"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Citizens United Decision vs F.E.C.’

Why Is the ACLU Helping The Richest Americans Buy Our Elections?

In Uncategorized on February 21, 2012 at 4:17 pm

Oldspeak: “Plutocrats come in Red and Blue. Elephantine and Asinine. You can bet your ass Newt Gingrich isn’t the only Presidential candidate with a Billionaire benefactor. Obama has them too, the difference is he’s not being called to account for it, he’s openly talked of raising ONE BILLION dollars to finance his reelection campaign. I ask you What’s democratic about that?  How does someone with the means to raise that sum of money represent the interests of all Americans? He doesn’t.  He represent the interests of his benefactors. As long as unlimited monetary donations from multinational corporations, foreign investors and god knows who else with millions to ‘contribute’ is allowed, plutocracy will be order of the day in the U.S. of A.  Need we any more evidence that the 2 party system has failed, and it hopelessly corrupted with money, greed, and cronyism? ‘The ACLU thrives on being attacked and sees itself as the last legal line of defense against state censorship. But an honest look in a mirror may reveal that its anti-censorship absolutism is helping the wealthy to eclipse and suppress—if not silence—political speech of millions of ordinary Americans.’ -Steven Rosenfeld

By Steven Rosenfeld @ Alter Net:

The American Civil Liberties Union has earned its reputation as the nation’s foremost legal opponent of government censorship and defender of First Amendment political speech. But increasingly, this national organization with 500,000 members and a $70 million annual budget has another legacy—helping the wealthiest Americans and institutions spend unlimited sums on elections.

This complex legacy follows a nearly four-decade history of filing briefs in the Supreme Court and lower federal courts, virtually all of them arguing that the door to censorship, via regulation of core political speech, must never be opened. But various forces in the courts, the political world, and inside the ACLU are converging that may prompt the ACLU’s national board to reexamine its hardened stance in a more nuanced light, just as it moderated its policy on public financing of elections soon after the Supreme Court’s controversial Citizens United ruling.

The pressure went up considerably on Friday, as two U.S. Supreme Court Justices said the Court should reopen Citizens United, as they suspended a Montana Supreme Court ruling that upheld the state’s century-old ban on corporate electioneering. Unlike the ACLU’s national office, which urged the Court to remove restrictions on independent—or non-candidate related—electioneering, the Montana ACLU argued this wasn’t about censorship at all, but preventing corruption and ensuring Montanans’ voices could be heard in elections.

“Montana’s experience, and experience elsewhere since this Court’s decision in Citizens United v. Federal Election Comm’n, make it exceedingly difficult to maintain that independent expenditures by corporations ‘do not give rise to corruption or the appearance of corruption,’” wrote Justice Ruth Bader Ginsburg, with Justice Stephen Breyer joining. A hearing “will give the Court an opportunity to consider whether, in light of the huge sums currently deployed to buy candidate’s allegiance, Citizens United should continue to hold sway.”

Two phrases in the justices’ statement may have particular resonance for the ACLU’s national board—the “experience elsewhere” and “corruption or the appearance of corruption,” which suggest constitutional issues apart from censorship. In Citizens United, the ACLU had argued that independent expenditures were the kind of “speech that lies at the heart of the First Amendment” and must not be censored.

According to Burt Neuborne, the ACLU’s former national legal director and now legal director at the Brennan Center for Justice, only one perspective matters to an organization that has weathered criticism for decades for defending unpopular people and causes: whether new facts from current events and recent changes in law demand a reevaluation of their position. As the two justices suggest, the 2012 presidential campaign, in combination with the Court majority’s recent aggressive deregulation of campaign financing, may be that spark.

The presidential campaign has seen what’s left of the nation’s campaign finance laws flouted in a striking way that cannot have gone unnoticed within the ACLU; it has revealed that critical rulings in Citizens United (and the D.C. Circuit Court in a ruling that followed, SpeechNow.org) were at best politically naïve constructions. This is because 2012’s electoral landscape is presenting free speech issues that are not about state censorship—but what American democracy should look like and how big money functions in it.

