Monday, July 18, 2011

Frank Rich On the Obama Administration and Why It--Along With the Rest of Us-- is in Deep Trouble

Illustration by Eddie Guy

http://nymag.com/news/frank-rich/obama-economy/presidents-failure/

All,

The great Frank Rich--by far the best and most insightful "mainstream" political journalist, commentator, analyst, and social critic in print media today--does an outstanding analysis of President Obama's administration thus far and what has gone so terribly wrong with it-- and why-- in a scrupulously fair, balanced, highly detailed, and critically nuanced piece that goes far beyond both myopic liberal/leftist sentimentality and hysterically demagogic rightwing bashing. What is revealed is a profound commentary on not only this President's disturbing failures, blindspots, weaknesses, and limitations but a searing account of the even greater responsibility that we as citizens all collectively share--and especially the left!-- for not effectively challenging and defeating the many politically and economically powerful enemies of both this Presidency and even more importantly the larger general society. Please read this definitive article closely and share it with others...

Kofi


Obama’s Original Sin
By Frank Rich
July 11, 2011

New York

The president’s failure to demand a reckoning from the moneyed interests who brought the economy down has cursed his first term, and could prevent a second.


After 9/11, Rudy Giuliani went on Saturday Night Live to give New Yorkers permission to laugh again. But Mayor Bloomberg never did tell us when we could resume conspicuous consumption after the crash of 2008. And so, as we stumble through the second year of the official “recovery,” it’s been an improvisational return to high-end carousing in Manhattan.

A case in point was the late-May celebration of the centennial rededication of the New York Public Library. Surely no civic institution could be a more unimpeachable beard for a blowout. The dress code—no black tie—was egalitarian. The Abyssinian Baptist Church Gospel Choir, the New York City Gay Men’s Chorus, and that cute chorus from P.S. 22 in Staten Island—Glee diversity on steroids—were in the house along with some 900 invited guests, marquee names included (Toni Morrison, Jonathan Franzen). Bloomberg delivered a pre-dinner benediction from an altarlike perch on the main reading room’s balcony. “Free and open access to information may be the single most important component of any democratic society,” he said

But it was impossible to banish toxic trace memories of the financial meltdown. Some two weeks earlier, the mayor had restricted the “free and open access” he now extolled. His fiscal 2012 budget called for slashing $40 million from the library system, a cut that would have mandated four-day weeks and the shutdown of a dozen branches.

There was also the awkward matter of the gala’s “corporate chair,” Brian Moynihan, the CEO of Bank of America. In the pageantry preceding Bloomberg’s remarks, the slightly flushed Moynihan, looking like a nervous ring bearer in a stately wedding ceremony, was among those singled out by the announcer while marching down the reading room’s long center aisle in a processional of library trustees. No doubt he earned this honor by ponying up to give more New Yorkers more books. But free and open access to the unexpurgated books of his own bank—and of its gutted acquisitions, Merrill Lynch and Countrywide Financial—would be a far more valuable gift to our democratic society. Just a week before the library fête, the Huffington Post reported that B of A was stonewalling the Department of Housing and Urban Development’s investigation into fresh charges of defrauding taxpayers. Down in Naples, Florida, one Bank of America victim, Warren Nyerges, a 45-year-old retired cop, was getting ready to take the law into his own hands. Through a bureaucratic blunder—or worse—the bank had hounded his family for over a month, trying to foreclose on his house even though it was entirely debt-free. Unable to recover the legal expenses inflicted by this harassment, Nyerges staged a ruckus by hiring a lawyer who “foreclosed” on the bank’s local branch instead.

Nyerges, at least, would pry loose a settlement of $5,772 in early June. We could use him in New York, perhaps packing heat. Justice has not come to the city or its publicly funded institutions, which wouldn’t be in the fiscal hole they’re in today had malefactors like Bank of America not wrecked the economy in the first place and required taxpayer bailouts (two in B of A’s case). Still, you can’t blame the NYPL for collecting whatever reparations it could from Moynihan. One of the library’s formative patrons, present at the original dedication exactly 100 years earlier, was Andrew Carnegie, a ruthless tycoon second to none. But Carnegie did build a steel empire that sped the growth of the nation. Our own Gilded Age’s legacy is the financial “products” that greased the skids of America’s decline. At the centennial gala, you couldn’t escape the paw print of Stephen Schwarzman, the Blackstone Group billionaire whose library gift had entitled him to blast his name on any stray expanse of marble on the 42nd Street building. Schwarzman is nothing if not a representative 21st- century titan. His principal monument has been to himself , namely a notorious over-the-top 60th-birthday party, exquisite in both its bad timing and bad taste, that he threw the year before the crash. (If you’re shelling out a million bucks for an entertainer, is Rod Stewart the best you can do?) He is perhaps most renowned of late for comparing Obama to Hitler because the administration dared propose taxing private-equity firms’ share of client profits at a rate higher than 15 percent. (He later apologized.)

