Monday, September 27, 2010

Conservative Groups Gearing Up To Spend $400 Million On Midterm Election

Original Link: http://thinkprogress.org/2010/08/27/conservative-groups-400-millio/

By Scott Keyes

In the wake of the Citizens United Supreme Court ruling earlier this year, corporations and special interest groups now enjoy the ability to spend unlimited amounts of money on elections. Now, with less than 10 weeks until November, it’s clear just how far conservative groups are willing to go to try to influence the midterm elections.

According to a new report from ThinkProgress, conservative organizations have committed (or already spent) $400 million to advance their conservative agenda at the ballot box this year. For comparison’s sake, this outside money alone is more than the Democratic campaign committees spent combined when they took back both houses of Congress in the last midterm election. Indeed, the Wall Street Journal notes that special interest groups have already spent three times as much in 2010 than they had in 2006.

Among the outside groups that plan to spend hundreds of millions of dollars electing conservatives are some familiar faces and some new ones as well. While the NRA and the Chamber of Commerce have long supported conservative causes, the former plans to double its spending from $10 million in 2006 to $20 million now and the latter will triple its commitment to $75 million this year. Many new groups are also entering the scene in a big way, including Karl Rove’s American Crossroads group with $52 million and Norm Coleman’s American Action Network with $25 million.

Those conservative groups trying to use $400 million in outside spending to tip the midterm election include:

– Chamber of Commerce has pledged to spend $75 million
– American Crossroads has pledged to spend $52 million
– Americans for Prosperity has pledged to spend $45 million
– Republican State Leadership Committee has pledged to spend $40 million
– American Action Network has pledged to spend $25 million
– American Future Fund has pledged to spend up to $25 million
– Club for Growth has pledged to spend at least $24 million
– National Republican Trust PAC has pledged to spend at least $20 million
– An unnamed health insurance industry coalition has pledged to spend $20 million
– National Rifle Association has pledged to spend $20 million
– Faith and Freedom Coalition has pledged to spend $11 million
– FreedomWorks has pledged to spend $10 million
– Americans for Job Security has pledged to spend $10 million
– Susan B. Anthony List has pledged to spend $6 million
– Our Country Deserves Better (Tea Party Express) has already spent $5 million
– Tax Relief Coalition has already spent $4 million
– Republican Majority Campaign has pledged to spend $3 million
– Campaign for Working Families has pledged to spend $2 million
– Heritage Action for America has pledged to spend $1 million
– Financial Services Roundtable has already spent $0.5 million
– Family Research Council has raised $0.5 million
– Citizens United Political Victory Fund has pledged to spend $0.2 million


TOTAL: $399.2 million

Given the number of progressive accomplishments in the 111th Congress, including health care reform, the economic stimulus bill, and Wall Street reform, it’s no wonder that conservative groups are fighting tooth-and-nail to prevent a repeat next term. Chris LaCivita, a Republican strategist who has also been involved in many independent-expenditure campaigns, told Politico, “If there is a time for independent groups to step up, this is it. This is the year for independent groups to put up or shut up.” Indeed, with conservative special interest groups putting it all on the line this November, their $400 million pledge may even increase before long.

Sunday, September 19, 2010

Voter Beware Concentrated Corporate Power is Creating Deceptive Elections

Original Link: http://dissidentvoice.org/2010/08/voter-beware-concentrated-corporate-power-is-creating-deceptive-elections/

By Kevin Zeese

The Republican Party is Being Replaced with Secret Donors and Unlimited Donations as Concentrated Corporate Interests Spend Hundreds of Millions in the Mid-Term Elections

In the last week Democrats were gloating about how little money the Republican Party had in its campaign coffers. The Republican National Committee has just over $5 million in the bank for the final stretch of the 2010 midterm election campaign and is carrying over $2 million in debt.

These figures have Democrats jumping for joy, but their excitement is misplaced. The combination of Michael Steele and Citizens United is creating a paradigm shift in how elections are funded among Republicans. Rather than giving to the Republican Party, where Michael Steele controls the money, their name is made public and they are limited by regulation as to how much they can give, major donors have abandoned the RNC and are giving to 527 and 501(c)(4) organizations, which can also take money directly from corporations. This new approach to campaign finance will alter U.S. politics reducing the power of political parties and increasing the power of concentrated corporate wealth.

The best example is the “Shadow RNC” American Crossroads, a Republican 527 and American Crossroads, GPS, a sister 501(c)(4) organization. These organizations are being run by Karl Rove, Ed Gillespie and Michael Duncan. Gillespie was the former chair of the Republican Party and Duncan, also a former RNC Chair, was a challenger to Michael Steele for Chairman of the Party. Duncan had the most votes in the first round but Steele won the contested nomination in six rounds.

Steele’s missteps, gaffes and embarrassments have led major donors to American Crossroads which has become known as the “Shadow RNC.” Others have described American Crossroads as a coup of the RNC. The former political strategist for President Reagan, Ed Rollins, has described Michael Steele as a “disaster” who “has failed miserably in the things you’re supposed to do [as Chair of the RNC] — raise money and basically go out and articulate the message.” Despite that, he concluded: “what he says or does in the next 11 weeks is not going to matter.” He described Steele and the RNC as irrelevant.

Indeed, American Crossroads will be doing the functions normally done by the RNC. This includes the nuts and bolts of political campaigns: advertising for and against candidates, polling, opposition research, data base acquisition and management as well as get out the vote efforts. They have even created a party platform which they call the “7 in 11” plan, consisting of blocking and obstructing taxing the rich, preventing stimulus spending, cutting back spending on Medicare and Social Security, preventing implementation of health care reform, aggressive immigration enforcement, and speeding up nuclear, coal, oil and other energy production.

American Crossroads is like the RNC except, unlike political parties where there are limits to the amount of money political parties can take from individuals and are required to report their donors; American Crossroads is not limited on the size of the donations and in many cases do not have to report the names of the donors. American Crossroads can also take money directly from corporations which under Citizens United can spend as much as they want on elections.

The two American Crossroads organizations have raised $17.6 million through mid-August. The initial fundraising of the 527 organization came from just four individual billionaires cited as donating over 97 percent of the 4.7 million total. Their 501(c)(4), American Crossroads GPS, raised $5 million in June, its first month of operation. The source of those funds is not reported and once again, there are no limits to how much an individual can give to a 527 or (c)(4). American Crossroads plans to raise and spend over $52 million to influence the 2010 elections.

The American Crossroads strategy is not only built on the failure of Michael Steele, but Citizens United which opened up unlimited campaign spending by corporations. During a July broadcast on Fox News Rove acknowledged that the American Crossroads groups would benefit from the Supreme Court’s Citizens United decision that ruled corporations could donate unlimited amounts of money to political organizations which can purchase unlimited amounts of political advertising. The “Shadow RNC” of Rove and Company seeks to elect candidates loyal to the GOP’s wealthiest donors.

American Crossroads is building a campaign team. It “is currently hiring operatives with state-specific campaign knowledge to bolster the operation.” It is spending millions on advertisements in key House and Senate races. They have already aired advertisements in the Ohio, Colorado and Nevada senate races and have targeted 11 Senate races — Ohio, Missouri, New Hampshire, Pennsylvania, Nevada, Arkansas, Colorado, Kentucky, Florida, Illinois and Washington State. American Crossroads will be hiring a media consultant and pollster to develop a tailored message for each campaign.

The election watchdog group for which I serve as spokesperson, Protect Our Elections, is seeking an Advisory Opinion from the FEC finding that American Crossroads is subject to the same rules that govern the RNC since it is functioning as political party. We have also written the Attorney General urging him to make a public statement that all electoral activities will be closely monitored, requiring organizations involved in elections or issue advocacy related to elections to preserve all documents and emails, set up a task force to monitor, investigate and prosecute illegal electoral activities, set up a tip line for whistleblowers to report campaign finance violations and impanel a grand jury to investigate these matters during the campaign season. The actions of Rove and Company should be examined as a coup d’├ętat of the Republican National Committee.

At the same time that the RNC is being minimized and the less regulated American Crossroads is taking over party functions, corporations are getting heavily into the mid-term elections. The Chamber of Commerce, led by Rove ally Tom Donohue, seeks to spend as much as either political party on the mid-term elections – $75 million – focusing on 10 senate races and 40 House races. The Chamber has already weighed in on Senate contests, spending more than $4 million so far in Massachusetts, Arkansas, Colorado, Pennsylvania, Illinois and Ohio with California next. The Chamber is the largest corporate player leading 15 conservative organizations planning on spending $300 million in the mid-term elections.

I recently received a letter from an insider-whistleblower at the Chamber of Commerce in response to a reward offered for information leading to the prosecution and conviction of the Chamber’s president, Tom Donohue. The whistleblower described how the Chamber promises business donors that it will protect their identity and describes fraud, campaign finance violations and financial impropriety that could be proven with a criminal investigation. We have shared this information in a letter to the Department of Justice and urged them to conduct a criminal investigation of the Chamber.

Individual industries are also planning to spend big. The Center for Public Integrity reports that five insurance giants, Aetna Inc., Cigna Corp., Humana Inc., United HealthCare Inc. and WellPoint Inc., plan to spend $20 million on close House races. The coal industry is also planning on spending millions to influence races in Kentucky and Tennessee.

On the Democratic side, the political party apparatus is holding its own in fundraising, and the Dems will get their usual support from union and other Democratic leaning groups. The Service Employees International Union will spend $44 million on the mid-term elections. The AFL-CIO is planning on spending more than $50 million and is focusing its efforts on six states: California, New York, Illinois, Nevada, Ohio and Pennsylvania. But the Republicans have adapted to Citizens United more quickly, in part due to necessity created by the shortcomings of Michael Steele. As a result concentrated corporate funding will dwarf unions and others allied with the Democrats.

