In austerity fight, deceptions have just begun

Only time will tell how much of a boost Republican challenger Mitt Romney will get from his debate win over President Obama.

The president seemed flatfooted and unprepared to respond to Romney’s shift toward the center, even though Romney’s campaign had suggested that’s exactly what they would do  - use the Etch-a-Sketch to pivot away from the extreme right toward a more moderate stance during the general election campaign.

The debate felt like a replay of the scenario that has played out so often over the past four years: aggressive Republicans concealing their real motives and putting passive Democrats on the defensive.

Romney was acting every bit the CEO in charge, telling the customers what he thought they wanted to hear to make the sale; in this case, that his deficit reduction scheme wouldn’t favor the wealthy and damage the middle-class.

The contrast between CEO Romney talking to voters (customers) and CEO Romney talking to his big contributors (his board of directors) at a private fundraiser in Boca Raton, Fla. in May couldn’t have been starker. In what he thought were private remarks that have now blown up, Romney, you recall, dismissed the 47 percent of the country that supports Obama as self-pitying moochers who need to be taken care by the government.

We know that all politicians say one thing in public and another in private.  That’s not a shock. But what’s striking is just how much contempt CEO Romney expressed for nearly half the voters when he was talking to the people who will hold real power in his administration: his board of directors.

Most CEOs wouldn’t let such feelings slip, even in private. But just as Romney told the Denver audience what he thought it wanted to hear at the debate, so too he was telling his contributors what he thought would please them.

Because make no mistake, plenty of the big money is preparing to work with whoever gets elected in November to launch a major offensive against Social Security and Medicare as well as to end tax breaks that favor the middle class, such as the mortgage interest tax break, under the guise of backing a new grand bargain to balance the budget.

For example, billionaire hedge fund executive Pete Peterson, who has also spent $458 million of his own money to push an austerity agenda, is now backing a bipartisan group known as Campaign to Fix the Debt. Ryan Grim at Huffington Post reports that the initiative has raised $30 million so far, including $5 million from a single unnamed donor.

The operation has hired 25 to 30 staffers, with plans to double, Grim reports. Along with a paid-media campaign, aims to influence press coverage in 40 states with locally focused teams.

This “bipartisan” initiative is just the latest attempt by Wall Street and its allies to pass the costs of the government deficits created by the financial crisis on to the middle class and those who can least afford it.  Though President Obama has said he won’t let these programs be cut in a way that hurts the most vulnerable, to keep that promise he’ll have to grow backbone that was missing Monday night – and through much of his first term.

 

Lobbying / Martin Column / Mitt Romney / President Barack Obama / Social Security - 10/05/2012

Nice recovery, if you can afford it

According to economists and the media, in June 2009 we came out of the deepest recession since the Great Depression and we’ve been on the upswing since. Unemployment’s down, with corporate profits recouping their losses from the recession and hitting new highs along with the stock market.

But it really continues to be a tale of two economies: one that works for the 1 percent and another, in which the 99 percent are increasingly falling behind.

For some striking evidence, look at the recent study by a prominent economist reported in the New York Times.

As the recovery took hold in 2010, UC Berkeley economist Emmanuel Saenz reported, the top 1 percent captured 93 percent of the income gains.

Top incomes grew 11.6 percent in 2010, while the incomes of the 99 percent increased only 0.2 percent. That tiny gain followed a drop of nearly 12 percent over the previous two years – the largest two-year drop since the Depression.

Other signs on the economic landscape also show the wreckage for those not protected by wealth.

Despite a dip in unemployment and the most the most recent more optimistic job creation numbers, the economy isn’t producing enough jobs on a sustained basis to permanently reduce unemployment. And many of the jobs that have been created pay severely reduced wages. Under the two-tiered wage systems increasingly favored by U.S. corporations, new blue-collar jobs pay start at a steeply lower hourly wage than they did in the past – $12 to $19 an hour as opposed to $21 to $32.

