Paul Krugman: Rock Bottom Economics

The Inflation and Rising Interest Rates That Never Showed Up

Six years ago the Federal Reserve hit rock bottom. It had been cutting the federal funds rate, the interest rate it uses to steer the economy, more or less frantically in an unsuccessful attempt to get ahead of the recession and financial crisis. But it eventually reached the point where it could cut no more, because interest rates can’t go below zero. On Dec. 16, 2008, the Fed set its interest target between 0 and 0.25 percent, where it remains to this day.

The fact that we’ve spent six years at the so-called zero lower bound is amazing and depressing. What’s even more amazing and depressing, if you ask me, is how slow our economic discourse has been to catch up with the new reality. Everything changes when the economy is at rock bottom — or, to use the term of art, in a liquidity trap (don’t ask). But for the longest time, nobody with the power to shape policy would believe it.

Senate Report: Scale of Wall Street Holdings Are “Unprecedented in U.S. History”

By Pam Martens: November 25, 2014

Last Thursday, the U.S. Senate’s Permanent Subcommittee on Investigations, chaired by Senator Carl Levin, released an alarming 396-page report that details how Wall Street’s too-big-to-fail banks have quietly, and often stealthily through shell companies, gained ownership of a stunning amount of the nation’s critical industrial commodities like oil, aluminum, copper, natural gas, and even uranium. The report said the scale of these bank holdings “appears to be unprecedented in U.S. history.”

Adding to the hubris of the situation, the Wall Street banks’ own regulator, the Federal Reserve, gave its blessing to this unprecedented and dangerous encroachment by banking interests into industrial commodity ownership and has effectively looked the other way as the banks moved into industrial commerce activities like owning pipelines and power plants.

Paul Krugman: Still Waiting for the Collapse

Sometimes the absurdity of what passes for economic wisdom surpasses even my highly adapted expectations.

I really, truly expected that even Wall Street would consider the recent hyperinflation-in-the-Hamptons rant from Paul Singer - the billionaire inflation truther who is sure that the books are cooked - embarrassing and pretend that it never happened. But no. Apparently Mr. Singer's letter to investors is being passed around eagerly by traders and big shots who think it's the greatest thing since sliced foie gras.

Filling the Blanks in Snowden’s ‘Citizenfour’

Exclusive: To grasp the full story of Citizenfour, the documentary on Edward Snowden’s decision to expose NSA spying, you must go back four decades to see how the reality slowly dawned on Americans that their privacy and freedoms were at risk, writes James DiEugenio.

By James DiEugenio

In 1974, at about the time President Richard Nixon was resigning due to the Watergate scandal, director Francis Coppola released his haunting, compelling film about electronic surveillance, The Conversation. Centered within the lives of surveillance technicians and the powerful corporate officers who employed them, Coppola depicted a nightmare world: one fraught with the invisible threat of electronic spying at almost any place, at any time – including in public parks and inside private hotel rooms.

The film had a remarkable double twist at the end. The protagonist, played by Gene Hackman, has found out that, unbeknownst to him, the people who hired him used his work to stage a killing. In turn, they find out about his dangerous knowledge. The long last scene depicts Hackman literally dismantling his apartment, trying to find the microphone his murderous employers have placed in his room.

Meet the Fortune 500 Companies Funding the Political Resegregation of America

—By Andy Kroll | Fri Nov. 21, 2014 6:00 AM EST

Over the past four to five years, the United States has been resegregated—politically. In states where registered Democrats outnumber Republicans and presidential races can be nail-biters, skillful Republican operatives have mounted racially-minded gerrymandering efforts—the redrawing of congressional and state legislative districts—that have led to congressional delegations stacked with GOP members and yielded Republican majorities in the state legislatures.

In North Carolina, Pennsylvania, and Ohio, to name just three, GOPers have recast state and congressional districts to consolidate black voters into what the political pros call "majority-minority districts" to diminish the influence of these voters. North Carolina is an especially glaring example: GOP-redistricting after the 2010 elections led to half the state's black population—1.1 million people—being corralled into one-fifth of the state legislative and congressional districts. "The districts here take us back to a day of segregation that most of us thought we'd moved away from," State Sen. Dan Blue Jr., who was previously North Carolina's first black House speaker, told the Nation in 2012.

Behind 700% Loans, Profits Flow Through Red Rock to Wall Street

By Zeke Faux - Nov 24, 2014

Joshua Wrenn needed money to make the January payment for his Jeep Cherokee.

The truck driver and aspiring country singer in Madison, North Carolina, got $800 within minutes from a website he found on his phone. When he called to check his balance a few weeks later, he was told he had electronically signed a contract to pay back $3,920 to a company owned by an American Indian tribe.

U.S. Senate Tries Public Shaming of New York Fed President Dudley

By Pam Martens and Russ Martens: November 24, 2014

Last Friday, the Senate Subcommittee on Financial Institutions and Consumer Protection, chaired by Sherrod Brown, effectively put William Dudley, President of the Federal Reserve Bank of New York, in stocks in the village square and engaged in a rather brilliant style of public shaming. With each well-formed question posed by the panel, Dudley’s jaded leadership of a hubristic regulator came into ever sharper focus.

There were a number of elephants in the room during the lengthy session that were only briefly touched upon but deserve greater scrutiny by the press. First, Congress knew that the New York Fed was a failed, crony regulator during the lead up to the financial collapse in 2008, but it granted it an even greater supervisory role under the Dodd-Frank financial reform legislation in 2010. This Congress has also failed to engage in public shaming of President Obama for brazenly ignoring the Dodd-Frank’s statutory mandate that calls for him to appoint, subject to Senate confirmation, a Vice Chairman for Supervision at the Federal Reserve Board of Governors, who could have shaped and monitored a more credible policing role for the New York Fed.

Zephyr Teachout Keeps Preaching 'We Can Actually Do Something' About Corruption

SUBHEADINGGOESHERE

Paul Blumenthal
Posted: 11/22/2014 7:30 am EST Updated: 11/22/2014 7:59 am EST

WASHINGTON -- Earlier this year, Fordham law professor Zephyr Teachout emerged as a political star among progressives when she challenged New York Gov. Andrew Cuomo in the Democratic primary and performed far better than expected. Teachout received 35 percent of the primary vote and won over 20 counties despite raising little money. She ran on a strongly populist platform that emphasized the anti-corruption and anti-monopoly principles she hopes to bring to the fore of American politics.

In that vein, Teachout also published a book this year titled Corruption in America: From Benjamin Franklin's Snuff Box to Citizens United, which traces the legal history of corruption. The book was intended, she said, to be a long letter to the Supreme Court's conservative majority showing how wrong they have been in major campaign finance cases.

Thomas Frank: Phony spin even Fox News won’t buy

For decades, the idiot pundit class has pushed Democrats to the right after every loss. It's not working this time

Thirty-four years ago, after a different disaster for Democrats, the pundit form known as the electoral postmortem reached an important milestone. It happened on the “MacNeil/Lehrer Report,” a then-influential PBS news program, on the day in 1980 following Jimmy Carter’s landslide defeat by Ronald Reagan. Morton Kondracke, on his way to becoming one of TV’s most respected bombastinators, was part of a panel sifting through the results. The traditional Democrat among the group was in despair; the Republican was jubilant. Then, like a ray of light through the darkness, came the words of the rising pundit princeling: “It seems to me,” Kondracke announced, “that what the Democratic Party has to do is adopt some sort of a — what might be called a neo-liberal ideology.”

The author from whom I derive this account of that shifting-of-the-tectonic-plates moment, Randall Rothenberg, proceeded to ennoble his description of the exchange with all the drama he could summon: He described Kondracke as a “youthful, guileless Midwesterner,” whose idea—“neoliberalism”—was so brash and shocking and just plumb outrageous that it actually startled the program’s host, Jim Lehrer (“What in the world is that, Mort?”). Indeed, the story of Kondracke’s TV pronouncement was supposed to be so momentous that it was the very first tale Rothenberg related in Chapter 1 of his 1984 salute to political pragmatism, “The Neoliberals.”

Malarkey on the Potomac

By Andrew J. Bacevich, TomDispatch

“Iraq no longer exists.” My young friend M, sipping a cappuccino, is deadly serious. We are sitting in a scruffy restaurant across the street from the Cathedral of St. John the Divine on Manhattan’s Upper West Side. It’s been years since we’ve last seen each another. It may be years before our paths cross again. As if to drive his point home, M repeats himself: “Iraq just doesn’t exist.”

