He Ain’t Heavy, He’s My Brother

Loss. That’s what I felt when I watched the space shuttle land at LAX, carried to our City of Angels on the back of a close relative, the mighty Boeing 747 – twelve years older than the shuttle and, though aging, nearly as inspiring when you happen to see one. I recalled where I was when Challenger exploded – studying in a library for the California bar exam – and when Columbia burned up on re-entry – at a cottage in Idyllwild with my family. But I’m talking about a different kind of loss.

When I was a kid, growing up in the Sixties, America seemed to be the land of limitless possibilities. President Kennedy launched the space program in 1961, promising we would reach the Moon by the end of the decade and though incredible, no one doubted the USA would do it. In the more distant future described by Gene Roddenberry, a “replicator” would eliminate want of food or material possessions and humans would be freed to explore any part of the universe they chose.

Sure, there were serious problems right here on Earth, and in this country, but the War on Poverty, the civil rights movement and a bipartisan roster of widely respected – even revered – public officials seemed determined to get these matters in hand. We were working on them, and nothing seemed intractable. The cynical snicker about the Sixties now. But such was the energy and enthusiasm of the economic prosperity of post World War II United States, an era that is already gauzy like our refracted impressions of ancient Rome.

Just after three in the afternoon on July 20, 1969, my friends and I gathered around the clunky RCA television in our den, understanding that the rest of the planet was doing the same. I was seventeen. Like all kids who grew up in the era before cable TV, video games and the Internet, we had spent many late nights outdoors contemplating the Moon, which seemed to us as distant as adulthood.  Now we could barely discern the astronauts in the grainy black and white images as they walked on the lunar surface, but there was no mistaking the achievement of that day. And though it was America’s achievement, the whole world celebrated.

A few days from now, shuttle Endeavor will be drawn through the streets of Los Angeles– like a funeral caisson for a fallen soldier – by a magnificent technological beast. That journey, at 2 mph, will end at a museum twenty-four hours later. There it will rest much like the Pyramids or the Great Wall of China, monuments to human will and imagination left to puzzle future generations. No ambitious program to explore the universe will succeed the shuttle.

That’s because there's no money left to pay for our aspirations. The last decade began with a speculation-induced economic recession in 2001. In California, once the home of aerospace, the collapse of the tech-bubble was compounded by the disastrous results of the deregulation of electricity by local lawmakers, which included a bailout for over-priced nuclear power plants that cost consumer ratepayers $28 billion. Then Enron and other Wall Street firms that bought the power plants covertly manipulated the supply of electricity to jack up prices, bankrupting utility companies and forcing the state to buy long term contracts for electricity from the manipulators – at the grossly inflated prices – to keep the lights on and businesses going. The deregulation debacle cost California $71 billion – and the local economy has never been the same.

Many Americans had not recovered from the 2001 recession when the Wall Street derivatives frenzy collapsed in the Fall of 2008. Americans lost their jobs, their homes, their savings. With incomes disappearing, Americans stopped spending. That hurt businesses, especially small businesses that could not borrow. And tax revenues declined. To pay Social Security and jobless benefits, and restart the economy, the federal government spent more than it took in in recent years.

This ignited the raging political debate over the federal government’s stimulus and deficit spending, though few Americans can claim to have been bailed out the way Wall Street was. After taxpayer cash infusions, subsidies, tax breaks and other favors estimated at between $9.7 trillion and $29 trillion, the Money Industry has emerged not merely intact but more profitable than ever.

Add $1.3 trillion for the Afghan and Iraq wars, and you can see why there won’t be a manned mission to Mars anytime soon, much less hyperdrive tours of the galaxy.

Our country paid a heavy price to save Wall Street. Consider that the cost of the getting to the Moon in today’s dollars would be about $26 billion less than taxpayers spent bailing out the insurance giant AIG – about $182 billion. And the Moon program was a massive stimulus program for America in the Sixties, and not just the defense industry. Its benefits included the research and development of a raft of technologies that led to enormous advance in computer, medicine and other industries – not to mention Velcro. Steve Jobs and his colleagues in Silicon Valley didn’t build the modern personal computer industry by themselves: you, the American taxpayer, helped.

Measuring the cost of government assistance to Wall Street versus to business innovators versus to Americans in need compartmentalizes the debate. What does it say about the country – and its future – that the average life expectancy of white Americans who did not graduate high school has dropped by four years, to where it was in the 1950s to Sixties?

