American Plutocrats

[americanplutocrats]

The Rich And Powerful Get Their Policies Adopted, Even If Opposed By Most Voters

Minnpost.com’s Eric Black takes a look at a a new study which suggests that the rich and powerful are pretty effective at getting their policy needs turned into law. Even if the ideas are ones that are opposed by a majority of voters: There were plenty of cases in which policies supported by the wealthy or the big lobbies became law even though they were opposed by the popular majority. (He mentioned a few, including the North American Free Trade Agreement, the Bush tax cuts and the 1999 repeal of the Glass-Steagall law — which was widely blamed for facilitating the economic collapse of 2007-8 — that were adopted even though they were opposed by the majority of Americans.)But they found no cases in which a policy with majority support was adopted without additional support by wealthy Americans or organized influence. That’s the key to Gilens’ statement that “only people with money or organized influence matter.” These results are one that I think many Americans already believe on some level. There is a growing sense that most of us have very little influence on the big picture. We’re worker drones, which isn’t the promise made by the Founding Fathers. 

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Mike Huckabee’s Morality Problem

In an election where economic inequality is a growing campaign issue, Republican Mike Huckabee should - at least in theory - be a good choice for voters. He exudes a populism that is at odds with the corporate-dominated national Republican Party and he can legitimately argue he’s the best choice in the Republican primary campaign for voters who care about economic issues and the “working man.” But as Josh Kraushaar notes in National Journal today, undecided voters who might be attracted to his economic message aren’t so thrilled about his very conservative social agenda: The biggest challenge for Huckabee is whether he can appeal to a wider swath of voters than simply the socially-conservative evangelicals that make up his political base. His message is broadly populist, but of the seven states he carried in the 2008 nominating fight, five were in the deep South. Less religious working-class voters who would be most receptive to his economic message might be turned off by the moralistic tone of his speeches. And he faces more competition from social conservatives than he did in 2008, with Ted Cruz, Ben Carson, Rick Santorum, and even Scott Walker making a play for those voters.

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Vox.com’s Matt Yglesias sends out a regular newsletter through TinyLetter, and it’s always a good read. Sometimes he’s referencing his Vox work, but he also talks about things that don‘t quite fit anywhere else. I recommend subscribing. In today’s newsletter he talks about college degrees and the fact that while recent college graduates might face some challenging job prospects, in general they still have it better than non-college graduates. I thought this part was especially on the mark: The same issue arises, I think, in lots of debates about the role of "culture" or "values" in leading people into poverty. What is true is that if you look at an individual poor person, it is generally true that there are various points in time at which had that individual displayed more grit/work ethic/diligence/prudence/etc she would be better off financially. But it doesn't follow that everyone's economic circumstances could be collectively improved primarily through an increase in grit. Under conditions of scarcity, the distribution of economic resources is in part a positional race. If 10 people apply for a job opening at McDonalds and nine of them have criminal records, the other person will probably get the gig. But it doesn't follow that had all 10 people avoided prison the would all be employed. There's still just one job to fight over. The meaningful change has to come from the other direction. If economic growth is strong and there are lots of job openings, then employers need to take risks on dicier candidates and invest more in training and workforce development. You can push this logic too far. America as a whole would be poorer with zero college graduates and it would be richer if everyone finished high school. But by and large advice to an individual and a strategy for national prosperity are different things.

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Why Economic Inequality Should Not Be Seen As An Urban Issue

Political writers and the politicians they cover tend to conflate economic inequality and urban poverty. That confusion suits the purposes of politicians, since both sides use urban poverty as a wedge issue with the core constituents. But the issue of economic inequality cuts across political and physical boundaries and the political party that figures out how to speak to that issue will be the one that dominates American politics over the next decade. A single working mom in urban south Chicago faces some of the same economic challenges as a shift manager at an A&W in Birmingham, Alabama. Wages that don’t pay the bills, lack of upward mobility and an unclear future for their kids. But the argument for commonality goes against the instincts of many politicians who worry that expanding the definition of “economic equality” will somehow alienate their party’s loyal voters. The Plum Line’s Greg Sargent has an interesting piece today on urban poverty and how voter demographics make it increasingly easy for Republican House members to ignore the issues of urban poverty:

Republicans probably need to win Florida and Ohio to win the presidency, and those, along with other states they will set their sights on, such as Wisconsin, Virginia and Pennsylvania, all have major urban centers. Wasserman notes that the debate over urban policy might actually end up mattering more in terms of the battle for suburban voters — rather than urban dwellers — in these states.

