Sunday, December 09, 2012 6:45:28 AM
Corporate Profit Share of GDP Reaches All-Time High Despite Sharia Socialism
Dec. 3, 2012
http://www.slate.com/blogs/moneybox/2012/12/03/profit_share_of_gdp_corporate_profits_after_tax_are_at_an_all_time_high.html [with comments]
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Corporate Profits Hit Record High While Worker Wages Hit Record Low
By Pat Garofalo on Dec 3, 2012 at 9:25 am
A constant conservative charge against President Obama is that he is inherently anti-business. However, businesses keep defying the storyline by making larger and larger profits, rebounding nicely out of the Great Recession.
In the third quarter of this year, “corporate earnings were $1.75 trillion [ http://money.cnn.com/2012/12/03/news/economy/record-corporate-profits/ ], up 18.6% from a year ago.” Corporations are currently making more as a percentage of the economy than they ever have since such records were kept. But at the same time, wages as a percentage of the economy are at an all-time low, as this chart shows. (The red line is corporate profits; the blue line is private sector wages.):
Corporations [sic - the Fortune 500] made a record $824 billion [ http://thinkprogress.org/economy/2012/05/07/479130/record-corporate-profits/ ] in profits last year as well, while the stock market has had one of its best performances [ http://thinkprogress.org/economy/2012/10/22/1063181/obama-anti-business-charts/ ] since 1900 while Obama has been in office.
Meanwhile, workers are getting the short end of the stick. As CNN Money explained, “a separate government reading shows that total wages have now fallen to a record low of 43.5% of GDP. Until 1975, wages almost always accounted for at least half of GDP [ http://money.cnn.com/2012/12/03/news/economy/record-corporate-profits/ ], and had been as high as 49% as recently as early 2001.”
© 2012 Center for American Progress Action Fund
http://thinkprogress.org/economy/2012/12/03/1270541/corporate-profits-wages-record/ [with comments]
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Chart of the day: The long decline of labor
By Felix Salmon
September 26, 2012
This chart comes from Margaret Jacobson and Filippo Occhino [ http://www.clevelandfed.org/research/commentary/2012/2012-13.cfm (next below)] at the Cleveland Fed, and it’s reasonably terrifying — yet another one of those charts where the trend is down and to the right, and where it’s only gotten worse since the end of the recession.
What you’re looking at here is the share of total national income which is accounted for by labor — a measure that includes wages, salaries, bonuses and things like pension and insurance benefits. Everything else is capital income: interest, dividends, capital gains. There are two ways of measuring this, which is why there are two lines; both of them are telling the same story.
The fascinating thing to me, here, is what has happened since the crisis. Over the past three years or so, wages and salaries have been rising steadily, while interest rates have been stuck at zero. It’s never been harder to make income from capital, while incomes for people with jobs have actually kept on rising. And unemployment, while still high, has been coming down.
Given all that, it would stand to reason that the share of national income going to labor should be rising, not falling. Labor incomes are going up, the number of employed people is going up, and income from savings is going down. And yet! It turns out that people with capital are so rich, and getting so much richer, that it’s not even close. All that belly-aching about the plight of savers on fixed incomes in a zero interest-rate environment? Well, you don’t see it in these numbers. Looking at this chart, if you were given the choice between having money and no job, or having a job but no money, it’s not obvious which one to go for.
Of course, as the Cleveland Fed paper shows, a lot of the story here is about rising inequality. But the more powerful, if less obvious, story, is just how entrenched capital income has become in the US economy. As recently as 2000, it was at levels more or less in line with the historical average. And then, something big happened. During the Great Moderation — when yields fell on all capital asset classes — capital income went up sharply. Then the crisis happened, a classic case of a dog not barking: you’d expect capital income to have fallen enormously, at least for a year or two, but it didn’t, it just stopped rising. Most recently, in the wake of the financial crisis, capital income has been soaring again.
There’s a big lesson here for anybody serious about fiscal policy, too. (Paul Ryan, I’m looking at you.) As the labor share of income goes down and the capital share of income goes up, the only way that we can stop tax revenues from plunging disastrously is to tax capital income at least as much as we tax labor income. By contrast, the Ryan plan proposes taxing capital income at zero — putting ever more of a burden on working Americans, while giving unearned income a massive tax break the rich really don’t need.
There are big global forces driving this chart, most importantly the way in which labor is becoming increasingly global and fungible. Labor income has been declining for a good 25 years, and the only substantial countertrend was the dot-com bubble. The trend is a bad one, and it’s getting worse. And while I don’t see any policies, on either side of the aisle, which really try to address it, the fact is that Republican policies seem explicitly designed to exacerbate it. Think of capital income as the money flowing to “job creators”, and the chart is very clear on that front.
Copyright 2012 Thomson Reuters
http://blogs.reuters.com/felix-salmon/2012/09/26/chart-of-the-day-the-long-decline-of-labor/ [with comments]
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Labor's Declining Share of Income and Rising Inequality
Labor income has been declining as a share of total income earned in the United States for the past three decades. We look at the past effect of the labor share decline on income inequality, and we study the likely future path of the labor share and its implications for inequality.
Economic Commentary
Margaret Jacobson and Filippo Occhino
09.25.12
Labor income has declined as a share of total income earned in the United States. This decline was caused by several factors, including a change in the technology used to produce goods and services, increased globalization and trade openness, and developments in labor market institutions and policies.
One consequence of the labor share decline has raised concerns. Since labor income is more evenly distributed across U.S. households than capital income, the decline made total income less evenly distributed and more concentrated at the top of the distribution, and this contributed to increased income inequality. In this Commentary, we look at how the labor share decline has affected income inequality in the past, and we study the likely future path of the labor share and its implications for inequality.
The Decline in Labor’s Share of Income
Household income comes in two types: labor income, which includes wages, salaries, and other work-related compensation (such as pension and insurance benefits and incentive-based compensation), and capital income, which includes interest, dividends, and other realized investment returns (such as capital gains). During the last three decades, labor’s share of total income has declined in favor of capital income (see “Behind the Decline in Labor’s Share of Income [ http://www.clevelandfed.org/research/trends/2012/0212/01gropro.cfm ]” for more detail).
There are a number of ways to measure the share of income that accrues to labor. We look at three different data sources, and each provides broad evidence of the decline. According to data from the Bureau of Economic Analysis, labor’s share of gross national income fluctuated around 67 percent during the 1980s, 1990s, and early 2000s, but it has declined since then and now stands at 63.8 percent.1 (See figure 1.) According to the Bureau of Labor Statistics, the ratio of compensation to output for the nonfarm business sector fluctuated around 65 percent until the early 1980s and has declined steadily since, from 63 percent during the 1980s and 1990s to 58.2 percent most recently. Finally, a 2011 study of income tax returns and demographic data by the CBO (CBO 2011) finds that labor’s share of income decreased from 75 percent in 1979 to 67 percent in 2007.
These three data sources measure slightly different labor share concepts, which is why their estimated levels are different. But they agree in indicating a significant drop of 3 to 8 percentage points in labor’s share of income since the early 1980s, with the trend accelerating during the 2000s.
Such a decline had implications for the distribution of incomes. Labor income is more evenly distributed across U.S. households than capital income, while a disproportionately large share of capital income accrues to the top income households. As the share that is more evenly distributed declined and the share that is more concentrated at the top rose, total income became less evenly distributed and more concentrated at the top. As a result, total income inequality rose.
Income Inequality
Income inequality is the dispersion of annual incomes across households, relative to the average household income. Inequality affects a variety of other important economic variables, such as the composition of consumption and investment, tax revenue and government spending, government policies, economic mobility, human capital accumulation, and growth. Some economists—most prominently Raghuram Rajan in his book Fault Lines—have suggested that rising income inequality contributed to the debt accumulation and financial imbalances that led to the recent financial crisis. And of course income inequality is the focus of much attention as an indicator, albeit imperfect, of the inequality of lifetime income and welfare across households.
Several indicators suggest that inequality was declining up to the late 1970s, but it has since reversed course. It rose sharply during the 1980s and early 1990s and currently is at near record-high levels. Between 1967 and 1980, the average real income of the bottom 20 percent of households grew by 1.34 percent, faster than the 1.09 percent growth rate of the top 20 percent and the 0.67 percent of the top 5 percent. After 1980, however, the opposite occurred: Average real income grew by 0.05 percent only for the bottom 20 percent of households, while it grew by 1.24 percent for the top 20 percent and by 1.67 percent for the top 5 percent (DeNavas-Walt et al. 2011). The share of income earned by the top-income households rose significantly after 1980, while the share earned by the bottom-income households declined (figure 2).
The most closely watched indicator of income inequality is the Gini index, an index that increases from 0 to 1 as income distribution becomes relatively more dispersed.
The Gini index is equal to half the relative mean income difference, that is, the average difference in income between households in the economy, expressed as a percentage of the average household income. For example, if the Gini index is 0.40 and the average household income is $50,000, the relative mean difference is 0.40 × 2 = 0.80, or 80 percent, which means that on average the difference in income between two randomly selected households in the population is 0.80 × $50,000 = $40,000.
The Gini index points to increasing inequality during the entire 1967–2010 period, and especially during the 1980s and early 1990s (figure 3). When computed using Census Bureau data, the Gini index increased from 0.40 in 1967 to 0.48 in 2011. This means that in 1967 the difference in income between households was on average 80 percent of the average household income, while in 2010 it was 96 percent. When computed by the CBO, which uses income tax data and a broader definition of income that includes capital gains, the Gini index increased from 0.48 in 1979 to 0.59 in 2007, which means that the relative mean difference in income between households increased from 96 percent to 118 percent.
There are limits to what income inequality measures. For starters, it indicates inequality of outcomes, not of opportunities. It focuses on income, not on welfare, which depends on other variables such as consumption, leisure, health, and public goods. On one hand, income inequality does not respond to changes in the level of income, remaining constant when all households earn proportionally more (or less). On the other hand, it changes all the same regardless of whether the richest households earn more or the poorest households earn less. And, since it provides a snapshot of the relative dispersion of income across households in a given year, part of it is simply explained by the fact that households earn a variable income during the different stages of their lives. That part does not reflect lifetime income inequality. Because inequality responds similarly to very different factors, it is as important to learn why it has risen.
Most of the rise in income inequality since 1980 has been attributed to an increase in the returns to education and in the wage differential between high-skilled and low-skilled labor. Over time, the marginal productivity of high-skilled workers has increased relative to low-skilled workers, which has driven the demand for their labor higher and raised their relative compensation. As a result of this change, labor income became less evenly distributed and more concentrated at the top.
However, part of the increase in income inequality was due to the decline in labor’s share of income, and the associated shift from the more evenly distributed type of income to the more concentrated one. As shown in box 1, the Gini index increases by approximately 0.15 to 0.33 percentage points for every percentage point decline in the labor share. Given these numbers, the decline that the labor share has experienced since the early 1980s (3 to 8 percentage points depending on the measure) translates into an increase of the Gini index of up to 2.5 percentage points. This is close to the CBO’s estimate, which suggested that the decline in the labor share from 1979 to 2007 raised the Gini index by 2.3 percentage points.
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Box 1. A Decomposition of the Gini Index
Income inequality increases when labor and capital incomes become more dispersed, or when the labor share of income declines in favor of capital income. To measure the size of these effects, we write the Gini index as the weighted average of the concentration indexes of labor and capital income, with the weights equal to the two income shares. Concentration indexes measure how concentrated capital or labor income is at the top of the income distribution (See the CBO study for further information):
Gini index = labor’s share of income × concentration index of labor income
+ capital’s share of income × concentration index of capital income
The Gini index increases if the concentration index of labor or capital rises (for instance if labor income becomes more concentrated at the top end of the income distribution) or if there is a shift from the less concentrated labor income to the more concentrated capital income.
The formula also tells us by how much the Gini index responds to changes in shares or concentrations. If the labor concentration increases by 1 percentage point, the Gini index increases by 1 percentage point times the labor share, and similarly for capital. If both concentrations increase by 1 percentage point, the Gini index increases by 1 percentage point as well. Suppose instead that the labor share decreases by 1 percentage point and the capital income share increases by the same amount. The Gini index then increases by 1 percentage point times the difference between the two concentration indexes.
Data from the CBO indicate that the difference between capital and labor concentrations has varied over time, approximately ranging from 0.25 in 1979, to 0.15 in 1991, to 0.33 percentage points in 2007. Hence, for every percentage point decrease in the labor share, the Gini index increases by approximately 0.15 to 0.33 percentage points (table 1).
Table 1. Effect of Component Changes on the Gini Index
Component - Gini index
Labor share, 1 percent decrease - 0.15–0.33 percent increase
Labor concentration, 1 percent increase - 0.6–0.7 percent increase
Capital concentration, 1 percent increase - 0.3–0.4 percent increase
Sources: Congressional Budget Office; authors’ calculations.
Notice that shares and concentrations of labor and capital income are not the ultimate determinants of inequality. There are deeper, underlying factors that cause households and firms to change their behavior, and this results in changes in income shares, income concentrations, and ultimately in inequality.
Decomposing changes in inequality in terms of changes in shares and concentrations is useful because it sheds light on these underlying factors. For instance, an increase in the concentration of labor income at the top may reflect a higher return to education and a higher wage-skill premium, while a decrease in labor’s share of income may be indicative of a technological change raising the productivity of capital relative to labor.
Decomposition is also useful for studying the dynamics of income inequality over time, since income shares and concentrations have different statistical and cyclical properties and can be studied separately, as we do in this Commentary.
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This is a sizeable effect. More importantly, most of the effect occurred during the last decade, when the decline in the labor share was accelerating. Is this trend going to continue, and how will it affect income inequality going forward?
Future Paths
We use the model described in box 2 to learn about the future path of the labor share. The model decomposes the labor share into its long-run trend and its transitory components, and then it forecasts the future path of the overall labor share. We do all the calculations twice, once with the BEA data and once with the BLS data.
According to our model, the labor share trend has declined since 1980, with an accelerated drop in the 2000s, in both sets of data (figure 4). In the BEA data, the trend declined from levels as high as 69 percent before 1980 to 66.9 percent in 2000, to 64.9 percent today. In the BLS data, the trend declined from levels of approximately 64.5 percent before 1980 to 62.8 percent in 2000, to 59.8 percent today. According to these measures, the trend in the labor share declined 1.5 to 2 percentage points between 1980 and 2000, and then dropped an additional 2 to 3 percentage points, for a total of 4 to 4.5 percentage points.
Our model indicates that the labor share is currently 1 to 1.5 percentage points below its long-run trend level. Part of the decline in the labor share in the past five years was temporary, and it will be reversed as the recovery continues. Going forward, the labor share will pick up and converge to its long-run trend value. This will tend to decrease income inequality, lowering the Gini index by up to 0.5 (0.33 × 1.5) percentage points, as the decomposition in box 1 indicates.
Income inequality will not necessarily decrease though. As shown in box 1, inequality is affected not only by the relative shares of labor and capital income, but also by the concentrations of each. Concentration refers to the way each type of income is distributed across the households that earn it. In particular, concentration indexes measure how concentrated capital or labor income is at the top of the income distribution.
The future path of labor concentration is hard to predict, as it depends on the evolution of the returns to education and of the wage-skill premium. The concentration of capital income, however, is strongly procyclical, rising during recoveries (figure 5), and this suggests that capital income will become more concentrated at the top in the coming years of the recovery, helping to raise income inequality even further. This effect has dominated the dynamics of income inequality during the past two business cycles, so the future path of income inequality will likely be determined by the strength of the recovery and the associated pickup of the concentration of capital income.
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Box 2. A Model of the Labor Share
In this box we describe the model that we use to forecast the evolution of the labor share. To choose the model, we first look at the data. Inspecting figure 1, we notice that the labor share fluctuates cyclically around an underlying slow-moving trend: The labor share peaks right after the beginning of a recession, declines during the rest of the recession and the initial phase of the recovery, and then picks up and returns to trend during the later phase of the recovery. The first step in building our model of the labor share is to identify and isolate this cyclical component.
Looking more closely at how the business cycle affects the labor share, we notice that the labor share is related to the tightness of the labor market: It tends to decline when unemployment is high and increase when unemployment is low. In the data, a high level of unemployment tends to be followed by a decline in the labor share: The correlation between the unemployment gap (the difference between unemployment and its trend, computed with an HP filter) and the change in the labor share over the subsequent year is negative and large, -0.51. We use this information to compute the business cycle component of the labor share with a least square regression of the change in the labor share over the previous-year unemployment gap.
Turning to the trend component, we begin by looking at what determines the labor share in the long run. The main factor is the technology available to produce goods and services. In competitive markets, labor and capital are compensated in proportion to their marginal contribution to production, so the most important factor behind the labor and capital shares is the marginal productivities of labor and capital, which are determined by technology. In fact, one important cause of the post-1980 long-run decline in the labor share was a technological change, connected with advances in information and communication technologies, which made capital more productive relative to labor, and raised the return to capital relative to labor compensation. Other factors that have played a role in the long-run decline in the labor share are increased globalization and trade openness, as well as changes in labor market institutions and policies.
All these factors are slow moving and highly persistent processes. Their future evolution is hardly predictable. This suggests that we model the trend of the labor share as a very slow moving, highly persistent process—a random walk subject to small shocks. To compute the trend, then, we begin with the labor share, subtract the cyclical component computed as explained above, and separate the long-run hidden trend from other transitory components using the Kalman filter.
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Footnote
1.In the BEA’s NIPA accounts, gross national income equals the sum of the following categories: Compensation of employees; proprietors’ income; rental income; corporate profits; net interest income; indirect taxes less subsidies; depreciation. To compute the labor share, we need to identify what part of each category is labor income, and what part is capital income. To do that, we follow an established methodology. We classify the compensation of employees as unambiguous labor income (UL), and we classify corporate profits, rental income, net interest income, and depreciation as unambiguous capital income (UK). The remaining categories, proprietors’ income and indirect taxes less subsidies, are partly labor income and partly capital income, in proportion to UL and UK, respectively. As a result, labor’s share is computed as the ratio of unambiguous labor income to the sum of unambiguous labor and capital income, i.e., UL/(UL+UK). (See Gomme and Rupert 2004 [ http://www.clevelandfed.org/research/policydis/no7nov04.pdf ] for a discussion of this methodology. Notice, however, that they also exclude the government and housing sectors, so their measure of labor's share differs from ours.) [The reference to Gomme and Rupert 2004 was modified on 10/23/2012.]
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Sources Cited
“Income, Poverty, and Health Insurance Coverage in the United States: 2010 [ http://www.census.gov/prod/2011pubs/p60-239.pdf ],” Carmen DeNavas-Walt, Bernadette D. Proctor, and Jessica C. Smith, 2011. U.S. Census Bureau, Current Population Reports, P60–239, U.S. Government Printing Office, Washington, DC.
“Measuring Labor’s Share of Income [ http://www.clevelandfed.org/research/policydis/no7nov04.pdf ],” Paul Gomme and Peter C. Rupert, 2004. Federal Reserve Bank of Cleveland, Policy Discussion Paper, no. 7.
“Trends in the Distribution of Household Income between 1979 and 2007 [ http://www.cbo.gov/publication/42729 ],” Edward Harris and Frank Sammartino, 2011. Congressional Budget Office.
“Behind the Decline in Labor’s Share of Income [ http://www.clevelandfed.org/research/trends/2012/0212/01gropro.cfm ],” Margaret Jacobson and Filippo Occhino, 2012. Federal Reserve Bank of Cleveland, Economic Trends.
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http://www.clevelandfed.org/research/commentary/2012/2012-13.cfm
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5 Charts that Show How Increasing Income Inequality Leads to Less Opportunity
SOURCE: AP/ Marcio Jose Sanchez
If there is high income inequality, children will likely experience low economic mobility and opportunity as adults.
By Nick Bunker | December 5, 2012
High levels of income inequality are associated with low levels of economic mobility, argues University of Ottawa economist Miles Corak in a new report from the Center for American Progress. Here are some key charts from the report, “How to Slide Down the Great Gatsby Curve,” that explain this phenomenon.
Note: The “intergenerational earnings elasticity” measure used in the charts below describes the percentage of a parent’s relative income position that his child inherits. A higher elasticity means lower economic mobility, as this means a child’s relative income position as an adult is more determined by his father’s position than by other factors. (All of the academic research in this area looks at father-son pairs because of data availability.)
The Great Gatsby Curve shows that children born in countries with high levels of income inequality will experience less economic mobility on average than children born in more equal countries. (see Figure 1)
Economic mobility is determined by three major institutions that all interact with income inequality: the family, the market, and the state. Changes in any of these three areas affect the rate of mobility in a country. (see Figure 2)
Countries with high levels of income inequality also have higher levels of teenage parenthood. Teenage parents cannot invest in their children as much as other parents can due to their lower average incomes and lower levels of human capital, which harms the chances for opportunities for their children. (see Figure 3)
Countries also have lower levels of intergenerational economic mobility when the difference between the pay of college graduates and noncollege graduates is larger. (see Figure 4)
Access to high-quality education is also important, as countries have lower levels of economic mobility when a child’s educator is more determined by who educated her parent. (see Figure 5)
As these charts show, economic mobility is largely associated with the level of income inequality in a country. If there is high income inequality, children will likely experience low economic mobility and opportunity as adults. Families, the market, and the state largely determine life chances for the future generation of citizens, and several factors can improve these outcomes for children. For a more detailed description, please see our report.
