Original Link: http://sunlightfoundation.com/blog/2010/12/23/tax-laws-may-result-in-more-advertising-from-post-citizens-united-groups-in-2011/
By Paul Blumenthal
One week ago, immediately prior to the votes on the tax cut deal reached between President Barack Obama and congressional Republicans, the independent group Crossroads GPS ran $400,000 worth of issue advertisements in twelve congressional districts calling for the Democrats who occupied them to support full extension of all of the Bush-era tax cuts. Crossroads GPS, a nonprofit created by Republican operatives in the wake of the Citizens United Supreme Court ruling, was giving the American public a sneak peek at the next torrent of political ads.
After the landmark Citizens United decision allowed corporations and unions to spend freely on electoral advertisements a series of groups popped up to take advantage of these new rules. There were new independent expenditure groups--taking advantage of the post-Citizens United ruling in SpeechNow.org v. FEC--and a few nonprofit groups that sought to raise unlimited money for unlimited advertisements. The nonprofit groups appeared to have the upper hand in terms of fundraising. Not only could they raise unlimited sums, but thanks to rules protecting the identities of nonprofit donors they did not have to disclose their donors to the public.
There was one feature of these nonprofit electoral groups, of which Crossroads GPS is one, that went largely unmentioned at the time. Nonprofits organized under the 501(c)(4) section of the tax code must provide educational or direct service to the public as their primary function. This excludes the political advertising that Crossroads GPS was known for in 2010.
Defenders of the Citizens United ruling have pointed out that Crossroads GPS spent less than half of the money they raised in 2010 on electoral activities. A Washington Post report states that the group raised $43 million in 2010. Federal Election Commission reports show that the group spent $17 million on independent expenditures and electioneering communications during the midterm elections.
Citizens United opponents, including Democracy 21 and the Campaign Legal Center, petitioned the IRS to investigate Crossroads GPS for violating this primary purpose clause of nonprofit operation.
While the electoral advertisements run by Crossroads GPS in 2010 do not count towards a primary purpose of public education, the spending on issue advertisements, like those the group ran during the tax cut debate, do. With the ability to raise $43 million in short notice and the inability to spend it all on electoral ads, we can expect outside groups organizing as nonprofits to take advantage of Citizens United to spend an increasing amount on issue advertisements.
This creates a problem for the system that legitimizes nonprofits. Since Citizens United aimed to increase the ability of groups organized outside of the political realm to participate openly in the political realm, those groups who seek to take advantage become more explicitly political. The issue ads appear to follow political considerations above all else.
The vast majority of the targets of Crossroads GPS' recent tax-cut ads weren't Democrats on the fence on the tax cut deal, but rather Democrats who either barely won reelection in 2010 or Democrats who occupy swing districts. Only one of the Democrats targeted by Crossroads GPS, Rep. Maurice Hinchey, voted against the tax cut deal. Hinchey's 2010 reelection was the closest of his career.
Further complicating matters for Crossroads GPS is their formation. The group was created as a spin-off of the independent expenditure committee American Crossroads because some donors wanted to help Republicans win the 2010 midterms, but wanted their identities kept secret. American Crossroads, an explicitly political group, and Crossroads GPS are run by the same group of political operatives and share the same P.O. Box as a contact address. The recent tax cut issue ad targets included five Democrats who were targeted by American Crossroads in the 2010 midterm elections.
With new groups expected to pop up on the Democratic side of the aisle in time for the 2012 elections there is likely to be even more uncertainty of the purposes of nonprofits taking advantage of Citizens United.
Friday, December 31, 2010
Crossroads GPS Announces First Post-Election Ad Buy
Original Link: http://thecaucus.blogs.nytimes.com/2010/12/14/crossroads-gps-announces-first-post-election-ad-buy/
By ASHLEY PARKER
Crossroads GPS, a Republican-friendly advocacy group with ties to Karl Rove, announced its first major post-election expenditure Tuesday — a $400,000 radio ad campaign in 12 districts across the country, urging the House Democrats to call for a vote on the tax-cut package.
“These are members of Congress who are specifically vulnerable on the tax issue,” said Jonathan Collegio, the communications director for the group. “They’ve either taken questionable votes of tax issues in previous years, they’ve just gotten by in a nail-biting election, or we believe their constituents support extending the tax relief to an even greater degree than voters in the general population.”
Though Mr. Collegio said that the new buy “is not a political exercise,” many of the 12 Democrats singled out just barely eked out a midterm victory. The group includes Gabrielle Giffords of Arizona, Jim Costa of California, Sanford D. Bishop Jr. of Georgia, Joe Donnelly of Indiana, Ben Chandler of Kentucky, Gary Peters of Michigan, Heath Shuler of North Carolina, Timothy H. Bishop of New York, Maurice D. Hinchey of New York, Bill Owens of New York, Jason Altmire of Pennsylvania and Gerald E. Connolly of Virginia.
The advocacy group’s top issue is “guaranteeing low tax rates that encourage economic growth,” and the goal with this radio blitz, Mr. Collegio said, “is an effort to make sure that the tax cuts are extended before everyone’s taxes go up on Jan. 1.”
The 60-second radio spots all follow a similar script, which in some ways seems to hark back to the midterms and opens with a reference to Speaker Nancy Pelosi: “She’s baaaccckkk. Nancy Pelosi’s at it again, trying to raise taxes while our economy struggles.”
The buy, which is supposed to run for a week, will be scaled back if there is a vote in the next few days.
George Burke, the communications director to Mr. Connolly, said he doesn’t think his boss is an obvious mark for the advocacy group.
“It is ironic that American Crossroads is targeting Rep. Gerry Connolly on the tax cut issue,” he wrote, in an email. “Connolly has been calling for a temporary extension of all of the tax cuts since last January.”
By ASHLEY PARKER
Crossroads GPS, a Republican-friendly advocacy group with ties to Karl Rove, announced its first major post-election expenditure Tuesday — a $400,000 radio ad campaign in 12 districts across the country, urging the House Democrats to call for a vote on the tax-cut package.
“These are members of Congress who are specifically vulnerable on the tax issue,” said Jonathan Collegio, the communications director for the group. “They’ve either taken questionable votes of tax issues in previous years, they’ve just gotten by in a nail-biting election, or we believe their constituents support extending the tax relief to an even greater degree than voters in the general population.”
Though Mr. Collegio said that the new buy “is not a political exercise,” many of the 12 Democrats singled out just barely eked out a midterm victory. The group includes Gabrielle Giffords of Arizona, Jim Costa of California, Sanford D. Bishop Jr. of Georgia, Joe Donnelly of Indiana, Ben Chandler of Kentucky, Gary Peters of Michigan, Heath Shuler of North Carolina, Timothy H. Bishop of New York, Maurice D. Hinchey of New York, Bill Owens of New York, Jason Altmire of Pennsylvania and Gerald E. Connolly of Virginia.
The advocacy group’s top issue is “guaranteeing low tax rates that encourage economic growth,” and the goal with this radio blitz, Mr. Collegio said, “is an effort to make sure that the tax cuts are extended before everyone’s taxes go up on Jan. 1.”
The 60-second radio spots all follow a similar script, which in some ways seems to hark back to the midterms and opens with a reference to Speaker Nancy Pelosi: “She’s baaaccckkk. Nancy Pelosi’s at it again, trying to raise taxes while our economy struggles.”
The buy, which is supposed to run for a week, will be scaled back if there is a vote in the next few days.
George Burke, the communications director to Mr. Connolly, said he doesn’t think his boss is an obvious mark for the advocacy group.
“It is ironic that American Crossroads is targeting Rep. Gerry Connolly on the tax cut issue,” he wrote, in an email. “Connolly has been calling for a temporary extension of all of the tax cuts since last January.”
Thursday, December 30, 2010
America in Decline: Why Germans Think We're Insane
Original Link: http://www.alternet.org/story/149324/america_in_decline%3A_why_germans_think_we're_insane
By Democrats Ramshield
A look at our empire in decline through the eyes of the European media.
The European Union has a larger economy and more people than America does. Though it spends less -- right around 9 percent of GNP on medical, whereas we in the U.S. spend close to between 15 to 16 percent of GNP on medical -- the EU pretty much insures 100 percent of its population.
The U.S. has 59 million people medically uninsured; 132 million without dental insurance; 60 million without paid sick leave; 40 million on food stamps. Everybody in the European Union has cradle-to-grave access to universal medical and a dental plan by law. The law also requires paid sick leave; paid annual leave; paid maternity leave. When you realize all of that, it becomes easy to understand why many Europeans think America has gone insane.
Der Spiegel has run an interesting feature called "A Superpower in Decline," which attempts to explain to a German audience such odd phenomena as the rise of the Tea Party, without the hedging or attempts at "balance" found in mainstream U.S. media. On the Tea Parties:
Full of Hatred: "The Tea Party, that group of white, older voters who claim that they want their country back, is angry. Fox News host Glenn Beck, a recovering alcoholic who likens Obama to Adolf Hitler, is angry. Beck doesn't quite know what he wants to be -- maybe a politician, maybe president, maybe a preacher -- and he doesn't know what he wants to do, either, or least he hasn't come up with any specific ideas or plans. But he is full of hatred."
The piece continues with the sobering assessment that America’s actual unemployment rate isn’t really 10 percent, but close to 20 percent when we factor in the number of people who have stopped looking for work.
Some social scientists think that making sure large-scale crime or fascism never takes root in Europe again requires a taxpayer investment in a strong social safety net. Can we learn from Europe? Isn't it better to invest in a social safety net than in a large criminal justice system? (In America over 2 million people are incarcerated.)
Jobless Benefits That Never Run Out
Unlike here, in Germany jobless benefits never run out. Not only that -- as part of their social safety net, all job seekers continue to be medically insured, as are their families.
In the German jobless benefit system, when "jobless benefit 1" runs out, "jobless benefit 2," also known as HartzIV, kicks in. That one never gets cut off. The jobless also have contributions made for their pensions. They receive other types of insurance coverage from the state. As you can imagine, the estimated 2 million unemployed Americans who almost had no benefits this Christmas seems a particular horror show to Europeans, made worse by the fact that the U.S. government does not provide any medical insurance to American unemployment recipients. Europeans routinely recoil at that in disbelief and disgust.
In another piece the Spiegel magazine steps away from statistics and tells the story of Pam Brown, who personifies what is coming to be known as the Nouveau American poor. Pam Brown was a former executive assistant on Wall Street, and her shocking decline has become part of the American story:
American society is breaking apart. Millions of people have lost their jobs and fallen into poverty. Among them, for the first time, are many middle-class families. Meet Pam Brown from New York, whose life changed overnight. The crisis caught her unprepared. "It was horrible," Pam Brown remembers. "Overnight I found myself on the wrong side of the fence. It never occurred to me that something like this could happen to me. I got very depressed." Brown sits in a cheap diner on West 14th Street in Manhattan, stirring her $1.35 coffee. That's all she orders -- it's too late for breakfast and too early for lunch. She also needs to save money. Until early 2009, Brown worked as an executive assistant on Wall Street, earning more than $80,000 a year, living in a six-bedroom house with her three sons. Today, she's long-term unemployed and has to make do with a tiny one-bedroom in the Bronx.
It's important to note that no country in the European Union uses food stamps in order to humiliate its disadvantaged citizens in the grocery checkout line. Even worse is the fact that even the humbling food stamp allotment may not provide enough food for America’s jobless families. So it is on a reoccurring basis that some of these families report eating out of garbage cans to the European media.
For Pam Brown, last winter was the worst. One day she ran out of food completely and had to go through trash cans. She fell into a deep depression ... For many, like Brown, the downfall is a Kafkaesque odyssey, a humiliation hard to comprehend. Help is not in sight: their government and their society have abandoned them.
Pam Brown and her children were disturbingly, indeed incomprehensibly, allowed to fall straight to the bottom. The richest country in the world becomes morally bankrupt when someone like Pam Brown and her children have to pick through trash to eat, abandoned with a callous disregard by the American government. People like Brown have found themselves dispossessed due to the robber baron actions of the Wall Street elite.
Hunger in the Land of the Big Mac
A shocking headline from a Swiss newspaper reads (Berner Zeitung) “Hunger in the Land of the Big Mac.” Though the article is in German, the pictures are worth 1,000 words and need no translation. Given the fact that the Swiss virtually eliminated hunger, how do we as Americans think they will view these pictures, to which the American population has apparently been desensitized.
This appears to be a picture of two mothers collecting food boxes from the charity Feed the Children.
Perhaps the only way for us to remember what we really look like in America is to see ourselves through the eyes of others. While it is true that we can all be proud Americans, surely we don't have to be proud of the broken American social safety net. Surely we can do better than that. Can a European-style social safety net rescue the American working and middle classes from GOP and Tea Party warfare?
By Democrats Ramshield
A look at our empire in decline through the eyes of the European media.
The European Union has a larger economy and more people than America does. Though it spends less -- right around 9 percent of GNP on medical, whereas we in the U.S. spend close to between 15 to 16 percent of GNP on medical -- the EU pretty much insures 100 percent of its population.
The U.S. has 59 million people medically uninsured; 132 million without dental insurance; 60 million without paid sick leave; 40 million on food stamps. Everybody in the European Union has cradle-to-grave access to universal medical and a dental plan by law. The law also requires paid sick leave; paid annual leave; paid maternity leave. When you realize all of that, it becomes easy to understand why many Europeans think America has gone insane.
Der Spiegel has run an interesting feature called "A Superpower in Decline," which attempts to explain to a German audience such odd phenomena as the rise of the Tea Party, without the hedging or attempts at "balance" found in mainstream U.S. media. On the Tea Parties:
Full of Hatred: "The Tea Party, that group of white, older voters who claim that they want their country back, is angry. Fox News host Glenn Beck, a recovering alcoholic who likens Obama to Adolf Hitler, is angry. Beck doesn't quite know what he wants to be -- maybe a politician, maybe president, maybe a preacher -- and he doesn't know what he wants to do, either, or least he hasn't come up with any specific ideas or plans. But he is full of hatred."
The piece continues with the sobering assessment that America’s actual unemployment rate isn’t really 10 percent, but close to 20 percent when we factor in the number of people who have stopped looking for work.
Some social scientists think that making sure large-scale crime or fascism never takes root in Europe again requires a taxpayer investment in a strong social safety net. Can we learn from Europe? Isn't it better to invest in a social safety net than in a large criminal justice system? (In America over 2 million people are incarcerated.)
Jobless Benefits That Never Run Out
Unlike here, in Germany jobless benefits never run out. Not only that -- as part of their social safety net, all job seekers continue to be medically insured, as are their families.
In the German jobless benefit system, when "jobless benefit 1" runs out, "jobless benefit 2," also known as HartzIV, kicks in. That one never gets cut off. The jobless also have contributions made for their pensions. They receive other types of insurance coverage from the state. As you can imagine, the estimated 2 million unemployed Americans who almost had no benefits this Christmas seems a particular horror show to Europeans, made worse by the fact that the U.S. government does not provide any medical insurance to American unemployment recipients. Europeans routinely recoil at that in disbelief and disgust.
In another piece the Spiegel magazine steps away from statistics and tells the story of Pam Brown, who personifies what is coming to be known as the Nouveau American poor. Pam Brown was a former executive assistant on Wall Street, and her shocking decline has become part of the American story:
American society is breaking apart. Millions of people have lost their jobs and fallen into poverty. Among them, for the first time, are many middle-class families. Meet Pam Brown from New York, whose life changed overnight. The crisis caught her unprepared. "It was horrible," Pam Brown remembers. "Overnight I found myself on the wrong side of the fence. It never occurred to me that something like this could happen to me. I got very depressed." Brown sits in a cheap diner on West 14th Street in Manhattan, stirring her $1.35 coffee. That's all she orders -- it's too late for breakfast and too early for lunch. She also needs to save money. Until early 2009, Brown worked as an executive assistant on Wall Street, earning more than $80,000 a year, living in a six-bedroom house with her three sons. Today, she's long-term unemployed and has to make do with a tiny one-bedroom in the Bronx.
It's important to note that no country in the European Union uses food stamps in order to humiliate its disadvantaged citizens in the grocery checkout line. Even worse is the fact that even the humbling food stamp allotment may not provide enough food for America’s jobless families. So it is on a reoccurring basis that some of these families report eating out of garbage cans to the European media.
For Pam Brown, last winter was the worst. One day she ran out of food completely and had to go through trash cans. She fell into a deep depression ... For many, like Brown, the downfall is a Kafkaesque odyssey, a humiliation hard to comprehend. Help is not in sight: their government and their society have abandoned them.
Pam Brown and her children were disturbingly, indeed incomprehensibly, allowed to fall straight to the bottom. The richest country in the world becomes morally bankrupt when someone like Pam Brown and her children have to pick through trash to eat, abandoned with a callous disregard by the American government. People like Brown have found themselves dispossessed due to the robber baron actions of the Wall Street elite.
Hunger in the Land of the Big Mac
A shocking headline from a Swiss newspaper reads (Berner Zeitung) “Hunger in the Land of the Big Mac.” Though the article is in German, the pictures are worth 1,000 words and need no translation. Given the fact that the Swiss virtually eliminated hunger, how do we as Americans think they will view these pictures, to which the American population has apparently been desensitized.
This appears to be a picture of two mothers collecting food boxes from the charity Feed the Children.
Perhaps the only way for us to remember what we really look like in America is to see ourselves through the eyes of others. While it is true that we can all be proud Americans, surely we don't have to be proud of the broken American social safety net. Surely we can do better than that. Can a European-style social safety net rescue the American working and middle classes from GOP and Tea Party warfare?
Reformers' crystal ball fails again with Crossroads GPS
Original Link: http://www.campaignfreedom.org/blog/detail/reformers-crystal-ball-fails-again-with-crossroads-gps
By Sean Parnell
In early October, the self-styled reform community was up in arms over the activities of Crossroads Grassroots Political Strategies (Crossroads GPS), a 501(c)(4) organization linked to the 527 group American Crossroads, even demanding an IRS investigation into the group's spending.
As a 501(c)(4) organization, Crossroads GPS is not required to disclose its donors, but it also cannot have the "primary activity" of engaging in political activities. After apparently plastering and examining newspaper advertisements on their office walls in order to decode secret messages concerning the funding and spending details of Crossroads GPS, the speech scolds at Democracy 21 and Campaign Legal Center, among others, decided that Crossroads GPS had a primary purpose of political activity. They penned a letter to the IRS demanding an investigation.