Yet a majority of Americans – 54% –believe that the government should do less to solve our country’s problems… though there is a sharp partisan divide on the question, with 82% of Republicans saying less and 67% of Democrats saying more, according to Gallup.

There will be Americans in space in the near future, however. Using the technology and facilities taxpayers built, a number of private companies are developing plans to commercialize orbital space flight, the New York Times reports. And every American who wants to hitch a ride can do so – for somewhere between $50 million and $150 million a ticket, depending on your destination.

As the 747 and the shuttle swung low over Los Angeles, one of my favorite oldies from the Sixties came to mind:

The road is long, with many a winding turn,
That leads us to who knows where, who knows where.

So on we go. His welfare is of my concern.
No burden is he to bear - we'll get there.

For I know: he would not encumber me.
He ain't heavy: he's my brother.

I thought back to that humid afternoon in July, 1969, when Kennedy’s charge was fulfilled by Apollo 11. JFK was gone; along with his brother Robert, and Martin Luther King, struck down by hate, fear, madness.  At the time, they seemed to us pioneers in the still young and uncertain cause of Democracy, and had given their lives to better their fellow Americans and the Nation. The sense of  purpose, destiny, determination and sacrifice – shared by the nation – was inspiring. At least to a young guy from a Boston suburb.

 

Harvey Column - 10/01/2012

“There Oughta Be A Law” – Want to Play?

I wrote last week that until we change the Constitution to permanently kick corporate money out of politics, we can forget about Congress protecting us from cell phone company contracts that strip consumers of their right to go to court.

I got a lot of interesting email on that post, because most people who read “Where’s Our Money” and other blogs think there “oughta be a law” of some kind. But no matter what you believe in or where you stand on the ideological spectrum, anybody who is trying to make America a better place for human beings is going to have a hard time overcoming the corrupting effect of corporate money on public officials and the democratic process.

Think I’m wrong? Here’s my challenge:

Name a policy issue that involves our power as voters, consumers, workers, taxpayers or even shareholders and I will show you how corporate money has derailed any serious progress on the matter.

If you don’t want to post it publicly, just ask that your comment remain private, or send me an email.

The same day I mused on our new status as second-class citizens courtesy of the US Supreme Court’s Citizens United decision, President Obama’s re-election campaign endorsed a constitutional amendment to reverse that ruling. "The President favors action—by constitutional amendment, if necessary—to place reasonable limits on all such spending," the Obama campaign said. This came in the context of a another controversial move: the President had decided to encourage supporters to donate to one of the Super PACs supporting him. “Super PACs” are the shadowy groups that the Supreme Court freed of restraints on political spending in Citizens United. Tens of millions of dollars, most of it from unidentified corporations and wealthy donors, have poured into the Republican primaries. But that’s just a fraction of what Super PACs are expected to spend to unelect Barack Obama in November.

In a stark example of biting the hand that has fed it, Wall Street has made it clear that it is offended even by the timid financial reforms mustered by the Obama Administration over the last few years. Now that the taxpayers have resuscitated the Money Industry, it wants to go all the way back to the insane deregulatory policies that pushed the nation into a depression in 2008.

There was a lot of critical commentary about the announcement, not just by hypocrite Republicans like John Beohner, but also by commentators on the left who feel Obama betrayed his commitment to campaign finance reform.

I for one can’t see how any candidate from either party can afford not to play by the deregulated rules of legalized bribery blessed by the Supreme Court. Like Obama’s campaign manager said, “unilateral disarmament” in the face of a massive attack of big money makes no sense. Our electoral system now assures the survival only of the financially fattest.

But will Obama really fight for the 28th Amendment? It’s one thing to endorse the concept and quite another to press for a change in the Constitution that would strip the corporate establishment of its power to elect candidates and dictate laws. The President has the bully pulpit and phenomenal power, but like the rest of us, he can't hope to pass any laws if corporations maintain a hammerlock over the legislative branch. No one knows better than he how the powerful insurance lobby turned health care reform into a corporate boondoggle. If President Obama thinks there oughta be a law, any meaningful law, in his second term, he's going to have confront Citizens United.

 

Citizens United / Congress / Harvey Column / Supreme Court / Uncategorized - 02/13/2012

What's Plan B For Jobs?