And, with the failure thus far of the Congress to pass the DISCLOSE Act voters will not be told who is funding advertising campaigns. The Chamber has a history of this deceptive approach, creating front groups that sound like citizen groups but which are really funded by concentrated corporate interests. As a result Americans may need to learn a new Latin phrase, one that goes along with caveat emptor, buyer beware; the new phrase when it comes to voting – caveat suffragium, voter beware. Due to the massive spending by concentrated corporate interest’s deception will even more so become the foundation of American elections

Voter Beware Concentrated Corporate Power is Creating Deceptive Elections

Original Link: http://dissidentvoice.org/2010/08/voter-beware-concentrated-corporate-power-is-creating-deceptive-elections/

By Kevin Zeese

The Republican Party is Being Replaced with Secret Donors and Unlimited Donations as Concentrated Corporate Interests Spend Hundreds of Millions in the Mid-Term Elections

In the last week Democrats were gloating about how little money the Republican Party had in its campaign coffers. The Republican National Committee has just over $5 million in the bank for the final stretch of the 2010 midterm election campaign and is carrying over $2 million in debt.

These figures have Democrats jumping for joy, but their excitement is misplaced. The combination of Michael Steele and Citizens United is creating a paradigm shift in how elections are funded among Republicans. Rather than giving to the Republican Party, where Michael Steele controls the money, their name is made public and they are limited by regulation as to how much they can give, major donors have abandoned the RNC and are giving to 527 and 501(c)(4) organizations, which can also take money directly from corporations. This new approach to campaign finance will alter U.S. politics reducing the power of political parties and increasing the power of concentrated corporate wealth.

The best example is the “Shadow RNC” American Crossroads, a Republican 527 and American Crossroads, GPS, a sister 501(c)(4) organization. These organizations are being run by Karl Rove, Ed Gillespie and Michael Duncan. Gillespie was the former chair of the Republican Party and Duncan, also a former RNC Chair, was a challenger to Michael Steele for Chairman of the Party. Duncan had the most votes in the first round but Steele won the contested nomination in six rounds.

Steele’s missteps, gaffes and embarrassments have led major donors to American Crossroads which has become known as the “Shadow RNC.” Others have described American Crossroads as a coup of the RNC. The former political strategist for President Reagan, Ed Rollins, has described Michael Steele as a “disaster” who “has failed miserably in the things you’re supposed to do [as Chair of the RNC] — raise money and basically go out and articulate the message.” Despite that, he concluded: “what he says or does in the next 11 weeks is not going to matter.” He described Steele and the RNC as irrelevant.

Indeed, American Crossroads will be doing the functions normally done by the RNC. This includes the nuts and bolts of political campaigns: advertising for and against candidates, polling, opposition research, data base acquisition and management as well as get out the vote efforts. They have even created a party platform which they call the “7 in 11” plan, consisting of blocking and obstructing taxing the rich, preventing stimulus spending, cutting back spending on Medicare and Social Security, preventing implementation of health care reform, aggressive immigration enforcement, and speeding up nuclear, coal, oil and other energy production.

American Crossroads is like the RNC except, unlike political parties where there are limits to the amount of money political parties can take from individuals and are required to report their donors; American Crossroads is not limited on the size of the donations and in many cases do not have to report the names of the donors. American Crossroads can also take money directly from corporations which under Citizens United can spend as much as they want on elections.

The two American Crossroads organizations have raised $17.6 million through mid-August. The initial fundraising of the 527 organization came from just four individual billionaires cited as donating over 97 percent of the 4.7 million total. Their 501(c)(4), American Crossroads GPS, raised $5 million in June, its first month of operation. The source of those funds is not reported and once again, there are no limits to how much an individual can give to a 527 or (c)(4). American Crossroads plans to raise and spend over $52 million to influence the 2010 elections.

The American Crossroads strategy is not only built on the failure of Michael Steele, but Citizens United which opened up unlimited campaign spending by corporations. During a July broadcast on Fox News Rove acknowledged that the American Crossroads groups would benefit from the Supreme Court’s Citizens United decision that ruled corporations could donate unlimited amounts of money to political organizations which can purchase unlimited amounts of political advertising. The “Shadow RNC” of Rove and Company seeks to elect candidates loyal to the GOP’s wealthiest donors.

American Crossroads is building a campaign team. It “is currently hiring operatives with state-specific campaign knowledge to bolster the operation.” It is spending millions on advertisements in key House and Senate races. They have already aired advertisements in the Ohio, Colorado and Nevada senate races and have targeted 11 Senate races — Ohio, Missouri, New Hampshire, Pennsylvania, Nevada, Arkansas, Colorado, Kentucky, Florida, Illinois and Washington State. American Crossroads will be hiring a media consultant and pollster to develop a tailored message for each campaign.

The election watchdog group for which I serve as spokesperson, Protect Our Elections, is seeking an Advisory Opinion from the FEC finding that American Crossroads is subject to the same rules that govern the RNC since it is functioning as political party. We have also written the Attorney General urging him to make a public statement that all electoral activities will be closely monitored, requiring organizations involved in elections or issue advocacy related to elections to preserve all documents and emails, set up a task force to monitor, investigate and prosecute illegal electoral activities, set up a tip line for whistleblowers to report campaign finance violations and impanel a grand jury to investigate these matters during the campaign season. The actions of Rove and Company should be examined as a coup d’├ętat of the Republican National Committee.

At the same time that the RNC is being minimized and the less regulated American Crossroads is taking over party functions, corporations are getting heavily into the mid-term elections. The Chamber of Commerce, led by Rove ally Tom Donohue, seeks to spend as much as either political party on the mid-term elections – $75 million – focusing on 10 senate races and 40 House races. The Chamber has already weighed in on Senate contests, spending more than $4 million so far in Massachusetts, Arkansas, Colorado, Pennsylvania, Illinois and Ohio with California next. The Chamber is the largest corporate player leading 15 conservative organizations planning on spending $300 million in the mid-term elections.

I recently received a letter from an insider-whistleblower at the Chamber of Commerce in response to a reward offered for information leading to the prosecution and conviction of the Chamber’s president, Tom Donohue. The whistleblower described how the Chamber promises business donors that it will protect their identity and describes fraud, campaign finance violations and financial impropriety that could be proven with a criminal investigation. We have shared this information in a letter to the Department of Justice and urged them to conduct a criminal investigation of the Chamber.

Individual industries are also planning to spend big. The Center for Public Integrity reports that five insurance giants, Aetna Inc., Cigna Corp., Humana Inc., United HealthCare Inc. and WellPoint Inc., plan to spend $20 million on close House races. The coal industry is also planning on spending millions to influence races in Kentucky and Tennessee.

On the Democratic side, the political party apparatus is holding its own in fundraising, and the Dems will get their usual support from union and other Democratic leaning groups. The Service Employees International Union will spend $44 million on the mid-term elections. The AFL-CIO is planning on spending more than $50 million and is focusing its efforts on six states: California, New York, Illinois, Nevada, Ohio and Pennsylvania. But the Republicans have adapted to Citizens United more quickly, in part due to necessity created by the shortcomings of Michael Steele. As a result concentrated corporate funding will dwarf unions and others allied with the Democrats.

And, with the failure thus far of the Congress to pass the DISCLOSE Act voters will not be told who is funding advertising campaigns. The Chamber has a history of this deceptive approach, creating front groups that sound like citizen groups but which are really funded by concentrated corporate interests. As a result Americans may need to learn a new Latin phrase, one that goes along with caveat emptor, buyer beware; the new phrase when it comes to voting – caveat suffragium, voter beware. Due to the massive spending by concentrated corporate interest’s deception will even more so become the foundation of American elections

G.O.P. Allies Drive Ad Spending Disparity

Original Link: http://www.nytimes.com/2010/09/14/us/politics/14money.html

By MICHAEL LUO

Outside groups supporting Republican candidates in House and Senate races across the country have been swamping their Democratic-leaning counterparts on television since early August as the midterm election season has begun heating up.

Driving the disparity in the ad wars has been an array of Republican-oriented organizations that are set up so they can accept donations of unlimited size from individuals and corporations without having to disclose them. The situation raises the possibility that a relatively small cadre of deep-pocketed donors, unknown to the general public, is shaping the battle for Congress in the early going.

The yawning gap in independent interest group spending is alarming some Democratic officials, who argue that it amounts to an effort on the part of wealthy Republican donors, as well as corporate interests, newly emboldened by regulatory changes, to buy the election.

“While each of our campaigns has the resources they need to be competitive, we now face shadow groups putting their thumbs on the scale with undisclosed, unlimited and unregulated donations,” said Senator Robert Menendez of New Jersey, chairman of the Democratic Senatorial Campaign Committee.

As the primary season ends this week and the general election begins in earnest, the nightmare for the Democrats is that this is just the beginning. Tracking by Democratic media buyers, in fact, shows that other large chunks of television time have been set aside in the coming weeks in key House races by more Republican-leaning groups.

The snapshot of early television spending would seem to be a fulfillment of Democrats’ worst fears after the Supreme Court’s ruling in the Citizens United case in January that lifted a ban on direct corporate spending on political campaigns.

It is not clear, however, whether it is actually an influx of new corporate money unleashed by the Citizens United decision that is driving the spending chasm, or other factors, notably, a political environment that favors Republicans.

There are only scattered clues that can be gleaned about the financing, like the two $1 million contributions from Louisiana companies tied to Harold Simmons, a Texas billionaire and longtime Republican donor who helped finance Swift Boat Veterans for Truth, in the campaign finance filings of one group, American Crossroads; and that David Koch, the billionaire co-owner of Koch Industries, is closely tied to another major player, Americans for Prosperity.

Corporations have so far mostly chosen not to take advantage of the Citizens United ruling to directly sponsor campaign ads themselves.

