Category Archives: Public Policy and Governance

Sold!

The sale of American democratic institutions hasn’t exactly been a market transaction. After all, in order for a market to operate, you need a willing buyer and a willing seller, both of whom are in possession of all relevant information.

Instead, we have the House of Representatives, controlled by Republicans who owe their current majority to gerrymandering and voter suppression, preparing to endorse Paul Ryan’s most recent budget. Not only are the American people not willing buyers, those “selling” this travesty are doing their level best to ensure that we have only the haziest notion of what it would really do.

As a fiscally-savvy friend of mine–a REPUBLICAN–posted to Facebook

The Ryan Plan in the House GOP’s own words: “Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax. “

In short, the Kochs and the Waltons, two families each at over $100 billion net worth, each worth more than 40% of Americans combined, would likely receive $2-3 billion a year in passive dividend income tax-free, used to buy back more shares from the public and into their own hands to earn more dividends, all compounding and passed on as ever more massive estates to their heirs, who also would received billions a year on income and never pay taxes. Meanwhile, you and I would be paying taxes on our earned income to provide these families with the secure and educated society on which the preservation and growth of their fortunes depend. The end of American capitalism and civil society as we know it. Outrageous. Abominable. Grotesque. Indefensible.

I stole his description because he said it better than I could.

The only thing standing between the 99% and this abomination is a Democratic-controlled Senate–and Nate Silver tells us the GOP has a 60% chance of retaking the Senate in November.

The fact that Federal lawmakers are falling over each other to do the bidding of the wealthy can be explained by lobbying and campaign contributions. What is inexplicable is why the Supreme Court–whose members are insulated from such pressures (and apparently from reality as well)–would further open the floodgates and invite the plutocrats to buy America.

The decision in McCutcheon was about “speech” only in the sense that money talks. More about that tomorrow.

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Food for Thought

Yesterday, I shared the story of a woman who cleans houses for a living, a hardworking woman whose financial situation is so precarious (and options so limited) that she felt she had no choice but to return to work just days after she’d had a heart attack.

Today, I want to share some data from an article from In These Times by Michael Winship. The contrast is quite illuminating:

Open the Books, a new nonprofit working for greater transparency in government spending, reports that between 2000 and 2012, Fortune magazine’s top 100 companies received $1.2 trillion from the feds. And, Aaron Cantú writes at AlterNet, “That doesn’t include all the billions of dollars doled out to housing, auto and banking enterprises in 2008-2009, nor does it include ethanol subsidies to agribusiness or tax breaks for wind turbine makers.”

Richard Rubin at Bloomberg News recently found that, “The largest US-based companies added $206 billion to their stockpiles of offshore profits last year, parking earnings in low-tax countries until Congress gives them a reason not to. The multinational companies have accumulated $1.95 trillion outside the US, up 11.8 percent from a year earlier.”

Alan Pyke at the website ThinkProgress adds:

While precise estimates of lost revenue are difficult to make, previous inquiries into profit offshoring found that it cost the US between $30 billion and $90 billion each year during the early and middle 2000s, when the pile of untaxed corporate profits was much smaller.

States and localities also lose out on tens of billions of dollars in tax revenue each year to similar offshoring strategies. A recent study found that by closing just one small loophole in state business tax laws, states could bring in a billion dollars in new revenue almost overnight.

Think of the highways, bridges and housing that money could build or repair, and the jobs that could be created, the teachers and tuitions it could provide, the mouths it could feed. Then throw in corporate malfeasance without punishment, gross mismanagement and exorbitant executive salaries—for example, Henrique de Castro, the failed #2 at Yahoo, who’s getting $109 million for his 15 disastrous months there, or about $244,000 per day (h/t to R.J. Eskow).

So let me see if I understand this. A social safety net that would allow my housekeeper a couple of weeks to recuperate from her heart attack is “charity” that would promote “an unhealthy dependency.” But the transfer of trillions of taxpayer dollars to businesses that hoard their profits, don’t hire new workers, and use every trick in the book to evade paying their fair share of taxes is common-sense encouragement of entrepreneurship.

Excuse me while I throw up.

 

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While Partisans Fiddle…

Congressional Republicans and Democrats continue to do battle over taxes, with most Democrats advocating a moderate hike in the rates paid by those making over 250,000/year, and the GOP insisting that a raise in (historically low) rates amounts to “class warfare.”

It’s a classic conflict between irreconcilable worldviews: rightwing Republicans label taxation for anything other than military spending and corporate welfare as socialism;  the more radical see taxation as theft. Democrats respond that taxes are the dues we pay for civilization.

Meanwhile, we have stalemate.

