Identity Theft in the Matrix

Something weird occurred on my TV when I happened to catch a few minutes of the Madrid Tennis Open on Sunday. Whatever technology these stadiums use to provide constantly changing television advertisements along the sides of the court wasn’t working too well. Some of the furniture on the clay itself seemed to be dissociating on an atomic level. A chair looked as if it was disappearing in a shimmering blue cloud. It was like that moment in the movie The Matrix when the reality of the unreality becomes apparent to Neo – a house cat vanishes for a split second, then reappears.

The technical snafu made the match pretty hard to watch, so I reverted to the New York Times, where columnist Thomas Friedman happened to be expressing astonishment at the profound influence of corporate marketing values on American society. Few have written more enthusiastically about the spread of capitalism worldwide than Friedman, so it was surprising to hear him say he “had no idea” that famous authors, revered sports players and even public institutions have all bartered their identities for corporate cash.

Just then, Roger Federer won the match. “Watch this,” my wife said in a moment.  “He’s going to reach into his gym bag and pull out an expensive watch, so he’s wearing it when he gets the award.” Sure enough, with a bemused grin – I took it to be a guilty “ok, I have to do this” sort of look – Federer theatrically slipped his sweaty hand into the bag and slowly pulled out a gleaming Rolex, which he then slid onto his wrist.

I’m no slouch when it comes to tracking the commodification of our culture – a Ralph Nader spin-off, Commercial Alert, has been quietly raising the issue for years – but I’d never witnessed someone of Federer’s stature actually engage in a corporate sponsorship ritual, one which happens to be well known to tennis fans.

The impact of celebrity endorsements and the promotion of products in TV shows and films is more than just an idle curiosity. For many years, Americans were urged to close the gap between the lifestyle they aspired to – as displayed in the entertainment media – and the economic reality of their lives by borrowing on their homes and credit cards. This masked a gaping and painfully growing chasm that is now the topic of conversation only because Wall Street flushed the toilet on our economy a few years back.  Where once you too might have been able to pull a beautiful watch out of your duffel courtesy of a JP Morgan Chase credit card, that’s no longer possible for many.

Even more insidious than dictating our personal dreams and values is the corporate capture of our political identities. In that sense, the United States Supreme Court’s infamous decision in Citizens United symbolically acknowledges what had long ago become the Golden Rule of American democracy: those who have the gold, rule. By bestowing human rights upon corporate entities, and equating spending money to buy elections with freedom of speech, Citizens United locked in a system of legalized bribery that locks most Americans out of the electoral process that is our birthright.

Sure, we still have the right to vote. But the choices we are offered are usually determined by a political establishment mostly dominated by corporate money and a vast apparatus of election consultants, public relations hacks and lobbyists.

Every corporate dollar spent on candidates and elections pays an enormous return on the investment.  The Money Industry gave $5 billion to federal officials in the ten years leading up to the 2008 financial debacle, as we documentedin 2009 (PDF). The result: “bipartisan” decisions by lawmakers and the executive branch stripping away decades of legislation designed to protect America against lunatic speculation. Liberated, Wall Street gambled till it lost everything. Cost to American taxpayers: hundreds of trillions of dollars in bailouts, lost jobs, battered businesses, devastated communities – a Depression. Heads they win, tales you lose.

A recent study by academics at the University of Kansas examined how a particular federal tax break for multinational corporations became law, and what happened after that. They calculated that for every $1 spent on lobbying in favor of the tax break, the companies were spared $220 in taxes – a return of 22,000%.

Last week’s revelation that JP Morgan Chase had lost $2 billion through trading practices that are supposed to be illegal under the financial reform law passed by Congress in 2010 begged the question: how did they get away with it? Answer: JP Morgan Chase spent millions on lobbyists whose job was to weaken the law, and delay its implementation. The current draft of the federal regulations required to enforce a key provision of the law is a 298-page monstrosity; thanks to JP Morgan’s lawyers, it’s loaded with political booby traps and sabotaging IEDs that will utterly neuter the law, if it ever takes effect.

Mission accomplished.

With staggering results like these, it’s no wonder that the corruption of American politics is now an industry itself. The Times estimates its size at $6 billion a year, and reports that a series of mergers and acquisitions is creating a corporate lobbying conglomerate where the best and brightest – including retiring members of Congress – alight.

This is the Invisible Government that used to be the topic of novelists and conspiracy theorists. In the celebrity-driven entertainment Matrix, it’s easy to miss if you aren’t looking around and wondering what’s going on.

 

Harvey Column / Paul Volcker / Supreme Court / Too Big To Fail - 05/15/2012

Doing the minimum for the 99 percent

From both left and right, commentators have been heating up the Internet with proposals to raise the minimum wage from $7.25 an hour.