On that Monday night, the Republican Schwarzman was a political outlier in the crowd, which was dominated by New York’s liberal elite, financial and cultural divisions. Even Moynihan has been a faithful Democratic donor. These were Obama’s people (myself, yes, among them), and the worldly, let’s-turn-the-page spirit in the library that night uncannily reminded me of the hubristic vibe of Obama’s White House: The worst of the downturn is past, the wobbly economy will eventually creep forward, let the healed too-big-to-fail banks move on, and pray that the lagging indicators (i.e., employment) will catch up. Indeed, it’s a certain swath of the New York liberal elite that helped reinforce that Obama mind-set to begin with. Uncorrected, it could lead the president to defeat in 2012, even against a roster of opponents that almost everyone there that night would cavalierly dismiss as clowns.

What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe. Time may heal most wounds, but not these. Chronic unemployment remains a constant, painful reminder of the havoc inflicted on the bust’s innocent victims. As the ghost of Hamlet’s father might have it, America will be stalked by its foul and unresolved crimes until they “are burnt and purged away.”

After the 1929 crash, and thanks in part to the legendary Ferdinand Pecora’s fierce thirties Senate hearings, America gained a Securities and Exchange Commission, the Public Utility Holding Company Act, and the Glass-Steagall Act to forestall a rerun. After the savings-and-loan debacle of the eighties, some 800 miscreants went to jail. But those who ran the central financial institutions of our fiasco escaped culpability (as did most of the institutions). As the indefatigable Matt Taibbi has tabulated, law enforcement on Obama’s watch rounded up 393,000 illegal immigrants last year and zero bankers. The Justice Department’s bally hooed Operation Broken Trust has broken still more trust by chasing mainly low-echelon, one-off Madoff wannabes. You almost have to feel sorry for the era’s designated Goldman scapegoat, 32-year-old flunky “Fabulous Fab” Fabrice Tourre, who may yet take the fall for everyone else. It’s as if the Watergate investigation were halted after the cops nabbed the nudniks who did the break-in.

Even now, on the heels of Bank of America’s reluctant $8.5 billion settlement with investors who held its mortgage-backed securities, the Obama administration may be handing it and its peers new get-out-of-jail-free cards. With the Department of Justice’s blessing, the Iowa attorney general, Tom Miller, is pushing the 49 other states to sign on to a national financial settlement ending their investigations of the biggest mortgage lenders. What some call a settlement others may find a cover-up. Time reported in April that the lawyer negotiating with Miller for Moynihan’s Bank of America just happened to be a contributor to his 2010 Iowa reelection campaign. If the deal is struck, any truly aggressive state attorneys general, like Eric Schneiderman of New York, will be shut down before they can dig into the full and still mostly uninvestigated daisy chain of get-rich-quick rackets practiced by banks as they repackaged junk mortgages into junk securities.

Those in executive suites at the top of that chain have long since fled the scene with the proceeds, while bleeding shareholders, investors, homeowners, and cashiered employees were left with the bills. The weak Dodd-Frank financial-reform law that rose from the ruins remains largely inoperative, since the actual rule-writing was delegated to understaffed agencies now under siege by banking lobbyists and their well-greased congressional overlords. The administration’s much-hyped Consumer Financial Protection Bureau is being sabotaged by Washington Republicans intent on blocking any White House nominee, whether Elizabeth Warren or some malleable hack, to lead it. “We can’t let special interests win this fight,” said Obama when he proposed the agency in October 2009. Well, he missed his moment to fight for both it and Warren, and the special interests won without breaking a sweat.

Rather than purge the crash’s crimes, Wall Street’s leaders are sticking to their alibi: Everyone was guilty of fomenting this “perfect storm,” and so no one is. Too-big-to-fail banks are bigger than ever, and ­Masters of the Universe swagger is back. Even Jamie Dimon of JPMorgan Chase, about the only bank chief not to be caught with a suspect balance sheet or a $1,400 office trash can, has taken to channeling Schwarzman. In June, he publicly challenged Ben Bernanke about the intolerable burdens of potential regulation—this despite a 67 percent surge in JPMorgan’s first-quarter profits and a 1,500 percent raise in his own compensation from 2009 to 2010. As good times roar back for corporate America, it’s bad enough that CEOs are collectively sitting on some $1.9 trillion in cash—much of it parked out of the IRS’s reach overseas—instead of hiring. (How many jobs can you buy for $1.9 trillion? America’s total expenditure on the Iraq and Afghanistan wars over a decade has been $1.3 trillion.) But what’s most galling is how many of these executives are sore winners, crying all the way to Palm Beach while raking in record profits and paying some of the lowest tax rates over the past 50 years.

