Ira Hansen Becomes a National Embarrassment

Ira Hansen

Oh my, merely a few hours after his selection as the Speaker of the Nevada State Assembly Ira Hansen (R-NVA32) made national headlines – mostly for all those “interesting”  columns he wrote between 1994 and 2010. [Wonkette]  Mr. Hansen has gathered attention to himself from Think Progress, and The Huffington Post, and the Atlantic, and Talking Points Memo, and Media-ite.   Mr. Hansen, who won his Assembly seat with  71.96% of the vote in the 2014 election, [NVSoS] offered a formulaic apology:

“I am deeply sorry that comments I have made in the past have offended many Nevadans. It is unfortunate that these comments, made almost 20 years ago as a newspaper columnist and talk radio host, have been taken out of context and are being portrayed as intentionally hurtful and disrespectful. These comments were meant to be purposely provocative in various political, cultural and religious views. I have the utmost respect for all people without regard to race, gender, religious or political beliefs.” [RGJ]

This statement is almost pure Limbaugh.  “I’m sorry IF you were offended.” Of course people were offended – his comments were intrinsically, blatantly, offensive.

The comments were made long ago,”  And, what have you said or done since, say,  last Wednesday to demonstrate you’ve cleaned up your act since?

And, “they were taken out of context…” In what context would these have been appropriate comments in the 21st century – or the 19th for that matter? Doesn’t that “taken out of context” refrain ever get old and hirsute?

And, “the comments were purposefully provocative,” PLEASE! Of course, and Limbaugh was only kidding?  Just trying to get a rise out of your audience?  Those right wing hate speech, hate radio, pack of bigots, racists, and fringe wingers, who call in to shows that re-enforce their own bigotry, racism, and homophobia?

And, Mr. Hansen, if you’d had any respect for non-white people, members of the LBGT community, members of the Hispanic/Latino community, you’d not have made the comments in the first place.

And, he ends his non-apology apology on the common hackneyed note:

“I am committed to showing that actions are much louder than words and my office will always have an open door to all backgrounds and political viewpoints. This will not distract us from finding solutions to building a brighter and more prosperous Nevada.” [RGJ]

Right,  the door’s open.  We’re supposed to believe that the Tea Party Darling who bested a Party Regular (no raving moderate himself, Pat Hickey) for the Speakership doesn’t believe in the privatization of any public activity in which someone can make a buck, and maintains overtly racist, bigoted, beliefs, is going to lead us to the Promised Land of whatever…

However, this isn’t Grandpa’s Republican Party anymore.  This is the Party of Cliven Bundy, [Reuters] of Jim “I’d vote for slavery if my constituents wanted it” Wheeler, [LVSun] of Cresent “The BLM doesn’t have the right to enforce federal laws on federal land” Hardy. [LVRJ]  This is the Republican Party in Nevada which adopted a Tea Party Platform at its 2014 convention. [RenoNewsR

There’s one Nevada Republican who’s embarrassed – our Striving For A Centrist Image Senator Dean Heller:

“Assemblyman Hansen’s past comments and positions on race, religion, and gender that have recently been reported give me great concern. These comments were insensitive, wrong, and extremely offensive and insulting. Statements like these do not have a place in public discourse.” [EDFP]

Yes, Senator Heller is concerned – however, where was Senator Heller’s concern when his state party adopted the Tea Party platform, promoted the election of Wheeler, and the election of Hardy?  The “moderates” were noticeably silent before the 2014 elections, and before the selection of the Assembly Speaker – and now that the cat has slipped the bag they are “concerned,” nay “greatly concerned.”

In the immortal words of Meryl Streep’s character in the 1992 comedy “Death Becomes Her,” “Now a Warning?”

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In time for Thanksgiving: 20 Bible Verses Right Wing Opponents of Immigration Reform Would Like To Forget

Bible immigrants

These are 20 Bible verses concerning the treatment of “strangers” from the Old and New Testaments which right wing extremist opponents of immigration policy reform would not like to be reminded of over Thanksgiving Dinner.   Enjoy.

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Amodei and Heck Do It Again!

Pollution air In case you missed it –  amidst all the publicity about the pipeline vote – the House of Representatives has again demonstrated its proclivity to promote the interests of corporate  exploiters and polluters (read — Koch Brothers):

“The House voted 229-191 to pass H.R. 1422, which would change the rules for appointing members to the Science Advisory Board (SAB), a group that gives scientific advice to the EPA Administrator. Also called the Science Advisory Board Reform Act, the bill would make it easier for scientists with financial ties to corporations to serve on the SAB, prohibit independent scientists from talking about their own research on the board, and make it more difficult for scientists who have applied for grants from the EPA to join the board.” [TP]

How nice for the Koch Brothers and the multi-national corporations which are annoyed by having to discuss such matters as global climate change, air pollution, and other topics related to whether or not our grandchildren will inherit a viable planet.

