Category Archives: Politics

A Second Look At AB 182: ALEC’s assault on Nevada Public Employees

AB 182

REVIEW: If one feels the need for a bit of background information, the origin of bills like AB 182 can be found in the ALEC model legislation package known as “The Public Employee Freedom Act.”  (pdf)  The bill is a veritable laundry list of the ALEC bill-mill wishes:

“(1) AN ACT relating to local governments; prohibiting a local government employer from entering into an agreement to pay dues to an employee organization through deductions from compensation; (2) prohibiting such an employer from providing paid leave or paying compensation or benefits for time spent by an employee in providing services to an employee organization; (3) prohibiting the inclusion of certain employees in a bargaining unit; (4) revising provisions relating to a reduction in force; (5) providing that a collective bargaining agreement between a local government employer and a recognized employee organization expires for certain purposes at the end of the term stated in the agreement; (6) requiring public notice of certain offers made in collective bargaining; (7) eliminating final and binding fact-finding except upon the election of the governing body; (8)  removing a portion of the budgeted ending fund balance of certain governmental funds from the scope of collective bargaining and from consideration by a fact finder; (9) eliminating statutory impasse arbitration for firefighters, police officers, teachers and educational support personnel;…”

Nothing would so please the corporate masters of ALEC and the Koch Brothers alliance than to see public employee unions brought down, scuttled, and preferably stricken branch to root.

Every provision in this bill is strategically calculated to prevent unions from providing their services to their members.  No dues check off, making dues collection more costly and cumbersome for members; combined with the  attack on union leadership – after all, if the leaders can’t afford the volunteer time then service is necessarily reduced.  Eliminate “supervisory personnel,” if they so much as think about making an “independent judgment.”  No lawyers, no doctors, no supervisory personnel, may by involved in a bargaining unit?  No “confidential employee?”

Allow a government agency to reallocate resources such that there is a reduction if force – translation: layoffs – and then say “We did it because we moved the money elsewhere.” Anywhere? Any budget category? For any purpose? For the purpose of laying off personnel?  No “evergreen provisions?” No cost of living adjustments without a new master contract?

AB 182 assumes there will be no employee strikes – illegal for public employees in this state – but there won’t be any resolution options either. No fact finding, mediation, or arbitration results shall impinge on the employer to do whatever the agency wishes.  It’s take it or leave it time.

And, 16.6% of the total “budgeted expenditures” must be kept in reserve.  Really?  While this sounds “financially responsible” it really isn’t.  There are supposed to be funds allocated at the local level for “extraordinary maintenance and repairs or improvements, funds for contingencies, and funds to stabilize operations, and to provide a cushion in case of a natural disaster. [See: NRS 354]  There’s really little more to this than pulling 16.6% away from the bargaining table.


The corporate sponsorships include:  The American Bail Corporation; the Altria Group (tobacco), AT&T, Diageo, Energy Future Holdings. Exxon Mobil Corporation, Koch Companies  Public Sector, Peabody Energy (coal), Pfizer Inc. PhRMA, State Farm Insurance, United Parcel Service, Amerian, American Express, US Airways, Anheuser Busch, Bayer Corporation, Bell Helicopter, BP America, Burlington Northern, Catepillar, Century Link, Chevron, Comcast, Conoco Phillips (under Phillips 66 brand), Dow Chemical, Eli Lilly Inc, Farmer’s Group, Georgia-Pacific (Koch Bros), Honeywell, Insight Schools Inc, JR Simplot, Marathon Oil, Raytheon, Reynolds American, T Mobile, Transcanada, (yes, THAT Transcanada)Verizon, and Xcel Energy.

However, a more interesting list is who has dropped membership in the organization which provides models for legislation like AB 182: Pepsi, Coca-Cola, Pepsi, Kraft, Intuit, McDonalds, Wendy’s, Mars, Reed Elsevier, American Traffic Solutions, Blue Cross Blue Shield, Yum! Brands, Proctor and Gamble, Kaplan,, Medtronic, Wal-Mart, Johnson and Johnson, Dell Computers, John Deere, MillerCoors, Hewlett-Packard, Best Buy, General Motors, Walgreens, Amgen, Dreyfus, Amgen, General Electric, Western Union, Sprint Nextel, Symantec, Entergy, Merck, Bank of America, Wellpoint, Bristol Myers Squibb, Brown-Forman, Publix Markets, Glaxo Smith Kline, Unilever, 3M, Darden Restaurants, IBM, Intel, Nestle USA, Berkshire Hathaway, NV Energy, Alliant Energy, Microsoft, Pacific Gas and Electric, Yahoo Inc, International Paper, Occidental Petroleum,, Facebook, Google, Union Pacific, eBay, Wells Fargo, and Northrop Grumman. [link]

Not to put too fine a point to it, but the Nevada legislators sponsoring AB 182 – Republicans Kirner, Dickman, Gardner, Oscarson, Wheeler, Edwards, Jones, Hambrick, Ellison, and Nelson – are still promoting legislation (and an ideology) which is no longer all that popular among major corporate sponsors.  The ALEC bill mill has lost some of its patina of late, but 10 Nevada Republicans haven’t quite noticed the train’s left the station?

