Monday Reads

Posted: June 4, 2012 | Author: | Filed under: 2012 presidential campaign, U.S. Economy, U.S. Politics, unemployment, voodoo economics, We are so F'd | Tags: , , , , , , , , , , , , , , | 74 Comments

Good Morning!

I thought I’d start this morning reads off with Bill Moyers who is having a good laugh at the expense of billionaires that are donating lots of money to political campaigns.  It seems they really don’t like having their names bandied about and their closets opened.  Pity the Poor Billionaires!!!

Last month, an Obama website cited eight mega-donors to Mitt Romney’s campaign as possessing “less-than-reputable records.” Among them was Frank VanderSloot, a Romney national finance co-chairman who has raised millions for the campaign. He’s a rancher – with 110,448 acres, on which he no doubt roams playing “This Land is Your Land” on his little Stradivarius — and CEO of the billion-dollar company Melaleuca, which Rolling Stone describes as “a ‘multilevel marketing’ firm based in Idaho that sells off-brand cleaning products and nutritional supplements.”

VanderSloot and his wealthy pals went ballistic and cried intimidation. “You go back to the Dark Ages,” VanderSloot said, “when they put these people in the stocks or whatever they did, or publicly humiliated them as a deterrent to everybody else — watch this — watch what we do to the guy who did this.”

Conservatives described the Obama ranking of Romney contributors as an “enemies list,” conjuring images of Nixonian wiretaps and punitive tax audits. But despite protestations to the contrary, these deep-pocketed plutocrats aren’t shelling out the shekels for the love of flag, Mom and apple pie (or tarte tatin, as they call it in the swanky joints).

“Most of the megadonors backing [Romney’s] candidacy are elderly billionaires,” Tim Dickinson writes in Rolling Stone. “Their median age is 66, and their median wealth is $1 billion. Each is looking for a payoff that will benefit his business interests, and they will all profit from Romney’s pledge to eliminate inheritance taxes, extend the Bush tax cuts for the superwealthy — and then slash the top tax rate by another 20 percent.” As at least one of them has said, they view these cash infusions as an “investment,” plain and simple.

Money is rolling into Wisconsin in Tuesday’s recall election. The Hill reports that it’s the most expensive race in Wisconsin history.  The Koch Brothers are knee deep in money trying to keep their union bustin’ boy in office.  We’ll be live blogging this tomorrow night so stay tuned!

Out-of-state sources have funded both sides heavily in the contest CPI said. Barrett has received about 26 percent of his $4 million in donations from sources outside of Wisconsin, while Walker has received two-thirds of his $30.5 million haul from out-of-state. Both campaigns have been aided by strong spending by super-PACs and other outside groups.

Labor unions have spent heavily to defeat Walker. The report says that the nation’s three largest public unions, the National Education Association (NEA), American Federation of State, County and Municipal Employees (AFSCME), and the Service Employees International Union (SEIU),  have directed at least $2 million to anti-Walker efforts.

Walker, for his part, has been aided by conservative businessmen including casino mogul Sheldon Adelson and billionaire David Koch. The Republican Governors Association received a $1 million contribution from Koch in February, according to CPI.

The economy is slowing down.  Oil prices are dropping in response.  The stock market has lost all its value.  Will we see another recession shortly?

The statistics on Friday were daunting. Only 69,000 jobs were created last month, far lower than what’s needed just to keep up with population growth. The job tallies for March and April, shabby to begin with, were revised down, for an average monthly tally of 96,000 over the past three months, versus 252,000 in the prior three months.

The weakness was not only displayed in job growth. Average weekly wages declined in May, to $805, as a measly two-cents-an-hour raise was more than clawed back by a drop to 34.4 hours in the length of the typical workweek.

Similarly, the rise in the number of people looking for work is normally considered a sign of optimism, but, on closer inspection, it appears to be simply the reversal of a drop in job-seekers in April.

Granted, it is better for jobless workers to be actively looking for work than sitting on the sidelines. But without enough jobs to go around, the inevitable result is higher official unemployment. The jobless rate ticked up from 8.1 percent in April to 8.2 percent in May, or 12.7 million people. Of those, 42.8 percent, or 5.4 million people, have been out of work for more than six months, a profound measure of personal suffering and economic decline.

There’s no sign that Washington is prepared to shoulder this responsibility. President Obama’s last big push for job creation, the $450 billion package proposed last fall, would have created an estimated 1.3 million to 1.9 million jobs by providing aid to states for teachers and other vital public employees, investments in infrastructure and tax breaks for new hiring. It was filibustered by Senate Republicans and not brought up for a vote in the Republican-dominated House, with Republican lawmakers claiming that deficit reduction was more important. Since then, they have balked at even smaller administration proposals, like modest investments in clean-energy projects.

