Working Life Jonathan Tasini's Ruminations on Work, The Economy, and Politics Sat, 31 Jan 2015 14:02:27 +0000 en-US hourly 1 Stiglitz: Don’t Trade Away Our Health In TPP Sat, 31 Jan 2015 14:02:27 +0000 Recently, I’ve written about the ways in which TPP destroys our economic base, jobs, and, when it comes to health care, actual lives (here and here are two recent contributions).  So, we should appreciate Nobel Prize-winning Joseph Stiglitz’s voice on the issue of how TPP will threaten the health of millions of people.

His piece in the NYT entitled “Don’t Trade Away Our Health” addresses how negotiators for the TPP are putting everyone’s health at risk:

The first is to restrict competition from generics. It’s axiomatic that more competition means lower prices. When companies have to fight for customers, they end up cutting their prices. When a patent expires, any company can enter the market with a generic version of a drug. The differences in prices between brand-name and generic drugs are mind- and budget-blowing. Just the availability of generics drives prices down: In generics-friendly India, for example, Gilead Sciences, which makes an effective hepatitis-C drug, recently announced that it would sell the drug for a little more than 1 percent of the $84,000 it charges here.That’s why, since the United States opened up its domestic market to generics in 1984, they have grown from 19 percent of prescriptions to 86 percent, by some accounts saving the United States government, consumers and employers more than $100 billion a year. Drug companies stand to gain handsomely if the T.P.P. limits the sale of generics.

The second strategy is to undermine government regulation of drug prices. More competition is not the only way to keep down the prices of essential goods and services. Governments can also directly restrain prices through law, or effectively restrain them by denying reimbursement to patients for “overpriced” drugs — thus encouraging companies to bring down their prices to approved levels. These regulatory approaches are especially important in markets where competition is limited, as it is in the drug market. If the United States Trade Representative gets its way, the T.P.P. will limit the ability of partner countries to restrict prices. And the pharmaceutical companies surely hope the “standard” they help set in this agreement will become global — for example, by becoming the starting point for United States negotiations with the European Union over the same issues.

To add to this, I repeat from what I wrote the other day about the White House”s 10 Big Lies To Congress About The TPP:

This one is really pathetic since it literally means death and sickness for a lot of people (I’d say “shame on Froman” but I don’t think shame registers). We already know, via leaks, that the TPP would give greater monopoly protection for drug companies–greater monopoly protection equals higher prices.

Even more so, the TPP’s 12-year monopoly protection is in direct contradiction to what the president claims to be seeking. GTW:

President Obama’s budget proposes to reduce a special monopoly protection for pharmaceutical firms with regard to biologic medicines – drugs used to combat cancer and other diseases that cost approximately 22 times more than conventional medicines.  To lower the exorbitant prices and the resulting burden on programs like Medicare and Medicaid, the Obama administration’s 2015 budget would reduce the period of Big Pharma’s monopoly protection for biologics from 12 to seven years. The administration estimates this would save taxpayers more than $4.2 billion over the next decade just for federal programs. However, Froman suggested yesterday that USTR continues to push for the 12 years of corporate protection in the TPP, which would lock into place pharmaceutical firms’ lengthy monopolies here at home while effectively scrapping the administration’s own proposal to save billions in unnecessary healthcare costs.

Kill this thing before it kills us.

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The White House’s 10 Big Lies To Congress About The TPP Thu, 29 Jan 2015 14:56:37 +0000 I start from the basic presumption that the president, and most of the people who work for him, are very, very smart people. So, when the president’s point person on the Trans Pacific Partnership, U.S. Trade Representative Michael Froman, marches up to Capitol to testify on the TPP and gives false information, you can only conclude that he’s lying and intentionally misleading Congress. That’s the upshot of what happened on Tuesday.

Froman appeared before the Senate Finance Committee. The Senate has generally been the place where the really bad NAFTA-type trade deals get a warmer, bi-partisan reception; if a putrid deal passes the House, where Democratic opposition is much stronger, you can almost bet the deal will sail through the Senate. But, still, Froman felt necessary to lie or, at best, spread half-truths.

Using a very helpful and detailed analysis courtesy of Global Trade Watch, here are the 10 lies/half-truth:

Froman Lie #1 : “[Fast Track] puts Congress in the driver’s seat to define U.S. negotiating objectives and priorities for trade agreements.”

Truth: that’s a laugher. “Fast track” explicitly takes the power away from Congress to shape any deal by handing the power over to the executive branch to cut a deal, put it before Congress and force an up-or-down vote with no amendments or changes.

Froman Lie #2: “You take all of our FTA partners as a whole, [and] we have a trade surplus. And that trade surplus has grown.”

Truth: that would be a really cool notion–except it’s false. The actual numbers–in English, the facts–show that, per GTW, “the United States has a $180 billion U.S. goods trade deficit with all free trade agreement (FTA) partners (in 2013, the latest year on record).  In manufactured goods, the United States has a $51 billion manufacturing trade deficit with all FTA partners.”

As for the Korea Free Trade Deal, per GTW, “Contributing to our FTA deficit is the 50 percent surge in the U.S. goods trade deficit with Korea in just the first two years of the Korea FTA, which literally was used as the U.S. template for the TPP. This deficit increase, owing to a drop in exports and rise in imports, spells the loss of more than 50,000 American jobs in the FTA’s first two years, according to the ratio used by the administration to claim the pact would create jobs. Froman tried to explain away the ballooning U.S. trade deficit under the Korea FTA as due to decreases in corn and fossil fuel exports.  But even if discounting both corn and fossil fuels, U.S. annual exports to Korea still fell under the FTA, and the annual trade deficit with Korea still soared.”

Froman Lie #3: “In negotiations, like TPP, we are working to ensure access to affordable life-saving medicines, including in the developing world, and create incentives for the development of new treatment and cures that benefit the world and which create the pipeline for generic drugs.”

Truth: this one is really pathetic since it literally means death and sickness for a lot of people (I’d say “shame on Froman” but I don’t think shame registers). We already know, via leaks, that the TPP would give greater monopoly protection for drug companies–greater monopoly protection equals higher prices.

Even more so, the TPP’s 12-year monopoly protection is in direct contradiction to what the president claims to be seeking. GTW:

President Obama’s budget proposes to reduce a special monopoly protection for pharmaceutical firms with regard to biologic medicines – drugs used to combat cancer and other diseases that cost approximately 22 times more than conventional medicines.  To lower the exorbitant prices and the resulting burden on programs like Medicare and Medicaid, the Obama administration’s 2015 budget would reduce the period of Big Pharma’s monopoly protection for biologics from 12 to seven years. The administration estimates this would save taxpayers more than $4.2 billion over the next decade just for federal programs. However, Froman suggested yesterday that USTR continues to push for the 12 years of corporate protection in the TPP, which would lock into place pharmaceutical firms’ lengthy monopolies here at home while effectively scrapping the administration’s own proposal to save billions in unnecessary healthcare costs.

Froman Lie #4: “15,600 firms export from Pennsylvania. Almost 90 percent of them are small and medium sized businesses. And the question is whether with these trade agreements we can create more opportunities for these kinds of businesses.”

Truth: this is a great example of using the math to lie and obscure truth. Most U.S. firms (500 workers or smaller) are considered small and medium operations. But, as a percentage of their overall output, what they export is pretty tiny, around 3 percent. Large firms account count on exports far more.