The fallout has left Obama in the worst imaginable political bind. No good deed he’s done for Wall Street has gone unpunished. He is vilified as an anti-capitalist zealot not just by Republican foes but even by some former backers. What has he done to deserve it? All anyone can point to is his December 2009 60 Minutes swipe at “fat-cat bankers on Wall Street”—an inept and anomalous Ed Schultz seizure that he retracted just weeks later by praising Dimon and Lloyd Blankfein as “very savvy businessmen.”

Obama can win reelection without carrying 10021 or Greenwich in any case. The bigger political problem is that a far larger share of the American electorate views him as a tool of the very fat-cat elite that despises him. Given Obama’s humble background, his history as a mostly liberal Democrat, and his famous résumé as a community organizer, this would also seem a reach. But the president has no one to blame but himself for the caricature. While he has never lusted after money—he’d rather get his hands on the latest novel by Morrison or Franzen—he is an elitist of a certain sort. For all the lurid fantasies of the birthers, the dirty secret of Obama’s background is that the values of Harvard, not of Kenya or Indonesia or Bill Ayers, have most colored his governing style. He falls hard for the best and the brightest white guys.

He stocked his administration with brilliant personnel linked to the bubble: liberals, and especially Ivy League liberals. Nearly three years on, they have taken a toll both on the White House’s image and its policies. Obama arrives at his reelection campaign not merely with a weak performance on Wall Street crime enforcement and reform but also with a scattershot record (at best) of focusing on the main concern of Main Street: joblessness. One is a consequence of the other. His failure to push back against the financial sector, sparing it any responsibility for the economy it tanked, empowered it to roll over his agenda with its own. He has come across as favoring the financial elite over the stranded middle class even if, in his heart of hearts, he does not.

The economic narrative of his presidency has been bookended by well-heeled appointees with tax issues. First came his Treasury secretary, Timothy Geithner, introduced to the public as a repeat tax delinquent, just too important to attend to the fine print that troubles mere mortals. This January, when Obama at long last created a jobs council, he appointed Jeffrey Immelt, CEO of G.E., to lead it. The Times did the due diligence the White House didn’t and found that G.E. paid essentially no U.S. taxes on $14.2 billion of profit, even as it has shed one fifth of its American workforce since 2002. Were Immelt creating more new American jobs in his new administration role than he has at G.E., perhaps we could understand why Obama kept him on. But his only visible achievement has been to co-write a “progress report” on his efforts for The Wall Street Journal op-ed page in June. It read like a patronizing corporate annual report aimed at small shareholders—a boilerplate wish list of bullet points followed by a promise that “a more strategic view” would be unveiled by September, a full nine months after he took his assignment. Maybe he and the president can hash it out this summer on the Vineyard.

A recent poll put Obama in a dead heat with Mitt Romney. Mitt Romney! The savior of the working stiff!

The roots of Obama’s capture by the corporate axis of influence inexorably trace back to his own personal Zelig, the former Clinton Treasury secretary and Harvard Corporation stalwart Robert Rubin. In The Audacity of Hope, published in late 2006, Obama called Rubin, then busily cheerleading the excessive risk at Citigroup, “one of the more thoughtful and unassuming people I know.” Two years later, when Citi cratered and threatened to take the economy with it, Rubin demonstrated his unassuming thoughtfulness by denying that he had anything to do with the toxic investments that cost taxpayers a $45 billion bailout and 52,000 Citi employees their jobs.

In his unseemly revolving-door career, Rubin not once but twice sped the Citi apocalypse—first in government, where he and his eventual successor as Treasury secretary, Larry Summers, championed the deregulatory policies that facilitated the consolidation of too-big-to-fail banks, and then in his $15 million-a-year role as Citi’s “guru,” where, by his own later account, he had no idea what was in the worthless paper the bank peddled to greedy dupes. You’d think Obama would have dumped him faster than he did the Reverend Wright, but that’s misreading him. Obama is preternaturally secure on thorny matters of race—as his magnificent speech on the subject made clear—and could distance himself from his preacher with no ambivalence. It’s “unassuming” braininess that’s his blind spot.

And so a parade of Rubin acolytes entered the White House, led by Geithner, a nearly lifelong civil servant so identified with the financial Establishment that even Mayor Bloomberg mistakenly introduced him as a Goldman alumnus at a public event in New York last year. It’s Geithner’s influence on policy, however, not his persona, that proved fateful. Not until March 2010 did the White House get its first explicit, modest jobs bill through Congress.

Obama had taken office at a true populist moment that demanded more than this. People were gagging over their looted 401(k)s and underwater homes, the AIG bonuses, and the bailouts. Howard Dean rage has never been Obama’s style—hope-and-change was an elegant oratorical substitute—and had he given full voice to the public mood, he would have been pilloried as an “angry black man.” But Obama didn’t have to play Huey Long. He could have pursued a sober but determined execution of justice and an explicit, major jobs initiative—of which there have been exactly none, the too-small stimulus included, to the present day.

