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Sen. Russ Feingold, D-Wis., is defending his decision to vote against the Wall Street reform bill on the grounds that it is simply too weak to prevent future crises, and Tim Fernholz is crying foul.

On policy substance, Feingold is undoubtedly correct. From Feingold:

At the start of this process I made clear that I had a simple test for financial reform — will it stop another financial meltdown? This bill fails that test.

Fernholz claims, to the contrary:

The bill will make bailouts very unlikely and bring derivatives out of the shadows.

I just can’t see how Fernholz can believe that line. Megabanks have spent the past two years “earning” their way back to health with the riskiest businesses—derivatives operations and proprietary trading. They’ve managed to make enormous profits from these trading operations even as the global economy has crumbled. At some point, the economy is going to catch up with the trading, and there is going to be a problem. But it will be seven to 12 years before the critical reforms reining in these activities will actually take effect (and for the most part, those reforms have been gutted). Blanche Lincoln’s derivatives language has a seven-year phase-in, and will not apply to the vast majority of derivatives currently being traded. The Volcker Rule ban on prop trading still allows banks to gamble with hedge funds, and this rule will take a dozen years to implement. (more…)

Astonishingly, as Wall Street reform enters its final hours a tired, generic corporate refrain against regulation is gaining traction. As bigwig bankers and their lobbyist brethren fight to defeat tough new rules on derivatives—the crazy casino that brought down AIG—all their sloganeers can come up with is the trite wail that serious rules will send this risky business overseas. It’d be funny if members of Congress weren’t taking it seriously.

“Oh no—the business will go overseas!” is the last-ditch, we’re-about-to-lose-this-one cry of despair for corporate executives in every industry. Crack down on a profitable abuse in the United States, and the entire business will move to London or Mumbai, sending jobs and tax revenue abroad– or so the argument goes. You only hear this line when CEOs know they have no case, and have to divert attention away from the real substance of the policy debate. In the case of Wall Street abuses, this nonsense is especially ridiculous. The bank lobby really just doesn’t have any good arguments to launch in its favor, so it’s falling back on generic corporate jargon.

In reality, the U.S. has extremely broad authority to crack down on derivatives activity abroad, we just don’t have a whole lot of good rules on derivatives for regulators to enforce. It’s extremely difficult for financial institutions to simply offshore their risky derivatives business to avoid oversight. Under current law, the Commodity Futures Trading Commission has the authority to regulate any trading done by foreign firms on behalf of U.S. clients, any trading of U.S. assets conducted by foreign institutions and any trading that causes a “substantial disruption” in U.S. markets. Just about anything the CFTC wants to get its hands on, it can, and the current CFTC Chairman, Gary Gensler, is a committed reformer. We just need to write good rules for his agency to enforce.

Moreover, finance tricksters will have no incentive to move their destructive derivatives trading abroad, because the rules in other countries are, in fact, much tougher than those the U.S. is currently considering.

There are a lot of ways to crack down on Wall Street, but none of them will work without reining in the insane, secretive market for derivatives—speculative instruments that allow financiers to gamble on anything from subprime mortgages to the price of corn. Right now Wall Street is making a big push to roll-out new derivatives on movie box-office receipts, allowing the financial world to place raw bets on how much money a movie is going to make. It sounds crazy and destructive, and it is.

Germany is leading the way on derivatives reform by simply banning this kind of naked gambling outright. The U.S. effort is critically important, but much more modest. Instead of banning the casino, reformers in Congress are hoping to shrink it by ending the taxpayer subsidies that fuel it. This is at the heart of the proposal from Sen. Blanche Lincoln, D-Ark., that has earned so much ire from the bank lobby. Bankers love their taxpayer subsidies, and love converting them into bonuses—who wouldn’t? The trouble is that this business is inherently risky, and can jeopardize the entire economy, as the collapse of AIG attests.

But ending subsidies is still not as strong as banning gambling, which Germany is doing. The entire European Union is currently making a move to follow Germany’s lead. Businesses can’t exit U.S. markets to skirt regulations if their Wild West trading schemes are outlawed everywhere else.

