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Barack Obama, Action Figure?

Peter Dreier

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Occasionally, President Barack Obama reminds us that he was once a community organizer.

In his interview last Monday night with BET News, Obama said that he had invited some people who have been organizing protests against police misconduct to meet with him at the White House last week.

“Because the old adage, power concedes nothing without a fight — I think that’s true,” Obama said.

Obama was closely paraphrasing a statement by the great abolitionist Frederick Douglass that is well-known among community organizers and activists: “Power concedes nothing without a demand.”

This is not a phrase that most politicians would be familiar with. Obama probably first heard Douglass’ words during his three years as a community organizer in Chicago during the 1980s. Douglass’ famous one-liner was actually part of a speech he gave on August 3, 1857 in Canandaigua, New York. Civil rights and community organizers rediscovered Douglass’ words in the 1960s and they’ve become a key part of the ideas that young activists imbibe, especially these two paragraphs:

Let me give you a word of the philosophy of reform. The whole history of the progress of human liberty shows that all concessions yet made to her august claims have been born of earnest struggle. The conflict has been exciting, agitating, all-absorbing, and for the time being, putting all other tumults to silence. It must do this or it does nothing. If there is no struggle there is no progress. Those who profess to favor freedom and yet deprecate agitation are men who want crops without plowing up the ground; they want rain without thunder and lightning. They want the ocean without the awful roar of its many waters.

This struggle may be a moral one, or it may be a physical one, and it may be both moral and physical, but it must be a struggle. Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress.

Obama echoed Douglass’ sentiments in several parts of his BET interview. He said that he supported the protests over police killings of unarmed black males so long as they are peaceful.

“A country’s conscience sometimes has to be triggered by some inconvenience, because I think a lot of people who saw the Eric Garner video are troubled, even if they haven’t had that same experience themselves. Even if they’re not African-American or Latino,” said Obama.

He noted that the news media and the public, sometimes lose interest in an issue as new topics grab their attention, “so the value of peaceful protests — activism, organizing — is it reminds the society this is not yet done.”

In 1985, at age 23, Obama was hired by the Developing Communities Project, a coalition of churches on Chicago’s South Side, to help empower residents to win improved playgrounds, after-school programs, job training, housing, and other concerns affecting a neighborhood hurt by large-scale layoffs from the nearby steel mills and neglect by banks, retail stores, and the local government. He knocked on doors and talked to people in their kitchens, living rooms, and churches about the problems they faced and why they needed to get involved to change things.

As an organizer, Obama learned the skills of motivating and mobilizing people who had little faith in their ability to make politicians, corporations and other powerful institutions accountable. Obama taught low-income people how to analyze power relations, gain confidence in their own leadership abilities, and work together.

For example, he organized tenants in the troubled Altgelt Gardens public housing project to push the city to remove dangerous asbestos in their apartments, a campaign that he acknowledged resulted in only a partial victory. After Obama helped organize a large mass meeting of angry tenants, the city government started to test and seal asbestos in some apartments, but ran out of money to complete the task.

Although he didn’t make community organizing a lifetime career — he left Chicago to attend Harvard Law School — Obama said that his organizing experience had shaped his approach to politics. After law school, Obama returned to Chicago to practice and teach law. But in the mid-1990s, he also began contemplating running for office. In 1995, he told a Chicago newspaper, “What if a politician were to see his job as that of an organizer — as part teacher and part advocate, one who does not sell voters short but who educates them about the real choices before them?”

During his 2008 campaign for president, Obama frequently referred to the three years he spent as a community organizer as “the best education I ever had.” He often referred to the valuable lessons he learned working “in the streets” of Chicago.

“I’ve won some good fights and I’ve also lost some fights, because good intentions are not enough, when not fortified with political will and political power,” echoing Frederick Douglass’ sentiments.

In 2008, Obama enlisted Marshall Ganz, a Harvard professor who is one of the country’s leading organizing theorists and practitioners, to help train organizers and volunteers as a key component of his presidential campaign. Ganz was instrumental in shaping the volunteer training experience.

Many Obama campaign volunteers went through several days of intense training sessions called “Camp Obama.” The sessions were led by Ganz and other experienced organizers, including Mike Kruglik, one of Obama’s organizing mentors in Chicago. Potential field organizers were given an overview of the history of grassroots organizing techniques and the key lessons of campaigns that have succeeded and failed.

During that contest, the Obama campaign drew on community organizing techniques to build an effective grassroots organization that increased registration and turnout among voters, particularly African Americans and 18 to 29 year olds. Both groups not only voted overwhelmingly for Obama but also came to the polls in relatively high numbers.

Throughout that 2008 campaign, Obama consistently praised the young organizers working on his staff and the role of organizers in American history.

“Nothing in this country worthwhile has ever happened except when somebody somewhere was willing to hope,” Obama said during that first campaign for the White House. “That is how workers won the right to organize against violence and intimidation. That’s how women won the right to vote. That’s how young people traveled south to march and to sit in and to be beaten, and some went to jail and some died for freedom’s cause.” Change comes about, Obama said, by “imagining, and then fighting for, and then working for, what did not seem possible before.”

In town forums and living-room meetings, Obama told audiences that “real change” only comes about from the “bottom up,” but that as president, he can give voice to those organizing in their workplaces, communities, and congregations around a positive vision for change. “That’s leadership,” he says.

Many of the organizers who worked on Obama’s first campaign wound up working for Organizing for America (now called Organizing for Action), a White House-led organization that was intended to keep the campaign volunteers involved in issue battles in-between election cycles. OFA has not lived up to its early promise, but many people trained in organizing skills in the first and second Obama campaigns went on to play key roles in other Democratic Party contests for Congress, governor races, and various issue campaign.

As soon as Obama won the Democratic Party’s presidential nomination, and even more since entering the White House, he has been subjected to constant attacks by right-wing talk show hosts and bloggers for his background as a community organizer. They’ve sought to demonize Obama as a “radical” and a “socialist” by linking him to Saul Alinsky, one of the founders of modern community organizing who died at 63 in 1972. Obama never met Alinsky but he was no doubt familiar with his ideas, summarized in two books — Reveille for Radicals (1946) and Rules for Radicals (1971).

Tens of thousands of organizers and activists have been directly or indirectly influenced by Alinsky’s ideas about organizing. Most of them — like the young Barack Obama — have been liberals and progressives, following Alinsky’s instincts to challenge the rich and powerful. The left, however, has no monopoly on using Alinsky’s techniques. After Obama took office in 2009, even as the Tea Party and conservatives like Glenn Beck attacked Obama for being a radical, they began recommending Alinsky’s books as training tools for building a right-wing movement. Freedom Works, a corporate-funded conservative group started by former Republican congressman Dick Armey, used Rules for Radicals as a primer for its training of Tea Party activists. One Tea Party leader explained, “Alinsky’s book is important because there really is no equivalent book for conservatives. There’s no ‘Rules for Counter-Radicals.'”

There are tens of thousands of Americans today who earn a living as organizers for unions, environmental groups, LGBT and women’s rights groups, community organizations, school reform groups, and others causes, and millions of people who participate in the meetings, lobbying campaigns, get-out-the-vote efforts, and occasional protests that these groups sponsor.

The mainstream media routinely ignores community organizing except when groups engage in dramatic protest, such as the current turmoil in Ferguson and elsewhere. Not a single daily newspaper has a reporter assigned full-time to cover community organizing. Environmental reporters mainly focus on scientific debates or politicians’ maneuverings over legislation, not the grassroots activism that helps turn pollution problems into public issues. Every newspaper has a business section that typically regurgitates the activities of corporate America, but the New York Times is the only major daily newspaper with a full-time reporter covering the labor movement, but last week that reporter, Steve Greenhouse, announced he would soon leave the paper and it isn’t clear whether the Times will replace him on the labor beat.

The editors of most major newspapers and TV networks can probably tell you the name of the CEO of at least one major Wall Street bank or the head of the U.S. Chamber of Commerce, but few likely could identify the leaders of the AFL-CIO, SEIU, the Center for Community Change, National Peoples Action, PICO, U.S. Action, the National Domestic Workers Alliance, Planned Parenthood, the Sierra Club, or the NAACP, and few reporters for local papers cover the day-to-day activities of the thousands of groups that mobilize people at work, in their neighborhoods, and through their faith-based congregations. Occasionally, a mainstream media outlet will highlight the impressive work of a local grassroots organizing group — such as Greenhouse’s recent profile of the Los Angeles Alliance for a New Economy and stories by the Washington Post’s Dina ElBoghdady and the Wall Street Journal’s Joe Light about the growing success of a network of local community groups to pressure banks and Fannie Mae to halt foreclosures and instead renegotiate loans with “underwater” homeowners. But organizers know that if they want to get their campaigns and issues in the news, they usually have disrupt business-as-usual, because otherwise they are invisible to the vast majority of reporters and columnists.