While ALEC may be headed off to the horizon, the Koch Brothers and their Americans for Prosperity are alive and well.

“AFP adopts the anti-union positions held by its libertarian funders, David and Charles Koch.[56] A video published on YouTube on February 26, 2011 shows Scott Hagerstrom, the executive director of Americans for Prosperity Michigan, advocating “taking unions out at the knees so they don’t have the resources” to fight for workplace benefits or political candidates.” [Sourcewatch]

One has only to look at Michigan, Ohio, and especially Wisconsin under the Koch financed Walker regime, to see that AFP can simply adopt the legislative packages from ALEC, and insert these into state legislatures – like Nevada.

Thus, Republicans Kirner, Dickman, Gardner, Oscarson, Wheeler, Edwards, Jones, Hambrick, Ellison, and Nelson are simply doing the bidding of the Koch Brothers and promoting their reactionary agenda.

CONSEQUENCES:   This assault on unions, and specifically the attack on public employee unions, are part of the general hostility of corporations toward labor, and toward government.  The results are obvious.  As union membership has declined over the years so have middle class incomes.  [MJ] [APO] [EPI]  And, how did many families move into the middle class in the first place?  By becoming police officers, firefighters, teachers, community health nurses, librarians, land management specialists, transportation specialists, heavy equipment operators, social workers, public health service workers, and so on.

The wages and salaries earned by public employees, as determined by negotiated master agreements, put more families into the middle class, and more money into local economies.  Once again – the Koch Brothers aren’t interested in Bob’s Bodega or the Smith Family Furniture Store, or Jill’s Fashions —  the kinds of small businesses which form the core of local economies.  Possibly the view from inside the 0.001% bubble doesn’t allow for the possibility that products such as Koch Brother’s brands wouldn’t sell in such quantities without local retailers – local retailers who rely on middle income consumers to produce their revenue?

The anti-union, anti-labor perspective is ultimately unsustainable.  Yes, paper towels (like Koch’s Brawny brand) are basic household items, but put too much downward pressure on household income and people will discover that re-washable rags will work as well.  Every household needs toilet paper, like Koch’s Angel Soft, but households under pressure to save pennies may find cheaper brands to purchase.  While the Koch’s can fall back on Flint Hills energy products, local grocers can’t fall too far back from their local demand.  Grocers average a margin of 1-6%, [AZBus] which is not a large cushion to sustain too much drop in customer demand.

Perhaps it’s easier to sit back insulated by a top 0.001% annual income and think of Liberty, Freedom, Personal Accountability, and other abstractions, but the middle class consumer, including the middle class firefighter, police officer, teacher, social worker, or public health nurse doesn’t have that luxury.  Freedom for most people comes down to what Franklin D. Roosevelt called “Freedom from Want.”  The freedom which allows a family to procure all that’s necessary for basic needs, and leave  little left over for a home, for retirement, for an education for their children.  They want, and need, the freedom to breathe between paychecks.

Bills like AB 182 take the air out of the room.  If Republicans Kirner, Dickman, Gardner, Oscarson, Wheeler, Edwards, Jones, Hambrick, Ellison, and Nelson would pull this bill, people could all breathe a little easier.

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Filed under Nevada economy, nevada education, Nevada legislature, Nevada politics, Politics, public employees

Thanks for you patience

DB’s been a bit busy the last couple of days. Posting will resume once the backlog is cleared. In the meantime, please visit some of the fine blogs and information sites in the sidebar — especially the ones in Nevada!

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Dissing the Disabled Part 2: The Numbers in Nevada Counties

disability GOP social security

Generalities: When the House of Representatives voted in favor of a provision which could cut Social Security Disability benefits, it was part of a general assault on the Social Security program which has been manufacturing a “crisis,” a tactic of long-standing from opponents of the popular government program.[TPM] Senator Rand Paul (R-KY) was particularly dismissive of the recipients of OASDI benefits, in a comment that deserves as much publicity as can be obtained:

“The thing is that all of these programs, there’s always somebody who’s deserving, everybody in this room knows somebody who’s gaming the system. I tell people that if you look like me and you hop out of your truck, you shouldn’t be getting a disability check. Over half the people on disability are either anxious or their back hurts. Join the club. Who doesn’t get up a little anxious for work every day and their back hurts? Everyone over 40 has a back pain.” [TPM]

There is no substantiation for the Senator’s claim that 50% of Social Security Disability recipients are “anxious or their back hurts.” None. In fact, anxiety disorders are categorized under mental illnesses, and constitute only 3.5% of all disability claims. [LAT] And, that back pain?  As stated before, qualifying for benefits under the SSA criteria is far more than just “back pain, or nerves”  Thus, our answer to Senator Paul’s claim should be to declare it the southbound product of a north bound bull.  However, this utterly unwarranted attack on our most vulnerable citizens has some real consequences for Nevadans.

