Category Archives: Heller

The Ladies of the Senate Scrape Facebook

The Zuckerberg Apology tour (Version 2018) continues today in Washington, DC. Yesterday, Nevada Senators Heller and Cortez-Masto had their opportunity to ask questons. Heller’s questions were well intentioned, but reduced in impact because his premise included the notion Facebook sells user information. It doesn’t. It sells advertising.(1)  [NVIndy] Understanding the questions from Cortez-Masto requires a bit of background.

Senator Cortez-Masto referred to the 2011 Consent Decree between the FTC and Facebook.

“I appreciate you being here, I appreciate the apology, but stop apologizing and make the change,” she said. “The skepticism that I have, and I’m hoping you can help me with this, is over the last seven years…I haven’t seen really much change in ensuring that the privacy is there and that individual users have control over their data.” [NVIndy]

She has reason for her skepticism, here’s what the FTC required as of November 29. 2011:

Specifically, under the proposed settlement, Facebook is:

  • barred from making misrepresentations about the privacy or security of consumers’ personal information;

  • required to obtain consumers’ affirmative express consent before enacting changes that override their privacy preferences;

  • required to prevent anyone from accessing a user’s material more than 30 days after the user has deleted his or her account;

  • required to establish and maintain a comprehensive privacy program designed to address privacy risks associated with the development and management of new and existing products and services, and to protect the privacy and confidentiality of consumers’ information; and

  • required, within 180 days, and every two years after that for the next 20 years, to obtain independent, third-party audits certifying that it has a privacy program in place that meets or exceeds the requirements of the FTC order, and to ensure that the privacy of consumers’ information is protected.

It doesn’t require too much mental effort to comprehend that Facebook’s response to the provision that it is “required to establish and maintain a comprehensive privacy program designed to address privacy risks associated with the development and management of new and existing products and services, and to protect the privacy and confidentiality of consumers’ information;” to see there’s been precious little progress made by Facebook in terms of a comprehensive privacy program. (2) Although Zuckerberg described his company’s response as “robust.” (3)  Robust is not a term I might apply to Facebook’s efforts since November 29, 2011, especially in regard to the implementation of comprehensive privacy policy development and subsequent audits.  Senator Cortez-Masto is correct in assuming we would not be discussing Cambridge Analytica had Facebook complied fully with the 2011 settlement terms.

There are deeper weeds to explore, a trail launched by Senator Maria Cantwell’s inquiry about Palantir. [BI]

“One of the oddest and most uncomfortable moments in the questioning of Facebook CEO Mark Zuckerberg by the Senate on Tuesday was when Senator Maria Cantwell (D-WA) started asking about Palantir.  “Do you think Palantir ever scraped data from Facebook?” She asked. Zuckerberg, looked nonplussed and answered. “Senator, I’m not aware of that.”  She asked, “Do you know who Palantir is?” Zuckerberg admitted that he did. And he should. Palantir is a company that was founded by his early investor and long-time board member Peter Thiel. [BI]

There was nothing “odd” about the moment, if one assumes Senators had done some homework.

A connection between Facebook, Cambridge Analytica, and Palantir is strongly suggested by this reporting in Business Insider:

“We learned today that an employee, in 2013-2014, engaged in an entirely personal capacity with people associated with Cambridge Analytica,” Palantir told The Times. “We are looking into this and will take the appropriate action.”

The employee was Alfredas Chmieliauskas, according to The Times. His LinkedIn shows that he is a business-development staffer at Palantir in London. He suggested that Cambridge Analytica create a personality-quiz app to harvest data from Facebook users, The Times said. Cambridge Analytica eventually used a similar method to obtain data from about 50 million Facebook users it could then sell.

Sure enough, Cambridge Analytica appropriated the idea, and the collections began.