Some, however, are most likely funneling more money into campaigns through some of these independent groups, said Lawrence M. Noble, a lawyer at Skadden, Arps, Slate, Meagher & Flom and a former general counsel for the Federal Election Commission. They had the right to make such contributions before the ruling, he said, but Citizens United made it more straightforward.

“There’s a greater comfort level,” Mr. Noble said.

Still, disclosure laws make it impossible to know for sure where the money for these groups is coming from in most cases.

“Corporate interests are buying the elections?” said Sheila Krumholz, executive director of the Center for Responsive Politics, a watchdog group. “Oh no, it’s much worse than that. We don’t know who’s buying the election.”

If the trend on television continues and extends across other types of independent group spending, it would be a reversal from the past. In recent elections, it was Democrats who used so-called soft money vehicles, which are able to accept unrestricted donations, to a much greater degree.

In 2006, for example, the last midterm election, Democratic-leaning 527 groups, named for the part of the tax code they fall under, outspent Republican-leaning ones in federal races $121 million to $65 million, according to the Center for Responsive Politics.

“The groups that perfected this were on the Democratic side,” said Steven Law, president and chief executive of American Crossroads, a Republican-oriented advocacy group, and its sister organization, Crossroads GPS. Crossroads GPS has been the biggest third-party player on television by far since early August.

In Senate races, Republican-leaning interest groups outspent Democratic-leaning ones on television $10.9 million to $1.3 million, from Aug. 1 to Sept. 8, according to Campaign Media Analysis Group, a company that tracks political advertising.

In the House, Republican-leaning groups outspent Democratic-leaning ones, $3.1 million to $1.5 million.

Television spending by the candidates themselves was fairly even during the period, with Republicans in the Senate pouring out about $19.6 million compared with $17.3 million by Democrats; in the House, Democrats spent $7.6 million to the Republicans $7 million. Spending by the party committees was negligible.

A major question is how big a mark labor unions will be able to make for Democrats; they have mostly held their fire on television up to this point. The one exception is the American Federation of State, County and Municipal Employees, which spent $1.2 million on House races. The Citizens United decision frees them up to more directly support candidates, as well, but even their leaders seemed to indicate that they would not be able to match pro-Republican expenditures over the airwaves.

“If we try to compete in that game, we can’t compete,” said Richard Trumka, president of the A.F.L.-C.I.O. “They have so much more resources.”

Fear has been building for some time among Democratic operatives that third-party spending on all fronts this year would favor Republicans, based on declarations by various groups on the amounts they were hoping to devote to this election. Spending on other activities, however, is much more difficult to track. Television advertising is, therefore, a useful gauge.

In Senate races over the last month, Crossroads GPS spent $4.8 million in California, Kentucky, Missouri, Nevada and Pennsylvania. It was followed by the United States Chamber of Commerce, a Republican-leaning trade association, which spent $2.9 million in television advertising in Illinois, Missouri and New Hampshire.

Fund-raising for both of the Crossroads groups has been spearheaded by Karl Rove, the former political strategist for President George W. Bush, and Ed Gillespie, a former Republican Party chairman.

The groups are well on their way to meeting their combined fund-raising goal of just over $50 million for this election, Mr. Law said.

Crossroads GPS is organized as a 501(c)(4) nonprofit, meaning it legally cannot devote more than half of its activities to politics, but it also means that it does not have to disclose its donors.

American Crossroads, on the other hand, recently filed paperwork to become an independent-expenditure political action committee, a new classification for third-party groups made possible by a pair of recent advisory opinions by the F.E.C. after the Citizens United decision. Such groups can accept donations of unlimited size but are required to regularly disclose their donors.

Perhaps not so coincidentally, American Crossroads spent only $437,000 on television in August and early September, much less than its sister-organization. Donations revealed in campaign finance filings by American Crossroads, however, offer a glimpse of the kinds of hefty contributions its leaders have been soliciting. There are the $1 million contributions linked to Mr. Simmons; and another $1 million donation came from a trust controlled by Jerry Perenchio, a former chairman of Univision and another major contributor to Republican causes.

Meanwhile, the biggest sponsor of television advertising in House races over the last month was Americans for Prosperity, which spent about $1.5 million, singling out races in which Republican candidates are at a fund-raising disadvantage.

Americans for Prosperity is another 501(c)(4), which does not have to disclose its donors. Mr. Koch, who has mostly supported Republicans over the years, serves as the chairman of its sister organization, Americans for Prosperity Foundation, which is much more limited in its political activities because it is set up as a 501(c)(3) nonprofit.

Saturday, September 18, 2010

Five Reasons to Let the Bush Tax Cuts for the Rich Expire

Original Link: http://blogs.alternet.org/speakeasy/2010/09/16/five-reasons-to-let-the-bush-tax-cuts-for-the-rich-expire/

By Chuck Collins

Congress is actively debating whether to retain President Bush’s 2001 and 2003 tax cuts for the wealthy that are due to expire at the end of this year. President Obama supports extending tax cuts for households with incomes under $250,000, but ending the tax breaks for higher income households.

Here are five good reasons for Congress to let them go.

1. Borrowing to Give the Rich Tax Breaks is a Really Bad Idea. We’ve already borrowed $700 billion since 2001 to pay for these tax cuts. Maintaining them for another decade would cost an estimated $700 billion, plus interest on the national debt estimated at $126 billion. Does it really make sense to send interest payments to China and millionaire bond-holders in the U.S. –so that we can cut taxes for U.S. millionaires and billionaires?

2. There are 700 Billion Better Ways to Use the Money. Consider the superior ways to spend $700 billion. We could use a portion to reduce budget deficits. We could make long overdue investments in infrastructure such as bridges, roadways, railroads, water treatment facilities, retrofitting buildings –things that make our economy strong and competitive. We could direct funds to make the transition to the new economy that is less dependent on foreign oil. In the short-term, all these investments would create millions of jobs. In the long term, it would put the economy on better footing for the future. There are a billion better ways to use the money.

3. Restores Balance to Tax Code. Over the last half century, Congress has steadily reduced tax obligations for the very rich and global corporations. Between 1960 and 2004, the top 0.1 percent of U.S. taxpayers –the wealthiest one in one thousand –have seen the share of their income paid in total federal taxes drop from 60 to 33.6 percent. Restoring the tax rates to pre-2001 levels would be a very slight increase, yet begin the process of rebalancing the tax code.

4. It Won’t Hurt the Economy. You’ve heard the blather about how taxing the rich is going to hurt the economy. But cutting the taxes for the wealthy are an ineffective way to help the economy. A recent analysis by the Congressional Budget Service ranked 11 strategies to spur the economy and create jobs. Cutting taxes for the rich was the worst ranked strategy. Here’ the reality: Taxing the rich is different than taxing the middle class. The rich save more of their tax cuts while working people and middle class spend it in the economy. Over the last decade, the top wealth holders have shifted trillions of dollars into speculative investments that have hurt the economy.

5. Reduces the Dangerous Concentration of Wealth and Power. We’re living in a period of unprecedented economic inequality. A recent series in the online journal Slate examined the “Growing Divergence” of wealth and income. Taxes is one of the ways we reduce these inequalities.

A final reason is that the U.S. public supports letting these tax cuts for the rich expire. A recent Gallup Poll reveals that 59 percent of the population support letting the tax cuts for the rich expire –while 37 percent support extending them. Polls rarely reveal support for any form of taxation –which indicates that a majority of Americans –including those who will pay the hire taxes – recognize the imprudence of extending them. Alan Greenspan, who supported the tax cuts in 2001, has now reversed his position and believes the time has come to raise taxes.

Friday, September 17, 2010

Poverty Rises as Wall Street Billionaires Whine

Original Link: http://www.huffingtonpost.com/les-leopold/poverty-rises-as-wall-str_b_720719.html

By Les Leopold

The ranks of the working-age poor in the United States climbed to the highest level since the 1960s as the recession threw millions of people out of work last year, leaving one in seven Americans in poverty. The overall poverty rate climbed to 14.3 per cent, or 43.6 million people, the Census Bureau said yesterday in its annual report on the economic well-being of US households. Gulfnews.com
While 43.6 million Americans live in poverty, the richest men of finance sure are getting pissy. First Steve Schwartzman, head of the Blackrock private equity company, compares the Obama administration's effort to close billionaires' tax loopholes to "the Nazi invasion of Poland." Then hedge fund mogul David Loeb announces that he's abandoning the Democrats because they're violating "this country's core founding principles" -- including "non-punitive taxation, Constitutionally-guaranteed protections against persecution of the minority, and an inexorable right of self-determination." Instead of showing their outrage about the spread of poverty in the richest nation on Earth, the super-rich want us to pity them?

Why are Wall Street's billionaires so whiny? Is it really possible to make $900,000 an hour (not a typo -- that's what the top ten hedge fund managers take in), and still feel aggrieved about the way government is treating you? After you've been bailed out by the federal government to the tune of $10 trillion (also not a typo) in loans, asset swaps, liquidity and other guarantees, can you really still feel like an oppressed minority?

You'd think the Wall Street moguls would be thankful. Not just thankful -- down on their knees kissing the ground taxpayers walk on and hollering hallelujah at the top of their lungs! These guys profited from puffing up the housing bubble, then got bailed out when the going got tough. (Please see The Looting of America for all the gory details.) Without taxpayer largess, these hedge fund honchos would be flat broke. Instead, they're back to hauling in obscene profits.

These billionaires don't even have to worry about serious financial reforms. The paltry legislation that squeaked through Congress did nothing to end too big and too interconnected to fail. In fact, the biggest firms got even bigger as they gobbled up troubled banks, with the generous support of the federal government. No bank or hedge fund was broken up. Nobody was forced to pay a financial transaction tax. None of the big boys had a cap placed on their astronomical wealth. No one's paying reparations for wrecking the US economy. The big bankers are still free to create and trade the very derivatives that catapulted us into this global crisis. You'd think the billionaires would be praying on the altar of government and erecting statues on Capital Hill in honor of St. Bailout.