Blocking constructive action is bad enough, but it’s not the worst of it. Recently, the House speaker, John Boehner, has ratcheted up economic uncertainty by pledging to force another showdown this year over legislation to raise the debt ceiling. A debt-ceiling debacle would come on top of the expiration at the end of 2012 of the Bush-era tax cuts and the onset of some $1 trillion in automatic spending cuts. If allowed to take effect as planned, those measures would take a huge bite out of growth, further weakening the economy.

Paul Krugman slammed the “anti-bipartisanship” in the Paul Ryan budget and in Romney’s support of obstructionist policies aimed at tanking the economy yesterday on ABC.  Krugman said that the budget Romney supports is a “fraud”.

This morning on “This Week,” New York Times columnist Paul Krugman called Rep. Paul Ryan’s proposed budget plan a “fraud” as Romney campaign senior advisor Eric Fehrnstrom confirmed his candidate’s support for the plan that would trim trillions in federal spending over the next decade.

“The Ryan plan — and I guess this is what counts as a personal attack — but it isn’t.  It’s not an attack on the person; it’s an attack on the plan.  The plan’s a fraud,” said Krugman. “And so to say that — just tell the truth that there is really no plan there, neither from Ryan, nor from Governor Romney, is just the truth.  That’s not — if that’s — if that’s being harsh and partisan, gosh, then I guess the truth is anti-bipartisanship. ”

Krugman, who has been critical of the Ryan, R-Wis., plan in the past, was responding to the Fehrnstrom, who confirmed Romney’s support for the plan after ABC News’ George Will asked Fehrnstrom to clarify his candidate’s stance on the Ryan proposal.

“He’s for the Ryan plan.  He believes it goes in the right direction.  The governor has also put forward a plan to reduce spending by $500 billion by the year 2016,” said Fehrnstrom. “In fact, he’s put details on the table about how exactly he would achieve that.  So to say he doesn’t have a plan to — a plan to restrain government spending is just untrue.”

Krugman defended the president’s budget plan when asked by Fehrnstrom if he preferred it over the Ryan plan.

“I mean, the president — at least it’s — you know, I don’t approve of everything, but there are no gigantic mystery numbers in his stuff.  We do know what he’s talking about.  His numbers are — you know, all economic forecasts are wrong, but his are not — are not insane.  These are — these are just imaginary,” he said.

Molly Ball writes about the mediocre Mitt Romney Governorship of Massachusetts at the Atlantic.   Here’s my favorite quote “He believed that a PowerPoint presentation would solve all our problems.”   Here’s some other tidbits that lead up to that very funny line.

Romney campaigned on a promise to clean up Massachusetts’ notoriously cronyistic state government, painting his opponent, the sitting state treasurer, as a product of a backroom-dealing Beacon Hill culture. But his efforts once he was elected were somewhat halfhearted and largely fruitless.

One example was the state’s judiciary, a notorious hotbed of patronage. Romney’s attempts to reform it didn’t succeed, and instead, he ended up succumbing to the status quo, the Washington Post reports. His attempt to consolidate transportation agencies was shot down by the legislature, as was his push to remove from the state university system William Bulger, brother of mobster “Whitey” Bulger. (Bulger did eventually resign, in part due to Romney’s pressure.)

“A lot of governors come in offering to change the political culture,” said Cunningham. “But he wasn’t here long enough, he didn’t put enough effort into it, and he had a very formidable opponent.”

Perhaps because of his outsider mien, Romney enjoyed notably chilly relationships with legislators and local officials, who found him distant and somewhat disengaged. John Barrett, who was mayor of the city of North Adams during Romney’s governorship, described him Thursday as “a governor who just ignored us, who didn’t want our effort,” saying he never met with mayors or sought their input. “He believed that a PowerPoint presentation would solve all our problems,” Barrett said.

So, the biggest issue on my mind is the looming Debt-Ceiling fight and the horrible Agent Orange.  I pretty much believe that the House Republicans will crash all the markets and then some if they think it makes Obama less likely to be elected.  Here’s Garrett Epps at the American Prospect.  He believes–as do I–that Obama should use the Constitutional Option and tell them all to go to hell regardless.  It will be interesting to see how soon they will heat this up.

The debt limit will apparently become a crisis again sometime after the election. Boehner two weeks ago announced his plan to demand another round of cuts when the current ceiling is reached at the end of the year. (I suspect this manufactured crisis will only happen if Obama is re-elected; if Mitt Romney wins the election, Republicans will suddenly find economic recovery an important value after all.)

Obama should begin now to prepare for the predicted crisis. And if there is any way to climb down from the inane “my attorney Bernie says I can’t” comment, he should find it. I called the U.S. Department of Justice to ask whether the Office of Legal Counsel has issued, or is preparing, a formal opinion on the President’s possible power under Section Four; the DOJ’s spokesman did not return my call.

There’s an interesting analysis at TP on how the last debt ceiling debate hurt the economy.  A repeat under current conditions could be disastrous.

