A graph and a big document:
The Walt Disney Co. has struck a deal valued at $52.4 billion to acquire much of the Hollywood holdings of 21st Century Fox, the global television and entertainment conglomerate controlled by Rupert Murdoch and his family. The deal occurs against a backdrop of swift changes to the industry’s finances and uncertainty about succession plans at both companies.
The sale represents a stunning turn of events for Murdoch, a reversal of decades of alternately calculated and impulsive expansion of a sprawling media empire that started with a single afternoon paper in a forgotten city on the southern coast of his native Australia.
Does this mean Fox News is going to be normal and nice? Nope.
The most profitable and controversial part of the Fox empire — Fox News —would not be part of the deal. Yet the family is selling off other defining properties, including the movie studio 20th Century Fox. The deal is expected to face regulatory scrutiny, as it would greatly concentrate similar holdings in Disney.
Still, what does this say about the Murdochs? Money problems? Maybe Fox’s days are numbered too.
Probably nothing has done more to erode Trump’s public standing than the consistently plutocratic cast of his domestic policy. The tax cut is the second-most-unpopular major piece of legislation in recorded history, behind only Trump’s other major domestic initiative, the health-care-repeal bill:
Democrats have nothing to fear from making repeal of the Trump tax cuts for the rich a defining party plank. On the contrary, they have a great deal to gain. The bill is a cash grab by the wealthy, driven by the demands of the Republican donor base, and stuffed with targeted favors for insiders with lobbyists. Many more are sure to surface. The more they talk about it, the more Democrats can drive home the message that Trump’s economic populism was a fraud.
In the 2020 campaign, Democrats are inevitably going to propose new social spending. Reporters are inevitably going to ask them how they plan to pay for it. Republicans have given them an easy answer: Repeal the Trump tax cuts for the rich.
The architects of the Trump tax cuts have dreamed of reshaping the tax code in a permanent way. Permanence means more than the technical absence of an expiration date. It has stood for the party’s ambition to leverage the Trump administration and their control of government into something deeper. “Once in a generation or so, there is an opportunity to do something transformational — something that will have a truly lasting impact long after we are gone,” Paul Ryan declared earlier this year. “That moment is here and we are going to meet it. Ladies and gentlemen, we are going to fix this nation’s tax code once and for all.”
Their “fix” is a cash grab. It is “permanent” only until Democrats regain control of government. And thanks to the Trump tax cuts, that day will come sooner.
Breaking: Jeff Flake (R-Az) votes for terrible tax bill. It looks like the GOP has enough to pass.
Just so we’re all clear, a bill no one’s seen, no one’s read, and no one’s scored, dramatically affecting the planet’s largest economy, is going to pass “the world’s most deliberative body” this afternoon. https://t.co/oS3U5BeGkn
— Steve Benen (@stevebenen) December 1, 2017
Graham and Cruz confirm there is no deficit trigger or any alternatives to address 1trillion deficit. Insist tax cuts will pay for themselves. Graham says if he’s wrong about that, country will pay a price.
— Alice Ollstein (@AliceOllstein) December 1, 2017
Narrator: “He’s wrong about that.”
I titled this post “In Other News….”, but one wonders about the haste of the passage of this Tax Bill. No hearings, almost no scoring, very few amendments. Was the processed rushed because insiders knew that the Flynn plea deal was coming?
The tax plan has been marketed by President Trump and Republican leaders as a straightforward if enormous rebate for the masses, a $1.5 trillion package of cuts to spur hiring and economic growth. But as the bill has been rushed through Congress with scant debate, its far broader ramifications have come into focus, revealing a catchall legislative creation that could reshape major areas of American life, from education to health care.
Some of this re-engineering is straight out of the traditional Republican playbook. Corporate taxes, along with those on wealthy Americans, would be slashed on the presumption that when people in penthouses get relief, the benefits flow down to basement tenements.
Some measures are barely connected to the realm of taxation, such as the lifting of a 1954 ban on political activism by churches and the conferring of a new legal right for fetuses in the House bill — both on the wish list of the evangelical right.
With a potentially far-reaching dimension, elements in both the House and Senate bills could constrain the ability of states and local governments to levy their own taxes, pressuring them to limit spending on health care, education, public transportation and social services. In their longstanding battle to shrink government, Republicans have found in the tax bill a vehicle to broaden the fight beyond Washington.
The result is a behemoth piece of legislation that could widen American economic inequality while diminishing the power of local communities to marshal relief for vulnerable people — especially in high-tax states like California and New York, which, not coincidentally, tend to vote Democratic.
This bill is what Republicans wanted for years, if not decades. Not just changes to benefit their donors, but social changes in ways that have little to do with tax policy (i.e. gifts to the religious right). It hopes to undo the social safety net in FDR’s programs. For instance, it could trigger rules mandating cuts to Medicare, the government health care program for seniors, the Congressional Budget Office warned. Some 13 million people could lose health care via the elimination of a key plank of Obamacare. Insurance premiums are also expected to rise by 10 percent.
I think this has to do with Trump, who the Republican elites are tolerating only because they had hoped that they could push this agenda through. Many of them might think (with good reason) that Trump’s days are numbered, and so they are trying to do a ‘Hail Mary’, squeeze a 4 to 8 year agenda into one bill. Never mind that (as we just learned seconds ago) it will increase the deficit by $1 trillion dollars (that’s for future generations to worry about).And they might pull it off.
Richard Cordray. the head of the Consumer Financial Protection Bureau, said that he would be leaving as head of the CFPB at the end of this month. Last Friday, November 24, he sent a letter to President Trump, declaring that he’s officially done leading the federal government’s controversial consumer watchdog agency once the clock strikes midnight.
In a separate letter to his staff, Cordray, who is the first-ever director of the fledgling CFPB, announced that chief of staff Leandra English will serve as the bureau’s acting director.
Shortly after Cordray’s announcement Friday, President Trump named Office of Management and Budget Director Mick Mulvaney as the CFPB’s interim director. The back-to-back moves set up a clash over who is in charge of the bureau. Mulvaney, like many Republicans, has been a staunch critic of the CFPB. While serving in Congress, he voted in favor of killing the agency. He and other opponents argue the agency — which was created in the wake of the 2008 financial crisis to keep an eye on Wall Street — has too much power and installs unduly harsh regulations.
— Mark Murray (@mmurraypolitics) November 27, 2017
In a tweet Friday night, Senator Elizabeth Warren, an architect of the consumer agency, said that under the Dodd-Frank financial reform law, the agency’s deputy director assumes the role of acting director if there’s a vacancy.
Sunday night, lawyers for Leandra English, filed a lawsuit in the US District Court for the District of Columbia seeking to halt the appointment of Mick Mulvaney, who serves as head of the Office of Management and Budget and is also named in the lawsuit.
Which brings us to today, the first workday since the whole thing broke.
Both Mulvaney and English were present at the CFBP this morning. Mulvaney was given full access to the CFPB director’s office with “full cooperation” from its staff, a senior White House official told CNN, adding that the OMB director brought doughnuts for his new staff. English, according to a source familiar with the matter, also was present at the bureau Monday morning, but it was not immediately clear if she and Mulvaney interacted. Mulvaney’s communications director tweeted a photo of his boss “hard at work” in his new position.
Mulvaney running the CFPB is the most literal interpretation of “fox guarding the henhouse” possible. That said, it is typical for the Trump Administration, that puts climate change deniers in charge of the EPA, or Secretary of State Rex Tillerson slowly dismantling the State Department. But unfortunately, the law does not turn on who would be best for the CFPB.
Who’s right? Unfortunately, one needs to get into the weeds to figure that out. This memo by Mary MacLeod, general counsel of the CFPB, does a good job laying out both sides of the legal argument, which turns on whether the position is open due to the “absence” or “vacancy” of the former director. She concludes that the position properly belongs to Mulvaney:
It is a convincing argument, but not everyone agrees
I’ve now read the 3-pg internal memo dated 11/25/17 by Mary McLeod supporting @POTUS’s power to override the specific Dodd-Frank provision making Leandra English Acting Director of CFPB. The memo must’ve been written in great haste. It’s weakly reasoned and wholly unconvincing.
— Laurence Tribe (@tribelaw) November 27, 2017
I’m not questioning McLeod’s motives — though I’ll admit your explanation crossed my mind — only the shoddiness of her pro-Mulvaney work product. It’s really VERY poor work indeed, even as a piece of advocacy. As a genuine analysis, well, it’s frankly awful. https://t.co/kLvjT5yfSk
— Laurence Tribe (@tribelaw) November 27, 2017
Rep. Barney Frank, D-Mass., a lead author of the Dodd-Frank Act, which created the CFPB, had this to say:
The president still has the ability to appoint a successor, said Frank, but only one who would not destroy the agency, as such a nominee would not get through the Senate. “The way it works, the acting director stays in until a confirmed successor appointed. I don’t think the Senate would confirm someone like Mulvaney, who would destroy the agency. Remember, Sen. Collins is in there and she voted for it. Republicans would like to get rid of the agency legislatively, but they don’t have the votes,” he said.
Former Rep. Brad Miller, D-N.C., the lead champion of the CFPB provision in the House, also said it was the intent of the bill’s authors to keep the acting director independent of the president. “We were very much about the task of trying to create an independent agency that would not be captured by its opponents,” he said. “The statute’s pretty clear. What happens if there’s a vacancy in the director’s spot, the deputy director steps up and serves until the Senate confirms a replacement.”
The OLC, in the memo filed [over the weekend], to its credit, admits that the references to unavailability and absence encompass vacancy. They’re not trying to argue that the statute doesn’t cover this. They’re trying to have it both ways. They’re arguing that the president retains an option under the Federal Vacancies Reform Act to override subsequent legislation. They’re trying to have half a loaf and make it a whole loaf. It’s an interesting position but it collapses on itself. It’s completely incoherent. Laws are not typically written that way.
Senate Minority Leader Chuck Schumer, D-N.Y., pushed back against the Mulvaney pick. “The process for succession laid out in Dodd Frank is clear: Leandra English, not Mick Mulvaney, is the acting director of the CFPB. By attempting to install Mr. Mulvaney as director, the Trump administration is ignoring the established, proper, legal order of succession that we purposefully put in place, in order to put a fox in charge of a hen house,” he said in a statement.
The courts will have the last say.
UPDATE: Press secretary Sarah Sanders insists that Mulvaney is in charge of the CFPB
"Elections have consequences at every agency, and that includes the CFPB," says Mick Mulvaney, acting director of the Consumer Financial Protection Bureau.
— Steve Peoples (@sppeoples) November 27, 2017
Trump is in hard core twitter world again, attacking the media for — well, not exactly sure.
The news isn’t good for Trump with the net closing on the Mueller scandal. Trump is obviously concerned.
But he did talk about the tax bill and how wonderful it supposedly is. I like how he calls the wealthy “job producers”, as if having money and creating jobs are the same thing (hint: they are not).
Well, that’s fine. Because I wanted to discuss the tax plan and just how horrible it is for higher education, particularly private education.
The version of the tax reform package passed by the House eliminates tax-exempt bond financing for private colleges and universities, while still advantaging public institutions with this option. Elimination of access to tax-exempt bond financing for private campuses will make it more expensive for campuses to add new facilities and is certain to slow or stall the facilities plans for many institutions.
The House version of the tax bill eliminates the student loan interest deduction, placing an additional burden on students who do not come from families with the means to pay for college without borrowing. The student loan business is already a profit-maker for the federal government. This proposal sends the wrong signal at a time when more students need to attain some form of education beyond high school to be competitive in today’s workforce.
The House version of tax reform also takes aim squarely at graduate students who perform vital teaching and research functions on many campuses. We live in a time when advanced degrees matter more than ever. People with advanced degrees are leaders in innovation, entrepreneurship and problem-solving. Adding to the tax liability of very modestly funded graduate students is simply counterproductive to nurturing American ingenuity and creativity, the seedbed of economic growth.
The way to become a better America is to become a smarter America. Now is the time to be investing in the young minds of our nation, not retrenching on our global leadership position for world-class higher education.
But this, I believe, is part of a long-term Republican strategy to kill higher education in private institutions (where they have no control), leaving us public universities and colleges. There is nothing wrong with those except that they can be controlled by legislatures, and that it what Republicans and other authoritarians want. This is a huge step in that direction, and it is very dangerous.
RELATED: The new CBO score shows that the Senate tax bill screws the poor even more than previously realized:
Republicans are aiming to have the full Senate vote on the tax plan as early as this week, but the new CBO analysis showing large, harmful effects on the poor may complicate those plans. The CBO also said the bill would add $1.4 trillion to the deficit over the next decade, a potential problem for Republican lawmakers worried about America’s growing debt.
Democrats have repeatedly slammed the bill as a giveaway to the rich at the expense of the poor. In addition to lowering taxes for businesses and many individuals, the Senate bill also makes a major change to health insurance that the CBO projects would have a harsh impact on lower-income families.
By 2019, Americans earning less than $30,000 a year would be worse off under the Senate bill, CBO found. By 2021, Americans earning $40,000 or less would be net losers, and by 2027, most people earning less than $75,000 a year would be worse off. On the flip side, millionaires and those earning $100,000 to $500,000 would be big beneficiaries, according to the CBO’s calculations. (In the CBO table below, negative signs mean people in those income brackets pay less in taxes).
Why? The answer turns out to be healthcare:
The Senate Republican tax bill eliminates the requirement that almost all Americans purchase health insurance or else pay a penalty. The CBO has calculated that health insurance premiums would rise if this bill becomes law, leading 4 million Americans to lose health insurance by 2019 and 13 million to lose insurance by 2027.
Many of the people who are likely to drop health insurance have low or moderate incomes. If they drop health insurance, they will no longer receive some tax credits and subsidies from the government.
Conclusion: if you are poor, don’t get sick.
Having failed to repeal and replace Obamacare, almost everything is riding, politically speaking, on the new GOP tax bill. And it looks like a tough road to passage.
A Washington Post poll provides a good starting point for measuring public opinion at the outset of the tax debate. Only one-third of Americans support the plan, against half opposing it. Sixty percent of the public believe it favors the rich. To the extent that people learn more, support is likely to fall even lower.
The bill contains three categories of political poison. First, it cuts taxes on rich people and corporations, a wildly unpopular goal. Americans want to raise taxes on corporations and people with high incomes. Republicans would do the opposite. The bill accomplishes this unpopular change by reducing the corporate income tax rate, raising the threshold at which the top income tax rate applies, from $400,000 to a million dollars, phasing out the estate tax, and creating a 25 percent income tax bracket for “pass-through firms.” The latter provision is rife for both abuse and lawyerly gaming. Any time the tax code makes a lot of money hinge on a technical difference, the opportunities for fraud will multiply. In this case, high-income earners who want to reduce their income tax rate from 39.6 percent or so to 25 percent can create a phony firm in which they are an investor.
Even the Wall Street Journal editorial page, which defends the plan, recognizes the problem. “Republicans should not want to defend Wall Street lawyers paying a lower rate than wage earners in Omaha,” it warns. But they will be.
The second problem is that the bill raises taxes for a large number of middle-class families. It does so by scaling back personal exemptions and reducing the inflation adjustment. Around a quarter of middle-class families will pay more taxes under this plan. That’s millions of people. (Or, to translate it into attack ad–ese, “MILLIONS of Middle-Class American families will get a TAX HIKE so CORPORATIONS CAN PAY LESS!”)