“Cambridge ultimately took a similar approach. By early summer, the company found a university researcher to harvest data using a personality questionnaire and Facebook app. The researcher scraped private data from over 50 million Facebook users — and Cambridge Analytica went into business selling so-called psychometric profiles of American voters, setting itself on a collision course with regulators and lawmakers in the United States and Britain.”  [NYT]

That 50 million number keeps increasing. Given Facebook wants to sell advertising based on access to people, their friends, the friends of their friends, and the friends of the friends of their friends — it isn’t too difficult to assume the number of those affected will move upward.  It would have been helpful if Facebook user’s were advised before they took the little “quiz app” that the information from their account would be “scraped” for use by psychometric efforts.  Little wonder, then, that Mr. Zuckerberg was nonplussed by Senator Cantwell’s questions.

A couple of efforts seem to be in order.  The first is an investigation into Facebook’s compliance with the terms of the November 2011 settlement with the FTC; the second is a thorough investigation into the links between Facebook, Cambridge Analytica, Palantir,  CubeYou, and similar data accumulation and analysis entities. (4)

In short, it’s time to have some follow up questions from the ladies in the Senate.

(1) See Sheryl Sandberg’s explanation and comments in this INC article.  (2) The original FTC complaint [PDF] can be found here. (3) To see the precise terms of the 2011 settlement with the FTC see this PDF document. (4) For additional information on CubeYou, see CNBC.

Comments Off on The Ladies of the Senate Scrape Facebook

Filed under Heller, Nevada politics, Politics, privacy

The Sound of Silence: Heller and Mass Shootings — Sandy Hook to Parkland

October 2, 2017:  A statement from Senator Dean Heller’s office:

“Nevada families are waking up to the shocking news of the tragic events that occurred last night in Las Vegas. Our communities are all in mourning as we try to understand this senseless massacre on the Strip,” said Heller. “I want to thank our first responders for their swift actions and efforts that without a doubt saved numerous lives. I’ve been in contact with the White House and Governor Sandoval, and I will continue to monitor the situation as this horrific event unfolds. Lynne and I are praying for all of the victims and their families who are experiencing immense pain and grave, shocking loss that cannot be measured.”

Let us parse.

“Nevada families are waking up to the shocking news of the tragic events that occurred last night in Las Vegas. Our communities are all in mourning as we try to understand this senseless massacre on the Strip,”

tragic events?”  It was a Shooting.  A man armed with a small arsenal rented a room with a view to kill concert-goers.  He used a bump stock to increase the lethality of his weaponry.  59 dead and 851 injured.  It was an event — singular, and singularly lethal.

as we try to understand…”  What is it we don’t understand?  When the shooting stopped there were 58 dead people, one more if we count the shooter.  Perhaps we don’t know the killer’s motive, but when the body count is 58 there’s not much more we need to comprehend other than the murderous SOB assembled his arsenal, loaded his weapons, and voluntarily fired into a crowd of concert attendees.  Jury duty training tells us there was a crime; the individual in question perpetrated the criminal act; and he did it with good old fashioned malice aforethought.  There doesn’t seem to be much more we need to understand.

praying for the victims and their families…” Yes that’s appropriate.  What we’d like to find out is what our Senator thinks should be done after we finish with the thoughts and prayers portion of the formulaic Republican/NRA response to this horror.

October 5, 2017: Senator Heller answers questions about what might be done to mitigate the lethality of the next mass shooting event, and his response

“Let me be clear, I’m not interested in watering down the Second Amendment,” Mr Heller, Nevada Republican, said on Fox News.  Mr. Heller was asked if he would support a ban on a device called a “bump stock,” which authorities now say the gunman used.  “You show me the law that would stop that, not only will I support it, I will be an advocate for that law,” he said.”

There’s a lack of clarity in this statement, i.e. what is “that?”  Was the Senator saying if we want to stop the sale of bump stocks he will be an advocate? Or, was he saying if a single law could have prevented the mass killing he would support it?  We do know that he’s previously not wanted to “water down” 2nd Amendment absolutism.  We know what he did in April 2013.

“On the weekend after Nevada Sen. Dean Heller joined 15 fellow Republicans to kill a GOP-led filibuster of gun-control legislation, he returned to his hometown of Carson City and ate with his family at an IHOP restaurant—the same one where a gunman went on a rampage in 2011, killing four people and injuring more than a dozen others before killing himself. In the process, the gunman unloaded a 30-round magazine clip and rocked the sense of safety in the small Nevada community.”

