Original Link: http://www.guardian.co.uk/commentisfree/2011/aug/01/us-debt-deal-tea-party
By George Monbiot
The debt deal will hurt the poorest Americans, convinced by Fox and the Tea Party to act against their own welfare.
There are two ways of cutting a deficit: raising taxes or reducing spending. Raising taxes means taking money from the rich. Cutting spending means taking money from the poor. Not in all cases of course: some taxation is regressive; some state spending takes money from ordinary citizens and gives it to banks, arms companies, oil barons and farmers. But in most cases the state transfers wealth from rich to poor, while tax cuts shift it from poor to rich.
So the rich, in a nominal democracy, have a struggle on their hands. Somehow they must persuade the other 99% to vote against their own interests: to shrink the state, supporting spending cuts rather than tax rises. In the US they appear to be succeeding.
Partly as a result of the Bush tax cuts of 2001, 2003 and 2005 (shamefully extended by Barack Obama), taxation of the wealthy, in Obama's words, "is at its lowest level in half a century". The consequence of such regressive policies is a level of inequality unknown in other developed nations. As the Nobel laureate Joseph Stiglitz points out, in the past 10 years the income of the top 1% has risen by 18%, while that of blue-collar male workers has fallen by 12%.
The deal being thrashed out in Congress as this article goes to press seeks only to cut state spending. As the former Republican senator Alan Simpson says: "The little guy is going to be cremated." That means more economic decline, which means a bigger deficit. It's insane. But how did it happen?
The immediate reason is that Republican members of Congress supported by the Tea Party movement won't budge. But this explains nothing. The Tea Party movement mostly consists of people who have been harmed by tax cuts for the rich and spending cuts for the poor and middle. Why would they mobilise against their own welfare? You can understand what is happening in Washington only if you remember what everyone seems to have forgotten: how this movement began.
On Sunday the Observer claimed that "the Tea Party rose out of anger over the scale of federal spending, and in particular in bailing out the banks". This is what its members claim. It's nonsense.
The movement started with Rick Santelli's call on CNBC for a tea party of city traders to dump securities in Lake Michigan, in protest at Obama's plan to "subsidise the losers". In other words, it was a demand for a financiers' mobilisation against the bailout of their victims: people losing their homes. On the same day, a group called Americans for Prosperity (AFP) set up a Tea Party Facebook page and started organising Tea Party events. The movement, whose programme is still lavishly supported by AFP, took off from there.
So who or what is Americans for Prosperity? It was founded and is funded by Charles and David Koch. They run what they call "the biggest company you've never heard of", and between them they are worth $43bn. Koch Industries is a massive oil, gas, minerals, timber and chemicals company. In the past 15 years the brothers have poured at least $85m into lobby groups arguing for lower taxes for the rich and weaker regulations for industry. The groups and politicians the Kochs fund also lobby to destroy collective bargaining, to stop laws reducing carbon emissions, to stymie healthcare reform and to hobble attempts to control the banks. During the 2010 election cycle, AFP spent $45m supporting its favoured candidates.
But the Kochs' greatest political triumph is the creation of the Tea Party movement. Taki Oldham's film (Astro)Turf Wars shows Tea Party organisers reporting back to David Koch at their 2009 Defending the Dream summit, explaining the events and protests they've started with AFP help. "Five years ago," he tells them, "my brother Charles and I provided the funds to start Americans for Prosperity. It's beyond my wildest dreams how AFP has grown into this enormous organisation."
AFP mobilised the anger of people who found their conditions of life declining, and channelled it into a campaign to make them worse. Tea Party campaigners take to the streets to demand less tax for billionaires and worse health, education and social insurance for themselves.
Are they stupid? No. They have been misled by another instrument of corporate power: the media. The movement has been relentlessly promoted by Fox News, which belongs to a more familiar billionaire. Like the Kochs, Rupert Murdoch aims to misrepresent the democratic choices we face, in order to persuade us to vote against our own interests and in favour of his.
What's taking place in Congress right now is a kind of political coup. A handful of billionaires have shoved a spanner into the legislative process. Through the candidates they have bought and the movement that supports them, they are now breaking and reshaping the system to serve their interests. We knew this once, but now we've forgotten. What hope do we have of resisting a force we won't even see?
Saturday, September 24, 2011
Groups look to rein in corporate power after Citizens United
Original Link: http://michiganmessenger.com/52550/groups-look-to-reign-in-corporate-power-after-citizens-united
By Eartha Jane Melzer
Last year’s U.S. Supreme Court decision in Citizens United v. Federal Election Commission granted corporations (and unions) the right to directly and expressly back political candidates, and triggered an enormous new wave of political spending. Now watchdog groups are trying to find ways to make sure voters can see who is funding which candidates.
In a web seminar sponsored by the Business Ethics Network last week, groups concerned about the role of money in politics gathered to review strategies for increased disclosure.
Norm Ornstein, a scholar with the American Enterprise Institute, who once helped craft the McCain-Feingold campaign finance act, said that he was struck and “even a little bit heartened” by the fact that Sarah Palin railed against crony capitalism during her Labor Day speech in Iowa saying, in effect, “what do we suppose those fat cats want for their money?”
“It suggests to me,” Ornstein said, “that there is at least a glimmer of a possibility that we might be able to build a very unusual type of coalition against what has become an utterly appalling landscape of influence peddling by enormous monied interests and more and more overt, almost shakedown schemes by political figures to get the money they want from corporations and individuals.”
The Citizens United decision did not strike down any rules that require disclosure of political spending, but loopholes in the tax system and lax campaign finance rules allow corporations to give money in ways that are very hard to track, disclosure advocates say.
According to an analysis by the Center for Responsive Politics in the 2010 election 67 percent of all outside (non political party) spending came from groups that had been freed to contribute by the Citizens United decision with non-profit 501(c) groups dominating spending on election ads.
IRS rules state that 501(c)(4) groups don’t have to name their contributors as long as electioneering is not their primary purpose, but this can be difficult to enforce in a meaningful way. Groups can form and carry out campaign work and then later switch to other activities so that political projects don’t appear to dominate their activities.
With Congress deadlocked over most issues, campaign finance reform advocates say it’s more prudent to focus on promoting regulatory measures that could increase disclosure.
One possibility would be to get the IRS to enforce its requirements for 501(c)(4)s. Another would be to get the Securities and Exchange Commission to require publicly traded companies to report their political spending to shareholders.
Aside from the way it could corrupt the political process, experts point out, unregulated corporate spending on politics poses risks for company shareholders.
Ten corporate law academics recently petitioned the SEC to adopt rules to require that corporations communicate with shareholders about political use of corporate funds.
The idea has support from major institutional investors including the International Corporate Governance Network, which represents $18 trillion in assets.
Any rule change at SEC will be a time consuming process. In the meantime some groups are trying to get corporations to voluntarily release information about their political spending.
Since 2003 the Center for Political Accountability has been working to get companies to establish rules for disclosure of political spending and shareholder oversight.
Valentina Judge of CPA said that such resolutions are good business practices that can protect companies from embarassing contributions that can cause reputational damage.
The Target corporation learned the pitfalls of political donations last year, she pointed out.
The company endured bad press and boycott threats after it made a $150,000 donation to a group that supported a candidate opposed to gay rights.
CPA is preparing to release an index of corporations that have adopted policies on corporate spending.
It’s urgent that groups focus on disclosure strategies that could work fast, said Craig Holman of Public Citizen.
“We just was a 427 percent increase in outside spending in the 2010 election,” he said, “This is a phenomenal increase … and this was just a test run, a trial. Corporations and CEOs were just starting to get involved and were pretty cautious.”
In the 2012 elections, he said, “I believe we are going to see numbers that are off the charts.”
The only thing that could force more disclosure right away would be an executive order from President Obama, he said.
“We need President Obama to step up to the plate and sign an order requiring enhanced political disclosure for contractors to show that contracts are being based on merit and not contributions.”
Another short term effort could involve getting the president to appoint Federal Elections Commissioner who would work to require funding disclosure on television ads, said Meredith McGehee of the Campaign Legal Center.
The most pressing need, however, she said, is is a public education campaign to translate the current situation around corporate funded politics into terms that meet average Americans.
“You have to build a public base before you can get into specific answers,”
she said. “The pot is not yet boiling.”
“The reality is that the other side that is supporting this outcome is outgunning the reform community and those that see the problem by a million to one,” she said. “It doesn’t mean give up. It means you’ve got to start thinking about 21 century solutions and approaches.”
By Eartha Jane Melzer
Last year’s U.S. Supreme Court decision in Citizens United v. Federal Election Commission granted corporations (and unions) the right to directly and expressly back political candidates, and triggered an enormous new wave of political spending. Now watchdog groups are trying to find ways to make sure voters can see who is funding which candidates.
In a web seminar sponsored by the Business Ethics Network last week, groups concerned about the role of money in politics gathered to review strategies for increased disclosure.