House Republicans tout a married couple with two children earning $59,000 as the prototypical beneficiaries of their plan. It is true, such a couple would pay lower tax in the first few years. But as time goes on, their tax cut will turn into a tax increase:
Many of those couples, or perhaps actors portraying them, will be seen on television between now and November 2018 making sad faces around their kitchen tables.
Finally, the House Republican plan eliminates specific tax breaks that are both worthy and popular. There are two fiscal requirements for a tax plan to pass the Senate. It can increase the deficit by no more than $1.5 trillion over the first decade, and it cannot increase the deficit at all after ten years. The House plan utterly fails the second test, which makes it unpassable in anything like its current form, and raises the question of why they’re bothering to take all the political risk.
But it does meet the first requirement. And in order to keep its net cost down to $1.5 trillion, when the tax cuts it gives out cost much more, Republicans went scrounging through the cushions of the tax code for loose change. And the nickels and dimes they’re saving to pay for the corporate and estate tax cuts include things like eliminating the tax credit that offsets the (frequently exorbitant) cost of adoption. Or the tax credit for small business to create access for disabled employees. Or the tax credit for clinical tests for treatment for rare diseases — which, the New York Times explains, is “central to the business model for such firms and eliminating it could mean that big pharmaceutical companies will have little reason to invest in drugs that help small patient populations.” Or repealing the Work Opportunity Tax Credit, which creates an incentive for hiring veterans.
The plan reads as if it was reverse-engineered from 30-second political attack ads. And while it seems very unlikely that Republicans actually designed their proposal by asking Democratic ad-makers for a list of the most sympathetic people in America — veterans, orphans, the disabled, people suffering rare diseases — the effect will be the same.
Republicans could have written a tax-cut plan that hurt nobody. Or they could have written a sweeping tax reform that could stand for years. Incredibly, they have done neither. They have taken on all the political downside of tax reform — but because their plan can’t pass the Senate, they will get none of the upside.
During his latest interview with Fox News’ Sean Hannity, President Trump went on a confused rant about the economy, at one point falsely suggesting that stock market gains are helping pay down the national debt.
“I’m so proud of the $5.2 trillion dollars of increase in the stock market,” Trump said, referring to the bull market that began as the economy pulled out of the Great Recession during the months after President Obama took office.
“Now, if you look at the stock market, that’s one element, but then we have many other elements. The country — we took it over, it owed $20 trillion, as you know, the last eight years they borrowed more than it did in the whole history of our country, so they borrowed more than $10 trillion — and yet, we picked up $5.2 trillion in the stock market, possibly picked up the whole things in terms of the first nine months in terms of value.”
“So, you could say in one sense we are really increasing values, and maybe in a sense we are reducing debt,” Trump added, before Hannity quickly moved on to another topic.
But it just doesn’t work like that. As CNBC details, to see why this doesn’t make sense, consider the relationship (or lack thereof) between the stock market and debt during the Obama administration. Between 2009 and 2017, the S&P 500 returned 235 percent while the national debt soared.
Overhauling the tax code is a task Republicans in Congress have been attempting to accomplish for 30 years. On Wednesday, President Donald Trump unveiled his administration’s tax plan, called the “Unified Framework For Fixing Our Broken Tax Code.” The plan is reported to cost an upwards of $5 trillion dollars and has been described by his officials as “completely designed with the middle class in mind.”
Trump has promised he would “cut taxes tremendously for the middle class” while also promising as recently as September 14 that the wealthiest Americans “will not be gaining at all with this plan,” but the framework provided by his administration proves otherwise.
Here are more details about the plan, per senior administration officials.
Individual tax reform:
- Creates three tax brackets — 12 percent, 25 percent and 35 percent — and gives the option for congressional committees to add a fourth rate on the highest earners. Doesn’t define the income ranges to which these rates apply.
- Currently, there are seven individual rate brackets ranging from 10 percent to 39.6 percent.
- Almost doubles the standard deduction to $12,000 for a single person and $24,000 for a married couple.
- Increases the child tax credit to something “substantially higher” than the current $1,000 per child. Increases the income level at which the credit phases out.
- Creates a $500 tax credit for non-child dependents.
- Repeals the alternative minimum tax.
- Repeals the personal exemption.
- Eliminates most itemized deductions, but keeps those for mortgage interest and charitable contributions.
- Repeals the estate tax.
- Eliminates state and local tax deduction.
- Maximum small business rate of 25 percent. Right now, it’s generally taxed at the individual level.
- 20 percent corporate rate. Currently, it’s 35 percent.
- Repeals the corporate alternative minimum tax.
- Allows businesses to immediately write off the cost of new investments over five years.
- Partially limits interest deductibility.
- Keeps the research and development tax credit, along with the low income housing credit.
- Moves to a “territorial system,” which doesn’t tax business profits made outside the country.
- As a transition, there will be a one-time tax on profits accumulated overseas. Higher rate for cash profits than liquid assets, but doesn’t say what the rates are.
Here’s what the tax plan actually does.
Repealing the individual alternative minimum tax
The alternative minimum tax (AMT) will be eliminated under Trump’s tax plan. The AMT, which was created to ensure that wealthy taxpayers pay their fair share and don’t take advantage of all the deductions in the current tax code, is the only reason Trump paid significant taxes in his leaked tax return from 2005. In 2005, he paid a total tax rate of about 24% on $150 million of income; without the AMT, he would have paid less than 4%.
Since it was enacted, the AMT has gone under several iterations and now affects roughly over 4 million taxpayers, mainly those who earn $250,000 in adjusted gross income. Tax policy experts have concerns that repealing it would result in a federal budget shortfall.
Progressive politicians like Bernie Sanders have also proposed to eliminate the AMT, but replacing it with a flat tax on the wealthy of around 28 percent.
Repealing the tax deduction for state and local taxes
This is the tax measure that will cause the biggest trouble for state lawmakers. The Trump tax plan includes repealing itemized deductions for state and local taxes as a way to help pay for the massive tax cuts provided to individuals and corporations.
This is good news for Republicans, as the state and local tax deduction (SALT) is most valuable in blue states like New York and New Jersey, but bad news for tax payers in those states. Rep. Steve King (R-NY) a Trump loyalist, has said he can’t vote for any bill that repeals the SALT. In New Jersey, losing the break would cost taxpayers an upwards of $3,500, and Rep. Leonard Lance (R-NJ) told Bloomberg he has the “gravest reservations” on voting for a bill that includes a repeal of the SALT.
There are 52 Republicans from districts in blue states that use the state tax deduction disproportionately, just enough to stop any legislation in the House that repeals the state and local tax deduction.
Eliminating the estate tax
Trump’s tax plan includes a tax reform measure many Republicans have wanted to repeal for a long time: the estate tax. It’s a 40 percent levy on assets that exceed the $5.49 million exemption per person and $10.98 million for a married couple. This measure is only really utilized by the country’s wealthiest tax payers, affecting less than half of a percent of all estates today, according to IRS figures. This is another tax break to the wealthiest Americans.
Slashing corporate tax rates
Some good news for Trump’s friends in the business world: the corporate tax rate will be lowered nearly 15 points, from 35 percent to 20 percent. When Trump was on the campaign trail, however, he repeatedly promised a 15 percent tax rate, which many experts saw as nearly impossible.
The plan also includes a special income tax rate for “pass-through” businesses, which include partnerships and LLCs. These businesses don’t pay the corporate rate, rather their owners pay taxes on their share of the profits from the business at their own personal rate, which now will be lowered to 35 percent under the Trump plan. There’s a provision in the Trump plan that would cap the rate on income from pass-through businesses at 25 percent.
The Trump Organization, which still has ownership of, owns more than 500 pass through business entities. This loophole would slash the tax rate on the profits from these businesses by more than a third.
Raising the bottom tax rate and cutting the top rate (while doubling standard deductions)
Republicans have agreed on raising the bottom tax rate two percentage points to 12 percent in order to offset a huge tax cut for the top individual tax rate, down nearly five points to 35 percent from 39.6 percent. However many tax experts say this doesn’t come anywhere near close enough to paying for those massive tax cuts for wealthier individuals.
By raising the bottom rate to 12 percent, the plan consolidates the seven current tax brackets into just three, set at 12 percent, 25 percent, and 35 percent, with the option of including a fourth tax bracket should the tax writing committees in Congress deem it necessary to include one, but the plan doesn’t detail at what income levels these individual brackets will be set at, also leaving that up to congressional committees.
Trump’s tax plan also proposes doubling the standard deduction, which is generally good for lower to middle income families, but when paired with other tax measures, like the elimination of the personal exemption, can end up actually raising taxes on middle-income families.
Eliminating personal exemptions
The personal exemption, currently at $4,050, will be eliminated under the White House’s tax plan. Bloomberg estimates that a middle-class couple with three kids would actually have to add $20,250 to their taxable income to make up for this. That amounts to nearly double the “benefit” they would receive by a doubled standard deduction. It’s again hard to determine the exact impact on a particular family because the plan lacks critical details.
The White House plan also proposes an increased child tax credit of over $1,000 dollars while also creating a $500 dollar tax credit for tax payers with non-child dependents, which they hope will offset the elimination of the personal exemption. However, because the White House didn’t provide at what income level the three individual tax brackets will be set at, middle-income families will just have to take the administration’s word for it and depend on the work of the tax writing committees.
A few months ago:
— Ivanka Trump (@IvankaTrump) April 4, 2017
First daughter Ivanka Trump, who made wage equality and workplace protections for women one of her signature issues on the campaign trail and in her personal brand, declared her support for the White House’s announcement Tuesday that it will halt a proposal requiring businesses to disclose employees’ pay, gender, race and ethnicity.
“While I believe the intention was good and agree that pay transparency is important, the proposed policy would not yield the intended results,” Trump told the Wall Street Journal. “We look forward to continuing to work with EEOC, OMB, Congress and all relevant stakeholders on robust policies aimed at eliminating the gender wage gap.”
Wait — information about employees’ pay and gender will not help provide information on gender wage gap? It sounds to me like JUST the sort of things that is needed.
The House Bill said 23 million would lose insurance under the House GOP plan to replace Obamacare.
Now the Senate version has been scored and it is…. just as bad.
The Senate bill to repeal the Affordable Care Act would increase the number of people without health insurance by 22 million by 2026, a figure that is only slightly lower than the 23 million more uninsured that the House version would create, the nonpartisan Congressional Budget Office said Monday.
Next year, 15 million more people would be uninsured compared with current law, the budget office said.
The legislation would decrease federal deficits by a total of $321 billion over a decade, the budget office said.
Good news unless you are uninsured and get sick. The deficits mostly come from GOP bill cuts, i.e., the spending cut on Medicaid by 26% by 2026
2018: 15 million *more* uninsured
2020: 19 million
2026: 22 million
— Katy Tur (@KatyTurNBC) June 26, 2017
By comparison, under the House’s bill (AHCA):
2018: 14 million *more* uninsured
2020: 19 million
2026: 23 million https://t.co/wvHNbX3uW8
— Nate Silver (@NateSilver538) June 26, 2017
To be honest, I really thought it would be somewhere around 15 million after 10 years. Nope, it’s 22 million. A disaster for the GOP. And most of that — well, 15 million — would happen right away. That would have a huge impact on the 2018 elections if this gets passed.
This chart from the CBO report really says it all: low income Americans are asked to pay higher premiums for less generous coverage. pic.twitter.com/hT51OqJAfs
— Sarah Kliff (@sarahkliff) June 26, 2017
Republicans in the House of Representatives passed the Choice Act yesterday, a sweeping deregulation of the financial sector. It passed 233-186, with no Democratic support. One Republican, Walter Jones of North Carolina, voted no. This bill rolls back or weakens most of the protections put in place since the 2008 financial crisis through President Barack Obama’s Dodd-Frank Act.
Though it is very unlikely to gain the 60 votes it needs to pass in the Senate, important parts of it could pass through the budget reconciliation process. But even if it goes nowhere, it reveals a Republican Party that is focused on destroying reform based on a false narrative of the crisis, largely to the benefit of the financial sector.
The Choice Act isn’t a matter of conservatives simply preferring less regulation than liberals, or Congress readjusting reform in light of new evidence. What passed today isn’t a result of liberals turning the financial reform dial up to 11 and conservatives want to turn the dial down. Instead, it’s a surgical strike, gutting specific parts of the reforms that have been effective in preventing another crisis.
Take the Consumer Financial Protection Bureau, one of the strongest pieces of Dodd-Frank, which has brought transparency to previously opaque financial markets. It has applied enforcement and accountability not just to consumer financial products but also to markets where consumers are the financial product, like mortgage servicing, debt collection and credit scoring.
Before the crisis, consumer protection was fragmented across 10 regulators, and because it was everyone’s job, it was nobody’s job. This meant no agency built the expertise or interest in standing up for consumers and, worse, there would be a race to the bottom in enforcement, with financial firms seeking out the most lax regulators. The C.F.P.B. solved these institutional problems by consolidating enforcement in a dedicated agency.
That feature is exactly what the Choice Act targets. The act would gut the C.F.P.B.’s supervisory authority, sending it back to regulators who missed the crisis and recreating the broken pre-crisis regulatory structure. With this authority, the C.F.P.B. has returned about $12 billion from bad bank behavior to 29 million citizens. The Choice Act would repeal the C.F.P.B.’s ability to stop unfair, deceptive and abusive acts and practices — an authority that was essential, for example, in going after Wells Fargo’s creation of fake accounts for its clients.
But Choice goes far beyond this. The Dodd-Frank rollback is shaped by a false diagnosis of the financial crisis, by which the crisis posed no problems to the American economy. As the influential conservative Peter Wallison of the American Enterprise Institute noted, the Choice Act is a natural result of believing, as he and most Republicans do, “that the Dodd-Frank Act was completely unnecessary.”
So now we’re back to the way we were before the financial crisis we just spent the last 8 years digging out of.
The Republicans argue that the Choice Act makes Wall Street angry. It’s tough to imagine how, when the vast number of changes amount to an industry wish list of the biggest banks. It repeals the miniature Glass-Steagall reform known as the Volcker Rule, which separates out high-risk proprietary trading from commercial banks. It removes the F.D.I.C.’s role of reviewing banks’ living wills — new procedures that make banks and regulators plan for a potential bank failure, presumably because the F.D.I.C. demands that they be stronger. It takes out language requiring firms that got bailouts to continue to be subject to stronger regulations. It allows industry to choose to ignore a wide range of regulations if they decide to adopt a single, easy-to-manipulate, balance-sheet metric. It eliminates a consumer complaint database the C.F.P.B. maintains.
It isn’t just the largest players who win under this bill. The Choice Act would remove the requirement that private equity firms register with the Securities and Exchange Commission and be subject to reviews. These types of firms were previously opaque, even though they are a major source of investment funds and exert a large amount of influence over the corporate sector. Preliminary examinations by the S.E.C. into private equity’s fees and expenses found abuses, conflicts of interest and fraud in over half of the cases, things that make the capital markets not work for investors or for companies.
(1) Repeal of the “Disclosure of Payments by Resource Extraction Issuers” Rule.
The rule was that oil, gas and mineral companies had to disclose (to the Securities and Exchange Commission) any payments (taxes, royalties, fees, bonuses, etc) given to foreign governments relating to commercial development of oil, natural gas, or minerals. Designed to prevent companies from engaging in corruption with foreign governments, it has only been a rule since last September. It is gone now.