One in seven Americans are on food stamps, while high gas prices put the squeeze on low-income and working people alike. Meanwhile, foreclosures are on the rise in the wake of the state attorneys general announcement of a settlement over foreclosure fraud charges with the biggest banks, though the details of the settlement still haven’t been released.

The Occupy movement has put the great divide between the 1 percent and the 99 percent on the political map, forcing President Obama to acknowledge income inequality in his state of the union speech as the “defining issue” of our time, while the Republican’s front-running presidential candidate, Mitt Romney has dismissed such concerns as “envy.”

Obama’s concern about inequality has yet to translate itself into effective action, and it’s unclear, given the strong ties he’s had to the big banks and corporate titans, whether he’s capable of delivering.

Occupy, after delivering a much-needed jolt to the public discourse, likewise, has also yet to show that it can go beyond influencing the debate to actually winning gains for the 99 percent and reducing the widening inequality gap.

It’s no coincidence that income inequality has accelerated as large corporations have grown more influential in our political system through the clout of their cash, encouraging deregulation, tax cuts, trade deals and a host of other policies that benefit the 1 percent and disadvantage the rest of us. The fight against income inequality and for a more fair economy inevitably leads to the fight to rid our government of toxic corporate donations. Find out about WheresOurMoney’s constitutional amendment to undo Citizens United, the U.S. Supreme Court’s terrible decision that unleashes unlimited, anonymous corporate political donations, here.

 

 

 

Income inequality / Jobs crisis / Martin Column / Occupy - 03/09/2012

Fight Back Against Citizens United

On the second anniversary of Citizens United, the U.S. Supreme Court ruling that corporations are people, there’s bad news and good news.

The bad news: we’re seeing the full impact of the ruling, with the creation of PACs --- political action committees -- with innocuous Mom and apple pie-sounding names, like Make Us Great Again and Winning Our Future, funded by unlimited anonymous corporate contributions.

The good news is that the ruling has galvanized a grassroots backlash: if you’re mad as hell and want to join the fight to rid our democracy of toxic big money, there’s an explosion of grassroots opposition for you to plug into today, or whenever you’re ready.

First, a little history. Corporate political contributions have been stirring outrage for more than 100 years, since they helped elect Teddy Roosevelt in 1904. Once elected, the savvy Roosevelt got in front of a movement to outlaw those contributions, resulting in passage of the Tillman Act.

But the corporations didn’t just slink away in defeat; they developed ever more creative ways to skirt the law and influence elections.

In Citizens United, eight Supreme Court justices ruled in 2010 that while corporations couldn’t contribute to individual candidates they could give to political action committees that do not, supposedly, have formal ties to a particular candidate.

In their ruling, the justices took a flawed, too narrow view of the way in which money corrupts politics. First, they said that since the PACs aren’t linked to individual candidates, the contributions couldn’t be used to bribe the candidates, or extract a quid pro quo.

The court ignored the well-known fact that the monster PACs do establish informal but strong ties to individual candidates.

In addition, the court misstates the more insidious way massive corporate cash corrupts our government. As Harvard professor Lawrence Lessig points out, large corporate contributions ensure that only those candidates, regardless of party, who can collect those contributions, and espouse a corporate-friendly political agenda, stand any chance.

This creates a political system that thwarts goals of left and right.

If we don’t reverse Citizens United and confront corporate power, we can expect more corporate bailouts with no questions asked, and fewer consumer, environmental, employee and investor protections. We can expect more tax breaks for the 1 percent and more austerity for the 99 percent.

At WheresOurMoney, my colleague Harvey Rosenfield has proposed a constitutional amendment to overturn Citizens United that is easily understood and will withstand any legal challenge. You can read more about it here. There’s a great video with background and ideas about fighting Citizens United here.

You can find groups taking a variety of actions against Citizens United across the country here and here.

 

 

 

 

Action / Citizens United / Martin Column - 01/21/2012

Mr. President, Keep Your Promise

President Obama got generally high marks earlier this month for “getting it” after he struck a populist tone in his speech at Osawatomie, the Kansas town where he evoked the progressive spirit of former president Teddy Roosevelt.