The ACLU was not responsible for the Supreme Court’s decision to expand Citizens United from a narrow case to one remaking big portions of campaign finance law. But like many times before, it urged deregulation of electioneering—which the Court’s majority did for independent expenditures. Just weeks later, an appeals court in SpeechNow.org drew on this ruling, allowing individuals and corporations to make unlimited contributions to political committees, so long as those groups only make independent expenditures and do not coordinate with candidates. That is how today’s super PACs emerged.

In Citizens United, the Supreme Court made a series of remarkable assertions. It declared that independent expenditures could not corrupt candidates, as they would be truly independent and operate apart from the candidates. But neither the Supreme Court nor the Speechnow.org court said how to avoid coordination, assuming the problem away. Everyone on the Court but Justice Clarence Thomas held that disclosure of spending was permissible, not recognizing that current disclosure rules allow donors to operate in the dark behind innocuous stage names. Like coordination, corruption was also dumbed down. Invoking the long-established doctrine that the only legitimate reason for regulating campaign funds is curbing quid pro quo corruption or the appearance of it, the majority watered this concept down saying a lot about what corruption was not, namely access, influence and ingratiation of candidates, but next to nothing about what quid pro quo corruption was, apart from buying votes. Against this backdrop, Justice Anthony Kennedy, writing for the majority, made the startling assertion that limitless independent expenditures in elections could not possibly cause the public to lose faith in our democracy.

Needless to say, his prediction has not been borne out by events. Recent nationwide polling has found 55 percent of Americans oppose the decision, and bigger numbers believe that their voices are diminished compared to big donors and lobbyists. It is not hard to see why the public is upset and discouraged. Presidential candidates’ former campaign staffers are managing the supposedly independent committees, mocking that supposed independence. By uniformly taking the low road, they complement the official campaign’s positive messaging showing further coordination. The top donors use the fiction of independence to ignore federal contribution limits and write million-dollar checks, including to political non-profits that do not disclose their names. To suggest that an individual or corporation writing six- or seven-figure checks to back candidates or parties does not expect payback is naïve, former political consultants say. Meanwhile, a voluminous record discussing independent expenditures, coordination and corruption was before the Court during its deliberations. Citing this record, Justice John Paul Stevens in his Citizens United dissent wondered how the majority could be so indifferent.

“On numerous occasions we have recognized Congress’ legitimate interest in preventing the money that is being spent from exerting an ‘undue influence on an officeholder’s judgment’ and from creating ‘the appearance of such influence,’” he wrote. “Corruption operates along a spectrum, and the majority’s apparent belief that quid pro quo arrangements can be neatly demarcated from other improper influences does not accord with the theory or reality of politics.”

These developments raise specific First Amendment issues that are not about state censorship of political speech, but about corruption and distortions of the democratic process. These issues have been noted not only on editorial pages and parodied on late-night TV, but from within the ACLU itself. The Montana ACLU affiliate weighed in before the recent Montana Supreme Court decision, taking the opposite view of the national ACLU office. And New Mexico’s ACLU chapter did not interfere this month as that state’s legislature passed a resolution calling for a constitutional amendment to overturn Citizens United.

Moreover, in recent weeks, a respected Second Circuit judge took issue with Citizens United in a concurring opinion in a case involving New York City’s public financing system. “All is not well with this law, and I believe it appropriate to state in a judicial opinion why I think this is so,” wrote Guido Calabresi, a U.S. Court of Appeals judge and former Yale Law School dean, in comments to late 2011 ruling. Calabresi’s remarks address the majority’s contention in Citizens United—which echoes the national ACLU’s view—that unfettered political speech regardless of the speaker is paramount. He began by quoting Luke 21:1-4.

As Jesus looked up, he saw the rich putting their gifts into the temple treasury. He also saw a poor widow put in two very small copper coins. “Truly I tell you,” he said, “this poor widow has put in more than all the others. All these people gave their gifts out of wealth; but she out of her poverty put in all she had to live on.”

Like Luke, Calabresi noted that the wealthy will drown out the political speech of poorer people by virtue of spending more to send a message—having a larger megaphone. Additionally, he said that such domination of the airwaves also “obscures the depth of each speaker’s views,” as one cannot tell if the voice being eclipsed is whispering, crying or yelling—conveying the intensity of their opinions. “And that is a problem of profound First Amendment significance.”