But, again, facts are a bitch. As GTW points out:

Under the Korea FTA, U.S. small businesses have seen their exports to Korea decline even more sharply than large firms (a 14 percent vs. 3 percent downfall in the first year of the FTA). And small firms’ exports to Mexico and Canada under NAFTA have grown more slowly than their exports to the rest of the world. Small businesses’ exports to all non-NAFTA countries grew over 50 percent more than their exports to Canada and Mexico (74 percent vs. 47 percent) during a 1996-2012 window of data availability. The sluggish export growth owes in part to the fact that small businesses’ exports grew less than half as much as large firms’ exports to NAFTA partners (47 percent vs. 97 percent from 1996-2012).

Forman Lie #5: “And to ensure these agreements are balanced, we seek a diversity of voices in America’s trade policy. The Administration has taken unprecedented steps to increase transparency… We have held public hearings soliciting the public’s input on the negotiations and suspended negotiating rounds to host first-of-a-kind stakeholder events so that the public can provide our negotiators with direct feedback on the negotiations.”Truth: this one is a laugher. GTW:

“A diversity of voices” is an odd way to describe the more than 500 official trade advisors with privileged access to secretive U.S. trade texts and U.S. trade negotiators.  About nine out of ten of these advisors explicitly represent industry interests. Just 10 of the more than 500 advisors (less than 2 percent) represent environmental, consumer, development, food safety, financial regulation, Internet freedom, or public health organizations.  It’s little wonder that so many of these groups, excluded from setting the content of the TPP, have denounced leaked TPP texts as presenting threats to the public interest.  And as for the claim of “unprecedented steps to increase transparency,” the reality is closer to the opposite. When the Bush administration negotiated the last similarly sweeping trade pact – the Free Trade Area of the Americas – USTR published the negotiating text online for anyone to see amid negotiations. In a step backwards from the degree of transparency exhibited by the Bush administration, the Obama administration has refused repeated calls from members of Congress and civil society organizations to release TPP texts. This secrecy limits the utility of the public hearings and stakeholder events that Froman touts, as it is difficult to opine on a text you are prohibited from seeing.

Uh, yeah, so it’s a bad day when a Democratic Administration has less transparency than a deeply paranoid, reckless Bush Administration.

Froman Lie #6: “In 2015, the Obama Administration will continue to pursue trade policies aimed at supporting the growth of manufacturing and associated high-quality jobs here at home and maintaining American manufacturers’ competitive edge.”

Truth: this is the nonsense that gets peddled every time a NAFTA-type deal climbs out of the scum at the bottom of the pond. First, the government’s own data confirms 845,000 permanent job losses from NAFTA–most of those are manufacturing jobs. Since NAFTA passed, the country has lost five million manufacturing jobs. To be sure, not all of those jobs were lost because of NAFTA–but it is pretty clear that when you make deals with countries, where workers make a lot less, corporate CEOs, always looking to fatten the bottom line and raise share prices (because their multi-million dollars paychecks and bonuses are tied to getting that share price up) are going to take a hike looking for the lowest wage possible.

It’s no coincidence, then, that, per GTW:

The U.S. manufactured goods trade balance with Canada and Mexico in NAFTA’s first 20 years changed from a $5 billion surplus in 1993 to a $64.9 billion deficit in 2013…And under just two years of the Korea FTA, U.S. manufacturing exports to Korea have fallen. Overall, the United States has a $51 billion trade deficit in manufactured goods with its 20 FTA partners. Reviving manufacturing and reviving Fast Track for the NAFTA-expanding TPP are incompatible.

Froman Lie #7: “At a time when too many workers haven’t seen their paychecks grow in much too long, these jobs typically pay up to 18% more on average than non-export related jobs.”

Truth: I suppose this could be considered a half-truth using obfuscation, creative math and a shell game. In the real world, it’s pretty clear that bad trade deals have been a major factor in inequality growth and wage decline. This isn’t rocket science: companies basically threaten, explicitly or implicitly, to close up plants if workers refuse to take wage cuts. And, once your lose a job, the job you find will pay less.

So, duh, trade deals hammered down wages–thus, paychecks didn’t grow–and, now, people looking for new jobs can get jobs that are higher than the rock-bottom wages (minimum wage, in many cases) they have been forced to take.

And the point is, as GTW points out, the TPP will just repeat, at the end of the day, the same dynamic:

The TPP would not only replicate, but actually expand, NAFTA’s extraordinary privileges for firms that relocate abroad and eliminate many of the usual risks that make firms think twice about moving to low-wage countries like Vietnam – a TPP negotiating partner where minimum wages average less than 60 cents an hour, making the country a low-cost offshoring alternative to even China.

Froman Lie #8: “We will continue to support a free and open Internet that encourages the flow of information across the digital world.

Truth: that’s bullshit. How else can you explain a fairly broad coalition of partners–Internet service providers, tech companies, and Internet freedom groups–writing that TPP copyright terms could “significantly constrain legitimate online activity and innovation.”

Froman Lie #9:“Our total exports have grown by nearly 50 percent and contributed nearly one-third of our economic growth since the second quarter of 2009. In 2013, the most recent year on record, American exports reached a record high of $2.3 trillion…” “By opening rapidly expanding markets with millions of new middle-class consumers in parts of the globe like the Asia-Pacific, our trade agreements will help our businesses and workers access overseas markets…”

Truth: This is stuff drafted for the White House by the Chamber of Commerce and it’s just false/half-truths. GTW:

U.S. goods exports grew by a grand total of 0 percent in 2013.   The year before that, they grew by 2 percent.  As a result, the administration utterly failed to reach President Obama’s stated goal to double U.S. exports from 2009 to 2014. Most of the export growth Froman cites – which is less than half of the administration’s stated objective – came early in Obama’s tenure as a predictable rebound from the global recession that followed the 2007-2008 financial crisis.  At the abysmal export growth rate seen since then, we will not reach Obama’s stated goal to double 2009’s exports until 2054, 40 years behind schedule.

Froman Lie #10 (yes, I’m glad this is it for now): “I think the President has made clear that as we pursue a new trade policy, we need to learn from the experiences of the past and that’s certainly what we’re doing through TPP and the rest of our agenda. For example, when he was running for President, he said we ought to renegotiate NAFTA. What that meant was to make labor and environment not side issues that weren’t enforceable, but to bring labor and environment in the core of the agreement and make them enforceable just like any other provision of the trade agreement consistent with what Congress and the previous administration worked out in the so-called May 10th agreement.”

Truth: oh, please. This is just more of the same. TPP gives companies NAFTA-type incentivesto move offshore, will do nothing to curb labor rights violations and does nothing to make them a core part of a trade deal (how about four TPP countries using child and/or forced labor?), and just gives huge investor powers that will override local laws.

These lies just add on to the evidence that the TPP, as I wrote, entirely contradicts the rhetoric coming from the president about his desire to fight inequality.

Fact is, they can only sell this shit by lying.

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S&P $1.3 Billion Stay-Out-Of-Jail, Slap-On-The-Wrist Fine Sets New Bar For Absurdity Wed, 28 Jan 2015 21:32:41 +0000 It seems like…just a week ago that I wrote about a proposed slap-on-the-wristfor Standard & Poor’s. Ah, and it’s the gift that keeps on giving. But, this one may give a new twist to the absurd world in which these guys in the executive suites of Wall Street and the financial world commit crimes, never pay for those crimes, keep their jobs, continue to get huge pay and benefits, sock the shareholders/customers with the cost of paying miniscule fines…and never admit to the crimes.