So, what did Representative Mark Amodei (R-NV2) do for the grandchildren?  He voted in favor of the Ignore The Science Bill.  Representatives Heck (R-NV3) and Amodei voted in favor of the bill on Roll Call 525.   Representatives Horsford (D-NV4) and Titus (D-NV1) thought enough of the kidlets to vote against this sop to multinational corporations. But wait! There’s more.

The House also passed H.R. 4795 – yet another pro-pollution bill:

“The Clean Air Act requires major new or expanding sources of air pollution to obtain permits with pollution limits before the facilities start construction.  These preconstruction permits ensure that a new or expanded facility will not increase local air pollution to levels that violate national ambient air quality standards (NAAQS), which the Environmental Protection Agency (EPA) sets for six principal air pollutants.  When EPA updates each air quality standard to reflect the latest science, permit applicants have to meet the new, more protective standard and show their emissions will not harm public health.

H.R. 4795, introduced by Rep. Steve Scalise (R-LA), creates a loophole in this process.  The bill establishes imprecise procedural requirements for EPA to follow after setting a new air quality standard.  If EPA does not meet those requirements, then a new or expanding facility can apply for a preconstruction permit based on the old air quality standard, which is not adequate to protect public health.  In effect, this bill could give new sources of pollution “amnesty” from new science-based air quality standards.”  [DEC]

Got that?  If Spew & Blow Corp. doesn’t like the new air quality standards, it can use the Scalise Loophole to get around them.  How convenient.  And what did our Representatives do?  The two Republicans (Heck and Amodei) voted for the “Promoting New Manufacturing Act” – the title should really have been the “Promoting More Pollution Act of 2014.”   Horsford and Titus both voted against this travesty of a bill.

Could we have any better demonstration of how closely Congressional Republicans, including our Congressional Republicans, are tied to the Koch Brothers?

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Filed under Amodei, ecology, Nevada politics, pollution

President Rides the Fourth Rail

obama The President of the United States will give a major speech tonight about immigration policy which may make some conservative Republican heads explode – which they were probably going to do anyway.  The House of Representatives has been sitting on a Comprehensive Immigration Reform bill (S. 744) since June 27, 2013; a bill passage which provided a photo-op for Senators McCain and Schumer cheering the bipartisan effort. [Politico] The widely touted bill went to the Republican controlled House in which politics took precedence over policy.  The GOP objected, and the leadership said it wanted to take up the measures in a piece-meal fashion, but none of the 19 related bills emerged from House committees. [Congress] Finally, it became relatively obvious to all, except those who would not see, that the Congress had no intention of voting on any immigration policy reform bill during this session of Congress.  So, what’s so dodgy about the issue?

One problem for the Republican majority leadership in the House came from an ideological split in their own membership – the U.S. Chamber of Commerce came out forcefully in favor of S. 744.  The radio broadcasts from the right wing screamed “amnesty!”  House Speaker John Boehner was caught between two wings of the GOP, in its internecine conflict between commercial and financial interests and the Tea Party ultra-nationalists. He never brought the bill to the floor – or any of the others.

The failure to act on S. 744 offered cover for Representatives such as Joe Heck (R-NV3) who was free to say almost anything on immigration policy without having to adopt the provisions of a Republican bill, drafting a bill of his own, or taking a specific stance against the Senate version.  The failure also allowed the ultra-right wing Tea Party members to ‘valiantly’ oppose ‘amnesty,’ in its current meaning – any reform of the immigration policy which allows a pathway to U.S. citizenship.  Why does this create such a clamor from the right wing?

The Toxic Mix

It’s easy to spot the cornerstone of opposition from Tea Party types to any form of immigration policy reform, and the rock-like intransigence is made of up that usual conglomeration of bigotry, racism, and fear.  At a purely political level it’s simply a chant “They (Democrats) want amnesty just to get votes.”   This is an interesting charge because there isn’t a political party which ever existed for more than three minutes anywhere that wasn’t interested in increasing its base. Using this frame of reference how might we logically characterize vote suppression tactics and strategies from the Republicans which diminish the voting of ethnic minorities?  “They just want to have just their own people voting?”

