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House Speaker John Boehner set out to preside over a do-nothing Congress, and he has succeeded. As this week’s scheduled repeal vote of the Affordable Care Act (ACA) shows, Boehner is an over-achiever. Depending on who’s counting, this is something like the 38th Obamacare repeal vote.

“We’ve got 70 new members who have not had an opportunity to vote on the president’s health care law,” Boehner said. “Frankly, they’ve been asking for an opportunity to vote on it.”

Boehner has previously acknowledged that the ACA is the “law of the land” and is not likely to be repealed. So this is purely symbolic.

I hope Boehner won’t be holding repeal votes for every “law of the land” that the Republicans don’t like. If that were the standard for what gets a vote in the GOP-controlled House, the Republicans would be doing nothing but pointless votes for a long time.

But if Boehner and House Majority Leader Eric Cantor are going to hold symbolic votes, why not vote on issues that would show where they really stand? (more…)

In a speech recently, the influential economist Jeffrey Sachs made the following statement, one that was both remarkable and yet predictable about the culture of Wall Street:

I’m going to put if very bluntly. I regard the moral environment as pathological…these people are out to make billions of dollars and nothing should stop them from that. They have no responsibility to pay taxes. They have no responsibility to their clients… to counter-parties in transactions.

They are tough greedy aggressive and feel absolutely out of control…and they have gamed the system to a remarkable extent. And they have a docile President, a docile White House, and a docile regulatory system that can’t find its voice. Its terrified of these banks. If you look at the campaign contributions the financial markets are the #1 campaign contributors in the US now.

We have a corrupt politics to the core… and both parties are up to their necks in this. The corruption is as far as I can see everywhere. But what it’s led to is this sense of impunity that is really stunning… and it very unhealthy. I have waited four, five years now to see one figure on Wall St. speak in a moral language and I’ve not seen it once.

And if they won’t I’ve waited for a judge, a President, for somebody and it hasn’t happened, and by the way, it’s not gonna happen any time soon.

It was predictable because in fact any neutral observer who knows anything about the way the big banks on Wall Street work has been saying it for years. But it was remarkable because Sachs is a tried and true member of the American establishment, a widely acclaimed Ivy League professor and New York Times best-selling author, and not exactly a raving populist in his economic or political views. But even the elites are now acknowledging the utter moral bankruptcy of our financial kingpins. (more…)

Ayn Rand’s novel “Atlas Shrugged” fantasizes a world in which anti-government citizens reject taxes and regulations, and “stop the motor” by withdrawing themselves from the system of production. In a perverse twist on the writer’s theme the prediction is coming true. But instead of productive people rejecting taxes, rejected taxes are shutting down productive people.

Perhaps Ayn Rand never anticipated the impact of unregulated greed on a productive middle class. Perhaps she never understood the fairness of tax money for public research and infrastructure and security, all of which have contributed to the success of big business. She must have known about the inequality of the pre-Depression years. But she couldn’t have foreseen the concurrent rise in technology and globalization that allowed inequality to surge again, more quickly, in a manner that threatens to put the greediest offenders out of our reach.

Ayn Rand’s philosophy suggests that average working people are ‘takers.’ In reality, those in the best position to make money take all they can get, with no scruples about their working class victims, because taking, in the minds of the rich, serves as a model for success. The strategy involves tax avoidance, in numerous forms.

Corporations Stopped Paying

In the past twenty years, corporate profits have quadrupled while the corporate tax percent has dropped by half. The payroll tax, paid by workers, has doubled.

In effect, corporations have decided to let middle-class workers pay for national investments that have largely benefited businesses over the years. The greater part of basic research, especially for technology and health care, has been conducted with government money. Even today 60% of university research is government-supported. Corporations use highways and shipping lanes and airports to ship their products, the FAA and TSA and Coast Guard and Department of Transportation to safeguard them, a nationwide energy grid to power their factories, and communications towers and satellites to conduct online business. (more…)

The bond-rating agency Moody’s made itself famous for giving subprime mortgage backed securities triple-A ratings at the peak of the housing bubble. This made it easy for investment banks like Goldman Sachs and Morgan Stanley to sell these securities all around the world. And it allowed the housing bubble to grow ever bigger and more dangerous. And we know where that has left us.

Well, Moody’s is back. They announced plans to change the way they treat pension obligations in assessing state and local government debt.

Instead of accepting projections of pension fund returns based on the assets they hold, Moody’s wants to use a risk-free discount rate to assess pension fund liabilities. This will make public pensions seem much worse funded than the current method.