Norm Ornstein, a scholar with the American Enterprise Institute, who once helped craft the McCain-Feingold campaign finance act, said that he was struck and “even a little bit heartened” by the fact that Sarah Palin railed against crony capitalism during her Labor Day speech in Iowa saying, in effect, “what do we suppose those fat cats want for their money?”
“It suggests to me,” Ornstein said, “that there is at least a glimmer of a possibility that we might be able to build a very unusual type of coalition against what has become an utterly appalling landscape of influence peddling by enormous monied interests and more and more overt, almost shakedown schemes by political figures to get the money they want from corporations and individuals.”
The Citizens United decision did not strike down any rules that require disclosure of political spending, but loopholes in the tax system and lax campaign finance rules allow corporations to give money in ways that are very hard to track, disclosure advocates say.
According to an analysis by the Center for Responsive Politics in the 2010 election 67 percent of all outside (non political party) spending came from groups that had been freed to contribute by the Citizens United decision with non-profit 501(c) groups dominating spending on election ads.
IRS rules state that 501(c)(4) groups don’t have to name their contributors as long as electioneering is not their primary purpose, but this can be difficult to enforce in a meaningful way. Groups can form and carry out campaign work and then later switch to other activities so that political projects don’t appear to dominate their activities.
With Congress deadlocked over most issues, campaign finance reform advocates say it’s more prudent to focus on promoting regulatory measures that could increase disclosure.
One possibility would be to get the IRS to enforce its requirements for 501(c)(4)s. Another would be to get the Securities and Exchange Commission to require publicly traded companies to report their political spending to shareholders.
Aside from the way it could corrupt the political process, experts point out, unregulated corporate spending on politics poses risks for company shareholders.
Ten corporate law academics recently petitioned the SEC to adopt rules to require that corporations communicate with shareholders about political use of corporate funds.
The idea has support from major institutional investors including the International Corporate Governance Network, which represents $18 trillion in assets.
Any rule change at SEC will be a time consuming process. In the meantime some groups are trying to get corporations to voluntarily release information about their political spending.
Since 2003 the Center for Political Accountability has been working to get companies to establish rules for disclosure of political spending and shareholder oversight.
Valentina Judge of CPA said that such resolutions are good business practices that can protect companies from embarassing contributions that can cause reputational damage.
The Target corporation learned the pitfalls of political donations last year, she pointed out.
The company endured bad press and boycott threats after it made a $150,000 donation to a group that supported a candidate opposed to gay rights.
CPA is preparing to release an index of corporations that have adopted policies on corporate spending.
It’s urgent that groups focus on disclosure strategies that could work fast, said Craig Holman of Public Citizen.
“We just was a 427 percent increase in outside spending in the 2010 election,” he said, “This is a phenomenal increase … and this was just a test run, a trial. Corporations and CEOs were just starting to get involved and were pretty cautious.”
In the 2012 elections, he said, “I believe we are going to see numbers that are off the charts.”
The only thing that could force more disclosure right away would be an executive order from President Obama, he said.
“We need President Obama to step up to the plate and sign an order requiring enhanced political disclosure for contractors to show that contracts are being based on merit and not contributions.”
Another short term effort could involve getting the president to appoint Federal Elections Commissioner who would work to require funding disclosure on television ads, said Meredith McGehee of the Campaign Legal Center.
The most pressing need, however, she said, is is a public education campaign to translate the current situation around corporate funded politics into terms that meet average Americans.
“You have to build a public base before you can get into specific answers,”
she said. “The pot is not yet boiling.”
“The reality is that the other side that is supporting this outcome is outgunning the reform community and those that see the problem by a million to one,” she said. “It doesn’t mean give up. It means you’ve got to start thinking about 21 century solutions and approaches.”
The Hidden Hands in Redistricting: Corporations and Other Powerful Interests
Original Link: http://www.propublica.org/article/hidden-hands-in-redistricting-corporations-special-interests
by Olga Pierce, Jeff Larson and Lois Beckett
Their names suggest selfless dedication to democracy. Fair Districts Mass. Protect Your Vote. The Center for a Better New Jersey. And their stated goals are unarguable: In the partisan fight to redraw congressional districts, states should stick to the principle of one person, one vote.
But a ProPublica investigation has found that these groups and others are being quietly bankrolled by corporations, unions and other special interests. Their main interest in the once-a-decade political fight over redistricting is not to help voters in the communities they claim to represent but mainly to improve the prospects of their political allies or to harm their enemies.
The number of these purportedly independent redistricting groups is rising, but their ties remain murky. Contributions to such groups are not limited by campaign finance laws, and most states allow them to take unlimited amounts of money without disclosing the source.
Today’s story is the first chapter in an in-depth examination of how powerful players are turning to increasingly sophisticated tools and techniques to game the redistricting process, with voters ultimately losing.
For special interests, there’s a huge potential payoff from investing in such efforts.
“Reshaping a map is very powerful” for donors, said Spencer Kimball, a political consultant who is executive director of Boston-based Fair Districts Mass. “It’s a big opportunity to have influence at the state level and the congressional level not one race at a time but for 10 years.”
Skillful redistricting can, of course, help create Republican or Democratic districts, but it can also grace incumbents with virtually guaranteed re-election or leave them with nearly no chance at all. In the process, it can also create seats almost certain to be held by minorities or break those same groups apart, ensuring that they have almost no voice.
But it’s not cheap, and that’s where corporations and other outside interests come in. They can provide the cash for voter data, mapping consultants and lobbyists to influence state legislators, who are in charge of redistricting in most states. Outside interests can also fund the inevitable lawsuits that contest nearly every state's redistricting plan after it is unveiled.
In Minnesota, for instance, the Republicans’ legal efforts to influence redistricting are being financed through a group called Minnesotans for a Fair Redistricting.
Fair Redistricting describes itself as independent, but it has much of its leadership in common with the Freedom Foundation of Minnesota, a group with ties to the political empire of the Koch brothers, industrialists from Kansas who’ve spent millions funding conservative causes. The head of the Freedom Foundation, Annette Meeks, told ProPublica she has “no involvement” with Fair Redistricting. But both organizations’ tax filings list the same address: Meeks’ home address.
Fair Redistricting is registered under the name of her husband, Jack Meeks, who is also on the board of the Freedom Foundation. He did not respond to requests for comment.
Who is actually paying for Fair Redistricting’s lawsuit and lawyers? And what district lines are they pushing for? The group doesn’t have to say and has so far kept its finances and plans under wraps. Annette Meeks did not respond to questions about the group’s donors or its ties to the Koch brothers, but she said the group complies with all legal filing requirements. But the group’s public tax filings contain no information on its contributors.
Fair Districts Mass, which says it’s advocating better representation of minorities in and around Boston, is another window into how money can move through the system. The group describes itself as "citizen-funded." But it also sought permission from state election officials for unlimited corporate funding. Donations “can include corporate contributions,” the group’s website announces. “Better yet,” the site notes, “we are not required to file reports regarding donations or expenditures.”
The group says its proposed maps would lead to better representation of Latinos and African-Americans.
“Minorities are very underrepresented in Massachusetts politics,” said Kimball, the group’s executive director. “We’re here to change that.”
But minority groups say Fair Districts' proposed maps would not likely help them. (See our interactive feature showing the group’s maps and our analysis.)
“I don’t see a person of color getting elected in this district, if that’s the goal,” said Alejandra St. Guillen, executive director of Oiste, looking at one of the maps Fair Districts has touted as helping Latinos and African-Americans. Oiste has been fighting for increased Latino representation and civic participation in the state for more than a decade.
“Even though the numbers might look as if that might be favorable to communities of color,” St. Guillen said, “if you look at voting patterns, it actually wouldn’t be.”
Others from Massachusetts have said the proposals made by Fair Districts Mass wouldn’t help them at all. At a town hall meeting in Lynn, which would be cut out of its historic district along Boston’s North Shore by the proposal, labor unions, the city's chamber of commerce and politicians from both parties converged on the town hall, urging that the board not adopt a plan that would carve out Lynn.
Lynn's Latino business owners are "very proud to be a part of the North Shore," said Frances Martinez, executive director of the North Shore Latino Business Association. "Our business owners decided to come here because they know this is a place to stay and grow for their families. Please keep the district together."
What Fair Districts’ proposals would do is hurt the traditional pro-labor and Democratic incumbents in the area. For instance, Lynn’s notably pro-union congressman, John Tierney, would effectively be drawn out of a seat—a finding included in the group’s own research.
Fair Districts can raise unlimited, undisclosed cash for its efforts, thanks to an innovative argument it made to state election officials.
This strategy had its roots in a lesson learned 20 years ago by a Republican redistricting guru named Dan Winslow. During the 1990 redistricting cycle, Winslow twice sought permission from state election officials for a group called the Republican Redistricting Committee to accept unlimited corporate donations without having to disclose them.
At the time, Winslow argued that the group didn’t have specific political aims and would also provide redistricting resources to minority groups.
Each time, the board refused to exempt the organization from campaign finance laws on the grounds that a group with "Republican" in its name and Republican politicians as leaders could not credibly claim to be independent.
