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

Is There a Secret White House Memo on Corporate Control of our Country?

An internal White House memo in 2010, just before the Supreme Court’s outrageous decision in Citizens United, suggested President Obama address the influence of money in politics. Other items crowded his agenda instead, but this election year President Obama would be wise to take up the citizen call for a 28th Constitutional Amendment to end the corruption caused by the Court’s corporate personhood decision.

First, some important background on the 2010 memo. It used to be that a history of a presidential administration would await the president’s departure, but in recent years mid-term profiles have become the norm. Bob Woodward chronicled the Bush White House with four books, and Ron Suskind’s “Confidence Men,” published last year, captured President Obama’s errors in strategy and communications. Both authors had access to sources close to the top of the White House. But this week’s New Yorker takes the genre to a new level. Ryan Lizza’s “The Obama Memos” is a fascinating analysis of the Obama presidency that relies greatly on White House memos that Lizza somehow obtained.  One of them, the transition team’s memo to the president-elect in 2008 on the economy, is available in its entirety for download on the New Yorker site.

It was another memo, excerpted in a sidebar, that really got my attention. It was from the President’s political advisers, in late December 2009 according to Lizza, and listed “ideas on how on how try and recapture some of the anti-Washington spirit of his 2008 campaign” in the President’s 2010 State of the Union address. One of the suggestions in the memo anticipated the Supreme Court’s decision in the Citizens United case.

Campaign Finance reform: By the time of the SOTU [State of the Union], the Citizens United case will have been handed down and at the time of the decision will likely make an announcement on our response/plans. We could use the SOTU opportunity to push the ball forward on whatever proposal we put forward, calling on Congress to act by a ‘date certain’ or further fleshing out our proposals.

The Court handed down its decision on January 21, just a week before the State of the Union speech. Of course, no one expected the decision to cement into American Constitutional law the proposition that corporations have the same First Amendment rights as human beings and that spending money to influence elections is a form of free speech. So when the advisers referred to the White House's “response/plans,” it was not clear what kind of decision they were expecting, or what they thought they could do about it.

We now know that the only thing that can be done about Citizens United is for the American people to join together to overrule it, by passing the 28th Amendment to the Constitution, such as the one we have proposed.

Meanwhile, the President had something to say about corporate money in politics at the end of his State of the Union speech on January 27, 2010, and it stirred quite a controversy. He began by noting that a byproduct of the 2008 financial collapse was the public’s loss of confidence in government of, by and for the people:

We face a deficit of trust -– deep and corrosive doubts about how Washington works that have been growing for years. To close that credibility gap we have to take action on both ends of Pennsylvania Avenue -- to end the outsized influence of lobbyists; to do our work openly; to give our people the government they deserve.

 Then, with members of the Supreme Court seated right in front of him, he slammed the Court’s ruling in Citizens United:

With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections. I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities. They should be decided by the American people. And I'd urge Democrats and Republicans to pass a bill that helps to correct some of these problems.

It was a powerful moment, to be sure, though hardly the assault on the Court that it was subsequently described as, at least in some quarters.

What happened next created the evening’s drama. Supreme Court Justice Samuel Alito, who had voted in favor of the Court’s ruling, took it upon himself to provide some instant analysis. Cameras caught Alito angrily mouthing the words “not true” in response to Obama’s critique. The New York Times recalled the moment recently.

Whatever the President or anyone else thought that night about the week-old decision, it has since opened the floodgates of corporate money while individual Americans – I’m referring to the human beings who cast ballots, not so-called "corporate citizens" – have become bystanders. Decades-old laws limiting the influence of big money in politics have fallen, with few exceptions – one of which I wrote about last week.

It’ll likely be a few years before we get to read the memos that his political team is forwarding President Obama this year. But focus on Citizens United and the power of corporations to determine the outcome of supposedly “free” elections in what is proudly hailed as the world’s greatest democracy is certainly consistent with the themes of government accountability and the ninety nine percent vs. the one percent that are dominating public discourse and even the debates between the pro-corporate Republican presidential candidates. Obama would find a welcoming, bipartisan audience for the 28th Amendment. Let’s see how far he’s prepared to go.

