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

Reality-based tax breaks

By now you’ve heard the bitter, widespread debate over whether giving the wealthiest Americans fat tax breaks will ever create jobs.

But everybody agrees on one thing – we shouldn’t just give rich people tax breaks so they can have even more money to do whatever they like with.

Don’t we?

That’s why I was intrigued by this proposal that would tie tax breaks to the actual creation of jobs.

The proposal was floated by Benjamin Barber, a Democratic theorist writing on Huffington Post.

Barber suggests a system of vouchers to make sure they’re creating jobs with their tax breaks.

“Conservatives should certainly welcome the principle of vouchers, which they have been proffering for a long time to the poor for education, groceries and housing – and now, courtesy of Mr. [Paul] Ryan, for Medicare too,” Barber writes, referring to the Republican vice-presidential candidate’s proposal to have the government give future Medicare recipients cash to buy insurance instead of health care. “The premise has been that a voucher prevents "irresponsible behavior" by those being helped, like buying drugs instead of groceries or a golf caddy instead of private schooling for the kids. It's a way to prevent the poor from getting all that "free stuff" Mitt Romney thinks they are always conniving to acquire.

Basically, it’s so simple I’d be surprised if someone hasn’t suggested it before: If you create real jobs, you get a tax break. No job creation, no tax breaks.

While Barber appears to suggest granting the tax cuts first and taking them away if the tax break doesn’t lead to jobs, I’d flip it: base the tax cut on hard proof that the jobs have been created.

Proponents of this latest version of the trickle-down theory should have no problem with the wealthy actually having to prove they’re creating real jobs to earn their tax breaks.

Because nobody wants to give away money for nothing, right?

I think the proposal could be refined to link the quality and number of jobs to the size of the tax cut.

For example, buy a yacht: no tax cut. Enjoy your yacht.

But prove you created a significant number of high-wage jobs with health care benefits and pensions, get a bigger tax cut.

Extending the logic of Barber’s idea, if you outsource jobs, shouldn’t your taxes increase?

Barber has hit on an issue that extends beyond just tax cuts – government officials have been extending all kinds of subsidies to business owners for creating jobs without ever requiring proof that the business owners actually create the jobs, or requiring that the subsidies be returned if the jobs are destroyed.

The very notion that we’ve allowed these huge tax cuts for the wealthy without demanding proof that they lead to real, not just theoretical, job creation, suggests how far we’ve moved away from the sensible fact and data-based world into a realm based on wish fulfillment for the wealthy who dominate our politics. The notion that proponents of the tax cuts want to pay for their extension by eliminating tax breaks that help the middle class, like the home mortgage tax break, also suggest how far our political debate has gone astray. Barber’s proposal suggests a way to get it back from fantasyland.

 

 

 

 

 

Martin Column / Mitt Romney / Paul Ryan / Tax breaks - 08/27/2012

Paul Ryan's battle for billionaires

Thanks to the Republican vice-presidential candidate, Paul Ryan, we’re going to be saved from a negative campaign. Now we’ll be elevated by a campaign about Big Ideas.

At least that’s the latest tripe being peddled by the Big Media, which has spent a lot of time drooling over the insane Ryan budget plan House Republicans passed before it died, only to be joyfully revived by Democrats who sought to pin in to the chests of their Republican opponents in Congressional races, then revived again by a befuddled Mitt Romney, who seems to want to cling to it (for his base) and distance himself from it (for everybody else).

According to the media, Ryan is a cheerful wonk who is the only one brave and bold enough to propose a plan to reduce the federal deficit. Never mind that the numbers don’t add up, or that his budget scheme involves a massive future reductions not only of Medicare but all government services except defense spending.

Ryan has become a top expert at capitalizing on legitimate skepticism about government and economic anxiety in the wake of the 2008 bailout and grafting those feelings on to the austerity agenda of the 1 percent – crushing all government regulation, reducing popular government services like parks and health care for the elderly, and privatizing Social Security while placing the burden of the nation’s fiscal problems on those least able to afford it and keeping tax rates low for the wealthiest Americans.