(2) Repeal of the “Stream Protection” Rule:
The rule, which has only been around since December, was a comprehensive regulatory environmental protection plan which governed the conditions in which a coal mining company can and cannot dump mining waste into streams and waterways. They would have had to monitor affected streams during mining, and the company had to develop a plan for restoring damaged waterways to something close to their natural state after mining is done. Except, no more. That rule is repealed under the reason that compliance would result in the loss of coal mining jobs. (In truth, the rule would only have taken about 120 jobs in the next 20 years, while the coal mining industry as a whole has lost 25,000 jobs since 2012, much of that due to continue automation and lower demand.)
So a few days ago, President-elect Donald Trump tweets that Carrier is not moving to Mexico and it is keeping jobs here. He pats himself on the back for delivering on a campaign promise. Except now we learn the truth:
The Carrier deal, brokered by President-elect Donald Trump, may not have saved as many factory jobs as was presented at the plant last week in Indianapolis.
Carrier workers received a flyer from the United Steelworkers, Local Union 1999. It details which jobs are staying here in Indy and which are going to Mexico. The numbers are a bit different from last week’s big announcement.
Last Thursday, amid much fanfare, President-elect Trump spent time on the factory floor and talked with union workers at the westside Indianapolis Carrier plant.
“We’re keeping a little over 1,100 jobs it turns out,” he told them.
He also made a big announcement about a big deal reached with United Technologies, Carrier’s parent company, to save 1,100 American jobs that were going to be moved to Mexico.
Carrier worker T.J. Bray, who’s also a communications rep for the union, told reporters across the country he was thrilled. His phone rang again while we talked with him Monday afternoon.
“I’ve been getting non-stop phone calls. Non-stop media. It’s been a wild, wild week,” Bray said.
But Bray and other union workers just learned some new numbers about the actual number of production jobs saved by the Trump-Pence deal.
“We didn’t know the breakdown before because no one would give us any information,” Union President Chuck Jones told Eyewitness News by phone Monday. “Now what we’re losing is 550 member jobs.”
“We found out today that more jobs are leaving than what we originally thought,” Bray said. “It seemed like since Thursday, it was 1,100 then it was maybe 900 and then now we’re at 700. So I’m hoping it doesn’t go any lower than that.”
Union workers got a letter at the plant saying Trump’s deal with Carrier will save only 730 factory jobs in Indianapolis, plus 70 salaried positions – 553 jobs in the plant’s fan coil lines are still moving to Monterrey, Mexico.
All 700 workers at Carrier’s Huntington plant will also lose their jobs.
So basically, dealmaker Donald Trump forced Indiana to cough up 7 million dollars to save 730, not 1100, jobs. I mean, good news if you’re one of those people… but even then, is it? This came about as a negotiation, a deal — not as a result of economic policy. Trump cannot intercede like that for every company that intends to ship jobs overseas.
And by the way, interceding like that, and arranging for corporate welfare, isn’t exactly laissez-faire economics. It is certainly not Republican. Hell, even Sarah Palin has a problem with it:
Foundational to our exceptional nation’s sacred private property rights, a business must have freedom to locate where it wishes. In a free market, if a business makes a mistake (including a marketing mistake that perhaps Carrier executives made), threatening to move elsewhere claiming efficiency’s sake, then the market’s invisible hand punishes. Thankfully, that same hand rewards, based on good business decisions.
But this time-tested truth assumes we’re operating on a level playing field.
When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. Meanwhile, the invisible hand that best orchestrates a free people’s free enterprise system gets amputated. Then, special interests creep in and manipulate markets. Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail.
Politicians picking and choosing recipients of corporate welfare is railed against by fiscal conservatives, for it’s a hallmark of corruption. And socialism. The Obama Administration dealt in it in spades. Recall Solyndra, Stimulus boondoggles, and all their other taxpayer-subsidized anchors on our economy. A $20 trillion debt-ridden country can’t afford this sinfully stupid practice, so vigilantly guard against its continuance, or we’re doomed.
Reaganites learned it is POLICY change that changes economic trajectory. Reagan’s successes were built on establishing a fiscal framework that invigorated our entire economy, revitalized growth and investment while decreasing spending, tax rates, over-reaching regulations, unemployment, and favoritism via individual subsidies. We need Reaganites in the new Administration.
I hate to say this, but Sarah Palin is right. Right about what Republicans want. This is, quite simply, Trump picking winners and losers.
EpiPens, made by a company called Mylan — are allergy injectors — sold two per pack — that contain epinephrine, a drug used to relax muscles. It can open the airways, and reduce swelling during a severe allergic reaction.
Over the years, the price of an EpiPen standard two-pack gradually grew to about $600. The same two-pack cost only about $100 in 2009. Meanwhile, epinephrine, which can be purchased alone, costs just a few dollars.
This isn’t new. A House of Representatives report found in 2014 that 10 generic drugs experienced price increases just a year prior, ranging from a 420% hike to more than 8,000%.
What’s going on? EpiPen explains:
“With changes in the healthcare insurance landscape, an increasing number of people and families are enrolled in high-deductible health plans, and deductible amounts continue to rise. This shift has presented new challenges for consumers, and they are bearing more of the cost. This change to the industry is not an easy challenge to address, but we recognize the need and are committed to working with customers and payors to find solutions to meet the needs of the patients and families we serve.”
That’s sort of saying “We recognize the problem but don’t claim responsibility for it”.
It’s true that more people are stuck with a high-deductible health plan — 25% now as opposed to 4% before Obamacare. But one reason employers are moving to higher-deductible plans is because they’re reacting to rising health-insurance costs—which are climbing in part because companies like Mylan are hiking drug prices.
In any case, it might behoove Mylan to find those “solutions” quickly: Members of Congress are already calling for an investigation.
And one thing that is sure to come out? CEO compensation. According to filings reported by NBC News, Mylan Pharmaceuticals CEO Heather Bresch’s yearly compensation rose from $2,453,456 in 2007 to $18,931,068 last year.
The Dow dropped another 250 points today, as it (and other world markets) assessed the fallout from the UK’s decision to leave the EU. At one point, it dipped to well below 300 points off.
In addition, Standard & Poor’s announced that it had lowered the United Kingdom’s sovereign credit rating from “AAA” to “AA,” citing last week’s referendum. Fitch, meanwhile, moved its rating from “AA+” to “AA.”
But others are beginning to see even more fallout. For example. London’s position as one of the world’s premiere financial centers is bound to change in the wake of a vote to leave the European Union. In coming years, it’s highly possible that major companies in London will no longer have unfettered access to the EU — and many firms have voiced a need to move employees elsewhere.
That’s where Dublin comes in.
“A lot of businesses in the U.K., in order to stay part of the EU, will expand operating subsidiaries or even redomicile to Ireland,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. “Having Dublin become more of a financial center could be part of the longer-term trajectory here.”
Dublin has a number of things going for it: First and foremost, as the capital of the Republic of Ireland, it’s still in the EU and will continue to enjoy freedom of trade and movement with Europe. It also has close proximity to London and Continental Europe, universal English language fluency, an existing banking presence, and a low tax policy.
The United Kingdom voted to leave the EU last night, and even though negotiations to leave will take years, the impact is felt now. The pound sterling has dropped in value about 10 percent.
Prime Minister David Cameron, who proposed the referendum as a way to remain in office (even though he was against leaving), is quitting.
Scotland voted overwhelmingly to remain in the EU – overwhelmingly in absolute terms and evenly spread across Scotland. The roots of that are a deeper European identity, reflexive contrariness to England, a deeper attachment to social democracy and many other things. Just two years ago Scotland came just short of voting to leave the UK. One of the small ‘no’ arguments was whether the EU would allow the Scots, at least any time soon, to enter as an independent country. I have zero expertise on Scottish nationalism, but looking at the big picture – the span not of months but of years – it’s hard to see how Scotland doesn’t leave the UK now.
You can count on London losing several major international banks and thousands of jobs to Ireland, Scotland, and/or the continent, something that Farage and Johnson can explain to the sheeple who probably didn’t even know what the hell they were really voting for.
And the US stock market, which opened 35 minutes ago (as I write this) is down 384 points, not as bad as the 508 drop at the opening bell. [UPDATE at 4:10pm – Dow closed down 611, losing all gains made this year in one day] Now, to be sure, the initial markets today and Monday are going to be volatile, but they are also going to be meaningless. The market needs to be watched, but how it looks two weeks, two months, and even two years from now is more important than how it looks today. This is not the end of Brexit. This is the beginning of it. Years of negotiation about the terms of Brexit are to come.
Here, I think is the most important graph of the day:
Yes indeed. As it says, those who must live with the result of the EU referendum the longest want to remain.
What is the market reacting to? Well, uncertainty. Uncertainty about the terms of the UK exodus. Uncertainty as to whether Scotland will leave the UK (Scotland voted overwhelmingly to remain). Uncertainty as to whether France and Germany might follow the UK.
The parallels between the Brexit vote and the US elections are not lost on anybody. On one side, you have a populist, nationalist, anti-elite, anti-immigration movement — the equivalent of Trumpism here in the States. On the other side, everybody else– from conservative to liberal — the so-called “elite” (which is actually a compliment).
Ignoring the advice of educated businessmen and politicians, the people of the United Kingdom have spoken, acting more on a sense of nationalism (yes, white nationalism) than reason.
Which is why — already — the United Kingdom is plummeting financially and the pound is worth far less than it was 24 hours ago. It make trade more difficult for the UK. It will make travel and foreign training and cultural exchange more expensive.
And some of the things that UK “leave” voters thought would be true simply won’t happen. Check out this video, where Nigel Farage of the “once-fringe United Kingdom Independence Party” basically owns up to creating a sham “Leave” reason:
— D (@Delo_Taylor) June 24, 2016
Writing for the Guardian, Diane Abbott summed up the Brexit results as a false promise:
For many Brexit voters the prime minister just confirmed to them how little the winners of globalisation like him cared about them, the losers.
If only the false promise that Britain’s malaise of disenfranchisement, voicelessness and an economic system that rewards the rich at the expense of the poor could be fixed by leaving the EU. The idea that migrants or politicians in Brussels are the problem with modern, unequal Britain was the canard at the core the referendum debate.
Britain’s problems come from a place much closer to home. They come from successive government policies that have promoted the financialisation of our economies and public services, thereby valuing profit over people. They come from a Tory government slashing public services and widening inequality under the dubious banner of austerity. And they come from a prime minister who was passionate about nothing but his own political survival.
These problems are so systemic today that fixing them will take a radical change to the structure of both our economy and political class. More of the past will not do to resolve the very real and interconnected global issues of our time: vast and rising wealth inequality, climate change and a foreign policy trapped in a cycle of destruction.
That feels about right. And the pro-Brexit pundits and politicians are a lot like the dog who finally caught the car. NOW WHAT?
And those sentiments exist here among those who feel like they are globalization’s losers and the political class’ victims. And who do they listen to? TRUMP. Got Mexicans? No problemo. TRUMP stops unwanted immigrants in their tracks. Pesky establishment? TRUMP politically incorrects for that. Lost your job? TRUMP again. Whites not white enough? TRUMP will make them bolder if not brighter.
Trump — located ironically in Scotland today to cut ribbons on his golf course (for the elites) — is, of course, praising this.
For the rest of us, this is a cautionary tale.
And how about this for a plot twist: The Brexit may not happen at all. There have already been murmurs that Thursday’s vote will lead the EU to offer new, more generous terms to convince Britain to stay, prompting a second referendum. An online petition calling for a re-do drew so much traffic that it crashed the U.K. government’s website Friday morning. This is, to be clear, a very unlikely scenario — the referendum results were close, but not that close, and none of Britain’s leaders is backing the idea of a new vote so far. But in theory, it is still possible that we could do all of this again.
After residents of the UK voted today to leave the European Union, the movement for an independent Texas may be gaining serious momentum, with thousands online calling for a “Texit.”
The largest group agitating for secession is the Texas Nationalist Movement, which has been promoting its own version of Brexit, called Texit, over the past several weeks. The group has taken inspiration from the pro-exit campaign in Britain, noting that the two movements share many of the same principles.
Federal Reserve officials strongly signaled they will toughen big-bank capital requirements even more than they have since the 2008 crisis, a move that will add to the pressure on the largest U.S. banks to consider shrinking. Fed governors Daniel Tarullo and Jerome Powell, in separate public comments on Thursday, said the Fed would require eight of the largest U.S. banks to maintain more equity to pass the central bank’s annual “stress tests.”
“Effectively, this will be a significant increase in capital,” Mr. Tarullo said on Bloomberg television….Mr. Powell said at a banking conference that the Fed’s move would make big banks “fully internalize the risk” they pose to the economy.
“I have not reached any conclusion that a particular bank needs to be broken up or anything like that,” he said. The point is to “raise capital requirements to the point at which it becomes a question that banks have to ask themselves.”
Although there have been some regulatory changes since the bank crash of 2008, big banks still have an unfair advantage in the market: their funding costs are lower because investors figure they’ll be bailed out if they ever implode in the future.
But this news today indicates a recognition of the problem. Big banks should, as Tarullo said, “fully internalize the risk” they pose to the economy. In other words, if big banks have an automatic advantage simply because taxpayers have little choice but to rescue them in case they fail, they should be required to pay higher insurance premiums against failure. That’s essentially what higher capital requirements do.
This won’t make big headlines, and it’s not sexy and it’s not Trump insulting somebody. And maybe it still doesn’t go far enough (Bernie Sanders simply wants to break the big banks altogether). But it is a step in the right direction to fiscal responsibility.
He didn’t actually say the word “default”, but what he is describing here is a default (“not repaying loans in full”):
One day after assuring Americans he is not running for president “to make things unstable for the country,” the presumptive Republican nominee,Donald J. Trump, said in a television interview Thursday that he might seek to reduce the national debt by persuading creditors to accept something less than full payment.
Asked whether the United States needed to pay its debts in full, or whether he could negotiate a partial repayment, Mr. Trump told the cable network CNBC, “I would borrow, knowing that if the economy crashed, you could make a deal.”
He added, “And if the economy was good, it was good. So, therefore, you can’t lose.”
Such remarks by a major presidential candidate have no modern precedent. The United States government is able to borrow money at very low interest rates because Treasury securities are regarded as a safe investment, and any cracks in investor confidence have a long history of costing American taxpayers a lot of money.
Experts also described Mr. Trump’s vaguely sketched proposal as fanciful, saying there was no reason to think America’s creditors would accept anything less than 100 cents on the dollar, regardless of Mr. Trump’s deal-making prowess.
“No one on the other side would pick up the phone if the secretary of the U.S. Treasury tried to make that call,” said Lou Crandall, chief economist at Wrightson ICAP. “Why should they? They have a contract” requiring payment in full.
This is unprecedented, as is many of things Trump says and does. This would lower America’s credit rating and our future ability to borrow.
This is precisely why business acumen does not translate into political acumen. Defaulting on a loan is a business decision. So is bankruptcy. It can be done and the company can bounce back. But you can’t think that way with a country.
Oh my God. I don’t understand how even fiscal conservatives can swallow this.