Last year, a lawyer in Winslow’s firm filed an almost identical request to accept unlimited corporate donations, but this time for a group that left "Republican" out of its name. The state agreed to his request. The group he was filing for? Fair Districts Mass.
Winslow, now a Republican state representative and legal adviser to Fair Districts, said the group has no partisan agenda.
“It’s not about shifting Massachusetts from Democrat to Republican,” Winslow said. “It creates an opportunity for challenges, for challengers to challenge the status quo.”
Fair Districts Mass Chairman Jack Robinson has run unsuccessfully for Congress three times as a Republican. Last year, when he announced the formation of Fair Districts, he said he was changing his registration to Independent.
Robinson said that change was important to Fair Districts’ “unique” ability to accept undisclosed corporate donations.
“In order to show that we are really nonpartisan, I decided to become an independent,” Robinson said.
Robinson also said the lack of disclosure has benefits.
“This is a very political process,” he said. “If you’re running a company in Newton, Mass., where Barney Frank is, and you want to donate to us, and our plan says Barney Frank has to run against another congressman, I could understand why people would not want to disclose their donations.” Frank is, of course, a powerful Democratic congressman.
The national Democratic and Republican parties are also working to limit disclosures about fundraising for redistricting. Both parties have raised and spent tens of millions of dollars on redistricting through their traditional conduits of money into state politics, the Republican State Leadership Committee and the Democratic Legislative Campaign Committee. And both have been pushing to keep increasing parts of those efforts exempt from disclosure requirements.
Last year, the National Democratic Redistricting Trust sought and was granted permission by the Federal Election Commission to allow members of Congress to solicit unlimited, undisclosed donations for the trust. The group, set up to fund lawsuits that inevitably spring up during redistricting fights, argued that redistricting is not a primarily political activity. Legislators doing the same fundraising, but directly for their parties, would be violating McCain-Feingold campaign finance laws. The trust is currently funding the Democratic legal response to Minnesotans for a Fair Redistricting.
The GOP formed its own opaque group dedicated to redistricting. Making America’s Promise Secure, which was headed by prominent Republicans Newt Gingrich and Trent Lott, was able to secure 501(c)4 status from the IRS as a "social welfare"organization—the same status granted Disabled American Veterans and the Lumberjack World Championships Foundation. Groups with that status do not have to disclose donors or how they spend money. And there is no limit on how much individual donors can contribute.
Florida, railroads and friends
As old hands at redistricting like to say, it’s personal. Working at the state level, you can give lasting help, or demonstrate your loyalty, to not just one party or the other but to specific candidates, who may one day return the favor.
Congresswoman Corrine Brown, an African-American Democrat from Florida, appears to be a case in point. Brown represents one of the most irregularly shaped districts in the nation. It is 150 miles long but only the width of a highway bridge at its narrowest point and scoops heavily African-American neighborhoods out of Orlando, Gainesville and Jacksonville. (See our interactive map of Brown’s district and our analysis.)
The result of a deal between Republicans and minority representatives in the state legislature, the district and ones like it helped elect a more diverse congressional delegation but also ensured that the remaining districts would be whiter—and more Republican—because minority voters, who tend to vote for Democrats, had been carved out. Redistricting professionals call that “bleaching.”
Republicans gained control of the state legislature in 1996 after decades of Democratic control and have held it ever since.
Brown, then a state assemblywoman, had worked with Republicans to create the district. She subsequently ran for Congress in it and won. She has been unbeatable ever since. (Even though 2010 was a tough year for Democrats in Florida, she still won by a landslide.)
Her seat finally was threatened last year when a coalition of unions, civic groups and Democrats got a pair of anti-gerrymandering amendments on Florida’s ballot. The amendments banned legislative districts drawn to help or hurt particular incumbents or parties. To make it clear that the amendments were not an attempt to pre-empt the Voting Rights Act of 1965, they also explicitly ban the drawing of districts to deny representation to minority groups.
Florida’s black legislative caucus and the state chapter of the NAACP endorsed the amendments, as did Democracia, a Latino political group.
But Brown opposed the effort, becoming the “African-American Chairwoman” of a group called Protect Your Vote. The group, Brown said at news conferences and in public statements, would be a bulwark against the harm the amendments would do to minority voting rights.
The NAACP strongly condemned Brown’s position and issued a statement criticizing “the blatant use of scare tactics with African-Americans and Hispanics to justify the continued gerrymandering of districts that benefit only politicians.”
Though Protect Your Vote had little support from representatives of the minority groups whose rights it was supposedly trying to protect, it had a lot of support from corporate donors, who gave nearly $800,000. (The contributions were reported because they related to a ballot measure. Normally, donations to Florida redistricting efforts don’t have to be disclosed.)
Among Protect Your Vote’s supporters were two of Brown’s own corporate donors.
Last year, Honeywell International PAC gave Protect Your Vote $25,000. The same year, the PAC gave Corrine Brown’s campaign $10,000. Also in 2010, Honeywell hired a former Brown aide as a lobbyist, according to federal lobbying disclosures. And many of the company’s government contracts fall under the purview of Brown’s membership on the Transportation and Infrastructure and Veterans’ Affairs committees.
In a statement, Honeywell said its PAC contributed money to defeat the anti-gerrymandering amendments because it supports “redistricting that is consistent with the historical practices that have served the State’s many diverse constituents well for decades.”
Another $25,000 donation to Protect Your Vote came from CSX Transportation Corp., a Jacksonville-based railroad and trucking company.
CSX has a long, friendly history with Brown, the ranking Democratic member of the House subcommittee on railroads.
Brown championed the controversial SunRail commuter rail project, using her position on the subcommittee to help secure federal funding that made the $1.2 billion project possible. The SunRail deal is worth more than $600 million to CSX. (Here's a video of Brown on the House floor extolling the virtues of the plan.)
Federal officials raised questions about just how many commuters the project would serve, and the Federal Transit Administration ranked the SunRail project last in terms of cost effectiveness on a recent list of national projects in the “final design” phase.
“The Protect Your Vote campaign had strong, bipartisan support, and was intended to maintain the integrity of reapportionment,” said CSX spokesman Gary Sease. “As a Florida-based corporation, we supported this bipartisan initiative.”
In November 2010, the Florida amendments passed despite Protect Your Vote’s efforts. The group filed an appeal in federal court shortly thereafter, alleging, among other things, that the new redistricting methodology outlined in the amendments did not do enough to protect incumbents. The suit was thrown out Sept. 9.
Brown and Protect Your Vote filed an appeal, vowing to take the case as far as the Supreme Court.
Brown declined to comment, saying it was a legal matter.
Unions and others play the game in California
Corporations, of course, are not the only special interests that have intervened in the redistricting process in less-than-transparent ways.
Last year, unions and others spent millions in an ultimately unsuccessful effort to kill a proposition making redistricting fairer and more transparent in California. The proposition put redistricting in the hands of a nonpartisan commission, a move opposed by Democratic politicians in the state legislature and Congress who stood to lose comfortable districts that in many cases were drawn personally for them.
The group called itself Yes on Fair, Yes on 27, No on 20—A Coalition of Entrepreneurs, Working People, Businesses, Community Leaders Such as Karen Bass, & Other Concerned Citizens Devoted to Eliminating Bureaucratic Waste. But most of the more than $7 million the group raised came from unions, large individual donations from prominent Democratic donors like George Soros—and no fewer than 35 Democratic politicians. (Disclosure: A Soros foundation has also provided a small portion of ProPublica’s funding.)
Among the group’s donors were Nancy Pelosi; above-mentioned "community leader" Karen Bass, who was speaker of the state assembly at the time and has since been elected to Congress; and Congresswoman Lois Capps, whose coast-hugging district was so long and narrow it was nicknamed the “ribbon of shame.”
Bass now says she supported the idea of an independent redistricting commission. However, based on how the commission was designed, “I was concerned about the impact on representation from communities of color.”
Capps did not respond to requests for comment.
The group immediately spent its cash to deploy some of the most questionable tactics endemic to California’s ballot-measure system. Nearly $3 million was spent on professional signature gatherers and another $1.8 million on California’s notoriously misleading voter guides. The mailers come from legitimate-sounding groups that are actually fictions cooked up by political consultants to mislead voters.
Though Yes on Fair was funded exclusively by Democratic interests, it spent $64,000 on the “Continuing the Republican Revolution” voter guide, which featured a bald eagle and a quote honoring Ronald Reagan at the top but urged voters to reject the citizens’ redistricting commission on the grounds that it represented bureaucratic waste. Similar voter guides were sent out representing fictitious religious, feminist, environmentalist and law-enforcement groups. Perhaps the most insidious was the “Our Voice Latino Voter Guide,” which urged a vote against establishing the citizens' commission even though Latinos stood to greatly benefit from it.
Despite Yes on Fair’s efforts, the measure for the commission passed anyway.
Once the commission was created, it offered another, limited glimpse into business interests’ attempts to influence redistricting.