For our media elite, these are what pass for serious ideas. There’s little scrutiny beyond reporting Ryan’s rhetoric, in which he insists he’s out to save Medicare and merely facing a fiscal reality that others are afraid to confront.

You don’t have to dig very deep to find Ryan’s real motives, and who the winners will be if he wins his fight.

As usual in contemporary politics, the reality can be found in the money that has fueled Ryan’s rise. Among his top campaign contributors: Bank of America, Goldman Sachs, UBS bank and Wells-Fargo, along with corporate powerhouses like AT&T, Blue Cross-Blue Shield and Northwestern Mutual. He’s been closely associated with the billionaire Koch Brothers’ Americans For Prosperity.

Once you look into Ryan’s actual record, he looks a lot more like your garden-variety congressional hypocrite: preaching the free-market gospel while he votes for the 2008 no-questions-asked bank bailout, trashing the Obama administration stimulus package while making sure that his congressional district got its share of the spoils.

If the media were doing its job, Ryan would be dismissed for the craven con artist that he is, not lionized. Mitt Romney claims that he chose Ryan to balance out his own inexperience in Washington. But Ryan’s efforts to push through his budget scheme have failed miserably – except at making him a media darling.

If the media were doing its job, the headlines would be describing Ryan’s real, and embarrassingly modest, legislative record since he was elected to Congress in 1998. His first successful piece of legislation renamed his local post office in Janesville, Wisconsin for longtime Wisconsin Democratic congressman and former defense secretary Les Aspin in 2000. His other legislative achievement has been a bill to amend the IRS code to modify the taxation of arrow components. (Ryan uses bows and arrows for sport.)

Along with other fellow Republicans, he signed on to the Bush tax cuts, a partial-birth abortion ban and several efforts to increase sanctions against Iran.

Aside from that, he’s co-sponsored eight pieces of legislation issuing commemorative coins and five resolutions honoring Ronald Reagan.

There must have been some tough choices involved. Just who exactly should get a commemorative coin in their honor? Not just anybody, and you’re bound to make somebody mad. But it’s not exactly a profile of courage. How much courage does it take to do the bidding of the CEOs who keep you in office, against the retirees and the poor who can’t afford fat contributions and lobbyists?

 

 

 

 

 

Congress / Martin Column / Mitt Romney / Social Security - 08/16/2012

Is born-again bank buster for real?

Who is Sandy Weill and why should we care that he now says he thinks big banks should be broken up?

Weill built Citibank into the financial colossus whose spectacular collapse in 2008 helped tank our economy. He said he had a vision of creating giant financial supermarkets that conjured up convenience, friendly service, well-lit aisles and lots of choices. But what he was actually building were massive financial tankers fueled on fraud and risky, toxic assets no one understood, kept afloat with dirty back-room deals, hijacked regulators, lobbying and campaign contributions.

To make that vision a reality, Weill also did more than anyone else to drive the final spike through the heart of the Depression-era Glass-Steagall law, which for seventy years had kept risky investment banking separate from federally-guaranteed traditional banking, reducing the risk of bank failures. President Clinton signed the bill repealing Glass-Steagall in 1999.

For his efforts, Weill, 79, made gazillions before he retired in 2006, ahead of the financial collapse.

He also earned a spot among a very select group - Time Magazine’s “25 people to blame for the financial crisis.”  Weill, Time said, helped create the country’s “swollen banks,” which remain one of the economy most serious unsolved problems.

His Citibank is one the worst, and remains on life support only through $45 million [million?] worth of the taxpayers’ generosity.

It didn’t help Weill’s reputation that a few weeks after Citibank accepted its bailout, he used the Citibank jet to fly to his vacation in Cabo, a flight immortalized by the poets on the New York Post copy desk with the headline: “Pigs Fly.”

It was only six months ago that Weill announced he was “downsizing” and simplifying his life, selling his Central Park West apartment in Manhattan for $88 million – more than double what he’d paid for it, as well as attempting to unload his yacht for nearly $60 million. Weill moved to another apartment downstairs.

