Blog

Dave Johnson

By Dave Johnson
Fellow with Campaign for America’s Future

People want the President to exert leadership to turn things around.

The oil leak. Unemployment. Credit card scams. Foreclosures. Predatory corporations. Environmental destruction. Global warming. Roads and bridges crumbling. Incomes stagnant. Schools getting worse. Companies moving overseas. Problem after problem.

People want to know, “Why doesn’t the government push BP aside and take over?” The answer is, “Government doesn’t have the resources to stop it.”

People want to know why the government can’t do more to help unemployed people, help with health care, help provide good educations, help with college, maintain the infrastructure, and all the other things that government does.

The answer, these days, is always, “Government doesn’t have the resources.” And that, in a nutshell, was exactly the plan.

We, the People no longer have the resources to solve our problems. We now must depend on and defer to the corporations and the wealthy few to make the important decisions and get things done instead of being able to decide and do on our own.

This is the legacy of 30 years of conservatism. They called it “starving the beast.” Reagan called it “cutting their allowance.” President Bush, told that his policies had turned the country back to massive deficits, said this was, “Incredibly positive news” because it will create “a fiscal straitjacket for Congress.” He came into office with a $236 billion surplus. His last budget left us with a $1.4 trillion deficit. “Incredibly positive news.”

They disemboweled the regulatory agencies. They “privatized” government functions and resources, letting a well-connected few profit at the expense of the rest of us.

The Reagan deficit plan was right there for everyone to see:
Step 1: Cut taxes to “cut the allowance” of government so that it can’t function on the side of We, the People. Intentionally force the government into greater and greater debt.

Step 2: Use the debt as a reason to cut the things government does for We, the People. When the resulting deficits pile up scare people that the government is “going bankrupt” so they’ll let you sell off the people’s assets and “privatize” the functions of government. Of course, insist that putting taxes back where they were will “harm the economy.”

Step 3: Blame liberals for the disastrous effects of spending cutbacks.

And here we are. Every time you hear someone say that we have to fight the deficit instead of getting things done that We, the People need done you are witnessing The Plan in action.

And now, government doesn’t have the resources to stop it.
NOTE: Part of the America’s Future Now conference in Washington D.C. from June 7-9 will be devoted to strategy on how the progressive movement can fight the deficit cutters. Speakers such as Van Jones, House Speaker Nancy Pelosi, Howard Dean, AFL CIO President Richard Trumka, Arianna Huffington will offer a build vision for how the progressive movement can rebuild America’s economy and put people back to work. Click here to attend.

***

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project and the “Virtual Summit on Fiscal and Economic Responsibility for People Who Did Not Wreck The Economy.” Sign up here for the CAF daily summary.

***

Johnson also is a fellow at the Commonweal Institute and a Senior Fellow at the Institute for the Renewal of the California Dream.

***

Follow Dave Johnson on Twitter: www.twitter.com/dcjohnson

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

According to a new CBS News poll 70 percent of Americans disapprove of how BP has handled the oil gush, compared with 45 percent who disapprove of how Obama has handled it. This could change in the days or weeks ahead if the spill continues to worsen and the White House looks and acts powerless.

The poll also points out a danger for Obama: Only 35 percent approve of his words and deeds so far during the crisis. He seems too willing to defer to BP executives, even as Bad Petroleum Ltd. tries to shift blame to Transocean Ltd., the rig operator, which is trying to put blame on Halliburton, which made the cement casings.

But it’s not just the oil gush. Most Americans continue to be livid at Wall Street executives and traders — for which they blame an economic crisis that’s cost many their jobs, savings, and homes — a crisis that’s still costing taxpayers a bundle even as the bankers are back to collecting huge compensation packages. Yet the President continues to consult and socialize with many of them. Inexplicably, the White House won’t go along with proposals by several Democratic senators to cap the size of the biggest banks (the only way to ensure they’ll never be too big to fail and their political power is contained), to resurrect the Glass-Steagall Act (except in its weaker “Volcker rule” form), or to force the biggest banks to do their derivative trading without the artificial support of tax-payer insured commercial deposits.

Most people are also furious that executives at Massey Energy failed to use mandated safety equipment and procedures that might have saved the lives of 29 miners. Where were the regulators? What does the Administration plan to do to the company or its executives?