His is an opinion grounded in experience. As an enlisted soldier, he completed two Iraq tours, serving as a member of a rifle company, before and during the famous Petraeus “surge.” After separating from the Army, he went on to graduate school where he is now writing a dissertation on insurgencies. Choosing the American war in Iraq as one of his cases, M has returned there to continue his research. Indeed, he was heading back again that very evening. As a researcher, his perch provides him with an excellent vantage point for taking stock of the ongoing crisis, now that the Islamic State, or IS, has made it impossible for Americans to sustain the pretense that the Iraq War ever ended.

Despite Electoral Defeat, Rev. Barber Touts “Forward Together” Triumph

Isaiah J. Poole

Rev. William Barber II’s new book, “Forward Together: A Moral Message To The Nation,” traces the advance of the Moral Mondays movement in North Carolina, which rose up in response to the right-wing takeover of the North Carolina state government in 2012. But what it doesn’t include is what movement participants hoped would be an electoral triumph: the defeat of state House Speaker Thom Tillis, who pushed a series of hard-right initiatives though the legislature, in his race for the U.S. Senate.

That triumph didn’t happen. But Barber, in an interview weeks later, said the results would still add a positive chapter to the book.

The People’s Republic of Plymouth

The strange and persistent right-wing myth that Thanksgiving celebrates the pilgrims’ triumph over socialism.

By Joshua Keating

This Thursday, Americans will gather together for an evening of family, food, football, and arguing with the relatives about politics. And why shouldn’t that argument extend to the meaning of the holiday itself?

One could argue that the idea of celebrating a rare moment of friendship between America’s early European settlers and its native inhabitants is marred somewhat by the centuries of bloodshed that followed. Yes, Americans of a conservative bent might dismiss this as mere P.C. revisionism. But the right has its own version of Thanksgiving revisionist history—the idea that the holiday is a celebration of the pilgrims’ abandonment of socialism in favor of free enterprise.

The Secrets of the “Secret Science” BillE

What House Republicans really mean when they call for reform of the EPA.

By Boer Deng

Few Republicans have kind words for the Environmental Protection Agency. Many refer to it as a menacing, conspiratorial madhouse—rather than an agency that takes up 0.2 percent of the federal government’s budget to keep the air and water clean. Michele Bachmann once pledged to padlock its doors; John Boehner has called it “nuts”; and Mitch McConnell says getting “the EPA reined in” will be a top priority when he ascends to Senate majority leader come January.

Those who insist the EPA needs muzzling claim it is consistently “overreaching” and making laws at “unprecedented” rates. (The agency is “a regulatory firehose on U.S. business,” intoned the Wall Street Journal.) But such bellows are at odds with the reality. According to the Office of Management and Budget, from 2001 to 2011, EPA regulations accounted for annual benefits to the country worth between $141 billion and $691 billion, while incurring annual costs between $42.4 billion and $66.3 billion. As of 2010, fewer Clean Air Act rules had been proposed or issued under the Obama administration than during the same point in the presidencies of George W. Bush or Bill Clinton.

Sam Pizzigati: Uncle Sam Needs Some Better Nephews

Average Americans have a choice at tax time. They can pay their taxes or risk going to jail for tax evasion.

America’s corporate CEOs have a different set of tax-time choices. These CEOs can have the corporations they run pay Uncle Sam or they can have their corporations pay more to their CEOs.

Painful to read...Warning: disturbing images--Dictynna

Whitewashing Imperialism

by Emanuel Stoakes

When the media erases the crimes of US imperialism, they make future atrocities more likely.

In the final weeks of summer, a minor news item shed light on a corner of the recent past largely forgotten by those north of the Rio Grande. “Beatification of Oscar Romero ‘unblocked’ by Pope Francis” read the headline, referring to the martyred Salvadoran bishop whose path to sainthood had previously been obstructed by a Vatican wary of the late prelate’s political influence.

Romero, as the piece explains, was “one of the heroes of the liberation theology movement in Latin America”; his criticism of atrocities committed by the US-backed Salvadoran armed forces precipitated his assassination at mass in March 1980.

Dean Baker | Seven Years After: Why This Recovery Is Still a Turkey

December will mark the seventh anniversary of the beginning of the recession brought on by the collapse of the housing bubble. Usually an economy would be fully recovered from the impact of a recession seven years after its onset. Unfortunately, this is not close to being the case now.

It would still take another 7-8 million jobs to bring the percentage of the population employed back to its pre-recession level. The 5.8 percent unemployment rate (compared to 4.5 percent before the recession) doesn't reflect the true weakness of the labor force since so many people have dropped out of the labor force. Furthermore, more than 7 million people are working part-time who would like full-time jobs. This is an increase of almost 3 million from the pre-recession level.

41 men targeted but 1,147 people killed: US drone strikes – the facts on the ground

New analysis of data conducted by human rights group Reprieve shared with the Guardian, raises questions about accuracy of intelligence guiding ‘precise’ strikes

Spencer Ackerman in New York

The drones came for Ayman Zawahiri on 13 January 2006, hovering over a village in Pakistan called Damadola. Ten months later, they came again for the man who would become al-Qaida’s leader, this time in Bajaur.

Eight years later, Zawahiri is still alive. Seventy-six children and 29 adults, according to reports after the two strikes, are not.

10 Fun Facts About the Student Debt Crisis

By Kyle McCarthy

1. Bigger than Most Countries

Currently, more than 40 million Americans hold student debt. The population with student loans is actually greater than the entire population of Canada, Poland, North Korea, Australia and more than 200 other countries. It's also about four times greater than the population of Sweden.

2. Giant Corporations can File for Bankruptcy, but Bankruptcy is Not an Option for Student Borrowers

Let freedom ring! Earlier this month, Freedom Industries, the company responsible for a chemical leak which contaminated drinking water in West Virginia, filed for Chapter 11 bankruptcy protection. The company faces 25 lawsuits, but by filing for bankruptcy protection, Freedom Industries is able to halt most litigation.

Jeb Bush’s Four Mysterious Companies Share The Same Address And Have Never Done Any Known Business

by Josh Israel
Posted on November 21, 2014 at 10:32 am

Jeb Bush and his capital investment company have set up several companies that, despite being registered to his office and being approved for “any and all lawful business,” have seemingly not yet done anything. A ThinkProgress review of corporate registration records with the Florida Department of State revealed several companies registered in Bush’s name but little additional information.

In addition to his lengthy and troubled history as a business consultant and corporate board member, in recent years former Florida Gov. Jeb Bush (R) has ventured into a new territory: capital investment. Since 2008, he and his partners have registered a lengthy array of secretive companies with the state of Florida.

Our Government Has Become a Clearing House for Big Money

By Bill Moyers and Michael Winship

November 21, 2014 | We’ve been watching Congress since the mid-term elections and reading Zephyr Teachout’s terrific history book, Corruption in America: From Benjamin Franklin’s Snuff Box to Citizens United [2]. That snuff box was a gift from King Louis XVI of France. His Majesty was a good friend of the American Revolution but when he gave Benjamin Franklin the gold box, featuring the monarch’s portrait surrounded with diamonds, some of our Founding Fathers objected. They worried that the gift would corrupt his judgment and unduly bias Franklin in France’s favor.

The framers debated the meaning of corruption at the Constitutional Convention in 1787, and Americans have been arguing about it ever since. Today, gifts to politicians that were once called graft or bribes are called contributions. The Supreme Court has granted corporations the rights our founders reserved for people, and told those corporations they can give just about anything they want to elect politicians favorable to their interests. Diamond and gold snuff boxes are as outmoded as the king’s powdered wig. Now we’re talking cash — millions upon millions of dollars. Quadrupled, quintupled and then some – and it’s not considered corruption.

Warren Torches GOP On Economy: We Tried It, It Was 'Nearly Catastrophic'

By Daniel Strauss
Published November 19, 2014, 3:42 PM EST

Sen. Elizabeth Warren (D-MA) went straight after Republicans, blasting the GOP on deregulation and trickle down economics during a Center for American Progress event on Wednesday.

"The Republicans have a pretty simple philosophy: they say if those at the top have more — more power for Wall Street players to do whatever they want and more money for tax cuts than somehow they can be counted on to build the economy for everyone else," Warren said. "Well, we tried it for 30 years and it didn’t work. In fact the consequences were nearly catastrophic."

Why is Anyone Surprised that Abenomics Failed?