The Wall Street Journal reports:

Standard & Poor’s Ratings Services could strike a $1.37 billion deal as early as Thursday resolving government allegations that it knowingly issued rosy grades of mortgages before the 2008 financial crisis, according to people familiar with the situation.An agreement isn’t yet final, but the Justice Department is expected to receive about $687 million, while more than 12 states as a group would get a similar total, the people said. California is expected to receive more than $100 million, while most other states would receive between $20 million to $25 million, the people said.

A deal would resolve a 2013 Justice Department lawsuit accusing S&P of misleading investors with inflated grades of residential mortgage bonds that turned out to be inaccurate. Eventually, attorneys general from 20 states and the District of Columbia made similar accusations in separate cases.

Ok, so, we already know this story: no jail time for the big fish, a few little fish get convicted and the bankers laugh all the way to the bank. And, remember, this in a company whose racket was, as an Australian court found, built around a culture that “deceived” and “mislead” investors.And, you know this usual rap in these deals: no one ever has to admit guilt. Sure, pay some fine–a fine that will be paid by shareholders and customers (in the case of banks, in particular, in the form of higher fees) but this is the part that is really worthy of a farce:

S&P, a unit of McGraw Hill Financial Inc., won’t admit wrongdoing as part of the settlement, but it will agree to a statement outlining its actions, the people said. S&P has been adamant that it not admit wrongdoing for violating any laws over fears that doing so would expose it to future litigation, according to people familiar with the company’s thinking. [emphasis added]

Jon Stewart, this is made for you. [voice of ya know a mobster type]: “look, you know, yeah, Stevie comes in one day with these awful mortgage deals, we laugh til we’re pissin’ our pants, we drink a few shots and, then, we give the AAA rating. No problem. Yeah, it was fraud, illegal. But, hey we didn’t do anything.It’s the new criminal defense.”

I can see it now, the new cool detective show, featuring:
Serial Killer: “well, sorry, I’m not admitting any guilt but no problem I’ll do an S&P for you–I cut the throats of those 35 people, drank their blood, boiled their skin…well, you get picture. Happy to outline those actions but I’m not admitting to anything or spending a day in the slammer.”

Ah, American justice.

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Austerity Takes A Hit Tue, 27 Jan 2015 23:23:25 +0000 Thank you, Greece voters.

Austerity a bit on the ropes:

Prime Minister Alexis Tsipras unveiled his new cabinet Tuesday, including an outspoken academic and harsh bailout critic as finance minister, in a signal that Greece’s coalition government will take a tough line in upcoming debt negotiations with international creditors.

Economist Yanis Varoufakis, who describes himself as a “libertarian Marxist,” had been recruited by Mr. Tsipras’ leftist Syriza party, which swept into first place in Greek elections on a wave of support from austerity-weary voters.

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Anti-TPP NYC Rally Pics TODAY: Blizzard Hysteria Doesn’t Stop The Committed Mon, 26 Jan 2015 21:02:46 +0000 As I wrote the other day, an anti-Trans Pacific Partnership rally was set for today to confront the negotiators for this odious deal–a deal that contradicts the president’s own rhetoric to combat inequality. As much of the news was about the approaching snow (as aside: when did New Yorkers become such a soft, coddled bunch to go into full panic mode over a little blizzard?), a hardy group of activists and good people stood outside the Sheraton New York (7th Avenue and 53rd), where the negotiators were meeting, to denounce this travesty. A few pics.

The emergency rally was organized by Trade Justice New York Metro and supported by:

350NYC, Activate CT, Animal Protection League of New Jersey, Bayan USA, Bergen County Green Party, Big Apple Coffee Party, Building Bridges: Your Community and Labor Report, Brooklyn For Peace, Carolyn Maloney Constituents for Trade Justice, Catskill Citizens for Safe Energy, Chpt. 34 Veterans For Peace NYC, Veterans for Peace (national), Clarke Constituents for Trade Justice, CLEAN-Cleveland Environmental Action Network, Damascus Citizens for Sustainability, Democracy for America, Eco-Logic (WBAI-FM), FaCT-Faith Communities Together, Flush the TPP, Food and Water Watch, Frack Free Nation, Fight for the Future, Franciscan Action Network, Friends of the Earth, Global Justice for Animals and the Environment, Gray Panthers NYC Network, Health GAP (Global Access Project), Manhattan Green Party Local, March Against Monsanto NYC, MoveOn Nassau Council, MoveOn NYC Councils, MoveOn Suffolk Council, New Jersey League of Humane Voters, New York Buyers’ Club, New York Committee in Solidarity with the People of El Salvador, New York Environmental Law and Justice Project, NY4Whales, NYC Friends of Clearwater, NYC Metro Raging Grannies, NYC Safe Energy Coalition, Occupy Bergen County, OWS Outreach Working Group, OWS Special Projects Affinity Group Peace Action Manhattan, Peace Action of Staten Island, Polo Democratico Alternativo-NY, Popular Resistance, Rainforest Relief, Rangel Constituents for TradeJustice, Sane Energy Project Sierra Club Atlantic Chapter, Systemic Disorder, Teraza 7, Trade Unionists in Solidarity with Colombia, TradeJustice New York Metro, United for Action, West Shore FACT, Working Families Party, and World War 4 Report.

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Slide Fri, 23 Jan 2015 18:43:05 +0000 It just gets worse for workers.

BLS via WSJ:

The percentage of the workforce represented by unions fell slightly in 2014 to 11.1%, down from 11.3% the year before, continuing a trend of stagnation that suggests labor will have to work harder to rebound from its decadeslong slide.

Figures released by the Bureau of Labor Statistics said union membership in the private sector in 2014 fell to a rate of 6.6% from 6.7% in 2013.

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The President Vs. TPP: One Step Forward, Two Steps Back Thu, 22 Jan 2015 19:13:27 +0000 It’s pretty simple: you can’t advance a progressive agenda, or even one you call “liberal”, that claims to want to combat inequality AND go all out to ram through the Trans Pacific Partnership using the odious “Fast track” authority. Here are the contradictions.

Hat tip to Global Trade Watch for this comparison using the president’s words from the State of the Union:

The president on income inequality: “Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”

TPP Reality: An “economy where only a few of us do spectacularly well” is actually the projected outcome of the TPP. A recent study finds that the TPP would spell a pay cut for all but the richest 10 percent of U.S. workers by exacerbating U.S. income inequality, just as past trade deals have done.

The president on reviving manufacturing: “More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China. Let’s give them one more reason to get it done.”

TPP Reality: The TPP would give manufacturing firms a reason to offshore jobs to Vietnam, not bring them back from China. The TPP would expand NAFTA’s special protections for firms that offshore American manufacturing, including to Vietnam, where minimum wages are a fraction of those paid in China. Since NAFTA, we have endured a net loss of more than 57,000 U.S. manufacturing facilities and nearly 5 million manufacturing jobs.

The president on American jobs: “So no one knows for certain which industries will generate the jobs of the future. But we do know we want them here in America.”

TPP Reality: TPP  rules would gut the popular Buy American preferences that require government-purchased goods to be made here in America, preventing us from recycling our tax dollars back into our economy to create U.S. jobs.

The president on Exports: “Today, our businesses export more than ever, and exporters tend to pay their workers higher wages.”

TPP Reality: Those who wish for more exports should wish for a different trade agenda. U.S. exports to countries that are part of TPP-like deals have actually grown slower than exports to the rest of the world, according to government data. Under the Korea deal that literally served as the template for the TPP, U.S. exports have actually fallen.

The president on small businesses: “21st century businesses, including small businesses, need to sell more American products overseas.”