“There is perhaps no greater a distortive influence on the intensity of expression than wealth differences,” he wrote. “The wider the economic disparities in a democratic society, the more difficult it becomes to convey, with financial donations, the intensity of an ordinary citizen’s political beliefs. People who care a little, if they are rich, still give a lot. People who care a lot must, if they are poor, give only a little. Jesus’ comment about the rich donors and the poor widow says it all.”

In other words, in 2012, when supposedly independent super PACs and political non-profits are raising millions from wealthy individuals and corporations whose actions are coordinated in all but name only with the candidates, and disclosure by those political entities is untimely or non-existent, the nation is facing serious First Amendment issues that do not neatly fit the ACLU’s anti-censorship line.

Convincing the ACLU

The ACLU is a nationwide organization with independent affiliates in every state and Washington, DC, and a headquarters and national legal department in New York. Its board of directors has representatives from every state and from its 500,000 members. As such, it is one of the most powerful legal advocacy organizations in the country.

For decades, people inside and outside the ACLU have tried to get its board to moderate its campaign finance views. Since 1970, it has taken up the issue two dozen times. The key question, according to Neuborne, its former national legal director, is whether today’s rising calls to restrict the wealthiest Americans and institutions from spending unlimited money ‘independent’ of campaigns is just today’s version of censoring society’s latest villain, as the federal government once tried to do with Communists, Nazis, gays, minorities and pornographers—or is something constitutionally different going on in today’s deregulated campaign finance environment?

One of the ACLU board’s long-held assumptions, which was affirmed in the Supreme Court’s 1976 Buckley v. Valeo ruling, is that candidates and independent groups who spend their own money in elections constitute a form of free speech that must not be regulated. In Buckley, the Court held that a new congressional law’s limits on campaign spending by office seekers and independent groups were unconstitutional. It ruled, however, that campaign contribution limits were constitutionally permissible in the interest of preventing corruption or its appearance with candidates, an interest that candidate and independent expenditures did not prevent. Buckley’s framework has led to today’s billionaires writing million-dollar checks to the supposedly independent super PACs and political non-profits, and in turn, voters in 2012’s early presidential contests hearing their views dominate the airwaves and debate.

The ACLU includes Buckley on its list of its most important 20th-century victories. Moreover, in the 36 years since that case, with few exceptions, the Court and the ACLU board both have treated spending money in elections as the purest form of protected constitutional speech there is—not conduct that can be regulated. That is a key legal distinction. Other areas of First Amendment law are not this clear-cut and all kinds of speech are regulated without seeing censorship issues. That raises the question of why should political speech in elections be so black and white, or can it be balanced with other democratic interests?

The ACLU’s assertion that political messaging is pure speech whose regulation amounts to censorship infuriates not just state and federal judges but many democracy advocates, particularly those who believe big money distorts the process and acts to suppress the speech of people of lesser means.

“It’s not speech itself and it never has been,” said John Bonifaz, co-founder and director of Free Speech for People. “It is conduct not speech, and any regulation of spending of campaign money in elections is the regulation of the manner of speech, to ensure that anyone who has a 1000-megawatt bullhorn is not able to drown out anybody else’s speech.”

A series of former top national ACLU officials have tried to get the national board to change its position. In fairness, the board did change its policy in April 2010 after Citizens Unitedsaying that spending limits were permissible for candidates that took public financing. And its board, noting this was unprecedented in ACLU history, agreed that “reasonable” contribution limits were acceptable, although that has been settled law since Buckley. But these changes re-enforced laws established decades earlier. And on the key holdings in Citizens United, the board did not budge.

“You can be furious at guys like that, especially when they win,” said Neuborne, who now believes the ACLU national policy is on the wrong side of history and the Constitution. He went before the board to make that case after Citizens United came out, debating Floyd Abrams, a famous First Amendment attorney whose legal career has spanned defending the New York Times to shielding major tobacco companies from federal health regulations.

“Their trumping legal argument is that you have to make an overwhelming showing of need before they will sit still for censorship. And they say your overwhelming showing of need is that rich people have too much power in the society, and they are distorting the democratic process. Their argument is, ‘Look, there are a lot of rich people and a lot of them disagree. So if the rich people cancel each other out, what’s the big deal? All they do is fund democracy. People get more speech and the rich folks pay for it.”