Republicans are “competing for suburban voters around places like Richmond and Milwaukee,” Wasserman says. “They don’t need to prove they are activists. They just need to prove to moderate suburbanites that they care.”

But in a twist, the GOP strategy for tightening the party’s grip on the House — the party’s bulwark against national demographic change — could end up acting as an obstacle to developing urban policies that might accomplish that. “Republicans have dis-incentivized their participation in addressing these issues because they have stuffed heavily Democratic, heavily minority precincts into urban seats,” Wasserman says. That’s a very valid point if the issue remains urban poverty instead of the larger issue of economic inequality. Yes, the riots in Baltimore were driven by some factors that are very specific to a poor, urban minority neighborhood. But there also some arguments to be made that speak to the larger issues that would resonate with the general pool of American voters. It’s a more nuanced approach, but one that has a great deal of upside.

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A Few Housekeeping Notes

Despite the short amount of time I’ve been doing this, I’m already getting a surprising amount of traffic (looks like more than 20,000 visitors yesterday, according to Google Analytics). So apparently this is an idea that resonates with readers.

A couple of updates and housekeeping notes. The domain americanplutocrats.com should be live sometime today and that will be the official home. Although it will also be live at americanplutocrats.tumblr.com.

I’m still working out the optimal amount of posting. Each day brings plenty to write about, but as much as I’m passionate about economic inequality, I still have to make a living. So there will be days (like yesterday) when I’m somewhat missing in action here. It would be nice if I could make some money doing this, but until then, other paying writing work has to take priority.

I’ve had a number of people ask about why I haven’t enabled a commenting system here. I like the idea of a spirited political discussion, but my experience has been that it rarely takes place in the comment section. Whether we’re talking Fox News or Politico, every web site that posts political stories ends up a comments section that is a cesspool. I could offer a moderated comments section, but that would require a lot more time than I have available right now. That having been said, if you want to write up a spirited rebuttal or follow-up to anything I’ve posted, send it to [email protected] and I’ll post it for you. That’s also the best way to contact me directly.

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Given the rumors of the past few weeks leading up to today’s announcement, former Hewitt Packard head Carly Fiorina has been thinking about running for president for awhile. But apparently not long enough for someone to remember to buy the domain name CarlyFiorina.org. That web site had the images above it today, which is a pretty visually brutal recounting of the layoffs that took place at HP during her watch. Sometimes a business record isn’t such a convenient thing to run on.

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It has been disheartening to see some commentators still writing as if poverty were simply a matter of values, as if the poor just mysteriously make bad choices and all would be well if they adopted middle-class values. Maybe, just maybe, that was a sustainable argument four decades ago, but at this point it should be obvious that middle-class values only flourish in an economy that offers middle-class jobs.

Paul Krugman, NY Times, “Race, Class & Neglect”

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Jeb Bush Has Apparently Never Worked Retail

Republican presidential hopeful Jeb Bush gave a big policy speech in February and as I was looking over it again this weekend, I was struck by this criticism of the Obama Administration: “For several years now, they have been recklessly degrading the value of work, the incentive to work, and the rewards of work. We have seen them cut the definition of a full-time job from 40 to 30 hours, slashing the ability of paycheck earners to make ends meet. We have seen them create welfare programs and tax rules that punish people with lost benefits and higher taxes for moving up those first few rungs of the economic ladder. Instead of a safety net to cushion our occasional falls, they have built a spider web that traps people in perpetual dependence.“

The problem is that even if you agree with the premise the major driver for economic inequality is the government, anyone who has ever worked retail understands who makes the decision about “full-time” work and why. The government cut the definition of full-time work from 40 to 30 hours because so many businesses were scheduling their employees to work just under the number of hours which would allow them to qualify for full-time benefits such as health insurance or a 401-K. It was a nice thought, but the result was that many businesses just slashed everyone’s hours to just below the new line and simply hired more part-time employees.

