Relevant and even prescient commentary on news, politics and the economy.

Senators promised 50 years of secrecy on their tax reform proposals

by Linda Beale

Senators promised 50 years of secrecy on their tax reform proposals

There continues to be more blather about the need for “tax reform, and buddies GOP Dave Camp and skin-deep Dem Max Baucus seem to be intent on accomplishing something “big”.  And that’s what’s worrying me.

The Republicans have been arguing that we need tax reform to “simplify” the Code, but that’s close to ludicrous.  Most of the complicating portions of the Code exist for two reasons:  (1) to provide some anti-abuse provisions to counter the tax avoidance techniques of wealthy, sophisticated taxpayers (including multinational corporations) and (2) to provide special tax subsidies through tax expenditures, again mostly for the wealthy (think capital gains preference) and industries with clout (consider the various subsidies for the natural resources extractive industries), accompanied by a few good ones that benefit the poor and marginalized individuals (such as the Earned Income Tax Credit).  We shouldn’t get rid of the anti-abuse provisions or of those tax expenditures that support lower-income families or favor emerging industries like wind power.  That leaves getting rid of the subsidies for Big Oil, Big Pharm, etc as the only simplifying moves that make much sense.  Something tells me that’s not what will come of the Camp-Baucus rewrite.

Federal Judge Finds Ohio Can’t Refuse to Recognize Couple’s Out-of-State Same-Sex Marriage

by Linda Beale

Federal Judge Finds Ohio Can’t Refuse to Recognize Couple’s Out-of-State Same-Sex Marriage

Dear Readers:

This has been a much needed break for me, but now I am ready to resume daily postings on tax, economics, and the potential for a just and fair society.  As you all are undoubtedly aware, Messrs Camp and Baucus continue their claim that they will accomplish “tax reform” before Baucus leaves the Senate in January 2015.  I remain unconvinced that this pair will put together the kind of reform that could merit passage.  Too much likelihood of favoritism for capital income at the expense of ordinary workers; too much likelihood of favoritism for multinationals and natural resource extractives, etc.

Is the IRS Inspector General Himself Partisan, Or Is He Just Stupifyingly Clueless About the Law?

After the tax agency was denounced in recent weeks by President Obama, lawmakers and critics for what they described as improper scrutiny of at least 100 groups seeking I.R.S. recognition, The New York Times examined more than a dozen of the organizations, most of them organized as 501(c)(4) “social welfare” groups under the tax code, or in some cases as 501(c)(3) charities. None ran major election advertising campaigns, according to the Campaign Media Analysis Group, the main activity of a small number of big-spending tax-exempt groups that emerged as major players in the 2010 and 2012 elections.

But some organized volunteers, distributed pamphlets and held rallies leading up to the 2010 elections or the 2012 presidential election, as conservatives fought to turn out Mr. Obama.

A report issued this month by the Treasury Department’s inspector general, J. Russell George, found that inappropriate criteria, including groups’ policy positions, were used to flag some cases and that specialists in the I.R.S. office in Cincinnati, which reviews all tax-exemption requests, sometimes asked questions that were irrelevant to the application process.

And agency officials have acknowledged that specialists inappropriately used keywords like “Tea Party” and “Patriots” in searching through applications.

But some former I.R.S. officials disputed several of [I.G. J. Russell] George’s conclusions, including his assertion that it was inappropriate to ask groups about their donors, or whether their leaders had plans to run for public office. While unusual, the former officials said, such questions are not prohibited if relevant to an application under consideration.

“The I.G. was as careless with terminology as the Cincinnati office was,” said Marcus S. Owens, who headed the I.R.S.’s exempt organizations division until 2000. “Half of those questions have been found to be germane in court decisions.”

Groups Targeted by I.R.S. Tested Rules on Politics, Nicholas Confessore and Michael Luo, New York Times, May 26

I had planned to post on the Times story but haven’t had the time this week, and Linda Beale’s terrific post this morning would make an in-depth one by me redundant.  But I do want question, explicitly, the inspector general’s own competence, and maybe even his own political biases.  What struck me most about the Times story is its indication that the I.G. himself apparently is ignorant of the relevant law, particularly of some relevant court decisions; that his report apparently does not attempt to reconcile the specific actions of some of these groups with the law’s limiting of 501(c)(4) status to groups that do not electioneer; and that the investigation (apparently) did not attempt to determine whether groups with conservative-sounding names were “targeted” for further inquiry at a higher rate than groups with with liberal-sounding names.

