Purchasing power, One-Percent style

There’s been a good deal of talk about how the Occupy movement “changed the debate in this country” to focus on income inequality.

But while members of Occupy Wall Street skirmished  with police over a patch of ground in lower Manhattan, the members of the country’s top 1 percent bypassed the political debate and have gone back to work wielding their influence in the corridors of power.

It’s been a particularly wrenching patch for the 99 percent, who are excluded from those corridors.

First, Congress this week, with President Obama’s blessing, passed something Republicans misleadingly labeled a JOBS Act, which basically gives a green light for fraud by removing important investor protections under the guise of promoting startups.

Second, Congress has been pushing financial regulators to weaken even further a mild piece of sensible financial regulation that would prevent banks from making risky gambles with their own accounts – the ones guaranteed by you and me as taxpayers. It’s the final coup de grace marginalizing the views of one-time Federal Reserve chair Paul Volcker, for whom the rule is named. Volcker has been a lonely voice among the president’s financial advisers, advocating stronger action to rein in the behavior of the too big to fail banks. Largely ignored by the president, Volcker’s views are getting stomped by Congress and financial regulators.

There is no mystery why we have suffered these setbacks: our political system has been overwhelmed by the power of money. The bankers lobby has swarmed the Capitol to drown any opposition to its views. The bankers have also come with their checkbooks in an election year, and they’re looking to buy whoever is for sale, of whatever party. According to a new report by Public Citizen, politicians who advocated for a weaker Volcker rule got an average of $388,010 in contributions from the financial sector – more than four times as much as politicians advocating to strengthen the rule, who still managed to haul in an average of $96,897 apiece.

Our politicians, insulated by a celebrity-obsessed media and swaddled in Super PAC cash, could care less about the consent of the governed. Republicans have only to wave around their magic wand that makes all problems the fault of government regulation in order to hypnotize their followers, while the Democrats only have to remind their followers how scary the Republicans are to keep them in line.

Meanwhile, the Occupy movement, which started with such promise in galvanizing public support against corporate domination of our politics, has splintered into a thousand pieces, wasting precious energy and time in confrontations with police rather than building a broad-shouldered coalition working on many different social and political fronts.

The challenge for Occupy remains the same: building a force that actually includes the members of the 99 percent who have not yet gotten active, who may be still stuck in apathy, cynicism or hopelessness or who may simply not have a perspective that includes social and political action.

The next opportunity is a series of protests planned nationwide for May 1, which has traditionally been a time of action around the immigration rights issue. This year occupiers, labor allies and a variety of community organizations are planning to join their issues. Can we forge a message strong enough and the numbers large enough to rock the corridors of power?

Congress / Martin Column / Occupy / Paul Volcker - 03/28/2012

Synthetic Tea

If you were looking for leadership of a real grass-roots movement for social change, Dick Armey might not be your first choice.

After he rose to become House Republican majority leader, he quit to cash in on his political connections with the top lobbying shop DLA Piper law firm. He’s also on the payroll of the Koch Brothers-funded Americans for Prosperity, one of the main sources of organizational backing of the Tea Party.

I’ve been critical of the Obama campaign’s hypocritical promises of a new kind of fundraising campaign that relies only on small donors, not fat cats, while he seeks donations from Wall Street.

But Obama’s nemeses in the Tea Party are no better, portraying themselves as a grassroots populist movement while relying on members of the Republican permanent government like Armey for leadership.

Armey actually had to quit his lobbying job because of his DLA  Piper clients favored Obama’s health care reform, after the president cut a deal to secure support from drug companies. The Tea Party, meanwhile, has been dead set against the Obama plan.

It’s not that somebody like Armey, with his vast knowledge gained from slithering through the corridors of power all these years, might not have something to offer an authentic grassroots movement. But wouldn’t he have to offer a renunciation of his past connections before he participate? Wouldn’t he have to acknowledge that he had been part of the problem before he could be part of the solution?