As we discussed back in October, there were ample reasons to believe the "reformers" were oblivious to basic principles concerning 501(c) tax law:
Crossroads GPS formed in July of this year... CLC/D21 could not possibly know whether or not Crossroads GPS will meet the "primary purpose" standard for this calendar year [later in the letter, CLC/D21 says that the IRS should apply the primary purpose test to Crossroads GPS according to its activity in this calendar year, based on an unrelated standard for the lobbying expenditures of 501(c)(3) groups]. But to apply a calendar year test to a nascent group that formed in the latter half of an election year doesn't make much sense.
Tax experts consulted by CCP note that the IRS has never spelled out this standard, but many tax professionals use the fiscal year standard. Contrary to what CLC/D21 claim, the fiscal year test is the test used by 501(c)(3) organizations choosing Section (h) status, which allows them to engage in some level of lobbying. Section 501(h) repeatedly notes that it is based on a "taxable year," not the "calendar year" as CLC/D21 claim...
Even if it is the case that, so far, Crossroads GPS has spent a majority of its expenditures on political activity, it does not follow that the group is violating tax law. Crossroads could presumably spend a significant amount of resources lobbying Congress during the lame duck session and the next legislative session. Indeed, it has indicated that it plans a significant legislative advocacy effort over the next few months and recently ran a policy-focused ad (on S. 3773, the Tax Hike Prevention Act) in Capitol Hill newspapers.
Considering this evidence, the allegation by CLC/D21 that the group is "engaged primarily, if not exclusively, in activities to promote and support Republican candidates and to oppose and attack Democratic candidates in the 2010 congressional elections" [emphasis added] seems demonstrably false—or at the very least premature...
Well, the pile of evidence that the "reformers" were chasing conspiracy theories untethered to the real world continues to add up. Last week I posted here regarding the overblown fears peddled by "reformers" about corporate funds overwhelming the 2010 election cycle, relying in good part on a report published by the Center for Responsive Politics (CRP) on OpenSecrets.org. Tucked at the end of the CRP post was the following:
Jonathan Collegio, the spokesman for American Crossroads, told the Washington Post on Thursday that Crossroads Grassroots Policy Strategies—a sister organization of American Crossroads that is not required to disclose information about its donors—raised an additional $43 million this year.
Crossroads GPS, legally defined as a 501(c)4 nonprofit designed to promote "social welfare," spent $17 million on political messages and advertisements this election cycle...
It doesn't take a degree in math, or for that matter more than a 6th grade education, to realize that the $17 million spent by Crossroads GPS on political activity is well less than half of their funds raised. Even given the uncertainty over whether Crossroads GPS will be filing their IRS reports based on calendar or fiscal year, the group has plenty of funds for activities other than election-related purposes.
I guess we can chalk this up as yet another example of "reformers" issuing dire warnings and making hysterical predictions that ultimately are seen to be little more than bluster, paranoia, and a cracked crystal ball.
By Sean Parnell
In early October, the self-styled reform community was up in arms over the activities of Crossroads Grassroots Political Strategies (Crossroads GPS), a 501(c)(4) organization linked to the 527 group American Crossroads, even demanding an IRS investigation into the group's spending.
As a 501(c)(4) organization, Crossroads GPS is not required to disclose its donors, but it also cannot have the "primary activity" of engaging in political activities. After apparently plastering and examining newspaper advertisements on their office walls in order to decode secret messages concerning the funding and spending details of Crossroads GPS, the speech scolds at Democracy 21 and Campaign Legal Center, among others, decided that Crossroads GPS had a primary purpose of political activity. They penned a letter to the IRS demanding an investigation.
As we discussed back in October, there were ample reasons to believe the "reformers" were oblivious to basic principles concerning 501(c) tax law:
Crossroads GPS formed in July of this year... CLC/D21 could not possibly know whether or not Crossroads GPS will meet the "primary purpose" standard for this calendar year [later in the letter, CLC/D21 says that the IRS should apply the primary purpose test to Crossroads GPS according to its activity in this calendar year, based on an unrelated standard for the lobbying expenditures of 501(c)(3) groups]. But to apply a calendar year test to a nascent group that formed in the latter half of an election year doesn't make much sense.
Tax experts consulted by CCP note that the IRS has never spelled out this standard, but many tax professionals use the fiscal year standard. Contrary to what CLC/D21 claim, the fiscal year test is the test used by 501(c)(3) organizations choosing Section (h) status, which allows them to engage in some level of lobbying. Section 501(h) repeatedly notes that it is based on a "taxable year," not the "calendar year" as CLC/D21 claim...
Even if it is the case that, so far, Crossroads GPS has spent a majority of its expenditures on political activity, it does not follow that the group is violating tax law. Crossroads could presumably spend a significant amount of resources lobbying Congress during the lame duck session and the next legislative session. Indeed, it has indicated that it plans a significant legislative advocacy effort over the next few months and recently ran a policy-focused ad (on S. 3773, the Tax Hike Prevention Act) in Capitol Hill newspapers.
Considering this evidence, the allegation by CLC/D21 that the group is "engaged primarily, if not exclusively, in activities to promote and support Republican candidates and to oppose and attack Democratic candidates in the 2010 congressional elections" [emphasis added] seems demonstrably false—or at the very least premature...
Well, the pile of evidence that the "reformers" were chasing conspiracy theories untethered to the real world continues to add up. Last week I posted here regarding the overblown fears peddled by "reformers" about corporate funds overwhelming the 2010 election cycle, relying in good part on a report published by the Center for Responsive Politics (CRP) on OpenSecrets.org. Tucked at the end of the CRP post was the following:
Jonathan Collegio, the spokesman for American Crossroads, told the Washington Post on Thursday that Crossroads Grassroots Policy Strategies—a sister organization of American Crossroads that is not required to disclose information about its donors—raised an additional $43 million this year.
Crossroads GPS, legally defined as a 501(c)4 nonprofit designed to promote "social welfare," spent $17 million on political messages and advertisements this election cycle...
It doesn't take a degree in math, or for that matter more than a 6th grade education, to realize that the $17 million spent by Crossroads GPS on political activity is well less than half of their funds raised. Even given the uncertainty over whether Crossroads GPS will be filing their IRS reports based on calendar or fiscal year, the group has plenty of funds for activities other than election-related purposes.
I guess we can chalk this up as yet another example of "reformers" issuing dire warnings and making hysterical predictions that ultimately are seen to be little more than bluster, paranoia, and a cracked crystal ball.
Wednesday, December 29, 2010
Corporate America's Plan to Loot Our Pensions Is the Latest Battle in Decades-Long Assault on the Middle Class
Original Link: http://www.alternet.org/economy/149226/corporate_america's_plan_to_loot_our_pensions_is_the_latest_battle_in_decades-long_assault_on_the_middle_class_/
By Arun Gupta
While the safety net is being withered by attrition, record corporate profits are deemed off-limits for discussion about closing the budget gap.
The severe economic crisis, now in its fourth year, is being used to batter the remnants of the social welfare state. Having decimated aid to the poor over the last 30 years, especially in the United States, the economic and political elite are now intent on strangling middle-class benefits, namely state-provided pensions, health care and education.
The initial neoliberal assault under Ronald Reagan and Margaret Thatcher reorganized the capitalist economy and hammered private-sector unions into submission. This was accomplished by putting labor back into competition with itself by off-shoring industrial production, through deregulation and with frontal assaults on labor rights, organizing and solidarity.
Similarly, the current attack is a two-pronged effort to reorganize state social services, either by eliminating or privatizing them, and decimate public-sector unions whose workers provide those services. While the safety net is being withered by attrition, police and spying agencies are getting more powers and funding, and the wealth of the super-rich and record corporate profits are deemed off-limits to taxation to close any government budget gap.
Simply put, the elderly are superfluous to capitalism. With high rates of joblessness the “new norm,” more and more people are being made disposable. This leads to an efficient if brutal logic: cutting old-age income and health care will make it easier to scrap old, useless workers. In fact, this reality is already coming to pass. One study published in 2008 found that over a 16-year period life expectancy had declined for many poor American women — precisely those who are disproportionately represented among the elderly heavily dependent on Social Security and Medicare.
Slashing social services affects everyone by increasing the pool of workers desperate for any sort of paying job, pushing down wages and benefits. This will all be pushed under the rubric of “personal responsibility,” and it will probably be successful as long as opposition is weak and divided. The main beneficiaries will be the super-wealthy who gain both from tax cuts as the social sector is chopped up and higher corporate profits as wages and benefits are slashed more deeply.
The attack on pensions is mainly occurring in the West and those countries close to its orbit. So while the United States, Greece, Ireland, Japan, France, Turkey, Spain, Poland and Latvia have been cutting or trying to squeeze state-run pensions, others such as Bolivia, China and Venezuela have been increasing funding of old-age pensions in recent years (though within these countries the picture is more complicated because social spending may be declining overall and inflation increasing).
The Right has stridently opposed Social Security since it was enacted in 1935, but the modern attack on pensions originated during the Reagan-Thatcher era. While he proposed making Social Security voluntary during the 1964 Goldwater campaign, when he reached office Reagan temporarily froze cost-of-living adjustments, raised the future retirement age to 67, taxed benefits of higher-income earners, made it more difficult for the disabled to claim benefits and forced the self-employed to pay 100 percent of payroll taxes. Then under Clinton, according to some economists, inflation was understated to suppress cost-of-living adjustments, resulting in benefits that should be 50 percent higher than the current average of $1,072 a month. Thatcher and Tony Blair formed the same one-two punch as Reagan and Clinton, but they went further by partially privatizing much of the state-run pension system.
The second historical component is the current crisis, which is severely widening the economic chasm. According to the New York Times, corporate profits “have grown for seven consecutive quarters, at some of the fastest rates in history,” hitting a record of $1.66 trillion on an annual basis. Taking advantage of Federal Reserve and U.S. Treasury monies, Wall Street has notched record profits over the last two years. And the top one percent actually increased their share of the wealth through the end of 2009.
As for the overall economic picture, industrial production is back to where it was in 2000 and the all-important capacity utilization rate – which measures how much of existing manufacturing plants are actually operating – is below 75 percent, compared to a level above 80 percent before the crash. This is like saying more than one-fourth of factories are idle. The trade deficit is at 3.7 percent of the gross domestic product. Only 874,000 jobs were created during the first 10 months of 2010, well short of the 1.2 million needed to keep up with population growth, and some 260,000 state workers lost their jobs during this period, leaving 7.5 million fewer jobs than when the recession began.
The household picture is even grimmer: family income shrank more than 4 percent in 2008 and 2009; the official poverty rate of 14.3 is the highest since 1994; 13.5 percent of home mortgages are in delinquency or foreclosure; the percentage of people receiving health insurance through their employer has dropped by 13 percent over the last decade and the real unemployment rate -- the “U6 rate” which includes those who have given up looking for work -- is at 17 percent. Household debt stands at 118 percent of after-tax income.
Most economists say there are really only four sources of potential growth in our economy: consumer spending, business investment, trade and government. As the data above indicates, the first three are on life support, while the Obama White House bungled the stimulus plan, helping the right in discrediting government intervention, which is still the only remaining option. These economic conditions prevail throughout the West, which is the backdrop for the global assault on pension plans. Thus the conclusion is stark: there is no functioning engine to drive economic growth.
With so much idle productive capacity, the bromide of giving tax breaks to spur business investment is little more than throwing away money. With American families drowning in debt, getting smacked with rising healthcare costs, having lost $15.8 trillion in wealth and fearing joining the armies of unemployed, they are incapable of pulling the economy out of its funk with increased consumption. Increased trade is one possibility, which would require a weaker dollar to make U.S. exports more competitive. But, as Paul Krugman points out, this is opposed by Republicans who believe continued economic decline will enhance their electoral chances in 2012. Despite investment money pouring into the BRIC countries – Brazil, Russia, India and China – agricultural commodities and precious metals, these markets are too narrow and shallow to form a new asset bubble, such as the ones in tech and housing that fueled economic growth for nearly two decades. And in any case, we know how well those bubbles worked out.
When business investment, consumption, trade, debt and speculation all falter, that leaves government as the only sector that can revive a capitalist economy. But, as I first pointed out in December 2008, the Obama administration knew the stimulus was almost certain to fail because the downturn was sapping a staggering $1 trillion a year from the economy at that point, while the plan offered a relatively meager $787 billion. Of that, only $600 billion of stimulus money was spent in the last two years and, according to Paul Krugman, more than 40 percent of that was in tax breaks that tend to offer the least bang for the buck. So in early 2009, faced with an economy leaking 7 percent of the GDP a year, Obama offers a plan that plugs 1 to 2 percent a year.
In the final equation, the Obama stimulus only covered some of the shortfall in state and local budgets. But that money is drying up, and that, to a large degree, is the reason state services and workers are now under attack.
But now we are in for more bloodletting of social services and government workers because the failed stimulus has legitimized the establishment hysteria over the federal debt. Debt matters but the simplest way to reduce it is by a combination of economic growth and inflation. This is what happened to U.S. debt after WW2, which peaked at about 120 percent of GDP, far more than today even with the economic depression and bailouts. Instead, the right is pushing policies that may result in a worst-case scenario. Cutting spending and taxes –which Obama has endorsed – could lead to further economic contraction and deflation. This will make federal debt payments doubly onerous because tax revenues will shrink as the dollar strengthens.
There is another solution to reviving the economy without piling on debt: tax the wealth of the elite. According to economist Rick Wolff, “high-net-worth” Americans have around $12 trillion in investable assets, which excludes the value of their homes. A 13 percent wealth tax would wipe out the entire 2010 federal budget deficit of $1.56 trillion while doing little to crimp the economy because this money is literally lying around.
Yet Obama never seriously considered even the Keynesian policy of debt-driven financing for national re-industrialization because he was the darling of Wall Street – and number one recipient of its dollars – for his unwavering support of the Bush bailout in September 2008 and by taking counsel from Larry Summers and Tim Geithner during the campaign. Once in the White House Obama shunned jobs programs on a massive enough scale to revive the economy because the indirect method of debt-driven financing would shore up benefits, wages and labor bargaining power, thus cutting into corporate profits, while the direct financing method, taxing the rich, would mean they would have to pay for programs that would eventually cut into their profits.
The Obama administration has consistently fought for policies that involve weakening labor -- such as its attacks on auto workers and teachers and the cynical gesture of calling for a freeze on the pay of federal workers– driving down wages, letting unemployment rise, and squeezing social services and benefits, all to transfer more wealth upward.
The wealthy have profited three times off the crisis: from the bubble itself, during the bailouts and from government bonds sold to them to pay for the bailouts. Putting pensions on the chopping block would give them a fourth opportunity to profit off the same crisis.
If debt is a problem, then bondholders should take a haircut because they took the risk. Of course, that’s not how capitalism works. So, in the case of Social Security, which has nearly $2.6 trillion in its trust fund and can meet ALL obligations through 2037 even assuming no changes are made, the plan is to raid it to pay off bondholders.
That’s why a crisis is being manufactured. Obama’s deal to reduce payroll tax by two percentage points will pilfer an estimated $120 billion from the trust fund that will supposedly be paid back by revenues from the general treasury. This means the deficit will increase, feeding into the fabricated panic over Social Security and debt.
For any country, cutting pensions is disastrous to long-term economic health. In the United States, Social Security accounts for 40 percent of the income of the population over 65 and nearly 50 percent for women in this group. It would also leave more people in the workforce as older workers delay retirement. Because the elderly tend to spend their benefits right away, on housing, food, transportation and medical services this means less demand and lower economic activity. And combining all this with trying to crush public workers also means more unemployed, less tax revenue and a shrinking economy.
It all adds up to a recipe for a depression. Two conclusions are inescapable: Obama is far more Herbert Hoover than FDR, and change will only come from creative independent movements instead of marching into the tomb of the Democratic Party.
By Arun Gupta
While the safety net is being withered by attrition, record corporate profits are deemed off-limits for discussion about closing the budget gap.
The severe economic crisis, now in its fourth year, is being used to batter the remnants of the social welfare state. Having decimated aid to the poor over the last 30 years, especially in the United States, the economic and political elite are now intent on strangling middle-class benefits, namely state-provided pensions, health care and education.
The initial neoliberal assault under Ronald Reagan and Margaret Thatcher reorganized the capitalist economy and hammered private-sector unions into submission. This was accomplished by putting labor back into competition with itself by off-shoring industrial production, through deregulation and with frontal assaults on labor rights, organizing and solidarity.
Similarly, the current attack is a two-pronged effort to reorganize state social services, either by eliminating or privatizing them, and decimate public-sector unions whose workers provide those services. While the safety net is being withered by attrition, police and spying agencies are getting more powers and funding, and the wealth of the super-rich and record corporate profits are deemed off-limits to taxation to close any government budget gap.
Simply put, the elderly are superfluous to capitalism. With high rates of joblessness the “new norm,” more and more people are being made disposable. This leads to an efficient if brutal logic: cutting old-age income and health care will make it easier to scrap old, useless workers. In fact, this reality is already coming to pass. One study published in 2008 found that over a 16-year period life expectancy had declined for many poor American women — precisely those who are disproportionately represented among the elderly heavily dependent on Social Security and Medicare.
Slashing social services affects everyone by increasing the pool of workers desperate for any sort of paying job, pushing down wages and benefits. This will all be pushed under the rubric of “personal responsibility,” and it will probably be successful as long as opposition is weak and divided. The main beneficiaries will be the super-wealthy who gain both from tax cuts as the social sector is chopped up and higher corporate profits as wages and benefits are slashed more deeply.
The attack on pensions is mainly occurring in the West and those countries close to its orbit. So while the United States, Greece, Ireland, Japan, France, Turkey, Spain, Poland and Latvia have been cutting or trying to squeeze state-run pensions, others such as Bolivia, China and Venezuela have been increasing funding of old-age pensions in recent years (though within these countries the picture is more complicated because social spending may be declining overall and inflation increasing).
The Right has stridently opposed Social Security since it was enacted in 1935, but the modern attack on pensions originated during the Reagan-Thatcher era. While he proposed making Social Security voluntary during the 1964 Goldwater campaign, when he reached office Reagan temporarily froze cost-of-living adjustments, raised the future retirement age to 67, taxed benefits of higher-income earners, made it more difficult for the disabled to claim benefits and forced the self-employed to pay 100 percent of payroll taxes. Then under Clinton, according to some economists, inflation was understated to suppress cost-of-living adjustments, resulting in benefits that should be 50 percent higher than the current average of $1,072 a month. Thatcher and Tony Blair formed the same one-two punch as Reagan and Clinton, but they went further by partially privatizing much of the state-run pension system.