Most Americans upset that the top guns at Anthem, WellPoint, and other health insurers are still hiking insurance rates. Why are these health insurers still immune from the antitrust laws? How can the Administration not blow the whistle on their current attempts blunt regulations that would cap their premiums?

Many are angry that the executives of credit card companies still charging outlandish rates on overcharges that are still hard to compute. What happened to the new rules that were supposed to stop this?

Most Americans who know about it are bothered that the managers of hedge funds and private-equity funds (the 25 richest of whom took $1 billion each last year) are taxed at only 15 percent because of a loophole in the tax laws that the Senate continues to protect.

You get my drift.

Yet the President is treating these corporate and financial executives the way he treats Senate Republicans. At most, he respectfully disagrees.

Respectful disagreement is virtuous in a democratic society, but so is appropriate indignation. Indignation signals to the public that social responsibilities have been breached, and thereby lends credence and authority to all those who are working toward them. Franklin D. Roosevelt had no hesitancy blaming the “economic royalists” — the rich bankers and executives who stood in the way of the New Deal.

Moreover, without indignation, the President opens himself up to libertarian critics such as Rand Paul, who oppose almost all government regulation (“What I don’t like from the president’s administration is this sort of, ‘I’ll put my boot heel on the throat of BP”), as well as right-wing opportunists who claim the President is pulling his punches because he receives campaign donations from oil companies.

Here’s Sarah Palin, of all people: “The oil companies who have so supported President Obama in his campaign and are supportive of him now — I don’t know why the question isn’t asked by the mainstream media and by others if there’s any connection with the contributions made to President Obama and his administration and the support by the oil companies to the administration [and] President Obama taking so doggone long to get in there, to dive in there, and grasp the complexity and the potential tragedy that we are seeing here in the Gulf of Mexico.”

It’s also important for the President to connect the dots — providing Americans a clear narrative for why government is so critically important. Corporations are organized to maximize profits, not to achieve public goals such as environmental protection, financial trust, safety, and so on.

Since Ronald Reagan first opined that government was the problem rather than the solution, right-wing Republicans have blasted all forms of regulation. Now we see the consequences of years of regulatory neglect.

The President has an opportunity now to express appropriate indignation and to assert the importance of reasonable regulation. He should waste no time doing so.

***

Cross-posted from Robert Reich’s Blog

***

Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.robertreich.org.

Dave Johnson

By Dave Johnson
Fellow with Campaign for America’s Future

Congress is a big FAIL on jobs and unemployment. The Senate is heading home instead of helping the unemployed, the House is FAILing on jobs unemployment and COBRA subsidies.

Congress says they are worried about the deficit, but the deficit was The Plan. It is right in front of your faces:

Step 1: Cut taxes to “cut the allowance” of government so that it can’t function on the side of We, the People. Intentionally force the government into greater and greater debt.

Step 2: Use the debt as a reason to cut the things government does for We, the People. When the resulting deficits pile up scare people that the government is “going bankrupt” so they’ll let you sell off the people’s assets and “privatize” the functions of government. Of course, insist that putting taxes back where they were will “harm the economy.”

Congress: If you are so worried about the deficit, why don’t you fix what caused the deficit instead of taking it out on unemployed people?

Anything else I write about this will quickly devolve into a post about setting up guillotines, and joining the Tea or Green Party.

Except the guillotines will probably be made in China.

If you are as mad as I am you might want to come to the America’s Future Now conference, where we are going to be talking about how progressives can get more done, June 7,8,9 in DC. Click here to see the agenda, then click here to register.

Update – In case anyone foolishly believed this was about cutting the deficit: House defies Obama, OKs F-35 engine funds. And not even a guarantee it will be made in the US!

***

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project and the “Virtual Summit on Fiscal and Economic Responsibility for People Who Did Not Wreck The Economy.” Sign up here for the CAF daily summary.

***

Johnson also is a fellow at the Commonweal Institute and a Senior Fellow at the Institute for the Renewal of the California Dream.