Specifics:  The following table shows the number and category of disabled people in Nevada who are blind and disabled (and under the age of 64) who would be affected by the proposed 20% reduction in benefits.

County Blind/Disabled Under 18 18-64
Churchill 384 71 306
Clark 27,909 7686 19,542
Douglas 318 57 258
Elko 384 66 311
Esmeralda xxx xxx xxx
Eureka xxx xxx xxx
Humboldt 166 27 133
Lander 55 xxx 48
Lincoln 47 xxx 44
Lyon 770 136 628
Mineral 102 xxx 96
Nye 858 129 702
Pershing 56 xxx 49
Storey xxx xxx 47
Washoe 5,261 1,097 4,070
White Pine 119 21 94
Carson City 756 117 627

*the XXX indicates a number so small that individual information would be revealed if the number/category were published.  Source: SSA Office of Retirement and Disability Policy. Table 3.

Nevada Congressional District 1 includes portions of Clark County, and the 27,909 disabled individuals are represented by Dina Titus (D-NV1) who voted against the proposed benefit cuts.

Nevada Congressional District 2 includes most of Lyon County, all of Churchill, Douglas, Elko,Eureka, Humboldt, Lander, Pershing, Storey and Washoe Counties, and Carson City.  Representative Mark Amodei (R-NV2) voted in favor of the proposed benefit cuts.

Nevada Congressional District 3 includes the area south of Las Vegas, including Henderson in Clark County. Representative Joe Heck (R-NV3) voted in favor of the proposed benefit cuts.

Nevada Congressional District 4 includes northern Clark County, part of Lyon County, all of Esmeralda, Lincoln, Mineral, Nye, and White Pine Counties.  Representative Cresent Hardy (R-NV4) voted in favor of the proposed benefit cuts.

From the table we know that there is NO Congressional District in the state of Nevada which does not have families who benefit from OASDI assistance, and yet only one Representative voted to maintain the benefit levels (meager as they are) for households in which a disabled person, who qualifies under the stringent criteria applied by the SSA, resides.  We can do better than this.

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Filed under Amodei, Economy, Nevada politics, Politics, Social Security

Some Context Is Needed

Crime Scene Tape

The Background: It’s nothing less than absolutely tragic that two NYPD officers, Liu and Ramos, were killed while on duty in Brooklyn, NY. [NBC]  The assassination brings back an equally unpleasant memory from last June, when two law officers were eating lunch at a pizza place in Las Vegas, Nevada.  However, playing the “blame game” in the aftermath of this most recent assault on law enforcement officers is counter-productive, and highly questionable.  PBA President Lynch should know better than to blame the protests against the use of lethal or excessive force by some law enforcement officers as the ‘reason’ for the assault.  There is a profound difference between calling for the improvement of police tactics and policies, and advocating violence against officers of the law.

Public officials and protest leaders have condemned the killings in the strongest possible language, the President saying: “

“I unconditionally condemn today’s murder of two police officers in New York City,” the president said in a statement released just after midnight on Sunday morning. “Two brave men won’t be going home to their loved ones tonight, and for that, there is no justification.” [Politico]

The Mayor added:

“These officers were shot execution-style, (a) particularly despicable act, which goes to the very heart of our society and democracy,” de Blasio said. “When a police officer is murdered, it tears at the foundation of our society. It is an attack on all of us. It’s an attack on everything we hold dear.

“We depend on our police to protect us against forces of criminality and evil,” the mayor said. “They are a foundation of our society, and when they are attacked, it is an attack on the very concept of decency. Therefore, every New Yorker should feel they, too, were attacked. Our entire city was attacked by this heinous individual.” [NYDN]

The Issue: So, why the continuing problems between the police unions and the city government?  In this instance we need to hark back to the tensions between Mayor David Dinkins and the police in 1992.  Dinkins at the time was supporting the creation of a civilian review board, and the response by the police unions was remarkably similar to the police reaction to body cameras today: “He never supports us on anything,” said Officer Tara Fanning of the Midtown South Precinct, echoing the view of many in the crowd.A cop shoots someone with a gun who’s a drug dealer, and he goes and visits the family.” [NYT 1992]   Indeed, it’s not hard to conclude after the issues about both the establishment of a civilian review board and the issues revolving around the adoption of body cameras and re-training, that the police unions will vehemently oppose any and all suggestions that they improve the implementation of their public services. [C&L]

The media: The national media hasn’t served the public well in this instance.  The issues are fundamentally about how the police can best enforce the law without risk to their own safety and the safety of members of the public.  The easy, and rather lazy journalistic approach is to pursue the politics of a dispute between the police unions and the mayor’s office.  “He said, and then He said,” journalism which makes for simple headlines, but obfuscates the larger issues involved.   The union commentary, which equates any criticism of police activities with an “attack on officers,” doesn’t address protracted problems related to Community Policing, nor does it contribute to any positive dialogue and cooperation between the police and the communities they protect.  While ‘conflict’ reportage may sell media, and thus advertising space, cooperation is what will improve the relationship between the community and the police department. There are other coverage issues which merit more attention than they are receiving in the current media environment.