Reverting to the right wing scare machine for a moment, the commentators and pundits of Hate Radio have been pounding their message since Reagan offered amnesty to family members in 1986. [BusInsider]  (Pre-emptive arguments, such as those offered by pundit David Frum,  appear to know exactly what the President wants before he says it, and to assume that because the Simpson-Mazzoli Act didn’t solve the all problems in perpetuity, therefore any other attempt at reform won’t either.)  The right wing has been lambasted with talking points ALL of which have long been debunked. “Immigrants don’t pay taxes.”  No, they are paying taxes for services they will never receive. “Immigrants come here to get on welfare!” No, the ratio between taxes paid and services used in this country never favors the immigrant population.  “They send all their money home!”  No, not when they’re contributing about $162 billion in tax revenues to federal, state, and local governments, and not when they are paying for housing, food, clothing and other essentials.

They take American jobs!”  No, again.  That myth has been long debunked. (See also: Boston Globe)   “They don’t speak English, and don’t want to!”  Now we’re gravitating into Nativist Territory.  Within ten years of immigration most speak English well enough to sustain employment and other activities in their communities.  [IPOrg] At the anecdotal level some who claim not to have a racist bone in their entire skeleton lament the advent of Spanish language broadcast programming, and Spanish language options on the telephone – retailers and other commercial interests figured out long ago that Spanish speaking immigrants aren’t “sending all their money home,” and want to make it as easy as possible for the immigrant families to part with some into the coffers of the marketers.  None of this anti-immigrant rhetoric explains why we have more demand for English Language classes than the supply will fulfill.

When all else fails, the descendants of immigrants from the great wave of the early 20th century will passionately announce that these immigrants are “different.”  Really, perhaps in that no immigrant from Honduras is going to see a “NINA” sign (No Irish Need Apply) but the discrimination remains the same.   How conveniently we forget the anti-German rhetoric of World War I, the anti-Polish “jokes” that still have a place in the lexicon of some not-very-funny people?  Just as the Irish, the Poles, the Russians, the Jews, the Chinese, and other previous immigrants experienced discrimination and derision – the Spanish speaking immigrants from Central and South America are now getting a taste of it.   They are – different, and therefore suspect.

Are they so suspect that we must pile up the ramparts, and protect ourselves from the ‘scourge’ of un-American immigrants?  We can look at our own state.

Nevada by the numbers: According to the last Census estimate (2013) there are 2,790,136 people living in the state of Nevada, or about 24.6 people per square mile of our acres and acres of acres and acres.  9% of the population is African American, 1.6% are Native American, 8.1% are of Asian descent , 27.5% are of Hispanic or Latino descent, and 52.2% report being white “alone” (not of Hispanic or Latino descent).  19.2% of Nevada residents are foreign born.  Of those who are foreign born, as of 2010, 57.2% were from Latin America, 29.8% from Asia, 8.5% from Europe, 1.7% from Canada, 2.3% from Africa, and 0.5% from Oceania.  [UNLV pdf]   When the Census Bureau ran the numbers and published information about naturalized citizens and non-citizens in 2003, there were 2,207,575 residents of Nevada, of whom 379,885 were foreign born, or about 17%.  129,330 were naturalized citizens, and 250,555 were non-citizens, or about 11%.  [Census download]

The following chart shows the percentage of residents of Hispanic or Latino descent by county, and the percentage of county residents (who might be of any ethnic classification) who are foreign born.  [Census]

County Hispanic Foreign Born
Carson City 22.7% 11.9%
Churchill 13.2% 5.7%
Douglas 11.8% 6.0%
Elko 23.7% 9.8%
Esmeralda 18% 16%
Humboldt 25.2% 13.6%
Lander 23.5% 13.6%
Lincoln 7.2% 2.1%
Lyon 15.7% 7.4%
Mineral 10.6% 3.3%
Nye 14.1% 8.3%
Pershing 22.5% 12.6%
Storey 7.5% 4.1%
White Pine 14.8% 2.3%
Washoe 23.3% 15.1%
Clark 30.0% 21.9%

 

One of the more interesting features of this chart is the obvious fact that in NO county are all the residents of Hispanic or Latino descent foreign born; for example in Carson City, it’s impossible to have an Hispanic/Latino population of 22.7% who are all non-citizens – a subgroup constituting only 11.9% of the total population.  In Humboldt County, 25.2% of the total population is of Hispanic/Latino descent, but only 13.6% of the total county population is foreign born.  Maybe “THEY” aren’t so different after all, their children are in school – probably participating in the athletic programs; they are shopping at the supermarket; and, the odds are that they were born here.

So, if they are paying taxes, using few public services, spending money in local businesses, taking jobs few others want to perform, and learning to speak English as fast as they can … what’s the problem?  Just once I’d like to hear a right wing radio personality be absolutely completely honest — “they” are different because they aren’t white.   So, whatever the President says this evening, it will be as the wits say “A black man advocating for brown people” and this will cause the White-Wing politicians to launch their diatribes and epithets, and excuses for continuing to do nothing.