It’s not just Ralph Nader beating the drum for the Occupy movement to spearhead a movement to raise the wage, which hasn’t been increased since 2009.

Ron Unz, commentator at the American Conservative, has proposed an increase as part of a new Republican immigration strategy, and he’s has been pleading for Mitt Romney to adopt an increase in the minimum wage as part of his campaign.

Romney has yet to heed Unz’s plea, which force the candidate to fight some ingrained Republican dogma that preaches against the minimum wage, let alone increasing it. According to this old dogma, the minimum wage discourages small business from hiring.

It was President Obama’s chairman of his council advisers, Alan Kreuger, wrote a study, back when he was a Princeton economics professor, who debunked that notion.

In the past, Romney has shown some willingness to discard the customary Republican disdain for the minimum wage, speaking in favor of increases pegged to increases in the consumer price index.

Then last month, after the Wall Street Journal and others beat up on Romney’s minimum wage position, the leading Republican contender backed down. “There’s probably not a need to raise the minimum wage,” Romney told CNBC.

On this issue, the Wall Street Journal and the Republican base is way out of step with voters across the country, who consistently support an increase. According to one recent poll, 67 percent of voters favor an increase.

Which brings us to the other candidate: the president. He’s always said he favors an increase.

Back in 2007, when he was just a contender in Bettendorf, Iowa, Barack Obama gave a speech on “Reclaiming the American Dream,” in which he promised:  “I won’t wait 10 years to raise the minimum wage, I’ll raise it every single year. That’s the change we need.”

After Obama was elected, during his transition to the presidency, Obama’s team promised to raise the minimum wage to $9.50 an hour by 2011, with future raises pegged to inflation “to make sure that full-time workers can earn a living wage.”

But the only increase during Obama’s administration was the one in 2009 from $6.55 to $7.25, which was mandated by a law passed during a previous administration.

The president had nothing to do with it.

Last year, when his labor secretary, Hilda Solis, was asked about the need for a minimum wage hike, Huffington Post reported that she “largely ducked the questions.”

Maybe keeping his campaign promise and improving the economy are not good enough reasons to recharge the president’s enthusiasm for launching a campaign to boost wages for the lowest paid workers.

Fortunately, there are plenty of other reasons that should convince him to do what he said he would.

For one, it’s simply the right thing to do.

As the president himself pointed out just four months ago in a speech with a broad populist message in Osawatomie, Kansas, income inequality is the “defining issue of our time.”

In 1968, the federal minimum wage was $1.60 an hour. Gasoline was 34 cents a gallon and an average new car cost $2,800 dollars.

So the worker on minimum wage could buy nearly 5 gallons of gas for an hour’s wage.  Now that minimum wage worker can buy less than 2 gallons of gas for an hour’s wage.

If you adjust that 1968 wage for inflation, it would be $10 an hour – far more than today’s $7.25 minimum wage.

As the New York Times pointed out Sunday, the average corporate CEO made $14.4 million last year, compared to the average annual U.S. salary of $45,230. A fulltime worker paid the minimum wage makes far less – $15,080 a year.

Correcting for inflation, those with the least income have seen their incomes reduced over the past decade.

Another good reason for Obama to get with it– his base, which has been frustrated with his compromises with Republicans and cave-ins to bailed-out bankers, strongly supports an increase. And so do independent voters. Obama needs both of those groups to win re-election. So doing the right thing is also smart politics.

Income inequality / Martin Column / Mitt Romney / President Barack Obama - 04/11/2012

Don’t Dump the Government, Sue It!

When our government institutions fail us through incompetence or corruption – the financial collapse being Exhibit A – what is the solution? That’s the question I posed a few weeks ago.

The Tea Partyers increasingly seem to advocate getting rid of government altogether, or at least the federal government. They (and the health insurance industry) are getting a lot of mileage these days by arguing that the Wall Street debacle shows government cannot be trusted to regulate health care. It’s not a crazy argument, but their solution is.

When government fails, the answer is not to get rid of government, but to force it to work better. How?

To start, citizens should be given “standing to sue” the federal government. It might surprise you to learn that the courts have often rejected the right of citizens to go to court to enforce state and federal laws. When I worked for Congress Watch, the D.C.-based lobbying group founded by consumer advocate Ralph Nader, back in the late 1970s, one of our top goals was to make sure that when Congress passed a law, no matter the subject, it gave Americans the right to sue if a federal agency failed to enforce that law, conducted itself in an arbitrary manner, spent taxpayer money improperly, or if the law was unconstitutional. We were often unsuccessful, defeated by lobbyists for big business who hoped to later subvert the agencies with impunity. Nader has written frequently about this tool of democracy, and it’s also covered in an excellent biography of the Nader consumer organizations by David Bollier that is now available online.