By failing to address that populist anger, Obama gave his enemies the opening to co-opt it and turn it against him. Which the tea party did, dishonestly but brilliantly, misrepresenting Obama’s health-care-reform crusade as yet another attempt by the elites to screw the taxpayer. (The Democrats haplessly reinforced the charge with marathon behind-the-scenes negotiations with insurance and pharmaceutical-­industry operatives.) Once the health-care law was signed, the president still slighted the unemployment crisis. A once-hoped-for WPA-style public-works program, unloved by Geithner, had been downsized in the original stimulus, and now a tardy, halfhearted stab at a $50 billion transportation-infrastructure jobs bill produced a dandy Obama speech but nothing else.

Obama soon retreated into the tea-party mantra of fiscal austerity. Short-term spending cuts when spending is needed to create jobs make no sense economically. But they also make no sense politically. The deficit has never been a top voter priority, no matter how loudly the right claims it is. At Obama’s inaugural, Gallup found that 11 percent of voters ranked unemployment as their top priority while only 2 percent did the deficit. Unemployment has remained a stable public priority over the deficit ever since, usually by at least a 2-to-1 ratio. In a CBS poll immediately after the Democrats’ “shellacking” of last November—a debacle supposedly precipitated by the tea party’s debt jihad—the question “What should Congress concentrate on in January?” yielded 56 percent for “economy/jobs” and 4 percent for “deficit reduction.”

Geithner has pushed deficit reduction as a priority since before the inauguration, the Washington Post recently reported in an article greeted as a smoking gun by liberal bloggers. But Obama is the chief executive. It’s his fault, no one else’s, that he seems diffident about the unemployed. Each time there’s a jolt in the jobless numbers, he and his surrogates compound that profile by farcically reshuffling the same clichés, from “stuck in a ditch” to “headwinds” (first used by Geithner in March 2009—retire it already!) to “bumps in the road.” It’s true the administration has caught few breaks and the headwinds have been strong, but voters have long since tuned out this monotonous apologia. The White House’s repeated argument that the stimulus saved as many as 3 million jobs, accurate though it may be, is another nonstarter when 14 million Americans are looking for work.

As culled from the president's public appearances.
In early June, the unemployment rate—7.8 percent when Obama took office and as high as 10.1 percent during his tenure—ticked upward to 9.1 percent. That cued a ubiquitous press refrain that no president since FDR has been reelected with an unemployment rate higher than 7.2 percent (as it stood when Reagan overcame a recession to win in 1984). Later that month, a plurality in a Bloomberg survey said the economy was worse now than when Obama took office.

The ultimate indignity, though, was a Washington Post / ABC News poll showing Obama in a dead heat with Mitt Romney. Mitt Romney! If any belief unites our polarized nation, it’s the conviction that Romney is the most transparent phony in either party, no matter how much he’s now deaccessioning hair products. It’s also been a Beltway truism that a Mormon can’t win the Republican nomination, let alone a Massachusetts governor who devised the prototype for “ObamaCare.” But that political calculus changed overnight. That this poseur could so quickly gain traction, even if evanescently, should alarm Obama.

It was on Monday, June 13, that the new state of play crystallized. That morning, Immelt unveiled his vacuous op-ed and rendezvoused with Obama in Durham, North Carolina, for a double-feature dog-and-pony show: a meeting of the otherwise invisible White House jobs council (only its second to date) and yet another small-bore presidential photo op promoting yet another green-tech employer illustrating the latest dim-wattage administration slogan, “Winning the Future.” Unfortunately for the White House, the Times front page delivered another message above the fold that morning: OBAMA SEEKS TO WIN BACK WALL ST. CASH. Among the objects of Obama’s affection interviewed was an unnamed Democratic financier who found it ironic that “the same president who once criticized bankers as ‘fat cats’ would now invite them to dine at Daniel, where the six-course tasting menu runs to $195 a person.”

That Monday morning was also when Romney unleashed a web video startling in its brazenness. Mockingly titled “Bump in the Road,” it dispatched a diverse parade of unemployed Americans (or actors impersonating them) to a desert, where each in turn plaintively announced in close-up, “I’m an American, not a bump in the road.” Though Romney (wisely) stayed offscreen, the ad cast him in the unlikely role of Tom Joad leading the downtrodden dust-bowl masses to salvation. Hours later, Romney aced that night’s first major GOP presidential debate by again offering himself as an economic savior. His jobs plan? “Keep government in its place” and let “the energy and passion of the American people create a brighter future.”

No one doubts that Romney is a shape-shifter par excellence, whether on abortion, health care, cap and trade, or the Detroit bailout (which he predicted would speed GM and Chrysler to their doom). In his last presidential run, he was caught fabricating both his prowess as a hunter and a nonexistent civil-rights march starring his father and Martin Luther King. But to masquerade as a latter-day FDR is a new high in chutzpah even by his standards. The only examples he can cite as a job creator are his “turnaround” of the Salt Lake City Olympics in 2002 and his ability to grow Bain Capital, the private-equity firm he founded, from “ten employees to hundreds.”