We know what people say about those who are good at making excuses? They usually aren’t very good at doing anything else.

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Don’t Feed The Net Trolls!

Net Neutrality

If you like your Internet the way it is then you are supporting “net neutrality.”  As of now corporations like AT&T, Verizon, and Comcast cannot charge you (or your company) more for higher speed service. 

Meanwhile  back in the U.S. Senate, Senator Ted “Cuban-Canadian” Cruz is staging a full on frontal attack on Net Neutrality – using a lovely combination of lies, misunderstandings, obfuscation, and downright idiocy to make his points.  Here’s a classic:

“CRUZ: When you regulate a public utility, it calcifies it — it freezes it in place. Let’s give a simple contrast. The Telecommunications Act of 1934 was adopted to regulate these [brings out an old rotary-dial phone]. To put regulations in place and what happened? It froze everything in place. This is regulated by Title II. [pulls out an iPhone] This is not.” [Wonkette]

WRONG, WRONG, AND WRONG.  Excuse me, but my smart-phone has an FCC number on the back. It is regulated just as every other phone is regulated, by the provisions of the 1934 Communications Act.  Far from being “calcified” the phones in my life have run the gamut from the Tulip Phone in my grandparent’s hallway to the smart-phone in my pocket.  The old Tulip Phone and my smart-phone are subject to the same Communications Act of 1934.  So, Senator Cruz can haul out Grandma’s Tulip, or the 1957 rotary, or the 1966 Ma Bell wall phone, or the Princess Phone, or the not-quite-portable cellular Bag Phone, or the Flip Top, or the smart-phone … and it’s perfectly obvious that the Communications Act of 1934 didn’t “calcify” anything.  (See Also: Bob Cesca – “Whopper”)

Not that being dead wrong has ever stopped the Tea Party Darlin’ from Calgary before.  So, he goes off some more:

CRUZ: “”Net Neutrality” is Obamacare for the Internet; the Internet should not operate at the speed of government.”   [Gizmodo]

Silly, Silly, and Silly.   There’s not much substance here, just an admixture of political cynicism, buzzword rhetoric, and silliness in the service of some very very profitable corporations.   The logic herein is non-existent: If you don’t like the President and you don’t like health insurance reforms then you won’t like Net Neutrality.  Huh?  This is all froth and no beer.

What the President wants is to prevent the corporations from BLOCKING, THROTTLING, OBFUSCATION, AND USING PAID PRIORITIZATION. [White House]   As a consumer, you don’t want to be blocked from the legal content of your choice.  As a consumer, you don’t want the corporations to deliberately slow down some content and speed up others based on the type of service or your ISP’s preference.

As a consumer you want INCREASED not decreased transparency.  There should be no special treatment of points of connectivity between the ISP and the rest of the Internet.  And, as a consumer you don’t want to be “stuck in the slow lane” because you didn’t pay some extra fee to the ISP.

Who’s Opposed to Net Neutrality?  The Daily Dot provides a succinct summary:

Going back to 2005 (when the phrase “net neutrality” first shows up in lobbying disclosure reports), the principle’s biggest opponents (Verizon, AT&T, Comcast and their allies) have lobbied against net neutrality about three times as hard as the biggest proponents of neutrality (Level 3, Google, Microsoft and their allies).

It’s not that the Big Three are struggling for money – AT&T reported just under $129 billion in sales/revenue (2013), Verizon reported $121 billion in sales/revenue (2013), and Comcast reported about $65 billion in the same category. {Marketwatch 11/19}

They’re also spending that money on a major lobby effort to end net neutrality, and the following chart (Daily Dot) shows how much from 2005 to 2012:

Net Neutrality spending

Senator Cruz might just as well show up on the Senate floor wearing an auto racing fire-suit bedecked in corporate logos, with the largest sponsorships decaled on his vehicle advertising Verizon, AT&T, and Comcast.

Which side are you on? If you happen to me a multi-billion dollar communications corporation you don’t want to be a “utility,” you want to be “deregulated!”  If you happen to be a consumer – as are most of us – you want Net Neutrality – you depend on it for sending holiday photos to relatives, for looking for job openings, for finding information on topics of special interest, to make vacation bookings, to watch a movie or video, or for all the other things the Internet has to offer.

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The Economic Elite Agenda

Economic Elite

How does 0.5% of the population manage to control the political discussion about the economic realities of the remaining members of the citizenry?  If everything is a commodity, then everything can be bought and sold – including information.  There are repercussions related to this. For themselves and others.