It’s not the protesters in the wake of the Eric Garner, John Crawford, Michael Brown, and Tamir Rice killings who are calling for the attacks on police officers.  Protesters have called for prosecutions, investigations, changes in training, screening, and recruitment – but they have not called for any violence.  The right wing reaction has been to declare that any demands for police reform may engender ill-will and hence attacks on officers – See, There, It Happened! even if the assassin in the Brooklyn case was evidently a violent, emotionally and psychologically unstable, man. There are, however, some voices which do advocate violence against officers, and who have made threats they carried out. A few examples:

January 29, 1998: An off-duty police officer is killed, and a nurse seriously injured when one of right wing activist Eric Robert Rudolf’s bombs explodes at a Birmingham, AL women’s health clinic.

December 8, 2003: Abbeville, SC Police Sgt. Danny Wilson and Constable Donnie Ouzts are shot to death by anti-government “patriot” Steven Bixby.

April 4, 2009: Three Pittsburgh, PA police officers (Sciullo, Mayhle, Kelly) are killed and a fourth wounded by Richard Andrew Poplawski, a white supremacist when they answered a call about a domestic disturbance. Poplawski explains he fired extra bullets into the bodies of the officers “just to make sure they were dead.”

April 25, 2009: Two Okaloosa County, FL sheriff’s deputies. Bert Lopez and Warren York, are killed by Joshua Cartwright, an anti-government extremist upset by the election of President Obama, who had previously expressed interest in joining a militia group.

May 20, 2010: West Memphis, AR police officers Paudert and Evans are attacked and killed by ‘sovereign citizens’.  [TDB]

August 16, 2012: Louisiana sheriff’s deputies Nielsen and Triche are ambushed by seven people with ties to the “sovereign citizens” movement.

September 4, 2012: California HP officer Youngstrom is shot and killed by Christopher Lacy, an anti-government individual with a large amount of ‘sovereign citizen’ literature on several computers in his home.

June 8, 2014: Jerad and Amanda Miller assassinate two Las Vegas, NV police officers Soldo and Beck,  who are having lunch.  The killers leave a Gadsden flag on Officer Beck’s body.  Weeks earlier the assassins had been present at the Bundy Ranch.

June 10, 2014: A Forsyth County deputy Daniel Rush was wounded by white supremacist, ‘sovereign citizen’ Dennis Marx who was attempting to ‘lay seige’ to the court house.  [AJC]

September 12, 2014: Eric Frein, military re-enactor ambushes state police barracks in Blooming Grove, PA, kills Officer Byron Dickson, and seriously injures Trooper Alex Douglass. [LeVNews]

November 22, 2014:  Leon County, FL sheriff’s deputy Scott Angulo was ambushed and killed by “anti-government/anti-establishment”  Curtis Wade Holley, who set fire to his home and vowed to kill as many first responders as he could.  [USAT]

The ADL has been keeping track of violent incidents between extremists and police:

“In the past five years alone, from 2009 through 2013, ADL has tracked 43 sep­a­rate vio­lent inci­dents between domes­tic extrem­ists (of all types) and law enforce­ment in the United States. These inci­dents include sit­u­a­tions in which shots are exchanged between police and extrem­ists (shootouts), sit­u­a­tions in which extrem­ists have fired at police but police sub­dued the extrem­ists with­out hav­ing to return fire, and sit­u­a­tions in which offi­cers had to use their firearms to pro­tect them­selves against extremists.

Of these 43 inci­dents, fully 39 of them involved extrem­ists sport­ing some sort of extreme right-wing ide­ol­ogy. White suprema­cists took part in 21 inci­dents, while anti-government extrem­ists were involved in 17 more. An anti-Muslim extrem­ist was involved in one inci­dent (the other four inci­dents included one with a left-wing extrem­ist and three with domes­tic Islamic extrem­ists). In these shoot­ing inci­dents, the extrem­ists shot 30 offi­cers, 14 fatally. Many other offi­cers sus­tained non-gunfire injuries dur­ing some of these encounters.” [ADL] (emphasis added)

Let’s assume that we can all walk and chew gum at the same time.  It is not impossible that reforms can be made in even the most recalcitrant police forces that improve the relations between the department and the communities; and, it’s not impossible that we can – and should – pay greater attention to those who actually DO advocate violence against law enforcement officials.  It was not until April 2010 that the FBI issued guidance to local law enforcement about the sovereign citizen threat.  We simply need to have a adult discussion, enhanced by better informational context, and to stop shouting and start talking.