Whatever minor disagreements Armey’s former clients might have with the Tea Party agenda, their interests dovetail neatly. Demonizing government and railing against strong regulations will only mean fewer watchdogs for the drug companies and bankers DLA Piper serves, and fewer tools to hold them accountable.

 

Martin Column - 06/28/2011

Suck it in And Cope, Buddy

Charlie Munger is one of the world’s richest men, a partner to Warren Buffet in Berkshire-Hathaway, which was a major recipient of taxpayers’ generosity in the bailout.

So it’s no surprise that Munger recently told a crowd at the University of Michigan: “Thank God for the bailout.”

Having come through the financial collapse unscathed, Munger went on to offer some advice to those less fortunate than himself, who are suffering in distress without the benefit of much federal help.

Munger sees a sharp distinction between the necessity of bailing out the wealthy, like himself, and everybody else.

"Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies," he continued.

The bailouts were required to save America, according to Munger, but bailing out Americans who aren’t bankers would have been a big mistake.

"There's danger in just shoveling out money to people who say, 'My life is a little harder than it used to be,'" Munger said. "At a certain place you've got to say to the people, 'Suck it in and cope, buddy. Suck it in and cope.'"

Munger, at 86, is probably not as comfortable navigating the vernacular as he is the corridors of power, probably meant, “suck it up.”

Full disclosure: I worked for a newspaper of which Munger, who also founded Los Angeles-based mega law firm Munger Tolles & Olson, was a primary owner. I had plenty of opportunity to watch his philosophy in action.

His view of the workplace and his employees seemed to be shaped by a close reading of Charles Dickens, not so much as social critique but as a how to manual.

Dickens is especially relevant with a new report about all of the people who will need to be “sucking it in” – 1 in 7 Americans now live in poverty, according to a report issued last week by the Census Bureau. That’s the highest level in 15 years. Four million more people descended poverty in 2009. Especially hard hit are children: one 1 in 5 in the U.S. now live below the poverty line.

Suck it in, kids.

Another recent outburst from a member of the nation’s uber-rich shows that Munger is not alone in his self-righteous entitlement.  Steve Schwartzman, billionaire head of one of the nation’s largest and most successful hedge funds, Blackstone Group, recently compared President Obama’s proposal to let the Bush tax cuts for the wealthiest Americans expire to the Nazi invasion of Poland in 1939. “It’s a war,” Schwartzman said.

He didn’t elaborate on the metaphor, but as I understand his perverse analogy, he’s comparing the president  to the Nazis and the nation’s rich to Poles, who thought they  were safe, because they had negotiated a peace treaty with the Reich. Hitler’s Army invaded  anyway.

Apparently Schwartzman believed that he and Wall Street had a deal with Obama that he would go easy on them. After all, the administration did oppose the toughest proposals for financial reform, instead leading the effort to pass a timid tinkering that doesn’t limit Wall Street’s risky behavior or offer enough public protection from its excesses. So Obama suggesting that the Bush tax cuts should expire would amount to a giant betrayal.

Schwartzman later apologized, but it’s breathtaking that a person – especially one of such prominence and presumed sophistication – not only sees the world in such distorted terms, but feels OK about saying so.

Munger and Schwartzman’s comments reflect not only their profound sense of entitlement, but just how far the nation’s most wealthy and powerful have gone in their war on the middle class.

Men like Munger and Schwartzman have not—at least in the recent past—felt the need to vent their contempt for those who don’t share their advantages. Instead, they would negotiate and lobby for deregulation behind closed doors, and when their investments went south, scare the taxpayers into bailing them out.

What’s striking now is their bold frankness. In the wake of this financial collapse and bailout, which strengthened them while crushing ordinary folks, Munger and Schwartzman aren’t afraid to come out from behind the closed doors of the boardroom and strut their stuff.

Martin Column - 09/22/2010