© 2012 Center for American Progress
http://www.americanprogress.org/issues/economy/news/2012/12/05/46817/5-charts-that-show-how-increasing-income-inequality-leads-to-less-opportunity/
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The Forgotten Millions
By PAUL KRUGMAN
Published: December 6, 2012
Let’s get one thing straight: America is not facing a fiscal crisis. It is, however, still very much experiencing a job crisis.
It’s easy to get confused about the fiscal thing, since everyone’s talking about the “fiscal cliff.” Indeed, one recent poll suggests that a large plurality of the public believes that the budget deficit will go up if we go off that cliff.
In fact, of course, it’s just the opposite: The danger is that the deficit will come down too much, too fast. And the reasons that might happen are purely political; we may be about to slash spending and raise taxes not because markets demand it, but because Republicans have been using blackmail as a bargaining strategy, and the president seems ready to call their bluff.
Moreover, despite years of warnings from the usual suspects about the dangers of deficits and debt, our government can borrow at incredibly low interest rates — interest rates on inflation-protected U.S. bonds are actually negative, so investors are paying our government to make use of their money. And don’t tell me that markets may suddenly turn on us. Remember, the U.S. government can’t run out of cash (it prints the stuff), so the worst that could happen would be a fall in the dollar, which wouldn’t be a terrible thing and might actually help the economy.
Yet there is a whole industry built around the promotion of deficit panic. Lavishly funded corporate groups keep hyping the danger of government debt and the urgency of deficit reduction now now now — except that these same groups are suddenly warning against too much deficit reduction. No wonder the public is confused.
Meanwhile, there is almost no organized pressure to deal with the terrible thing that is actually happening right now — namely, mass unemployment. Yes, we’ve made progress over the past year. But long-term unemployment remains at levels not seen since the Great Depression: as of October, 4.9 million Americans had been unemployed for more than six months, and 3.6 million had been out of work for more than a year.
When you see numbers like those, bear in mind that we’re looking at millions of human tragedies: at individuals and families whose lives are falling apart because they can’t find work, at savings consumed, homes lost and dreams destroyed. And the longer this goes on, the bigger the tragedy.
There are also huge dollars-and-cents costs to our unmet jobs crisis. When willing workers endure forced idleness society as a whole suffers from the waste of their efforts and talents. The Congressional Budget Office estimates that what we are actually producing falls short of what we could and should be producing by around 6 percent of G.D.P., or $900 billion a year.
Worse yet, there are good reasons to believe that high unemployment is undermining our future growth as well, as the long-term unemployed come to be considered unemployable, as investment falters in the face of inadequate sales.
So what can be done? The panic over the fiscal cliff has been revelatory. It shows that even the deficit scolds are closet Keynesians. That is, they believe that right now spending cuts and tax hikes would destroy jobs; it’s impossible to make that claim while denying that temporary spending increases and tax cuts would create jobs. Yes, our still-depressed economy needs more fiscal stimulus.
And, to his credit, President Obama did include a modest amount of stimulus in his initial budget offer; the White House, at least, hasn’t completely forgotten about the unemployed. Unfortunately, almost nobody expects those stimulus plans to be included in whatever deal is eventually reached.
So why aren’t we helping the unemployed? It’s not because we can’t afford it. Given those ultralow borrowing costs, plus the damage unemployment is doing to our economy and hence to the tax base, you can make a pretty good case that spending more to create jobs now would actually improve our long-run fiscal position.
Nor, I think, is it really ideology. Even Republicans, when opposing cuts in defense spending, immediately start talking about how such cuts would destroy jobs — and I’m sorry, but weaponized Keynesianism, the assertion that government spending creates jobs, but only if it goes to the military, doesn’t make sense.
No, in the end it’s hard to avoid concluding that it’s about class. Influential people in Washington aren’t worried about losing their jobs; by and large they don’t even know anyone who’s unemployed. The plight of the unemployed simply doesn’t loom large in their minds — and, of course, the unemployed don’t hire lobbyists or make big campaign contributions.
So the unemployment crisis goes on and on, even though we have both the knowledge and the means to solve it. It’s a vast tragedy — and it’s also an outrage.
© 2012 The New York Times Company
http://www.nytimes.com/2012/12/07/opinion/krugman-the-forgotten-millions.html [with comments]
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Ken Fisher, Billionaire Forbes Writer, Attempts To Argue That The U.S. Needs Fewer Jobs
Kenneth Fisher, chief executive officer of Fisher Investments, speaks at the Forbes Global CEO Conference in Sydney, Australia, on Tuesday, Sept. 28, 2010.
(Gillianne Tedder, Bloomberg / Getty Images)
By Mark Gongloff
Posted: 12/06/2012 2:53 pm EST Updated: 12/06/2012 6:49 pm EST
For years Americans have pondered the mystery of how to create more jobs. Turns out we've been thinking about it all wrong: What we need are fewer jobs.
Billionaire investor and author [ http://www.forbes.com/lists/2010/10/billionaires-2010_Kenneth-Fisher_W06I.html ] Ken Fisher explains in Forbes -- the Christmas Eve issue, on newsstands soon! -- that "Job Growth Is Overrated [ http://www.forbes.com/sites/kenfisher/2012/12/05/why-job-growth-is-overrated/ ]."
"Believe it or not, I’m for fewer jobs, not more," he starts out.
OK, this is a good start: It is good to acknowledge right up front that readers might not quite believe that a sentient human being is somehow against more jobs.
But you expect that maybe Fisher is then going to do a bait-and-switch of some kind: He says he's against jobs, but what he really means is that he is for some other mind-blowing kind of employment that's not exactly a "job" as we commonly think of the term. Like being a financial advisor, say. Or maybe Fisher is sort of like a Situationist [ http://en.wikipedia.org/wiki/Situationist_International ], somebody who believes the entire social construct of "work" is a sham that keeps people from ever truly enjoying life. Fine, sounds good.
But, no, what Fisher means is that he really, really can't stand jobs, or people who want them, or people who want to create them:
"Throughout 2012 we heard politicians and pundits of all stripes yammering endlessly on the need for job growth—that we don’t have enough jobs," he continues. "It’s pure rubbish."
Oooo...k?
Jobs, Fisher explains, are actually signs of weakness in the economy. Jobs mean we can't produce stuff without human beings lousing up the place, instead of nice, clean robots, which are not constantly pestering you for health care and maternity leave and breaks. The greater our economy's productivity, the less we need of such nuisances. Then we can all sip cocktails on the beach for the rest of our days. Sous les paves, la plage [ http://en.wikipedia.org/wiki/May_1968_protests_in_France ].
"In the long run we will all benefit," Fisher says, by nobody having any jobs any more, forever. He then goes on to extol the virtues of investing in a handful of companies he says will be top-notch at destroying jobs, including Anheuser-Busch InBev and Walmart.
The massive mistake Fisher is making is understandable: People often think that productivity and jobs are mutually exclusive. The government's official measure of productivity [ http://www.bls.gov/bls/productivity.htm ] is calculated by dividing output by worker hour. If you can get more output with fewer worker hours, voila, productivity.
But history shows that higher productivity and more jobs typically go hand in hand, according to a paper a few years back [ http://www.nber.org/papers/w11354.pdf ] by William Nordhaus of the National Bureau of Economic Research.
Nordhaus looked at times in ye olde American history when productivity was rising and found, what do you know, jobs were rising then, too. When productivity is high, prices fall, which gives workers the ability to buy more stuff. Higher demand leads to more production and more jobs.
One notable exception was around the late 1990s, early 2000s, when computers were boosting American productivity like crazy, but China was taking all of our jobs. That experience maybe colors our thinking about productivity as a job-killer.
But China, at the very same time, was enjoying both rising productivity and more jobs.
More recently, China is no longer undercutting the rest of the world on labor costs quite as much as any more. And some of those jobs the U.S. lost to China might be coming back here. Exhibit A: Apple, which said on Thursday it is going to start making stuff in the U.S. again [ http://www.huffingtonpost.com/2012/12/06/apple-manufacturing-usa-macs_n_2249613.html?utm_hp_ref=business&ir=Business ].
We don't have to live in Ken Fisher's zero-jobs world. Although we could all use more days at the beach.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/06/ken-fisher-forbes_n_2251630.html [with comments]
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Today's Job Numbers Show Why Job-Creation Must Take Precedence Over Deficit Reduction
By Robert Reich
Posted: 12/07/2012 10:49 am
Today's jobs report [ http://www.huffingtonpost.com/2012/12/07/november-jobs-report-unemployment-rate_n_2256767.html ] shows an economy that's still moving in the right direction but way too slowly, which is why Washington's continuing obsession with the federal budget deficit is insane. Jobs and growth must come first.
The cost of borrowing is so low -- the yield on the ten-year Treasury is near historic lows -- and the need for more jobs and better wages so high, and our infrastructure so neglected, that it's insanity not to borrow more to put more Americans to work rebuilding the nation.
Yes, unemployment is down slightly and 146,000 new jobs were created in November. That's some progress. But don't be blinded by the hype coming out of Wall Street and the White House, both of which want the public to believe everything is going wonderfully well.
The fact is some 350,000 more people stopped looking for jobs in November, and the percent of the working-age population in jobs continues to drop -- now at 63.6 percent, almost the lowest in 30 years. Meanwhile, the average workweek is stuck at 34.4 hours.
The slowness of this recovery isn't because of Hurricane Sandy, which it turns out had very little impact on these job numbers. And it's not because of any uncertainty over the looming "fiscal cliff." Most consumers in November were oblivious about any pending cliff.
The reason the economy is still under-performing is demand is inadequate. Businesses won't create more jobs without enough customers. But consumers can't and won't spend because they don't have the money. Unless or until the private sector -- businesses and consumers -- are able to boost the economy, government must be the spender of last resort.
But the nation has bought into the Republican frame of thinking that we have to "get our fiscal house in order" before the economy can get back on track. Even though Barack Obama was reelected and Democrats gained seats in the House and Senate, that frame is still dominating debate.
Even though we're near a fiscal cliff that illustrates how dangerous deficit reduction can be when so many people are still unemployed, the White House and the Democrats seem incapable of changing the frame of debate.
Jobs must come first. Job creation must be our first priority.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/robert-reich/november-jobs-numbers_b_2257674.html [with comments]
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The Fiscal Ignoramus Factor
By Paul Krugman
December 6, 2012, 2:40 pm
Some of us had fun with the Business Insider poll [ http://www.businessinsider.com/47-of-people-think-the-deficit-would-increase-if-we-go-over-the-fiscal-cliff-2012-12 ] finding that by a large margin, people who thought they knew something about the fiscal cliff believed that it would increase, not reduce, the deficit. Ha ha ha — although I actually have a lot of sympathy for ordinary voters, who don’t follow these things closely but know that everyone important has been warning for years that the budget deficit is Worse than H!lter or something. How are they supposed to know that those very same people are now screaming that the deficit is coming down too fast?
I have less sympathy for major political figures who also can’t get it straight.
As Jonathan Chait [ http://nymag.com/daily/intel/2012/12/bobby-jindal-unclear-on-what-fiscal-cliff-is.html ] points out, Bobby Jindal — who is supposed to be one of the intellectual leaders of his party — has just published an op-ed on the cliff [ http://www.politico.com/story/2012/12/bobby-jindal-opinion-fiscal-cliff-diving-84647.html ( http://dyn.politico.com/printstory.cfm?uuid=959D0018-9CAB-40C0-864C-519FAB1D903A )] that sure looks as if he has no idea whatsoever what the cliff is about. There’s nothing in that piece even hinting that the looming problem is spending cuts and tax increases that will shrink the deficit too soon; and his big policy ideas would actually make the lurch to austerity worse. It’s not just the idea of a balanced budget amendment, which would force harsh austerity every time the economy goes into recession; putting a cap on spending as share of GDP would do the same, because you’d have to cut spending whenever GDP went down.
You really have to wonder how someone who’s a major political figure could be this uninformed — but you have to wonder even more about the state of mind that induces you to write an op-ed about a subject you don’t comprehend at all.
But this isn’t the first time something like this has happened to a supposed GOP star. In the early stages of the Republican primary, Tim Pawlenty — a supposed thoughtful conservative — published an op-ed based on the premise that public-sector employment was booming; in fact, it was plunging [ http://www.politifact.com/truth-o-meter/statements/2010/dec/16/tim-pawlenty/tim-pawlenty-repeats-questionable-statistic-growth/ ]. And, of course, Mitt Romney made statements — about the 47 percent, about Benghazi — that he clearly thought were smart and well-informed, but were in fact flatly false.
I think it comes back to the epistemic closure issue. Even supposedly well-informed people on the right get their “facts” from the likes of the Heritage Foundation. Probably Jindal never talks to anyone who will quietly explain that the fiscal cliff is a problem because, well, Keynesian economics is basically right, and you really don’t want austerity in a depressed economy. So he has some vague notion that it’s about the wages of fiscal irresponsibility, which it isn’t, and apparently believes that he knows enough to pontificate.
It’s pretty amazing, actually — and again, it makes me a lot more sympathetic to those confused voters, who have much better excuses than sitting governors with presidential ambitions.
© 2012 The New York Times Company
http://krugman.blogs.nytimes.com/2012/12/06/the-fiscal-ignoramus-factor/ [with comments]
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Coalition For Fiscal And National Security Boasts Deep Financial Ties To Military Complex
Former Secretary of Defense Robert Gates, left, and former Chairman of the Joint Chiefs of Staff Adm. Mike Mullen are part of the 15-member Coalition for Fiscal and National Security, backed by billionaire Peter G. Peterson.
(AP Photo/Alex Brandon)
By Christina Wilkie and Paul Blumenthal
Posted: 12/07/2012 12:01 am EST | Updated: 12/07/2012 12:47 pm EST
WASHINGTON -- The multi-million dollar lobbying campaign to fix the national debt opened a new front this week, when a group of retired foreign policy experts -- many with longstanding ties to private equity billionaire Peter G. Peterson -- launched an effort to influence the debate over defense spending and debt reduction.
The Coalition for Fiscal and National Security is chaired by retired Adm. Michael Mullen, and includes 14 other former high-ranking government officials. Four former secretaries of state -- Henry Kissinger, Madeleine Albright, George Shultz, and James A. Baker -- are in the group, with three former defense secretaries and three former secretaries of the treasury.
The coalition is funded by Peterson's family foundation and boasts a lineup of recognizable luminaries well out of the prime of their careers (the average age of coalition members is 79). All but one of the 15 coalition members has a personal financial stake in companies that stand to be affected by the group's advocacy, raising the possibility of conflicts of interest.
The coalition is the latest Peterson-funded group advocating cuts to retirement and health care benefits. Peterson, a longtime proponent of cutting Social Security and Medicare in order to finance deficit reduction and low corporate tax rates, has spent nearly a half-billion dollars [ http://www.huffingtonpost.com/2012/05/15/peter-peterson-foundation-half-billion-social-security-cuts_n_1517805.html ] in the past five years spreading his austerity agenda by funding groups that include the Committee for a Responsible Federal Budget, the Campaign To Fix the Debt, the Moment of Truth, and the Concord Coalition.
The Coalition for Fiscal and National Security [ http://www.pgpf.org/Issues/Fiscal-Outlook/2012/12/120412-Coalition-for-Fiscal-and-National-Security-Announcement.aspx ] advocates increasing government spending on cutting-edge military technology, boosting funding [ http://www.pgpf.org/fiscalandnationalsecurity ] of non-military diplomatic outreach projects and lowering overall defense spending. Although short on specifics, the group identified potential sources of spending cuts as Defense Department employee health care and retirement benefits, and the military procurement process.
But as the former officials prepare to push their recommendations, their personal financial ties to defense contractors and lucrative consulting businesses cast a shadow over their work.
At least nine of the 15 members of the Coalition for Fiscal and National Security are deeply invested in companies with huge Pentagon contracts to build, in many cases, precisely the types of high-tech weapons that coalition members support. Two-thirds of the group, or 10 members, have lucrative consulting practices, advising companies how to do business with domestic and foreign government officials.
Of the 15 retired officials, only one has yet to leverage his public service for private gain: Mullen, the group's chair, who retired from the Navy in 2011.
For Scott Amey, general counsel to the nonprofit watchdog group The Project on Government Oversight, the potential for conflicts of interest among coalition members is troubling.
"These people have a great wealth of knowledge as far as operations and [defense] spending, but I have great concerns over the fact that most of them are operating in the military complex," Amey told HuffPost. Given their personal financial interests, he said, "their thoughts on these subjects aren't necessarily what may be good for the general public, but are going to be biased towards what is going to protect defense companies and their bottom lines."
Several members of the Coalition for Fiscal and National Security have spent the bulk of their post-government careers profiting from Defense Department spending.
One is Frank Carlucci, who served as secretary of defense under President Ronald Reagan. After leaving government, Carlucci made a fortune as chairman of The Carlyle Group, a Washington-based private equity firm specializing in aerospace and defense companies. Carlucci's other business interests include defense contractors BAE Systems, United Defense Industries and General Dynamics. He recently founded The Frontier Group, a Carlyle spinoff investment firm heavily focused on the defense industry.
Another coalition member, Paul O'Neill, treasury secretary under former President George W. Bush, joined Pete Peterson at his private equity firm, the Blackstone Group in 2003, immediately after leaving the cabinet. Today, O'Neill sits on the board [ http://www.trw.com/board_directors/paul_h_oneill ] of TRW Automotive, the last vestige of defense contractor TRW [ http://articles.latimes.com/2009/apr/03/business/fi-northrop3 ]. Charges that TRW padded its bills, and later, that it knowingly sold the Pentagon faulty parts, have cost its parent company, Northrup Grumman, hundreds of millions of dollars to settle.
Peterson also has close personal ties to Sam Nunn, a former Democratic senator from Georgia who co-chairs Peterson's original debt reduction group, the Concord Coalition. Nunn is also a director at one of the world's largest defense contractors, General Electric, which has won over $27 billion worth of Pentagon contracts since 1996. Nunn himself was paid more than $300,000 [ http://www.ge.com/ar2011/pdf/GE_annual_meeting_proxy_2012.pdf ] last year for his service to GE and took most of it in GE stock. In addition to his work at the company, Nunn is on the board of directors at two oil companies with ongoing Pentagon contracts, Hess Corp. and Chevron.
Nunn's fellow Democrat in the coalition, Ike Skelton, the former House Armed Services Committee chairman, received more campaign contributions from the defense electronics industry than anyone else in Congress when he last ran for office in 2010. Over the course of his career in Congress, the defense industry contributed more than $1.5 million [ http://www.opensecrets.org/politicians/industries.php?cycle=Career&cid=N00005105&type=I ] to help keep Skelton in office. Following his 2010 defeat, Skelton joined Husch Blackwell, a law and lobbying firm specializing in government contracts, where he is currently a partner. Skelton also sits on the board of EADS North America, a major defense contractor, and simultaneously advises the Department of Defense as a member of the Pentagon's Legal Policy Board [ http://www.huschblackwell.com/ike-skelton/ ].
Another former defense appropriator in the coalition is retired Sen. John Warner (R-Va.), who served three stints as chairman of the Senate Armed Services Committee. Now a senior adviser at the lobbying and law firm Hogan Lovells, Warner focuses [ http://www.hoganlovells.com/john-warner/ ] on defense, government contracting and federal regulations. In 2010, he joined the board of Aurora Flight Sciences, a defense aerospace company that manufactures unmanned aircraft [ http://www.aurora.aero/ ], known as drones. As soon as Warner joined the Aurora board, the company hired his firm, Hogan Lovells, to lobby Congress for it [ http://www.opensecrets.org/lobby/clientsum.php?id=D000031706&year=2011 ].
Matt Rhoades, director of legislative affairs at the progressive Truman National Security Project, advised against drawing hasty conclusions about the coalition's recommendations. Mullen, the coalition's chair, "gave this country more than 40 years of public service, and reached the top of his field, and you can make similar statements across this group," Rhoades told HuffPost. Rhoades said he wasn't in a position to comment on each individual's involvement, adding, "I would caution against casually questioning the personal intentions of some of our most decorated public servants.”
Peterson Foundation spokesman Patrick Dorton also focused on the coalition members' vaunted careers in government, calling the group "patriots who have spent their lives working to strengthen America’s national security." Coalition members "recognize that debt is the greatest threat to our national security and America needs sound fiscal and defense policies that reflect the realities of the 21st century,” Dorton said.
The coalition recommends spending more, not less, for the State Department to bolster what it calls the "non-defense dimensions of our national security" and "diplomatic assets."
There is ample room for coalition members to profit in this. Of the 15 former officials on the Coalition for Fiscal and National Security, 10 are currently involved with strategic consulting firms -- the kinds of agencies where former cabinet secretaries leverage their Rolodexes, and their prestige, to open doors for well-paying clients.
Kissinger and Albright each founded large international advisory firms -- Kissinger Associates and Albright Stonebridge Group -- after they left government. Meanwhile, former Secretary of State James A. Baker is listed as an expert in "cross-border transactions" at lobbying and law firm Baker Botts.
If a long-term debt deal includes more government spending on diplomatic assets, it's a safe bet that the companies hoping to provide those services will seek out former secretaries of state to help facilitate connections.
This should come as good news to former Defense Secretary Robert Gates, who counts former Secretary of State Condoleezza Rice as a partner in his consulting firm, as well as former National Security Adviser Stephen Hadley. The firm, RiceHadleyGates, advises corporations facing "national security and foreign policy challenges [ http://www.ricehadleygates.com/work.html ]."