The second historical component is the current crisis, which is severely widening the economic chasm. According to the New York Times, corporate profits “have grown for seven consecutive quarters, at some of the fastest rates in history,” hitting a record of $1.66 trillion on an annual basis. Taking advantage of Federal Reserve and U.S. Treasury monies, Wall Street has notched record profits over the last two years. And the top one percent actually increased their share of the wealth through the end of 2009.
As for the overall economic picture, industrial production is back to where it was in 2000 and the all-important capacity utilization rate – which measures how much of existing manufacturing plants are actually operating – is below 75 percent, compared to a level above 80 percent before the crash. This is like saying more than one-fourth of factories are idle. The trade deficit is at 3.7 percent of the gross domestic product. Only 874,000 jobs were created during the first 10 months of 2010, well short of the 1.2 million needed to keep up with population growth, and some 260,000 state workers lost their jobs during this period, leaving 7.5 million fewer jobs than when the recession began.
The household picture is even grimmer: family income shrank more than 4 percent in 2008 and 2009; the official poverty rate of 14.3 is the highest since 1994; 13.5 percent of home mortgages are in delinquency or foreclosure; the percentage of people receiving health insurance through their employer has dropped by 13 percent over the last decade and the real unemployment rate -- the “U6 rate” which includes those who have given up looking for work -- is at 17 percent. Household debt stands at 118 percent of after-tax income.
Most economists say there are really only four sources of potential growth in our economy: consumer spending, business investment, trade and government. As the data above indicates, the first three are on life support, while the Obama White House bungled the stimulus plan, helping the right in discrediting government intervention, which is still the only remaining option. These economic conditions prevail throughout the West, which is the backdrop for the global assault on pension plans. Thus the conclusion is stark: there is no functioning engine to drive economic growth.
With so much idle productive capacity, the bromide of giving tax breaks to spur business investment is little more than throwing away money. With American families drowning in debt, getting smacked with rising healthcare costs, having lost $15.8 trillion in wealth and fearing joining the armies of unemployed, they are incapable of pulling the economy out of its funk with increased consumption. Increased trade is one possibility, which would require a weaker dollar to make U.S. exports more competitive. But, as Paul Krugman points out, this is opposed by Republicans who believe continued economic decline will enhance their electoral chances in 2012. Despite investment money pouring into the BRIC countries – Brazil, Russia, India and China – agricultural commodities and precious metals, these markets are too narrow and shallow to form a new asset bubble, such as the ones in tech and housing that fueled economic growth for nearly two decades. And in any case, we know how well those bubbles worked out.
When business investment, consumption, trade, debt and speculation all falter, that leaves government as the only sector that can revive a capitalist economy. But, as I first pointed out in December 2008, the Obama administration knew the stimulus was almost certain to fail because the downturn was sapping a staggering $1 trillion a year from the economy at that point, while the plan offered a relatively meager $787 billion. Of that, only $600 billion of stimulus money was spent in the last two years and, according to Paul Krugman, more than 40 percent of that was in tax breaks that tend to offer the least bang for the buck. So in early 2009, faced with an economy leaking 7 percent of the GDP a year, Obama offers a plan that plugs 1 to 2 percent a year.
In the final equation, the Obama stimulus only covered some of the shortfall in state and local budgets. But that money is drying up, and that, to a large degree, is the reason state services and workers are now under attack.
But now we are in for more bloodletting of social services and government workers because the failed stimulus has legitimized the establishment hysteria over the federal debt. Debt matters but the simplest way to reduce it is by a combination of economic growth and inflation. This is what happened to U.S. debt after WW2, which peaked at about 120 percent of GDP, far more than today even with the economic depression and bailouts. Instead, the right is pushing policies that may result in a worst-case scenario. Cutting spending and taxes –which Obama has endorsed – could lead to further economic contraction and deflation. This will make federal debt payments doubly onerous because tax revenues will shrink as the dollar strengthens.
There is another solution to reviving the economy without piling on debt: tax the wealth of the elite. According to economist Rick Wolff, “high-net-worth” Americans have around $12 trillion in investable assets, which excludes the value of their homes. A 13 percent wealth tax would wipe out the entire 2010 federal budget deficit of $1.56 trillion while doing little to crimp the economy because this money is literally lying around.
Yet Obama never seriously considered even the Keynesian policy of debt-driven financing for national re-industrialization because he was the darling of Wall Street – and number one recipient of its dollars – for his unwavering support of the Bush bailout in September 2008 and by taking counsel from Larry Summers and Tim Geithner during the campaign. Once in the White House Obama shunned jobs programs on a massive enough scale to revive the economy because the indirect method of debt-driven financing would shore up benefits, wages and labor bargaining power, thus cutting into corporate profits, while the direct financing method, taxing the rich, would mean they would have to pay for programs that would eventually cut into their profits.
The Obama administration has consistently fought for policies that involve weakening labor -- such as its attacks on auto workers and teachers and the cynical gesture of calling for a freeze on the pay of federal workers– driving down wages, letting unemployment rise, and squeezing social services and benefits, all to transfer more wealth upward.
The wealthy have profited three times off the crisis: from the bubble itself, during the bailouts and from government bonds sold to them to pay for the bailouts. Putting pensions on the chopping block would give them a fourth opportunity to profit off the same crisis.
If debt is a problem, then bondholders should take a haircut because they took the risk. Of course, that’s not how capitalism works. So, in the case of Social Security, which has nearly $2.6 trillion in its trust fund and can meet ALL obligations through 2037 even assuming no changes are made, the plan is to raid it to pay off bondholders.
That’s why a crisis is being manufactured. Obama’s deal to reduce payroll tax by two percentage points will pilfer an estimated $120 billion from the trust fund that will supposedly be paid back by revenues from the general treasury. This means the deficit will increase, feeding into the fabricated panic over Social Security and debt.
For any country, cutting pensions is disastrous to long-term economic health. In the United States, Social Security accounts for 40 percent of the income of the population over 65 and nearly 50 percent for women in this group. It would also leave more people in the workforce as older workers delay retirement. Because the elderly tend to spend their benefits right away, on housing, food, transportation and medical services this means less demand and lower economic activity. And combining all this with trying to crush public workers also means more unemployed, less tax revenue and a shrinking economy.
It all adds up to a recipe for a depression. Two conclusions are inescapable: Obama is far more Herbert Hoover than FDR, and change will only come from creative independent movements instead of marching into the tomb of the Democratic Party.
How Do We Shift Power to the People and Away from Concentrated Corporate Power?
Original Link: http://dissidentvoice.org/2010/12/how-do-we-shift-power-to-the-people-and-away-from-concentrated-corporate-power/
By Kevin Zeese
Education, Organization and a Culture of Resistance Will Build an Independent Movement for Real Change
The power of concentrated corporate capital was on display in Washington last week, as it has been all year. The incoming Chair of the Congressional committee responsible for banking regulation, Rep. Spencer Bachus (R-AL) says “my view is that Washington and the regulators are there to serve the banks.” And President Obama sat down with the CEOs of 20 large corporations to talk about how he could help Big Business increase their already record profits. And, in the Supreme Court, 13 of 16 business cases were ruled in favor of business interests.
These actions echo a year where Sen. Durbin complained the banks “own” the Congress and where President Obama worked with the health insurance industry to keep them in control of health care while claiming it was “reform,” and where the Supreme Court in Citizens United vastly increased corporate power in elections by allowing unlimited spending.
Corporate capital dominates the government and prevents the changes urgently needed in so many crisis issues for the nation and the world.
In the last year, through Prosperity Agenda I worked on many of these critical issues including the impact of corporate power on elections, providing health care to all Americans, restructuring finance regulation to prevent another economic collapse and reigning in spending on weapons and war. In all of these areas we had some impact, but in 2011 and beyond, much more will be needed.
Shifting power from concentrated corporate interests to the people is no easy task. It has taken years of work by those interests to gain the power that they have. It will take years of work to weaken the corporate stranglehold. The growing crises remind us of the urgency of our work and the need for a commitment to sustain and increase our efforts.
In preparing this article I looked back at a memo written by Lewis Powell two months before he was nominated to the Supreme Court by President Nixon. The memo was written in 1971 at a time when the business community felt it was rapidly losing power and that the capitalist system was under severe attack. Powell, a lawyer for the Richmond Chamber of Commerce, described as “the fundamental premise” of his paper that “business and the enterprise system are in deep trouble, and the hour is late.” They saw attacks coming in the colleges, in the media, on the streets, in bookstores and from politicians. Everywhere they looked they were under attack and on the verge of total defeat – the end of free markets and crony capitalism.
The purpose of the Powell memo, written to the head of the Chamber of Commerce, was to lay out a plan to restore and build corporate power. Powell laid out a plan that is instructive for those of us who want to shift power from concentrated capital to the people, who want to see a democratized economy in which people have greater control of their economic lives and are more represented in both the economy and government.
Powell’s plan was a long-term one built primarily on education and organization. In response to a “broadly based and consistently pursued” attack on corporate power, Powell wrote “independent and uncoordinated activity by individual corporations, as important as this is, will not be sufficient. Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.” He urged action in universities, with speaker’s bureaus, in publishing, influencing the media and working in the courts, as well as in electoral politics.
We also have a long term plan to educate, organize and unite our efforts:
■We’ve used education in writing, media and video. We strive for but do not rely on the corporate media, which is also part of the problem, to cover our work. We also recognize that too often they are part of the problem. We make our own media and work with the independent media.
■We’ve reached out to allied organizations and allied movements in order to help develop consistent and coordinated actions. And we’ve asked our thousands of members to take actions in unison so our voices are multiplied.
■We’ve used the courts and instruments of government to challenge the illegal actions of the Chamber of Commerce and Karl Rove’s American Crossroads seeking investigation and prosecution of their abuses in the 2010 elections. See more here, and here. We’ve done the same when we seek corporate responsibility for companies like Massey Energy and their CEO Don Blankenship when 29 miners were killed in West Virginia (more here) and were pleased when he resigned.
While education and organization are critical ingredients to bringing change, this is a slow process and many of the issues the nation faces are urgent. This is why we also pursue acts of protest and resistance. We did this in the health care debate and most recently in the anti-war movement. Resistance has always been an ingredient for bringing change whether it was people sitting in at segregated lunch counters, or blacks sitting in the white section of the bus, or Cindy Sheehan camping outside of George Bush’s ranch. In the next year we will see a growing culture of resistance in the United States.
Other acts of resistance are seen around the release of documents by WikiLeaks. The reaction demonstrated corporations and the government working together to block the American people from knowing what is being done in our name. VISA, Mastercard, Bank of America, PayPal, Amazon and various financial institutions stopped processing funds for WikiLeaks at the request of the government. But the truth is getting out and we now know what the government is doing in our name and must take action to stop it. Knowing the truth and not acting is complicity. More and more Americans are acting. We see resistance in the more than 1,000 mirror sites of WikiLeaks, in the more than 100,000 people who downloaded the WikiLeaks “insurance policy” and were prepared to release documents if Julian Assange were harmed. It is seen in Americans organizing for their right to know, and to reaffirm Freedom of the Press. We are organizing under the banner WikiLeaksIsDemocracy.org, with a petition signed by notables and now by thousands. Join us and urge others to as well.
It is going to take education, organization and resistance as part of a persistent independent movement for political change. Those who want real change achieve it by voting for parties dominated by the donations of corporate executives. Voting for corporate parties re-enforces corporate power. We need independent electoral activity along with an independent movement and independent media to shift the power to the people.
There is a growing movement for real paradigm shifting change. It is a slow process that is accelerating and 2011 promises to be a milestone year. Please join us in our efforts at www.ProsperityAgenda.US. We need all Americans who want a democratized economy where power is shifted to the people joining us.
By Kevin Zeese
Education, Organization and a Culture of Resistance Will Build an Independent Movement for Real Change
The power of concentrated corporate capital was on display in Washington last week, as it has been all year. The incoming Chair of the Congressional committee responsible for banking regulation, Rep. Spencer Bachus (R-AL) says “my view is that Washington and the regulators are there to serve the banks.” And President Obama sat down with the CEOs of 20 large corporations to talk about how he could help Big Business increase their already record profits. And, in the Supreme Court, 13 of 16 business cases were ruled in favor of business interests.
These actions echo a year where Sen. Durbin complained the banks “own” the Congress and where President Obama worked with the health insurance industry to keep them in control of health care while claiming it was “reform,” and where the Supreme Court in Citizens United vastly increased corporate power in elections by allowing unlimited spending.
Corporate capital dominates the government and prevents the changes urgently needed in so many crisis issues for the nation and the world.
In the last year, through Prosperity Agenda I worked on many of these critical issues including the impact of corporate power on elections, providing health care to all Americans, restructuring finance regulation to prevent another economic collapse and reigning in spending on weapons and war. In all of these areas we had some impact, but in 2011 and beyond, much more will be needed.
Shifting power from concentrated corporate interests to the people is no easy task. It has taken years of work by those interests to gain the power that they have. It will take years of work to weaken the corporate stranglehold. The growing crises remind us of the urgency of our work and the need for a commitment to sustain and increase our efforts.
In preparing this article I looked back at a memo written by Lewis Powell two months before he was nominated to the Supreme Court by President Nixon. The memo was written in 1971 at a time when the business community felt it was rapidly losing power and that the capitalist system was under severe attack. Powell, a lawyer for the Richmond Chamber of Commerce, described as “the fundamental premise” of his paper that “business and the enterprise system are in deep trouble, and the hour is late.” They saw attacks coming in the colleges, in the media, on the streets, in bookstores and from politicians. Everywhere they looked they were under attack and on the verge of total defeat – the end of free markets and crony capitalism.
The purpose of the Powell memo, written to the head of the Chamber of Commerce, was to lay out a plan to restore and build corporate power. Powell laid out a plan that is instructive for those of us who want to shift power from concentrated capital to the people, who want to see a democratized economy in which people have greater control of their economic lives and are more represented in both the economy and government.
Powell’s plan was a long-term one built primarily on education and organization. In response to a “broadly based and consistently pursued” attack on corporate power, Powell wrote “independent and uncoordinated activity by individual corporations, as important as this is, will not be sufficient. Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.” He urged action in universities, with speaker’s bureaus, in publishing, influencing the media and working in the courts, as well as in electoral politics.
We also have a long term plan to educate, organize and unite our efforts:
■We’ve used education in writing, media and video. We strive for but do not rely on the corporate media, which is also part of the problem, to cover our work. We also recognize that too often they are part of the problem. We make our own media and work with the independent media.
■We’ve reached out to allied organizations and allied movements in order to help develop consistent and coordinated actions. And we’ve asked our thousands of members to take actions in unison so our voices are multiplied.
■We’ve used the courts and instruments of government to challenge the illegal actions of the Chamber of Commerce and Karl Rove’s American Crossroads seeking investigation and prosecution of their abuses in the 2010 elections. See more here, and here. We’ve done the same when we seek corporate responsibility for companies like Massey Energy and their CEO Don Blankenship when 29 miners were killed in West Virginia (more here) and were pleased when he resigned.
While education and organization are critical ingredients to bringing change, this is a slow process and many of the issues the nation faces are urgent. This is why we also pursue acts of protest and resistance. We did this in the health care debate and most recently in the anti-war movement. Resistance has always been an ingredient for bringing change whether it was people sitting in at segregated lunch counters, or blacks sitting in the white section of the bus, or Cindy Sheehan camping outside of George Bush’s ranch. In the next year we will see a growing culture of resistance in the United States.
Other acts of resistance are seen around the release of documents by WikiLeaks. The reaction demonstrated corporations and the government working together to block the American people from knowing what is being done in our name. VISA, Mastercard, Bank of America, PayPal, Amazon and various financial institutions stopped processing funds for WikiLeaks at the request of the government. But the truth is getting out and we now know what the government is doing in our name and must take action to stop it. Knowing the truth and not acting is complicity. More and more Americans are acting. We see resistance in the more than 1,000 mirror sites of WikiLeaks, in the more than 100,000 people who downloaded the WikiLeaks “insurance policy” and were prepared to release documents if Julian Assange were harmed. It is seen in Americans organizing for their right to know, and to reaffirm Freedom of the Press. We are organizing under the banner WikiLeaksIsDemocracy.org, with a petition signed by notables and now by thousands. Join us and urge others to as well.
It is going to take education, organization and resistance as part of a persistent independent movement for political change. Those who want real change achieve it by voting for parties dominated by the donations of corporate executives. Voting for corporate parties re-enforces corporate power. We need independent electoral activity along with an independent movement and independent media to shift the power to the people.
There is a growing movement for real paradigm shifting change. It is a slow process that is accelerating and 2011 promises to be a milestone year. Please join us in our efforts at www.ProsperityAgenda.US. We need all Americans who want a democratized economy where power is shifted to the people joining us.
Monday, December 27, 2010
22 Statistics That Prove That The Middle Class Is Being Systematically Wiped Out Of Existence In America
Original Link: http://www.businessinsider.com/22-statistics-that-prove-the-middle-class-is-being-systematically-wiped-out-of-existence-in-america-2010-7
The 22 statistics that you are about to read prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America. The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace. So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough. The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker ten times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.
What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.
So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.
What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about 6 unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.
Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.
But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.
The truth is that the middle class in America is dying - and once it is gone it will be incredibly difficult to rebuild.
The following are 22 statistics that prove that the rich are getting much richer and the poor are getting much poorer in America....
#1) According to a poll taken in 2009, 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
#2) The number of Americans with incomes below the official poverty line rose by about 15% between 2000 and 2006, and by 2008 over 30 million U.S. workers were earning less than $10 per hour.
#3) According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.
#4) According to that same poll, 36 percent of Americans say that they don't contribute anything to retirement savings.
#5) A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
#6) According to one new survey, 24% of American workers say that they have postponed their planned retirement age in the past year.
#7) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
#8) Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
#9) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
#10) In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
#11) One study found that as of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
#12) The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
#13) Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
#14) In the United States, the average federal worker now earns about twice as much as the average worker in the private sector.
#15) An analysis of income tax data by the Congressional Budget Office found that the top 1% of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
#16) In America today, the average time needed to find a job has risen to a record 35.2 weeks.
#17) More than 40% of Americans who actually are employed are now working in service jobs, which are often very low paying.