Instead, standing before us are these troubled souls, haunted by visions of persecution. Why?

The world changed. Before the bubble burst, these people walked on water. Their billions proved that they were the best and the brightest -- not just captains of the financial universe, but global elites who had earned a place in history. They donated serious money to worthy causes -- and political campaigns. No one wanted to mess with them.

But then came the crash. And the things changed for the big guys -- not so much financially as spiritually. Plebeians, including me, are asking pointed questions and sometimes even being heard, both on the Internet and in the mainstream media. For the first time in a generation, the public wants to know more about these emperors and their new clothes. For instance:

• What do these guys actually do that earns them such wealth?
• Is what they do productive and useful for society? Is there any connection between what they earn and what they produce for society?
• Did they help cause the crash?
• Did these billionaires benefit from the bailouts? If so, how much?
• Are they exacerbating the current unemployment and poverty crisis with their shenanigans?
• Why shouldn't we eliminate their tax loopholes (like carried interest)?
• Should their sky-high incomes be taxed at the same levels as during the Eisenhower years?
• Can we create the millions of jobs we need if the billionaires continue to skim off so much of our nation's wealth??
• Should we curb their wealth and political influence?

How dare we ask such questions! How dare we consider targeting them for special taxes? How dare we even think about redistributing THEIR incomes... even if at the moment much of their money comes directly from our bailouts and tax breaks?

It's true that the billionaires live in a hermetically sealed world. But that doesn't mean they don't notice the riffraff nipping at their heels. And they don't like it much. So they've gotten busy doing what billionaires do best: using their money to shield themselves. They're digging into their bottomless war chests, tapping their vast connections and using their considerable influence to shift the debate away from them and towards the rest of us.

We borrowed too much, not them. We get too much health care, not them. We retire too soon, not them. We need to tighten our belts while they pull in another $900,000 an hour. And if we want to cure poverty, we need to get the government to leave Wall Street alone. Sadly, their counter-offensive is starting to take hold.

How can this happen? Many Americans want to relate to billionaires. They believe that all of us are entitled to make as much as we can, pretty much by any means necessary. After all, maybe someday you or I will strike it rich. And when we do, we sure don't want government regulators or the taxman coming around!

Billionaires are symbols of American individual prowess and virility. And if we try to hold them back or slow them down, we're on the road to tyranny. Okay, the game is rigged in their favor. Okay, they got bailed out while the rest of us didn't -- especially the 29 million people who are jobless or forced into part-time work. But what matters most is that in America, nothing can interfere with individual money-making. That only a few of us actually make it into the big-time isn't a bad thing: It's what makes being rich so special. So beware: If we enact even the mildest of measures to rein in Wall Street billionaires, we're on the path to becoming North Korea.

Unfortunately, if we don't adjust our attitudes, we can expect continued high levels of unemployment and more people pushed below the poverty line. It's not clear that our economy will ever recover as long as the Wall Street billionaires keep siphoning off so much of our wealth. How can we create jobs for the many while the few are walking off with $900,000 an hour with almost no new jobs to show for it? In the old days, even robber barons built industries that employed people -- steel, oil, railroads. Now the robber barons build palaces out of fantasy finance. We can keep coddling our financial billionaires and let our economy spiral down, or we can make them pay their fair share so we can create real jobs. These guys crashed the economy, they killed billions of jobs, and now they're cashing in on our bailout. They owe us. They owe the unemployed. They owe the poor.

Dwight D. Eisenhower was no radical, but he accepted the reality: If America was going to prosper -- and pay for its costly Cold War -- the super-rich would have to pony up. It was common knowledge that when the rich grew too wealthy, they used their excess incomes to speculate. In the 1950s, memories of the Great Depression loomed large, and people knew that a skewed distribution of income only fueled speculative booms and disastrous busts. On Ike's watch, the effective marginal tax rate for those earning over $3 million (in today's dollars) was over 70 percent. The super-rich paid. As a nation we respected that other important American value: advancing the common good.

For the last thirty years we've been told that making as much as you can is just another way of advancing the common good. But the Great Recession erased that equation: The Wall Streeters who made as much as they could undermined the common good. It's time to balance the scales. This isn't just redistribution of income in pursuit of some egalitarian utopia. It's a way to use public policy to reattach billionaires to the common good.

It's time to take Eisenhower's cue and redeploy the excessive wealth Wall Street's high rollers have accumulated. If we leave it in their hands, they'll keep using it to construct speculative financial casinos. Instead, we could use that money to build a stronger, more prosperous nation. We could provide our people with free higher education at all our public colleges and universities -- just like we did for WWII vets under the GI Bill of Rights (a program that returned seven dollars in GDP for every dollar invested). We could fund a green energy Manhattan Project to wean us from fossil fuels. An added bonus: If we siphon some of the money off Wall Street, some of our brightest college graduates might even be attracted not to high finance but to jobs in science, education and healthcare, where we need them.

Of course, this pursuit of the common good won't be easy for the billionaires (and those who indentify with them.). But there's just no alternative for this oppressed minority: They're going to have to learn to live on less than $900,000 an hour.

How the Chamber of Commerce Allegedly Laundered Millions in Charity Dollars to Beat Back Financial Reform and Reelect Republicans

Original Link: http://www.alternet.org/news/148174/how_the_chamber_of_commerce_allegedly_laundered_millions_in_charity_dollars_to_beat_back_financial_reform_and_reelect_republicans

By Joshua Holland

According to a complaint filed with the Internal Revenue Service last week, the U.S. Chamber of Commerce (CoC), the corporate right’s massive lobbying arm, laundered millions of dollars in charitable contributions to finance its political assault on the American working class.

The New York Times notes that the Chamber has “a war chest rivaling that of the Republican Party itself” and represents “the Obama administration’s most-well-financed rival on signature policy debates like health care and financial regulation.” According to the Washington Post, the $44.3 million the group has paid to lobbyists so far this year, along with the $50 million it plans on spending to elect business-friendly politicians this fall, will make it the top lobbyist in Washington once again. (The group is nevertheless unlikely to top the $144 million it spent buying political influence in 2009.)

Those expenditures represent the day-to-day business of the Chamber. But according to the complaint filed last week by U.S. Chamber Watch, a watch-dog group, the CoC violated U.S. tax laws by funneling $18 million in loans and grants that the Starr Foundation gave to the Chamber’s charitable, non-profit arm, the National Chamber Foundation into the CoC’s lobbying efforts. The Starr Foundation was created by AIG’s founder, Cornelius Vander Starr, and is led by former CEO Maurice Greenberg. According to Chamber Watch’s complaint, none of the group’s $12 million in principle loans had been repaid, and the “money appeared to have been given to the chamber’s foundation for unrestricted use.”

According to a New York Times analysis of the complaint:

The money, in violation of nonprofit restrictions, was ultimately funneled to the chamber itself and used to finance broader political causes, including support for legal tort reform to shield companies like A.I.G. from liability. Mr. Greenberg himself had worked to promote restrictions on lawsuits, the complaint notes.

Christy Setzer, a spokeperson for Chamber Watch, told AlterNet that the cash was ultimately funneled to the chamber itself where it was used to further its political agenda. “The Starr Foundation began giving about a million dollars per year to the National Chamber Foundation in 2000," she said. "Then in 2003, the Starr Foundation gives $5 million and then another $10 million in the following year. And subsequently, in the same time period, it appears that the National Chamber Foundation turns around and gives that money to the Chamber itself.”

“What’s interesting about all of this is what was happening at the time,” Setzer said. She noted that the cash was transferred during a time when the Chamber was amassing a massive war chest for the re-election of George W. Bush in 2004, and also when AIG was lobbying hard to roll back greater oversight of the financial industry’s accounting practices. “While the Chamber and AIG were campaigning against laws to crack down on accounting fraud, they were potentially committing accounting fraud of their own,” she said.

According to Setzer, during those years, 80 percent of the National Chamber Foundation’s operating budget was provided by the Starr Foundation. “There’s a question about what the role of the National Chamber Foundation really was other than to be a pass-through organization for this money.”

Stan Harrell, chief financial officer for the Chamber of Commerce, told the New York Times that the Chamber Watch complaint was politically motivated and that the CoC had disclosed the transaction as required under the law.

Mr. Harrell said that the funding from the Starr Foundation was listed in tax documents as a loan only in the most technical sense and that it was never intended to be paid back. Instead, he said, the money was restricted for long-term use on educational and research projects as part of the chamber’s capital plan and was invested by the chamber to ensure the Starr Foundation a set rate of return.

“We wanted to make sure we guaranteed the investment return,” Harrell told the Times. “Legally, that has to be represented as a loan.” But according to Setzer, the CoC’s potential legal problems stem from the fact that charitable organizations cannot give money to a political organization in the first place. “The issue isn’t that the money flowed from a charitable organization to a political organization and then was used for political purposes,” she told AlterNet. “The issue is that it flowed there at all … so their answer doesn’t respond to the legal complaint.”

The stakes surrounding the complaint are high. According to Setzer, if the IRS upholds it, the National Chamber Foundation would lose its status as a tax-exempt charitable organization. “Effectively, the National Chamber Foundation would cease to exist,” she said.

Sunday, September 12, 2010

A G.O.P. Leader Tightly Bound to Lobbyists

Original Link: http://www.nytimes.com/2010/09/12/us/politics/12boehner.html

By ERIC LIPTON

House Democrats were preparing late last year for the first floor vote on the financial regulatory overhaul when Representative John A. Boehner of Ohio and other Republican leaders summoned more than 100 industry lobbyists and conservative political activists to Capitol Hill for a private strategy session.

Representative John A. Boehner arriving for a fund-raiser for Ann Marie Buerkle, a House candidate from New York.
The bill’s passage in the House already seemed inevitable. But Mr. Boehner and his deputies told the Wall Street lobbyists and trade association leaders that by teaming up, they could still perhaps block its final passage or at least water it down.

