Exposing and Dismembering ALEC and its Kleptocracy Agenda
Posted: April 16, 2012 Filed under: American Gun Fetish, Big Pharma, Civil Liberties, Civil Rights, collective bargaining, Corporate Crime, corporate greed, corporate money, corporatism, corruption, Domestic Policy, Economy, education, Environment, New Orleans, We are so F'd | Tags: ALEC 13 Comments
I have a personal interest in seeing ALEC dismembered. My governor Bobby Jindal has adopted and enacted some of its worse cookie cutter laws. There are three progressive interests that are leading actions to defund and defang this supposedly “nonpartisan individual membership organization of state legislators which favors federalism and conservative public policy solutions”. They are the Urban League, Common Cause, and ColorofChange. I would hope that many more groups will join in.
Many of ALEC’s corporate sponsors have quit funding the organization which seeks to remove oversight and regulation of all kinds of industry, privatize public services and goods, and deprive minority communities and women of basic voting rights and civil rights. They seek tort reform that would limit corporate exposure to liability from unsafe products and practices. They like to remove laws providing consumer protection and information. They are not nonpartisan and are responsible for some of the most heinous, radical legislation of the last few years. Woe to those of you whose governors or legislators belong to this organization for you will live in a world with very little protection from big money and big business and your tax dollars will be used to line their coffers.
The American Legislative Exchange Council describes itself as a nonpartisan champion of free markets. But if you spend some time at an ALEC conference (Bloomberg Businessweek did, for an article last year) you will be hard-pressed to find many Democrats. And when the entire conference meets for lunch, you will hear from the podium nothing that would seem out of place in a press release from Eric Cantor’s office. Last year in New Orleans, for example, Bobby Jindal, governor of Louisana, told an ALEC annual meeting, “Defeating the president is crucial to defending our economy,” and “Obama has been a disaster.” I didn’t hear anyone boo. What I did hear was the sound of fevered applause when the conference played a videotaped greeting from Ronald Reagan.
I’m not saying it’s wrong to feverishly applaud Ronald Reagan. I am saying that only in the most thinly defensible, legalistic sense can ALEC call itself “nonpartisan.” And the council doesn’t really support free markets, either. It supports the companies that fund it. This is an important distinction, because the corporations that donate to ALEC aren’t doing so to protect markets. They’re protecting favored tax treatments and pushing regulations that lock in their market positions. As best as we were able to determine in reporting our piece last year, corporations propose bills at the state level and then push them up to ALEC, which has both corporate and legislative members. ALEC pushes the legislative members to the foreground, stamps the bills as “model legislation,” and then the corporations push them back out to other state legislatures. This may not be the case with all ALEC legislation, but it certainly was with the bill we followed.
So ALEC is not what it says it is. That’s not extraordinary: Few advocacy groups are what they say they are. In ALEC’s case, however, the fingers-crossed-behind-its-back description of itself is definitional. If the American Legislative Exchange Council operated with complete openness, it couldn’t operate at all. ALEC has attracted a wide and wealthy range of supporters precisely because it does its real work in a black box. Membership lists are secret. The origins of the model bills are secret. Deliberations and votes on model bills are secret. The model bills themselves are secret. The council has designed its entire structure to disguise industry-backed legislation as grassroots work from state legislators. If this becomes clear to everyone, there’s no reason for corporations to use it. And that is exactly what has been happening.
Minority advocacy groups have been most active in the fight against ALEC. ALEC is responsible for the legislation that requires specific picture ids to vote and they are responsible for the Stand Your Ground Laws. Both of these issues have been front and center in Civil Rights Groups. The Trayvon Martin case is important in two key ways. First, it is bringing to light the institutional racism implicit in the criminal system. Second, it has exposed the role of ALEC in sneaking through legislature in states that most voters do not support or like. The vigilante-empowering Stand Your Ground laws are now seeing daylight.
The tension in corporate boardrooms over the case is the latest example of the pitfalls companies can sometimes face when they donate to political and lobbying groups, even those that seem safely below the radar of public consciousness.
The ALEC controversy is now sparking a broader debate about corporate participation in politics and the polarized state of political discourse. At a minimum, it has strengthened calls for companies to develop clear policies explaining their spending.
“I would caution companies to be very aware of where their money is going,” says Nell Minow, director of GMI Ratings, which provides corporate governance information to investors, corporate auditors and regulatory agencies. “Companies are going to realize they can take a real reputational hit with this kind of affiliation.”
She and others recall the tempest that erupted in 2010 around Target after the company donated to a nonprofit group supporting a Minnesota gubernatorial candidate who was known for opposing gay rights initiatives.
Like Louisiana, many Arizona politicians are in cahoots with ALEC. ALEC likes to use laws to funnel public money into corporate income statements. This isn’t free market promotion, this is more like being given the ability to loot public resources.