The economic elite, the financialist allies, and the compliant Republican Party would like very much to remove the fetters on their capacity to accumulate wealth.  Deregulate banking,  cut taxes for the ultra-wealthy and remove the taxation on capital gains, get rid of unions and any other form of organized labor, privatize and monetize as many formerly public services as possible and then they’ll be happy?  Probably not.  They may be “shackled in golden handcuffs,”  or  “addicted to wealth.”  Or, they are simply following the prescribed path to riches, adopt the Shareholder Value Theory of Everything as if it described any economic reality other than their own.

Controlling the Flow

In order to advance the Shareholder Value Theory of Everything it must take precedence over all other topics of conversation.   For example, see the current web page for CNBC, and look at the major topics for today:  Comprehensive Immigration Reform is reduced to a political article about a possible government shutdown.  It’s a relatively shallow piece, speculative in nature, and purely political.  It will not tell you the findings which demonstrate the value of immigrants to this country in economic terms.

“Immigrants are not the cause of unemployment in the United States. Empirical research has demonstrated repeatedly that there is no correlation between immigration and unemployment. In fact, immigrants—including the unauthorized—create jobs through their purchasing power and their entrepreneurship, buying goods and services from U.S. businesses and creating their own businesses, both of which sustain U.S. jobs.”  [AIC]

Interesting, that sounds just like DB’s favorite theme:  Increase the aggregate demand and you will grow the economy.   Nor will a speculative political piece inform us that the top occupations for foreign born workers between the ages of 25 and 64 were construction jobs and extraction related employment. [CBO pdf]   Better still for our economy, immigrants play a large role in our overall economic life:

“Immigrants have an outsized role in U.S. economic output because they are disproportionately likely to be working and are concentrated among prime working ages. Indeed, despite being 13 percent of the population, immigrants comprise 16 percent of the labor force. Moreover, many immigrants are business owners. In fact, the share of immigrant workers who own small businesses is slightly higher than the comparable share among U.S.-born workers. (Immigrants comprise 18 percent of small business owners.)”  [EPI]

And here comes the point – if CNBC is trying to grab ratings in order to boost advertising, and thereby increase the value of its shares – then the Shareholder Value Theory of Everything is ultimately determining what kind of “business news” we are getting.  Not information about the economic value of immigrants, or even what portion of our demographics they represent; instead we are fed a pabulum of political speculation. Nothing so enhances the power of the economic elites as the capacity to offer little or no economic information beyond the stock market reports and the endless speculation of analysts.

For information which has not been sifted through the tentacles of the economic elite see: “Facts About Immigration and the U.S. Economy” (EPI) “Immigration / EPI” (EPI) “Value Added Immigration,” (EPI), “Immigration and American Values,” (Our Future),  “Immigration and the Rural Workforce,” (USDA), “The Economic Benefits of Fixing Our Broken Immigration System,” (WhiteHouse pdf)  Clicking on just a couple of these links will give you 100% more economic information than you would get from the CNBC lead article.

Interestingly enough, considering the ridiculousness of Fox’s reporting on climate related issues, their Big Story of the day is about Toyota’s hydrogen powered car.  Fox is quick to inform its readers that other car manufacturers are ramping up development of more ‘climate friendly’ vehicles – but as for the effect of climate problems on our economy – you’ll have to go elsewhere.   Honda, they note with emphasis, is not keeping up in order to keep costs down – thus complying with the Shareholder Value Theory of Everything.

For information about the relationship of climate change and the economy, there’s the UCS site including  the “Hot Map,”  or the CBO’s “The Economics of Climate Change,” (pdf) “Modeling the Impact of Warming in Climate Change Economics,” (NBER), and “Climate Change: Of Warming and Warnings,” (Economist) Again, reading just a few articles out of many will offer far more knowledge about climate and the economy than most of what appears in the so-called business channels.

Good luck finding any comprehensive information about the American work force, or about the increasing threat of income inequality which could have a profound impact on our consumer based economy, or even about the state of American research and development – these are not topic which grab the viewers and focus attention on the sponsor’s products.  Worse still, information about the economic impact of income inequality or the struggles of middle income Americans in the ‘wrong’ hands could lead to some serious questioning of the motives of the economic elite.

Controlling the Ballot Box

Money is valuable – especially when a bit of it spread about can offer success in the election of those amenable to the interests of the economic elite.  If there’s “runaway spending” in this country it’s NOT coming from the federal government, its sources are corporations – some of which are foreign – pouring vast amounts of the coin of the realm into American politics.  Would it surprise anyone that the debate over the pipeline project is driven by about $60 million in election and lobbying funding? [Common Cause]   We’re talking about “net neutrality,” and others were discussing it as well – to the tune of some $42 million in federal and state lobbying efforts from AT&T, Comcast, Verizon, NCTA, Time Warner Cable, [Common Cause] all of whom oppose neutrality.