*SPLC “Terror from the Right”  The Daily Beast, “Sovereign Citizens are America’s Top Cop Killers.” Media Matters, “How Fox News Covers Right Wing Cop Killers.” ADL, “Officers Down: Right Wing Extremists Attacking Police at a Growing Rate.”  Crooks and Liars, “Rudy Guiliani Knows Exactly How to Spark a Police Riot – he’s done it before.”

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Memo to Police Union Reps: Do be careful, please.

Coolidge Police Strike

It was September 1919, and about 80% of the Boston police force went on strike.  Police Commissioner Edwin Upton Curtis denied that the officers had a right to form a union, and he was certain they had no right to form one associated with the  American Federation of Labor.  Calvin Coolidge rode anti-union sentiment all the way to the White House, the Boston officers who had been fired for striking weren’t reinstated until 1931, and it would be two decades after the strike that police would be able to form unions – generally after World War II.

The gains made to protect officers from arbitrary and capricious hiring and firing, to insure their rights in regard to due process, and to bargain wages, hours and working conditions were hard won, and required general public approval to become reality.  Whether the police union representatives like it or not, associations of law enforcement officers are public employee unions, and subject to some of the same dynamics which affect other such organizations.  Ergo, here comes some unsolicited advice.

Keep your friends close and your enemies closer.  As of now most conservatives are inclined to support the police, and to support their use of lethal force.  [Salon]  As long as the “us versus them” mentality can be associated with communities of color, with poor people, and with those who might advocate for things like increasing the minimum wage, the conservative voices will be pleased to sing the praises of pro-police activities.    As long as the police are keeping such movements as the “99%” Occupy Whatever under control the powers that be will be supportive.

However, there’s a chink in the Kevlar.  The police are fine as long as they don’t ask for “exorbitant” overtime pay, or get negotiated pension benefits which appear “too large.” United Airlines is bristling at the pay for security personnel (police/firefighters) at the Newark airport. [ChAviation] Wages for Port Authority Police are under scrutiny as some veteran officers earn six figure salaries – one example, which is not identified as an outlier, given as $221,000. [NBC

What we don’t know is how much experience (seniority) this officer had, nor do we know the rational for running up all the overtime.  Medical expenses at home?  Several children to send to college?  Home mortgage payments? Yes, that $221,000 sounds “outrageous” when compared to the median income in a Newark household ($33,960)  but not quite so outstanding when compared to the U.S. median of $71,629.  It’s  even less so when we insert the cost of raising children from birth to 18 years of age in the northeast:

“In New Jersey and the rest of the Northeast, the cost is even higher. Families can expect to spend $261,000. After adjusting for inflation over 17 years, that amount grows to just less than $350,000.” []

It appears that some of those who are touting the efforts of police to secure places like bridges and tunnels, the World Trade Center, and other  New York City airports are loathe to pay the overtime negotiated for that protection.

Newspapers in Nevada were publishing overtime stories last year about corrections officers overtime pay [LVSun] and one news outlet placed a discussion of overtime pay framed as a “public trust” issue. [News8]  Once again there were brief mentions of police providing security for special events, and of seniority levels, but it’s hard to miss the point that these negotiated overtime payments might be considered “excessive.”

Rarely can one find articles, such as the one in the Chicago Sun Times which points out that suburban police and fire pension funds in that metropolitan area are “drying up.”  How much national publicity was given to the problems with the pension funds for New Orleans (LA) port police? [NOLA] Examples in California and Detroit made the national scene as cities faced bankruptcy – and it should be noted that the questions were framed as “either the police and other public employees should absorb the cuts so that (1) debts incurred by city governments could be paid off, or (2) tax cuts and loopholes could be maintained, or taxes could be kept lower than necessary to support the negotiated agreements – Did anyone speak to how closing tax loopholes or removing subsidies, or even raising taxes to meet expenses, might solve the problem?

Here again, we find the old canard that the only way to make a city budget balance is to do so on the backs of public employees – never, never on those who benefit from tax incentives, breaks, and subsidies, nor should any bondholders have to take a “hair cut” on ill-advised public projects.   Police spokespersons are gently advised to secure all the support they can, but be aware that the impetus for “transparency” for public employees’ salaries and benefits, and the publicized issues involved in pension benefits are motivated by a desire to play the “public employees at the public trough’” card with conservative voters.

It’s Us vs. Them when money matters.  Remember when teachers were highly regarded?  That would be before they decided that being hired or fired on capricious grounds wasn’t a good thing. Back in the Good Old Days when merit counted for nothing and New York City could shake down teachers for $120 for a job and $175 for a transfer.  {Bettman: The Good Old Days – They Were Terrible}  That would also be before the days when they decided that during a teacher evaluation the principal should actually appear IN the classroom and not conduct “humming bird evaluations” from the corridor.  That would also be before the days when teachers decided that their wages should allow them to pay off student loans for degrees costing about $9,139 per year, and still put food on the table, gas in the car’s tank, and dress “professionally.”