Posted on November 19, 2014 by Yves Smith

In case you managed to miss it, there’s been a fair bit of hand-wringing over the fact that Japan has fallen back into a recession despite the supposedly heroic intervention called Abenomics, whose central feature was QE on steroids.

But Japan of all places should know that relying on the wealth effect to spur growth has always bombed in the long term. They were the first to try that approach of a large scale. That idea was the basis for the Bank of Japan keeping monetary policy super loose in the later 1980s. They explicitly wanted to increase stock market and real estate prices to stimulate more consumer spending. We know how that movie ended.

Social Security advocates fear more cuts in staff and service

By Joe Davidson Columnist November 18

In advance of feared Republican budget cuts, Social Security advocates gathered on Capitol Hill to ward off more hits to a basic federal program that serves nearly all American families.

But while the anxiety over cuts to Social Security might have increased with election victories that will put the GOP in control of Congress in January, everyone gathered in the Capitol Visitors Center meeting room knew that service reductions have been a reality for years, with Congress providing less money than President Obama requested.

We Need to Act Now to Save the Post Office

Wednesday, 19 November 2014 15:40
By The Daily Take Team, The Thom Hartmann Program | Op-Ed

Congress has a lot on its plate this lame-duck session. It has to pass a bill to continue to fund the government by December 11, should fill a number of judicial vacancies, and, at least according to the Constitution, must either authorize or put an end to the war against ISIS in Iraq and Syria.

But those are just the major headline-grabbing items. There are also many less-well-known things that Congress has to get done before the end of the year if it wants to, you know, actually govern the country.

A Citigroup Banker Dies – Along With Responsible Press Reporting

By Pam Martens and Russ Martens: November 20, 2014

Depending on where and when you got your news yesterday on the tragic death of Shawn D. Miller, a Managing Director of Wall Street mega bank, Citigroup, you were either emphatically told he died of a suicide or you were led to believe he was murdered. By late evening yesterday, the story had disintegrated into wild speculation. The New York Daily News ran this stunning headline, based on anonymous sources, at 9:22 p.m.: “Banker, 42, slashed his own throat in Manhattan bathtub during drug- and booze-filled bender: sources.”

It is becoming abundantly clear that if you work for a major Wall Street firm and die a sudden death, it will be shaped, molded, twisted and contorted until it fits with the suicide narrative – no matter how strongly the facts argue otherwise.

Bank of North Dakota Outperforms Wall Street

by ELLEN BROWN

While 49 state treasuries were submerged in red ink after the 2008 financial crash, one state’s bank outperformed all others and actually launched an economy-shifting new industry. So reports the Wall Street Journal this week, discussing the Bank of North Dakota (BND) and its striking success in the midst of a national financial collapse led by the major banks. Chester Dawson begins his November 16th article:

It is more profitable than Goldman Sachs Group Inc., has a better credit rating than J.P. Morgan Chase & Co. and hasn’t seen profit growth drop since 2003. Meet Bank of North Dakota, the U.S.’s lone state-owned bank, which has one branch, no automated teller machines and not a single investment banker.

Paul Krugman: Suffer Little Children

The Tenement Museum, on the Lower East Side, is one of my favorite places in New York City. It’s a Civil War-vintage building that housed successive waves of immigrants, and a number of apartments have been restored to look exactly as they did in various eras, from the 1860s to the 1930s (when the building was declared unfit for occupancy). When you tour the museum, you come away with a powerful sense of immigration as a human experience, which — despite plenty of bad times, despite a cultural climate in which Jews, Italians, and others were often portrayed as racially inferior — was overwhelmingly positive.

I get especially choked up about the Baldizzi apartment from 1934. When I described its layout to my parents, both declared, “I grew up in that apartment!” And today’s immigrants are the same, in aspiration and behavior, as my grandparents were — people seeking a better life, and by and large finding it.

Paul Krugman: Anxieties Over Interest Rates

As usual, my inbox is full of speculations about when the Federal Reserve Board will raise interest rates in the United States. June 2015? Earlier? Has the Fed already waited too long? And as usual, I wonder why anyone is talking about this at all. Yes, the unemployment rate has fallen. But there is huge ambiguity about what level of unemployment is sustainable given the changing demographics, the uncertain degree to which people might return to the work force given better job availability, and so on.

There's also a huge asymmetry in risk between raising rates too soon - which can leave us stuck in either a low-inflation or a deflationary trap for a very long time - and raising rates a bit too late, which at worst means temporarily overshooting an inflation target that's arguably too low anyway. Meanwhile, both wages and the Fed's preferred measure of inflation are showing no hint of an overheated economy.

The Real Roots of Hedge Fund Manager Rage

by Jesse Eisinger
ProPublica, Nov. 12, 2014, 12:10 p.m.

The anger of the investing class has curdled into paranoia.

Paul Singer, the head of the $25 billion hedge fund Elliott Management, had an Edvard Munch moment in his most recent letter to his investors. "Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth," he wrote. Some commenters think the economy is improving, but he wrote, "We do not think this optimism is warranted, and we think a lot of the data is cooked or misleading."

Could hydrogen vehicles take over as the 'green' car of choice?

Now that car makers have demonstrated through hybrid vehicle success that consumers want less-polluting tailpipes, they are shifting even greener. In 2015, Toyota will roll out the first hydrogen fuel-cell car for personal use that emits only water. An article in Chemical & Engineering News (C&EN), the weekly newsmagazine of the American Chemical Society, explains how hydrogen could supplant hybrid and electric car technology -- and someday, even spur the demise of the gasoline engine.

Conclusion: Slow Growth and Inequality are Political Choices. We Can Choose Otherwise.

By Joseph E. Stiglitz

A rich country with millions of poor people. A country that prides itself on being the land of opportunity, but in which a child’s prospects are more dependent on the income and education of his or her parents than in other advanced countries. A country that believes in fair play, but in which the richest often pay a smaller percentage of their income in taxes than those less well off. A country in which children every day pledge allegiance to the flag, asserting that there is “justice for all,” but in which, increasingly, there is only justice for those who can afford it. These are the contradictions that the United States is gradually and painfully struggling to come to terms with as it begins to comprehend the enormity of the inequalities that mark its society—inequities that are greater than in any other advanced country.

Those who strive not to think about this issue suggest that this is just about the “politics of envy.” Those who discuss the issue are accused of fomenting class warfare. But as we have come to grasp the causes and consequences of these inequities we have come to understand that this is not about envy. The extreme to which inequality has grown in the United States and the manner in which these inequities arise undermine our economy. Too much of the wealth at the top of the ladder arises from exploitation—whether from the exercise of monopoly power, from taking advantage of deficiencies in corporate governance laws to divert large amounts of corporate revenues to pay CEOs’ outsized bonuses unrelated to true performance, or from a financial sector devoted to market manipulation, predatory and discriminatory lending, and abusive credit card practices. Too much of the poverty at the bottom of the income spectrum is due to economic discrimination and the failure to provide adequate education and health care to the nearly one out of five children growing up poor.

House Passes Bill That Makes It Harder For Scientists To Advise The EPA

by Emily Atkin
Posted on November 18, 2014 at 6:07 pm

While their Senate colleagues were engaged in a fiery debate over the fate of the Keystone XL pipeline, the House on Tuesday quietly passed a bill that environmentalists say would hamper the Environmental Protection Agency’s ability to use the best scientific information when crafting regulations to protect public health and the environment.

The House voted 229-191 to pass H.R. 1422, which would change the rules for appointing members to the Science Advisory Board (SAB), a group that gives scientific advice to the EPA Administrator. Also called the Science Advisory Board Reform Act, the bill would make it easier for scientists with financial ties to corporations to serve on the SAB, prohibit independent scientists from talking about their own research on the board, and make it more difficult for scientists who have applied for grants from the EPA to join the board.

Inside the Right-Wing Mania over Including 'Under God' in the Pledge of Allegiance

By Tina Dupuy

November 14, 2014 | Did you hear atheists are suing god? According to Fox News’ for-profit preacher Mike Huckabee they do it all the time! “Dear Lord!” he tweeted this week, “Atheists are suing God AGAIN!”

Never mind the spurious premise of a group of people suing the very thing they don’t believe in. That’d be like Republicans suing birth control, scientific evidence or a living wage. Or Democrats, respectively, suing winning.