While this might seem like a nerdy and technical point, it has very real consequences. If Moody’s methodology is accepted as the basis for accounting by state and local governments then they will suddenly need large amounts of revenue to make their pensions properly funded. This will directly pit public sector workers, who are counting on the pensions they have earned, against school children, low-income families, and others who count on state supported services.

In other words, this is exactly the sort of politics that the Wall Street and the One Percent types love. No matter which side loses, they win. While public sector workers fight the people dependent on state and local services, they get to walk off with all the money.

Wall Street is expert at these sorts of accounting tricks; it is after all what they do for a living. And this is not the first time that they have played these sorts of games to advance their agenda. (more…)

For people who were blown away to learn recently that the 11 largest global pharmaceutical companies made an astonishing $711 billion in profits over the last decade, here’s another measure of the industry’s greed: The same companies paid their chief executive officers a combined $1.57 billion in that period. Not bad work if you can get it. They achieved this thanks in part to their systematic exploitation of Medicare and an epidemic of illegal marketing activity.

According to corporate filings analyzed by Health Care for America Now (HCAN), in 2012 the drug companies’ CEOs drew total compensation of $199.2 million, two and a half times the total in 2003. In 2006, the first year of the Medicare prescription drug law, the pay of the CEOs jumped by $58.9 million from the previous year, the largest one-year increase in the decade HCAN reviewed.

Inflated Drug Prices

These huge spikes in pay coincided with eye-popping profits bolstered by a provision the pharmaceutical lobby inserted into the law to prohibit Medicare from using its unparalleled purchasing power to obtain discounts or negotiate prices with drug companies. By prohibiting Medicare to get better drug prices, the federal government is effectively subsidizing the greed of the drug makers and their CEOs. As a result, Americans pay vastly higher prices than people in other countries for identical drugs. This is ludicrous and wasteful. It hurts the government, seniors and middle-class families.

It should not be the official policy of the United States to price-gouge our people and government – a practice that’s especially offensive at a time when some in Washington are talking about cutting Medicare benefits.

Simply empowering Medicare to buy drugs under the same bulk purchasing discounts used by state Medicaid programs would save the federal government billions. For example, the Medicare Drug Savings Act, introduced by Sen. Jay Rockefeller (D-WV), would save $141 billion over the next 10 years without reducing Medicare benefits. Similar measures are in President Obama’s budget proposal and the House Democratic budget plan.

Illegal and Improper Conduct on the Rise

The increases in CEO pay and drug company profits also corresponded with a surge in illegal and improper conduct by the industry. From 2003 to 2012, financial penalties paid by drug manufacturers to settle allegations of illegal marketing, price-gouging of government programs and other violations rose by more than 500 percent, according to a report issued by Public Citizen in September 2012. In 2003, there were only nine settlements with the federal or state governments, amounting to $967 million in penalties. In 2011, federal and state government agencies reached a record 44 settlement agreements with drug makers. And by July 2012, with the year only half over, drug companies had already agreed to pay nearly $6.6 billion as part of 19 settlements with the government. Data on the second half of 2012 have not yet been compiled by Public Citizen.

Here’s the kicker: The most common drug-company violation cited by regulators and law enforcement agencies between 1991 and July 2012 was overcharging government health programs. Really? How much overcharging do they need?

Over the last decade, the drug companies racked up unprecedented penalties for criminal and civil violations. They jacked up prices for seniors and the government. They made excessive profits and gave unconscionable compensation to the CEOs in charge of this all.

End Corporate Tax Giveaways

It is obscene that any lawmakers in Washington — even the most extremist Republicans who hate civilization as we know it — are even talking about cutting benefits for seniors in the midst of what amounts to a drug industry scandal.

We shouldn’t be making any benefit cuts to Medicare, Medicaid, the Affordable Care Act or Social Security. Not now, not ever. Instead, we should make the wealthiest Americans pay their fair share in taxes and eliminate indefensible special-interest tax breaks and subsidies for big corporations like the companies that ship jobs overseas, Big Oil, and a drug industry that has made a science out of ripping off the American people.

* * * * *HCAN’s analysis of CEO pay focused on 11 companies: Johnson & Johnson, Abbott Laboratories, Pfizer, Novartis, Eli Lilly, Roche, Merck, Bristol-Myers Squibb, Sanofi, GlaxoSmithKline and AstraZeneca. Over the 10-year period, the $1.57 billion in total compensation was split among 27 executives. The top earners in 2012 were Johnson & Johnson’s William Weldon, who took in $29.8 million, and Pfizer’s Ian Read, who received $25.6 million. By comparison, the median household income in the U.S. last year was $50,054, while half of all Medicare beneficiaries had less than $22,500 in annual income. Click here for details on Big Pharma’s annual CEO compensation expenditures. In April, HCAN compiled data showing that the 11 drug companies reported $711.4 billion in profits over the same 10-year span.