 

Citizens United / D.C. Disconnect / Harvey Column / Outrage / President Barack Obama / Supreme Court - 01/30/2012

Slamming the Door on Democracy

Revolving door just no longer cuts it to describe how large corporate interests have swallowed up the government officials that are supposed to be working in our interest.

First Street, a D.C. insiders’ guide to people, policy and influence peddling, recently published a guide to lobbyists. The highest paid lobbyists were former elected officials, with an average take of $178,000 a year, the next highest paid group was former staffers, with an average take of more than $144,000 a year. Both left the professional lobbyists far behind in their value to their clients.

In public, our corporate leaders use polite language describing themselves in glowing terms like “job creators.”  Republicans wring their hands over regulations; Democrats weep crocodile tears over the plight of the middle class. Meanwhile the politicians feast at the public trough and prepare for lucrative payoffs, I mean careers, in the private sector.

Revolving door implies that these officials are somehow going back and forth between serving the public interest and the corporate interests that lobby them, pay for their campaigns if they’re elected, and then hire them when they’re ready to cash out.

But that’s not what’s happening.

The door doesn’t revolve, it only swings one way. And what’s happening to our government deserves much stronger language than the description of a door.

We have to face up to the fact that under our present system, election to public office, or appointment to key regulatory posts, is for the vast majority is the entryway into a world of legalized prostitution, where major corporations wield nearly absolute power over our government.

At WheresOurMoney.org we’ve proposed a constitutional amendment, 28A, to undo Citizens United, the awful U.S. Supreme Court ruling that unleashes even more unrestricted and unreported corporate money into our political system. That won’t curb lobbying. But rallying around the reversal of Citizens United will focus attention on the culture of legalized corruption that has overtaken our government.

 

 

 

 

 

 

 

Citizens United / Congress / Martin Column - 12/20/2011

Government Under the Influence

While the media’s grand poobahs have been poopooing the Occupy movement as a bunch of clueless hippies, the occupiers themselves couldn’t be more focused on the source of their frustration.

It’s a political system addicted to corporate cash, with politicians willing to do and say anything to keep it coming.

The occupiers communicate a keen sense of just how outrageously we have been betrayed by a government captured by corporate campaign contributions, lobbyists and the cozy swinging door between government and big business.

Though the occupiers have been criticized for not arriving with a full legislative agenda in tow, the homemade cardboard signs they carry pithily describe the world that has been too often, until now, left out of the political debate between our two parties, which, just like other kinds of addicts, are unable to have an honest conversation about their substance abuse, or to acknowledge the damage it’s done.

The issue of corporate influence peddling has also been largely left out of the media’s horse race political coverage, which focuses on philosophical differences between left and right rather than what the occupiers are focused on – the corporate might that has overwhelmed our politics.

The occupiers know that at the root of our financial collapse, bank bailout, jobless recovery and continuing housing crisis is one root cause – the undue influence of bankers and corporate titans over our political system.


So it’s left to the youth camped out in parks across the country to pose the tough questions.

They’re picking up on the strong rhetoric Barack Obama himself used back when he was a candidate about the need for fundamental change in our political system. But the president abandoned that quest, and now he’s got to raise $1 billion dollars to fund his reelection ambitions.

The occupiers have also picked up on Obama’s call for civility, with their own devotion to process and making sure everybody gets heard. The cynics are having a blast mocking the occupiers’ general assembly meetings. But the atmosphere at the occupations is a world away from the toxic cable talking point battles that have gotten the country nowhere. Let’s see who has the last laugh.

Here at WheresOurMoney, we’re offering a powerful antidote to the toxic flow of corporate money that is poisoning our democracy: a constitutional amendment to overturn the Supreme Court’s wrong-headed Citizens United ruling, which said that for purposes of political contributions, corporations are just like people. This terrible decision will only make a bad situation worse and we’ve got to start the fight against it now. You can read the amendment, get more background on Citizens United, and sign a petition here.

Citizens United / Martin Column / President Barack Obama - 10/06/2011

The President's Odd Jobs Choice

About the only the job that Jeffrey Immelt would be less qualified for than jobs czar would be to lead a crackdown on the influence of big money lobbyists.

Oh wait- there is no crackdown on lobbying.

So Immelt, the CEO of General Electric, will have to make do with the job the president has given him as head of the administration’s reconfigured outside economic advisory council, which is supposed to focus on job creation.