#18) For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
#19) This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
#20) Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
#21) According to one new study, approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
#22) According to Professor Emmanuel Saez of the University of California at Berkeley, the gap between what the top 10 percent of Americans earn per year and what the rest of us earn has been widening sharply for the last 30 years. His measurements show that the top 10% percent of Americans now take in approximately 50% of the income.
The 22 statistics that you are about to read prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America. The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace. So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough. The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker ten times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.
What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.
So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.
What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about 6 unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.
Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.
But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.
The truth is that the middle class in America is dying - and once it is gone it will be incredibly difficult to rebuild.
The following are 22 statistics that prove that the rich are getting much richer and the poor are getting much poorer in America....
#1) According to a poll taken in 2009, 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
#2) The number of Americans with incomes below the official poverty line rose by about 15% between 2000 and 2006, and by 2008 over 30 million U.S. workers were earning less than $10 per hour.
#3) According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.
#4) According to that same poll, 36 percent of Americans say that they don't contribute anything to retirement savings.
#5) A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
#6) According to one new survey, 24% of American workers say that they have postponed their planned retirement age in the past year.
#7) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
#8) Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
#9) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
#10) In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
#11) One study found that as of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
#12) The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
#13) Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
#14) In the United States, the average federal worker now earns about twice as much as the average worker in the private sector.
#15) An analysis of income tax data by the Congressional Budget Office found that the top 1% of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
#16) In America today, the average time needed to find a job has risen to a record 35.2 weeks.
#17) More than 40% of Americans who actually are employed are now working in service jobs, which are often very low paying.
#18) For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
#19) This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
#20) Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
#21) According to one new study, approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
#22) According to Professor Emmanuel Saez of the University of California at Berkeley, the gap between what the top 10 percent of Americans earn per year and what the rest of us earn has been widening sharply for the last 30 years. His measurements show that the top 10% percent of Americans now take in approximately 50% of the income.
Sunday, December 26, 2010
Republicans: Bought And Delivered
Original Link: http://www.blackstarnews.com/news/135/ARTICLE/6904/2010-11-08.html
By Colin Benjamin
Today, Republicans, like Karl Rove, are feeling good about themselves after riding a wave of anti-incumbency into control of the House of Representatives, although Democrats retained the Senate.
Unfortunately, this disastrous election result will further paralyze any notion of advancing a progressive agenda for American workers. Two years of legislative limbo and, possible, investigative witch-hunts by Republicans await us.
The question now is: are we ready to stop this insurgence of political ignorance and retrograde White supremacy at the heart of the ugliness exhibited by Tea Party crackpots and right-wing Republicans? Republicans have made it clear the prize they really covet: the White House in 2012.
As sick as it is, Republicans aren't interested in pulling this country out of its economic malaise. They're too busy trying to discredit President Obama, for political gain.
For example, Mike Duncan Chairman of American Crossroads, a political propaganda group of right-wingers run by Karl Rove, said "It's a bigger prize in 2012 and that's changing the White House. We planted a flag for permanence and we believe we'll play a major role for 2012."
Moreover, they've made it clear this election was a dry-run for 2012. Karl Rove and his minions have promised to continue running ads from now until 2012. From the beginning, Republicans never intended to govern in any cooperative way with President Obama and the Democrats. Yet, voters have just rewarded these obstinate obstructionists by giving them control of the House of Representatives. How could anybody, who voted for change in 2008, put back into office these corporately-owned Republicans?
If these voters wanted to send a "message"to Democrats why didn't they elect some third-party candidates? Wouldn't that have made more political sense? Why couldn't New York's Freedom Party garner more than 20,000 votes, especially, when Carl Palladino had no chance of beating Andrew Cuomo? Are voters that politically unsophisticated?
President Obama's hands will now be effectively tied for the next two years. With a Republican stranglehold on the House all progressive ideas to push this country forward, for regular Americans, will be effectively crushed. Worst of all, Republicans have pledged to repeal the major gains of the last two years, especially, healthcare reform.
Under the healthcare reform bill, 32 million Americans would receive healthcare, while cutting the deficit by $138 billion from 2010-2019. Over the first decade it would cost $940 billion. Republicans say we don't have the money to pay for healthcare. However, these supposedly fiscally-responsible people are committed to giving $750 billion in tax-breaks to the richest 2 percent in the country over a 10-year period.
President Obama, rightly, conceded that the Democrats had a messaging problem. Republicans fought against the stimulus bill, which included significant tax breaks for average Americans.
Republicans claim to be fighting for the "American people." I guess they mean superrich American people. The obscene amount of money --nearly $4 billion-- spent on this mid-term should make it crystal clear who Republicans really work for: billionaires and multi-millionaires.
For example, American Crossroads gets over 95 percent of its funding from four billionaires: Bob Perry, Bradley Hughes, Trevor Rees-Jones and Robert Rowling. Robert Rowling is the co-founder, along with his father Reese Rowling, of the Texas Company TRT Holdings; which owns the oil and gas exploration entity Tana Exploration. It also owns Gold's Gym and the Omni Hotel chains. Rowling has given American Crossroads, through his companies and as a private donor, more than $ 6 million.
Trevor Rees-Jones is the owner and Chairman of Chief Oil and Gas, a Texas company involved in oil drilling, including the controversial hydraulic fracturing process.
Jones has given American Crossroads at least $1 million this year. Bradley Wayne Hughes is the founder of Public Storage, America's largest self-storage company based in Glendale , California. Hughes has also given Karl Rove and American Crossroads over $1 million.
And then there is Texas construction magnate Bob Perry owner of Perry Homes. Perry was a big contributor to George W. Bush and other Republicans like: Tom DeLay, Mike Huckabee and Mitt Romney. Perry gave the Swift Boats Vets for Truth over $4 million. Remember how these fabricators tarnished the reputation of Senator John Kerry, during the 2004 Presidential Election? Reportedly, between this September and October, Perry gave American Crossroads $7 million. Along with the Koch brothers, the bankrollers of the Tea Party phonies, these are the people pulling the strings of Republicans.
Given the Supreme Court's Citizen United ruling, manipulated by activist Republican judges on the John Roberts Court, the wealthy have been given the green light to spend any amount of money to thwart true democracy. The will of regular Americans is again being dictated by money and the flawed political party system which promotes divided loyalty, leading to the "broken Washington" everyone complains about.
The fight for 2012 has begun. The time to get organized, to denounce greed and bigotry is now. As poet Ella Wilcox, in her
poem "Protest," said: "To sit in silence when we should protest makes cowards out of men. Therefore do I protest."
By Colin Benjamin
Today, Republicans, like Karl Rove, are feeling good about themselves after riding a wave of anti-incumbency into control of the House of Representatives, although Democrats retained the Senate.
Unfortunately, this disastrous election result will further paralyze any notion of advancing a progressive agenda for American workers. Two years of legislative limbo and, possible, investigative witch-hunts by Republicans await us.
The question now is: are we ready to stop this insurgence of political ignorance and retrograde White supremacy at the heart of the ugliness exhibited by Tea Party crackpots and right-wing Republicans? Republicans have made it clear the prize they really covet: the White House in 2012.
As sick as it is, Republicans aren't interested in pulling this country out of its economic malaise. They're too busy trying to discredit President Obama, for political gain.
For example, Mike Duncan Chairman of American Crossroads, a political propaganda group of right-wingers run by Karl Rove, said "It's a bigger prize in 2012 and that's changing the White House. We planted a flag for permanence and we believe we'll play a major role for 2012."
Moreover, they've made it clear this election was a dry-run for 2012. Karl Rove and his minions have promised to continue running ads from now until 2012. From the beginning, Republicans never intended to govern in any cooperative way with President Obama and the Democrats. Yet, voters have just rewarded these obstinate obstructionists by giving them control of the House of Representatives. How could anybody, who voted for change in 2008, put back into office these corporately-owned Republicans?
If these voters wanted to send a "message"to Democrats why didn't they elect some third-party candidates? Wouldn't that have made more political sense? Why couldn't New York's Freedom Party garner more than 20,000 votes, especially, when Carl Palladino had no chance of beating Andrew Cuomo? Are voters that politically unsophisticated?
President Obama's hands will now be effectively tied for the next two years. With a Republican stranglehold on the House all progressive ideas to push this country forward, for regular Americans, will be effectively crushed. Worst of all, Republicans have pledged to repeal the major gains of the last two years, especially, healthcare reform.
Under the healthcare reform bill, 32 million Americans would receive healthcare, while cutting the deficit by $138 billion from 2010-2019. Over the first decade it would cost $940 billion. Republicans say we don't have the money to pay for healthcare. However, these supposedly fiscally-responsible people are committed to giving $750 billion in tax-breaks to the richest 2 percent in the country over a 10-year period.
President Obama, rightly, conceded that the Democrats had a messaging problem. Republicans fought against the stimulus bill, which included significant tax breaks for average Americans.
Republicans claim to be fighting for the "American people." I guess they mean superrich American people. The obscene amount of money --nearly $4 billion-- spent on this mid-term should make it crystal clear who Republicans really work for: billionaires and multi-millionaires.
For example, American Crossroads gets over 95 percent of its funding from four billionaires: Bob Perry, Bradley Hughes, Trevor Rees-Jones and Robert Rowling. Robert Rowling is the co-founder, along with his father Reese Rowling, of the Texas Company TRT Holdings; which owns the oil and gas exploration entity Tana Exploration. It also owns Gold's Gym and the Omni Hotel chains. Rowling has given American Crossroads, through his companies and as a private donor, more than $ 6 million.
Trevor Rees-Jones is the owner and Chairman of Chief Oil and Gas, a Texas company involved in oil drilling, including the controversial hydraulic fracturing process.
Jones has given American Crossroads at least $1 million this year. Bradley Wayne Hughes is the founder of Public Storage, America's largest self-storage company based in Glendale , California. Hughes has also given Karl Rove and American Crossroads over $1 million.
And then there is Texas construction magnate Bob Perry owner of Perry Homes. Perry was a big contributor to George W. Bush and other Republicans like: Tom DeLay, Mike Huckabee and Mitt Romney. Perry gave the Swift Boats Vets for Truth over $4 million. Remember how these fabricators tarnished the reputation of Senator John Kerry, during the 2004 Presidential Election? Reportedly, between this September and October, Perry gave American Crossroads $7 million. Along with the Koch brothers, the bankrollers of the Tea Party phonies, these are the people pulling the strings of Republicans.
Given the Supreme Court's Citizen United ruling, manipulated by activist Republican judges on the John Roberts Court, the wealthy have been given the green light to spend any amount of money to thwart true democracy. The will of regular Americans is again being dictated by money and the flawed political party system which promotes divided loyalty, leading to the "broken Washington" everyone complains about.
The fight for 2012 has begun. The time to get organized, to denounce greed and bigotry is now. As poet Ella Wilcox, in her
poem "Protest," said: "To sit in silence when we should protest makes cowards out of men. Therefore do I protest."
Spending blitz by outside groups helped secure big GOP wins
Original Link: http://today.msnbc.msn.com/id/39995283/ns/politics-decision_2010/
By Michael Isikoff and Rich Gardella
Hedge fund moguls helped bankroll groups' attack ads, sources tell NBC News
A tightly coordinated effort by outside Republican groups, spearheaded by Karl Rove and fueled by tens of millions of dollars in contributions from Wall Street hedge fund moguls and other wealthy donors, helped secure big GOP midterm victories Tuesday, according to campaign spending figures and Republican fundraising insiders.
Leading the GOP spending pack was a pair of groups — American Crossroads and its affiliate, Crossroads GPS — both of which were co-founded by two former aides in the George W. Bush White House: Rove, and Ed Gillespie.
Together, the groups — which are not formally part of the Republican Party — spent more than $38 million on attack ads and campaign mailings against Democrats, according to figures compiled by the Sunlight Foundation, a nonpartisan group that tracks campaign spending in congressional races.
A substantial portion of Crossroads GPS’ money came from a small circle of extremely wealthy Wall Street hedge fund and private equity moguls, according to GOP fundraising sources who spoke with NBC News on condition of anonymity. These donors have been bitterly opposed to a proposal by congressional Democrats — and endorsed by the Obama administration — to increase the tax rates on compensation that hedge funds pay their partners, the sources said.
A scorecard compiled by NBC News shows the ad barrage appeared to mostly pay off: Republican candidates won nine of the 12 Senate races and 14 of 22 House races where American Crossroads and Crossroads GPS spent money.
That had the groups’ leaders gloating Wednesday about what they described as their pivotal role in the election results.
‘A decisive blow for freedom’
“Thank you, America!” read the banner headline on a blog posting by Steve Law, president of American Crossroads, on the group’s website. The posting proclaimed that the organizations’ team had “struck a decisive blow for freedom” with the election results. “Together we not only retired House Speaker Nancy Pelosi, we also achieved the largest House seat switch since 1938!” Law wrote.
While it is hard to calculate exactly how much of an impact the Crossroads groups had in an election that was tilting Republican for a variety of reasons, their efforts helped fuel an substantial overall spending advantage by outside GOP groups. Overall, outside Republican groups outspent outside Democratic groups, $245 million to $191 million — a $54 million edge.
The Crossroads affiliates and similar groups were formed after a controversial Supreme Court ruling in January that permitted outside political groups to collect unlimited contributions from corporations, labor unions and other wealthy donors and use them directly on campaign ads. In addition, groups that were organized as nonprofit “advocacy” organizations (such as Crossroads GPS) did not have to disclose the identity of their donors.
Advertisement | ad info
As a result, the airwaves this campaign season were flooded with millions of dollars in attack ads, paid for by secret donors. Out of nearly $300 million spent on congressional campaigns ads by both parties, 42 percent were funded by undisclosed donors, according to a study by the Center for Responsive Politics.
Just behind the Crossroads groups in outside spending on the GOP-side were the Chamber of Commerce ($31 million) and the American Action Network ($14 million), according to Sunlight Foundation figures. Neither disclosed the identity of its donors.
While outside Democratic groups belatedly tried to mimic the GOP efforts, they fell short. America’s Families First Action Fund, a group founded by a number of former Democratic strategists that operated much like American Crossroads, wasn’t organized until last summer and spent just $5.5 million — $1 million of which came from a non-disclosing nonprofit affiliate, according to the Sunlight Foundation. The big outside spenders on the Democratic side were labor unions such as AFSME ($10.7 million) and the SEIU ($10 million.)
Groups coordinated spending, insiders say
In addition to the spending advantage, outside GOP groups like the Crossroads groups, Americans for Prosperity and Club for Growth coordinated their efforts, divvying up which groups would spend in which races at which times. The groups’ leaders would meet and talk regularly in sessions often led by Rove or one of his associates, according to the two GOP fundraising sources familiar with how the organizations worked.
The coordination could be seen in spending patterns in key Senate races.
In Illinois, for example, GOP winner Mark Kirk benefited from $5.5 million in attack ads from the Crossroads groups targeting his Democratic opponent, Alexi Giannoulias.
In Wisconsin, meanwhile, the Crossroads groups didn’t spend any money, but the Chamber of Commerce spent $748,000 on attack ads that helped defeat Democratic Sen. Russ Feingold. (Feingold, ironically, was co-author of the McCain-Feingold campaign finance law whose restrictions on advertisements by outside groups was overturned by the Supreme Court ruling earlier this year, paving the way for the creation of groups such as American Crossroads.)
The long term impact of the spending by the outside groups during this election will be to lay the groundwork for an even bigger effort during the presidential campaign two years from now. That will substantially diminish the role of the two political parties, according to campaign finance experts.
Other than running primaries, “who needs (political parties)?” asked Brett Kappel, a Washington lawyer who specializes in campaign finance laws. Contributions to the parties remain “heavily regulated,” under strict limits and must be publicly disclosed, he noted.
“After this election,” Kappel said, “all of that can be outsourced to unregulated entities that don’t have to disclose their donors.”
By Michael Isikoff and Rich Gardella
Hedge fund moguls helped bankroll groups' attack ads, sources tell NBC News
A tightly coordinated effort by outside Republican groups, spearheaded by Karl Rove and fueled by tens of millions of dollars in contributions from Wall Street hedge fund moguls and other wealthy donors, helped secure big GOP midterm victories Tuesday, according to campaign spending figures and Republican fundraising insiders.
Leading the GOP spending pack was a pair of groups — American Crossroads and its affiliate, Crossroads GPS — both of which were co-founded by two former aides in the George W. Bush White House: Rove, and Ed Gillespie.
Together, the groups — which are not formally part of the Republican Party — spent more than $38 million on attack ads and campaign mailings against Democrats, according to figures compiled by the Sunlight Foundation, a nonpartisan group that tracks campaign spending in congressional races.
A substantial portion of Crossroads GPS’ money came from a small circle of extremely wealthy Wall Street hedge fund and private equity moguls, according to GOP fundraising sources who spoke with NBC News on condition of anonymity. These donors have been bitterly opposed to a proposal by congressional Democrats — and endorsed by the Obama administration — to increase the tax rates on compensation that hedge funds pay their partners, the sources said.
A scorecard compiled by NBC News shows the ad barrage appeared to mostly pay off: Republican candidates won nine of the 12 Senate races and 14 of 22 House races where American Crossroads and Crossroads GPS spent money.
That had the groups’ leaders gloating Wednesday about what they described as their pivotal role in the election results.
‘A decisive blow for freedom’
“Thank you, America!” read the banner headline on a blog posting by Steve Law, president of American Crossroads, on the group’s website. The posting proclaimed that the organizations’ team had “struck a decisive blow for freedom” with the election results. “Together we not only retired House Speaker Nancy Pelosi, we also achieved the largest House seat switch since 1938!” Law wrote.
While it is hard to calculate exactly how much of an impact the Crossroads groups had in an election that was tilting Republican for a variety of reasons, their efforts helped fuel an substantial overall spending advantage by outside GOP groups. Overall, outside Republican groups outspent outside Democratic groups, $245 million to $191 million — a $54 million edge.
The Crossroads affiliates and similar groups were formed after a controversial Supreme Court ruling in January that permitted outside political groups to collect unlimited contributions from corporations, labor unions and other wealthy donors and use them directly on campaign ads. In addition, groups that were organized as nonprofit “advocacy” organizations (such as Crossroads GPS) did not have to disclose the identity of their donors.
Advertisement | ad info
As a result, the airwaves this campaign season were flooded with millions of dollars in attack ads, paid for by secret donors. Out of nearly $300 million spent on congressional campaigns ads by both parties, 42 percent were funded by undisclosed donors, according to a study by the Center for Responsive Politics.
