Friday, September 21, 2012 6:13:46 AM
Tomgram: Jeremiah Goulka, Confessions of a Former Republican
Posted by Jeremiah Goulka [ http://www.tomdispatch.com/authors/jeremiahgoulka/ ] at 5:53pm, September 9, 2012.
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Here, to my mind, was one strange aspect of the political convention season just past: since the great meltdown of 2008, brilliantly engineered by various giant financial institutions gone wild, we’ve seen a collapse in the wealth of middle-class African Americans [ http://money.cnn.com/2012/06/21/news/economy/wealth-gap-race/index.htm ] and Hispanics [ http://www.nytimes.com/2011/07/26/us/26hispanics.html ], and a significant drop in the wealth of middle-class whites. Only the rich have benefitted [ http://www.huffingtonpost.com/2012/07/19/households-wealth-american-1-percent_n_1687015.html ]. Though the draining of wealth from the middle and its fortification at the top have been a long time coming, the near collapse of the economy four years ago was a disaster whether you look at the rise in unemployment figures, poverty [ http://www.cbsnews.com/2100-201_162-20105376.html ], the use of food stamps [ http://www.sfgate.com/business/bloomberg/article/Food-Stamp-Use-Climbs-to-Record-Reviving-3838495.php ], gauges of upward mobility [ http://www.nytimes.com/2012/01/05/us/harder-for-americans-to-rise-from-lower-rungs.html ], or just about any other grim measure you’d care to employ.
All this suggests that the twenty-first century has largely been an American riches-to-rags story. It was this that gave both political conventions an almost fairy-tale-like quality, since the single life trajectory featured prominently at each of them by just about every speaker you’d want to cite was the opposite. Everybody, even Mitt Romney [ http://www.tampabay.com/news/politics/full-text-of-mitt-romneys-rnc-speech/1249012 ] (“My dad never made it through college and apprenticed as a lath and plaster carpenter...”), was obliged to offer a wrenching, heartwarming tale of rags (or relative rags) to riches (no relative about it). The theme, heavily emphasized at the Republican convention and an undercurrent at the Democratic one, wasn’t I feel your pain, but I celebrate my gain.
There are, in our world, so many journeys of every sort. It’s strange to see only one of them emphasized and celebrated, the one that, at the moment, is perhaps the least likely to speak to the actual experience of most Americans. With this in mind, TomDispatch today offers quite a different journey -- not economic, but political, and of a sort no one usually thinks to write about. It’s Jeremiah Goulka’s trip out of a particular kind of fantasy world and into what, in 2004, Karl Rove (then an unnamed source for journalist Ron Suskind) pejoratively called [ http://www.tomdispatch.com/blog/174791/tomgram%3A_mark_danner,_the_age_of_rhetoric/ ] “‘the reality-based community’ which he defined as people who 'believe that solutions emerge from your judicious study of discernible reality.'” Rove added -- that moment being the highpoint of Bush-era imperial self-celebration -- “We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors... and you, all of you, will be left to just study what we do.'”
Goulka’s is a tale of how one man left a party that, in recent years, has had, in Jonathan Schell’s pungent phrase [ http://www.thenation.com/article/169411/gops-will-fantasy ], “a will to fantasy,” and embarked on a hard-won trip into reality. There are so many more such stories in our country. Maybe someday some political convention will have the nerve to celebrate some of them. (To catch Timothy MacBain's latest Tomcast audio interview in which Goulka discusses his political journey, click here [ http://tomdispatch.blogspot.com/2012/09/confessions-of-former-republican.html ] or download it to your iPod here [ http://itunes.apple.com/us/podcast/tomcast-from-tomdispatch-com/id357095817 ].) Tom
Joining the Reality-Based Community
Or How I Learned to Stop Loving the Bombs and Start Worrying
By Jeremiah Goulka
I used to be a serious Republican, moderate and business-oriented, who planned for a public-service career in Republican politics. But I am a Republican no longer.
There’s an old joke we Republicans used to tell that goes something like this: “If you’re young and not a Democrat, you’re heartless. If you grow up and you’re not a Republican, you’re stupid.” These days, my old friends and associates no doubt consider me the butt of that joke. But I look on my “stupidity” somewhat differently. After all, my real education only began when I was 30 years old.
This is the story of how in New Orleans after Hurricane Katrina and later in Iraq, I discovered that what I believed to be the full spectrum of reality was just a small slice of it and how that discovery knocked down my Republican worldview.
I always imagined that I was full of heart, but it turned out that I was oblivious. Like so many Republicans, I had assumed that society’s “losers” had somehow earned their desserts. As I came to recognize that poverty is not earned or chosen or deserved, and that our use of force is far less precise than I had believed, I realized with a shock that I had effectively viewed whole swaths of the country and the world as second-class people.
No longer oblivious, I couldn’t remain in today’s Republican Party, not unless I embraced an individualism that was even more heartless than the one I had previously accepted. The more I learned about reality, the more I started to care about people as people, and my values shifted. Had I always known what I know today, it would have been clear that there hasn’t been a place for me in the Republican Party since the Free Soil days of Abe Lincoln.
Where I Came From
I grew up in a rich, white suburb north of Chicago populated by moderate, business-oriented Republicans. Once upon a time, we would have been called Rockefeller Republicans [ http://www.tnr.com/blog/timothy-noah/98542/rockys-ghost ]. Today we would be called liberal Republicans or slurred by the Right as “Republicans In Name Only” (RINOs).
We believed in competition and the free market, in bootstraps and personal responsibility, in equality of opportunity, not outcomes. We were financial conservatives who wanted less government. We believed in noblesse oblige, for we saw ourselves as part of a natural aristocracy, even if we hadn’t been born into it. We sided with management over labor and saw unions as a scourge. We hated racism and loved Dr. Martin Luther King, Jr., particularly his dream that his children would “live in a nation where they will not be judged by the color of their skin but by the content of their character.” We worried about the rise of the Religious Right and its social-conservative litmus tests. We were tough on crime, tough on national enemies. We believed in business, full stop.
I intended to run for office on just such a platform someday. In the meantime, I founded the Republican club at my high school, knocked on doors and collected signatures with my father, volunteered on campaigns, socialized at fundraisers, and interned for Senator John McCain and Congressman Denny Hastert when he was House Majority Whip Tom DeLay's chief deputy.
We went to mainstream colleges -- the more elite the better -- but lamented their domination by liberal professors, and I did my best to tune out their liberal views. I joined the Republican clubs and the Federalist Society, and I read the Wall Street Journal and the Economist rather the New York Times. George Will was a voice in the wilderness, Rush Limbaugh an occasional (sometimes guilty) pleasure.
Left Behind By the Party
In January 2001, I was one of thousands of Americans who braved the cold rain to attend and cheer George W. Bush’s inauguration. After eight years hating “Slick Willie,” it felt good to have a Republican back in the White House. But I knew that he wasn’t one of our guys. We had been McCain fans, and even if we liked the compassionate bit of Bush’s conservatism, we didn’t care for his religiosity or his social politics.
Bush won a lot of us over with his hawkish response to 9/11, but he lost me with the Iraq War. Weren’t we still busy in Afghanistan? I didn’t see the urgency.
By then, I was at the Justice Department, working in an office that handled litigation related to what was officially called the Global War on Terror (or GWOT). My office was tasked with opposing petitions for habeas corpus brought by Guantánamo detainees who claimed that they were being held indefinitely without charge. The government’s position struck me as an abdication of a core Republican value: protecting the “procedural” rights found in the Bill of Rights. Sure, habeas corpus had been waived in wartime before, but it seemed to me that waiving it here reduced us to the terrorists’ level. Besides, since acts of terrorism were crimes, why not prosecute them? I refused to work on those cases.
With the Abu Ghraib pictures [ http://www.antiwar.com/news/?articleid=8560 ], my disappointment turned to rage. The America I believed in didn’t torture people.
I couldn’t avoid GWOT work. I was forced to read reams of allegations of torture, sexual abuse, and cover-ups in our war zones to give the White House a heads-up in case any of made it into the news cycle.
I was so mad that I voted for Kerry out of spite.
How I Learned to Start Worrying
I might still have stuck it out as a frustrated liberal Republican, knowing that the wealthy business core of the party still pulled a few strings and people like Richard Lugar and Olympia Snowe remained in the Senate -- if only because the idea of voting for Democrats by choice made me feel uncomfortable. (It would have been so… gauche.) Then came Hurricane Katrina. In New Orleans, I learned that it wasn’t just the Bush administration that was flawed but my worldview itself.
I had fallen in love with New Orleans during a post-law-school year spent in Louisiana clerking for a federal judge, and the Bush administration’s callous (non-)response to the storm broke my heart. I wanted to help out, but I didn’t fly helicopters or know how to do anything useful in a disaster, so just I sat glued to the coverage and fumed -- until FEMA asked federal employees to volunteer to help. I jumped at the chance.
Soon, I was involved with a task force trying to rebuild (and reform) the city’s criminal justice system. Growing up hating racism, I was appalled but not very surprised to find overt racism and the obvious use of racist code words by officials in the Deep South.
Then something tiny happened that pried open my eyes to the less obvious forms of racism and the hurdles the poor face when they try to climb the economic ladder. It happened on an official visit to a school in a suburb of New Orleans that served kids who had gotten kicked out of every other school around. I was investigating what types of services were available to the young people who were showing up in juvenile hall and seemed to be headed toward the proverbial life of crime.
My tour guide mentioned that parents were required to participate in some school programs. One of these was a field trip to a sit-down restaurant.
This stopped me in my tracks. I thought: What kind of a lame field trip is that?
It turned out that none of the families had ever been to a sit-down restaurant before. The teachers had to instruct parents and students alike how to order off a menu, how to calculate the tip.
I was stunned.
Starting To See
That night, I told my roommates about the crazy thing I had heard that day. Apparently there were people out there who had never been to something as basic as a real restaurant. Who knew?
One of my roommates wasn’t surprised. He worked at a local bank branch that required two forms of ID to open an account. Lots of people came in who had only one or none at all.
I was flooded with questions: There are adults who have no ID? And no bank accounts? Who are these people? How do they vote? How do they live? Is there an entire off-the-grid alternate universe out there?
From then on, I started to notice a lot more reality. I noticed that the criminal justice system treats minorities differently in subtle as well as not-so-subtle ways, and that many of the people who were getting swept up by the system came from this underclass that I knew so little about. Lingering for months in lock-up for misdemeanors, getting pressed against the hood and frisked during routine traffic stops, being pulled over in white neighborhoods for “driving while black [ http://www.theatlantic.com/magazine/archive/2009/07/driving-while-black/307625/ ]”: these are things that never happen to people in my world. Not having experienced it, I had always assumed that government force was only used against guilty people. (Maybe that’s why we middle-class white people collectively freak out at TSA airport pat-downs.)
I dove into the research literature to try to figure out what was going on. It turned out that everything I was “discovering” had been hiding in plain sight and had been named: aversive racism, institutional racism, disparate impact and disparate treatment, structural poverty, neighborhood redlining, the “trial tax,” the “poverty tax,” and on and on. Having grown up obsessed with race (welfare and affirmative action were our bête noires), I wondered why I had never heard of any of these concepts.
Was it to protect our Republican version of “individual responsibility”? That notion is fundamental to the liberal Republican worldview. “Bootstrapping” and “equality of opportunity, not outcomes” make perfect sense if you assume, as I did, that people who hadn’t risen into my world simply hadn’t worked hard enough, or wanted it badly enough, or had simply failed. But I had assumed that bootstrapping required about as much as it took to get yourself promoted from junior varsity to varsity. It turns out that it’s more like pulling yourself up from tee-ball to the World Series. Sure, some people do it, but they’re the exceptions, the outliers, the Olympians.
The enormity of the advantages I had always enjoyed started to truly sink in. Everyone begins life thinking that his or her normal is the normal. For the first time, I found myself paying attention to broken eggs rather than making omelets. Up until then, I hadn’t really seen most Americans as living, breathing, thinking, feeling, hoping, loving, dreaming, hurting people. My values shifted -- from an individualistic celebration of success (that involved dividing the world into the morally deserving and the undeserving) to an interest in people as people.
How I Learned to Stop Loving the Bombs
In order to learn more -- and to secure my membership in what Karl Rove sneeringly called the “reality-based community [ http://www.dailykos.com/story/2012/05/23/1094237/-Scott-Walker-s-alternate-universe ]” -- I joined a social science research institute. There I was slowly disabused of layer after layer of myth and received wisdom, and it hurt. Perhaps nothing hurt more than to see just how far my patriotic, Republican conception of U.S. martial power -- what it’s for, how it’s used -- diverged from the reality of our wars.
Lots of Republicans grow up hawks. I certainly did. My sense of what it meant to be an American was linked to my belief that from 1776 to WWII, and even from the 1991 Gulf War to Kosovo and Afghanistan, the American military had been dedicated to birthing freedom and democracy in the world, while dispensing a tough and precise global justice.
To me, military service represented the perfect combination of public service, honor, heroism, glory, promotion, meaning, and coolness. As a child, I couldn’t get enough of the military: toys and models, movies and cartoons, fat books with technical pictures of manly fighter planes and ships and submarines. We went to air shows whenever we could, and with the advent of cable, I begged my parents to sign up so that the Discovery Channel could bring those shows right into our den. Just after we got it, the first Gulf War kicked off, and CNN provided my afterschool entertainment for weeks.
As I got older, I studied Civil War military history and memory. (I would eventually edit a book [ http://www.amazon.com/dp/0807828645 ] of letters by Union Gen. Joshua Lawrence Chamberlain.) I thought I knew a lot about war; even if Sherman was right that “war is hell,” it was frequently necessary, we did it well, and -- whatever those misinformed peaceniks said -- we made the world a better place.
But then I went to a war zone.
I was deployed to Baghdad as part of a team of RAND Corporation researchers to help the detainee operations command figure out several thorny policy issues. My task was to figure out why we were sort-of-protecting and sort-of-detaining an Iranian dissident group [ http://www.rand.org/pubs/monographs/MG871.html ] on Washington’s terrorist list.
It got ugly fast. Just after my first meal on base, there was a rumble of explosions, and an alarm started screaming INCOMING! INCOMING! INCOMING! Two people were killed and dozens injured, right outside the chow hall where I had been standing minutes earlier.
This was the “surge” period in 2007 when, I was told, insurgent attacks came less frequently than before, but the sounds of war seemed constant to me. The rat-tat-tat of small arms fire just across the “wire.” Controlled detonations of insurgent duds. Dual patrolling Blackhawks overhead. And every few mornings, a fresh rain of insurgent rockets and mortars.
Always alert, always nervous, I was only in Iraq for three and a half weeks, and never close to actual combat; and yet the experience gave me many of the symptoms of PTSD. It turns out that it doesn’t take much.
That made me wonder how the Iraqis took it. From overhead I saw that the once teeming city of Baghdad was now a desert of desolate neighborhoods and empty shopping streets, bomb craters in the middle of soccer fields and in the roofs of schools. Millions displaced [ http://www.tomdispatch.com/post/174892/michael_schwartz_the_great_iraqi-brain_drain ].
Our nation-building efforts reeked of post-Katrina organizational incompetence. People were assigned the wrong roles -- “Why am I building a radio station? This isn’t what I do. I blow things up…” -- and given no advance training or guidance. Outgoing leaders didn’t overlap with their successors, so what they had learned would be lost, leaving each wheel to be partially reinvented again. Precious few contracts went to Iraqis. It was driving people out of our military.
This incompetence had profound human costs. Of the 26,000 people we were detaining in Iraq, as many as two-thirds [ http://www.npr.org/templates/story/story.php?storyId=112051193 ] were innocent -- wrong place, wrong time -- or, poor and desperate, had worked with insurgent groups for cash, not out of an ideological commitment. Aware of this, the military wanted to release thousands of them, but they didn't know who was who; they only knew that being detained and interrogated made even the innocents dangerously angry. That anger trickled down to family, friends, neighbors, and acquaintances. It was about as good an in-kind donation as the U.S. could have made to insurgent recruitment -- aside from invading in the first place.
So much for surgical precision and winning hearts and minds. I had grown up believing that we were more careful in our use of force, that we only punished those who deserved punishment. But in just a few weeks in Iraq, it became apparent that what we were doing to the Iraqis, as well as to our own people, was inexcusable.
Today, I wonder if Mitt Romney drones on about not apologizing [ http://factcheck.org/2012/08/romneys-sorry-apology-tour-dig/ ] for America because he, like the former version of me, simply isn’t aware of the U.S. ever doing anything that might demand an apology. Then again, no one wants to feel like a bad person, and there's no need to apologize if you are oblivious to the harms done in your name -- calling the occasional ones you notice collateral damage (“stuff happens [ http://articles.cnn.com/2003-04-11/us/sprj.irq.pentagon_1_looting-defense-secretary-donald-rumsfeld-coalition-forces?_s=PM:US ]”) -- or if you believe that American force is always applied righteously in a world that is justly divided into winners and losers.