If there were a significantly higher number of applicant conservative groups than applicant liberal groups, or if applicant conservative groups more often use political-sounding names than applicant liberal groups do, then–in light of the body of actual law pertaining to 501(c)(4) status–these statistics, it certainly seems to me, should have been featured in the report, and then widely reported by news organizations.

But instead, the I.G. started–and therefore finished–with the mistaken legal premise that political groups, groups whose very purpose was to electioneer, were entitled to 501(c)(4) status. This itself is stunning. From time to time, there are indications that an inspector general has deliberately skewed an investigative report or an investigation itself.  But I’ve never before heard of an inspector general who appeared unknowledgeable about the law relevant to the agency or department that his or her office was charged with inspecting upon receiving triggering information.

It would be nice now if Obama, having already expressed his outrage at the indication of political targeting by that IRS division, would now fully explain to the public what the relevant law actually is; that Democratic-leaning electioneering groups were targeted, too; why the groups that were targeted were targeted; what some of these groups actually do; and the real reason that these groups, whether Republican-leaning or Democratic-leaning, applied for 501(c)(4) status: to be able to hide the identity of the electioneering organization’s donors.

Obama, of course, won’t do that.  His primary goals throughout his presidency have been to please centrist pundits and try to tamp down on the virulence toward him from the right.  But any self-styled centrist pundit who would attack him for explaining the law and mentioning what the targeted organizations really do–that is, what exactly “targeting” meant here–is, by definition, no centrist.  And it’s painful to think of how much more successful this administration would have been all along, and how many serious mistakes it would have avoided, had Obama not dedicated himself so thoroughly to trying to assuage the unassuageable.  And that includes the political pundits of the studiously-centrist variety.

But the Senate Democrats should hold a hearing to make the points about the Times article makes.  The Times article provides a good starter witness list–including Inspector General George–and the names of some of the political organizations, Republican-leaning and Democratic-leaning, that inappropriately filed 501(c)(4) applications, and whose officers should be subpoenaed to testify.

The purpose would be to clarify for the public what the law is now and why–why–groups whose raison d’être is openly partisan want the 501(c)(4) designation, and, in doing so, enlist public support for a new campaign-finance law with specific guidelines concerning public disclosure of donors to political-campaign groups irrespective of their IRS tax status.  And along the way maybe we would learn why, pray tell, the inspector general thinks current law permits (requires?) the IRS to authorize these overtly partisan groups to keep their donors’ identities secret.  That alone would be worth the trouble.

Senate did the right thing–will the House?

by Linda Beale

Senate did the right thing–will the House?

Most are aware that online businesses have an unfair tax advantage. Under the 1992 Quill Supreme Court decision, states cannot currently require online retailers without physical presence in the state to collect applicable sales taxes. Although customers are supposed to save receipts and then pay over the appropriate amount of sales tax at the end of the year, nobody does. And they get away with not paying since it would be an onerous burden on states to assess those taxes without information from the onlines sellers. The result is that the tax-included price for merchandise purchased online is cheaper than for the same merchandise purchased in stores. So our tax system is essentially subsidizing the replacement of mom and pop small businesses with online giants. The mom and pop business often serves the online business in another way–for free: customers may go try on the merchandise at the local store, but then order online to get the cheaper (sales-tax-free) price.

Margaret Thatcher, Polarizing Right-Winger

Margaret Thatcher, Polarizing Right-Winger

The major news media celebrated Margaret Thatcher upon her death.  They seem to praise her stubbornness and ability to move the UK to support her very conservative anti-union, pro-deregulation and privatization policies and talk of her impact on the UK.  David Brooks, a typical voice on the right who saw Thatcher as a hero of conservative politics, has this to say in his op-ed in the New York Times today, The Vigorous Virtues, New York Times (Apr. 9, 2013).

Margaret Thatcher was a world historical figure for the obvious reasons.  Before Thatcher, history seemed to be moving in the direction of Swedish social democracy. After Thatcher, it wasn’t. 

She lionized the self-made striver. …She championed a certain sort of individual …: “upright, self-sufficient, energetic, adventurous, indepedent-minded, loyal to friends and robust against foes.” (quoting Shirley Letwin)

Today, bourgeois virtues like industry, competitiveness, ambition and personal responsibility are once again widely admired …. Today, technology is central to our world and tech moguls are celebrated.  Tony Blari and Bill clinton embraced and ratified her policy shifts.  Millions more have been influenced by her idea of what makes an admirable individual.

A.C. Grayling presents a much more realistic–and somber–view of Thatcher’s “contribution” to the UK in his op-ed, Thatcher’s Divided Isle, New York Times (Apr. 9, 2013).

It is hard to think of a more divisive figure in British politics than Margaret Thatcher. 