House Republicans last year used the imminent approach of the nation’s credit limit to force Congress into enacting a series of spending cuts. The hostage scenario led to the nation’s first ever credit downgrade, with the credit rating agency Standard & Poor’s repeatedly citing the GOP’s intransigence on revenue as a key justification. Speaker of the House John Boehner (R-OH) has indicated that the GOP is ready to reenact the debt ceiling debacle the next time the nation comes close to its borrowing limit. But as economists Betsey Stevenson and Justin Wolfers write, the economy was significantly setback during the last showdown, which they call “an act of economic sabotage“

Follow the links to the Bloomberg analysis and you’ll see why we’re in worse position to weather that kind of anti-bipartisanship nonsense this year. So, who really killed the confidence fairy last year?

High-frequency data on consumer confidence from the research company Gallup, based on surveys of 500 Americans daily, provide a good picture of the debt-ceiling debate’s impact (see chart). Confidence began falling right around May 11, when Boehner first announced he would not support increasing the debt limit. It went into freefall as the political stalemate worsened through July. Over the entire episode, confidence declined more than it did following the collapse of Lehman Brothers Holdings Inc. in 2008. After July 31, when the deal to break the impasse was announced, consumer confidence stabilized and began a long, slow climb that brought it back to its starting point almost a year later. (Disclosure: We have a consulting relationship with Gallup.)

Businesses were also hurt by uncertainty, which rose to record levels as measured by the number of newspaper articles mentioning the subject. This proved far more damaging than the regulatory uncertainty on which Republican criticisms of Barack Obama’s administration have focused (more on that subject in a Bloomberg View editorial today). Employers held back on hiring, sapping momentum from a recovery that remains far too fragile.

It’s going to be a very long, hot summer.

What’s on your reading and blogging list today?


The Bane of Bain

Posted: May 22, 2012 | Author: | Filed under: 2012 presidential campaign, The Bonus Class, We are so F'd | Tags: , , , , | 27 Comments

I have to write about this.  The recent media hoopla surrounding Cory Booker’s comments about Bain Capital just put me over the top.  I guess it’s just an occupational hazard with me. I teach this stuff. I study this stuff. I know the difference between venture capital, capital angels, and corporate raiders.  I’m wondering how many politicians actually grok this.  Oddly enough, Romney’s Republican primary rivals knew the difference before they were forced to tow the Romney line.  I did watch Newt Gingrich last night on Piers Morgan (only because Lama was here and it was on)  and he doesn’t seem to be able to fully embrace the Bain Mission.The best Gingrich could say was it was a better job than any thing Obama has done. He said something obligatory about Obama raiding the tax payer’s funds.   Gingrich still knows what Romney did is not from the positive ledger side of equity capital firms.

Venture capitalists are wonders to be hold and represent the best of the best.  These guys take on tremendous amounts of risk and usually bring a lot of business acumen to a start up firm.  Frequently, start up firms are high tech and ran by nerdy scientists who are great in labs and on computers.  They known nothing of financing, bringing products to market, or monetizing an investment.  This is a true partnership of great minds and money.  This is not what Mitt Romney did when he was CEO of Bain Capital.  Romney’s firm could’ve been a contender in the angel category except that’s not what he did either.  Warren Buffet has been an angel investor many times. Romney’s firm basically ran like a pack of hyenas to a company that was struggling and used the law to extract its life force.

Ralph B reminded me of several articles that have been out there written by financial economist wonks like me explaining why Romney never got a hero’s welcome in the past and should not get a pass right now.  Putting corporate raiders into the same pile as the rest of equity capital firms is like saying cancer is just basically another cell that exists in your body.

Here’s three excellent points by Konczal on why Romney isn’t an angel or a venture capital hero.  Romney’s firm played the sociopathological side of the equity capital game. They were serial killers.

1. Tax/regulatory loopholes. I did an interview with Josh Kosman, author of The Buyout of America, where he argued that the whole point of the enterprise is to game tax law loopholes. Private equity “saw that you could buy a company through a leveraged buyout and radically reduce its tax rate. The company then could use those savings to pay off the increase in its debt loads. For every dollar that the company paid off in debt, your equity value rises by that same dollar, as long as the value of the company remains the same.”

A recent paper from the University of Chicago looking at private equity found that “a reasonable estimate of the value of lower taxes due to increased leverage for the 1980s might be 10 to 20 percent of firm value,” which is value that comes from taxpayers to private equity as a result of the tax code.

That’s one thing in an industry with large and predictable cash flows. But after those low-hanging fruits were picked, as Kosman explained, “firms are taken over in very volatile industries. And they are taking on debts where they have to pay 15 times their cash flow over seven years — they are way over-levered.”

This critique has power as far as it goes. But let’s combine it with another issue.

2. Risk-shifting among parts of the firm. Traditional “creative destruction” is about putting rivals out of business with better products and techniques. Leveraged buyouts and private equity are about something different, something that exists within a single firm. This is often described as putting new techniques into place, firing people and divisions that are not performing, and generally making the firm more efficient.