In the U.K., officials are poised to impose a hefty tax on all financial assets, prevent banks from ballooning their balance sheets with derivatives trades. That means, U.S. banks can’t send their derivatives operations to the U.K. without paying a big price.

Outside of Europe, few nations have the financial infrastructure to support derivatives trading on the scale of what we currently have in the U.S., where $300 trillion in trades are housed at just five banks. Some Asian nations do have this kind of infrastructure, big financial firms in Asia all realize that they will have to comply with U.S. rules if they want to keep doing business in the U.S. And indeed, policymakers in Hong Kong and other financial centers are looking to the U.S. for leadership on derivatives, and are likely to mimic whatever reforms are adopted here.

But more broadly, we have to ask why the U.S. should be worried about this activity being offshored at all. Raw gambling by financial institutions brought on one of the greatest economic catastrophes in American history. It forced the government to pony up over $4 trillion in bailout funds, expanded the national debt by 40 percent, and killed over 8 million jobs. If this business goes overseas, so be it! Let other nations bailout their megabanks and wreck their own economies if they want to. Today’s derivatives casino is a job-killing nightmare that produces nothing other than megabonuses for bankers. Taxpayers have no business subsidizing such economic destruction.

Compared to international efforts, Blanche Lincoln’s derivatives bill is overpoweringly mild, but it remains the only serious attempt to rein in the speculative casino that crashed our economy. The fact that the bank lobby’s only tactic left is the wail “offshore!” shows how desperate our bank executives have become. Congress has no business caving to such nonsense at this stage of the reform process.

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This piece is re-posted from the Campaign for America’s Future blog, OurFuture.

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Zach Carter also is a Fellow a Campaign for America’s Future. His work has appeared in The Nation, Mother Jones, The American Prospect and Salon.

Zach Carter

Zach Carter
Economics Editor, AlterNet

A coalition of conservative New Democrats, whose leader is being investigated by a Congressional ethics committee over Wall Street fundraising, has officially come out in favor of gutting financial reform. The issue they’ve targeted: derivatives, the most closely watched effort of the bank overhaul. Good luck in November, guys.

New Democrats like to say they are “pro-business,” but what they usually mean is, “willing to funnel federal gifts to bigwig executives.” Their chair is Rep. Joseph Crowley, D-N.Y., currently under investigation by the House Office of Congressional Ethics over a fundraiser he held just days before the final House vote on the Wall Street reform package back in December 2009. Crowley is a favorite of Wall Street CEOs, who has pulled in more than $2.6 million from the finance industry over the course of his Congressional career, over 250 percent more than any other industry.

Crowley isn’t the only New Dem close to Wall Street. Rep. Jim Himes of Connecticut is a former Goldman Sachs executive, Rep. Melissa Bean of Illinois has been doing big banks’ dirty work for years, and New Dems score more campaign contributions from Wall Street than their regular-old-Democrat colleagues.

The new Dems are opposing the tough derivatives overhaul being pushed by Sen. Blanche Lincoln, D-Ark., known on Capitol Hill as “Section 716.” The Lincoln plan is a huge blow to Wall Street profits and the first real crack in the too-big-to-fail armor worn by the nation’s largest banks. The derivatives market is the risky casino that brought down AIG and Enron, and played a huge role in the inflation of the subprime mortgage bubble and necessitated the bailouts of megabanks when that bubble burst. While a little under ten percent of the market consists of risk-hedging by businesses, the remainder is a speculative nightmare.

Taxpayers actually subsidize this market by allowing commercial banks to deal derivatives. Since commercial banks have access to cheap Fed loans and FDIC-guaranteed deposits, this funding ends up feeding the global casino. If you force banks to move their derivatives operations to an independently-capitalized subsidiary with no access to taxpayer perks, the market shrinks, and with it, big bank profits and bonuses.

