Beware the Last Minute Political Ad Blitz - Follow the Money!

Use your vote to show that our country is NOT for sale. Watch for and disregard ads sponsored by these groups.  They have a hidden (or perhaps, not-so-hidden) agenda.

• Americans for Prosperity, 
• the American Energy Alliance, 
• Concerned Veterans for America, 
• the Freedom Partners 
• Chamber of Commerce, 
• Generation Opportunity and 
• the 60 Plus Association

     (Source: http://www.washingtonpost.com/blogs/the-fix/wp/2014/09/04/one-out-of-every-10-ads-run-in-the-2014-election-have-ties-to-the-koch-brothers/)

These groups are heavily funded by the Koch brothers who are notorious for selecting politicians who will vote in ways that disregard the public interest and promote the Kochs' business interests.

The Koch brothers have made their fortunes in industries that pollute. (Source: http://www.inspirationgreen.com/koch-brothers-products.html)

University of Massachusetts at Amherst’s Political Economy Research Institute, shows Koch Industries as the nation’s 14th largest polluter/emitter. But with their 2013 purchase of Molex, Inc they will slide closer to the top. See detailed emissions breakdowns - www.peri.umass.edu/toxic_index 

Koch Industries spent a total of $37.9 million on oil and gas lobbying during 2006 to 2009. www.sourcewatch.org

According to the International Forum on Globalization, Charles and David Koch are America’s single largest source of private money for attacks against environmental protections. They have spent over $643 million to block or rollback legal protections for clean air, clean energy, clean water, and other environmental issues through sketchy scientific research, lobbying lawmakers, contributing to electoral candidates’ campaigns, media manipulation, etc. kochcash.files.wordpress.com 

Petroleum coke (a byproduct of tar sands refining) has been irritating numerous residents in both Chicago and Detroit. Koch Carbon is storing enormous quantities of petroleum coke on the banks of Chicago’s Calumet River and Michigan's Detroit River. The ever growing piles await processing, but refineries cannot keep up with the quantity. thinkprogress.org

A routine aerial inspection found Koch Pipeline Co. spilled 400 gallons of crude oil in Texas in late October, 2013.

I repeat: Use your vote to show that our country is NOT for sale.

Is the US No Longer a Democracy?

Severe financial inequality and "money as speech" = US oligarchy (rule by the richest few).

Among the blog posts worth taking time to read are:

Erza Klein's: http://www.vox.com/2014/4/11/5581272/doom-loop-oligarchy

Matthew Yglesias': http://www.vox.com/2014/10/2/6889147/winship-tcherneva-inequality-debate

Kevin Drum's: http://www.motherjones.com/kevin-drum/2014/09/rich-are-getting-richer-part-millionth

The only way to maintain our democracy is for ALL eligible voters to get informed and VOTE.

When Corporations Abandon Their Corporate Citizenship

Talk about not paying a fair share of taxes for the benefits received.  Some corporations who do most of their business in the US are scheming to "locate" in other countries to avoid taxes.

Norm Ornstein explains how in this piece from The Atlantic:

http://www.theatlantic.com/business/archive/2014/07/corporations-still-not-people/373889/

Condensed Guides to Inequality in the US

You might be one of the many who haven't the time or the inclination to read the latest best seller on the topic of how the economics game in the US is rigged in favor of the super rich.  If so, you might want to check out this summary by Nicholas Kristof:

http://www.nytimes.com/2014/07/24/opinion/nicholas-kristof-idiots-guide-to-inequality-piketty-capital.html

And if you prefer a humorous approach to the topic, John Oliver has just the thing for you in this video:

https://www.youtube.com/watch?v=LfgSEwjAeno

John Oliver Explains How the Wealth Game is Rigged

Here's a great post from Vox.com with a video from John Oliver's "Last Week Tonight".

http://www.vox.com/2014/7/14/5897797/john-oliver-explains-wealth-gap

Is false optimism shaping your view of what's fair when it comes to taxation?

Because They Believe Our Country is More Important than Their Money

Did you know there's a group called Patriotic Millionaires?