I’ve written before about G.E. as a prime example of how major corporations benefited from the bailout without exhibiting any gratitude to taxpayers.

To say that Immelt is a weird choice for a job creation initiative is an understatement.

Under Immelt’s stewardship, G.E. has shredded thousands of jobs in the U.S. while outsourcing many jobs to India and China. In the years before the financial collapse, G.E. focused on building up its enormous credit operation, which melted down under the weight of bad loans along with the rest of the financial sector. If not for the generosity of taxpayers, who gave G.E. more than  $16 billion in low-interest loans to keep it afloat, Immelt himself probably wouldn’t have a job. In 2008, Forbes named Immelt one of the U.S. most overpaid executives.

His company has engaged in economic blackmail, threatening the state of Massachusetts that G.E. would close plants if state officials didn’t cough up tax breaks. It’s true that Immelt’s GE has embraced green technology – but only wherever there is a substantial government subsidy involved.

Meanwhile, GE is spending more than any other firm on lobbying, while it pays little or no taxes.

If Immelt has had any previous innovative ideas about substantially reducing unemployment, he’s kept them to himself. This is the person our president chooses to lead his jobs effort? For Immelt and other corporate and financial titans, the “too big to fail” bubble has never really burst. They’re continuing to rake in profits and shape government policies in their own interests, while the majority who don’t have access to power are shut out from financial security as well as political influence. Rather than challenging this unequal equation, our president has chosen to try to climb into the bubble himself.

Around the Web / Executive Pay / Martin Column / Too Big To Fail - 02/02/2011

The Reform Charade

Remember when the president’s chief of staff, Rahn Emmanuel,  strode onto the political stage and stirringly channeled Churchill, saying: “Never waste a crisis?”

It turns out that what he was really saying was: “Never waste an opportunity to reward your campaign contributors.”

Two years after the credit meltdown that crippled our economy, the financial system remains way too complicated and continues to reward high risk and focus on short-term profits that offer few benefits to those who aren’t bankers.

And even after the fiasco we’ve been through, the banks continue to  snooker the snoozing watchdogs.

Last week, the Wall Street Journal reported how 18 banks have continued to manipulate their financial reporting to disguise from regulators their real level of risky borrowing.

And this is after the generous, no strings attached bailout that put trillions of taxpayer-backed dollars into the hands of the big banks.

We need a massive overhaul. What we’re getting instead is a charade, tricked out by a Democratic leadership intent on rewarding failure, propping up the status quo and labeling that reform.

One of the few U.S. senators who’s offering a stronger version of reform and consistent candor on the shortcomings of the leadership’s proposals is the man who replaced Vice President Joe Biden. Sen. Ted Kaufman, D-Delaware, said last month: “After a crisis of this magnitude, it amazes me that some of our reform proposals effectively maintain the status quo in so many critical areas, whether it is allowing multi-trillion-dollar financial conglomerates that house traditional banking and speculative activities to continue to exist and pose threats to our financial system, permitting banks to continue to determine their own capital standards, or allowing a significant portion of the derivatives market to remain opaque and lightly regulated.”

The Democratic senators would do well to be guided by the words of someone who was one of them not long ago, who was particularly astute about the toxic influence of lobbyists and campaign cash on our economy and the political process.

Back when he was a U.S. senator, President Obama wrote in the Financial Times in 2007 that the subprime crisis “was also a parable of how an excess of lobbying and influence can defeat the common sense rules of the road, placing both consumers and the nation’s well-being at risk.”

Washington, Obama wrote, “needs to stop acting like an industry advocate and start acting like a public advocate.”

Candidate Obama wouldn’t have been shocked by the new report from the Treasury Department’s Inspector General about how the two regulating agencies which were supposed to watching over Washington Mutual bungled the job before the bank collapsed in 2008, under the weight of worthless subprime mortgages, resulting in the largest bank failure in U.S. history.

It turns out that regulators were well aware of the foul odors coming off the carcass of Washington Mutual’s loan business. But the Office of Thrift Supervision continued to find the bank “fundamentally sound” and didn’t raise alarms until days before it collapsed.

We can’t let our leaders ignore these harsh lessons that came with such a high price. They may be able to squander a crisis, but without some meaningful change to rein in the financial industry, the crisis may waste the rest of us.

Martin Column - 04/12/2010