Other coalition members may not have been in a president's cabinet, but carry big names and clout nevertheless. Former National Security Adviser Zbigniew Brzezinski has a consulting business, Z.B. Inc., which appears on his public speaking bio [ http://www.leadingauthorities.com/speaker/zbigniew-brzezinski.aspx ]. Former Federal Reserve Chairman Paul Volcker's company, Paul A. Volcker, is registered in New York [ http://www.manta.com/c/mmc1rkx/volcker-paul-a ].
The remaining two members of the coalition are former Secretary of Defense Harold Brown and former National Security Advisor Sandy Berger. Brown is a corporate director for Evergreen Oil and Philip Morris International, where he chairs the tobacco company's regulatory affairs committee. Berger is Albright's business partner at Albright Stonebridge.
These consulting firms all keep tight lids on client lists, and some have reportedly forbidden clients from discussing the relationship. But in a rare instance of openness in 2007, the CEO of accounting giant Marsh, Brian Storms, accidentally offered a glimpse into the value that high-ranking government officials bring to their clients, even decades after they've left public service. Explaining why he kept Albright's firm on retainer, he told a reporter [ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aU1Dya07Rrr8 ], "To be blunt, the access that Madeleine Albright gives Marsh through her global contacts is unprecedented."
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/06/coalition-for-fiscal-and-national-security_n_2248011.html [with comments]
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Starbucks To Pay More UK Taxes Than Required Following Outcry
Starbucks has been criticized for not paying corporate taxes in the UK
12/06/12 11:11 AM ET EST
LONDON — Starbucks bowed to mounting pressure over its tax affairs in Britain and revealed Thursday that it would pay about 10 million pounds ($16 million) in each of the next two years.
Having been slammed by the country's lawmakers of "immorally" avoiding tax, Starbucks' U.K. managing director Kris Engskov said the firm had agreed to pay more than required by law.
"With the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more," he told the London Chamber of Commerce.
The Seattle-based coffee company has 700 British outlets, but has paid just 8.6 million pounds ($13.8 million) in corporation tax in 14 years. Starbucks Corp. says this is due to a process involving paying royalties to its European headquarters in the Netherlands.
The company hasn't done anything illegal. Companies operating in Europe can base themselves in any of the 27 European Union nations, allowing them to take advantage of a particular country's low tax rates.
Earlier this week, Parliament's Public Accounts Committee criticized multinationals such as Starbucks, Amazon and Google for "using the letter of tax laws both nationally and internationally to immorally minimize their tax obligations."
Starbucks, which also has been the target of demonstrations by the protest group U.K. Uncut, announced this week that it was reviewing its tax approach.
Engskov said the company was proposing "to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years."
He estimated that would amount to "somewhere in the range of 10 million pounds in each of the next two years."
Labour lawmaker Margaret Hodge, who chaired the parliamentary committee, said Starbucks' change of heart was proof that "people power works."
Earlier this week, U.K. Treasury chief George Osborne earmarked an extra 77 million pounds ($124 million) to clamp down on "offshore evasion and avoidance by wealthy individuals and by multinationals."
Copyright 2012 The Associated Press
http://www.huffingtonpost.com/2012/12/06/starbucks-uk-taxes_n_2249666.html [with comments]
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Adelsons donate $33 million to GOP super PACs in closing days
Posted by CNN Senior Producer Kevin Bohn
December 6th, 2012 05:45 PM ET
Washington (CNN) - Nevada casino mogul Sheldon Adelson and his wife Miriam contributed $33 million to two major Republican super PACs in the closing weeks of the 2012 campaign, according to campaign finance disclosure reports filed Thursday with the Federal Election Commission.
The couple donated $23 million to the Karl Rove-founded American Crossroads.
The Adelsons separately donated another $10 million to the pro-Mitt Romney super PAC Restore Our Future in the last weeks of the campaign. Together, the couple donated $30 million to Restore Our Future.
Their donations throughout the campaign have drawn scrutiny, including their contributions to the pro-Newt Gingrich super PAC Winning Our Future. Their January cash infusions were a major reason the former House speaker's campaign stayed alive.
Restore Our Future spent $45.5 million from October 18th through the end of November, according to a FEC report.
In the same period, the group brought in just over $22 million.
With the election over we will now have a more complete picture of the super PACs financial activity in this campaign. During this year Restore Our Future ended up spending $146.4 million and raised $147 million. The group spent almost all of its reserves reporting now having $842,000 cash on hand.
© 2012 Cable News Network. Turner Broadcasting System, Inc.
http://politicalticker.blogs.cnn.com/2012/12/06/adelsons-donate-33-million-to-gop-super-pacs-in-closing-days/ [with comments]
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Sheldon Adelson Gave $10 Million To Mitt Romney Super PAC In Last Days
Sheldon Adelson and his wife, Miriam Ochsorn, celebrate the opening of Sheraton Macao Hotel at the Sands Cotai Central on Sept. 20, 2012.
(AP Photo/Kin Cheung)
By Paul Blumenthal
Posted: 12/06/2012 6:33 pm EST Updated: 12/06/2012 6:48 pm EST
WASHINGTON -- In the waning weeks of the 2012 election, Restore Our Future raised [ http://query.nictusa.com/cgi-bin/dcdev/forms/C00490045/839518/sa/11AI ] $22 million while spending $45 million in its ultimately failed effort to send Mitt Romney to the White House, according to the super PAC's final 2012 report filed with the Federal Election Commission. The largest source of money for Restore Our Future was casino billionaire Sheldon Adelson.
The owner of the Las Vegas Sands and his wife, Miriam Adelson, contributed $10 million to the super PAC in the final two weeks of the campaign, which brought their total giving to the pro-Romney group to $30 million -- double the amount they donated to help Adelson's first choice for the Republican nomination, former House Speaker Newt Gingrich.
Adelson has achieved the status of a feudal lord in the Republican Party by pumping a reported $150 million [ http://www.huffingtonpost.com/2012/12/03/sheldon-adelson-2012-election_n_2223589.html (about two-thirds of the way down at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82178007 )] into super PACs and "dark money" nonprofits to help GOP candidates up and down the ticket. He came to Washington on Tuesday to meet with top Republican lawmakers [ http://www.politico.com/story/2012/12/sheldon-adelson-met-with-john-boehner-eric-cantor-84692.html ]. Future GOP presidential hopefuls, in turn, have traveled to Adelson's Venetian casino in Las Vegas to meet with their party's biggest mega-donor [ http://www.politico.com/story/2012/12/2016-contenders-courting-mega-donors-84497.html ( http://dyn.politico.com/printstory.cfm?uuid=325EBAC4-FB20-445E-80DA-38E3F4DF48AF )].
They were likely hoping to benefit from his plan to double down on his contributions next time, as he told The Wall Street Journal.
"I happen to be in a unique business where winning and losing is the basis of the entire business," Adelson told the Journal [ http://online.wsj.com/article/SB10001424127887323717004578159570568104706.html ]. "So I don't cry when I lose. There's always a new hand coming up."
Adelson wasn't the only billionaire to donate huge sums to Restore Our Future in the final moments of the campaign.
The group also received generous contributions from Oracle CEO Larry Ellison, the third-richest American according to Forbes. Ellison gave $3 million to the super PAC in the final two weeks of the campaign, after making no contributions to super PACs in the preceding 21 1/2 months.
In the same two weeks, Houston Texans owner Robert McNair and reclusive billionaire Ira Rennert's corporation, The Renco Group, each dropped $1 million, doubling the amount they had previously given.
Other notable last-minute donors included former "Price Is Right" host Bob Barker, a first-time super PAC donor who gave $174,200. Hedge fund investor Marc Leder, host of the fundraiser at which Romney gave his infamous 47 percent speech, gave $250,000; Jimmy Johns CEO James Liautaud gave $500,000; and conservative media magnate Richard Mellon Scaife gave $417,500.
Despite a massive $100 million-plus war chest, the super PAC that helped Romney win the Republican nomination could not pull out a victory over President Barack Obama.
In the final weeks of the election, Restore Our Future even expanded its spending beyond the traditional swing states to include Michigan, Minnesota and Pennsylvania. But its barrage of television ads was not enough. Few of its spots proved to be memorable, and the ad chosen by Ace Metrix as the most memorable of the cycle [ http://www.marketwatch.com/story/ace-metrix-announces-the-most-effective-tv-ads-of-the-2012-election-2012-11-05 ] came from Restore Our Future's top competitor, the pro-Obama super PAC Priorities USA Action.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/06/sheldon-adelson-mitt-romney-super-pac_n_2252986.html [with comments]
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Casino mogul Adelson opened wallet to try to defeat Stabenow
By Todd Spangler
Detroit Free Press Washington Staff
1:39 PM, December 6, 2012
WASHINGTON – It wasn’t just the presidential race that attracted casino mogul Sheldon Adelson’s attention. It turns out he pumped a sizable chunk of cash into the campaign to beat U.S. Sen. Debbie Stabenow this year.
On Thursday, a group calling itself the Hardworking Americans Committee filed a campaign report showing that Adelson, the founder of Las Vegas Sands Corp. who spent millions of dollars in support of Republican presidential candidates, gave $1 million on Oct. 19.
Hardworking Americans Committee – which also raised contributions in the last month of the campaign from Amway president Doug DeVos and others – mounted a last-minute campaign against Stabenow, the Democratic incumbent from Michigan, accusing her of raising taxes on Americans while failing to pay her own.
Stabenow had missed some property tax payments on her property in Washington, D.C., about six years ago but had long since paid those and any penalties, her campaign spokesman, Cullen Schwarz, said at the time.
Hardworking Americans Committee was created by Republican consultant Stu Sandler, who previously worked for former state Attorney General Mike Cox.
The effort didn’t seem to slow down Stabenow, by the way. She beat the Republican nominee against her – former U.S. Rep. Pete Hokestra of Holland – by 21 percentage points in the Nov. 6 election.
Copyright 2012 Detroit Free Press
http://www.freep.com/article/20121206/NEWS15/121206061/Sheldon-Adelson-Debbie-Stabenow-Hardworking-Americans-Committee [with comments]
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Romney raised $86 million in closing weeks
About 91.8 percent of donations during that time period were $250 or less.
AP Photo
Read more: http://www.politico.com/story/2012/12/romney-raised-86-million-in-closing-weeks-84725.html#ixzz2EXk70MCU
By TARINI PARTI | 12/6/12 7:24 PM EST
Mitt Romney’s victory effort raised $86 million between Oct. 18 and Nov. 26, his campaign said Thursday.
The total reflects a combined fundraising effort by the Romney campaign and the Republican National Committee.
The campaign itself raised $65.6 million during that time period and spent $105.3 million on the final push to oust President Barack Obama, according to federal reports filed Thursday.
Romney for President spent $58.5 million, the bulk of its haul, on ads and an additional $6.3 million on online ads. Romney’s campaign was believed to have been saving up for a major ad blitz close to election day after seeing Obama dominate the airwaves for months.
The rest of the money went toward travel expenses ($8.4 million), direct mail consulting, printing and postage ($7 million), digital consulting ($5.1 million) payroll ($2.8 million) and strategic consulting ($2.7 million).
According to an email from the campaign, although the reports show that the campaign combined with the RNC still has $24.4 million in the bank, that number “does not take into account spending currently in process. The campaign continues to process invoices for pre-election expenses and forecasts that there will be less than $1 million at year end.”
About 91.8 percent of Romney’s donations during that time period were $250 or less, and the campaign raised $28 million from checks less than $250.
“Romney Victory continued its strong fundraising through the final weeks of the campaign. Every dollar we raised was put to use in the effort to elect Mitt Romney,” said Romney Victory National Finance Chairman Spencer Zwick in the email.
© 2012 POLITICO LLC
http://www.politico.com/story/2012/12/romney-raised-86-million-in-closing-weeks-84725.html [with comments]
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President Obama outspent Mitt Romney in last days
Romney’s committees and the Republican National Committee raised about $86 million during the same period.
AP Photo
By DAVE LEVINTHAL | 12/6/12 11:31 PM EST
In late June, his fundraising machine struggling, President Barack Obama darkly declared [ http://www.barackobama.com/news/entry/i-will-be-outspent/ ] to supporters, “I will be outspent.”
So much for that: As the presidential election reached its climax, Obama’s campaign spending dwarfed that of Romney’s campaign, outspending its Republican counterpart by more than $71 million between Oct. 18 and Election Day, according to documents filed Thursday night with the Federal Election Commission.
Such spending, coupled with the late, but heavy support from friendly super PACs [ http://www.politico.com/story/2012/12/liberal-donors-gave-to-priorities-usa-action-super-pac-at-11th-hour-84731.html ] and union groups, boosted Obama’s fortunes in key swing states such as Florida, Virginia, Iowa, New Hampshire, Colorado, Nevada and Ohio, all of which he won.
For perspective, the $176.4 million Obama’s campaign spent during this brief but critical period could run all city government operations in Dayton, Ohio, for more than a year.
As it was, the bulk of Obama’s money went toward campaign advertisements, production and consulting — more than $85 million from Oct. 18 to Nov. 26, according to the campaign’s filings. Online advertising accounted for another $22.66 million in spending.
Travel ($9.6 million) and payroll ($4.44 million) also constituted major 11th hour expenses for the campaign.
The $111 million raised by Obama’s committees and the Democratic National Committee in the weeks immediately before and after the election also boosted their collective fundraising total to more than $1.12 billion, POLITICO’s calculations of federal filings indicate. Obama’s campaign alone raised more than $88 million of that from Oct. 18 to Nov. 26.
Romney’s committees and the Republican National Committee raised about $86 million [ http://www.politico.com/story/2012/12/romney-raised-86-million-in-closing-weeks-84725.html (just above)] during the same period, federal records show.
As of Nov. 26, Obama’s campaign committee had $5.4 million remaining in its account versus $7.22 million in debt, his filing shows.
This means his committee will likely continue fundraising even though Obama has no further campaigns to run.
Kenneth P. Vogel contributed to this report.
© 2012 POLITICO LLC
http://www.politico.com/story/2012/12/obama-outspent-romney-in-final-weeks-84734.html [with comment]
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Manic spending marked end of 2012 campaigns, FEC reports show
A wave of last-minute donations fueled massive spending in this year’s presidential race.
John Moore/GETTY IMAGES
By Tom Hamburger, Dec 07, 2012 02:34 AM EST
Federal Election Commission [ http://www.fec.gov/ ] reports filed Thursday reveal manic activity in the final days of the 2012 campaign, with a wave of last-minute donations fueling massive spending.
President Obama’s campaign received contributions from 1.3?million donors in the last two weeks of the campaign and spent more than $100 million during that period.
Republican Mitt Romney’s campaign raised $85.9?million during the same period from nearly 600,000 donors. Together, the campaigns spent more than $2?billion, part of a record $6?billion election tab. The totals were fueled this year by “independent” campaign committees that emerged after a 2010 Supreme Court decision permitted unlimited corporate and union spending.
A super PAC backing Romney spent about $45?million in the final two weeks after receiving checks from wealthy donors, including $10?million from Sheldon Adelson, the Las Vegas gambling magnate.
The reports that were available early Thursday evening showed extensive activity by Adelson, who spent an estimated $100?million on campaigns this election cycle. For example, Adelson helped fund a super PAC that formed close to the election and paid for attacks on Sen. Debbie Stabenow (D-Mich.), who easily won reelection.
Thursday’s filings show that Adelson contributed $1?million to the group, which reported spending $1.1 million in opposing Stabenow. Adelson’s role was reported first Thursday by the Center for Responsive Politics [ http://www.opensecrets.org/news/2012/12/latest-super-pac-spending.html ], which reviews FEC data.
Adelson, who also owns casinos in Singapore and Macau, provided more than $54?million to Republican presidential candidates this cycle. He gave an additional $18?million to other Republicans. As a result of his largesse, the billionaire is courted by ambitious politicians and conservative causes.
Adelson’s spokesman, Ron Reese, declined to comment Thursday. The casino executive and his wife were in Washington this week for a variety of events, including meetings with officials on Capitol Hill. The spending details revealed Thursday show the growing influence of wealthy individuals in addition to Adelson.
The filings also detailed campaign spending by New York Mayor Michael R. Bloomberg (I). The filings show that Bloomberg was the only donor to the Independence USA PAC, which sent more than $8?million to help candidates who could aid causes he backs, such as environmental action and gun control. FEC reports show that Bloomberg’s biggest expenditure was nearly $3?million on ads attacking Rep. Joe Baca (D-Calif.), who has opposed some legislation restricting guns sales. Baca lost his reelection bid to another Democrat, Gloria Negrete McLeod.
The full story of the 2012 election spending wasn’t immediately clear. Computer problems delayed the receipt of the full Obama FEC report. A campaign spokeswoman, Katie Hogan, said late Thursday that the final report would show that Obama’s joint campaign committee had raised more than $1.1 billion from a record 4.5 million donors.
The final wave of money came mostly in the form of small checks. Hogan said the average amount contributed after Oct. 18 was $41. Results weren’t available late Thursday for spending by a super PAC backing Obama [ http://articles.washingtonpost.com/2012-09-05/politics/35496643_1_priorities-usa-action-obama-aide-super-pac ], which collected checks in larger amounts from a relatively small group of donors.
© 2012 The Washington Post
http://www.washingtonpost.com/politics/manic-spending-marked-end-of-2012-campaigns-fec-reports-show/2012/12/06/ecb4e7d6-3ff9-11e2-bca3-aadc9b7e29c5_story.html [with comments]
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Romney Campaign Winners: Firms Tied To Romney Aides Raked In Cash
12/08/2012
http://www.huffingtonpost.com/2012/12/07/romney-campaign-winners-aides_n_2259356.html [with comments]
===
Why Money in Politics Is Still a Really Big Deal
By Miles Mogulescu
Posted: 12/06/2012 3:09 pm
Since the 2012 elections -- the most expensive in history at a cost of $6 billion [ http://www.opensecrets.org/news/2012/10/2012-election-spending-will-reach-6.html ] -- there has been a growing media narrative that because Sheldon Adelson's millions and Karl Rove's super PACs didn't defeat Barack Obama or create a Republican Senate, money in politics and post-Citizens United super PACs really aren't such a big deal.
Indeed this line has often been most pronounced in the liberal media, which has enjoyed itself by gloating, "Ha ha, Sheldon Adelson wasted his money and Karl Rove turned out to be a fool."
A smiling James Carville (who, along with his Republican wife, earn a good part of his living from political consulting funded by campaign contributions) told Rolling Stone [ http://www.rollingstone.com/politics/news/how-president-obama-won-a-second-term-20121123 ], "Never have so few spent so much to accomplish so little. We all freak out that the money in politics is going to change everything. As it turned out, it really didn't change that much."
To which I respond, "Bullsh*t!" The outsized influence of money in politics pre-selects the candidates of both parties, defines and delimits the range of issues and circumscribes what elected officials even attempt to accomplish once in office. Money in politics remains the greatest danger to government of, by, and for the people, and the 2012 elections only made a bad situation worse.
Certainly the billionaires who invest in candidates and the consultants who spend their money don't think they wasted their political investments in 2012 and only plan to come back bigger and better in coming elections.
Adelson -- who reportedly contributed [ http://www.huffingtonpost.com/2012/12/03/sheldon-adelson-2012-election_n_2223589.html (about two-thirds of the way down at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82178007 )] $150 million to 2012 campaigns -- isn't crying over his investment losses and tells [ http://online.wsj.com/article/SB10001424127887323717004578159570568104706.html ] the Wall Street Journal that he plans to double his political investments in 2016.
Karl Rove -- who runs the biggest [ http://www.huffingtonpost.com/2012/11/04/karl-rove-crossroads-2012-election_n_2072744.html ] Republican super PACs -- writes [ http://online.wsj.com/article/SB10001424127887324735104578118873224497426.html ] in his own Wall Street Journal column that conservative super PACs and their donors are "in it for the long haul... Their attitude is: The fight goes on, beat 'em next time."
And not to be left behind, Politico reports [ http://www.politico.com/news/stories/1112/84205.html ] that
[s]hortly after Election Day, House Minority Leader Nancy Pelosi, New York Sen. Chuck Schumer and top White House aides spoke at a three-day secret meeting of major Democratic donors and officials from liberal outside groups gearing up for 2014...Their goal: a permanent network of officially blessed independent groups that leverages liberals' increasing acceptance and appreciation of outside money.
So some media commentators may think that 2012 proved that money in politics doesn't matter all that much. But the millionaires, billionaires and corporations in the class that invests in politicians, and the consultants who advise them clearly think it matters a whole lot. And they'll be back bigger and better in coming elections with super PACs 2.0, 3.0 and 4.0. Unless they're all plain stupid -- which is extremely unlikely -- they must know something about the value of their political investments.
One of the things they know is that the extravagant costs of running for election, and the need for members of both parties to raise huge sums of money from the richest Americans, means that neither party will carry out, or even debate, policies which threaten the plutocracy.
Take climate change, probably the greatest threat on the horizon to the nation and the world. But the issue was all but invisible in the 2012 campaign. Except for Mitt Romney's snide remarks at the Republican convention about Barack Obama wanting to stop the rise of the oceans, and Michael Bloomberg's late endorsement of Obama after Hurricane Sandy, neither presidential candidate discussed the greatest threat to the future -- global climate change -- as an issue in the campaign. And the likelihood is that in his second term, President Obama will do little to combat global climate change because no meaningful legislation can get through Congress. Does anyone really think this has nothing to do with the tens of millions of dollars in campaign cash spread around Congress by Exxon Mobil, the Koch Brothers and other corporations and billionaires in the energy industry?