That’s not all the ACLU’s board says, said Neuborne. “Second thing they say [is that] if you think that rich folk’s speech is skewed, you have to show me facts to demonstrate that. You just can’t tell me it’s a problem. Show me which election it has happened in. Show me where one side blew out the other side to the point where the other side wasn’t able to make its case to the electorate. You know what, I can’t make that showing. The closest it happened interestingly was Florida, when Romney outspent Gingrich five to one. I think it demonstrably changed the outcome of the election. But you cannot argue that national elections are shifted that way, because in national elections that parties are relatively equally balanced in terms of money.”

Indeed, 2012 is turning into exactly that kind of political arms race. While most of the early independent spending has been in the Republican presidential race, the Democrats are quickly falling in line. The Obama re-election campaign has said it would refer donors to a super-PAC run by a top ex-Obama campaign staffer—another instance of admitting that these PACs were anything but “independent” of the campaigns, the concern that Justice Kennedy turned a blind eye to Citizens United. In liberal circles, Credo Mobile, a phone company that has raised millions for progressive causes, said it too would form a super-PAC for the 2012 election. So has ActBlue, which has a traditional PAC that can donate to candidates and an independent super-PAC.

Neuborne knows American elections do not benefit from this spiral—which only elevates the role of wealthier participants at the expense of Americans of more modest means. The question is how to convince the ACLU board. It may have debated its response to Citizens United too soon, he said, noting that Abrams argued the organization would look foolish after siding with the Court majority in the case and winning—only to reverse its position. That, however, was a political argument, not a constitutional one. Neuborne said 40 percent or more of the board believe it is time to take a more nuanced view.

“Where the ACLU goes off the rails is that it forgets at some point that spending massive amounts of money ceases to be analogous to just pure speech and becomes an exercise in power,” Neuborne said. “I think that the ACLU is forgetting that the First Amendment is democracy’s friend, not democracy’s enemy.  And when it demonstrably hurts democracy there has to be something wrong with a policy that just digs in and says, ‘Sorry, the First Amendment made us do it.'”

The ACLU’s national press office declined to comment or make any attorneys available for this article. Calls and emails to ACLU litigators, current and former, who litigated many of its political speech cases before the Court also were not returned.

However, Neuborne is hardly alone in his analysis of how First Amendment fundamentalism can fray the fabric of political speech and democracy. Supreme Court Justices, starting with Byron White’s dissent at the start of the Court’s modern deregulatory regime in Buckley, and John Paul Stevens, whose 2010 dissent in Citizens United, catalogued the dangers of unregulated big money in elections.

“While it is true that we have not always spoken about corruption in a clear or consistent voice, the approach taken by the majority cannot be right, in my judgment, “Stevens wrote. “It disregards our constitutional history and the fundamental demands of a democratic society.”

Unlike the 1976 Buckley decision, which slowly transformed America’s campaign finance landscape over many years, the impact from Citizen United has come in barely two years. The Court’s majority in Citizens United did not anticipate these consequences. It puts those who argued with the majority—such as the ACLU’s national office—in an awkward place, because as new facts have emerged, so have nuanced political speech issues that cannot be adequately answered by saying censorship is the most important First Amendment issue.

And Citizens United may be headed back to the Supreme Court. On Friday, the Court issued a stay in a suit challenging Montana’s 1912 ban on corporate campaigning. The Court could overrule Montana without a hearing—citing the supremacy of the nation’s highest court over state courts. Or it could hold a hearing to re-evaluate parts of it in light of new facts and public perceptions.

Should the Court hear the Montana case, the ACLU board may be pushed to re-evaluate its policy. Whether it will remains to be seen. The ACLU thrives on being attacked and sees itself as the last legal line of defense against state censorship. But an honest look in a mirror may reveal that its anti-censorship absolutism is helping the wealthy to eclipse and suppress—if not silence—political speech of millions of ordinary Americans.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of “Count My Vote: A Citizen’s Guide to Voting” (AlterNet Books, 2008).