Of course, the concept of net neutrality is at odds with the short term business interests of the corporate giants listed above, and since we remain in the land of the Shareholder Value Theory of Everything this must not be implemented – less the share prices go down during the quarter.

However, there is much more attached to the election of those enamored of the economic elite – there’s deregulation of the banks because they had so much fun, and so much profit, the last time they turned Wall Street into such a casino that there are no more investment banks; there’s the privatization of public services because who can complain about someone’s idea to turn public education into test driven private schooling?  What better opportunity to make a few million than to privatize public water systems? Privatize public library and internet connection services?  We could even privatize our roads, bridges, dams, airports, air traffic control systems? Food inspection? Hospital and clinic inspections?   All in the interest of the economic elite.  But mostly we could insure the continued prosperity of the economic elite by making certain they don’t have to pay taxes.  “Only little people pay taxes.” 

Combining The Queen of Mean with the Shareholder Value Theory of Everything  yields such excesses as the taking of approximately $30 Trillion from financial gains since the recession – almost all of it going to the richest 1% of our nation’s population – and much of it tax free.  The economic elite have framed the system such that you pay less on the income earned from stocks than from the labor of your hands, you can use “carried interest” as an excuse not to pay taxes for hedge fund profits.  Roth IRA’s are a tax loophole for the 20% of Americans who own 95% of our financial wealth, and you can insure that your derivatives are paid off first if the bank collapses.  And, by the way – a business can get out of debt by declaring bankruptcy, but a student can’t. [Salon]

Did you hear any of this from the corporate controlled media?  Probably not.  Put the Queen of Mean with the Shareholder Value Theory of Everything and add a Wealth Addiction and we get a picture of the economic elites:

“Only a wealth addict would feel justified in receiving $14 million in compensation — including an $8.5 million bonus — as the McDonald’s C.E.O., Don Thompson, did in 2012, while his company then published a brochure for its work force on how to survive on their low wages. Only a wealth addict would earn hundreds of millions as a hedge-fund manager, and then lobby to maintain a tax loophole that gave him a lower tax rate than his secretary.”  [NYT]

Ours was supposed to be a republic, founded on the democratic principle of voting by citizens who shared in the future of the nation – it was not intended to be an aristocracy much less a plutocracy.  Nor was it ever meant to be a nation pandering to the addictions of those for whom the love of money became the rationale for their existence.

We can do better.

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Filed under Economy, Immigration, Politics

The Great Pension Swipe Coming to a State Near You

Burglar

“Elections have consequences” and this time the results may be a disaster for public employee pensions.  The rationale underpinning this contention is simple.  Wall Street is running out of Big Pots of Money.  They’ve already run through the money which flowed in from the earnings of more women in the work force – the Wall Street Casino used up the proceeds from the increasing number of two income families by 2000, when the number of women in the work force increased from 18,389,000 in 1950 to 65,616,000 in 2000.  To add a bit of context here:  In 1950 there were 43,819,000 men in the work force, and 18,389,000 women.  By 2000 there were 75,247,000 men working and 65,616,000 women. [BLS pdf]   Some families were induced to join in the new Money Market Accounts made possible by the Garn-St. Germain Depository Institutions Act of 1982.  This new form of “savings” account allowed the banks to get and keep the deposits.

“Banks are required to discourage customers from exceeding these limits (on withdrawals), either by imposing high fees on customers who do so, or by closing their accounts. Banks are free to impose additional restrictions (for instance: some banks limit their customers to six total transactions). ATM, teller, and bank-by-mail transactions are not counted towards the total.”  [link]

And so, Wall Street had a big pot of money to play with. But enough is never enough.   Wall Street invented more money pots – using securitized assets. These were non-existent before the 1970s.  For review, a securitized asset is something done to create “debt securities, or bonds, whose payment of principal and interest derive from cash flows generated by separate pools of assets.”  [ HFS pdf 2003]  In plainer English this means that Wall Street can use securitization to immediately (and that’s a key word – immediately) make money on any “cash-producing asset” – like trade receivables, leases, auto loans, credit card lines, and, of course, mortgages.

Now the Money Mad Denizens of Wall Street have run through the addition of women’s earnings, the accumulation of funds in money market accounts created thereby, and they mis-managed their money in securitized assets such that the Housing Bubble of the early 2000’s burst and splattered all over their operations.  But enough is never enough.  One former Wall Street trader described the Wealth Addiction rampant in the firms:

“But in the end, it was actually my absurdly wealthy bosses who helped me see the limitations of unlimited wealth. I was in a meeting with one of them, and a few other traders, and they were talking about the new hedge-fund regulations. Most everyone on Wall Street thought they were a bad idea. “But isn’t it better for the system as a whole?” I asked. The room went quiet, and my boss shot me a withering look. I remember his saying, “I don’t have the brain capacity to think about the system as a whole. All I’m concerned with is how this affects our company.” [...]