The Business Insider headline reads: “Donald Trump is floating an insane idea that would tank the American economy” —
“I’ve borrowed knowing that you can pay back with discounts,” he said. “I would borrow knowing that if the economy crashed, you could make a deal.”
Some corporate finance deals really do work like this: You issue risky debt, and the lenders know you might not be able to pay them back in full if something really bad happens. But that kind of debt bears a high interest rate, because the lenders know you might not be able to pay them back in full if something really bad happens.
US Treasury bonds have very low interest rates because investors are extremely confident they will be paid in full, even in poor economic conditions. Trump — by openly saying that he would keep partial payment on the table as an option — could spark a crisis in the Treasury markets if he became president. Investors would cease to see Treasurys as a safe asset, and they would demand higher interest rates in exchange for risk.
This, of course, is a terrible idea, and a good reason for Republicans to hesitate in coalescing around Trump.
Maybe Trump should read Section 4 of the 14th Amendment that says this:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
Pressed to elaborate on his remarks, Mr. Trump did appear to step back. He said that he was not suggesting a default, but instead that the government could seek to repurchase debt for less than the face value of the securities. The government, in other words, would seek to repay less money than it borrowed.
Jesus. Is this what a Trump presidency will be like? Him doing things and then walking them back?
The leak amounts to 2.6 terabytes of information — perhaps the largest whistleblower leak in history. Also, it might topple a country or too.
So it might be interesting to learn what the Panama Papers leak is all about.
It starts with a company called Mossack Fonesca. That’s a Panamanian law firm that has long been well-known to the global financial and political elite. The firm’s operations are diverse and international in scope, but they originate in a single specialty — helping foreigners set up Panamanian shell companies to hold financial assets while obscuring the identities of their real owners. Since its founding in 1977, it’s expanded its interests outside of Panama to include more than 40 offices worldwide, helping a global client base work with shell companies not just in Panama but also the Bahamas, the British Virgin Islands, and other notorious tax havens around the world. The Panama Papers are leaks from that law firm.
Here’s another way to put it, thanks to a Reddit user:
When you get a quarter you put it in the piggy bank. The piggy bank is on a shelf in your closet. Your mom knows this and she checks on it every once in a while, so she knows when you put more money in or spend it.
Now one day, you might decide “I don’t want mom to look at my money.” So you go over to Johnny’s house with an extra piggy bank that you’re going to keep in his room. You write your name on it and put it in his closet. Johnny’s mom is always very busy, so she never has time to check on his piggy bank. So you can keep yours there and it will stay a secret.
Now all the kids in the neighborhood think this is a good idea, and everyone goes to Johnny’s house with extra piggy banks. Now Johnny’s closet is full of piggy banks from everyone in the neighborhood.
One day, Johnny’s mom comes home and sees all the piggy banks. She gets very mad and calls everyone’s parents to let them know.
Now not everyone did this for a bad reason. Eric’s older brother always steals from his piggy bank, so he just wanted a better hiding spot. Timmy wanted to save up to buy his mom a birthday present without her knowing. Sammy just did it because he thought it was fun. But many kids did do it for a bad reason. Jacob was stealing people’s lunch money and didn’t want his parents to figure it out. Michael was stealing money from his mom’s purse. Fat Bobby’s parents put him on a diet, and didn’t want them to figure out when he was buying candy.
Now in real life, many very important people were just caught hiding their piggy banks at Johnny’s house in Panama. Today their moms all found out. Pretty soon, we’ll know more about which of these important people were doing it for bad reasons and which were doing it for good reasons. But almost everyone is in trouble regardless, because it’s against the rules to keep secrets no matter what.
The leaked documents provide details on some of these piggy banks — uh, shell companies. They reveal shocking acts of corruption in Russia, hint at scandalous goings-on in a range of developing nations, and may prompt a political crisis in Iceland.
Here are a few of the highlights, with links to the full stories where you can read the details:
- Vladimir Putin’s inner circle appears to control about $2 billion worth of offshore assets.
- The prime minister of Iceland secretly owned the debt of failed Icelandic banks while he was involved in political negotiations over their fate.
- The family of Pakistan’s prime minister owns millions of dollars’ worth of real estate via offshore accounts.
- Ukrainian President Petro Poroshenko pledged to sell his Ukrainian business interests during his campaign, but appears instead to have transferred them to an offshore company he controls.
In a way, the fact that people use shell companies is not new, and it’s always been somewhat understood that there’s some underlying shenanigans behind these accounts. Some of the shenanigans revealed by the Panama Papers involves nothing more than legal avarice.The name of Ian Cameron, the late father of British Prime Minister David Cameron, shows up in the Panama Papers, for example. Mossack Fonseca helped him set up his investment company Blairmore Holdings (named after his family’s ancestral country estate) in the British Virgin Islands, where, marketing material assured investors, the company “will not be subject to United Kingdom corporation tax or income tax on its profits.”
This particular kind of move is perfectly legal and doesn’t even involve any secrecy. It is entirely typical for investment companies whose employees all work or reside in New York, London, or Connecticut to be domiciled for tax purposes in someplace like the Cayman Islands. Although when Bernie Sanders talks about this stuff, this is what he means.
On the other hand, there is shadier stuff. One wealthy client, US millionaire and life coach Marianna Olszewski, was offered fake ownership records to hide money from the authorities. This is in direct breach of international regulations designed to stop money-laundering and tax evasion.
An email from a Mossack executive to Ms Olszewski in January 2009 explains how she could deceive the bank: “We may use a natural person who will act as the beneficial owner… and therefore his name will be disclosed to the bank. Since this is a very sensitive matter, fees are quite high.” (It’s not clear with Ms. Olszewski has broken the law).
Meanwhile, as I write this, Iceland is going ballistic. Protests throughout (below is a live YouTube stream) as the Prime Minister there refuses to resign:
Anyway, to be continued.
Dow was down almost 500 earlier today; it’s around -463 now (at 1:10 pm). Mostly about fears of low oil prices ,which 6% to as low as $29.28 a barrel today (remember when it was over $100?)
The Dow starts the year in a plummet this morning. Because Asian markets suck apparently. Also international fears re: Middle East. You know…. the usual.
Martin Shkreli, a pharmaceutical entrepreneur and former hedge fund manager who has been widely criticized for drug price gouging, was arrested Thursday morning by the federal authorities.
The investigation, in which Mr. Shkreli has been charged with securities fraud, is related to his time as a hedge fund manager and running the biopharmaceutical company Retrophin — not the price-gouging controversy that has swirled around him.
Mr. Shkreli, 32, is now chief executive and founder of Turing Pharmaceuticals, which has drawn scrutiny for acquiring a decades-old drug and raising the price of it overnight to $750 a pill, from $13.50.
He was arrested in his Midtown Manhattan apartment, according to a law enforcement source, who declined to be identified because the indictment had not been unsealed. Federal prosecutors in Brooklyn were expected to hold a news conference on the charges later Thursday.
UPDATE: Wish this was true….
— The New Yorker (@NewYorker) December 17, 2015
From former Fed chairman Ben Bernanke, in his new memoir, The Courage To Act:
[I] lost patience with Republicans’ susceptibility to the know-nothing-ism of the far right. I didn’t leave the Republican Party. I felt that the party left me.
That’s a Reagan quote, except Reagan was talking about the Democratic Party.
Bernake was nominated for the job by president George W. Bush, for whom Bernanke served as head of the White House Council of Economic Advisors.
It’s not hard to see what Benanke feels this way. The know-nothing wing of the Republican Party rebelled against the TARP rescue package at the height of the economic meltdown. They howled that low interest rates would lead to imminent hyperinflation. They resolutely refused to consider fiscal stimulus despite Bernanke’s repeated pleas (see helpful illustration below from 2011). They wanted to audit the Fed. They wanted to end the Fed. They wanted to put us back on the gold standard. When Bernanke told them that spending cuts would lead to higher unemployment, Rep. Kevin McCarthy (who is about to become Speaker of the House) refused to believe him.
Honestly. What is it going to take for the people and/or the government to throw these rich bastards in jail? No, not for being rich, but for, you know, breaking laws and regulations that effect the lives of actual people…. when?!?
Volkswagen chief executive Martin Winterkorn resigned Wednesday as a growing scandal over falsified emissions tests rocked the world’s biggest carmaker.
“I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part,” Winterkorn said after an emergency meeting with Volkswagen directors.
Winterkorn, 68, was Volkswagen (VLKAY) CEO for eight years. The German company, which also owns the Audi and Porsche brands, had just achieved his long-standing goal of overtaking Toyota (TM) to become the biggest automaker three years ahead of target.
But his position had looked increasingly precarious since the scandal broke Friday, when U.S. regulators said the company had deliberately programmed some 500,000 diesel-powered vehicles to emit lower levels of harmful gases in official tests than on the roads.
The crisis escalated Tuesday when Volkswagen revealed it had found significant emissions discrepancies in 11 million diesel vehicles worldwide.
Winterkorn, an engineer and former head of Audi, said he was stunned by the scale of the misconduct, and was accepting responsibility to clear the way for a “fresh start” for the company.
Stunned, my ass. You don’t intentionally program an entire line of cars to “cheat” emissions tests without the CEO knowing about it. So this guy straps on a golden parachute, and leaves Volkswagon. But people die when these things are avoided:
Volkswagen has admitted that 11 million of its cars worldwide were designed to cheat emissions testing, in an escalating scandal that has loaded pressure on the wider motor industry.
Campaigners have long claimed engine emissions figures under laboratory tests are far exceeded in real-life conditions, and experts have said thousands of premature deaths could be averted by ensuring cars meet their legal limits.
Hedge fund manager Martin Shkreli is 32 years old but he’s acting half that age on Twitter today after news broke that his company, Turing Pharmaceuticals, had raised the price of the life-saving drug Daraprim from $13.50 to $750 per pill.
That’s not a typo — $13.50 to $750.00 per pill.
Daraprim is used to treat toxoplasmosis, a condition caused by a parasite that exists in nearly a quarter of the U.S. population over age 12, but which can prove deadly for the unborn children of pregnant women and for immunocompromised individuals like AIDS patients. These vulnerable populations will now have to pay over 5,000 percent more for their treatment.
Due to the sudden price hike, Shkreli, whose company only acquired Daraprim last month, has already dethroned the dentist who killed Cecil the Lion as the most-hated man in America.
Shkreli did a news show circuit as well, beginning with Bloomberg, where he attempted to argue that Daraprim had been underpriced before Turing swept in.
“The price per course of treatment to save your life was only $1,000 and we know these days, [with] modern pharmaceuticals, cancer drugs can cost $100,000 or more, rare-disease drugs can cost half a million dollars,” Shkreli said, as if it should be shocking that cheap, life-saving medicine could cost less than a laptop.
When confronted by the reporter with the low cost of producing Daraprim—about $1 per pill by her estimate—Shkreli claimed that the price hike was necessary for Turing Pharmaceuticals to increase revenue, and that some of the profits would be funneled into research and development costs for a Daraprim alternative. But as Emory University infectious disease professor Dr. Wendy Armstrong told RawStory, “I certainly don’t think this is one of those diseases where we have been clamoring for better therapies.”
Why do one percenters get away with this? Because they can:
But as reprehensible as Shkreli’s actions might appear, what is even more harrowing is that they are not illegal. With his social media swagger, Shkreli makes an easy target for a problem that extends far beyond the confines of his ego: the rampant overpricing of life-saving medicine. As USA Today reported, many new cancer drugs cost over $100,000 per year—a fact that Shkreli, ironically, sees as justification for raising the cost of Daraprim. And technically, there’s no way to stop him.
As a spokesperson for the Food and Drug Administration told The Daily Beast’s Ben Collins on Twitter in response to Shkreli’s actions, their power in this situation is, well, nonexistent.
An FAQ page on the FDA’s website asks, “What can the FDA do about the cost of drugs?” and the answer is, essentially, nothing: “We understand that drug prices have a direct impact on the ability of people to cope with their illnesses as well as meet other expenses. However, FDA has no legal authority to investigate or control the prices charged for marketed drugs.”
In any event, Shkreli’s media blitz cast him in an even worse light — he came off as slimy and greasy as a used car salesman. Just .look at his picture. The latest news today is that Shkreli has agreed to reduce the price, although he will not say by how much.
He’s not the first person to corner the market on a drug and hike the price. But he’s one of the most frequent offenders. Fortunately, Bernie Sanders and Hillary Clinton have weighed in, and this could become a political hot potato. Any chance for reform? We’ll see.
So after a huge “crash” at the beginning of the week, the Dow flies up 619 points yesterday, and today (as 11:18am), it was up almost 280 points.
So here’s the question: will all the GOP politicians and pundits who blamed Obama for “Black Monday” give him credit for the recovery of yesterday and today?
Don’t hold your breath.
Nothing like listening to tens of thousands of dollars slip out of your 401(k) in a matter of minutes, which is what I was doing this morning. The Dow dropped 1,082 points. The “circuit breakers” — the 7% dropoff point where trading is automatically stopped (to prevent a crash) — were set to go at a drop of 1,157, which we didn’t quite reach. But everything was down 6.5% within minutes of the opening bell. It made Friday’s drop off look like an anthill.
The Dow rebounded so that right now — at 10:00 am (half an hour after opening) — we are down about 650 points (around 4%).
And now it is 511 down (10:06 am EDT). Here’s the 5-day so you can see the dramatic fall this morning.
This was not unexpected. China virtually lost all its gains from the past year last night (it went down 8.5%). China’s stock market is plummeting. You know how people are about Greece being totally bankrupt? Well, China has lost the equivalent of 15 Greeces in market capital…. just in the past three weeks! I won’t get into the details, but basically, China’s stock market is based on debt, and the Chinese government has an monetary policy that has propped up its stock market falsely. The Chinese government used monetary policy, state-owned banks, local governments, and other tools under its control to push internal investment. The result was a massive buildup in factories, highways, airports, real estate, and much more. Some of these investments were wise. Many weren’t. China has become famous for its profusion of empty stadiums, skyscrapers, and even cities. They were able to do this because the average Chinese investor is illiterate and has bought stocks on debt… because the communist government has told him to. The result? A stock market boom, that eventually ended up with a lot of overcapacity and bad debt. In other words, the value of a Chinese company is not accurately reflected by its stock price, which is the only way a stock market can work.
Usually, when one market goes down, the other markets do as well, because of the multi-national aspect of the world economy. But the crash now has less to do with the Chinese market than fears of Chinese political upheaval. If the Chinese economy goes really south, and factories close and people lose their life savings, the people will uprise like they did with the 1989 Tiananmen Square protests. This is bad news for many multinational companies. So many of our high tech products and clothes are made in China (despite the human rights abuses and the deplorable rape factories and slave labor factories). So political unrest in China gives rise to unpredictability, and that’s why our market struggles.
Analysts are saying to ride this out, which is what most of us with 401(k)s are doing, since we have no choice.
Crude oil hit a new low this morning, too — $38.13 a barrel. That’s due to OPEC nations like Saudi Arabia pumping oil into the economy, and U.S. fracking which is at an all-time production high (and why Oklahoma has so many earthquakes). What does that mean to you?
(1) Don’t be surprised to see gas prices fall below $2.00
(2) Don’t be surprised to see this economic slump last a while.
UPDATE: As of 10:22 am EDT, Dow is down only 316 points (or 1.9%). Could be people taking advantage of low stocks from earlier. In any event, volatility seems to have slowed down and things are settling down. The hit wasn’t that bad…… so far.