Did the Senator join with others to alleviate the carnage in the wake of the Sandy Hook Mssacre?

“But when the Senate began to take up individual pieces of gun-control legislation earlier this week, Heller joined with nearly all Republicans and several Democrats to vote no—no on an amendment to ban assault weapons, no on a measure to limit magazine capacity, and no on the Manchin-Toomey amendment to expand background checks for gun sales.” [TDB]

The original Machin-Toomey bill went down to a GOP filibuster 54-46.  If we drill down a little further the form of Senator Heller’s objections — his defense of the absolutism of the 2nd Amendment — become clearer.  The following votes were taken on April 17, 2013.

Vote 97 (113th Congress) Senator Heller votes “nay” on the Manchin Amendment to “protect Second Amendment rights, ensure that all individuals who should be prohibited from buying a firearm are listed in the National Instant Criminal Background Check System, and provide a responsible and consistent background check process.”

Vote 98 (113th Congress) Senator Heller votes “yea” on the Grassley Amendment, which purported to improve the background check system and prevent straw purchases and gun trafficking.  However, the poison pill in the Grassley-Cruz amendment was that while it did address trafficking, it also made it easier to purchase and carry guns across state lines. [WaPo]

Vote 99 (113th Congress) Senator Heller also voted “nay” on the Leahy Amendment “To increase public safety by punishing and deterring firearms trafficking.”  Not only did our Senator not seem to want to “water down” the 2nd Amendment, he even voted against an amendment which the NRA supported after the language was changed to allow for easy transfer of guns as gifts and prizes.  [WaPo]

Vote 100 (113th Congress) Senator Heller was among those voting “yea” on the Cornyn Amendment to facilitate reciprocity for concealed carry across state lines.  In other words, to create a situation in which the least restrictive states would inform how all other states regulate concealed carry issues.

Vote 101 (113th Congress) Senator Heller was one of the forty US Senators to vote against the Feinstein Amendment to “regulate assault weapons, to ensure that the right to keep and bear arms is not unlimited, and for other purposes.”  There wasn’t much hope that the assault weapon  would be passed, but Senator Harry Reid (D-NV) had promised Senator Feinstein he would bring the amendment to the floor.

Vote 102 (113th Congress) Senator Heller voted “yea” on the Burr Amendment to “protect” the gun rights of veterans and military families.  This is an interesting vote because it contains issues pertinent to today’s debate.  Original language in the proposed legislation said that veterans receiving disability benefits who are deemed unable to manage their own financial affairs would be precluded from owning firearms.  Opponents of this amendment argued that the proposed language would make it easier for mentally ill individuals to obtain firearms.

Vote 103 (113th Congress) Senator Heller voted “nay” on the Lautenberg Amendment to regulate large capacity ammunition feeding devices.

Vote 104 (113th Congress) Senator Heller voted in favor of the Barrasso Amendment to  withhold 5 percent of Community Oriented Policing Services program Federal funding from States and local governments that release sensitive and confidential information on law-abiding gun owners and victims of domestic violence.  Senator Barrasso was disturbed that a New York newspaper had compiled a list of gun owners from county information sources.

What did the 113th Congress do? It did agree to provide more funding for mental health services.   There was a pattern evident in the 2013 votes in the wake of the Sandy Hook shooting.  Republicans were focused on ‘gun rights’ without restriction and in favor of passing legislation (without mentioning the word ‘gun’) concerning mental health.  Not to put too fine a point to it but when the shooters are white there is a voluminous amount of palaver concerning mental health; when the shooter is Muslim there is a chorus of indignation about terrorism; and, when the shooter is Black the GOP conversations shifts to “broken homes,” “lifestyles,” and “gangs.” Whether it’s mental health, terrorism, or broken homes — the GOP result is the same and the debate is diverted away from guns and toward some security or societal issue.   This pattern would test the Republicans in the wake of the San Bernardino shooting in December 2015.