Can you imagine how much economic damage could have been  avoided if citizens had been able to sue the federal agencies that unilaterally stopped regulating the Money Industry over the last decade?

A lot of Americans don’t like litigation – because they have never seen how it can work to protect their interests as consumers or taxpayers. But suing the government is a crucial, even life-saving right that is part of the law in some states, including California. For example, my colleagues at Consumer Watchdog and I sued the California Department of Managed Health Care when it suddenly started permitting HMOs to evade state laws and deny autistic children medically-necessary treatments. The agency’s misconduct began after intense behind-the-scenes lobbying by the heath insurance companies. The trial will be held this fall in a Los Angeles Superior Court and based on a recent preliminary ruling by the judge, we are looking forward to forcing this renegade agency to follow the law.

No doubt the prospect of litigation against the government raises fears of wasted taxpayer resources. But court rules allow judges to block truly frivolous cases. And I believe the costs would be more than offset by the benefits to Americans.

Standing to sue is one of many proposals for systemic reform that you don’t hear much about, because they aren’t sexy. They involve changes to the internal mechanisms of government. But if they were adopted, government would operate far more effectively and with much greater accountability to the public.

Harvey Column - 03/23/2010

All Nader is Saying is Give Super-Rich a Chance

Having spent the last half century showing ordinary citizens how they could  fight corporate power, legendary crusader and presidential candidate Ralph Nader has taken on a new project.

Now he wants the wealthy, more specifically, the wealthiest of the wealthy, to confront the country’s problems.

In undertaking the project, Nader didn’t call a teleconference, issue a manifesto in the New York Times or send an email to George Soros.

He toiled for 5 years on Underwood typewriters to write his target audience an eccentric 733-page work of fiction, “Only the Super-Rich Can Save Us.” Nader describes it as a  “practical utopia.”

And Nader says the super-rich have to read the whole thing in order to get the message because it’s a “blueprint for action.”

“I talked to Ted Turner the other day,” Nader told me by phone. “He said he’d  gotten through 100 pages.”

A character based on Turner, named Ted Turner, plays a starring role in the book, along with 16 other characters based on the super-rich and celebrities, including Warren Buffet, Bill Gates and Warren Beatty. The story follows the super-rich and a parrot in their collaborative effort to turn the country around.

Yoko Ono plays a key role in the novel, inventing a logo that causes people to discard their apathy. Warren Buffet gets the ball rolling, inspired by a visit to post-Katrina New Orleans. Sol Price, the founder of Costco, eulogized on WheresOurMoney.org several weeks ago, leads a successful campaign to unionize Wal-Mart. Warren Beatty runs for governor against Schwarzenegger – and wins.  The group of wealthy do-gooders call themselves the Meliorists.  They push for universal health care and a cleaner environment, start a new political party and infiltrate corporate boards.

Nader lugs his message through his fantasy world, in which the rich and famous attend a series of meetings, conferences, conference calls, press conferences and other gatherings delivering policy briefs and stump speeches.

“I’m trying to get the rich to think differently,” Nader said. “They’re good at building business but at making change, they’re amateurs.

Nader says proudly: “There’s never been a book like it written in the history of the country.”

That part is probably true.

Wealthy people have always supported social causes, from abolition to the NAACP and women’s movement, Nader explains. What he’s proposing is that the wealthy take it the next level, and create a movement for themselves.

If the super-rich ponied up a mere $1 billion, that could fund a successful fight against insurance and pharmaceutical companies blocking single-payer health care that a majority of the people in the country support, Nader said. “Money brings money, money brings knowledge and knowledge is power,” he says.

And the super-rich wouldn’t even miss the money, Nader added.

I suggested to Nader that even those eager to pick a 733-page tome might be reluctant to pick up his, in particular, because they’re still mad at him over the 2000 election.

Nader was unbowed and unapologetic. Far from costing Gore the election, Nader says that the former vice-president only did as well as he did because Nader’s campaign forced him to take stronger positions. “Tell them to call Al Gore,” Nader said. “I actually made his campaign better.  He was too namby-pamby. Wherever he took more populist positions he did better.”

Nader has little good to say about the current occupant of the White House, who he calls a Wall-Street funded phony. Scanning the political landscape, all is not lost. Nader sees one politician who could have stepped out of the pages of “Only the Super-Rich Can Save Us:” Michael Bloomerg, who has taken on transfat and tobacco. “He’s doing what I’m writing. It’s non-deductible philanthropy. It takes on power and shifts it.”

Martin Column - 01/23/2010