***

Follow Dave Johnson on Twitter: www.twitter.com/dcjohnson

Gilbert B. Kaplan

By Gilbert B. Kaplan
Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce

The outcome of today’s Security and Economic Dialogue (S & ED) talks in Beijing is discouraging for those of us who want to see an immediate effect on Main Street. No specific movement has taken place on currency issues. China’s President Hu says he will take action on currency, but he doesn’t say what action he will take or when he will take it. China’s currency is undervalued by about 40%. It is unlikely that anything he is even contemplating would close that gap. And while we wait for him to make up his mind, more jobs in the U. S. will be lost to China.

The United States is playing defense everywhere in the world. Militarily we are losing influence and appear to be losing wars. Diplomatically our powers of persuasion are waning. And in international trade, jobs are moving off-shore, we have no sustained manufacturing policy, and the production sectors in other countries’ economies are growing faster than ours.

There is certainly a great effort to solve the military and diplomatic problems, but what are we doing on trade? President Obama is aware of the issue, but the solutions are hard to find and are not being articulated. To me, a large part of the problem is that industrial growth in this country, indeed what used to be called industrial policy, takes a second chair to almost every other policy in Washington. The biggest example of that right now is this failure to address currency undervaluation in China, in a forthright and immediate fashion. It has now been years since the problem has been identified.

When I served in the United States government, I heard regularly that we could never deal with the Japan trade issues aggressively because we needed our military bases in Japan in order to stand up to the then-Soviet Union. Now we hear we can’t stand up to China because we need their help on Iran and North Korea or on global warming issues.

But we can’t keep paying for military and diplomatic victories–assuming we are even achieving these–by trading away our economic prowess. Put simply, the cost is too high and we don’t have enough chips left. As Clyde Prestowitz puts it in his new book, The Betrayal of American Prosperity, “the United States fell into the habit–and the addiction continues today–of making economic concessions in order to obtain geopolitical objectives.” He also notes that the blind adherence to laissez faire economics and trade policy was not the way we became a great power and world technology leader. Indeed, the time when America emerged as a world leader–broadly the beginning through the middle of the twentieth century–was when the U. S. government intervened in the economy and actively supported U. S. manufacturing.

Why aren’t we able or willing to do that today? I think the biggest single reason is the failure of the policy community to come up with a sustained and powerful rationale for doing so. There are voices out there calling for this renaissance: Prestowitz, many elected representatives on Capital Hill, Leo Gerard and other union leaders. But for every one of these there are more on the other side, repeating stale mantras calling for more work on the Doha Round, saying we should only talk softly to China while they continue to engage in mercantilist policies, and standing up for a trading system that is not reciprocal.

What we need is a renaissance of American production. We need to make things in this country and balance the terms of trade or our future, and even more our children’s future, will be very dim. As a country we will go further in debt and we will not have the productive capacity to work our way out of it.

How do we create this renaissance? First, we need to create a sustained policy dialogue that will challenge the current assumptions and develop alternatives. To this end, I plan to sponsor a Conference calling for the revival of American manufacturing which will meet in early fall, bringing together the key players on the issue, companies in the U. S., trade associations concerned about this issue, labor leaders, and policy and legal thinkers. This will be under the rubric of the Committee to Support U. S. Trade Laws, an organization devoted to keeping American trade laws strong, of which I am the President.

As part of this effort, we are coming up with new legislation which will strengthen the U. S. trade laws, particularly in the area of ending evasion and fraud. It is amazing that the U. S. has allowed foreign producers to take advantage of weaknesses in enforcement powers under these laws for so long.

The conference and our policy analysis needs to lead into 2010 House and Senate elections, and make it clear that, quite simply, we are not going to take it any more. The loss of jobs and manufacturing needs to be an election issue. We cannot walk away from manufacturing and remain any kind of great power in the future. Candidates who support this goal of returning production to the U. S. should be supported by the American electorate. Those who soft pedal it should not. Indeed this was a key issue in the special election in Western Pennsylvania in which Mark Critz was elected to John Murtha’s seat, and where he stood up strongly against the off-shoring of U. S. jobs.

Making manufacturing a sacrificial lamb has got to come to an end as part of the 2010 elections.

***

Mr. Kaplan is the Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce and he is currently a partner in the international trade firm of King & Spalding in Washington, D. C. He filed the first successful anti-subsidy case by any U. S. industry against China, which led to large anti-subsidy duties on imports of Chinese pipe into the United States in 2008. Mr. Kaplan can be contacted at gkaplan@kslaw.com.