Thomas Frank on Ronald Reagan’s secret tragedy: How ’70s and ’80s cynicism poisoned Democrats and America

Nixon's lies and Reagan's charms created the space for Clinton, Carter and Obama to redefine (and gut) liberalism

“The Invisible Bridge” is the third installment in Rick Perlstein’s grand history of conservatism, and like its predecessors, the book is filled with startling insights. It is the story of a time much like our own—the 1970s, which took America from the faith-crushing experience of Watergate to economic hard times and, eventually, to a desperate enthusiasm for two related figures: the nostalgic presidential aspirant Ronald Reagan, and the “anti-politician” Jimmy Carter. (I discussed Perlstein’s views on Carter in this space a few weeks ago.)

In blending cultural with political history, “The Invisible Bridge” strikes me as an obvious addition to any list of nonfiction masterpieces. But I also confess to being biased: Not only do I feel nostalgia for many of the events the book describes—Hank Aaron’s pursuit of the home run record, for example—but I have been friends with Rick since long ago, when he was in college and The Baffler was publishing his essays. I interviewed Rick on an Amtrak train traveling from Seattle to Portland, Oregon, a few weeks ago (we were there to do readings from a new anthology of essays); here is an edited transcript of our conversation.

Dean Baker | The Problem of "Stupid" in Economics

MIT Professor Jonathan Gruber has inadvertently become a YouTube celebrity as a result of a video of him referring to the public as "stupid." The immediate point of reference was the complexity of the design of the Affordable Care Act (ACA), which Gruber was describing as being necessary politically in order to deceive the public. With the right-wing now in a state of near frenzy after the Republican election victories, the Gruber comment was fresh meat in their attack on the ACA.

Apart from merits of the ACA, there is something grating about seeing a prominent economist refer to the US public as "stupid." After all, the country and the world have suffered enormously over the last seven years because the leading lights of the economic profession were almost completely oblivious to the largest asset bubble in the history of the world.

Paul Krugman: When Government Succeeds

The great American Ebola freakout of 2014 seems to be over. The disease is still ravaging Africa, and as with any epidemic, there’s always a risk of a renewed outbreak. But there haven’t been any new U.S. cases for a while, and popular anxiety is fading fast.

Before we move on, however, let’s try to learn something from the panic.

Frenzied Financialization

Shrinking the financial sector will make us all richer.

By Michael Konczal

If you want to know what happened to economic equality in this country, one word will explain a lot of it: financialization. That term refers to an increase in the size, scope, and power of the financial sector—the people and firms that manage money and underwrite stocks, bonds, derivatives, and other securities—relative to the rest of the economy.

The financialization revolution over the past thirty-five years has moved us toward greater inequality in three distinct ways. The first involves moving a larger share of the total national wealth into the hands of the financial sector. The second involves concentrating on activities that are of questionable value, or even detrimental to the economy as a whole. And finally, finance has increased inequality by convincing corporate executives and asset managers that corporations must be judged not by the quality of their products and workforce but by one thing only: immediate income paid to shareholders.

Report Funded by Big Business Explains to Small Businesses What's Best for Them

The Atlantic Council has just released another report cheerleading the Trans-Atlantic Free Trade Agreement (TAFTA), the controversial U.S.-EU deal under negotiation, also known as TTIP.

The report pitches the deal as a gift to small businesses.

It was financed by FedEx, the 64th largest corporation in the United States.

Is It Time for the United States to Consider a Shorter Work Week?

By Martin Hart-Landsberg
November 14, 2014 • 2:00 PM

Iceland continues to experiment with new ways to promote majority living standards. According to the Icelandic Grapevine, a bill has been submitted to the Icelandic parliament that would shorten the work week. More specifically, it would change the definition of a full-time work week to 35 hours instead of the current 40 and the full workday to seven hours rather than the current eight.

As the Grapevine reports:

The bill points out that other countries which have shorter full time work weeks, such as Denmark, Spain, Belgium, Holland and Norway, actually experience higher levels of productivity. At the same time, Iceland ranked poorly in a recent OECD report on the balance between work and rest, with Iceland coming out in 27th place out of 36 countries.

Bill Moyers Puts the Spotlight on the Bare Knuckle Fight to Buy and Control Our Democracy

Moyers interviews reformers Lawrence Lessig and Zephyr Teachout on how money dominates our political system.

By Bill Moyers

November 14, 2014 | In this turbulent midterm election year, two academics -- Zephyr Teachout and Larry Lessig --decided to practice what they preached. They left the classroom, confronted the reality of down-and-dirty politics, and tried to replace moneyed interests with the public interest. Neither was successful – this year, at least – but on this week’s show, Bill Moyers talks with them about their experiences and the hard-fought lessons learned about the state of American democracy.

BILL MOYERS: Welcome. What happens when two college professors leave the theories of the classroom behind for the real world of bare-knuckle politics? Well, they learn a lesson the hard way. Just ask Zephyr Teachout and Larry Lessig. Each is an outstanding scholar. She teaches constitutional and property law at Fordham Law School here in New York, and recently published this highly acclaimed book, “Corruption in America: From Benjamin Franklin’s Snuff Box to Citizens United.” Larry Lessig teaches law at Harvard and directs that university’s Edmond J. Safra Center for Ethics. Both champion free and fair competition in our economy and our elections. Zephyr Teachout ran for governor of New York in the Democratic primary against incumbent and friend of Wall Street, Andrew Cuomo.

America’s Pseudo-Democracy

U.S. pundits mock countries, like Iran or China, where candidates are screened before they go on the ballot, but America has a similar approach, with candidates needing approval from plutocrats and special interests. But that’s just one problem of U.S. democracy, says Lawrence Davidson.

November 15, 2014
By Lawrence Davidson

Given the dangerous results of the recent election in the United States – one that saw the Republicans, a right-wing party increasingly populated with neocon warmongers, reactionaries and plutocrats take control of both houses of Congress – it might be time to take a look at a sober look at U.S. democracy.

We can begin be taking note of the generic observation made by Winston Churchill: “Democracy is the worse form of government, except for all the other forms that have been tried from time to time.” The implication here is that democracy is really not the God-blessed system so many of Americans take it to be.

Charles P. Pierce: John Doar, 1921-2014

Anyone who followed the Watergate saga knows that Richard Nixon, history's yard waste and a criminal president, was done in by the monotones. First, there was John Dean before the committee chaired by Sam Ervin, his voice never rising or falling, almost unnaturally without affect, a scapegoat turned lethal, explaining at length why the people in the White House needed a scapegoat in the first place. There was no anger in his presentation. Just one damning fact after another after another, over and over again. The second monotone appeared in July of 1974. It belonged to a lawyer named John Doar. It cut out Richard Nixon's heart and ate it in the marketplace.

For several weeks, the Republicans in the House of Representatives, who were seeking to pull Nixon's chestnuts out of his own self-immolating fire, were leaning on Doar, the counsel to the House Judiciary Committee, to produce his case so they could consider articles of impeachment against the president. Even Democratic members of the House were leaning on Majority Leader Tip O'Neill, who in turn was leaning on committee chairman Peter Rodino, who in turn was leaning on Doar and his staff. Knowing that, ultimately, Rodino had his back just as O'Neill had Rodino's, Doar sent word back up the chain of command to tell the Republican water-haulers and the impatient and nervous Democrats to pound sand. Doar would deliver his report when it was ready, and not before. He was not a nervous fellow, this John Doar. Long before he ever came to Congress, he had been threatened by experts.

Nobel Prize-Winning Economist Reveals Why Robots Really Are Coming For Your Job

Tomas Hirst

Nobel prize-winning economist Joe Stiglitz has a new NBER paper out that comes to a worrying conclusion — the robots really are coming for your job.

In economic theory innovation should make workers more efficient — they can produce more for less — but it comes at the cost of lower skilled jobs as fewer people are required to produce the same amount of output.

Exclusive: Controversial U.S. energy loan program has wiped out losses

By Nichola Groom

(Reuters) - The controversial government program that funded failed solar company Solyndra, and became a lighting rod in the 2012 presidential election, is officially in the black.

According to a report by the Department of Energy, interest payments to the government from projects funded by the Loan Programs Office were $810 million as of September - higher than the $780 million in losses from loans it sustained from startups including Fisker Automotive, Abound Solar and Solyndra, which went bankrupt after receiving large government loans intended to help them bring their advanced green technologies to market.

Chicago Mayor Rahm Emanuel Accepted Campaign Contributions From Financial Firms Managing City Pension Money

By David Sirota

Executives at investment firms that manage Chicago pension funds have since 2011 poured more than $600,000 in contributions into Mayor Rahm Emanuel's campaign operation and political action committees (PACs) that support him, according to documents reviewed by International Business Times. These contributions appear to flout federal rules banning companies that manage pension funds from financing the campaigns of officials with authority over pension systems, say legal experts.