Legislators in Arizona continue to advance extremist legislation inspired by the American Legislative Exchange Council (ALEC) and its out-of-state corporate backers, according to a new analysis by People For the American Way Foundation, Common Cause, the Center for Media and Democracy and Progress Now. This report shines a new light on the Arizona Legislature’s unprecedented ties to the secretive organization, which recently drew nationwide fire for its role in implementing radical policies across the country like “Shoot First” laws and voter suppression laws, and anti-worker measures. ALEC’s extreme agenda has recently led companies such as Pepsi, Coca-Cola, McDonalds, Wendy’s, KRAFT and Intuit to withdraw from the organization. The Bill and Melinda Gates Foundation on Monday also withdrew its support from ALEC.
The comprehensive report found that Arizona’s large concentration of ALEC-member legislators, working hand-in-hand with the corporate leaders who make up ALEC’s membership, are continuing to endorse special interest legislation that harms ordinary people by limiting consumers’ rights, privatizing education and dismantling unions.
The report, ALEC in Arizona: The Voice of Corporate Special Interests in the Halls of Arizona’s Legislature, updated for the Fiftieth Legislature, second regular session is available here.
“Recent polling shows that Arizonans are appalled by the out-of-touch and extremist agenda at their State Legislature. This report shows that agenda is no accident,” said John Loredo, a member of Arizona Working Families and a former Arizona House Minority Leader. “Unfortunately, Arizona has one of the highest concentrations of ALEC legislators in the country, and that makes us a petri dish for anti-worker legislation and a host of other bad ideas.”
“ALEC-member legislators are unabashedly continuing to push legislation straight from corporate headquarters to Arizona’s lawbooks,” said Marge Baker, Executive Vice President at People For the American Way Foundation. “Well-heeled special interests are circumventing the democratic system and bypassing Arizona’s citizens, who can’t match the level of access that ALEC provides. As a result, Arizonans are facing an endless assault from laws that serve the interests of the rich and powerful instead of everyday people.”
You can find ALEC’s model bills and reports on its activities in many states at the site ALEC Exposed. ALEC is responsible for the horrible school voucher and privatization plan that Bobby Jindal has ramrodded through our state. It is also responsible for some of the worst climate change denial propaganda. The source of this funding is big oil, big coal, and the Koch Brothers.
$375,858 received from Koch foundations 2005-2010 [Total Koch foundation grants 1997-2010: $708,858]
American Legislative Exchange Council (ALEC) is one-stop shopping for state elected officials interested in perusing the wares of an array of Koch-funded opposition organizations including IER, ACCF, Mercatus and other sources. ALEC has successfully peddled corporate-written legislation to numerous states attacking the Kyoto Protocol, undermining climate science education in schools and numerous other anti-environmental legislation. ALEC has close ties to Koch Industries, which helped bail the organization out of financial troubles with a half-million dollar grant.
ALEC publishes its own materials as well, including a “Climate Change Overview for State Legislators” which downplays the science and risks of global warming and exaggerates the costs of addressing it. The Overview was written by Daniel Simmons, who moved from ALEC to become AEA’s Director of State Affairs. Simmons was at the Mercatus Institute before ALEC and is a graduate of the George Mason University School of Law.
Here’s some of the background information on the laws that ALEC creates with the intended purpose of “starving Public Schools“.
ALEC’s most ambitious and strategic push toward privatizing education came in 2007, through a publication called School Choice and State Constitutions, which proposed a list of programs tailored to each state. That year Georgia passed a version of ALEC’s Special Needs Scholarship Program Act. Most disability organizations strongly oppose special education vouchers—and decades of evidence suggest that such students are better off receiving additional support in public schools. Nonetheless, Louisiana, Oklahoma, Florida, Utah and Indiana have passed versions of their own. Louisiana also passed a version of ALEC’s Parental Choice Scholarship Program Act (renaming it Student Scholarships for Educational Excellence), along with ALEC’s Family Education Tax Credit Program (renamed Tax Deductions for Tuition), which has also been passed by Arizona and Indiana. ALEC’s so-called Great Schools Tax Credit Program Act has been passed by Arizona, Indiana and Oklahoma.
ALEC’s 2010 Report Card on American Education called on members and allies to “Transform the system, don’t tweak it,” likening the group’s current legislative strategy to a game of whack-a-mole: introduce so many pieces of model legislation that there is “no way the person with the mallet [teachers’ unions] can get them all.” ALEC’s agenda includes:
§ Introducing market factors into teaching, through bills like the National Teacher Certification Fairness Act.
§ Privatizing education through vouchers, charters and tax incentives, especially through the Parental Choice Scholarship Program Act and Special Needs Scholarship Program Act, whose many spinoffs encourage the creation of private schools for specific populations: children with autism, children in military families, etc.