Activists in the environmental, immigrant rights, community organizer, and labor movements had hoped that Obama would use the growing network of grassroots organizers to his advantage. They figured that he would understand that protest in the streets, workplaces, and neighborhoods would make it easier for the president to achieve his liberal policy agenda. They wanted Obama to follow the example of Franklin D. Roosevelt, who recognized that his ability to push New Deal legislation through Congress depended on the pressure generated by protesters — workers, World War I veterans, the jobless, the homeless, and farmers — even though he didn’t always welcome it. They thought that Obama would learn the lessons that Lyndon Johnson learned in the 1960s, when the willingness of civil rights activists to put their bodies on the line against fists and fire hoses shifted public opinion and transformed LBJ from a reluctant advocate to a powerful ally, joining forces with Rev. Martin Luther King and others to get Congress to pass his Great Society plans, such as the Civil Rights Act and the Voting Rights Act.

But Obama seemed to abandon his affinity for organizing soon after he entered the White House. He tried to be a consensus-builder, eschewing conflict, even with those in Congress and in corporate boardrooms who pledged not only to defeat his policy agenda but also to undermine his legitimacy as president.

The battle over health care reform in 2009 and 2010 reflected Obama’s ambivalence toward disruptive activism. At first, White House staffers discouraged Health Care for America Now (HCAN), a coalition of labor, consumer, and community groups, from mobilizing protests, worried that it would alienate moderate Democrats who had close ties to the drug and insurance industries. But when it appeared that Obama’s signature legislative initiative was going down to embarrassing defeat — due to the rise of the Tea Party movement and the insurance industry’s unwillingness to broker a deal — Obama undertook a cross-country speaking tour to energize voters to pressure Congress members to vote for reform.

“Let’s seize reform. It’s within our grasp,” Obama implored his audience at Arcadia University outside Philadelphia. He denounced the insurance companies, which “continue to ration care on the basis of who’s sick and who’s healthy.” Forgoing the bipartisan rhetoric that for months had frustrated activists, Obama taunted Republican critics who have stymied reform: “You had 10 years. What happened? What were you doing?”

“I’m kind of fired up,” Obama continued, repeating a phrase he used in his campaign. Then he again appealed for help. “So I need you to knock on doors. Talk to your neighbors. Pick up the phone,” he said.

While Obama was firing up audiences, HCAN — with the White House’s quiet support — organized protests at the offices of leading insurance companies, and even at the homes of top industry executives. The group mounted more than 200 increasingly feisty protest events in 46 states.

It represented an escalation in HCAN’s efforts to spotlight the industry’s outrageous profits, abuse of consumers, and outsized political influence. HCAN publicly warned Democrats not to get duped by the industry’s pledges of cooperation, echoing the old union song, “which side are you on? The industry or consumers?” The protests and media attention emboldened the Obama House to treat the industry as a target rather than an ally, reflected in his increasingly aggressive speeches critical of the insurance giants. Obama signed the Affordable Care Act in March 2010, although he failed to give HCAN the credit it deserved for salvaging health care reform.

Today’s organizers have mostly been disappointed that Obama has been reluctant to play this “inside/outside” game. Instead, he has often been the target of protests by progressive movements, such as the crusade to stop the Keystone Pipeline and the battle to pass immigrant reform. On both issues, however, these movements have influenced and shifted Obama’s stance. He has indicated his willingness to stop the oil pipeline and he recently issues an executive order protecting at least 5 million undocumented immigrants from deportation. Although he’s been unable to push Congress to increase the federal minimum wage, he recently took the labor movement’s advice to use his executive authority to increase wages for employees of private companies that have federal government contracts.

Every so often, however, Obama seems to remember his activist background and uses it to encourage a new generation to organize for change.

“I’m here to enlist your generation’s help in keeping the United States of America a global leader in the fight against climate change,” Obama told students at Georgetown University in June of last year, during a speech announcing his proposal to cut pollution from power plants, expand renewable energy development on public lands, and support climate-resilient investments. Noting that big corporations will resist calls to reduce their unhealthy practices, Obama urged the students to “Convince those in power to reduce our carbon pollution. Push your own communities to adopt smarter practices. Invest. Divest. Remind folks there’s no contradiction between a sound environment and strong economic growth.”

The word “divest” was like a dog whistle to campus activists who’ve been pushing their colleges and universities to rid their endowments of stock in companies that are part of the fossil fuel industry. It looked like the former community organizer was embracing the movement to dump stock holdings in order to compel corporations to be more socially responsible?

“‘Invest, divest’ is the most crypto-radical line the president has ever uttered,” tweeted Chris Hayes, host of a news show on MSNBC.

“President Obama’s shout-out to the fossil fuel divestment movement is a huge endorsement for the students on over 300 campuses across the country who are running this campaign,” said Jamie Henn, Communications Director for 350.org, a key advocacy group for campus divestment. “If the U.S. president supports divestment, surely university presidents should do the same. My Twitter feed absolutely lit up with students tweeting the news, people are pumped.”

Two days later, while visiting Senegal, Obama recalled his first foray into activism.

“My first act of political activism was when I was at Occidental College. As a 19-year-old, I got involved in the anti-apartheid movement back in 1979, 1980, because I was inspired by what was taking place in South Africa.”

Now, another protest movement against racist injustice — triggered by the killings of Michael Brown and Eric Garner, and the failure of the criminal justice to indict their killers — has propelled Obama to recall his community organizing roots.


(This feature was crossposted at Huffington Post.)

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Politics & Government

Rick Scott Super PAC Donations Challenge Federal Anti-Corruption Rule

The Florida governor led a group that raked in cash from Wall Street firms after Scott’s administration gave them pension deals.

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Rick Scott photo by Gage Skidmore

A super PAC led by Florida Gov. Rick Scott raked in donations from two private equity executives after Scott’s administration directed lucrative state pension investments to their firms, according to government records reviewed by MapLight and Capital & Main.

The donations were made to a committee that’s now supporting Scott’s U.S. Senate bid, despite a federal rule designed to prevent financial firms from bankrolling the election campaigns of public officials who oversee state pension investments.

Scott, a Republican, began chairing the New Republican PAC in May 2017 and announced his former campaign manager would serve as its executive director. Soon after, the group received $5,000 from New Mountain Capital Chief Executive Officer Steve Klinsky and $50,000 from Energy Capital Partners founder Douglas Kimmelman.

The contributions flowed to the super PAC after New Mountain Capital and Energy Capital Partners received a combined $250 million worth of new investment commitments from Florida’s state pension system in 2014 and 2015. Scott is one of three state officials who oversee the $160 billion pension system. During the most recent fiscal year, the Florida investments generated more than $3 million in fees for the firms.

A 2010 Securities and Exchange Commission (SEC) rule prohibits firms from receiving investment fees from public pension systems if their executives donate campaign cash to pension overseers like Scott. SEC officials aimed to prevent investment decisions from being shaped by political influence.

But the commission didn’t explicitly bar donations to “independent” political groups, unless the donations were deliberately designed to circumvent the restrictions. And it hasn’t addressed whether a state official can lead a super PAC that received donations from firms with pension business and later be supported by the super PAC.

John Kuczwanski, a spokesperson for the Florida State Board of Administration, told MapLight/Capital & Main that Florida’s first investments in the two private equity firms happened in 2005 and 2009, and he said Scott had nothing to do with new investments during his governorship, which started in 2011.

“The [state’s] initial relationships with both managers predate Governor Scott’s time in office,” said Kuczwanski, whose agency manages the day-to-day operations of the pension system. “Neither the trustees, nor their appointed investment advisory council members are involved in the investment manager/fund selection process.”

Scott’s campaign and the super PAC did not respond to questions from MapLight/Capital & Main. New Mountain Capital and Energy Capital Partners did not return requests for comment.

Energy Capital recently completed the purchase of Calpine, whose natural gas power plant near Tampa is regulated by Scott’s appointees at the Florida Public Service Commission. Kimmelman, who is now a director of Calpine, also donated $35,000 in 2017 to the National Republican Senatorial Committee, which is backing Scott’s Senate campaign.