On December 2, 2015 14 people were killed and another 22 seriously injured in a mass shooting in San Bernardino, California. On June 12, 2016 49 people were killed and another 58 wounded at the Pulse nightclub in Orlando, Florida.  During June 2016 a bipartisan group of Senators proposed a “No Fly, No Buy” bill prohibiting those on the TSA No Fly List for terrorism suspects from purchasing firearms. [NYT]  Subsequent attempts to apply “No Fly No Buy” became entangled in the appropriations bill for the Commerce, Justice, Science, and related agencies during the 114th Congress.  The following votes are of particular interest:

Vote 103 (114th Congress) Senator Heller votes “nay” on a cloture vote to bring up S Amendment 4751 to address gun violence and improve the availability of records to the National Instant Criminal Background Check System.  This element of the No Fly No Buy fails on a 53-47 vote.

Vote 106 (114th Congress) Senator Heller again votes “nay” on a cloture vote to bring up S Amendment 4720 to authorize the Attorney General to deny requests to transfer a firearm to known or suspected terrorists.

And thus ended the attempt to prevent those on the terrorist watch list from purchasing firearms in the United States of America. It was over on June 20, 2016.

March 3, 2018:  The White House hosted a “listening” session on gun violence in the wake of the Parkland, Florida killing of 17 people at Majory Stoneman Douglas High School.  Senator Heller did not attend.

“The office of Nevada’s senior senator, Republican Dean Heller, would not say why did he did not attend the White House meeting. Heller, who is facing a tough re-election fight, has avoided the spotlight in the subsequent days as well, declining to address specifics about his positions on gun legislation.”

Heller spokeswoman Megan Taylor declined to say whether the senator supported universal background checks, raising the age for gun purchases to 21, or provisions to ban high-capacity magazines and assault rifles, all ideas tossed out by lawmakers or President Trump in recent days.

“He looks forward to continuing discussions with his colleagues as Congress explores ways to enhance compliance with existing law and keep our communities safe,” Taylor said.

Heller has signed on to legislation known as “Fix NICS,” a modest measure supported by the NRA and intended to encourage better participation in the National Instant Criminal Background Check System. It was one of the few gun bills to find bipartisan support and appeared poised to move ahead, only to be sidelined.

Senate Majority Leader Mitch McConnell, a Kentucky Republican who has said little about the gun debate in recent days, said Thursday that no gun-related legislation would be heard in the coming week. [TDB] [RGJ]

No more formulaic GOP press responses from Senator Heller. This massacre warranted  a tweet. “Lynne and I are heartbroken for those impacted by the senseless act of violence at Marjory Stoneman Douglas High School. We are praying for the victims and their families, the school’s students and faculty, as well the entire Parkland, FL community,” Heller wrote.” [NVIndy]  The only response less informative came from Representative Mark Amodei (R-NV2): “The first thing that needs to be done is find out what the story is with this guy…so we have a 360-degree picture and then we’ll go from there,” Amodei said.” [NVIndy]

Perhaps in light of the Academy acknowledgment of an award winning rendition of Winston Churchill last evening, a quote from the Prime Minister is appropriate:

“It’s no use saying, ”We are doing our best.” You have got to succeed in doing what is necessary.”

 

 

 

 

 

Comments Off on The Sound of Silence: Heller and Mass Shootings — Sandy Hook to Parkland

Filed under Amodei, Gun Issues, Heller, Nevada politics, Politics

Monitoring and Messaging: Russians Coming? They’re Already Here

Perhaps before we exchange “Hail to the Chief” with “Troika, from the Lt. Kije Suite,” it would be nice for the Oval Office oaf to consider giving his NSA the word to DO something about the current Russian interference problem:

While Rogers pushed back on the notion that the administration has done nothing to counter Russian interference, he acknowledged that the response so far—which has included sanctions passed by Congress—has been insufficient in deterring such behavior.  “They haven’t paid a price, at least, that has significantly changed their behavior,” Rogers said.