An early participant in the state’s redistricting process was the California Institute for Jobs, Economy and Education, which submitted proposed district maps and testified before the redistricting commission.
But there is little evidence of the institute’s existence. It has no website and has published no scholarly research. The institute first shows up in public records, registered as a corporation in California in May 2011, just after the redistricting process had begun. It is registered with the same street address and suite number as Bell, McAndrews & Hiltachk, a law firm that specializes in campaign finance and lobbying law.
The entity’s true purpose, according to someone close to it, was to represent “business interests” across California. Top-level individuals involved with the so-called institute also have ties to JOBS PAC, a pro-business committee in California that lists Philip Morris, AT&T and Chevron as donors.
Tom Hiltachk, managing partner at the firm that shares its address with the institute, didn’t respond to requests for comment.
by Olga Pierce, Jeff Larson and Lois Beckett
Their names suggest selfless dedication to democracy. Fair Districts Mass. Protect Your Vote. The Center for a Better New Jersey. And their stated goals are unarguable: In the partisan fight to redraw congressional districts, states should stick to the principle of one person, one vote.
But a ProPublica investigation has found that these groups and others are being quietly bankrolled by corporations, unions and other special interests. Their main interest in the once-a-decade political fight over redistricting is not to help voters in the communities they claim to represent but mainly to improve the prospects of their political allies or to harm their enemies.
The number of these purportedly independent redistricting groups is rising, but their ties remain murky. Contributions to such groups are not limited by campaign finance laws, and most states allow them to take unlimited amounts of money without disclosing the source.
Today’s story is the first chapter in an in-depth examination of how powerful players are turning to increasingly sophisticated tools and techniques to game the redistricting process, with voters ultimately losing.
For special interests, there’s a huge potential payoff from investing in such efforts.
“Reshaping a map is very powerful” for donors, said Spencer Kimball, a political consultant who is executive director of Boston-based Fair Districts Mass. “It’s a big opportunity to have influence at the state level and the congressional level not one race at a time but for 10 years.”
Skillful redistricting can, of course, help create Republican or Democratic districts, but it can also grace incumbents with virtually guaranteed re-election or leave them with nearly no chance at all. In the process, it can also create seats almost certain to be held by minorities or break those same groups apart, ensuring that they have almost no voice.
But it’s not cheap, and that’s where corporations and other outside interests come in. They can provide the cash for voter data, mapping consultants and lobbyists to influence state legislators, who are in charge of redistricting in most states. Outside interests can also fund the inevitable lawsuits that contest nearly every state's redistricting plan after it is unveiled.
In Minnesota, for instance, the Republicans’ legal efforts to influence redistricting are being financed through a group called Minnesotans for a Fair Redistricting.
Fair Redistricting describes itself as independent, but it has much of its leadership in common with the Freedom Foundation of Minnesota, a group with ties to the political empire of the Koch brothers, industrialists from Kansas who’ve spent millions funding conservative causes. The head of the Freedom Foundation, Annette Meeks, told ProPublica she has “no involvement” with Fair Redistricting. But both organizations’ tax filings list the same address: Meeks’ home address.
Fair Redistricting is registered under the name of her husband, Jack Meeks, who is also on the board of the Freedom Foundation. He did not respond to requests for comment.
Who is actually paying for Fair Redistricting’s lawsuit and lawyers? And what district lines are they pushing for? The group doesn’t have to say and has so far kept its finances and plans under wraps. Annette Meeks did not respond to questions about the group’s donors or its ties to the Koch brothers, but she said the group complies with all legal filing requirements. But the group’s public tax filings contain no information on its contributors.
Fair Districts Mass, which says it’s advocating better representation of minorities in and around Boston, is another window into how money can move through the system. The group describes itself as "citizen-funded." But it also sought permission from state election officials for unlimited corporate funding. Donations “can include corporate contributions,” the group’s website announces. “Better yet,” the site notes, “we are not required to file reports regarding donations or expenditures.”
The group says its proposed maps would lead to better representation of Latinos and African-Americans.
“Minorities are very underrepresented in Massachusetts politics,” said Kimball, the group’s executive director. “We’re here to change that.”
But minority groups say Fair Districts' proposed maps would not likely help them. (See our interactive feature showing the group’s maps and our analysis.)
“I don’t see a person of color getting elected in this district, if that’s the goal,” said Alejandra St. Guillen, executive director of Oiste, looking at one of the maps Fair Districts has touted as helping Latinos and African-Americans. Oiste has been fighting for increased Latino representation and civic participation in the state for more than a decade.
“Even though the numbers might look as if that might be favorable to communities of color,” St. Guillen said, “if you look at voting patterns, it actually wouldn’t be.”
Others from Massachusetts have said the proposals made by Fair Districts Mass wouldn’t help them at all. At a town hall meeting in Lynn, which would be cut out of its historic district along Boston’s North Shore by the proposal, labor unions, the city's chamber of commerce and politicians from both parties converged on the town hall, urging that the board not adopt a plan that would carve out Lynn.
Lynn's Latino business owners are "very proud to be a part of the North Shore," said Frances Martinez, executive director of the North Shore Latino Business Association. "Our business owners decided to come here because they know this is a place to stay and grow for their families. Please keep the district together."
What Fair Districts’ proposals would do is hurt the traditional pro-labor and Democratic incumbents in the area. For instance, Lynn’s notably pro-union congressman, John Tierney, would effectively be drawn out of a seat—a finding included in the group’s own research.
Fair Districts can raise unlimited, undisclosed cash for its efforts, thanks to an innovative argument it made to state election officials.
This strategy had its roots in a lesson learned 20 years ago by a Republican redistricting guru named Dan Winslow. During the 1990 redistricting cycle, Winslow twice sought permission from state election officials for a group called the Republican Redistricting Committee to accept unlimited corporate donations without having to disclose them.
At the time, Winslow argued that the group didn’t have specific political aims and would also provide redistricting resources to minority groups.
Each time, the board refused to exempt the organization from campaign finance laws on the grounds that a group with "Republican" in its name and Republican politicians as leaders could not credibly claim to be independent.
Last year, a lawyer in Winslow’s firm filed an almost identical request to accept unlimited corporate donations, but this time for a group that left "Republican" out of its name. The state agreed to his request. The group he was filing for? Fair Districts Mass.
Winslow, now a Republican state representative and legal adviser to Fair Districts, said the group has no partisan agenda.
“It’s not about shifting Massachusetts from Democrat to Republican,” Winslow said. “It creates an opportunity for challenges, for challengers to challenge the status quo.”
Fair Districts Mass Chairman Jack Robinson has run unsuccessfully for Congress three times as a Republican. Last year, when he announced the formation of Fair Districts, he said he was changing his registration to Independent.
Robinson said that change was important to Fair Districts’ “unique” ability to accept undisclosed corporate donations.
“In order to show that we are really nonpartisan, I decided to become an independent,” Robinson said.
Robinson also said the lack of disclosure has benefits.
“This is a very political process,” he said. “If you’re running a company in Newton, Mass., where Barney Frank is, and you want to donate to us, and our plan says Barney Frank has to run against another congressman, I could understand why people would not want to disclose their donations.” Frank is, of course, a powerful Democratic congressman.
The national Democratic and Republican parties are also working to limit disclosures about fundraising for redistricting. Both parties have raised and spent tens of millions of dollars on redistricting through their traditional conduits of money into state politics, the Republican State Leadership Committee and the Democratic Legislative Campaign Committee. And both have been pushing to keep increasing parts of those efforts exempt from disclosure requirements.
Last year, the National Democratic Redistricting Trust sought and was granted permission by the Federal Election Commission to allow members of Congress to solicit unlimited, undisclosed donations for the trust. The group, set up to fund lawsuits that inevitably spring up during redistricting fights, argued that redistricting is not a primarily political activity. Legislators doing the same fundraising, but directly for their parties, would be violating McCain-Feingold campaign finance laws. The trust is currently funding the Democratic legal response to Minnesotans for a Fair Redistricting.
The GOP formed its own opaque group dedicated to redistricting. Making America’s Promise Secure, which was headed by prominent Republicans Newt Gingrich and Trent Lott, was able to secure 501(c)4 status from the IRS as a "social welfare"organization—the same status granted Disabled American Veterans and the Lumberjack World Championships Foundation. Groups with that status do not have to disclose donors or how they spend money. And there is no limit on how much individual donors can contribute.
Florida, railroads and friends
As old hands at redistricting like to say, it’s personal. Working at the state level, you can give lasting help, or demonstrate your loyalty, to not just one party or the other but to specific candidates, who may one day return the favor.
Congresswoman Corrine Brown, an African-American Democrat from Florida, appears to be a case in point. Brown represents one of the most irregularly shaped districts in the nation. It is 150 miles long but only the width of a highway bridge at its narrowest point and scoops heavily African-American neighborhoods out of Orlando, Gainesville and Jacksonville. (See our interactive map of Brown’s district and our analysis.)