A Painful Transition
An old saw has it that no one profits from talking about politics or religion. I think I finally understand what it means. We see different realities, different worlds. If you and I take in different slices of reality, chances are that we aren’t talking about the same things. I think this explains much of modern American political dialogue.
My old Republican worldview was flawed because it was based upon a small and particularly rosy sliver of reality. To preserve that worldview, I had to believe that people had morally earned their “just” desserts, and I had to ignore those whining liberals who tried to point out that the world didn’t actually work that way. I think this shows why Republicans [ http://www.aei.org/article/politics-and-public-opinion/lets-just-say-it-the-republicans-are-the-problem/ ] put so much effort [ http://www.tennessean.com/article/20120905/COLUMNIST0150/309050062/Fact-checking-is-beneath-Romney-campaign ] into “creat[ing] our own reality [ http://www.dailykos.com/story/2012/05/23/1094237/-Scott-Walker-s-alternate-universe ],” into fostering distrust [ http://www.fair.org/index.php?page=4541 ] of liberals, experts, scientists, and academics, and why they won’t let a campaign “be dictated by fact-checkers [ http://www.nytimes.com/2012/09/01/us/politics/fact-checkers-howl-but-both-sides-cling-to-false-ads.html ]” (as a Romney pollster put it). It explains why study after study shows -- examples here [ http://www.alternet.org/story/154252/the_republican_brain%3A_why_even_educated_conservatives_deny_science_--_and_reality?page=entire&paging=off ], here [ http://articles.nydailynews.com/2011-11-22/news/30431182_1_fox-news-results-show-viewers ], and here [ http://www.huffingtonpost.com/2012/05/23/fox-news-less-informed-new-study_n_1538914.html ] -- that avid consumers of Republican-oriented media are more poorly informed than people who use other news sources or don’t bother to follow the news at all.
Waking up to a fuller spectrum of reality has proved long and painful. I had to question all my assumptions, unlearn so much of what I had learned. I came to understand why we Republicans thought people on the Left always seemed to be screeching angrily (because we refused to open our eyes to the damage we caused or blamed the victims) and why they never seemed to have any solutions to offer (because those weren’t mentioned in the media we read or watched).
My transition has significantly strained my relationships with family, friends, and former colleagues. It is deeply upsetting to walk on thin ice where there used to be solid, common ground. I wish they, too, would come to see a fuller spectrum of reality, but I know from experience how hard that can be when your worldview won’t let you.
No one wants to feel like a dupe. It is embarrassing to come out in public and admit that I was so miseducated when so much reality is out there in plain sight in neighborhoods I avoided, in journals I hadn’t heard of, in books by authors I had refused to read. (So I take courage from the people who have done so before me like Andrew Bacevich [ http://www.tomdispatch.com/archive/175290/ ].)
Many people see the wider spectrum of reality because they grew up on the receiving end. As a retired African-American general in the Marine Corps said to me after I told him my story, “No one has to explain institutional racism to a black man.”
Others do because they grew up in families that simply got it. I married a woman who grew up in such a family, for whom all of my hard-earned, painful “discoveries” are old news. Each time I pull another layer of wool off my eyes and feel another surge of anger, she gives me a predictable series of looks. The first one more or less says, “Duh, obviously.” The second is sympathetic, a recognition of the pain that comes with dismantling my flawed worldview. The third is concerned: “Do people actually think that?”
Yes, they do.
Jeremiah Goulka writes about American politics and culture. His most recent work has been published in the American Prospect [ http://prospect.org/authors/jeremiah-goulka ] and Salon [ http://www.salon.com/2012/03/28/guest_op_ed_mek_and_its_material_supporters_in_washington/ ]. He was formerly an analyst at the RAND Corporation, a recovery worker in New Orleans following Hurricane Katrina, and an attorney at the U.S. Department of Justice. He lives in Washington, D.C. You can follow him on Twitter @jeremiahgoulka or contact him at jeremiah@jeremiahgoulka.com. His website is jeremiahgoulka.com [ http://www.jeremiahgoulka.com/ ]. To listen to Timothy MacBain's latest Tomcast audio interview in which Goulka discusses his political journey, click here [ http://tomdispatch.blogspot.com/2012/09/confessions-of-former-republican.html ] or download it to your iPod here [ http://itunes.apple.com/us/podcast/tomcast-from-tomdispatch-com/id357095817 ].
Copyright 2012 Jeremiah Goulka (emphasis in original)
http://www.tomdispatch.com/post/175590/tomgram%3A_jeremiah_goulka%2C_confessions_of_a_former_republican/
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http://investorshub.advfn.com/boards/read_msg.aspx?message_id=4393656 (the post linked in the board intro) and preceding and following;
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=4391159 and following
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'Dead voters' exposed as phantom scandal
The Rachel Maddow Show
September 20, 2012
Veronica Degraffenreid, elections liaison for the North Carolina State Board of Elections, talks with Rachel Maddow about the burden on the election boards in her state to address the frivolous claims of dead voters on the rolls by a tea party group called the Voter Integrity Project.
© 2012 NBCNews.com
http://www.msnbc.msn.com/id/26315908/vp/49112935#49112935 [show links at http://maddowblog.msnbc.com/_news/2012/09/20/13998211-links-for-the-920-trms (with comments)]
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US Chamber launches ads in Maine, Montana, Ohio
September 18, 2012
http://www.stamfordadvocate.com/news/article/US-Chamber-launches-ads-in-Maine-Montana-Ohio-3872959.php [no comments yet]
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Goldman Sachs CEO: 'You Can't Austere Yourself Into A Higher GDP'
By ROB GILLIES
Posted: 09/19/2012 11:34 am EDT Updated: 09/19/2012 12:14 pm EDT
TORONTO (AP) — The chief executive of Goldman Sachs says he's against austerity measures in the short term as the U.S. fiscal cliff looms.
Lloyd Blankfein, also chairman of the investment bank, said Wednesday during a talk at the Canadian Club of Toronto that he's all for budget cutbacks in the long term but not in the short term.
Blankfein says "you can't austere yourself into a higher GDP" and says "it's not going to be very good if the medicine kills the patient."
The U.S. faces the prospect of a debilitating "fiscal cliff" in January when Bush-era tax cuts expire and across-the-board spending cuts are set to take effect at the same time. Economists warn that unless Congress acts, the one-two austerity punch would send the fragile economy back into recession.
Copyright 2012 The Associated Press
http://www.huffingtonpost.com/2012/09/19/goldman-sachs-austerity_n_1896973.html [with comments]
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Money-Laundering Inquiry Is Said to Aim at U.S. Banks
By JESSICA SILVER-GREENBERG and BEN PROTESS
Published: September 14, 2012
Federal and state authorities are investigating a handful of major American banks for failing to monitor cash transactions in and out of their branches, a lapse that may have enabled drug dealers and terrorists to launder tainted money, according to officials who spoke on the condition of anonymity.
These officials say they are beginning one of the most aggressive crackdowns on money-laundering in decades, intended to send a signal to the nation’s biggest banks that weak compliance is unacceptable.
Regulators, led by the Office of the Comptroller of the Currency [ http://topics.nytimes.com/top/reference/timestopics/organizations/c/comptroller_of_the_currency/index.html ], are close to taking action against JPMorgan Chase [ http://topics.nytimes.com/top/news/business/companies/morgan_j_p_chase_and_company/index.html ] for insufficient safeguards, the officials said. The agency is also scrutinizing several other Wall Street giants, including Bank of America [ http://topics.nytimes.com/top/news/business/companies/bank_of_america_corporation/index.html ].
The comptroller’s office could issue a cease-and-desist order to JPMorgan in coming months, an action that would force the bank to plug any gaps in oversight, according to several people knowledgeable about the matter. But the agency, which oversees the nation’s biggest banks, has not yet completed its case. JPMorgan is in the spotlight partly because federal authorities accused the bank last year of transferring money in violation of United States sanctions against Cuba and Iran.
In addition to the comptroller, prosecutors from the Justice Department and the Manhattan district attorney’s office are investigating several financial institutions in the United States, according to law enforcement officials.
The surge in investigations, compliance experts say, is coming now because authorities were previously inundated with problems stemming from the 2008 financial turmoil. “These issues may have been put on hold during the financial crisis, and now regulators can go back to focus on money-laundering and other compliance problems,” said Alma M. Angotti, a director at Navigant, a consulting firm that advises banks on complying with anti-money-laundering rules.
Until now, investigators have primarily focused on financial transactions at European banks, most recently Standard Chartered. The authorities accused several foreign banks of flouting American law by transferring billions of dollars on behalf of sanctioned nations.
As the investigation shifts to American shores, the Justice Department and the Manhattan district attorney’s office are moving beyond those violations to focus on money-laundering, in which criminals around the globe try to hide illicit funds in United States bank accounts. If these new cases follow the pattern of previous ones, prosecutors could follow up on regulatory actions with their own complaints.
Despite shortcomings, banks spend millions of dollars a year to guard against money-laundering. Compliance experts argue that violations are typically unintentional and often harmless because they aren’t always exploited by criminals.
Still, prosecutors and regulators have spotted gulfs in the way financial institutions oversee suspicious cash transfers, according to the federal and state officials. Under the Bank Secrecy Act, financial institutions like banks and check-cashers must report any cash transaction of more than $10,000 and bring any dubious activity to the attention of regulators. The federal law also requires banks to have complex controls in place to detect any criminal activity.
The comptroller’s office, JPMorgan and Bank of America declined to comment.
The investigations are gaining momentum as concern is growing in Washington that illicit money is coursing through the American financial system.
Back in July the Senate Permanent Subcommittee on Investigations accused HSBC of exposing “the U.S. financial system to money-laundering and terrorist financing risks” between 2001 and 2010. The British bank, which is also under investigation by federal and state prosecutors, is suspected of funneling cash for Saudi Arabian banks with ties to terrorists, according to federal authorities with direct knowledge of the investigations. HSBC officials have pointed out that they had strengthened controls to prevent money-laundering and replaced employees tainted by the allegations. Standard Chartered maintains that “99.9 percent” of the transactions under scrutiny complied with that rule and involved legitimate Iranian banks and corporations.
The case against HSBC alarmed banking regulators, who wondered if monitoring flaws could be pervasive in the banking industry. The comptroller’s office, which lawmakers accused of missing warning signs about HSBC’s weaknesses, has stepped up its scrutiny of American banks in recent months.
In April, the regulator issued a cease-and-desist order against Citigroup for gaps in its oversight of cash transactions. The order cited “internal control weaknesses including the incomplete identification of high-risk customers in multiple areas of the bank.” A person close to the bank attributed part of the problem to an accident when a computer was unplugged from anti-money-laundering systems.
Citi did not admit or deny wrongdoing, but said in April that it had already undertaken many of the reforms required.
Federal officials are now examining whether problems run even deeper and if criminals have managed to exploit these vulnerabilities. An example of how criminals can evade the system surfaced publicly in a federal drug case in a Texas court this summer. Mexican drug cartels hid proceeds from cocaine-trafficking in two accounts at Bank of America, according to law enforcement testimony in the case, and some of the money was used to buy racehorses.
Bank of America was not accused of wrongdoing, and the comptroller’s office has said privately it is unlikely to bring an action related to the case, according to a person with knowledge of the matter.
Authorities have not disclosed the scope of their inquiries at Bank of America and JPMorgan, or the period being examined.
Any regulatory action against JPMorgan would be another black eye for its chief executive, Jamie Dimon, and the bank, which was rattled this spring by a $5.8 billion trading loss. That misstep brought additional scrutiny of the bank’s risk controls and compliance efforts.
Last year, JPMorgan agreed to pay $88.3 million to the Treasury Department, which had accused the bank of thwarting United States sanctions by processing roughly $178.5 million for Cubans in 2005 and 2006. Even after bank officials spotted the questionable transactions in 2005, the Treasury said, they failed to report the problem to federal authorities. JPMorgan also made an improper $2.9 million loan in 2009 to a bank tied to Iran’s government-owned shipping line, according to the Treasury Department.
In a 2011 statement, Treasury officials called the bank’s actions “egregious,” adding that JPMorgan’s “managers and supervisors acted with knowledge of the conduct constituting the apparent violations and recklessly failed to exercise a minimal degree of caution or care.” At the time, JPMorgan said that it had not dealt directly with institutions in Cuba and Iran and that it had merely acted as a middleman.
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/15/business/money-laundering-inquiry-said-to-target-us-banks.html [ http://www.nytimes.com/2012/09/15/business/money-laundering-inquiry-said-to-target-us-banks.html?pagewanted=all ]
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A Lonely Redemption
ANGRY
Sandy Lewis, an ex-broker who once manipulated a stock price to make a point, at his Essex, N.Y., farm. “There’s no rational structure” on Wall Street, he says.
Fred R. Conrad/The New York Times
Mr. Lewis in the '80s.
Estate of Eddie Adams/Dolph Briscoe Center for American History, via The University of Texas at Austin
RANT
Sandy Lewis in 2008. Now 73, he said he saw what was coming, warning a Bear Stearns executive in 2006: "Bear is toast. Get out now!"
Nathaniel Brooks for The New York Times
FAMILY
Mr. Lewis's father, Cy, left, here in the 1950s, was managing partner at Bear Stearns. Mr. Lewis, right, after his sentencing in 1989.
Left, collection of S. B. Lewis; right, Bill Swersey for The New York Times
SUNNY, FOR NOW
Mr. Lewis and his wife, Barbara. He sees more dark economic times ahead.
Fred R. Conrad/The New York Times
By MICHAEL POWELL and DANNY HAKIM
Published: September 15, 2012
ESSEX, N.Y. — Striding barefoot through the fields of his farm in the Adirondacks, S. B. Lewis, known as Sandy, is talking without pause, gesturing this way and that in a soft summer rain.
That Mr. Lewis is in a rage is not unusual. A few days earlier, he had watched as the computerized stock trading of Knight Capital ran amok.
“If Knight blows, six firms follow, and the whole corrupt thing goes up,” he said. “Predator banks and hedge funds run the market for their pleasure — there’s no rational structure, nothing!”
He is just warming up. News reports have revealed a world he knows intimately. Goldman Sachs pays vast fines to avoid prosecution for mortgage securities fraud. Barclays manipulates interest rates. The Senate exposes HSBC as a racketeering enterprise, laundering money for drug cartels. Banks are laden with bad assets.
And Wall Street, Washington, the press corps, everyone sits and stares like so many dumb cows.
“The complicity on Wall Street is sickness!” Mr. Lewis says. He fixes you with his laser stare. “If you think the big firms are being honest” — his tone slides streetwise — “well, sweetheart, go think something else!”
The temptation is to dismiss Mr. Lewis, 73, as a crank, except he once ruled as an eccentric genius of arbitrage, with a preternatural feel for the tectonic movements of the markets. He has railed for decades about venalities now on daily display. Rude truth is his currency.
He knows Wall Street’s heights. He helped hire Michael R. Bloomberg, and he invested the money of two former Securities and Exchange Commission chairmen, making a fortune in the 1980s. And he knows its depths, since he pleaded guilty to stock manipulation in 1989, and was barred from the Street.
President Bill Clinton pardoned him, and a federal court judge later said Mr. Lewis acted out of pure reforming impulse.
But he remains in self-imposed exile.
Mr. Lewis wants to flip over Wall Street’s paving stones and search for worms. He relies on his singular strength: he discerns patterns where most see random data. He forecast the financial meltdown of 2008 that vaporized Bear Stearns, Merrill Lynch and Lehman Brothers. In 2006, he warned a Bear Stearns executive: “Bear is toast. Get out now!”
Lehman Brothers, he notes, certified it was in good health in June 2008 and issued stock, attracting investment, including from the New Jersey Teachers’ Pension and Annuity Fund. Secretly, Lehman was on an intravenous drip, poisoned by bad debt.
“My respect for their brains is too great to think Lehman’s top guys didn’t know they were conveying the cynical impression of health,” Mr. Lewis said.
He is no less suspicious of Goldman Sachs, which has alumni sprinkled across the upper reaches of government. In a tough spot, Goldman obtained extraordinary permission to make an overnight metamorphosis from investment bank to traditional bank holding company.
“Can I prove this was a wired deal? Absolutely not,” Mr. Lewis said. “Am I certain of it? Only 100 percent.”
As for the whirling, three-million-shares-per-second casino of Wall Street? He sees it as rigged. “I would not risk stocks under any circumstances,” he said, “because we don’t know when this thing is going to blow.”
Nothing about Mr. Lewis is easy. He delights in sending scabrous, insulting, free-associative mass e-mails to journalists, financiers and members of Congress. Show annoyance, and he doubles down. “You know what I do with tension?” he said. “I ratchet it up!”
Not surprisingly, some dismiss him as a nut. As striking are those who pay careful heed.
“Sandy’s right; government created a banking oligopoly with no accountability,” said Peter Solomon, a friend of Mr. Lewis’s who runs an investment banking firm.
Arthur Aeder, a retired accounting executive, was twice fired by Mr. Lewis. “Not many antagonize Goldman just for the hell of it,” Mr. Aeder said. “Most people think, ‘I have a family to feed.’ ”
Mr. Lewis is no less harsh on himself. After a visit, he handed us laptops containing every furious e-mail he had sent and received over 10 years.