By failing to address populist anger, Obama gave his enemies the opening to co-opt it and turn it against him. Which the tea party did, dishonestly but brilliantly.

The most significant workers he added to the payroll in Salt Lake City were sixteen lobbyists, at a cost of nearly $4 million, to solicit taxpayers’ subsidies—“more federal cash than any previous U.S. Olympics,” according to The Wall Street Journal. That’s hard to square with Romney’s current stand that jobs will bloom across the land if government stops giving any handouts (even to tornado victims, he said in the GOP debate) and lets the free market work its magic. As for his fifteen years in the corporate-buyout business, he was best known for the jobs Bain shredded at the once-profitable companies it took over and then demolished for parts.

It’s a record Romney perennially tries to cover up. It may have cost him his Senate race against Ted Kennedy in 1994. In that campaign, Romney was stalked by a “Truth Squad” of striking workers from a Marion, Indiana, paper plant who had lost jobs, wages, health care, and pensions after Ampad, a Bain subsidiary, took control. Ampad eventually went bankrupt, but Bain walked away with $100 million for its $5 million investment. It was an all-too-typical Romney story, which is why Mike Huckabee could nail him with his memorable 2008 wisecrack: “I want to be a president who reminds you of the guy you work with, not the guy who laid you off.” Stephen Colbert recently topped Huckabee, portraying Romney as a cross between Gordon Gekko and Jack Kevorkian because of the profitable mercy killings of companies in Bain’s care. When Romney was governor, his record was no better. A Northeastern University analysis of his term (2003–6) found that Massachusetts was one of only two states to have no growth in their labor forces. The other was Louisiana, which happened to have an excuse named Katrina.

That Romney thinks he can pass himself off as the working stiff’s savior and Obama as the second coming of the out-of-touch patrician George H.W. Bush of 1992 truly turns reality on its head. Obama’s palling around with Rubinistas may be too much for his administration’s or the American people’s good, but Romney is a bona fide plutocrat whose financial backers include David Koch and whose idea of a joke was to tell a group of out-of-work Floridians on the campaign trail, “I’m also unemployed.” Yet so far, Romney is getting away with it, and the Republican Establishment, smelling a savior, is happy to embrace and embroider his proletarian masquerade. Peggy Noonan recently anointed this well-connected son of a Detroit CEO and Michigan governor a “self-made” financial success. Should the ersatz Horatio Alger end up on a ticket with a right-wing pseudo-populist—Michele Bachmann, unlike Romney, is quite at ease with bashing Wall Street—it’s not inconceivable he could ride a sputtering recovery further than anyone expects.

There’s not much Obama can do to alter the economy by 2012, given the debt-ceiling fight, the long campaign, and nihilistic Capitol Hill antagonists opposed to any government spending that might create jobs and, by extension, help Obama keep his own. But the central question before the nation couldn’t be clearer: Who pays? The taxpayers bailed out the elite; now it’s the elite’s turn to return the favor. Massive cuts to the safety net combined with scant sacrifice from those at the top is wrong ethically and politically. It is, in the truest sense, un-American. Obama knows this, and he hit a welcome note last week when he urged some higher corporate taxes for hedge funds and the like. But his forays in this direction are tentative and sporadic. You have to wonder why he isn’t seizing the moment to articulate and fight for the big picture instead of playing a lose-lose game of rope-a-dope with the Republicans on their budgetary turf.

Some Obama fans think it’s tactical genius that’s holding him back—his fabled long ball. Americans are no longer as angry as they were in January 2009 so much as they are defeated, depressed, and jaded by the slow recovery and by four decades of raging inequality that tells them the deck is stacked no matter who’s in Washington. Better, then, not to ruffle these still waters—or those easily rattled independents fetishized by political consultants—and instead scare seniors about imminent Medicare cutbacks and plot deep-think policy initiatives that (like health-care reform) might fix America over time. But the voters’ placidity hardly augurs well for Democratic turnout in 2012. And it may not last. All that’s required is one more economic panic to shatter the phony peace and whip the rage back to center stage, once again to the right’s advantage.

“A nation cannot prosper long when it favors only the prosperous,” Obama declared at his inauguration. What he said on that bright January morning is no less true or stirring now. For all his failings since, he is the only one who can make this case. There’s nothing but his own passivity to stop him from doing so—and from shaking up the administration team that, well beyond the halfway-out-the-door Geithner and his Treasury Department, has showered too many favors on the prosperous. This will mean turning on his own cadre of the liberal elite. But it’s essential if he is to call the bluff of a fake man-of-the-people like Romney. To differentiate himself from the discredited Establishment, he will have to mount the fight he has ducked for the past three years.

The alternative is a failure of historic proportions. Those who gamed the economy to near devastation—so much so that the nation turned to an untried young leader in desperation and in hope—would once again inherit the Earth. Unless and until there’s a purging of the crimes that brought our president to his unlikely Inauguration Day, much more in America than the second term of his administration will be at stake.