But of course, bankers like their bonuses, and they’ve enlisted the New Dems to protect them. A total of 43 New Democrats are circulating a letter around Capitol Hill in an effort to defang the derivatives overhaul (interestingly, 26 New Dems have refused to sign on to this overt Wall Street sellout). Here’s the key section:

“Section 716 . . . would increase systemic risk by forcing derivatives transactions into less regulated and less capitalized institutions and impede effective oversight of the derivatives markets . . . Legitimate conflict of interest concerns are addressed by the ban on proprietary trading in the Volcker rule, and, accordingly, we believe Section 716 should be removed from the legislation.”

Nobody in Washington takes these claims seriously. One is a bald-faced lie, the other an effort to obfuscate other New Dem efforts to defang the Volcker Rule itself.

First, the lie. The New Dems are claiming that the Lincoln provision would push derivatives into the shadows, when, in fact, it would bring them into the light. Right now, most derivatives transactions are conducted off-balance-sheet, meaning banks don’t have to disclose information about these risky deals to their investors, making it easy for them to skirt capital requirements. The idea that the Lincoln plan could actually make the derivatives market more opaque or harder to regulate than they are now is just laughable.

The Wall Street reform bill includes a set of capital rules for all derivatives trading, rules which apply to everybody who engages in derivatives activity, be they a hedge fund, a bank, or a bank-affiliate. There is absolutely no way in which Lincoln’s plan would be “forcing derivatives transactions into less regulated and less capitalized institutions.”

The opposite, in fact, would happen. Banks would have to put up more of their own money in order to back derivatives trades, because they wouldn’t have access to taxpayer money to back them. That’s why the bank lobby is fighting the Lincoln language like crazy.

The bank lobby has been pushing for weeks to secure some kind of compromise in which the Volcker Rule is substituted for Lincoln’s derivatives plan. There is almost no overlap between the two proposals. The Volcker Rule bans outright gambling by banks– Lincoln’s plan is an effort to rein in gambling outside of the banking system itself.

And New Dems are also making a huge push behind the scenes to gut the Volcker Rule. As Brian Beutler has reported, New Dems Dennis Moore, D-Kan., and Gregory Meeks, D-N.Y., are part of a team that hopes to secure a giant fatal loophole allowing banks to invest up to 5 percent of their capital in hedge funds. In other words, no gambling, except when you conduct this gambling with a hedge fund. This would totally gut the purpose of the Volcker Rule. Hedge fund investments have a habit of creating absolutely massive losses—even when the upfront investment is relatively low. In the go-go years of the housing bubble, Bear Stearns put $40 million into a hedge fund to gamble on mortgages. As Mike Konczal has emphasized, when that hedge fund blew up in 2007, Bear Stearns had to payout over $3.2 billion in losses—80 times what they put into it. If that $40 million had been 5 percent of Bear’s capital, the company would have been bankrupt four times over when the hedge fund went down.

The New Dems are hoping that this overt hatchet-work for the bank lobby will simply go unnoticed in the media firestorm surrounding the BP oil catastrophe and General McChrystal’s inability to understand chain-of-command under a Democratic commander-in-chief. Don’t let them get away with it.

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This piece is re-posted from the Campaign for America’s Future blog, OurFuture.

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Zach Carter also is a Fellow a Campaign for America’s Future. His work has appeared in The Nation, Mother Jones, The American Prospect and Salon.

An anonymous source in the White House was quoted as saying that organized labor “flushed $10 million of their members’ money down the toilet” by backing the challenger to Arkansas Sen. Blanche Lincoln. Of course, there was no mention of the millions dropped in Lincoln’s campaign by her corporate masters. It does not matter, as they will be sending all their money to the Republican candidate in the general election. A corporate blue dog like Lincoln is handy, but you can always count on a Republican to do the master’s bidding.