§ Increasing student testing and reporting, through more “accountability,” as seen in the Education Accountability Act, Longitudinal Student Growth Act, One-to-One Reading Improvement Act and the Resolution Supporting the Principles of No Child Left Behind.
§ Chipping away at local school districts and school boards, through its 2009 Innovation Schools and School Districts Act and more. Proposals like the Public School Financial Transparency Act and School Board Freedom to Contract Act would allow school districts to outsource auxiliary services.
ALEC is also invested in influencing the educational curriculum. Its 2010 Founding Principles Act would require high school students to take “a semester-long course on the philosophical understandings and the founders’ principles.”
Perhaps the Brookings Institute states the mission most clearly: “Taken seriously, choice is not a system-preserving reform. It is a revolutionary reform that introduces a new system of public education.”
The passage of radical public school defunding in Louisiana is leading to a recall Jindal effort. We’ve already had some of this type of reform in New Orleans and it’s clearly not working well at all unless you count teacher union busting and lowering teacher salaries progress. Here are some of the things we will now be suffering in Louisiana. I personally am opposed to the state funding religious indoctrination hiding under the guise of education. These laws funnel public money into any thing that deems itself a school, it seems.
A vast expansion of charter schools, an overhaul of teacher tenure and establishment of a statewide program to pay private school tuition with public dollars moved within one step of final passage Thursday, as the Louisiana Senate Education Committee endorsed the headliner components of Gov. Bobby Jindal’s education agenda without changes or dissent.
I know this thread wanders around through many topics but the number of right wing bills pressured cooked into law by ALEC and their toadies is just as wandering and perverse. Check out the site and be aware of which politicians supposedly representing the people of your state that are ALEC cronies. The movement to get corporations to defund the organization should be paramount. Ordinary Americans have already lost a lot to their agenda. It’s time to stop them. Put pressure on organizations to join in the effort. Let’s defang this beast together.
The Politics of Budget and Deficit
Posted: April 7, 2012 Filed under: Barack Obama, Economy, Federal Budget, Federal Budget and Budget deficit 7 CommentsThe economics of federal budgets and deficits is fairly straightforward. It is basically a matter of simple math that comes from the results of automatic and discretionary spending, tax policy, 
and the current state of the economy. The last ten years have seen a combination of contradictory tax policy and spending priorities and a bad economy. We also face an aging population that will rely heavily on entitlement programs that have not been re-gauged since the Reagan years. The last serious attempts at deficit reduction occurred in the Clinton and Carter years. There were spending frenzies in the Reagan and Dubya Bush years. Tax policy was seriously crippled in the Dubya Bush years and was completely out of alignment with spending. The decade long wars we’ve endured were not only long and expensive, they were also the first wars that were not specifically funded with tax increases. Obama has inherited serious fiscal problems due to these wars, the bad economy, and capricious tax policy based on failed hypotheses.
Paul Ryan’s budget and its underlying assumptions go beyond capricious and fall into the category of scam. His budget–combined with evidence provided by recently written articles on the Obama 2011 budget negotiation– show that Republicans are only serious about crippling the Federal Government with voodoo tax policies. Obama appears to have fully embraced Republican policies that were offered up during the Clinton years. Obama is clearly the deficit hawk in the room. You wouldn’t know this, however, if you spend time in the economics illiteracy zone that is our press and media. All we ever get is spin on lies analyzed by folks with journalism and law degrees at best.
Paul Krugman sums up Ryan’s budget antics nicely. He also understands that many Republican defenders that position themselves as moderates are not moderate. They are only partisan.
These are people whose whole pose is one of standing between the extremes of both parties, and calling for a bipartisan solution. The problem they face is how to maintain this pose when the reality is that a quite moderate Democratic party — one that is content to leave tax rates on the rich far below those that prevailed for most of the past 70 years, that has embraced a Republican health care plan — faces a radical-reactionary GOP.
What these people need is reasonable Republicans. And if such creatures don’t exist, they have to invent them. Hence the elevation of Ryan — who is, in fact, a garden-variety GOP extremist, but with a mild-mannered style — to icon of fiscal responsibility and honest argument, despite the reality that his proposals are both fiscally irresponsible and quite dishonest.
The fact that a Republican presidential wannabe with degrees in business from Harvard (JD/MBA) actually embraces this budget scares me. That’s because every thing we see from Obama’s budget negotiations last year indicates he’s probably the biggest deficit hawk we’ve ever had in the White House and he over-compromises. Evidence indicates that Obama is more than willing to out-Republican the Republicans on the issue. Yet, the right wing noise machine ignores the ignoble Ryan’s budget assumptions and numbers and the actions of 2011 in Obama the negotiator. Republicans seem to easily drag him way into their policy zone while calling him a socialist at the same time. For any one with a background in economics and finance, this is like watching John Cena wrestle Pee Wee Herman while accusing Pee Wee of Droid Rage.