First, those sanctions passed by Congress on overwhelming (veto-proof) majorities, and signed into law (PL 115-44) last August 2nd, have not been implemented.  Not only have those sanctions not been enforced, the rationale borders on bizarre.

“So to recap, the head of America’s foreign intelligence agency (Pompeo) is suggesting Russia will attempt to do what it did in the 2016 election again in 2018 and that he hasn’t “seen a significant decrease in their activity.” But then the State Department announces that it doesn’t need to impose the sanctions that were meant to punish that behavior because the legislation is already serving as a deterrent?”  (January 30, 2018)

The administration’s insistence upon interpreting PL 115-44 as a “deterrent” rather than the punishment it was meant to be is reflected in Senator Dean Heller’s (R-NV) comments: “… the Administration announced that the Countering America’s Adversaries Through Sanctions Act is deterring malicious Russian behavior and new sanctions will not be imposed at this time.”  And, he’s happy with that.  To which we might ask: Deterring What?  Both the NSA and the CIA are telling us the Russians are happily carrying on without a significant change in their nefarious behavior.

But the Treasury Department issued a list of possible Russian citizens who might be targeted — yes, and by all accounts the list was simply a compilation from Forbes Magazine’s list of rich Ruskies.  A high school student with a tablet could have produced this! In a couple of minutes.  Somehow this doesn’t inspire a surfeit of confidence on my part.

But wait, there’s more —

The Russians are also pleased to be violating the sanctions against North Korea. Their actions could be directly approved by Moscow or the product of profit keen oil dealers, or both, but either way the Russians have been ignoring maritime sanctions on oil.  Surely the administration in D.C. would have something to say about this?

On Friday, the Trump administration issued a new set of sanctions that aimed to crack down on North Korea’s ability to profit from maritime activities. The new sanctions targeted one person, 27 companies and 28 vessels located or registered in countries such as China, Singapore, Taiwan, Hong Kong, Tanzania and Panama, among others. The sanctions did not target Russia. [Newsweek]

The “sanctions did not target Russia.”  It appears not only are we not imposing the sanctions enacted by Congress on Russia, we aren’t even imposing penalties on Russians for trading with North Korea.  However, at present Senator Heller seems content to “monitor” the situation.  At this juncture that could be tantamount to watching the bank robbers remove the safe deposit box contents in the hope they won’t take the loot out the door?

The administration’s various excuses for not only doing practically nothing about Russian interference, but doing even less to prevent further incursions, are becoming more tenuous by the day.   Those explanations make less sense than the constant barrage of tweets about witch hunts, and other aspersions cast at the investigation of any and all suggestions of Russian activities against the interests of the United States.  Each day passing offers both a challenge and a choice.

The challenge for Republicans in Congress is to maintain support for the White House without making the choice to be an enabler of extremely untoward conduct.

Senator Heller, and others of his party, are rapidly approaching the point at which their choice will serve to augment the attraction of their challengers.

Comments Off on Monitoring and Messaging: Russians Coming? They’re Already Here

Filed under Heller, Nevada politics, Politics

Heller’s Making Hay, Just Without a Business License

The Reno Gazette Journal informs us today that Senator Dean Heller (R-NV) has a hay farm in Smith Valley (180 acres) for which he’d not bothered to get a business license.  The royal irony herein is that Heller is a former Secretary of State, and so a person presumed to have some knowledge of business licenses in this state.  What’s wrong with this picture?

His excuse is that it’s a home based business which doesn’t make a profit.  Okay.  Many family farms and ranches are home based.  Most have business licenses.   The business license costs are minimal, $200.00.   The last time I looked hay was going for about $170 per ton.  [hay price check here]  I’m having a bit of trouble figuring out how a hay operation in Smith Valley is running in the red.  Unless of course that’s a deliberate business plan for tax purposes?  If it is, that’s not a good look for a “fiscally responsible” US Senator.