“We need you to get out there and speak up against this,” Mr. Boehner said that December afternoon, according to three people familiar with his remarks, while also warning against cutting side deals with Democrats.

That sort of alliance — they won a few skirmishes, though they lost the war on the regulatory bill — is business as usual for Mr. Boehner, the House minority leader and would-be speaker if Republicans win the House in November. He maintains especially tight ties with a circle of lobbyists and former aides representing some of the nation’s biggest businesses, including Goldman Sachs, Google, Citigroup, R. J. Reynolds, MillerCoors and UPS.

They have contributed hundreds of thousands of dollars to his campaigns, provided him with rides on their corporate jets, socialized with him at luxury golf resorts and waterfront bashes and are now leading fund-raising efforts for his Boehner for Speaker campaign, which is soliciting checks of up to $37,800 each, the maximum allowed.

Some of the lobbyists readily acknowledge routinely seeking his office’s help — calling the congressman and his aides as often as several times a week — to advance their agenda in Washington. And in many cases, Mr. Boehner has helped them out.

As Democrats increasingly try to cast the Ohio congressman as the face of the Republican Party — President Obama mentioned his name eight times in a speech last week — and as Mr. Boehner becomes more visible, his ties to lobbyists, cultivated since he arrived here in 1991, are coming under attack.

The woman he hopes to replace, Speaker Nancy Pelosi, derided him on Friday as having met “countless times with special-interest lobbyists in an effort to stop tough legislation” that would regulate corporations and protect consumers. And the Democratic Congressional Campaign Committee, through a spokeswoman, charged that he “epitomizes the smoked-filled, backroom, special-interest deal making that turns off voters about Washington.”

Mr. Boehner, who declined to be interviewed for this article, and his lobbyist allies ridicule such criticism as politically motivated by desperate Democrats. His actions, they say, simply reflect the pro-business, antiregulatory philosophy that he has espoused for more than three decades, dating back to when Mr. Boehner, the son of a tavern owner, ran a small plastics company in Ohio. And fielding requests from lobbyists is nothing unusual, he says.

“I get lobbied every day by somebody,” he said last month after a speech in Cleveland. “It could be by my wife. It could be the bellman. It goes on all day, every day, every place.”

Mr. Boehner — a 60-year-old, perpetually tanned, sharply tailored, chain-smoking golfer — is not as fiery as Newt Gingrich or as unrelenting an arm-twister as Tom DeLay, two of his Republican predecessors in top House posts. It is his reputation as a “Chamber of Commerce” Republican and his fund-raising skills — he has raised $36 million for Republican causes during this election cycle, more than almost anyone else in his party — that explain, in part, his rise.

If elected as his party’s leader in the House, Mr. Boehner will certainly lean on his industry allies for help as he builds coalitions necessary to push legislation through Congress, his office acknowledges.

Michael Steel, a spokesman for Mr. Boehner, said the industry ties only help make Mr. Boehner a better Republican leader. “Like the American people, Boehner — a former small-business man — is most concerned right now about the issue of jobs,” he said. “So he often speaks with employers, rather than, for example, labor unions or environmentalists who support job-killing policies.”

His lobbyist friends also defended the close ties.

“Does he have a lot of relationships in this city? Yes, absolutely,” said Mark Isakowitz, a friend whose Republican firm represents more than three dozen financial, telecommunications, energy and consumer products companies as diverse as Coca-Cola and Zurich Financial Services. “But I think all the good lawmakers do.”

Mr. Boehner won some of his first national headlines in 1996 after he was caught handing out checks from tobacco lobbyists to fellow Republicans on the House floor. Then the fourth-ranking House Republican, he said he had broken no rules and was simply assisting his lobbyist friends, who were contributing to other Republicans’ campaigns.

His business-friendly reputation was enhanced through the weekly powwows he organized on Capitol Hill nicknamed the Thursday Group, a gathering of conservative leaders and business lobbyists whom he relied on to help push the party’s legislative agenda. The Thursday gathering was disbanded after a Republican power struggle that cost him his leadership position.

But he continued to routinely meet with business leaders, particularly in his role as chairman of the Education and the Workforce Committee, and returned to power as House G.O.P. leader in 2006. Several of the onetime Thursday regulars, along with some newcomers, are among the close-knit group that routinely call on Mr. Boehner’s office for client matters, write checks to his campaign and socialize with him.

That circle includes Mr. Isakowitz; Bruce Gates, a lobbyist for the cigarette maker Altria; Nicholas E. Calio, a Citigroup lobbyist; and two former aides, Marc Lampkin and Sam Geduldig, both now financial services lobbyists.

The tobacco industry is particularly well represented, with Mr. Gates and John Fish, a lobbyist for R. J. Reynolds, maker of Camel cigarettes, in the group. People affiliated with those companies have contributed at least $340,000 to Mr. Boehner’s political campaigns, with Mr. Gates being the top individual donor among the thousands during Mr. Boehner’s political career, according to the Center for Public Integrity.

While many lawmakers in each party have networks of donors, lobbyists and former aides who now represent corporate interests, Mr. Boehner’s ties seem especially deep. His clique of friends and current and former staff members even has a nickname on Capitol Hill, Boehner Land. The members of this inner circle said their association with Mr. Boehner translates into open access to him and his staff.

“He likes to bring similarly minded people together to try to advance legislation or oppose it,” said Drew Maloney, a lobbyist at Ogilvy Government Relations. “That is how you get things done.”

One lobbyist in the club — after lauding each staff member in Mr. Boehner’s office that he routinely calls to ask for help — ticked off the list of recent issues for which he had sought the lawmaker’s backing: combating fee increases for the oil industry, fighting a proposed cap on debit card fees, protecting tax breaks for hedge fund executives and opposing a cap on greenhouse gas emissions. Mr. Boehner’s office said these were positions he already agreed with.

Still, with Mr. Boehner and his party in the minority, they often lost the fights. But despite recent defeats on the House floor, Mr. Boehner has benefited from his alliance with lobbyists.

From 2000 to 2007, Mr. Boehner flew at least 45 times, often with his wife, Debbie, on corporate jets provided by companies including R. J. Reynolds. (As required, Mr. Boehner reimbursed part of the costs.)

In addition, over the last decade he has taken 41 other trips paid for by corporate sponsors or industry groups, often to popular golf spots. That makes him one of the top House beneficiaries of such travel, which has recently been curbed as a result of changes in ethics rules.
Mr. Boehner continues to travel to golf destinations on a corporate-subsidized tab, though now it is paid for through his political action committee, the Freedom Project. In the last 18 months, it has spent at least $67,000 at the Ritz-Carlton Naples in Florida, at least $20,000 at the Robert Trent Jones Golf Club in Gainesville, Va., and at least $29,000 at the Muirfield Village Golf Club in Dublin, Ohio, federal records show, for fund-raising events.

In June, with the prospects for a Republican takeover of the House rising, Mr. Boehner moved to accelerate his fund-raising effort, starting what he called the Boehner for Speaker campaign. The idea was to use his high profile to draw large donations that would be mostly allocated to help elect other House Republicans.

He turned again to the same group of lobbyists, former aides and friends during a July meeting at the headquarters of the Republican National Committee.

“The wave is there, there is a rebellion in the country, and we have good candidates,” Mr. Boehner told his supporters, one of the lobbyists present at the meeting recalled. “But I don’t want to miss this once-in-a-lifetime opportunity because we have not raised enough money. They might be able to stop us with a wall of money.”

Mr. Calio of Citigroup was among the first to write a large check. So far, a party spokesman said, the campaign has raised nearly $2 million. Mr. Boehner has helped raise millions more in the last six weeks for Republican House candidates across the country and the party, appearing at more than 40 fund-raisers.

The Boehner for Speaker campaign offers donors who give the maximum amount special perks, like “meetings with Leader Boehner and much much more.”

But his lobbyist friends and former aides said these incentives did not mean too much, because they already had plenty of access to Mr. Boehner. They just now want to see him as the speaker of the House.

“He knows this is going to be a tough election,” said Samuel J. Baptista, a friend, golf partner and lobbyist whose clients include Goldman Sachs and Discover Financial. “But people who underestimate him really do so at their own peril.”

Saturday, September 11, 2010

Chamber of Commerce Accused of Tax Fraud

Original Link: http://www.nytimes.com/2010/09/11/us/politics/11chamber.html

By ERIC LICHTBLAU

With a war chest rivaling that of the Republican Party itself, the U.S. Chamber of Commerce has emerged in the last year as perhaps the Obama administration’s most-well-financed rival on signature policy debates like health care and financial regulation.

Critics on the left have long complained about the chamber’s outsize influence. But now they are taking on the business association directly, charging in a complaint filed Friday with the Internal Revenue Service that it violated tax codes by laundering millions of dollars meant for charitable work from a group with ties to the insurance giant A.I.G.

The complaint was brought by a group called U.S. Chamber Watch, which was created four months ago — with the strong financial backing of labor unions — to scrutinize the Chamber of Commerce’s growing influence and provide a counterbalance.

But chamber officials said they had complied with all tax laws and dismissed the complaint as a political ploy.

A chamber spokeswoman, Tita Freeman, said its opponents “are desperately looking for opportunities to undermine the chamber’s efforts to promote free markets and economic growth.”

The I.R.S. refused to comment on the complaint, citing the confidentiality of taxpayer records.

I.R.S. regulators have often been wary of wading into political grievances, particularly after evidence emerged during the Watergate scandal that the Nixon White House had sought to use the agency for political purposes.

But in recent years the agency has occasionally gotten involved in politically tinged controversies. In one high-profile case in 2004, Republican complaints led it to open an investigation into the N.A.A.C.P.’s tax-exempt status after the group’s leader criticized President George W. Bush in a speech. The I.R.S. concluded two years later that the remarks did not violate the group’s nonprofit restrictions on political activity.