And despite the fact that a vast majority of voters told pollsters that they cared more about jobs than the deficit, the deficit -- not job creation -- has dominated the political debate in Washington and in the media since the election. Does anyone really think this has nothing to do with the influence of Wall Street, Chamber of Commerce and super PAC money in the election?
Moreover, Fix the Debt, a nominally bipartisan alliance of CEO's, many of whom supported Romney, has raised $42 million [ http://money.cnn.com/2012/11/28/news/economy/campaign-to-fix-the-debt/index.html ] for a post-election campaign for what Paul Krugman has characterized as "campaigning for cuts to Social Security and Medicare, even while making lower tax rates a 'core principle.'" The corruption of the political system by big money doesn't stop when the election cycle ends.
And speaking of the overarching issue of money in politics, was it ever mentioned in the Presidential campaign? President Obama is nominally on record in support of a constitutional amendment to overturn Citizens United. A recent Greenberg Quinlan Rosner poll [ http://www.campaignmoney.org/files/111312Polling-Memo-Final.pdf , via http://www.campaignmoney.org/press-room/2012/11/13/new-poll-voters-push-back-against-big-money-politics ] found that 81 [sic - 78] percent of voters agree that "there is too much big money spent on political campaigns and elections today and reasonable limits should be placed on campaign contributions and spending". More specifically, 62 percent oppose the Citizens United decision and nearly half (46 percent) strongly oppose it. But in the course of the most expensive political campaign in history, did Obama ever mention the issue? Is President Obama going to try to make ending the corrupting influence of outsized campaign contributions part of his presidential legacy? Not likely.
So, for the wealthy political investor class, it's always heads we win, tails you lose. There are real policy differences between a centrist Democratic Party and a far-right Republican Party. But when it comes to the biggest issues that really matter, money always wins out. And contrary to the myth that money didn't count all that much in the 2012 elections, the $6 billion election only reinforced the power of big money in politics, and it will be reinforced further in future elections if nothing is done to reverse it.
Unless the pervasive influence of big money in elections is ended, America will never be able to solve its biggest pressing problems, whether climate change, debt, taxes, financial regulation, education, or health care, energy, or the environment. As centrist New York Times columnist Thomas Friedman has written [ http://www.nytimes.com/2009/11/22/opinion/22friedman.html ], the best America will be able to come up with is "sub-optimal" solutions, since
...money in politics has become so pervasive that lawmakers have to spend most of their time raising it, selling their souls to those who have it or defending themselves from the smallest interest groups with deep pockets that can trump the national interest.
In addition to defining the narrow limits of political debate and available solutions to America's biggest problems, the outsized influence of money in politics continues to have other nefarious effects. Long before election campaigns, the "money primary" defines who can even run for office. If a potential candidate can't raise large sums early, forget even trying. (Remember, Barack Obama won the money primary against Hillary Clinton early in 2007 by out-fundraising her among Wall Street donors. And although Wall Street may have somewhat abandoned Obama for their compatriot Mitt Romney in 2012, don't think that didn't impact Obama going easy on the big Wall Street Banks in the aftermath of the economic crash of 2008.)
Moreover, money has an even bigger influence in elections for the House, state legislatures and judgeships, than it does in presidential elections where both candidates come in heavily armed. A big infusion of outside money can quickly swing a race that "only" costs a few hundred thousand or a few million dollars, and the fear of that money entering the race can control what congressperson or state legislator will do to take on special interests while in office. At its most insidious, contributions to low visibility judicial campaigns by business interests with potential cases before judges can corrupt the legal system.
Moreover, in the 2010 elections, Republican super PACs outspent Democratic super PACs by 4-1 in state elections which helped them gain control of a number of state legislatures. They immediately used that power to gerrymander Congressional districts to all but guarantee that Republicans would control the House for the next decade, regardless of voter sentiment. Largely as a result, in the 2012 elections, Democrats received [ http://www.huffingtonpost.com/2012/11/08/house-candidates-votes_n_2096978.html ] approximately 1 million more votes in House races than Republicans but the Republicans have more than a 30-seat majority in the House.
Whatever other issue you care about, and whether you're moderate, liberal or conservative, if we don't solve the problem of the outsized influence of money in politics -- by amending the Constitution if necessary -- no big solutions will be found to America's pressing problems. That was true before the 2012 elections, and $6 billion later, it's all the more true after them.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/miles-mogulescu/money-in-politics_b_2251109.html [with comments]
===
How the Mainstream Press Bungled the Single Biggest Story of the 2012 Campaign
By Dan Froomkin
Posted: 12/07/2012 1:36 pm
Post-mortems of contemporary election coverage typically include regrets about horserace journalism, he-said-she-said stenography, and the lack of enlightening stories about the issues.
But according to longtime political observers Thomas Mann [ http://www.brookings.edu/experts/mannt ] and Norman Ornstein [ http://www.aei.org/scholar/norman-j-ornstein/ ], campaign coverage in 2012 was a particularly calamitous failure, almost entirely missing the single biggest story of the race: Namely, the radical right-wing, off-the-rails lurch of the Republican Party, both in terms of its agenda and its relationship to the truth.
Mann and Ornstein are two longtime centrist Washington fixtures who earlier this year dramatically rejected the strictures of false equivalency that bind so much of the capital's media elite and publicly concluded [ http://www.washingtonpost.com/opinions/lets-just-say-it-the-republicans-are-the-problem/2012/04/27/gIQAxCVUlT_story.html ] that GOP leaders have become "ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition."
The 2012 campaign further proved their point, they both said in recent interviews. It also exposed how fabulists and liars can exploit the elite media's fear of being seen as taking sides.
"The mainstream press really has such a difficult time trying to cope with asymmetry between the two parties' agendas and connections to facts and truth," said Mann, who has spent nearly three decades as a congressional scholar at the centrist Brookings Institution.
"I saw some journalists struggling to avoid the trap of balance and I knew they were struggling with it -- and with their editors," said Mann. "But in general, I think overall it was a pretty disappointing performance."
"I can't recall a campaign where I've seen more lying going on -- and it wasn't symmetric," said Ornstein, a scholar at the conservative American Enterprise Institute who's been tracking Congress with Mann since 1978. Democrats were hardly innocent, he said, "but it seemed pretty clear to me that the Republican campaign was just far more over the top."
Lies from Republicans generally and standardbearer Mitt Romney in particular weren't limited to the occasional TV ads, either; the party's most central campaign principles -- that federal spending doesn't create jobs, that reducing taxes on the rich could create jobs and lower the deficit -- willfully disregarded the truth.
"It's the great unreported big story of American politics," Ornstein said.
"If voters are going to be able to hold accountable political figures, they've got to know what's going on," Ornstein said. "And if the story that you're telling repeatedly is that they're all to blame -- they're all equally to blame -- then you're really doing a disservice to voters, and not doing what journalism is supposed to do."
Ornstein said the media's failure led him to conclude: "If you want to use a strategy of 'I'm just going to lie all the time', when you have the false equivalence meme adopted by a mainstream press and the other side lies a quarter of the time, you get away with it."
The Apostasy
Ornstein and Mann's big coming out took place in late April, when the Washington Post's Outlook section published their essay "Let’s just say it: The Republicans are the problem. [id.]", adapted from their book It's Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism [ http://www.amazon.com/Even-Worse-Than-Looks-Constitutional/dp/0465031331 ], which went on sale a few days later.
Political journalists had no doubt heard similar arguments many times before, mostly from left wing bloggers. But this time the charge was coming from two of the most consistent purveyors of conventional wisdom in town, bipartisan to a fault.
And they were pretty harsh in their critique of the media. "Our advice to the press: Don't seek professional safety through the even-handed, unfiltered presentation of opposing views," they wrote in the Post. "Which politician is telling the truth? Who is taking hostages, at what risks and to what ends?"
Initially, at least, Mann and Ornstein weren't completely ignored. "We had really good reporters call us and say: 'You're absolutely right'," Mann said. "They told us they used this as the basis for conversations in the newsroom."
But those conversations went nowhere, Mann said.
"Their editors and producers, who felt they were looking out for the economic wellbeing of their news organizations, were also concerned about their professional standing and vulnerability to charges of partisan bias," Mann said.
So most reporters just kept on with business as usual.
"They're so timid," Mann said.
Some reporters did better than others, Ornstein said, particularly crediting Jackie Calmes of the New York Times and David Rogers of Politico among a few others. "They grew a little bit more straightforward in what they do, and showed you can be a good, diligent unbiased reporter, report the facts, put it in context, and yet show what's really going on," he said.
Most reporters, however -- including many widely admired for their intelligence and aggressive reporting -- simply refused to blame one side more than the other. Mann said he was struck in conversations with journalists by how influenced they were by the heavily funded movement to promote a bipartisan consensus around deficit reduction and austerity. Such a bipartisan consensus doesn't actually exist, Mann pointed out. But if you believe it does, than you can blame both parties for failing to reach it.
"The Peterson world, I think, has given journalists the material to keep doing what they're doing," Mann said of the vast network of think tanks and other influential Washington groups underwritten at least in part by Wall Street billionaire Peter Peterson [ http://www.huffingtonpost.com/2012/05/15/peter-peterson-foundation-half-billion-social-security-cuts_n_1517805.html ].
Peterson's vast spending has given rise to an environment of contempt among the Washington elites for anyone who doesn't believe the government is dangerously overextended. And by that reckoning, the Democrats are therefore more out of touch with reality than Republicans, who at least pay the concept ample lip service.
How Fact-Checking Made Things Worse
Ornstein and Mann's views on journalistic failure have not been widely shared by mainstream media critics, who have instead focused on the fact that the press, in its enthusiasm to see the presidential race decided by a nose, ignored solid polling data to the contrary and called it wrong until the very end.
To the extent that the issue of widespread prevarication has come up at all, many media critics identified the rise of fact-checking as the big new trend of the 2012 cycle.
But Mann and Ornstein said that in practice, the fact-checkers may have made things worse rather than better.
"We had these little flurries of fact-checking -- which I found not worthless, but not a substitute for coherent, serious reporting -- and most of the time it just got stuck in the back of a news organization's output and there was no cost to a candidate of ignoring it," Mann said.
And then there was this terrible irony: "Fact checkers almost seemed obliged to show some balance in their fact checking."
"There was some damn good stuff done, and stuff that really did hold Romney to account," Ornstein said. But no fact-checker intent on "appearing to be utterly straightforward, independent, and without an axe to grind, is going to actually do the job of saying that we're going to cover 20 fact checks on one side, to three on the other."
So, Ornstein concluded: "If you looked at where the scales should have been, and where they were, they were weighted. And they weren't weighted for ideological bias. They were weighted to avoid being charged with ideological bias."
It's hard to exaggerate just how popular Mann and Ornstein were with the press before their apostasy. They were quite possibly the two most quotable men in Washington. They were the media cocktail party circuit's most reliable walking talking points.
And now they are virtual pariahs.
"It's awkward. I can no longer be a source in a news story in the Wall Street Journal or the Times or the Post because people now thing I've made the case for the Democrats and therefore I'll have to be balanced with a Republican," Mann said.
Neither Mann nor Ornstein have been guests on any of the main Sunday public affairs shows since their book came out. Nor has anyone else on those shows talked about the concerns they raised.
Ornstein is particularly infuriated that none of the supposed reader advocates at major newspapers have raised the issues they brought up. "What the fuck is an ombudsman doing if he's not writing about this?" he asked.
Their phones are still ringing, they say -- but not from inside the Beltway. "We've gotten a tremendous amount of attention, but much of that is due to the Internet and our original piece going viral," Mann said. They were also featured on NPR [ http://www.npr.org/2012/04/30/151522725/even-worse-than-it-looks-extremism-in-congress ].
There have been countless requests for speaking engagements. "We're just selling a shitload of books," said Mann. "There've been page-one stories in countries around the world."
Domestically, however, Mann and Ornstein said they refuse to be "balanced" on TV shows by Republicans -- because they are not anti Republican. The reason they wanted the press to expose what was really happening, they said, was to give voters a chance to respond in an appropriate way.
"The argument we're making is that our politics will never really get better until the Republican Party gets back into the game, instead of playing a new one," Mann said. "We want a strong, conservative Republican Party -- but one with some connection with reality."
Their critique came not out of ideology, they said, but out of their background as devoted process junkies and honest analysts, who finally realized that their vision of collegial governance wasn't possible any more, and it was clear why.
Both see the rise of Tea Party influence on the GOP as a major turning point. For Mann, the moment of reckoning came in the summer of 2011. "What flipped me over was the debt ceiling hostage-taking [ http://www.huffingtonpost.com/2011/08/03/austerity-priority-economy-deficit-hawks_n_917138.html ]," Mann said. It was clear then that the Republicans would "do or say anything" to hurt Obama, even if it was overtly bad for the country and false to core Republican values.
"That and getting older. What do I give a shit about access," he said.
"The fact is that one of the parties stopped being a conventional conservative party," Mann said. "My own view is that what needed to happen is somehow the public had to take a two-by-four to the Republicans' heads, knock them back to their senses, and allow conservative pragmatic voices to emerge," he said.
Democrats won soundly in 2012 of course, so the two-by-four was administered. But because the media obfuscated what was going on, the message was not entirely clear -- and certainly not to the Republican leadership.
Their Message Going Forward
Mann and Ornstein don't get invited to talk to the leaders of news organizations anymore.
But if they were, again, here is what Mann would say: "First of all, I'd sympathize. I'd say I understand that you have the responsibility to use professional norms of accuracy and fairness and not let your own personal feelings get in the way."
But, he would add: "You all have missed an incredibly important story in our politics that's been developing over a period of time. You'll slip it in here and there, you'll bury it, but you really don't confront it."
Ornstein said his message would be this: "I understand your concerns about advertisers. I understand your concerns about being labeled as biased. But what are you there for? What's the whole notion of a free press for if you're not going to report without fear or favor and you're not going to report what your reporters, after doing their due diligence, see as the truth?
"And if you don't do that, then you can expect I think a growing drumbeat of criticism that you're failing in your fundamental responsibility.
"Your job is to report the truth. And sometimes there are two sides to a story. Sometimes there are ten sides to a story. Sometimes there's only one.
"Somebody has got to make an assessment of whether the two sides are being equally careless with their facts, or equally deliberate with their lies."
Dan Froomkin is in the process of launching a new accountability journalism project. He is contributing editor of Nieman Reports, and the former senior Washington correspondent for the Huffington Post. He wrote the White House Watch column for the Washington Post website from 2004 to 2009, and was editor of the site from 2000 to 2003. Dan welcomes your email and can be reached at froomkin@gmail.com.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/dan-froomkin/republican-lies-2012-election_b_2258586.html [with comments]
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(linked in):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=74962613 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75222884 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=79791661 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=81839934 and preceding and following
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In Debt Ceiling Standoff, 14th Amendment Is Not An Option, Says White House
The White House is ruling out the idea of President Obama using the Constitution to raise the debt ceiling.
(Olivier Douliery-Pool/Getty Images)
By Jennifer Bendery
Posted: 12/07/2012 11:56 am EST | Updated: 12/07/2012 4:40 pm EST
WASHINGTON -- The White House signaled Thursday that President Barack Obama would not use the Constitution to unilaterally raise the debt ceiling in the event of a standoff with Republicans. But there are plenty of key Democrats who think that wouldn't be such a bad idea.
During his Thursday briefing, White House Press Secretary Jay Carney dismissed the idea that Obama has the constitutional authority to increase the debt limit himself if Congress doesn't do it by early February, when the government is expected to run out of money. The debt ceiling is currently capped at $16.4 trillion.
"This administration does not believe that the 14th Amendment gives the president the power to ignore the debt ceiling -- period," Carney said.
Carney said the White House has been consistent in opposing that approach, though he noted "there was a period where this was under discussion" during the 2011 debt ceiling fight. Ultimately, though, the White House dismissed the idea, questioning the legality of that option, he said.
The idea came up last year when House Speaker John Boehner (R-Ohio) refused to pass a bill to increase the debt limit without tying it to matching spending cuts -- a first -- and the country nearly defaulted on its debt as squabbling continued until the very last minute. The standoff resulted in America's first credit downgrade and is projected to cost taxpayers $18.9 billion [ http://bipartisanpolicy.org/news/press-releases/2012/11/bipartisan-policy-center-estimates-federal-government-will-hit-debt-limi ] over ten years.
During that fight, Democrats increasingly urged Obama to invoke the Constitution to raise the debt limit himself. They pointed to Section 4 of the 14th Amendment, which states: "The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned." Essentially, they argued that since the "public debt" cannot be questioned, the debt ceiling itself is unconstitutional.
The 2011 fight appears to be back [ http://www.huffingtonpost.com/2012/11/29/debt-ceiling-showdown-obama_n_2212368.html ]: Last week, Boehner said any increase in the debt ceiling must be tied to spending cuts as part of ongoing fiscal negotiations. Obama responded with a resounding no. And Democrats are once again citing the 14th Amendment as a way out.
Next week, Rep. Peter Welch (D-Vt.) plans to collect signatures from his colleagues on a letter to Obama, urging him to use the Constitution to raise the debt ceiling if Boehner doesn't relent in tying the increase to spending cuts.
"As you know, Speaker Boehner has explicitly stated that he will withhold support for raising the debt ceiling as leverage to win concessions in fiscal negotiations with the White House," the letter reads. "In the event the Speaker follows through on his reckless threat, we would support your use of any authority available to you, including the 14th amendment, to preserve America's full faith and credit and prevent further damage to our economy."
Welch told HuffPost on Friday that Republicans are playing "a very dangerous game" by using the debt ceiling to gain leverage in budget negotiations. He said he didn't know what else Obama could do if there continues to be a standoff and he's not willing to invoke the 14th Amendment. But in the event that the president is willing to keep that option on the table, Welch said he'll have plenty of support.
"There's a lot of us who do regard that as an option to protect the economy from reckless congressional conduct," Welch said.
If past is precedent, Welch would indeed have the support of a number of prominent Democrats. Among them, Sen. Chris Coons (D-Md.), House Minority Whip Steny Hoyer (D-Md.), Assistant to the Speaker James Clyburn (D-S.C.), House Democratic Caucus Chairman John Larson (D-Conn.) and Reps. Eliot Engel (D-N.Y.), Jerrold Nadler (D-N.Y.), John Garamendi (D-N.Y.), Gerry Connolly (D-Va.) and Del Donna Christensen (D-Virgin Islands). House Minority Leader Nancy Pelosi (D-Calif.) also privately backs the idea [ http://www.huffingtonpost.com/2011/07/30/congressman-pelosi-clearly-backs-14th-amendment-in-debt-standoff_n_914137.html ], one lawmaker told HuffPost last year.
Perhaps the most notable proponent of the constitutional option? Bill Clinton [ http://www.huffingtonpost.com/2011/07/19/bill-clinton-debt-ceiling_n_902266.html ].
Mike McAuliff contributed to this report.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/07/debt-ceiling-14th-amendment_n_2257610.html [with comments]
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Platinum Coins Debt Ceiling Solution Again Gaining Momentum
This is a U.S. Mint handout of the one-ounce $100 platinum coin from 1997.
(AP Photo/US Mint)
By Harry Bradford
Posted: 12/07/2012 11:15 am EST | Updated: 12/07/2012 11:15 am EST
Forget political brinksmanship, this whole debt ceiling thing could be solved quite elegantly with two coins. Made of platinum and worth, oh, $1 TRILLION each.
An analyst at Guggenheim Partners recently revived the possibility of "coin seignorage," an idea that, ahem, gained currency during 2011's debt ceiling debacle. Chris Krueger mentioned the idea as fourth in a list of ways that the U.S. could solve the debt ceiling problem, which is threatening to come up again as part of fiscal cliff negotiations.
The idea is pretty simple to understand. While there are legal limits to the amount of paper currency that can be in circulation and the amount of gold and silver than can be turned into coins, Treasury can issue coins made of platinum [ http://www.cnbc.com/id/100285772 ] in any denomination. The coins would be created by the U.S. Mint and deposited at the Federal Reserve, allowing the government to meet its debt requirements and avoid the debt ceiling.
Krueger is skeptical that this would happen. "The effects on the currency market and inflation are unclear, to say the least. You would also likely trigger a wave of lawsuits," he notes.
One economist tells the Washington Post that in terms of responses to the debt ceiling, “A government shutdown is much more straightforward [ http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/07/could-two-platinum-coins-solve-the-debt-ceiling-crisis/ ].”
James Pethokoukis at the conservative American Enterprise Institute points out that the move might have a negative impact on inflation [ http://www.aei-ideas.org/2012/12/how-could-washington-avoid-a-debt-ceiling-default-mint-a-few-trillion-dollar-platinum-coins-seriously/ ]. Others, WaPo’s Brad Plumer among them, believe it would have little effect on the value of the dollar [ http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/07/could-two-platinum-coins-solve-the-debt-ceiling-crisis/ ] since it is money that would not be directly injected into the economy.
Back in 2011, Reuters’ Felix Salmon wrote that the move could affect investor confidence in the U.S. [ http://blogs.reuters.com/felix-salmon/2011/07/14/the-damage-already-done-by-the-debt-ceiling-debate/ ], a stance debated by Naked Capitalism blogger Joe Firestone [ http://www.nakedcapitalism.com/2011/07/why-matt-yglesias-and-felix-salmon-are-wrong-about-a-legal-way-to-circumvent-the-debt-ceiling-impasse.html ].