“The Wall Street ethic broke decades ago,” he said by way of goodbye. “The stink is terrible.”
MR. LEWIS was born to Wall Street royalty — his father, Cy, was managing partner at Bear Stearns from 1949 to 1978. His parents were characters out of a Fitzgerald novel: his father was Jewish, debonair and domineering; he desired power, wealth and a beautiful woman — wife or mistress, that mattered little. His mother, Diana Bonnor, a member of the Protestant establishment, was beautiful, brilliant and no less formidable. She cared about social justice and status and was profoundly uninterested in mothering.
“I never remember her at breakfast,” recalled Roger Lewis, Mr. Lewis’s younger brother. “High tea? Oh, yes. Cocktails? Yes! But breakfast? Never.”
Cy doted on Sandy while Diana screamed at the boy, striking him with a hair brush when he refused to read, he said. A willful child, the boy stopped speaking for days and sometimes retreated onto a window ledge, sitting high above Park Avenue.
Another brother, John, renounced wealth, bought clothes in thrift shops and became a well-known legal-aid lawyer. Roger got off to a fine start on Wall Street until the Grateful Dead moved into his town house before Woodstock. He ingested gobs of LSD, was arrested on charges of selling drugs and served time. “I broke all the bonds of polite behavior,” Roger said. “Prison was pretty fascinating.”
When Sandy Lewis was 10, his parents shipped him off to Chicago and Bruno Bettelheim’s Orthogenic School, an institution for emotionally disturbed children. The first day, he held his breath until he nearly passed out. But he credits the school with saving his life; Bettelheim became a second father.
“He had Bruno’s traits: he was arrogant, controlling, all powerful — and generous,” recalled George Kaiser, a former teacher at the school.
Mr. Lewis saw in Wall Street a three-dimensional chess game played at great velocity. “Brain not brawn, and the smartest wins, yes!” he said.
He came to conceive of the Street as a drainage system, every pipe connected to another. Inside information sluiced from brokerages to white-shoe law firms to investment houses.
He glimpsed this world when he returned to New York in 1964. He said he sat in the front of his father’s Cadillac limousine, listening as Cy and friends talked angrily about a partner who had impersonated a reporter for The New York Times and got a half-hour drop on a Supreme Court decision. The firm profited by trading ahead of the news.
Mr. Lewis said he confronted his father that night. Dad, you must fire that man. Cy shook his head: He is too valuable, Son.
“That,” Mr. Lewis said recently, “was when I realized that the trouble on Wall Street was systemic.”
He refused to sit at the Four Seasons trolling for inside tips and paying for call girls for clients.
He was fired by all the best firms: Salomon Brothers, White Weld, Dean Witter and Merrill Lynch. At Merrill, the chief executive officer at the time, Donald Regan, pursued a system to buy and sell stocks without using the exchange floor. Mr. Lewis came to see this creation as unfair to the public.
So Mr. Lewis, in speeches and work with the S.E.C., fought to make all sales transparent on the floor of the exchange. “In one of my periodic periods of unemployment, I walked down the street thinking, ‘O.K., now I’m going to sabotage Don Regan,’ ” he said. “I have six kids and I’m going to be eating worms.”
He worked briefly for Ivan F. Boesky, until he realized the arbitrage specialist was trolling for inside information. Mr. Lewis quit and Mr. Boesky was later imprisoned.
To find a place that would not fire him, in 1980 Mr. Lewis established S. B. Lewis and Company. The company’s returns were meteoric — over 50 percent annual returns after expenses. Former employees recall a brilliant arbitrageur who could, without warning, go to “Sandy World,” a mental planetoid with a population of one.
Mr. Lewis brokered the merger between Sandy Weill’s Shearson and James Robinson’s American Express.
“I told Robinson: ‘Weill’s got the brains; you’ve got great class. It’s perfect,’ ” Mr. Lewis recalled.
He had found success, a lovely wife and five boys and a girl, with a home in Short Hills, N.J. Except his volcanic pit never stopped rumbling.
IN November 1988, Rudolph W. Giuliani, the United States attorney, indicted Mr. Lewis on 22 charges, accusing him of manipulating the stock of a large insurer. Mr. Giuliani was a Savonarola in the canyons of mammon, and Mr. Lewis would fall beneath his sword.
Rivals shared laughs at Sandy the Moralist laid low. The trouble, however, took root not in venality but in his mania to police his industry. He had watched as insiders reaped profits by driving down prices before shares went public.
He laid a trap. He asked another securities firm to buy stock in the insurer to shore up the price. I’ll cover your losses and describe the payments as “investment banking services,” he told them.
Mr. Lewis hoped to deliver a delicious kick to the teeth of the insiders. He made not a dime; his firm was not involved in the offering.
Years later, a federal judge, William C. Conner, described Mr. Lewis’s action as “an act of market vigilantism in which Lewis in no way personally profited.” He was infuriated, the judge wrote, “by what he viewed as the unethical actions of arbitrageurs.”
“He was the Lone Ranger,” Mr. Solomon recalled, “and Giuliani treated him like a member of the corrupt club.”
Prosecutors threatened Mr. Lewis with 15 years if he went to trial. His wife, Barbara, urged him to cut a deal. He argued prison would be interesting. His bravado reinforced her fears.
Silver haired and trim, she looks at Mr. Lewis, still consumed: “I thought he would die. That was weak of me.”
He pleaded guilty to three charges, and the judge handed him three years’ probation and a $250,000 fine.
TELL us about Bill Clinton. Mr. Lewis cannot resist a smile; even by his standards, this is a weird tale.
In the summer of 1994, Mr. Lewis — in exile — got a phone call at his Maine home from his friend, Douglas S. Eakeley. Mr. Eakeley was also an old friend of Mr. Clinton’s.
I want you to go to a fund-raiser in Portland, Mr. Eakeley said, and talk with the president about his womanizing.
Is this, Mr. Lewis asked, an intervention?
As it happens, Mr. Lewis possesses a sixth sense for psychic pain. He can pick the addicted, the sick and the depressed out of a crowd. His fractured childhood and pathological candor give him an expert hand with the singed.
He rounded up Barbara and a friend, Dr. Stanley Evans, and drove to see Mr. Clinton at the Holiday Inn by the Bay.
Mr. Lewis introduced himself. “You’re Doug’s friend?” the president said, according to Mr. Lewis and Dr. Evans. “Wait, we’ll talk.”
The Secret Service escorted Mr. Lewis, his wife and the doctor into the kitchen, and the president followed.
“Sir,” Mr. Lewis recalled saying as he stared at Mr. Clinton. “Doug thought maybe I should spend a weekend with you. It would be the two of us only.”
Mr. Lewis said the president was taken aback. “What is this about?”
“Sir,” Mr. Lewis said, “this is about your most personal business. You probably won’t be too happy with me by Monday morning, but I think we can avoid a train wreck.”
The president’s face flushed. Dr. Evans realized his friend was confronting the president about his extramarital affairs. “I thought Sandy had lost his mind,” he said.
The weekend session never took place. Revelations of the president’s sexual dalliance with Monica Lewinsky came years later.
Mr. Eakeley is circumspect. “Sandy has incredible intuition and intellect, and I knew he could help if the president could stand it,” he said. “Sandy may have alarmed the president, but I don’t think he repelled him.”
Mr. Clinton’s office declined to comment.
So it goes for Mr. Lewis on his walk, decades long, through the wilderness. One night, he said, he yanked a truck driver out of a fiery wreck on the New Jersey Turnpike, only to discover that the driver had Mafia connections. He said a mob representative told him he could call in his i.o.u. anytime; Mr. Lewis declined, politely.
He became the de facto impresario of the Clinton Correctional Facility, a prison near his farm in the Adirondacks, arranging frequent performances. The prison has housed a who’s who of the criminal and homicidal, from Lucky Luciano to the serial killer Joel Rifkin.
Recently, Mr. Lewis brought in Helena Baillie, 30, an accomplished violinist who is akin to his surrogate daughter, to perform Bach’s “Chaconne” in the Church of St. Dismas, the Good Thief. Many prisoners were in tears.
Mr. Eakeley said Mr. Lewis might be better for his exile. One of Mr. Lewis’s sons, John, is not convinced. He sees a father become “walking id.”
“Giuliani,” he said, “obliterated some part of him.”
In 2000, Mr. Eakeley and former Attorney General Nicholas deB. Katzenbach worked pro bono and submitted a pardon application to Mr. Clinton. In January 2001, just before leaving office, the president signed it.
Six years later, Judge Conner overturned the S.E.C. order that barred Mr. Lewis from Wall Street. “Federal regulations now outlaw the very practice his actions were meant to thwart,” the judge noted.
No cloud of mellow descended. Mr. Lewis trailed the S.E.C. counsel out of the courthouse. “I will rip your guts out,” he bellowed. “Letter to follow!”
A few days later, he looked at the mountains and experienced an epiphany: “I’ve gotten my redemption, and no one cares.”
THE phone rings and Mr. Lewis, in midsentence of a long disquisition, picks up the receiver. A North Country car dealer asks about the economy.
“Yes? Yes!” he listens for 30 seconds. “It’s going to get a lot worse. We’ll be burning scrap wood in our fireplaces before it’s over. Goodbye!”
Among residents of this rural land, Mr. Lewis has a reputation as a savant. He warned that the housing market was overheating years ago and sold several properties. He converted to cash before the 1987 stock crash.
Still, he could not complete the last act in his redemptive play. Financiers with White House connections solicited his advice during the 2008 crisis. But he was not invited into the circle of advisers who, to his mind, poorly served this young president.
As a Wall Street friend warned in an e-mail: “Sandy, you constantly kill yourself. You exhaust folks.”
Mr. Lewis considers his plight over a dinner with Barbara. His eyes are red, his voice a rasp. “I’m bright as hell, but I’m impossible to live with.” Barbara nods. “I am in a state of outrage all the time.” Barbara nods. “I bring this Orthogenic morality to everything on Wall Street, and it’s unsustainable.” Barbara, dry as gin, says, “No kidding.”
Mr. Lewis sees a banking system in unstable remission. Goldman answers to no one. China and Europe are wobbling, deflation is at the door, another crash is coming.
“The criminality is astounding,” he says. “You have a complete confusion between principal and principle.”
He is pacing again. “You don’t understand what it is to find someone on Wall Street who tells it like it is. You want to get real? Baby, let’s do the full root canal!”
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/16/nyregion/the-lonely-redemption-of-sandy-lewis-wall-street-provocateur.html [ http://www.nytimes.com/2012/09/16/nyregion/the-lonely-redemption-of-sandy-lewis-wall-street-provocateur.html?pagewanted=all ] [with comments]
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Apple, Google, Microsoft Avoid Taxes By Keeping Billions In Profits Offshore: Senate Report
The Google and Apple logos. Google, Apple and other companies have been accused of using complicated schemes to avoid paying taxes.
By Mark Gongloff
Posted: 09/20/2012 4:50 pm EDT Updated: 09/20/2012 7:33 pm EDT
American multinational corporations have something in common with Republican presidential nominee Mitt Romney, aside from being people, too [ http://www.huffingtonpost.com/2011/08/11/mitt-romney-heckled-iowa_n_924426.html ]: They both keep a lot of their income overseas [ http://www.huffingtonpost.com/2012/08/23/mitt-romney-bain-capital_n_1825140.html ] to cut their tax bills.
Companies such as Microsoft and Apple quietly dodge billions of dollars in taxes each year with potentially illegal schemes to move their profits offshore, according to a Senate subcommittee report [ http://www.hsgac.senate.gov/download/?id=7B9717AF-592F-48BE-815B-FD8D38A71663 ] released on Thursday.
"Some multinationals use our current tax system to engage in gimmicks to avoid paying taxes they owe," Sen. Carl Levin (D-Mich.), chairman of the Senate Permanent Subcommittee On Investigations, said in a hearing on Thursday. Levin described "a system used to shift billions of dollars of profit offshore and avoid billions in taxes."
Microsoft, Apple, Google and Hewlett-Packard were among the companies Levin singled out for criticism over their tax-avoidance practices, but they are not alone. Most multinational companies pay a tax rate well below the 35 percent rate [ http://www.huffingtonpost.com/2012/08/06/most-profitable-corporations-tax-rate_n_1746817.html ] mandated by law. Some avoid paying taxes altogether, or even get the government to pay them money [ http://www.huffingtonpost.com/2012/04/09/corporate-tax-rates_n_1413268.html ]. These loopholes cost the U.S. government billions of dollars in revenue that could be used to help close the budget deficit.
Using complex schemes to shift U.S. revenue overseas, Microsoft was able to avoid paying taxes on $21 billion in revenue between 2009 and 2011, amounting to about half its total U.S. sales, according to the subcommittee report. The company avoided paying $4.5 billion in taxes, or about $4 million per day, during that time, according to the report.
Using similar schemes, Levin said, Apple avoided taxes on $34.5 billion between 2009 and 2011, and Google has dodged taxes on $24 billion.
Hewlett-Packard, meanwhile, used a series of constantly revolving short-term loans between itself and its subsidiaries that have helped it avoid paying billions of dollars in taxes since at least 2008, according to Levin. Though he didn't say how much money H-P has avoided paying, Levin did say that H-P has kept billions of dollars in cash offshore -- more than $17 billion in 2010, for example -- that it would then "lend" to its U.S. parent company in a steady stream.
"HP has complied fully with all applicable provisions of the U.S. Internal Revenue Code and auditor Ernst & Young has consistently reviewed and approved the accuracy of HP’s financials," Hewlett-Packard responded in a statement emailed to the Huffington Post. "HP has always had an extremely productive and professional relationship with the IRS, who has permanent offices at two of our facilities and has been continually auditing HP since the filing of our 1962 tax return. They have never raised any concerns about these programs. We are disappointed to see what appears to be a politically motivated attack on one of America’s largest employers.”
Apple and Google did not immediately return requests for comment. A Microsoft representative was scheduled to address the subcommittee later on Thursday.
"In conducting our business at home and abroad, we abide by U.S. and foreign tax laws," Microsoft said in a statement emailed to the Huffington Post. "That is not to say that the rules cannot be improved -- to the contrary, we believe they can and should be. U.S. international tax rules are outdated and not competitive with the tax systems of our major trading partners."
The ranking Republican on the subcommittee, Tom Coburn (R-Okla.), defended the companies, saying they were following the letter of the law to avoid what he called onerous tax rates and an overly complex tax code.
"This is perfectly legal tax avoidance," Coburn said, arguing that the 35 percent corporate tax rate mandated by law is twice that of the average rate around the world. "They take advantage of every loophole we have created in the tax system. There is nothing heinous in that. Nothing illegal in that."
Levin responded that he wasn't sure, but it seemed "highly dubious" that Hewlett-Packard's revolving loan program, for example, "complies with current tax law." He also blamed the IRS for lax enforcement of that law.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/09/20/microsoft-taxes-profits-offshore_n_1901398.html [with comments]
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Deutsche Bank Allegedly Denied Kelley Voelker Pay, Promotions Because Of Maternity Leave
09/20/2012
http://www.huffingtonpost.com/2012/09/20/kelley-voelker-deutsche-bank-pregnancy-lawsuit_n_1900325.html [with comments]
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Mitt Romney: '95% Of Life Is Set Up For You If You're Born In This Country'
By Ryan Grim and Arthur Delaney
Posted: 09/20/2012 2:04 pm EDT
WASHINGTON -- In a less-examined portion of the recently revealed remarks Mitt Romney made during a private fundraiser in May, the presidential candidate told donors that "95 percent of life is set up for you if you're born in this country."
Romney told the donors there are people who say to him, "'Oh, you were born with a silver spoon,' you know, 'You never had to earn anything,' and so forth. And, and frankly, I was born with a silver spoon, which is the greatest gift you could have, which is to get born in America. I'll tell ya, there is -- 95 percent of life is set up for you if you're born in this country."
Romney delivered his comments in the context of a story he told about observing miserable labor conditions in a Chinese factory he had visited. (Watch the remarks above, clipped from the full video courtesy of Mother Jones [ http://www.motherjones.com/politics/2012/09/full-transcript-mitt-romney-secret-video ].)
If 95 percent of life is set up in this country, however, it certainly doesn't reach 95 percent of the people. The U.S. poverty rate has hovered at or near 15 percent for the past few years. Moreover, the same 15 percent of the population is not constantly poor. In fact, recent research suggests that only 15 percent of Americans will not experience some type of economic insecurity in their lives.
Fully 85 percent of Americans by age 60 will have experienced unemployment, sharply lower income, poverty or the use of welfare for at least a year of their adult lives, according to a 2012 longitudinal analysis by Mark R. Rank [ http://gwbweb.wustl.edu/FACULTY/FULLTIME/Pages/MarkRank.aspx ], the Herbert S. Hadley professor of social welfare at Washington University in St. Louis. For black people born in America, life is even less set up. Whites by age 60 were 43 percent less likely than blacks to have been poor and 42 percent more likely to have experienced affluence, according to Rank.