Just behind the Crossroads groups in outside spending on the GOP-side were the Chamber of Commerce ($31 million) and the American Action Network ($14 million), according to Sunlight Foundation figures. Neither disclosed the identity of its donors.
While outside Democratic groups belatedly tried to mimic the GOP efforts, they fell short. America’s Families First Action Fund, a group founded by a number of former Democratic strategists that operated much like American Crossroads, wasn’t organized until last summer and spent just $5.5 million — $1 million of which came from a non-disclosing nonprofit affiliate, according to the Sunlight Foundation. The big outside spenders on the Democratic side were labor unions such as AFSME ($10.7 million) and the SEIU ($10 million.)
Groups coordinated spending, insiders say
In addition to the spending advantage, outside GOP groups like the Crossroads groups, Americans for Prosperity and Club for Growth coordinated their efforts, divvying up which groups would spend in which races at which times. The groups’ leaders would meet and talk regularly in sessions often led by Rove or one of his associates, according to the two GOP fundraising sources familiar with how the organizations worked.
The coordination could be seen in spending patterns in key Senate races.
In Illinois, for example, GOP winner Mark Kirk benefited from $5.5 million in attack ads from the Crossroads groups targeting his Democratic opponent, Alexi Giannoulias.
In Wisconsin, meanwhile, the Crossroads groups didn’t spend any money, but the Chamber of Commerce spent $748,000 on attack ads that helped defeat Democratic Sen. Russ Feingold. (Feingold, ironically, was co-author of the McCain-Feingold campaign finance law whose restrictions on advertisements by outside groups was overturned by the Supreme Court ruling earlier this year, paving the way for the creation of groups such as American Crossroads.)
The long term impact of the spending by the outside groups during this election will be to lay the groundwork for an even bigger effort during the presidential campaign two years from now. That will substantially diminish the role of the two political parties, according to campaign finance experts.
Other than running primaries, “who needs (political parties)?” asked Brett Kappel, a Washington lawyer who specializes in campaign finance laws. Contributions to the parties remain “heavily regulated,” under strict limits and must be publicly disclosed, he noted.
“After this election,” Kappel said, “all of that can be outsourced to unregulated entities that don’t have to disclose their donors.”
Saturday, December 25, 2010
Kenneth Griffin of Citadel Helps Fill Coffers of Rove's Political Group
Original Link: http://www.bloomberg.com/news/2010-12-03/griffin-of-citadel-helps-fill-coffers-of-rove-s-political-group.html
By Jonathan D. Salant and Traci McMillan
Kenneth Griffin, chief executive of Citadel Investment Group LLC, and his wife Anne each contributed $250,000 to Karl Rove’s American Crossroads fundraising group, new Federal Election Commission reports show.
Griffin, who runs the $12.5 billion hedge fund based in Chicago, called the U.S. government’s role in the financial system “frightening” at an April 2009 conference. His wife is managing partner of Aragon Global Management LLC, also based in Chicago.
American Crossroads took in $3.8 million between Oct. 14 and Nov. 22, including $250,000 from Thomas Siebel, founder of Siebel Systems Inc. and now chairman of Palo Alto, California- based First Virtual Group; and $950,000 from B. Wayne Hughes, chairman of Glendale, California-based Public Storage, bringing his total contributions to the group to $3.3 million.
The U.S. attorney’s office in Manhattan has subpoenaed Citadel as part of an investigation into insider trading, the Wall Street Journal reported Nov. 23.
Griffin also gave $650,000 to the Republican Governors Association, including $150,000 on Oct. 11, Internal Revenue Service filings show.
Devon Spurgeon, a spokeswoman for Citadel, declined comment.
$71 Million
American Crossroads, which discloses its donors, and its affiliate, Crossroads GPS, which doesn’t, raised $71 million for the 2010 elections, according to Jonathan Collegio, a spokesman for both groups. American Crossroads is the biggest of the so- called “super” political action committees, which can take in unlimited donations from corporations, unions and individuals.
The Crossroads groups spent $38 million, more than any other organization, to help elect Republican candidates in this year’s mid-term elections. Both groups were advised by Rove, former President George W. Bush’s chief political strategist.
The elections resulted in a Republican net gain of six governorships, six Senate seats and at least 63 House seats, with a race still undecided in a New York district. Republicans will control the House in the new Congress that convenes in early January and control 47 seats in the 100-member Senate.
The Crossroads groups plan to remain active on issues such as taxes and health care, Collegio said.
Concerned Taxpayers
Another Republican super PAC, Concerned Taxpayers of America, took in $307,500 between Oct. 14 and Nov. 22, all but $30,000 from Robert Mercer, co-chief executive of Renaissance Technologies Corp., an East Setauket, New York, hedge fund. The PAC raised $957,500 for the elections, with $627,500 coming from Mercer. Concerned Taxpayers spent $789,452, all on House races.
Labor unions were the biggest contributors to Democratic super PACs in the campaign’s last three weeks. The National Education Association contributed $400,000 and the Service Employees International Union gave $250,000 to Commonsense Ten, a Washington-based group run by Democratic strategists.
The American Federation of State, County and Municipal Employees contributed $300,000 to Patriot Majority, which aired advertisements in support of Senate Majority Leader Harry Reid. The Nevada Democrat defeated Tea Party favorite Sharron Angle Nov. 2.
The trial lawyers’ trade group, the American Association for Justice, gave $325,000 to Commonsense Ten, increasing its total donations to the PAC to $575,000.
By Jonathan D. Salant and Traci McMillan
Kenneth Griffin, chief executive of Citadel Investment Group LLC, and his wife Anne each contributed $250,000 to Karl Rove’s American Crossroads fundraising group, new Federal Election Commission reports show.
Griffin, who runs the $12.5 billion hedge fund based in Chicago, called the U.S. government’s role in the financial system “frightening” at an April 2009 conference. His wife is managing partner of Aragon Global Management LLC, also based in Chicago.
American Crossroads took in $3.8 million between Oct. 14 and Nov. 22, including $250,000 from Thomas Siebel, founder of Siebel Systems Inc. and now chairman of Palo Alto, California- based First Virtual Group; and $950,000 from B. Wayne Hughes, chairman of Glendale, California-based Public Storage, bringing his total contributions to the group to $3.3 million.
The U.S. attorney’s office in Manhattan has subpoenaed Citadel as part of an investigation into insider trading, the Wall Street Journal reported Nov. 23.
Griffin also gave $650,000 to the Republican Governors Association, including $150,000 on Oct. 11, Internal Revenue Service filings show.
Devon Spurgeon, a spokeswoman for Citadel, declined comment.
$71 Million
American Crossroads, which discloses its donors, and its affiliate, Crossroads GPS, which doesn’t, raised $71 million for the 2010 elections, according to Jonathan Collegio, a spokesman for both groups. American Crossroads is the biggest of the so- called “super” political action committees, which can take in unlimited donations from corporations, unions and individuals.
The Crossroads groups spent $38 million, more than any other organization, to help elect Republican candidates in this year’s mid-term elections. Both groups were advised by Rove, former President George W. Bush’s chief political strategist.
The elections resulted in a Republican net gain of six governorships, six Senate seats and at least 63 House seats, with a race still undecided in a New York district. Republicans will control the House in the new Congress that convenes in early January and control 47 seats in the 100-member Senate.
The Crossroads groups plan to remain active on issues such as taxes and health care, Collegio said.
Concerned Taxpayers
Another Republican super PAC, Concerned Taxpayers of America, took in $307,500 between Oct. 14 and Nov. 22, all but $30,000 from Robert Mercer, co-chief executive of Renaissance Technologies Corp., an East Setauket, New York, hedge fund. The PAC raised $957,500 for the elections, with $627,500 coming from Mercer. Concerned Taxpayers spent $789,452, all on House races.
Labor unions were the biggest contributors to Democratic super PACs in the campaign’s last three weeks. The National Education Association contributed $400,000 and the Service Employees International Union gave $250,000 to Commonsense Ten, a Washington-based group run by Democratic strategists.
The American Federation of State, County and Municipal Employees contributed $300,000 to Patriot Majority, which aired advertisements in support of Senate Majority Leader Harry Reid. The Nevada Democrat defeated Tea Party favorite Sharron Angle Nov. 2.
The trial lawyers’ trade group, the American Association for Justice, gave $325,000 to Commonsense Ten, increasing its total donations to the PAC to $575,000.
Friday, December 24, 2010
9 Biggest Conservative Lies About Taxes and Public Spending
Original Link: http://www.alternet.org/story/149265/the_9_biggest_conservative_lies_about_taxes_and_public_spending
By Joshua Holland
Here are the things the corporate media won't tell you about the tax-cut rhetoric in Washington
It’s difficult to know where to begin deconstructing conservative rhetoric on taxes and spending. It's such a central part of their worldview, and yet it's a view informed by a whole slew of falsehoods that have been repeated again and again during this year's debates over the Bush tax cuts, public spending and the deficit. What follows are nine of the biggest fact-free whoppers that conservatives insist are true.
1. Cutting Taxes Leads to More Money for the Government
Conservatives can't say they oppose popular programs on ideological grounds, and they can't admit they're happy to run up huge budget deficits, so they've come up with the fiction that cutting taxes actually brings in more revenues to finance the public sector.
What's especially brazen about this is that it's usually preceded by debate-stifling phrases such as “as everyone knows,” “history shows us” or “every single time taxes have been cut.”
In 2007, Sen. John McCain, R-Arizona, said, “Tax cuts, starting with Kennedy, as we all know, increase revenues”; Sen. Kay Bailey Hutchinson, R-Texas, claimed that “Every major tax cut we've had in history has created more revenue," and Senate Minority Leader Mitch McConnell, R-KY said earlier this year that the myth represented “the view of virtually every Republican on that subject."
It's also complete nonsense, and it's worth noting that only conservative politicians and pundits make the claim -- economists across the ideological spectrum agree that the argument is cursed by voodoo math.
As Time Magazine's Justin Fox noted in 2007, "Every economics Ph.D. who has worked in a prominent role in the Bush administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves—and were never intended to.” Harvard professor Greg Mankiw, a former chairman of Bush’s Council of Economic Advisers, dedicated a whole section of his economics textbook to debunking the claim.
And in an opinion column in the Wall Street Journal responding to Bush's claim that "You cut taxes, and the tax revenues increase," Andrew Samwick, who served as chief economist on Bush’s Council of Economic Advisers, wrote, “You are smart people....You know that the tax cuts have not fueled record revenues... You know that the first order effect of cutting taxes is to lower tax revenues.”
2. Conservatives' Favorite Economist Proves the Point
As I note in my book, The Fifteen Biggest Lies About the Economy, that falsehood is based in large part on an abuse of “Laffer’s curve,” the conservative media’s favorite economic theorem. The idea, first scribbled on a cocktail napkin by economist Arthur Laffer (according to lore), is pretty simple. It holds that you can raise income taxes to a degree, but when the top tax rate exceeds a certain point, people will go to such extraordinary lengths to avoid paying the piper that the government will actually end up collecting less revenue.
When Dylan Matthews asked a number of experts where the Laffer Curve “bends” for the Washington Post, the economists (he asked some conservative opinion columnists as well) all agreed that a top rate of 50 percent – several went as high as 70 percent – would still fall below the curve. That's important to keep in mind as we debate the merits of letting the top rate return to the 39 percent that prevailed during the Clinton years.
Each time taxes have been cut in the past few decades, it's led to a drop in revenues, which is why people like McCain like to go back to the Kennedy era, when cutting the top rate did spur growth and bring more money into the government's coffers. What they don't mention is that Kennedy cut the top rate from 91 percent to 70 percent, which has no bearing on the debate we're having today.*
3. Taxes on the Rich Keep 'Wealth Producers' from 'Creating Jobs'
We're all familiar with this one. In a New York Post column last week, Fox Business columnist Charles Gasparino claimed that businesses have "been hoarding cash instead of hiring" because of "the likelihood for higher taxes.” Media Matters responded by citing the CBO's finding that "[I]ncreasing the after-tax income of businesses typically does not create much incentive" to hire.
What's noteworthy about the narrative is the degree to which it defies simple common sense. It shouldn't be a matter of debate that only one thing creates jobs, and that's demand for companies' goods and services. The idea that a business that was booming would refuse to hire people and forego expansion because top tax rates might nudge upward is as silly as the idea that a business that has no customers would add new employees because its owners expect taxes to be low.
4. The Opposite: Tax Cuts for Upper Earners Spur Job Growth
Demand creates jobs, and U.S. Demand is way down because American households lost around $15 trillion dollars in wealth during the downturn. So it's important to note that research has shown that when you give a tax break to high-earners, they bank it, and when you give relief to working people, they spend it, increasing demand.
Like other types of public spending, giving cuts to those at the top does stimulate the economy, but very, very badly. According Mark Zandi, chief economist for Moody's, a dollar in tax cuts on capital gains adds .38 cents of economic growth and a dollar in corporate tax cuts brings us just .30 cents worth of stimulus, but a dollar in unemployment benefits gives the economy a boost of $1.63 and a buck worth of food stamps adds $1.73 in stimulus (PDF).
5. Only Half of American Families Pay Taxes
Rush Limbaugh put it this way: “The bottom 50 percent is paying a tiny bit of the taxes.... Remember this the next time you hear the ‘tax cuts for the rich’ business. Understand that the so-called rich are about the only ones paying taxes anymore.”
That's an entirely false narrative that emerges from some rather transparent sleight-of-hand. You have to look at the federal income tax in isolation and then pretend that it represents the government’s entire take. But the reality is that the government isn't financed from federal income taxes alone – far from it. Payroll taxes, for example, represent the biggest tax bite for the average worker.
When you add it all up—state and local taxes, federal taxes, sales taxes and excise fees—it turns out that the rich, the poor, and those in between all end up with about the same tax rate. That’s the conclusion of a 2007 study by Boston University economists Laurence J. Kotlikoff and David Rapson. They summarized, “The average marginal tax rate on incomes between $20,000 and $500,000 is 40.3%, the median tax rate is 41.8%, and the standard deviation of all of those rates is 5.3 percentage points. Basically, most of us pay about 40%, plus or minus 5.3 percentage points.”
6. Americans Are Taxed to Death
This is one of those claims made so frequently that it becomes a matter of faith. But faith doesn't rely on fact, and this one is totally untrue.
In 2008, we ranked 26th out of the 30 countries in the Organization for Economic Cooperation and Development (OECD) in terms of our overall tax burden -- the share of our economy we fork over to the government. The U.S.came in almost 9 percentage points below the average of the group of wealthy nations, and some 20 percentage points below highly taxed countries like Denmark.
7. We're Being Killed by Runaway Government Spending
Public spending has increased with the wars in Afghanistan and Iraq, and, temporarily, with the stimulus package. And it will rise in the future as more baby boomers retire. But beyond that, it's important to understand how “limited” our government really is relative to other wealthy countries.
Sabina Dewan and Michael Ettlinger of the Center for American Progress crunched the data and found that between 2004 and 2007, the U.S. ranked 24th out of 26 OECD countries in overall government spending as a share of our economic output. Only Ireland and South Korea, both relative newcomers to the club, had a more “limited government” than we did during that span. Again, we came in around 7 percentage points of GDP below the OECD average -- and almost 20 percentage points beneath that of big spenders like France
8. Conservatives Favor Low Taxes and Limited Government
The Right loves “Big Government” as long as it's pursuing their preferred agenda. What they don't like are the government's most popular functions – assuring a social safety net, protecting consumers and the environment, subsidizing education, etc. They don't want to debate priorities, so they claim an ideological preference for a smaller government while showering tons of money on the military, law-enforcement, corporate subsidies, etc.
That's why the share of the economy represented by government spending (at the local, state, and federal levels combined) has been remarkably consistent during the last 40 years or so, regardless of which party controlled the White House or Congress.
In the two years that Gerald Ford presented budgets, government spending as a share of GDP averaged 31.4 percent; in ultra-liberal Jimmy Carter’s four years, it dropped to 30.7 percent; Ronald Reagan, the patron saint of fiscal conservatism, came into office, and it rose to 32.2 percent. It nudged slightly higher during the first George Bush’s term in office, then dropped to an almost Nixonian 30.3 percent during the Clinton years, before rising to 31.6 percent during the second Bush administration.
Looking at the other side of the ledger, overall government revenues have also remained relatively stable, but the pattern is reversed. The government’s take, as a share of GDP, dropped during the Ford era, rose again under Carter, and fell again under Reagan. Revenues rose by almost 2 percent under Clinton and fell by a percent and a half under George W. Bush. (The only exception: government revenues rose from 27.3 percent of GDP during the Reagan years to 27.6 percent under George Herbert Walker Bush – that was the “peace dividend.”)
Although the government taxes and spends at fairly similar rates, under Republican leadership the nation shells out a bit more for government services and takes in just a bit less in taxes. With a $15 trillion economy, those little differences add up to pretty big deficits, and this, rather than hot school lunches for poor kids, is responsible for a large chunk of our federal debt.
Given that reality, it's a wonder that conservatives have managed to convince the mainstream media and much of the country that they’re the fiscally responsible ones who are always ready to step in and clean up the nation’s budgetary mess.
9. Taxes on Top Earners Are Actually Taxes on 'Small Businesses'
For years, Republicans have pushed the spin that most of the Bush cuts for the highest earners were going to “small business owners,” the proverbial lifeblood of Small Town U.S.A. Then Republican national committee chair Ed Gillespie launched the meme in a 2003 speech, saying that “80% of the tax relief for upper income filers goes to small businesses.”
Fact-check.org, the nonpartisan campaign watchdog, looked at the claim, which was cooked up by GOP staffers on the House Economic Committee, and concluded that “it’s untrue—and a classic example of a statistical distortion gone amok.” The lie is pretty simple: around 80 percent of the wealthiest Americans report some business income on their tax returns, either from private partnerships (think big law firms) or from “hobby” businesses. And the GOP committee counted everyone who reported even a dollar on Schedule C of their returns as a “small business owner.”
The reality? Less than 2 percent of tax returns reporting small-business income are filed by people in the top two income brackets. As a Washington Post analysis concluded, “If the objective is to help small businesses, continuing the Bush tax cuts on high-income taxpayers isn't the way to go -- it would miss more than 98 percent of small-business owners and would primarily help people who don't make most of their money off those businesses.”
By Joshua Holland
Here are the things the corporate media won't tell you about the tax-cut rhetoric in Washington
It’s difficult to know where to begin deconstructing conservative rhetoric on taxes and spending. It's such a central part of their worldview, and yet it's a view informed by a whole slew of falsehoods that have been repeated again and again during this year's debates over the Bush tax cuts, public spending and the deficit. What follows are nine of the biggest fact-free whoppers that conservatives insist are true.