Now “unions” come under fire for “putting the needs of the teacher ahead of the needs of the students” for daring to declare that a salary schedule might need enhancement to meet the financial needs of the teachers in the system.  Once again, the question is framed NOT as how revenue might be generated to pay teachers what they are worth and what they need, but how demands for salary increases are jeopardizing the services the school can provide.  So-called ‘reformers’ come from the woodwork and every other conceivable direction to tell the general public that in order to ‘improve’ education the union must be broken, and teacher paid based on some matrix of quantifiable factors – as if education and schooling were one and the same.

The police unions are perilously close to the edge of the ‘public employees at the trough’ and ‘protectors of the incompetent’ charges when they negotiate wages and benefits.  Once more, when it’s a question of controlling the ‘great unwashed’ the conservatives are supportive, but when it comes to a question of paying for that ‘protection’ the conservatives are willing to slip easily into their Taxpayer Protector mode – not the regular garden variety taxpayer, but the tax benefited, bond holding, variety.

It’s almost guaranteed that when the police negotiators come up against those who want to protect bondholders and tax break benefited interests their status as “public servants” at servants’ wages will be inserted into the public discussion.  One of the banners so often waved in teachers’ faces is the canard that unions protect the incompetent, the extrapolation of this is, of course, do away with the union and the problem will be solved.

Policeman Police Thyself.   There’s a way to defend against the latter charge, but it requires some humility. The boisterous defense of police activities by  union leadership in St. Louis, Cleveland, and New York City, may ring well to the rank and file in the short term; however, it doesn’t take too much effort for the other shoe to drop – a public perception that the union is protecting incompetent officers.  Therefore, it might be recommended that:

Police union leadership should remind the public that the union is protecting the contract, not necessarily the actions of a few officers.  If the master agreement calls for a specific response to matters of suspension, demotion, or dismissal, then the union should insure the due process rights of its membership.  After all, the union is collecting dues, and those dues include defense of the person and the contract provisions.

Perhaps instead of caterwauling about an attack on the police from an uncooperative community, the union representative might want to say, “Officer X is facing some very serious charges, charges which could result in his suspension, demotion, or dismissal, and his union is tasked with defending his due process rights under our master agreement at every step in that process.”

If more comment is deemed necessary, then something like the following could be offered: “Officer X is guaranteed by our contract to have every opportunity to present his defense, and we will help him present it.” (It isn’t necessary for the representative to add in public —  “If he can dream one up.”)

The foregoing hypothetical allows the union to present its case as a defense of the contract provisions – and how many people don’t believe that contracts should be honored? – instead of taking the posture that even the most egregious actions by an individual union member should be fiercely defended in the public domain.

The right of public employees to organize, and to defend their membership was long in the making, and faces some important issues today as the anti-tax, pro-tax break and taxpayer subsidy, mentality holds serve in regard to community services.    The old saw might prove true some day: “Never  permanently antagonize an enemy, some day you might need him.”

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It’s Not Capitalism Anymore, and someone has noticed

Middle Class photo

Jim Tankersley has a series of articles published in the Washington Post which ought to do for Wall Street what Dana Priest and Ann Hull did for the Walter Reed Army Hospital and other veterans’ care centers in previous publications – expose problems at the core of the institution.

“In 2012, economists at the International Monetary Fund analyzed data across years and countries and concluded that in some countries, including America, the financial sector had grown so large that it was slowing economic growth. Using a different methodology, the most prominent researcher on the size and economic value of Wall Street, a New York University economist named Thomas Philippon, estimates that the United States is sinking nearly $300 billion too much annually into finance.” [WaPo]

How could this be? Isn’t the financial sector supposed to be the heart pumping capital through the veins of American enterprise? That would be capitalism, in which money saved (surplus) is channeled into investment (scarcity) and the machine moves smoothly.  What happened?  We’ve heard this before, from those economists who decry the inflation of the financial sector – that the firms (banks) are more interested in devising financial products for their own profit than they are in acting as brokers for financial markets between business and finance.  The result is a drain:

“In perhaps the starkest illustration, economists from Harvard University and the University of Chicago wrote in a recent paper that every dollar a worker earns in a research field spills over to make the economy $5 better off. Every dollar a similar worker earns in finance comes with a drain, making the economy 60 cents worse off.”  [WaPo]

Compounding the problem we have a consumer culture and institutional environment which abet this drain.  In a good old fashioned Capitalist system the financial sector is concerned with creating markets for investment, again that’s moving money (capital) from savings to scarcity.  However, when the financial sector changes function to moving money from scarcity (debt) to revenue for the firm the investment firm (bank) does well but the underpinnings of the economy are weakened.

Savings Rate

We’ve been keeping track of the personal savings rate since 1959.  Notice the general direction of the trend line since 1980.  The ratio of  personal income saved to our personal net disposable income has been tightening. We are, as a nation, saving less than we saved in the decades before 1980.  And, we’re accumulating more debt:

Household Debt trends

Note, again, that the accumulated liability for consumer debts started pulling up in the 1970s and 1980s.  When the savings rate is trending down and the household debt level is trending up how are the bankers and financiers to make money?