I wonder if the antagonists might be able to “cut the baby,” Solomon-like, by agreeing to pursue corporations actively evading their civic responsibilities.

The largest American multinational companies parked an additional $206 billion of profits in offshore accounts last year, according to Bloomberg, bringing the total amount of profits stashed where U.S. tax officials can’t touch them up to about two trillion dollars.

 The 307 companies that Bloomberg examined now hold a combined $1.95 trillion offshore, allowing them to avoid paying U.S. taxes on those earnings. The majority of the total is concentrated in just a few corporate hands. The largest 22 of those companies hold more offshore than the other 285 combined.

 Surely, even the purveyors of  “makers and takers” rhetoric can see how wrong this is. After all, the corporations playing these games are shifting the tax burden to those who aren’t able to do so.

Talk about theft.

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Throwing in the Towel?

Oh, drat.

I’ve been reading a recent book by Ilya Somin, a well-known and respected constitutional scholar, called Democracy and Political Ignorance.

 He begins by reciting several aspects of public ignorance with which readers of this blog are also distressingly familiar. And he argues that certain aspects of that ignorance are particularly troubling:

many voters are ignorant not just about specific policy issues but about the basic structure of government and how it operates….such basic aspects of the U.S. political system as who has the power to declare war, the respective functions of the three branches of government, and who controls monetary policy.

 This makes it difficult to assign credit and blame for policy outcomes; it also means that many voters have a very inaccurate picture of “the scope of elected officials’ powers.”

No kidding.

How many times have I heard liberal voters express disappointment that Obama didn’t “do” this or that? How many times have I heard conservative critics charge the President with “dictatorial” powers when he has (1) done something routine, something all Presidents have done; or (2) when Congress has either enacted a policy they disliked or defeated one they liked (so they attributed the result to a President they dislike)?

Somin notes that the level of political knowledge has barely increased since the 1930s—as he says, this is a “stable level of ignorance” that has persisted even in the face of massive increases in educational achievement and “an unprecedented expansion in the quantity and quality of information available to the general public at little cost.” Television and the internet seem not to have increased political knowledge, with the exception of those who were already well-informed. Somin suggests these media may actually have diverted attention away from politics by providing alternate sources of entertainment.

In the introductory chapter of the book, Somin provides reams of evidence—as if we needed to be further depressed—in support of his contention that the public cannot make fact-based decisions about policies or the merits of public officials when they know virtually nothing of the political world they inhabit. With all of the screaming about Obama’s stimulus bill, for example, 57% of the public didn’t know that a quarter of the stimulus came in the form of tax cuts. Only 34% of the public knew that TARP was enacted by President Bush. Only 39% is aware that defense spending is a larger percentage of the federal budget than education, Medicare and interest on the national debt.

We know that people who are unaware of facts are more easily manipulated.

The question—as always—is “what do we do about this state of affairs?” Somin is convinced that “rational ignorance”—the recognition that one vote is unlikely to matter much in the democratic scheme of things—will prevent us from raising the level of civic knowledge.

His conclusion? We need to change our form of government. I haven’t yet finished the book, or read his recommendations, so I will withhold comment.

Talk amongst yourselves….

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Can We Define “Liberty”–Before Someone Gets Shot?

For a bunch of lawmakers who just love to talk about liberty, the cowboys at the Indiana General Assembly seem to have embraced a very odd definition of that term. In their view, “liberty” means their right to make decisions for everyone else.

Funny, I thought that was a description of autocracy.

Case in point: A bill is proceeding through the General Assembly that will allow guns to be brought to schools and school events. The measure also says that no school board (public or private) can enact a policy forbidding legally authorized persons to have guns in their cars on school property.

The NRA must be so proud.

Ignore, for a moment, the lunacy of encouraging people to bring weapons to schools. Pretend that 26 children weren’t gunned down last year in Connecticut. Ignore the fact that gun violence is an epidemic in this city, state and country. Those arguments–while important– really are beside the point. (Although for a pointed and effective, albeit snarky, takedown of the “let’s arm the world” lunatics, you really should read this Op Ed about an Idaho bill permitting guns on campus..)

The real question is: Why in the world does the Indiana General Assembly get to tell public and private schools what safety precautions they may not choose to employ?

Municipalities have long complained about the lack of home rule in Indiana, but as the years have gone on, it has only gotten worse. The micromanaging and increasing high-handedness of the General Assembly is hard enough to stomach; the undeniable fact that campaign donors and special interests are all too often served at the expense of both sound policy and Indiana’s citizens is getting intolerable.

At what point do we ordinary Hoosiers demand some “liberty” of our own?
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