“From that moment on, I started to see Wall Street with new eyes. I noticed the vitriol that traders directed at the government for limiting bonuses after the crash. I heard the fury in their voices at the mention of higher taxes. These traders despised anything or anyone that threatened their bonuses.” [NYT]

What might threaten those bonuses? Not having Big Pots of Money to play with.   There are some money pots out there – and more and more of them are being “touched” by the Wall Street bankers who see them as ways to enhance those precious bonuses.  Pension funds.

How to unlock that next Big Money Pot for the Wealth Addicts of Wall Street?  The strategy has been alarmingly simple.

First, bash public employee unions – the organizations which negotiated defined benefit plans for retiring public employees.  Union bashing has been a staple of Republican politics since time out of mind, so it makes perfect sense to incorporate it into the strategy for raiding public pension funds. Public employees are no longer to be seen as the helpful librarian, or the firefighter who saves the kittens, or the police officer who donates time to direct traffic at the high school football game.  He or she is no longer the person willing to work in frigid temperatures clearing snow from highways at 3:00 A.M. Nor is the public employee to be thought of as the bookkeeper who diligently keeps track of taxes paid, fees assessed, or paper-work properly filled out to prevent fraud.  No! These people are to be seen as “greedy teachers” who think only of job security, “lazy” bureaucrats who create paperwork, and “leagues of over-paid shovel leaners” who don’t care about the snow on the roads…. The cynicism of this is excruciating.  The result is little else than a contemptuous, divisive, misanthropic perspective which divides private sector employees earning $45,000 per year from public sector employees earning $45,000 per year.

Secondly, once the bashing begins the misanthropes add in a measure of jealousy.   Publish the retirement incomes of Everyone, because surely someone is making more money in retirement income than the targeted population of disaffected voters.  Cover this in the banner of Right to Know. “You,” meaning the disenchanted audience, have a “right” to know what “each and every public employee is making” because, “you know” they have been “feeding at the public trough.”  The argument is predicated on the jealousy factor – who else would care what a firefighter, police officer, highway department employee, teacher, librarian, public health nurse, etc. would receive in a year?

That the release of this information would allow personal identity thieves to thrive is of little consequence to the advocates of total transparency – so much transparency that the former public employees have no right to any financial privacy whatsoever.

Third, flat out lie about the sustainability of defined benefits pension plans.  There are three major advantages of a defined benefit plan.  It provides security.  The person who has paid into the plan knows exactly want the financial benefits will be and can do some financial planning accordingly. The person also know exactly how long he or she has to work to be eligible for the benefits.  And, finally, the person knows that the pension is covered by the Pension Benefit Guaranty Corporation.

We know that some public employee pension plans are better administered than others, but the opponents of defined benefit plans are eager, enthusiastic even, about publicizing the problems of some as the characteristics of all.  This is evident in the ALEC assault on public pension funds, all 45 pages of it which blatantly calls for defined benefit plans to be morphed  into “properly defined alternatives, such as defined contribution, cash balance, and hybrid plans.”  Read: The Next Big Money Pot for Wall Street.

Creeping Financialism

The ALEC advocates and associates are only too pleased to discuss the delights of the defined contribution plans.  Most often they are couched in friendly wording such as “you can manage your own plan,” which sounds like “freedom.”  It also sounds like a 401(k).   What they aren’t anxious to publicize is that 401(k) plans have been a bust.

“The 401(k) plan was never meant to be a mainstream pension plan and is a poor substitute for one. It’s a voluntary program that was intended to supplement retirement savings –  one of those quirky little options in the byzantine tax code that employers seized upon as a way to save money while pretending that they were doing the right thing by their employees.” [Forbes]

That’s putting it about as bluntly as possible.  Oops! The 401(k) was never intended to be the main source of retirement funds, and it’s a poor substitute for a defined benefit plan.

“Authors like Helaine Olen have been right on the mark in saying that the financial services industry and employers are all too eager to tell us how little we’re saving, yet don’t serve as honest brokers in maximizing our retirement savings. That would require cutting fees, eliminating middlemen, increasing employer contributions and getting rid of the fee structure that is based on assets under management. And above all, the most dangerous part of this equation: Educating employees on how to invest cost- and risk effectively.”  [Forbes]

And for all this – while the fund administrators collect the fees, hire middlemen, and thrive under the fee structure – the public employee is asked to give up any and all financial privacy, learn to be a financial manager, and forget about the security a defined benefits plan offers. All this so that Wall Street will secure the next Big Money Pot.  And it’s already started.