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/07/platinum-coins-debt-ceiling_n_2257361.html [with comments]
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(linked in):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82258767 and following
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Dec. 3, 2012
http://www.slate.com/blogs/moneybox/2012/12/03/profit_share_of_gdp_corporate_profits_after_tax_are_at_an_all_time_high.html [with comments]
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Corporate Profits Hit Record High While Worker Wages Hit Record Low
By Pat Garofalo on Dec 3, 2012 at 9:25 am
A constant conservative charge against President Obama is that he is inherently anti-business. However, businesses keep defying the storyline by making larger and larger profits, rebounding nicely out of the Great Recession.
In the third quarter of this year, “corporate earnings were $1.75 trillion [ http://money.cnn.com/2012/12/03/news/economy/record-corporate-profits/ ], up 18.6% from a year ago.” Corporations are currently making more as a percentage of the economy than they ever have since such records were kept. But at the same time, wages as a percentage of the economy are at an all-time low, as this chart shows. (The red line is corporate profits; the blue line is private sector wages.):
Corporations [sic - the Fortune 500] made a record $824 billion [ http://thinkprogress.org/economy/2012/05/07/479130/record-corporate-profits/ ] in profits last year as well, while the stock market has had one of its best performances [ http://thinkprogress.org/economy/2012/10/22/1063181/obama-anti-business-charts/ ] since 1900 while Obama has been in office.
Meanwhile, workers are getting the short end of the stick. As CNN Money explained, “a separate government reading shows that total wages have now fallen to a record low of 43.5% of GDP. Until 1975, wages almost always accounted for at least half of GDP [ http://money.cnn.com/2012/12/03/news/economy/record-corporate-profits/ ], and had been as high as 49% as recently as early 2001.”
© 2012 Center for American Progress Action Fund
http://thinkprogress.org/economy/2012/12/03/1270541/corporate-profits-wages-record/ [with comments]
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Chart of the day: The long decline of labor
By Felix Salmon
September 26, 2012
This chart comes from Margaret Jacobson and Filippo Occhino [ http://www.clevelandfed.org/research/commentary/2012/2012-13.cfm (next below)] at the Cleveland Fed, and it’s reasonably terrifying — yet another one of those charts where the trend is down and to the right, and where it’s only gotten worse since the end of the recession.
What you’re looking at here is the share of total national income which is accounted for by labor — a measure that includes wages, salaries, bonuses and things like pension and insurance benefits. Everything else is capital income: interest, dividends, capital gains. There are two ways of measuring this, which is why there are two lines; both of them are telling the same story.
The fascinating thing to me, here, is what has happened since the crisis. Over the past three years or so, wages and salaries have been rising steadily, while interest rates have been stuck at zero. It’s never been harder to make income from capital, while incomes for people with jobs have actually kept on rising. And unemployment, while still high, has been coming down.
Given all that, it would stand to reason that the share of national income going to labor should be rising, not falling. Labor incomes are going up, the number of employed people is going up, and income from savings is going down. And yet! It turns out that people with capital are so rich, and getting so much richer, that it’s not even close. All that belly-aching about the plight of savers on fixed incomes in a zero interest-rate environment? Well, you don’t see it in these numbers. Looking at this chart, if you were given the choice between having money and no job, or having a job but no money, it’s not obvious which one to go for.
Of course, as the Cleveland Fed paper shows, a lot of the story here is about rising inequality. But the more powerful, if less obvious, story, is just how entrenched capital income has become in the US economy. As recently as 2000, it was at levels more or less in line with the historical average. And then, something big happened. During the Great Moderation — when yields fell on all capital asset classes — capital income went up sharply. Then the crisis happened, a classic case of a dog not barking: you’d expect capital income to have fallen enormously, at least for a year or two, but it didn’t, it just stopped rising. Most recently, in the wake of the financial crisis, capital income has been soaring again.
There’s a big lesson here for anybody serious about fiscal policy, too. (Paul Ryan, I’m looking at you.) As the labor share of income goes down and the capital share of income goes up, the only way that we can stop tax revenues from plunging disastrously is to tax capital income at least as much as we tax labor income. By contrast, the Ryan plan proposes taxing capital income at zero — putting ever more of a burden on working Americans, while giving unearned income a massive tax break the rich really don’t need.
There are big global forces driving this chart, most importantly the way in which labor is becoming increasingly global and fungible. Labor income has been declining for a good 25 years, and the only substantial countertrend was the dot-com bubble. The trend is a bad one, and it’s getting worse. And while I don’t see any policies, on either side of the aisle, which really try to address it, the fact is that Republican policies seem explicitly designed to exacerbate it. Think of capital income as the money flowing to “job creators”, and the chart is very clear on that front.
Copyright 2012 Thomson Reuters
http://blogs.reuters.com/felix-salmon/2012/09/26/chart-of-the-day-the-long-decline-of-labor/ [with comments]
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Labor's Declining Share of Income and Rising Inequality
Labor income has been declining as a share of total income earned in the United States for the past three decades. We look at the past effect of the labor share decline on income inequality, and we study the likely future path of the labor share and its implications for inequality.
Economic Commentary
Margaret Jacobson and Filippo Occhino
09.25.12
Labor income has declined as a share of total income earned in the United States. This decline was caused by several factors, including a change in the technology used to produce goods and services, increased globalization and trade openness, and developments in labor market institutions and policies.
One consequence of the labor share decline has raised concerns. Since labor income is more evenly distributed across U.S. households than capital income, the decline made total income less evenly distributed and more concentrated at the top of the distribution, and this contributed to increased income inequality. In this Commentary, we look at how the labor share decline has affected income inequality in the past, and we study the likely future path of the labor share and its implications for inequality.
The Decline in Labor’s Share of Income
Household income comes in two types: labor income, which includes wages, salaries, and other work-related compensation (such as pension and insurance benefits and incentive-based compensation), and capital income, which includes interest, dividends, and other realized investment returns (such as capital gains). During the last three decades, labor’s share of total income has declined in favor of capital income (see “Behind the Decline in Labor’s Share of Income [ http://www.clevelandfed.org/research/trends/2012/0212/01gropro.cfm ]” for more detail).
There are a number of ways to measure the share of income that accrues to labor. We look at three different data sources, and each provides broad evidence of the decline. According to data from the Bureau of Economic Analysis, labor’s share of gross national income fluctuated around 67 percent during the 1980s, 1990s, and early 2000s, but it has declined since then and now stands at 63.8 percent.1 (See figure 1.) According to the Bureau of Labor Statistics, the ratio of compensation to output for the nonfarm business sector fluctuated around 65 percent until the early 1980s and has declined steadily since, from 63 percent during the 1980s and 1990s to 58.2 percent most recently. Finally, a 2011 study of income tax returns and demographic data by the CBO (CBO 2011) finds that labor’s share of income decreased from 75 percent in 1979 to 67 percent in 2007.
These three data sources measure slightly different labor share concepts, which is why their estimated levels are different. But they agree in indicating a significant drop of 3 to 8 percentage points in labor’s share of income since the early 1980s, with the trend accelerating during the 2000s.
Such a decline had implications for the distribution of incomes. Labor income is more evenly distributed across U.S. households than capital income, while a disproportionately large share of capital income accrues to the top income households. As the share that is more evenly distributed declined and the share that is more concentrated at the top rose, total income became less evenly distributed and more concentrated at the top. As a result, total income inequality rose.
Income Inequality
Income inequality is the dispersion of annual incomes across households, relative to the average household income. Inequality affects a variety of other important economic variables, such as the composition of consumption and investment, tax revenue and government spending, government policies, economic mobility, human capital accumulation, and growth. Some economists—most prominently Raghuram Rajan in his book Fault Lines—have suggested that rising income inequality contributed to the debt accumulation and financial imbalances that led to the recent financial crisis. And of course income inequality is the focus of much attention as an indicator, albeit imperfect, of the inequality of lifetime income and welfare across households.
Several indicators suggest that inequality was declining up to the late 1970s, but it has since reversed course. It rose sharply during the 1980s and early 1990s and currently is at near record-high levels. Between 1967 and 1980, the average real income of the bottom 20 percent of households grew by 1.34 percent, faster than the 1.09 percent growth rate of the top 20 percent and the 0.67 percent of the top 5 percent. After 1980, however, the opposite occurred: Average real income grew by 0.05 percent only for the bottom 20 percent of households, while it grew by 1.24 percent for the top 20 percent and by 1.67 percent for the top 5 percent (DeNavas-Walt et al. 2011). The share of income earned by the top-income households rose significantly after 1980, while the share earned by the bottom-income households declined (figure 2).
The most closely watched indicator of income inequality is the Gini index, an index that increases from 0 to 1 as income distribution becomes relatively more dispersed.
The Gini index is equal to half the relative mean income difference, that is, the average difference in income between households in the economy, expressed as a percentage of the average household income. For example, if the Gini index is 0.40 and the average household income is $50,000, the relative mean difference is 0.40 × 2 = 0.80, or 80 percent, which means that on average the difference in income between two randomly selected households in the population is 0.80 × $50,000 = $40,000.
The Gini index points to increasing inequality during the entire 1967–2010 period, and especially during the 1980s and early 1990s (figure 3). When computed using Census Bureau data, the Gini index increased from 0.40 in 1967 to 0.48 in 2011. This means that in 1967 the difference in income between households was on average 80 percent of the average household income, while in 2010 it was 96 percent. When computed by the CBO, which uses income tax data and a broader definition of income that includes capital gains, the Gini index increased from 0.48 in 1979 to 0.59 in 2007, which means that the relative mean difference in income between households increased from 96 percent to 118 percent.
There are limits to what income inequality measures. For starters, it indicates inequality of outcomes, not of opportunities. It focuses on income, not on welfare, which depends on other variables such as consumption, leisure, health, and public goods. On one hand, income inequality does not respond to changes in the level of income, remaining constant when all households earn proportionally more (or less). On the other hand, it changes all the same regardless of whether the richest households earn more or the poorest households earn less. And, since it provides a snapshot of the relative dispersion of income across households in a given year, part of it is simply explained by the fact that households earn a variable income during the different stages of their lives. That part does not reflect lifetime income inequality. Because inequality responds similarly to very different factors, it is as important to learn why it has risen.
Most of the rise in income inequality since 1980 has been attributed to an increase in the returns to education and in the wage differential between high-skilled and low-skilled labor. Over time, the marginal productivity of high-skilled workers has increased relative to low-skilled workers, which has driven the demand for their labor higher and raised their relative compensation. As a result of this change, labor income became less evenly distributed and more concentrated at the top.
However, part of the increase in income inequality was due to the decline in labor’s share of income, and the associated shift from the more evenly distributed type of income to the more concentrated one. As shown in box 1, the Gini index increases by approximately 0.15 to 0.33 percentage points for every percentage point decline in the labor share. Given these numbers, the decline that the labor share has experienced since the early 1980s (3 to 8 percentage points depending on the measure) translates into an increase of the Gini index of up to 2.5 percentage points. This is close to the CBO’s estimate, which suggested that the decline in the labor share from 1979 to 2007 raised the Gini index by 2.3 percentage points.
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Box 1. A Decomposition of the Gini Index
Income inequality increases when labor and capital incomes become more dispersed, or when the labor share of income declines in favor of capital income. To measure the size of these effects, we write the Gini index as the weighted average of the concentration indexes of labor and capital income, with the weights equal to the two income shares. Concentration indexes measure how concentrated capital or labor income is at the top of the income distribution (See the CBO study for further information):
Gini index = labor’s share of income × concentration index of labor income
+ capital’s share of income × concentration index of capital income
The Gini index increases if the concentration index of labor or capital rises (for instance if labor income becomes more concentrated at the top end of the income distribution) or if there is a shift from the less concentrated labor income to the more concentrated capital income.
The formula also tells us by how much the Gini index responds to changes in shares or concentrations. If the labor concentration increases by 1 percentage point, the Gini index increases by 1 percentage point times the labor share, and similarly for capital. If both concentrations increase by 1 percentage point, the Gini index increases by 1 percentage point as well. Suppose instead that the labor share decreases by 1 percentage point and the capital income share increases by the same amount. The Gini index then increases by 1 percentage point times the difference between the two concentration indexes.
Data from the CBO indicate that the difference between capital and labor concentrations has varied over time, approximately ranging from 0.25 in 1979, to 0.15 in 1991, to 0.33 percentage points in 2007. Hence, for every percentage point decrease in the labor share, the Gini index increases by approximately 0.15 to 0.33 percentage points (table 1).
Table 1. Effect of Component Changes on the Gini Index
Component - Gini index
Labor share, 1 percent decrease - 0.15–0.33 percent increase
Labor concentration, 1 percent increase - 0.6–0.7 percent increase
Capital concentration, 1 percent increase - 0.3–0.4 percent increase
Sources: Congressional Budget Office; authors’ calculations.
Notice that shares and concentrations of labor and capital income are not the ultimate determinants of inequality. There are deeper, underlying factors that cause households and firms to change their behavior, and this results in changes in income shares, income concentrations, and ultimately in inequality.
Decomposing changes in inequality in terms of changes in shares and concentrations is useful because it sheds light on these underlying factors. For instance, an increase in the concentration of labor income at the top may reflect a higher return to education and a higher wage-skill premium, while a decrease in labor’s share of income may be indicative of a technological change raising the productivity of capital relative to labor.
Decomposition is also useful for studying the dynamics of income inequality over time, since income shares and concentrations have different statistical and cyclical properties and can be studied separately, as we do in this Commentary.
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This is a sizeable effect. More importantly, most of the effect occurred during the last decade, when the decline in the labor share was accelerating. Is this trend going to continue, and how will it affect income inequality going forward?
Future Paths
We use the model described in box 2 to learn about the future path of the labor share. The model decomposes the labor share into its long-run trend and its transitory components, and then it forecasts the future path of the overall labor share. We do all the calculations twice, once with the BEA data and once with the BLS data.
According to our model, the labor share trend has declined since 1980, with an accelerated drop in the 2000s, in both sets of data (figure 4). In the BEA data, the trend declined from levels as high as 69 percent before 1980 to 66.9 percent in 2000, to 64.9 percent today. In the BLS data, the trend declined from levels of approximately 64.5 percent before 1980 to 62.8 percent in 2000, to 59.8 percent today. According to these measures, the trend in the labor share declined 1.5 to 2 percentage points between 1980 and 2000, and then dropped an additional 2 to 3 percentage points, for a total of 4 to 4.5 percentage points.
Our model indicates that the labor share is currently 1 to 1.5 percentage points below its long-run trend level. Part of the decline in the labor share in the past five years was temporary, and it will be reversed as the recovery continues. Going forward, the labor share will pick up and converge to its long-run trend value. This will tend to decrease income inequality, lowering the Gini index by up to 0.5 (0.33 × 1.5) percentage points, as the decomposition in box 1 indicates.
Income inequality will not necessarily decrease though. As shown in box 1, inequality is affected not only by the relative shares of labor and capital income, but also by the concentrations of each. Concentration refers to the way each type of income is distributed across the households that earn it. In particular, concentration indexes measure how concentrated capital or labor income is at the top of the income distribution.
The future path of labor concentration is hard to predict, as it depends on the evolution of the returns to education and of the wage-skill premium. The concentration of capital income, however, is strongly procyclical, rising during recoveries (figure 5), and this suggests that capital income will become more concentrated at the top in the coming years of the recovery, helping to raise income inequality even further. This effect has dominated the dynamics of income inequality during the past two business cycles, so the future path of income inequality will likely be determined by the strength of the recovery and the associated pickup of the concentration of capital income.
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Box 2. A Model of the Labor Share
In this box we describe the model that we use to forecast the evolution of the labor share. To choose the model, we first look at the data. Inspecting figure 1, we notice that the labor share fluctuates cyclically around an underlying slow-moving trend: The labor share peaks right after the beginning of a recession, declines during the rest of the recession and the initial phase of the recovery, and then picks up and returns to trend during the later phase of the recovery. The first step in building our model of the labor share is to identify and isolate this cyclical component.
Looking more closely at how the business cycle affects the labor share, we notice that the labor share is related to the tightness of the labor market: It tends to decline when unemployment is high and increase when unemployment is low. In the data, a high level of unemployment tends to be followed by a decline in the labor share: The correlation between the unemployment gap (the difference between unemployment and its trend, computed with an HP filter) and the change in the labor share over the subsequent year is negative and large, -0.51. We use this information to compute the business cycle component of the labor share with a least square regression of the change in the labor share over the previous-year unemployment gap.
Turning to the trend component, we begin by looking at what determines the labor share in the long run. The main factor is the technology available to produce goods and services. In competitive markets, labor and capital are compensated in proportion to their marginal contribution to production, so the most important factor behind the labor and capital shares is the marginal productivities of labor and capital, which are determined by technology. In fact, one important cause of the post-1980 long-run decline in the labor share was a technological change, connected with advances in information and communication technologies, which made capital more productive relative to labor, and raised the return to capital relative to labor compensation. Other factors that have played a role in the long-run decline in the labor share are increased globalization and trade openness, as well as changes in labor market institutions and policies.
All these factors are slow moving and highly persistent processes. Their future evolution is hardly predictable. This suggests that we model the trend of the labor share as a very slow moving, highly persistent process—a random walk subject to small shocks. To compute the trend, then, we begin with the labor share, subtract the cyclical component computed as explained above, and separate the long-run hidden trend from other transitory components using the Kalman filter.
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Footnote
1.In the BEA’s NIPA accounts, gross national income equals the sum of the following categories: Compensation of employees; proprietors’ income; rental income; corporate profits; net interest income; indirect taxes less subsidies; depreciation. To compute the labor share, we need to identify what part of each category is labor income, and what part is capital income. To do that, we follow an established methodology. We classify the compensation of employees as unambiguous labor income (UL), and we classify corporate profits, rental income, net interest income, and depreciation as unambiguous capital income (UK). The remaining categories, proprietors’ income and indirect taxes less subsidies, are partly labor income and partly capital income, in proportion to UL and UK, respectively. As a result, labor’s share is computed as the ratio of unambiguous labor income to the sum of unambiguous labor and capital income, i.e., UL/(UL+UK). (See Gomme and Rupert 2004 [ http://www.clevelandfed.org/research/policydis/no7nov04.pdf ] for a discussion of this methodology. Notice, however, that they also exclude the government and housing sectors, so their measure of labor's share differs from ours.) [The reference to Gomme and Rupert 2004 was modified on 10/23/2012.]
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Sources Cited
“Income, Poverty, and Health Insurance Coverage in the United States: 2010 [ http://www.census.gov/prod/2011pubs/p60-239.pdf ],” Carmen DeNavas-Walt, Bernadette D. Proctor, and Jessica C. Smith, 2011. U.S. Census Bureau, Current Population Reports, P60–239, U.S. Government Printing Office, Washington, DC.
“Measuring Labor’s Share of Income [ http://www.clevelandfed.org/research/policydis/no7nov04.pdf ],” Paul Gomme and Peter C. Rupert, 2004. Federal Reserve Bank of Cleveland, Policy Discussion Paper, no. 7.
“Trends in the Distribution of Household Income between 1979 and 2007 [ http://www.cbo.gov/publication/42729 ],” Edward Harris and Frank Sammartino, 2011. Congressional Budget Office.
“Behind the Decline in Labor’s Share of Income [ http://www.clevelandfed.org/research/trends/2012/0212/01gropro.cfm ],” Margaret Jacobson and Filippo Occhino, 2012. Federal Reserve Bank of Cleveland, Economic Trends.
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http://www.clevelandfed.org/research/commentary/2012/2012-13.cfm
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5 Charts that Show How Increasing Income Inequality Leads to Less Opportunity
SOURCE: AP/ Marcio Jose Sanchez
If there is high income inequality, children will likely experience low economic mobility and opportunity as adults.
By Nick Bunker | December 5, 2012
High levels of income inequality are associated with low levels of economic mobility, argues University of Ottawa economist Miles Corak in a new report from the Center for American Progress. Here are some key charts from the report, “How to Slide Down the Great Gatsby Curve,” that explain this phenomenon.
Note: The “intergenerational earnings elasticity” measure used in the charts below describes the percentage of a parent’s relative income position that his child inherits. A higher elasticity means lower economic mobility, as this means a child’s relative income position as an adult is more determined by his father’s position than by other factors. (All of the academic research in this area looks at father-son pairs because of data availability.)
The Great Gatsby Curve shows that children born in countries with high levels of income inequality will experience less economic mobility on average than children born in more equal countries. (see Figure 1)
Economic mobility is determined by three major institutions that all interact with income inequality: the family, the market, and the state. Changes in any of these three areas affect the rate of mobility in a country. (see Figure 2)
Countries with high levels of income inequality also have higher levels of teenage parenthood. Teenage parents cannot invest in their children as much as other parents can due to their lower average incomes and lower levels of human capital, which harms the chances for opportunities for their children. (see Figure 3)
Countries also have lower levels of intergenerational economic mobility when the difference between the pay of college graduates and noncollege graduates is larger. (see Figure 4)
Access to high-quality education is also important, as countries have lower levels of economic mobility when a child’s educator is more determined by who educated her parent. (see Figure 5)
As these charts show, economic mobility is largely associated with the level of income inequality in a country. If there is high income inequality, children will likely experience low economic mobility and opportunity as adults. Families, the market, and the state largely determine life chances for the future generation of citizens, and several factors can improve these outcomes for children. For a more detailed description, please see our report.