1. Cutting Taxes Leads to More Money for the Government
Conservatives can't say they oppose popular programs on ideological grounds, and they can't admit they're happy to run up huge budget deficits, so they've come up with the fiction that cutting taxes actually brings in more revenues to finance the public sector.
What's especially brazen about this is that it's usually preceded by debate-stifling phrases such as “as everyone knows,” “history shows us” or “every single time taxes have been cut.”
In 2007, Sen. John McCain, R-Arizona, said, “Tax cuts, starting with Kennedy, as we all know, increase revenues”; Sen. Kay Bailey Hutchinson, R-Texas, claimed that “Every major tax cut we've had in history has created more revenue," and Senate Minority Leader Mitch McConnell, R-KY said earlier this year that the myth represented “the view of virtually every Republican on that subject."
It's also complete nonsense, and it's worth noting that only conservative politicians and pundits make the claim -- economists across the ideological spectrum agree that the argument is cursed by voodoo math.
As Time Magazine's Justin Fox noted in 2007, "Every economics Ph.D. who has worked in a prominent role in the Bush administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves—and were never intended to.” Harvard professor Greg Mankiw, a former chairman of Bush’s Council of Economic Advisers, dedicated a whole section of his economics textbook to debunking the claim.
And in an opinion column in the Wall Street Journal responding to Bush's claim that "You cut taxes, and the tax revenues increase," Andrew Samwick, who served as chief economist on Bush’s Council of Economic Advisers, wrote, “You are smart people....You know that the tax cuts have not fueled record revenues... You know that the first order effect of cutting taxes is to lower tax revenues.”
2. Conservatives' Favorite Economist Proves the Point
As I note in my book, The Fifteen Biggest Lies About the Economy, that falsehood is based in large part on an abuse of “Laffer’s curve,” the conservative media’s favorite economic theorem. The idea, first scribbled on a cocktail napkin by economist Arthur Laffer (according to lore), is pretty simple. It holds that you can raise income taxes to a degree, but when the top tax rate exceeds a certain point, people will go to such extraordinary lengths to avoid paying the piper that the government will actually end up collecting less revenue.
When Dylan Matthews asked a number of experts where the Laffer Curve “bends” for the Washington Post, the economists (he asked some conservative opinion columnists as well) all agreed that a top rate of 50 percent – several went as high as 70 percent – would still fall below the curve. That's important to keep in mind as we debate the merits of letting the top rate return to the 39 percent that prevailed during the Clinton years.
Each time taxes have been cut in the past few decades, it's led to a drop in revenues, which is why people like McCain like to go back to the Kennedy era, when cutting the top rate did spur growth and bring more money into the government's coffers. What they don't mention is that Kennedy cut the top rate from 91 percent to 70 percent, which has no bearing on the debate we're having today.*
3. Taxes on the Rich Keep 'Wealth Producers' from 'Creating Jobs'
We're all familiar with this one. In a New York Post column last week, Fox Business columnist Charles Gasparino claimed that businesses have "been hoarding cash instead of hiring" because of "the likelihood for higher taxes.” Media Matters responded by citing the CBO's finding that "[I]ncreasing the after-tax income of businesses typically does not create much incentive" to hire.
What's noteworthy about the narrative is the degree to which it defies simple common sense. It shouldn't be a matter of debate that only one thing creates jobs, and that's demand for companies' goods and services. The idea that a business that was booming would refuse to hire people and forego expansion because top tax rates might nudge upward is as silly as the idea that a business that has no customers would add new employees because its owners expect taxes to be low.
4. The Opposite: Tax Cuts for Upper Earners Spur Job Growth
Demand creates jobs, and U.S. Demand is way down because American households lost around $15 trillion dollars in wealth during the downturn. So it's important to note that research has shown that when you give a tax break to high-earners, they bank it, and when you give relief to working people, they spend it, increasing demand.
Like other types of public spending, giving cuts to those at the top does stimulate the economy, but very, very badly. According Mark Zandi, chief economist for Moody's, a dollar in tax cuts on capital gains adds .38 cents of economic growth and a dollar in corporate tax cuts brings us just .30 cents worth of stimulus, but a dollar in unemployment benefits gives the economy a boost of $1.63 and a buck worth of food stamps adds $1.73 in stimulus (PDF).
5. Only Half of American Families Pay Taxes
Rush Limbaugh put it this way: “The bottom 50 percent is paying a tiny bit of the taxes.... Remember this the next time you hear the ‘tax cuts for the rich’ business. Understand that the so-called rich are about the only ones paying taxes anymore.”
That's an entirely false narrative that emerges from some rather transparent sleight-of-hand. You have to look at the federal income tax in isolation and then pretend that it represents the government’s entire take. But the reality is that the government isn't financed from federal income taxes alone – far from it. Payroll taxes, for example, represent the biggest tax bite for the average worker.
When you add it all up—state and local taxes, federal taxes, sales taxes and excise fees—it turns out that the rich, the poor, and those in between all end up with about the same tax rate. That’s the conclusion of a 2007 study by Boston University economists Laurence J. Kotlikoff and David Rapson. They summarized, “The average marginal tax rate on incomes between $20,000 and $500,000 is 40.3%, the median tax rate is 41.8%, and the standard deviation of all of those rates is 5.3 percentage points. Basically, most of us pay about 40%, plus or minus 5.3 percentage points.”
6. Americans Are Taxed to Death
This is one of those claims made so frequently that it becomes a matter of faith. But faith doesn't rely on fact, and this one is totally untrue.
In 2008, we ranked 26th out of the 30 countries in the Organization for Economic Cooperation and Development (OECD) in terms of our overall tax burden -- the share of our economy we fork over to the government. The U.S.came in almost 9 percentage points below the average of the group of wealthy nations, and some 20 percentage points below highly taxed countries like Denmark.
7. We're Being Killed by Runaway Government Spending
Public spending has increased with the wars in Afghanistan and Iraq, and, temporarily, with the stimulus package. And it will rise in the future as more baby boomers retire. But beyond that, it's important to understand how “limited” our government really is relative to other wealthy countries.
Sabina Dewan and Michael Ettlinger of the Center for American Progress crunched the data and found that between 2004 and 2007, the U.S. ranked 24th out of 26 OECD countries in overall government spending as a share of our economic output. Only Ireland and South Korea, both relative newcomers to the club, had a more “limited government” than we did during that span. Again, we came in around 7 percentage points of GDP below the OECD average -- and almost 20 percentage points beneath that of big spenders like France
8. Conservatives Favor Low Taxes and Limited Government
The Right loves “Big Government” as long as it's pursuing their preferred agenda. What they don't like are the government's most popular functions – assuring a social safety net, protecting consumers and the environment, subsidizing education, etc. They don't want to debate priorities, so they claim an ideological preference for a smaller government while showering tons of money on the military, law-enforcement, corporate subsidies, etc.
That's why the share of the economy represented by government spending (at the local, state, and federal levels combined) has been remarkably consistent during the last 40 years or so, regardless of which party controlled the White House or Congress.
In the two years that Gerald Ford presented budgets, government spending as a share of GDP averaged 31.4 percent; in ultra-liberal Jimmy Carter’s four years, it dropped to 30.7 percent; Ronald Reagan, the patron saint of fiscal conservatism, came into office, and it rose to 32.2 percent. It nudged slightly higher during the first George Bush’s term in office, then dropped to an almost Nixonian 30.3 percent during the Clinton years, before rising to 31.6 percent during the second Bush administration.
Looking at the other side of the ledger, overall government revenues have also remained relatively stable, but the pattern is reversed. The government’s take, as a share of GDP, dropped during the Ford era, rose again under Carter, and fell again under Reagan. Revenues rose by almost 2 percent under Clinton and fell by a percent and a half under George W. Bush. (The only exception: government revenues rose from 27.3 percent of GDP during the Reagan years to 27.6 percent under George Herbert Walker Bush – that was the “peace dividend.”)
Although the government taxes and spends at fairly similar rates, under Republican leadership the nation shells out a bit more for government services and takes in just a bit less in taxes. With a $15 trillion economy, those little differences add up to pretty big deficits, and this, rather than hot school lunches for poor kids, is responsible for a large chunk of our federal debt.
Given that reality, it's a wonder that conservatives have managed to convince the mainstream media and much of the country that they’re the fiscally responsible ones who are always ready to step in and clean up the nation’s budgetary mess.
9. Taxes on Top Earners Are Actually Taxes on 'Small Businesses'
For years, Republicans have pushed the spin that most of the Bush cuts for the highest earners were going to “small business owners,” the proverbial lifeblood of Small Town U.S.A. Then Republican national committee chair Ed Gillespie launched the meme in a 2003 speech, saying that “80% of the tax relief for upper income filers goes to small businesses.”
Fact-check.org, the nonpartisan campaign watchdog, looked at the claim, which was cooked up by GOP staffers on the House Economic Committee, and concluded that “it’s untrue—and a classic example of a statistical distortion gone amok.” The lie is pretty simple: around 80 percent of the wealthiest Americans report some business income on their tax returns, either from private partnerships (think big law firms) or from “hobby” businesses. And the GOP committee counted everyone who reported even a dollar on Schedule C of their returns as a “small business owner.”
The reality? Less than 2 percent of tax returns reporting small-business income are filed by people in the top two income brackets. As a Washington Post analysis concluded, “If the objective is to help small businesses, continuing the Bush tax cuts on high-income taxpayers isn't the way to go -- it would miss more than 98 percent of small-business owners and would primarily help people who don't make most of their money off those businesses.”
Saturday, December 18, 2010
Fox News Viewers Are The Most Misinformed: Study
Original Link: http://www.huffingtonpost.com/2010/12/17/fox-news-viewers-are-the-_n_798146.html
UPDATE: Fox News senior vice president for news Michael Clemente has responded to the study which found that his network's viewers are more misinformed about American political issues than any other channel. In a statement to the New York Times' Brian Stelter, Clemente disparaged the University of Maryland, where the study was done.
"The latest Princeton Review ranked the University of Maryland among the top schools for having ‘Students Who Study The Least’ and being the ‘Best Party School’ – given these fine academic distinctions, we’ll regard the study with the same level of veracity it was ‘researched’ with," Clemente said.
"For the record, the Princeton Review says the University of Maryland ranks among the 'Best Northeastern Colleges," Stelter notes. "It was No. 19 on the Review’s list of 'Best Party Schools.'"
ORIGINAL POST: Fox News viewers are much more likely than others to believe false information about American politics, a new study concludes.
The study, conducted by the University of Maryland, judged how likely consumers of various news outlets and publications were to believe misinformation about a wide range of political issues. Overall, 90% of respondents said they felt they had heard false information being given to them during the 2010 election campaign. However, while consumers of just about every news outlet believed some information that was false, the study found that Fox News viewers, regardless of political information, were "significantly more likely" to believe that:
--Most economists estimate the stimulus caused job losses (12 points more likely)
--Most economists have estimated the health care law will worsen the deficit (31 points)
--The economy is getting worse (26 points)
Story continues below
Advertisement--Most scientists do not agree that climate change is occurring (30 points)
--The stimulus legislation did not include any tax cuts (14 points)
--Their own income taxes have gone up (14 points)
--The auto bailout only occurred under Obama (13 points)
--When TARP came up for a vote most Republicans opposed it (12 points)
--And that it is not clear that Obama was born in the United States (31 points)
In addition, the study said, increased viewership of Fox News led to increased belief in these false stories.
UPDATE: Fox News senior vice president for news Michael Clemente has responded to the study which found that his network's viewers are more misinformed about American political issues than any other channel. In a statement to the New York Times' Brian Stelter, Clemente disparaged the University of Maryland, where the study was done.
"The latest Princeton Review ranked the University of Maryland among the top schools for having ‘Students Who Study The Least’ and being the ‘Best Party School’ – given these fine academic distinctions, we’ll regard the study with the same level of veracity it was ‘researched’ with," Clemente said.
"For the record, the Princeton Review says the University of Maryland ranks among the 'Best Northeastern Colleges," Stelter notes. "It was No. 19 on the Review’s list of 'Best Party Schools.'"
ORIGINAL POST: Fox News viewers are much more likely than others to believe false information about American politics, a new study concludes.
The study, conducted by the University of Maryland, judged how likely consumers of various news outlets and publications were to believe misinformation about a wide range of political issues. Overall, 90% of respondents said they felt they had heard false information being given to them during the 2010 election campaign. However, while consumers of just about every news outlet believed some information that was false, the study found that Fox News viewers, regardless of political information, were "significantly more likely" to believe that:
--Most economists estimate the stimulus caused job losses (12 points more likely)
--Most economists have estimated the health care law will worsen the deficit (31 points)
--The economy is getting worse (26 points)
Story continues below
Advertisement--Most scientists do not agree that climate change is occurring (30 points)
--The stimulus legislation did not include any tax cuts (14 points)
--Their own income taxes have gone up (14 points)
--The auto bailout only occurred under Obama (13 points)
--When TARP came up for a vote most Republicans opposed it (12 points)
--And that it is not clear that Obama was born in the United States (31 points)
In addition, the study said, increased viewership of Fox News led to increased belief in these false stories.
GOP Has Abandoned Fiscal Responsibility By Adopting ‘Theology’ Of Tax Cuts
Original Link: http://forums.contracostatimes.com/topic/gop-has-abandoned-fiscal-responsibility-by-adopting-%E2%80%98theology%E2%80%99-of-tax-cuts
By ED CHAINEY
We don't have a spending problem in American government so much as we have a revenue problem, through plutocratic influences, the wealthiest elites and most corporations in America have succeeded over the last thirty years, through the enactment of voodoo economic policies in transferring the tax burden from themselves and onto the American middle- and working-classes.
Yesterday [11/28/2010] Warren Buffett restated it AGAIN, saying the richest Americans didn't sacrifice at all, during this recession. In fact, they have prospered at the expense of the average American – normally I would say worker here, but too many of our former workmates are unemployed.
In an interview on ABC’s "This Week," Warren Buffett, Chairman and CEO of Berkshire Hathaway, said that the rich should be paying more taxes and that the Bush-era tax cuts for the wealthy should be left to expire at the end of December.
Buffett said, "If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further."
He said, "But I think that people at the high end -- people like myself -- should be paying a lot more in taxes. We have it better than we've ever had it."
Buffet said, "There's no sacrifice among the rich. There's plenty of sacrifice going on now."
He said, "I mean, if you look at Iraq and now Afghanistan, there's been sacrifice. But I would doubt if you take the people on the Forbes 400 list - whether many of them have a child or a grandchild that served in Iraq or Afghanistan - they come home in body bags to Nebraska, but they don't have to call up anybody up at the country club to notify them."
“A rising tide raises all yachts, not all boats.” - Warren Buffett
And remember the RICH don’t have to pay payroll taxes. They contribute nothing to Social Security, and in fact are hell bent on eviscerating it
On CNN, Reagan Budget Director David Stockman revealed: GOP Has Abandoned Fiscal Responsibility By Adopting ‘Theology’ Of Tax Cuts:
David Stockman continues to make the [media] rounds after bucking with the Republicans on tax cuts for the rich last summer. He is a Republican statesman who is in favor of returning to higher tax rates on the truly wealthy.
David Stockman has never been one to shy away from a roaring economic-policy debate. The former boy-wonder budget director in the first Reagan administration and the architect of Reagan’s supply-side economic policies, Stockman has been very busy lately rejecting the tax-cutting recommendations of Republicans in Washington and arguing that we must get our fiscal house in order or watch our way of life continue its decline. As an “imperialist power,” he says, America is in danger of being at “sundown.” Stockman, who turned 64 on Wednesday, has always been ahead of the curve on tax and fiscal issues, and it appears that he is ahead of it again this time, too.
As Congress prepares to take up extension of the Bush tax cuts during its lame duck session, Republican lawmakers have been unanimous in demanding that the cuts for the richest two percent of Americans be extended, claiming they are necessary for economic growth and that tax cuts (miraculously) pay for themselves.
While independent economists have shown these arguments to be false, today [11/28/2010] on CNN’s Fareed Zakaria GPS, President Reagan’s former budget director took on his own party for pushing this faulty logic. David Stockman, who led the all-important Office of Management and Budget under Reagan and was a chief architect of his fiscal policy, criticized today’s GOP for misreading Reagan’s legacy by adopting a “theology” of tax cuts.
Stockman has spoken out before, but took perhaps his strongest stance yet against his own party today, saying “I’ll never forgive the Bush administration” for “destroying the last vestige of fiscal responsibility that we had in the Republican Party.”
(Excerpted From ABC, CCN & Crooks & Liars.)
So, what should we average Americans do?
Unearned income should be taxed at a progressive rate – with a base income level exemption for the fixed-income retired – and not at the flat rate it is now.
It is the capital gains tax rate’s regressiveness that motivated Warren Buffett to expose the Republican’s dark secret: due to the capital gains rate reductions and counting payroll taxes, Buffett pays taxes at a lesser rate than his secretary and everyone else in his office.
We don’t really have a spending problem in America – we have an unfair tax revenue problem.
By ED CHAINEY
We don't have a spending problem in American government so much as we have a revenue problem, through plutocratic influences, the wealthiest elites and most corporations in America have succeeded over the last thirty years, through the enactment of voodoo economic policies in transferring the tax burden from themselves and onto the American middle- and working-classes.
Yesterday [11/28/2010] Warren Buffett restated it AGAIN, saying the richest Americans didn't sacrifice at all, during this recession. In fact, they have prospered at the expense of the average American – normally I would say worker here, but too many of our former workmates are unemployed.
In an interview on ABC’s "This Week," Warren Buffett, Chairman and CEO of Berkshire Hathaway, said that the rich should be paying more taxes and that the Bush-era tax cuts for the wealthy should be left to expire at the end of December.
Buffett said, "If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further."
He said, "But I think that people at the high end -- people like myself -- should be paying a lot more in taxes. We have it better than we've ever had it."
Buffet said, "There's no sacrifice among the rich. There's plenty of sacrifice going on now."
He said, "I mean, if you look at Iraq and now Afghanistan, there's been sacrifice. But I would doubt if you take the people on the Forbes 400 list - whether many of them have a child or a grandchild that served in Iraq or Afghanistan - they come home in body bags to Nebraska, but they don't have to call up anybody up at the country club to notify them."