They recently sponsored a lively discussion between economist and author Thomas Piketty and Senator Elizabeth Warren.  It's definitely worth watching.

http://www.youtube.com/watch?v=uEYAS5U5Wuk

I agree with Senator Warren: Inequality is not inevitable.  Right now the game is rigged for and by the super-rich.  But, we have our voices and our votes as leverage for change.

How Big Money Endangers Democracy

This video by Robert Reich* recently came to my attention.  In 3 minutes, it provides the premiere example of how big money endangers democracy.

http://youtu.be/QJip9qX-Qy8

It's an easy way to get informed about this important issue.  You might want to take a look at Reich's YouTube videos on other topics such as raising the minimum wage, too.

* Robert B. Reich (currently a Professor of Public Policy at University of California at Berkeley) has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President-Elect Obama’s transition advisory board. He has written twelve books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet,Supercapitalism, Aftershock and Beyond Outrage.

Raise the Minimum Wage - Advice to US from the IMF

There are steps Congress can take to counter the effects of an economic game that is rigged to favor the richest among us.

The International Monetary Fund is calling on our lawmakers to raise the minimum wage. Last week, the IMF issued their annual review of the U.S. economy, and they said that there is a lot more we can do to fight poverty. Our federal minimum wage puts us at number 11 on the list of developed nations, and our social safety net ranks even lower in comparison to other countries. We're the richest nation on Earth, yet we allow millions of people to remain in poverty. In addition to raising wages, the IMF says that tax credits that benefit low-income families should be permanently extended, and expanded to cover more Americans. The Earned Income Tax Credit and the Child Tax Credit are set to expire in 2017, despite the fact that they have the highest impact on low-income families. These recommendations could help lift millions of Americans out of poverty, but they both require that our broken Congress actually gets something done. Republicans refuse to listen to economists in our country, but maybe they'll take heed to the IMF's important advice.  (Source: transcript from "On the News with Thom Hartmann)

When we elect Representatives and Senators in November, let's throw our support behind candidates who will follow these recommendations - Democrats.

Why Inequality Matters

The CEO of one of the worlds richest banks, Lloyd Blankfein, was recently interviewed by CBS news and had this to say: “...too much of the GDP of the country has gone to too few of the people...If you grow the pie but too few people enjoy the benefits of it, the fruit, then you’ll have an unstable society.”

Read an analysis of the issue and watch a video of the full interview at the link. The income inequality comments are at 4:30 minutes into the interview.
http://thinkprogress.org/economy/2014/06/13/3448679/goldman-sachs-income-inequality/

It's important to vote for candidates who understand why inequality matters and will work to do something about it.

Saving the Middle Class through Tax Reform

Here's an excellent interview of Nobel prize-winning economist, Joseph Stiglitz, by Bill Moyers.

How Tax Reform Can Save the Middle Class

From the transcript:

JOSEPH E. STIGLITZ: It's amazing. And Americans have not yet grasped the reality of where we are. That our economic system has not been delivering for most Americans. And the fact that this has been true and that we have no longer a country where there's opportunity, where the life prospects of a young person are so dependent on the income and education of his parents means that our view of the way our economic system works has to change.
   My view is that these are not inevitable. These are not just the result of the laws of economics. You know if it were just inevitable, just the laws of economics, you'd say, as an economist, you'd say, well, that's the way it is. You know, that's, nature didn't deal us a good hand.
  But it's our policies and our politics that have shaped our economy, and shaped it in ways that have not served most Americans. And an important part of those policies are our tax policies.

And some of his comments on US markets:

And the evidence is so overwhelming that our markets don't work perfectly, that markets can and are an important force. But we have to shape markets. Come back to our theme of taxes, taxes are one of the ways we shape markets.
    If our tax system says speculation is going to be taxed at a lower rate, you're going to get more speculation. If our tax system says if you keep your money abroad, you don't have to pay taxes, you're going to get more money abroad and you're going to get less job creation inside America. If your taxes say we want to encourage real investments in America, then you can get more investment in America. So I'm an economist who believes that incentives matter. But I also believe that you have to shape incentives and that markets on their own don't necessarily shape them the right way.
   And that when we have a distorted tax system, distorted by a distorted political system that has given a huge amount of weight to the upper one percent, to the corporations, then that kind of distorted political system leads to a distorted tax system, which leads to a distorted economic system, which leads to an economy that is not performing as well for most Americans.