UPDATE #2: Still around 2% down, so…. no biggie really. Thought I would share this chart with the admonition not to panic. Why not? The drop pales in comparison to all the gains the market has made over the past decade.
UPDATE #3: Dow started tanking toward the end of the day. It closed down 566.47, or 3.58%. Not the worst day ever. Comparable to Friday.
Wheeeee! Dow dropped over 500 today (and over 300 yesterday). Let’s look at the past six weeks:
Nice little dip there at the end, huh?
What’s going on? It’s China. It’s always China. They are having hard economic times. So everybody feels it. The people I feel sorriest for are the Chinese workers making our Apple and Samsung products, as well as our fashionable women’s clothes. (Actually, the conditions for Chinese workers in Apple and Samsung are getting marginally better). Those people are going to be working 24/7 under forced labor. And their kids.
Earlier this week, I got in — not one but two — debates with good progressive friends about the wisdom of the BLM movement shutting down Bernie Sanders speaking at a Social Security and Medicaid event last Saturday in Seattle. It’s a lot of ground to cover, but I read something by Hamilton Nolan (whoever he is) at Gawker that gets me 66% of the way there. So I am going to piggyback on his essay to explain my take:
On Saturday, Bernie Sanders was scheduled to speak to a crowd of thousands of supporters in a Seattle park. He never did; the event was shut down after a handful of protesters disrupted it in the name of “Black Lives Matter.” This was remarkably dumb.
Some caveats up front: 1) “Black Lives Matter,” like “Occupy,” is not a formal group with strict membership requirements. It is a banner, an overarching cause, a general proclamation of a set of political beliefs that can be picked up by anyone who cares to invoke its name. The actions of a few people should not, therefore, be used to try to tarnish that entire cause.
Yup. And part of the problem in the debates about “what BLM did” is that there is no centralized BLM leadership. When you think “BLM”, think “Tea Party”, but with a different set of goals. When I use “BLM” in this post, I am referring to those who say and believe that what happened in Seattle speaks for all BLM movement supporters, even though I do not concede that to be true. *I* am a BLM movement supporter, one of many who disagree with the tactics in Seatlle.
2) There are already plenty of conspiracy theories circulating in lefty circles about the group of protesters who disrupted the event, and their true motivations, and what they hoped to accomplish. I do not want to dive into a sea of unprovable suppositions, or overgeneralize about a broad cause. There have already been many tortured op-eds by progressives trying to painstakingly reconcile what happened. The fact is that this is not the first time that Bernie Sanders has been driven from the stage by Black Lives Matter protesters.
Agreed. The background of the protesters at the event is interesting. One of them was definitely once a Sarah Palin supporter, but what that means NOW, if anything, can only be guessed at. For the purposes of what I am saying, I will consider the background of the protesters to be irrelevant.
I simply want to talk about the wisdom of doing this.
It is stupid, don’t do it.
Is “Black Lives Matter,” drawing attention as it does to institutional racism, racist police practices, and other pervasive instances of racism in American society, a legitimate cause? Of course it is. It is perfectly appropriate for BLM to wave its banner in rallies, in protest marches, and in city halls. It is appropriate to wave its banner in neighborhoods, in meeting halls, in the media, and in the streets. It is even, I would argue, appropriate for protesters to stand up and raise their voices and be disruptive at campaign rallies for political candidates who are acting to reinforce and support the sort of racism that they are campaigning against.
One of the criticisms that gets pushed against people like me who were critical of BLM is that we’re trying to get black protesters to “be nice” and “not make waves” and not “shake up the status quo”. Nothing could be further from the truth. Direct action is not only a valid tactic, but in many instances, a necessary tactic. My gripe is not against direct action — it is against misdirected action.
Donald Trump, the leading Republican presidential candidate, who spits venom about “illegals” pouring into America to rape innocent women, could use a good Black Lives Matter protest. Almost every Republican presidential candidate, in fact—who stumble over themselves competing to build a bigger wall on the border and who unerringly back the police state in word and deed—could use a good Black Lives matter protest. As could most Republican senators, and state governors, and a host of mayors and city council members and sheriffs.
But Bernie Sanders?
Let me stop again here and blunt what some might be thinking. I am not a Bernie Sanders supporter. I like much if not most of what he says. But I don’t think an 80 year old socialist can be an effective leader in this ultra-divided political climate. He would be a great king, but this is a democracy where compromise is actually necessary. I also doubt his bona fides on foreign policy. And a number of other reasons. So don’t tag me with “You’re in Bernie’s camp” assumption. You would be wrong.
Nor do I think Sander’s campaign is above reproach. He has many critics on the left for a number of reasons. The unbelievably awesome Larry Lessig, for example, is critical of Sanders, saying that Sanders has not put campaign finance reform at the top of his agenda. Like Lessig, I believe that you can’t solve the major problems of this country (including racial problems) without changing the way we elect people. And I’m excited about a possible Lessig campaign. But you don’t see Lessig, or other Sanders critics, storming the stage and shouting at Sanders like it is a Jerry Springer show.
Bernie Sanders? Bernie Sanders, of all presidential candidates, is the one that you choose to target on the issue of America’s structural racism? Bernie Sanders is the most progressive serious presidential candidate, and the most liberal, and the most vocal and wise on the issue of America’s entrenched and widening economic inequality. And should the Black Lives Matter movement care about economic inequality? Of course. The average white household in America has 16 times the wealth of the average black household. No group in America suffers from our nation’s economic inequality more than black people. Further, closing the racial wealth gap is probably the single most effective thing that any politician could do to help advance the cause of ending structural racism in America. This is because promoting progressive economic policies that work against the extreme concentration of wealth in small groups of people is something that politicians can actually do that has actual real world effects on racial inequality. “Giving nice speeches” is an example of a thing that politicians can do that tends to have little if any real world effect on racial inequality. I guarantee you that there are Democratic (and even some Republican) presidential candidates who are far more polished and smooth politicians than Bernie Sanders who are capable of giving speeches on race in America that sound far more pleasing and life-affirming to listen to than anything that Bernie Sanders says in his own plainspoken growl. And those candidates, who are heavily influenced by Wall Street donors, will go on to do very little to close the racial wealth gap in America, unlike Bernie Sanders.
So the question is: do you want someone who will do the things that will actually address the issues you care about? Or do you want to be pandered to better?
Many on the left find it hard to come out and say “this was stupid,” because they support both Bernie Sanders and the Black Lives Matter movement. That is a misperception of the political landscape. Believing that a small group of angry young protesters did something that was not well thought out need not make you feel guilty or racist; rash and counterproductive things are what young people do. Screaming Bernie Sanders offstage is dumb because you support Black Lives Matter. For those perceptive enough to separate pretty slogans from actual policy prescriptions, it is clear that Bernie Sanders is the candidate most aligned with the group’s values. Stifling his voice only helps his opponents.
Go shout at someone who deserves it.
Here’s where I have a little pushback of my own for the Gawker opinion piece. While it is true that Sanders is, of all the candidate, the one most likely to be the best friend of the BLM movement, it is clear that the BLM movement doesn’t see it that way. The Gawker pieces doesn’t seem to understand this point. So I’ll address it.
The Seattle protesters (and perhaps the ones at Netroots) claim not to be interested in partisan politics. In fact, the Seattle protesters claim that that “white supremacist liberals” are actually the cause of the problem.
If that is indeed the position of ALL of BLM (and again, it isn’t, because BLM is just an umbrella name to describe a movement, rather than an actual organization), then BLM is in serious trouble. It is not liberals who can be blamed for the black people dying at the hands of law enforcement. Progressive policies are not the root cause of this (and tellingly, no BLMed can point to one), nor are progressives guilty by reason of complacency.
Especially and including Sanders. Sanders had incorporated a searing critique of entrenched racism into his regular stump speech. He addressed the SCLC (MLK’s organization) talking about Sandra Bland and the need for officers to wear police cameras. When he addressed the national conference of the Urban League on August 7, Sanders rattled off the names of Brand, Brown, Boyd, Garner, Scott, Gray and Rice and presented his own standards. “Violence and brutality of any kind, particularly at the hands of law enforcement sworn to protect and serve their communities, is unacceptable and must not be tolerated, he said. “We must reform our criminal justice system. Black lives do matter, and we must value black lives.”
All this was BEFORE last weekend. His reward was a public scolding by Seattle activists who prevented him from speaking at a Social Security rally, one of whom demanded the crowd “join us now in holding Bernie Sanders accountable for his actions.” What would those actions be? It wasn’t explained then or since. Maybe that’s because the people who supported the Seattle protests were too busy congratulating themselves and taking victory laps, while the rest of us shook our heads in embarrassment and disbelief.
It’s possible that the Seattle protesters didn’t know about Sanders’ statements over the past few weeks, but if so, then the organization that prides itself on using the new social media of the Internet to “spread the word” and organize encountered a massive fail.
Even if they had known, my understanding is that the Seattle protesters didn’t care about Sanders’ civil rights past (going back 50 years) or his recent statements about black lives. The BLM, I’m told, doesn’t care about partisan politics.
Which is all well and good, but then its focus on candidates of the 2016 election seems counterproductive to even its OWN mission. In any event, I don’t think they should care about partisan politics either. If a Republican candidate had the same background and positions as Sanders, he/she should be welcomed into the BLM fold as well. Being am equal-opportunity troll still means you are a troll (See Trump, Donald) (UPDATE: Speaking of Trump, he just held a short press conference. He said Bernie Sanders was “weak” when he allowed #BlackLivesMatter protesters to take the microphone at his rally… and actually threatened to physically fight them if they tried to do the same thing to him. Attention BLMers: you want to impress me? Don’t take your fight to Sanders who offers the path of least resistance because he’s on your side. Take it to Trump)
As an aside, yet ANOTHER defense offered by those who support the Seattle protests — and it is a common theme running through the larger debate — is that “white people” shouldn’t be telling “black people” how to run “their” movement.
This is absurd for a number of reasons. The first is, many people don’t see it as a movement refined to people of color. As Kennedy once said:
“The rights of every man are diminished when the rights of one man are threatened.”
It’s not “my” movement? Bullshit. Besides, if the people doing the killing are white, and I am white, and what they do reflects upon me (and apparently it does), then I’m not going to remain silent when I see a movement destined to fail.
Furthermore, I’m not criticizing the movement “as a white man”. The criticisms I have a color-neutral, and one way you know that is because my exact same criticism of BLM has been said by Oprah Winfrey and Al Sharpton, who became, as a result, pariahs within the BLM movement (more on that in a moment).
To suggest that my criticisms come because of my whiteness denies a central tenant of a belief that BLMers themselves hold — that I am a beneficiary of white privilege (I acknowledge that I am a beneficiary of a racist system, but that does not mean I cause or support it). I don’t check my color, and I am not conscious of it when I open my mouth to opine. However, it is helpful to the BLM movement that I am portrayed that way, and they will take advantage of liberal white guilt to advance that theory that all whites are racist. But it simply isn’t true. I know when I am being condescending on a racial basis — that it “feels” that way to a black person doesn’t make it so.
So returning the the point, who then can the finger be pointed when it comes to racial injustice? Go to the conservative blogs whenever a unarmed black person gets shot by white policemen. If they are talking about it at all, it is in defense of the police. The opposite is true of the progressive blogs. Compare the new media versions of the right and the left on the subject of racial homicides. Hell, compare the old media.
BLM supporters are quick to point out that racism is different now. It isn’t hoods and Civil War flags. No it isn’t. That’s too obvious. But that doesn’t mean it is mainstream progressive thought either. LISTEN to what is said on the very very white Fox News. None of them have hoods either.
Can progressives be taken to task for failing to fix the problem? Sure. For example, Obama’s My Brother’s Keeper Initiative (or rather, the expansion of his My Brother’s Keeper Initiative) seems like weak tea to many, and I tend to agree. But failure to fix the problem is not the same as being at the root cause of the problem. BLMers seem to not know the difference.
So what is BLM’s problem with me and Oprah and Sharpton? Not hard to answer. We’re the older generation. And THAT, I insist, is really what this schism is about. Not progressive left against BLM, but rather, old (experienced) activists and younger ones. If I sound condescending in my criticisms to a young black BLM activist, my condescension is rooted in my experience, not my skin color.
One defender of BLM said that he had been involved in social activism for 7 years, so he’s not a neophyte. Seven years is good, but it’s not 37. And as other BLM activists have blatantly admitted, proudly, they don’t care about the past. MLK was then, this is now.
Each generation needs to find its own voice, so you certainly can understand where BLM comes from. If I grew up with black parents who were (probably) liberal and followers of Jesse Jackson or Al Sharpton, and I came of age in world where young black people got shot and nobody seemed to care, I too might reject the world and politics of my parents (not just leftie politics, but the racist political system altogether) and start from scratch. So I get that.
But black lives matter. They matter more than white peoples’ feelings (as we often hear), but guess what? They matter more than black peoples’ feelings, too. I don’t care that “this ain’t your daddy’s revolution” as many BLM signs and websites like to say. Fidelity to being “now” — and using social media, and being leaderless, and being angry, and upturning the apple cart, and yada yada yada — that don’t mean shit if doesn’t yield change.
And the problem with BLM is that they waste time reinventing the wheel –thinking that their “new” brand of movement will get things done. In the meantime, black lives are at stake. But for some reason, it is more important to close their ears to (or even piss on) natural allies than to be pragmatic about ACTUAL change.
Not that the BLM cares about history, but the phenomenon of self-marginalization isn’t new. In the 1960s, you had a split between the militant Malcolm X and Martin Luther King. Both engaged in direct action, so that factor is a wash. But who was the white power structure more afraid of — (a) Malcolm X and his threat to take democracy into black hands “by any means necessary”, or (b) Martin Luther King with his progressive coalition taking direct action (coupled with his ability to work within the system he was engaging)?
Martin Luther King was the threat.
Why? Because for all his talk and perceived militancy, Malcolm X had no method, no program, no “means” that would actually bring about long-lasting change. King, on the other hand, had shown he could move mountains. And when he crossed Pettus bridge on his way to Selma, it wasn’t just King and the SCLC; it was preachers and volunteers of every religion and race. (The only person to die in the march to Selma was a white woman).
But BLM doesn’t seem to care about that. “Coalition politics is sooooo 60 years ago, and we’ve got hashtags now!” So old farts like Oprah and me, we can sit on the side. That’s seriously what is going on today.
It’s too bad. Because social media is great for getting people to look at stuff. A black girl in Houston gets kneed in the back by a white cop at a pool party in Houston. Some guy with a cellphone records it. Bam!! People all over the world know about it before the day is over. That’s powerful and an incredible tool to harness.
But one need only look to the Occupy movement to see the shortcomings of relying just on that. At the end of the day, almost no financial reform came when Occupy took the tents down. Only one very low level guy has been prosecuted for the intentional financial crimes that resulted in a catastrophic worldwide depression that saw the USA alone lose trillions in net worth, and saw hundreds of thousands of Americans lose their hopes for retirement, or a house, etc. The best tthat can be said of the Occupy movement is that “income inequality” is a phrase people know, and it is sorta kinda a campaign issue in 2016.
Perhaps that was all the Occupy intended to do, so I won’t say it is a “failure”. But one thing is certain — by design or by accident, Occupy had no Act Two.