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Ethan Rome served as deputy campaign manager in HCAN’s 2009 successful campaign to win comprehensive health care reform. He has been a grassroots organizer, political activist, and strategic communicator for progressive issue and electoral campaigns for more than 20 years. From 2002until 2009, Mr. Rome directed public affairs for the 1.6 million-member American Federation of State, County and Municipal Employees (AFSCME). He managed national communications and media relations for International President Gerald W. McEntee and the union’s priority organizing, legislative and political campaigns. Prior to joining AFSCME in 1999, Rome was chief policy and political adviser to the speaker of the Connecticut House.

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Follow Ethan Rome on Twitter: www.twitter.com/@HCAN

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This piece is republished from The Huffington Post.

The ghosts of the Enron Corporation are haunting us still, and they are a lot scarier than any horror movie ghosts because, unlike the Hollywood variety, these ghosts still have enough substance to cause an economic nightmare.

I have a lot of familiarity with the Enron scandal because in 2001 and 2002, I ran a corporate accountability project that focused a great deal of attention on what was going down at that rotten, corrupt corporation. We set up a war room operation to track what was going on in the case, put out a 10 minute informational video, ran a TV ad linking Bush and Cheney to corporate scandals that helped drive down Bush’s approval ratings 15 points in six weeks, and even created one of the first blogs in the country, something we called the DailyEnron. (In 2001, I don’t know the term blog existed, we certainly didn’t call it a blog, just thought of it as daily update people could go to for information on the case — who knew I’d be such a trendsetter?)

The Enron story was pretty incredible. The company had not only soared in value to become the seventh highest valued corporation in America, but was almost universally praised and revered as a model company in the modern American economy. And the sad truth is: it was. In spite, or maybe because of, its legal and ethical crimes, its methods of manipulating markets infected the entire financial industry.

What brought all this to mind, of course, is the NYT article on JP Morgan Chase’s various problems with regulators. When I read about JPM’s “manipulative schemes” in the energy markets, I got a serious flashback to my Enron work over a decade ago, because it was Enron’s energy market trading manipulations that brought both them and powerhouse accounting firm Arthur Andersen down. The thing that is giving me nightmares about this ghost story, though, is that JPM Chase has grown so big and powerful just a dozen years later that no matter what crimes they commit, there might be no accountability. (more…)

Unregulated capitalism is out of control. Like a  cancer, it has become “something evil or malignant that spreads destructively,” with tumors growing in several once-healthy parts of the American body.

1. Attacking the Hungry

 

The uncontrolled growth of investment wealth is diverting resources away from vital programs, effectively smothering them. The average Supplemental Nutrition Assistance Program  (SNAP) recipient received about $1,500 for food for the entire year. At least ten Americans each made that much in under ten seconds from their investment gains  in 2012, about the time it took each one to fluff his pillow and roll over in bed.

 

Under capitalism, fortunes accrue to a few while  47 million Americans, or one out of seven, need food  assistance. Almost half of the hungry are  children. For every food bank we had in  1980, we now have 200.

 

Yet just 20 people made more from their investment income in  one year than the entire 2011 food assistance  budget. That’s $73 billion, taxed at the capital gains rate. Meanwhile, President Obama couldn’t get the $1 billion per year he needed to improve childhood  nutritionin schools.

 

Most recently, the House proposed a farm  bill that would cut another $2 billion a year from the food stamps account.

 

2. Suffocating the Students

 

The corporate style of capitalism allows young college graduates, the bright hope of the future, to work in minimum wage positions while carrying an average of  $26,000 in student loans, which accumulated because tuition rose  ten times faster than the cost of living, and which now come with  interest rates many times higher than the banks pay.

 

The great majority of pre-recession jobs have been replaced, if they’ve come back at all, as low-wage jobs in food service and retail. The number of college grads working for minimum wage has  doubled in five years. They may be the ‘fortunate’ ones. In 2011, about  360,000Americans holding advanced degrees were on food stamps or some other form of public assistance. Many of them are  homeless.

 

Jobless and frustrated young Americans trusted the system, and it failed them. Yet free enterprise entrepreneurs  hustle them for even more college, in order to extract federal loan money, which goes right to the schools to pay administrative salaries.