Her admirers laud her for breaking Britain’s once-powerful trade unions, and liberalizing the City of London’s financial services industry; these acts, they say, halted the country’s economic decline.  Her detractors blame her for destroying much of the country’s manufacturing base by refusing to aid struggling industries and effectively annihilating the mining sector by emasculating the National Union of Miners.  Her premiership will always be remembered for the bloody battles between workers and the police, and the high unemployment and sudden appearance of industrial wastelands that followed.  

Mrs. Thatcher left behind a changed and divided Britain.  She dismantled local government structures
which meant that urban decay and the effects of unemployment were not adequately countered.  …..[S]he did little to advance the cause of women generally. …She was also unfriendly towards homosexuals. … 

She began the deregulation of banking that led ultimately to Britain’s contribution to the global financial crisis of 2008.  She reversed the trend of greater social integration and diminishing of the wealth gap that had characterized Britain in the three decades after 1945.  Postwar convergences in class and wealth disappeared and former divisions resurfaced as consumerism and social incivility followed quickly on her brusque reorganization of British society. …

This much is quite clear:  Thatcher wanted to break unions, privatize public resources, and deregulate industries.  She pushed the same ideological conservative manifesto that Ronald Reagan did in the USA. Reagan’s legacy (and Thatcher’s) regretably lives on today as we face daunting inequalities of opportunity and resources, inequalities that underlie a host of other problems in society.  It traces back to the use of Friedman’s Chicago School “free market” theories to push lower taxes for the wealthy, expanded use of more regressive taxation and less supportive social insurance programs (the calls for a VAT or national sales tax to replace income taxation, the demands for Social Security cuts and Medicare premium increases, etc.), treating government as “the problem” rather than an essential part of the solution, unquestioning admiration of the wealthy few as “responsible” “job creators”  and an accompanying trend to treat the poor and lower income (Romney’s “47%”)  as irresponsible bums living off so-called “entitlements”.  The result is the expansion of harmful extremes of inequality from coupling regressive tax policies  with wealthy corporatists’ capture of elective officials (think Citizen’s United) and hence of legislative policies.

cross posted with   ataxingmatter

Big Business believes in taxpayer subsidies, not "free markets"

by Linda Beale

Big Business believes in taxpayer subsidies, not “free markets”

David Cay Johnston, former NY Times reporter and now Syracuse professor, writes about the thing that most journalists don’t bother to (or are told not to) write about–the way that Big Business successfully lobbies legislators and regulatory agencies to write the rules to favor Big Business, at the expense of ordinary Americans, all under the false claim that they are pushing de-regulation for the good of competition and ordinary consumers.  Johnston, Missing the Story, American Journalism Review (March 2013).

Johnston describes a number of ways that state legislatures, Congress and state and federal regulatory agencies have made life easy-street for Big Business at the cost of ordinary consumers.  He notes it is often discussed as “deregulation” but that “is a misnomer because, literally, no such thing exists in commerce….Everything in business is regulated in some fashion, and has been since long before the first nearly full set of laws we have….  [Thus, d]eregulation typically means reregulation under new rules that favor business interests.”  Id.

Businesses claim that the ‘deregulation’ they seek is just another step towards their ideal of “free markets” to help competitiveness.  Not so, Johnston replies.  The regulatory climate that results is almost always one that creates “moats” making competition much harder for small businesses and allowing duopolies or monopolies to arise that can set prices as high as they wish. And often the captured regulatory agencies allow the most absurd subsidies imaginable.

The Bush Treasury did that in spades.  One example is the changes the pro-business Treasury under Paulsen made in the regulations under section 368 governing corporate reorganizations, in which the Bush Treasury (many officials of whom are still part of the Obama Treasury) promulgated rules that provide, for the first time, the possibility of a loss recognition by shareholders in the nonrecognition reorg exchange.  Settled law at the time said no such loss could be recognized.  And the Bush Treasury also did it in setting up (through regulations) yet  another tax subsidy of Big Oil (as an add-on to an already ridiculous subsidy enacted by Congress when it allowed Big Oil to operate as limited partnerships).

Here’s how Johnston describes this.

The simple story is that Congress in 1986 exempted monopoly pipelines from the corporate income tax if they organized themselves as Master Limited partnerships. The George W. Bush administration then let these pipelines include the nonexistent tax in the rates they charge.

The cost of this fake tax is both tiny and huge.