Obama was willing to make substantial cuts to the crown jewels of liberalism—Social Security, Medicare and Medicaid—and get little in return, in order to get a deficit-reduction deal with Republicans.
The details of the proposed deal should be very disturbing to anyone who believes in Democratic core values and protecting the American Dream. In addition to substantial cuts to Social Security, Medicare, Medicaid and the domestic budget, Obama was willing to reduce top-end tax rates, maintain current tax rates on investment income (the reason millionaires like Mitt Romney pay such low tax rates) and prevent the expiration of the Bush tax cuts in return for increasing tax revenues by $800 billion.
That amount is less than half the amount of new revenues recommended by the co-chairs of the Bowles-Simpson Deficit Reduction Commission, but, as it turns out, the $800 billion in “new revenues” was mostly a mirage. The $800 billion mentioned by the Republican Speaker of the House, John Boehner, would not have come from increasing taxes on anyone, especially not the rich, who would have had their taxes cut even below the Bush tax cut levels, but from nebulous plans to “overhaul the tax code,” which may or may not have ever gotten through Congress, and from projecting new revenues based on the largely disproven assumption that lower tax rates would boost the economy and produce more revenues (the laughable Laffer Curve). As one of the authors, Jonathan Chait, characterized it, “The Republican position was that its higher revenue, in other words, had to be imaginary, theoretical revenue.”
The “laughable Laffer Curve” should not underlie the negotiations or budget assumptions of any serious policy. Laffer developed a testable hypothesis of the basic underlying voodoo economics assumption that high marginal tax rates deter savings and investment and incentives to work. Here’s the basic theses: “When you cut the highest tax rates on the highest-income earners, government gets more money from them.” Laffer’s curve showed up in 1978 and was immediately pounced upon by Reagan Republicans. Decades of reality has now made that curve and hypothesis laughable. Here’s some short form evidence from Lane Kenworthy. I’m going to just highlight the latest results but you can go read the other examples at that last link.
Tax reform in the early 2000s reduced the top marginal rate by four percentage points, from 39% in 2002 to 35% in 2003. In this case the effective rate on the top 1% of households fell by exactly the same amount, from 24% in 2002 to 20% in 2003.
That’s a one to one change. That’s not going to bring increased revenues. Ryan’s budget numbers are still based on the idea that taking away taxes from the rich and benefits from the poor increases economic activity and tax receipts. Neither of these assumptions are based on anything more than wishful thinking and an obsession to kill all government services except a vast, powerful military. This explains the right wing behavior, but it does little to explain the behavior of the President who was willing to basically do the same thing. The “Grand Bargain” seems to play into this pretzel logic even though the President has been talking about upping the taxes of the richest of our rich. Talk is obviously cheap.
When they reached Daley’s office, the Republicans were handed a four-page document that made changes, typed in red, to an offer Boehner had made two days earlier, during a secret meeting at the Capitol.
A lot of red ink, the Republicans thought. But the major elements of a bargain seemed to be falling into place: $1.2 trillion in agency cuts, smaller cost-of-living increases for Social Security recipients, nearly $250 billion in Medicare savings achieved in part by raising the eligibility age. And $800 billion in new taxes.
In Boehner’s offer Friday night, the taxes came with strings attached. The Republicans wanted Obama to give up plans to raise the tax rate paid by the wealthiest Americans, now set at 35 percent. Instead, they wanted that rate to go down. They also wanted to preserve low rates for investment income — one of the biggest perks for the wealthy in the tax code — and establish a blanket exemption from U.S. taxes for corporate profits earned overseas.
Another key caveat: Much of the $800 billion would have to come from overhauling the tax code — not from higher tax rates. The Republicans believed lower rates and a simpler code would generate new revenue by discouraging cheating and spurring economic growth. If the White House would agree to count that money, the Republican leaders said, then they might have a deal.
That last condition was a problem. For years, Democrats have mocked the Republican argument that tax cuts pay for themselves by boosting the economy, an assertion for which evidence is scant. Many independent budget experts say the effect, if it exists, would be almost impossible to measure and useless in crafting a budget. Fiscal “snake oil,” some Democrats say.
So there were issues to work out that Sunday but also reason for optimism. In its counterproposal, the White House appeared to accept the $800 billion tax offer and a lower top rate. The administration rejected the exemption for overseas profits, but Geithner told the Republicans, they said, that he could get most of the way there.