© 2012 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/154184/

Obama’s “American Jobs Act”: Why Less Is More Of The Same

In Uncategorized on September 15, 2011 at 11:51 am

President Barack Obama holds a copy of the American Jobs Act while announcing he is sending the $447 billion jobs package, his plan to create job growth, to Congress. (Photo: Philip Scott Andrews/The New York Times)

Oldspeak: “Look beyond the rhetorical wizardry.  What we got from Obama was a 2009 “Stimulus Light” proposal. This so-called “American Jobs Act” is 60% tax cuts (which don’t create jobs), half the size of the 2009 stimulus (that already wasn’t big enough to create jobs and had the NET EFFECT OF CUTTING JOBS), is too light on shovel-ready jobs (Construction and infrastructure jobs are long term. What is needed today is IMMEDIATE job creation.) Is too heavily weighted in favor of subsidies to the states (Local government laid off hundreds of thousands of workers since June 2009 despite the $263 billion in subsidies received) and does not go far enough in taxing the rich. Why is this man touring the country passionately selling a proposal that won’t work for the vast majority of the American people, and is basically another massive giveaway to the rich? Nevermind the fact that it doesn’t compel the banking cartels to lend the trillions they’re hoarding to small business owners which would create the conditions for job creation. Nor does it compel large multinational corporations to stop hoarding the trillions in tax savings they have stashed offshore to create jobs in the U.S. Obama has already bestowed the Corporatocracy with 1 TRILLION in tax cuts the past 2 years, why is he trying to give them more? Look no further than his list of campaign contributors. While the fact that legions of ordinary americans have contributed to him has been played up in corporate media, his biggest and most influential donors are wall street banks, hedge fund managers, media conglomerates, dirty energy conglomerates, big business interests, all denziens of the Corporatocracy. And what have the American people received in return? Toothless financial reform, expanded support for dirty energy policy, Business friendly health care reform, media and communications consolidation, weaker regulation, utterly ignored poor and working poor. Oh and 6 wars. Quid pro quo par excellence. More change I can’t believe in.”

By Jack Rasmus @ Truthout

On Thursday, September 8, President Obama proposed a $474 billion “Jobs Act.” What we got from Obama was a 2009 “Stimulus Light” proposal, with all the problems of the prior 2009 stimulus package in the form of inadequate magnitude of spending, wrong composition and targets and bad timing.

First, on the matter of the magnitude of spending in the proposal, some think it was bold. But put it in context; $447 billion just won’t achieve the job creation it claims. It’s once again too little for an economy the size of the US, for an economy in as deep an economic hole as it is and in an economy facing growing downward momentum at home in the context of a global economy also rapidly slipping.

In February 2009, President Obama proposed $787 billion in economic stimulus. Unemployment was about 25 million. More than two years later, after the $787 billion has been spent, unemployment (measured by the Labor Department’s U-6 rate) is still around 25 million. Why, therefore, should Obama’s latest proposals to create jobs, consisting about half the size of the 2009 stimulus, expect to create jobs when the larger stimulus did not?

Even more important than Obama’s Jobs Act’s insufficient magnitude, the composition is also seriously deficient – just as was the 2009 stimulus. Like the stimulus in 2009, it is once again overloaded in tax cuts. In fact, a greater percentage (60 percent) of the total Jobs Act is composed of tax cuts than was the 2009 stimulus (38 percent). Then and now, tax cuts simply cannot and will not create jobs, given the kind of “epic” recession in which the US economy now finds itself entrapped.

The 38 percent tax cut mix in 2009 amounted to about $300 billion in total tax reduction. That $300 billion followed a $90 billion tax cut less than nine months before in spring 2008. Another $50 billion in tax cuts was further added later in 2009-2010 in various bills and administrative actions. That’s a total of $440 billion in tax cuts. There’s more. Add to that $440 billion another $270 billion in Bush tax cut extensions in late 2010 for 2011, plus another $100 billion in this year’s payroll tax cut. Now, add the Job Act’s tax-heavy $270 additional billion. Now, we’re well over $1 trillion in tax cuts in just the past two years. And what’s been the result in jobs? Still 25 million unemployed today as in June 2009.

If someone needs still further evidence that tax cuts don’t create jobs in today’s environment, just step back a decade. In 2001-2004 George W. Bush passed another $3 trillion in tax cuts, overwhelmingly biased again toward the rich and their corporations in the form of capital gains, dividends, inheritance, business depreciation, and other corporate largesse. Over 80 percent of the $3 trillion went to the wealthiest 20 percent households and most of that to the wealthiest 5 percent and 1 percent. And what kind of job creation resulted? We had the longest jobless recession in US history up to that point. It took 46 months just to recover to the level of jobs we had before the first Bush recession in 2001.