Debt is inherently risky.  So, securitize the debt and spread it around. And earn fees for the bank in the process.  In 1970 Ginnie Mae launched the first securitized mortgages, and in 1985 Wall Street securitized the first auto loans.  This situation expanded to include the packaging of credit card backed securities, home equity backed securities, collateralized debt obligations, student loan backed securities, equipment lease backed securities, manufactured housing backed securities, small business loans, and aircraft leases.

Once more with even more feeling: One man’s debt is another man’s asset. Now, one man’s debt can be magically transformed into the assets of several investors.  As long as Americans are willing to accumulate more and more indebtedness, the bankers will be equally willing to create “financial products” to securitize that debt and make money doing so.  The consumer culture and the institutions that profit from all the mortgages, auto loans, credit cards, student loans…. works perfectly well for the financialists.  Gone are the days when savings formed the basis for the health and wealth of Wall Street. Now it’s debt.  And, the corollary of debt: We have put about $300 billion per year too much into the Wall Street Casino.

Even our tax system permits this situation – we tax capital gains at 15% and productive work at levels above that. We have loopholes aplenty for writing off debts incurred by major corporations. We have a tax structure which depreciates work and products while appreciating financial products. If this isn’t bad enough, we’ve based the system on some very tentative valuations.

What is the “fair value” of any package of securitized assets?  This is not only an accounting problem. It’s also an issue for accountants.  [GSBColumbiaEdu pdf]  It’s also an issue for homebuyers who are now being told that the down-payment standards could be reduced to 3%. [MortgageNews]  What do the mortgage lenders want?  Their strategic goal:

“Maintain, in a safe and sound manner, foreclosure prevention activities and credit availability for new and refinanced mortgages to foster liquid, efficient, competitive and resilient national housing finance markets.”

What does Wall Street hear?  More people taking out more mortgages, which can be diced and sliced, warehoused, tranched into pieces, and sold as securitized asset based financial products.  So, what IS the value of one of these products?  After the Housing Bubble Debacle of 2007-08 the Federal Reserve created the Term Asset-Backed Securities Loan Facility which was supposed to help untangle the mess made by the Wall Street Casino.  Two new acronyms entered the financial vocabulary – TALF and CMBS (non-mortgage securities).  When the Office Monetary Policy studied the results of the program it found:

“In terms of benefits, the results point to substantially stronger effects at the market level than at the security level, which suggests that the impact of TALF may have been to calm investors, broadly speaking, about U.S. ABS markets, rather than to subsidize or certify the particular securities that were funded by the program.” [Campbell pdf] 

Okay, the investors felt better, more comfortable, and the government wasn’t at great risk, that’s the good news.  The bad news is that despite the best efforts of algorithm creating quants – there is still no valuation of ABS (asset based securities) which goes much beyond “what they’re worth is what someone is willing to pay.”  From the Campbell Study: “In addition, we find that the program screened out the riskiest deals but attracted somewhat riskier than average deals among the pool of potentially eligible securities.”

Thus we find ourselves with a tax structure which rewards investment gains over productive work, an investment system that rewards the sale of financial products derived from indebtedness, and banking institutions which make investors “more comfortable.” Top this off with  a population far more willing to spend than to save and there’s all manner of potential for yet another Casino Bust.

When does the indebtedness become unsustainable?  In order to create all the ‘wonderful’ products on Wall Street someone has to buy a house, purchase a car, take out a student loan, put items of the household credit card, lease some heavy equipment, lease an aircraft, take out a small business loan, or in some other way accumulate debt which can be transformed into an “asset.” What happens when the stagnation of wages becomes such that there is no more room in the family budget for more debt?

For most workers in the United States their wages haven’t moved significantly for decades.  In the old fashioned Capitalism vernacular, when labor markets tighten, wages will go up.  However, this hasn’t been the case for years. [HuffPo]

“… after adjusting for inflation, today’s average hourly wage has just about the same purchasing power as it did in 1979, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.” [HuffPo] [BLS]

Not to be a complete Grinch in the midst of everyone’s Christmas season, but to suggest that either savings or indebtedness (or both) can sustain a long term healthy growth rate in the U.S. economy is pure lunacy, unless wages and salaries make some significant gains.  Arguing that “we can’t afford” to increase the minimum wage because we’ll be “non-competitive” in world markets is essentially contending that it’s somehow better to risk ending up being nothing. 

The BLS report for December 2013 shows an average hourly wage of $20.35, and an estimated average hourly wage of $$20.74 for 2014.  Both of these numbers show less purchasing power than the January 1973 average hourly wage.  In the long view: Less purchasing power = fewer purchases = less indebtedness for large expenses = fewer asset based securities = less income for financiers, who for the moment give every appearance of believing that short term gains are preferable to long term losses.