The result of a deal between Republicans and minority representatives in the state legislature, the district and ones like it helped elect a more diverse congressional delegation but also ensured that the remaining districts would be whiter—and more Republican—because minority voters, who tend to vote for Democrats, had been carved out. Redistricting professionals call that “bleaching.”
Republicans gained control of the state legislature in 1996 after decades of Democratic control and have held it ever since.
Brown, then a state assemblywoman, had worked with Republicans to create the district. She subsequently ran for Congress in it and won. She has been unbeatable ever since. (Even though 2010 was a tough year for Democrats in Florida, she still won by a landslide.)
Her seat finally was threatened last year when a coalition of unions, civic groups and Democrats got a pair of anti-gerrymandering amendments on Florida’s ballot. The amendments banned legislative districts drawn to help or hurt particular incumbents or parties. To make it clear that the amendments were not an attempt to pre-empt the Voting Rights Act of 1965, they also explicitly ban the drawing of districts to deny representation to minority groups.
Florida’s black legislative caucus and the state chapter of the NAACP endorsed the amendments, as did Democracia, a Latino political group.
But Brown opposed the effort, becoming the “African-American Chairwoman” of a group called Protect Your Vote. The group, Brown said at news conferences and in public statements, would be a bulwark against the harm the amendments would do to minority voting rights.
The NAACP strongly condemned Brown’s position and issued a statement criticizing “the blatant use of scare tactics with African-Americans and Hispanics to justify the continued gerrymandering of districts that benefit only politicians.”
Though Protect Your Vote had little support from representatives of the minority groups whose rights it was supposedly trying to protect, it had a lot of support from corporate donors, who gave nearly $800,000. (The contributions were reported because they related to a ballot measure. Normally, donations to Florida redistricting efforts don’t have to be disclosed.)
Among Protect Your Vote’s supporters were two of Brown’s own corporate donors.
Last year, Honeywell International PAC gave Protect Your Vote $25,000. The same year, the PAC gave Corrine Brown’s campaign $10,000. Also in 2010, Honeywell hired a former Brown aide as a lobbyist, according to federal lobbying disclosures. And many of the company’s government contracts fall under the purview of Brown’s membership on the Transportation and Infrastructure and Veterans’ Affairs committees.
In a statement, Honeywell said its PAC contributed money to defeat the anti-gerrymandering amendments because it supports “redistricting that is consistent with the historical practices that have served the State’s many diverse constituents well for decades.”
Another $25,000 donation to Protect Your Vote came from CSX Transportation Corp., a Jacksonville-based railroad and trucking company.
CSX has a long, friendly history with Brown, the ranking Democratic member of the House subcommittee on railroads.
Brown championed the controversial SunRail commuter rail project, using her position on the subcommittee to help secure federal funding that made the $1.2 billion project possible. The SunRail deal is worth more than $600 million to CSX. (Here's a video of Brown on the House floor extolling the virtues of the plan.)
Federal officials raised questions about just how many commuters the project would serve, and the Federal Transit Administration ranked the SunRail project last in terms of cost effectiveness on a recent list of national projects in the “final design” phase.
“The Protect Your Vote campaign had strong, bipartisan support, and was intended to maintain the integrity of reapportionment,” said CSX spokesman Gary Sease. “As a Florida-based corporation, we supported this bipartisan initiative.”
In November 2010, the Florida amendments passed despite Protect Your Vote’s efforts. The group filed an appeal in federal court shortly thereafter, alleging, among other things, that the new redistricting methodology outlined in the amendments did not do enough to protect incumbents. The suit was thrown out Sept. 9.
Brown and Protect Your Vote filed an appeal, vowing to take the case as far as the Supreme Court.
Brown declined to comment, saying it was a legal matter.
Unions and others play the game in California
Corporations, of course, are not the only special interests that have intervened in the redistricting process in less-than-transparent ways.
Last year, unions and others spent millions in an ultimately unsuccessful effort to kill a proposition making redistricting fairer and more transparent in California. The proposition put redistricting in the hands of a nonpartisan commission, a move opposed by Democratic politicians in the state legislature and Congress who stood to lose comfortable districts that in many cases were drawn personally for them.
The group called itself Yes on Fair, Yes on 27, No on 20—A Coalition of Entrepreneurs, Working People, Businesses, Community Leaders Such as Karen Bass, & Other Concerned Citizens Devoted to Eliminating Bureaucratic Waste. But most of the more than $7 million the group raised came from unions, large individual donations from prominent Democratic donors like George Soros—and no fewer than 35 Democratic politicians. (Disclosure: A Soros foundation has also provided a small portion of ProPublica’s funding.)
Among the group’s donors were Nancy Pelosi; above-mentioned "community leader" Karen Bass, who was speaker of the state assembly at the time and has since been elected to Congress; and Congresswoman Lois Capps, whose coast-hugging district was so long and narrow it was nicknamed the “ribbon of shame.”
Bass now says she supported the idea of an independent redistricting commission. However, based on how the commission was designed, “I was concerned about the impact on representation from communities of color.”
Capps did not respond to requests for comment.
The group immediately spent its cash to deploy some of the most questionable tactics endemic to California’s ballot-measure system. Nearly $3 million was spent on professional signature gatherers and another $1.8 million on California’s notoriously misleading voter guides. The mailers come from legitimate-sounding groups that are actually fictions cooked up by political consultants to mislead voters.
Though Yes on Fair was funded exclusively by Democratic interests, it spent $64,000 on the “Continuing the Republican Revolution” voter guide, which featured a bald eagle and a quote honoring Ronald Reagan at the top but urged voters to reject the citizens’ redistricting commission on the grounds that it represented bureaucratic waste. Similar voter guides were sent out representing fictitious religious, feminist, environmentalist and law-enforcement groups. Perhaps the most insidious was the “Our Voice Latino Voter Guide,” which urged a vote against establishing the citizens' commission even though Latinos stood to greatly benefit from it.
Despite Yes on Fair’s efforts, the measure for the commission passed anyway.
Once the commission was created, it offered another, limited glimpse into business interests’ attempts to influence redistricting.
An early participant in the state’s redistricting process was the California Institute for Jobs, Economy and Education, which submitted proposed district maps and testified before the redistricting commission.
But there is little evidence of the institute’s existence. It has no website and has published no scholarly research. The institute first shows up in public records, registered as a corporation in California in May 2011, just after the redistricting process had begun. It is registered with the same street address and suite number as Bell, McAndrews & Hiltachk, a law firm that specializes in campaign finance and lobbying law.
The entity’s true purpose, according to someone close to it, was to represent “business interests” across California. Top-level individuals involved with the so-called institute also have ties to JOBS PAC, a pro-business committee in California that lists Philip Morris, AT&T and Chevron as donors.
Tom Hiltachk, managing partner at the firm that shares its address with the institute, didn’t respond to requests for comment.
Original Link: http://www.nytimes.com/2011/09/23/opinion/krugman-the-social-contract.html
By Paul Krugman
This week President Obama said the obvious: that wealthy Americans, many of whom pay remarkably little in taxes, should bear part of the cost of reducing the long-run budget deficit. And Republicans like Representative Paul Ryan responded with shrieks of “class warfare.”
It was, of course, nothing of the sort. On the contrary, it’s people like Mr. Ryan, who want to exempt the very rich from bearing any of the burden of making our finances sustainable, who are waging class war.
As background, it helps to know what has been happening to incomes over the past three decades. Detailed estimates from the Congressional Budget Office — which only go up to 2005, but the basic picture surely hasn’t changed — show that between 1979 and 2005 the inflation-adjusted income of families in the middle of the income distribution rose 21 percent. That’s growth, but it’s slow, especially compared with the 100 percent rise in median income over a generation after World War II.
Meanwhile, over the same period, the income of the very rich, the top 100th of 1 percent of the income distribution, rose by 480 percent. No, that isn’t a misprint. In 2005 dollars, the average annual income of that group rose from $4.2 million to $24.3 million.
So do the wealthy look to you like the victims of class warfare?
To be fair, there is argument about the extent to which government policy was responsible for the spectacular disparity in income growth. What we know for sure, however, is that policy has consistently tilted to the advantage of the wealthy as opposed to the middle class.
Some of the most important aspects of that tilt involved such things as the sustained attack on organized labor and financial deregulation, which created huge fortunes even as it paved the way for economic disaster. For today, however, let’s focus just on taxes.
The budget office’s numbers show that the federal tax burden has fallen for all income classes, which itself runs counter to the rhetoric you hear from the usual suspects. But that burden has fallen much more, as a percentage of income, for the wealthy. Partly this reflects big cuts in top income tax rates, but, beyond that, there has been a major shift of taxation away from wealth and toward work: tax rates on corporate profits, capital gains and dividends have all fallen, while the payroll tax — the main tax paid by most workers — has gone up.
And one consequence of the shift of taxation away from wealth and toward work is the creation of many situations in which — just as Warren Buffett and Mr. Obama say — people with multimillion-dollar incomes, who typically derive much of that income from capital gains and other sources that face low taxes, end up paying a lower overall tax rate than middle-class workers. And we’re not talking about a few exceptional cases.