“A Very Clear Case”

Under the SEC rule — which GOP state parties have tried to overturn — investment executives are not prohibited from donating to independent political groups. But the rule allows regulators to apply restrictions to donations that are deliberately routed through third parties in order to support public officials — a situation that critics argue is happening with Scott and his super PAC.

After the governor announced his Senate bid last week, New Republican PAC’s website began promoting his candidacy. End Citizens United, a Democratic-leaning political action committee based in Washington, DC, filed a complaint alleging that Scott has violated Federal Election Commission rules and is using the super PAC, which can accept unlimited donations, to evade contribution limits. Scott’s campaign says he stepped down as New Republican PAC’s chair in February.

In writing the original rule, SEC officials noted that while they could not restrict all donations to political action committees, contributions to third parties “may effectively operate as a funnel to the campaigns of the government officials.” They said the final rule “prohibits acts done indirectly, which, if done directly, would violate the rule.”

One ethics expert said that those anti-circumvention provisions should apply to the donations to Scott’s super PAC.

“This appears to be a very clear case of close coordination and circumvention of the pay-to-play rule,” said Craig Holman, an ethics lobbyist at the government watchdog group Public Citizen. “This is something that I’d like the SEC to pay attention to.”

“No Loopholes”

The SEC has only occasionally enforced the pay-to-play rule, and the agency hasn’t applied the provisions dealing with third parties to donations to super PACs. Because Scott is a sitting governor who can influence pension investments, he is covered by the rule, which has hampered the fundraising of past governors who tried to run for federal office.

A spokesman for former Texas Gov. Rick Perry’s presidential campaign said the rule prevented him from raising enough money to be competitive in the 2012 race. Bloomberg reported that during the same election cycle, then-New Jersey Gov. Chris Christie was rejected as the vice presidential nominee, partly because Republicans feared the rule would prevent them from raising money from Wall Street firms that do business with his state’s pension system.

“There is no way around it, and there are no loopholes,” said Bill Palatucci, Christie’s longtime advisor.

Even so, in recent years the rule has not deterred financial executives from donating to groups that help lawmakers who can influence pension investments. Financial executives whose firms received New Jersey and New Mexico investments continued to donate to the Republican Governors Association (RGA) when Christie and New Mexico Gov. Susana Martinez led the group. During the 2016 election cycle, executives at firms managing state pension money donated nearly $1.3 million to the GOP association, even as the group boosted the campaigns of Republican governors with power over state pension investments.

Last year, U.S. Sen. Tom Udall, D-N.M., called for the SEC to apply the pay-to-play rule to outside groups “to ensure that no one is able to circumvent these laws by using super PACs, dark money groups or other campaign spending vehicles.” The RGA has argued that because it funds multiple candidates and does not allow donors to earmark contributions for particular races, it can accept donations from firms with investment business that can be influenced by individual governors. The SEC said in 2016 that donations to outside political groups “are independent expenditures that do not trigger” the rule.

“So long as the PAC faithfully observes the requirement to operate independently of candidates, a contribution to a super PAC will not trigger the [rule], even if the super PAC supports a covered official,” Sam Brown, a former advisor to Federal Election Commissioner Ellen Weintraub, wrote in 2016. “Super PACs are increasingly being used in novel ways, and it remains to be seen whether these changes will result in increased circumvention risks.”


This story is a collaboration between MapLight and Capital & Main.

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Policymakers Seek Healthier, More Prosperous California

A summary of legislative proposals discussed at Policy Insights 2018, from gender equality to expanding health-care coverage.

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Seth Sandronsky

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Photo: Program for Environmental and Regional Equity

Over 300 state policymakers, researchers, advocates and service providers explored driving a progressive political agenda to expand economic opportunity and financial security at the Policy Insights 2018 conference held last week in Sacramento. Facts and ideas presented at the event “could help form the basis of a new, future-oriented economic agenda for California in areas like tax policy, health coverage and family supports,” California Budget & Policy Center executive director Chris Hoene told participants as he reviewed the state landscape within Trump World. “It’s about bringing more prosperity to more people and to deepening their well-being.” The nonprofit, nonpartisan Budget Center, which says it engages in independent fiscal and policy analysis to improve “the well-being of low- and middle-income Californians,” hosts the gathering every year. A summary of some of the panels’ discussions follows below.


Despite growth and low unemployment, labor’s share of the economic pie is paltry, Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities in Washington, DC, said in the morning’s keynote address. He detailed many connections between economics and politics, linking workers’ pay and productivity, unions’ difficulties, fiscal and monetary policies, and state and federal budgets. The best progressive policies are the most direct, Bernstein said during a Q&A. “We need to think about direct job creation for folks left behind in rural and urban communities,” he told a panel moderated by Los Angeles Times staff writer John Myers. Such a jobs policy should find a home in the upcoming election season, Bernstein added.

State Senator Holly Mitchell (Photo: Joanne Kim)

Advancing Gender Justice: Boosting Women’s Well-Being Through Economic Security, Employment and Earnings

In a gender equity and justice workshop, Mary Ignatius, statewide organizer of Parent Voices, a grassroots group advocating better childcare policies, stressed the importance of a public platform for the voices of struggling, low-income women. Such a platform can and does help to dispel myths that blame working females for their plight, she said. These women often have no option other than to seek costly and scarce childcare while working outside the home, she said.

Heather McCulloch, founder and director of Closing the Women’s Wealth Gap, said research shows women experience this shortfall as a group. Therefore, organizing with a “strength in numbers” focus to build coalitions is a useful tool to improve women’s investment and savings, McCulloch said.

In blue-collar occupations such as those in the building trades, women’s sexual harassment is rampant, said Jessica Stender, an attorney at Equal Rights Advocates, which describes itself as a national civil rights organization dedicated to protecting and expanding economic and educational access, and opportunities for women and girls. This harassment makes the goal of females “getting in and staying in” such high-paying blue-collar jobs critical, Stender said. She also discussed exploitation of low-wage women workers, saying remedies for occupations such as janitors and restaurant servers range from individual to class-action litigation.

California Budget Prospects for 2018-19 and Beyond

KQED-FM reporter Marisa Lagos moderated a panel on current state budget and policy proposals for the 2018 legislative session, and which featured state Senator Holly J. Mitchell (D-Los Angeles) and Assemblyman Phil Ting (D-San Francisco).

The two legislators focused on new priorities for the criminal justice system. Mitchell urged reforming policies that criminalize poverty and addiction. This change is underway, she said, with more work required. The recent legalization of marijuana for recreational use is a case in point — people are behind bars for crimes that no longer exist. Ting noted that the state prison population is down, but spending for it is up. Both urged fellow lawmakers to support bills that shift spending from prisons to meet the social needs of low-income Californians — such as child nutrition and early childhood education. A related means of improving low-income Californians’ lives is to increase the CalWORKs cash grant, Mitchell said.

She also stressed that closing the education equity gap requires sufficient funding to ensure that all kids who enter kindergarten are prepared to learn. Ting noted that at the local K-12 school district level, better budgetary transparency is necessary to track spending and student results.

Mitchell and Ting said it is vital to continue state laws and policies that deal with the impacts of climate change. They also urged lawmakers on both sides of the aisle to continue to work to improve immigrants’ lives — which they said the Trump White House opposes.

Building on Health Care Reform: Next Steps in State Health Policy

The University of California, Berkeley’s Laurel Lucia noted that despite the Affordable Care Act cutting the number of Californians without health care insurance (from 17 percent in 2012 to seven percent in mid-2017), three million remain uninsured. Undocumented adults (10 percent of the labor force and 58 percent of the uninsured), do not have access to the ACA and Medi-Cal, said Lucia, director of the health care program at the university’s Labor Center. She backed policy options such as Senate Bill 974, introduced by Sen. Ricardo Lara (D-Bell Gardens), to address that.

Anthony Wright, head of Health Access California, a nonprofit advocacy group, focused on policy steps the state could take without federal help, given what he called the national GOP’s and President Trump’s antipathy. Wright announced the launch of Care4All, a new campaign to achieve universal health care coverage in California. A step toward that goal is to expand the affordability of the ACA in the individual market and Covered California marketplace. In this way, he said, consumers would spend less of their income on premiums, copays and deductibles. Wright mentioned SB 910, authored by Senate Health Committee Chair Sen. Ed Hernandez (D-West Covina), that would ban the sale of short-term health and substandard insurance policies that Trumpcare’s ACA overhaul favors, beginning in 2019.