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The Frustrating Myopia Of The Washington Press Corp

Even at this stage in the presidential campaign, the Washington media is obsessed with the optics of the race. Journalists are uncomfortable asking the logical follow-up questions because they are afraid of being seen as “taking a side.” Rep. Paul Ryan was on Sunday’s “Meet The Press” and in response to a question about federal spending on poverty, he delivered his standard argument for allowing the state to have greater latitude on how the money is spent: "I would consolidate many of our federal poverty programs into flexible programs to go to our states," he said. "We're actually dis-incentivizing a person from getting on with their life and going to work. It-it pays not to take that risk to take a job to go help improve your life because of the benefits you lose."

But is that an accurate representation of the state of federal poverty programs? Rather than looking at that question, journalists seem more interested in how Ryan’s statements play politically.

I’d like to hear a journalist follow up by asking a couple of questions. Since a majority of households receiving food stamps are ones in which at least one person is working, then how does that translate into “food stamps disincentive from working? Based on the numbers, working by itself clearly isn’t helping these families. Secondly, while all the talk this week has been about poverty and its impact on Baltimore, the fact is that whites are a bigger percentage of the food stamp recipients than any other ethnic group. So what does that say about White America? It’s easy to ask questions about the political race. It takes real journalism to ask the questions that might your guest uncomfortable and force them off-message.

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Here’s the questions that every voter should ask themselves over the next few months. Are your children going to have more or less opportunities than you’ve had in the past? Do you think they’ll make more or less than money than you during their lifetime? Strip away all the political rhetoric and ask yourself which policy or idea has had the most impact on your personal economic growth? And then compare that answer to the political statements of each candidate.

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Reddit user Bombed recently shared this image, which compares the top contributors to Hillary Clinton and rival Bernie Sanders over the course of their respective political careers. Nine of the top twenty contributors to Hillary Clinton have been corporate, including seven banks and five law firms that often do some sort of corporate lobbying. While 19 of the top 20 contributors to Bernie Sanders’ political career have been labor unions. The data comes from Open Secrets, and as that site notes, the donations often came from individuals rather than the corporations. And there are other variables to consider, including the fact that a Senator from New York is likely to get a lot more corporate money than one from Vermont. That having been said, it does provide a bit of insight into the types of donors that are most willing to support Hillary Clinton or Bernie Sanders.

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Can Hillary Clinton Stand Up To Wall Street’s ‘Incredible Wealth & Power?’

The Washington Post’s Greg Sargent just interviewed Sen. Bernie Sanders from Vermont, who recently announced he was running for the Democratic Presidential nomination. Barring some unforeseen political disaster, I don’t see Sanders having much of a chance to win the nomination. But as this interview shows, he’ll be the perfect person to confront the Clinton campaign about is ties to Wall Street and big business. And unlike Clinton, he’s not shy about pointing out that Wall Street has an immense impact on American politics: I predicted that by deregulating Wall Street and allowing a handful of these mega-financial institutions to grow and to merge that it would be disastrous for the economy. Of course I believe in reestablishing Glass Steagall. But let me go further. I do not believe that, given that six financial institutions have assets today around $10 trillion — 60 percent of the GDP of the United States — I do not believe that Congress has the capability of regulating Wall Street. I believe that Wall Street regulates the Congress and that you gotta break these guys up. These are moments when I curse the naive morons of Occupy Wall Street. They had the momentum and public support to force changes. But no one was willing to do the organization and planning necessary to see it through to the end. Now making changes to Wall Street will be infinitely more difficult and messy.