The critique here is that, instead of making the firm more efficient, it often simply shifts the risks into different places. As Peter Róna, head of the IBJ Schroder Bank & Trust in New York, described it in 1989:

The very foundation of the LBO is the current actual distribution of hypothetical future cash flows. If the hypothesis (including the author’s net present value discounted at the relevant cost of capital) tums out to be wrong, the shareholders have the cash and everyone else is left with a carcass. “Creating shareholder value” and “unlocking billions” consists of shifting the risk of future uncertainty to others, namely, the corporation and its current creditors, customers, and employees…

The notion that underleveraging a corporation can cause problems is neither new nor unfounded. What is new is the assertion that shareholders shouid set the proper leverage because, motivated by maximizing the return on their investment, they will ensure efficiency of all factors of production. This hypothesis requires much more rigorous proof than Jensen’s episodic arguments… although Jensen denies it, the maximization of shareholder returns must take place, at least in part, at someone else’s expense.

Shareholders gain, but at the expense of other stakeholders in the firm. This isn’t the normal winner/loser dynamic, where some suffer in the short-term to do what’s best for the long-term. Here the long-term suffers to create short-term winners. Once again, this issue becomes problematic when combined with another critique.

3. Dividend looting. The theory behind private equity, as Róna caught above, is that it requires shareholders to be the proper and most efficient group to set the leverage ratio. But what if, instead of setting leverage for the long term to make the firm more efficient, shareholders simply use additional debt to pay themselves, regardless of the health of the firm? As Josh Kosman put it:

If you look at the dividends stuff that private equity firms do, and Bain is one of the worst offenders, if you increase the short-term earnings of a company you then use those new earnings to borrow more money. That money goes right back to the private equity firm in dividends, making it quite a quick profit. More importantly, most companies can’t handle that debt load twice. Just as they are in a position to reduce debt, they are getting hit with maximum leverage again. It’s very hard for companies to take that hit twice…

The initial private equity model was that you would make money by reselling your company or taking it public, not by levering it a second time…Right after this goes on for a few years, you’ve starved your firm of human and operating capital. Five years later, when the private equity leaves, the company will collapse — you can’t starve a company for that long. This is what the history of private equity shows.

The biggest difficulty I have with all this political back and forth is that Republicans and Democrats will take money from Wall Street as political donations without really looking at the individual or the firm.  Some private equity firms are value-added.  Others basically remove value from the US economy. Romney falls into the looter baron role.  However, Booker and Obama have both taken political donations from all breeds of these guys. So, they may not have closed down the companies or bootstrapped Yahoo, but they’ve been in on the spoils.

Again, let’s look at what some of Romney’s Republican rivals said.

1. “The idea that you’ve got private equity companies that come in and take companies apart so they can make profits and have people lose their jobs, that’s not what the Republican Party’s about.” — Rick Perry [New York Times, 1/12/12]

2. “The Bain model is to go in at a very low price, borrow an immense amount of money, pay Bain an immense amount of money and leave. I’ll let you decide if that’s really good capitalism. I think that’s exploitation.” — Newt Gingrich [New York Times, 1/17/12]

3. “Instead of trying to work with them to try to find a way to keep the jobs and to get them back on their feet, it’s all about how much money can we make, how quick can we make it, and then get out of town and find the next carcass to feed upon” — Rick Perry [National Journal, 1/10/12]

4. “We find it pretty hard to justify rich people figuring out clever legal ways to loot a company, leaving behind 1,700 families without a job.” — Newt Gingrich [Globe and Mail, 1/9/12]

5. “Now, I have no doubt Mitt Romney was worried about pink slips — whether he was going to have enough of them to hand out because his company, Bain Capital, of all the jobs that they killed” — Rick Perry [New York Times, 1/9/12]

Even the media doesn’t know a damn thing about the variants of equity capital firms. ABC appears to be joining FOX news in spreading stupid tropes and canards.

Private-equity firms aren’t supposed to create jobs; they’re supposed to make money for their investors, which to a large extent include pension funds and university endowments. The companies in which they invest are sometimes on the brink of failure to begin with, and are likely to go bankrupt without outside help. These risky investments often include making decisions like cutting costs and jobs.

But in the little-understood world of private equity, Obama has seized upon a basic formula — Romney and Bain plus companies equals some lost jobs and millions for Romney — to argue that he’s unfit for the Oval Office.

Defending the Bain ad, Obama spokesman Ben LaBolt said the campaign isn’t “questioning the purpose of the private-equity business as a whole.”

“Why did Romney and his partners succeed even if the company failed?” LaBolt asked rhetorically on a conference call.

Probably because private-equity firms don’t necessarily rise and fall with the companies in which they invest. Finance experts explained that faced with a decision over bankruptcy, those firms are obligated to protect their investors, not the workers at the company. Pumping more money into a company that has shown signs of failure isn’t as smart a move business-wise as cutting losses to save investors money.