At issue in the complaint against the Chamber of Commerce is whether the group mixed funds for charitable and noncharitable political purposes in violation of tax codes.

The chamber, often using expensive mass-market radio and TV spots, has weighed in on many major public policy debates in recent months, including the Obama administration’s health care policy, business regulations, campaign finance laws and Internet rules, as well as job creation and the threat of tax hikes. On many issues, it has pushed for less government regulation in favor of free-market incentives.

Now the chamber’s political arm is turning to the November elections, and it expects to spend $50 million or more to push pro-business candidates, usually Republicans. As part of a wave of new commercials broadcast this week, the chamber’s California affiliate attacked Senator Barbara Boxer — a Democrat running for re-election against Carly Fiorina, the former chief executive of Hewlett-Packard — and accused Ms. Boxer of “destroying jobs” by voting against business.

Cyrus Mehri, a Washington lawyer who brought the I.R.S. complaint on behalf of U.S. Chamber Watch, said in an interview that the chamber’s current political activities were, in effect, being underwritten with money intended for charitable work.

The complaint focuses on loans and grants totaling about $18 million that were made beginning in 2003 to a nonprofit affiliate, the National Chamber Foundation, by the Starr Foundation, a charity started by the founder of A.I.G. and now led by Maurice R. Greenberg, the insurer’s former chairman.

Lawyers for Chamber Watch said their research, based largely on public tax filings, found that none of the principal on some $12 million in loans had been paid back and that the money appeared to have been given to the chamber’s foundation for unrestricted use.

The lawyers said that the money, in violation of nonprofit restrictions, was ultimately funneled to the chamber itself and used to finance broader political causes, including support for legal tort reform to shield companies like A.I.G. from liability. Mr. Greenberg himself had worked to promote restrictions on lawsuits, the complaint notes.

“You have millions of dollars improperly going to the chamber,” said Mr. Mehri, who drafted the complaint with Gail M. Harmon, a Washington lawyer specializing in tax law. “This is not a technical violation.”

But Stan Harrell, chief financial officer for the Chamber of Commerce, said in an interview Friday that the chamber’s lawyers and its accountants at Ernst & Young had reviewed the Starr Foundation funding and found that it complied with all relevant tax law.

“We’ve never had an issue, period,” Mr. Harrell said. He said that Chamber Watch, which was created by a federation of five unions called Change to Win, was simply trying to create trouble for the chamber because of its opposing political views.

“That’s democracy. From time to time, people make allegations,” he said. “If their real interest was proper accounting, they’d be talking to us. This is political.”

Mr. Harrell said that the funding from the Starr Foundation was listed in tax documents as a loan only in the most technical sense and that it was never intended to be paid back. Instead, he said, the money was restricted for long-term use on educational and research projects as part of the chamber’s capital plan and was invested by the chamber to ensure the Starr Foundation a set rate of return.

“We wanted to make sure we guaranteed the investment return,” he said. “Legally, that has to be represented as a loan. This was all done very scrupulously. If anything, we overdisclosed the transaction” in the group’s federal tax returns, he said

Kim Bowled for Murdoch's Dollars With Korean Games

Original Link: http://www.bloomberg.com/news/2010-09-06/kim-jong-il-bowls-for-murdoch-dollars-with-video-games-made-in-north-korea.html

By Matthew Campbell and Bomi Lim

North Korean leader Kim Jong Il has found an unlikely ally to help raise cash for his impoverished regime: The Dude, the pot-smoking underachiever played by Jeff Bridges in the movie “The Big Lebowski.”

Programmers from North Korea’s General Federation of Science and Technology developed a 2007 mobile-phone bowling game based on the 1998 film, as well as “Men in Black: Alien Assault,” according to two executives at Nosotek Joint Venture Company, which markets software from North Korea for foreign clients. Both games were published by a unit of News Corp., the New York-based media company, a spokeswoman for the unit said.

They represent a growing software industry championed by Kim that is boosting the economy of one of the poorest countries in the world and raising the technological skills of workers. Contracting with North Korean companies is legal under United Nations sanctions unless they are linked to the arms trade.

“From the government’s point of view, foreign currency is the main reason to nurture and support these activities,” said Andrei Lankov, an academic specializing in North Korea at Seoul- based Kookmin University. “These activities help to fund the regime, but at the same time they bring knowledge of the outside world to people who could effect change.”

The technological education of graduates from North Korean universities has “become significantly better,” Volker Eloesser, a founder of Pyongyang-based Nosotek, said in an e- mail. Companies with “hundreds or even thousands of staff each” operate in North Korea, he said.

Double-Edged Sword

Better trained programmers may also bolster the regime’s cyberwarfare capabilities, said Kim Heung Kwang, who taught computer science at universities in the north for 19 years before defecting to South Korea in 2004. South Korea’s presidential office said July 28 the nation had received intelligence that North Korea may plan an Internet-based attack.

Won Sei Hoon, director of South Korea’s National Intelligence Service, told lawmakers last October that North Korea’s postal ministry was responsible for cyber attacks in July 2009 on dozens of websites in South Korea and the U.S.

President Barack Obama widened U.S. financial sanctions on North Korea on Aug. 30, freezing assets of North Korean officials, companies and government agencies suspected of “illicit and deceptive activities” that support the regime’s weapons industry.

Seeking Capability

“Any sort of transaction that gives cash to the North Korean government works against U.S. policy,” said James Lewis, a senior fellow at the Center for Strategic and International Studies, a Washington-based policy group. “The coding skills people would acquire in outsourcing activities could easily strengthen cyberwar cyber-espionage capabilities. Mobile devices are the new frontier of hacking.”

North Korea’s information technology push began in the 1980s as the government sought to bolster the faltering economy, said defector Kim. That drive also led to the creation of a cyber-military unit in the late 1990s, he said. He runs North Korea Intellectuals Solidarity, a group composed of defectors who have graduated from North Korean universities.

Nosotek’s Eloesser disputed any connection between programming for games and cyber-espionage.

“Who could train them, as neither me nor the Chinese engineers who are cooperating with the Koreans have those skills ourselves?” he asked in an e-mail. “Training them to do games can’t bring any harm.”

Joint Venture

Nosotek is a joint venture between the science and technology federation and foreign investors, company vice president Ju Jong Chol said in an e-mail. He said federation members developed both “Big Lebowski Bowling,” set in a rendition of the bowling alley where The Dude spent much of the movie drinking White Russians, and “Men in Black,” in which players battle invading aliens. Eloesser confirmed his comments.

Both games were published by Ojom GmbH, a unit of a company called Jamba that was bought by News Corp. and later renamed Fox Mobile, according to Fox Mobile spokeswoman Juliane Walther in Berlin. They came out after News Corp. took a controlling interest in Jamba in January 2007 and before it bought the remainder in October 2008. Ojom was eliminated in a May 2008 reorganization, Walther said.

When asked whether Fox Mobile distributes games developed in North Korea, Walther said that the unit “has extensive partnerships with content producers in all areas, with operators, and with the biggest media companies worldwide, including various Asian companies.”

No More Details

She said the company could not provide more details on where partners are based or confirm “if and how” North Korean companies were involved in development for Ojom. Dan Berger, a News Corp. spokesman in Los Angeles, declined to comment further. News Corp. is controlled by Chairman and Chief Executive Officer Rupert Murdoch, 79.

Fox Mobile says on its website that it offers “the industry’s broadest array of mobile products available directly via mobile phones.” In the direct-to-consumer segment, it is probably the biggest operator, according to Shailendra Pandey, senior analyst at London-based research firm Informa Telecoms & Media. Among game developers, the biggest players are EA Mobile, Gameloft and Glu Mobile, he said.

Fox Mobile now focuses on marketing and distribution, rather than the content development undertaken by the Ojom unit before its closure, Walther said. The Big Lebowski and Men in Black games are not listed in the top 50 games available on cnet.com, a popular website for downloaded content.

Visiting North Korea

Eloesser founded Elocom Mobile Entertainment GmbH in 2003, which later became a subsidiary of Ojom. He said he first visited North Korea in 2005 and helped found Nosotek in 2007.

Nosotek offers clients billing through either a Hong Kong or Chinese company, according to its website, which promises “skills, secrecy, dedication.”

Such practices allow the funds to flow to North Korea, said Paul Tjia, director of Rotterdam, Netherlands-based GPI Consultancy, which helps companies outsource overseas, including to North Korea. It is “impossible to estimate” how much revenue North Korea earns through software development, he said.

Some practical bottlenecks still stand in the way of the North Korean information technology industry, Felix Abt, a co- founder of the European Business Association in Pyongyang, said in an e-mail. For the most part only foreign staff can use the Internet, “meaning that Korean project managers cannot deal directly and efficiently” with customers overseas, he said.

Foreign companies that are reluctant to do business in North Korea need to understand that investment there can help the country modernize and reduce its isolation, Tjia said.

“Most companies are still reluctant, which we think is unfortunate,” he said. North Koreans “need investment, like China in the 1970s.”

Sunday, September 5, 2010

Audit: Why Do Deficit Hawks Hate Social Security?

Original Link: http://www.themediaconsortium.org/2010/08/31/weekly-audit-why-do-deficit-hawks-hate-social-security/

By Zach Carter

Last week, Social Security advocates learned something they had long suspected. Arguments for cutting Social Security aren’t really about economics or the deficit. They’re all about waging war on social services.

In short, some very prominent policymakers are out to dismantle Social Security on ideological grounds. The most recent example of this view comes from Alan Simpson, a former Republican Senator from Wyoming who now serves as co-Chair of President Barack Obama’s Federal Debt Commission. Earlier this summer, Simpson was caught on video spreading absurd lies about Social Security, but his latest outburst explains why he’s been so willing to distort the facts. Simpson simply hates Social Security.