Michelle Cabrera, health care director of the Service Employees International Union, State Council, detailed the causes and effects of high medical prices, including the upward spiral of those costs created by health-plan mergers. As an antidote, she cited Assembly Bill 595, introduced by Assemblymember Jim Wood (D-Healdsburg), to boost the Department of Managed Health Care’s oversight of such mergers. These mergers hike consumers’ prices, she said, and are partly why the U.S. spends more per person on health care than all other nations, yet delivers high-priced and low-quality coverage. Measures such as AB 595 could shed light on the hidden negotiated prices between health plans and providers — the kind of transparency that is now unavailable. Price transparency could expand an overdue discussion of the proprietary forces driving high health care prices, according to Cabrera.

Crafting a New Economic Agenda for California

The conference ended with a plenary discussion of building a new state economic agenda, moderated by the Budget & Policy Center’s Hoene. University of Southern California sociologist Manuel Pastor looked at what worked in California’s postwar economy before its boom ended and social inequality grew to its present extremes. Pastor, director of the USC Program for Environmental and Regional Equity and the USC Center for the Study of Immigrant Integration, urged state politicians to approve a new Master Plan for Higher Education to ensure low-cost access for students, and to increase investment in affordable housing. Such policies, given the state’s changing demographics to a nonwhite majority, can cut the impacts of structural racism, he said.

Hoene described California’s corporate-friendly economy as one that puts employers first and workers last. Alma Hernández, executive director, SEIU California, urged politicians to back better labor standards, which she said would empower working people in their fight to weaken current corporate power over politics and policies. Employers who fracture work into precarious, non-union jobs, for example, harms workers’ lives on and off the job, she said. Natalie Foster, co-chair of the Economic Security Project, pondered the role of political narratives. Who tells whose stories matters in overcoming current social divisions, symptoms of rising income and wealth gaps. “Big ideas matter,” she said, adding that one example is a wealth tax that could generate more revenues for progressive policies.


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Historian: Why Economic Libertarianism Is an Overwhelmingly White Cause

While the eyes of most journalists and citizens have been fixed on Washington and Donald Trump, a Duke University professor warns, Charles Koch-funded groups and politicians are quietly lining up the state authorizations needed for a new constitutional convention.

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Nancy MacLean is a historian in a hurry. Leaning forward, hands pressed on the table in front of her, she is telling a room full of activists that an assault on democratic institutions has created an “all-hands-on-deck emergency” on a scale that “we have not seen in our lifetime.” MacLean has a dramatic flair in her writing and in her personal presentations. She speaks with the urgency of someone who recognizes a pivotal historical moment when she see one.

Seated in the windowless basement of a union hall that is shared with a local economic justice non-profit, she is dressed in a white blouse and blazer.

Those assembled take turns expressing dismay over a divided country, over the daily attack on immigrants, and over the legendary discipline of an extreme right-wing political movement that has advanced all the way to the White House.

“Economic libertarianism produces a kind of social Darwinism — the idea that anyone who is not thriving in the economy must have something wrong with them.”

The Duke University professor says she discovered the intellectual underpinnings of the country’s rightward tilt while digging through the archive of a Southern economist named James McGill Buchanan. She laid out her argument in her impassioned and highly readable 2017 book, “Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. That history holds important lessons for those resisting the right’s ascendance, she tells the group.

The “days of silos are over,” says MacLean. Whereas the left has been focused on discrete campaigns and issues, the extreme right, she warns, has undertaken “an audacious bid that has been six decades in the making to fundamentally change the relationship between the government and the people — and to do so permanently.”

Buchanan, who was 93 when he died in 2013, provided a key set of anti-democratic ideas that propelled the libertarian right’s effort to dismantle the liberal state, while giving plutocrats free rein, according to MacLean. Part of his agenda, MacLean says, included shielding the “makers” from the “takers” by eroding the public’s faith in government as a means to protect the rights of the property-owning class.

Buchanan, a Nobel Prize winner, favored requiring supermajority votes to approve tax increases, making it more difficult for public officials to meet the needs of ordinary citizens. In a long and varied career, he advocated dismantling Social Security, counseled the government of Chilean dictator Augusto Pinochet and nurtured generations of scholars at Southern universities, including at a center he founded at George Mason University with the help of $10 million from the right-wing billionaire Charles Koch.

One of her book’s insights is how conservative legal scholars and economists have understood the degree to which the devil lay in the mind-numbing detail of policy.

“The wicked genius of Buchanan’s approach to binding popular self-government was that he did it with detailed rules that made most people’s eyes glaze over. In the boring fine print, he understood transformations can be achieved by increments that few will notice, because most people have no patience for minutiae,” she writes.

That passage refers to the advice he gave Pinochet’s government, which she argues has hampered Chile’s current president, Michelle Bachelet, from enacting social programs in spite of a strong popular mandate.

Now MacLean is warning progressive activists that the Republican tax bill and its projected $1.5 trillion deficit could help fuel a growing right-wing clamor for a state-led constitutional convention, whose first order of business would be a balanced budget amendment to curtail future government spending.

“While the eyes of most journalists and citizens have been fixed on Washington” and Trump, she warns, “scores of organizations and elected officials funded by Charles Koch and his donor network” have been “quietly lining up the state authorizations” needed for a constitutional convention that will curtail legislators’ ability to serve the needs of the governed. “They now have 28 of the 34 states needed to call such a constitutional convention under Article 5 [of the U.S. Constitution].”

Such a move, she adds, would put the country further down the path toward the “glorious period of liberty” favored by Koch and Buchanan — a place in which workers have “no legal right to organize for collective voice and power” and where corporations are “all but free of democratic accountability” — and where privatization had eliminated Social Security, Medicaid, and Medicare.

Nobody is immune from the right-wing attack on government, says MacLean. “Every civil rights activist, every feminist, every environmentalist, every queer and every retirees’ group who goes to government to move a public agenda is a target for this and will suffer if it goes through,” she says.

Yet this creates a “perverse source of strength,” she says. “Our common need for government can potentially unite all these constituencies across groups to protect and expand democracy.”

MacLean’s fifth book has received a slew of positive reviews from major publications and a National Book Award nomination. Not surprisingly, Democracy in Chains has also drawn an avalanche of attacks from the very right-wing think tank networks that she critiques, as well as complaints from some left academics.

MacLean’s claim of Buchanan’s centrality to the rise of libertarianism, wrote political scientists Henry Farrell and Steven Teles, could be misleading to a progressive movement “liable to overestimate the extent to which the right is operating by a single plan. The most serious danger is that the left might look to this mistaken understanding of the right’s success as a model for how it should organize itself.”

Speaking to Capital & Main, MacLean actually gives some credit to Buchanan, who in spite of his deeply reactionary politics, was “probably the most original thinker about democracy in the last 50 years,” she said.

But Buchanan’s “very, very reductionist analysis” was deployed to erode popular trust in government, she argues.

“He sought to build a case that government could not do what it promised because politicians were not really seeking to advance the public interests as they claimed. They were just trying to get themselves elected using other people’s money. The same was true of all public actors, according to Buchanan,” as she told the union-hall gathering.

MacLean’s book anchors Buchanan’s thinking in the South’s troubled history of segregation and slavery. He advocated for state-funded voucher systems for private schools in the late 1950s, after local officials had closed public schools as part of massive resistance against court-ordered desegregation.

MacLean is careful to say her research found no evidence that Buchanan operated on the basis of racial animus — although he must have understood the context of his proposal for school privatization. MacLean joins conservative scholars in connecting Buchanan’s ideas to those of antebellum South Carolina Senator and plantation owner John C. Calhoun, who thought democracy needed to be curbed because it failed to preserve the liberty of the slave-owning elite.

And what about today’s libertarians? She believes there is a reason libertarianism has remained an overwhelmingly white cause.

“Economic libertarianism,” she told this website, “produces a kind of social Darwinism — the idea that anyone who is not thriving in the economy must have something wrong with them. There’s always this slippage between [economic libertarianism] and the really ugly white-supremacist right,” she says.

MacLean’s fundamental message is that Buchanan – and the extreme right – have an Achilles heel. Their ideas are extremely unpopular and so they have had to proceed by stealth – whether through voter suppression laws, gerrymandering or other means.