Rank examined social mobility in the U.S. and the likelihood that Americans would face economic fortune or misfortune. His research shows that a large percentage of Americans are poor at some point in their lives and that safety net programs don't eliminate the sting.
Romney's reference to the 95 percent "set up" sheds further light on his attitude toward the 47 percent of Americans he said don't take personal responsibility and care for themselves.
"There are 47 percent who are with [President Barack Obama], who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it," Romney said at the same fundraiser. "And so my job is not to worry about those people -- I'll never convince them that they should take personal responsibility and care for their lives."
If Romney believes, as he said, that "95 percent of life is set up for you if you're born in this country," then people who fail to become successful have only themselves to blame, which helps explain why Romney feels he'll never be able to redeem such people. He said in February that he is "not concerned about the very poor [ http://www.huffingtonpost.com/2012/02/02/mitt-romney_n_1250094.html ]" because the government's social programs take care of them.
But the safety net is porous.
By age 30, Rank's research shows, more than 35 percent of Americans have experienced at least one year of poverty or near-poverty, and 11.2 percent have been poor for three or more consecutive years -- not including any time spent poor as children. Nearly a quarter have experienced a 50 percent drop in household income. Yet only 27.3 percent have availed themselves of a safety net program, with just 16.8 percent using such a program for two years or more.
By age 60, more than 54 percent of Americans have been poor for at least a year, with 22.2 percent poor for at least three consecutive years. Nearly two-thirds have experienced a 50 percent drop in household income. Forty-four percent have used a safety net program of some kind, while 28.4 percent have used the safety net for two years or more.
On the brighter side, 76.8 percent of Americans by age 60 will have experienced at least one year earning $100,000 or more, either alone or combined with a spouse, with slightly more than half earning six figures for at least five years.
Despite the United States' famed economic mobility, many Europeans have it better. Among American families in which the father's earnings put him in the bottom 20 percent of incomes, 42.2 percent of the sons remain in the bottom fifth as adults, while only 7.9 percent make it to the top fifth. For sons raised in the top 20 percent, 36 percent stay in the top fifth as adults, while fewer than 10 percent sink to the bottom, according to Rank's research. By comparison, in Denmark, Finland, Norway, Sweden and the United Kingdom, a lower percentage of sons raised in poor families stay poor, and a greater percentage become rich.
Romney's life fits the pattern identified by Rank. He was born to a wealthy and powerful family. While his father was governor of Michigan, the son attended an elite boarding school. His father also paid for his undergraduate education and his graduate study at Harvard Business School. His father then bought the younger Romneys a beautiful house in Massachusetts, lending them $42,000 in the 1970s. "We stayed there seven years and sold it for $90,000, so we not only stayed for free, we made money. As I said, Mitt's very bright," Ann Romney noted in 1994 [ http://www.theatlanticwire.com/politics/2012/08/fact-checking-ann-and-mitt-romneys-hardknock-early-years/56321/ ].
The way Ann Romney has described her family's early years also helps to explain why Mitt Romney thinks it's easy to succeed in America. She apparently believes that all her husband's advantages don't count in judging his success -- he still made it on his own. "Mitt will be the first to tell you that he is the most fortunate man in the world. He had two loving parents who gave him strong values and taught him the value of work. He had the chance to get the education his father never had. But as his partner on this amazing journey, I can tell you Mitt Romney was not handed success," she told [ http://www.theatlanticwire.com/politics/2012/08/fact-checking-ann-and-mitt-romneys-hardknock-early-years/56321/ ] the Republican National Convention.
Mitt Romney believes the same thing. "By the way, both my dad and Ann's dad did quite well in their life, but when they came to the end of their lives and, and passed along inheritances to Ann and to me, we both decided to give it all away. So I had inherited nothing. Everything that Ann and I have, we earned the old-fashioned way, and that's by hard work," he told the gathering of wealthy donors in May.
The Romneys have described their early years as ones of real hardship, hardship they overcame through hard work -- and income from stocks.
"They were not easy years. You have to understand, I was raised in a lovely neighborhood, as was Mitt, and at [Brigham Young University], we moved into a $62-a-month basement apartment with a cement floor and lived there two years as students with no income ... Neither one of us had a job, because Mitt had enough of an investment from stock that we could sell off a little at a time," Ann Romney told the Boston Globe in 1994. "We had no income except the stock we were chipping away at. We were living on the edge, not entertaining."
Perhaps most interesting, however, is that in crediting 95 percent of an American's success to the country in which he or she was born, Mitt Romney was saying that something else was responsible for that success. In other words, if you've got a business, you didn't build that.
Copyright © 2012 TheHuffingtonPost.com, Inc. (emphasis in original)
http://www.huffingtonpost.com/2012/09/20/mitt-romney-95-percent-video_n_1900608.html [with comments]
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Rural Minorities Ponder The American Dream From The Bottom Rung Of The Economic Ladder
Cary, Miss., is a case study in persistent rural poverty. Government programs have lifted most, though not all, families out of shotgun shacks and into an assortment of small single-family homes, trailers or other low-income housing. But jobs remain scarce and government dependency is rampant.
By Tom Zeller Jr.
Posted: 09/20/2012 9:21 am EDT Updated: 09/20/2012 9:54 am EDT
About 22 miles northeast of Laredo, Texas, in an otherwise desolate and unincorporated stretch of Webb County, a roughed-out grid of unnamed dirt roads cuts through a maze of half-built cinderblock homes and dilapidated trailers.
Israel Reyna, a local attorney and advocate for the poor, has been driving me through this and similar communities, and we've stopped amid a haphazard cluster of residences a few hundred yards off the main highway. As I linger at the side of the road, a yellow school bus inches past, taking care not to savage its struts on a path rutted by poor drainage and cycles of fierce, mud-churning rain and baking prairie sun.
Reyna calls from the side of a tidy trailer where he is chatting with its owners, Elia De La O and her husband, Rogelio. The couple invites us inside.
Like most of the homes in this ostensibly planned subdivision, the De La Os' trailer, with its exposed beams and jerry-rigged wiring, is a work in progress. The family is blessed with electricity -- still a luxury for some impoverished communities along the Texas-Mexico border -- but they lack running water. For this residents queue up, sometimes for hours, at a county-run spigot a couple miles away, where they fill huge plastic drums of varying shapes and vintage with foul-smelling water that officials describe as potable. Elia and Rogelio, like most residents, won't drink it, preferring to visit a private, for-profit water vendor in Laredo, or nearby Rio Bravo, for jugs to slake their thirst.
The De La Os were not born here and they have not yet sought full citizenship, they say, in part because they've struggled with the language. But they've learned enough to find steady work as seasonal agricultural hands in states across the Midwest, and they have been permanent, legal and taxpaying residents of the United States for more than a dozen years. They take great care to say that they are proud of their home, and that they are grateful to have gained a foothold on the American dream. But Elia, 64, also shares that, growing up in Mexico, she once imagined that dream rather differently.
"I never thought there were people living like this, like we're living here, in the United States," she says. "We always thought, 'This is the United States -- it's the United States, it's the best.' We didn't think when we came here that we would live like kings, but we didn't imagine there would be places like this."
From the borderlands of Texas and the cotton fields of the Mississippi Delta to the reservations of the Great Plains, there are many places like this, and they have remained as such, generation after generation -- all of them easy to find. While much has improved since this sort of grinding poverty was first identified as a national disgrace more than 40 years ago, advocates for the rural poor say the pace of change has been glacial. They also say that persistent, multigenerational poverty continues to plague millions of people living in rural areas, particularly blacks, Hispanics and Native Americans who languish in small towns and isolated outposts where dollars are scarce, development is difficult and discrimination is historically rampant.
In a nation struggling with record levels of poverty [ http://www.washingtonpost.com/business/census-bureau-us-poverty-rate-stood-at-15-percent-in-2011-record-numbers-of-poor-continue/2012/09/12/aab19912-fce5-11e1-98c6-ec0a0a93f8eb_story.html ]; where the gap between rich and poor is is wider than ever [ http://www.latimes.com/business/la-fi-census-poverty-rate-20120913,0,4738274.story ]; where upward economic mobility is increasingly rare [ http://www.tnr.com/article/politics/magazine/100516/inequality-mobility-economy-america-recession-divergence ]; and where a breathtaking 46 million people [ http://www.marketwatch.com/story/household-income-falls-as-46-million-in-poverty-2012-09-12 ] are now living below the poverty line, these destitute, rural, largely minority communities represent the poorest of America's poor -- the very bottom of an economic ladder that fewer and fewer have the capacity to climb.
Viewed against the nation's larger urban and suburban populations, their numbers are small. Only about 51 million Americans -- less than 20 percent of the population -- are considered nominally rural anymore, and minorities make up a fraction of that: about 10 million, all told. But their share of the poverty burden is, by any calculus, wildly disproportionate, making them emblematic of some of the country's more unsettling and persistent truths.
Several anti-poverty advocates summed up the situation in a word: "embarrassing."
In May, the Census Bureau reported [ http://www.census.gov/newsroom/releases/archives/population/cb12-90.html ] that the number of minority births in the U.S., for the very first time, had exceeded the number of white births.
For whatever else that statistic might mean, it suggests that, as a new generation of black and brown Americans comes of age in these forgotten communities, they will increasingly find themselves at the center of the philosophical tug-of-war now paralyzing the nation and animating a presidential election. It is a debate that turns on fundamental questions of wealth, advantage and the role of government in mitigating, even minimally, the influence of discrimination and dumb luck -- of where and to whom we are born -- on the odds of acquiring an equitable piece of the American dream.
Just this week, the ideological poles were brought into stark relief when news broke [ http://www.huffingtonpost.com/2012/09/17/mitt-romney-video_n_1829455.html ] of a grainy video showing Republican presidential contender Mitt Romney telling a group of wealthy donors, "If the Hispanic voting bloc becomes as committed to the Democrats as the African-American voting bloc has in the past, why, we're in trouble as a party and, I think, as a nation."
The video also recorded the candidate disparaging "47 percent" of the nation -- all presumably supporters of President Barack Obama, the candidate quipped -- as under-taxed, dependent on government programs, and unwilling to "take responsibility for their lives."
Critics, of course, quickly pointed out that many of the households Romney dismissed out-of-hand are, in fact, among the nation's poorest [ http://www.taxpolicycenter.org/taxtopics/federal-taxes-households.cfm ], and whose subsistence income is mercifully exempt from federal income tax. Others noted that Romney's own father benefitted from welfare and other government programs [ http://www.washingtonpost.com/blogs/election-2012/wp/2012/09/18/mitt-romneys-fundraising-comments-would-mom-approve/ ] early in life.
In broader terms, however, concern and finger-pointing over the persistence of grinding poverty in the U.S. is not a purely partisan affair. Many activists on the ground in the most distressed communities I visited for this article also criticized the current leadership in Washington for cutting housing and loan programs that are vital to the rural poor; for favoring cities over small towns; or for lavishing subsidies on corporate agriculture while ignoring millions of struggling rural residents who have no connection to farming.
Other stakeholders gave the Obama administration high marks for taking what they viewed as an unprecedented interest in rural development generally, and for targeting persistently poor, minority communities specifically, even as budgets have shrunk.
"We keep thinking that maybe if we tell this story one more time, it will provoke enough shame in people and finally spur real action," says Israel Reyna.
(Photo: Tom Zeller Jr.)
The reality is surely some blend of all these observations, but what remains clear is that allowing these pockets of deep poverty to persist, generation after generation, is in no one's interest.
"Rural Americans are often overlooked and under-appreciated," said Tom Vilsack, who heads up the U.S. Department of Agriculture, the primary federal agency charged with overseeing rural development.
In a phone call, Vilsack underscored hundreds of millions of dollars of Obama-era programs, grants and loans aimed at revitalizing rural communities and reaching disenfranchised populations that have struggled for decades. "I strongly believe that through the sustained commitment of this administration," he said, "the best days for rural America are yet to come."
In the meantime, Elia De La O says that despite the faint scent of rotten eggs left on her washed clothes, and a vaguely slimy feeling left on the skin after bathing, the water she and Rogelio cull from the county spigot serves most of their household needs. "We are content," she says.
Reyna, who works with Texas RioGrande Legal Aid [ http://www.trla.org/ ], which represents low-income and seasonal workers in nearly 70 counties of Southwest Texas, isn't convinced.
"Entire generations have passed through, from birth to adulthood, living without water or without electricity, without plumbing," he says. "It doesn't have to be this way, and that's part of the tragedy of all this. We keep thinking that maybe if we tell this story one more time, it will provoke enough shame in people and finally spur real action.
"Unfortunately, it hasn't happened that way so far," he adds. "Progress moves at a snail's pace."
DISPROPORTIONATE POVERTY
The story of miserably poor Latinos, African and Native Americans eking out hardscrabble lives beyond the bustle of the city is hardly new. Such places were the impetus, more than 40 years ago, for President Lyndon B. Johnson's formation of a National Advisory Commission on Rural Poverty and that body's subsequent report, titled "The People Left Behind." In 1967, places like this drew Robert F. Kennedy, then a junior senator from New York, to the Mississippi Delta, where he encountered, to his and subsequently the country's dismay, a harsh landscape of plank-wood outhouses, dirt floors and affectless children with bellies distended from hunger.
In the 1980s, Richard Woodbury, writing for Time Magazine, exposed the struggle "to bring drinking water to thousands of impoverished families" in ramshackle communities along the Mexican border. In 1990, reporters from the Associated Press noted that the infant mortality rate in the Delta ranked below that in some Third World nations. Last October, ABC's Diane Sawyer described the "unthinkable conditions" on the Pine Ridge Indian reservation of South Dakota.
In many of these places, basic amenities like plumbing and electricity have improved standards of living, even if jobs remain scarce and dependence on government assistance remains widespread. In some outposts, however, households lacking even these most basic of basics can still be found.
The Economic Research Service, the data-gathering arm of USDA, notes that while the gap in poverty rates between the nation's urban areas and its rural outposts has been shrinking over time, families living away from the bustle of city and suburban life have had a higher rate of poverty every year since data on the subject was first officially recorded in the 1960s.
The ERS lists the current overall poverty rate in rural America at 16.6 percent, the highest rate since 1993. The poverty rate among children in rural areas is now roughly 27 percent -- an increase of 6 percentage points over 2000 -- according to an analysis prepared by the Southern Rural Development Center at Mississippi State University.
These statistics often conjure visions of Appalachia, and not without reason. More than 90 counties in the Southern Highlands of the Virginias, eastern Kentucky and parts of Missouri and Oklahoma -- all predominantly white -- are considered "high poverty," according to federal data.
No matter where poverty is measured, however -- whether in urban, suburban or rural areas -- minorities always fare worse. According to a 2011 analysis by the National Poverty Center [ http://npc.umich.edu/publications/u/2011-16%20NPC%20Working%20Paper.pdf ], a nonpartisan research center at the University of Michigan, roughly 26 million of the nation's poor are racial or ethnic minorities.
Put another way: Of the 46 million U.S. residents who now live below the poverty line, nearly 60 percent are minorities. This is despite the fact that all racial and ethnic minorities combined comprise just 37 percent of the U.S. population [ http://www.census.gov/newsroom/releases/archives/population/cb12-90.html ].
In rural areas, the disparities are particularly pronounced. Of the more than 400 rural counties with poverty rates exceeding 20 percent, which are considered "high poverty" counties, roughly three-fourths were "linked directly to the economic circumstances of racial and ethnic minorities," according to the NPC report.
About 47 percent of those counties are largely African-American; 17 percent are mostly Hispanic; and about 9 percent are Native American. These include places like predominantly black Isaquenna County in Mississippi's Delta region, where 60 percent of children were living in poverty in 2010, or Todd County, S.D., with its large Native American population, where the child-poverty figure is 59 percent.
"Despite advances made through the civil rights movement, labor struggles and increased self-determination, the experiences and conditions of rural minorities are often overlooked given their relatively small populations," noted the Housing Assistance Council, a Washington-based nonprofit that tracks rural poverty issues, in a recent report [ http://hac.nonprofitsoapbox.com/storage/research_notes/rrn-race-and-ethnicity-web.pdf ]. "Moreover, it is often assumed that the conditions that led to these upheavals have been addressed."
These numbers suggest, of course, that they have not.
Disparities in standards of living, wherever they occur, are often dismissed as the result of poor personal choices or cultural decay. A 2012 survey commissioned by the Salvation Army [ http://www.salvationarmy.com/usn/2012povertyreport.pdf ], for example, suggested that 27 percent of Americans believe people are poor because they are lazy. Nearly 30 percent of respondents said poor people have lower moral values, while 43 percent believed poor people could find a job if they really wanted one. Fully half of those surveyed said a good work ethic was all that was needed to escape poverty.
Epidemics of drug and alcohol abuse, low educational attainment, teen pregnancies and long-term, multigenerational dependence on government subsidies in these rural outposts, as in areas of urban decay, can lend a superficial legitimacy to such assessments.