Actually, angels and venture capitalists do exactly all of that and make money if they do it right.   The above description is just whacked. I’d drum a student out of my corporate finance class that tried to offer this up.  But, the media can print just about any old thing it wants to and get away with it.  Most private equity firms are NOT corporate raiders. There are even funds that do project financing that help Governments build things like dams, highways and universities.  Gordan Gecko’s way of business is not the life blood of the private equity market.  They can provide seed money, start-up money, expansion and development money and a lot of money that isn’t based on gutting existing businesses. Some specialize in transfers of power from a sole owner who is retiring to a new group of owners.  Most don’t drain the firms of capital when they leave either.  Romney was a pirate not some kind of private enterprise swashbuckler.

Enuf said.

Okay, so that’s my lecture\rant for the day.  I’m going back to grading papers now.  That is all.

Exposing and Dismembering ALEC and its Kleptocracy Agenda

Posted: April 16, 2012 | Author: | 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: | 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.

An Immodest Proposal

Posted: April 13, 2012 | Author: | Filed under: Voter Ignorance, War on Women, We are so F'd | Tags: , , | 20 Comments

I’m spitting mad about the attacks on Hillary Rosen and the crocodile tears of folks like Rush Limbaugh and others that are trying to say that the war on women is really about evil feminists and real women. You’ll notice that most of this fabrication is coming from right wing men who have a lot to gain by reigniting the Mommy wars. Just follow this link to the WSJ op ed  page and read how the real misogynists are Feminists. There is nothing more disingenuous that the rant that says feminists don’t support women and child rearing in what ever form that takes.  Most feminists would love to see a situation more like Germany where the country actually supports extended parental leave for babies and toddlers and extends training and quality of day care providers and access to nursery school for all types of families.  If this were really about how to do best by our children we would be having a completely different conversation. We would protect them better from abuse and give them and their parents the kind of support they need to be healthy, happy, and well-educated.  This hoopla is only about splitting the women’s vote.

The heart of the argument needs to be aimed squarely back at the folks that are defunding everything from family planning,  Planned Parenthood, Title X, preschools, school lunches, student loans and all things that support a functioning society.  This includes public health and education structures more than anything else.  Any mother–working a paying job or not–wants institutions in place that support her children.  The real anti-family agenda is from people who do not support the basic structures of civilization.   Folks that can’t write checks for tutors, nannies, preventative health care measures, prenatal services, childhood illness treatment, extra curricular activities and fancy schools and colleges rely on society recognizing the benefits of good health and education for its members.  A decent society provides decent public goods. We pool our funds to benefit the economic security and health of our country. Our recent spending priorities have been wars, weapons, and subsidies to businesses that pollute, gamble, and abuse our resources. None of this is healthy for the future of our children.

These interests have now set up a cat fight between women to take our minds off the real problems.   Feast your eyes on the Ryan Budget and you will see–as Paul Krugman puts it–who is cannibalizing our future and our families.

One general rule of modern politics is that the people who talk most about future generations — who go around solemnly declaring that we’re burdening our children with debt — are, in practice, the people most eager to sacrifice our future for short-term political gain. You can see that principle at work in the House Republican budget, which starts with dire warnings about the evils of deficits, then calls for tax cuts that would make the deficit even bigger, offset only by the claim to have a secret plan to make up for the revenue losses somehow or other.

And you can see it in the actions of Chris Christie, the governor of New Jersey, who talks loudly about acting responsibly but may actually be the least responsible governor the state has ever had.

Mr. Christie’s big move — the one that will define his record — was his unilateral decision back in 2010 to cancel work that was already under way on a new rail tunnel linking New Jersey with New York. At the time, Mr. Christie claimed that he was just being fiscally responsible, while critics said that he had canceled the project just so he could raid it for funds.

Now the independent Government Accountability Office has weighed in with a report on the controversy, and it confirms everything the critics were saying.

Chris Christie lied on a project that would shorten commutes, provide jobs, and basically create a better situation for families in the northeast corridor.  I have only to ask why?  Well, if you take a look at the Ryan Budget and the Norquist mentality, the deal is that most of these folks don’t want the community and its families to succeed, they want their cronies to be able to make a buck off of everything.  They want all the power and all the money within their plutocracy. I’m not talking about government ownership of airlines, telecommunications, or any other move that one could logically equate with socialism.  I talking funding and providing infrastructure improvements and the taxes that would enable them for the benefit of all.  These kinds of public projects  are ones that only a government can do successfully because of the scale and related economies.  Jonathan Alter demonstrates that today’s republicans don’t recognize that the benefits from legitimate public projects bring benefits that far outweigh the costs for every one.

Grover Norquist, the tax-cutting champion, famously said he wanted to shrink the federal government “down to the size where we can drown it in the bath tub.”

With gargantuan deficits, that seems like a pipe dream, but it may be time to start running the water.