According to new estimates by the nonpartisan Tax Policy Center, one-fourth of those with incomes of more than $1 million a year pay income and payroll tax of 12.6 percent of their income or less, putting their tax burden below that of many in the middle class.
Now, I know how the right will respond to these facts: with misleading statistics and dubious moral claims.
On one side, we have the claim that the rising share of taxes paid by the rich shows that their burden is rising, not falling. To point out the obvious, the rich are paying more taxes because they’re much richer than they used to be. When middle-class incomes barely grow while the incomes of the wealthiest rise by a factor of six, how could the tax share of the rich not go up, even if their tax rate is falling?
On the other side, we have the claim that the rich have the right to keep their money — which misses the point that all of us live in and benefit from being part of a larger society.
Elizabeth Warren, the financial reformer who is now running for the United States Senate in Massachusetts, recently made some eloquent remarks to this effect that are, rightly, getting a lot of attention. “There is nobody in this country who got rich on his own. Nobody,” she declared, pointing out that the rich can only get rich thanks to the “social contract” that provides a decent, functioning society in which they can prosper.
Which brings us back to those cries of “class warfare.”
Republicans claim to be deeply worried by budget deficits. Indeed, Mr. Ryan has called the deficit an “existential threat” to America. Yet they are insisting that the wealthy — who presumably have as much of a stake as everyone else in the nation’s future — should not be called upon to play any role in warding off that existential threat.
Well, that amounts to a demand that a small number of very lucky people be exempted from the social contract that applies to everyone else. And that, in case you’re wondering, is what real class warfare looks like.
By Paul Krugman
This week President Obama said the obvious: that wealthy Americans, many of whom pay remarkably little in taxes, should bear part of the cost of reducing the long-run budget deficit. And Republicans like Representative Paul Ryan responded with shrieks of “class warfare.”
It was, of course, nothing of the sort. On the contrary, it’s people like Mr. Ryan, who want to exempt the very rich from bearing any of the burden of making our finances sustainable, who are waging class war.
As background, it helps to know what has been happening to incomes over the past three decades. Detailed estimates from the Congressional Budget Office — which only go up to 2005, but the basic picture surely hasn’t changed — show that between 1979 and 2005 the inflation-adjusted income of families in the middle of the income distribution rose 21 percent. That’s growth, but it’s slow, especially compared with the 100 percent rise in median income over a generation after World War II.
Meanwhile, over the same period, the income of the very rich, the top 100th of 1 percent of the income distribution, rose by 480 percent. No, that isn’t a misprint. In 2005 dollars, the average annual income of that group rose from $4.2 million to $24.3 million.
So do the wealthy look to you like the victims of class warfare?
To be fair, there is argument about the extent to which government policy was responsible for the spectacular disparity in income growth. What we know for sure, however, is that policy has consistently tilted to the advantage of the wealthy as opposed to the middle class.
Some of the most important aspects of that tilt involved such things as the sustained attack on organized labor and financial deregulation, which created huge fortunes even as it paved the way for economic disaster. For today, however, let’s focus just on taxes.
The budget office’s numbers show that the federal tax burden has fallen for all income classes, which itself runs counter to the rhetoric you hear from the usual suspects. But that burden has fallen much more, as a percentage of income, for the wealthy. Partly this reflects big cuts in top income tax rates, but, beyond that, there has been a major shift of taxation away from wealth and toward work: tax rates on corporate profits, capital gains and dividends have all fallen, while the payroll tax — the main tax paid by most workers — has gone up.
And one consequence of the shift of taxation away from wealth and toward work is the creation of many situations in which — just as Warren Buffett and Mr. Obama say — people with multimillion-dollar incomes, who typically derive much of that income from capital gains and other sources that face low taxes, end up paying a lower overall tax rate than middle-class workers. And we’re not talking about a few exceptional cases.
According to new estimates by the nonpartisan Tax Policy Center, one-fourth of those with incomes of more than $1 million a year pay income and payroll tax of 12.6 percent of their income or less, putting their tax burden below that of many in the middle class.
Now, I know how the right will respond to these facts: with misleading statistics and dubious moral claims.
On one side, we have the claim that the rising share of taxes paid by the rich shows that their burden is rising, not falling. To point out the obvious, the rich are paying more taxes because they’re much richer than they used to be. When middle-class incomes barely grow while the incomes of the wealthiest rise by a factor of six, how could the tax share of the rich not go up, even if their tax rate is falling?
On the other side, we have the claim that the rich have the right to keep their money — which misses the point that all of us live in and benefit from being part of a larger society.
Elizabeth Warren, the financial reformer who is now running for the United States Senate in Massachusetts, recently made some eloquent remarks to this effect that are, rightly, getting a lot of attention. “There is nobody in this country who got rich on his own. Nobody,” she declared, pointing out that the rich can only get rich thanks to the “social contract” that provides a decent, functioning society in which they can prosper.
Which brings us back to those cries of “class warfare.”
Republicans claim to be deeply worried by budget deficits. Indeed, Mr. Ryan has called the deficit an “existential threat” to America. Yet they are insisting that the wealthy — who presumably have as much of a stake as everyone else in the nation’s future — should not be called upon to play any role in warding off that existential threat.
Well, that amounts to a demand that a small number of very lucky people be exempted from the social contract that applies to everyone else. And that, in case you’re wondering, is what real class warfare looks like.
The Truth about Class War in America
Original Link: http://www.guardian.co.uk/commentisfree/cifamerica/2011/sep/19/class-war-america-republicans-rich
By Richard Wolff
Republicans claim, in Orwellian fashion, that Obama's millionaire tax is 'class war'. The reality is that the super-rich won the war
Republicans and conservatives always fight back against proposals to raise taxes on corporations and rich individuals by making two basic claims. First, such proposals amount to un-American "class warfare", pitting the working class against corporations and the rich. Second, such proposals would take money for the government that would otherwise have been invested in production and thus created jobs.
Neither logic nor evidence supports either claim. The charge of class war is particularly obtuse. Consider simply these two facts. First, at the end of the second world war, for every dollar Washington raised in taxes on individuals, it raised $1.50 in taxes on business profits. Today, that ratio is very different: for every dollar Washington gets in taxes on individuals, it takes 25 cents in taxes on business. In short, the last half century has seen a massive shift of the burden of federal taxation off business and onto individuals.
Second, across those 50 years, the actual shift that occurred was the opposite of the much more modest reversal proposed this week by President Obama; over the same period, the federal income tax rate on the richest individuals fell from 91% to the current 35%. Yet, Republicans and conservatives use the term "class war" for what Obama proposes – and never for what the last five decades have accomplished in shifting the tax burden from the rich and corporations to the working class.
The tax structure imposed by Washington on the US over the last half-century has seen a massive double shift of the burden of taxation: from corporations to individuals and from the richest individuals to everyone else. If the national debate wants seriously to use a term like "class war" to describe Washington's tax policies, then the reality is that the class war's winners have been corporations and the rich. Its losers – the rest of us – now want to reduce our losses modestly by small increases in taxes on the super-rich (but not, or not yet, on corporations).
To refer to this effort as if it had suddenly introduced class war into US politics is either dishonest or based on ignorance of what federal tax policies have actually been. Or perhaps, for conservatives, it is a convenient mixture of both.
Much the same sort of analysis applies to the Republican claims that taxing corporations and rich people takes money that would otherwise be invested in business growth and thus create jobs. Last Friday, the US Federal Reserve reported a record quantity of cash on the books of US businesses (over $2tn). Even with the currently low taxes on businesses and the rich, that money is not being invested and is not creating jobs. It is not being distributed to anyone else and so is not being spent on consumer goods either. Taxing a portion of that money to finance Washington's stimulation of the economy by spending that money – or even better, by using it to hire and pay the unemployed – would be a much more effective way to provide jobs than leaving it as cash hoards in corporations' coffers.
Last month, Warren Buffett upset many of his "mega-rich friends" by what he stated categorically in a New York Times op-ed. He made it clear that he had never encountered any serious investor who decided whether or not to invest based on tax rates. It was always the prospects of profit that made the difference. He then urged Americans to raise taxes on the rich like himself. He also hinted – none too subtly – that it was becoming politically dangerous for the whole economic system's survival to keep having the minority of extremely rich people paying federal tax at lower rates than the middle- and low-income majority.
The final irony of loose talk about class war is this: the Republican and conservative voices opposing all tax increases for corporations and the rich thereby provoke, as Buffett intimated and New York Mayor Michael Bloomberg more explicitly warned last week, a renewal of class consciousness in the US. Then, Washington might learn what class war really is.
By Richard Wolff
Republicans claim, in Orwellian fashion, that Obama's millionaire tax is 'class war'. The reality is that the super-rich won the war
Republicans and conservatives always fight back against proposals to raise taxes on corporations and rich individuals by making two basic claims. First, such proposals amount to un-American "class warfare", pitting the working class against corporations and the rich. Second, such proposals would take money for the government that would otherwise have been invested in production and thus created jobs.