“We’ve had the most radical gerrymandering in American history,” MacLean told Capital & Main. “And they’re trying to destroy labor unions without actually saying that they don’t want working people to have a collective voice.”

“However much they may offer bromides to freedom or liberty in the abstract,” she added about the far right, “what they’re really talking about is freeing corporations, and the wealthiest taxpayers, who don’t support what the majority of their fellow citizens do.”


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David Cay Johnston on the Trump We Don’t Know

A Pulitzer Prize-winning journalist tells of his encounters with Donald Trump, a man he calls a “Potemkin president.”

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Original Photo: Shealah Craighead/White House

“There’s no good ending to Trump’s presidency.”


 

Investigative journalist David Cay Johnston has been reporting on Donald Trump since 1988, and admits that he has long been fascinated with a figure he calls “the greatest con artist in the history of the world.” Johnston first met Trump while reporting on casinos for the Philadelphia Inquirer, and has since served as a one-man fact-checking operation on Trump’s claims. His new book, It’s Even Worse Than You Think: What the Trump Administration is Doing to America, tracks the first 250 days of the administration. Johnston spoke to Capital & Main about what he’s learned while on the Trump beat, and why the mainstream media, despite incessant coverage of Trump, still tends to miss the big story.


Gabriel Thompson:  The title of your new book is It’s Even Worse Than You Think. It seems pretty bad already — what are we missing?

David Cay Johnston:  Journalists have done a very good job of covering Donald’s tweets and the nutty things that have gone on —the palace intrigues. A lot of journalists are not equipped to cover the government, because to do that, you have to understand regulations, budgets and accounting. Most journalists have not trained in those things. They’ve trained in how to accurately tell you the official version of events, and the official criticisms of the official version of events. I’m in the unofficial business.

What’s an example of a story that is being missed or is not receiving the attention it deserves?

David Cay Johnston

Johnston:  Throughout the campaign, Trump talked about how he is all for the veterans. One of the most important things he did was use the word love. He would say to his audience, “We love you. We love our police. We love our veterans.” I think that was a very powerful motivating word. And yet, his first budget proposal sought to cut the benefits for many disabled veterans when they reach retirement age. You’re unable to work because you served your country and you paid a terrible physical price, and you’re currently getting about $35,000 a year. Trump proposed to cut that amount to $13,000. That tells you that he doesn’t care about the vets.

The only area that some Trump critics might give him some credit is on his knowledge of taxes. But you push back on this as well.

Johnston:  Donald testified under oath that he knows nothing about accounting. Well if you don’t know accounting, you cannot know taxes. That’s like saying I’m an expert in flying jet fighters, but I don’t know what lift is. I tried to give Donald tax advice in 1990—my purpose wasn’t to save him money, it was to find out if he really understood taxes. We had lunch in Trump’s Castle [a hotel and casino in Atlantic City], and he couldn’t follow my basic, simple advice. At the time, Donald was in deep financial trouble, and I was going over the terms of his ownership, but he didn’t even understand his own deal. When I say Donald doesn’t know anything, I literally mean that.

Of course, it’s not just taxes.

Johnston:  He’s appallingly ignorant. In my previous book, I tell the story of the primary debate, in December 2015, when Hugh Hewitt asked Trump about our nuclear triad and what his priorities would be if we had to make cuts for budgetary reasons. And Trump goes on about how he learned everything there is about nuclear energy from his Uncle John at MIT, a super genius. Hewitt asked again what his priority would be, and Trump mentioned how nuclear is so massive.

“Most journalists have trained in how to accurately tell you the official version of events, and the official criticisms of the official version of events. I’m in the unofficial business.”

Then the question goes to Senator Marco Rubio, not exactly known as a heavyweight. Rubio explained that the nuclear triad is the capacity to deliver nuclear bombs from jet airplanes, land-based missiles, or submarines. This story is important because four months earlier, on his radio show, Hewitt had asked Trump the exact same question. I ran into Hewitt, and I asked him about this, and he said, “Yeah, isn’t that something. He had four months to learn about this and obviously made no effort whatsoever.”

What stood out to you in his recent State of the Union address?

There were of course tons of factual errors and claims that don’t stand up. It was a pretty banal speech, and he applauded himself. Good God! But Donald has some skills. He’s the greatest con artist in the history of the world, and he knows how to craft a line to appeal to people. He knows, when he’s being interviewed, where to have the lighting and camera stationed. The man has significant skills in self-promotion and creating his image. But he’s a Potemkin president. There’s no substance there.

You write in the conclusion that Trump is a symptom of our country’s problems, not the cause. Looking at all the terrible things he’s done, what gives you hope?

Johnston:  There’s no good ending to Trump’s presidency. Whether he’s voted out or impeached, he will go around the country claiming he was robbed and will foment violence. Nothing will hold him back. But we will get through this. We got through the Civil War, through the burning of the capital in the War of 1812, through the Great Depression. Some of the damage we can fix, and some will cause lasting problems. They are approving judges left and right, many of whom are ideologues and marginally qualified. We’ll be dealing with that long after I am gone.

Here’s what gives me hope. The day after he took office, six million Americans turned out in the biggest demonstrations in the history of this country. If that energy can be translated into votes in November, and we can get people to realize that it is our government and we need to act like owners instead of like we’re powerless, then we can move our country in the direction of progress.


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Scenes From Los Angeles’ Women’s March

Photojournalist Joanne Kim captures the sights of Saturday’s Women’s March in downtown L.A.

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Approximately 300,000 people gathered in and around downtown Los Angeles’ Pershing Square Saturday for the 2018 Women’s March. Their signs and banners spoke to a variety of issues that also included climate change and immigrants’ rights. From Pershing Square protesters took to Olive and Hill streets, Broadway and Spring Street towards Grand Park and City Hall. Many held signs focused on encouraging women to vote and run for office.

Many young women and girls took to the streets with their mothers and grandmothers. One young girl sat on her mother’s shoulders holding a sign with a woman’s fist in the air declaring, “We Rise.” Kimberly Castro, from South Gate, California held a sign in support of Planned Parenthood. “Being around everyone makes me feel powerful to make a change, and that all together we do have a voice,” she said.

Across from City Hall, a group of Trump supporters gathered in a small counter-protest. “Go back to Mexico!” screamed one of the Trump supporters. Wendy Rodriguez, whose mother is from El Salvador and father is from Honduras, shouted back, “Go back to your country!” Another young woman waved a sign at the Trump supporters that read, “Anything you can do I can do bleeding.”

All photos by Joanne Kim


































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Erwin Chemerinsky and the Case Against Trump

The constitutional scholar discusses Donald Trump’s tumultuous first year, and what may lie ahead. “It’s very frightening to me,” Chemerinsky tells Capital & Main.

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Danny Feingold

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Erwin Chemerinsky photo by Rpogge

Since Donald Trump took office once year ago, perhaps no American has called into question the legal and ethical behavior of the president with more persistence and authority than Erwin Chemerinsky. One of the country’s preeminent constitutional scholars, and the dean of the University of California, Berkeley’s law school, Chemerinsky has sounded the alarm from day one of Trump’s administration – most strenuously over the president’s alleged daily violation of the emoluments clause of the Constitution. Those provisions bar the president from receiving any form of payment from a foreign government, and also from receiving any payments beyond the salary of the chief executive. Last month, a federal court dismissed a lawsuit that Chemerinsky and other leading legal authorities had helped prepare seeking to stop the president from accepting any further payments – that decision is currently being appealed.

Capital & Main sat down with Chemerinsky at his UC Berkeley office to discuss Trump’s tumultuous first year, and what may lie ahead.


Capital & Main  How would you assess Trump’s first year in office?

Chemerinsky  It’s so much worse than I could have ever feared. I don’t think that we’ve ever had a president who has less respect for the Constitution. It’s reflected in what he expresses with regard to freedom of the press, it’s reflected in the fact that on a daily basis he’s violating the emoluments clause of the Constitution by receiving benefits from foreign governments, benefits from the United States government beyond his salary. It’s reflected in his immigration policies, his travel ban, his efforts against sanctuary cities. It’s very frightening to me.

What does it say about the rule of law in this country that we have a sitting president who, in your view, has been in violation of the Constitution every single day that he’s been in office?

Chemerinsky  Before taking office the president-elect said that he was going to take steps to try to comply with the emoluments clause. None of that ever happened. What’s troubling to me is Congress seems largely unconcerned about it and so far the courts haven’t stepped in.