Listen to the full interview and you'll be ready to push for change in tax policy?

Wealth Grows Faster for the Few than Income Does for the Many

If you haven't heard of Thomas Piketty and his new book "Capital in the 21st Century," you can find an excellent introduction to his work here: http://www.truth-out.org/news/item/23817-thomas-piketty-the-market-and-private-property-should-be-the-slaves-of-democracy

The site features both a video and a transcript of Piketty's remarks.

Here's a sample of Piketty's views on taxation:

I think it is important to realize that wealth is going to be increasingly important as compared to income in the 21st century. Therefore the taxation of wealth is going to be more and more important as compared with the taxation of income. We need both, of course, but we need to rethink the taxation of wealth. In most developed countries the way we tax wealth right now is through property taxes. So for instance in the US or in most European countries you tax real estate property just in proportion to their value. So it's not progressive and also because these property taxes were set up in the 19th century, they do not really take into account financial assets or financial liabilities. So I think it would be important to adapt them to the structure of wealth in the 21st century. And it will be adequate to transform these property taxes into progessive taxation of net wealth. So for instance, if you have a house worth $500,000 and you have a mortgage of $490,000 your net wealth is only $10,000. You are not rich in any way. So in the current property tax system you shouldn't pay as much property tax as someone without a mortgage. And sometimes you even have people whose property value is below their mortgage and they keep paying the same property tax. So I think this is just not the right way to tax wealth. And both to allow people to access wealth, to accumulate wealth and also to limit the concentration of wealth at the top end of the distribution, we need to have a progressive tax on net wealth.

A Huge Tax Break That Hurts the Rest of Us

Here's something to think about on April 15, Tax Day.

Dean Baker writes in an opinion piece:

(F)or all the sneaky and squirrelly ways that the rich use to escape their tax liability, none can beat the hedge fund managers' tax break. This is the way the rich tell the rest of us, because they are rich and powerful, the law doesn't apply to them. 

The hedge fund managers' tax break, which is also known as the carried interest tax deduction, is different from other tax breaks in that it has no economic rationale. With most other tax breaks there is at least an argument as to how it serves some socially useful purpose. That is not the case with the hedge fund managers' tax break. This is simply a case where the rich don't feel like paying taxes and are saying to the rest of us, "what are you going to do about it?"

You can read more at:
http://truth-out.org/opinion/item/23074-the-hedge-fund-managers-tax-break-because-wall-streeters-want-your-money

As for "what are you going to do about it?" Vote for candidates who will end tax breaks that are geared to make the very rich even richer.  Those tax breaks leave the rest of us paying more than our fair share  to fill in the gaps.  As Warren Buffet has said: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”  The hedge fund managers' tax break is an example of how the rich make war.

If Money Is Speech, We Have a Right to Know Who is Talking

If you are as fed up with the number, frequency and content of political ads as I am, here is some welcome news.  We do not have to wait for Congress to act in order to find out whose money is speaking.  The FCC (Federal Communications Commission) has the power to force the disclosure of who is paying for ads.  (For example, we deserve to know who those "Americans for Prosperity" are. An organization's name is not enough - who funds the ads.)  But the FCC will only take action if we citizens make our voices heard.

According to a Government Accountability Office (GAO) study:

 “The FCC is responsible for ensuring that the public knows when and by whom it is being persuaded.” Again, this requirement applies to both commercial and political advertising. In fact, the GAO states, “For content considered political or that discusses a controversial issue, broadcasters must follow all requirements for commercial content and additional requirements, such as indentifying officials associated with the entity paying for an advertisement.” 