TPP Reality: Small businesses have endured declining exports and export shares under pacts serving as the model for the TPP. Small businesses suffered a steeper downfall in exports than large firms under the Korea trade pact, and small businesses’ export share has declined under NAFTA.

The president on economic growth: “Maintaining the conditions for growth and competitiveness. This is where America needs to go.”

TPP Reality: An official U.S. government study finds that the economic growth we could expect from the TPP is precisely zero, while economists like Paul Krugman have scoffed at the deal’s economic significance.

The president on middle class wages: “Of course, nothing helps families make ends meet like higher wages.”

TPP Reality: The TPP would put downward pressure on middle class wages, just as NAFTA has, by offshoring the jobs of decently-paid American manufacturing workers and forcing them to compete for lower-paying, non-offshoreable jobs.

The president on the legacy of past trade deals: “Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense.”

TPP Reality: Past trade deals have resulted in massive trade deficits and job loss not because the pacts’ rules have been broken, but because of the rules themselves. The TPP would double down on NAFTA’s rules – the opposite of Obama’s promise to renegotiate the unpopular pact – by expanding NAFTA’s offshoring incentives, limits on food safety standards, restrictions on financial regulation and other threats to American workers and consumers.

The president on affordable medicines: “…middle-class economics means helping working families feel more secure in a world of constant change. That means helping folks afford …health care…”

TPP Reality: The TPP would directly contradict Obama’s efforts to reduce U.S. healthcare costsby expanding monopoly patent protections that jack up medicine prices and by imposing restrictions on the U.S. government’s ability to negotiate or mandate lower drug prices for taxpayer-funded programs like Medicare and Medicaid.

The president on Wall Street regulation: “We believed that sensible regulations could prevent another crisis…Today, we have new tools to stop taxpayer-funded bailouts, and a new consumer watchdog to protect us from predatory lending and abusive credit card practices…We can’t put the security of families at risk by…unraveling the new rules on Wall Street…”

TPP Reality: Senator Warren has warned that the TPP could help banks unravel the new rules on Wall Street by prohibiting bans on risky financial products and “too big to fail” safeguards while empowering foreign banks to “sue” the U.S. government over new financial regulations.

The president on Internet freedom: “I intend to protect a free and open internet…”

TPP Reality: The TPP includes rules that implicate net neutrality and that would require Internet service providers to police our Internet activity – rules similar to those in the Stop Online Piracy Act (SOPA) that was rejected as a threat to Internet freedom.

The president on the country’s national interests: “But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen?”

TPP Reality: With the TPP, multinational corporations want to write the rules that would put our workers at a disadvantage and undermine our national interests. TPP rules, written behind closed doors under the advisement of hundreds of official corporate advisers, would provide benefits for firms that offshore American jobs, help pharmaceutical corporations expand monopoly patent protections that drive up medicine prices, give banks new tools to roll back Wall Street regulations, and empower foreign firms to “sue” the U.S. government over health and environmental policies.

Rhetoric versus reality.

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S&P Gets Slap-On-The-Wrist $80 Million Fine: Same Old Story About The Wall Street Robbery Wed, 21 Jan 2015 16:21:25 +0000 Ah, the seasons turn from summer to winter to spring…predictable. And just like the seasons we can count on one almost predictable fact: no one of consequence will go to jail for the robbery of the economy, the obliteration of millions of jobs and trillions of dollars of wealth. Nope, slap on the wrist. Every. Time. And, ladies and gents, the next example: S&P.

Please, spare me the drama:

S.&P., which is owned by McGraw Hill, has agreed to settle an array of government investigations stemming from 2011, paying nearly $80 million, federal and state authorities announced on Wednesday. As part of the deals, reached with the Securities and Exchange Commission and the attorneys general in New York and Massachusetts, S.&P. agreed to take a one-year “timeout” from rating certain commercial mortgage investments at the heart of the case, an embarrassing blow to the rating agency.


The settlement, which came on top of an action filed against a former S.&P. ratings executive, is the S.E.C.’s first action against a top ratings firm. Despite the central role that rating agencies played in the crisis – awarding inflated credit ratings to mortgage investments that spurred the meltdown – they faced no S.E.C. penalties.Yet the Justice Department and several state attorneys general did take action, suing S.&P. in connection with the crisis. After fighting that case for two years, S.&P. has now reached a tentative settlement that would require it to pay $1.37 billion, a penalty large enough to wipe out its operating profit for a year.

Let’s be clear what the culture of this racket was. As an Australian court found, as I wrote two years ago, S&P had “deceived” and “mislead” investors.

Did anyone lose their job in the executive suite as part of this deal?

Answer: NO.

Will any of the executives pay out of their own pockets?

Answer: NO. As with all of these fines, the money comes out of the corporate treasury and ends up being paid for by shareholders and/or customers–not the executives who engineered and managed the scam.

Did anyone go to jail over this scam?

Answer: NO.

What is the lesson one learns if you work in this industry?

Answer: I can do anything. I can break the law. I can make tens of millions of dollars and screw the little people. And I will never pay a personal price. Never. I will keep my job. I will make more money. And, let’s do this again.

Nope, The Laughter You Hear Comes From Wall Street and The Banks who just can’t believe their good fortune.

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The President’s Tax Props: Relatively Meek, Pollster-Driven, Discriminatory, Long-Term Bleh Tue, 20 Jan 2015 16:18:18 +0000 In the midst of the Greek chorus demanding that everyone salute in awe and reverence to the tax proposals set to be unveiled in stage-managed “don’t actually look behind the curtain” fashion, it’s worth a pause to consider what these ideas mean in the big picture of class warfare and the crumbling of the country: meek stuff, clearly driven by the very Democratic/liberal pollsters who got the country into the mess in the first place by being cowards, a bit discriminatory and just long-term…bleh…

Perhaps to calm down the true believers and hard-core Greek chorus members, it’s worth saying three things, a bit on the substance and a bit on the politics.

1. The capital gains tax changes are a step in the right direction. As the Institute for Taxation and Economic Policy rightly says:

The centerpiece of Obama’s plan is a proposal to raise substantial new revenues by closing the long-lamented, and rarely defended, “stepped up basis” rule for capital gains. Stepped up basis means that when stocks and bonds (among other assets) are not sold during the owner’s lifetime, no income tax will ever be paid on the (unrealized) capital gains income created during the owner’s lifetime. When the heirs who are gifted these capital assets sell them, they will pay not a dime of tax on the often-huge capital gains that accrued prior to the time they inherit.Obama’s proposal would treat the transfer of these untaxed capital assets to heirs as a potentially taxable event. This sensible step would remove what is called the “lock-in effect” of the current system, which encourages wealthy owners of capital assets to hold on to them until death to avoid paying tax on their (unrealized) capital gains. Notably, the proposal would actually leave stepped-up basis intact for many heirs of smaller estates, since it would allow capital gains of up to $200,000 to be passed on tax-free for a married couple (half that for a single taxpayer). On top of this, the proposal would allow a $500,000 exemption for the value of homes passed on to heirs. While complete elimination of stepped-up basis would be a more straightforward and welcome reform, the half-step toward reform taken in Obama’s draft plan would sharply curtail one of the least justified tax dodges in existence today.

Taken on its own, ending stepped-up basis is only a starting point toward the laudable goal of taxing wealth like work. This is because even repealing stepped up basis would leave intact the stark difference in the top income tax rate on wages (currently 39.6 percent) and capital gains (20 percent). Happily, Obama’s draft proposal would mitigate (but not eliminate) this tax break by increasing the top tax rate on capital gains and dividends to 28 percent.