Is there evidence that any of the president’s decisions have in fact been influenced by payments that his business interests have received?

Chemerinsky  China gave to President Trump some very valuable licenses on trademarks. He’d been trying to get them from China for years before being elected as president. He received them and then he changed his policy with regard to China. Maybe it was a coincidence, but certainly one followed the other.

Some critics observed that the countries that were selected for the immigrant and refugee travel ban did not include any countries where President Trump’s business organization had properties and interests.

Chemerinsky  It’s at least ironic that when you look at the seven countries initially listed in the travel ban, none had Trump interests there. Of course there was also no linkage between terrorists of any of those countries and yet the countries where you could link past terrorist acts to people from those nations, like Saudi Arabia or Indonesia, were not on the list, and those are places where Trump had investments. The travel ban has gone through two more iterations and that continues to be so — Trump doesn’t have any interests in North Korea or Chad, and they find themselves on the list, but the countries where Trump does have interests don’t find themselves on the list.

One other example that is just astounding: The Trump administration has allowed offshore drilling now in all states that have coastal areas except for one — Florida. Of course that’s where Trump has coastal property. Maybe it’s a coincidence, but doesn’t this show exactly the kind of self-dealing that the Constitution’s emoluments clauses were meant to prevent?

Is there a case to be made against President Trump on obstruction of justice?

Chemerinsky  I think that there is significant evidence that President Trump engaged in obstruction of justice. He told the Russians that he fired James Comey for purposes of trying to end the investigation with regard to Russia.

If anybody tries to interfere with an ongoing federal investigation, that’s obstruction of justice. The crime that Richard Nixon would have been impeached for, if he didn’t resign, was telling the FBI not to investigate Watergate because it was a CIA matter. Well, that’s exactly what President Trump apparently tried to do — keep the FBI from investigating.

We also have more evidence that President Trump tried to interfere with the investigation of Russian interference in the election. All of this is the basis for strong concern with regards to obstruction of justice. My prediction is what we’ll see next is the implication of Donald Trump Jr. and Jared Kushner. The question is, will it reach to the president? Will it reach to the vice president?

Do you believe that there is a credible case to be made for invoking the 25th Amendment based on concerns about Trump’s mental health?

Chemerinsky  I think that Donald Trump’s engaged in erratic behavior. I don’t think that he’s shown himself to be mentally ill or physically ill in a way that would justify the 25th Amendment to this point in time. There’s a thing called narcissistic personality disorder — maybe it’s that. But I don’t know if all politicians don’t fall into that to a greater or lesser extent.

Are there any other grounds for legal or constitutional concern about the president?

Chemerinsky  My greatest concern for the next three years of the Trump presidency is whether there’s going to be a moment where a court issues an order and Trump says, “We’re going to ignore it.” When the courts first enjoined the initial version of the travel ban, there were rumblings from Trump that maybe the administration would just ignore the court order. My worry is once the president takes that position, if he does, then there’s nothing to stop him from locking up you or me or anybody else. Once the president says I’m going to ignore a court order then there’s nothing left of the rule of law.

Does Trump’s pardon of former Arizona Sheriff Joe Arpaio lay the groundwork for him to pardon anyone who’s indicted and convicted as a result of the Mueller investigation?

Chemerinsky  The president is allowed to pardon anyone accused or convicted of a federal crime. I think the pardon of Joe Arpaio shows that President Trump has no shame, that he’s not hesitant to use it even in an instance where there was a violation of law. Joe Arpaio was ordered by a court to stop racial profiling. He ignores that court order and continues to engage in it. A judge finds him in criminal contempt, and before the judge even sentences, President Trump says, “I regard Joe Arpaio as a hero, I’m going to pardon him.” Will he do it with regard to the Mueller investigation? We don’t know.

How do you assess Neil Gorsuch’s performance on the Supreme Court?

Chemerinsky  Since coming on to the court on April 6, 2017, Gorsuch has voted together with Clarence Thomas a hundred percent of the time. To put this in context, the last year Justice Scalia and Justice Thomas were on the court together, they voted together 87 percent of the time. Gorsuch so far has been at the farthest right part of the court. Maybe he’ll be different as months and years go by, but for the first nine months of his time on the court, no one has been more conservative.

Do you have concerns that the standards for what is legal and ethical behavior by a president have been damaged by this president in just one year?

Chemerinsky  It’s impossible to know what the long term consequences of that are going to be. Is Trump going to lose to a mainstream Democrat or Republican in 2020 and we’ll regard this as a blip? Or is this the start of something much more apocalyptic?

The United States form of government isn’t going to be here forever. Every form of government is here until it’s not. I believe that the institutions of government can withstand the Trump presidency, but I know many are afraid that this is the start of something that is very different than we’ve ever seen before.


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Study: California Economy Unhurt by Progressive Policies

A new report shows that California, with its higher minimum wage, Medicaid expansion and ambitious climate policy, has done better than 19 Republican-led states with lower taxes and fewer regulations.

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A California worker installing solar panels. (Photo: Danita Delimont/Alamy)

Reducing carbon emissions, raising low-wage workers’ incomes and increasing access to health insurance have not, as critics warned, led to job stagnation and lower GDP.


 

In a direct rebuke to anyone using the term “job-killing regulations,” a recent study shows that a group of progressive policies enacted since 2011 have had no negative impact on the California economy. If anything, the report, “California is Working: The Effects of California’s Public Policy on Jobs and the Economy since 2011,” shows that California has done better than several states that have lower taxes and fewer regulations.

The report’s author, University of California, Berkeley Labor Center researcher Ian Perry, examined 51 progressive policy measures – including environment, safety net, taxation, infrastructure and housing – that Perry coins the “California Policy Model,” or CPM. These policies include laws that provide a path to a higher minimum wage, expand Medicaid as part of the Affordable Care Act, raise taxes on corporations and promote California’s comprehensive and ambitious climate policy.

Perry chose 2011 as a starting point because that’s when Democrats captured majorities in the legislature as well as the governor’s office. Also that year, Proposition 25, which let Democrats approve a state budget with a simple majority vote rather than a two-thirds requirement, went into effect. That opened the floodgates to a wave of progressive policies that have been scorned by conservative politicians, pundits and think tanks.

Perry told Capital & Main that he set out to see whether critics of California’s progressive policies were correct — that, for example, California’s higher minimum wage would increase unemployment, or whether the state’s strict regulations on carbon would send businesses to other states in droves.

To do so, Perry compared wage growth and employment growth in California with statistics from 19 Republican-controlled states. But he also had to create a legitimate control group to weight factors like California’s tech boom, which might have skewed economic results, or a Republican-controlled state’s downturn, which may not have been due to conservative policies. To combat an apples-to-avocados comparison, Perry used a “synthetic control” method to weight data from Republican states to create an alternate California (or alt-California) in which CPM had not been enacted.

Perry found that California – the real California with its CPM – enjoyed higher total employment, private sector employment and GDP than the 19 Republican states and alt-California.

The study, by design, looked at the cumulative impact of policies instead of evaluating specific policies. “Still, one policy stood out to me,” Perry said. “My study found that the expansion of Medicaid through the ACA was one of the more pro-growth policies because it led to a greater demand in health care services and a growth in health industry jobs.”

The biggest takeaway from the study, Perry said, was that policies that make up the CPM – reducing carbon emissions, improving income for low-wage workers and helping more people access health insurance – have not, as critics warned, led to negative economic effects like job stagnation and lower GDP.

“There are warnings from conservatives that [progressive policies] will slow down economic growth, but California is a big piece of evidence that the fears are unwarranted,” Perry said.

Kansas, which went all in on supply side economics under Governor Sam Brownback, showed that the converse is true, that cutting taxes can sometimes kill growth, Perry said.

In a Washington Post op-ed, Jared Bernstein, chief economist to former Vice President Joe Biden, praised the study. He said that, while it didn’t convince him that there’s a direct line between progressive laws and job growth (a relationship Perry did not set out to prove), the study did, “in tandem with tons of other research, convince me that these progressive interventions do not hurt growth.”

The Berkeley study was released as Republicans on Capitol Hill pushed a tax bill heavily weighted to tax cuts for corporations and wealthy individuals, legislation that a majority of Americans are firmly against.