The pipelines raise prices to cover the cost of the tax, which in turn means they have to raise prices even more to cover the taxes on the extra earnings, known as “grossing up.” A 42 percent tax on profits, grossed up, means a pipeline gets to earn its profit plus 75 percent for taxes. These higher costs are then built into prices people pay for gasoline and natural gas to heat homes. Paying this fake tax costs each American less than three cents per day, about $10 per year, I calculate. That is the tiny part. The huge part is that collecting just a penny a day from everyone in America adds up to $1.1 billion in a yearor $3.3 billion at three cents per day per American. Id.

 (emphasis added).

Note, folks.  That’s an unnecessary $3.3 billion subsidy provided to already-profitable businesses that comes entirely at the cost of ordinary Americans.  It is a subsidy put into law entirely through Big-Busienss-friendly tax administrators in ways that most Americans do not see it–or, if they see it, they believe it is a “real” tax cost of the businesses rather than just another theft subsidy.

This is another aspect of the problem of the way the media treats any discussion of “free markets.” The fundamentalist approach to free markets (that I have sometimes labeled “free marketarianism” or “friedmania”) claims to believe that deregulation helps people by increasing competition and opening up markets.  In fact, it is usually the opposite.  Deregulation helps Big Business by decreasing competition and allowing the development of powerful oligarchs and powerful monopolies or near-monopolies.  Brute capitalism, that is, allows those who hold capital to hold power, and those who hold power act against the interests of ordinary people in order to consolidate their power.  Another blog addressed this well:

A free market requires that everybody plays nice and follows the rules. Guess what. There’s always someone who will do whatever evil they think is required to make money. Once you realize that, you know there can be no such thing as the free market.


That’s one of the primary reasons that uncontrolled capitalism has been such a gross failure since the Reagan/Thatcher “revolution”, leaving us with record inequality and damaged democracy, and bringing the world economy to the brink of total collapse that simply evaporated trillions of dollars. Random Notes from the Exasperation File, Class War In America.

I have often noted that the media treat the daily ups and downs of the stock market as though it is an accurate reflection of the entire economy.  It is not.  When the stock market is up, it is likely that one or another segment of Big Business is doing well or exceptionally well.  That means the affluent–those in the top 30% who own most of the financial assets of this country, including Big Business’s CEOs and board members, are doing well.  So as the stock market has resurged after the 2007 financial crisis brought on by the excess of Big Financial Businesses, the wealthy who run and own those Big Businesses are doing mighty well indeed.

This is corporatism at its worst–the takeover of the economy and all of its institutions by a corporate mindset that favors the wealthy and the managers/owners of Big Business over ordinary people, leaving ordinary people’s views unheard.  It often is associated with class warfare, wherein the rich ensure that their money buys laws and regulations written by, for, and of the rich.  Corporations pay less in taxes and ordinary workers pay more–either in direct taxes or in the indirect tax of wage and benefit loss that is a tax subsidy for the wealthy.

Those at the bottom of the economic distribution are of course the ones most hurt by the decline and by the class warfare policies of the rich.  They are most likely still doing poorly or just barely getting by, mostly because those big profits at Big Business are taken at their expense–through constantly rising prices not reflected in increased quality or costs of production, or through increasingly unfair worker wages and benefits that have been cut in order to increase the rents to the owners/managers.  And usually with the assistance of legislators and regulators.

Take a friend of mine, who was laid off from an auto parts manufacturer for almost three years and has been struggling to make a full-time living at it since he was reinstated–at a much lower salary then before the crash (conveniently for the company but not so good for the workers).  He bought a new truck about a year before the financial crash.  The payments were supposed to be around 250 a month.  In the first months of the layoff he couldn’t find any substitute work, and he fell behind in payments on the truck (his family depends on him as the sole breadwinner; his family has almost no assets and no liquid assets; he depends on the truck to allow him to take odd jobs when his job at the factory is on hiatus–often landscaping, mowing, etc.).  The interest rate on the loan went up to 32% almost immediately.   That would once have been treated as illegal usury.

Not now, since “deregulation” has allowed financial firms to rip off their customers coming and going for their own profits.   Now his payments are around $400 a month and he owes as much on the truck as he did several years ago in spite of all the payments he has worked hard to make since then.  This Thursday he missed the payment again, after keeping up for most of the year.  He missed it because his company began selectively laying off workers for a week or 3 days at a time during the winter, and he didn’t work for about ten days of the month before the payment was due.  On Wednesday he talked to his adviser at the financial firm that gave him the loan.  It was a new “adviser”. They replaced a more understanding one with one who was considerably harsher.  The adviser told him on Wednesday that he would give him til Friday to make the next payment.  On Thursday, however, he sent a repo man who took the truck.  Friday my friend got a paycheck and could have made the payment (as he’d told the adviser on Wednesday).  Instead, when he went to make the payment thinking he could get the truck back that day, the financial firm advised him that he now had to pay off the truck in full–as well as a bunch of additional charges due to the repossession.