The Nation Exposes the Nefarious Role of the American Legislative Exchange Council (ALEC) in Republican Rightwing Politics Today

http://www.thenation.com/article/161978/alec-exposed

All,

Maxim One of NATAMBU'S LAW states: "No matter how bad or backward or reactionary things are or appear to be at any given time one can rest assured upon further investigation that in reality things are far worse than anything you could possibly imagine."

Maxim Two states: "No matter how bad things actually are they can ALWAYS be changed for the better if you know the truth and are fully prepared and determined to use it"

Kofi


Published on The Nation (http://www.thenation.com)


ALEC Exposed
John Nichols | July 12, 2011

“Never has the time been so right,” Louisiana State Representative Noble Ellington told conservative legislators gathered in Washington to plan the radical remaking of policies in the states. It was one month after the 2010 midterm elections. Republicans had grabbed 680 legislative seats and secured a power trifecta—control of both legislative chambers and the governorship—in twenty-one states. Ellington was speaking for hundreds of attendees at a “States and Nation Policy Summit,” featuring GOP stars like Texas Governor Rick Perry, former House Speaker Newt Gingrich and House Majority Leader Eric Cantor. Convened by the American Legislative Exchange Council (ALEC)—“the nation’s largest, non-partisan, individual public-private membership association of state legislators,” as the spin-savvy group describes itself—the meeting did not intend to draw up an agenda for the upcoming legislative session. That had already been done by ALEC’s elite task forces of lawmakers and corporate representatives. The new legislators were there to grab their weapons: carefully crafted model bills seeking to impose a one-size-fits-all agenda on the states.

Founded in 1973 by Paul Weyrich and other conservative activists frustrated by recent electoral setbacks, ALEC is a critical arm of the right-wing network of policy shops that, with infusions of corporate cash, has evolved to shape American politics. Inspired by Milton Friedman’s call for conservatives to “develop alternatives to existing policies [and] keep them alive and available,” ALEC’s model legislation reflects long-term goals: downsizing government, removing regulations on corporations and making it harder to hold the economically and politically powerful to account. Corporate donors retain veto power over the language, which is developed by the secretive task forces. The task forces cover issues from education to health policy. ALEC’s priorities for the 2011 session included bills to privatize education, break unions, deregulate major industries, pass voter ID laws and more. In states across the country they succeeded, with stacks of new laws signed by GOP governors like Ohio’s John Kasich and Wisconsin’s Scott Walker, both ALEC alums.

The details of ALEC’s model bills have been available only to the group’s 2,000 legislative and 300 corporate members. But thanks to a leak to Aliya Rahman, an Ohio-based activist who helped organize protests at ALEC’s Spring Task Force meeting in Cincinnati, The Nation has obtained more than 800 documents representing decades of model legislation. Teaming up with the Center for Media and Democracy, The Nation asked policy experts to analyze this never-before-seen archive.

The articles that follow are the first products of that examination. They provide an inside view of the priorities of ALEC’s corporate board and billionaire benefactors (including Tea Party funders Charles and David Koch). “Dozens of corporations are investing millions of dollars a year to write business-friendly legislation that is being made into law in statehouses coast to coast, with no regard for the public interest,” says Bob Edgar of Common Cause. “This is proof positive of the depth and scope of the corporate reach into our democratic processes.” The full archive of ALEC documents is available at a new website, alecexposed.org [1], thanks to the Center for Media and Democracy, which has provided powerful tools for progressives to turn this knowledge into power. The data tell us that the time has come to refocus on the battle to loosen the grip of corporate America and renew democracy in the states.

“Business Domination Inc. [2],” by Joel Rogers and Laura Dresser

“Sabotaging Healthcare [3],” by Wendell Potter

“The Koch Connection [4],” by Lisa Graves

“Starving Public Schools [5],” by Julie Underwood

“Rigging Elections [6],” by John Nichols




Source URL: http://www.thenation.com/article/161978/alec-exposed

Links:

[1] http://www.alecexposed.org/wiki/ALEC_Exposed
[2] http://www.thenation.com/article/161977/business-domination-inc
[3] http://www.thenation.com/article/161975/sabotaging-healthcare
[4] http://www.thenation.com/article/161973/koch-connection
[5] http://www.thenation.com/article/161971/starving-public-schools
[6] http://www.thenation.com/article/161969/rigging-elections

The Prominent Role of the Koch Brothers in ALEC

http://www.thenation.com/article/161973/alec-exposed-koch-connection?page=full


ALEC Exposed: The Koch Connection
by Lisa Graves
July 12, 2011

The Nation

This article is part of a Nation series exposing the American Legislative Exchange Council, in collaboration with the Center For Media and Democracy. John Nichols introduces [1] the series.