But downsizing doesn’t mean the same for an uber-banker that it does for the rest of us. He spent $31 million on the largest real estate-deal in Sonoma County’s history, buying a Tuscan-inspired villa that includes 8 acres of vineyards, seven miles of private hiking trails, and an 11,605-square-foot mansion made with 800-year-old Italian roof tiles and 200-year-old wood beams, and a fire truck that comes with seven firefighters. A real estate agent cautioned against viewing Weill’s purchase as a sign that the real estate market in the county north of San Francisco was recovering. As one Coldwell Banker agent said: “[The sale] is not an indicator of an emerging real estate recovery, but rather the ability of the world’s wealthiest individuals to buy what they desire.”

There’s been all kinds of speculation about why has now come out in favor breaking up big banks. But the best way to judge whether he’s serious, or just trying to get a little good PR, is to examine how much cash he’s willing to spend to make it happen.

When bankers, led by Weill, wanted to repeal Glass-Steagall, they fought for 20 years and spent millions in lobbying and campaign contributions before they won. The big banks would certainly put up a similar fight against its reinstatement. No one knows better than Weill that when it comes to changing banking regulations, it’s not what people say that matters; money talks.

How much is Weill willing to spend in support of his newfound conviction? Without massive amounts of money behind them, his words are no more than an old mogul’s sad, empty cry for attention.

 

 

 

Glass-Steagel / Lobbying / Martin Column - 07/30/2012

That incredible shrinking foreclosure settlement

I checked in with Citibank the other day to see how they were doing on their promise to reduce principal on loans for qualified underwater borrowers.

The bank had made that promise as part of a highly touted national settlement of foreclosure fraud charges with state attorneys general back in February.

One thing the bank did not agree to, apparently, was any sense of urgency.

A bank representative told me they had taken a couple of months to get set up and were now in the process of reviewing their borrowers’ files.

He said he thought they would be done by mid-August.

One thing we know for certain: without a tough independent monitor to track what the banks are doing, and not doing, they’ll take their time to produce little help for troubled borrowers.

We know that from the banks’ past poor performance in the administration’s various foreclosure aid programs.

But now state politicians are threatening to grab the cash that banks paid as part of the settlement – money that was supposed to be used to pay monitors to oversee the banks’ compliance with the settlement, along with hiring more housing counselors that could guide homeowners to assistance where it was available and providing legal advice.

At issue is the relatively small amount of cash penalties the banks actually had to turn over in the $25 billion settlement– about $5 billion– with half of that supposed to go to state attorneys general for new foreclosure assistance.

Another $20 billion consists of a dubious and highly complex system of credits given to the banks for taking actions to help homeowners, some of which they were already supposed to be doing.

The national mortgage settlement has always been mainly a PR stunt for the state attorneys general and the Obama administration, to try to make up for their shameful collective failures to protect homeowners from the bankers’ continuing fraud and sloppiness in the foreclosure process, or to hold bankers accountable.

The investigative outfit Pro Publica delved into what they called the “billion-dollar bait and switch,” with states planning to divert $974 million from the settlement to their general funds to cover serious budge deficits arising, ironically, from the Great Recession, which was caused by the bankers’ out of control speculation.

Among those that are looting money that was supposed to be targeted at helping those facing foreclosure are states that have been particularly hard hit by foreclosures, including California and Arizona. Those states got more money from the settlement to compensate for their residents’ victimization by the biggest banks in the foreclosure process.

In California, Governor Jerry Brown now intends to use the state’s $411 million settlement proceeds to help plug a severe budget gap, in particular to pay for existing housing programs, but no new foreclosure assistance initiatives.

You would think diverting the proceeds of a legal settlement would be illegal. But apparently states have the power to raid the settlement funds, having done so in 2003 with fancy financing schemes to get state officials’ hands on funds that were supposed to be targeted for health care costs from a 1998 settlement with tobacco companies, the San Francisco Chronicle reported.