What would that be, he asked?  He assumed he owed about $3500, in his calculations the amount still due on the original loan.  Oh, no, the finance guy told him.  You will have to pay $4975 on Monday, and that amount will increase by $25 a day for every day you do not pay.  It’s that much because of all the late fees we added on the bill.  Oh, and we are charging you $400 for repo-ing the vehicle on Thursday (even though we had promised we would not do so)…..
Again, deregulation of financial institutions has made these rent-seeking add-on charges customary for anyone in the lower part of the income distribution.  Big Business sells it as competitive services for the underprivileged but it is really deregulated excess profits for the financial firms for acting like modern equivalents of plantation owners with a captive workforce unable to ever build up financial assets and always dependent on the firms’ calculations as to what they owe or are owed.

How is my friend (who happens to be an African American) supposed to ever advance beyond the near-serfdom in which he currently exists?   Lucky for him, we are willing to offer him a personal loan at market-rate interest so that he can finally pay off his overseer and begin to dig himself out of the hole that our deregulated, GOP-ideology-driven state puts most Detroit low-income residents in.   Mass transit hardly operating and not permitted to expand as it should to permit low-income residents to commute easily to work in the region.  White suburbs that cannot be annexed into the city, so continue their oblivious lives exploiting Detroit’s assets while pitying the poor black residents that just can’t seem to do anything right.  Businesses that charge white folks in the suburbs less than black folks in the city.  Insurance companies that rip off their Detroit clients.  And on and on.

This is all happening in a world where white folks with money set all the rules and now, in Michigan, have made it very hard for any union to form and exert some worker-power on behalf of the employees. Michigan’s new, so-called “right-to-work” law that the religiously right-wing Republican party of Michigan passed with no input at all from the people and with misinformation galore–all of the newspaper coverage talked about workers being “forced” to join a union unless you have “right-to-work” and how “right-to-work” would free them not to have to pay for the union and encourage more economic growth and more jobs.  None of the newspaper articles or the legislators reported the fact that right-to-work states tend to have lower wages for their workers, less good jobs, and poorer economies.  Of course, the information was wrong to start with–no one was forced to join a union without right-to-work laws–they were merely required to pay some amount (less than union dues) for the services that the union provides.  Now, they can demand the same services and pay nothing.  No Republican business would provide services on that basis, but Republican legislators serving their oligarchic base ensure that no true freedom exists for anybody without money.

Michigan, of course, has also just taken over the City of Detroit, with Gov. Snyder’s appointment of an emergency manager.  This is as undemocratic as it gets, given the state vote rejecting the last EM law and the fact that the EM will have dictatorial power to ignore the Mayor, the City Council and all other elected officials.  Snyder is a right-wing tool, in office backed by a majority-GOP legislature that reflects the racism of most of the “upstate” part of Michigan and blames Detroit’s problems on its predominately black residents.  The legislature passed right-to-work to retaliate against unions for trying to get protection for workers’ rights in the constitution.  Apparently, the GOP thinks the constitution should only protect the wealthy, as it does by prescribing a flat tax, ensuring that the wealthy in Michigan get to choose what they support but are hardly taxed at all by the State. The rabid right in this state forget that what condemned Detroit was the “white flight” to the suburbs and Michigan’s foolish state constitution which does not allow Detroit to take the suburbs into the city.  So Royal Oak’s mayor a few years ago could refuse to fund metropolitan buses because he didn’t want Detroit’s black population able to cross the border into Royal Oak and pollute the city by taking jobs there.  And the wealthy residents of the 90% white suburbs of 80% black Detroit come into the city for its amenities–opera, plays, sports, museums–and its work, but take their pay out of the city to maintain their schools and shops and amenities while complaining about how awful Detroit is.  We Detroit residents are very worried that the GOP’s takeover of the Democratically elected city government will result in the rape of the city’s assets–Belle Isle is a jewel in Detroit’s crown that the state covets; Detroit’s water system is another asset that the state–and the white suburbs–covet and want to control.  The EM will be pressured by Snyder and the rest of the upstate Detroit haters to take over those assets and make Detroit pay for being a center of unionism and Democratic voters.

The Michigan passage of the so-called “right-to-work” law and the renewal of the emergency manager law AFTER it was defeated by the people in November are perfect illustrations of the contempt that the current Republican party shows for ordinary people when it is in power in a state.  And it also illustrates well the capture of legislators and agencies by oligarchs, monopolies and duopolies.  This is, as Johnston notes, a sad state of affairs that will only get worse unless the press reinvigorates itself to inform rather than kiss Big Business’s ass.

cross posted with ataxingmatter

The Evils of Corporatism

by Linda Beale

The Evils of Corporatism

I have often written in these pages about “corporatism”, an approach that pervades our economy and many government agencies and does not align with the interests of the majority of Americans.