***

This piece was first published on The Huffington Post

James Parks

By James Parks
AFL-CIO Senior Writer

The U.S. House decided not to vote on [1] the jobs bill Friday —and that’s really bad news for America’s jobless workers, especially the millions of long-term unemployed. They desperately need the jobs bill because it extends unemployment insurance (UI) for those who have been without a job for 26 weeks or longer. And while members of Congress head home for the Memorial Day holiday, they will have to explain to their constituents why they didn’t vote on a bill that would [2] create badly needed jobs—but managed a vote that would give them time-off around the Memorial Day weekend.

Without passage of the bill, more than 8 million people will exhaust their benefits by the end of the year, leaving their families with no money for life’s basic necessities such as food and shelter, Economic Policy Institute ([3] EPI) economist Heidi Shierholz predicts.

EPI estimates that the bill’s package of aid to states, infrastructure projects, extension of UI and COBRA benefits, creation of summer jobs, loan guarantees for small business and other provisions will help save or create more than 1 million critically needed jobs.

The [4] EPI report notes that not only will the UI and COBRA extensions benefit “the nearly 10 million Americans who have lost their jobs and are receiving unemployment compensation while they look for work,” but the safety net spending also will benefit “the economy as a whole by circulating cash into local communities and helping businesses avert further job cuts.”

In an economy that is not creating new jobs, extending long-term unemployment benefits is not only the humane thing to do, it makes good economic sense, says Shierholz. She and several labor economists discussed the nation’s long-term jobless crisis yesterday during an EPI forum, “Long-Term Unemployment: Causes, Consequences and Solutions.”    

Congressional Republicans are wrong when they say UI prolongs joblessness, said EPI President Lawrence Mishel. It is “distressing” that anyone would even question whether unemployment insurance should be extended, he says.

Mishel said research shows that extending jobless benefits for a year could create or maintain about 800,000 jobs. But the current method of doling out the extensions in “dribbles a month at a time” is doing little to create jobs, he says.

Nearly half—46 percent—of all unemployed workers have been out of work for six months or more—some 6.7 million workers. That is the highest number of long-term unemployed since the 1930s Depression, says Shierholz.

It’s good news that the economy added 290,000 jobs in April, but at that rate, she says, it would take five years just to get back to the levels before the recession began in 2007.

A report distributed at the forum by the National Employment Law Project ([5] NELP) found that a severely depressed job market—not unemployment insurance—is the cause of long-term unemployment. With 5.6 workers for each available job, odds are slim that a worker will be able to get a job quickly, the report says.   

Unemployment insurance also is a fiscal stimulus for the economy, says Harvard University economist Raj Chetty. Jobless workers spend the money they receive for essential items—food, college tuition, etc. This consumption helps stabilize the local economy in the communities where these workers live.

Chetty said his research shows the median savings for an unemployed family is less than $250. That means the family needs more income to pay bills that you can’t cut back on, like mortgages and utility bills. Because they are unemployed, they can’t get credit to borrow the money so they cut back on other items such as food, medicine and other items without a fixed cost. So, says Chetty, UI returns far more to the economy than it costs to provide it.

The NELP report also points out that UI enables families to maintain their savings and avoid severe financial hardships. And with long-term unemployment at such high levels, extending benefits would be critical to preventing poverty and even greater economic hardship for the unemployed.    

Jesse Rothstein, chief economist at the U.S. Department of Labor, and Columbia University economist Till von Wachter also spoke at the forum.

***

Re-posted from the AFL-CIO Now Blog 

Gilbert B. Kaplan

By Gilbert B. Kaplan
Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce

Corporate citizens like Apple have a greater responsibility than just making money for their shareholders. They have a responsibility to the future of this country. Given the problems that are occurring at the Foxconn plant where they have been subcontracting iPad production, they should fulfill their responsibilities and move the production of the iPad back to the United States.