But they rankle experts like Meizhou Lui, the former director of the Closing the Racial Wealth Gap Initiative [ http://www.insightcced.org/index.php?page=Closing-RWG ] at the Insight Center for Community Economic Development, a California-based nonprofit, and the lead author of the 2006 book, "The Color of Wealth: The Story Behind the U.S. Racial Wealth Divide [ http://www.dollarsandsense.org/bookstore/color.html ]."
For starters, Lui points out that numerous studies have shown that economic collapse or struggle in any American enclave -- urban, rural, white, black, Latino -- is often attended by higher rates of depression, drink, drug abuse and other social ills. She also notes that a more humane social safety net has been documented to prevent similar outcomes in European communities where factories have closed up or job opportunities have otherwise shriveled.
High unemployment in rural areas, Lui says, also makes competition for whatever jobs might be available -- meatpacking, poultry processing, light factory work -- incredibly fierce, ensuring that wages remain at or near the minimum. Even when combined with government assistance, such wages are typically unable to lift families out of poverty.
"People can be working full-time and still be living under the poverty line," Lui said.
"You have all these people in these rural areas that don't have great schools, they don't have great amounts of skill, and they don't have jobs. Everybody is saying, 'You need to have a college degree,' but there aren't even enough jobs that require a college degree to go around. As it is, today white middle-class kids are graduating from college and not finding jobs," Lui said. "So what's a poor person from a rural area, especially given the cost of college these days, supposed to do?
"The opportunities just are not there, and I think that even conservatives have recognized that we have systemic unemployment problems," Lui added. "They think the solution is to give tax breaks to the wealthy, but if a few wealthy people are not paying as much taxes, are they then going to create employment programs in rural Mississippi for African Americans?
"I don't think so," Lui said, "unless you make them do it."
THE POVERTY TRAP
In 1992, the late Willie Morris, a chronicler of the American South and then a writer-in-residence at the University of Mississippi, described the experience of escorting visitors to Yazoo City and other parts of his native flatlands that extend eastward from the Mississippi River:
Over the years I have taken countless outlanders through the Delta: peregrinating Yankee scholars, writers, journalists, civil rights activists, and more than a few of the merely idle and professionally despondent curious. Their reaction has often been a singular blend of bafflement, titillation, anger, and, not the least of it, fear; yet to the person they are struck nearly dumb by its brooding quintessential sadness.
Morris' words were written when Lakeisha Davis, another Delta native, was just 2 years old. Today, the 22-year-old Davis sits on a concrete slab skirting the Anguilla Family Houses, a low-rise, low-income housing project in Mississippi's Sharkey County, one of the poorest counties in one of the poorest regions of one of the poorest states in the nation. Her daughter, 2-year-old Josmin, plays in a nearby patch of dying grass, unaware that she is likely the latest installment in what seems a forever unfolding tale of brooding, quintessential sadness.
Davis and I take a seat on a pair of orange cafeteria chairs, which have been reclaimed as porch furniture, and I ask her to tell me what life is like in this rural outpost.
"There just ain't nothing here," she says. "That's it."
Davis' response is an abridged version of a story told to me by just about every resident, academic or politician I met in a week of touring the area. These plainspoken observations are typically delivered without affect or complaint: The Delta, one resident told me, never changes.
I arrived in Jackson, the state capital, just as the wet, leaden weight of summer was settling on the South. I headed westward across the eternal flatness of the Yazoo, aka the Delta basin, a wide shelf of cotton, soybeans, rice and catfish farming that stretches like a black cherry leaf [ http://is.gd/tUOVVc ] -- wide in the middle and pinched at both ends -- from Vicksburg in the south to Southaven in the north, along the border with Tennessee.
This roughly 15-county floodplain, bounded by the Bluff Hills [ http://mshistorynow.mdah.state.ms.us/images/604.jpg ] to the east, was essentially a swamp in the antebellum years, prompting many locals to remind visitors that there never really was slavery in the Delta. Rather, levees and other post-war infrastructure created an expanse of fertile cotton land for white farmers, and free blacks flocked to the area as sharecroppers. Its population is now predominantly African-American.
But just as the untameable Mississippi still rises here, often leaving many of the poorest residents vulnerable to devastating floods, so too does the residue of racism and discrimination linger in the Delta. In the tiny town of Cary, I visited the town hall, a two-room, one-story building adjacent to an empty field where a lumber mill once stood. Inside, the walls of the building are lined with carefully framed memorabilia reaching back decades: black-and-white yearbook photos and sepia snapshots of local sports teams, high school dances, returning war heroes.
i.huffpost.com/gen/757942/thumbs/o-RURAL-POVERTY-CARY-MISSISSIPPI-570.jpg?4
The town hall in Cary, Miss., features a variety of memorabilia, but few black faces.
Virtually every smiling face in every photograph is white.
Cary's population, on the other hand, is two-thirds black.
I asked Leslie Brock, the deputy clerk and the only occupant of the building, why that's the case. "Well, you've got to think about, at that time, things were segregated," said Brock, who grew up in the area around Cary and is black. I suggested to her that there must be at least a few contemporaneous photographs of African-American families from the area -- black schools, black proms?
"You would think so," she replied.
Brock, who left the Delta for Los Angeles at 18 before returning in her early 40s two years ago, grew up in the sort of sparse "shotgun house" that predominated among black families here in the 1960s and '70s: narrow shacks, typically without water or plumbing, that skirted the cotton fields where many blacks found work. These were the places where Robert Kennedy often encountered hungry, barefoot children [ http://bobby-kennedy.com/photos/campaign/bob10.jpg ] during his 1968 anti-poverty tour of the Delta.
Government programs have lifted most families out of shotgun shacks and into an assortment of small single-family homes, trailers or government-subsidized housing of varying quality. Most have the basics: electricity, running water, plumbing.
But the ability to flip on a light switch, flush an indoor toilet, or draw a glass of water from a kitchen tap has not created new opportunities for poor black Delta residents to thrive, and many continue to languish in a limbo of dependence and the sort of social strife that comes with long-term disinvestment: drug and alcohol abuse, teen pregnancy, truancy, poor health and crime.
Asked why these trends continue generation after generation, Brock said part of it is the mentality of the people who live here. "They've heard for so long that they can't have anything, that they cannot be anything, that they cannot do anything, that they start to believe it," she said. "People are a product of their environment."
Paulette Meikle [ http://www.deltastate.edu/pages/3936.asp ], the director of the Center for Community and Economic Development at Delta State University [ http://www.deltastate.edu/pages/426.asp ] in Cleveland, Miss., 40 miles north of Greenville, expounds on this notion. "When you drive through parts of the Delta, you can see, it's like, 'Wow, this is a wealthy place,'" she said. "There is wealth, because we have the power elite, the ones who own the means of production, who control the land. That economy, which grew out of the plantation economy, still survives. You have wealth here that emerged out of that structure."
But that wealth was not shared by -- and, as researchers have frequently shown, was actively withheld from -- black workers and sharecroppers. As the 20th century wore on and mechanization eliminated work opportunities for low-skilled blacks, nothing emerged to take its place.
"The intersection between race and social class, it's so locked-in," Meikle explains. "So when you look at the data: if you're born in poverty and you're a minority group member, a large percentage of those who are born into that kind of situation will remain that way. An intergenerational exchange of poverty occurs."
Such has been the fate of Lakeisha Davis and her daughter. There once was a peanut factory in Anguilla, she tells me offhandedly, but that's long gone. Today, the town has a mini-mart and little else.
Davis managed to complete high school, though now she mostly gets by on food stamps and other government assistance, much as her mother did before her, and her grandmother before that. She enlisted in job training in Greenville, about 40 miles northwest of Anguilla, but she has no car, and the difficulty in finding a ride to and from the city, along with the dearth of even low-paying opportunities within a wide radius of her home, made the effort Sisyphean.
By her calculus -- and that of many in her station -- it's safer to maintain her benefits than to suffer the subsidy cuts that come with a minimum-wage income and long-distance travel to and from home. "If you move a little forward, they push you right back," Davis said. "It doesn't make sense."
That sentiment is echoed by Marion Tyler, a licensed social worker with the Cary Christian Center [ http://www.carychristiancenter.org/ ], a nonprofit organization that has helped Davis navigate the vagaries of her young pregnancy. Tyler, once a teen mother herself, said she benefited from the benevolence of an employer who was willing to support her as she earned a bachelor's and then master's degree. Without that support -- exceedingly rare, she said -- she would likely still be spinning her wheels on subsidies.
Far more often, the young and poor wash up at low-paying service or fast-food jobs. Tyler recalls flipping burgers at McDonald's, which caused her government benefits -- $96 in cash assistance at the time, along with $118 in food stamps for her and her son each month -- to plummet.
"So I quit my job," she says. "Any step up is a step back, so why step up? That's the whole trap with everybody out here, and I understand it."
TELL THEM TO COME HELP US
All of this, of course, raises the question: Why not just leave?
Charles Fluharty [ http://truman.missouri.edu/People/Charles-WFluharty ], the founding director of the Rural Policy Research Institute [ http://www.rupri.org/ ] and a professor at the Harry S. Truman School of Public Affairs at the University of Missouri, suggests that's a facile question.
"That is like saying to someone in a five-block area of the Bronx, 'You should leave here now.' And they look at you and say, 'What are you talking about? This is my neighborhood. I'm the fourth generation on this block, you've got to be kidding me.'"
In economic terms, Fluharty said, it's a given that some people will always take less money to stay where they’re comfortable. In many of the most impoverished, minority-dominated rural communities, the proclivity to stay put despite poor prospects can be particularly strong.
Combine those who won't leave with those who, for a variety of reasons, can't -- lack of means or connections elsewhere, or family obligations -- and the result is substantial pockets of gnawing economic need.
That raises another key quandary, Fluharty said. "There's an ongoing argument in the social welfare literature about whether you invest in people or in places. There's a pretty strong argument for both sides."
On one hand, he explained, if you invest in people, they will move away to improve their social mobility. But if you only invest in people, it will ignore the problems of place that attend those who stay behind. "If you don't invest in the places where those people stay," Fluharty said, "you are giving them an uphill battle that's almost impossible."
A recent analysis [ http://www.newgeography.com/content/002223-the-new-geography-population-loss-and-gain ] by Richard Morrill, a professor of geography and environmental studies at the University of Washington, showed the Mississippi Delta to have experienced some of the highest population losses in the country between 2000 and 2010. Several counties in the Delta have shed 15 percent to 20 percent of their populations over that period, according to census data.
Empty storefronts in Cary, Miss.
Sharkey County, where Davis and her daughter idly watch the hot sun rise and fall each day, lost more than a quarter of its population. These are areas "where significant development investment simply did not occur," Morrill writes. "Race matters."
Karl Stauber [ http://www.drfonline.org/staff/staff09.php ], president and CEO of the Danville Regional Foundation [ http://www.drfonline.org/ ], a Virginia-based nonprofit, and a former undersecretary for research, education and economics with the USDA, explained the dynamic. "The two challenges I have to the 'just move' argument are that the people most likely to move are the people that are the most skilled," he said. "So then we're back to the rural ghetto.
"We spent a lot of the 1960s to the 1980s trying to overcome the concentration of poverty in places like Appalachia, the Delta," Stauber added. "If we had been a little more sophisticated, we would have included Indian reservations, we would have included the colonias, which were already existing along the U.S.-Mexico border. We would have produced a more nuanced picture.
"What we know will happen, because it's already happening, is that people that are the most skilled and the people who are often the best educated are the folks that are most likely to move and successfully relocate. And then we end up with this poverty concentration, and we go back to the 'Two Americas' problem."
A measure of this sort of economic divide can be found in any number of statistics. Mississippi, for example, now ranks first in children born underweight; it is among the five states spending the least amount of money per pupil; it ranks first for obesity, second for diabetes, and has the highest teen pregnancy rate in the country. In infant mortality -- often correlated with the worst sorts of endemic poverty -- Mississippi ranks second, just behind the nation's capital.
The infant mortality rate for blacks in Mississippi, roughly 14 deaths per 1,000 live births [ http://msdh.ms.gov/msdhsite/_static/resources/4619.pdf ], is more than double the rate for whites, more than double the national average, and considerably higher than the rates in Botswana and Sri Lanka.
Cuts in government benefits after the wholesale reformation of the welfare system in 1996 have been blamed for a worsening in many of these metrics, although small social service agencies, like the Cary Christian Center 13 miles south of Anguilla, have made in-roads in turning them around. The Center's prenatal program, funded through donations, involves intensive outreach and home visits by social workers like Tyler, and has been credited with keeping infant mortality rates markedly lower in Sharkey and Issaquenna Counties, compared to rates in other parts of the Delta.
Yet endeavors like these, along with the slow drip of food stamps and cash assistance, stakeholders suggest, are mere bandages on a much more systemic problem. "We need the powers that be, the policymakers and the landowners -- they need to create opportunities for people to benefit from living in a rural community," says Dorsey Johnson, a co-director of the Cary Christian Center. "We have to create something, you know, that will have some longevity and will help to sustain our community."
Not doing so can be expensive. In a recent essay published in The Clarion Ledger, Charlie Mitchell, a syndicated columnist and assistant dean of the Meek School of Journalism and New Media at the University of Mississippi, lambasted state and federal officials for watching the Delta languish and letting taxpayers foot the bill:
Take Humphreys County. There, the cost of direct government aid, in all forms, per person, was $11,385.31 in 2010. The same cost in DeSoto County, which was Mississippi's fastest growing in the last census, was $4,717.20. So, clearly, given that the expense to the taxpaying public can be 2.5 times greater per person where poverty rules than where there's an economic pulse, there's an economic imperative (on top of the social imperative) to seek a turnaround for the region as aggressively as possible.
Mitchell decried the fact that major assembly plants for brands like Toyota and Nissan have found their way to other parts of the state in recent years, and he had special opprobrium for Democratic Rep. Bennie Thompson, the powerful member of Congress who has represented the Delta counties for more than 20 years. "He practices politics the old-school way," Mitchell wrote [ http://djournal.com/view/full_story/18752550/article-CHARLIE-MITCHELL--Fiscal-conservatives-take-note--Poverty-is-expensive?instance=secondary_stories_left_column ]. "Reward your friends, punish your enemies, tell your constituents repeatedly they are hapless victims of an unfair world and then dance off to enjoy junket after junket."
Thompson declined to be interviewed for this article, but in a phone call, a spokesman for his office, Cory Horton, ticked off a number of programs and federal funds that the congressman had secured for his district over the years, including substantial funding for Army Corps of Engineer improvements to the levees that keep the entirety of the Delta from going underwater. He also points to funds that have augmented agriculture, catfish farming and casinos in the Delta.
"You know, it's going to take everybody working together to fix these things," Horton said. "There's just this one congressman from this district, but there are also two senators. There's a governor. Everything can't be put off on one person."
Heather McTeer [ http://heathermcteer.com/ ], a former mayor of Greenville who ran unsuccessfully against Thompson for the Democratic nomination in a primary earlier this year, suggested that everyone has copped out. "There are a number of reasons I think we're still in this situation, and one is leadership," she said. "When you have leadership on a state and a federal and a local level that's not really addressing the true issues of poverty and how you change a community, when they're not identifying what factors are critical to helping to change poverty, then you're always going to stay in that situation."
Back in Anguilla, I asked Davis what she aspired to as a child. "I wanted to go all over the world," she declared. "I wanted to go to Canada."
Today, she talks of making it to Jackson, the state capital 100 miles to the south, or to Memphis, 200 miles north, where she reckons she'd have higher odds of finding a job -- any job. At the moment, though, she's got little in the way of means to make this happen, and those faraway cities, which are facing [ http://www.bizjournals.com/memphis/news/2012/06/21/memphis-msas-unemployment-rate-up-to.html ] their own tough times [ http://www.jacksonfreepress.com/news/2011/nov/03/study-jackson-6th-largest-metro-for-concentrated/ ], might as well be in another country.
"Tell them to come help us. We need some real help down here," Davis said when asked if she had a message for people outside the Delta. "We sure need some help."
DIFFERENT STARTING LINES
In the book "The Color of Wealth," Lui and her co-authors take on those who would suggest [ http://img.rushlimbaugh.com/home/daily/site_081111/content/01125111.guest.html ] that enough help has already been given, or that people in Davis' shoes just haven't tried hard enough [ http://mediamatters.org/research/2004/06/16/oreilly-irresponsible-and-lazy-thats-what-pover/131278 ].
"Individual effort does make a difference in financial success, compared to how the same individual would have fared without putting forth an effort," they wrote. "But Americans begin the race from different starting lines. Not only do well-off people, primarily whites, have significant head starts, but even many working-class whites have had modest advantages when compared with working-class people of color, most of whom begin far behind whites' starting line."
At the point of birth, that starting line might be thought of as wealth, a nugget of potentiality and as-yet-unrealized opportunity that individuals, families and communities carry with them, nurture, contribute to and pass on, sometimes in imperceptible ways, to subsequent generations.