Hundreds of ALEC’s model bills and resolutions bear traces of Koch DNA: raw ideas that were once at the fringes but that have been carved into “mainstream” policy through the wealth and will of Charles and David Koch. Of all the Kochs’ investments in right-wing organizations, ALEC provides some of the best returns: it gives the Kochs a way to make their brand of free-market fundamentalism legally binding.
No one knows how much the Kochs have given ALEC in total, but the amount likely exceeds $1 million—not including a half-million loaned to ALEC when the group was floundering. ALEC gave the Kochs its Adam Smith Free Enterprise Award, and Koch Industries has been one of the select members of ALEC’s corporate board for almost twenty years. The company’s top lobbyist was once ALEC’s chairman. As a result, the Kochs have shaped legislation touching every state in the country. Like ideological venture capitalists, the Kochs have used ALEC as a way to invest in radical ideas and fertilize them with tons of cash.

Take environmental protections. The Kochs have a penchant for paying their way out of serious violations and coming out ahead. Helped by Koch Industries’ lobbying efforts, one of the first measures George W. Bush signed into law as governor of Texas was an ALEC model bill giving corporations immunity from penalties if they tell regulators about their own violation of environmental rules. Dozens of other ALEC bills would limit environmental regulations or litigation in ways that would benefit Koch.

ALEC’s model legislation reflects parts of the Kochs’ agenda that have little to do with oil profits. Long before ALEC started pushing taxpayer-subsidized school vouchers, for example, the Koch fortune was already underwriting attacks on public education. David Koch helped inject the idea of privatizing public schools into the national debate as a candidate for vice president in 1980. A cornerstone of the Libertarian Party platform, which he bankrolled, was the call for “educational tax credits to encourage alternatives to public education,” a plan to the right of Ronald Reagan. Several pieces of ALEC’s model legislation echo this plan.

The Kochs’ mistrust of public education can be traced to their father, Fred, who ranted and raved that the National Education Association was a communist group and public-school books were filled with “communist propaganda,” paranoia that extended to all unions, President Eisenhower and the “pro-communist” Supreme Court. Such redbaiting might be ancient history if fifty years later David were not calling President Obama a “hard-core socialist” who is “scary.”

The Kochs have not just multiplied the wealth of their dad; they’ve repackaged and amplified his worldview. David’s latest venture, Americans for Prosperity, subsidizes the Tea Party movement, which repeats this “socialist” smear. Charles is a member of the exclusive Mount Pelerin Society, inspired by Frederic von Hayek’s antisocialist polemic The Road to Serfdom. Through the Charles G. Koch Charitable Foundation, the Institute for Humane Studies administers the Hayek Fund for Scholars and sister programs to fund academics and staffers for like-minded groups across the country. “Charles G. Koch Fellows” and interns stock ALEC, and have gone on to direct ALEC task forces.

Another David Koch project, Citizens for a Sound Economy—which launched the effort to repeal Glass-Steagall protections keeping banks from gambling in securities—helped fuel the fight for “free trade,” an unpopular policy in the 1980s. The North American Free Trade Agreement passed with help from CSE and its corporate allies. ALEC resolutions for state legislators have long supported such trade agreements in the face of local concerns about job losses, and today the Koch free-market fantasy is reflected in ALEC’s support for free trade pacts with Korea, Georgia, Colombia and other countries. On just about every issue taken on by Koch’s CSE, ALEC has provided legislative tools to carry them through to state legislatures, from privatizing “federal and state services and assets,” as CSE put it, to blocking common-sense caps on unlimited credit card interest rates.

ALEC and the Kochs often pursue parallel tracks. Just as ALEC “educates” legislators, Koch funding has helped “tutor” hundreds of judges with all-expenses-paid junkets at fancy resorts, where they learn about the “free market” impact of their rulings. But ALEC also operates like an arm of the Koch agenda, circulating bills that make their vision of the world concrete. For a mere $25,000 a year, Koch Industries sits as an “equal” board member with state legislators, influencing bills that serve as a wish list for its financial or ideological interests.

It’s a pittance for the Kochs but far out of the reach of working Americans. Ordinary citizens rely on our elected representatives’ efforts to restore what’s left of the American Dream. But through ALEC, billionaire industrialists are purchasing a version that seems like a real nightmare for most Americans.



Links:

[1] http://www.thenation.com/article/161978/alec-exposed

The Political Economy of Capitalism and its Current Impact on the United States and the World

http://www.truth-out.org/ideological-crisis-western-capitalism/1310127895

All,

Joseph Stiglitz-- one of the finest and most progressive economists in this country and a past winner of the internationally prestigious Nobel Prize in Economics--lays out in direct and lucid language what the real ideological and social dimensions of our current political economy are and the pervasive damage these structural, institutional, and systemic realities are inflicting on this country and the world.