Let’s first look at what’s gone wrong at Foxconn, the sprawling subcontracting plant where iPads and other high tech products are made in Shenzhen, north of Hong Kong. Let’s look at the most fundamental point first, at least as it relates to the United States. That is that the workers at Foxconn’s plant are paid $130 a month. Assuming that they work four fifty hour weeks a month, this translates to a wage of 65 cents an hour. That is basically a slave labor wage, at least as compared to the wages in western markets where the iPad is sold. How can we continue to tolerate a trading system that not only allows this, but in fact encourages it? It is true that workers in China seem to want these jobs because the alternative is even worse, but even that conclusion has now been thrown into doubt. If it’s such an ideal career path, why have ten workers thrown themselves off buildings at the Foxconn plant (nine died and the other suffered severe injuries), why have their been reports of security guards abusing workers, and why has the work been described as relentless, as “making people numb,” as turning them into machines?

It is a scandal that this is where the high tech goods that people across America are enjoying are being made. And Apple does not need to make them there. The classic economic argument that the very low wages are economically necessary for a product like the iPad simply makes no sense at all. iSuppli, a well respected international economics firm, estimates that the cost of manufacturing including labor in the iPad, is about $10 in a product that retails for about $600, in other words less than 2% of the price. And the profit Apple makes on the iPad is over $300 an item. Even if this $10 manufacturing cost (which includes such other things as factory overhead and energy costs) were doubled or tripled or quadrupled by paying a U.S. worker a reasonable wage and helping restore the U.S. economy, Apple’s profits would still be enormous.

About 100 years ago Henry Ford realized you cannot have a sustained industrial economy if the people who make goods don’t have enough money to buy them. So he paid his workers enough money that over time they could buy his cars, buy their homes and move into the middle class. Apple, now the largest technology company in America, is trying to squeeze every penny it can out of the U.S. consumers, and give nothing back, not even a manufacturing job in Silicon Valley or somewhere else in the United States for people making the iPad. 65 cents an hour is a better wage from their point of view. I’m a lawyer and I like to make a good income. I guess I should try and figure out how to pay my employees 65 cents an hour too.

One of the saddest footnotes, to me, in the whole Foxconn suicide story came from a nonchalant comment made by one of the Foxconn employees who an AP reporter interviewed next to the company swimming pool. The pool was supposedly built for the workers. But the worker commented that the pool closes at 9 pm, and she gets off too late to ever use it. It was sad both because this is just part of the whole Foxconn picture, unending routine, depersonalization, and migrant workers coming to Shenzhen with no way out. But it was also sad because it appears that Foxconn has built a Potemkin village, a fake façade, to appeal to U. S. outsourcers and U. S. journalists, and until recently, we all bought it.

***

Mr. Kaplan is the Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce and he is currently a partner in the international trade firm of King & Spalding in Washington, D. C. He filed the first successful anti-subsidy case by any U. S. industry against China, which led to large anti-subsidy duties on imports of Chinese pipe into the United States in 2008. Mr. Kaplan can be contacted at gkaplan@kslaw.com.

***

This piece was first published on The Huffington Post

Leo Hindery Jr.

By Leo Hindery Jr.
Chairman, U.S. Economy/Smart Globalization Initiative at the New America Foundation

Like so many who worked to defeat the Republicans in November 2008, I was convinced that despite the nightmarish economy we were about to ‘inherit’ in January 2009, in the process we were going to be given a once-in-a-lifetime opportunity. It would give government back to the middle class and throw out the 30 years of laissez faire financial regulatory practices that had almost single-handedly destroyed our economy, left us with greatest income inequality ever, and saddled future generations with crushing federal indebtedness.

The easiest target, and the one I was convinced we would tackle first, was Wall Street: the profit-driven, greedy, selfish institution that, with its unbridled compensation practices and current light-touch regulatory regime is, I truly believe, behind almost every major societal and economic ill that has befallen the United States since 1980.

I knew we couldn’t change Wall Streeters, but when it came to reining them in, properly regulating them, and, in some cases, punishing them, it was going to be like shooting ducks in a barrel. All the pain they had caused was obvious, and the ‘evidence’ even then was laid out more clearly than in a Law & Order episode. And we would be finished early in 2009, for sure.