Occupy 2.0
Posted: March 21, 2012 Filed under: #Occupy and We are the 99 percent!, 2012 elections, Action Memo, Anti-War, Austerity, Banksters, Civil Liberties, corporate greed, corporatism, corruption, Economy, Global Financial Crisis, income inequality, social justice, U.S. Economy, U.S. Politics 12 CommentsUntil this past weekend, the Occupy Movement was flying under the radar, percolating beyond public view. But members returned to Zucotti
Park on St. Pat’s Day to celebrate the Movement’s six-month anniversary. From on the ground reports, the demonstration was peaceful. Until the NYPD arrived. Then there was trouble—a number of arrests and one woman reportedly had a seizure after she was thrown to the ground and handcuffed. Several participants said it took 17 minutes for the police to react, after which an ambulance was called.
For naysayers, the Occupy Wall St. Movement [OWS], their members and reasons for being were summarily dismissed before they began. Who is the leader of this motley group? journalists and pundits asked repeatedly. What do these people want?
Surprisingly, there is a leader or so I’ve read, someone well known to Occupy organizers but deliberately kept out of public view. As far as what they want? The answer seemed perfectly clear to me at the start because I think it’s what most Americans want or if they don’t want it, they expect it: an end to the gross inequality in the country, for which Wall St. and Government collusion holds the lion’s share of responsibility and an end to ‘bought’ elections, where the 1% and corporate interests routinely choose our leaders, shape policy and control the message, known in polite circles as ‘perception management.’
All of this transcends parties, btw. We’re talking Republican and Democratic parties alike, regardless of how many times we enter the ‘lesser than two evils’ spin.
You don’t need to be a psychic to ‘get’ the OWS message. You don’t even need to be a member of Occupy. All that’s needed is a modicum of alertness, a shaking-off of the trance-inducing distraction and deflection of pundits, media hounds and political operators.
So, what has OWS managed to accomplish, thus far? According to the critics—not a damn thing. But is that really the case?
Last summer, the headlines were ripe with talk of deficits, crushing debt and woe is me. We need a Grand Bargain, wisemen crooned [translation: we need to cut public services]. Somehow, we always have money for foreign adventures, national security, weapons and surveillance equipment. For instance, how many drones will be in American skies by 2020? Hummm. Try 30,000. That’s the Federal Aviation Administration’s rough estimate. The ever popular ‘shop ‘til you drop’ hee-haw isn’t working either, even with the news that ‘average’ Americans are flocking back to restaurant dining. Despite a stumbling economy there is money for weapons and drones and assorted homeland security gear. When it comes to education, infrastructure, home mortgage write downs, decent healthcare, aide to our poor, disabled and elderly? We’re just stone-broke and need to be put on an austerity diet. See Paul Ryan’s reiteration on social program slashes and numbers that don’t add up. It’s a nice set piece that will contrast with the soon-to-come kinder and gentler Democratic version.
One could call the dialogue change a bizarre coincidence but public conversation pivoted after Occupy came on the scene. We went from Oooooo, we need to slash Medicare, Medicaid and refigure Social Security to why is Wall St. getting bailed out on the backs of the taxpayer? Why do we have a system where the profits go to the top income bracket, while risk is carried by Main Street? Why have the wages of middle-class workers[if they’re fortunate enough to still have a job] barely kept pace with inflation, while the top 1% has had a 275% increase in income?
Uncomfortable questions, the sort that make politicians squirm.
OWS has also focused attention on home foreclosures, working with foreclosed families to save their homes. The Movement rallied the public in a Change Your Bank Day strategy that is estimated to cost TBTFs a $185 billion in transfers to community banks and credit unions. Religious organizations have joined the effort. According to Think Progress, The New Bottom Line, a coalition of faith groups has pledged to remove $1 billion from the major banks this year alone. OWS also pushed against the ATM fee-increase proposal; the banks pulled back. In late February, Occupy the SEC submitted a 300+ page document, urging regulators to resist the financial sector’s desire to water down the Volker Rule, part of the Dodd-Frank Wall St. reform. The group that put the document together was comprised of former Wall St. workers. OWS members also stood with private landowners, Tea Party members and environmentalists protesting the Keystone XL pipeline, a project that the President has expressed a new-found love for.
Not too shabby for six months activism. Yet still the critics howl. Where is the direction, what are the goals?
The Movement is young and still developing but you cannot fault it for sitting on its hands. More importantly, the Occupy spirit is global in nature because many activists are ‘graduates without a future’—young, educated and fed up. Paul Mason documented this facet of the worldwide
Arundhati Roy
social/political movements in his book, “Why It’s Kicking Off Everywhere,” and Arundhati Roy wrote this in a recent essay: “Capitalism, A Ghost Story”:
As Gush-Up concentrates wealth on to the tip of a shining pin on which our billionaires pirouette, tidal waves of money crash through the institutions of democracy—the courts, Parliament as well as the media, seriously compromising their ability to function in the ways they are meant to. The noisier the carnival around elections, the less sure we are that democracy really exists.