But if he really wants to do something about the economic pain Americans continue to suffer, the president could start by keeping a campaign promise he made – to lead a fight to reform bankruptcy laws to allow judges to modify mortgage loans in their courts.

Under heavy pressure from bankers, the Senate defeated such a proposal in 2009, while the president and his administration remained silent on the sidelines.

At the time, Illinois Sen. Dick Durbin said bitterly, referring to Congress, the big banks “frankly own the place.”

The administration’s refusal to address the foreclosure crisis remains one of the sorriest aspects of its consistent underestimation of the depth of the economic crisis.

Earlier this month, the non-profit investigative journalism outfit Pro Publica filled in the details on how the administration pooped out on the president’s campaign promise. It turns out that many on the president’s bank-friendly economic team were never enthusiastic about cram-down.

The idea behind judicial cram-downs is to treat mortgage debt the same as other debts which bankruptcy judges are permitted to reduce as part of a bankruptcy.

The impact would be to encourage bankers to reduce principal on mortgages before they ever got to bankruptcy court. Judicial cram-down would be far more effective than the Obama administration’s previous failed programs intended to address the foreclosure crisis, which offered banks insufficient incentives to voluntarily modify loans with inadequate government oversight.

Part of the reason the president can’t hammer the Republicans for their lack of any plan to address foreclosures is that he hasn’t come up with a decent plan of his own – and that he didn’t fight hard enough for a solution like cram-down, which lost by six votes in the Senate, including 12 members of the president’s own party.

In addition, 11 Republicans who represent states among the hardest hit by the foreclosure crisis also voted against cram-down.

Couldn’t a tougher, savvier, more committed fight by the president come up with the seven or so votes needed to win this fight?

As the  president takes on the big banks. he may take encouragement from these words from the predecessor he evoked so successfully at Osawatomie:

“The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

 

Foreclosure / Martin Column / President Barack Obama - 12/28/2011

“If We Build It, He Will Come”

Washington has become Wall Street’s “field of dreams.” There, the money conglomerates engage in their beloved sport of financial speculation, cheered on by a small but powerful group of public officials who have sold out the rest of the country.

Deregulation was a home run for the financial industry. Wall Street’s friends in Washington sacked the rules of the game, unleashing the hedge funds, banks, investment firms, insurance companies and other speculators who made billions before the crash, then got billions more from the taxpayers after the crash.

Meanwhile, as today’s New York Times points out, almost nothing has been done about “derivatives,” the virtual technology for the speculation that drove our economy into the dugout three years ago. Federal agencies that were supposed to issue new regulations to prevent another debacle have been tied up in knots by Wall Street lawyers.

Jobless and fearful for their kids’ future, people are furious about what happened.  But it was always going to be a daunting task to mobilize the public behind the necessary reforms when they are so complex, and anything drafted to appeal to directly to Americans’ wallets – say, by providing a cap on credit card interest rates, or low-rate mortgages, or other forms of financial relief – would have inspired the financial industry to retaliate with nuclear weapons. Neither the President nor anyone in Congress were willing to start that fight, principled as it would have been.

So it has all come down to Elizabeth Warren, the brainiac Harvard law professor who suggested, in a law review article in 2005, that Congress create a new federal agency with the mission of protecting consumers against false advertising, misleading contracts and the general thievery of the financial industry.  Democrats proposed the agency as part of the Wall Street reform legislation in 2009, and after the industry thought they had whittled it down to something they could easily live with – or simply get around – Congress created the Consumer Financial Protection Bureau and the President signed it.

Warren was the obvious person for the job, and almost immediately Americans began calling on President Obama to nominate her for the post.

What Wall Street didn’t realize at first is that it is way, way easier for Americans to get behind a human being than a thousand-page piece of legislation that has been lawyered and lobbied into mush. America has become a celebrity-driven culture, and while Elizabeth Warren is no Lady Gaga, she is one of a small number of outsiders that have occasionally busted up the D.C. establishment – just as Ralph Nader did in the 1970s, and Jimmy Stewart fictionally did in the Frank Capra movie “Mr. Smith Goes to Washington.”