Well, as Pogo said in the long-ago comic strip, “We have met the enemy and he is us.” We have already let Wall Street off the hook, as they say, for fully a year more than I ever thought possible, because of apologists for Wall Street within both the White House and Congress. But even more concerning, depending on how the upcoming House and Senate conference on financial regulatory reform legislation turns out, we may be about to give the Street ‘soft-touch’ regulatory reform that it will laugh about — and again run to the bank with — for at least a generation.

Once you’ve missed some or all of a God-given major regulatory reform opportunity, political exhaustion sets in and abusive practices become even more abusive and embedded. In the specific case of Wall Streeters, if we miss ‘getting’ them now, as they say, these greedy guys will simply get greedier and their practices more harmful as their securities become ever more complex and thus beyond any reasonable regulatory oversight capability.

As sort of a ‘canary in the coal mine’ to larger financial reform, we’ve seen on the relatively simple issue of trying to reform the abusive tax treatment of “carried interest,” which costs the Treasury $10 to $12 billion per year, just how disingenuous, misleading and vile the anti-financial reform crowd can be. Thus it comes as no surprise that the very same tactics and in some cases, even the very same lies, which have been used over the last nearly four years to push back on carried interest reform have now been embraced by many of the Republicans who just voted against the Senate’s finance reform bill. And the similarities between the two efforts will be even more apparent in coming weeks as the actual reconciliation with the House version takes place.

For example, last Thursday, Senator Richard Shelby (R-AL), ranking member of the Senate Banking Committee, said, with regard to the Senate Bill, “I cannot support legislation that threatens business conditions and threatens job creation.” On the very same day, May 20, the President of the grossly self-serving Private Equity Council said that any change in the taxation of carried interest would “hurt those companies that are most desperately in need of capital to sustain or create jobs.”

This is such B.S., as neither overall financial reform nor reforming carried interest has anything at all to do with ‘job creation,’ and it is unconscionable to threaten the American people this way. At the onset of this Great Recession, which we now know was brought on mostly by Wall Street and investment excesses, the number of real unemployed Americans was 16.8 million — the number today is 30.3 million, an increase of 13.5 million, and we are ‘short’ 22 million jobs in order to be at or near full employment. Substantially and quickly reforming the villain that largely caused the Great Recession is the sine qua non to creating those 22 million jobs, not the other way around, as these fellows falsely insist.

The next several weeks are when the substantial financial industry reforms that were promised in the 2008 presidential campaign will come to pass — or not. There will be at least seven ‘indicators’ of who won in conference, and pray God, it isn’t, as it was in 1999, Wall Street and, to steal a phrase from President Obama, its “hoards of lobbyists”, which have already spent an unbelievable $1 million per Member of Congress (more than $500 million in total!) lobbying on these issues.

Specifically, we need to see:

As proposed by the House, the consumer protection reform goals met through a stand-alone agency (the “Consumer Financial Protection Agency”) subject to annual budget appropriations by Congress, rather the Senate’s weak alternative of a consumer protection bureau within the Federal Reserve. (This has everything to do with foxes, chickens and henhouses, and the idea of housing consumer protection within the ineffective and uninterested Federal Reserve needs to fail.)

Ideally, no compromise, least of all by the administration, on Senator Lincoln’s (D-AR) requirement that big banks spin off their trading in swaps into separate subsidiaries. But if the Senator fails, and the strength of the opposition within the administration suggests sadly that she will, then at least the House version of the so-called “Volcker Rule” has some teeth, whereas the Senate’s (which is Geithner’s) version calls for nothing more than a namby-pamby “period of study”.

No ‘shielding’ of auto dealers from oversight by the new consumer agency. The House is just wrong on this.

As proposed by Senators Cantwell (D-WA) and Feingold (D-WI), and others, no loopholes when it comes to regulating the trading of derivatives.

Application of the concept of “insurable interest” to all credit default swaps, together with the outright barring of “naked” credit default swaps. Regarding the latter, just as you can’t take out a life insurance policy on a stranger, you shouldn’t be able to use swaps as a form of ‘death insurance’ to bet that an asset or financial activity will fail.

No compromise when it comes to insisting that “failing” financial institutions be reviewed by a special panel of bankruptcy judges. (There is no good reason for the administration to be resisting this, and they shouldn’t.)

Some restrictions on excessive compensation overall and especially at “failing” institutions, to absolutely include the ‘clawing back’ of ill-gotten individual earnings. If not now and not in this bill, then when and where?