Neither logic nor evidence supports either claim. The charge of class war is particularly obtuse. Consider simply these two facts. First, at the end of the second world war, for every dollar Washington raised in taxes on individuals, it raised $1.50 in taxes on business profits. Today, that ratio is very different: for every dollar Washington gets in taxes on individuals, it takes 25 cents in taxes on business. In short, the last half century has seen a massive shift of the burden of federal taxation off business and onto individuals.
Second, across those 50 years, the actual shift that occurred was the opposite of the much more modest reversal proposed this week by President Obama; over the same period, the federal income tax rate on the richest individuals fell from 91% to the current 35%. Yet, Republicans and conservatives use the term "class war" for what Obama proposes – and never for what the last five decades have accomplished in shifting the tax burden from the rich and corporations to the working class.
The tax structure imposed by Washington on the US over the last half-century has seen a massive double shift of the burden of taxation: from corporations to individuals and from the richest individuals to everyone else. If the national debate wants seriously to use a term like "class war" to describe Washington's tax policies, then the reality is that the class war's winners have been corporations and the rich. Its losers – the rest of us – now want to reduce our losses modestly by small increases in taxes on the super-rich (but not, or not yet, on corporations).
To refer to this effort as if it had suddenly introduced class war into US politics is either dishonest or based on ignorance of what federal tax policies have actually been. Or perhaps, for conservatives, it is a convenient mixture of both.
Much the same sort of analysis applies to the Republican claims that taxing corporations and rich people takes money that would otherwise be invested in business growth and thus create jobs. Last Friday, the US Federal Reserve reported a record quantity of cash on the books of US businesses (over $2tn). Even with the currently low taxes on businesses and the rich, that money is not being invested and is not creating jobs. It is not being distributed to anyone else and so is not being spent on consumer goods either. Taxing a portion of that money to finance Washington's stimulation of the economy by spending that money – or even better, by using it to hire and pay the unemployed – would be a much more effective way to provide jobs than leaving it as cash hoards in corporations' coffers.
Last month, Warren Buffett upset many of his "mega-rich friends" by what he stated categorically in a New York Times op-ed. He made it clear that he had never encountered any serious investor who decided whether or not to invest based on tax rates. It was always the prospects of profit that made the difference. He then urged Americans to raise taxes on the rich like himself. He also hinted – none too subtly – that it was becoming politically dangerous for the whole economic system's survival to keep having the minority of extremely rich people paying federal tax at lower rates than the middle- and low-income majority.
The final irony of loose talk about class war is this: the Republican and conservative voices opposing all tax increases for corporations and the rich thereby provoke, as Buffett intimated and New York Mayor Michael Bloomberg more explicitly warned last week, a renewal of class consciousness in the US. Then, Washington might learn what class war really is.
Sunday, September 18, 2011
The Election of 2012: Why the Most Important Issues May Be Off the Table
Original Link: http://robertreich.org/post/10292950339
By Robert Reich
We’re on the cusp of the 2012 election. What will it be about? It seems reasonably certain President Obama will be confronted by a putative Republican candidate who:
Believes corporations are people, wants to cut the top corporate rate to 25% (from the current 35%) and no longer require they pay tax on foreign income, who will eliminate capital gains and dividend taxes on anyone earning less than $250,000 a year, raise the retirement age for Social Security and turn Medicaid into block grants to states, seek a balanced-budged amendment to the Constitution, require any regulatory agency issuing a new regulation repeal another regulation of equal cost (regardless of the benefits), and seek repeal of Obama’s healthcare plan.
Or one who:
Believes the Federal Reserve is treasonous when it expands the money supply, doubts human beings evolved from more primitive forms of life, seeks to abolish the Internal Revenue Service and shift most public services to the states, thinks Social Security is a Ponzi scheme, while governor took a meat axe to public education and presided over an economy that generated large numbers of near-minimum-wage jobs, and who will shut down most federal regulatory agencies, cut corporate taxes, and seek repeal of Obama’s healthcare plan.
Whether it’s Romney or Perry, he’s sure to attack everything Obama has done or proposed. And Obama, for his part, will have to defend his positions and look for ways to counterpunch.
Hence, the parameters of public debate for the next fourteen months.
Within these narrow confines progressive ideas won’t get an airing. Even though poverty and unemployment will almost surely stay sky-high, wages will stagnate or continue to fall, inequality will widen, and deficit hawks will create an indelible (and false) impression that the nation can’t afford to do much about any of it – proposals to reverse these trends are unlikely to be heard.
Neither party’s presidential candidate will propose to tame CEO pay, create more tax brackets at the top and raise the highest marginal rates back to their levels in the 1950s and 1960s (that is, 70 to 90 percent), and match the capital-gains rate with ordinary income.
You won’t hear a call to strengthen labor unions and increase the bargaining power of ordinary workers.
Don’t expect an argument for resurrecting the Glass-Steagall Act, thereby separating commercial from investment banking and stopping Wall Street’s most lucrative and dangerous practices.
You won’t hear there’s no reason to cut Medicare and Medicaid – that a better means of taming health-care costs is to use these programs’ bargaining clout with drug companies and hospitals to obtain better deals and to shift from fee-for-services to fee for healthy outcomes.
Nor will you hear why we must move toward Medicare for all.
Nor why the best approach to assuring Social Security’s long-term solvency is to lift the ceiling on income subject to Social Security payroll taxes.
Don’t expect any reference to the absurdity of spending more on the military than do all other countries put together, and the waste and futility of an unending and undeclared war against Islamic extremism – especially when we have so much to do at home.
Nor are you likely to hear proposals for ending the corruption of our democracy by big money.
Although proposals like these are more important and relevant than ever, they won’t be part of the upcoming presidential election.
But they should be part of the public debate nonetheless.
That’s why I urge you to speak out about them – at town halls, candidate forums, and public events. Continue to mobilize and organize around them. Talk with your local media about them. Use social media to get the truth out.
Don’t be silenced by Democrats who say by doing so we’ll jeopardize the President’s re-election. If anything we’ll be painting him as more of a centrist than Republicans want the public to believe. And we’ll be preserving the possibility (however faint) of a progressive agenda if he’s reelected.
Remember, too, the presidential race isn’t the only one occurring in 2012. More than a third of Senate seats and every House seat will be decided on, as well as numerous governorships and state races. Making a ruckus about these issues could push some candidates in this direction — particularly since, as polls show, much of the public agrees.
Most importantly, by continuing to push and prod we give hope to countless Americans on the verge of giving up. We give back to them the courage of their own convictions, and thereby lay the groundwork for a future progressive agenda — to take back America from the privileged and powerful, and restore broad-based prosperity.
By Robert Reich
We’re on the cusp of the 2012 election. What will it be about? It seems reasonably certain President Obama will be confronted by a putative Republican candidate who:
Believes corporations are people, wants to cut the top corporate rate to 25% (from the current 35%) and no longer require they pay tax on foreign income, who will eliminate capital gains and dividend taxes on anyone earning less than $250,000 a year, raise the retirement age for Social Security and turn Medicaid into block grants to states, seek a balanced-budged amendment to the Constitution, require any regulatory agency issuing a new regulation repeal another regulation of equal cost (regardless of the benefits), and seek repeal of Obama’s healthcare plan.
Or one who:
Believes the Federal Reserve is treasonous when it expands the money supply, doubts human beings evolved from more primitive forms of life, seeks to abolish the Internal Revenue Service and shift most public services to the states, thinks Social Security is a Ponzi scheme, while governor took a meat axe to public education and presided over an economy that generated large numbers of near-minimum-wage jobs, and who will shut down most federal regulatory agencies, cut corporate taxes, and seek repeal of Obama’s healthcare plan.
Whether it’s Romney or Perry, he’s sure to attack everything Obama has done or proposed. And Obama, for his part, will have to defend his positions and look for ways to counterpunch.
Hence, the parameters of public debate for the next fourteen months.
Within these narrow confines progressive ideas won’t get an airing. Even though poverty and unemployment will almost surely stay sky-high, wages will stagnate or continue to fall, inequality will widen, and deficit hawks will create an indelible (and false) impression that the nation can’t afford to do much about any of it – proposals to reverse these trends are unlikely to be heard.
Neither party’s presidential candidate will propose to tame CEO pay, create more tax brackets at the top and raise the highest marginal rates back to their levels in the 1950s and 1960s (that is, 70 to 90 percent), and match the capital-gains rate with ordinary income.
You won’t hear a call to strengthen labor unions and increase the bargaining power of ordinary workers.
Don’t expect an argument for resurrecting the Glass-Steagall Act, thereby separating commercial from investment banking and stopping Wall Street’s most lucrative and dangerous practices.
You won’t hear there’s no reason to cut Medicare and Medicaid – that a better means of taming health-care costs is to use these programs’ bargaining clout with drug companies and hospitals to obtain better deals and to shift from fee-for-services to fee for healthy outcomes.
