|
America's "We" Problem |
 |
|
Saturday, 15 February 2014 09:18 |
|
Reich writes: "America has a serious 'We' problem - as in 'Why should we pay for them?' The question is popping up all over the place. It underlies the debate over extending unemployment benefits to the long-term unemployed and providing food stamps to the poor."
Economist, professor, author and political commentator Robert Reich. (photo: Richard Morgenstein)
America's "We" Problem
By Robert Reich, Robert Reich's Blog
15 February 14
 merica has a serious "We" problem - as in "Why should we pay for them?"
The question is popping up all over the place. It underlies the debate over extending unemployment benefits to the long-term unemployed and providing food stamps to the poor.
It's found in the resistance of some young and healthy people to being required to buy health insurance in order to help pay for people with preexisting health problems.
It can be heard among the residents of upscale neighborhoods who don't want their tax dollars going to the inhabitants of poorer neighborhoods nearby.
The pronouns "we" and "they" are the most important of all political words. They demarcate who's within the sphere of mutual responsibility, and who's not. Someone within that sphere who's needy is one of "us" - an extension of our family, friends, community, tribe – and deserving of help. But needy people outside that sphere are "them," presumed undeserving unless proved otherwise.
The central political question faced by any nation or group is where the borders of this sphere of mutual responsibility are drawn.
Why in recent years have so many middle-class and wealthy Americans pulled the borders in closer?
The middle-class and wealthy citizens of East Baton Rouge Parish, Louisiana, for example, are trying to secede from the school district they now share with poorer residents of town, and set up their own district funded by property taxes from their higher-valued homes.
Similar efforts are underway in Memphis, Atlanta, and Dallas. Over the past two years, two wealthy suburbs of Birmingham, Alabama, have left the countywide school system in order to set up their own.
Elsewhere, upscale school districts are voting down state plans to raise their taxes in order to provide more money to poor districts, as they did recently in Colorado.
"Why should we pay for them?" is also reverberating in wealthy places like Oakland County, Michigan, that border devastatingly poor places like Detroit.
"Now, all of a sudden, they're having problems and they want to give part of the responsibility to the suburbs?" says L. Brooks Paterson, the Oakland County executive. "They're not gonna talk me into being the good guy. 'Pick up your share?' Ha ha."
But had the official boundary been drawn differently so that it encompassed both Oakland County and Detroit – say, to create a Greater Detroit region – the two places would form a "we" whose problems Oakland's more affluent citizens would have some responsibility to address.
What's going on?
One obvious explanation involves race. Detroit is mostly black; Oakland County, mostly white. The secessionist school districts in the South are almost entirely white; the neighborhoods they're leaving behind, mostly black.
But racisim has been with us from the start. Although some southern school districts are seceding in the wake of the ending of court-ordered desegregation, race alone can't explain the broader national pattern. According to Census Bureau numbers, two-thirds of Americans below the poverty line at any given point identify themselves as white.
Another culprit is the increasing economic stress felt by most middle-class Americans. Median household incomes are dropping and over three-quarters of Americans report they're living paycheck to paycheck.
It's easier to be generous and expansive about the sphere of "we" when incomes are rising and future prospects seem even better, as during the first three decades after World War II when America declared war on poverty and expanded civil rights. But since the late 1970s, as most paychecks have flattened or declined, adjusted for inflation, many in the stressed middle no longer want to pay for "them."
Yet this doesn't explain why so many wealthy America's are also exiting. They've never been richer. Surely they can afford a larger "we." But most of today's rich adamantly refuse to pay anything close to the tax rate America's wealthy accepted forty years ago.
Perhaps it's because, as inequality has widened and class divisions have hardened, America's wealthy no longer have any idea how the other half lives.
Being rich in today's America means not having to come across anyone who isn't. Exclusive prep schools, elite colleges, private jets, gated communities, tony resorts, symphony halls and opera houses, and vacation homes in the Hamptons and other exclusive vacation sites all insulate them from the rabble.
America's wealthy increasingly inhabit a different country from the one "they" inhabit, and America's less fortunate seem as foreign as do the needy inhabitants of another country.