We can reasonably assume a crop of about 7 tons per acre, and Heller has 180 acres. Perhaps he’s getting about 1,260 tons?  At $170 per ton that’s $214,200 gross.  He’s going to have irrigation, pest management, and fertilization expenses like every other farmer. Additionally there are going to be expenses for labor, equipment, harvesting operations, and vehicles.  It’s a little hard to imagine he’s racked up over $200,000 in expenses?  If he isn’t making a profit — then (a) why’s he in the business? or (b) why is he continuing with a business operations plan which is losing money?  Less gently, he’s either in the business to get some breaks, or he’s one of the state’s worst hay farmers.

Either way, he’s not been one of the state’s best Senators.  His opposition to consumer protections from the financial sector (see his consistent opposition to the Dodd-Frank Act, and Sarbanes-Oxley) and his support for just about any proposal Wall Street has to offer make him more the Bankers Boy than a Nevada small farmer’s friend.

 

 

1 Comment

Filed under Heller, Nevada politics, Politics

Heller’s Tele-Somethings Redux

Senator Dean Heller is fond of his Telephone Town Halls, which, as we’ve noted previously are more telephonics than town halls.  [Here, and especially here]

Perhaps he’s addressed the transparency problems associated with his previous telephone conference calls, but maybe not:

“Senator Heller has employed this one in the not so distant past.  It goes like this.  Have a telephone conference call from which questions are solicited from the public.  However, the fog descends almost immediately. Are the questions pre-screened?  There’s no way to know with absolute certainty, but someone has to be taking the calls like a radio call-in broadcast so chaos doesn’t happen.  Thus, it isn’t too hard to imagine that some pre-screening is happening.

These town halls can also be re-cycled.  The contact with the constituent begins with “You are invited to participate in Senator Sludgepump’s telephone town hall. If you have a question for the Senator press (number) and give your name and address…)

It doesn’t take too many conversations to figure out that if Constituent A heard the town hall on Monday evening, and Constituent B heard the same town hall on Tuesday evening, then we can assume people have been listening to a canned recycling of a political campaign pitch.  Hardly a town hall.”

Therefore, a person would be excused from being a little skeptical about the current iterations of Senator Heller’s open mic nights.   Thanks to the Nevada Independent we have a taste of the latest town hall:

“Asked why he supported Trump after the president reportedly called some African nations, Haiti and El Salvador “s**hole” countries, described his forceful sexual advances in an Access Hollywood tape and called outlets such as the BBC “fake news,” Heller told the caller that she probably supported Democratic presidents with similar problems.”

This is nothing more than a thinly disguised “kill the messenger” motif.  Don’t like the message, then play the Whataboutit” card — what about Clinton (inserting the foil of the day) to which one might add what about — Grover Cleveland? Warren G. Harding? Franklin D. Roosevelt?    Thence comes the exceptionally vague pivot:

“What I’m trying to do is get issues done. That’s what I’m looking for is what’s best for the state of Nevada, and whether I’m standing behind the president or whether I’m standing in right field, it doesn’t matter. Literally doesn’t matter.”

I’d assert Senator Heller is, indeed, standing out in right field, but that’s beside the point.  One unfortunate way to translate this Hellerian side step is to assume he means that no matter the moral depravity of the occupant of the White House Heller will support anyone who advocates what Heller believes is in the best interest of the state of Nevada.

The problem is that the reprobate in the Oval Office doesn’t have any clear ideological principles.  How Heller can divine precisely what the administration’s position is on any given topic is beyond most analysts.  We might guess that the administration proposals on immigration range from “a bill of love” to “build a wall.” We might guess that the issues related to banking run the gamut from “take care of the middle class” to “let bankers be bankers.”  And so on.

It should matter to Senator Heller, and to any other citizen of Nevada (and the other 49) whether or not the administration has the moral fiber necessary to inform the proposed policies.  Moral fiber tends to filter out the self-serving, the grifting, and the unconscionable — without the filter there’s little space left for anything other than the moral relativism of pure opportunism.  Surely this is not what Senator Heller has in mind?

 

 

Comments Off on Heller’s Tele-Somethings Redux

Filed under Heller, Nevada politics, Politics

Heller’s Money

Senator Dean Heller is leading in one category.  He’s leading in the Money From Leadership PAC’s race collecting a total of $314,750 from those entities. ( OS, 9/30/17 report)

From the Department of Absolutely No Surprises, he reported taking in $414,867 from PACs associated with the Securities and Investment industries.