Corporatism runs rampant today in states’ treatment of their public universities, treasures of the American educational system that have been central in continuing basic research into ideas that transform our lives and our understanding of ourselves.  Today, many states are cutting back more and more on funding for state universities, and demanding that the universities turn themselves into contract researchers for private corporations (where the corporations, not the universities, enjoy the commercial fruits of the research).  This is just another form of subsidy for Big Business at the expense of ordinary people. 

In addition, many states–including regressive Michigan under regressive governor Rick Snyder–are cutting funding for state universities in order to provide even more tax cuts to their corporate Big Business buddies.  And they tend to cut funding to those that need it most to serve the neediest populations that find equality of opportunity a meaningless promise in today’s casino capitalist economy–the poor and the disadvantaged. 

In Michigan, for example Wayne State’s paltry increase doesn’t keep pace with inflation, but Wayne serves the region and the region’s population in ways that other institutions in Michigan do not.  Corporatism, of course, also runs rampant in the universities themselves.  Wayne’s current president, who is paid $410,000 for being here only a few days a week and has a “deputy president” paid another $400,000, was a chief corporate officer at Ford and came to the university with very little understanding of academics.  It has shown, as he has run the place like a corporation, with his “never say no to the boss” cabinet of vice presidents and associate vice presidents (ranging around 23-25 these days) operating on a “flatter your boss brings rewards” system.

Corporatism exists all across governments, where Big Business spends billions to win influence on legislators and agency heads, and goes to every length to present a “PR” picture of the world as they want us to believe it exists to ordinary Americans.

Take one example–the Bureau of Land Management.  The BLM is basically a government toady for the wealthy and influential cattlemen and other industries that want to use public lands for private enrichment.  Perhaps the most glaring (but certainly not the only) example of this is the BLM’s treatment of the native American wild mustangs on public lands.  In spite of legislation charging the BLM to protect and preserve these American treasures on public lands, it has engaged in activities that are decimating the population, herding them up and selling them at $25 a head to buyers who take them to inhumane slaughterhouses in Mexico to be butchered while still conscious.  BLM is a toady for big ranchers, not a protector of public treasures.  And it should be stopped.

There is a non-profit organization that works hard on this issue–the Wild Horse Freedom Federation.  Earlier, it presented petitions to President Obama urging him to rein in the BLM and stop its use of tax dollars to wipe America’s wild horses off public lands to which they are legally entitled under the legislation passed in the mid 1970s.

Are you listening, President Obama?  Or is the only tune you hear the one played by Wall Street, Big Business, and corporate wealth?  If the latter, corporatism will continue to expand to cover every aspect of our lives, and the freedom that we pretend to cherish as Americans will disappear as surely as the wild mustangs will vanish from their “protected” public lands.

cross posted with ataxingmatter

Same-Sex Marriage In Illinois? No Basis for Objection

by Linda Beale (op-ed)

Same-Sex Marriage In Illinois? No Basis for Objection

In the US today, 9 states and the District of Colombia have legalized same-sex marriages and 9 states (counting Colorado, where the legislature passed a civil union bill on March 13) have legalized some form of civil union or domestic partnership for same-sex couples. Now one of the civil union states–where same-sex couples have everything that married couples have except for the stigma of not being permitted to call their union a marriage–is on the verge of recognizing the hatefulness of that stigma and enacting a same-sex marriage statute.  Illinois’s Senate has passed the legislation.  Illinois’s House executive committee has said it supports it.  and Illinois’s governor has said he will sign it.  See Geoffrey R. Stone,Same-Sex Marriage in Illinois–Now is the Time, Huffington Post (The Blog), Mar. 15, 2013.

As Stone points out, we have come a long way in a few short years, with a majority of Americans now supporting the concept of same-sex marriage.

[W]e have changed as a society. We have come to understand that people around us — good, kind, decent, loving people — are themselves gays and lesbians. And with that awareness of individual gays and lesbians, the social view of homosexuals generally has gradually changed.

Further, any state that has created an “in all but the name” civil union equivalent of same-sex marriage has recognized the injustice of not permitting same-sex couples to have the kind of legal, committed relationship that different-sex couples can have.  But that difference–in all but name–is not insignificant.