Ok, check. Good thing…2. Sure, a smidgen of tax cuts for lower income people is a good thing…with a caveat to come.

3. Sure, even these proposals, as meek as they are, have no chance of passing the Republican Congress so, the Greek chorus would argue, there’s no point in proposing anything more fundamental.

Now, another view. First, the proposals do fit well with this president, the donor-driven main bloc of his party and the pollsters that drive all the thinking (if you want to refer to it as “thinking”, as opposed to groping around to measure the size of your campaign wallet) within the party. The pollsters have quickly captured the attention of the chattering political classes, arguing that the recent election results are a result of paying too much attention to poor people and not enough attention to the “middle class”.

I think the losses had less to do with attending to the “poor” as it was about the lack of vision and courage.

A party that went around and pushed a pathetic $10.10-an-hour hike in the federal minimum wage had no chance of rallying the country around the basic principle that  the “free market” has robbed us all…however you define “poor” or “middle-class”.

It is because $10.10-an-hour will not allow people to make a fair living, or challenge the basic, “We-make-profits-thanks-to-poverty” system that underpins today’s real world economy. It had no chance of rallying the country around the basic principle that  the “free market” has robbed us all…however you define “poor” or “middle-class”. And, by the way, the $10.10-an-hour idea is being swamped by campaigns starting advocacy at $15-an-hour (I have advocated for $20-an-hour…because that’s actually what the minimum wage should be at, when you use a bizarre thing called math)

People can do the math. Historically, the “middle-class” supported, broadly, programs that benefited what we think of as the “poor” WHEN those were visionary and showed a large section of the people, across incomes, that what was being done would fundamentally reshape the country.

So, now, rather than have a larger vision of a different economy that buries the so-called “free market” in favor of a more sustainable model, we have a few bones thrown to the “middle-class”.

A brief note on the issue of discrimination: I know this is almost un-American to say but…did anyone notice that 50 percent of Americans are single? Not married, not with children. Where exactly is the fairness to half the people in the country?

Truth is, we shouldn’t be giving tax cuts out at all. They won’t solve the problems we face. Sure, it will give the illusion of helping but we’ve seen this movie before–with tax credits doled out–yet, wages are still declining, people are less secure, health care is still outrageously expensive and pensions don’t exist.

Truth is, our taxes are not high. More than 85 percent of households with earnings above $25,000 paid less in total taxes than comparable households in 1980.

The problems are about WAGES and INVESTMENT, particularly public investment in our infrastructure.

We should be:

1. Raising corporate taxes because U.S.-based companies pay low taxes relative to the world and higher taxes do not hurt competitiveness.

2.  Raising the top income tax rates to 40 percent and 45 percent and add a top rate of 50 percent for those people with taxable income higher than $1 million.

3. Taking that added revenue and rebuilding the country which needs, according to the American Society of Civil Engineers, needs $3.6 trillion by 2020 just to bring the country’s bridges, roads, tunnels, water systems and the rest just back to a solid place–not to mention what is needed to raise infrastructure to address climate change.

4. Guaranteeing everyone a minimum government IRA-type pension because increased savings is a must.

5. Guaranteeing a minimum annual income.

6. Fully funding a single-payer system to replace the ACA–which still hands over tens of billions of dollars to insurance companies and drug companies.

And…on and on…

But, that’s not what the pollsters say.

So, the proposals are mostly optics (with the exception of the slight good step forward on capital gains), mostly poll-driven politics and very, very, very short on long-term changes in the economic fortunes of the country.

By the way, I did not expect anything more. This president is who he is: a person very comfortable with the “free market” (see: Trans Pacific Partnership) who is looking to curb the “excesses” he sees. And, to be slightly harsher, the few dollars he throws to the lucky married people with children will be, eventually, taken away because of bad trade deals that undercut wages for all, health care costs that are still too high through the ACA and a badly, inefficient crumbling infrastructure.

That’s it, folks.

Now, please return to the orchestrated applause.

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MLK Weeps: 80 Peoples’ Wealth=3.5 BILLION Ppl Wealth, 1% Will Control 50% Global Wealth By 2016 Mon, 19 Jan 2015 12:18:06 +0000 There is little doubt that if Martin Luther King Jr. was alive today–and he would be 85 years old–he would be at the forefront of decrying the class warfare that has reached levels that even he could not have imagined during his short lifetime. He once said that what we “are saying that something is wrong … with capitalism…. There must be better distribution of wealth and maybe America must move toward a democratic socialism. Call it what you may, call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all of God’s children.”

And he would have woken up to this startling fact: the richest 1% of people throughout the globe control 48% of the planet’s wealth, leaving the other 52% for the other 99% of humanity.

Or put another way: 80 people worth had a total net worth of 1.9 trillion dollar, which is equal to the wealth of 3.5 billion people at the bottom 50 percent of the world’s population.

Oxfam lays out these facts in a report today. Oxfam uses data compiled by Credit Suisse in updated reports from the one I wrote about in 2011.

If this trend continues:

…the top 1% will have more wealth than the remaining 99% of people in just two years,…
with the wealth share of the top 1% exceeding 50% by 2016.

The most interesting this in the report, from my point of view, was an analysis of the extreme wealth made by a few people profiting from drugs and healthcare–profits that were enhanced by the Affordable Care Act, which handed to the insurance and drug industries tens of billions of dollars in new profits:

Between 2013 and 2014 billionaires listed as having interests and activities in the pharmaceutical and healthcare sectors saw the biggest increase in their collective wealth. Twenty-nine individuals joined the ranks of the billionaires between March 2013 and March 2014 (five dropped off the list), increasing the total number from 66 billionaires to 90, in 2014 making up 5% of the total billionaires on the list. The collective wealth of billionaires with interests in this sector increased from $170bn to $250bn, a 47% increase and the largest percentage increase in wealth of the different sectors on the Forbes list.

There is little doubt in my mind that if King were alive during the recent healthcare debate he would have lent his voice to the movement to enact “Medicare for All”, understanding that anything short of a single-payer system would simply enrich a few people and force more people to pay immoral prices for the right to health care.

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TPP, NAFTA, Fast Track…Rinse, Repeat: Prosperity Undermined–The Full Report Fri, 16 Jan 2015 14:18:40 +0000 Sometimes, it’s hard to connect the dots between things that happened twenty years ago–because we don’t teach real history in schools and Crazy Birds is more popular than reading a book. So, people who are correctly suspicious/opposed to the Trans-Pacific Partnership don’t necessarily get the connection to the phrase “fast track” and don’t remember NAFTA which passed, thanks to Bill Clinton, back in 1993 (it came into force January 1994). So, Public Citizen’s Global Trade Watch lends a hand today with a really great piece of analysis.

It’s called Prosperity Undermine: Fast Tracked Trade Agreements’ 20 Year Record of Massive U.S. Trade Deficits, American Job Loss and Wage Suppression. What I think is worth doing is citing the key points in the 52-page report and, by all means, read it all.

So, let’s build this “house” slowly. What the hell is “fast track”?