Beyond revealing that net worth for all families plummeted between 2007 and 2010, data from the Federal Reserve Board's most recent survey of consumer finances, released in June, show a marked and continued disparity in the size of that carrying resource among racial groups.
The median value of net worth for white, non-Hispanic families in 2010 was about $131,000, according to the survey. For non-whites and Hispanics, the amount was just over $20,000. The data also showed that the median value of immediately available financial assets for white families was $37,000. For non-whites, it was just $6,000.
Studies have also shown that anywhere from a quarter to a third of white families will, at some point in their lifetimes, augment their net worth with an inheritance of some kind -- but even the majority who don't receive such endowments often fail to recognize the variety of other windfalls that come their way. Citing research from Thomas Shapiro, a professor of sociology and public policy at Brandeis University, Lui explains in her book:
These numbers show that most white people do not receive any inheritances from deceased relatives' estates. But in interviewing black and white working-class families, Shapiro found that modest amounts of money passed down by living relatives were also far more common in white families than in black families. Whites who get such help often don't think of themselves as inheritors, but consider such transfers to be just a normal part of family life. Contributions to a down payment on a house and college tuition are the most common forms of family financial aid. Shapiro calls these "transformative assets," because they boost lifelong prosperity and security.
"Transformative assets" or "transformative wealth" are key words in the study of persistent poverty. These are the sorts of windfalls, even small ones, that can lead upward to new rungs on the economic ladder. It's cash to buy a reliable car, for example, which can lead to new job opportunities and upward progress. For some, it may simply be enough money to buy a decent suit for a job interview.
For those already halfway up the ladder, transformative nuggets like these, if they initially came from family, come later in the form of commercial loans or credit, ideally at interest rates that aren't ruinous. For the rural poor, neither avenue is available, and the dribble of government benefits or minimum-wage work tends to keep the unlucky on a treadmill of subsistence.
It is worth noting, for example, that in 2011, the average monthly food stamp outlay in the U.S. was just $133, according to data compiled by the Kaiser Family Foundation [ http://www.statehealthfacts.org/comparetable.jsp?cat=1&ind=26 ]. Families that qualify for temporary cash assistance have also seen the purchasing power of that benefit plummet. In all but two states, cash assistance benefit levels in 2011 are actually lower, in real dollars and despite inflation, than they were in 1996, according to the Center On Budget and Policy Priorities [ http://www.cbpp.org/cms/?fa=view&id=3625 ] in Washington.
Jim Richardson [ http://www.nrfc.org/our_staff.asp ], the executive director of the National Rural Funders Collaborative [ http://www.nrfc.org/ ], a philanthropy aimed at addressing persistent poverty, particularly in minority communities, argues that it's this inability to get any sort of foothold that has kept so many poor families poor. It also explains why they remain disenfranchised socially, politically and culturally.
"Our initial understanding was simply that from years of disinvestment and disenfranchisement of people at low wealth, you basically got these deep pockets of poverty. We knew that these have to be addressed, and can only be addressed, through building family wealth, increasing family sufficiency and then increasing civic participation within the communities," Richardson said.
"But what we found over the first four or five years was that persistent poverty, especially in rural communities, was inextricably linked with race. And if you look at the disparities not only in income but in wealth, in rural areas by race, the statistics are really pretty staggering."
By the reckoning of numerous researchers, the comparative absence of such transformative assets among communities of color -- particularly those in areas where land and labor were the only assets available -- is no mere accident. Some have attempted to calculate, for example, the real loss of wealth that attended slavery and subsequent discriminatory policies. Among these are Joe Feagin [ http://sociweb.tamu.edu/faculty/feagin/ ], a professor of sociology at Texas A&M University and a leading expert on the racial weath gap.
Writing in the 2010 edition of his book "Racist America [ http://books.google.com/books/about/Racist_America.html?id=0stwPeRea2MC ]," Feagin cited a variety of estimates for the value of the free labor provided by enslaved African Americans, with the cumulative losses for subsequent generations of American black families ranging between $2.1 trillion and $4.7 trillion.
The "40 acres and a mule" that were historically promised as a way to allow freed slaves and their families to begin building real wealth never materialized for the most part, Feagin noted. Through much of the 20th century, and particularly in the South, deliberate and codified exclusion from land acquisition, access to credit, equal education and even political power continued to prevent the wider community of African Americans from developing the sort of wealth that has passed through and improved the lot of generations of whites.
"A simple total of the current economic worth of all black labor stolen by whites through the means of slavery, segregation, and contemporary discrimination is huge -- perhaps six to ten trillion dollars," Feagin wrote. "This latter figure is staggeringly high, indeed about 70 percent of the Gross Domestic Product generated by the United States in a recent year. In addition, these monetary figures do not include other major costs -- the great pain and suffering inflicted, the physical abuse, or the many untimely deaths."
This is not ancient history.
What land had been acquired by African Americans in the early part of the 20th century -- more than 15 million acres at its peak -- was systematically whittled away through a variety of post-slavery structural barriers to only 2 million acres by the 1990s. Part of this was almost certainly due to a lack of wills, estate planning and basic legal representation among African American landowners -- tools that that would have helped to protect and foster wealth. As intestate land accrued to disparate and far-flung heirs over generations, state acquisition and redistribution to white or corporate interests was made easier, and common.
But the federal government was also instrumental in preventing black landowners from profiting from their properties. According to a 2011 report by the nonpartisan Congressional Research Service [ http://www.nationalaglawcenter.org/assets/crs/RS20430.pdf ], which reviewed the findings of a 1994 study commissioned by the USDA, agency loans granted to black farmers were $4,000 less, on average, than those given to white farmers. The study also found that less than 1 percent of disaster payments went to black farmers.
The largest agency loans went to corporations and white male farmers.
In 1997, African-American farmers filed a class action suit against the USDA, Pigford v. Glickman, claiming the agency had discriminated against black farmers in the issuance of money for crop payments, disaster payments and loans between the late 1980s and late 1990s. An initial settlement was reached in 1999, resulting in some $1 billion in payouts to more than 13,000 black farmers to date. Another $1.2 billion was agreed upon in 2008 to cover the large number of farmers and their families who missed the original cut-off for filing claims.
The deadline for filing new claims passed on May 11 of this year.
Conservative critics have slammed some of these efforts. In particular, the USDA suit -- among the largest civil-rights settlements in history -- was labeled a "shakedown" and a "fraud" by right-wing pundit Andrew Breitbart [ http://mediamatters.org/research/2011/02/10/breitbarts-pigford-report-distortions-and-shady/176264 ], among others, in large part because the number of claimants exceeded federal data on black-owned farms for the period in question.
Extensive under-counting of black farmers, as well as shared land development among minorities, have been offered as explanations for the disparity.
But even if every one of the nearly 100,000 claimants in the Pigford case were fraudulent, and they somehow managed to game the system to secure what amounts, in most cases, to a one-time $50,000 payout, the total $2.2 billion price tag for the case would still only amount to a tiny fraction -- far less than 1 percent -- of the estimated wealth that has been extracted from the African-American community over time, if Feagin's upper-end estimate is accurate.
IF ONE PERSON IS POOR, WE ARE ALL POOR
Eileen Briggs, a member of the Cheyenne River Sioux [ http://www.sioux.org/ ] reservation in central South Dakota, joins me for a 50-mile drive along Route 212 from Eagle Butte to the reservation's eastern edge. A herd of buffalo, property of the tribe, grazes on the crest of a low hill off to the right, beyond which an empty, yellow-green prairie spills southward to the horizon.
Briggs, an articulate and passionate host, has been educating me about her tribe's role in an otherwise familiar narrative arc for all Native Americans, one of displacement, disenfranchisement and unabashed double-dealing. This has been particularly true for tribes of the desert and prairie West, where, over the last century or so, tribal culture has been deliberately undermined, land has been given and taken away, and geographic isolation has made gaining a meaningful foothold in the American economy particularly difficult.
By at least one recent census measure, Ziebach County, one of two South Dakota counties that comprise most of the Cheyenne River reservation, is currently the nation's poorest.
At the point where 212 meets Lake Oahe, a massive reservoir formed by the damming of the Missouri River north of Pierre two generations ago, Briggs points toward a manicured, roadside pull-out punctuated by a large granite monument.
The boulder, cleaved to expose a broad, polished face, is inscribed with a tribute to Cheyenne River leadership. At the bottom, behind a clutch of wildflowers placed by an unknown visitor, the monument notes that the tribe's burial sites have been relocated from their original site nearby, along the banks of the pre-dammed Missouri.
The Cheyenne River Sioux lost more than 100,000 acres, including huge swaths of valuable timber and range land, to intentional flooding when the federal Oahe Dam project got underway in the 1950s.
The dam now provides electricity for millions of residents and businesses across the north-central United States, but the federal government originally offered little to the Cheyenne River tribe in return. Dogged legal battles, spearheaded by tribal leaders over the last 40 years, finally prompted the U.S. Treasury in October of last year to set aside roughly $145 million in interest, along with $293 million in principal, for the tribe as compensation for the land lost in the dam project.
That's good news, Briggs says, but all of this -- the damming, the exhumation of tribal graves by the Army Corps of Engineers, the wholesale relocation of the tribal agency to Eagle Butte and the high-handed behavior of the federal government -- are simply part of a long list of insults that this and other tribes have borne. Briggs says it all weighs heavily on minds here, and that healing from all that, both economically and culturally, takes time.
"Our thinking, our culture tells us, that if one person is poor, we're all poor," she said. "And we are someone struggling in this country. We are part of this great American story that we all believe in, that we all want to see happen -- a future for any dream that we want. There should be some understanding and some newly raised awareness and compassion for these Americans who have been suffering for a very long time."
Unemployment figures on the reservations of South Dakota are staggering: averaging about 70 percent year over year, and peaking as high as 90 percent when seasonal work dries up. Not surprisingly, drunkenness, drug abuse and crime are problems, as are high-school dropouts and teen pregnancies.
Among the unemployed is Ronnie Bowker, a 50-year-old tribal member who last found work two years ago installing fencing around the cemeteries, scattered about the reservation, where the Army Corps of Engineers relocated the tribe's graves. He has not worked since.
Bowker grew up on the reservation in abject poverty, with no running water and no electricity. He now has a subsidized trailer in a community called La Plant, not far from the stone monument at the reservation's end, that he struggles to maintain against the harsh prairie winters and wicked spring and summer storms. A span of shingles is missing, torn off by high winds a year ago, and a broken gutter hangs across one of the front windows.
Ronnie Bowker
(Photo: Aaron Packard)
Like many of the residents with whom I spoke, Bowker has his own particular understanding of his station. He complained of racism within the tribe, where "half-breeds" with lighter skin wield more power and have more opportunity than "full-bloods" like him. He blamed himself for the indiscretions of his youth: dropping out of school, drinking heavily, fighting and spending time in prison.
But he also said that despite his efforts at reform -- he no longer drinks, he earned his GED, and he has become a something of a spokesman for the poorest and most remote residents on the reservation -- he has a hard time identifying opportunities that might better his lot in life, and that of his wife and children.
"I often say it in a joking way, that La Plant is like a retirement home: You come here to die," he tells me. "There's just nothing to do."
It's easy to dismiss Bowker's lot as self-inflicted, and there's little question that, had he followed a different path early in life, he might have found better fortunes. But as with African Americans, it's also fair to say that a great deal more wealth -- transformational wealth -- would have been coursing through La Plant, and Cheyenne River, and among many other tribes of the Great Plains, had it not been for decades of discriminatory policy.
This, too, would likely have made a difference in Bowker's trajectory.
Consider the trust system set up by the U.S. government under the Dawes Act of 1877, which essentially broke up tribal lands and assigned parcels, ranging in size from 40 to 160 acres, to individual tribal members as a way of assimilating Native Americans into the economy through land ownership. But rather than grant the parcels outright, the government held the land in trust -- at first temporarily, but in the end, in perpetuity -- and in many cases, it was leased for exploitation to the timber industry, miners and oil and gas companies.
Presumably, the tribal owners of each parcel would profit from such leasing, but the royalties collected from industries active on trust land was wildly mismanaged by the Department of the Interior. A lawsuit filed by a tribal member in 1996 seeking to find out the extent of the mismanagement discovered that the department had also failed to keep track of the heirs to the original allotments. And as had happened with black landowners, nominal ownership of intestate tribal allotments had multiplied exponentially over the generations.
In his 2004 testimony before Congress [ http://naturalresources.house.gov/uploadedfiles/swimer_6.23.04.pdf ], Ross Swimmer, the former special trustee for American Indians at the Interior Department, noted that there are now tribal properties "with ownership interests that are less than 0.0000001 percent." That fraction would afford an interest holder, Swimmer said, about four one-thousandths of a penny.
In the end, the lack of records made it virtually impossible for government officials to sort out what it owed and to whom. Even if it were possible to forensically create records for every potential beneficiary, Swimmer said, doing so would have cost vastly more than what most account holders were actually owed.
More than a dozen years of litigation yielded a $3.4 billion settlement that was ultimately upheld in May of this year. It will provide payments of between $800 and $1,000 to individual claimants. A large chunk of the settlement will also be used to allow the government to buy up some of the hopelessly fractionated land and turn the consolidated allotments back over to the tribes.
The federal judge who presided over the case for 10 years before being removed by an appeal panel in 2006, called the Interior Department and its handling of tribal interests "the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government."
Despite all of this, the Cheyenne River Sioux have been remarkably entrepreneurial, establishing a number of tribally owned ventures that have created jobs and small measures of growth and opportunity over the last few decades. These include a telephone authority, which now has some $10 million in annual revenues, and Lakota Technologies [ http://www.lakotatechnologies.com/ ], an information technology firm that provides call centers and other services to government and commercial customers.
On a recent visit to the facility, a handful of young workers operated the phones as part of work performed for the federal government under contract. Odds are good that a foreigner phoning the U.S. State Department in pursuit of an entry visa will actually be connected to this warehouse on Eagle Butte's Main Street, where a young Native American woman earning a little bit more than minimum wage will take the call.
Still, many stumbling blocks remain. There is not nearly enough housing for the reservation's population, and overcrowding inside crumbling housing stock is common. Attempts to attract outside businesses to the area -- an assembly plant, say, or a livestock processing facility -- are stymied by the tribe's antiquated and overtaxed water system, which has been unable to support new connections for years.
Kevin Keckler, chairman of the Cheyenne River Sioux tribe, reckoned a proper upgrade to the water system would cost about $65 million. He said the tribe has lobbied the federal government for funding assistance with limited success, estimating that about half the necessary amount is still needed. He guessed it would be another four or five years, even in the best of circumstances, before a new water system might be in place. He also said hundreds of millions more dollars would be needed to distribute the water to the remote communities like La Plant and others scattered across the reservation.
Keckler held up his index finger to indicate the size of the tubing that currently snakes out under the prairie to reach far-flung homes. When more than a few of these households turn on a spigot at the same time, the pressure can drop to a trickle.
"If we could get that water system built," Keckler said, "I think we could see a better quality of life."
Meanwhile, even tribal members who sit on substantial and intact parcels of trust land with clear title have had difficulty using the holding as collateral to secure loans and otherwise spur economic activity that would improve their lot. Commercial banks often avoid lending against trust land, they say, for fear of unfamiliar paperwork and complicated jurisdictional issues should the debt go bad. This in turn makes it more difficult for tribal members to develop the sort of credit histories that are so key to upward mobility in modern society.
Zach Ducheneaux, a tribal member who sits on the board of directors of the Intertribal Agriculture Council [ http://www.indianaglink.com/ ], an organization founded in 1987 to promote the development of agricultural resources in tribal territories, traveled to Capitol Hill in June. He was armed with a request that the Government Accountability Office undertake a study of "credit deserts," areas of the U.S. that are statistically underserved by bank financing and other credit opportunities.
"We think if you did a map of credit deserts, places where there is a lack of available credit and affordable credit to acquire assets to produce income and build wealth, it would lay right over the poorest places in the country, including this reservation," Ducheneaux said. "It's a real problem here."
Officials at the USDA said they are working on programs to help ease the commercial credit gap on tribal land. The agency also noted in June [ http://blogs.usda.gov/2012/06/25/usda-highlights-efforts-to-give-tribes-the-tools-to-improve-basic-services/ ] that it was taking advantage of a new rule, authorized in the 2008 Farm Bill, that "will make it much easier for Tribes to gain access to USDA funding for water and sewer improvement projects, electrical system upgrades and telecommunications services including broadband."
In the minds of tribal members attempting to turn things around, such incremental programs and investments are a pittance compared to what's been taken away, and to what was promised in treaties signed with their people.
"The reality is that the federal government has a trust responsibility with the Cheyenne River Sioux Tribe and every other tribe in this country," Briggs said. She is currently the executive director of Tribal Ventures [ http://www.crtribalventures.org/ ], a 10-year, $11 million poverty-reduction plan funded largely by the Northwest Area Foundation, a Minnesota-based philanthropy. The Tribal Ventures program seeks to spur community and economic development opportunities on the reservation, and by its conclusion in 2016, Briggs hopes to be able to provide insight for other tribes on what works and what doesn't in the struggle to lift reservations out of poverty.