The contributions also potentially conflict with an executive order Emanuel himself signed in 2011 prohibiting city contractors and subcontractors from making campaign donations to city officials.

Mission Creep-y

Google Is Quietly Becoming One of the Nation’s Most Powerful Political Forces While Expanding Its Information-Collection Empire

Nov. 13, 2014 — Google is so rapidly expanding both its information-collecting capabilities and its political clout that it could become too powerful to be held accountable, a new Public Citizen report finds.

Paul Krugman: China, Coal, Climate

It’s easy to be cynical about summit meetings. Often they’re just photo ops, and the photos from the latest Asia-Pacific Economic Cooperation meeting, which had world leaders looking remarkably like the cast of “Star Trek,” were especially cringe-worthy. At best — almost always — they’re just occasions to formally announce agreements already worked out by lower-level officials.

Once in a while, however, something really important emerges. And this is one of those times: The agreement between China and the United States on carbon emissions is, in fact, a big deal.

Wall Street Takes Over More Statehouses

By David Sirota

No runoff will be needed to declare one unambiguous winner in this month’s gubernatorial elections: the financial services industry. From Illinois to Massachusetts, voters effectively placed more than $100 billion worth of public pension investments under the control of executives-turned-politicians whose firms profit by managing state pension money.

The elections played out as states and cities across the country debate the merits of shifting public pension money—the retirement savings for police, firefighters, teachers and other public employees—from plain vanilla investments such as index funds into higher-risk alternatives like hedge funds and private equity funds.

Revealed: US Agency Using Spy Planes to Fool Cell Phones, Capture Data

Newly revealed mass surveillance program by the US government is "inexcusable," says ACLU

by Jon Queally, staff writer

According to new reporting by the Wall Street Journal, the U.S. Marshals Service—an arm of the Department of Justice—has been using small aircraft equipped with technology that can mimic the functions of cell towers in order to capture the data contained on phones and mobile devices of people across large areas on the ground below.

Citing those familiar with the program, the Journal report (subscription) reveals how the program's use of so-called "dirtbox" technology is part of "a high-tech hunt for criminal suspects that is snagging a large number of innocent Americans" in a dragnet approach that will remind some of similar techniques known to be used by the National Security Agency and other federal agencies.

Leaked TTIP Documents Reveal Powerful Chemical Industry Wins

The European Commission may be conceding to corporate interests in controversial trade negotiations

by Nadia Prupis, staff writer

Corporate interests may be winning in U.S.-EU trade negotiations, endangering public health and the environment, a new cache of documents (pdf) leaked on Tuesday show.

Backed by powerful industry advisers and bolstered by U.S. allies who have already made significant concessions to move negotiations along, the Transatlantic Trade and Investment Partnership (TTIP) deal is poised to derail European regulations around the use and transport of chemicals—regulations which are significantly stronger than those in the U.S. The deal would also limit public access to information on toxic and hazardous substances.

After Gutting the Voting Rights Act, Alabama Cites It As an Excuse for Racial Gerrymandering

The state uses a measure it helped destroy to justify redistricting that ghettoized minority voters.

—By Stephanie Mencimer | Wed Nov. 12, 2014 6:30 AM EST

You have to give Alabama credit for its cheek. Last year, the state's Shelby County persuaded the US Supreme Court to find unconstitutional part of the Voting Rights Act that required certain states with histories of discriminatory election laws to get permission from the federal government before changing their voting practices. On Wednesday, Alabama will argue before the court that the same provision it helped decimate compelled lawmakers to racially gerrymander the entire state.

This convoluted case got its start after the GOP took control of both houses of the Alabama state Legislature in 2010. The Republicans then redrew the state legislative voting districts in 2012 as part of the regular redistricting process. The new plan preserved most of the state's majority-minority districts, where black residents had political power and tended to elect Democrats—often African American ones. But state legislators also redrew the lines in a way that minimized the influence of African American voters in districts where they did not make up a majority of voters.

Paul Krugman: The Temptation to Spend

As I've been noting recently, there's a lot of opposition within Japan to the Bank of Japan's policy of printing more money, and there's also a lot of pressure on the government to raise taxes.And that's not very different from what has been happening throughout the rest of the advanced world: Central banks that have pursued quantitative easing have done so despite political pressure, not because of it, and fiscal austerity has been imposed almost everywhere.

The funny thing is that when you ask for justifications for pursuing hard money and tight budgets in a depressed, low-inflation economy, the answers you get often start from the presumption that money printing and deficit finance are immensely tempting to politicians, so that you shouldn't dare let them get even a slight taste of these addictive drugs.

ISPs Removing Their Customers' Email Encryption

By Jacob Hoffman-Andrews

Recently, Verizon was caught tampering with its customer's web requests to inject a tracking super-cookie. Another network-tampering threat to user safety has come to light from other providers: email encryption downgrade attacks. In recent months, researchers have reported ISPs in the US and Thailand intercepting their customers' data to strip a security flag—called STARTTLS—from email traffic. The STARTTLS flag is an essential security and privacy protection used by an email server to request encryption when talking to another server or client.

By stripping out this flag, these ISPs prevent the email servers from successfully encrypting their conversation, and by default the servers will proceed to send email unencrypted. Some firewalls, including Cisco's PIX/ASA firewall do this in order to monitor for spam originating from within their network and prevent it from being sent. Unfortunately, this causes collateral damage: the sending server will proceed to transmit plaintext email over the public Internet, where it is subject to eavesdropping and interception.

Rachel Maddow trolls Arizona Tea Partiers threatening to censor biology textbooks

Arturo Garcia

MSNBC host Rachel Maddow got a step ahead of a trio of lame-duck Tea Party school board members in Arizona on Tuesday, saying biology materials they tried to censor are now available online.

“They’re lovely in their boring biology-ness,” she said of the pages, taken from an AP Biology textbook. “So if you want to brush up on how a baby’s made or how contraception works and all that stuff at a 10th grade level, be my guest.”

Americans want what 21st century politics has so far not delivered: real options for challenging concentrated wealth.

by Sam Pizzigati

What can we expect Congress to do about America’s staggeringly top-heavy concentration of income and wealth over the next two years? Absolutely nothing.

What do Americans want Congress to do about that concentration? A good bit.

Paul Krugman: Death by Typo

The Latest Frivolous Attack on Obamacare

My parents used to own a small house with a large backyard, in which my mother cultivated a beautiful garden. At some point, however — I don’t remember why — my father looked at the official deed defining their property, and received a shock. According to the text, the Krugman lot wasn’t a rough rectangle; it was a triangle more than a hundred feet long but only around a yard wide at the base.

On examination, it was clear what had happened: Whoever wrote down the lot’s description had somehow skipped a clause. And of course the town clerk fixed the language. After all, it would have been ludicrous and cruel to take away most of my parents’ property on the basis of sloppy drafting, when the drafters’ intention was perfectly clear.

The GOP’s poisonous double-speak: Thomas Frank on how Republicans hijacked the midterms

Once again, Republicans used their patented brand of fake populism to make Democrats look like chumps

Last week, with the Republican campaign robo-calls coming one after another over the phone in suburban Kansas City — at least a dozen of them every day, the right-wing super PACs’ version of a World War I artillery barrage — I picked out one phrase from the hailstorm of words: “Washington’s liberal class.”

That phrase, delivered with sneering emphasis on the second word, may have been a key to the whole confusing affair. Consider the many ironies of the 2014 elections. Georgia, the state with the highest unemployment in the nation, just elected as its United States senator a businessman who is “proud” of his career of outsourcing. The voters of Illinois overwhelmingly approved a referendum calling for a higher minimum wage, but they also chose as their governor a Wall Street type who in the past has asserted that the minimum wage ought to be reduced or eliminated. And the public as a whole, driven to fury by the spectacle of Washington gridlock, just handed over the U. S. Senate to a party that has enshrined obstructionism as its most precious article of faith.

Why warnings on climate spark aggressive denials

A new book argues that death threats and abuse illustrate how climate change messengers are being demonised in a way that is without parallel in the history of science.

By: Tim Radford

LONDON, 8 November, 2014 − If you don’t like the message on climate change, it seems that the answer is to shoot the messenger.

