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Mike Lux
Co-founder and CEO, Progressive Strategies

Readers may remember my last, shall we say, dialogue with the great Republican thinker Todd Akin. Akin is rapidly becoming one of my favorite Republicans because he articulates the party’s true positioning on issues so well. He has been back in the news recently with this gem of a quote about student loans: “America has the equivalent of the stage-three cancer of socialism because the federal government is tampering in all kinds of stuff it has no business tampering in.” While Mitt “Etch A Sketch” Romney and other Republicans are back-pedaling as fast as they can on the student loan issue to make it sound like they don’t want student loan interest rates to go up, Todd Akin and the other right wingers who control the Republican party are digging in, questioning the whole idea of whether the government should even be involved in student loans.

Please, keep speaking out, Congressman. Your country, your Party, and my Party especially all need you to keep making clear the true Republican position on student loans.

There couldn’t be a clearer distinction between Republicans and Democrats, between conservatives and progressives than on this issue. What Democrats, progressives, and incidentally the American people believe is that one of the best ways to rebuild the great American middle class is to invest in our young people’s education through both high-quality K-12 public education and through grants and loans for college students. Thomas Jefferson’s dream of public education for all, Abraham Lincoln’s idea of a land grant university system, FDR’s plan for a GI Bill for our country’s soldiers so they could get a college education after serving their country, and Claiborne Pell’s bill that gave grant money for college students in need helped create the legacy of a strong middle class in this country. We created a way for poor and working class kids to get a good education and make a better life for themselves than their parents had, and that made us a stronger country.

The American middle class, the largest and most prosperous middle class in the history of the world, was not built by accident. It was built brick-by-brick by the generations that came before. It was built by raising our wages through the power of the labor movement and the minimum wage; it was built by providing incomes, health care, and a safety net for our senior citizens and those with disabilities and those who had hard times; it was built by protecting us from financial speculation and the specter of bank runs; it was built by investing in roads, bridges, highways, and rural electrification; it was built by investing in the kind of R&D that created the transistor chip and the Internet; it was built by encouraging entrepreneurship and small business strength through vigorous anti-trust enforcement; and it was built by investing in the education of our young people. Education was one of the cornerstones. (more…)

Sanjay Sanghoee
Former banker; Author, The Merger

They say that there are only two certainties in life: death and taxes. In a capitalist economy, many regard death as the lesser of those evils. That may be amusing but only in the same disturbing way as the NRA slogan ‘gun control is hitting your target.’ Given that the hot-button issue of taxes could sway the presidential elections and impact our future, it is critical to examine it more closely and dispel the absurd myths surrounding it. Broadly speaking, there are four big arguments to consider:

Portfolio and passive income should be taxed at lower rates than earnings
This one always leaves me scratching my head. Why should non-active income, such as capital gains, be taxed any differently than the salary of a construction worker, a bartender or a lawyer? Conventional wisdom says that lower tax on portfolio and passive income encourages investments, which then generates jobs. That sounds great but is nonsense. People invest money to make more money — and regardless of whether those returns are taxed at 15 percent, 20 percent or 35 percent, they still make money. Investment income also has the added benefit of not requiring active work. Granted, double taxation, nations with friendlier tax codes and other factors do complicate the issue, but the U.S. still provides the safest and most attractive arena for investing anywhere in the world.

To boil it down, if we don’t offer tax breaks to doctors to show up for surgery or cops to respond to a 911 call, there is no reason to offer it to business people to do what is already in their own best interests. It is blatantly unfair and penalizes anyone whose major source of income is wages. (more…)

Learn how the Affordable Care Act benefits you: https://my.barackobama.com/acaanniversaryvid

Jared Bernstein
Senior Fellow, Center on Budget and Policy Priorities

Suppose you are going to repair your damaged home and your only tool on hand is a roll of duct tape. Your resourceful neighbor points out that you could probably also use a hammer, a drill, and a saw.

If you’re the FHFA, you tell him, “I can do a better job with just my duct tape, so thanks but no thanks.”

That, in a nutshell, is the problem with the most recent analysis by this key regulator of the mortgage giants Fannie Mae and Freddie Mac when it comes to adding the tool of principal reduction to their anti-foreclosure toolkit. They’ve made progress in their evaluation of the costs and benefits of loan forbearance and loan forgiveness, but, somewhat bewilderingly, they appear to be comparing the two as if they were mutually exclusive. An optimal program of course will employ both, as some homeowners will benefit more from one than the other, and vice versa.

Some loans will fare better (have a higher net present value, or NPV) for Fannie and Freddie under forbearance, others under principal reduction, and many will fare better if they don’t get either type of loan modification — some folks simply need to get out from under the weight of their unsustainable home loans. The problem is that FHFA director Ed DeMarco is resisting the realization that all three of these options maximizes the interests of the GSEs and thus the U.S. taxpayer.

A bit of background:

Fannie and Freddie a) are currently 80 percent owned by taxpayers and b) hold or insure millions of mortgages, many of which are underwater. The last time I visited this issue, I pointed out that FHFA’s analysis of how much taxpayers would save under these two options was flawed in various ways.

They’ve now improved that analysis, as presented in a speech by Director DeMarco a few weeks ago, a talk tellingly sub-titled “Is Principal Reduction the Answer?” (vs. is it one of the answers?). And when they improved their methods, they found that PR produces slightly more savings than PF (principal forbearance). (more…)

By Mike Hall
AFL-CIO Senior Writer

So much for Gov. Scott Walker’s (R) stewardship of the Wisconsin economy and his promise that eliminating collective bargaining rights for public employees and massive budget cuts would turn the Badger State into a job growth miracle.