Whether President Obama will nominate Warren to the position has become the defining question of his Presidency for millions of Americans, especially those who voted for "change we can believe in" in 2008.

When confronted with demands by civil rights leaders to take action against racial discrimination in the late 1930s, President Franklin Roosevelt’s legendary retort was “make me do it.” Whether he ever said that, the strategy he suggested is literally page one of the best manual for citizen empowerment and political organizing.

Let’s put it in more contemporary terms. President Obama has made it clear he doesn’t want to nominate Warren. It’s just another fight he’d rather not have. He embraces consensus, not controversy.

But the President has to know she’s the best person for the job. So the burden is on Americans to make it impossible for him not to nominate her. Part of that means punishing the people who are working against her – members of Congress, and those in the Administration – because they are doing Wall Street’s dirty work. These are the same people who let Wall Street plunder our nation and then bailed Wall Street out with our money.

My guess is, we can make Obama do it.

Consumer Financial Protection Agency / Harvey Column / Outrage / President Barack Obama / Uncategorized - 06/22/2011

3 Steps Toward Real Economic Recovery

Democrats should be less worried less about Sarah Palin’s mangling of American history and more concerned about the Obama administration’s consistent underestimation of the recession since the financial collapse.

The president and his team has been downplaying the seriousness of the jobs and housing crises since they took office, repeatedly taking inadequate steps to address the twin fiascoes of foreclosure and unemployment, while wrongly conceding to Republicans that the political focus should be the short-term deficit.

This is not only bad for the country but bad politics for the Democrats, increasing the chances that voters will blame them for not fighting harder for programs to create jobs and straighten out the housing mess. Never mind that Republican efforts to address these issues amount to less than zero.

Nobody expects the president and his party to win every fight. But we do expect him not to wave the white flag before the fight starts.

Circumstances still offer the president opportunities to show that he finally gets it – and to signal a more aggressive approach.

First, the president can launch a fight for Elizabeth Warren to head the Consumer Financial Protection Agency. Warren is popular, articulate and sensible, and the agency was her idea in the first place. Of course the Republicans hate her, in fact they don’t want a single head of the agency. Republicans favor a committee to run the agency, the more easily for the banks to bamboozle it.

Second, he can replace his outgoing economic adviser, Austan  Goolsbee with somebody more tuned in to the jobs and housing crises. How bad was Goolsbee (and the administration’s economic policies he defended)?

Here’s how economist Firedoglake blogger Scarecrow put it after listening to Goolsbee Sunday, saying it was up to the private sector to create jobs now because government could do nothing: “If I’d been asleep for the last decade and woke up to ABC This Week’s interview of Presidential economic advisor Austan Goolsbee, I would assume that Mitt Romney won the 2008 election, that he was predictably following Republican dogma about how to recover from a severe financial collapse and recession...” Scarecrow wrote.

With Democrats like these, who needs Republicans?

Third, Obama can fire his Treasury secretary, Timothy Geithner, who has shamelessly pandered to his banker cronies while ignoring Main Street’s woes since he helped engineer the bailout as head of the New York Fed prior to the Obama administration.

Of course it will take more than gestures and a few appointments for the president to tackle the continuing severe economic challenges we face. But he can still saddle up and take a brave ride on the right side of history, if he chooses.

 

Consumer Financial Protection Agency / Martin Column / President Barack Obama - 06/06/2011

Billion-Dollar Campaign Bus Leaves Unemployed Behind

Congress and the president threw the long-term unemployed under the bus last year in the deal to extend the Bush era tax cuts for the wealthiest Americans.

As the president and his fellow politicos revv up his re-election campaign bus, are they now poised to run over the 99ers, as the long-term unemployed are known?

The head of the Congressional Black Caucus, Rep. Emmanuel Cleaver, appears ready to concede without a fight that the cost of extending unemployment benefits to the 99ers is “prohibitive.”