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Political Corruption Is A Bi-Partisan Problem

Sure, there are serious political differences between Republicans and Democrats and those differences are serious enough to warrant some contentious arguing. But the rich and powerful also like to encourage the differences between us. Because the more we argue amongst ourselves, the less we see what’s going on around us. As Ezra Klein recounts in Vox, while the Clinton Foundation story is troubling, it pales nest to the normal overt political corruption that happens on a daily basis in Washington, D.C. Both on the Democratic side: The dynamics behind Clinton's Super PAC are the precise dynamics that people fear existed in the Clintons' foundation. Extremely rich individuals and institutions will give extremely large sums of money in order to get Clinton elected. These donors will get access, influence, and a certain measure of power over her administration — after all, if Clinton wants to run again, she's going to need them to fund her next campaign, too. And there will be no chance that these donors simply wanted to help Bill Clinton distribute HIV/AIDS drugs in the world's poorest countries. And the Republicans: It's not just Clinton, of course. The Republican candidates will have their own Super PACs. The Koch Brothers, for instance, are coordinating a network of rich Republicans who intend to spend nearly a billion dollars — yes, billion with a "B" — on the 2016 election. And there, the corruption has become almost comically explicit.Rand Paul wrote them a love letter in Time magazine. "Charles and David Koch are well known for their business success, their generous philanthropic efforts and for their focus on innovation in management," he wrote. "Some also know them for their activism in the political realm." Yes, I think I heard something about that activism. It’s fine to support your side and your beliefs. But let’s not fool ourselves. “Our” side is just as corrupt as our opponent’s camp. And corruption that exists to push forward your political beliefs is still corruption. Evil that seeks to change things for the better is still evil.

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NY Times columnist Nicholas Kristof has a piece entitled “Inequality is A Choice.” I recommend reading the entire thing, but he argues that the current level of income inequality in the U.S. is at least partly a result of politicians opting to focus on the problems of the super-rich rich rather than on the problems of everyone else. We as a nation have chosen to prioritize tax shelters over minimum wages, subsidies for private jets over robust services for children to break the cycle of poverty. And the political conversation is often not about free rides by corporations, but about free rides by the impoverished.Kansas’ Legislature is so concerned with this that it recently banned those receiving government assistance from, among other things, spending welfare funds on cruise ships (there is, of course, no indication that this was a problem). Will Kansas next address the risk that food stamps are spent on caviar and truffles? We all know that public money is better used to subsidize tax-deductible business meals by executives at fancy restaurants.As Stiglitz notes: “Inequality is a matter not so much of capitalism in the 20th century as of democracy in the 20th century.”

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Aristocracy And The Supreme Court

One of the more important changes in American Life in the past fifty years or so has been the growth of a informal aristocracy. Wealthy and successful people tend to see other people with their background as intellectual equals. The result is that more and more parts of society-even the government-have become populated with groups of people who all look a lot alike. Whether they’re white, black, man, woman or transgender, this equality of experience is a limiting factor on any attempt to move America away from a plutocracy. The Supreme Court is just one example of this trend. Fifty or sixty years ago, the typical Supreme Court justice was a man. But that was about the only thing they had in common. There were former politicians on the Supreme Court, country lawyers, former heads of government agencies such as the S.E.C. and the occasional practicing lawyer. Felix Frankfurter, whose Supreme Court head the landmark case Brown v. Board of Education was a former head of the American Civil Liberties Union and adviser to President Roosevelt during the New Deal. Contrast that to today’s court. Every sitting Supreme Court judge attended either Stanford, Georgetown or Holy Cross. Each of them went on to study law at Harvard or Yale and at the time they were appointed to the Supreme Court, each of them was a sitting federal circuit-court judge. While there’s nothing inherently wrong with any of that, having a court comprised of judges with similar backgrounds is problematic. No matter how much of a constitutionalist you might be as a judge, your background, life experience and personal  beliefs will have an impact on your decisions. Having a Supreme Court full of lawyers who have all lived variations of the same life isn’t good for the Court of for the country.