As Stone notes:

Imagine if African-Americans could enter into civil unions but not marriages. Imagine if Catholics could legally enter into civil unions but not marriages. Imagine if mixed-race couples could enter into civil unions but not marriages. The insult, the indignity, the discrimination would be apparent to all. The same is true for same-sex couples.

And there really isn’t a good argument for refusing to remove this last indignity for same-sex
couples.  Most of the arguments against gay marriage are along the following lines–we have to uphold traditional (meaning different-sex) marriage; we want to encourage traditional marriage to encourage procreation and cprovide the “right” environment for children; we want to further the traditional “moral values” of society, etc.  These arguments don’t hold water as far as the well-being of children or the needs of society are concerned or even whether there is a relationship between refusing marriage to same-sex couples and accomplishing those goals.  They frequently amount to arguments from the religious views of those who cling to conservative religious perspectives of homosexuality as bad and same-sex marriage as prohibited by God.  Stone makes the point the following way.

In a nation committed to the separation of church and state, the government can never deny rights to some in order to appease the religious beliefs of others. During the civil rights struggle, for example, segregationists frequently invoked biblical authority for the separation of the races. The Rev. James E. Burks of Bayview Baptist Church in Norfolk, Virginia, for example, insisted that God had separated the races and that “when man sets aside the plain teachings” of the Bible and “disregards the boundary lines God Himself has drawn, man assumes a prerogative that belongs to God alone.” Similarly, discrimination against women was often justified by reference to “divine ordinance.” Such arguments have no place in the American constitutional system.

I understand and respect the strong and sincere feelings of those who think that the marriage of same-sex couples is incompatible with their religious beliefs. But they cannot legitimately or with a proper respect for the American system of law and justice attempt to impose those beliefs on those who disagree. They have every right not to marry a person of the same-sex and they have every right not to officiate at the marriage of a same-sex couple, but they have no right — no right — to attempt to prevent the government from recognizing such marriages because they offend their religious beliefs.

In my view, we Americans are too often afraid to address these points of religious bigotry, perhaps from a long association of religious groups with the struggle FOR civil rights and our knowledge that not all religions join in this charade (see link to article below, for example), perhaps from the long connection of religious leadership in communities with the communities’ political and social leadership.  People don’t like to stand out, to fail to conform to the views of those around them, so where these fundamentalist religious views dominate, people may find it hard to go against them.  Perhaps it is also because we so often  misunderstand our own Constitutional protections–for rights to bear arms, for rights to avoid unreasonable searches, and especially for the free exercise of religion. Religious liberty protections are intended to ensure that no person is denied the right to exercise his/her religious views, so long as those religious views don’t cause real harm to others. But the Free Exercise Clause is not meant to protect religious institutions by allowing them to impose narrow dogmas on society in order that  their leaders and practitioners avoid the “offense” of others’  differing religious views.

Aside:  This is one reason that I think the Supreme Court’s ruling in the ministerial exception is wrong, the Tax Code provisions excluding certain income of ministers from taxation is wrong, having a federal “faith-based organizations” office is wrong, as is the concept recently in the news in connection with Obamacare that Catholic institutions shouldn’t have to provide the same health care–including abortion and birth control coverage–to all its employees who want it as other entities must do. ]
The Free Exercise Clause protects each American as an individual to provide that person the liberty to exercise his/her faith as s/he sees it (or not).   But not to impose his/her views on others.

cross posted with ataxingmatter

Senator Warren Puts Bank Regulators on Hot Seat

by Linda Beale

Senator Warren Puts Bank Regulators on Hot Seat

Elizabeth Warren started out her questioning of big bank regulators by noting that actual trials, where guilty parties are paraded before juries, information about their wrongdoing is spread over front pages, and everybody is aware that bad guys get punished for their bad deeds has an effect on whether the wrongdoing is committed in the first place. In the case of the big Wall Street banks, however, she notes that they made out like bandits during the speculative orgy that caused the financial system crisis, and yet not a one has paid by being taken to trial in this expressive way.

“Tell me,” she says to a group of bank regulators called before her Senate committee, “about the last few times you’ve taken the biggest financial institutions on Wall Street to trial. Anybody?”

The FCC representative, Tom Curry, notes that ordinarily they are just trying to move things along and correct deficiencies. Warren interrupts and notes–“yes, and you set a price for that… that’s effectively a settlement. What I’m asking is … when did you last take a financial institution, a Wall Street Bank, to trial? ” Curry “We’ve had a fair number of consent orders. We don’t have to bring them to trial.” Warren “I understand that you say you don’t “have” to but my question is when is the last time that you did?” (No further responsive answer).