That’s the big question after the Republicans, true to their word, killed President Obama’s $447 billion jobs proposal.

In response, the president has pledged to break up his plan, which is already too small to significantly reduce unemployment, into even smaller chunks that the Republicans might swallow. It’s hard to find anybody who believes that’s a serious plan to put a dent in unemployment.

The only job the president seems to have a clue about preserving is his own, continuing to raise campaign cash at a record-breaking pace, raising $70 million for his own and Democrats’ reelection.

Meanwhile Republicans pursue their own single-minded agenda to enhance corporate power and their own – destroy President Obama, reduce taxes and cripple government regulation.

Unfortunately for Republicans, when you look at the facts, regulations don’t turn out to be much of a threat to jobs after all

The only legislation the two parties agree on are a handful of NAFTA-style trade agreements that most Americans fear will only lead to more outsourcing.

Where does that leave the 99 percent?

Out in the street.

That’s where they’ll be across the country and the globe today, to register their frustration with a political and financial elite whose actions created persistently high unemployment, plummeting home values, social service cutbacks and a world of growing economic uncertainty.

As OccupyLA states on its web site, “We have been giving away our representation to people who do not deserve it …”

Check here for a list of demonstrations around the world.

 

 

Congress / D.C. Disconnect / Martin Column / Outrage / President Barack Obama - 10/15/2011

Quotable - Paul Wellstone

The American polity is infected with a serious imbalance of power between elites and masses, a power which is the principal threat to our democracy.

Paul Wellstone
former U.S. senator, Minnesota

 

Homepage Content / Quotable - 06/13/2011

King's Longest March

Everybody wants to claim a piece of the spirit of Martin Luther King in support of his or her cause. A Pentagon official even had the nerve to say King, who championed nonviolence, would have supported U.S. wars in Afghanistan.

That’s an especially dubious assertion given that the civil rights leader became an increasingly vocal opponent of the Vietnam war, in a move that cost him some support.

What would King make of the U.S. in 2011?

We don’t need to guess. We have the record of his words and deeds, especially in his final year.

As early as 1957, King was highlighting the disparities between rich and poor, In a speech celebrating the 25th anniversary of the Highlander Center, a grass-roots organizing center in Tennessee, he said: “I never intend to adjust myself to the tragic inequalities of an economic system which takes necessities from the masses to give luxuries to the classes.”

By 1963 King was moving his fight for strictly civil rights for minorities, like voting and equal access to public facilities, toward a broader struggle for economic rights for the disadvantaged and least powerful, recognizing that civil rights without economic rights couldn’t guarantee the opportunity and justice for all promised that was key to the great democratic experiment “What good is to it have the right to be able to sit at a lunch counter,” he asked, “if you can’t afford a hamburger.”

He gave the “I have a dream” speech that galvanized a nation at a march on Washington that demanded both jobs and freedom.

But it was in the last year of his life that his focus on economic injustice became most acute and profound.

He put in motion an effort to organize poor people, not just to focus on their plight, but also so they could fight for better jobs and decent housing for themselves.

King certainly would have celebrated the historic election of the nation’s first black president, and Obama began his presidency by evoking King’s spirit.

But the civil rights leader- he would have recognized that that election was not a resting place amid the economic suffering of so many.

He would not have abided the bailouts and tax cuts that allowed bankers and the wealthiest to prosper while those without access to the backrooms of power suffer. He would not have abided the widening gulf between the wealthiest and the poorest Americans, knowing the dire consequences of that division, not just for the poor and the middle class but also for the whole country.

He also would not have been surprised how tough it is to fight the entrenched power of corporations brought back from the dead by compliant politicians.

“It’s much easier to integrate a lunch counter than it is to guarantee a livable income and a good solid job,” King said in April 1967 at Stanford University in a speech entitled `The Other America' that rings as sadly true today as it did more than 40 years ago, with its reference to "work-starved men searching for jobs that don't exist".

“It's much easier to guarantee the right to vote than it is to guarantee the right to live in sanitary, decent housing conditions," King said at Stanford. "It is much easier to integrate a public park than it is to make genuine, quality, integrated education a reality. And so today we are struggling for something which says we demand genuine equality.”