The first step in widening the sphere of "we" is to break down the barriers - not just of race, but also, increasingly, of class, and of geographical segregation by income - that are pushing "we Americans" further and further apart.
Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest, "Beyond Outrage," is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause. His new film, "Inequality for All," is available on DVD in January and on Netflix February 28th.
 |
|
Ex-Morgan Stanley Chief Jams Foot in Mouth, Complains of CEO Abuse |
|
|
Friday, 14 February 2014 15:37 |
|
Taibbi writes: "In a discussion about executive pay, Mack said we're all being too rough on his fellow too-big-to-fail bank CEOs."
Matt Taibbi. (photo: Current TV)
Ex-Morgan Stanley Chief Jams Foot in Mouth, Complains of CEO Abuse
By Matt Taibbi, Rolling Stone
14 February 14
 here's a ton of interesting stuff going on in the Wall Street sphere of late - I'm trying to find some time to do a proper write-up of the extraordinary lawsuit just filed by the Better Markets advocacy group against Eric Holder's Justice Department, seeking to invalidate the $13 billion JP Morgan Chase settlement - but one particular thing happened this week that just can't go by without comment.
John Mack, the former CEO of Morgan Stanley and one of the more irritatingly unrepentant dickheads of the crisis era, gave an incredible interview to Bloomberg TV. In a discussion about executive pay, Mack said we're all being too rough on his fellow too-big-to-fail bank CEOs.
He would love, he said, "to see people stop beating up on Lloyd and Jamie," endearingly referring to Goldman chief Lloyd Blankfein and Chase chief Jamie Dimon by their first names (Mack must be in a bowling league with both men). He added: "I think that would make a lot of sense, and I'm in favor of that."
Mack went on to say that the debate over compensation was healthy, just not always warranted. "As long as shareholders reward performance," he said, "we can argue." But, he added, "The last time I checked, this business is still a business that pays people extremely well."
It's already funny that of all the injustices in the world, this was the one Mack decided to worry about on TV: the criticism of poor Jamie Dimon's 74 percent raise. But more to the point: If we really did live in a world where shareholders rewarded performance, would a CEO who just oversaw a record $20 billion in regulatory penalties even have a job, much less be getting a raise?
Mack had stones enough to be whining about people "beating up" on Jamie Dimon, given the year Chase just had. But to do so and simultaneously scold us that high compensation on Wall Street is just "shareholders rewarding performance," that's either Nobel-caliber chutzpah or laboratory-pure stupidity.
John Mack of all people should be quiet when it comes to the issue of public outrage over bank corruption. How about this, John: All of us malcontents will promise to stop beating up on your fellow CEOs, if you share with us the entire contents of your conversation with Pequot hedge fund honcho Art Samberg on June 29th, 2001?
Mack, readers may recall, was at the center of the controversy involving SEC whistleblower Gary Aguirre. Aguirre is a lawyer and investigator who began working for the SEC in September 2004. One of his first assignments was to look into a case involving a hedge fund called Pequot Capital Management, which had made a highly auspicious series of trades just ahead of, and after, a merger involving GE and a company called Heller Financial in the summer of 2001. The man making the deal was legendary Pequot trader Art Samberg.
As evidence in a Senate investigation into Aguirre's firing later revealed, Samberg made a huge investment in Heller on July 2nd, 2001, apparently without having done any research into Heller before that time. He had, however, talked the previous business day (Friday, June 29th) to John Mack, who had recently left a job running Morgan Stanley and had just returned from Switzerland, where he'd interviewed for a job with Credit Suisse. Both Morgan Stanley and Credit Suisse had worked on the merger for Heller financial. and, the Senate explained, "possessed material, non-public information about the deal."
Right after Mack talked to Samberg and Samberg invested in Heller, Pequot cut Mack in on a lucrative deal involving a Lucent spinoff that ended up more than tripling Mack's $5 million investment. When Aguirre asked permission to interview Mack about all of this, he was denied such permission by his superiors at the SEC. When he pressed, they fired him (Aguirre later won a wrongful termination settlement with the SEC in the amount of $755,000).