“A rising tide raises all yachts, not all boats.” - Warren Buffett
And remember the RICH don’t have to pay payroll taxes. They contribute nothing to Social Security, and in fact are hell bent on eviscerating it
On CNN, Reagan Budget Director David Stockman revealed: GOP Has Abandoned Fiscal Responsibility By Adopting ‘Theology’ Of Tax Cuts:
David Stockman continues to make the [media] rounds after bucking with the Republicans on tax cuts for the rich last summer. He is a Republican statesman who is in favor of returning to higher tax rates on the truly wealthy.
David Stockman has never been one to shy away from a roaring economic-policy debate. The former boy-wonder budget director in the first Reagan administration and the architect of Reagan’s supply-side economic policies, Stockman has been very busy lately rejecting the tax-cutting recommendations of Republicans in Washington and arguing that we must get our fiscal house in order or watch our way of life continue its decline. As an “imperialist power,” he says, America is in danger of being at “sundown.” Stockman, who turned 64 on Wednesday, has always been ahead of the curve on tax and fiscal issues, and it appears that he is ahead of it again this time, too.
As Congress prepares to take up extension of the Bush tax cuts during its lame duck session, Republican lawmakers have been unanimous in demanding that the cuts for the richest two percent of Americans be extended, claiming they are necessary for economic growth and that tax cuts (miraculously) pay for themselves.
While independent economists have shown these arguments to be false, today [11/28/2010] on CNN’s Fareed Zakaria GPS, President Reagan’s former budget director took on his own party for pushing this faulty logic. David Stockman, who led the all-important Office of Management and Budget under Reagan and was a chief architect of his fiscal policy, criticized today’s GOP for misreading Reagan’s legacy by adopting a “theology” of tax cuts.
Stockman has spoken out before, but took perhaps his strongest stance yet against his own party today, saying “I’ll never forgive the Bush administration” for “destroying the last vestige of fiscal responsibility that we had in the Republican Party.”
(Excerpted From ABC, CCN & Crooks & Liars.)
So, what should we average Americans do?
Unearned income should be taxed at a progressive rate – with a base income level exemption for the fixed-income retired – and not at the flat rate it is now.
It is the capital gains tax rate’s regressiveness that motivated Warren Buffett to expose the Republican’s dark secret: due to the capital gains rate reductions and counting payroll taxes, Buffett pays taxes at a lesser rate than his secretary and everyone else in his office.
We don’t really have a spending problem in America – we have an unfair tax revenue problem.
Tuesday, December 7, 2010
Tax the Rich
Original Link: http://dissidentvoice.org/2010/11/tax-the-rich/
By Al Engler
High government deficits are being used to justify cuts to public employment and social programs. It is not a surprise that transnational finance, the corporate media and right-wing political parties demand that returns on investments be given priority over employment, workers’ income, and the well-being of the marginalized. Having aggressively supported cuts to business and income taxes, they have reason to worry about the real returns on government bonds.
It is also not a surprise that unions and students in Europe have mobilized millions against these cuts. Unions, public sector workers, pensioners, immigrants and the poor are not to blame. Government deficits are a direct result of tax cuts, capitalist speculation, the 2008 financial crash, government bailouts, and the resulting loss of employment, income and government revenues.
If public deficits were the real problem—not just a pretext—military spending particularly in the U.S. would be drastically cut. Taxes would be raised. Of course, tax increases have consequences. Higher sales and value-added taxes reduce consumer purchasing power, further weakening markets in times of recession. Taxes on enterprise revenues can reduce expenditures for plant and equipment and lead to the failure of more businesses.
Steeply graduated income taxes would upset the super-rich but are otherwise benign. Taxing income over $200,000 a year at rates of 75 per cent, and over $500,000 at 90 per cent would substantially increase government revenues without reducing markets for most goods and services. Taxing profits on the buying and selling of stocks, bonds, real estate, and currencies could raise additional revenues. International agreement to raise tariffs to 15 to 25 per cent from the current average of five to ten per cent would raise more. Although the profits of transnational corporations would be squeezed, the resulting growth in local production for local consumption would expand employment, income, and public revenues everywhere.
Increasing taxes on capitalist income is anathema to the supply-side economists who have dominated government policy for thirty years. They claim that increasing taxes on the wealthy reduces the supply of funds available for private investment, causing job loss, reduced real incomes, and economic decline. Supply-side economics was a wealth-holders’ reaction to Keynesian demand-side policies.
The Keynesian period—from World War II through the 1970s—had been a response to destructive twentieth century wars, financial crashes, prolonged economic declines, and rising support for militant unionism, socialism, and communism. To counter growing opposition to capitalism, to stimulate consumer demand and to revive opportunities for profitable investments, governments increased spending on pensions, unemployment insurance, education, healthcare and income support. Laws were changed to make it easier for unions to organize and to bargain collectively.
Much of the cost of stimulating demand was covered by steeply graduated income taxes. In Canada, the U.S., and the U.K. the highest incomes were taxed at marginal rates up to 90 per cent during the war and after. Although lowered in the 1960s, income taxes remained steeply graduated through the 1970s. The share of total income going to capital as profits, dividends, interest payments, and rent did decline. Nonetheless, investments in machinery, equipment, buildings, infrastructure (bridges, roads, schools, hospitals, public transit), and housing stock rose steadily.
By the 1970s many of the very rich and corporate oligarchs had concluded that the welfare state was not in their interests. Unions were in decline. Communism was clearly not outperforming capitalism economically or militarily. At the end of the decade, neoconservatives like Margaret Thatcher and Ronald Reagan were winning political office claiming that Keynesian policies had increased demand at the expense of the supply of capital for investments. The result, they said, was not growth, but inflation and stagnation.
In fact, the Keynesian period was a time of steady, impressive growth in investment and consumer income. Inflation rates did reach double digits in the 1970s. Neoconservatives blamed this on rising social spending and government deficits. A more obvious explanation was the combination of rising oil prices and massive inflows of capital from abroad. Oil prices had risen from under $3 to over $30 a barrel, increasing the price of nearly all goods and services. Suddenly awash in revenues, the rulers of oil exporting countries invested billions in the U.S., U.K, Europe and Canada. Governments that were already cutting taxes paid by the rich and accumulating deficits, responded by borrowing more. U.S. government decisions to finance war in Indochina with borrowed money, not tax increases, compounded the problem.
In the 1980s, after supply-side policies became the economic orthodoxy, taxes on corporations and upper incomes were methodically lowered. Industries were deregulated. Laws were changed to make it more difficult for unions to organize and to engage in effective collective bargaining. Public utilities and services were privatized.
The rich did get richer—the super-rich substantially richer—but economies did not flourish as supply-siders had predicted. The quality of public services declined. Social infrastructure was allowed to decay. Employment in manufacturing and service industries fell. The real income of wage and salary workers stopped growing. Markets for consumer goods stagnated.
Supply-side theorists ignored the evidence. Instead, they turned phrases from Adam Smith into a mantra. More income for capitalists, they intoned, meant more savings, more investment, more economic growth. But Smith was not talking of twentieth century corporate oligarchs when he equated capitalist income with savings and investment. He was describing a middle class of prosperous farmers, shopkeepers, and merchants, whose frugality he contrasted with the aristocracy’s fondness for luxury. The middle class, he said, turned their surplus income into savings for investment in the future; aristocrats spent and borrowed for their current pleasure.
Today’s super-rich are more like eighteenth-century aristocrats than the middle classes of Smith’s day. They are mega and giga-consumers who transform revenues from productive assets and social labour into personal wealth—into mansions, yachts, beachfront condos, and winter retreats. As a class, they are obsessed with maximizing returns on their wealth, but they have little interest in productive investment. For them, innovation means new more profitable investment instruments: futures, derivatives, dubious mortgages packaged as collatoralized debt obligations, and credit default swaps (bankruptcy insurance).
Even when pyramid scams and outright fraud are not involved, nothing is added to means of livelihood when one capitalist buys and another sells stocks. Financial entitlements are merely shuffled from one to another. When the rich do invest in actual plant and equipment this is likely to be abroad where labour is cheaper and profits are higher.
The economic argument
Steeply graduated income taxes would make public debt manageable. Unlike taxes on consumption, taxes on the highest incomes would not dampen markets for consumer goods. Additional public revenues could be used to improve education, healthcare, social housing, income support, public transit. As employment and markets expand, enterprises would be encouraged to invest more.
Undistributed corporate profits are the main source of investment in research, development, plant, and equipment. By discouraging the distribution of profits as dividends, executive salaries, and bonuses, confiscatory tax rates on the highest incomes would give enterprises more reason to retain earnings, increasing the funds available for investment in real means of livelihood.
With far higher taxes on capitalist income, the super-rich will have to make do with less sumptuous homes, fewer and less luxurious automobiles, yachts, and vacation spots. For everyone else, the cost of keeping up with the Joneses will be less. People in all income groups are likely to save more, making more funds available for investment in housing and local enterprises.
The democratic argument
Capitalism claims to be a system of individual opportunities. Increasing the revenues for education, healthcare, pensions, and income-support would expand opportunities. Steeply graduated income taxes would transfer control of social surpluses from a corporate oligarchy to elected national, regional, and local governments.
Can governments and elected representatives be trusted to act in the common interest? With steeply graduated income tax, a small self-serving minority would have less money to influence legislation and corrupt politicians. Billionaires, like the Koch brothers—two of the wealthiest men in the U.S. who have bankrolled the U.S. Tea Party—would have less spare cash to dominate and manipulate political agendas in their narrow class interests.
Steeply graduated income taxes alone would not end capitalist entitlement, but as elected governments gain more revenues to expand social entitlements and public employment, people will demand to have a voice in economic decisions. The right of wealth-holding minorities to impose their immediate interests will be replaced with the transparent, democratic right of people to direct economic life in the common interest, in the interests of human and environmental well-being.
The environmental argument
The wealthiest one per cent presently claim twenty per cent and more of total income. If their share were reduced to five per cent, extravagant consumption and the accompanying waste of resources would be greatly reduced.
Governments would have the funds needed to replace dependence on private automobiles with fast, accessible public transportation. Federal, regional, and local governments could be provided with the funds to construct public heating and cooling systems that require less fossil fuels. Investments could be made in local agriculture for local markets. Environmental protection agencies could employ enough inspectors to investigate complaints and to act against corporate damage to ecosystems.
As control of social surpluses passes from the hands of wealth-holding minorities to elected governments, people will mobilize to demand that national, regional, and local communities provide more employment and goods and services as human rights. Fewer people will come to depend on the profitability of capital in general and of transnational corporations in particular. More people will be free to oppose environmentally destructive industrial activity.
As communities replace private corporations as the institutions making economic decisions, industrial and service workers, professionals, the retired, homemakers, students, farmers, mushroom pickers, loggers, and ecologists will all have the right to a voice and equal vote. The interests of major shareholders and top corporate executives will no longer take precedence over the income and employment of common people, or over the carrying capacity of environments.
By Al Engler
High government deficits are being used to justify cuts to public employment and social programs. It is not a surprise that transnational finance, the corporate media and right-wing political parties demand that returns on investments be given priority over employment, workers’ income, and the well-being of the marginalized. Having aggressively supported cuts to business and income taxes, they have reason to worry about the real returns on government bonds.
It is also not a surprise that unions and students in Europe have mobilized millions against these cuts. Unions, public sector workers, pensioners, immigrants and the poor are not to blame. Government deficits are a direct result of tax cuts, capitalist speculation, the 2008 financial crash, government bailouts, and the resulting loss of employment, income and government revenues.
If public deficits were the real problem—not just a pretext—military spending particularly in the U.S. would be drastically cut. Taxes would be raised. Of course, tax increases have consequences. Higher sales and value-added taxes reduce consumer purchasing power, further weakening markets in times of recession. Taxes on enterprise revenues can reduce expenditures for plant and equipment and lead to the failure of more businesses.
Steeply graduated income taxes would upset the super-rich but are otherwise benign. Taxing income over $200,000 a year at rates of 75 per cent, and over $500,000 at 90 per cent would substantially increase government revenues without reducing markets for most goods and services. Taxing profits on the buying and selling of stocks, bonds, real estate, and currencies could raise additional revenues. International agreement to raise tariffs to 15 to 25 per cent from the current average of five to ten per cent would raise more. Although the profits of transnational corporations would be squeezed, the resulting growth in local production for local consumption would expand employment, income, and public revenues everywhere.
Increasing taxes on capitalist income is anathema to the supply-side economists who have dominated government policy for thirty years. They claim that increasing taxes on the wealthy reduces the supply of funds available for private investment, causing job loss, reduced real incomes, and economic decline. Supply-side economics was a wealth-holders’ reaction to Keynesian demand-side policies.
The Keynesian period—from World War II through the 1970s—had been a response to destructive twentieth century wars, financial crashes, prolonged economic declines, and rising support for militant unionism, socialism, and communism. To counter growing opposition to capitalism, to stimulate consumer demand and to revive opportunities for profitable investments, governments increased spending on pensions, unemployment insurance, education, healthcare and income support. Laws were changed to make it easier for unions to organize and to bargain collectively.
Much of the cost of stimulating demand was covered by steeply graduated income taxes. In Canada, the U.S., and the U.K. the highest incomes were taxed at marginal rates up to 90 per cent during the war and after. Although lowered in the 1960s, income taxes remained steeply graduated through the 1970s. The share of total income going to capital as profits, dividends, interest payments, and rent did decline. Nonetheless, investments in machinery, equipment, buildings, infrastructure (bridges, roads, schools, hospitals, public transit), and housing stock rose steadily.
By the 1970s many of the very rich and corporate oligarchs had concluded that the welfare state was not in their interests. Unions were in decline. Communism was clearly not outperforming capitalism economically or militarily. At the end of the decade, neoconservatives like Margaret Thatcher and Ronald Reagan were winning political office claiming that Keynesian policies had increased demand at the expense of the supply of capital for investments. The result, they said, was not growth, but inflation and stagnation.
In fact, the Keynesian period was a time of steady, impressive growth in investment and consumer income. Inflation rates did reach double digits in the 1970s. Neoconservatives blamed this on rising social spending and government deficits. A more obvious explanation was the combination of rising oil prices and massive inflows of capital from abroad. Oil prices had risen from under $3 to over $30 a barrel, increasing the price of nearly all goods and services. Suddenly awash in revenues, the rulers of oil exporting countries invested billions in the U.S., U.K, Europe and Canada. Governments that were already cutting taxes paid by the rich and accumulating deficits, responded by borrowing more. U.S. government decisions to finance war in Indochina with borrowed money, not tax increases, compounded the problem.
In the 1980s, after supply-side policies became the economic orthodoxy, taxes on corporations and upper incomes were methodically lowered. Industries were deregulated. Laws were changed to make it more difficult for unions to organize and to engage in effective collective bargaining. Public utilities and services were privatized.
The rich did get richer—the super-rich substantially richer—but economies did not flourish as supply-siders had predicted. The quality of public services declined. Social infrastructure was allowed to decay. Employment in manufacturing and service industries fell. The real income of wage and salary workers stopped growing. Markets for consumer goods stagnated.
Supply-side theorists ignored the evidence. Instead, they turned phrases from Adam Smith into a mantra. More income for capitalists, they intoned, meant more savings, more investment, more economic growth. But Smith was not talking of twentieth century corporate oligarchs when he equated capitalist income with savings and investment. He was describing a middle class of prosperous farmers, shopkeepers, and merchants, whose frugality he contrasted with the aristocracy’s fondness for luxury. The middle class, he said, turned their surplus income into savings for investment in the future; aristocrats spent and borrowed for their current pleasure.
Today’s super-rich are more like eighteenth-century aristocrats than the middle classes of Smith’s day. They are mega and giga-consumers who transform revenues from productive assets and social labour into personal wealth—into mansions, yachts, beachfront condos, and winter retreats. As a class, they are obsessed with maximizing returns on their wealth, but they have little interest in productive investment. For them, innovation means new more profitable investment instruments: futures, derivatives, dubious mortgages packaged as collatoralized debt obligations, and credit default swaps (bankruptcy insurance).
Even when pyramid scams and outright fraud are not involved, nothing is added to means of livelihood when one capitalist buys and another sells stocks. Financial entitlements are merely shuffled from one to another. When the rich do invest in actual plant and equipment this is likely to be abroad where labour is cheaper and profits are higher.
The economic argument
Steeply graduated income taxes would make public debt manageable. Unlike taxes on consumption, taxes on the highest incomes would not dampen markets for consumer goods. Additional public revenues could be used to improve education, healthcare, social housing, income support, public transit. As employment and markets expand, enterprises would be encouraged to invest more.
Undistributed corporate profits are the main source of investment in research, development, plant, and equipment. By discouraging the distribution of profits as dividends, executive salaries, and bonuses, confiscatory tax rates on the highest incomes would give enterprises more reason to retain earnings, increasing the funds available for investment in real means of livelihood.
With far higher taxes on capitalist income, the super-rich will have to make do with less sumptuous homes, fewer and less luxurious automobiles, yachts, and vacation spots. For everyone else, the cost of keeping up with the Joneses will be less. People in all income groups are likely to save more, making more funds available for investment in housing and local enterprises.
The democratic argument
Capitalism claims to be a system of individual opportunities. Increasing the revenues for education, healthcare, pensions, and income-support would expand opportunities. Steeply graduated income taxes would transfer control of social surpluses from a corporate oligarchy to elected national, regional, and local governments.
Can governments and elected representatives be trusted to act in the common interest? With steeply graduated income tax, a small self-serving minority would have less money to influence legislation and corrupt politicians. Billionaires, like the Koch brothers—two of the wealthiest men in the U.S. who have bankrolled the U.S. Tea Party—would have less spare cash to dominate and manipulate political agendas in their narrow class interests.
Steeply graduated income taxes alone would not end capitalist entitlement, but as elected governments gain more revenues to expand social entitlements and public employment, people will demand to have a voice in economic decisions. The right of wealth-holding minorities to impose their immediate interests will be replaced with the transparent, democratic right of people to direct economic life in the common interest, in the interests of human and environmental well-being.
The environmental argument
The wealthiest one per cent presently claim twenty per cent and more of total income. If their share were reduced to five per cent, extravagant consumption and the accompanying waste of resources would be greatly reduced.
Governments would have the funds needed to replace dependence on private automobiles with fast, accessible public transportation. Federal, regional, and local governments could be provided with the funds to construct public heating and cooling systems that require less fossil fuels. Investments could be made in local agriculture for local markets. Environmental protection agencies could employ enough inspectors to investigate complaints and to act against corporate damage to ecosystems.