Wall Street is desperately in need of reform, yet, because of the ways it compensates itself, it is incapable of self-reform and fairness. We know from countless examples its self-serving (and selfish) tactics, we know the harm it has done, and we know the even greater harm it can do if left unchecked.

President Obama needs to vigorously and resolutely weigh in on the House-Senate conference efforts and make sure that the bill that comes out of the reconciliation process reflects the results and values that he talked about during his campaign — he simply cannot leave it to Wall Street and its industry lobbyists, to the ‘diluters’ and ‘over-compromisers’ on Capitol Hill, or to the Wall Street apologists within his own administration and hope that Congress produces strong financial regulatory reform legislation. Opponents of reform learned years ago, more than proponents ever have, that ‘in conference’ is where reforms can easily die (and greedy guys can win even more).

***

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.

***
This piece was first published on The Huffington Post

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

Based on John Kerry’s 2004 declaration that “I actually did vote for the $87 billion before I voted against it,” you could credibly argue that the Massachusetts Democrat is the founder of modern political flip-flopping — the James Naismith of the political world’s most dazzling sport. By that metric, though, you would also have to acknowledge that Kentucky Republican Sen. Mitch McConnell is the game’s Michael Jordan.

As the upper chamber’s GOP leader, McConnell backed the Wall Street bailout in 2008, calling it “one of the finest moments in the history of the Senate.” A year and a half later, he was telling reporters that he vehemently opposes bailouts of big business.
Now, just weeks after that textbook “for-it-before-against-it” feat, McConnell and his Republican cohorts are leaping past the Kerry-inspired fundamentals. Determined to pull off an all-star caliber act of “for-it-against-it-for-it” acrobatics, the GOP is pushing a bailout for yet another big business: the Oil Industry.

True, we haven’t heard that word — “bailout” — during the Gulf disaster, which the government calls the worst petroleum spill in U.S. history. But we have heard a lot about the oil industry’s “liability cap” — a term that is just another synonym for “bailout.”

See, someone is going to bear the massive cost of damage to the Gulf Coast economy. The lost wages, sales and revenues will be borne by either A) fishermen, motel owners and other small businesses whose livelihoods are being choked in oil plumes, B) taxpayers whose cash would finance disaster aid and victims’ benefits or C) oil firms whose rig caused the catastrophe in the first place. In this particular calamity, a bailout would permit C to pass off major portions of the economic cost to A and B. 

Which, of course, is precisely what existing liability caps are designed to do. 

That’s right, under current law, “Oil companies face unlimited liability for the cleanup costs of an offshore spill, but their liability for economic damages to affected communities is capped at $75 million,” reports Congressional Quarterly.

Considering the fact that oil-spill costs can far surpass $75 million, this is the old “too big to fail” idea propping up the oil companies. Applied specifically to the Gulf cataclysm, the statute suggests that the national interest is best served by having taxpayers and communities foot the bill for the destruction rather than having companies like British Petroleum suffer the balance-sheet pain of paying the full damages. 
In response, Democrats are proposing sensible new legislation to eliminate the cap and reaffirm the “polluter pays” principle. As President Obama’s associate attorney general told Congress this week, “We don’t think there should be an arbitrary cap on financial liability.”

Yet, McConnell apparently does. Appearing on “Meet the Press,” the Republican leader, who weeks ago railed on “guaranteed perpetual taxpayer bailouts,” not only refused to support eliminating the liability cap, but warned of “the danger of taking the cap too high” — in effect, opposing even moderately reducing the size of the bailouts that the cap inevitably creates.

Obviously, the GOP is trying to help its oil industry benefactors stall for time. As Sen. Bernie Sanders, I-Vt., said in chastising the obstructionism, “A year from now, the television cameras will be gone, and it will be a fisherman who’s trying to file a claim and he’s going to be by himself” with no means of redress.

That’s the Republicans’ unfortunate goal, and because of the GOP’s intransigence, prospects for the Democrats’ legislation remain cloudy. What’s clear, however, is McConnell’s place in the Flip-Flopping Hall of Fame. His spectacular contortions have earned him a hallowed spot in the building’s brand new Bailout Wing. 