© 2012 Center for American Progress
http://www.americanprogress.org/issues/economy/news/2012/12/05/46817/5-charts-that-show-how-increasing-income-inequality-leads-to-less-opportunity/
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The Forgotten Millions
By PAUL KRUGMAN
Published: December 6, 2012
Let’s get one thing straight: America is not facing a fiscal crisis. It is, however, still very much experiencing a job crisis.
It’s easy to get confused about the fiscal thing, since everyone’s talking about the “fiscal cliff.” Indeed, one recent poll suggests that a large plurality of the public believes that the budget deficit will go up if we go off that cliff.
In fact, of course, it’s just the opposite: The danger is that the deficit will come down too much, too fast. And the reasons that might happen are purely political; we may be about to slash spending and raise taxes not because markets demand it, but because Republicans have been using blackmail as a bargaining strategy, and the president seems ready to call their bluff.
Moreover, despite years of warnings from the usual suspects about the dangers of deficits and debt, our government can borrow at incredibly low interest rates — interest rates on inflation-protected U.S. bonds are actually negative, so investors are paying our government to make use of their money. And don’t tell me that markets may suddenly turn on us. Remember, the U.S. government can’t run out of cash (it prints the stuff), so the worst that could happen would be a fall in the dollar, which wouldn’t be a terrible thing and might actually help the economy.
Yet there is a whole industry built around the promotion of deficit panic. Lavishly funded corporate groups keep hyping the danger of government debt and the urgency of deficit reduction now now now — except that these same groups are suddenly warning against too much deficit reduction. No wonder the public is confused.
Meanwhile, there is almost no organized pressure to deal with the terrible thing that is actually happening right now — namely, mass unemployment. Yes, we’ve made progress over the past year. But long-term unemployment remains at levels not seen since the Great Depression: as of October, 4.9 million Americans had been unemployed for more than six months, and 3.6 million had been out of work for more than a year.
When you see numbers like those, bear in mind that we’re looking at millions of human tragedies: at individuals and families whose lives are falling apart because they can’t find work, at savings consumed, homes lost and dreams destroyed. And the longer this goes on, the bigger the tragedy.
There are also huge dollars-and-cents costs to our unmet jobs crisis. When willing workers endure forced idleness society as a whole suffers from the waste of their efforts and talents. The Congressional Budget Office estimates that what we are actually producing falls short of what we could and should be producing by around 6 percent of G.D.P., or $900 billion a year.
Worse yet, there are good reasons to believe that high unemployment is undermining our future growth as well, as the long-term unemployed come to be considered unemployable, as investment falters in the face of inadequate sales.
So what can be done? The panic over the fiscal cliff has been revelatory. It shows that even the deficit scolds are closet Keynesians. That is, they believe that right now spending cuts and tax hikes would destroy jobs; it’s impossible to make that claim while denying that temporary spending increases and tax cuts would create jobs. Yes, our still-depressed economy needs more fiscal stimulus.
And, to his credit, President Obama did include a modest amount of stimulus in his initial budget offer; the White House, at least, hasn’t completely forgotten about the unemployed. Unfortunately, almost nobody expects those stimulus plans to be included in whatever deal is eventually reached.
So why aren’t we helping the unemployed? It’s not because we can’t afford it. Given those ultralow borrowing costs, plus the damage unemployment is doing to our economy and hence to the tax base, you can make a pretty good case that spending more to create jobs now would actually improve our long-run fiscal position.
Nor, I think, is it really ideology. Even Republicans, when opposing cuts in defense spending, immediately start talking about how such cuts would destroy jobs — and I’m sorry, but weaponized Keynesianism, the assertion that government spending creates jobs, but only if it goes to the military, doesn’t make sense.
No, in the end it’s hard to avoid concluding that it’s about class. Influential people in Washington aren’t worried about losing their jobs; by and large they don’t even know anyone who’s unemployed. The plight of the unemployed simply doesn’t loom large in their minds — and, of course, the unemployed don’t hire lobbyists or make big campaign contributions.
So the unemployment crisis goes on and on, even though we have both the knowledge and the means to solve it. It’s a vast tragedy — and it’s also an outrage.
© 2012 The New York Times Company
http://www.nytimes.com/2012/12/07/opinion/krugman-the-forgotten-millions.html [with comments]
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Ken Fisher, Billionaire Forbes Writer, Attempts To Argue That The U.S. Needs Fewer Jobs
Kenneth Fisher, chief executive officer of Fisher Investments, speaks at the Forbes Global CEO Conference in Sydney, Australia, on Tuesday, Sept. 28, 2010.
(Gillianne Tedder, Bloomberg / Getty Images)
By Mark Gongloff
Posted: 12/06/2012 2:53 pm EST Updated: 12/06/2012 6:49 pm EST
For years Americans have pondered the mystery of how to create more jobs. Turns out we've been thinking about it all wrong: What we need are fewer jobs.
Billionaire investor and author [ http://www.forbes.com/lists/2010/10/billionaires-2010_Kenneth-Fisher_W06I.html ] Ken Fisher explains in Forbes -- the Christmas Eve issue, on newsstands soon! -- that "Job Growth Is Overrated [ http://www.forbes.com/sites/kenfisher/2012/12/05/why-job-growth-is-overrated/ ]."
"Believe it or not, I’m for fewer jobs, not more," he starts out.
OK, this is a good start: It is good to acknowledge right up front that readers might not quite believe that a sentient human being is somehow against more jobs.
But you expect that maybe Fisher is then going to do a bait-and-switch of some kind: He says he's against jobs, but what he really means is that he is for some other mind-blowing kind of employment that's not exactly a "job" as we commonly think of the term. Like being a financial advisor, say. Or maybe Fisher is sort of like a Situationist [ http://en.wikipedia.org/wiki/Situationist_International ], somebody who believes the entire social construct of "work" is a sham that keeps people from ever truly enjoying life. Fine, sounds good.
But, no, what Fisher means is that he really, really can't stand jobs, or people who want them, or people who want to create them:
"Throughout 2012 we heard politicians and pundits of all stripes yammering endlessly on the need for job growth—that we don’t have enough jobs," he continues. "It’s pure rubbish."
Oooo...k?
Jobs, Fisher explains, are actually signs of weakness in the economy. Jobs mean we can't produce stuff without human beings lousing up the place, instead of nice, clean robots, which are not constantly pestering you for health care and maternity leave and breaks. The greater our economy's productivity, the less we need of such nuisances. Then we can all sip cocktails on the beach for the rest of our days. Sous les paves, la plage [ http://en.wikipedia.org/wiki/May_1968_protests_in_France ].
"In the long run we will all benefit," Fisher says, by nobody having any jobs any more, forever. He then goes on to extol the virtues of investing in a handful of companies he says will be top-notch at destroying jobs, including Anheuser-Busch InBev and Walmart.
The massive mistake Fisher is making is understandable: People often think that productivity and jobs are mutually exclusive. The government's official measure of productivity [ http://www.bls.gov/bls/productivity.htm ] is calculated by dividing output by worker hour. If you can get more output with fewer worker hours, voila, productivity.
But history shows that higher productivity and more jobs typically go hand in hand, according to a paper a few years back [ http://www.nber.org/papers/w11354.pdf ] by William Nordhaus of the National Bureau of Economic Research.
Nordhaus looked at times in ye olde American history when productivity was rising and found, what do you know, jobs were rising then, too. When productivity is high, prices fall, which gives workers the ability to buy more stuff. Higher demand leads to more production and more jobs.
One notable exception was around the late 1990s, early 2000s, when computers were boosting American productivity like crazy, but China was taking all of our jobs. That experience maybe colors our thinking about productivity as a job-killer.
But China, at the very same time, was enjoying both rising productivity and more jobs.
More recently, China is no longer undercutting the rest of the world on labor costs quite as much as any more. And some of those jobs the U.S. lost to China might be coming back here. Exhibit A: Apple, which said on Thursday it is going to start making stuff in the U.S. again [ http://www.huffingtonpost.com/2012/12/06/apple-manufacturing-usa-macs_n_2249613.html?utm_hp_ref=business&ir=Business ].
We don't have to live in Ken Fisher's zero-jobs world. Although we could all use more days at the beach.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/06/ken-fisher-forbes_n_2251630.html [with comments]
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Today's Job Numbers Show Why Job-Creation Must Take Precedence Over Deficit Reduction
By Robert Reich
Posted: 12/07/2012 10:49 am
Today's jobs report [ http://www.huffingtonpost.com/2012/12/07/november-jobs-report-unemployment-rate_n_2256767.html ] shows an economy that's still moving in the right direction but way too slowly, which is why Washington's continuing obsession with the federal budget deficit is insane. Jobs and growth must come first.
The cost of borrowing is so low -- the yield on the ten-year Treasury is near historic lows -- and the need for more jobs and better wages so high, and our infrastructure so neglected, that it's insanity not to borrow more to put more Americans to work rebuilding the nation.
Yes, unemployment is down slightly and 146,000 new jobs were created in November. That's some progress. But don't be blinded by the hype coming out of Wall Street and the White House, both of which want the public to believe everything is going wonderfully well.
The fact is some 350,000 more people stopped looking for jobs in November, and the percent of the working-age population in jobs continues to drop -- now at 63.6 percent, almost the lowest in 30 years. Meanwhile, the average workweek is stuck at 34.4 hours.
The slowness of this recovery isn't because of Hurricane Sandy, which it turns out had very little impact on these job numbers. And it's not because of any uncertainty over the looming "fiscal cliff." Most consumers in November were oblivious about any pending cliff.
The reason the economy is still under-performing is demand is inadequate. Businesses won't create more jobs without enough customers. But consumers can't and won't spend because they don't have the money. Unless or until the private sector -- businesses and consumers -- are able to boost the economy, government must be the spender of last resort.
But the nation has bought into the Republican frame of thinking that we have to "get our fiscal house in order" before the economy can get back on track. Even though Barack Obama was reelected and Democrats gained seats in the House and Senate, that frame is still dominating debate.
Even though we're near a fiscal cliff that illustrates how dangerous deficit reduction can be when so many people are still unemployed, the White House and the Democrats seem incapable of changing the frame of debate.
Jobs must come first. Job creation must be our first priority.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/robert-reich/november-jobs-numbers_b_2257674.html [with comments]
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The Fiscal Ignoramus Factor
By Paul Krugman
December 6, 2012, 2:40 pm
Some of us had fun with the Business Insider poll [ http://www.businessinsider.com/47-of-people-think-the-deficit-would-increase-if-we-go-over-the-fiscal-cliff-2012-12 ] finding that by a large margin, people who thought they knew something about the fiscal cliff believed that it would increase, not reduce, the deficit. Ha ha ha — although I actually have a lot of sympathy for ordinary voters, who don’t follow these things closely but know that everyone important has been warning for years that the budget deficit is Worse than H!lter or something. How are they supposed to know that those very same people are now screaming that the deficit is coming down too fast?
I have less sympathy for major political figures who also can’t get it straight.
As Jonathan Chait [ http://nymag.com/daily/intel/2012/12/bobby-jindal-unclear-on-what-fiscal-cliff-is.html ] points out, Bobby Jindal — who is supposed to be one of the intellectual leaders of his party — has just published an op-ed on the cliff [ http://www.politico.com/story/2012/12/bobby-jindal-opinion-fiscal-cliff-diving-84647.html ( http://dyn.politico.com/printstory.cfm?uuid=959D0018-9CAB-40C0-864C-519FAB1D903A )] that sure looks as if he has no idea whatsoever what the cliff is about. There’s nothing in that piece even hinting that the looming problem is spending cuts and tax increases that will shrink the deficit too soon; and his big policy ideas would actually make the lurch to austerity worse. It’s not just the idea of a balanced budget amendment, which would force harsh austerity every time the economy goes into recession; putting a cap on spending as share of GDP would do the same, because you’d have to cut spending whenever GDP went down.
You really have to wonder how someone who’s a major political figure could be this uninformed — but you have to wonder even more about the state of mind that induces you to write an op-ed about a subject you don’t comprehend at all.
But this isn’t the first time something like this has happened to a supposed GOP star. In the early stages of the Republican primary, Tim Pawlenty — a supposed thoughtful conservative — published an op-ed based on the premise that public-sector employment was booming; in fact, it was plunging [ http://www.politifact.com/truth-o-meter/statements/2010/dec/16/tim-pawlenty/tim-pawlenty-repeats-questionable-statistic-growth/ ]. And, of course, Mitt Romney made statements — about the 47 percent, about Benghazi — that he clearly thought were smart and well-informed, but were in fact flatly false.
I think it comes back to the epistemic closure issue. Even supposedly well-informed people on the right get their “facts” from the likes of the Heritage Foundation. Probably Jindal never talks to anyone who will quietly explain that the fiscal cliff is a problem because, well, Keynesian economics is basically right, and you really don’t want austerity in a depressed economy. So he has some vague notion that it’s about the wages of fiscal irresponsibility, which it isn’t, and apparently believes that he knows enough to pontificate.
It’s pretty amazing, actually — and again, it makes me a lot more sympathetic to those confused voters, who have much better excuses than sitting governors with presidential ambitions.
© 2012 The New York Times Company
http://krugman.blogs.nytimes.com/2012/12/06/the-fiscal-ignoramus-factor/ [with comments]
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Coalition For Fiscal And National Security Boasts Deep Financial Ties To Military Complex
Former Secretary of Defense Robert Gates, left, and former Chairman of the Joint Chiefs of Staff Adm. Mike Mullen are part of the 15-member Coalition for Fiscal and National Security, backed by billionaire Peter G. Peterson.
(AP Photo/Alex Brandon)
By Christina Wilkie and Paul Blumenthal
Posted: 12/07/2012 12:01 am EST | Updated: 12/07/2012 12:47 pm EST
WASHINGTON -- The multi-million dollar lobbying campaign to fix the national debt opened a new front this week, when a group of retired foreign policy experts -- many with longstanding ties to private equity billionaire Peter G. Peterson -- launched an effort to influence the debate over defense spending and debt reduction.
The Coalition for Fiscal and National Security is chaired by retired Adm. Michael Mullen, and includes 14 other former high-ranking government officials. Four former secretaries of state -- Henry Kissinger, Madeleine Albright, George Shultz, and James A. Baker -- are in the group, with three former defense secretaries and three former secretaries of the treasury.
The coalition is funded by Peterson's family foundation and boasts a lineup of recognizable luminaries well out of the prime of their careers (the average age of coalition members is 79). All but one of the 15 coalition members has a personal financial stake in companies that stand to be affected by the group's advocacy, raising the possibility of conflicts of interest.
The coalition is the latest Peterson-funded group advocating cuts to retirement and health care benefits. Peterson, a longtime proponent of cutting Social Security and Medicare in order to finance deficit reduction and low corporate tax rates, has spent nearly a half-billion dollars [ http://www.huffingtonpost.com/2012/05/15/peter-peterson-foundation-half-billion-social-security-cuts_n_1517805.html ] in the past five years spreading his austerity agenda by funding groups that include the Committee for a Responsible Federal Budget, the Campaign To Fix the Debt, the Moment of Truth, and the Concord Coalition.
The Coalition for Fiscal and National Security [ http://www.pgpf.org/Issues/Fiscal-Outlook/2012/12/120412-Coalition-for-Fiscal-and-National-Security-Announcement.aspx ] advocates increasing government spending on cutting-edge military technology, boosting funding [ http://www.pgpf.org/fiscalandnationalsecurity ] of non-military diplomatic outreach projects and lowering overall defense spending. Although short on specifics, the group identified potential sources of spending cuts as Defense Department employee health care and retirement benefits, and the military procurement process.
But as the former officials prepare to push their recommendations, their personal financial ties to defense contractors and lucrative consulting businesses cast a shadow over their work.
At least nine of the 15 members of the Coalition for Fiscal and National Security are deeply invested in companies with huge Pentagon contracts to build, in many cases, precisely the types of high-tech weapons that coalition members support. Two-thirds of the group, or 10 members, have lucrative consulting practices, advising companies how to do business with domestic and foreign government officials.
Of the 15 retired officials, only one has yet to leverage his public service for private gain: Mullen, the group's chair, who retired from the Navy in 2011.
For Scott Amey, general counsel to the nonprofit watchdog group The Project on Government Oversight, the potential for conflicts of interest among coalition members is troubling.
"These people have a great wealth of knowledge as far as operations and [defense] spending, but I have great concerns over the fact that most of them are operating in the military complex," Amey told HuffPost. Given their personal financial interests, he said, "their thoughts on these subjects aren't necessarily what may be good for the general public, but are going to be biased towards what is going to protect defense companies and their bottom lines."
Several members of the Coalition for Fiscal and National Security have spent the bulk of their post-government careers profiting from Defense Department spending.
One is Frank Carlucci, who served as secretary of defense under President Ronald Reagan. After leaving government, Carlucci made a fortune as chairman of The Carlyle Group, a Washington-based private equity firm specializing in aerospace and defense companies. Carlucci's other business interests include defense contractors BAE Systems, United Defense Industries and General Dynamics. He recently founded The Frontier Group, a Carlyle spinoff investment firm heavily focused on the defense industry.
Another coalition member, Paul O'Neill, treasury secretary under former President George W. Bush, joined Pete Peterson at his private equity firm, the Blackstone Group in 2003, immediately after leaving the cabinet. Today, O'Neill sits on the board [ http://www.trw.com/board_directors/paul_h_oneill ] of TRW Automotive, the last vestige of defense contractor TRW [ http://articles.latimes.com/2009/apr/03/business/fi-northrop3 ]. Charges that TRW padded its bills, and later, that it knowingly sold the Pentagon faulty parts, have cost its parent company, Northrup Grumman, hundreds of millions of dollars to settle.
Peterson also has close personal ties to Sam Nunn, a former Democratic senator from Georgia who co-chairs Peterson's original debt reduction group, the Concord Coalition. Nunn is also a director at one of the world's largest defense contractors, General Electric, which has won over $27 billion worth of Pentagon contracts since 1996. Nunn himself was paid more than $300,000 [ http://www.ge.com/ar2011/pdf/GE_annual_meeting_proxy_2012.pdf ] last year for his service to GE and took most of it in GE stock. In addition to his work at the company, Nunn is on the board of directors at two oil companies with ongoing Pentagon contracts, Hess Corp. and Chevron.
Nunn's fellow Democrat in the coalition, Ike Skelton, the former House Armed Services Committee chairman, received more campaign contributions from the defense electronics industry than anyone else in Congress when he last ran for office in 2010. Over the course of his career in Congress, the defense industry contributed more than $1.5 million [ http://www.opensecrets.org/politicians/industries.php?cycle=Career&cid=N00005105&type=I ] to help keep Skelton in office. Following his 2010 defeat, Skelton joined Husch Blackwell, a law and lobbying firm specializing in government contracts, where he is currently a partner. Skelton also sits on the board of EADS North America, a major defense contractor, and simultaneously advises the Department of Defense as a member of the Pentagon's Legal Policy Board [ http://www.huschblackwell.com/ike-skelton/ ].
Another former defense appropriator in the coalition is retired Sen. John Warner (R-Va.), who served three stints as chairman of the Senate Armed Services Committee. Now a senior adviser at the lobbying and law firm Hogan Lovells, Warner focuses [ http://www.hoganlovells.com/john-warner/ ] on defense, government contracting and federal regulations. In 2010, he joined the board of Aurora Flight Sciences, a defense aerospace company that manufactures unmanned aircraft [ http://www.aurora.aero/ ], known as drones. As soon as Warner joined the Aurora board, the company hired his firm, Hogan Lovells, to lobby Congress for it [ http://www.opensecrets.org/lobby/clientsum.php?id=D000031706&year=2011 ].
Matt Rhoades, director of legislative affairs at the progressive Truman National Security Project, advised against drawing hasty conclusions about the coalition's recommendations. Mullen, the coalition's chair, "gave this country more than 40 years of public service, and reached the top of his field, and you can make similar statements across this group," Rhoades told HuffPost. Rhoades said he wasn't in a position to comment on each individual's involvement, adding, "I would caution against casually questioning the personal intentions of some of our most decorated public servants.”
Peterson Foundation spokesman Patrick Dorton also focused on the coalition members' vaunted careers in government, calling the group "patriots who have spent their lives working to strengthen America’s national security." Coalition members "recognize that debt is the greatest threat to our national security and America needs sound fiscal and defense policies that reflect the realities of the 21st century,” Dorton said.
The coalition recommends spending more, not less, for the State Department to bolster what it calls the "non-defense dimensions of our national security" and "diplomatic assets."
There is ample room for coalition members to profit in this. Of the 15 former officials on the Coalition for Fiscal and National Security, 10 are currently involved with strategic consulting firms -- the kinds of agencies where former cabinet secretaries leverage their Rolodexes, and their prestige, to open doors for well-paying clients.
Kissinger and Albright each founded large international advisory firms -- Kissinger Associates and Albright Stonebridge Group -- after they left government. Meanwhile, former Secretary of State James A. Baker is listed as an expert in "cross-border transactions" at lobbying and law firm Baker Botts.
If a long-term debt deal includes more government spending on diplomatic assets, it's a safe bet that the companies hoping to provide those services will seek out former secretaries of state to help facilitate connections.
This should come as good news to former Defense Secretary Robert Gates, who counts former Secretary of State Condoleezza Rice as a partner in his consulting firm, as well as former National Security Adviser Stephen Hadley. The firm, RiceHadleyGates, advises corporations facing "national security and foreign policy challenges [ http://www.ricehadleygates.com/work.html ]."