As control of social surpluses passes from the hands of wealth-holding minorities to elected governments, people will mobilize to demand that national, regional, and local communities provide more employment and goods and services as human rights. Fewer people will come to depend on the profitability of capital in general and of transnational corporations in particular. More people will be free to oppose environmentally destructive industrial activity.
As communities replace private corporations as the institutions making economic decisions, industrial and service workers, professionals, the retired, homemakers, students, farmers, mushroom pickers, loggers, and ecologists will all have the right to a voice and equal vote. The interests of major shareholders and top corporate executives will no longer take precedence over the income and employment of common people, or over the carrying capacity of environments.
Sunday, December 5, 2010
5 Right-Wing Scumbags Bankrolling Dangerous (and Plain Weird) Conservative Causes
Original Link: http://www.alternet.org/teaparty/149011/5_right-wing_scumbags_bankrolling_dangerous_(and_plain_weird)_conservative_causes/
By Brad Reed
Much ink has been spilled about the Koch brothers. But there are plenty of other wealthy right-wingers promoting dangerous policies.
A non-insane observer of American politics might wonder why our elite policy makers are considering curbing our budget deficit by cutting Social Security and Medicare payments all while further lowering tax rates for high-income earners.
The answer is that most of our political class and establishment media have bought into the meme that rich people are so super-special that if we hurt their feelings by making them pay the same amount in taxes that they paid in the 1990s, they will get so depressed they will lose the will to work and no one in the country will ever have jobs again.
While this idea may seem insane to all sane people, it’s actually one of many ideas promoted over the past several decades by wealthy right-wingers who have plunged significant sums of money into conservative think tanks, political candidates and advertising campaigns. You see, for some reason rich Americans aren’t content to have five yachts and a butler named Willivers -- rather, they seem obsessed with having the entire country leave red, white and blue smooch marks all over their rear ends.
And just who are these multimillionaire propagandists, you ask? Well, I’m sure you know all about the Koch brothers and Rupert Murdoch, since they’ve all been relatively high-profile lately. But there are plenty more right-wing sugar daddies out there. So without further ado, let’s get started!
Right-Wing Sugar Daddy #1: Sheldon Adelson
Like most neoconservatives, Adelson’s goal in life is to make sure the United States and Israel remain in a state of perpetual warfare against Arab countries until most of the world is destroyed. Adelson, who made his fortune as a Las Vegas casino mogul, made headlines in 2007 when he funded Freedom’s Watch, a neoconservative advocacy group that supported wars wherever and whenever it could find them.
The group’s first campaign was a $15 million ad blitz urging Americans to support the Iraq troop surge. One of the group’s most notorious ads featured an Iraq war vet who lost both his legs during the war imploring Congress to keep funding the war indefinitely because “if we pull out now everything I’ve given and sacrificed will mean nothing.” The ad also shamelessly conflated the Iraq war with the September 11 terrorist attacks by showing pictures of the World Trade Center burning as the vet firmly reminded Americans that “they attacked us.”
From there, the group held a conference hyping up the dangers of Iran and radical Islam in general. Freedom’s Watch disbanded in late 2008 after a sizable chunk of Adelson’s spare cash went up in smoke -- quite possibly the only good outcome from the global financial crisis.
Although Adelson’s impact on U.S. policy is relatively small, he is much more of a factor in Israel where he invested a reported $180 million to launch the free Israel Hayom tabloid in 2007. The Israeli media apparently refer to the paper as “Bibi-ton” because it serves as a propaganda rage for Netanyahu’s hard-line Likud government. The paper, which now has the largest circulation of any daily newspaper in Israel, mercilessly attacked the government of former Israeli Prime Minister Ehud Olmert, particularly his handling of the 2006 mini-war with Lebanon (sample headline, per the New Yorker: “The Ass-Covering of the Government”). Adelson was also upset that Olmert had the audacity to support a two-state solution where Palestinians are actually given some level of autonomy over their lives.
Right-Wing Sugar Daddy #2: Richard Mellon Scaife
Scaife got his start in politics by giving Richard Nixon’s campaign $1 million in 1972 and he hasn’t looked back since. As an heir to the Mellon fortune, Scaife didn’t exactly have to pick himself up by his bootstraps on his way to the top. And instead of doing something useful with his life, Scaife has blown hundreds of millions of dollars keeping wastoids like Jonah Goldberg employed by funding conservative think tanks such as the Heritage Foundation, newspapers such as the Pittsburgh Tribune-Review and right-wing opinion rags such as the American Spectator.
Scaife really hit his stride in the 1990s when he became obsessed with forcing President Bill Clinton and his penis from office. He kicked things off in 1993 by funding the so-called “Arkansas Project” that sent Spectator hacks down to Little Rock to dig up embarrassing dirt on the Clintons. Although that failed to produce the goods, Scaife decided to simultaneously fund Paula Jones’ unsuccessful sexual harassment lawsuit against Clinton, thus setting the stage for later sex scandals that would result in the president getting impeached by the Republican House.
Scaife also got another “gift” when the suicide of Deputy White House Counsel Vince Foster sparked a litany of crazed conspiracies asserting that the Clintons had actually murdered Foster themselves.
“The death of Vincent Foster: I think that's the Rosetta Stone to the whole Clinton Administration,” Scaife told the New York Times in 1995. “There are just too many questions that have no answers. ”
In order to unlock this "Rosetta Stone," Scaife funded “journalists” who were willing to keep the Foster-was-murdered conspiracy alive. As New York Times reporter Tim Weiner noted at the time, Scaife’s Tribune-Review was “the only daily newspaper in the nation trying to prove that Mr. Foster might have been murdered.”
To make a long story short, Scaife never truly nailed Clinton like he wanted to, but he did get to watch Clinton get impeached for lying about a blowjob. God, America was a much nicer country back when we had no real problems to deal with.
Right-Wing Sugar Daddies #3 and #4: The Wyly Brothers
Sam and Charles Wyly gained notoriety during the 2000 Republican presidential primary by bankrolling the most comically Orwellian front group ever assembled. Dubbed “Republicans for Clean Air” the group spent more than $2 million for ads that attacked John McCain’s environmental record while praising George W. Bush’s green credentials. The Wylys similarly went to bat for their boy Bush by donating $10,000 a piece to the infamously dishonest Swift Boat Veterans for Truth campaign that attacked John Kerry’s war record in Vietnam. The Wylys also donated more than $1 million to the Republican National Committee from 2000 through 2004, although they significantly curbed those donations once the Securities and Exchange Commission started investigating them for tax fraud.
Other than funding conservative campaigns, the Wylys’ favorite hobby seems to be getting in trouble for alleged tax evasion. The Wylys, who started making money in the software business and then branched out to clothing stores, restaurants and energy companies, first got the attention of the SEC in 2004 when they refused to provide Bank of America with details on their offshore assets. Oops!
From there, it was one unfortunate event after another for the Wylys. In 2005 the brothers copped to “inadvertently” hiding company profits in offshore trusts. In 2006, the Senate’s Permanent Subcommittee on Investigations issued a report detailing a series of trusts the Wylys set up on the Isle of Man that were used to shelter $720 million worth of profits from taxation. And this past summer the SEC finally brought the hammer down on the Wylys, accusing them of reaping more than $30 million from an insider trading scheme related to the sale of their Sterling Software company. The SEC is seeking millions of dollars in fines from the brothers, which would presumably leave them with less cash to use on political smear campaigns. And what a sad, sad tragedy that would be.
Right-Wing Sugar Daddy #5: Peter Thiel
This super-wealthy technodork, who made his money cofounding the PayPal online payment service and being one of Facebook’s earliest investors, is using his cash to influence hearts and minds, albeit in a significantly different way from the previous right-wing sugar daddies we’ve examined. For instead of funding right-wing political campaigns, advertising blitzes and think tanks, Thiel is instead trying to influence his fellow libertarians to flee society, not change it.
Thiel officially lost faith in American society after the 2008 presidential election and he confessed on the Cato Institute’s Web site that he thought democracy and freedom were no longer compatible. The big reason for this, Thiel said, was that over the past century too many people went on welfare and women got the right to vote. Since welfare recipients and women are “two constituencies that are notoriously tough for libertarians,” Thiel reasoned, then “the notion of ‘capitalist democracy’” has become “an oxymoron. ”
To rectify this, Thiel sunk more than $500,000 into the hilariously bone-headed “Seasteading” project being headed up by Patri Friedman, the grandson of famous conservative economist Milton Friedman. With money from Thiel and other like-minded rich libertarians, the seasteading project aims to build large, floating, concrete platforms in international waters where libertarians can live without the greedy hands of Uncle Sam taking their hard-earned cash.
They also plan to make money for themselves by using these platforms as intranational havens for drugs and prostitution, since no legal authority would be able to arrest them out in the open waters. And presumably, women living on the platforms won’t have any say in how the seasteads are run, lest they transform these aquatic libertarian paradises into scummy socialist hellholes. Thiel is also interested in funding transhumanist life-extension projects, as he has given the Methuselah Foundation excess of $3.5 million to ensure that he and his buddies can haunt the Earth with their presence for at least the next few hundred years.
When you think about it, Thiel’s devotion to dopey libertarian escapism, while elitist and horribly sexist, actually makes him the most palatable of all the right-wing sugar daddies we’ve examined. Unlike Scaife, Adelson and the Wylys, Thiel doesn’t want to influence how we think about the world. Rather, he wants to flee the wretched mediocrity of his fellow fleshbags and escape to a no-girls-allowed cyber-treehouse out in the middle of the ocean. To which I say, “You go, Galt!” The only tragedy is that if Thiel succeeds he likely won’t bring any of his brethren with him to the seastead platforms. Because what America needs now more than ever is for a bunch of its self-appointed Atlases to go shrug themselves.
By Brad Reed
Much ink has been spilled about the Koch brothers. But there are plenty of other wealthy right-wingers promoting dangerous policies.
A non-insane observer of American politics might wonder why our elite policy makers are considering curbing our budget deficit by cutting Social Security and Medicare payments all while further lowering tax rates for high-income earners.
The answer is that most of our political class and establishment media have bought into the meme that rich people are so super-special that if we hurt their feelings by making them pay the same amount in taxes that they paid in the 1990s, they will get so depressed they will lose the will to work and no one in the country will ever have jobs again.
While this idea may seem insane to all sane people, it’s actually one of many ideas promoted over the past several decades by wealthy right-wingers who have plunged significant sums of money into conservative think tanks, political candidates and advertising campaigns. You see, for some reason rich Americans aren’t content to have five yachts and a butler named Willivers -- rather, they seem obsessed with having the entire country leave red, white and blue smooch marks all over their rear ends.
And just who are these multimillionaire propagandists, you ask? Well, I’m sure you know all about the Koch brothers and Rupert Murdoch, since they’ve all been relatively high-profile lately. But there are plenty more right-wing sugar daddies out there. So without further ado, let’s get started!
Right-Wing Sugar Daddy #1: Sheldon Adelson
Like most neoconservatives, Adelson’s goal in life is to make sure the United States and Israel remain in a state of perpetual warfare against Arab countries until most of the world is destroyed. Adelson, who made his fortune as a Las Vegas casino mogul, made headlines in 2007 when he funded Freedom’s Watch, a neoconservative advocacy group that supported wars wherever and whenever it could find them.
The group’s first campaign was a $15 million ad blitz urging Americans to support the Iraq troop surge. One of the group’s most notorious ads featured an Iraq war vet who lost both his legs during the war imploring Congress to keep funding the war indefinitely because “if we pull out now everything I’ve given and sacrificed will mean nothing.” The ad also shamelessly conflated the Iraq war with the September 11 terrorist attacks by showing pictures of the World Trade Center burning as the vet firmly reminded Americans that “they attacked us.”
From there, the group held a conference hyping up the dangers of Iran and radical Islam in general. Freedom’s Watch disbanded in late 2008 after a sizable chunk of Adelson’s spare cash went up in smoke -- quite possibly the only good outcome from the global financial crisis.
Although Adelson’s impact on U.S. policy is relatively small, he is much more of a factor in Israel where he invested a reported $180 million to launch the free Israel Hayom tabloid in 2007. The Israeli media apparently refer to the paper as “Bibi-ton” because it serves as a propaganda rage for Netanyahu’s hard-line Likud government. The paper, which now has the largest circulation of any daily newspaper in Israel, mercilessly attacked the government of former Israeli Prime Minister Ehud Olmert, particularly his handling of the 2006 mini-war with Lebanon (sample headline, per the New Yorker: “The Ass-Covering of the Government”). Adelson was also upset that Olmert had the audacity to support a two-state solution where Palestinians are actually given some level of autonomy over their lives.
Right-Wing Sugar Daddy #2: Richard Mellon Scaife
Scaife got his start in politics by giving Richard Nixon’s campaign $1 million in 1972 and he hasn’t looked back since. As an heir to the Mellon fortune, Scaife didn’t exactly have to pick himself up by his bootstraps on his way to the top. And instead of doing something useful with his life, Scaife has blown hundreds of millions of dollars keeping wastoids like Jonah Goldberg employed by funding conservative think tanks such as the Heritage Foundation, newspapers such as the Pittsburgh Tribune-Review and right-wing opinion rags such as the American Spectator.
Scaife really hit his stride in the 1990s when he became obsessed with forcing President Bill Clinton and his penis from office. He kicked things off in 1993 by funding the so-called “Arkansas Project” that sent Spectator hacks down to Little Rock to dig up embarrassing dirt on the Clintons. Although that failed to produce the goods, Scaife decided to simultaneously fund Paula Jones’ unsuccessful sexual harassment lawsuit against Clinton, thus setting the stage for later sex scandals that would result in the president getting impeached by the Republican House.
Scaife also got another “gift” when the suicide of Deputy White House Counsel Vince Foster sparked a litany of crazed conspiracies asserting that the Clintons had actually murdered Foster themselves.
“The death of Vincent Foster: I think that's the Rosetta Stone to the whole Clinton Administration,” Scaife told the New York Times in 1995. “There are just too many questions that have no answers. ”
In order to unlock this "Rosetta Stone," Scaife funded “journalists” who were willing to keep the Foster-was-murdered conspiracy alive. As New York Times reporter Tim Weiner noted at the time, Scaife’s Tribune-Review was “the only daily newspaper in the nation trying to prove that Mr. Foster might have been murdered.”
To make a long story short, Scaife never truly nailed Clinton like he wanted to, but he did get to watch Clinton get impeached for lying about a blowjob. God, America was a much nicer country back when we had no real problems to deal with.
Right-Wing Sugar Daddies #3 and #4: The Wyly Brothers
Sam and Charles Wyly gained notoriety during the 2000 Republican presidential primary by bankrolling the most comically Orwellian front group ever assembled. Dubbed “Republicans for Clean Air” the group spent more than $2 million for ads that attacked John McCain’s environmental record while praising George W. Bush’s green credentials. The Wylys similarly went to bat for their boy Bush by donating $10,000 a piece to the infamously dishonest Swift Boat Veterans for Truth campaign that attacked John Kerry’s war record in Vietnam. The Wylys also donated more than $1 million to the Republican National Committee from 2000 through 2004, although they significantly curbed those donations once the Securities and Exchange Commission started investigating them for tax fraud.
Other than funding conservative campaigns, the Wylys’ favorite hobby seems to be getting in trouble for alleged tax evasion. The Wylys, who started making money in the software business and then branched out to clothing stores, restaurants and energy companies, first got the attention of the SEC in 2004 when they refused to provide Bank of America with details on their offshore assets. Oops!
From there, it was one unfortunate event after another for the Wylys. In 2005 the brothers copped to “inadvertently” hiding company profits in offshore trusts. In 2006, the Senate’s Permanent Subcommittee on Investigations issued a report detailing a series of trusts the Wylys set up on the Isle of Man that were used to shelter $720 million worth of profits from taxation. And this past summer the SEC finally brought the hammer down on the Wylys, accusing them of reaping more than $30 million from an insider trading scheme related to the sale of their Sterling Software company. The SEC is seeking millions of dollars in fines from the brothers, which would presumably leave them with less cash to use on political smear campaigns. And what a sad, sad tragedy that would be.
Right-Wing Sugar Daddy #5: Peter Thiel
This super-wealthy technodork, who made his money cofounding the PayPal online payment service and being one of Facebook’s earliest investors, is using his cash to influence hearts and minds, albeit in a significantly different way from the previous right-wing sugar daddies we’ve examined. For instead of funding right-wing political campaigns, advertising blitzes and think tanks, Thiel is instead trying to influence his fellow libertarians to flee society, not change it.
Thiel officially lost faith in American society after the 2008 presidential election and he confessed on the Cato Institute’s Web site that he thought democracy and freedom were no longer compatible. The big reason for this, Thiel said, was that over the past century too many people went on welfare and women got the right to vote. Since welfare recipients and women are “two constituencies that are notoriously tough for libertarians,” Thiel reasoned, then “the notion of ‘capitalist democracy’” has become “an oxymoron. ”
To rectify this, Thiel sunk more than $500,000 into the hilariously bone-headed “Seasteading” project being headed up by Patri Friedman, the grandson of famous conservative economist Milton Friedman. With money from Thiel and other like-minded rich libertarians, the seasteading project aims to build large, floating, concrete platforms in international waters where libertarians can live without the greedy hands of Uncle Sam taking their hard-earned cash.
They also plan to make money for themselves by using these platforms as intranational havens for drugs and prostitution, since no legal authority would be able to arrest them out in the open waters. And presumably, women living on the platforms won’t have any say in how the seasteads are run, lest they transform these aquatic libertarian paradises into scummy socialist hellholes. Thiel is also interested in funding transhumanist life-extension projects, as he has given the Methuselah Foundation excess of $3.5 million to ensure that he and his buddies can haunt the Earth with their presence for at least the next few hundred years.
When you think about it, Thiel’s devotion to dopey libertarian escapism, while elitist and horribly sexist, actually makes him the most palatable of all the right-wing sugar daddies we’ve examined. Unlike Scaife, Adelson and the Wylys, Thiel doesn’t want to influence how we think about the world. Rather, he wants to flee the wretched mediocrity of his fellow fleshbags and escape to a no-girls-allowed cyber-treehouse out in the middle of the ocean. To which I say, “You go, Galt!” The only tragedy is that if Thiel succeeds he likely won’t bring any of his brethren with him to the seastead platforms. Because what America needs now more than ever is for a bunch of its self-appointed Atlases to go shrug themselves.
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