Sound familiar? The neoliberal model, the gross inequality that rewards the few at the expense of the many has circled the globe, creating universal discontent and misery.
So, what’s coming up for 2012? What will Occupy 2.0 look like?
I’d suggest checking the OWS page here for an updated list of scheduled actions. OWS plans to be in Chicago in mid-May to protest the NATO Summit although the city is throwing up barriers to prevent demonstrations. Somehow, I don’t think the protest will be stopped.
May 1 will be a National Action, the day traditionally known as International Worker’s Day. This year OWS is calling for a General Strike
across the country. From the Occupy site:
We are calling on everyone who supports the cause of economic justice and true democracy to take part: No Work, No School, No Housework, No Shopping, No Banking – and most importantly, TAKE THE STREETS!
This Saturday, March 24, a Disrupt Dirty Power protest has been called in NYC to jumpstart a month-long action until Earth Day, April 22. More information here.
Sunday, March 25, Occupy Town Square IV will focus on public parks and other public spaces in NYC. More info here.
If you’re interested in local actions in particular states, towns, cities or countries, info can be found at the Occupy Together site here.
And if you want to eliminate the idea of ‘a failed movement’ from your brain. Check out the participation map here. The scope is massive.
The essay I mentioned by Arundhati Roy is well worth a read—highly informative, even shocking about vulture capitalism’s impact on India. Be prepared, it’s long. As Roy moves into her concluding paragraphs, she writes this:
Capitalism is in crisis. Trickledown failed. Now Gush-Up is in trouble too. The international financial meltdown is closing in. India’s growth rate has plummeted to 6.9 per cent. Foreign investment is pulling out. Major international corporations are sitting on huge piles of money, not sure where to invest it, not sure how the financial crisis will play out. This is a major, structural crack in the juggernaut of global capital.
Capitalism’s real “grave-diggers” may end up being its own delusional Cardinals, who have turned ideology into faith. Despite their strategic brilliance, they seem to have trouble grasping a simple fact: Capitalism is destroying the planet. The two old tricks that dug it out of past crises—War and Shopping—simply will not work.
Disaster capitalism has certainly lived up to its name, be it continuous war, environmental degradation or exploding poverty. What is Occupy about? Speaking for myself, Occupy is about a break of faith with a global economic system that serves no one but an elite minority, where infinite money and power is the only morality. The movement is a massive rejection of the ongoing mantra: there’s no other way. Occupy challenges that static position, calls on us to envision something else, something better than the consensus mind. It dares us to shake off the old and embrace a sense of possibility. It demands we wake up, now.
Paul Ryan in La La Lie Land
Posted: March 20, 2012 Filed under: 2012 elections, Economy, voodoo economics | Tags: Paul Ryan budget 12 Comments
Economist Aaron Carroll forecast the trend in temperature for Indianapolis based on the last two days. Scared yet?
Lying with statistics is one of those things you watch out for when you work with numbers. It’s one of the reasons there’s peer review for journal submissions. Mistakes in methodology ruin academic careers and reputations. However, loosey goosey methodology is the hallmark of advocacy research. Paul Ryan’s chart–published today in the WSJ–is going to be a hallmark of Stats Gone Wild. Finding a trend in an economic variable is a standard practice for analyzing time series. It’s taught to undergraduates in their first stat class and doctoral students continually in econometrics. Results are dependent on a lot of things you can do while running the analysis. The first thing you teach to your undergrads is there has to be a certain number of observations. Then, you start looking for other things that could cause problems. Forecasts are only as good as the assumptions. We’ve seen this problem before when Ryan’s number crunching. Paul Ryan’s new little chart takes the cake. Ryan’s assumptions continually fail the reality test. They also are extreme in their result.
Ryan’s assumptions and programs are summed up by Ezra Klein this way.
Ryan’s budget funds trillions of dollars in tax cuts, defense spending and deficit reduction by cutting deeply into health-care programs and income supports for the poor.
Yes, folks, the poor are going to pay if Paul Ryan gets his way. All of this based on ideology and the same baseless assumptions he always makes. Tax cuts more than pay for themselves. Privatization always saves money. Health care costs only increase by the rate of inflation. Giving money to the rich will grease the wheels of manufacturing and hiring. We might as well assume that the Treasury can hire a few alchemists to turn hay bushels into gold.
Ryan tells CBO to assume his tax plan will raise revenues to 19 percent of GDP and then hold them there. He tells them to assume his Medicare plan will hold cost growth in Medicare to GDP+0.5 percentage points. He tells them to assume that spending on Medicaid and the Children’s Health Insurance Program won’t grow any faster than inflation. He tells them to assume that all federal spending aside from Medicare, Medicaid and Social Security will fall from 12.5 percent of GDP in 2011 to 3.75 percent of GDP in 2050.