Nevertheless, the comment from the administration is a knife in the back to the movement that put them into the White House. Once again we have been played, just like with Clinton. Once again we are threatened if we take our ball and go home, that we will face a president that is openly hostile to the labor movement, rather than just one who kisses us on the cheek while the Romans wait in the bushes. Maybe it is finally time for a Labor Party in the United States. The path to a Labor Party was outlined for us by Tony Mazzocchi, former vice president of the Oil, Chemical and Atomic Workers International Union (OCAW) and a true labor hero who gave us the Occupational Safety and Health Administration (OSHA). Maybe now is the time to show we have the courage to follow.

Kris Dye
President, USW Local 4959
Spokane, Wash.

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Robert Reich

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

The most important thing to know about the 1,500-page financial reform bill passed by the Senate last week — now on he way to being reconciled with the House bill — is that it’s regulatory. If does nothing to change the structure of Wall Street.

The bill omits two critical ideas for changing the structure of Wall Street’s biggest banks so they won’t cause more trouble in the future, and leaves a third idea in limbo. The White House doesn’t support any of them.

First, although the Senate bill seeks to avoid the “too big to fail” problem by pushing failing banks into an “orderly” bankruptcy-type process, this regulatory approach isn’t enough. The Senate roundly rejected an amendment that would have broken up the biggest banks by imposing caps on the deposits they could hold and their capital assets.

You do not have to be an algorithm-wielding Wall Street whiz-kid to understand that the best way to prevent a bank from becoming too big to fail is preventing it from becoming too big in the first place. The size of Wall Street’s five giants already equals a large percentage of America’s gross domestic product.

That makes them too big to fail almost by definition, because if one or two get into trouble — as they did in 2008 — their demise would shake the foundations of the financial system, even if there were an “orderly” way to liquidate them. Because traders and investors know they are too big to fail, these banks have a huge competitive advantage over smaller banks.

Another crucial provision left out of the Senate bill would be to change the structure of banking by resurrecting the Depression-era Glass-Steagall Act and force banks to separate commercial banking (the classic function of connecting lenders to borrowers) from investment banking.

Here, too, the bill takes a regulatory approach instead. It includes a provision barring banks from “proprietary trading,” or making market bets with their own capital. Even if this regulation were tough enough (and the current Senate bill requires various delays and studies before it’s applied), it would not erode the giant banks’ monopoly over derivatives trading, adding to their power and inevitable “too big to fail” status.

Which brings us to the third structural idea, advanced by Senator Blanche Lincoln. She would force the banks to do their derivative trades in entities separate from their commercial banking.

This measure is still in the bill, but is on life-support after Paul Volcker, Tim Geithner, and Fed chair Ben Bernanke came out against it. Republicans hate it. The biggest banks detest it. Virtually every major Wall Street and business lobbyist has its guns trained on it. Almost no one in Washington believes it will survive the upcoming conference committee.

But it’s critical. For years the big banks have relied on taxpayer-funded deposit insurance to backstop their lucrative derivative businesses. Obviously they want the subsidy to continue. Bernanke argues that “depository institutions use derivatives to help mitigate the risks of their normal banking activities.” True, but irrelevant. Lincoln’s measure would allow banks to continue to use derivatives. They just could not rely on their government-insured deposits for the capital.

Requiring banks to do derivative trading in separate entities would force them to raise extra capital. But if such trading is so useful, banks should foot the bill, not taxpayers. Bernanke and others say the measure would give foreign banks a competitive advantage. Even if he is right, since when is it up to taxpayers to guarantee profitability at America’s largest banks relative to foreign ones?

The trading of derivatives is not so crucial to the US economy that taxpayers should subsidize the practice. If the past two years have taught us anything, the lesson is just the opposite. Derivatives can generate huge risks unless carefully regulated.

Wall Street’s lobbyists have fought tooth and nail against these three ideas because all would change the structure of America’s biggest banks. The lobbyists won on the first two, and the Street has signaled its willingness to accept the Dodd bill, without Lincoln’s measure.

The interesting question is why the president, who says he wants to get “tough” on banks, has also turned his back on changing the structure of American banks — opting for a regulatory approach instead.