The new plan offered by House Budget Committee Chairman Paul Ryan and approved recently by Mitt Romney and congressional Republicans puts the Republicans on record supporting a federal government that within a decade will consist of little more than national defense, entitlements and interest on the national debt.

Those are largely transfer payments to defense contractors, seniors and bankers. The rest of what the government actually does would be eviscerated, from building roads to environmental protection to medical research.

Ryan has abandoned the Republican fantasy on display during the primaries that cutting liberal spending programs will be enough to restore fiscal sanity. He’d go where the big money is — entitlement reform — and also eliminate a series of tax deductions used by the affluent, though in an April 10 editorial board session with Bloomberg View he was still mum on which ones.

Ryan does not represent the historical positions of any Republican administration.  The first Republican Project that required some taxes was the civil war. The used taxes on the rich–among other things–to fund that, reconstruction, and expansion into the westward part of the country.

To fund the war, the federal government taxed as it had never taxed before. The tariff, long the main source of government revenue, was raised sharply. So were excise taxes on commodities such as liquor. The government also instituted the country’s first income tax, which imposed a 3 percent levy on incomes above $800. It was soon raised to 3 percent on earnings of more than $600 and 5 percent on those that exceeded $10,000.

In the mid-19th century, anyone would have considered a person with a $10,000 annual income “rich.”

With the war’s end, government outlays declined sharply. In 1865, they had been almost $1.3 billion, the first time any government anywhere had spent more than $1 billion in a year. By 1870, they had declined to $309 million.

The income tax was allowed to lapse in 1873, and excise taxes were lowered as well. What remained very high was the tariff. But the purpose of a high tariff wasn’t solely to fund federal operations; it was so high that the government ran budget surpluses for 28 straight years, from 1866 to 1893.

Rather, the tariff was kept high to protect the booming industrialization of the American economy in the postwar years. That was very popular in the Northeast and Midwest, where the industry was concentrated, but deeply unpopular in the South and West.

The Republicans also wanted a transcontinental railroad. Look back to the article for the kinds of things built by Republican Presidents–still useful today–that wouldn’t pass muster with today’s Republican Party.  This again comes from the Alter article cited above.  All of these things improved commerce, provided jobs, and made the country much better off.  Each generation of Americans–up until now–were always better off than our predecessors because they invested in a future for us.

The 1856 Republican platform demanded that “the Federal Government render immediate and efficient aid in [the] construction” of a transcontinental railroad. Money was also pledged for “the improvement of rivers and harbors.”

Soon thereafter, Abraham Lincoln signed laws creating hundreds of new colleges (the Morrill Land Grant Act), helping Americans buy property (the Homestead Act), establishing a new Cabinet department (Agriculture) and protecting public land from development (Yosemite).

Today’s Republican Party is on the other side of each of those Lincoln-era achievements, voting to slash money for education (Pell grants, which are discretionary, would be eviscerated in the Ryan budget), withdraw federal loans to buy property (closing Fannie Mae and Freddie Mac), shut Cabinet departments (Romney has said he’d shutter a few, though not which ones) and open up more coastlines for drilling.

The idea of using government money to invest in the future hardly died with Lincoln. Theodore Roosevelt built the Panama Canal; Dwight Eisenhower constructed the interstate highway system; and Republicans have voted for smaller such investments repeatedly over the years.

You get the idea.  We shouldn’t even have to introduce the other items coming from Democratic Presidents like FDR that did projects like the Hoover Dam, rural electrification, and the blue star highways that were predecessors to Eisenhower’s interstate system.  If you look at countries that have made priorities of internet systems and/or solar energy projects rather than let a few for-profit businesses piece together networks around urban areas, you’ll see the benefits of federal projects that we’re losing right now.  We may not only see rural Americans loose the benefit of these things but also of something as basic as the constitutionally mandated postal service.  If some one can’t make extraordinary profit from it, today’s Republicans don’t want it.

I”ll let Paul Krugman have the last word.

America used to be a country that thought big about the future. Major public projects, from the Erie Canal to the interstate highway system, used to be a well-understood component of our national greatness. Nowadays, however, the only big projects politicians are willing to undertake — with expense no object — seem to be wars. Funny how that works.

But think beyond that, public education, the national park system, great science projects like the moon shots or huge telescopes would not be done by private industry without huge amounts of federal largess or protection.  Then there’s medical research like Nuclear medicine, genetics, and prevention of diseases by vaccinations.  All of these started out as government funded projects before they were profitable enough to be transferred to the private sector. Why do today’s republicans think small for the country and big only for the 1%?  Why are they creating a cat fight to take us off the real problems that challenge our children’s future?