State budget problems brought on by the 2008 financial collapse are enormous, but no more compelling than the continuing failure of our elected officials to grapple with the foreclosure crisis. That failure is now underscored by the hollow ring of the state AGs’ promises, and compounded by governors’ betrayal of  those promises.

 

 

California Attorney General Kamala Harris / Foreclosures / Martin Column - 06/01/2012

Will the Supreme Court Split the Difference on Health Care and Immigration?

"The High Court" (c) Charles Bragg

Last November, the U.S. Supreme Court announced it would hear one of many lawsuits by conservative officials challenging the new federal health care reform law championed by President Obama. At the time, you will recall, very few observers thought there was a serious chance that the high court would invalidate the legislation.

I was among them –until three weeks later, when the Supreme Court announced it would hear the federal government’s challenge to Arizona’s immigration law, which bars illegal immigrants from trying to get a job and gives state cops the power to arrest people suspected of being illegal immigrants. The Obama Administration argues the Arizona law interferes with federal authority to control the nation’s borders.

When I heard that the Court took the immigration case, I was pretty sure I saw a trade-off in the works.

Here’s how I reckoned it: extreme conservatives loathe universal health care (and the President) and want to stop it now, before it takes effect and becomes one of those successful federal programs, like Social Security, that becomes wildly popular and hence impossible to privatize or repeal.  Liberals, by contrast, aren’t crazy about the sorely compromised product that President Obama signed, but they believe that everybody should receive the health care they need, and that the government ought to at least mandate fair rules in the marketplace. Overturning the new law would set liberals ablaze, and give President Obama a powerful campaign issue – activist judges – in the Fall.

On immigration, many liberals are uncomfortable with the harsh and arguably unconstitutional provisions of Arizona’s law. And they remember how the “state’s rights” movement was once a thinly veiled euphemism for maintaining state laws that discriminated against African Americans. But conservatives strongly support the right of Arizona to take extraordinary measures to stop illegal immigration. Overturning the Arizona statute would anger the conservative base.

See where I’m going here?

By taking both cases within a few weeks of each other, the Republican majority on the Supreme Court gave itself the kind of political cushion it didn’t have when it handed the presidency to George W. Bush in Bush v. Gore.  The high court can grant conservatives the massive victory they seek by invalidating federal health care reform, and then disappoint them by ruling in favor of the federal government in the Arizona case.

“See! Impartial!” the pundits will trumpet;  “this proves that Supreme Court ‘judges are like umpires,’” as now Chief Justice John Roberts put it during his confirmation hearings on Capitol Hill in 2005.  “Umpires don't make the rules; they apply them. The role of an umpire and a judge is critical. They make sure everybody plays by the rules,” he said at the time, and it sounded reassuring.

“Split the difference” maneuvering is a common feature in American politics. I've seen it in action ever since I first worked on Capitol Hill in the Seventies. The lawmaker votes against a bill – disappointing some – only to vote for a different bill a few days later, pleasing them. All is forgiven, or maybe not; either way, it's portrayed as proof of "independence": “If both sides are mad at me,” the politicians’ old saw goes, “I must be doing something right.”

That may fool some of the people some of the time, but such tactical machinations are of course completely improper in the judicial branch, where justice is supposed to be blind and decisions made based on the merits of the case, not whether “the base” will be thrilled or disappointed, or both.

As a lifelong student of the law, I hope I’m wrong about the U.S. Supreme Court. Those who devote their lives to justice, as most lawyers one way or another must, can only rue the public’s distrust of the judicial process.

That’s growing, and no wonder. Some conservatives indiscriminately berate “judicial activists” on the bench. Meanwhile, corporations spend increasingly vast sums of money belittling judges, juries and lawyers in the quest to pass legislation repealing the average American’s right to hold wrongdoers accountable in a court, which they call "tort reform."

And in a little noticed part of its infamous Citizens United decision, the Supreme Court granted corporations the First Amendment right to campaign for or against judges as if they were politicians. Super PACs are now targeting justices whose rulings aren’t pro-business enough – as if “pro-business” is a constitutional imperative unto itself.