It’s almost exactly like health care reform. Ideas for changing the structure of the health-care industry — a single payer, Medicare for all, even a so-called “public option” — were all jettisoned by the White House in favor of a complex set of regulations that left the old system of private for-profit health insurers in place. The final health care act doesn’t even remove the exemption of private insurers from the nation’s antitrust laws.

Regulations don’t work if the underlying structure of an industry — be it banking or health care — got us into trouble in the first place. Wall Street’s big banks are just too big, and their ability to draw on commercial deposits for investment banking activities, including derivatives, will make them even bigger. It will also subject the economy to greater and greater risks in the future. No amount of regulation can cure that.

Similarly, the underlying system of private for-profit health insurance is a key driver of America’s bloated and ineffective health care delivery. We can try to regulate it like mad, but no amount of regulation will cure this fundamental problem.

A regulatory rather than structural approach to deep-seated problems in complex industries like banking and health care is also vulnerable to the inevitable erosion that occurs when industry lobbyists insert themselves into the regulatory process. Tiny loopholes get larger. Delays get longer. Legislative words are warped and distorted to mean what industry wants them to mean.

Both Senate and House financial reform bills exempt “customized” derivatives from the exchanges, for example, but leave it to regulators to define what contracts will be excused. Yet many of the derivatives that caused the most trouble (read: Goldman Sachs and other banks’ deals with AIG) might well be thought of as customized. Another potential problem: in assigning consumer protection to the Fed, the bill puts it under Fed chiefs who in the past displayed a patent disregard of such safeguards (read: Alan Greenspan).

Inevitably, top regulators move into the industry they’re putatively trying to regulate, while top guns in the industry move temporarily into regulatory positions. This revolving door of regulation also serves over time to erode all serious attempt at overseeing an industry.

The only way to have a lasting effect on industries as large and intransigent as banking and health care is to alter their structure. That was the approach taken to finance by Franklin D. Roosevelt in the 1930s, and by Lyndon Johnson to health care (Medicare) in the 1960s.

So why has Obama consistently chosen regulation over restructuring? Because restructuring Wall Street or health care would surely elicit firestorms from these industries. Both are politically powerful, and Obama did not want to take them on directly.

A regulatory approach allows for more bargaining, not only in the legislative process but also, over time, in the rule-making process as legislation is put into effect. It’s always possible to placate an industry with a carefully-chosen loophole or vague legislative language that will allow the industry to continue to go on much as before.

And that’s precisely the problem.

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Cross-posted from Robert Reich’s Blog

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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.

Robert Reich

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

Right now, the biggest battle in bank reform is over a provision introduced by Senator Blanche Lincoln of Arkansas that would force the giant Wall Street banks to give up their lucrative derivative trading businesses if they want the government (i.e. taxpayers) to continue insuring their commercial deposits.

The five biggest Wall Street banks have had the derivatives market (derivatives are bets on whether the price of certain assets will rise or fall, bets thereby “derived” from asset prices) almost entirely to themselves. Last year their revenues from derivatives trading totaled a whopping $22.6 billion. Their advantage comes from their large size, plus government insurance of their commercial deposits that allows them to raise money more cheaply than other financial institutions.

Derivatives lie at the point where the basic saving-and-lending function of commercial banking meets the private casino of Wall Street investment banking. You and I subsidize the biggest players in the casino who, precisely because we subsidize them, have grown too big to fail. The Glass-Steagall Act once prevented the casino from using commercial deposits, but since 1999, when Glass-Steagall was repealed, the game has exploded. That’s part of the reason the giants on Wall Street could make wild bets that ended up threatening the entire economy, costing millions of Americans their jobs and savings, and requiring a massive taxpayer-financed bailout.

Lincoln wants to force the banks to put their derivatives into separate entities that aren’t subsidized by you and me. This is just common sense. Her move would also end the big banks’ monopoly over derivatives, thereby reducing their risk to the financial system. It would also cut dramatically into the big banks’ profits.