"My relatives, my ancestors, gave up much for this country to be prosperous, to be what it is today," Briggs says, "and if people cannot remember that, if they have forgotten that, we will continue to remind them. This is not about handouts. The government has not provided assistance for tribal lands because they felt it was the charitable thing to do. It's because they have a treaty obligation to the Sioux Nation and to our tribe. This was an exchange. This was a business deal.
"This whole economic downturn and the country's struggle, we have compassion and recognize that many people in this country have suffered a great deal because they lost their homes and their jobs and their savings. We have a lot of compassion for that," Briggs added. "But that's been our reality for 100 years."
TURNING THINGS AROUND
On a blazing June afternoon, Ale Obregon, one of the leaders of the community where Elia and Rogelio De La O live, stands at the local county watering hole armed with a video camera. He's arranged to meet with the Webb County utility supervisor, Johnny Armaya, to discuss the lack of official supervision at the site, the need for better maintenance of the pump, which occasionally breaks down, and the inadequacy of the facility to meet growing needs of residents.
As he waits for Armaya to arrive, a queue of cars pulling flatbed trailers and assorted pickup trucks -- all bearing empty plastic tubs and drums -- begins to form. As their turn arrives, drivers maneuver their vehicles under a fat hose dangling alongside a rusty steel box the size of a small van. They stuff the hose into the mouth of a container and then drop a couple of quarters into a slot on the side of the box: 50 cents for 150 gallons. The pump motor inside the box revs to life, and a stream of water begins to flow. The stink of sulfur fills the air.
A man fills a container at the community spigot.
When Armaya arrives, Obregon complains that many customers are taking more than their prescribed limit, 500 gallons, which is laid out on a small sign nearby. He asks why the county doesn't keep someone posted at the water point to oversee the operation, and why another water point couldn't be set up nearby to help alleviate what can be grindingly long waits in line -- sometimes hours. Armaya, a small man with dusty boots and the weary carriage of an empathetic bureaucrat -- someone who would like to do more but can't -- listens patiently and says he will look into the problem.
Later, Armaya tells me that his staff has tried to regulate matters better at the water point, but that tensions and tempers run high in the queue. Heated words and threats have been exchanged, he says, and guns have been drawn. He also notes that the water, a third of which comes from an aquifer underfoot, with the rest being trucked in from Laredo, is provided by the county at a substantial loss. The coin box generates about $30,000 a year, he says. The cost to pump and truck water there, and otherwise maintain the facility, is more than ten times that.
Underserviced communities like this are found all along the U.S.-Mexico border, from New Mexico and Arizona to California, but the largest share of them is in Texas. Some 400,000 Texans call these colonias home. The vast majority -- including 85 percent of colonias residents under 18 -- are American citizens born in the United States.
Taking advantage of lax authority on unincorporated county land, developers in the 1950s began creating ad hoc subdivisions outside of city boundaries, often in agriculturally fallow or dangerously flood-prone areas. "They divided the land into small lots," the Secretary of State's website explains, "put in little or no infrastructure, then sold them to low-income individuals seeking affordable housing."
What the site doesn't say, poverty advocates argue, is that demand is and has long been high among low-income buyers in part due to a lack of affordable housing inside border cities. And while the Texas legislature has passed numerous zoning laws, beginning in the 1990s, to curb the proliferation of the colonias, the lack of housing alternatives remains a problem. Often enough, colonias residents informally subdivide their own small plots to make room for family and other new neighbors, who plop down low-budget trailers or begin stacking cinder blocks in pursuit of a home.
Tangled networks of orange extension cords sometimes crisscross these complexes, linking those who don't have power to those who do.
Just how all of these pockets of need -- or those in the Delta, or those on tribal lands -- can ultimately be turned around is a matter of great debate. Karl Stauber believes that part of the problem is that per capita government spending has traditionally favored metropolitan areas over rural areas.
Given the billions of dollars in agricultural subsidies that arise every five or so years from the Farm Bill, that might seem a flawed assumption, but there's some evidence to support it, including a recent analysis by Bill Bishop, a long-time Texas-based journalist covering rural affairs and a co-editor of the web-based newspaper The Daily Yonder.
Using data from the Economic Research Service, Bishop found [ http://www.dailyyonder.com/federal-spending-rural-lags-cities/2012/02/24/3780 ] that federal spending on cities outstripped rural spending every year between 2004 and 2009. Per capita spending on non-agricultural development -- that is, on community facilities, the environment, housing, regional development, transportation and Native American programs -- has been substantially lower in rural areas in recent years.
"I think the Obama administration is the most metropolitan-focused administration in my lifetime," Stauber told me, "and I'm over 60 years old."
Secretary Vilsack took great umbrage at that suggestion, noting that President Obama signed an executive order last year that created the very first White House Rural Council [ http://www.whitehouse.gov/administration/eop/rural-council ] specifically to address the challenges facing rural communities.
"For the first time we actually have a damn plan to build a rural economy that will support middle-class families, and we don't get credit for it and don't get recognition for it by anybody," said Vilsack, who heads up the year-old council. "Pardon me for being frustrated about this, but we're working our tails off here and you know, this rural council doesn't get the recognition it deserves. For someone to say [the President] is urban-centric, it's crazy."
Stauber and other critics also argue that government strategies aimed at rural development have traditionally focused too heavily on subsidizing farming, and that this inevitably drives dollars into the pockets of big agriculture -- a highly mechanized affair that has slowly shed jobs even as output has increased -- at the expense of real solutions for America's poorest citizens.
"I think the reality is, as long as the dominant federal frame that gets applied to rural development is agriculture, then I think we're actually forcing people to leave," Stauber said. "If you want to look at one of the great economic success stories of the 20th century, it's agriculture. You look at the yield per unit of labor and the yield per unit of capital, and it's just remarkable.
"There's nothing wrong with helping farmers create new competitive advantage," he added, "but the answer to that is not the same thing as the answer to the question: 'How do you help rural communities create new competitive advantage?'"
According to a 2010 report from the Congressional Research Service, even farm families don't make money from farms. "Nearly 90 percent of total farm household income comes from off-farm sources," the report found. Manufacturing accounts for roughly 25 percent of rural private sector earnings and about 12 percent of all rural jobs, according to the report. As in many other places, the service sector is the predominant source for employment opportunities in rural areas.
"Farming, and agriculture more generally, however, remain the major legislative focus for much of congressional debate on rural policy," the report noted.
Other advocates, including John Henneberger, a co-director of the Texas Low-Income Housing Information Service [ http://www.texashousing.org/ ], which works to develop low-income housing opportunities in Texas, have condemned both Congress and the USDA for cutting back on a number of crucial programs. Henneberger is particularly incensed at steady declines in housing loan programs that have helped thousands of very low- and low-income families to build their homes or otherwise become homeowners.
"Vilsack may be investing historic amounts of money in some people in rural America, but it is not getting invested in the homes or lives of poor rural Americans," Henneberger said. "Rural Americans have Congress to thank for acting to reject a portion of Secretary Vilsack's unprecedented transfer of funds to corporate agriculture from programs that help the rural poor afford a home."
On this, and on charges that the administration is too agriculture-focused to really address the problem of rural poverty, Vilsack again becomes incensed. "One of the biggest frustrations I have in life -- in life, not just in this job," he said, "is how few people understand what this department does."
The administration has overseen substantial increases in agricultural production and exports, Vilsack said, which lead to increases in processing and shipping and packaging jobs in rural areas. He points to a recent analysis [ http://www.kc.frb.org/publicat/mse/mse_0212.pdf ] of the rural manufacturing sector by the Federal Reserve Bank of Kansas City, which notes that "rural manufacturing has rebounded with a vengeance" in the last two years.
Vilsack also said the administration has enrolled a record number of acres in conservation, linking that to outdoor recreational opportunities and, in turn, increased jobs in contracting and tourism. The administration has also put a good deal of support behind domestic energy production, including biofuels, which inevitably creates jobs in rural areas.
In an effort to drive USDA resources further into historically disenfranchised minority communities, the agency has also developed a StrikeForce Initiative, which seeks to connect with community-based organizations already on the ground and distribute USDA resources through them. And all of this has been done, Vilsack said, in an era of stiff budget and staffing cutbacks.
"When we're dealing with substantial reductions in our budget, and we're dealing with having to meet a growing demand," Vilsack said, "the challenge for us is to determine where we can do the most good with the least amount of money."
Reyna, the Texas attorney who introduced me to the De La Os, says that's a philosophy that's deeply familiar to residents of the border colonias.
"We send all this foreign aid to other countries to help them develop water resources, and yet there are people living right here without potable water," he told me. "They live on American soil. They live in Texas. They live right here, smack in the middle of the United States. It's really very, very sad to see. I wish we had a magic wand to fix all this, but we don't."
Since the late 1990s, the De La Os have been slowly improving their trailer home, inch by inch, dollar by dollar, with their own hands. A lack of affordable alternatives drove them to this place, and the bare wood framing, floppy panel floors, exposed insulation and unfinished wiring suggest years of sweat equity for a family that has lived -- without government help, they say -- on $10,000 to $15,000 a year.
Until Rogelio, 69, took ill last year, they earned that money, with help from their American-born daughter, working in the canneries of Wisconsin or harvesting beets and potatoes in North Dakota and Minnesota. When harvest season was over, they returned to Texas and took jobs in sewing factories or construction sites around Laredo. For most of this work, the family earned about $8 an hour, Elia said.
At the family's kitchen table, Elia serves her guests tall glasses of distilled water, which she draws from a jug. It is a welcome treat on a day when the outside temperature is now upwards of 105 degrees. I ask the couple if they've ever felt taken advantage of, or abused by a social order that, from the outside, seems very much stacked against them.
Elia quickly answers no, and so I follow with another question: Does she consider herself poor?
"Poverty doesn't make a difference to us. We've always been poor," she replies. "We don't have luxuries. But the things that God has allowed us to do here, we appreciate them. Many people are worse off.
"The only thing that is a great need for us," she adds, "is the water."
Copyright © 2012 TheHuffingtonPost.com, Inc. (emphasis in original)
http://www.huffingtonpost.com/2012/09/20/rural-poverty-minorities_n_1829911.html [with comments]
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In Prosecutors, Debt Collectors Find a Partner
Angela Yartz with debt collection notices on district attorney letterhead. She was threatened with conviction over a $47.95 check to Walmart.
Noah Berger for The New York Times
Interactive Graphic
Letter From Bad Check Restitution Program
http://www.nytimes.com/interactive/2012/09/16/business/20120916_DEBT_LETTER.html
Collection notices.
Noah Berger for The New York Times
By JESSICA SILVER-GREENBERG
Published: September 15, 2012
The letters are sent by the thousands to people across the country who have written bad checks, threatening them with jail if they do not pay up.
They bear the seal and signature of the local district attorney’s office. But there is a catch: the letters are from debt-collection companies, which the prosecutors allow to use their letterhead. In return, the companies try to collect not only the unpaid check, but also high fees from debtors for a class on budgeting and financial responsibility, some of which goes back to the district attorneys’ offices.
The practice, which has spread to more than 300 district attorneys’ offices in recent years, shocked Angela Yartz when she was threatened with conviction over a $47.95 check to Walmart. A single mother in San Mateo, Calif., Ms. Yartz said she learned the check had bounced only when she opened a letter in February, signed by the Alameda County district attorney, informing her that unless she paid $280.05 — including $180 for a “financial accountability” class — she could be jailed for up to one year.
“I was so worried driving my kid to and from school that if I failed to signal, they would cart me off to jail,” Ms. Yartz said.
Debt collectors have come under fire for illegally menacing people behind on their bills with threats of jail. What makes this approach unusual is that the ultimatum comes with the imprimatur of law enforcement itself — though it is made before any prosecutor has determined a crime has been committed.
Prosecutors say that the partnerships allow them to focus on more serious crimes, and that the letters are sent only to check writers who ignore merchants’ demands for payment. The district attorneys receive a payment from the firms or a small part of the fees collected.
“The companies are returning thousands of dollars to merchants that is not coming at taxpayer expense,” said Ken Ryken, deputy district attorney with Alameda County.
Consumer lawyers have challenged the debt collectors in courts across the United States, claiming that they lack the authority to threaten prosecution or to ask for fees for classes when no district attorney has reviewed the facts of the cases. The district attorneys are essentially renting out their stationery, the lawyers say, allowing the companies to give the impression that failure to respond could lead to charges, when it rarely does.
“This is guilty until proven innocent,” said Paul Arons, a consumer lawyer in Friday Harbor, Wash., about two hours north of Seattle.
The partnerships have proliferated from Los Angeles to Baltimore to Detroit, according to the National District Attorneys Association, as the stagnant economy leaves city and state officials grappling with budget shortfalls. Lawyers for the check writers estimate that more than 1 million of them are targeted a year. The two main debt collectors — California-based CorrectiveSolutions and BounceBack of Missouri — return millions of dollars each year to retailers including Safeway, Target and Walmart.
While the number of bounced checks has fallen as more shoppers pay with credit or debit cards, Americans still write billions of dollars worth of bad checks each year. In 2009, $127 billion worth of checks were returned, according to the most recent data from the Federal Reserve. That’s down from $182 billion in 2006.
Because the cases are not fully investigated, there is no way of knowing whether the bad checks were the result of innocent mistakes or intentional fraud. The so-called bad check diversion programs start from the position that a crime has been committed.
Before the first partnerships were rolled out in the late 1980s, merchants who received a bad check typically tried to retrieve the money themselves or through a private collection company, with abysmal results. Those merchants who suspected fraud could send along the checks to their local district attorneys.
The influx of bad-check reports overwhelmed district attorneys’ offices, according to Grover C. Trask, a former district attorney in Riverside, Calif., considered the father of such programs. “It was a way to deal with a fairly serious nonviolent crime going on in the business community, but not overburden the court system or the resources of the district attorneys,” Mr. Trask said.
The programs were quickly challenged by consumer lawyers, who took aim primarily at California-based American Corrective Counseling Services. Facing a barrage of class-action lawsuits, the company reorganized through a Chapter 11 bankruptcy in 2009.
Still, its successor, CorrectiveSolutions, which says it has contracts with more than 140 prosecutors, has been dogged by similar legal challenges, including a class-action lawsuit pending in federal court in San Francisco that claims the company “has constructed an elaborate artifice” to terrify borrowers into paying. CorrectiveSolutions, which did not respond to requests for comment, has contested the claims, court filings show.
For the collection companies, the partnerships offer a distinct financial benefit: the “financial accountability” classes. Typically, a small portion of the class fees, which can exceed $150, are passed on to the district attorneys’ offices. Check writers are led to believe that unless they take the courses, they could end up in jail.
A letter signed by the Santa Clara County district attorney, for example, informed Kathy Pepper that the “bad check restitution program” would allow her to avoid “the possibility of further action against the accused by the District Attorney’s Office.”
Petrified, Ms. Pepper agreed to pay $170 for a class and another $25 to reschedule the class last year after accidentally writing a $68 check in the midst of a divorce last year that upended her finances.
What Ms. Pepper did not know was that her bad check was sent directly from the merchant to the debt-collection company, without any prosecutor determining whether she had actually committed a crime.
Under the terms of five contracts between CorrectiveSolutions and district attorneys reviewed by The New York Times, merchants refer checks directly to the company, circumventing the prosecutors’ offices. While the merchants are required, for example, to attempt to contact the check writer, they can send any bad checks to the collection companies if the shopper hasn’t responded, typically within 10 days.
“No one at the district attorney’s office reviews the cases” before the collection company sends out letters, said Priscilla Cruz, an assistant director in the Los Angeles district attorney’s office.
As of July, CorrectiveSolutions had sent out 16,955 letters on behalf of the Los Angeles district attorney, and during that time 635 people attended the program’s classes, county data show. While few people will be prosecuted for not attending the class, there is a possibility of charges, Ms. Cruz said.
While the percentage of targeted check writers taking the classes is low — 4 percent to 7 percent in recent years — the percentage of cases referred for potential prosecution is much lower, about 0.10 percent.
Few bad-check writers are prosecuted, especially for relatively small sums, lawyers say, because it is hard to prove the person meant to defraud the merchant.
Gale Krieg, a vice president at BounceBack, said he has turned down business from prosecutors who won’t agree to at least have all copies of the checks sent to their offices, where prosecutors can determine if a crime has been committed. Mr. Krieg, who said the company has contracts in 38 states, acknowledges the limitations: “Whether they exert oversight isn’t something that we can control.”
Prosecutors point out that people who write bad checks should be held accountable for paying back what they owe.
“I view it as quite a win-win,” said Baltimore County State’s Attorney Scott D. Shellenberger. “You aren’t criminalizing someone who shouldn’t have a criminal record, and you are getting the merchant his money back.” On its Web site [ http://correctivesolutions.org/ ], CorrectiveSolutions says that its classes result in low rates of recidivism.