Two members of Cleaver’s caucus, Reps. Barbara Lee and Bobby Scott have proposed H.R. 589 to fund some benefits for the long-term unemployed.

Once again, Congress appears to be unwilling to find the $14 billion to extend unemployment compensation for the more than 1 million Americans out of work for at least 99 weeks.

President Obama seems more preoccupied with fighting for the $1 billion he says he will need for his reelection campaign.

How much could one of those 99ers contribute to the president, or anybody’s political campaign, for that matter?

That’s what occurred to me when I read who Obama – the man who at one time was supposed to transform American politics – had chosen to run his campaign to keep his job.

That would be Jim Messina, one of the undisputed experts at raising massive corporate campaign cash, a former staffer for Sen. Max Baucus, one-time head of the one Senate’s Finance Committee and one of the top vacuums of special interest contributions ever, according to Public Citizen.

So much for the grass roots that got the president where he is today. He’s dancing with Wall Street, big pharm and the insurance industry now. Messina apparently takes a dim view of the grass roots activists and their issues, which tend to clog up his vacuum cleaner.

For the corporate titans Obama will be relying on, it’s been a very, very good recovery.

For a lot of the grass roots folks who walked precincts and made phone calls in 2008, not so much. They’ve lost jobs, health insurance, homes, savings, pensions, and security.

Minorities have been especially hard hit, USA Today reports, by a “dual system” of finance. More than 20 percent of African-Americans and Hispanics will lose their homes in the present housing crisis, the Center for Responsible Lending contends.

Meanwhile the long-term unemployed, many of them older workers, face high hurdles reentering the workforce. Younger people face their own challenges, often taking lower paying jobs when they can find employment.

The politicians may be giving up on those of us who are unemployed but we shouldn’t. Call your congressperson and demand that they find the money for H.R 589.

 

 

 

 

 

 

Martin Column / President Barack Obama / Uncategorized - 04/05/2011

Stand Up Against Fear, Mr. President

Dear Mr. President:

I'm glad to see reports that you don’t intend to call for cuts to Social Security, as your hand-picked so-called deficit commission recommended.

But turning over the Social Security debate to Congress and standing back to see what they come up with is not good enough, Mr. President.

It’s time for you to take on those who want to undermine Social Security protections under the guise of concern over the deficit, rather than enable them, as you have been doing by stacking your deficit commission with members who had previously supported cuts to Social Security.

Now it’s time for you to fight back against the fear-mongering propaganda campaign that’s been trying to whip up a phony crisis around Social Security, not to stand on the sidelines, Mr. President.

Yes, it will be a tough fight. The pundits, Republicans, many in your own party and a gang of Wall Street tycoons are lined up against you.

But the good news for you politically, Mr. President, is that a majority of the people in the country are lined up with you, should you choose to lead them in this fight.

This is a fight we can win, Mr. President. It’s good politics and it’s good sense.

Yes, it means you’ll have to go up against some of the bankers you’ve been trying to get cozy with. You’ll have to stand up and speak out against the fear that the Social Security cutters are peddling. But if you choose to lead this fight, you may remember that’s why we elected you.

Martin Column / President Barack Obama / Social Security - 01/25/2011

Elizabeth Warren's Inside Move

So President Obama did not appoint bailout critic and middle-class champion Elizabeth Warren to head the new Consumer Financial Protection Agency.

He did appoint her to an important-sounding post as a White House adviser with responsibility to set up the agency, which after all was her idea in the first place.

Is the president actually marginalizing her with the window dressing of a fancy title? Or will she have a meaningful role in setting up the agency and shaping policy?

The punditocracy has gone into overdrive analyzing the president’s handling of Warren.

The positive spin is that it’s a savvy political move on Obama’s part to get her to work right away creating the agency and avoid a Republican filibuster, and that the president will finally be hearing from an insider not under Wall Street’s spell.