The next FEC filing deadline is January 31, 2018 at which time we can start tracking the trends of Senator Heller’s fund-raising, and see if he maintains his lead in the Leadership PAC money race.

Comments Off on Heller’s Money

Filed under Heller, Nevada politics, Politics

The Great Bamboozle: GOP Tax Plan Targeted Right At the Middle Of The Top 1%

There are some amazing feats of verbal legerdemain going on as Republicans try to explain why their Jam It Through Tax Plan isn’t a real bag of snakes.

Oh, don’t worry about our plan…people want to see an improving economy…people want to see more in their paychecks…now 90% of the people can file a simple return…there’s a lot of wishful thinking going on here, and most of it is wrong.  The political advertising is going to write itself in 2018.

Senator Maria Cantwell (D-WA) is correct to say that “haste makes waste,” and in its haste the GOP is about to unload both barrels into their own feet.

The tax cuts will explode the debt.  Remember all the times the GOP told us that debt is a problem?  It certainly can be.  When there was a Democrat in the White House the Heritage Foundation positively screamed about the impact of increasing the national debt:

Current and projected increases in government debt, cutting into future economic growth rates, also mean slower future growth of government revenues. Even as future interest expense rises as taxpayers are called upon to service all this debt, growth in government revenues will slow, leaving less available for other priorities, such as national security and economic security, education, and innovation-driving research.

The only difference now is that the accumulated deficits will be driven by a Republican penchant for rewarding the investor class with amazing tax cuts.  Now the argument is reversed: there will supposedly be More revenue, More innovation, More funds for national security and research.  No there won’t. And we don’t need to kid ourselves, because the same basic economic elements are going to underpin the new tax/budget structure that are girding the current one. 

Nothing in the tax bill reverses the current emphasis on short term gains. The GOP is fond of pointing to gains in the stock market as “proof” of its stewardship of economic growth.  There’s an obvious problem with this, as noted by the Chicago Tribune:

Nearly half of country has $0 invested in the market, according to the Federal Reserve and numerous surveys by groups such as Gallup and Bankrate. That means people have no money in pension funds, 401(k) retirement plans, IRAs, mutual funds or ETFs. They certainly don’t own individual stocks such as Facebook or Apple.

So, nearly half the population has Zilch invested in The Market. What about the others?  While people don’t generally have elephantine memories, 2008 isn’t that far in the rear view mirror, and that’s part of the reason about 54% of Americans have some sort of investments, as opposed to the 62% prior to the Big Crash of 2007-08.

Further,  there’s some recent research indicating the decline isn’t over.

Rosenthal and Austin’s main focus was the precipitous decline of taxable investment accounts. In 50 years, the amount of stock owned by individual investors and funds outside retirement and nontaxable accounts such as 529 college-savings plans has dropped off a cliff — to about 25% in 2015 from over 80% in 1965.

But wait, there’s more:

The other startling finding was the growth in foreign investment in the US stock market. What was once a small sliver of the makeup now accounts for a quarter of all stock ownership at $5.5 trillion. Part of this may be due to increasing wealth in foreign countries, but, as the researchers noted, it could also be influenced by corporate inversions, in which foreign-domiciled firms have large direct holdings of US-based stock.

So, we have a structural situation in which the percentage of individual investors is declining precipitously, the percentage of institutional investors is increasing, as is the percentage of foreign investors.   It doesn’t take much effort to perceive that the produce of stock market gains aren’t going to benefit most Americans, but should assist institutional and foreign investors.

But surely those institutional investors will be looking for long term investment prospects and will act as a curb on short term pursuits as exemplified by hedge fund operations?  Nupe.  That part of the structure hasn’t changed either.  It’s not happening:

Across the world, a clamor is rising against corporate short-termism—the undue attention to quarterly earnings at the expense of long-term sustainable growth. In one survey of chief financial officers, the majority of respondents reported that they would forgo current spending on profitable long-term projects to avoid missing earnings estimates for the upcoming quarter.1

Critics of short-termism have singled out a set of culprits—activist hedge funds that acquire 1% or 2% of a company’s stock and then push hard for measures designed to boost the stock price quickly but unsustainably. 2 The typical activist program involves raising dividends, increasing stock buybacks, or spinning off corporate divisions—usually accompanied by a request for board seats.