Furthermore, most of the jobs that were created under Bush were in the finance and housing sectors of the economy at the time, which were both undergoing a boom due to speculative excesses before an eventual bust. The jobs mostly created in finance and housing had little to do with Bush’s tax cuts of 2001-2004, however. Instead, millions of jobs were being lost in manufacturing while the tax cuts were taking effect last decade.

In 2004, Bush also pushed through a bill to allow multinational corporations to repatriate their then $700 billion hoard of cash they were keeping offshore in their subsidiaries in order to avoid paying the US 35 percent corporate tax rate. The multinationals blackmailed Congress to let them pay only 5.25 percent instead of 35 percent. In exchange, they said they’d bring back the money (saving 29.75 percent for themselves) and use it to create jobs. Did they? No. They money brought back was used to buy back their stock, payout more dividends and to use for mergers and acquisitions that, in fact, resulted in fewer jobs. Now the same “game” is being proposed in Congress, except this time their offshore cash hoard is $1.2 trillion.

The historical record of the past decade is clear: tax cuts simply don’t create jobs, especially tax cuts for the rich and corporations. So, why has Obama given them $1 trillion in tax cuts the past two years and now proposes more?

But Obama’s once again tax-heavy proposal is not the only problem with his “Jobs Act.” The Jobs Act shares another deficiency with the president’s prior 2009 stimulus. It’s too heavily weighted in favor of subsidies to the states as well. The 2009 stimulus provided $264 billion in subsidies to the states. It was supposed to create jobs. It didn’t. Local government laid off hundreds of thousands of workers since June 2009 despite the $263 billion. What guarantees are there that this won’t be repeated when they’re given the added subsidies? Will they get the subsidy only if they first prove they’ve added the jobs? Don’t count on it.

Another problem with the “composition” of the Jobs Act announcement by the president is it once again repeats the promise of the 2009 stimulus that infrastructure spending will quickly create jobs. In 2009, about $100 billion was allocated to infrastructure-related spending that was supposed to create four million jobs. That didn’t happen. There were 6.4 million construction workers employed in June 2009. There are 5.5 million today. Nearly a million fewer construction jobs was the result. There just weren’t as many “shovel-ready” jobs as was claimed. Construction and infrastructure jobs are long term. What is needed today is immediate job creation. Infrastructure programs just won’t cut it, especially when they are of the minimal magnitude in Obama’s recent proposal.

Obama promised his proposals would focus on small business by subsidizing their hiring of workers for each job they create. But for small businesses to create jobs, it needs more than a partial hiring subsidy. It needs funds in addition to cover all the other costs of production. For that, small businesses need bank loans. And for two years now, they just can’t get the loans from the big banks. Bank lending to small businesses declined for 15 consecutive months after June 2009, and it’s not much better today. Obama and the Federal Reserve bailed out the big banks to the tune of $9 trillion in recent years, in the expectation they would start lending. They didn’t. They still aren’t. Like the big corporations hoarding their $2 trillion and not creating jobs, the big banks are hoarding their cash reserves as well and not lending to small businesses that might create jobs if they could get the loans. Obama would have done better to propose the federal government bypass the banks and directly loan to small businesses at 0.25 percent. After all, that’s the interest rate at which the Fed today “loans” to the big banks. No, I take that back. Actually it’s only 0.1 percent and then the Fed pays the banks 3 percent to temporarily park the free money with the Fed in the interim. What a deal: the Fed pays the big banks to take its free money.

In summary, what we got from Obama’s “Jobs Act” was more of the same in terms of poor composition (i.e. excessively tax cut heavy), poor timing (long-term infrastructure projects) and too little magnitude of spending in any event.

There’s no reason to believe that the Obama jobs package that repeats the problems of poor composition and bad timing of the 2009 stimulus – which didn’t create, although it may have saved some jobs – is going to do any better when it’s also half the size of the stimulus.

Of course, the proposed Jobs Act won’t pass anyway because the Teapublicans will oppose it. At best, they might try to cherry-pick out the business tax cuts proposed by Obama and then add even more tax cuts to the “Jobs Act” – a proposal which anyway should be appropriately renamed “The Business Tax Cut Expansion Act of 2011.”