As Joshua Holland highlights for AlterNet, Simpson fired off a nasty email to Ashley Carson, who advocates for elderly women, in which he referred to the most successful social program in U.S. history as “a milk cow with 310 million tits.”
Social Security is doing just fine

But Simpson has a lot of power on the Debt Commission, which is expected to recommend that Congress reduce the deficit by cutting social programs in a report this year. But as Holland notes, Social Security isn’t in trouble:

Social Security is in fine shape. It’s got a surplus that will run out in 2037, but even if nothing were to change by then, it could still continue to pay out 75 percent of scheduled benefits seventy-five years from now, long after the surplus disappears, and those benefits would still be higher than what retirees receive today.

What’s more, as William Greider notes for The Nation, Social Security has never added one cent to the federal budget deficit. According to the law that created the program, Social Security never can. Targeting Social Security in order to fix the deficit is like invading Iraq to fight Al-Qaeda. The issues are not related.

Raising the retirement age robs workers

The Debt Commission is likely to recommend raising the retirement age—the age at which Social Security benefits begin to be paid out. But as Martha C. White notes for The Washington Independent, it’s a “solution” that simply robs low-income workers of their tax money. Everybody pay Social Security taxes when they work, and when they retire, they receive federal support. If you don’t live long enough to actually retire, you don’t get any benefit from Social Security.

“The hardship of raising the retirement age falls disproportionately on low-income workers who work in physically demanding professions, jobs they may not be able to continue through their seventh decade. … Moreover, though the average lifespan has increased since Social Security’s creation, those extra years aren’t enjoyed equally by all Americans. Overall, Americans are living about 7 years longer. But the poorest 20 percent of Americans are living just two years longer.”

Raising the retirement age, in other words, disproportionately hurts the poor—the very people Social Security is supposed to help most.

Subprime scandal 2.0

So who would pick up the slack if Social Security were to be cut? The same crooked Wall Street scoundrels who brought us the financial crisis. If the government cuts back on retirement benefits, the financial establishment can step in and manage a bigger piece of the retirement pie. The more we learn about the financial mess, the less we should want to see our retirement money controlled by bigwig financiers. Truthout carries a blockbuster new investigative report by ProPublica’s Jake Bernstein and Jesse Eisinger that reveals a new, multi-billion-dollar subprime scam engineered by the financial elite.

We’ve known about Wall Street’s subprime shenanigans for some time, but the report reveals that banks were essentially selling their own products to themselves in order to create the illusion that people really wanted lousy mortgages. It’s called “self-dealing,” and it’s supposed to be illegal.

Subprime Disaster, meet Mortgage Nightmare

Here’s how the scam worked: Wall Street crammed thousands of mortgages into securities, then sliced and diced those securities into new products called CDOs. Those CDOs, in turn, were divided into different “buckets” and sold to investors. The riskiest buckets paid out the most money to investors, but were the most likely to take losses if the underlying mortgages ever went bad. As the housing bubble grew more and more out-of-control, investors became wary of these risky buckets, and stopped buying them.

Wall Street banks were still making a killing from the packaging and sale of everything else, though, so they devised a plan to get rid of some risky bits: they’d buy them up themselves, without telling anybody. A bank would create a CDO called, say, Mortgage Nightmare CDO. Then it would create a separate CDO, called, say, Subprime Disaster CDO. Subprime Disaster would buy up a risky bucket from Mortgage Nightmare, creating the illusion to the market that banks were still able to sell off risky mortgage assets without any trouble, even though the bank was basically just selling garbage to itself.

That illusion propped up the prices of these risky assets and created more revenue for the tricky bankers who sold them, and plump, short-term profits for the banks. It also strongly encouraged other bankers to issue lousy mortgages to the public, since those loans could be packaged into lousy CDOs and score short-term profits for Wall Street’s schemers.

Ultimately, this scheming resulted in a multi-billion-dollar disaster for Wall Street, which taxpayers ended up footing the bill for. Anybody want to see that happen with Social Security?

Social programs did not cause the deficit

As Seth Freed Wessler notes for ColorLines, deficit hawks’ emphasis on social programs is at odds with the factors that actually created the deficit. The Bush tax cuts, the wars in Iraq and Afghanistan and the bank bailouts are the big-ticket items when it comes to government revenues and expenses. Yet deficit hawks in Congress have been refusing to extend paltry unemployment benefits or food stamps to the people hit hardest by the recession. And pretty soon they’re going to go after Social Security too.

In reality, the deficit is only a problem if investors are afraid that the government will default on its debt. Markets measure this worry with interest rates—high rates mean investors are worried, low rates mean they are not. Right now, interest rates on government bonds are at their lowest in decades. With the recession dragging on and the recovery weakening, now would be a great time for the government to spend more money to create jobs and help those knocked out of work.

Instead, the policy debate features cranky old men whining about 310-million-titted cows.

Top 10 Reasons for Higher Taxes on the Top 1%

Original Link: http://hubpages.com/forum/topic/52482

By Paul Buchheit

Funding for our country's children is being cut, but we allow a hedge fund manager to make enough money to pay the salaries of every public school teacher in New York City. Most of his earnings are taxed at a rate less than that of his secretary.

We haven't been able to do anything about it because the cry of 'socialism' from the top generates fear in the minds of average Americans. It's a meaningless cry. Here are ten reasons why the wealthiest 10% of us, and especially the richest 1%, should be paying higher taxes.

1. Benefits to the rich (and everyone else)

Americans with land and expensive houses have the most to lose by failing to support national security and a clean environment and infrastructure repair. And they have a lot to lose from the growing levels of crime and violence. Researchers Richard Wilkinson and Kate Pickett have documented numerous studies that correlate economic inequality with shorter life expectancies, increased disease and health problems, and higher rates of murder and other forms of violence.

About their book "The Spirit Level: Why Equality is Better for Everyone," Wilkinson says: "We quote a prison psychiatrist who spent 25 years talking to really violent men, and he says he has yet to see an act of violence which was not caused by people feeling disrespected, humiliated, or like they've lost face. Those are the triggers to violence, and they're more intense in more unequal societies, where status competition is intensified and we're more sensitive about social judgments."

2. Correcting the redistribution of income to the rich

The richest 1% took $7 of every $100 of America's income in 1980. They have increased that to $20 of every $100 today. In just one generation they've TRIPLED their cut of the pie. Most of the gains by the rich were not 'earned' in the sense of production, innovation, inventiveness. They didn't work 3 times harder than everyone else as they tripled their share. They benefited from tax cuts and deregulation.

3. Correcting the redistribution of income from the poor

Since 1980 our country's productivity has steadily risen, with total income doubling approximately every 10 years. If the bottom 90% of America, most of whom have not been lazy, had shared in this prosperity at a level consistent with 1980 incomes, they would be making $45,000 a year instead of $35,000.

Change to Win, a coalition of union organizations, notes that the high point for wages was in 1972 when union membership reached 28%. Workers are now "earning only 83 cents of every dollar they earned more than 35 years ago, while their productivity has increased a dramatic 80%."

4. Outmoded tax brackets

Our tax system is stuck at 1980s levels. As noted by The New Yorker economist James Surowiecki, "Our system sets the top bracket at three hundred and seventy-five thousand dollars, with a tax rate of thirty-five per cent...This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron James's dentist: same difference."

5. Inequality to instability

As explained by Time's economics writer Stephen Gandel, "Consider what [money held by the very rich] is doing now. It is adding to our economic problems not helping. For the most part it is not money being spent and trickling down. Instead it just adds to that global pool of money that sloshes around our financial markets and creates all types of bubbles...it actually makes our economy prone to booms and busts, and less stable."

6. Instability to catastrophe

The current level of inequality is equivalent to that of the years just before the Great Depression. There is reason to suspect that this level of income inequality is dangerous to our economy. The only other year since 1913 that the wealthy claimed such a large share of national income was 1928, when the top 1% share was 23.9%. The following year, the stock market crashed, which led to the Great Depression. After peaking again in 2007, the U.S. stock market crashed in 2008, leading to what some are now calling the "Great Recession."

7. The Tax Myth

The belief that the "rich pay most of the taxes" is incorrect. The truth comes from the U.S. Congressional Budget Office and the Internal Revenue Service. It's true that the top-earning 1% of Americans pay 23% of their incomes in federal income taxes, while the lowest-earning half of Americans pay only 3%. But top earners pay 5% of their incomes in state and local taxes (sales, property, and income taxes), while low earners pay 10%. Top earners pay 2% of their incomes toward social security, compared to 9% for low earners. Top earners pay 0% (i.e., a negligible portion) of their incomes in federal excise taxes (e.g., tobacco, alcohol and gasoline), while low earners pay 2%. Top earners save another 1% through the Bush tax cuts, while low earners see little benefit. So total taxes for top earners are 29% of their incomes. Total taxes for low earners are 24% of their incomes.

Beyond this, the US Department of Housing and Urban Development and the American Gas Association concur that low-income households pay over 20% of their incomes for utilities, while high-income households pay less than 4%. As a result, total taxes and utilities for top earners consume 33% of their incomes. Total taxes and utilities for low earners consume 44% of their incomes.

8. The Consumption Myth

The belief that rich stimulate the economy is another myth. If anything, the poor stimulate the economy. Low-income earners have a higher "Marginal Propensity to Consume," which means that they spend a greater percentage of their overall income on consumption. High-income earners, on the other hand, will hold more in investments. A University of California study showed that from 1980 to 2003 the share of capital income (stocks, interest, dividends) owned by the richest 1% grew from 37% to 57%.

It's not just rich individuals holding the money. The 500 largest non-financial corporations are currently sitting on $1.8 trillion in cash.