Nor will you hear why we must move toward Medicare for all.
Nor why the best approach to assuring Social Security’s long-term solvency is to lift the ceiling on income subject to Social Security payroll taxes.
Don’t expect any reference to the absurdity of spending more on the military than do all other countries put together, and the waste and futility of an unending and undeclared war against Islamic extremism – especially when we have so much to do at home.
Nor are you likely to hear proposals for ending the corruption of our democracy by big money.
Although proposals like these are more important and relevant than ever, they won’t be part of the upcoming presidential election.
But they should be part of the public debate nonetheless.
That’s why I urge you to speak out about them – at town halls, candidate forums, and public events. Continue to mobilize and organize around them. Talk with your local media about them. Use social media to get the truth out.
Don’t be silenced by Democrats who say by doing so we’ll jeopardize the President’s re-election. If anything we’ll be painting him as more of a centrist than Republicans want the public to believe. And we’ll be preserving the possibility (however faint) of a progressive agenda if he’s reelected.
Remember, too, the presidential race isn’t the only one occurring in 2012. More than a third of Senate seats and every House seat will be decided on, as well as numerous governorships and state races. Making a ruckus about these issues could push some candidates in this direction — particularly since, as polls show, much of the public agrees.
Most importantly, by continuing to push and prod we give hope to countless Americans on the verge of giving up. We give back to them the courage of their own convictions, and thereby lay the groundwork for a future progressive agenda — to take back America from the privileged and powerful, and restore broad-based prosperity.
Free to Die
Original Link: http://www.nytimes.com/2011/09/16/opinion/krugman-free-to-die.html
By Paul Krugman
Back in 1980, just as America was making its political turn to the right, Milton Friedman lent his voice to the change with the famous TV series “Free to Choose.” In episode after episode, the genial economist identified laissez-faire economics with personal choice and empowerment, an upbeat vision that would be echoed and amplified by Ronald Reagan.
But that was then. Today, “free to choose” has become “free to die.”
I’m referring, as you might guess, to what happened during Monday’s G.O.P. presidential debate. CNN’s Wolf Blitzer asked Representative Ron Paul what we should do if a 30-year-old man who chose not to purchase health insurance suddenly found himself in need of six months of intensive care. Mr. Paul replied, “That’s what freedom is all about — taking your own risks.” Mr. Blitzer pressed him again, asking whether “society should just let him die.”
And the crowd erupted with cheers and shouts of “Yeah!”
The incident highlighted something that I don’t think most political commentators have fully absorbed: at this point, American politics is fundamentally about different moral visions.
Now, there are two things you should know about the Blitzer-Paul exchange. The first is that after the crowd weighed in, Mr. Paul basically tried to evade the question, asserting that warm-hearted doctors and charitable individuals would always make sure that people received the care they needed — or at least they would if they hadn’t been corrupted by the welfare state. Sorry, but that’s a fantasy. People who can’t afford essential medical care often fail to get it, and always have — and sometimes they die as a result.
The second is that very few of those who die from lack of medical care look like Mr. Blitzer’s hypothetical individual who could and should have bought insurance. In reality, most uninsured Americans either have low incomes and cannot afford insurance, or are rejected by insurers because they have chronic conditions.
So would people on the right be willing to let those who are uninsured through no fault of their own die from lack of care? The answer, based on recent history, is a resounding “Yeah!”
Think, in particular, of the children.
The day after the debate, the Census Bureau released its latest estimates on income, poverty and health insurance. The overall picture was terrible: the weak economy continues to wreak havoc on American lives. One relatively bright spot, however, was health care for children: the percentage of children without health coverage was lower in 2010 than before the recession, largely thanks to the 2009 expansion of the State Children’s Health Insurance Program, or S-chip.
And the reason S-chip was expanded in 2009 but not earlier was, of course, that former President George W. Bush blocked earlier attempts to cover more children — to the cheers of many on the right. Did I mention that one in six children in Texas lacks health insurance, the second-highest rate in the nation?
So the freedom to die extends, in practice, to children and the unlucky as well as the improvident. And the right’s embrace of that notion signals an important shift in the nature of American politics.
In the past, conservatives accepted the need for a government-provided safety net on humanitarian grounds. Don’t take it from me, take it from Friedrich Hayek, the conservative intellectual hero, who specifically declared in “The Road to Serfdom” his support for “a comprehensive system of social insurance” to protect citizens against “the common hazards of life,” and singled out health in particular.
Given the agreed-upon desirability of protecting citizens against the worst, the question then became one of costs and benefits — and health care was one of those areas where even conservatives used to be willing to accept government intervention in the name of compassion, given the clear evidence that covering the uninsured would not, in fact, cost very much money. As many observers have pointed out, the Obama health care plan was largely based on past Republican plans, and is virtually identical to Mitt Romney’s health reform in Massachusetts.
Now, however, compassion is out of fashion — indeed, lack of compassion has become a matter of principle, at least among the G.O.P.’s base.
And what this means is that modern conservatism is actually a deeply radical movement, one that is hostile to the kind of society we’ve had for the past three generations — that is, a society that, acting through the government, tries to mitigate some of the “common hazards of life” through such programs as Social Security, unemployment insurance, Medicare and Medicaid.
Are voters ready to embrace such a radical rejection of the kind of America we’ve all grown up in? I guess we’ll find out next year.
By Paul Krugman
Back in 1980, just as America was making its political turn to the right, Milton Friedman lent his voice to the change with the famous TV series “Free to Choose.” In episode after episode, the genial economist identified laissez-faire economics with personal choice and empowerment, an upbeat vision that would be echoed and amplified by Ronald Reagan.
But that was then. Today, “free to choose” has become “free to die.”
I’m referring, as you might guess, to what happened during Monday’s G.O.P. presidential debate. CNN’s Wolf Blitzer asked Representative Ron Paul what we should do if a 30-year-old man who chose not to purchase health insurance suddenly found himself in need of six months of intensive care. Mr. Paul replied, “That’s what freedom is all about — taking your own risks.” Mr. Blitzer pressed him again, asking whether “society should just let him die.”
And the crowd erupted with cheers and shouts of “Yeah!”
The incident highlighted something that I don’t think most political commentators have fully absorbed: at this point, American politics is fundamentally about different moral visions.
Now, there are two things you should know about the Blitzer-Paul exchange. The first is that after the crowd weighed in, Mr. Paul basically tried to evade the question, asserting that warm-hearted doctors and charitable individuals would always make sure that people received the care they needed — or at least they would if they hadn’t been corrupted by the welfare state. Sorry, but that’s a fantasy. People who can’t afford essential medical care often fail to get it, and always have — and sometimes they die as a result.
The second is that very few of those who die from lack of medical care look like Mr. Blitzer’s hypothetical individual who could and should have bought insurance. In reality, most uninsured Americans either have low incomes and cannot afford insurance, or are rejected by insurers because they have chronic conditions.
So would people on the right be willing to let those who are uninsured through no fault of their own die from lack of care? The answer, based on recent history, is a resounding “Yeah!”
Think, in particular, of the children.
The day after the debate, the Census Bureau released its latest estimates on income, poverty and health insurance. The overall picture was terrible: the weak economy continues to wreak havoc on American lives. One relatively bright spot, however, was health care for children: the percentage of children without health coverage was lower in 2010 than before the recession, largely thanks to the 2009 expansion of the State Children’s Health Insurance Program, or S-chip.
And the reason S-chip was expanded in 2009 but not earlier was, of course, that former President George W. Bush blocked earlier attempts to cover more children — to the cheers of many on the right. Did I mention that one in six children in Texas lacks health insurance, the second-highest rate in the nation?
So the freedom to die extends, in practice, to children and the unlucky as well as the improvident. And the right’s embrace of that notion signals an important shift in the nature of American politics.
In the past, conservatives accepted the need for a government-provided safety net on humanitarian grounds. Don’t take it from me, take it from Friedrich Hayek, the conservative intellectual hero, who specifically declared in “The Road to Serfdom” his support for “a comprehensive system of social insurance” to protect citizens against “the common hazards of life,” and singled out health in particular.
Given the agreed-upon desirability of protecting citizens against the worst, the question then became one of costs and benefits — and health care was one of those areas where even conservatives used to be willing to accept government intervention in the name of compassion, given the clear evidence that covering the uninsured would not, in fact, cost very much money. As many observers have pointed out, the Obama health care plan was largely based on past Republican plans, and is virtually identical to Mitt Romney’s health reform in Massachusetts.
Now, however, compassion is out of fashion — indeed, lack of compassion has become a matter of principle, at least among the G.O.P.’s base.
And what this means is that modern conservatism is actually a deeply radical movement, one that is hostile to the kind of society we’ve had for the past three generations — that is, a society that, acting through the government, tries to mitigate some of the “common hazards of life” through such programs as Social Security, unemployment insurance, Medicare and Medicaid.
Are voters ready to embrace such a radical rejection of the kind of America we’ve all grown up in? I guess we’ll find out next year.
Subscribe to:
Posts (Atom)