BLM is going the way of Occupy in that they think that simply exposing the problem is the same as fixing it. Unfortunately, people are aware of the race problem already. The mainstream media didn’t cover financial shenanigans because it wasn’t sexy and it was hard to understand, but they DO cover race wars. So the American public is aware of the problem (even conservatives who deny it is a problem are aware of the issue). At best, you’re either preaching to choir, or just annoying people who will resist you. At worst, you are annoying your allies.
So BLM needs an Act Two and a way to bring about change. But they are stuck in Malcolm X mode, engaging in divisive politics that marginalizes themselves, and specifically rejecting coalition movements That’s unfortunate.
I could probably write another post on what BLM should be doing, but that would take too long. The thumbnail version is this: act more locally. Police units operate and the city, county and municipal level. That’s where the rubber needs to meet the road. National politics and politicians can only do so much.
So demand “audits” or “report cards” from every police department. Have specific benchmarks that every law enforcement entity needs to meet. Some criteria might relate to hiring practices (i.e., does the racial make-up of the police officers reflect that of the population they serve), police distribution (i.e., do minority policemen police minority neighborhoods), data collection (i.e., is information gathered relating to the race of people stopped, frisked, detained, as well as the race of the cop), police training (i.e., prevailing model that is taught — self-protection model vs “protect and serve the public” model), police continuing education, views on use of cameras (not only by police but the public recording the police) and so on. Require local police departments to issue annual reports on these and other factors. Form joint legislative-citizen committees to address shortcomings that surface from these reports. Write and pass local legislation to correct flaws in the system (I, for one, think that government should not be permitted to negotiate with police unions on any issue mentioned above). And so on.
And if direct action is needed, BLM needs to take direct action at the local level against whatever entity is obstructing it. But don’t marginalize. BLM needs to understand, for example, how other groups — say, groups concerned about gun control, or groups concerned about income inequality — have issues that bear directly on the issues that concern BLM. And bring them in. Don’t piss them off and shut them out.
That’s what BLM needs to do, at a minimum.
That is, if it cares about black lives.
“Keep your eyes on the prize.”
– Folk song from 1950s and 1960s civil rights movement
LOOSE THREADS AND AFTERTHOUGHTS: I thought I would update this post to address a few items I didn’t touch. Some of them, I think, are obvious, but I seem to keep reading the same thing so….
(1) “The Seattle protest exposed the white supremacist liberalism that exists.” Nope. It really didn’t. Apparently, some people think that if you boo a rude black person who is stealing the mic, you are booing because the person is black. Which of course isn’t true. They were booing because it was rude. Flashback:
[Kanye] West had said that he was “rude” for interrupting her acceptance speech for Best Female Video. “It was just very rude, period,” West said to Leno. “I’d like to apologize to her in person.”
The people who criticized Kanye weren’t being racist, were they?
Furthermore, go back to the video. When the protesters call for 4½ minutes of silence for Michael Brown (to symbolize the 4½ hours his body lay on a Ferguson street), the rally organizers raised their hands in support, as did many in the audience. Yes, there were catcalls and even some slurs (there are always are a few in every crowd). But to say that it exposed liberal racism? Based on what?
This isn’t to say that there isn’t white progressive racism. There is. Some of it is blatant but exists in small pockets (Yes, certain counties in West Virginia, I am looking at you). Some of it comes in more subtle forms, like those who insist that they are “colorblind:” and “don’t see race”. That, of course, is its own kind of racism. Of course, those people exist within all political camps (personally, I have seen more people on the right espouse themselves as “colorblind” than those on the left, but that might just be my experience). But as I state in the main body of my essay, the forces opposed to what BLM seeks to do are on the right. And if they visit rallies of THOSE candidates, they will see the racism. Sanders was an easy target because he was close to the protesters philosophically. Getting him to condemn racism in BLM language wasn’t like leading a horse to water and forcing him to drink — it was like approaching a horse already drinking from the water.
(2) “Who cares what the Seattle protesters did? They were successful, weren’t they?” Nope. I’ve already discussed how Sanders had already spoken about the black lives matter before the Seattle protest. But more than that, some people claim that by focusing on economic injustice, Sanders was avoiding the issue of racial injustice. That’s simply not true. Sanders understands, as apparently many BLM supporters do not, that you cannot achieve sweeping revolutionary racial changes unless you address economic injustice. Race and class are inextricably tied together.
Take two real world examples: A rich and famous former athlete kills two people in Brentwood, California. He gets due process of a trial (several trials actually), and retains the best lawyers. He’s found not guilty. Compare that to a a guy in Staten Island, New York, who allegedly tried to sell a cigarette on a sidewalk. He was summarily executed by police who compress his neck and chest until he could no longer breathe. No trial, no lawyers, no due process guaranteed by the Constitution. Since both guys were black, you can’t point your fingers at racism. It has to do with class.
Now, I certainly understand why protesters in the BLM movement would not like it if a presidential candidate (or someone like me) brings up the topic of economic injustice within a dialogue about racial injustice. It certainly appears like an attempt to skirt the race issue (or even sweep it under the table). Perhaps that might be considered a “gaffe” by failing to talk about race, instead of economy, to people upset exclusively about race (and who don’t see the economic connection). But I maintain… unless you are looking for bandaid approaches rather than long term permanent solutions, you need to understand how class and economics play a part in racial injustice. There are many good books on this issue.
(3) Black people don’t know what all white people think. Does this even need to be said? Any sentence that begins with “White people think that….” is just as prejudiced as a sentence that begins with “Black people think that….”. I know what a broad brush is, and it is a broad brush no matter who wields it. It doesn’t help a race movement to make broad-brush statements about someone else’s race.
This is entirely different from pointing out a structure or a political system which benefits one race over another. That is true and supportable.
So one can say that white people benefit from the current legal and political systems to the detriment of people of color. But don’t say that all white people want to preserve a system which endows them with white privilege. That’s simply untrue, and people of color don’t get to ascribe my motives any more than I can accurately ascribe theirs.
In a related vein, don’t claim that the white people at the Sanders event were “inconvenienced”. That’s spin. Some of them waited a long time to see/hear Sanders. Some of them wanted to know what he would say. But in the long run, who cares? Or “hurt feelings”. Again, that’s probably not true. But who cares? The criticisms against BLM are because BLM is shooting itself in the foot.
(4) Stop with the ridiculous false comparisons. Yes, being shot by police is worse than interrupting a political event. So is dying from breast cancer. Should the Koman people interrupt a BLM event because dying from breast cancer is worse than a rally?
(5) What to do, what to do. Hopefully, the Sanders incident was just a setback for BLM. Hopefully, they will rethink their broader strategy. But one should not disparage their efforts completely. Direct action against those who deny there is a problem (or who take the position that people of color are the problem) will always help. I don’t mean to turn anyone off to BLM. They should be a part of YOUR coalition,even if they reject coalition politics. In that vein, let me point to other organizations worthy of your time and consideration. Some have been around for a long time. For example, the Stolen Lives Project and the October 22 Coalition (to Stop Police Brutality, Repression and the Criminalization of a Generation).
The latter has many local chapters (here’s the one for Greensboro NC) and his calling for a National Day of Protest on October 24. The event has a wide range of endorsers — from Eve Ensler to Cindy Sheehan (I mention them, because they are white), from the mother of Tamir Rice to the Cornel West. A coalition.
Imma just tell this story in Tweets
We experienced a network connectivity issue. We are working to resolve and apologize for any inconvenience.
— United (@united) 9:43 am – July 8, 2015
— Talking Points Memo (@TPM) 10:39 am – July 8, 2015
(1 of 2) We’re experiencing a technical issue that we’re working to resolve as quickly as possible.
— NYSE (@NYSE) 12:09 pm – July 8, 2015
(2 of 2) We’re doing our utmost to produce a swift resolution & will be providing further updates as soon as we can. — NYSE (@NYSE) 12:10 pm – July 8, 2015
Trading on NYSE and NYSE MKT has resumed
— NYSE (@NYSE) 3:13 pm – July 8, 2015
So United went down (It went up after 2 hours), and NYSE went down (it went up after 3 hours). Also down (and now back up) today, the Wall Street Journal computers.
Many think this is a Chinese government hacking attack. First of all, China is in some serious shit:
While most recent financial news has focused on the crisis currently facing Greece, another disaster is stirring further east that makes Alexis Tsipras’s problems look like chicken feed.
Since the middle of June, the prices of Chinese company shares have fallen by 30 per cent. That amounts to around $3.2 trillion dollars that has been wiped off the stock market in only a few weeks.
It’s hard to make sense of such a huge number, but this figure is higher than the UK’s GDP in 2013, a comparatively modest $2.7 trillion.
The sudden drop in prices came after months of solid growth. Since November last year, Chinese stocks had more than doubled, largely due to small retail investors – ‘mum and dad’ investors playing the stock market – using borrowed money.
There are concerns that the Chinese government’s response could be partially responsible for the sell-off.
Which is why the Asian markets did so bad yesterday. Hong Kong’s Hang Seng index plunged as much as 8% before closing down 5.8% and China’s Shanghai Composite sank 5.9%. Japan’s Nikkei 225 index lost 3.1% to close at 19,737.64. That’s what was facing Wall Street as it opened today. (As I write this, the now-reopened Dow is down 238 points today).
But the theory that China might be behind these computer outages today could be supported by data from the Norse Intelligence Network, a California-based online security company. The company offers up a real-time cyber attack map, which seemed to show at midday on Wednesday that China was the number-one attacker and the US was the number-one target:
I don’t know if this is usual or not. But it looks like St. Louis is getting bombarded.
To be continued…..?
Rand Paul recently spoke in Cedar Rapids, Iowa, and to draw a line from taxes to slavery:
“Now you can have some government, we all need government,” the Kentucky senator said while discussing Thomas Paine and the role of government at the local public library. “Thomas Paine said that government is a necessary evil. What did he mean by that?”Paul said he believes that “you have to give up some of your liberty to have government,” saying he was “for some government.”
“I’m for paying some taxes,” continued Paul. “But if we tax you at 100% then you’ve got zero percent liberty. If we tax you at 50% you are half slave, half free. I frankly would like to see you a little freer and a little more money remaining in your communities so you can create jobs. It’s a debate we need to have.”
Because of bankruptcies and mega-mergers over the past decade, the United States has gone from nine major airlines to four — Delta, Southwest, American and United — and those four fly about 80 percent of all domestic passengers. So 14 years after the 9/11 attacks nearly drowned the airline industry in red ink, the limited competition has helped airlines post some of their biggest profits in history. American, for example, which just merged with US Airlines, just logged $1.2 billion in profit, its most profitable three months ever.
I don’t begrudge these guys making a profit, but with only four airlines, it becomes very easy to collude. They have a joint interest in keeping capacity tight, which they can now do, and keep prices up. And it is fairly easy to “signal” each other of their intentions.
So this is a welcome development:
The U.S. government is investigating possible collusion between major airlines to limit available seats, which keeps airfares high, according to a document obtained by The Associated Press.
The civil antitrust investigation by the Justice Department appears to focus on whether airlines illegally signaled to each other how quickly they would add new flights, routes and extra seats.
A letter received Tuesday by major U.S. carriers demands copies of all communications the airlines had with each other, Wall Street analysts and major shareholders about their plans for passenger-carrying capacity.
Justice Department spokeswoman Emily Pierce confirmed Wednesday that the department was investigating potential “unlawful coordination” among some airlines. She declined to comment further, including about which airlines are being investigated.
Thanks to a series of mergers starting in 2008, American Airlines, Delta Air Lines, Southwest Airlines and United now control more than 80 percent of the seats in the domestic travel market. During that period, they have eliminated unprofitable flights, filled a higher percentage of seats on planes and made a very public effort to slow growth in order to command higher airfares.
It worked. The average domestic airfare rose 13 percent from 2009 to 2014, when adjusted for inflation, according to the Bureau of Transportation Statistics. And that doesn’t include the billions of dollars airlines collect from new fees: $25 each way to check a bag and $200 to change a domestic reservation. During the past 12 months, theairlines took in $3.6 billion in bag fees and another $3 billion in reservation change fees.
All of that has led to record profits for the industry. In the past two years, U.S. airlines earned a combined $19.7 billion.
This O’Reilly segment on the homeless in Penn Station is… one of the most dehumanizing things I’ve seen on Fox. http://t.co/OHV428A8G1
— Carlos Maza (@gaywonk) June 30, 2015
Yeah, I tend to agree. This segment plays into some of the worst stereotypes about the homeless.
This “Watter’s World” guy is Jesse Watters, and his shtick is to interview people on the street to show how dumb they are. It’s always mean-spirited, and a little old (Jay Leno had been doing it for years). But to Fox, I guess that’s journalism.
Apparently, there is an increase in homeless people in Penn Station, but the only evidence of this is apparently some Fox News staffers and some observations of a few New Yorkers. And even if there are more homeless in Penn Station, it probably has nothing to due with lax police enforcement under Mayor Bill de Blasio’s policing policies, but rather, an increase in the homeless nationwide, as well as chops in FEDERAL funding for things like the Department of Housing and Urban Development (thank you, GOP).
The Republicans will say it is because of the GOP presidential race contenders, not Obama’s economic policies:
U.S. job growth rebounded last month and the unemployment rate dropped to a near seven-year low of 5.4 percent, signs of a pick-up in economic momentum that could keep the Federal Reserve on track to hike interest rates this year.
Nonfarm payrolls increased 223,000 as gains in services sector jobs offset weakness in mining, the Labor Department said on Friday. The one-tenth of a percentage point decline in the unemployment rate to its lowest level since May 2008 came even as more people piled into the labor market.
Unemployment among African-Americans dropped from 10.1% to 8.7%, the first time it has been under 10% since mid-2008.
Monday night, Bill O’Reilly wanted you to know about America’s poor, put-upon rich people.
“[Y]ou can see that taxes are through the roof on affluent Americans and business profits.But for the rest of Americans, things are not so bad.
The bottom 60% of wage-earners pay just 2.7% of federal income taxes.
The bottom 40% actually get money from the feds; they receive payments called earned-income tax credits.
Those bastards. Here rich people are working their besuited asses off every day earning interest and collecting dividends and attending board meetings and having very important lunch meetings over glasses of very important wine while poor people, what with their refrigerator-having and rent-paying and whatnot, are living the easy life on the earned-income tax credit. It’s enough to make rich person Bill O’Reilly sick, it is.
I believe that I’ve cut back investing because of the heavy capital gains hit.
And the bottom 40% have cut back investing because of having no money to invest. I’ve noticed, in fact, that very few of the people serving the very important wine or cleaning the very important conference rooms have been investing very much at all in the American free-enterprise system of late, and no amount of cutting their paychecks or dismantling their unions seems to convince them to invest more. Like Bill O’Reilly, they are probably disheartened by the capital gains tax.
But how much more can the government take from the affluent without crashing the entire free-market economy?
That is a fine question. We could probably look at the historical data to find an answer to that, perhaps looking through the record books to find periods of strong economic growth and look at what the tax rates on the wealthy and on corporations were during those very prosperous times.
And let’s remember that well into the 1950s, the top marginal tax rate was above 90%. Today it’s 35%. But both real GDP and real per capita GDP were growing more than twice as fast in the 1950s as in the 2000s. At the same time, the average tax rate paid by the top tenth of a percent fell from about 50% to 25% in the last 60 years, while their share of income increased from 4.2% in 1945 to 12.3% before the recession. The truth is this — lowering the marginal tax rates on the wealthy only adds to income inequality — it doesn’t create economic growth.