Oh, there’s more of that Republican wishful thinking. Or as I like to call it, big fat ol’ lies. Lies and ideology in. Ideology and Lies and Pain out.
At the end of his initial release, Ryan posts a table comparing his budget to the president’s budget. The single largest difference is in the tax section: Ryan raises $2 trillion less in revenue than the White House does. In the president’s budget, those revenues come mostly from increasing taxes on the wealthy. So that’s the first big gap between the two proposals: Under Ryan’s budget, revenue would be lower, and the distribution of taxes more regressive, than under Obama’s budget.
On the spending side, Ryan’s biggest cuts come from health-care programs. He eliminates the $1.5 trillion that the Affordable Care Act uses to purchase health insurance for 30 million Americans. Then he cuts Medicaid and related health programs by $770 billion — which is to say, by about a third. Medicare takes $200 billion in cuts on top of that.
Yes. All of us will be held hostage to Insurance Companies in Paul Ryan’s world. Ryan thinks he’s doing us all a favor. Here’s some more thoughts from Matthew Yglesias who reminds us that all of Paul Ryan’s analysis comes from the bad fiction of Ayn Rand.
What Ryan is talking about here is Medicaid which offers health care coverage to the poor, to the disabled, and to an important class of elderly people. Currently the money for Medicaid comes from both the states and the federal government. States have to meet a lot of minimum coverage standards and get federal financial assistance for doing so, and in addition states have the option of securing additional federal monies for additional coverage if they’re willing to kick in extra money of their own. Because health care is proejcted to grow more expensive over the next fifty years, the cost of this program is projected to go up substantially. One way of preventing that from happening is to just refuse to pony up the money, and make Medicaid beneficiaries get by with less health care. And that’s what Ryan’s plan does. On the one hand, it excuses states from their minimum coverage responsibilities. On the other hand, it reduces the amount of money that’s available to give people coverage. Which is all about what you’d expect from a tax cutting Ayn Rand fan. Keep the money in the hands of the job creators who earned it rather than handing it out to the moochers and looters looking for a little free medicine.
But please God almighty can we avoid referring to this as a measure that “strengthens the safety net” by empowering states to “tailor assistance to their specific populations”? Ryan doesn’t like taxing the wealthy to give resources to the poor and disabled, so he proposes to give fewer resources to the poor and disabled.
Every time I read something that comes out of Paul Ryan I end up wondering what is seriously wrong with this man. He’s like the master of doublespeak. We’ve seen this before and it’s still called voodoo economics in my book. There is no evidence that giving excessive tax cuts to rich people creates jobs. There is plenty of evidence that our health care delivery system is the worst and most expensive of all the development nations. Paul Ryan wants to continue life support to the sick system we have now. The one that was put into place by the Dubya Bush administration that’s delivered endless, expensive wars, poor job creation and economic growth, huge deficits, and a global financial crisis. Why does he keep playing the scratched-up record? My hope is that all the political activism and outrage brought about by Scott Walker in Wisconsin will hand Paul Ryan a pink slip in the fall. The nation cannot afford any more lies, distorted statistics, and voodoo economics. How can congress ever negotiate a budget in good faith when at least one of the major players appears to be delusional?
What The Irish Can Teach Us
Posted: March 18, 2012 Filed under: Barbara Ehrenreich, Charles Murray, corporatism, Economy, financial institutions, free market ideology, hunger, income inequality, The Great Hunger, U.S. Economy, unemployment, voodoo economics, worker rights 12 CommentsNow that we’ve all been Irish for a day–donning the green, marching or watching parades and downing those pints at the local bar, we might ask ourselves [whether we’re from Irish American backgrounds or not]: Is there anything more the Irish can teach us?
Running across an essay by Barbara Ehrenreich on American poverty, specifically the lingering, depressing notion of the ‘culture of poverty’ and
Dublin's Famine Memorial
having listened to Charles Murray on Book TV discuss his recent book, “Coming Apart: The State of White America, 1960-2012,” I think the answer is a resounding ‘yes.’
As Ehrenreich reminds us, the idea that poor people are inherently different than the affluent and in fact, need to be changed, corrected, put right has been an enduring theme of the conservative right. The inequality between the poor and the rich is not a matter of jobs or opportunity, education or money, so the theory goes. It’s about the poor being substantially flawed. They lack core values: ambition, get-up-and-go, faith, and the ability to plan for the future. The poor are impulsive, promiscuous, prone to addiction and crime and, as Ehrenreich points out, theorists all contend that the poor ‘certainly cannot be trusted with money.’