Punking Hilary Rosen

Posted: April 12, 2012 | Author: | Filed under: religious extremists, right wing hate grouups, Rush Limbaugh, the GOP, War on Women, We are so F'd, Women's Rights | Tags: | 36 Comments

Hilary Rosen provided the right wing noise machine with a two second sound byte that has been used to reignite the Mommy Wars.  They have purposefully obfuscated what Rosen said thinking they will dupe women into voting for Romney.  I am not falling for it.  I can’t imagine most of the women I know will fall for it either.  Any one that thinks that Hilary Rosen believes that stay-at-home parents without access to maids, nannies, yard crews, and millions of dollars don’t work, raise your hand! I thought so.  It’s different when you have the ability to just write a check to get anything done. Ann Romney does not have the day-to-day experience of 99% of the women in this country, housewife or not. Most women who work inside and outside of the home have to do stuff for themselves. They can’t just write a check and call on an army of servants. Not so with Ann Romney. So, why is every one punking Hillary Rosen? That Punk’d treatment  would include that provided by “this is what a feminist looks like” President Obama and his gang of campaign boyz.

President Obama strongly disagreed with Democratic strategist Hilary Rosen’s controversial comment about Ann Romney, saying today that “there’s no tougher job than being a mom.”

“Anybody who would argue otherwise, I think, probably needs to rethink their statement,” the president told Bruce Aune of ABC’s Cedar Rapids affiliate KCRG.

Rosen sparked a political firestorm when she questioned Wednesday whether Ann Romney is qualified to gauge women’s economic concerns, claiming the mother of five has “never worked a day in her life.” The Romney campaign pounced on the comments as an opportunity to boost the GOP frontrunner’s standing among female voters, while the president’s campaign and the White House publicly distanced themselves from Rosen.

My mom was a “housewife” too.  However,  Mildred cleaned our house.  Mrs. Anders watched me and my sister when we weren’t at Miss Margaret’s pre-school, Miss Donna’s ballet lessons, or Mrs. Donna’s swimming classes. My mom played a lot of bridge, spent a lot of time at the country club, and then did things for junior league like volunteering at the hospital gift shop or attending lunches for the local Red Cross.  Mrs Olsen did all our laundry except for our clean ironed bed sheets that were dropped off by Kimball’s laundry at  our front door. My dad did the grocery shopping since mom hated doing that and he cooked dinner any way so it was pointless for her to do that.  So, as you can see the life of an upper middle class house wife is just full of challenges.  Most of the women I’ve mentioned here–like Miss Donna who taught me ballet or the Mrs Donna that taught me swimming–were either widowed or divorce.  Mildred and Mrs. Anders had husbands that were old and not able to make money any more since their bodies had way gone pass the point of being able to do the kinds of physical work their educations would allow.  Mrs. Olsen was putting her son through college.  Yup, my mom had the toughest job in the world.  Did I mention that we were the poor ones in my family?  My mother’s brother and sister had live-ins for all of that.  Of course,  my aunts were “housewives” too although I came to think of them more as country club wives.   They never worried about much of anything except boredom and when to pick us up.  None of us were rich enough to have chauffeurs.  Some how, I can’t imagine Ann Romney cleaning any of those multitudes of houses, can you? So,  I wish I was reading a lot more articles in support of Hillary Rosen, like this one from The Nation.  My mother had the ability to pay a lot of other people do a lot of things. She didn’t have to worry about making ends meet, for example.  She had other women doing a lot of work because they needed that money just to stay in their houses.  I don’t think my mother could’ve related to Mrs. Olsen’s concerns any more than Ann Romney could relate to most women. The issue is not if you choose to work or not.  The issue is if your life is completely underwritten by millions of dollars or a struggle to keep food on the table.

Rosen was responding to Mitt Romney’s constant trotting out of Ann when he gets a question on women’s issues:

What you have is Mitt Romney running around the country saying, well, you know, my wife tells me that what women really care about are economic issues. And when I listen to my wife, that’s what I’m hearing.Guess what, his wife has actually never worked a day in her life. She’s never really dealt with the kinds of economic issues that a majority of the women in this country are facing in terms of how do we feed our kids, how do we send them to school and how do we—why do we worry about their future?

There’s nothing there about stay-at-home moms, or the idea that that raising children isn’t work. Rosen was referring to the fact that Ann Romney—an incredibly rich and elite woman—likely does not understand the economic concerns of most American women. Again, it was unfortunate choice of words—but she wasn’t wrong.

The Romney campaign, predictably, has grabbed onto this “controversy” in an attempt to divert attention from their missteps around equal pay and the war on women yesterday. Ann Romney joined Twitter, and her first two messages were about the flap, writing that “all moms are entitled to choose their path” and that she “made a choice to stay home and raise five boys.”

Since all moms are “entitled” to “choose” their path, I’m very much looking forward to the Romney’s plan for national mandated paid parental leave. I’m also wondering, since they believe that women’s domestic labor is valuable and real work, when they will come out in support of wages for said work. (Or perhaps women are only entitled to make their “choice” when they have the financial means to do so.)

Focusing on this slip-up just brings more attention to the way in which a Romney presidency wouldn’t support mothers. Because empty platitudes about motherhood “being the hardest job in the world” doesn’t change the reality of most moms’ lives, or make their job any easier.