But Bill doesn’t care about facts and numbers. So we should probably just declare that wealthy people pay one million times too much in taxes, and that under the Obama administration their tax burden has increased roughly eleventy billion percent. It may or may not be true, but while being wealthy in America may saddle you with a crippling tax burden and the unenviable duty of funding entire presidential races in order to keep the nation’s priorities in proper order, it at least allows you to never come into contact with any of the unpleasant little snots who might look those numbers up.
The House is gearing up to vote Thursday on repealing the estate tax, an issue that has energized the base in both parties — and that Democrats and Republicans see as a political winner.
Republicans are making the vote the centerpiece of their agenda during a week when millions of taxpayers face the annual IRS filing deadline and anti-tax groups regularly hold protests.
For the GOP, repealing the estate tax — or the “death tax,” as they’ve long called it — is more than just a proposal favored by their supporters in the business community.
Republican leaders insist it’s patently unfair that people pay taxes as they accumulate wealth through the years, only for their heirs to pay additional taxes on that wealth after they die.
House Majority Whip Steve Scalise (R-La.) said Tuesday that it is “morally wrong” for a family’s toughest decision after a death to be figuring out the next steps for their business. “That’s not supposed to be something people have to deal with when they’re grieving for the loss of a loved one,” he told reporters.
Republicans believe that voters agree with them on that point, even as polls have long suggested that most people believe the wealthiest Americans don’t pay enough in taxes.
For their part, Democrats are just as excited for Thursday’s vote. After all, President Obama won his second term in 2012 after explicitly campaigning for higher taxes on the wealthy.
And Democrats say they’re more than happy to have a debate over a repeal proposal that would add $270 billion to the federal debt over a decade, according to the Congressional Budget Office, while affecting only a small fraction of estates in the U.S.
“I guess when it comes to helping the wealthiest people in the country, it’s never enough,” Sen. Debbie Stabenow (D-Mich.) said Tuesday with a laugh.
Yup. Republicans want to repeal the estate tax and add $270 billion to the debt. But the important part is buried further down the article:
Under current law, the Joint Committee on Taxation estimates that 5,400 estates will have to deal with the tax over the next several years, out of the well over 2 million deaths that occur annually.
That’s because individuals with estates valued at less than $5.43 million this year, and married couples with estates worth less than $10.86 million, are exempt. The 2013 “fiscal cliff” deal set the current parameters, which also include a 40 percent rate and linking the exemption parameters to inflation.
The estate tax affects only 5,400 taxpayers per year. Out of a couple million.
The Republicans will try to sell this as something that saves you some tax money, but unless you have an estate valued at 5.4 million, it won’t affect you at all.
“A budget is a moral document; it talks about where your values are,” said Representative Rob Woodall, Republican of Georgia and a member of the Budget Committee. “
Okay, Rep. Woodall. Then let’s see where the Republicans values are, by looking at its proposed budget:
Without relying on tax increases, budget writers were forced into contortions to bring the budget into balance while placating defense hawks clamoring for increased military spending. They added nearly $40 billion in “emergency” war funding to the defense budget for next year, raising military spending without technically breaking strict caps imposed by the 2011 Budget Control Act.
The plan contains more than $1 trillion in savings from unspecified cuts to programs like food stamps and welfare. To make matters more complicated, the budget demands the full repeal of the Affordable Care Act, including the tax increases that finance the health care law. But the plan assumes the same level of federal revenue over the next 10 years that the Congressional Budget Office foresees with those tax increases in place — essentially counting $1 trillion of taxes that the same budget swears to forgo.
And still, it achieves balance only by counting $147 billion in “dynamic” economic growth spurred by the policies of the budget itself. In 2024, the budget would produce a $13 billion surplus, thanks in part to $53 billion in a projected “macroeconomic impact” generated by Republican policies. That surplus would grow to $33 billion in 2025, and so would the macroeconomic impact, to $83 billion.
“I don’t know anyone who believes we’re going to balance the budget in 10 years,” said Representative Ken Buck, Republican of Colorado. “It’s all hooey.”
So let me get this straight. It adds to war spending, cuts food stamps and welfare for the needy. Guns, not butter. AND…. it assumes an increase in federal tax income without actually raising taxes, because….. magic, I guess.
Libertarianism (Latin: liber, “free”) is a political philosophy that upholds liberty as its principal objective. Libertarians seek to maximize autonomy and freedom of choice, emphasizing political freedom, voluntary association and the primacy of individual judgement.
For months, nay, years, I have been wanting to write about the shortfalls of libertarianism. It’s been difficult because who in America, other than outright fascists, would argue with liberty and freedom of choice?
But finally FINALLY we have an illustrative example come to the fore. And I’ve been blogging about it recently (a lot) and now I can make a simple tie-in without expending too many words.
Let’s go to the money quote from libertarian extraordinaire and 2012 Presidential candidate, Ron Paul:
On Monday, Rand Paul, the son, hedged a little:
Paul was asked to weigh in on vaccines, after New Jersey Gov. Chris Christie (R), a likely rival for the GOP nomination in 2016, said Monday morning that there should be “some measure of choice” for parents leery of vaccinating their children. “I’m not anti-vaccine at all, but most of them ought to be voluntary,” Paul, an ophthalmologist, said Monday on the “Laura Ingraham Show,” in a segment circulated by the Democratic National Committee along with criticism of Paul’s views.
UPDATE: Later that day, Rand Paul was asked a follow-up, and said this with respect to vaccines:
I think they’re a good thing but I think the parent should have some input. The state doesn’t own your children; parents own the children and it is an issue of freedom.
Huh. So parents own their children (that’s libertarian?!?) and not only have the “freedom” to expose their property to deadly illnesses, they have the freedom to expose your kids to deadly illnesses.
The thing is — and I certainly can see why the anti-vaxxers hate this — IT TAKES A VILLAGE to get rid of some of these diseases. All or most children had to be vaccinated before measles made its disappearance and the beginning of this century. The same can be said for many more diseases.
The same holds true for other areas of human endeavor — the economy for example. Libertarians think the self-interest and the invisible hand of Adam Smith will take care of everything. Nope:
Neighborhoods, communities, villages, cities, societies — depending on the situation — can succeed and improve the quality of life where “individual freedom” cannot. Does that mean socialism and communism is the way to go? Of course not. But libertarianism — the polar opposite of socialism and communism — is just as ineffectual for most things.
There is a balance between individual rights and the common good. This should be obvious, but hardcore libertarians seem to believe that the mere assertion of a right is sufficient to end a public argument. It is not, when the exercise of that right has unacceptable public consequences, or when the sum of likely choices is dangerous to a community.
Turning to the issue at hand, vaccines provide protection through two means. The first is direct protection. I get a shot for something and the probability of me getting that particular disease declines dramatically as my immune system now knows how to fight that type of invader. The second is indirect protection via herd immunity. If I get a shot, I go from being a possible vector and transmitter of a disease to another unvaccinated person to a very low probability of passing the disease along. Herd immunity only works when the vast majority of the population already is immune to a disease as the probabilities of a current carrier bumping into a receptive individual is fairly low if the general population is overwhelmingly vaccinated.
So the point of vaccinations is to protect not merely ourselves, but the community. To not vaccinate is to threaten the array of trillions of antibodies and T cells that decades of vaccination have built up in our bodies/ We drape a web of germ-fighting agents not just in ourselves, but around our most vulnerable neighbors. To not vaccinate is to affirm an overweening individuality. It’s a form of selfishness.
The best results come when everybody does what is best for themselves and for the group. Adam Smith was wrong. So are Ron and Rand Paul. And the anti-vaxxers.
So here it is in one graphic:
Basically, the bottom 20 percent would see their after-tax incomes grow by around 1.2 percent, while people in the top 20 percent would receive -0.7 percent less.
But by dollar amounts, the differences between the bottom and the top are much bigger. The bottom 20 percent would receive $175 more per year on average, while the top 20 percent would lose out on $1,800 per year. Things get steeper among higher-income Americans — the top 1 percent would get $29,000 less in after-tax income than they do now, and the top 0.1 percent would get $168,000 less. In the very middle 20 percent, meanwhile, there would be virtually no change — an increase of $7 on average.
Now, get prepared from some complaining about “unfairness”.
And then ask yourself one question: Who would you rather be — a person who makes $15,000 a year suddenly making $15,175 per year, or a person make $10,000,000 a year making only $9,832,000? Me? I would rather be the second guy.
But that’s not the REAL question, is it. The real question is — given that capitalism necessarily has winners and losers (after all, if we’re ALL millionaires, who is going to do the crap jobs), then who within our capitalist system has benefited most from it and should therefore pick up the tab for the government services that protect and provide for us all?
Yup, the second guy.
The one who is probably going to whine about socialism.
P.S.: Maybe this goes without saying, but this proposal will never pass. The tax proposal is mostly important for two reasons at this point. One is as a piece of the White House budget, which will be released next week (and the center will revise its figures once the budget is out). This tax reform proposal, together with all of the administration’s other spending proposals, will give a sense of the administration’s proposed priorities for the federal government.
But the tax reform proposal, like the president’s budget (which itself will never pass Congress, either), is also a political statement. The tax reform proposal is a way for Obama to emphasize what he believes is wrong in the US economy — that is, that work just isn’t paying the way that it used to. Wages are stagnant, but workers are seeing so many incomes at the top pull away from the bottom 99 percent, thanks in part to income from capital gains (that is, income that doesn’t come from a paycheck).
They’re called “Democrat pipe dreams” by some. I’m referring to Obama’s plans which he will raise in his 2015 State of the Union speech tonight.
Top among those plans is his $60 billion pitch for free two-year community college tuition and $175 billion in new tax benefits for the middle class. How to pay for that? In a very West Wing-ish way: he would raise $320 billion over the next 10 years through a capital gains tax hike and new bank fees.
Of course, legislation of this sort is DOA when it comes to the Republican-controlled Congress. Republicans will want to cut taxes (for the rich) because the economy is good. Just like the wanted to cut taxes (for the rich) when the economy was bad.
Since Obama surely knows his plans will go nowhere, many say this is just a ploy for 2016 — to get Republicans on the record as being against tax hikes for the rich and education for the middle class. In other words, they don’t care about income inequality.
A cynical ploy by Obama? Maybe, although when Republicans in Congress vote over 50 times to repeal Obamacare (which also has no chance of becoming a law in the Obama administration), nobody seems to mind. And they do this even though Obamacare is clearly working.
Still, Obama should take a victory lap with this State of the Union. The crisis that overwhelmed the economy in 2008 has largely passed. Unemployment is down to 5.6 percent. This has been the longest period of sustained private-sector job growth on record. The economy is growing at a rate we haven’t seen since 2003. Obama’s approval ratings are up, people are more satisfied with the economy than they have been for the past decade, and just seven percent say jobs are the most important problem facing the country, the lowest number since October 2008.
Even a Republican pollster declared that America was busting out of its Recession Era slump.
We are, at this moment, far and away the strongest major economy in the world. By far.
In much of the country, you can buy gas for less than $2 per gallon, which is, honestly, ridiculous.
Unfortunately, while the state of the union is strong, the political climate sucks. We’re just too polarized to get things done.
P.S. Not really relevant to the SOTU, I suppose, but we’re moving westward and slightly southward.
Continuing a trend of solid job gains, the U.S. economy added 252,000 jobs in December, and the unemployment rate fell to 5.6%.
The job gains were stronger than analysts had expected, and the unemployment rate is now 0.2% lower than in the previous month. Overall, 2014 marked the strongest year of job gains since 1999, adding 2.95 million new jobs total and an average monthly gain of 246,000.
“Although job gains did not match the tremendous November increased, they were nonetheless strong and indicative of momentum in the labor market that is expected to continue in 2015,” said Sophia Koropeckyj, senior economist and managing director for Moody’s Analytics. The firm expects monthly job gains to pick up and exceed 300,000 by the end of the year.
But December’s report also pointed to the underlying weaknesses of the economic recovery: stagnant wages and low participation in the labor force. Average wages fell 0.2% in December, after seeing a 0.4% rise the previous month, driving down 2014’s overall wage gains to just 1.7%.
The story on wages is less encouraging. The widely touted November jump in wages was almost completely reversed, with the December data showing a 5-cent drop from a downwardly revised November figure. The average over the last three months grew at a 1.1 percent annual rate compared with the average of the prior three months, down from a 1.7 percent growth rate over the last year. This may be due in part to a shift to lower paying jobs in restaurants, retail, and the lower-paying portions of the health care industry. However, it is also possible that we are just seeing anomalous data.
The plummeting price of oil is still the biggest energy story in the world right now. It’s bringing back cheap gasoline to the United States while wreaking havoc on oil-producing countries like Russia and Venezuela.
Why does the price of oil keep falling? The short version of the story goes like this: For much of the past decade, oil prices were high — bouncing around $100 per barrel since 2010 — because of soaring oil consumption in countries like China and conflicts in key oil nations like Iraq. Oil production couldn’t keep up with demand, so prices spiked.
But beneath the surface, many of those dynamics were rapidly shifting. High prices spurred companies in the US and Canada to start drilling for new, hard-to-extract crude in North Dakota’s shale formations and Alberta’s oil sands. At the same time, demand for oil in places like Europe, Asia, and the US began tapering off, thanks to weakening economies and new efficiency measures. On top of that, countries like Iraq began producing more oil.
By late 2014, world oil supply was on track to rise much higher than actual demand.
As prices slid, many observers waited to see whether OPEC, the world’s largest oil cartel, would cut back on its production to prop prices up. (Many OPEC states, like Saudi Arabia and Iran, need high prices to balance their budgets.) But at its big meeting in November, OPEC did nothing. Saudi Arabia didn’t want to give up market share, and it hoped that lower prices would help throttle the US oil boom. That was a surprise. So oil went into free-fall.
The oil price crash is now upending the global economy, with ramifications for every country in the world. Low prices are excellent news for oil consumers in places like Japan or the US, where gasoline is the cheapest it’s been in years. But it’s a different story for nations reliant on oil sales. Russia’s economy is facing a potential meltdown. Venezuela is facing serious unrest. Even better-prepared countries like Saudi Arabia could face heavy pressure if oil prices stay low.
And today, another ramification. The price of oil, traditionally around $100 per barrel before the freefall, dipped below $50 per barrel today, and there is no end in sight. Some experts say it can go as low as $30 per barrel in the weeks to come. As a result, the Dow dropped more than 300 points just after midday.
“We’re starting a new year with a bit of trepidation; it’s difficult for equities to get any traction when one of the asset classes is in a free fall,” said Art Hogan, chief market strategist at Wunderlich Securities, referring to crude’s ongoing decline. Exxon Mobil, Chevron and other oil producers fell with the price of crude.
“Clearly we haven’t found a bottom in the commodity,” said Hogan of oil’s ongoing decline.
On the New York Mercantile Exchange, U.S. light crude, also known as West Texas Intermediate, fell 4.7 percent, with futures for February delivery falling as low as $49.95, and lately down $2.49 at $50.20 a barrel.
Just after midday, the Dow Jones Industrial Average shed 312.97 points, or 1.8 percent, to 17,520.02, with Chevron leading blue-chip declines that included 28 of its 30 components. The S&P 500 declined 36.16 points, or 1.8 percent, to 2,022.04. The Nasdaq dropped 62.02 points, or 1.3 percent, to 4,664.81.