Ultimately, the government did not interview Mack about the Pequot deal until August 1st, 2006, exactly five days after the five-year statute of limitations on the incident had expired. In that testimony, Mack denied having foreknowledge of the Heller deal, and claimed that Samberg had wanted him to invest in the Lucent spinoff, not the other way around - despite the fact that the SEC had emails from Samberg saying Mack had nagged Samberg to let him into the lucrative deal, "busting his chops" to get in.
The government never really pursued the matter further and Mack's role in what the Senate called a "highly suspicious" trade was never fully investigated. He ultimately returned to Morgan Stanley to serve as the bank's CEO from 2005 to 2009.
All of which means exactly nothing today, over a decade after the original incidents. By now it's just one of a pile of stories about cases that never got made against Wall Street executives for questionable behaviors in the pre-crisis years.
Still, it seems to me that after having been saved by the gods from the jaws of death in the Heller episode, Mack should probably henceforth stay on the sidelines in any debate about financial corruption. That he doesn't should tell us a lot. I'm not sure these guys can even spell "shame," much less exercise any.
|
|
|
Merging Cable Giants Is 'an Affront to the Public Interest' |
|
|
Friday, 14 February 2014 15:29 |
|
Nichols writes: "When it comes to media, bigger is not better. And when it comes to the control of the infrastructure of how we communicate now, the trend toward extreme bigness...is accelerating at a dangerous pace."
The Comcast Center in downtown Philadelphia. (photo: unknown)
Merging Cable Giants Is 'an Affront to the Public Interest'
By John Nichols, The Nation
14 February 14
 hen it comes to media, bigger is not better. And when it comes to the control of the infrastructure of how we communicate now, the trend toward extreme bigness - as illustrated by Comcast's plan to buy Time Warner Cable and create an unprecedented cable combine - is accelerating at a dangerous pace.
In the aftermath of a federal court decision striking down net neutrality protections that were developed to maintain an open and freewheeling discourse on the Internet, and with journalism threatened at every turn by cuts and closures, the idea of merging Comcast and Time Warner poses a threat that ought to be met with official scrutiny and grassroots opposition.
The point of the free-press protection that is outlined in the First Amendment is not to free billionaire media moguls and speculators to make more money. The point is to have a variety of voices, with multiple entry points for multiple points of view and a communications infrastructure that fosters debate, dissent and democratic discourse.
When media conglomerates merge, they do not provide better service or better democracy. They create the sort of monopolies and duopolies that constrain America's promise. Franklin Delano Roosevelt was right when he decried "concentration of economic power in the few" and warned that "that business monopoly in America paralyzes the system of free enterprise on which it is grafted, and is as fatal to those who manipulate it as to the people who suffer beneath its impositions."
Merging the two largest cable providers is a big deal in and of itself - allowing one company to become a definitional player in major media markets across the country - but this goes far beyond cable. By expanding its dominance of video and Internet communications into what the Los Angeles Times describes as a "juggernaut" with 30 million subscribers, the company that already controls Universal Studios can drive hard bargains with content providers. It can also define the scope and character of news and public-service programming in dozens of states and hundreds of major cities - including Chicago, Los Angeles, Philadelphia, New York City and Washington, DC.
That's too much power for any one corporation to have, especially a corporation that has been on a buying spree. Comcast already controls NBCUniversal and a broadcast and cable empire that includes NBC, CNBC, MSNBC, the USA Network, Telemundo and various other networks.
It's bad for consumers.
"In an already uncompetitive market with high prices that keep going up and up, a merger of the two biggest cable companies should be unthinkable. The deal would be a disaster for consumers and must be stopped," says Craig Aaron, the president of the media-reform group Free Press.
It's bad for musicians, documentary makers and other creators.
"Comcast's proposed takeover of Time Warner would give one company incredible influence over how music and other media is accessed and under what conditions," says Casey Rae, interim executive director of the Future of Music Coalition, who noted "the ever present danger of a huge corporation like Comcast - which already owns a major content company - disadvantaging competition or locking creators into unfair economic structures."
And it is bad for the democratic discourse of a nation founded on the premise memorably expressed by Thomas Jefferson in 1804 when he wrote, "No experiment can be more interesting than that we are now trying, and which we trust will end in establishing the fact, that man may be governed by reason and truth. Our first object should therefore be, to leave open to him all the avenues to truth. The most effectual hitherto found, is the freedom of the press."