Fast Track was a U.S. procedure established in the 1970s for the negotiation and congressional approval of trade agreements. It delegated to the executive branch various congressional constitutional authorities, including Congress’ exclusive constitutional authority to “regulate Commerce with foreign nations.” In particular, Fast Track allowed the executive branch to select countries for, set the substance of, and then negotiate and sign trade agreements–all before Congress had a vote on the matter. Under Fast Track, the executive branch was empowered to write lengthy implementing legislation for each pact with normal congressional committee processes, such as legislative amendments in committee mark ups, circumvented. These executive-authored bills altered wide swaths of U.S. federal law to conform domestic policy to each agreement’s requirements. And, once passed, the trade agreements and implementing bills become federal law, and thus pre-empt state law.Moreover, Fast Track was unique in that it also delegated to the executive branch control of the schedules of the House and Senate with respect to consideration of trade agreements. Fast Track empowered the executive branch to force a congressional vote on such implementing legislation and the related agreement within a set amount of time, regardless of the views of congressional leaders. Sixty legislative days after the president submitted to Congress whatever agreement he signed and whatever legislation he wrote, the House of Representatives was required to vote on the package. A Senate floor vote was required no more than 30 days later. Under Fast Track, normal congressional
floor procedures also were waived when Congress voted on the final pacts and implementing legislation. All amendments were forbidden and congressional debate
was limited to 20 hours. Agreements were passed by simple majority votes, even in the Senate.

The above can be simply distilled to: fast track took away your democratic power as citizens because the people you vote for to represent you in Congress have essentially no say in shaping these trade deals that effect every aspect of the economic and environmental fabric of life.

And then:

Fast Track enabled the negotiation and expedited passage of 16 agreements, including the 1994 NAFTA, the 1995 WTO [World Trade Organizations], and various expansions of the NAFTA model (including the Central America Free Trade Agreement (CAFTA) passed in 2005 by a one vote margin). The last grant of Fast Track expired in June 2007, but Fast Track’s extraordinary procedures nonetheless applied to the agreements signed with Korea, Colombia and Panama under the previous authority and passed in 2011[WTO bracketed explanation added]

And what did we get as a result? I’m just highlighting here most of the headings in the report, each of which provides details and makes the case, individually and as a group, that these putrid trade deals–the babies of Republican and Democratic presidents–play a key, if not original, role:

1. Prior to the establishment of Fast Track and the trade agreements it enabled, the United
States had balanced trade; since then, the U.S. trade deficit has exploded.2. Food imports into the United States are soaring, destabilizing family farmers and posing
unchecked safety risks.

3. Six million American manufacturing jobs–1 out of 3–have been lost during the Fast Track

4. Offshoring of American jobs is moving rapidly up the income and skills ladder.

5. Devastation of American manufacturing is eroding the tax base that supports U.S. schools, hospitals and the construction of such facilities, highways and other essential infrastructure.

6. WTO, NAFTA and NAFTA-expansion agreements ban Buy American and forbid federal and
many state governments from requiring that U.S. workers perform the jobs created by the
outsourcing of government work.

7. U.S. wages barely increased in real terms since 1974, the year before Fast Track was first enacted, even as American worker productivity doubled.

8. Trade agreement investor privileges promote offshoring of production from the United States to low-wage nations.

9. Manufacturing workers displaced by trade have taken significant pay cuts.

10. Trade policy holds back wages even of jobs that can’t be offshored.

11. The bargaining power of American workers has been eroded by threats of offshoring.

12. Even accounting for Americans’ access to cheaper imported goods, the current trade model’s downward pressure on wages outweighs those gains, making most Americans net losers.

13. Powerful sectors obtained protection in NAFTA and WTO-style pacts, raising consumer

14. The inequality between rich and poor in America has jumped to levels not seen since the robber baron era.

15. Longstanding economic theory states that trade will increase income inequality in developed countries.

16. Official government data show that big businesses have crowded out U.S. small and medium enterprises (SMEs) under NAFTA.

17. Under the Korea FTA, U.S. small businesses have seen their exports to Korea
decline even more sharply than large firms.

18. U.S. small and medium businesses are not helped by NAFTA-style deals.

Despite all this:

Yet, in the face of the relentless evidence that our past trade agreement model is not working, President Barack Obama’s administration has doubled down on the old model with the TPP. The 2011 Korea FTA was based on an expansion of the NAFTA text and the Korea pact literally served as the U.S. opening offer for the TPP negotiations.[emphasis added]

And so all this talk and hand-wringing about inequality, raising the minimum wage (a paltry, pathetic proposed hike to $10.10-an-hour) and education is pointless when the president, and his enablers in the Democratic Party and among “liberals”, continues to push a trade agenda that undercuts, by a big margin, everything else.

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We All Pay Higher Tax Rates Than The Rich: A Lesson In Class Warfare Wed, 14 Jan 2015 21:10:35 +0000 Not that this should be entirely shocking but this should end the debate about how is getting fleeced and who carries the burden in society. And it’s useful to have this handy to dispatch to the usual class warfare deniers.

Into my mailbox came two exhaustive pieces of research–you know, those weird things that use FACTS (how quaint)–about who pays taxes. The first is a national study, the second focuses on New York (I know, I’m provincial).

First to the exhaustive state-by-state study Who Pays? by the Institute on Taxation & Economic Policy

Key piece in intro:

Economists have widely discredited trickle-down economic theories espoused for more than three decades, but that hasn’t stopped new generations of supply-side theorists from repackaging those philosophies and pushing for lower state tax rates for wealthy individuals, businesses and corporations. In fact, recent years have brought tax proposals and changes in multiple states that would overwhelmingly benefit the highest income households under the guise of stimulating economic growth. This report doesn’t seek to rebut ideological claims; rather it is an in-depth analysis of all taxes that all people pay at the state and local level.This study assesses the fairness of each state’s tax system by measuring state and local taxes paid by non-elderly taxpayers in different income groups in 2015 as shares of income for every state and the District of Columbia. The report provides valuable comparisons among the states, showing which states have done the best — and the worst — job of providing a modicum of fairness in their overall tax systems. The Tax Inequality Index (Appendix B) measures the effects of each state’s tax system on income inequality and is used to rank the states from the most regressive to the least regressive.

The bottom line is that every state fails the basic test of tax fairness. The District of Columbia is the only tax system that requires its best-off citizens to pay as much of their incomes in state and local taxes as the very poorest taxpayers, but middle-income taxpayers in DC pay far more than the top one percent. In other words, every single state and local tax system is regressive and even the states that do better than others have much room for improvement[emphasis added]

.So, that is the top-line message. And, along with the war against wages in the workplace (principally, the attacks against unions, this is THE TOOL used to prosecute broad class warfare: whatever services are left in society after the political establishment slashes and burns our basic social network (often in the name of the stupid obsession over “deficit reduction”) are paid for disproportionately by the very workers getting hammered in their pocketbooks at work.

Take an ugly bow:

Ten states —Washington, Florida, Texas, South Dakota, Illinois, Pennsylvania, Tennessee, Arizona, Kansas, and Indiana— are particularly regressive. These “Terrible Ten” states tax their poorest residents— those in the bottom 20 percent of the income scale — at rates up to seven times higher than the wealthy. Middle-income families in these states pay a rate up to three times higher as a share of their income as the wealthiest families.