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If you’re a Democratic who cares about economic equality, the official announcement that Hillary Clinton is running for the Democratic Presidential nomination is greeted with same enthusiasm a music fan would greet a Jackson Family tour that’s headlined by Tito Jackson. Even those people who are deeply in the Team Hillary camp will admit that she’s an unlikely flag bearer for solving the problems that have pummeled America’s middle class over the past thirty years.

The Hillary Clinton campaign knows that a message arguing against the policies that have increased economic inequality will resonate with voters from both sides of the political spectrum. But the campaign also has no desire to actually move against Wall Street or America’s other big-money interests. In part, because Wall Street is a reliable cash register for any national campaign that promises more of the same for the country’s economic elite. But the other factor is that these are people the Clintons feel close to personally. These Wall Street folks see Hillary as “one of us,” and a reflection of that is seen in this Politico piece from William D. Cohan. Those folks see any message of economic populism coming from Hillary’s campaign as being nothing but political pandering: But here’s the strange thing: Down on Wall Street they don’t believe it for a minute. While the finance industry does genuinely hate Warren, the big bankers love Clinton, and by and large they badly want her to be president. Many of the rich and powerful in the financial industry—among them, Goldman Sachs CEO Lloyd Blankfein, Morgan Stanley CEO James Gorman, Tom Nides, a powerful vice chairman at Morgan Stanley, and the heads of JPMorganChase and Bank of America—consider Clinton a pragmatic problem-solver not prone to populist rhetoric. To them, she’s someone who gets the idea that we all benefit if Wall Street and American business thrive. What about her forays into fiery rhetoric? They dismiss it quickly as political maneuvers. None of them think she really means her populism. And that will be the challenge for Democratic primary voters interested in resetting the economic playing field. Can they push past the triangulation of the Hillary Clinton campaign message and force her to publicly argue for policies that might make her unpopular with the rich and powerful? I suspect that battle will be the defining one for 2015/16 Democratic presidential primary campaign.

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In theory, I like the idea of a presidential hopeful railing against the influence of big money and Wall Street. It’s a smart move politically for a marginal candidate and if the argument does begin to gain traction, it forces the major candidates (who are accepting lots of Wall Street money) to address the issue. Even if they’re really not sincere about making serious changes.Democratic hopeful Martin O’Malley should be the perfect presidential candidate to make this anti-Wall Street argument. He’s trying to find some rationale for voters to pick him over the presumptive nominee Hillary Clinton. And she is as closely tied to big money as is any major candidate on either side of the political spectrum.Yet as Ron Fournier notes in The National Journal, when given the chance to come out hard against Clinton’s ties to Wall Street, he declines to alienate anyone: Where Dean channeled opposition to the Iraq War, O'Malley wants to ride the rage against Wall Street – an issue that could cut hard against Clinton and her husband who have a long history of playing footsie with donors from the financial sector. "Both parties are too beholden to Wall Street," O'Malley told me. To the frustration of many Iowa Democrats, he has not taken the verbal club to Clinton. Two party leaders mischievously suggested that I ask O'Malley if he'd would forsake campaign donations from Wall Street and challenge Clinton to do the same—a mostly symbolic move for O'Malley (he's not getting much Wall Street money anyhow) that would tie Clinton in political knots.                           So I asked. O'Malley responded with a long pause and a blank stare. Then he gave a long rambling answer that I took as a no. He won't rage against Wall Street donation.Backing Hillary Clinton into a corner over Wall Street donations is a great political move-at least in the short term. But there are two huge downsides. The first one is obvious. Team Hillary would be over-the-top angry at the move and if America knows one thing about Hillary Clinton and her team is that they never forget (or forgive) a betrayal.The second problem is financial. On the very off chance that O’Malley wins the Democratic presidential nomination, he’s faced with the prospect of refusing Wall Street money while facing a Republican nominee with an almost unlimited amount of Wall Street funds at his disposal. O’Malley could try and make the same anti-Wall Street money argument against a Republican. But I’m not convinced it would resonate the same way with Republican voters.