Other coalition members may not have been in a president's cabinet, but carry big names and clout nevertheless. Former National Security Adviser Zbigniew Brzezinski has a consulting business, Z.B. Inc., which appears on his public speaking bio [ http://www.leadingauthorities.com/speaker/zbigniew-brzezinski.aspx ]. Former Federal Reserve Chairman Paul Volcker's company, Paul A. Volcker, is registered in New York [ http://www.manta.com/c/mmc1rkx/volcker-paul-a ].
The remaining two members of the coalition are former Secretary of Defense Harold Brown and former National Security Advisor Sandy Berger. Brown is a corporate director for Evergreen Oil and Philip Morris International, where he chairs the tobacco company's regulatory affairs committee. Berger is Albright's business partner at Albright Stonebridge.
These consulting firms all keep tight lids on client lists, and some have reportedly forbidden clients from discussing the relationship. But in a rare instance of openness in 2007, the CEO of accounting giant Marsh, Brian Storms, accidentally offered a glimpse into the value that high-ranking government officials bring to their clients, even decades after they've left public service. Explaining why he kept Albright's firm on retainer, he told a reporter [ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aU1Dya07Rrr8 ], "To be blunt, the access that Madeleine Albright gives Marsh through her global contacts is unprecedented."
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/06/coalition-for-fiscal-and-national-security_n_2248011.html [with comments]
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Starbucks To Pay More UK Taxes Than Required Following Outcry
Starbucks has been criticized for not paying corporate taxes in the UK
12/06/12 11:11 AM ET EST
LONDON — Starbucks bowed to mounting pressure over its tax affairs in Britain and revealed Thursday that it would pay about 10 million pounds ($16 million) in each of the next two years.
Having been slammed by the country's lawmakers of "immorally" avoiding tax, Starbucks' U.K. managing director Kris Engskov said the firm had agreed to pay more than required by law.
"With the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more," he told the London Chamber of Commerce.
The Seattle-based coffee company has 700 British outlets, but has paid just 8.6 million pounds ($13.8 million) in corporation tax in 14 years. Starbucks Corp. says this is due to a process involving paying royalties to its European headquarters in the Netherlands.
The company hasn't done anything illegal. Companies operating in Europe can base themselves in any of the 27 European Union nations, allowing them to take advantage of a particular country's low tax rates.
Earlier this week, Parliament's Public Accounts Committee criticized multinationals such as Starbucks, Amazon and Google for "using the letter of tax laws both nationally and internationally to immorally minimize their tax obligations."
Starbucks, which also has been the target of demonstrations by the protest group U.K. Uncut, announced this week that it was reviewing its tax approach.
Engskov said the company was proposing "to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years."
He estimated that would amount to "somewhere in the range of 10 million pounds in each of the next two years."
Labour lawmaker Margaret Hodge, who chaired the parliamentary committee, said Starbucks' change of heart was proof that "people power works."
Earlier this week, U.K. Treasury chief George Osborne earmarked an extra 77 million pounds ($124 million) to clamp down on "offshore evasion and avoidance by wealthy individuals and by multinationals."
Copyright 2012 The Associated Press
http://www.huffingtonpost.com/2012/12/06/starbucks-uk-taxes_n_2249666.html [with comments]
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Adelsons donate $33 million to GOP super PACs in closing days
Posted by CNN Senior Producer Kevin Bohn
December 6th, 2012 05:45 PM ET
Washington (CNN) - Nevada casino mogul Sheldon Adelson and his wife Miriam contributed $33 million to two major Republican super PACs in the closing weeks of the 2012 campaign, according to campaign finance disclosure reports filed Thursday with the Federal Election Commission.
The couple donated $23 million to the Karl Rove-founded American Crossroads.
The Adelsons separately donated another $10 million to the pro-Mitt Romney super PAC Restore Our Future in the last weeks of the campaign. Together, the couple donated $30 million to Restore Our Future.
Their donations throughout the campaign have drawn scrutiny, including their contributions to the pro-Newt Gingrich super PAC Winning Our Future. Their January cash infusions were a major reason the former House speaker's campaign stayed alive.
Restore Our Future spent $45.5 million from October 18th through the end of November, according to a FEC report.
In the same period, the group brought in just over $22 million.
With the election over we will now have a more complete picture of the super PACs financial activity in this campaign. During this year Restore Our Future ended up spending $146.4 million and raised $147 million. The group spent almost all of its reserves reporting now having $842,000 cash on hand.
© 2012 Cable News Network. Turner Broadcasting System, Inc.
http://politicalticker.blogs.cnn.com/2012/12/06/adelsons-donate-33-million-to-gop-super-pacs-in-closing-days/ [with comments]
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Sheldon Adelson Gave $10 Million To Mitt Romney Super PAC In Last Days
Sheldon Adelson and his wife, Miriam Ochsorn, celebrate the opening of Sheraton Macao Hotel at the Sands Cotai Central on Sept. 20, 2012.
(AP Photo/Kin Cheung)
By Paul Blumenthal
Posted: 12/06/2012 6:33 pm EST Updated: 12/06/2012 6:48 pm EST
WASHINGTON -- In the waning weeks of the 2012 election, Restore Our Future raised [ http://query.nictusa.com/cgi-bin/dcdev/forms/C00490045/839518/sa/11AI ] $22 million while spending $45 million in its ultimately failed effort to send Mitt Romney to the White House, according to the super PAC's final 2012 report filed with the Federal Election Commission. The largest source of money for Restore Our Future was casino billionaire Sheldon Adelson.
The owner of the Las Vegas Sands and his wife, Miriam Adelson, contributed $10 million to the super PAC in the final two weeks of the campaign, which brought their total giving to the pro-Romney group to $30 million -- double the amount they donated to help Adelson's first choice for the Republican nomination, former House Speaker Newt Gingrich.
Adelson has achieved the status of a feudal lord in the Republican Party by pumping a reported $150 million [ http://www.huffingtonpost.com/2012/12/03/sheldon-adelson-2012-election_n_2223589.html (about two-thirds of the way down at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82178007 )] into super PACs and "dark money" nonprofits to help GOP candidates up and down the ticket. He came to Washington on Tuesday to meet with top Republican lawmakers [ http://www.politico.com/story/2012/12/sheldon-adelson-met-with-john-boehner-eric-cantor-84692.html ]. Future GOP presidential hopefuls, in turn, have traveled to Adelson's Venetian casino in Las Vegas to meet with their party's biggest mega-donor [ http://www.politico.com/story/2012/12/2016-contenders-courting-mega-donors-84497.html ( http://dyn.politico.com/printstory.cfm?uuid=325EBAC4-FB20-445E-80DA-38E3F4DF48AF )].
They were likely hoping to benefit from his plan to double down on his contributions next time, as he told The Wall Street Journal.
"I happen to be in a unique business where winning and losing is the basis of the entire business," Adelson told the Journal [ http://online.wsj.com/article/SB10001424127887323717004578159570568104706.html ]. "So I don't cry when I lose. There's always a new hand coming up."
Adelson wasn't the only billionaire to donate huge sums to Restore Our Future in the final moments of the campaign.
The group also received generous contributions from Oracle CEO Larry Ellison, the third-richest American according to Forbes. Ellison gave $3 million to the super PAC in the final two weeks of the campaign, after making no contributions to super PACs in the preceding 21 1/2 months.
In the same two weeks, Houston Texans owner Robert McNair and reclusive billionaire Ira Rennert's corporation, The Renco Group, each dropped $1 million, doubling the amount they had previously given.
Other notable last-minute donors included former "Price Is Right" host Bob Barker, a first-time super PAC donor who gave $174,200. Hedge fund investor Marc Leder, host of the fundraiser at which Romney gave his infamous 47 percent speech, gave $250,000; Jimmy Johns CEO James Liautaud gave $500,000; and conservative media magnate Richard Mellon Scaife gave $417,500.
Despite a massive $100 million-plus war chest, the super PAC that helped Romney win the Republican nomination could not pull out a victory over President Barack Obama.
In the final weeks of the election, Restore Our Future even expanded its spending beyond the traditional swing states to include Michigan, Minnesota and Pennsylvania. But its barrage of television ads was not enough. Few of its spots proved to be memorable, and the ad chosen by Ace Metrix as the most memorable of the cycle [ http://www.marketwatch.com/story/ace-metrix-announces-the-most-effective-tv-ads-of-the-2012-election-2012-11-05 ] came from Restore Our Future's top competitor, the pro-Obama super PAC Priorities USA Action.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/06/sheldon-adelson-mitt-romney-super-pac_n_2252986.html [with comments]
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Casino mogul Adelson opened wallet to try to defeat Stabenow
By Todd Spangler
Detroit Free Press Washington Staff
1:39 PM, December 6, 2012
WASHINGTON – It wasn’t just the presidential race that attracted casino mogul Sheldon Adelson’s attention. It turns out he pumped a sizable chunk of cash into the campaign to beat U.S. Sen. Debbie Stabenow this year.
On Thursday, a group calling itself the Hardworking Americans Committee filed a campaign report showing that Adelson, the founder of Las Vegas Sands Corp. who spent millions of dollars in support of Republican presidential candidates, gave $1 million on Oct. 19.
Hardworking Americans Committee – which also raised contributions in the last month of the campaign from Amway president Doug DeVos and others – mounted a last-minute campaign against Stabenow, the Democratic incumbent from Michigan, accusing her of raising taxes on Americans while failing to pay her own.
Stabenow had missed some property tax payments on her property in Washington, D.C., about six years ago but had long since paid those and any penalties, her campaign spokesman, Cullen Schwarz, said at the time.
Hardworking Americans Committee was created by Republican consultant Stu Sandler, who previously worked for former state Attorney General Mike Cox.
The effort didn’t seem to slow down Stabenow, by the way. She beat the Republican nominee against her – former U.S. Rep. Pete Hokestra of Holland – by 21 percentage points in the Nov. 6 election.
Copyright 2012 Detroit Free Press
http://www.freep.com/article/20121206/NEWS15/121206061/Sheldon-Adelson-Debbie-Stabenow-Hardworking-Americans-Committee [with comments]
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Romney raised $86 million in closing weeks
About 91.8 percent of donations during that time period were $250 or less.
AP Photo
Read more: http://www.politico.com/story/2012/12/romney-raised-86-million-in-closing-weeks-84725.html#ixzz2EXk70MCU
By TARINI PARTI | 12/6/12 7:24 PM EST
Mitt Romney’s victory effort raised $86 million between Oct. 18 and Nov. 26, his campaign said Thursday.
The total reflects a combined fundraising effort by the Romney campaign and the Republican National Committee.
The campaign itself raised $65.6 million during that time period and spent $105.3 million on the final push to oust President Barack Obama, according to federal reports filed Thursday.
Romney for President spent $58.5 million, the bulk of its haul, on ads and an additional $6.3 million on online ads. Romney’s campaign was believed to have been saving up for a major ad blitz close to election day after seeing Obama dominate the airwaves for months.
The rest of the money went toward travel expenses ($8.4 million), direct mail consulting, printing and postage ($7 million), digital consulting ($5.1 million) payroll ($2.8 million) and strategic consulting ($2.7 million).
According to an email from the campaign, although the reports show that the campaign combined with the RNC still has $24.4 million in the bank, that number “does not take into account spending currently in process. The campaign continues to process invoices for pre-election expenses and forecasts that there will be less than $1 million at year end.”
About 91.8 percent of Romney’s donations during that time period were $250 or less, and the campaign raised $28 million from checks less than $250.
“Romney Victory continued its strong fundraising through the final weeks of the campaign. Every dollar we raised was put to use in the effort to elect Mitt Romney,” said Romney Victory National Finance Chairman Spencer Zwick in the email.
© 2012 POLITICO LLC
http://www.politico.com/story/2012/12/romney-raised-86-million-in-closing-weeks-84725.html [with comments]
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President Obama outspent Mitt Romney in last days
Romney’s committees and the Republican National Committee raised about $86 million during the same period.
AP Photo
By DAVE LEVINTHAL | 12/6/12 11:31 PM EST
In late June, his fundraising machine struggling, President Barack Obama darkly declared [ http://www.barackobama.com/news/entry/i-will-be-outspent/ ] to supporters, “I will be outspent.”
So much for that: As the presidential election reached its climax, Obama’s campaign spending dwarfed that of Romney’s campaign, outspending its Republican counterpart by more than $71 million between Oct. 18 and Election Day, according to documents filed Thursday night with the Federal Election Commission.
Such spending, coupled with the late, but heavy support from friendly super PACs [ http://www.politico.com/story/2012/12/liberal-donors-gave-to-priorities-usa-action-super-pac-at-11th-hour-84731.html ] and union groups, boosted Obama’s fortunes in key swing states such as Florida, Virginia, Iowa, New Hampshire, Colorado, Nevada and Ohio, all of which he won.
For perspective, the $176.4 million Obama’s campaign spent during this brief but critical period could run all city government operations in Dayton, Ohio, for more than a year.
As it was, the bulk of Obama’s money went toward campaign advertisements, production and consulting — more than $85 million from Oct. 18 to Nov. 26, according to the campaign’s filings. Online advertising accounted for another $22.66 million in spending.
Travel ($9.6 million) and payroll ($4.44 million) also constituted major 11th hour expenses for the campaign.
The $111 million raised by Obama’s committees and the Democratic National Committee in the weeks immediately before and after the election also boosted their collective fundraising total to more than $1.12 billion, POLITICO’s calculations of federal filings indicate. Obama’s campaign alone raised more than $88 million of that from Oct. 18 to Nov. 26.
Romney’s committees and the Republican National Committee raised about $86 million [ http://www.politico.com/story/2012/12/romney-raised-86-million-in-closing-weeks-84725.html (just above)] during the same period, federal records show.
As of Nov. 26, Obama’s campaign committee had $5.4 million remaining in its account versus $7.22 million in debt, his filing shows.
This means his committee will likely continue fundraising even though Obama has no further campaigns to run.
Kenneth P. Vogel contributed to this report.
© 2012 POLITICO LLC
http://www.politico.com/story/2012/12/obama-outspent-romney-in-final-weeks-84734.html [with comment]
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Manic spending marked end of 2012 campaigns, FEC reports show
A wave of last-minute donations fueled massive spending in this year’s presidential race.
John Moore/GETTY IMAGES
By Tom Hamburger, Dec 07, 2012 02:34 AM EST
Federal Election Commission [ http://www.fec.gov/ ] reports filed Thursday reveal manic activity in the final days of the 2012 campaign, with a wave of last-minute donations fueling massive spending.
President Obama’s campaign received contributions from 1.3?million donors in the last two weeks of the campaign and spent more than $100 million during that period.
Republican Mitt Romney’s campaign raised $85.9?million during the same period from nearly 600,000 donors. Together, the campaigns spent more than $2?billion, part of a record $6?billion election tab. The totals were fueled this year by “independent” campaign committees that emerged after a 2010 Supreme Court decision permitted unlimited corporate and union spending.
A super PAC backing Romney spent about $45?million in the final two weeks after receiving checks from wealthy donors, including $10?million from Sheldon Adelson, the Las Vegas gambling magnate.
The reports that were available early Thursday evening showed extensive activity by Adelson, who spent an estimated $100?million on campaigns this election cycle. For example, Adelson helped fund a super PAC that formed close to the election and paid for attacks on Sen. Debbie Stabenow (D-Mich.), who easily won reelection.
Thursday’s filings show that Adelson contributed $1?million to the group, which reported spending $1.1 million in opposing Stabenow. Adelson’s role was reported first Thursday by the Center for Responsive Politics [ http://www.opensecrets.org/news/2012/12/latest-super-pac-spending.html ], which reviews FEC data.
Adelson, who also owns casinos in Singapore and Macau, provided more than $54?million to Republican presidential candidates this cycle. He gave an additional $18?million to other Republicans. As a result of his largesse, the billionaire is courted by ambitious politicians and conservative causes.
Adelson’s spokesman, Ron Reese, declined to comment Thursday. The casino executive and his wife were in Washington this week for a variety of events, including meetings with officials on Capitol Hill. The spending details revealed Thursday show the growing influence of wealthy individuals in addition to Adelson.
The filings also detailed campaign spending by New York Mayor Michael R. Bloomberg (I). The filings show that Bloomberg was the only donor to the Independence USA PAC, which sent more than $8?million to help candidates who could aid causes he backs, such as environmental action and gun control. FEC reports show that Bloomberg’s biggest expenditure was nearly $3?million on ads attacking Rep. Joe Baca (D-Calif.), who has opposed some legislation restricting guns sales. Baca lost his reelection bid to another Democrat, Gloria Negrete McLeod.
The full story of the 2012 election spending wasn’t immediately clear. Computer problems delayed the receipt of the full Obama FEC report. A campaign spokeswoman, Katie Hogan, said late Thursday that the final report would show that Obama’s joint campaign committee had raised more than $1.1 billion from a record 4.5 million donors.
The final wave of money came mostly in the form of small checks. Hogan said the average amount contributed after Oct. 18 was $41. Results weren’t available late Thursday for spending by a super PAC backing Obama [ http://articles.washingtonpost.com/2012-09-05/politics/35496643_1_priorities-usa-action-obama-aide-super-pac ], which collected checks in larger amounts from a relatively small group of donors.
© 2012 The Washington Post
http://www.washingtonpost.com/politics/manic-spending-marked-end-of-2012-campaigns-fec-reports-show/2012/12/06/ecb4e7d6-3ff9-11e2-bca3-aadc9b7e29c5_story.html [with comments]
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Romney Campaign Winners: Firms Tied To Romney Aides Raked In Cash
12/08/2012
http://www.huffingtonpost.com/2012/12/07/romney-campaign-winners-aides_n_2259356.html [with comments]
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Why Money in Politics Is Still a Really Big Deal
By Miles Mogulescu
Posted: 12/06/2012 3:09 pm
Since the 2012 elections -- the most expensive in history at a cost of $6 billion [ http://www.opensecrets.org/news/2012/10/2012-election-spending-will-reach-6.html ] -- there has been a growing media narrative that because Sheldon Adelson's millions and Karl Rove's super PACs didn't defeat Barack Obama or create a Republican Senate, money in politics and post-Citizens United super PACs really aren't such a big deal.
Indeed this line has often been most pronounced in the liberal media, which has enjoyed itself by gloating, "Ha ha, Sheldon Adelson wasted his money and Karl Rove turned out to be a fool."
A smiling James Carville (who, along with his Republican wife, earn a good part of his living from political consulting funded by campaign contributions) told Rolling Stone [ http://www.rollingstone.com/politics/news/how-president-obama-won-a-second-term-20121123 ], "Never have so few spent so much to accomplish so little. We all freak out that the money in politics is going to change everything. As it turned out, it really didn't change that much."
To which I respond, "Bullsh*t!" The outsized influence of money in politics pre-selects the candidates of both parties, defines and delimits the range of issues and circumscribes what elected officials even attempt to accomplish once in office. Money in politics remains the greatest danger to government of, by, and for the people, and the 2012 elections only made a bad situation worse.
Certainly the billionaires who invest in candidates and the consultants who spend their money don't think they wasted their political investments in 2012 and only plan to come back bigger and better in coming elections.
Adelson -- who reportedly contributed [ http://www.huffingtonpost.com/2012/12/03/sheldon-adelson-2012-election_n_2223589.html (about two-thirds of the way down at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82178007 )] $150 million to 2012 campaigns -- isn't crying over his investment losses and tells [ http://online.wsj.com/article/SB10001424127887323717004578159570568104706.html ] the Wall Street Journal that he plans to double his political investments in 2016.
Karl Rove -- who runs the biggest [ http://www.huffingtonpost.com/2012/11/04/karl-rove-crossroads-2012-election_n_2072744.html ] Republican super PACs -- writes [ http://online.wsj.com/article/SB10001424127887324735104578118873224497426.html ] in his own Wall Street Journal column that conservative super PACs and their donors are "in it for the long haul... Their attitude is: The fight goes on, beat 'em next time."
And not to be left behind, Politico reports [ http://www.politico.com/news/stories/1112/84205.html ] that
[s]hortly after Election Day, House Minority Leader Nancy Pelosi, New York Sen. Chuck Schumer and top White House aides spoke at a three-day secret meeting of major Democratic donors and officials from liberal outside groups gearing up for 2014...Their goal: a permanent network of officially blessed independent groups that leverages liberals' increasing acceptance and appreciation of outside money.
So some media commentators may think that 2012 proved that money in politics doesn't matter all that much. But the millionaires, billionaires and corporations in the class that invests in politicians, and the consultants who advise them clearly think it matters a whole lot. And they'll be back bigger and better in coming elections with super PACs 2.0, 3.0 and 4.0. Unless they're all plain stupid -- which is extremely unlikely -- they must know something about the value of their political investments.
One of the things they know is that the extravagant costs of running for election, and the need for members of both parties to raise huge sums of money from the richest Americans, means that neither party will carry out, or even debate, policies which threaten the plutocracy.
Take climate change, probably the greatest threat on the horizon to the nation and the world. But the issue was all but invisible in the 2012 campaign. Except for Mitt Romney's snide remarks at the Republican convention about Barack Obama wanting to stop the rise of the oceans, and Michael Bloomberg's late endorsement of Obama after Hurricane Sandy, neither presidential candidate discussed the greatest threat to the future -- global climate change -- as an issue in the campaign. And the likelihood is that in his second term, President Obama will do little to combat global climate change because no meaningful legislation can get through Congress. Does anyone really think this has nothing to do with the tens of millions of dollars in campaign cash spread around Congress by Exxon Mobil, the Koch Brothers and other corporations and billionaires in the energy industry?