Creepy Financialists

The unease felt by public employees about their future financial security isn’t merely the result of escalating fiscal paranoia; it’s very real. The Rhode Island Case describes what happens when crony capitalism merges with Wall Street wealth addiction when state treasurer Gina Raimondo issued forth :

“Nor did anyone know that part of Raimondo’s strategy for saving money involved handing more than $1 billion – 14 percent of the state fund – to hedge funds, including a trio of well-known New York-based funds: Dan Loeb’s Third Point Capital was given $66 million, Ken Garschina’s Mason Capital got $64 million and $70 million went to Paul Singer’s Elliott Management. The funds now stood collectively to be paid tens of millions in fees every single year by the already overburdened taxpayers of her ostensibly flat-broke state. Felicitously, Loeb, Garschina and Singer serve on the board of the Manhattan Institute, a prominent conservative think tank with a history of supporting benefit-slashing reforms. The institute named Raimondo its 2011 “Urban Innovator” of the year.

The state’s workers, in other words, were being forced to subsidize their own political disenfranchisement, coughing up at least $200 million to members of a group that had supported anti-labor laws.” [Rolling Stone]

Worse still, the states that were supposed to be making defined contributions didn’t seem to be taking the process very seriously.

Chris Tobe, a former trustee of the Kentucky Retirement Systems who blew the whistle to the SEC on public-fund improprieties in his state and wrote a book called Kentucky Fried Pensions, did a careful study of states and their ARCs. While some states pay 100 percent (or even more) of their required bills, Tobe concluded that in just the past decade, at least 14 states have regularly failed to make their Annual Required Contributions. In 2011, an industry website called 24/7 Wall St. compiled a list of the 10 brokest, most busted public pensions in America. “Eight of those 10 were on my list,” says Tobe.

Among the worst of these offenders are Massachusetts (made just 27 percent of its payments), New Jersey (33 percent, with the teachers’ pension getting just 10 percent of required payments) and Illinois (68 percent). In Kentucky, the state pension fund, the Kentucky Employee Retirement System (KERS), has paid less than 50 percent of its ARCs over the past 10 years, and is now basically butt-broke – the fund is 27 percent funded, which makes bankrupt Detroit, whose city pension is 77 percent full, look like the sultanate of Brunei by comparison.” [Rolling Stone]

However, nothing stops the administrators of the Annual Required Contribution plans from drawing their salaries. Nothing stops the hedge fund managers and wealth managers from earning their money, and nothing stops the hedge funds, wealth funds, and bankers from getting nice bonuses from playing with these new Big Money Pots.

2013 also brought the disclosure of other pension swindles.  A report on North Carolina’s pension plan yielded the most opaque atmosphere surrounding a supposedly transparent pension system, with the Wall Street characters benefiting from the opacity:

“Today, TSERS assets are directly invested in approximately 300 funds and indirectly in hundreds more underlying funds, the names, investment practices, portfolio holdings, investment performances, fees, expenses, regulation, trading and custodian banking arrangements of which are largely unknown to stakeholders, the State Auditor and, indeed, to even the (State) Treasurer and her staff,” he reports. “As a result of the lack of transparency and accountability at TSERS, it is virtually impossible for stakeholders to know the answers to questions as fundamental as who is managing the money, what is it invested in and where is it?” [Salon]

How are the investors in the system (the state, the locality, the employees) supposed to act as “free” administrators of their own pension plans when they can’t discover who is managing the money, what investments have been made, and where the money is?  Much less ask what fees are being paid to the money managers of the new Big Pot?  In the initial example above, Rhode Island, state treasurer Raimondo couldn’t answer the question about the amount paid in fees.

President George W. Bush famously tread on the third rail of American politics, privatizing Social Security in 2005, and just as famously backed away from the precipice.  It seems that Americans have not forgotten what is supposed to be a “mainstream pension plan.”   If continued symbolic acts continue to be promoted by the Cato Institute and if there continue to be the likes of Iowa senator-elect Ernst who call for a hybrid plan in which younger workers are allowed to put a portion of their Social Security into a Retirement Savings Account (read: Wall Street Money Pot) we can’t declare the nation free of schemes to privatize Social Security.  If a state treasurer in Rhode Island who promoted the defined contribution plan in her jurisdiction can’t find out how much is being raked in by money managers, then how do we expect our average “younger worker” to effectively track his or her retirement account.

Thus we can look forward to more proposals for Hybrid Plans – which augment the Big Money Pot, and Defined Contribution Plans – which can’t be tracked and make a mockery of the entire concept of transparency, and more assaults on public employees who might be victims of the latest Great Burglary of their pension systems.  Elections do have consequences, and the last mid term election put more than $100 billion in public pension funds in the hands of financialists turned politicians.

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