A report today from the U.S. Bureau of Labor Statistics (BLS) shows that Wisconsin is the only state in the nation to suffer “statistically significant” job loss during the 12 months from March 2011 to March 2012. In other words, while the rest of the nation is at least holding its own or seeing improvement in job growth, Walker’s Wisconsin experiment is a miserable failure.

During the period, Wisconsin lost 23,900 jobs. That was the largest decrease in percentage terms in the country. The public-sector job losses (17,800) were far larger than the private-sector job losses (6,100).

Voters will certainly keep this in mind when they go to the polls in Walker’s upcoming recall election.

The BLS report can be found here. Also click here to check out this report from the Economic Policy Institute and here for a more detailed look at Walker’s economic record.

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This has been reposted from AFL-CIO.

By Richard Trumka
President, AFL-CIO

This week’s reports from the New York Times about Walmart’s practices in Mexico are breathtaking. The Times found “credible evidence that bribery played a persistent and significant role in Walmart’s rapid growth in Mexico.” The Times interviewed an executive of Walmart’s Mexican subsidiary who “bought zoning approvals and reductions in environmental impact fees.” According to the New York Times, when lawyers for Walmart discovered this activity and informed senior management, then Walmart CEO Lee Scott ordered Walmart’s internal investigative protocols revised to give the targets of internal investigations more control over those same investigations. The specific reports about conduct in Mexico were ignored, the executives involved were promoted and a senior in-house lawyer who objected subsequently left Walmart. The apparent result was that Walmart grew dramatically in Mexico at the expense of its Mexican competitors, leading to Mexico becoming Walmart’s second largest market after the United States. The executive identified in Walmart’s in-house investigator’s notes as “most responsible” was promoted to head of all U.S. Walmart stores.

Under the Foreign Corrupt Practices Act, it is a crime for a U.S. company to bribe an official of a foreign government — just as it is a crime to bribe an official of the United States government. It is also a crime in Mexico to bribe an official of the Mexican government. And bear in mind that the Times story does not describe the acts of isolated individuals — it describes conduct and elaborate efforts to suppress the results of internal investigation of that conduct involving multiple top executives over a period of years. In other words, the New York Times story describes “credible evidence” of criminal activity and the willful neglect of criminal activity involving individuals at the highest levels of one of America’s largest corporations.

Nothing like this has happened since the collapse of Enron and Worldcom in 2002. And Walmart is of course a more important company than either Enron or Worldcom. Walmart is the largest private employer in the United States. And in the days since the Times story appeared, the Washington Post has reported that Walmart has participated in an aggressive lobbying campaign to weaken the Foreign Corrupt Practices Act which makes bribing foreign officials a crime. (more…)

Mike Lux
Co-founder and CEO, Progressive Strategies

The big news coming out of the Pennsylvania primaries yesterday are that two of K Street’s favorite Capitol Hill Democrats, Tim Holden and Jason Altmire, got upset in races where they had lots more cash than their opponents but still got taken down. The way these races played out should be a big lesson to Democrats who think they can take special interest cash, make pro-special interest votes and still win elections. And with big issues like student loans, tax subsidies for Wall Street and Big Oil, and accountability for the big banks in play the rest of the year, politicians should pay attention.

Holden was an incumbent and his only weakness was that he was forced to run in a more Democratic district than he used to have. Given that he voted with corporate special interests and Republicans a lot of the time — including on the Bush tax cuts and fracking and factory farms — that became a big problem when he faced a progressive challenger named Matt Cartwright. Holden had the support of the Democratic establishment and the monied interests, but Cartwright thumped him. One of the key ads in the race directly took on his ties to Wall Street:

By Dean Baker
Co-Director, Center for Economic and Policy Research, Author

Last week the country saw one of the fruits of the Dodd-Frank financial reform bill. The bill requires that major corporations offer their shareholders the opportunity to vote on the pay package for their chief executive. The shareholders of Citigroup voted down the $14.9 million pay package for CEO Vikram Pandit by a margin of 55-45 percent.

The vote was non-binding (a very serious problem), but it was nonetheless a huge slap in the face for Pandit and Citigroup’s top management and directors. It is extremely difficult to organize shareholders for this sort of vote. Management controls the flow of information to shareholders in a way that would make incumbent members of Congress green with envy.

When shareholders see a poorly run company, it is far easier for even large investors to just dump their shares rather than try to gain the support needed to change the way the company is managed. That is why this vote was so striking in a huge corporation like Citigroup.

Of course the law is still tilted so much in management’s favor, that even when the shareholders — the actual owners of the company — vote down a pay package, it is still only an advisory vote which the board and top management is free to ignore. But this vote is still a big step forward.

The first question that people should ask is how Pandit managed to get a compensation package that was so out of line with his performance. The fact that executive pay packages bear little relationship to performance is well documented in Lucian Bebchuck and Jesse Fried’s excellent book Pay Without Performance. (more…)

Obama slow jams the news with Jimmy Fallon. He makes three pointers. He sings Al Green in tune.

Romney praises the height of trees. He sings “Who let the dogs out”. He fakes that a New Hampshire waitress grabbed his behind.

This video was originally posted on The Washington Post.