I checked the Constitution – it’s not in there.

Unfortunately, what’s transpired since last winter gives me little reason to believe that the current Supreme Court will put respect for precedent over politics. During three days of hearings last month, the notion that the Supreme Court would invalidate the federal health care law went from being a right wing fantasy to a possible, even likely, outcome based on the questions and comments of the Republican justices.

In fact, after the hearing on the immigration law last week, it looked to many like the Supreme Court was prepared to rule in favor of Arizona.

The Conventional Wisdom now has the Court dumping heath care reform and upholding the immigration controls, making it a clean sweep for the anti-federal government conservatives. After all, members of the Supreme Court cannot be held accountable for their actions, short of impeachment. So why would they care whether they look like they’re “balanced”?

So much for my theory.

On the other hand, a political version of one of the laws of quantum physics may be at work on the Court at this very moment. The Heisenberg Principle posits that the mere observation of atomic particles changes their course. Since its astounding determination that the Constitution protects corporate money, the Supreme Court has come under a nearly unprecedented degree of criticism. Perhaps the public scrutiny is beginning to have an effect.

At least two members of the Court itself have said they want to reconsider it (PDF). Justice Anthony Kennedy, the “swing vote” on the bench, may end up unwilling to join in a wholesale re-engineering of constitutional law.  Some experts suggest that Chief “Umpire” John Roberts might be sensitive to how history will view his stewardship of the institution.

So I still wouldn’t be surprised to see a “split the difference” strategy play out in June, when the Supreme Court is expected to issue its decisions on both cases, just five months from the election.

Citizens United / Harvey Column / Supreme Court - 04/30/2012

Main Street talks back

Inside the D.C. bubble, Wall Street’s titans continue to have their way.

Their Republican allies in the Senate helped the titans kill the Buffet Rule, which would have required those who made more than $1 million a year to pay at least 30 percent in taxes, double what investors pay on capital gains income.

Wall Street has continued to stifle efforts to regulate risky derivatives like the ones that led to the financial collapse, while most of the Dodd-Frank financial reform enacted in the wake of the financial crisis has yet to be implemented.

In the Wall Street Journal (no link), columnist David Weidner asserted Wednesday that Wall Street has gotten some of its swagger back. “Big financial interests,” Weidner wrote, “are beating back every broadside with a vigor not seen since the financial-bubble days.”

But outside Washington it is a different story.

Voting for the first time on the CEO compensation of a too-big –to-fail bank, Citibank shareholders rejected a $14.9 million annual compensation for its top executive.  The “say on pay” vote, mandated as part of Dodd-Frank, is strictly advisory. Citibank officials can ignore it if they want.

For years, the company’s executives had promised that their pay would be strictly tied to performance. The CEO, Vikram Pandit, had been making $1 a year since the bailout during which time the bank performed miserably. But this year, the bank’s directors decided that Pandit deserved to get back on the gravy train with the rest of the industry’s CEOs.

The following day, shareholders at another smaller regional bank, FirstMeritCorp of Akron, Ohio, rejected the compensation package for their CEO in another “say on pay” vote. Directors of that bank wanted to raise the CEO’s pay $1 million to $6.4 million a year, after the bank’s stock had fallen 20 percent during the past year.

They’re just a couple of non-binding votes. But I found it striking that when Main Street voters had the opportunity to express their opinion directly on one aspect of Wall Street’s practices, the voters voiced disapproval.

Wall Street can’t dismiss their shareholders as a bunch of Occupy Wall Street types out to destroy the system, or marginalize their rejection as mere envy. These are hardnosed investors who would like nothing better than for Wall Street banks to get on solid footing and make money. But these voters realize that despite all the administration’s happy talk about how well the bailouts have worked, the banks still aren’t sound, and that the outrageous pay for top executives who haven’t delivered is a big part of the problem because it encourages focus on short-term profit, loading up on risk and relying on continuing government help to prop up their businesses.