According to a new book by veteran environmentalist George Marshall, thousands of abusive emails − including demands that he commit suicide or be “shot, quartered and fed to the pigs, along with your family” – were received by climate scientist Michael Mann, director of Pennsylvania State University’s Earth System Science Centre, who drew and published the “hockey stick graph” that charts a steep rise in global average temperatures.

30 Years of Conservative Nonsense, An Explainer

If those calls to close the borders over Ebola are giving you déjà vu, you might not be wrong.

By Kurt Eichenwald

Are conservatives ever right?

The question isn’t meant to suggest that liberals are never wrong. But reviewing the last few decades of conservative policy initiatives—or their objections over that timespan to policies they hate—shows a consistent pattern of failure: predictions never pan out, and intended results turn to catastrophic flops.

Given the G.O.P.’s midterm victories this week, the question is of particular import. Come January, conservatives will have control of both houses of Congress, and hold a considerable legislative advantage in the last two years of the Obama presidency. Yet not a week ago, conservative politicians and commentators were screaming out batty ideas as they demanded that President Obama close the borders over Ebola, ignoring the advice of infectious disease specialists who know that shutting borders against a disease leads people to make travel by means that aren’t easily tracked, escalates danger, and harms the ability to stop the infection at its source. Conservative know-nothings dismiss the professionals as know-nothings themselves, despite their training and expertise.

This Democratic Party Is Going Nowhere. Can Progressives Take it Over and Change the World?

By Alan Minsky

Tuesday’s crushing defeat of the centrist Clinton/Obama Democratic Party provides an opening for the American left. The next few years are not going to be pretty, but they could be the beginning of something beautiful.

In 2009, shortly after its most crushing national electoral defeat in 44 years, the GOP was sparked back to life by the tea party insurgency. America’s right wing revived its moribund conservative party with a stark challenge to the Republican establishment. The GOP gained 63 House seats in 2010.

“The president is basically in hiding”: Thomas Frank unloads on Dems, Kansas and crushing midterm losses

The Salon columnist dissects Tuesday's GOP rout and a tumultuous Kansas cycle -- and slams the Democrats' response

Luke Brinker

In an election that witnessed crushing Democratic losses in the U.S. Senate, the House of Representatives, and in key gubernatorial races, the victories of Kansas Republicans Sam Brownback and Pat Roberts have been among the most painful for many Democrats to absorb.

Gov. Brownback, after all, trailed Democratic challenger Paul Davis in the polls for most of the 2014 cycle, owing to the destructive fiscal consequences of his large tax cuts. While Democrats expected to sustain tough losses elsewhere, the prospect of knocking off a right-wing governor in Kansas in an otherwise good year for the GOP provided at least some solace. Likewise, the perception that Sen. Roberts had lost touch with the Sunflower State after 34 years in Congress and the vigorous campaign waged by independent Greg Orman presented a rare opportunity to defeat a GOP Senate incumbent.

Midterms 2014: Paying the Gold Price, and the Iron Price

By Lambert Strether of Corrente.

In Game of Thrones, “the iron price” is a concept in the culture of the Ironborn. Paying the iron price means taking by the sword, rather than paying with coin. Thus, it is a primary aspect of the “Old Way”, the traditional lifestyle of the Ironborn. The opposite of the iron price is “the gold price,” which is considered shameful for a man to pay. And it is true that in some ways it’s more honorable to risk your life, sword to sword, than risk your hoard, moneybags to moneybags, and that the midterms were more about gold than iron.

But I’d like to connect “the iron price” to the well-known “Iron Law of Institutions,” explained here by A Tiny Revolution:

Democrats operate according to the Iron Law of Institutions. The Iron Law of Institutions is: the people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself. Thus, they would rather the institution “fail” while they remain in power within the institution than for the institution to “succeed” if that requires them to lose power within the institution.

This is true for all human institutions, from elementary schools up to the United States of America. If history shows anything, it’s that this cannot be changed. What can be done, sometimes, is to force the people running institutions to align their own interests with those of the institution itself and its members.

Could Obama have fixed the economy?

Ian Welsh

I’m hearing “Obama couldn’t have fixed the economy. Wage stagnation is not his fault, it’s been going on for decades!” (For the record it’s been going on for at least 34 years, probably 39, and for some parts of the population, for 46 (that’s when wages for working class white males peaked. Which is why they’re pissy.))

This argument is, to give it more courtesy than it deserves, bullshit. I wrote about this back in 2010, and you can read that article, but let’s run through this one more time, because you will never get good leadership if you keep excusing your leaders for betraying you.

ALEC Corporate Board Chair Quits Over Climate Change, Renewables and Voting Rights

Nick Surgey

The corporate board chair of the American Legislative Exchange Council (ALEC), the software company SAP America, has quit the group, telling CMD that it has made the decision to "immediately disassociate itself from ALEC" because of the group's position on climate change, opposition to renewable energy, its position on gun safety and its attacks on voter rights.

Facing increased criticism of its role opposing action to tackle climate change and for teaching climate change denial, ALEC has lost numerous major corporate funders in recent months, with tech firms Google, Facebook, Yahoo and Yelp all leaving. Most high profile was Google, with Executive Chairman Eric Schmidt telling the Diane Rehm show on NPR that it made a mistake in funding ALEC. "We should not be aligned with such people. They are just literally lying," Schmidt said in reference to ALEC's teaching climate change denial. "The company has a very strong view that we should make decisions in politics based on fact," said Schmidt.

Q&A: James K. Galbraith on the Myth of Perpetual Growth, How Language Shapes Economic Thought, and More

Lauren Kirchner

In Issue 19 of The Baffler, James K. Galbraith debunked the notion that the world’s economists were caught unawares by the financial crisis of 2007 and 2008, in a piece that was appropriately titled “We Told You So.” Now, in his new book, The End of Normal: The Great Crisis and the Future of Growth (Simon & Schuster, 291 pages, $26), he widens his scope, laying out an economic theory that begins in the years following World War II and extends to the future.

One central argument of his book explains why we would be mistaken to expect perpetual growth in the American economy. The post-war decades have raised our expectations, Galbraith says, but for the economy to continue to grow at the same pace would be unsustainable. So we need to adjust our idea of “normal” growth—and even change how we measure overall economic success.

Righteous rage, impotent fury: Thomas Frank returns to Kansas to hunt the last days of Sam Brownback and Pat Roberts

On eve of a possible GOP rout, Frank goes home to rediscover the matter with Kansas and all American politics

PRAIRIE VILLAGE, KANSAS – One of the treasured vanities of my home state of Kansas is the idea that, although we are the nation’s laggards and late-comers in so many ways, there are other departments in which we are way ahead of everyone else, savoring the fast-food treats you will one day savor and debating the issues that you, too, will agonize over before too long. It’s an understandable fantasy for a people who are constantly reminded by the culture at large how lame and uncool they are, but I’ll be damned if it isn’t coming true, for once, in 2014. This week, Kansas may well be the one state that bucks all the national political trends.

Here you have several prominent conservatives, Republicans in one of the most Republican states in the country, running in a year that looks to be a Republican sweep nationwide, and these Kansas Republicans are either behind in the polls or barely keeping pace with their Democratic opponents.

Understanding and Overcoming America's Plutocracy

Jeffrey Sachs

Pity the American people for imagining that they have just elected the new Congress. In a formal way, they of course have. The public did vote. But in a substantive way, it's not true that they have chosen their government.

This was the billionaires' election, billionaires of both parties. And while the Republican and Democratic Party billionaires have some differences, what unites them is much stronger than what divides them, a few exceptions aside. Indeed, many of the richest individual and corporate donors give to both parties. The much-discussed left-right polarization is not polarization at all. The political system is actually relatively united and working very effectively for the richest of the rich.

Brand-name companies' secret Luxembourg tax deals revealed

Landlocked European duchy a “magical fairyland” for global corporations seeking to slash their tax bills

By Leslie Wayne, Kelly Carr, Marina Walker Guevara, Mar Cabra, Michael Hudson

Pepsi, IKEA, FedEx and hundreds of other international companies have secured secret deals from Luxembourg, allowing many of them to slash their global tax bills while maintaining little presence in the tiny Western European duchy, leaked documents show.

These 343 companies appear to have channeled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes, according to a review of nearly 28,000 pages of confidential documents conducted by the International Consortium of Investigative Journalists and a team of more than 80 journalists from 26 countries.