Despite the report’s generally rosy economic picture, Perry points out that some issues threaten California’s prosperity. First, progressive labor standards need to be enforced to combat rampant wage theft in California’s low-wage industries. Second, the effect of very high housing prices in much of the state could undermine some economic gains.

“High housing prices and lack of supply could force more people to live farther away from their jobs, which would increase carbon emissions and make it harder for [businesses] to attract workers,” he said.

And the possible repeal, or undermining of, the Affordable Care Act, could undo some of the economic benefits of the past seven years, Perry said. Another study from the UC Berkeley Labor Center earlier this year showed that California would have lost more than half a million jobs if the Graham-Cassidy repeal-and-replace legislation had passed.


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2017’s Greatest Hits (and Misses)

The political journey between good intentions and the statute book was twisted even by Sacramento standards in 2017. But there was more — much more.

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Bill Raden

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Photo by Bruno Sanchez-Andrade Nuño

Working Californians’ biggest hope during Trump Year One: Sacramento’s Democratic supermajorities:

With a Democrat as governor and a legislature controlled by true-blue supermajorities, it seemed only logical for Sacramento to spearhead the Trump resistance. State Senate President pro Tem Kevin de León (D-Los Angeles) and Assembly Speaker Anthony Rendon (D-Paramount) said as much the day after Donald Trump’s 2016 election, vowing to “set an example for other states to follow.” Twelve months later, a modest raft of new laws aimed at blunting the brazen bigotry of Trump immigration policies — including Senate Bill 54, de León’s hard-won sanctuary state bill — and checking the administration’s planet-killing orgy of climate deregulation.

Working Californians’ biggest disillusionment during Trump year one: Sacramento’s Democratic supermajorities:

The political journey between good intentions and the statute book was twisted even by Sacramento standards in 2017. Of the 2,980 bills introduced by state lawmakers, roughly 35 were drafted as “Trump resistance” measures. But by the time the dozen-plus resistance bills made it to the governor’s desk, they tended to be anodyne wisps of their original forms. Senate Bill 6, San Diego Democrat Ben Hueso’s effort to create a legal defense fund for undocumented workers scooped up in ICE raids, became so toothless that Hueso retitled his “Due Process for All Act” as the “Expanding Due Process Act.” A no-brainer by state senators Mike McGuire (D-Healdsburg) and Scott Wiener (D-San Francisco) designed to force Trump to release his tax returns before getting on the state’s 2020 ballot earned a Brown veto. Most controversially, perhaps, Rendon tabled SB 520, a sweeping Medicare for All-styled measure by state senators Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), before it even received a hearing.

2017’s wannest excuse for a sanctuary state act:

It once virtually banned all state and local law enforcement cooperation with ICE agents. But the bill signed into law by Jerry Brown, which had promised to be the sharpest state rebuke yet to Trump’s mass deportations, now looked strangely familiar. That’s because to get the governor’s signature, the California Values Act had to first pass muster with the powerful California Sheriffs’ Association. The compromise gives ICE full access to prisons and jails, allows police and sheriffs to share databases and to detain and transfer people to ICE if they have been convicted of any crime from a risibly broad list of 800 “hold offenses” recycled from 2014’s California Trust Act. Those include the very serious offenses of “intentionally processing a milk product that is required to be pasteurized without pasteurization, manufacturing a milk product in an unlicensed plant, providing milk product for manufacture or resale to an unlicensed person, or falsifying records required.”

2017’s most unsurprising (if most ignored) Rx for national and California Dems:

Just over 46 percent of California’s registered Democrats turned out for Bernie Sanders in the 2016 presidential primary. That’s nearly the same percentage that pre-election polling for the November vote indicated was motivated by anti-Hillary feelings — presumably disgust over four more years of the romance between Clinton-Obama “New Democrats” and Wall Street — rather than anything remotely pro-Trump. Unfortunately, that lesson was lost on state Democrats when they gathered in May and selected Los Angeles County Democratic chair Eric Bauman as state party leader — in spite of Bauman’s financial ties to Big Pharma. Progressive challenger Kimberly Ellis, who narrowly lost a vote plagued by irregularities, charged that a “clear conflict“ had developed among “those nestled in power.” That diagnosis was echoed in postmortems that urged the disentangling of Democrats — “ideologically and financially — from Wall Street, the military-industrial complex and other corporate interests that put profits ahead of public needs.”

California’s most badly bungled headline of 2017:

The news in November was all about the great Silicon Valley sigh of relief that blew down from Palo Alto like a laissez faire Santa Ana wind: California’s Department of Motor Vehicles had issued its long-delayed driverless vehicle testing regulations that would allow autonomous vehicles on California highways. A potential global market of at least $42 billion by 2025, panted the L.A. Times business pages. But for 3.1 million U.S. truckers (who represent represent two percent of total employment), there was little to cheer. In May, Goldman Sachs became the latest to predict that autonomous vehicle technology will disrupt trucking jobs — one of the last middle-class occupations that doesn’t require a high school diploma — into obsolescence at a rate of 25,000 a month, or 300,000 a year. A far more apropos headline would have been, “Just Say No.”

2017’s poster child for neoliberalism: Elon Musk. Again.

Everything that’s wrong with Silicon Valley’s virulently anti-communitarian, anti-regulatory ethos seems to eventually get uttered by California’s favorite South African-born billionaire bad boy, Elon Musk. And in 2017, Musk did not disappoint. In February, the entrepreneur announced the creation of a new tunnel boring company and its first for-profit venture — digging an express tunnel that will bypass L.A.’s legendarily impenetrable rush hour traffic by connecting Musk’s Bel-Air home with his Space X headquarters in Hawthorne. Those lucky enough to be Elon Musk could see their morning hour commute cut to six minutes. Lest there be any confusion about who the free market best serves, this month Musk tweeted his Marie Antoinette-esque distaste for public transit and its twin aims of affordability and accessibility.

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How a Reporter Got a Corker of a Scoop About the GOP’s Tax Bill

At first David Sirota thought there was no hidden story behind the Republican tax bill. Then a tax lawyer called — it turned out there was plenty to reveal, thanks to the last-minute addition of a special loophole.

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Photo: U.S. Senator Bob Corker (R-TN)

Senator Corker’s defense was, “I didn’t know about the provision because I didn’t read the bill that I’m voting for.”


As the House and Senate moved toward approving the final version of the GOP tax bill, the International Business Times (IBT) revealed in an explosive story Friday that a loophole slipped into the bill in the final minutes will directly enrich President Donald Trump and his son-in-law Jared Kushner, as well as wealthy senators and key members of Congress, including the provision’s writers.

Controversy swirled around the timing of the measure and the fact that deficit hawk Senator Bob Corker of Tennessee abruptly switched his vote in favor of the bill, whose tax cuts the Congressional Budget Office estimated will add $1.4 trillion to the deficit by 2027. Corker had been the lone Republican holdout in the Senate and had previously voted with Democrats against the bill. He has millions of dollars invested in real estate-related limited liability companies (LLCs) that could see a $1.1 million payday from the loophole. David Sirota’s IBT reporting quickly went viral as Corker’s apparent cushy accommodation was splashed across social media under the hashtag #CorkerKickback.

Capital & Main spoke to Sirota for a blow-by-blow account of the developing story, its implications and its consequences.

IBT had been closely following the debate over how the tax measure would treat income passed through a tax shelter known as an LLC, a “pass-through” tax entity because profits pass through to its owners who report them on their personal tax returns. The Senate version had limited tax cuts to pass through LLCs that actually employ people — the “job creators.” The House version has been far broader.

“We took a look at the key tax writers on committees that oversaw the bill as well as leadership,” Sirota said. “And we got a list of their real estate-related LLCs, and a day before the final bill came out, we put together this story about who could benefit. We found that between the conference committee, the Ways and Means Committee, the Finance Committee and the two leaders of the House and Senate, there were 13 members of Congress who owned and were earning income from real estate or from real estate-related LLCs. And depending on whether the final tax bill adopts the House version or the Senate version, they would stand to make a lot of money.”

IBT reported that the members of Congress — including House Speaker Paul Ryan — have between $36 million and $163 million invested in real estate-related LLCs. Between $2.6 million and $16 million in “pass through” income from those investments would benefit from the new provision.

Which version of the pass through would end up in the final tax bill would be determined by the joint House and Senate conference committee. At 5:30 p.m. on Friday, the committee released a final version that appeared to follow the Senate approach, the more rational version, according to tax experts Sirota spoke to.