It is worth noting that a majority of the states have been largely run by Republicans governors and/or barely Democratic governors and/or legislatures run by Republicans. And, so, one can assume that, as the statehouse picture has gotten even darker in the wake of the last election, that more states will vie for a place among the “Terrible Ten”.What makes a state so terrible?:

• Four of the ten states do not levy a personal income tax — Florida, South Dakota, Texas, and Washington. An additional state, Tennessee, only applies its personal income tax to interest and dividend income.•Five states do levy personal income taxes, but have structured them in a way that makes them much less progressive than in other states. Pennsylvania , Illinois and Indiana use a flat rate which taxes the income of the wealthiest family at the same marginal rate as the poorest wage earner. Arizona has a graduated rate structure, however there is little difference between the bottom marginal rate and top marginal rate. Kansas’ graduated rate structure only has two brackets, applying the top rate starting at $30,000 for married
• Six of the ten most regressive tax systems — those of Washington, South Dakota, Tennessee, Texas, Arizona and Florida — rely very heavily on regressive sales and excise taxes. These states derive roughly half to two-thirds of their tax revenue from these taxes, compared to the national average of 34 percent in fiscal year 2011-2012.

Bernie Sanders, take a proud bow for your state:

Vermont’s tax system is among the least regressive in the nation because it has a highly progressive income tax and low sales and excise taxes. Vermont’s tax system is also made less unfair by the size of the state’s refundable Earned Income Tax Credit (EITC) — 32 percent of the federal credit.

Why is this bad economically?:

The vast majority of states allow their very best-off residents to pay much lower effective tax rates than their middle- and low-income families must pay — so when the richest taxpayers grow even richer, these exploding incomes hardly make a ripple in state tax collections. And when the same states see incomes stagnate or even decline at the bottom of the income distribution it has a palpable, devastating effect on state revenue. A recent Standard & Poor’s report found that the more income growth goes to the wealthy and
incomes stagnate or decline at the bottom, the slower a state’s revenue grows, especially if the state relies more heavily on taxes that disproportionately fall on low- and middle-income households. Hitching your state’s funding of investments to those with a shrinking share income is not a path to a sustainable, growing revenue stream.Moreover, shrinking revenues and overreliance on regressive taxes prevent states from investing in the priorities that will bolster the prospects of low- and middle-income residents: education, workforce development, infrastructure improvements, and adequate healthcare. State tax structures that rely on trickle-down theories of economic growth, balance budgets on the backs of working families rather than asking the wealthy to do more, and fail to improve the wellbeing of the majority of that state’s residents will fail to be competitive in the long run. Shortsighted tax cuts can be a long-term drag on development. [emphasis added]

The above two paragraphs seem obvious to the rationale person. It is a measure of ideological blindness that such an obvious economic point is ignored, willfully, and, thus, it means all this rhetoric about competitiveness is, well, rhetoric.It’s worth reading the rest. Here’s a pretty cool feature: you can go here and check out your own state.

I also got a great report from the Fiscal Policy Institute Report just on New York. I’ll just highlight, for the sake of brevity, just two pieces.

On New York’s income tax burden on regular people:

Looked at another way, the top one percent in the city—tax filers with incomes over
$600,000—received 35 percent of all income in 2011 but paid only 27 percent of local taxes. The first four income quintiles—the “bottom 80 percent” with incomes under $71,000—paid a greater share of city taxes than their share of income. This disparity reflects the regressivity of sales and property taxes and the fact that rental properties
(lower-income households are much more likely to rent) bear a much higher effective property tax than do owner-occupied housing.

The biggest contribution to the national argument come swhen FPI blows up–again–the canard that higher taxes on business and the wealthy drive away jobs and rich people. Nonsense:

In his recent review of the literature on the relationship of state and local taxes to interstate migration, state tax policy expert Michael Mazerov noted:

The vast majority of academic research using sophisticated statistical techniques concludes that differences in state tax systems and levels do not have a significant impact on interstate migration. Seven economists (or groups of economists) have published studies on state taxes and migration in peer review economics journals since 2000. Six of the seven studies concluded that taxes do not drive interstate moves. Eight additional studies… that were not published in academic journals have been released in the same period; six of the eight found either that state income taxes had no effect on migration or that the effect was small and inconsistent.

Based on his extensive review of the latest literature and his own analysis of IRS data on
interstate migration, Mazerov concluded:

Differences in tax levels among states have little to no effect on whether and where people move, contrary to claims by some conservative economists and elected officials. For decades, Americans have been moving away from the Northeast, the industrial Midwest, and the Great Plains to most of the southern and southwestern states regardless of overall tax levels or the presence of anincome tax in any of these states. They’ve moved in large part for employment opportunities in the Sunbelt states and, secondarily, for less expensive housing, and, for many retirees, a warmer, snow free climate.

[emphasis added]

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Wall Street Banker Pulls Out, In Victory For Sen. Warren Tue, 13 Jan 2015 13:05:33 +0000 Ok one victory for the good guys…


Antonio Weiss, the Wall Street banker who President Barack Obama had picked to be the third-ranking official at the Treasury Department, has asked that the president not resend his nomination to the Senate following a major backlash from progressive Democrats who questioned his ties to the financial industry, POLITICO has learned.Obama accepted the decision, which Weiss conveyed in a letter to the president over the weekend. But the Lazard banker will still join the administration in the position of counselor to Treasury Secretary Jack Lew, which does not require Senate confirmation.

Of course, Weiss will still ends up in the mix of the people who influence Treasury policy since he is going to be a counselor to Lew.The opposition to Lew was focused specifically on his work at Lazard that reportedly included corporate tax inversions such as the one undertaken by Burger King (I’ve written about the Burger King tax inversion here, among other posts on the topic).

However, it’s still important that the larger point was made: the government has plenty of people influencing economic policy who come from the very institutions that have caused the economic crisis…not just the recent Depression but the crisis facing workers that has been building and escalating over decades.

The credit for this has to go to Elizabeth Warren who spearheaded the opposition. Here she talks about that opposition in the context of the general revolving door between Wall Street executives and the Treasury Department:

Bernie Sanders on this:

“I have no personal animosity toward Mr. Weiss but I am very glad he withdrew his nomination. The president needs economic advisors who do not come from Wall Street. In fact, he needs advisors prepared to stand up to Wall Street. We need economic policies in this country which ask the wealthy and large corporations to pay their fair share of taxes and which create millions of good-paying jobs.”

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Financial Transactions Tax Rears Its Head A Tad Mon, 12 Jan 2015 20:43:40 +0000 Oh, so, the Democrats have awakened. Now, it’s the “middle-class” that is in vogue because somehow the campaign to lift people out of poverty via a hike in the minimum wage was a drag on Democrats politically (stupid argument, but a different story). It’s time for tax cuts to be paid for a little by Wall Street.

The news:

Senior Democrats, dissatisfied with the party’s tepid prescriptions for combating income inequality, are drafting an “action plan” that calls for a massive transfer of wealth from the super-rich and Wall Street traders to the heart of the middle class.

The centerpiece of the proposal, set to be unveiled Monday by Rep. Chris Van Hollen (D-Md.), is a “paycheck bonus credit” that would shave $2,000 a year off the tax bills of couples earning less than $200,000. Other provisions would nearly triple the tax credit for child care and reward people who save at least $500 a year.

The windfall — about $1.2 trillion over a decade — would come directly from the pockets of Wall Street “high rollers” through a new fee on financial transactions, and from the top 1 percent of earners, who would lose billions of dollars in lucrative tax breaks.

I’ve written a lot about the FTT (including way back in 2008) so this is good news that it is on the table. Whether it becomes law is entirely a different story. However, it’s good to make the simple argument: traders benefit from government protections, not the least of which is a regulatory system that prevents, in theory, fraud and crazy speculation (ok, so that doesn’t always work out well). Plus, such a tax might also exercise some restraint, perhaps modest, on the wild and crazy big trades made on rumors and the thirst for a quick buck.

The main point, though, is shared responsibility. You live in this society and, so, you make a contribution. And that contribution is relatively modest and relatively painless.