If corporations increase profitability I am hearing, “raising dividends, increasing stock buybacks, and mergers, acquisitions, and spin offs.  I am NOT hearing investment in plant expansion, workers’ wages, and company benefits.  And, I’m certainly not hearing anything about encouraging the promotion of taxable investment accounts, the kind that  puts revenue into the Nation’s coffers.

Nothing in the tax bill addresses wage stagnation.   And, no, this is not a myth:

“After adjusting for inflation, wages are only 10 percent higher in 2017 than they were in 1973, with annual real wage growth just below 0.2 percent.[1] The U.S. economy has experienced long-term real wage stagnation and a persistent lack of economic progress for many workers.” […] ” The portion of national income received by workers fell from 64.5 percent in 1974 Q3 to 56.8 percent in 2017 Q2.”

Ouch.  Somehow, the Growth Fairy is supposed to be so enamored of tax cuts for corporations and wealthy individuals that more greenbacks will float down and squirm into the pay packets of average American workers.  Probably not, and putting more dollars into the pockets of institutional investors — foreign and domestic — isn’t going to be all that helpful either.  So, not only does the tax plan not address short term-ism, it doesn’t really address paycheck issues either.

But Wait! How about increasing the child tax credits and standard deductions?  It’s no secret that those people earning $75,000 or less aren’t going to be the big winners in this tax bill.  “The tax bill Senate Republicans are championing would give large tax cuts to the rich while raising taxes on American families earning $10,000 to $75,000 over the next decade, according to a report released Thursday by the Joint Committee on Taxation, Congress’s official nonpartisan analysts.” [WaPo]

But, but, but…Your tax filings will be simpler!  Simple doesn’t matter if you aren’t getting your taxes cut.  And, if the tax preparation deduction is eliminated then there are going to be some mom and pop franchises in serious straits — those just happen to be local small businesses as well.

But, but, but…jobs won’t go overseas!  You can only dream.  The arguments get a bit into the economic weeds, into territorial taxation, but the bottom line is clear:

This might seem like a small difference, but the design of their global minimum tax creates perverse incentives for companies to offshore jobs and shift profits to tax havens—outcomes that a per-country minimum tax would avoid.

Perverse indeed, especially if one expects the new tax plan to provides incentives for companies to expand operations domestically.  Nothing in this plan actually and directly promotes domestic expansion in the economy — it’s all indirect and absolutely hopeful, perhaps even illusory if not downright delusional.

In the meantime, Medicare will be facing cuts of about $25 billion.  There will be calls to “reform” Social Security” in order to reduce the debt — translation: Higher requirements for fewer benefits.  There will be calls to cut SNAP programs — not a drop in the bucket needed to fill the debt hole; and, educational funding — another squeeze on programs that actually help people eventually earn higher wages.

This won’t prevent Republicans like Nevada’s Senator Dean Heller from enjoying the passage of a “great tax cut,” while he hopes to high Heaven no one in the state notices cuts to Medicare, Medicaid, Childrens’ Health Insurance, and no one talks about increased premiums in the individual health insurance market.  Perhaps no one will notice that graduate students at UNR and UNLV are supposed to pay taxes on tuition waivers while they’re actually earning minimum wages for part time jobs?  No one will notice the reduction in home mortgage interest deductions?  No one will observe the reduction or elimination of deductions for major medical expenses — much of which will be out of the pockets of the elderly.

My guess is that Nevadans will notice.  The political ads may, indeed, write themselves.

 

 

Comments Off on The Great Bamboozle: GOP Tax Plan Targeted Right At the Middle Of The Top 1%

Filed under health insurance, Heller, Nevada economy, Nevada politics, Politics, Taxation