But it’s not just that Romney is bad for women (whether they work outside the home or not). What’s being lost in this conversation is the incredibly facile and insulting notion that just because a woman made the decision to marry Romney and occasionally talk to him about other women, that he is somehow well-informed on women’s issues. Ann Romney is not an expert on women’s issues just because she happens to be one. And she’s not an expert in what mothers need just because she has children. Believing otherwise is infantilizing and reduces women’s very important and complex concerns to beauty parlor chitchat.

What’s disappointing to me is that most of the press and even many Democrats are allowing the right wing to frame and punk single mother Hillary Rosen. Here’s a little sample of the right wing smear going on right now.

No one is arguing that raising children isn’t work. Democratic strategist and CAP Action board member Hilary Rosen is a single mother of twins who had to go through the expensive and challenging process of adoption with her then partner Elizabeth Birch. Now, she’s trying to stick up for other mothers who don’t have the luxury of millionaire husbands to help fund their child-rearing duties, and the backlash is getting ugly. Catholic League president Bill Donohue attacked her family on Twitter this morning:

@CatholicLeague: Lesbian Dem Hilary Rosen tells Ann Romney she never worked a day in her life. Unlike Rosen, who had to adopt kids, Ann raised 5 of her own.

So, just so you know this is right wing spin, here’s Limbaugh and the newly fabricated “democratic war on mothers”.  So, the defunding and removing access to prenatal care, school lunches, family planning services, preschool, maternal leave, and a myriad of other family-friendly programs wasn’t enough evidence of a republican war on mothers that we need to invent things out of thin air?

Rush Limbaugh jumped into the firestorm on Thursday created by Democratic strategist Hilary Rosen’s jab at stay-at-home-mom Ann Romney as the radio talk show host accused the Democratic Party of launching a “war on mothers.”

Limbaugh spent the bulk of his three-hour afternoon program griping about Rosen’s charge Wednesday that Mitt Romney’s wife has “never worked a day in her life,” telling listeners that the comment summed up the Democrats’ position on women’s role in society.

“This is big because it’s such a teachable moment. It’s such an illustration of who these people are, the left. It’s such an illustration of phonies of feminism. It is an illustration of the absolute hostility that the left has for women who stay at home,” the conservative radio host said, speaking before Rosen issued a statement apologizing to Ann Romney.

He continued, “Obama and the Democrats are not content to just divide men and women. They want to go deeper and dive working mothers from stay at home mothers. And they want to attach the virtue to working mothers and assign no virtue to stay at home moms. Now you talk to most women, even those who consider themselves feminists … they will tell you that they thought that was a battle they fought and won and ended years ago.”

Limbaugh also personally defended Ann Romney, referring to her as a “role model.”

“They’ve gone after the wrong woman here. Ann Romney is not disliked. Ann Romney is not unlikeable. Ann Romney isn’t controversial. Ann Romney isn’t telling anybody how to live. … Ann Romney’s a role model. Don’t care what you think of Mitt. That’s not the point here. She is a role model for living and trying to live a fulfilling life,” he said.

No one but Ann Romney knows if her life is fulfilling and if she considers herself any kind of a role model. I would hope my daughters would not consider Ann Romney’s life one worth copying but then that’s my values. For one, I love my father a lot. If he were an outspoken atheist like Ann Romney’s was, I certainly would have never allowed any one to sneak-baptize him into any religion after his death. I consider that the panultimate disrespect. I also would not for a minute raise my daughters in any tradition where women must call 18 year old man children “elders”, where tons of money is spent defeating the ERA, and where women are not allowed access to “heaven” with out a husband sponsor. That’s just the short list of the kinds of patriarchal, women-hating stuff that goes on in Romney’s religion. I don’t consider that much of a role model for self respect. I also would’ve put my husband on the roof of the car if he’d have tried to put the family dog up there.  However, Ann Romney has to live with all of these decisions and her life. That’s the deal with being a mother, you should be able to choose the way you do it. I can’t imagine any one thinking Ann Romney’s choices or lifestyle is common to all but a few women and I challenge all of us that see this backlash and stand behind Hillary Rosen. For a group of people that scream class war at the drop of a hat, the misogynists sure have done a great job of missing the point of class and money in Rosen’s comments.

endnote:

I’ve just been told that David Pflouffe is on Lawrence O’Donnell acting lie a complete ass.  He just called the pillorying of Rosen a “rare moment of bi-partisan agreement”.  This is just another example of the inability of Democratic men to really stand up for what’s right.  Unbelievable! This is akin to them joining in the swift boating of Kerry.  This has nothing to do with the choice of not working or working.  It has everything to do with being a member of a privileged elite that’s far removed from the rest of us.  We need to be very vocal about this.

or as Hillary herself puts it on her facebook:

I’ve nothing against @AnnRomney. I just don’t want Mitt using her as an expert on women struggling $ to support their family. She isn’t.

← Older Entries
Newer Entries →