Obviously, the big banks are apoplectic about Lincoln’s measure and will do almost anything to strip it from the Dodd bill. The banks have 130 registered lobbyists, countless unregistered ones, 40 former banking staffers, and at least one retired senator (Trent Lott) crawling over Capitol Hill, arguing that Lincoln’s provision would be the end of civilization as we know it.

They also seem to have ensnared Paul Volcker. Late last week Volcker opined that commercial shouldn’t be barred from dealing in derivatives because derivatives are an important aspect of commercial banking; they hedge (that is, provide insurance against) risks associated with interest rates on loans. It’s an odd argument. If derivatives were as essential to the normal practice of lending as Volcker says, you’d expect every commercial bank to be dealing in them instead of just the five giant Wall Street behemoths.

As to the risk you and I might be left holding the bag again, Volcker says not to worry: His own rule now contained in the Dodd bill, preventing bankers from making bets for their own accounts, would take care of that. But Volcker’s rule would not erode the giant banks’ monopoly over derivatives trading — making them too big to fail. By contrast, Lincoln’s provision, by pushing derivative trading out of commercial banking, would remove the big banks’ artificial advantage, resulting in more competition and a better capitalized derivatives market.

Another argument being disingenuously used by Lincoln’s opponents is her measure would push derivative trading into unregulated shadow markets. That’s nonsense. Derivatives would have to be traded through a central clearinghouse or exchange, and every dealer in derivatives would still have to be registered and regulated by the Commodity Futures Trading Corporation or by the SEC.

So what are Lincoln’s chances? All the big guns are aiming at her. Lobbyists are lined up against her. Republicans and many Democrats who want to do the Street’s bidding are eager to get rid of Lincoln’s measure. But she has two things going for her. First is the awkwardness for the White House if the President were to come out explicitly against her. For many weeks the Administration has talked about the importance of being tough on derivatives. The President has even said he’ll veto any bill that doesn’t go far enough regulating them. Now Lincoln is giving the White House a chance to prove its mettle or show itself to be pandering to the Street on one of the biggest reasons the Street almost melted down in the fall of 2008.

The second advantage Lincoln has is her measure passed her committee with so much momentum — including the votes of every Democrat on the panel and one Republican — that it’s been included in Dodd’s overall financial reform bill. While it’s always possible for opponents of reform to hide when amendments are voted down, it’s much harder to hide when trying to strip a provision from a bill. Democrats who want to do so will have to join Republican Senators Judd Gregg, Saxby Chambliss, and Bob Corker, who already have introduced an amendment to accomplish this on behalf of their Wall Street patrons. The public will be able to identify which Senate Democrats care more about Wall Street’s campaign donations than the public good.

Volcker has given these Democrats, and the White House, some cover. But the public is watching closely. Some cover may not be enough.

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Cross-posted from Robert Reich’s Blog

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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.

Simply make all the tax cuts expire in 2011, producing tons of revenue at the very end of the time period the Congressional Budget Office was using to estimate total costs.

Bush, those conservative congresspeople and their corporate patrons never intended to stick with that plan. They always assumed Congress would face intense pressure to keep all the tax cuts, no matter what the economic and fiscal picture.

Now, Bush is long gone, and the big business lobbies are quite worried about what may happen next.

Not that the middle-class tax cuts would expire. President Obama appears committed to keeping those. But those massive tax breaks to the superwealthy don’t quite have the same juice they used to.

Especially, the estate tax — levied on the inheritances of the wealthiest heirs in America.

This year, because of the Bush tax plan from his first term to gradually phase out the estate tax altogether, the estate tax is literally wiped off the books.

But in 2011, it returns! Inheritance income above the $2 million threshold would be subject to a 55% tax.

And after fanning the flames of deficit hysteria to squelch progressive reforms, corporate lobbyists are terrified that the estate tax would actually help reduce the deficit.

Bloomberg reports:

The clock is ticking on estate-tax changes because, as 2011 nears, so does the prospect that congressional inaction would start to bring in billions of dollars to help reduce trillion- dollar deficits.