The idea that "all the avenues to truth" would be controlled by a monopoly, a duopoly or any small circle of multinational communications conglomerates is antithetical to the understanding of the authors of a free press, and of its true defenders across the centuries.
So yes, US Senator Al Franken - the Minnesota Democrat who has proven to be one of the most serious and savvy congressional watchdogs on communication policy - is absolutely right when he says, "There's not enough competition in this space; we need more competition. This is going in the wrong direction."
Franken has written to the US Department of Justice, the Federal Trade Commission and the Federal Communications Commission, urging each of them "to act quickly and decisively to ensure that consumers are not exposed to increased cable prices and decreased quality of service as a result of this transaction."
The FCC, in particular, has broad authority to review telecommunications-industry mergers, with an eye toward determining whether they are in the public interest. And watchdog groups have been pressuring the commission's new chairman, Tom Wheeler, to assert the FCC's authority. For Wheeler, a former president of the National Cable and Telecommunications Association, the lobbying organization for the cable industry, this is will be a critical test of his leadership.
But challenges to this proposed merger must also come from the anti-trust lawyers at the Department of Justice and the congressional watchdogs over consolidation and monopoly issues.
"Stopping this kind of deal is exactly why we have antitrust laws," says Free Press's Aaron.
The congressional role cannot be underestimated. The Department of Justice, the FTC and the FCC get cues from Congress. And the voices of members of the House and Senate will play a critical role in determining whether the merger goes forward.
Some of the initial signals have been good.
"This proposed merger could have a significant impact on the cable industry and affect consumers across the country," says Minnesota Democrat Amy Klobuchar, the chair of the Senate Antitrust Subcommittee, who announced: "I plan to hold a hearing to carefully scrutinize the details of this merger and its potential consequences for both consumers and competition."
The ranking Republican on the committee, Utah Senator Mike Lee, supports the review, as do public interest groups ranging from Public Knowledge to Consumers Union.
But hearings will not be enough. The Senate, in particular, must send clear signals.
Former FCC Commissioner Mike Copps is precisely right when he says of the idea of creating an even larger telecommunications conglomerate, "This is so over the top that it ought to be dead on arrival at the FCC."
Copps, who now serves as a special adviser to Common Cause's Media and Democracy Reform Initiative, is also right when he says, "The proposed deal runs roughshod over competition and consumer choice and is an affront to the public interest."
But the public interest will prevail only if the public, and its elected representatives, raise an outcry in defense of the robust competition that opens "all the avenues to truth."
|
|
Why the Senate STILL Isn't Able to Get Anything Done Even After the 'Nuclear Option' |
|
|
Friday, 14 February 2014 08:47 |
|
Millhiser writes: "A lawmaker who is poorly informed will represent their constituents poorly. A lawmaker who neglects important relationships will find themselves impotent. A lawmaker who ignores their constituents or who pays too little attention to their reelection campaign probably won't remain a senator much longer."
Senate Minority leader Mitch McConnell (R-KY). (photo: Susan Walsh/AP)
Why the Senate STILL Isn't Able to Get Anything Done Even After the 'Nuclear Option'
By Ian Millhiser, ThinkProgess
14 February 14
 t wasn't supposed to be this way.
In 2013, the Senate adopted two of the most significant changes to its rules in nearly 40 years. The first significantly reduced the amount of time senators in the minority can delay a confirmation vote before it can move forward. The second effectively reduced the amount of votes required to confirm nearly all presidential nominees from 60 to 51 votes. Senators in the minority now have fewer opportunities to frustrate Senate confirmations than at any point in the Senate's recent history.
At yet judicial confirmations remain at a standstill. Just one judge has been confirmed so far in 2014, and this judge was a holdover from the November 2013 fight that led to Democrats invoking the so-called "nuclear option." Majority Leader Harry Reid (D-NV) began the process necessary to confirm four judges on Wednesday night, but this process will still take days to complete and will only confirm a small fraction of the 32 judicial nominees awaiting votes. Even after the transformative changes last year brought to the Senate's rules, the Senate still isn't working. Routine confirmations are not moving forward.