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House Democrats To White House: Forget This Fast Track Nonsense, TPP Thu, 08 Jan 2015 20:06:02 +0000 Over the years, the Democratic opposition in the House to so-called “free trade” has grown, with more members opposed to so-called “free trade” than say back in the 1990s; the Senate has continued to be a disaster when it comes to building opposition to trade deals–basically, if you can’t stop it in the House, it’s a done deal. So, this is why today’s new conference on opposition to so-called “fast track” is good news–especially as the State of the Union looms when, I’m guessing, the president will offer up the Trans Pacific Partnership as an area of “bi-partisanship” agreement.

The full video of the press conference is here.

Excerpts, via The NYTimes:

As Mr. Obama works to secure the so-called trade promotion authority, a coalition of Democratic lawmakers and activists from organized labor, environmental, religious and civil rights groups is stepping up efforts to stop him.“This is one of the broadest advocacy coalitions that we’ve had,” said Representative Rosa DeLauro, a Connecticut Democrat who is leading the opposition. “There is no reason why we should exacerbate the loss of jobs or lower wages in the United States.”


Even as the president was boasting of the American automobile industry’s resurgence, Lori Wallach, the director of Public Citizen’s Global Trade Watch, accused him of pursuing trade deals that could devastate the industry and cost American jobs.She and other opponents find a cautionary tale in the adoption of the 1994 North American Free Trade Agreement and the creation of the World Trade Organization, products of a collaboration between a Republican Congress and a Democratic president, Bill Clinton.

Those measures “woke up Congress about what ‘fast track’ means,” she said in an interview, and ever since, “It’s really hard to get them to delegate that authority.” She noted that in the 21 years since those deals were approved, Congress has awarded trade promotion authority to a president only for a total of five years.

For Obama, it’s particularly tricky, because that big power grab would be used for this agreement that is basically a Trojan horse for every kind of extreme corporate proposal that could not get passed in the sunshine of public debate,” she said, referring to the Trans-Pacific Partnership.[emphasis added]

Let me just repeat the words above: workers got screwed in the 1990s because of the adoption of the 1994 North American Free Trade Agreement and the creation of the World Trade Organization, products of a collaboration between a Republican Congress and a Democratic president, Bill Clinton.By the way, for the sake of those interested in a really good explanation of the evils of “fast track”, Wallach gave a great piece of testimony back in 2007, which I posted here. Wallach has been a leading warrior on defeating this shit since NAFTA. Excerpts:

This is because Fast Track ensures that Congress’ role is performed too late to do any good: Congress only gets a “yes” or “no” vote on a trade agreement after it’s been signed and “entered into.” That vote also ok’s hundreds of changes to wide swaths of U.S. non-trade law to conform our policies to what the “trade” deals require. By eliminating Congres s’ right to approve an agreement’s contents before it is signed, Fast Track also allows outrageous provisions to be “super glued” onto actual trade provisions. Did the U.S. Congress really intend to extend U.S. drug patent terms from the pre-WTO 17-year terms to the WTO-required 20-year terms? This requirement was tucked into the WTO’s Trade
Related Intellectual Property provisions. The University of Minnesota School of Pharmacy found that the WTO’s windfall patent extensions cost U.S. cons umers at least $6 billion in higher drug prices and increased Medicare and Medicaid costs nearly $1.5 billion just for drugs then under patent.Because under Fast Track, Congress never had the ability to review, much less vote on the WTO text before it was signed, this and numerous other outrageous non-trade policy changes were bundled in with legitimate trade provisions.

Federalism is also flattened by Fast Track. In a form of international pre-emption, state officials also must conform our local laws to hundreds of pages of non-trade domestic policy
restrictions in these “trade” pacts, yet state officials do not even get Congress’ cursory role Fast Track is how we got stuck with NAFTA, WTO and other race-to-the-bottom deals. Fast Track trashes the “checks and balances” that are essential to our democracy – handcuffing
Congress, state officials and the public so we can not hold U.S. negotiators accountable during trade negotiations while corporate lobbyists call the shots.
In one lump sum, Fast Track:
• Delegates away Congress’ ability to veto the choice of countries with which to launch negotiations;
• Delegates away Congress’ constitutional authority to set the substantive rules for international commerce. Congress lists “negotiating objectives,” but these are not mandatory or enforceable and Executive Branch negotiators regularly ignore them. In fact, the 1988 Fast Track used for NAFTA and WTO explicitly required that labor rights be included in U.S. trade agreements.
• Fast Track permits the Executive Branch to sign trade agreements before Congress votes on them, locking down the text and creating a false sense of crisis regarding congressional wishes to change provisions of a signed agreement.
• Fast Track empowers the Executive Branch to write legislation (Congress’ constitutional role), circumvent normal congressional committee review, suspend Senate cloture and other procedures, and have guaranteed “privileged” House and Senate floor votes 90 days after the President usurps one more congressional role by submitting legislation (Congress’ role).
• Fast Track rules forbids all amendments and permits only 20 hours of debate on the signed deal and conforming changes to U.S. law.

It’s this secretive process that led Bernie Sanders Monday to demand to see a copy of the full draft of the TPP, as I wrote about here.Obviously, this is a tough fight. However, keep in mind that there is a core of Republicans who are also opposed to certain aspects of so-called “free trade”–there has been, since NAFTA, a left-right meeting-of-the-minds on the issue. I don’t know enough yet about the newly elected Republicans on this topic–yes, on the rest of the issues they are mostly nuts–to know what the numbers are to defeat “fast track”.

But, at least, we have some Democrats in the House willing to put up a fight to kill a most undemocratic process.

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Bernie Sanders To Obama Admin: Let Me See The Damn TPP Draft Tue, 06 Jan 2015 14:45:50 +0000 Ok, so, Bernie Sanders was more judicious in his demand to the Obama Administration that he have access to a full draft of the current Trans-Pacific Partnership deal. Still, this is extremely important because it is the very secrecy about trade deals–going back decades–that goes to the heart of our ability, as citizens, to function in a democratic society.

Sanders’ demand came yesterday in a letter to Michael Froman, the United States Trade Representative. Sanders’ letter makes some key points:

It is incomprehensible to me that the leaders of major corporate interests who stand to gain enormous financial benefits from this agreement are actively involved in the writing of the TPP while, at the same time, the elected officials of this country, representing the American people, have little or no knowledge as to what is in it.


It goes without saying that the American people and their elected officials have a right to know what is in this agreement before fast track is voted on.


Please also explain why you think it is appropriate that the representatives of the largest financial institutions, pharmaceutical companies, oil companies, media conglomerate and other major corporate interests not only have access to some of these documents, but are also playing a major role in developing many of the key provisions in it. Meanwhile, the people who will suffer the consequences of this treaty have been shut out of this process.

He gives Froman until January 16th to respond.Of course, the importance of what is in this document is paramount. But, the idea that this whole thing is being done in secret–as all trade deals are negotiated–is outrageous.

To be clear, this is not a partisan issue. The Democratic Party’s presidents have been horrendous when it comes to secrecy on trade. Bill Clinton was the godfather of NAFTA (along with the great cheerleader for NAFTA, Robert Reich, who continues to be entirely dishonest about his role in pimping for so-called “free trade”) and the renewal of “fast track” authority in the 1990s–and he was quite happy to have it all done in secret, away from any open debate about trade and what it meant for the people.

Ripping open the secrecy around trade is the economic equivalent of the Snowden exposure of NSA spying. It’s that consequential for democracy and economic justice.

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