“That’s the real fear,” said Rosemary Becchi, who lobbies on tax issues for Washington-based Patton Boggs LLP, the top lobbying firm by revenue. “Then it becomes extremely difficult to change it.”

The nonpartisan Tax Policy Center in Washington estimated that a revived estate tax at pre-2001 levels would collect more than $34 billion next year and about $410 billion through 2019.

The wealthiest heirs having to pay their fair share and help cut the deficit. The horror!

And the best part is: this all happens so long as Congress … does nothing! Which it has proven incredibly good at!

What’s stunning is the superwealthy’s lobbyist posse and the Senate’s conservative minority could just take what the House has already passed: locking in the estate tax at 45%, while exempting all inheritances below $7 million. That ain’t chump change!

But that’s not good enough for the heirs who have no interest in paying their fair share and reducing the deficit. Bloomberg reports:

Arizona Republican Senator Jon Kyl and Arkansas Democratic Senator Blanche Lincoln have proposed setting the rate at 35 percent, retroactive to Jan. 1. The measure would apply to the portion of estates that exceed $10 million per couple, and would adjust that exemption for inflation in later years…

…House Democrats voted in December to extend the 2009 rate of 45 percent on married couples’ estates after a $7 million exemption. Senate Republicans blocked action in that chamber…

…A 35 percent rate “is really that sort of sweet spot of what’s acceptable to all sides,” said Dena Battle, director of tax policy for Washington-based National Association of Manufacturers. “We don’t want to see the tax go up to 55. We didn’t want to see the tax at 45.”

Uh, a $10 million exemption and a 35% rate above that is not very sweet at all. It’s a bitter windfall to the Paris Hilton set.

But thanks to the combination of their greed, and their exploitation of deficit hysteria, the superwealthy may actually have to pay their fair share on their inheritances after all.

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Bill Scher is the author of Wait! Don’t Move To Canada!: A Stay-and-Fight Strategy to Win Back America.  He is the online campaign manager at Campaign for America’s Future, a regular contributor to Bloggingheads.tv and a fellow at the Commonweal Institute.

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Originally posted at OurFuture.org

I would like to congratulate you on your entry into Blanche Lincoln’s Arkansas primary race. I read about it in this morning’s blog on Firedoglake.”

After reading Jane Hamsher’s article entitled, “Bill Halter Crosses the $5 Million Mark,” I emailed the White House to suggest they remain on the sidelines instead of supporting Ms. Lincoln, along with the Democratic Senatorial Campaign Committee (DSCC).

I believe it is long past time for the Democratic party to acknowledge the work and sacrifice the unions make on behalf of unappreciative politicos in the Democratic Party.

It appears to me as if it may be time for the unions to put this White House and an ungrateful DSCC on notice. The analogy presented in Clint Eastwood’s film, “The Outlaw Josey Wales,” when the protagonist tells the ungrateful and unappreciative, “Don’t piss down my back and tell me its raining,” exemplifies democratic politicos’ treatment of labor organizations, and I believe its past time to retaliate.

Peter Van Dyk
Las Vegas, Nev.

Posted: June 26, 2009 08:47 AM from the Huffington Post

Stewart Acuff

May you live in interesting times goes the old blessing. Well for all of us the times could hardly be more interesting. As Charles Dickens wrote in a Tale of Two Cities–”It was the best of times and the worst of times.”

The nation’s economy is almost in free fall. We now measure economic progress not by whether unemployment is going down or up–because it is always going down but whether we lost more or fewer jobs than we lost the month before. The government has had to take over the once iconic symbol of American capitalism, General Motors, and bail out the onetime pillars of American capitalism, our largest banks and financial institutions.

It is now beyond debate that 30 years of continuous deregulation across the economy, unmitigated greed, the devaluation of work and disdain toward workers, assaults on our unions and the middle class, and turning Wall St. into the world’s largest casino has plunged our country and our people into the worst inequality and the greatest economic crisis since 1929 and the Great Depression.