According to Weidner, polls show that most voters have moved on from anger at Wall Street. That may be so. But if ordinary citizens, rather than Washington insiders beholden to Wall Street, were making decisions, I think they would coolly, calmly and rationally favor the wealthy paying their fair share of taxes, and sensible regulation that would keep the titans from getting too carried away with themselves and their schemes.

 

Congress / Derivatives / Executive Pay / Financial Reform Legislation / Martin Column - 04/20/2012

Corporations Gone Wild

It’s a magnificent time to be alive – if you’re a giant corporation, that is.

Spring is here, and after a deep chill, the mighty mega-businesses are not merely reborn, but blossoming. “Big U.S. companies have emerged from the recession more productive, more profitable, flush with cash and less burdened by debt,” swoons the Wall Street Journal.  The seductively sweet smell of speculation – in mortgages, derivatives, oil, wheat – once again fills the air. Amidst the giddy exuberance of the stock market, why dwell on the dreary conditions among the human population, where one out of every six Americans lives below the poverty line, one of every ten is out of work, and one of every five homes are worth less than the loans that secure them?

Oh to be young, free and incorporated – preferably in an island like Bermuda.

Being a Big Business wasn’t always so much fun. For a long time, corporations had to obey the same rules as the rest of us. And after Wall Street drove America into a ditch four years ago, Corporate America was hurting, too. True, many of us never really thought of inanimate objects as capable of suffering. And come to think of it, I never did meet a homeless corporation (though I’ve encountered many a crooked one). But with bailouts, special tax breaks, and the ability to borrow taxpayer money from the Fed at .05% interest, that painful period didn't last very long.

And then, in 2010, the U.S. Supreme Court decreed in the infamous Citizens United case that under the U.S. Constitution, corporations are the same as people and spending money is a form of free speech. So when corporations write checks, it’s the same as you and me speaking. And corporations have the right, under the First Amendment, to use money to buy public officials and purchase elections.

Corporate America’s been partying like its in Ft. Lauderdale on Spring Break ever since.

As you might expect from a climate of unrestrained corporate debauchery, there’ve been some ill-fated hook-ups, like AT&T and T-Mobile (the annulment cost $4 billion). But don’t worry about a newly rejuvenated Ma Bell not having any BFFs. Its 100 million customers literally cannot dump the company, at least not without paying a massive “early termination fee.” AT&T’s allies on the Supreme Court ruled last year that the company can strip you of your right to take it to court, leaving you no way to sever the relationship if your service fails, your “unlimited” data plan gets throttled, or you get overcharged.

Big businesses were screwing people way before Citizens United and Concepcion v. AT&T, of course. But those decisions fundamentally altered the balance of power between citizens and corporations in the courts, Congress and the executive branch.

Philosophers, scientists and science fiction writers have long predicted that the moment would come when artificial creatures, created by humans, would become more intelligent than humans – a technological "singularity" projected to arrive later this century. But no one would have guessed that 2010 would become the date of the political singularity – the year in which a legal construct – a corporation – would become more politically powerful than humans.

That corporations don’t yet have all the benefits of personhood misses the point. Justice Stevens’ dissent in Citizens United  warned: “Under the majority's view, I suppose it may be a First Amendment problem that corporations are not permitted to vote, given that voting is, among other things, a form of speech.” But corporations don’t need to vote. Corporations decide who gets elected simply by dumping vast quantities of cash into elections on behalf of candidates who will do their bidding.

As a student of American civic life named Tony Montana once explained, “In this country, you gotta make the money first. Then when you get the money, you get the power.”

Citizens United / Harvey Column / Uncategorized - 04/12/2012

Why the Supreme Court Wants to Kill Universal Health Care

Name the most popular federal program of all time, and you’ll understand why the Republican Supreme Court wants to kill health care reform before it gets going in 2014.

It’s Social Security, of course. Part of FDR’s New Deal, Congress enacted it in 1935 to provide insurance against the vicissitudes of old age, poverty and unemployment, all of which were made more horrific by the Great Depression.