“At 5:45 we were sort of like, ‘Okay, I don’t think there’s much to really write,’” Sirota said. “‘It looks like they kind of got it out.’ But I said, ‘I’ll talk to a couple of tax lawyers who have been following this.’ And what do you know? One of them comes back to me at 6:15 and is like, ‘You know, they added this one extra line that’s not in either of the bills. It talks about depreciable assets. This is the loophole.’ He said something along the lines of, ‘It’s narrow enough that it shows intent for a specific kind of investment vehicle.’”

Senator “John Cornyn on his Twitter feed is promoting a lobbyist’s talking points to defend this bill.”

The original House tax cut on pass-throughs, Sirota explained, was broad enough to argue that it was merely an ideological, across-the-board tax cut rather than something that picked specific winners and losers. But the additional line was included with one intent in mind. That line carved out a particular tax windfall for owners of rental-income generators like apartment buildings or commercial office complexes, depreciable property with few or no employees.

“That’s when we realized this is an absolutely enormous story,” Sirota said.

The real estate-specific windfall immediately raised the question of whether the LLC pass-through had been part of a deal aimed at influencing Corker to switch. When asked to comment on the pass-through for a followup story, Corker didn’t seem to be familiar with it, Sirota said.

“He called it ‘ridiculous,’” Sirota said. “But then he called back — he must have talked to somebody — and he said, ‘You know, I’m not sure I want to criticize it that way. You know, I need more information. I haven’t really read it. I’ve only read a summary of the bill. I haven’t read the bill.’ Which is, of course, another story: You’re the key vote on a $1.5 trillion [deficit] bill, and you’re announcing your support for it, admitting that you didn’t even read it. So your defense is, ‘I didn’t know about the provision because I didn’t read the bill that I’m voting for.’ That became another sort of huge story about how [Republicans] are rushing the bill through without even the pivotal vote having read it.”

What followed Sirota’s story was a firestorm of public outrage on social media. Under mounting pressure, Corker wrote a letter to Utah Republican Orin Hatch, the head of the Senate’s tax-writing committee, supporting the narrative that he didn’t know anything about the pass-through by asking for clarification of the provision, where it came from and how it got in the bill. To take the heat off Corker, Hatch replied on Monday, insisting that he had authored the loophole. Hatch added that Corker and his staff never contacted the tax-writing committee about the bill, in effect publicly admitting that a key swing vote on the tax bill wasn’t even communicating with the staff or the members of the panel writing it.

However, the Hatch alibi could not withstand new reporting that revealed Corker’s chief of staff, Todd Womack, had been investing heavily in a real estate LLC in the run-up to the bill and also stood to profit from the provision. Worse, Texas Republican Senator John Cornyn, in a Sunday appearance on ABC’s This Week, admitted that the decision to include the pass-through came from an effort to “cobble together the votes we need to get this bill passed.” With Cornyn suddenly under attack himself, his office aggressively tried to backpedal.

“They were upset that anybody viewed it that way,” Sirota noted, “but you can read the transcript. It was very clear that’s exactly what he said. It’s incredible: Cornyn is now defending the provision on his Twitter feed — I swear to god, you cannot make this up — by sending out an article written by a bank lobbyist who is lobbying on this provision. So John Cornyn on his Twitter feed is promoting a lobbyist’s talking points to defend this bill.”

But Sirota noted that the neither self-enrichment nor massive, deficit-hiking tax giveaways to corporations and the richest Americans are new. Republicans have been redistributing the country’s wealth upwards since the days of Ronald Reagan. What actually is precedent-setting about this tax bill, he said, is how explicit it is.

“There’s no pretense in this bill,” Sirota said. “There was a thing the Republicans put out in their summary when the bill came out. I tweeted out the graphic. It was sort of in a section about trying to prevent people from using their LLCs to put their wage income into their LLCs. They called it ‘safeguards’ — and I’m paraphrasing here — ‘We have put safeguards in to make sure that the business income taxes not go to wage earners.’ They are very crystal-clear that this is a tax bill not for workers. This is a tax bill for corporations and business owners. That is the ideology. They’re actually open about that. They want the public to know.”


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State Senator Predicts “Sledgehammer Time” If GOP Tax Bill Passes

Holly Mitchell, a leading legislative advocate for children and low-income Californians, says the state may return to the days of budget cutting if the current Congressional Republican tax plan becomes law.

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State Senator Holly Mitchell (All photos by Joanne Kim)

Holly Mitchell, the state Senator who represents Los Angeles’ heavily blue-collar 30th District, has been called by one colleague the “social conscience of the entire Senate.” A personable policy wonk whose career included a stint as chief executive of Crystal Stairs, a child development nonprofit, Mitchell chairs the Senate Budget Committee — the first African-American woman to do so. She recently sat down in Pico-Fairfax with Capital & Main at the Paper and Plastik Cafe to talk about the possible effects of the Republican tax bill on California’s poor.


Capital & Main: Taking the temperature between now and New Year’s, what’s your prognosis for the House and Senate tax bills?

Senator Mitchell: The GOP tax plan is a redistribution of wealth from the poor to the rich or semi-rich. It gambles away the health care of poor people and this is unacceptable.

I’m so disappointed with the work of the [U.S.] Senate Budget Committee. I can’t imagine being a legislator, getting a report from the Congressional Budget Office that says the things it says about these bills — and voting to pass it. Did they ignore it? Did they not care?

One Senator, when interviewed, expressed concern about the bill’s potential to make the deficit skyrocket. When asked if that was enough to make him not vote for it he said, “I’m not sure. I’m still working on it.”

Senator Mitchell: The whole point of having the support of fiscal analysts and the Congressional Budget Office, with their independent status, is to provide you with critical data to help you make a decision. How can you say, “Oh yeah, that’s bad, but I’m not sure if I’m going to go forward on this or not”? Politics is continuing to trump — lowercase T—what’s best.

Is Sacramento concerned?

Senator Mitchell: Am I concerned? Yes! But I think what I’m more concerned about now is the Healthy Families Program.

This is the entitlement for California families who aren’t poor enough for Medi-Cal — but don’t earn enough to have private insurance.

Senator Mitchell: It provides care for about two million kids [and] requires federal reauthorization. And [Congress] has not reauthorized it. That could have immediate impacts on California’s budget. It’s a separate process [from the federal tax bills] but they have already missed the deadline.

It’s also been said that the tax proposals could undermine affordable housing construction in California because they would affect the credits and tax breaks that developers receive.

Senator Mitchell: Yes, which are critical for developments to pencil out. Given how far behind we are in terms of our housing-unit need, it would be devastating. L.A. County has done amazing things — voters have said yes to Prop M, yes to Prop HHH. All of that could be compromised — this delicate balance where developers can come in, get these credits to build affordable units. We’re already behind the eight ball in terms of our need. This would be yet another blow.

Defenders of the tax bill say everybody will get their taxes cut initially. Then by 2027, according to the Congressional Budget Office, middle- and low-income people will experience a net loss.

Senator Mitchell: They claim that they’re protecting “the middle class” — folks who make $100,000 and over. But that’s not how we define the middle class in California—here the salary threshold is much lower. What they claim is good news, I think, masks the bad news. And they’re rushing it through the process.

What steps are needed to analyze and create a response for a new federal tax plan’s effect on California?

Senator Mitchell: It will be a process. Unlike [the U.S. Senate], I will rely on our Department of Finance, the Legislative Analyst’s Office, the Senate Budget Committee staff to have discussions, to have a full budget hearing.

What’s your sense of the tax proposals’ potential effect on the state’s economic health?

Senator Mitchell: How we earn income as a state government could be severely impacted. We are socking money away into rainy-day funds to try to prepare for the time at which our recovery will slow down — [but] we couldn’t save enough to prepare for these [federal] proposals and the kind of hole they could blow in the state’s general fund.

What’s your plan if California does take a financial hit?

Senator Mitchell: As budget chair, I would be forced, as painful as that would be, to go back to the days of cutting. We may not be able to use a scalpel. It may be sledgehammer time — it would be devastating. In terms of the trend we’ve experienced with investments in K through 12, early education, the investments we have made in the last couple of years in the University of California and Cal State University systems — all these investments that we’ve made to expand access to services, would be impacted.

We fund Opti-Cal and Dental-Cal [for eye and dental care] — those are the kinds of core, basic human services that we could potentially have to roll back again. Medi-Cal funding helps undergird and support our overall health-care delivery system. If that went away, everything would be compromised.


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