 

Defenders of capitalism say hard work will ensure success. At a recent  jobs hearing in Washington, only one Congressman bothered to show up. (more…)

As President Barack Obama prepares to travel to Mexico Thursday for a meeting with President Enrique Peña Nieto economic growth, immigration and security policies top the agenda. Yet one unmentioned theme – Mexico’s dismal labor rights record – has important consequences for all three of these policy areas.From 2006-2012, the government of Felipe Calderón mounted a full-scale assault on democratic labor unions in Mexico, combining all the mechanisms of labor control built up during 70 years of one-party rule with full-scale military assaults on striking workers. Although the compensation of Mexican workers relative to U.S. workers in manufacturing was lower in 2010 than in 1975, Calderón was determined to drive wages even lower to attract foreign investment.

It is not yet clear whether Peña Nieto intends to continue Calderón’s repressive policies, or whether he will finally respect Mexican workers’ rights. The message that Obama sends could make a crucial difference.

Recognition of Independent Unions in Mexico

The Calderón government deployed thousands of troops to break strikes by the National Union of Mineworkers (“Los Mineros”), and four union members were killed in these disputes between 2006-2011. The government continues to pursue baseless criminal charges against the union’s leader, Napoleón Gómez, even after these charges were thrown out by five federal appeals courts.

In February another court ordered Peña Nieto’s Attorney General to notify INTERPOL that the charges had been dismissed, and in March Interpol informed Gómez that his file has been deleted because “the information recorded concerning him raised strong doubts concerning its compliance with INTERPOL’s rules” which prohibit governments from using INTERPOL to pursue political opponents. (more…)

I won’t waste space in this blog discussing the harmful effects of the sequester. If the recent FAA debacle doesn’t give you an idea of how bad this is, or how bad it will get, nothing will.

 

Instead, I want to highlight just how crazy the Republican position is on this issue.

 

For the past four years, the party has made it its mission to obstruct President Obama’s agenda, and to whittle away at the power of the federal government so that the country can safely be run by special interests without the pesky intervention of the law. On the economy, the GOP has tried everything they can to drain the public sector of much-needed tax revenues and to channel even more money into the hands of their wealthy donors. After all, who needs public roads, subways, housing, hospitals, schools, and the police department when the rich can buy all those services privately?

 

But even knowing the Republican mindset, the party’s stance on the sequester has left me scratching my head. Granted, the Democrats are as much to blame for the sequester as their opponents, and the political calculation behind it has clearly backfired since our Congress is so dysfunctional that it cannot reach a deal even when confronted with a crisis. But whether you look backwards or forwards, it is the Republican obsession with austerity that led to this, and which is continuing to make it impossible to find a solution.

 

While the Republicans say they would cooperate with Democrats to repeal the sequester, what they want in return makes the whole exercise pointless. More precisely, they are willing to stop the spending cuts triggered by the sequester only if the Democrats agree to even bigger spending cuts and for even more public services! (more…)

The inside-the-beltway world of Washington, D.C. rarely deals with truly foundational economic issues. When they do, it is only because they are being forced to by crisis or a political movement forcing something onto center stage. The big fundamental issues make the powers that be uncomfortable simply because they may cause big changes that do damage to the wealthy economic incumbents who don’t want their privileged status upended. This is why D.C. seems so disconnected to people in the real world: While Congress is goofing around with stupid stuff like sequesters, the things that really matter to people go unaddressed.

Occasionally, though, the real issues are forced onto the D.C. scene by some combination of smart, gutsy politicians and political movements whose time has come. It’s too early to tell, but on what I believe are the two most central economic issues of the next generation, I’m hoping D.C. is finally going to be forced to pay attention.

The first of these issues is the steady destruction of the American middle class by the massive expansion of the low wage worker economy. There is a movement on this issue that is coming together to take this issue on, and we are seeing the early signs of it in the New York and Chicago fast food strikes, and the huge nationwide day of action at Wal-Marts around the country last year. There will be more to write about this in the coming weeks, so that will be Part 2 of this story, but you heard it here first: This will be a big deal.

Part 1, though, is to discuss the ongoing battle to break up the economic concentration of power in this society, starting with the most important of all industries to break up, the banking industry. The first step in that fight legislatively is the introduction of Sherrod Brown and David Vitter’s bill taking on the Too Big To Fail banks. Brown and Vitter, who to my great delight call their bill the Terminating Bailouts for Taxpayer Fairness (TBTF) Act, put serious pressure on TBTF banks in a variety of ways, and those banks are doing some serious squealing as a result. The banks are saying that if you make them be safer, if you lessen their risk of failure, that it will hurt economic growth. Seriously, guys — you can’t come up with something better than that? I guess I missed all the great things these banks’ speculative unregulated trading did for the economy in that last few years. Perhaps a few waiters’ jobs at high end Manhattan restaurants? (more…)