9. Wealth with Honor

Although our country is built on capitalism, wise American business leaders have recognized the danger of the "free hand" of unregulated open markets. Adam Smith, the father of capitalism, believed that unrestricted businesses tend to engage in "conspiracy against the public." John Kenneth Galbraith said "Capitalism left to its own devices, doesn't work properly; it excludes the poor, ruins the environment, and fails to deliver enough collectively produced goods, such as roads, reservoirs, schools and hospitals."

Teddy Roosevelt (in 1910, exactly 100 years ago) criticized the "small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power...We grudge no man a fortune in civil life if it is honorably obtained and well used...We should permit it to be gained only so long as the gaining represents benefit to the community...I think we have got to face the fact that an increase in governmental control is now necessary."

Taxes were raised on the rich shortly after Roosevelt's speech, and the United States gradually became a middle class nation.

More recently, Warren Buffett and Bill Gates have been trying to convince the rich of their responsibility to society. "Responsible Wealth," a project of United for a Fair Economy, is a network of over 700 business leaders and wealthy individuals in the top 5% of income and/or wealth in the US who advocate for fair taxes and corporate accountability.

10 As the Tea Party argues, there should be no new taxes. On 90% of us.

Saturday, September 4, 2010

The GOP Masterplan: Obstruct, smear, lie, repeat

Original Link: http://smirkingchimp.com/thread/mike-whitney/31025/the-gop-masterplan-obstruct-smear-lie-repeat

By Mike Whitney

Last Tuesday, the nonpartisan Congressional Budget Office (CBO) released a report on the estimated impact of the American Recovery and Reinvestment Act (a.k.a.--Obama's $787 billion fiscal stimulus) The report provides conclusive evidence that the stimulus did exactly what it was designed to do and helped to avert another Great Depression. Here's a summary:

It raised real (inflation-adjusted) gross domestic product (GDP) by between 1.7 per cent and 4.5 per cent;

Lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points;

Increased the number of people employed by between 1.4 million and 3.3 million;

Increased the number of full-time-equivalent jobs by 2.0 million to 4.8 million compared with what would have occurred otherwise.

Naturally, the GOP is up-in-arms over the report's findings. In fact, House minority leader John Boehner launched a counterattack claiming that the stimulus "has gotten us nowhere" and that it was a sign of "government run amok."

Boehner's "talking points" are part of a larger political strategy to mislead the public about the effects of the stimulus while assuming the mantle of fiscal conservatives. Keep in mind, George W. Bush nearly doubled the national debt--from $5.4 trillion to $10.5 trillion--during his 8 years in office. If GOP leaders were really "thrifty minded" conservatives, as they pretend to be, they should have stopped Bush when they had the chance. Instead, they pumped out enough red ink to fill an ocean.

By the time the Republicans were swept from office in 2008, the economy was in freefall. Unemployment was rising at 750,000 per month, and all of the main economic indicators were plunging faster rate than after the Crash of '29. The only thing that kept the country from sliding into a full-blown depression, was massive doses of monetary and fiscal stimulus. And, while the hugely unpopular TARP handout merely distributed public funds to crooked banksters, Obama's fiscal stimulus did what it was designed to do.

Here's Boehner again: “We will not solve our fiscal challenges until we cut spending and have real economic growth....But we do not have the luxury of waiting months for the president to pick scapegoats for his failing ‘stimulus’ policies."

More nonsense. Cutting spending when the economy is still weak is the fast-track to recession as Ireland, Greece, Hungary, Latvia and Spain have all found out in recent months. Each one of these countries has tried to reduce deficits by slashing government spending, and they've all discovered the same thing; that spending cuts widen the output gap, increase unemployment, shrink growth, lower government revenues and, thus, increase the deficits. That's right; when government cuts spending, revenues shrink and deficits grow, the exact opposite of what one might expect. Additionally, these belt-tightening measures make it more expensive for struggling nations to borrow in the capital markets. Most of these countries are now facing painful downgrades that will make it more costly for them to procure funding to keep government operations going.

Here's an excerpt from an article by economist Gary Burtless titled "It could have been much worse", which explains how the stimulus helped the economy avoid a steeper decline:

"The tea leaves are clear: The Great Recession will not be a second Great Depression.....Any reasonable grader of the stimulus’s effects on driving recovery and combating joblessness would give the stimulus at least a B+.....

“Federal government programs and stimulus dollars cushioned the massive blow to private family incomes. Disposable income fell less than 1 percent after the start of the recession... Reduced federal taxes and increased government benefit payments, partly funded out of the stimulus package, have kept Americans’ spendable incomes from falling as fast as their private incomes. Household consumption fell in the recession, in spite of the massive swing in taxes and public transfers, but it only fell modestly. Americans were made cautious in their spending because of the drop in their personal wealth and fear of losing their jobs. But government benefits helped boost the spending of the unemployed, and lower taxes helped insulate middle class families from some of the effect of the drop in wealth.

“Could the administration and Congress have done better? (Yes, but) opposition to stimulus spending by conservatives in the Senate precluded a larger package. In fact, Congress passed a smaller stimulus than the one the president asked for. In retrospect, the package should also have included a much bigger allocation for new government capital spending—on roads, mass transit, public buildings, and environmental capital projects. This investment would directly provide jobs to workers in construction and capital goods manufacturing, industries hard hit by the recession....." ("It could have been much worse", Gary Burtless, Brookings Institute)

The Republicans succeeded in blocking a larger stimulus bill although some of the blame clearly belongs to Blue dog Democrats and Obama's feckless economics team. Even so, it could have been much worse as Burtless notes. Once the downward spiral of layoffs, debt-liquidation, falling asset prices and deflation begins, it is hard to reverse. It's much better to keep Pandora's Box bolted shut, than to unleash economic forces that can lead to widespread hardship and social unrest. Fortunately, those pitfalls have been (mostly) avoided, but we're not out of the woods yet. Rebuilding the economy will require a long-term commitment to expand the deficits until the private sector is back on its feet and able to spend again. US households are still recovering from a decades-long credit binge; it will take time to repair the damage. That means the government must sustain its outlays until private sector retrenchment ends and the recovery takes hold.

Recent surveys show that more than 50 per cent of Americans think that the funds for Obama's stimulus were "wasted". Clearly, Republicans have been able to capitalize on the fact that activity hasn't returned to pre-crisis levels. But this is an impossibly high standard. The economy cannot return to the "frothy" bubble era without generating another gigantic credit bubble. And that's unlikely since the bubble depended on easy credit and gargantuan leveraging on the part of households and financial institutions. Those days are over, at least for now. The present sluggishness reflects the true state of the economy (the "new normal") without steroids. The government needs to ease the transition to slower growth by shoring up demand while the economy emerges from its postcrisis funk. That means more stimulus.

Here's an excerpt from a recent post by Bill Mitchell who explains how large government deficits have been effectively used since WW2 to increase demand, lower unemployment, and strengthen the middle class. The article is titled, "Fiscal policy Worked". Here's a clip:

"At the end of 2008 and into 2009, as the real sectors in our economies were starting to experience the aggregate demand collapses instigated by the banking crisis, most governments took steps to stop the meltdown from becoming the next Depression...After years of eschewing active fiscal policies, governments suddenly rediscovered the fiscal keyboard key and in varying magnitudes pushed fairly large expenditure injections into their economies....

“The experience of the Second World War showed governments that full employment could be maintained with appropriate use of budget deficits....From 1945 until 1975, governments manipulated fiscal and monetary policy to maintain levels of overall spending sufficient to generate employment growth in line with labor force growth. This was consistent with the view that mass unemployment reflected deficient aggregate demand which could be resolved through positive net government spending (budget deficits).

“Governments used a range of fiscal and monetary measures to stabilize the economy in the face of fluctuations in private sector spending and were typically in deficit. As a consequence, in the period between 1945 through to the mid 1970s, most advanced Western nations maintained very low levels of unemployment, typically below 2 per cent..." ("Fiscal policy Worked--Evidence", Bill Mitchell, Billy Blog; alternative economic thinking)

Economists know how to get the economy up-and-running, but the Republicans are blocking the path. More stimulus means more growth, higher employment, and greater prosperity. Why would they want that? That doesn't help them to privatize public assets, crush the labor movement, weaken the state, or "strangle the beast". That's not in their interests at all. Besides, Republicans figure the only way they can regain power is by making sure that Obama fails. And that's their top priority.

Toomey touts his ‘very important’ Social Security plan, without mentioning it’s based on privatization

Original Link: http://thinkprogress.org/2010/08/19/toomey-social/

By Pat Garofalo

Earlier this week, a host of Republican pundits tried to claim that no members of their party are proposing to privatize Social Security. “There’s no Republican, basically, standing up and saying that, and we haven’t for a very long time,” said Republican talking head Ed Rollins. Of course, plenty of Republicans have proposed just that, most notably Rep. Paul Ryan (R-WI), whose Roadmap for America includes the creation of personal Social Security accounts. And then there’s Pat Toomey, the Republican nominee for the Senate in Pennsylvania, who during an interview with Real Clear Politics touted his plan for Social Security, conveniently leaving out that he would privatize the system:

RCP: Your campaign website, under “spending,” complains of “wasteful pork projects, multiple bailouts, the so-called stimulus, and new government programs.” But what about entitlements?

Toomey: You know, I’ve always said that we need to reform our big entitlement programs. These programs are not sustainable in their current form and so we’re going to have to put them on a secure footing. That’s what we have to do.

RCP: OK, how do we do that? Do we raise the retirement age? Do we cut benefits?

Toomey: I’ve got a whole chapter in a book that I wrote that deals with how I think, one of the ways I think we could reform Social Security to make it viable. So I have provided great detail on that whole idea. That would be a very important start.

In Toomey’s book, the first subhead under the “Transforming Social Security” chapter is “Personal Accounts Lead to Personal Prosperity.” And that’s really no surprise, considering Toomey said he was “thrilled” with President George W. Bush’s privatization scheme. The Wonk Room explains that Toomey may be avoiding mention of privatization, as such a step is both bad policy and bad politics.