Social Security retirement benefits are based on an individual mandate, just like the new health care law is. Workers and employers are required to pay taxes into the system now, to cover them later. You can’t have a solvent health or retirement insurance program if participation is voluntary, because no one will contribute until they need the benefits – and then they can’t pay for them, as I’ve noted. Social Security, like the health care law, is a universal system - everyone has to be part of it – both getting the benefits and paying for its cost.

Due to a limited grasp of their own history, most Americans don’t realize how similar today's campaign against universal health care is to the one waged against Social Security.

Republican lawmakers bitterly opposed (PDF) FDR’s measure – and still do, though these days they cloak their hostility behind the hysterical and unfounded argument that Social Security is about to go bankrupt. Federal Reserve Chairman Alan Greenspan claimed in 2004 that retirement benefits had to be cut and the system “privatized” or the nation would face an economic disaster (it did four years later, thanks not to Social Security but to Greenspan’s policies).  The Bush Administration concocted a plan to turn over Social Security proceeds to Wall Street, which it claimed would do a better job of investing people’s retirement savings.  Had it succeeded, most of that money would have been lost in the financial crash of 2008.

But the conservatives’ attempts to demolish Social Security have consistently failed. Why? Because Social Security works. Americans support it by huge margins – even Republicans.

Hence the vehemence of the attack on the health care law now. The anti-government forces realize that once Americans begin to receive the benefits of universal health care – no denials for pre-existing conditions, no medical underwriting, no caps on benefits – they won’t want to give them up.

That’s not all.  Under the law passed by Congress, the insurance industry stands to gain the most from the mandate that all Americans buy health insurance. But the experts understand that the program will end up being too expensive – in most states, private insurance companies are going to be able to raise their rates at will.  If this doesn’t kill universal care, it will eventually lead to a single public system just like Social Security.

Last week’s spectacle at the Supreme Court – three days of “hearings,” with some lawyers appointed by the Court itself to argue positions no party had taken – looked more like a political ambush by a legislative body than the supposedly chaste pursuit of constitutional principles.  It’s important to remember that an unelected majority of the U.S. Supreme Court almost nipped Social Security in the bud 75 years ago. Pro-industry conservatives on the Court consistently rejected FDR’s proposals to provide Americans relief from the New Deal, as I explained recently.  The Social Security law was considered in danger by FDR’s advisors. Criticism of the Supreme Court became widespread, and FDR began to prepare a plan to add more justices to the nine serving on the high court. Unwilling to provoke a constitutional confrontation that would sully the independence of the judicial branch, the Supreme Court backed down, and upheld the law.

It’s difficult to discern any similar hesitation by the current majority of the Supreme Court, with five of its nine members increasingly unabashed ideologues willing to rewrite the Constitution. Think about the Court’s decision to interfere with the Florida vote count and award the 2000 election to George Bush. Consider its 2011 decision in Concepcion v. AT&T, where five Republican appointees determined that “arbitration clauses” inserted in the fine print of virtually every contract between a giant corporation and consumers can rob people of their right to their day in court.  And then there’s the infamous 2010 Citizens United case, in which the five ruled that spending money to influence elections is a form of free speech, protected by the First Amendment. In one fell swoop, the Court disenfranchised the vast majority of Americans who cannot hire their own lobbyist or fund the election of a friendly politician.

On the other hand, yesterday President Obama sent the politicians on the high court a powerfully worded message. Briefly channeling FDR, he said: “I’d just remind conservative commentators that for years what we’ve heard is, the biggest problem on the bench was judicial activism or a lack of judicial restraint — that an unelected group of people would somehow overturn a duly constituted and passed law. Well, this is a good example. And I’m pretty confident that this court will recognize that and not take that step.”

Much is at stake here – more than health care reform itself. Public confidence in government is at record lows. As the financial crash of 2008 confirmed, money has corrupted the electoral process; the wealthy and powerful dictate public policy. The judiciary used to be the only branch of government in which a citizen could take on any person or corporation and be accorded equal stature. When Americans loses their confidence in the integrity of the courts, what is left?

Citizens United / Harvey Column / Supreme Court - 04/03/2012

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