I've withheld writing about the fatal shooting of Michael Brown. For those distracted by other news stories, Michael Brown was to start college this week. Instead, his parents are planning his funeral. On August 9th, Mr Brown was shot several times and killed by a policeman in Ferguson, a suburb near St Louis, Missouri. The police say the black 18-year-old attacked the officer and tried to grab his gun. A friend who was with Mr Brown says that on the contrary, he was unarmed and had his hands up in the air.
I've withheld writing about it because for the same reason I withheld writing (for a while) about Treyvon Martin: we just don't know enough facts. Right now, we still don't know much. The FBI is investigating the Ferguson shooting, and the Justice Department is looking into the possibility that Mr Brown’s civil rights were violated. Those are good things.
Another eyewitness stepped forward yesterday — Tiffany Mitchell (age 27) — and I found her retelling of the account to be credible and consistent.
According to her, Brown was shot in cold blood, while his hands were raised.
Still, we can't be sure.
But the eyewitness accounts aren't the only thing we can look at. We can get a sense of the truth by looking at the context. And if the past few days are any indication, it seems that the Ferguson MO police department has a tendency to Rambo up unnecessarily. This picture fromj the Times tells it all:
Yesterday, Washington Post reporter Wesley Lowery was reportedly arrested along with Ryan Reilly of the Huffington Post for failing to exit a McDonalds. According to Lowery's Twitter account, the two were "assaulted and arrested" because "officers decided we weren't leaving McDonalds quickly enough, shouldn't have been taping them." No charges were filed.
There are also accounts and video of the Ferguson police dispensing tear gas and shooting rubber bullets at a peaceful (albeit angry) protest. Pointing high-power military rifles at peaceful protesters. Deliberate targeting of journalists with tear gas.
What's going on?
Well, part of the problem is bad training. This is a small town police department, not skilled in dealing with situations like this.
Secondly, the police department has toys, and they are itching to use them. Since 1996, "the Department of Defense has transferred $4.3 billion in military equipment to local and state police through the 1033 program." Then the equipment was intended to help fight the war on drugs. With that much firepower in the hands of local police, it was only a matter of time before they began to be used in such obscene excess against Americans.
Ex police chief Joseph McNamara addressed this dynamic in this op-ed:
Simply put, the police culture in our country has changed. An emphasis on "officer safety" and paramilitary training pervades today's policing, in contrast to the older culture, which held that cops didn't shoot until they were about to be shot or stabbed. Police in large cities formerly carried revolvers holding six .38-caliber rounds. Nowadays, police carry semi-automatic pistols with 16 high-caliber rounds, shotguns and military assault rifles, weapons once relegated to SWAT teams facing extraordinary circumstances. Concern about such firepower in densely populated areas hitting innocent citizens has given way to an attitude that the police are fighting a war against drugs and crime and must be heavily armed.
Yes, police work is dangerous, and the police see a lot of violence. On the other hand, 51 officers were slain in the line of duty last year, out of some 700,000 to 800,000 American cops. That is far fewer than the police fatalities occurring when I patrolled New York's highest crime precincts, when the total number of cops in the country was half that of today. Each of these police deaths and numerous other police injuries is a tragedy and we owe support to those who protect us. On the other hand, this isn't Iraq. The need to give our officers what they require to protect themselves and us has to be balanced against the fact that the fundamental duty of the police is to protect human life and that law officers are only justified in taking a life as a last resort.
"If you build it, they will use it".
If the Ferguson Police department's defense is that its officers showed restraint where Michael Brown is concerned, they have just blown that argument to bits. These guys have no restraint in them, as last night showed.
As the New Yorker correspondent wrote this morning:
What transpired in the streets appeared to be a kind of municipal version of shock and awe; the first wave of flash grenades and tear gas had played as a prelude to the appearance of an unusually large armored vehicle, carrying a military-style rifle mounted on a tripod. The message of all of this was something beyond the mere maintenance of law and order: it’s difficult to imagine how armored officers with what looked like a mobile military sniper’s nest could quell the anxieties of a community outraged by allegations regarding the excessive use of force. It revealed itself as a raw matter of public intimidation.
The American middle class, long the most affluent in the world, has lost that distinction.
While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.
After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.
The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.
Although economic growth in the United States continues to be as strong as in many other countries, or stronger, a small percentage of American households is fully benefiting from it. Median income in Canada pulled into a tie with median United States income in 2010 and has most likely surpassed it since then. Median incomes in Western European countries still trail those in the United States, but the gap in several — including Britain, the Netherlands and Sweden — is much smaller than it was a decade ago.
What's to account for this? It doesn't take a genius. It's the policies the began in the early 2000's, and are still here with us today: a tax policy that favors the wealthiest while placing burdens on the middle and lower classes. There is no trickle-down. These other countries did not apply the rightwing tax policy (plus, take note, they all have socialized medicine). And they are surpassing the United States.
But try to tell that to your typical Fox News viewer, lobotomized by what he sees on Hannity. You'll know what he'll say? Benghazi!!!!
Yes, human civilization is facing one of the greatest threats it has ever faced and no, we aren’t going to do anything about it. Or so says ExxonMobil in their latest report issued coincidentally on the same day as the latest IPCC report on the dangers of climate change. The report marks a rhetorical turning point of sorts where the fossil fuel industry accepts that climate change does pose significant risks.
Apparently ExxonMobil did not get the memo that climate change is a hoax as the world’s largest energy corporation acknowledged that the carbon being pumped into the atmosphere posed serious risks.
“We know enough based on the research and science that the risk (of climate change) is real and appropriate steps should be taken to address that risk,” Ken Cohen, Exxon’s government affairs chief, said in an interview. “But given the essential role that energy plays in everyone’s lives, those steps need to be taken in context with other realities we face, including lifting much of the world’s population out of poverty.”
97% of scientists might have a point.
But before anyone starts celebrating a new enlightened fossil fuel industry, recognize this public acknowledgement of the danger does not translate into a commitment to reduce carbon emissions. In fact, ExxonMobil sees the climate change issue as part of a larger calculus that still favors their current business model. One that reasonable governments will be “highly unlikely” to mess with.
Exxon says that renewable energy sources are not now cheap enough nor technologically advanced enough to meet growing demand for energy, let alone also replace oil and gas. Governments therefore face a choice between restricting access to energy or raising the cost of energy significantly. In Exxon’s view, governments will chose to raise the cost of fossil fuels to encourage alternatives somewhat, but stop well short of enacting policies that will sharply curtail consumption, especially in developing countries, because populations would resist and social upheaval would result.
Now that is some impressive rhetorical jujitsu. Unlike Koch Industries which just lobs crazy people at Congress, ExxonMobil takes the warnings that climate change will cause social unrest and political instability and turns them on their head. Regulating carbon consumption, not climate change, becomes the real threat to social stability. GO figure.
Venture capitalist Tom Perkins compared liberals' push to reduce inequality in the United States to Nazi Germany's war on Jews.
In a letter to the editor published in The Wall Street Journal Perkins, a founding member of Kleiner Perkins Caufield & Byers, asks whether a "progressive Kristallnacht" is coming. Perkins's letter is in response to an editorial on speech codes at American colleges.
"Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its "one percent," namely its Jews, to the progressive war on the American one percent, namely the "rich," Perkins wrote in the letter to the editor.
He continued that he perceives "a rising tide of hatred of the successful one percent. There is outraged public reaction to the Google buses carrying technology workers from the city to the peninsula high-tech companies which employ them."
Perkins cites outrage over real-estate prices as an example of overblown liberal outrage.
"This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendent "progressive" radicalism unthinkable now?" Perkins concluded in the letter.
Perkins is listed as a partner emeritus on the Kleiner Perkins Caulfield & Byers website.
Here's the full letter to the editor:
Regarding your editorial "Censors on Campus" (Jan. 18): Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its "one percent," namely its Jews, to the progressive war on the American one percent, namely the "rich."
From the Occupy movement to the demonization of the rich embedded in virtually every word of our local newspaper, the San Francisco Chronicle, I perceive a rising tide of hatred of the successful one percent. There is outraged public reaction to the Google buses carrying technology workers from the city to the peninsula high-tech companies which employ them. We have outrage over the rising real-estate prices which these "techno geeks" can pay. We have, for example, libelous and cruel attacks in the Chronicle on our number-one celebrity, the author Danielle Steel, alleging that she is a "snob" despite the millions she has spent on our city's homeless and mentally ill over the past decades.
This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendent "progressive" radicalism unthinkable now?
Mr. Perkins is a founder of Kleiner Perkins Caufield & Byers.
Yes, proposals to tax the richest one percent at a rate closer to what they were paying under Ronald Reagan or to charge giant tech companies a small fee for using city bus stops for their private shuttles…. that's JUST like the Nazis. Except they're not. Really, not even close.
The biggest historical difference of course, is that the Jews in pre-war Germany — even the most wealthy ones — did not have any political power whatsoever which would ensure that their riches were safe, or grew exponentially. Can that be said of the 1 percenters? I think not.
Nice try at victimhood though. I'm sure we won't see the last of it.
Just 1 percent of the world's population controls nearly half of the planet's wealth, according to anew study published by Oxfam ahead of the World Economic Forum's annual meeting.
The study says this tiny slice of humanity controls $110 trillion, or 65 times the total wealth of the poorest 3.5 billion people.
Other key findings in the report:
— The world's 85 richest people own as much as the poorest 50 percent of humanity.
— 70 percent of the world's people live in a country where income inequality has increased in the past three decades.
— In the U.S., where the gap between rich and poor has grown at a faster rate than any other developed country, the top 1 percent captured 95 percent of post-recession growth (since 2009), while 90 percent of Americans became poorer.
President Barack Obama is risking “impeachable” offenses with the way he is handling the debt limit debate, former Alaska Gov. Sarah Palin said in a post on her Facebook page Monday.
“Defaulting on our national debt is an impeachable offense, and any attempt by President Obama to unilaterally raise the debt limit without Congress is also an impeachable offense,” Palin wrote.
That has to be the most densely packed stupid that I have seen in a long time. Where to begin?
First of all, Obama has no control for defaulting on the national debt. If Congress does not raise the debt ceiling, we default, but Obama hasn't created an impeachable offense.
Secondly, I don't know how he could raise the debt limit without Congress, but if he could, how can that both be an impeachable offense while avoiding one?
It's scary that some people actually think she makes sense.
The Dow is down 150 points already.
The Republicans are going to fuck with the full faith and credit of the U.S. economy.
The US Chamber of Commerce is one of the most conservative, pro-business lobby groups out there. And even they can't deal with what the House GOP is proposing: "Seriously, dudes. Stop screwing around with the full faith and credit of the United States."
which is totally true. The headlines this week, buried in the back of your favorite newsite, said:
Income Disparity Between Richest 1% And Rest Of US Biggest Since ’20s
WASHINGTON (AP) — The gulf between the richest 1 percent and the rest of America is the widest it’s been since the Roaring ’20s.
The very wealthiest Americans earned more than 19 percent of the country’s household income last year — their biggest share since 1928, the year before the stock market crash. And the top 10 percent captured a record 48.2 percent of total earnings last year.
U.S. income inequality has been growing for almost three decades. And it grew again last year, according to an analysis of Internal Revenue Service figures dating to 1913 by economists at the University of California, Berkeley, the Paris School of Economics and Oxford University.
One of them, Berkeley’s Emmanuel Saez, said the incomes of the richest Americans surged last year in part because they cashed in stock holdings to avoid higher capital gains taxes that took effect in January.
In 2012, the incomes of the top 1 percent rose nearly 20 percent compared with a 1 percent increase for the remaining 99 percent.
And although a Democrat is president and GOP popularity is at its lowest, it makes no difference, since a minority of Republicans can gum up the works so badly that nothing gets done (including Wall Street reform).
Meanwhile, while progressives care about many issues, those on the right tend to be one-issue voters who act with a passion. That explains how this could happen:
WASHINGTON — The first recall election in Colorado's history on Tuesday marked a stunning victory for the National Rifle Association and gun rights activists, with the ouster of two Democrats — Senate President John Morse (Colorado Springs) and state Sen. Angela Giron (Pueblo). The two lawmakers were the target of separate recall fights over their support for stricter gun laws earlier this year.
"The highest rank in a democracy is citizen, not senate president," Morse said in his concession speech, as his supporters solemnly watched, some shedding tears.
What originally began as local political fallout over the Democratic-controlled legislature's comprehensive gun control package quickly escalated into a national referendum on gun policy. Morse and Giron both voted in favor of the legislation,signed into law by Gov. John Hickenlooper (D) in March, which requires background checks for all firearm purchases and bans ammunition magazines over 15 rounds.
Gun rights activists initially sought to recall four Democrats they perceived as vulnerable, but only collected the required signatures to challenge Morse and Giron.
That's right. Some lawmakers backed a bill for stricter gun laws, and for that, they lost in a recall. Take note — they didn't lose in the normal course of the election cycle. They were recalled.
And this happened in Colorado… fourteen months after the shooting in Aurora which killed 12 and left 70 injured.
When New York mayoral candidate Bill de Blasio first proposed taxing the rich so every child in the city could attend all-day preschool, it was October and he had support from fewer than 10 percent of Democrats in polls.
Now he leads the pack. And some of the wealthy New Yorkers who’d pay more under his plan say it bewilders and offends them.
“It shows lack of sensitivity to the city’s biggest revenue providers and job creators,” said Kathryn Wylde, president of the Partnership for New York City, a network of 200 chief executive officers, including co-Chairman Laurence Fink of BlackRock Inc. (BLK), the world’s biggest money manager.
Days before next week’s primary election, de Blasio, 52, has seized the lead decrying economic inequality. After 20 years of Republican and independent mayoral rule during which crime rates and welfare rolls plummeted and parks, stadiums, shopping, tourism and luxury apartments and office towers rose up, de Blasio speaks of a “Tale of Two Cities,” where almost half of New York residents are poor or struggling.
De Blasio, elected in 2009 to the watchdog post of public advocate, says he’s concerned that the number of middle-income city residents is shrinking. The city's richest 1 percent took home 39 percent of all earnings in 2012, up from 12 percent in 1980, according to the Fiscal Policy Institute, a nonprofit research group in New York.
“Almost anyone with a self-perceived degree of affluence will be uncomfortable with de Blasio’s tax ideas,” said Michael Steinhardt, chairman of New York-based asset manager WisdomTree Investments Inc. (WETF) While growing inequality is troubling, Steinhardt said, “perhaps even more so is the thought that more government spending is the way out of our problems.”
Right. 21% of all families of four living in New York are living below the poverty level, while the richest 1 percent took home 39 percent of all earnings in 2012. How cruel to talk about a tax increase.
12 years ago today was the infamous August 6 PDB (or Presidential Daily Briefing) which said, in really big letters:
BIN LADEN DETERMINED TO STRIKE IN U.S.
After listening to the briefer who told him this on Bush's ranch, Bush reportedly replied, "All right. You've covered your ass, now."
We know what happened a month later.
Which led to a war against Afghanistan.
Which allowed Skippy McNumbnuts to fight a war in Iraq.
Which meant that the nation's surplus became a huge deficit.
Which contributed to the bad state we are in now economically.