Kofi


The Ideological Crisis of Western Capitalism
by Joseph E. Stiglitz
July 10, 2011
Project Syndicate [3] | Op-Ed
Truthout


Just a few years ago, a powerful ideology – the belief in free and unfettered markets – brought the world to the brink of ruin. Even in its hey-day, from the early 1980’s until 2007, American-style deregulated capitalism brought greater material well-being only to the very richest in the richest country of the world. Indeed, over the course of this ideology’s 30-year ascendance, most Americans saw their incomes decline or stagnate year after year.

Moreover, output growth in the United States was not economically sustainable. With so much of US national income going to so few, growth could continue only through consumption financed by a mounting pile of debt.

I was among those who hoped that, somehow, the financial crisis would teach Americans (and others) a lesson about the need for greater equality, stronger regulation, and a better balance between the market and government. Alas, that has not been the case. On the contrary, a resurgence of right-wing economics, driven, as always, by ideology and special interests, once again threatens the global economy – or at least the economies of Europe and America, where these ideas continue to flourish.

In the US, this right-wing resurgence, whose adherents evidently seek to repeal the basic laws of math and economics, is threatening to force a default on the national debt. If Congress mandates expenditures that exceed revenues, there will be a deficit, and that deficit has to be financed. Rather than carefully balancing the benefits of each government expenditure program with the costs of raising taxes to finance those benefits, the right seeks to use a sledgehammer – not allowing the national debt to increase forces expenditures to be limited to taxes.

This leaves open the question of which expenditures get priority – and if expenditures to pay interest on the national debt do not, a default is inevitable. Moreover, to cut back expenditures now, in the midst of an ongoing crisis brought on by free-market ideology, would inevitably simply prolong the downturn.

A decade ago, in the midst of an economic boom, the US faced a surplus so large that it threatened to eliminate the national debt. Unaffordable tax cuts and wars, a major recession, and soaring health-care costs – fueled in part by the commitment of George W. Bush’s administration to giving drug companies free rein in setting prices, even with government money at stake – quickly transformed a huge surplus into record peacetime deficits.

The remedies to the US deficit follow immediately from this diagnosis: put America back to work by stimulating the economy; end the mindless wars; rein in military and drug costs; and raise taxes, at least on the very rich. But the right will have none of this, and instead is pushing for even more tax cuts for corporations and the wealthy, together with expenditure cuts in investments and social protection that put the future of the US economy in peril and that shred what remains of the social contract. Meanwhile, the US financial sector has been lobbying hard to free itself of regulations, so that it can return to its previous, disastrously carefree, ways.

Help fight ignorance. Click here for daily Truthout email updates. [5]

But matters are little better in Europe. As Greece and others face crises, the medicine du jour is simply timeworn austerity packages and privatization, which will merely leave the countries that embrace them poorer and more vulnerable. This medicine failed in East Asia, Latin America, and elsewhere, and it will fail in Europe this time around, too. Indeed, it has already failed in Ireland, Latvia, and Greece.

There is an alternative: an economic-growth strategy supported by the European Union and the International Monetary Fund. Growth would restore confidence that Greece could repay its debts, causing interest rates to fall and leaving more fiscal room for further growth-enhancing investments. Growth itself increases tax revenues and reduces the need for social expenditures, such as unemployment benefits. And the confidence that this engenders leads to still further growth.

Regrettably, the financial markets and right-wing economists have gotten the problem exactly backwards: they believe that austerity produces confidence, and that confidence will produce growth. But austerity undermines growth, worsening the government’s fiscal position, or at least yielding less improvement than austerity’s advocates promise. On both counts, confidence is undermined, and a downward spiral is set in motion.

Do we really need another costly experiment with ideas that have failed repeatedly? We shouldn’t, but increasingly it appears that we will have to endure another one nonetheless. A failure of either Europe or the US to return to robust growth would be bad for the global economy. A failure in both would be disastrous – even if the major emerging-market countries have attained self-sustaining growth. Unfortunately, unless wiser heads prevail, that is the way the world is heading.



For a podcast of this commentary in English, please use this link [6].

Copyright: Project Syndicate, 2011 [7].


Source:

URL: http://www.truth-out.org/ideological-crisis-western-capitalism/1310127895

Links:


[1] http://www.truth-out.org/print/3933
[2] http://www.truth-out.org/printmail/3933
[3] http://www.project-syndicate.org/commentary/stiglitz140/English
[4] http://www.flickr.com/photos/emperley3/4481874889/
[5] http://www.truth-out.org/newsletter
[6] http://media.blubrry.com/ps/media.libsyn.com/media/ps/stiglitz140.mp3
[7] http://www.project-syndicate.org
[8] http://twitter.com/share
[9] http://www.truth-out.org/joseph-stieglitz/1304688238
[10] http://org2.democracyinaction.org/o/6694/p/salsa/web/common/public/signup?signup_page_KEY=2160
[11] https://members.truth-out.org/donate
[12] http://www.truth-out.org/?q=opposition-paying-capitalisms-crime-global-movement-video/1301468400
[13] http://www.truth-out.org/?q=foreign-banks-or-foreign-capital/1307113740