If anyone is arguing that the income gap doesn’t really matter, and perhaps it’s just that some people are better at earning than others – and we shouldn’t punish success, then we ought to take a second look at what this philosophical perspective means for long term economic growth.

Income Gap

When more income is siphoned off toward the upper income earners, and the gap continues to expand, the obvious conclusion is that those who earn middle incomes are less likely to … and here we go again … spend money, have disposable income to spend, have the capacity to take out loans and mortgages…  For those who prefer numbers to charts, the Census Bureau has handy downloads.  In 1967 the top 5% had an aggregate of 17.2% of the nation’s income, and the middle category had 17.3%.  As of 2013 the top 5% had 22.2% and the middle category had 14.4%. (Table H2)

How is it possible to sustain, much less grow, an economy in which larger accumulations of income are consistently moving into the hands of fewer consumers?  It may be fine (for the financiers) for families to take on more debt to sustain a middle class lifestyle in the short run, but eventually the pinch has to be felt by the financialists who are benefiting from the situation.

It almost seems as if we have a financial system which has turned old fashioned Capitalism on its head – savings bad, spending good, indebtedness better; a financial system that is feeding off the debts of people who have less capacity to even become indebted as time moves on.  Instead of a vision of Capitalism writ large, we’ve settled for a myopic view of short term gains to satisfy an investor class moving ever so steadily away from the realities of our economic life.

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Filed under Economy, financial regulation, Politics

The Great Nevada Bundy Babe Battle


Assemblywoman Michele Fiore (R-LV4) will chair the Assembly Taxation Committee?  Sometime before the February 2nd opening of the Assembled Wisdom, Nevada Republicans need to get the clown car in operating condition.  Part of the reclamation project seems to be to explain the part where a person with tax liens gets to head a Taxation Committee.  She’s heading the Taxation Committee? She’s not heading the Taxation Committee? She’s not heading the Taxation Committee because there’s a GOP war on Women? She is heading the Taxation Committee because there’s no war on women, or she is heading the Taxation Committee because she can explain the tax liens? [Ralston]  [RGJ]

Those tax liens aren’t piddling, they add up to more than $1 million [[RGJ]  And, yes, she’s explained that an embezzling employee is at the root of the unfortunate matter – and there will be consequences (unspecified) — [CO] A list of the liens and release dates can be located here.  Scroll down and there’s another list of liens, some of which have not been released.  The Assemblywoman’s assertion that she is ‘all clear’ with the IRS indicates she might not be quite so entrenched as her compatriot Cliven Bundy in the Don’t Pay Taxes To the Occupying Government bunker — At least not so much as to Go Down Waving The Gadsden Flag before the almighty Government image she’d prefer during engagements with the Nevada GOP/Tea Party?

Fiore describes herself as a ‘health care industry CEO,’ of “Always There Personal Care,” and as manager/managing member of “Always There 4U LLC”, she’s also listed as once associated with Stage Left Productions LLC (now dissolved), and Galactic Pictures Corporation (permanently revoked). [NVSoS] Always There 4U LLC is listed five times in the Department of Health’s notices of investigations for deficiencies (2009-2014), and Always There Personal Care was the subject of two. [NSDH] Most were resolved without further action by the state agency.  Fiore may believe herself to be beleaguered by government red tape, but the record indicates she’s had relatively few and usually mild encounters with state regulatory agencies.

While her “anti-government” protestations may resonate weakly in terms of her actual business experiences, her propensity for “saying bad words” could push her into the Ira Hansen wing of racially repugnant Republicans, in the wake of the Bundy Battle her words were almost pure Limbaugh:

“At the station, Fiore continues her attacks on BLM agents, whom she called “Nazi-minded” bullies. During a commercial break, she criticizes government leaders for dividing America by race and political party. She uses Democratic Rep. Steven Horsford as an example, saying Horsford was the first person to accuse Bundy of being a racist on Twitter, while Horsford’s wife, an education scholar at UNLV, promotes the “negro student of America” in her writing.

“You talk about a racist household,” Fiore says later. “What if I went and printed an article saying the ‘white woman student of America.’ What would happen? I mean, we have Black Entertainment Television. What would happen if we started White Chick TV? Are you kidding me?” [LVSun]

Attempting to play the role of victim in a society beset with white privilege usually isn’t successful.  However, it may play well with the 16-18%:

“Overall, 79 percent of Americans in the poll said “racism is still a problem in American life,” while only 16 percent said it was not. Among white Americans, 77 percent said racism is a problem, with 18 percent saying it is not. In fact, 57 percent of Americans, including 58 percent of white Americans, said they know someone who is racist.” [HuffPo]

At any rate, the Nevada Republican Party members in the statehouse have until February 2nd to figure their messy leadership problems out, and more Nevadans will have time to calculate the damage some of these people can do before the 2016 general election.

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Filed under Nevada politics, Politics