The more skeptical interpretation sees it as the latest example of the president’s failure to push back against Wall Street on issues that Wall Street cares about. As he has in the past, rather than picking a principled fight with Wall Street (and Republicans) Obama found a way around it.

The third spin, from Barney Frank, is that Warren actually didn’t  want a permanent appointment now, keeping her options open to either exit the administration or accept the job later.

Writing on WheresOurMoney.org earlier, Harvey Rosenfield, eloquently described why Warren is the best person to lead the new agency.

Warren has been a long-time critic of predatory lending practices and the American way of debt. In her role as congressional monitor of the federal bank bailout she’s been a fearless straight shooter and a down-to-earth demystifier of the complexities and foibles of high finance.

But Obama’s handling of her appointment reinforces the impression that he’s weak in the face of Wall Street’s power. Why in the world, with a high-stakes election less than 2 months away, would the president want to avoid a fight with Wall Street and Republicans on behalf of the undisputed champion of the middle-class and consumers? If the president does intend to appoint Warren to head the agency later, does he seriously think it will be easier later?

Unlike most of the president’s other top economic advisers, Warren has never been cozy with Wall Street. But it’s simply not realistic to expect the president is about to get more aggressive in reining in the big banks with Warren on the inside.

The president has shown that he is capable of ignoring perfectly good advice from well-respected advisers with impressive job titles within his administration. Remember Paul Volcker? The former Fed adviser has been a lonely voice within the Obama administration warning about the continuing dangers of the too big to fail banks and too much risky business in the financial system. But the president used Volcker as little more than a populist prop, preferring the more conciliatory approach championed by his other top economic adviser, Larry Summers, Treasury Secretary Tim Geithner and Fed president Ben Bernanke. These three effectively fought off the tougher aspects of financial regulation at the same they time touted themselves as real reformers. While the president made clear Warren will work directly for him, will she be able to match Summers, Geithner and Bernanke, all seasoned bureaucratic infighters? She’s done little to endear herself to them and has publicly tangled with Geithner.

There’s no question that Warren, a Harvard bankruptcy law professor, has already played an extraordinary and important role in helping understand the financial collapse and its fallout. She’s never been anything but forthright, no-nonsense, principled, unafraid to speak truth to financial power and to demand accountability. She will need all those qualities as well as thick skin and nerves of steel for her new job. The stakes are high. I wish her well.

Consumer Financial Protection Agency / Martin Column / Paul Volcker / President Barack Obama - 09/17/2010

Around the Web: Landmark or Pit Stop?

I understand why people feel the need to tout the historical significance of the financial reform package that passed the conference committee. The president needs it politically and those who support him want to give him credit for getting anything at all in the face of the onslaught of bank lobbyists. Lots of folks worked very hard against tremendous odds to get something passed.

But I think a more sober analysis shows that what’s been achieved is pretty modest. It hands over many crucial details to the same regulators who oversaw our financial debacle.

Summing up, Bloomberg reports: “Legislation to overhaul financial regulation will help curb risk-taking and boost capital buffers. What it won’t do is fundamentally reshape Wall Street’s biggest banks or prevent another crisis, analysts said.”

Zach Carter characterizes it as a good first step. The Roosevelt Institute’s Robert Johnson writes: “This first round was not the whole fight. It was the wake-up call and the beginning of the fight. Rest up and get ready. There is so much more to do.”

The question is when we’ll get the chance to take the additional steps that are needed. The public is skeptical that the new rules will prevent another crisis, according to this AP poll. The Big Picture’s Barry Ritholtz grades the various aspects of the reform effort. Overall grade? C-. Top marks go to the new minimum mortgage underwriting standards. But legislators get failing grades for leaving four critical issues on the table: “to big to fail banks,” bank leverage, credit rating agencies and corporate pay.

Ritholtz saves some of his harshest evaluation for the proposal to house the new consumer protection agency inside the Federal Reserve, which he finds “beyond idiotic.”

Around the Web / Executive Pay / Financial Reform Legislation / Martin Column - 06/25/2010