Charles Murray’s presentation picks up on the ‘culture of poverty’ theory and runs with it like a champion of reason and rightness. The American Project, Murray contends, the continuation of a civil society is threatened because the working class and upper-middle class are of a different kind altogether. The unraveling of America has nothing to do with the inequality of income but the inequality of culture.
Murray uses two ‘symbolic’ communities to illustrate his thesis: Belmont and Fishtown though both communities actually exist—Belmont, an affluent neighborhood outside Boston and Fishtown, a working class neighborhood of Philadelphia. Murray goes on to compare the two communities in four main areas: marriage, industriousness, honesty, and religiosity. And surprise, surprise. Fishtown gets a failing grade on all scores.
What does this have to do with the Irish? I suggest a quick trip back in time, say to the mid-19th century during what became known as the Great Hunger.
Ireland was heavily populated with subsistence/tenant farmers, generally in debt to their English landlords. Most have heard of the ‘great potato blight’ of 1845-1849 when over 1 million Irish died of starvation. What many may not know is that the the affluent English landlords were exporting an abundance of grain, meat and dairy for profit as the Irish poor starved. And the conservative government response? Their policy was one of laissez faire, leave well enough alone. As the Assistant Secretary of Ireland reportedly said at the time: to give the people something for nothing, ‘would have the country on us for an indefinite time.’ The fear of dependency was greater than watching the population starve. Free market policies and workhouses became popular. But still people died. In droves. The fields of once blighted potatoes became graveyards.
How were the Irish viewed by ‘polite’ English society? The Irish were considered brutish, lazy, devious, promiscuous, prone to crime and heavy drinking. Worse yet—they were Catholic.
The point is that this warped view on poverty is not new. Nor are the political responses. Even when a population was starving to death en masse, the response in Ireland was an ideological one: people had to work to be fed, even when they were too weak and sick to stand upright.
The Irish know this. They remembered it well and passed the bleak stories down to their descendants. The impoverished Irish immigrants, those who came to America [if they survived the ocean crossing], found the same weary stereotypes waiting on another shore. Anyone with Irish American grandparents or other family oldsters have likely heard the tales of blatant bigotry while growing up—the ‘no dogs or Irish’ signs in shop windows.
Still I found it amazing that Murray could say the main problem threatening the Nation today is not income inequality but cultural inequality. Minx wrote a very effective piece last week on the growing poverty in the US. Cited in her post was a statement by Tavis Smiley, who is pushing to have the issue of exploding poverty included in the 2012 election:
Women are much more likely to be poor than men, and more than a million children have fallen into poverty, and more than 500,000 have fallen into extreme poverty” — that is, living on less than $2 a day — “since 2010.” Recent census data shows that the number of children who live in extreme poverty has doubled from 1996 to 2011, from 1.4 million to 2.8 million.
And yet, as Minx pointed out a number of states: Kansas, Utah and Nebraska have initiated policies to cut food stamps to needy children.
Well here’s a factoid that turns the whole cultural argument on its head: the fastest growing segment of the newly poor are in suburban neighborhoods.
Warrensville Heights, Cleveland suburb, photo:dustin franz,NYT
Some of this is due to changing demographics but the larger percentage has to do with long-term unemployment, stagnate wages, off-shoring, the housing debacle, etc., etc. Here’s a chilling study from the same link:
Mark Rank, a social welfare professor at Washington University in St. Louis, has written extensively about shifts in U.S. poverty since the 1960s, and finds that Americans today are more likely to face poverty than in the past. According to Rank’s data, 24 percent of people who were in their 20s in the 1970s were likely to experience poverty at some point in their lives. That number rose to 31 percent in the 1980s and 37 percent in the 1990s. Today a majority of Americans-51.4 percent, according to the Urban Institute-will experience poverty by the time they’re 65.
Are we to believe that this sudden shift to poverty or expectation of poverty is all about lost moral/cultural compasses? Charles Murray would say, ‘yes.’ He suggests that the upper-middle class reach out, reintegrate and reeducate the working classes in the four pillars of civil society: marriage, industriousness, honesty and religiosity. Note that Murray’s study just happens to begin at the soon-to-be turbulent 1960s. Ahhh, if only we could go back to those Father Knows Best days.
In contrast, Barbara Ehrenreich pointedly says:
. . . a new discovery of poverty is long overdue. This time, we’ll have to take account not only of stereotypical Skid Row residents and Appalachians, but of foreclosed-upon suburbanites, laid-off tech workers, and America’s ever-growing army of the “working poor.” And if we look closely enough, we’ll have to conclude that poverty is not, after all, a cultural aberration or a character flaw. Poverty is a shortage of money.
My suggestion? Find yourself an Irish grandmother, the older the better. She’ll give you an earful. Generational memory is a powerful thing!
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