Franz Kafka's Senate
The key to understanding why is to first understand how the Senate's rules create roadblocks to progress even without requiring a supermajority to get anything done. Although Senate Democrats reduced the number of votes required to confirm a judge last November, they didn't actually eliminate the filibuster. Absent unanimous consent from every single senator, confirming a judicial nominee still requires two votes. First, a majority of the Senate must vote to invoke "cloture" on the nominee - that's the process that used to require 60 votes but now only requires 51. After this cloture vote succeeds, a fairly small number of senators can force hours of delay before an actual confirmation vote can be held. For relatively low-ranking trial judges, there's only two hours of delay between cloture and a final vote. But for the more powerful court of appeals judges, up to 30 hours of time can be wasted before the final confirmation vote takes place. (Moreover, the rule that reduces the confirmation time for trial judges sunsets in January - meaning that even the lowest ranking judges could also require 30 hours to confirm next year).
And that's just two of the hoops Senate Democrats have to jump through in order to confirm a judge. Before a cloture vote can take place, sixteen senators need to sign a "cloture petition," present that petition on the floor, and then wait more than a day for the petition to "ripen." If the Senate is currently debating a piece of legislation, it is not allowed to shift gears to focus on a nomination unless it agrees to shift into something known as "executive session." And, as an aide to Majority Leader Harry Reid (D-NV) tells ThinkProgress, Republicans started insisting that the full Senate hold a vote every time it switches in and out of executive session.
The punchline is that if the Senate wants to take a break from, say, debating whether to raise the debt ceiling in order to confirm a judge, it must hold at least four votes: 1) A vote to shift into executive session; 2) a voter to invoke "cloture" on the nominee; 3) a vote to actually confirm the nominee; and 4) a vote to shift out of executive session. Meanwhile, many of these votes are punctuated by hours or even days of waiting for petitions to "ripen" or for time to tick down between cloture and a final vote.
Disruption
If Reid were determined to confirm judges at the expense of all other priorities, this byzantine procedure would not be enough to stop him. But he would do so at the expense of his colleagues' ability to perform many of the basic functions of their jobs.
Most senators actually spend very little time on the Senate floor, where confirmation votes and similar business takes place. The rest of their time is spent speaking with colleagues and sitting on committees. It's spent meeting with constituents and being briefed on policy by staffers. It's spent in caucus meetings and in closed-door meetings with their allies. And, because senators are elected officials, much of it is also spent fundraising or talking to their campaign staff.
Each of these tasks is essential to a senator's job. A lawmaker who is poorly informed will represent their constituents poorly. A lawmaker who neglects important relationships will find themselves impotent. A lawmaker who ignores their constituents or who pays too little attention to their reelection campaign probably won't remain a senator much longer.
For these reasons, every floor vote is a disruptive event. When Reid calls a vote on a bill, or a nomination, or even a motion reconsider whether to proceed to debate, he is telling 99 of the most over-scheduled people in Washington that they need to drop what they are doing and present themselves on the Senate floor. It would be as if your boss ordered everyone in your office to drop what they are doing and report to a central conference room at barely predictable intervals, and then to try to schedule the rest of their days around these disruptions.
A majority leader who doesn't manage this process in a way that allows his or her colleagues to attend to the rest of their job responsibilities probably won't remain majority leader much longer.
The bottom line is, as George Washington University's Sarah Binder put it in an email to ThinkProgress, "it's not that Democrats CAN'T get these nominees confirmed," but rather that it "seems costly in floor/senators time to do so." In order to confirm a judge, Reid must halt all other Senate business for up to 30 hours just to proceed from cloture to confirmation. And he has to do so in a way that still makes it possible for the rest of the senators to do their jobs.
The Senate, in other words, is profoundly broken in a way that could not be solved by one simple rules change - or even by the full package of changes enacted throughout 2013. Much of the Senate's rules are premised on the notion that literally every single member of the Senate will agree to allow basic tasks to be performed. In the era of Ted Cruz and Mitch McConnell, that is no longer a viable assumption.
|
|