It is Section 317 of the Communications Act (47 U.S.C. §47) that requires on-air identification of ad sponsors. Explaining the rules it wrote to implement the law, the FCC stipulated years ago that political ads must “fully and fairly disclose the true identity of the person or persons, or corporation, committee, association or other unincorporated group, or other entity” paying for them. “Listeners are entitled to know by whom they are being persuaded,” said the FCC. I think we all get the drift of what’s being required here: specific identification of who is really bank-rolling all this stuff?

Read more about this from the source of the above quote at http://benton.org/node/148065 

Here are some ways to take action:

• Best way: Contact the FCC chairman and each of the commissioners and urge them to issue updated rules for Section 317 that will require the true identity of those individuals and organizations who are paying for political and issues ads to be listed.  

Chairman Tom Wheeler: Tom.Wheeler@fcc.gov

Commissioner Mignon Clyburn: Mignon.Clyburn@fcc.gov

Commissioner Jessica Rosenworcel: Jessica.Rosenworcel@fcc.gov

Commissioner Ajit Pai: Ajit.Pai@fcc.gov

Commissioner Michael O’Rielly: Mike.O'Rielly@fcc.gov

• Another good way: Sign the "Tell the FCC to Enforce Disclosure" petition on the Common Cause web site.

Involved Voters acting together can help reduce the impact of the recent US Supreme Court's decisions regarding money and political speech.

"Too Big to Fail" = Subsidies for Mega-banks

The Federal Reserve and the International Monetary Fund agree - mega-banks profit from the assumption that governments will bail them out.

To quote Matthew C Klein at Bloomberg Review:

No matter how you count it, U.S. taxpayers continue to transfer tens of billions of dollars each year to the big banks.

According to an article by David Dayen in The American Prospect (http://prospect.org/article/wall-streets-subsidy-safety-net), in recent reports both the Fed and the IMF..

agreed that mega-banks, in America and abroad, enjoy a lower cost of borrowing than their competitors, based on the perception that governments will bail them out if they run into trouble. This advantage effectively works as a government subsidy for the largest banks, allowing them to take additional risks and threaten another economic meltdown.

Dayen is hopeful, as am I, that chances for reforming the financial system will get better as Wall Street becomes isolated in denying that banks benefit from government largess.

Supreme Court Decisions and Income Inequality

Yesterday, economist Joseph Stiglitz testified before the Senate Budget Committee.  Today the US Supreme Court announced its 5 to 4 decision declaring limits on the total amount of money individuals can give to candidates, political parties and political action committees unconstitutional.

Stiglitz's prepared remarks on income inequality are worth reading and can be found here: http://www.nextnewdeal.net/stiglitz-why-inequality-matters-and-what-can-be-done-about-it.

Here is the section of his remarks that made the connection with the Supreme Court's decision for me (highlighting mine):

(W)e pay a high price for this inequality, in terms of our democracy and nature of our society. A divided society is different—it doesn't function as well. Our democracy is undermined, as economic inequality inevitably translates into political inequality. I describe in my book how the outcomes of America’s politics are increasingly better described as the result of a system not of one person one vote but of one dollar one vote. One of the prices we pay for the extremes to which inequality has grown and the nature of inequality in America—both inequality in outcomes and inequalities of opportunities—is that we have a weaker economy. Greater inequality leads to lower growth and more instability. These ideas now have become mainstream: even the IMF has embraced them. We used to think of there being a trade-off: we could achieve more equality, but only at the expense of giving up on overall economic performance. Now we realize that, especially given the extremes of inequality achieved in the US and the manner in which it is generated, greater equality and improved economic performance are complements.

More information about the Senate Budget Committee hearing can be found at:  http://www.budget.senate.gov/democratic/public/index.cfm/2014/3/meet-the-witnesses-joseph-stiglitiz-and-raj-chetty  There are links to more information about the two economists, Stiglitz and Chetty, at that site.