Tomorrow: King in Memphis

Martin Column / President Barack Obama - 01/17/2011

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

Barack Obama, Meet Gray Davis

The Massachusetts Massacre rocked the D.C. establishment. But when it comes to political earthquakes, there’s no place like California. A look back at the Golden State’s electricity crisis, when a cautious governor let the state’s taxpayers bear the financial brunt of deregulation and was later ousted, suggests that last Tuesday’s vote was merely a foreshock of what lies ahead unless President Obama and congressional Democrats step up.

Nine years ago, Wall Street energy traders took advantage of California’s newly deregulated electricity market to do what Wall Street always does. By gaming the system, buying and selling electricity contracts multiple times, sending power out of state and ultimately shutting down their power plants to create blackouts, the speculators drove the price of electricity through the roof, until the state’s utilities collapsed and the California economy seized up. It was a massive windfall for Wall Street.

Although deregulation had been signed into law by Republican Governor Pete Wilson, it didn’t take full effect for several years. By the time deregulation proved to be the disaster myself and other consumer advocates predicted it would be, the Governor of California was Gray Davis, a moderate Democrat who was on the short list of contenders for the Presidency in 2004.

Then the lights went off – in middle of January, when consumption in California is at its lowest of the year. The energy industry said its plants were down for maintenance. The Bush Administration blamed California for not building enough power plants. But anyone not on the industry’s payroll or blinded by worship of the free market could figure out that California was being scammed, big time, by an artificial shortage.

With traffic signals dark and businesses shutting down, we called upon Governor Davis to send in the National Guard, seize control of the power plants, and turn the juice back on.

Davis didn’t know what to do. Deregulation wasn’t his idea, but it melted down on his watch. We later heard that representatives of the California Public Utilities Commission and some of the state’s utility companies had privately urged him to use the power of eminent domain to take over the plants. But Davis declined.

Instead, he brought in Wall Street advisors from firms like the Blackstone Group to guide him. At that point, the state’s utility companies had run out of money to pay for electricity. The energy companies refused to generate any more electricity unless the state of California – the taxpayers – stepped in. The Wall Street rating agencies piled on, threatening to downgrade the state’s credit rating if Sacramento didn’t agree. It was “blackout blackmail,” but Davis’s Wall Street advisors convinced him that it was the only solution, and he capitulated.

California borrowed tens of billions of dollars to pay the energy companies their vastly inflated prices for electricity. Our electricity bills will reflect that debt for another 20 years. Meanwhile, Wall Street firms reaped billions of dollars – from the phony crisis, and from the bonds that were floated to pay for it.

The lights came back on. But California voters never forgot how Gray Davis handled the confrontation between Wall Street and Main Street. And when an action figure from the movies gave them an opportunity, they terminated Davis’s political career.

Similar forces were at work in the Massachusetts election. Bay State voters were simply the first in 2010 to have the opportunity to express their dismay at how Washington has handled the financial crash that Wall Street engineered.

Like Davis, President Obama wasn’t even on the scene when Congress and federal regulators dismantled the Depression era safeguards that protected us against a speculation-driven collapse. But when confronted with an unprecedented crisis, President Obama, like Governor Davis, choked.

Instead of using every measure of his presidential authority to stop the speculation, punish the perpetrators, reform the financial system and relieve struggling Americans, Obama brought in a cadre of Wall Street players whose advice was, not surprisingly, to spend trillions of taxpayer dollars to bail out the banks, credit card companies and hedge funds, and let Wall Street go back to business as usual with barely a slap on the wrist. The hundreds of millions of Americans who didn’t qualify for a federal bailout were left empty-handed.

Like Davis, Obama will have a couple of years to turn this political and personal debacle around.

Putting a cap on the interest rates we pay to borrow our own money from banks and credit card firms would help millions of consumers weather the coming months and get the economy going again.  Replacing Geithner, Summers and others who used to work for the industry with a few Nobel Laureates like Joseph Stiglitz who warned of the coming collapse would be good for the White House, now trapped in its own pro-Wall Street bubble. Last week, Obama proposed breaking up the too-big-to-fail banks, which would prevent more reckless speculation and future crash/bailouts. But Americans now wonder if the President will follow his words with deeds, or surrender to the industry lobbyists without a fight, as he did before.

Whether Obama will find the courage that eluded Gray Davis remains to be seen.

Harvey Column / President Barack Obama / Too Big To Fail - 01/25/2010