Just a day before the president’s address, the Teapublican candidates gathered to hold their latest debate. They stumbled all over each other to see who could promise corporate America even greater tax cuts. Rick Perry even promised to end all corporate taxes. Rick Santorum promised to lower capital gains and dividends taxes to zero. Others proposed no income taxes whatsoever for earners of $200,000 income a year. Grovel for those campaign contributions, fellas. These same candidates, after proposing cutting hundreds of billions a year in tax cuts for the rich and corporations, will turn around and cry about the budget deficits and demand equivalent cuts in Social Security, Medicare and Medicaid to make up for their ever generous handouts to the wealthy.

But this kind of mercenary, Robin-Hood-in-reverse policy of “No taxes whatsoever” for the rich and their corporations is expected from the radical right. Yet, it seems Obama is being drawn into their tax-cut-for-the-rich frenzy with his proposal for yet another $270 billion in cuts. He just agreed, less than nine months ago, to give them $270 billion by extending the Bush tax cuts last December. Now, he proposes hundreds of billions of dollars more. This past year witnessed the president’s adopting their central agenda demand to cut deficits. Could he now be tailing the Teapublicans once again down the “Cut more taxes for Corporate America” road as well?

A real jobs program today would be proposals and programs to recreate, in 21st century form, a Works Progress Administration – paid for not by giving the rich and their corporations still more tax cuts, but by taxing their $2 trillion cash hoard, their $1 trillion in excess free Fed money bank reserves, their $1.2 trillion held in offshore subsidiaries and by taxing the more than $6 trillion they’ve all stashed away in their tax havens around the globe from the Cayman islands to the Seychelles to Vanuatu and, of course, Switzerland.

Politics in America today, sadly, is not about what will ensure true economic recovery and give the 25 million Americans a job. It’s about how to extend tax cuts for corporate America and its shareholder beneficiaries; it’s about how to ensure the Great American Tax Shift of recent decades is never rescinded and instead further extended; and it’s about how to make everyone else in American pay for their bailouts so that the corporations and wealthiest themselves do not have to.

Why The Wealthiest Americans Are the Real ‘Job-Killers’

In Uncategorized on July 20, 2011 at 9:00 pm

Train Chartering & Private Rail Cars

OLDSPEAK: ‘”It’s a beautiful thing, the destruction of words.’ –Syme (1984). Doublethink par excellence. ‘That the wealthy are “job creators,” and therefore have interests that must be defended by the public at large, is a talking-point that, however facile, is so popular it slips effortlessly from the lips of conservatives every day…It’s also complete nonsense; the opposite of the truth. Sure, the wealthy create a few jobs – people who offer exclusive services or sell them high-end goods. But the overwhelming majority of jobs in this country are “created” by ordinary Americans when they spend their paychecks.” -Joshua Holand. What a sad society it is where truth has so little sway in the course of its affairs. In this backward economic system, less consumption is seen as undesirable , even if it’s been established that perpetual ‘growth’ and ever-increasing consumption is unsustainable and life threatening our planet and everything on it. In this reality controlled society America’s bought and paid for ‘public servants’ are allowed to so brazenly propagate their overseer’s baseless propaganda and pass laws that benefit the few, with no challenge from its corporate consolidated and controlled journalists and news outlets. “Freedom is Slavery”

By Joshua Holand @ AlterNet:

That the wealthy are “job creators,” and therefore have interests that must be defended by the public at large, is a talking-point that, however facile, is so popular it slips effortlessly from the lips of conservatives every day.

It can be deployed for any purpose – not only in calling for more tax breaks for the rich, but also when opposing public interest regulation, consumer litigation and worker protections. Rep. Michele Bachmann, R-Minnesota, even used it to deflect attention from the “gay rehabilitation” services her clinic allegedly offers. When asked about it by ABC News, Bachmann merely acknowledged, “we do have a business that deals with job creation.” When pressed, she stuck with it: “As I said, again, we’re very proud of our business and we’re proud of all job creators in the United States.”

It’s also complete nonsense; the opposite of the truth. Sure, the wealthy create a few jobs – people who offer exclusive services or sell them high-end goods. But the overwhelming majority of jobs in this country are “created” by ordinary Americans when they spend their paychecks.