But as Dickens said, it is also the best of times. Finally, led by a brilliant, principled and disciplined President Obama, our government and our country are facing up to long-term problems and immediate crises. We are debating and struggling to fix our healthcare crisis that haunts almost 100 million of our people–50 million of us with no healthcare, another 40 million with inadequate or unreliable healthcare. We are re-regulating financial services, stimulating the economy wisely with $150 billion of long needed, jobs producing infrastructure investment, billions more to rebuild our electricity grid and invest in renewable energy and trying to make higher education affordable again.

Most of all and most importantly, we are engaged in a great struggle between Corporate America and their radical rightwing Republican allies on one side and America’s workers, unions and people of good will on the other side to restore one of the most fundamental freedoms in any democracy–the freedom to form unions and bargain collectively.

The 30 year assault on workers and unions effectively destroyed this freedom so that now upwards of 30,000 workers every year are illegally retaliated against for exercising legally protected union activity, 1 in 5 union activists trying to form unions are fired, and according to Cornell scholar, Dr. Kate Bronfenbrenner, management intimidation against workers trying to organized has reached an all time high.

This assault and destruction of freedom has had devastating consequences:
–20% more Americans in poverty since George Bush was elected president.
–90–100 million Americans suffering from lack of healthcare.
–30 years of stagnant and declining wages while workers productivity climbed by 75%.
–lower take home pay than in 1973.
–Yawning inequality. The average CEO in 1980 made 40 times as much as the average worker. Today the average CEO makes 400 times as much as the average worker.
–And the biggest problem in our economic crisis is the lack of consumer demand or buying power. Americans no longer make enough money to drive the great American economic engine. And our great middle class is being squeezed and squeezed and squeezed.
–Now more Americans say they expect their kids and grandkids to do worse than today’s generation instead of better.

This last fact makes me ashamed–ashamed of myself and my generation, ashamed of what we squandered, ashamed of our lack of stewardship, ashamed of those we allowed to lead us–ashamed that in spite of 4000 years of human history and wisdom, 4000 years of Judeo-Christian teachings and traditions we allowed a bankrupt business-government ethos that greed is good and you’re on your own to dominate our culture.

But it is the best of times because we can change all that right now. We can pass the Employee Free Choice Act now, this summer.

We can change it all right here in Arkansas. We have one senator, Mark Pryor, who is working hard to build the 60 votes to pass the Employee Free Choice Act. We have another, Blanche Lincoln, who was once a co-sponsor of the Employee Free Choice Act but now Wal-Mart and Tyson’s Chickens have convinced her that maybe she ain’t for the Employee Free Choice Act anymore.

I don’t have to tell this crowd that the Employee Free Choice Act does three very simple, straightforward, common sensical things:

• Real penalties on employers who violate the law and workers rights. $20,000 civil fines and triple damage back pay for firings.
• Guarantee first contracts by allowing for arbitration if the corporation refuses to bargain in good faith.
• Allows workers to form or join a union just like young workers volunteer to go to Afghanistan–simply by signing up and when 51% sign up the union is established.

It is past time for Sen. Lincoln to be a real Democrat and commit to support fundamental labor law reform.

So on Saturday July 11 led by President Ed Hill and Leo Gerard of the Steelworkers and Rich Trumka we’re gonna help Sen. Lincoln find her backbone, her conscience, and her Democratic Party.

We’re gonna caravan from all over Arkansas to Central High in Little Rock, meet together and march. Presidents Hill and Gerard and Trumka, faith leaders, elected officials, African-American leaders, and every constituency of the Democratic Party will call on her to vote for and support the Employee Free Choice Act. Will you be there? If Ed Hill and Rich Trumka can come from Washington, DC, can you be there?

And to finish it all off, after the rally, we will have an old-fashioned Arkansas catfish fry free–so bring your families but do not miss this.

Sen. Lincoln is feeling the heat. She’s feeling our pressure. And she doesn’t like it and is complaining to every body who will listen. It is uncomfortable. But in every campaign like this, we have to go through this kind of pressure and heat to get to yes. And we have to get to yes.