Coming Up: Repatriation, A HUGE Huge Tax Giveaway To Big Corporations

Dave Johnson

Washington insiders are saying that one deal Republicans and President Obama think they can make is a deal to let corporations off the hook for taxes they owe if they “bring back” the money the multinational corporations have stashed outside of the country. The deal is that this is in exchange for using some of it to fix up our country’s crumbling infrastructure. Here is why this is a bad deal.

A Huge tax Loophole

You have probably heard that big companies use all kinds of schemes to shift profits out of the country to avoid paying taxes. A loophole in our tax laws lets companies dodge (“defer”) taxes on “offshore” profits until they “repatriate” the money, meaning “bring it back into the country.” Of course it would be easy for Congress to just fix this loophole, but this is about really big money, and big money is able to keep loopholes like this from getting fixed.

“It’s about forgetting the past”: Eric Lichtblau exposes how the CIA protected ex-Nazis

The New York Times reporter tells Salon about his new book on one of the U.S.'s greatest moral failures

Elias Isquith

Roughly three-quarters of a century ago, the United States of America threw itself into the giant, history-defining and utterly nightmarish orgy of death, destruction and cruelty that nowadays goes by the name of World War II. And while the U.S. did not enter the abyss because of the Nazis — and in fact only declared war after Hitler did it first — there is little doubt that, ever since VE-Day, the U.S. has been more than happy to take credit as the vanquisher of a regime that most of the developed world still sees as the ultimate embodiment of political evil. (Even if much of that credit is undeserved.)

All of which is to say that when it comes to protecting America’s “brand” as the moral leader of the globe, the protector of liberty and the guardian of human rights, not being in league with the people chiefly responsible for the death of roughly 2.5 percent of the world’s population ranks high on the list. Yet according to reports that first surfaced years ago, but which are now being much more fully substantiated, cooperating with — and even protecting — former Nazis is exactly what the United States once did.

Matt Taibbi: The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn't take it anymore.

"It was like watching an old lady get mugged on the street," she says. "I thought, 'I can't sit by any longer.'"

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She's had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.

Paul Krugman: Triumph of the Wrong

The race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet midterms to men of understanding. Or as I put it on the eve of another Republican Party sweep, politics determines who has the power, not who has the truth. Still, it’s not often that a party that is so wrong about so much does as well as Republicans did on Tuesday.

I’ll talk in a bit about some of the reasons that may have happened. But it’s important, first, to point out that the midterm results are no reason to think better of the Republican position on major issues. I suspect that some pundits will shade their analysis to reflect the new balance of power — for example, by once again pretending that Representative Paul Ryan’s budget proposals are good-faith attempts to put America’s fiscal house in order, rather than exercises in deception and double-talk. But Republican policy proposals deserve more critical scrutiny, not less, now that the party has more ability to impose its agenda.

Why Innocent People Plead Guilty

Jed S. Rakoff

The criminal justice system in the United States today bears little relationship to what the Founding Fathers contemplated, what the movies and television portray, or what the average American believes.

To the Founding Fathers, the critical element in the system was the jury trial, which served not only as a truth-seeking mechanism and a means of achieving fairness, but also as a shield against tyranny. As Thomas Jefferson famously said, “I consider [trial by jury] as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution.”

Shadow Banking Grows to $75 Trillion Industry, FSB Says

By Ben Moshinsky Oct 30, 2014 12:00 PM ET

The shadow banking industry grew by $5 trillion to about $75 trillion worldwide last year, driven by lenders seeking to skirt regulations and investors searching for yield amid record low interest rates.

The size of the shadow banking system, which includes hedge funds, real estate investment trusts and off-balance sheet investment vehicles, is about 120 percent of global gross domestic product, or a quarter of total financial assets, according to a report published by the Financial Stability Board today.

Shadow banking “tends to take off when strict banking regulations are in place, when real interest rates and yield spreads are low and investors search for higher returns, and when there is a large institutional demand for assets,” according to the report. “The current environment in advanced economies seems conducive to further growth of shadow banking.”

Global Warming Denier Will Head Committee Dealing With Global Warming

How do you deal with a problem you refuse to acknowledge? Ask Jim Inhofe!

By Susie Madrak November 5, 2014 7:00 am

Voting (or not voting) has consequences, and this would be a really bad one. The New Republi on a James Inhofe-led environment committee:

In handing Republicans control of the Senate on Tuesday, Americans effectively voted for the party's hostile plans against President Barack Obama’s environmental legacy.

It's a Rout: Democrats Lose Badly as GOP Extremists Consolidate Power In Congress and Across America

By Steven Rosenfeld

November 4, 2014 | The politics of anti-government rage, fueled by dark money negative ads emerged victorious on Tuesday, as the Republican Party won a U.S. Senate majority and re-elected right-wing governors despite Democrat and progressive organizations' determined efforts to turn out their base.

While there were some bright spots for progressives, such as minimum wage increases passing in Nebraska and Arkansas, and legalizing recreational marijuana in Oregon and in Washington DC, the national political landscape has taken a hard turn to the right. Differing Republican Party factions have been empowered in ways that will resonate well into the 2016 presidential election—from anti-regulatory corporatists taking control in Congress to union-bashing, anti- choice, anti-voting rights governors dominating their states.

John Maynard Keynes Is the Economist the World Needs Now

By Peter Coy, October 30, 2014

Is there a doctor in the house? The global economy is failing to thrive, and its caretakers are fumbling. Greece took its medicine as instructed and was rewarded with an unemployment rate of 26 percent. Portugal obeyed the budget rules; its citizens are looking for jobs in Angola and Mozambique because there are so few at home. Germans are feeling anemic despite their massive trade surplus. In the U.S., the income of a median household adjusted for inflation is 3 percent lower than at the worst point of the 2007-09 recession, according to Sentier Research. Whatever medicine is being doled out isn’t working. Citigroup (C) Chief Economist Willem Buiter recently described the Bank of England’s policy as “an intellectual potpourri of factoids, partial theories, empirical regularities without firm theoretical foundations, hunches, intuitions, and half-developed insights.” And that, he said, is better than things countries are trying elsewhere.

There is a doctor in the house, and his prescriptions are more relevant than ever. True, he’s been dead since 1946. But even in the past tense, the British economist, investor, and civil servant John Maynard Keynes has more to teach us about how to save the global economy than an army of modern Ph.D.s equipped with models of dynamic stochastic general equilibrium. The symptoms of the Great Depression that he correctly diagnosed are back, though fortunately on a smaller scale: chronic unemployment, deflation, currency wars, and beggar-thy-neighbor economic policies.

Who’s Tripping up the Designs of the Global Corporatocracy?

by Don Quijones • November 2, 2014

Resistance comes not only from certain quarters of the largely disenfranchised public but also from the least likely national governments.

In Europe, opposition to the Transatlantic Trade and Investment Treaty is rising. The primary cause of concern, both among the general public and certain national governments, is the proposed inclusion of the Investor-State Dispute Settlement (ISDS).

As I previously reported, this rather innocuous-sounding provision is what gives the new generation of bilateral and multilateral trade agreements their sharpened claws and canine teeth, by allowing private companies and investors to sue entire nations if they feel that a law lost them money on an investment. As even The Economist now admits, while the original intention of ISDS was to encourage foreign investment by protecting them from discrimination or expropriation, their implementation has proven disastrous:

Multinationals have exploited woolly definitions of expropriation to claim compensation for changes in government policy that happen to have harmed their business…

Paul Krugman: Business versus Economics

TOKYO — The Bank of Japan, this country’s equivalent of the Federal Reserve, has lately been making a big effort to end deflation, which has afflicted Japan’s economy for almost two decades. At first its efforts — which involve printing a lot of money and, even more important, trying to assure investors that it will keep printing money until inflation reaches 2 percent — seemed to be going well. But more recently the economy has lost momentum, and last week the bank announced new, even more aggressive monetary measures.

I am, as you might guess, very much in favor of this move, although I worry that the policy might nonetheless fail thanks to fiscal mistakes. (More about that later.) While the bank did the right thing, however, it did so amid substantial internal dissent. In fact, the new stimulus was approved by only five of the bank board’s nine members, with those closest to business voting against. Which brings me to the subject of this column: the economic wisdom, or lack thereof, of business leaders.

The New Loan Sharks

by Susanne Soederberg

The dependence of the poor on payday loans is neither natural nor inevitable. It is the result of neoliberal policies.

Before World War I, American wage earners who couldn’t make ends meet before their next paycheck relied on an insidious form of loan sharks known as salary lenders. These predators lent money at an illegal rate of interest and without collateral. They often charged annual interest rates in excess of 1,000 percent. State sanctions against salary lenders were not rigorously imposed, and the industry thrived not through the threat of physical violence, but the illusion of a legal obligation.