Learn How Wall Street Has Been Rigged Against You

Here's a link to a recent interview of Michael Lewis by Terry Gross about his latest book, Flash Boys.  Lewis outlines the problem and how a group of traders figured out how things were rigged and started a new exchange to even the playing field for investors.

http://www.npr.org/2014/04/01/297686724/on-a-rigged-wall-street-milliseconds-make-all-the-difference

From the interview summary:

You'd be surprised to hear what investment banks do to get that nanosecond edge, and how they often use it in ways Lewis describes as predatory. The victims range from some investment houses to individual investors. Lewis says high-frequency trades can end up hurting the returns on your retirement accounts. The FBI, Wall Street regulators and New York's attorney general are investigating high-frequency trading, and whether it has created an uneven playing field.

Are We Revisiting the 1920's?

Here's an article from Think Progress that cites some evidence that income inequality is at 1920's levels.  I don't think anyone would claim those days to be worth repeating.  Thirty years of policies favoring those with the highest incomes have taken their toll.

http://thinkprogress.org/economy/2014/03/31/3420998/wealth-inequality/

The following graph is from the article.  The whole thing is worth reading.

A Meaning of "Rent" That Many Aren't Familiar With

In his post at Triple Crisis, James K Boyce quotes one of the clearest explanations of the economists'  term "rent" that I've seen:

Rent isn’t just the monthly check that tenants write to landlords. Economists use the term “rent seeking” to mean “using political and economic power to get a larger share of the national pie, rather than to grow the national pie,” in the words of Nobel laureate Joseph Stiglitz, who maintains that such dysfunctional activity has metastasized in the United States alongside deepening inequality.

When rent inspires investment in useful things like housing, it’s productive. The economic pie grows, and the people who pay rent get something in return. When rent leads to investment in unproductive activities, like lobbying to capture wealth without creating it, it’s parasitic. Those who pay get nothing in return.

The entire article is worth reading and can be found here:  http://triplecrisis.com/rent-in-a-warming-world/

Our Financial Security Depends on It

Do you know about Americans for Financial Reform?

From their web site:

Americans for Financial Reform is a nonpartisan and nonprofit coalition of more than 250 civil rights, consumer, labor, business, investor, faith-based, and civic and community groups. Formed in the wake of the 2008 crisis, we are working to lay the foundation for a strong, stable, and ethical financial system – one that serves the economy and the nation as a whole.

Checking out AFR's Issues and Quick Links topics is an easy way to learn about the many facets of financial reform.

Auto Lending
CFPB
Consumer Finance Issues
Debt Collection
Fiduciary Duty
Forced Arbitration
Swaps Pushout

Derivatives
Executive Compensation
Foreclosures & Mortgages
Investor Protection & Corporate Governance
Mortgages, Foreclosures & Housing
Payday Lending
Public Opinion
Systemic Risk
Wall Street Speculation Tax

Housing Finance Reform - Keep an Eye on This One

A new proposal for replacing Fannie Mae and Freddie Mac has emerged in the US Senate.  An essential part of any such reform should be requiring banks to have capital to cover a reasonable percentage of those loans.

Here's a recent article on the proposal:
http://www.latimes.com/business/money/la-fi-mo-fannie-mae-freddie-mac-senate-housing-finance-reform-20140311,0,2529598.story#axzz2vlQi0TJb

I will add other links as they come to my attention.

Break Up the Banks, Raise Their Capital Requirements

Just read two articles related to the new focus of this blog.

Ed Kilgore at Political Animal offers this on breaking up banks that are "too big to fail":
http://www.washingtonmonthly.com/political-animal-a/2014_03/can_anything_short_of_breaking049437.php

Kevin Drum at Mother Jones has his say about the need for higher capital requirements:
http://www.motherjones.com/kevin-drum/2014/03/europeans-unhappy-over-high-american-capital-standards

New Focus for Involved Voters Blog

The new focus for this blog comes largely from my recent reading of The Bankers' New Clothes: What's Wrong with Banking and What to Do About It.

This 3 minute video clip by co-author Anat Admati will give you an idea of what the book contains: https://www.youtube.com/watch?v=ZDRpZvCOVrc

It's my aim to help all of us understand how essential reform of the US (and global) financial system is to our economic health and stability, and get involved by applying political pressure for reform.  I'll be posting links to groups and resources related to financial system reform.  Your suggestions via email are welcome.