And despite the fact that a vast majority of voters told pollsters that they cared more about jobs than the deficit, the deficit -- not job creation -- has dominated the political debate in Washington and in the media since the election. Does anyone really think this has nothing to do with the influence of Wall Street, Chamber of Commerce and super PAC money in the election?
Moreover, Fix the Debt, a nominally bipartisan alliance of CEO's, many of whom supported Romney, has raised $42 million [ http://money.cnn.com/2012/11/28/news/economy/campaign-to-fix-the-debt/index.html ] for a post-election campaign for what Paul Krugman has characterized as "campaigning for cuts to Social Security and Medicare, even while making lower tax rates a 'core principle.'" The corruption of the political system by big money doesn't stop when the election cycle ends.
And speaking of the overarching issue of money in politics, was it ever mentioned in the Presidential campaign? President Obama is nominally on record in support of a constitutional amendment to overturn Citizens United. A recent Greenberg Quinlan Rosner poll [ http://www.campaignmoney.org/files/111312Polling-Memo-Final.pdf , via http://www.campaignmoney.org/press-room/2012/11/13/new-poll-voters-push-back-against-big-money-politics ] found that 81 [sic - 78] percent of voters agree that "there is too much big money spent on political campaigns and elections today and reasonable limits should be placed on campaign contributions and spending". More specifically, 62 percent oppose the Citizens United decision and nearly half (46 percent) strongly oppose it. But in the course of the most expensive political campaign in history, did Obama ever mention the issue? Is President Obama going to try to make ending the corrupting influence of outsized campaign contributions part of his presidential legacy? Not likely.
So, for the wealthy political investor class, it's always heads we win, tails you lose. There are real policy differences between a centrist Democratic Party and a far-right Republican Party. But when it comes to the biggest issues that really matter, money always wins out. And contrary to the myth that money didn't count all that much in the 2012 elections, the $6 billion election only reinforced the power of big money in politics, and it will be reinforced further in future elections if nothing is done to reverse it.
Unless the pervasive influence of big money in elections is ended, America will never be able to solve its biggest pressing problems, whether climate change, debt, taxes, financial regulation, education, or health care, energy, or the environment. As centrist New York Times columnist Thomas Friedman has written [ http://www.nytimes.com/2009/11/22/opinion/22friedman.html ], the best America will be able to come up with is "sub-optimal" solutions, since
...money in politics has become so pervasive that lawmakers have to spend most of their time raising it, selling their souls to those who have it or defending themselves from the smallest interest groups with deep pockets that can trump the national interest.
In addition to defining the narrow limits of political debate and available solutions to America's biggest problems, the outsized influence of money in politics continues to have other nefarious effects. Long before election campaigns, the "money primary" defines who can even run for office. If a potential candidate can't raise large sums early, forget even trying. (Remember, Barack Obama won the money primary against Hillary Clinton early in 2007 by out-fundraising her among Wall Street donors. And although Wall Street may have somewhat abandoned Obama for their compatriot Mitt Romney in 2012, don't think that didn't impact Obama going easy on the big Wall Street Banks in the aftermath of the economic crash of 2008.)
Moreover, money has an even bigger influence in elections for the House, state legislatures and judgeships, than it does in presidential elections where both candidates come in heavily armed. A big infusion of outside money can quickly swing a race that "only" costs a few hundred thousand or a few million dollars, and the fear of that money entering the race can control what congressperson or state legislator will do to take on special interests while in office. At its most insidious, contributions to low visibility judicial campaigns by business interests with potential cases before judges can corrupt the legal system.
Moreover, in the 2010 elections, Republican super PACs outspent Democratic super PACs by 4-1 in state elections which helped them gain control of a number of state legislatures. They immediately used that power to gerrymander Congressional districts to all but guarantee that Republicans would control the House for the next decade, regardless of voter sentiment. Largely as a result, in the 2012 elections, Democrats received [ http://www.huffingtonpost.com/2012/11/08/house-candidates-votes_n_2096978.html ] approximately 1 million more votes in House races than Republicans but the Republicans have more than a 30-seat majority in the House.
Whatever other issue you care about, and whether you're moderate, liberal or conservative, if we don't solve the problem of the outsized influence of money in politics -- by amending the Constitution if necessary -- no big solutions will be found to America's pressing problems. That was true before the 2012 elections, and $6 billion later, it's all the more true after them.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/miles-mogulescu/money-in-politics_b_2251109.html [with comments]
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How the Mainstream Press Bungled the Single Biggest Story of the 2012 Campaign
By Dan Froomkin
Posted: 12/07/2012 1:36 pm
Post-mortems of contemporary election coverage typically include regrets about horserace journalism, he-said-she-said stenography, and the lack of enlightening stories about the issues.
But according to longtime political observers Thomas Mann [ http://www.brookings.edu/experts/mannt ] and Norman Ornstein [ http://www.aei.org/scholar/norman-j-ornstein/ ], campaign coverage in 2012 was a particularly calamitous failure, almost entirely missing the single biggest story of the race: Namely, the radical right-wing, off-the-rails lurch of the Republican Party, both in terms of its agenda and its relationship to the truth.
Mann and Ornstein are two longtime centrist Washington fixtures who earlier this year dramatically rejected the strictures of false equivalency that bind so much of the capital's media elite and publicly concluded [ http://www.washingtonpost.com/opinions/lets-just-say-it-the-republicans-are-the-problem/2012/04/27/gIQAxCVUlT_story.html ] that GOP leaders have become "ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition."
The 2012 campaign further proved their point, they both said in recent interviews. It also exposed how fabulists and liars can exploit the elite media's fear of being seen as taking sides.
"The mainstream press really has such a difficult time trying to cope with asymmetry between the two parties' agendas and connections to facts and truth," said Mann, who has spent nearly three decades as a congressional scholar at the centrist Brookings Institution.
"I saw some journalists struggling to avoid the trap of balance and I knew they were struggling with it -- and with their editors," said Mann. "But in general, I think overall it was a pretty disappointing performance."
"I can't recall a campaign where I've seen more lying going on -- and it wasn't symmetric," said Ornstein, a scholar at the conservative American Enterprise Institute who's been tracking Congress with Mann since 1978. Democrats were hardly innocent, he said, "but it seemed pretty clear to me that the Republican campaign was just far more over the top."
Lies from Republicans generally and standardbearer Mitt Romney in particular weren't limited to the occasional TV ads, either; the party's most central campaign principles -- that federal spending doesn't create jobs, that reducing taxes on the rich could create jobs and lower the deficit -- willfully disregarded the truth.
"It's the great unreported big story of American politics," Ornstein said.
"If voters are going to be able to hold accountable political figures, they've got to know what's going on," Ornstein said. "And if the story that you're telling repeatedly is that they're all to blame -- they're all equally to blame -- then you're really doing a disservice to voters, and not doing what journalism is supposed to do."
Ornstein said the media's failure led him to conclude: "If you want to use a strategy of 'I'm just going to lie all the time', when you have the false equivalence meme adopted by a mainstream press and the other side lies a quarter of the time, you get away with it."
The Apostasy
Ornstein and Mann's big coming out took place in late April, when the Washington Post's Outlook section published their essay "Let’s just say it: The Republicans are the problem. [id.]", adapted from their book It's Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism [ http://www.amazon.com/Even-Worse-Than-Looks-Constitutional/dp/0465031331 ], which went on sale a few days later.
Political journalists had no doubt heard similar arguments many times before, mostly from left wing bloggers. But this time the charge was coming from two of the most consistent purveyors of conventional wisdom in town, bipartisan to a fault.
And they were pretty harsh in their critique of the media. "Our advice to the press: Don't seek professional safety through the even-handed, unfiltered presentation of opposing views," they wrote in the Post. "Which politician is telling the truth? Who is taking hostages, at what risks and to what ends?"
Initially, at least, Mann and Ornstein weren't completely ignored. "We had really good reporters call us and say: 'You're absolutely right'," Mann said. "They told us they used this as the basis for conversations in the newsroom."
But those conversations went nowhere, Mann said.
"Their editors and producers, who felt they were looking out for the economic wellbeing of their news organizations, were also concerned about their professional standing and vulnerability to charges of partisan bias," Mann said.
So most reporters just kept on with business as usual.
"They're so timid," Mann said.
Some reporters did better than others, Ornstein said, particularly crediting Jackie Calmes of the New York Times and David Rogers of Politico among a few others. "They grew a little bit more straightforward in what they do, and showed you can be a good, diligent unbiased reporter, report the facts, put it in context, and yet show what's really going on," he said.
Most reporters, however -- including many widely admired for their intelligence and aggressive reporting -- simply refused to blame one side more than the other. Mann said he was struck in conversations with journalists by how influenced they were by the heavily funded movement to promote a bipartisan consensus around deficit reduction and austerity. Such a bipartisan consensus doesn't actually exist, Mann pointed out. But if you believe it does, than you can blame both parties for failing to reach it.
"The Peterson world, I think, has given journalists the material to keep doing what they're doing," Mann said of the vast network of think tanks and other influential Washington groups underwritten at least in part by Wall Street billionaire Peter Peterson [ http://www.huffingtonpost.com/2012/05/15/peter-peterson-foundation-half-billion-social-security-cuts_n_1517805.html ].
Peterson's vast spending has given rise to an environment of contempt among the Washington elites for anyone who doesn't believe the government is dangerously overextended. And by that reckoning, the Democrats are therefore more out of touch with reality than Republicans, who at least pay the concept ample lip service.
How Fact-Checking Made Things Worse
Ornstein and Mann's views on journalistic failure have not been widely shared by mainstream media critics, who have instead focused on the fact that the press, in its enthusiasm to see the presidential race decided by a nose, ignored solid polling data to the contrary and called it wrong until the very end.
To the extent that the issue of widespread prevarication has come up at all, many media critics identified the rise of fact-checking as the big new trend of the 2012 cycle.
But Mann and Ornstein said that in practice, the fact-checkers may have made things worse rather than better.
"We had these little flurries of fact-checking -- which I found not worthless, but not a substitute for coherent, serious reporting -- and most of the time it just got stuck in the back of a news organization's output and there was no cost to a candidate of ignoring it," Mann said.
And then there was this terrible irony: "Fact checkers almost seemed obliged to show some balance in their fact checking."
"There was some damn good stuff done, and stuff that really did hold Romney to account," Ornstein said. But no fact-checker intent on "appearing to be utterly straightforward, independent, and without an axe to grind, is going to actually do the job of saying that we're going to cover 20 fact checks on one side, to three on the other."
So, Ornstein concluded: "If you looked at where the scales should have been, and where they were, they were weighted. And they weren't weighted for ideological bias. They were weighted to avoid being charged with ideological bias."
It's hard to exaggerate just how popular Mann and Ornstein were with the press before their apostasy. They were quite possibly the two most quotable men in Washington. They were the media cocktail party circuit's most reliable walking talking points.
And now they are virtual pariahs.
"It's awkward. I can no longer be a source in a news story in the Wall Street Journal or the Times or the Post because people now thing I've made the case for the Democrats and therefore I'll have to be balanced with a Republican," Mann said.
Neither Mann nor Ornstein have been guests on any of the main Sunday public affairs shows since their book came out. Nor has anyone else on those shows talked about the concerns they raised.
Ornstein is particularly infuriated that none of the supposed reader advocates at major newspapers have raised the issues they brought up. "What the fuck is an ombudsman doing if he's not writing about this?" he asked.
Their phones are still ringing, they say -- but not from inside the Beltway. "We've gotten a tremendous amount of attention, but much of that is due to the Internet and our original piece going viral," Mann said. They were also featured on NPR [ http://www.npr.org/2012/04/30/151522725/even-worse-than-it-looks-extremism-in-congress ].
There have been countless requests for speaking engagements. "We're just selling a shitload of books," said Mann. "There've been page-one stories in countries around the world."
Domestically, however, Mann and Ornstein said they refuse to be "balanced" on TV shows by Republicans -- because they are not anti Republican. The reason they wanted the press to expose what was really happening, they said, was to give voters a chance to respond in an appropriate way.
"The argument we're making is that our politics will never really get better until the Republican Party gets back into the game, instead of playing a new one," Mann said. "We want a strong, conservative Republican Party -- but one with some connection with reality."
Their critique came not out of ideology, they said, but out of their background as devoted process junkies and honest analysts, who finally realized that their vision of collegial governance wasn't possible any more, and it was clear why.
Both see the rise of Tea Party influence on the GOP as a major turning point. For Mann, the moment of reckoning came in the summer of 2011. "What flipped me over was the debt ceiling hostage-taking [ http://www.huffingtonpost.com/2011/08/03/austerity-priority-economy-deficit-hawks_n_917138.html ]," Mann said. It was clear then that the Republicans would "do or say anything" to hurt Obama, even if it was overtly bad for the country and false to core Republican values.
"That and getting older. What do I give a shit about access," he said.
"The fact is that one of the parties stopped being a conventional conservative party," Mann said. "My own view is that what needed to happen is somehow the public had to take a two-by-four to the Republicans' heads, knock them back to their senses, and allow conservative pragmatic voices to emerge," he said.
Democrats won soundly in 2012 of course, so the two-by-four was administered. But because the media obfuscated what was going on, the message was not entirely clear -- and certainly not to the Republican leadership.
Their Message Going Forward
Mann and Ornstein don't get invited to talk to the leaders of news organizations anymore.
But if they were, again, here is what Mann would say: "First of all, I'd sympathize. I'd say I understand that you have the responsibility to use professional norms of accuracy and fairness and not let your own personal feelings get in the way."
But, he would add: "You all have missed an incredibly important story in our politics that's been developing over a period of time. You'll slip it in here and there, you'll bury it, but you really don't confront it."
Ornstein said his message would be this: "I understand your concerns about advertisers. I understand your concerns about being labeled as biased. But what are you there for? What's the whole notion of a free press for if you're not going to report without fear or favor and you're not going to report what your reporters, after doing their due diligence, see as the truth?
"And if you don't do that, then you can expect I think a growing drumbeat of criticism that you're failing in your fundamental responsibility.
"Your job is to report the truth. And sometimes there are two sides to a story. Sometimes there are ten sides to a story. Sometimes there's only one.
"Somebody has got to make an assessment of whether the two sides are being equally careless with their facts, or equally deliberate with their lies."
Dan Froomkin is in the process of launching a new accountability journalism project. He is contributing editor of Nieman Reports, and the former senior Washington correspondent for the Huffington Post. He wrote the White House Watch column for the Washington Post website from 2004 to 2009, and was editor of the site from 2000 to 2003. Dan welcomes your email and can be reached at froomkin@gmail.com.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/dan-froomkin/republican-lies-2012-election_b_2258586.html [with comments]
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(linked in):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=74962613 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75222884 (and any future following)
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In Debt Ceiling Standoff, 14th Amendment Is Not An Option, Says White House
The White House is ruling out the idea of President Obama using the Constitution to raise the debt ceiling.
(Olivier Douliery-Pool/Getty Images)
By Jennifer Bendery
Posted: 12/07/2012 11:56 am EST | Updated: 12/07/2012 4:40 pm EST
WASHINGTON -- The White House signaled Thursday that President Barack Obama would not use the Constitution to unilaterally raise the debt ceiling in the event of a standoff with Republicans. But there are plenty of key Democrats who think that wouldn't be such a bad idea.
During his Thursday briefing, White House Press Secretary Jay Carney dismissed the idea that Obama has the constitutional authority to increase the debt limit himself if Congress doesn't do it by early February, when the government is expected to run out of money. The debt ceiling is currently capped at $16.4 trillion.
"This administration does not believe that the 14th Amendment gives the president the power to ignore the debt ceiling -- period," Carney said.
Carney said the White House has been consistent in opposing that approach, though he noted "there was a period where this was under discussion" during the 2011 debt ceiling fight. Ultimately, though, the White House dismissed the idea, questioning the legality of that option, he said.
The idea came up last year when House Speaker John Boehner (R-Ohio) refused to pass a bill to increase the debt limit without tying it to matching spending cuts -- a first -- and the country nearly defaulted on its debt as squabbling continued until the very last minute. The standoff resulted in America's first credit downgrade and is projected to cost taxpayers $18.9 billion [ http://bipartisanpolicy.org/news/press-releases/2012/11/bipartisan-policy-center-estimates-federal-government-will-hit-debt-limi ] over ten years.
During that fight, Democrats increasingly urged Obama to invoke the Constitution to raise the debt limit himself. They pointed to Section 4 of the 14th Amendment, which states: "The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned." Essentially, they argued that since the "public debt" cannot be questioned, the debt ceiling itself is unconstitutional.
The 2011 fight appears to be back [ http://www.huffingtonpost.com/2012/11/29/debt-ceiling-showdown-obama_n_2212368.html ]: Last week, Boehner said any increase in the debt ceiling must be tied to spending cuts as part of ongoing fiscal negotiations. Obama responded with a resounding no. And Democrats are once again citing the 14th Amendment as a way out.
Next week, Rep. Peter Welch (D-Vt.) plans to collect signatures from his colleagues on a letter to Obama, urging him to use the Constitution to raise the debt ceiling if Boehner doesn't relent in tying the increase to spending cuts.
"As you know, Speaker Boehner has explicitly stated that he will withhold support for raising the debt ceiling as leverage to win concessions in fiscal negotiations with the White House," the letter reads. "In the event the Speaker follows through on his reckless threat, we would support your use of any authority available to you, including the 14th amendment, to preserve America's full faith and credit and prevent further damage to our economy."
Welch told HuffPost on Friday that Republicans are playing "a very dangerous game" by using the debt ceiling to gain leverage in budget negotiations. He said he didn't know what else Obama could do if there continues to be a standoff and he's not willing to invoke the 14th Amendment. But in the event that the president is willing to keep that option on the table, Welch said he'll have plenty of support.
"There's a lot of us who do regard that as an option to protect the economy from reckless congressional conduct," Welch said.
If past is precedent, Welch would indeed have the support of a number of prominent Democrats. Among them, Sen. Chris Coons (D-Md.), House Minority Whip Steny Hoyer (D-Md.), Assistant to the Speaker James Clyburn (D-S.C.), House Democratic Caucus Chairman John Larson (D-Conn.) and Reps. Eliot Engel (D-N.Y.), Jerrold Nadler (D-N.Y.), John Garamendi (D-N.Y.), Gerry Connolly (D-Va.) and Del Donna Christensen (D-Virgin Islands). House Minority Leader Nancy Pelosi (D-Calif.) also privately backs the idea [ http://www.huffingtonpost.com/2011/07/30/congressman-pelosi-clearly-backs-14th-amendment-in-debt-standoff_n_914137.html ], one lawmaker told HuffPost last year.
Perhaps the most notable proponent of the constitutional option? Bill Clinton [ http://www.huffingtonpost.com/2011/07/19/bill-clinton-debt-ceiling_n_902266.html ].
Mike McAuliff contributed to this report.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/07/debt-ceiling-14th-amendment_n_2257610.html [with comments]
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Platinum Coins Debt Ceiling Solution Again Gaining Momentum
This is a U.S. Mint handout of the one-ounce $100 platinum coin from 1997.
(AP Photo/US Mint)
By Harry Bradford
Posted: 12/07/2012 11:15 am EST | Updated: 12/07/2012 11:15 am EST
Forget political brinksmanship, this whole debt ceiling thing could be solved quite elegantly with two coins. Made of platinum and worth, oh, $1 TRILLION each.
An analyst at Guggenheim Partners recently revived the possibility of "coin seignorage," an idea that, ahem, gained currency during 2011's debt ceiling debacle. Chris Krueger mentioned the idea as fourth in a list of ways that the U.S. could solve the debt ceiling problem, which is threatening to come up again as part of fiscal cliff negotiations.
The idea is pretty simple to understand. While there are legal limits to the amount of paper currency that can be in circulation and the amount of gold and silver than can be turned into coins, Treasury can issue coins made of platinum [ http://www.cnbc.com/id/100285772 ] in any denomination. The coins would be created by the U.S. Mint and deposited at the Federal Reserve, allowing the government to meet its debt requirements and avoid the debt ceiling.
Krueger is skeptical that this would happen. "The effects on the currency market and inflation are unclear, to say the least. You would also likely trigger a wave of lawsuits," he notes.
One economist tells the Washington Post that in terms of responses to the debt ceiling, “A government shutdown is much more straightforward [ http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/07/could-two-platinum-coins-solve-the-debt-ceiling-crisis/ ].”
James Pethokoukis at the conservative American Enterprise Institute points out that the move might have a negative impact on inflation [ http://www.aei-ideas.org/2012/12/how-could-washington-avoid-a-debt-ceiling-default-mint-a-few-trillion-dollar-platinum-coins-seriously/ ]. Others, WaPo’s Brad Plumer among them, believe it would have little effect on the value of the dollar [ http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/07/could-two-platinum-coins-solve-the-debt-ceiling-crisis/ ] since it is money that would not be directly injected into the economy.
Back in 2011, Reuters’ Felix Salmon wrote that the move could affect investor confidence in the U.S. [ http://blogs.reuters.com/felix-salmon/2011/07/14/the-damage-already-done-by-the-debt-ceiling-debate/ ], a stance debated by Naked Capitalism blogger Joe Firestone [ http://www.nakedcapitalism.com/2011/07/why-matt-yglesias-and-felix-salmon-are-wrong-about-a-legal-way-to-circumvent-the-debt-ceiling-impasse.html ].
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/12/07/platinum-coins-debt-ceiling_n_2257361.html [with comments]
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