Fast-forward one hundred years, and salary lending has expanded, but under a different name: payday lending, a wildly lucrative industry that occupies more storefronts than McDonald’s and Starbucks combined. These new loan sharks operate under the same logic as salary lenders, but specifically target more vulnerable populations like welfare recipients, and are armed with new techniques to squeeze as much surplus as possible from debtors.

FCC reportedly close to reclassifying ISPs as common carriers

"Hybrid" approach wouldn't prevent all Internet fast lane deals.

by Jon Brodkin - Oct 31, 2014 4:45 am UTC

The head of the Federal Communications Commission (FCC) is reportedly close to proposing a "hybrid approach" to network neutrality in which Internet service providers would be partially reclassified as common carriers, letting the commission take a harder stance against Internet fast lane deals.

However, the proposal would not completely outlaw deals in which Web services pay for faster access to consumers.

Study reveals startling decline in European birds

Bird populations across Europe have experienced sharp declines over the past 30 years, with the majority of losses from the most common species

Bird populations across Europe have experienced sharp declines over the past 30 years, with the majority of losses from the most common species, say the University of Exeter, the RSPB and the Pan-European Common Bird Monitoring Scheme (PECBMS) in a new study. However numbers of some less common birds have risen.

The study, published today in the journal Ecology Letters, reveals a decrease of 421 million individual birds over 30 years. Around 90 percent of these losses were from the 36 most common and widespread species, including house sparrows, skylarks, grey partridges and starlings, highlighting the need for greater efforts to halt the continent-wide declines of our most familiar countryside birds.

Corporate Propagandist Richard Berman Secretly Taped Bragging About How He Smears Progressives

By Steven Rosenfeld

October 31, 2014 | One of corporate America’s most notorious political hitmen, Richard Berman, whose ugly campaigns rely on smears and fake front groups that hide sponsors’ identities, has been secretly tape-recorded bragging about his dirty tactics.

“Think of this as an endless war,” told a group of oil and gas industry executives at a June meeting of the Western Energy Alliance in Colorado Springs, as he sought to raise $3 million for a campaign called “Big Green Radicals” aimed at environmentalists and fracking opponents. “You can either win ugly or lose pretty.”

Berman’s remarks were secretly recorded by an attendee who gave them to the Center for Media and Democracy [3]. His speech was filled with the inflammatory rhetoric and bruising tactics he has used for decades in corporate propaganda campaigns to smear, discredit and destroy public-interest causes and groups. As a lengthy profile in AlterNet detailed [4], Berman—labeled Dr. Evil by CBS’s "60 Minutes"—is known for pioneering a toxic mix of front groups, distortion-filled attacks, ridicule and bullying to stoke prejudice and hatred as a means of turning public attention and regulators away from clients’ business practices.

Why Taxation Must Go Global

BERLIN – We are witnessing profound changes in the way that the world economy works. As a result of the growing pace and intensity of globalization and digitization, more and more economic processes have an international dimension. As a consequence, an increasing number of businesses are adapting their structures to domestic and foreign legal systems and taxation laws.

Thanks to technical advances in the digital economy, companies can serve markets without having to be physically present in them. At the same time, sources of income have become more mobile: There is an increasing focus on intangible assets and mobile investment income that can easily be “optimized” from a tax point of view and transferred abroad.

Paul Krugman: Apologiziing to Japan

TOKYO — For almost two decades, Japan has been held up as a cautionary tale, an object lesson on how not to run an advanced economy. After all, the island nation is the rising superpower that stumbled. One day, it seemed, it was on the road to high-tech domination of the world economy; the next it was suffering from seemingly endless stagnation and deflation. And Western economists were
scathing in their criticisms of Japanese policy.

I was one of those critics; Ben Bernanke, who went on to become chairman of the Federal Reserve, was another. And these days, I often find myself thinking that we ought to apologize.

Police Using Controversial Patriot Act Authority for 'Everyday' Cases: Civil Liberties Group

Created under the guise of fighting terrorism, 'Sneak and Peek' now being used to spy on drug suspects, immigrants, rights group finds

by Nadia Prupis, staff writer

A contentious surveillance provision of the Patriot Act, which allows law enforcement to conduct searches while delaying informing the suspect, is broadly used, but almost never in terrorism cases—despite Justice Department officials arguments to the contrary, according to an analysis by the Electronic Frontier Foundation (EFF).

"Yet again, terrorism concerns appear to be trampling our civil liberties," writes EFF’s Mark Jaycox.

The rights group analyzed federal reports from 2011, 2012, and 2013, released after an unexplained three-year delay, on warrants that were issued under Section 213, known colloquially as "Sneak and Peek."

Number of global billionaires has doubled since the financial crisis

Jamie Merrill, Wednesday 29 October 2014

The number of billionaires has doubled since the start of the financial crisis, according to a major new report from anti-poverty campaigners.

According to Oxfam, the world’s rich are getting richer, leaving hundreds of millions of people facing a life “trapped in poverty” as global “inequality spirals out of control”.

While You Were Getting Worked Up Over Oil Prices, This Just Happened to Solar

By Tom Randall

Every time fossil fuels get cheaper, people lose interest in solar deployment. That may be about to change.

After years of struggling against cheap natural gas prices and variable subsidies, solar electricity is on track to be as cheap or cheaper than average electricity-bill prices in 47 U.S. states -- in 2016, according to a Deutsche Bank report published this week. That’s assuming the U.S. maintains its 30 percent tax credit on system costs, which is set to expire that same year.

How Dark Money Is Taking Over Judicial Elections

By AJ Vicens

Most people don't think about judicial elections until they find themselves staring at a group of unfamiliar names on the ballot. But judges are selected by voters in 39 states, whether in an initial election or a retention election after being appointed. The explainer below details how special-interest money has increasingly flooded the system over the last several decades—including the first ever set of data on campaign money in lower court races.

Living Wages, Rarity for U.S. Fast-Food Workers, Served Up in Denmark

By LIZ ALDERMAN and STEVEN GREENHOUSE, OCT. 27, 2014

COPENHAGEN — On a recent afternoon, Hampus Elofsson ended his 40-hour workweek at a Burger King and prepared for a movie and beer with friends. He had paid his rent and all his bills, stashed away some savings, yet still had money for nights out.

That is because he earns the equivalent of $20 an hour — the base wage for fast-food workers throughout Denmark and two and a half times what many fast-food workers earn in the United States.

“You can make a decent living here working in fast food,” said Mr. Elofsson, 24. “You don’t have to struggle to get by.”

American Exceptionalism

By Charles P. Pierce on October 28, 2014

In Sunday's New York Times, there was a fascinating story about fast-food workers, both here and in Denmark. The story is interesting in that it pretty much blows a hole below the water line of every precept of conservative economics promulgated here since Ronald Reagan turned the federal budget process stupid in 1981. Quite simply, if you, the average Dane named Hampus, wants to make a career out of working at Burger King, you can do it. Everybody needs to have a dream.

On a recent afternoon, Hampus Elofsson ended his 40-hour workweek at a Burger King and prepared for a movie and beer with friends. He had paid his rent and all his bills, stashed away some savings, yet still had money for nights out. That is because he earns the equivalent of $20 an hour - the base wage for fast-food workers throughout Denmark and two and a half times what many fast-food workers earn in the United States. "You can make a decent living here working in fast food," said Mr. Elofsson, 24. "You don't have to struggle to get by."

Naturally, the example provided by Denmark cannot apply because America, that's why.

How the Washington Press Turned Bad

October 28, 2014

Exclusive: There was a time when the Washington press corps prided itself on holding the powerful accountable – Pentagon Papers, Watergate, Vietnam War – but those days are long gone, replaced by a malleable media that puts its cozy relations with insiders ahead of the public interest, writes Robert Parry.

By Robert Parry

Following the death last week of legendary Washington Post executive editor Ben Bradlee at age 93, there have been many warm remembrances of his tough-guy style as he sought “holy shit stories,” journalism that was worthy of the old-fashioned demand, “stop the presses.”

Many of the fond recollections surely are selective, but there was some truth to Bradlee’s “front page” approach to inspiring a staff to push the envelope in pursuit of difficult stories – at least during the Watergate scandal when he backed Bob Woodward and Carl Bernstein in the face of White House hostility. How different that was from Bradlee’s later years and the work of his successors at the Washington Post!