Consumer demand accounts for around 70 percent of our economic output. And with so much wealth having been redistributed upward through a 40-year class-war from above, American consumers are too tapped out to spend as they once did. This remains the core issue in this sluggish, largely jobless recovery. The wealthy, in their voracious appetite for a bigger piece of the national pie, are the real job-killers in this economic climate.

Don’t take my word for it. The Wall Street Journal reported this week that “the main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists” the paper surveyed. That jibes with what business owners themselves are saying. Last week, the National Federation of Independent Businesses released a survey of small businessmen and women that found widespread “pessimism about future business conditions and expected real sales gains.”

New York Times reporter David Leonhardt wrote this week that “We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making.”

The auto industry is on pace to sell 28 percent fewer new vehicles this year than it did 10 years ago — and 10 years ago was 2001, when the country was in recession. Sales of ovens and stoves are on pace to be at their lowest level since 1992. Home sales over the past year have fallen back to their lowest point since the crisis began. And big-ticket items are hardly the only problem.

Leonhardt cites worse-than-expected retail sales and a study conducted by the New York Federal Reserve Bank that found “discretionary service spending” – which excludes housing, food and health care – to have dropped 7 percent, more than twice the decline we saw during previous recessions.

“If you’re looking for one overarching explanation for the still-terrible job market,” Leonhardt concludes, “it is this great consumer bust. Business executives are only rational to hold back on hiring if they do not know when their customers will fully return. Consumers, for their part, are coping with a sharp loss of wealth and an uncertain future (and many have discovered that they don’t need to buy a new car or stove every few years).”

Average American households’ economic malaise started long before the current downturn, as those at the top started grabbing an ever-increasing share of the pie in the 1970s. These graphs, courtesy of Mother Jones, tell the tale:

(click for larger version)Discounting those in the top 20 percent of the pile – according to economists Emanuel Saez and Thomas Picketty it’s actually the top 10 percent – Americans haven’t seen their real incomes rise in the past 30 years.

Paul Buchheit, a professor with City Colleges of Chicago, crunched some numbers using IRS data and found that “if middle- and upper-middle-class families had maintained the same share of American productivity that they held in 1980, they would be making an average of $12,500 more per year.” In other words, because the share of income going to the top has increased so dramatically, ordinary people have $12,500 less in their wallets today. Studies have shown that when wealthy people grab more post-tax income they’re more likely to bank it than to spend it, so much of that $12,500 also represents lost demand, and hence less jobs. Wealthy Americans’ avarice is a job-killer.

American households compensated for their flat incomes first by sending millions of women into the workforce – the single-earner household is largely a relic of the past – and then by running up lots of debt. In the 1970s, Americans socked away between 8-12 percent in case hard times hit, but the national savings rate declined precipitously as the top earners started grabbing an outsized share of the nation’s income.

As a result, we were among the least prepared citizens in the developed world to handle the crash – we didn’t have a rainy-day fund put away.

 

 

(click for larger version)

Then came the Great Recession. The federal Reserve did a study in 2009 in which it went back and surveyed the same households that had been examined in a 2007 snapshot of consumer finances to see how they were faring during the recession. The study found that between 2007 and 2009, median family net worth fell 23 percent, from $125,400 to only $96,000.

Like income, that continued a longer trend that began as those at the top of the pile began grabbing an ever-greater share of the nation’s wealth. As Edward Wolff, an economist at NYU, noted, between 1983 and 2007, only those in the top 5 percent of the income distribution added to their households’ net worth (PDF). The rest of us tread water. Economists talk about a “wealth effect,” which simply means that when you have more wealth you tend to spend more freely. So, this concentration of wealth has also impacted demand.

None of this is particularly complex. In 1978, the top 1 percent of the ladder took in just under 9 percent of the nation’s income, leaving a bit more than 91 percent for the rest of us. In 2007, the year before the crash, they took in 23.5 percent, leaving just 76.5 percent for the rest of the population to split up.

They banked most of that income, whereas we would have spent it. The fact that we’re broke means that businesses are facing less demand for their goods and services than they otherwise would, and have less need to hire a bunch of employees. And that dynamic explains why it’s the wealthiest Americans who are the real “job killers.”