***

David Sirota is the bestselling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008). E-mail him at ds@davidsirota.com or follow him on Twitter @davidsirota. This is his latest column for Creators Syndicate.

Bill Lucy

By Bill Lucy
President, Coalition of Black Trade Unionists 

Don’t pity Rand Paul, who pleads he’s not the civil rights bogeyman that his own words have exposed him to be. Paul, the new prince of the Tea Party movement and the Republican Senate candidate in Kentucky, got in hot water last week when he said private businesses shouldn’t be forced to adhere to civil right rights laws. 

Even though Paul quickly backpedaled from his bigoted remark, I just don’t buy it. Based on Dr. Paul’s previous writings on civil rights, his comment was not a benign slip of the tongue. 

For me, Rand Paul epitomizes what I would call the “rise (or return) of the Rollback Movement:” the Tea Party zealots who want to ‘take back their government;’ Arizona’s far-right Legislature that passed a hateful immigration law that blatantly discriminates against people with brown skin; the Texas State Board of Education that now requires students to study Confederate President Jefferson Davis’ inaugural address [to secede from the United the States of America!] and to study the “contributions of Confederate generals.” 

What binds these groups together is a passion and determination to rollback history and shift the burden of their economic and cultural insecurity onto people of color striving for a more tolerant, inclusive and equitable America. 

This Rollback Movement recites the coded buzzwords spewed by conservative pied-pipers like Glenn Beck, Rush Limbaugh and Sarah Palin. All the while, mainstream media rush to turn xenophobic noisemakers like the Tea Party into political celebrities. As a result, new dimensions of the economic crisis go unreported or get marginalized. 

For example, last Friday (May 21), The Washington Post gave Rand Paul’s controversial remarks front-page coverage. Yet, the same day, the Pulitzer Prize-winning newspaper totally ignored the release of a stunning new report that reveals the wealth gap between blacks and whites has more than quadrupled over the course of a generation from $20,000 to $95,000. But the study by the Institute on Assets and Social Policy at Brandeis University did catch the attention of James Parks on the AFL-CIO’s blog. According to the study: 

African American families have fewer economic resources to fall back on during this economic crisis than do white families, mainly due to discrimination and tax policies that favor the rich.

In fact, a typical white family is now five times richer than its African-American counterpart of the same class.

That means blacks had little or no money to start businesses, send children to college or ensure a secure retirement, the authors say.

Black households have also been dealt another wealth-building blow in the shrinking part of the workforce that is unionized: 

In 2009, black union membership plummeted by more than 200,000, constituting 27 percent of the total union jobs lost and more than double the share of black workers in unions (13 percent.)

This disproportionate erosion of black union jobs means African-American workers – already saddled with a steep wealth deficit – will lose health care coverage for their families, pension income for their retirement and a nest egg to help their children achieve some level of financial security. 

That’s why with the economy barely creeping back to life, it’s imperative that workers of color have equal access to jobs that compensate them fully and fairly. Otherwise, the racial income and wealth gaps will only deepen and multiple over generations. 

Congress can help shape the inclusive economy we must build to ensure shared prosperity across lines of class, color and gender. A crucial step in that direction would be passage of the Employee Free Choice Act, which would empower workers to join unions and demand fair pay without intimidation or retaliation. 

I’m hopeful President Obama will champion this vital bill as he fine-tunes his strategy to tackle the jobs crisis. Then let the Rollback Movement confront an energized and multi-hued progressive movement. 

***
In 1972, William Lucy founded the Coalition of Black Trade Unionists (CBTU), an organization of union leaders and rank-and-file members dedicated to the needs of black and minority group workers. Lucy, who served as International Secretary-Treasurer of the American Federation of State County and Municipal Employees (AFSCME) for nearly 40 years, also co-founded the Free South Africa Movement. This grassroots campaign sparked widespread opposition to apartheid in the U.S. When South Africa conducted its first post-apartheid elections, Lucy served as a monitor with the AFL-CIO delegation. In November of 1994, he became the first African American to be elected president of Public Services International (PSI), the world’s largest union federation. A year later, the AFL-CIO appointed him to its executive council. In addition Lucy served on the boards of directors of civic groups such as the African America Institute, Americans for Democratic Action, and the Center for Policy Alternatives.