(Dan here…a clip of her at the committee meeting is below the fold)

The same kind of interchange–can you identify when you last took Wall Street Banks to trial –was similarly nonresponded to by Elisse Walter. Nobody else even offered to comment. Certainly nobody offered a single date for “last time a Wall Street bank was taken to trial.”

Warren closed with a comment that made clear that she thought that a very different standard was being applied to Wall Street than is applied to ordinary citizens that commit even minor infractions. She noted that there are District Attorneys every day squeezing ordinary citizens on rather small matters and taking them to trial explicitly to set an example, but “For Wall Street banks, ‘too big to fail‘ has become ‘too big to try [take to trial]’. That just seems wrong to me.”

You go, Elizabeth. Without using the words “class warfare”, she has made absolutely crystal clear the class warfare problem that exists in our country today, where Wall Street institutions and their chiefs and chief owners get all kinds of protections while the little guy is shaken down for peanuts. As a commenter on the site already noted, if only there were 99 more like her in the Senate…..

cross posted with ataxingmatter

(Dan here…via Business Insider comes this clip about Senator Warren’s questioning at the hearing)

Lew’s Senate Finance hearing as Treasury Nominee

by Linda Beale

Lew’s Senate Finance hearing as Treasury Nominee

Jack Lew, former budget director under Clinton and Obama and former Obama chief of staff, answered questions at Senate Finance today in his bid to succeed Tim Geithner as Treasury Secretary.  See, e.g., Rubin & Klimasinska, Lew Says He Didn’t Know Money-Losing Investment Was in Caymans, (Feb. 13, 2013) and other related articles linked below.

When he was first nominated, I noted that I found his candidacy somewhat worrisome.  While there are a number of considerations that suggest a decently competent person, there are also some suggestions of a person who has lived in the “Wall Street” flow too long and thus falls into line with the typical Wall Street/mainstream economics thinking–thinking which ultimately supports policies that will continue to slide towards oligarchy.

The hearing focused on several interesting aspects of Lew’s career and investment choices.

1) Investing in the Caymans.  Lew made an investment of 50 to 100 thousand in a Citigroup fund based in theCaymans while he was at Citigroup, and claimed that he didn’t know it was an offshore investment.  He got out of it when he went into government and lost money on it.

ME:  There we have it–like most rich people, he just didn’t care enough to consider closely whehter his investment was in a tax haven country and certainly didn’t ponder the negatives .

2) Compensation at Citigroup.  Lew got a “bonus” of $940,000 in January 2009 when Citigroup was receiving federal bailout funds.  He defended it as being paid in the same way other private-sector employees in similar jobs were paid.

ME:  But there was a ridiculous racheting up of financial sector compensation during the years when the big banks were feeding at the trough of easy mortgage securitization money and derivative speculation.  Shouldn’t someone that we hire as the head of Treasury have been more aware of that speculative binge?    Or shouldn’t that person be at least somewhat ashamed now that such an exorbitant “bonus” (10 times what most Americans receive in annual pay) should have been funded, in essential part, by taxpayer bailouts of his institution?

Now, Orrin Hatch (GOP-Utah) tried to make a big deal out of Lew overseeing the Financial Stability Oversight Council in administering the Volcker Rulelimiting proprietary trading, saying that “it could lead to an awkward situation in which, in your role as chair of the FSOC, you would effectively be saying to financial firms: ‘Do as I say, not as I did.’ ”  Hatch claimed that this issue “bear[s] directly on your qualifications.”  I’m not so sure that is such a big worry since I think it is advantageous if Treasury has some understanding of how big banks trade, but it is just one more piece of Lew’s overall nature of being well-attuned to Wall Street (and not so well-attuned to Main Street).
3)  Corporate taxes.  Lew suggested in the hearing that Republicans and Democrats could “work together” so that changes in the international tax scheme could lead to lighter burdens on some foreign income of US multinationals.  The Bloomberg report notes that he supported a global minimum tax, but indicated that could be nominally territorial, with limits on offshoring income to tax haven countries.

4) Earned benefit programs.  Lew is one of those Democrats who is more right of center than the party’s base.  He still mentions the need for “entitlement” program changes as well as additional revenue increases as a part of “balanced” deficit reduction.

ME:  This is one of the most disturbing aspects of the Lew nomination.  He is pushing the GOP agenda of deficit reduction and “entitlement” reform when instead he should be staunchly defending the New Deal against the oligarchs who want to shrink government, diminish the safety net, end any support for innovative environmental and energy progrms, yet continue to reap benefits from the long-term government subsidies for Big Oil…..We should not tamper with Social Security–and there is no deficit reason for doing so.

cross posted with ataxingmatter