Some officials in district attorneys’ offices have quietly raised concerns that the programs are misleading. A November 2009 county audit of Deschutes County, Ore., titled “District Attorney’s Office-Cash handling over revenues,” wondered whether elements of the program could be “disingenuous.” The prosecutor’s office, which did not return requests for comment, contracts with CorrectiveSolutions to handle its bad checks. Ms. Yartz said she accidentally wrote a check for groceries on her credit union account, rather than her bank checkbook. She had recently moved and was in the process of closing that account.
Even after Ms. Yartz paid $100.05 in February to cover the bounced check, the returned item fee and an administration fee, she got a letter signed by the Alameda district attorney informing her that her remaining balance was $180 for the class. After consulting with a lawyer, she decided to take her chances rather than pay for a class she could not afford, to avoid being punished for a crime she said she did not commit. Ms. Yartz also questioned the need for a class on budgeting and financial accountability: “If I meant to bounce this check like a criminal, why do I need a class on budgeting?”
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/16/business/in-prosecutors-debt-collectors-find-a-partner.html [ http://www.nytimes.com/2012/09/16/business/in-prosecutors-debt-collectors-find-a-partner.html?pagewanted=all ]
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U.S. Income Inequality Worse Now Than In 1774: Study
By Harry Bradford
Posted: 09/20/2012 10:09 am Updated: 09/20/2012 10:18 am
Believe it or not, income inequality in the United States is worse today than it was back in 1774.
That’s what a recent report from the National Bureau of Economic Research has found. In “American Incomes 1774 to 1860 [ http://papers.nber.org/tmp/88127-w18396.pdf ],” authors Peter H. Lindert and Jeffrey G. Williamson argue that the American colonies were exceptionally egalitarian, compared to both other nations at the time and the U.S. today. And their data even factors in slavery.
As the Atlantic’s Jordan Weissman points out [ http://www.theatlantic.com/business/archive/2012/09/us-income-inequality-its-worse-today-than-it-was-in-1774/262537/ ], such studies should be taken with a grain of salt, given that making historical economic analyses is like “making a messy collage, collecting the disparate bits and pieces of information we have available and fashioning them into a coherent picture,” Weissman writes.
But NBER's is not the first study to contend that income inequality today is worse than before. A 2009 study looking at data stretching back to 1917 found that American income inequality was at an all-time high [ http://www.huffingtonpost.com/2009/08/14/income-inequality-is-at-a_n_259516.html ]. Likewise, two historians concluded last year that income inequality today is worse even than it was during the Roman Empire [ http://www.huffingtonpost.com/2011/12/19/us-income-inequality-ancient-rome-levels_n_1158926.html ]. The study found that the top 1 percent of Ancient Roman earners controlled 16 percent of the Empire’s riches, compared to the top 1 percent of American earners today who control 40 percent of the country's wealth.
Indeed, signs of America’s yawning income gap aren’t exactly rare. On Wednesday, just days after the first anniversary of Occupy Wall Street [ http://www.huffingtonpost.com/2012/09/16/occupy-wall-street-anniversary_n_1888184.html ], a movement in part dedicated to exposing the nation's income inequality, Forbes released its list of the 400 richest Americans [ http://www.huffingtonpost.com/2012/09/19/richest-people-america-forbes-400_n_1896828.html?utm_hp_ref=business ]. Combined, their net worth is $1.7 trillion, or the combined yearly household income of more than 64 million Americans [ http://www.huffingtonpost.com/2011/10/20/us-incomes-falling-as-optimism-reaches-10-year-low_n_1022118.html ].
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/09/20/us-income-inequality_n_1898539.html [with comments]
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Billionaires Getting Richer As Millionaires Lose Money: Report
By John O'Callaghan
Posted: 09/17/2012 5:30 am EDT Updated: 09/17/2012 8:49 am EDT
SINGAPORE, Sept 17 (Reuters) - Many millionaires got poorer in the last year, but billionaires did just fine, using their heavyweight money management teams to ride out market and economic turmoil that hit the lesser rich, research company Wealth-X said on Monday.
The ranks of people with at least $30 million edged up to 187,380 but their total wealth fell 1.8 percent to $25.8 trillion -- still a sum bigger than the combined size of the U.S. and Chinese economies, Wealth-X said in a report.
Hardest hit globally were those in the $200 million to $499 million range, whose numbers dropped 9.9 percent and whose fortunes shrank 11.4 percent, the World Ultra Wealth Report said, using data for the year through July 31.
But the really, really rich got even richer as the number of billionaires rose 9.4 percent to 2,160 people and their wealth grew 14 percent to $6.2 trillion.
"Even at a billion or two billion, they have a much larger entourage, they have much more in the way of investment advice. They certainly get the attention of every major bank," Mykolas Rambus, Wealth-X's chief executive officer, told Reuters.
"This was the issue about that mid tier, the $100- to $500-million risk land. I don't think it appears these guys employ enough talent to help their own portfolios plus their holding companies to be successful."
As Europe struggles and the U.S. economy recovers fitfully, the affluent are shifting away from speculative investments into private companies, commodities and property, said Wealth-X, a Singapore-based firm that provides intelligence on the ultra-rich to banks, fundraisers and luxury retailers.
Asia suffered the worst regional loss of wealth, with a fall of 6.8 percent to $6.25 trillion due to weaker equity markets and lower export demand from the West, it said.
While wealth also shrank in Europe, Latin America and the Middle East, the rich saw their fortunes grow in North America (up 2.8 percent to $8.88 trillion) and Oceania (up 4.4 percent to $475 billion) -- much of that in Australia.
But Asia's rich cannot be discounted, Wealth-X said, as the fall in wealth in Japan, China and India -- home to 75 percent of ultra high net worth (UHNW) Asians -- will reverse, based on the strength of the region's financial systems and economies.
"Total Asian UHNW wealth is forecast to surpass the U.S. combined wealth by 2020," it said.
The full report is available at http://www.wealthx.com/wealthreport
(Editing by Ron Popeski)
Copyright 2012 Reuters
http://www.huffingtonpost.com/2012/09/17/wealth-x-world-ultra-wealth-billionaires-millionaires_n_1889404.html [with comments]
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Fossil Fuel Industry Ads Dominate TV Campaign
President Obama delivered remarks on energy policy at Prince George's Community College in Largo, Md., in March.
Chip Somodevilla/Getty Images
Video Feature [embedded]
Energy Takes Center Stage in Political Ads
A Shift in Energy Ads
Many energy ads in 2008 emphasized clean energy and conservation. Presidential and policy ads this year are more likely to promote policies that are friendly to fossil fuels.
http://www.nytimes.com/interactive/2012/09/14/us/politics/a-shift-in-energy-ads.html
By ERIC LIPTON and CLIFFORD KRAUSS
Published: September 13, 2012
WASHINGTON — When Barack Obama first ran for president, being green was so popular that oil companies like Chevron were boasting about their commitment to renewable energy, and his Republican opponent, John McCain, supported action on global warming [ http://topics.nytimes.com/top/news/science/topics/globalwarming/index.html ].
As Mr. Obama seeks re-election, that world is a distant memory. Some of the mightiest players in the oil, gas and coal industries are financing an aggressive effort to defeat him, or at least press him to adopt policies that are friendlier to fossil fuels. And the president’s former allies in promoting wind and solar power [ http://topics.nytimes.com/top/news/science/topics/solar_energy/index.html ] and caps on greenhouse gases? They are disenchanted and sitting on their wallets.
This year’s campaign on behalf of fossil fuels includes a surge in political contributions to Mitt Romney, attack ads questioning Mr. Obama’s clean-energy agenda, and television spots that are not overtly partisan but criticize administration actions like new air pollution rules and the delay of the Keystone XL [ http://topics.nytimes.com/top/reference/timestopics/subjects/k/keystone_pipeline/index.html ] oil pipeline from Canada.
“Since Obama became president, gas prices have nearly doubled,” said one advertisement by the American Energy Alliance [ http://www.americanenergyalliance.org/ ], a group financed in part by oil executives. “Tell Obama we can’t afford his failing energy policies.”
With nearly two months before Election Day on Nov. 6, estimated spending on television ads promoting coal and more oil and gas drilling or criticizing clean energy has exceeded $153 million this year, according to an analysis by The New York Times of 138 ads on energy issues broadcast this year by the presidential campaigns, political parties, energy companies, trade associations and third-party spenders.
That tally is nearly four times the $41 million spent by clean-energy advocates, the Obama campaign and Democratic groups to defend the president’s energy record or raise concerns about global warming and air pollution. The Times rated presidential campaign and national policy ads by whether they promoted fossil fuels or pushed clean energy and conservation, regardless of their sponsors, using ad and spending data compiled by Kantar Media [ http://www.kantarmedia.com/ ], a company that tracks television advertising.
The lopsided nature of the energy messages this year contrasts sharply with 2008. Back then, global warming was a top public concern, and green ads greatly outnumbered those for fossil fuels, $152 million to $109 million, according to the analysis by The Times, which looked at 184 energy-related ads. In 2008, Chevron, one of the nation’s leading oil companies, trumpeted its investments in geothermal power [ http://mycmag.kantarmediana.com/videos/ISSUE_CHEVRON_EVERY_DAY.wmv ], and Mr. McCain spent millions of dollars on ads featuring solar panels [ http://mycmag.kantarmediana.com/videos/PRES_MCCAIN_GLOBAL.wmv ] and wind farms [ http://topics.nytimes.com/top/news/business/energy-environment/wind-power/index.html ] as part of a solution to global warming.
But climate change legislation [ http://topics.nytimes.com/top/news/business/energy-environment/climate-and-energy-legislation/index.html ] died in Congress, Republicans gained a majority in the House, and pocketbook issues like the price of gasoline began dominating public discussion. After imposing a yearlong oil and gas drilling moratorium in the Gulf of Mexico in response to the disastrous BP spill in 2010, President Obama recast himself as favoring an “all of the above” energy strategy, allowing the industry to drill offshore as deep as ever and moving to open up new regions like Alaska’s Arctic waters.
The shift left many fossil fuel critics disillusioned and unwilling to do much to support the president. “It’s hard to think of any environmental activist who is enthused about anything Obama does these days,” said Brendan Cummings, senior counsel for the Center for Biological Diversity [ http://www.biologicaldiversity.org/index.html ], which challenges the industry on drilling plans. “Obama’s explicit embrace of fossil fuels and implicit embrace of all the environmental degradation that entails are almost indistinguishable from the policies of the Bush administration.”
Mr. Obama’s policy decisions on the Keystone pipeline and clean air rules did not win him friends in the fossil fuel world, either. Many of the industry’s titans are going all out to elect Mr. Romney, who has promised to open up more land and coastline to oil and gas drilling, end wind and solar power subsidies and curb regulations that discourage burning coal for electricity.
“The stakes are high,” said Steve Miller, the recently retired president of the American Coalition for Clean Coal Electricity [ http://www.cleancoalusa.org/ ], which has spent about $12 million on pro-coal television ads [ http://mycmag.kantarmediana.com/Videos/ISSUE_ACCCE_THREE_SHORT_YEARS.mov ], according to the Kantar data. “Our goal is to assure that whoever is elected will have seen a groundswell for coal in swing states.”
The Times analysis shows that ads with energy themes have played an outsized role in the 2012 campaign season, with energy earning more frequent mentions than every other issue except jobs and the economy.
Energy first emerged as a major advertising topic during the last presidential election. Back then, one of the biggest spenders was the Alliance for Climate Protection, an environmental group backed by former Vice President Al Gore that spent an estimated $32 million on ads urging legislation to combat global warming.
This year, the alliance, now called the Climate Reality Project [ http://climaterealityproject.org/ ], is not buying television ads at all, focusing instead on social media, training and organizing. “Whatever we would spend, it would just be washed away in this sea of fossil fuel money,” said Maggie L. Fox, the group’s chief executive.
Other clean-energy players, particularly from the solar industry, are also keeping a low profile after Solyndra, a California solar module manufacturer that received half a billion dollars in federal loans, declared bankruptcy and became a favorite Republican target.
Certain environmental groups, like the Sierra Club, are still running their own television commercials [ http://mycmag.kantarmediana.com/Videos/ISSUE_SIERRA_AIR_POLLUTION_STANDARDS.mov ] this year in support of Mr. Obama’s policies. And the wind industry is on a campaign to win renewal of a major tax credit. But “we are being outgunned by orders of magnitude,” said Michael Brune, executive director of the Sierra Club [ http://www.sierraclub.org/ ]. “There is just no way we can compete with some of the richest companies in the history of the world.”
The American Petroleum Institute, backed by the nation’s largest oil and gas companies, is the top energy spender this year with its “I’m an energy voter [ http://vote4energy.org/?gclid=CJapz5LWqLICFUJo4Aod9lYANg ]” campaign. Although the ads avoid explicitly endorsing any candidate, they clearly echo policy stands taken by Mr. Romney and the Republicans: opposing regulations that might slow down drilling and denouncing Mr. Obama’s proposal to eliminate oil industry subsidies [ http://mycmag.kantarmediana.com/Videos/ISSUE_API_KEEP_ENERGY_COSTS_DOWN_15.mov ].
“New energy taxes could hurt drivers and families,” one ad says. “Better to produce more energy here, like oil and natural gas [ http://topics.nytimes.com/top/news/business/energy-environment/natural-gas/index.html ]. That will help the economy. That’s good for everyone.”
The petroleum institute has spent an estimated $37 million so far on television ads, according to the Kantar data, more than it spent in all of 2008. And it is just one of nearly two dozen groups — including Americans for Prosperity [ http://mycmag.kantarmediana.com/Videos/PRES_AFP_OBAMA_SACRIFICES_PAWNS_FOR_POLITICS_60.mov ], backed by the oil billionaire David H. Koch, and Crossroads GPS [ http://mycmag.kantarmediana.com/Videos/Pres_CROSSROADSGPS_TOO_MUCH.mov ] — that are running advertisements this year advocating more fossil-fuel production or condemning spending by the Obama administration on solar and wind projects.
“These are companies and industries that clearly feel threatened,” said Ken Goldstein, president of Kantar Media’s Campaign Media Analysis Group. “And when companies and industries with resources feel threatened, they air advertisements.”
The fossil fuel industries have also used more subtle tactics, like mobilizing miners to wear pro-coal hats and shirts at candidate events and placing a coal industry logo [ http://www.americaspower.org/clean-coal-campaign-teams-nascar ] on the cars for Dale Earnhardt Jr.’s Nascar team.
Their trade associations have targeted swing states like Ohio, Colorado, Virginia and Pennsylvania, where there are established operations like coal mines or fast-growing new efforts, like fields where natural gas is extracted through hydraulic fracturing, a technique that could face new restrictions from regulators.
“President Obama has placed a de facto embargo on energy production on American lands and shores,” said Benjamin Cole, a spokesman for the American Energy Alliance, which expects to spend $7 million on television ads and other media to defeat Mr. Obama. “It’s irresponsible and overzealous.”
The imbalance in spending shows up on the campaign finance side as well.
Mr. Romney, the Republican National Committee and Mr. Romney’s political action committee have taken in at least $13 million in campaign contributions from oil, gas and coal industry executives or their related groups.
By comparison, Mr. Obama and the Democratic National Committee have received less than $950,000 from the fossil fuel industry over the past two years, according to data from the Center for Responsive Politics. The clean-energy industry has hardly made up the difference, with Mr. Obama directly collecting only about $78,000 from it so far, according to the center’s data.
The surge in energy-related political spending partly reflects the rise in overall election spending after the Supreme Court lifted limits on corporate contributions in 2010. Mr. Romney, for example, has accepted $3 million in contributions from Oxbow, a coal company controlled by William Koch, a brother of David Koch.
At a $50,000-a-plate shrimp-and-steak lunch in Houston last month, Mr. Romney solicited advice on energy policy from scores of oil and gas executives.
The group — which included Rex W. Tillerson, chief executive of Exxon Mobil, and Harold G. Hamm of Continental Resources, a top adviser to the Romney campaign — told Mr. Romney that the best thing he could do would be to reduce the regulatory burdens on the industry and permit more drilling on federal lands.
“There is a lot more at stake now,” said Amy Myers Jaffe, associate director of the Rice University energy program. “The producers can drill a lot in the United States or they could lose the right to drill in the United States. It’s a campaign about the E.P.A., how the president responds to a major accident, and it’s about do we or don’t we lease on federal lands.”
Eric Lipton reported from Washington, and Clifford Krauss from Houston.
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/14/us/politics/fossil-fuel-industry-opens-wallet-to-defeat-obama.html [ http://www.nytimes.com/2012/09/14/us/politics/fossil-fuel-industry-opens-wallet-to-defeat-obama.html?pagewanted=all ] [with comments]
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Romney Campaign Cautious With Ad Budget, Even in Key States
By JEREMY W. PETERS and NICHOLAS CONFESSORE
Published: September 19, 2012
Mitt Romney [ http://elections.nytimes.com/2012/primaries/candidates/mitt-romney ] has had a light campaign schedule lately. He held his first rally in five days on Wednesday night.
And there is another place where his presence is oddly lacking: in the television ad wars.
Despite what appears to be a plump bank account and an in-house production studio that cranks out multiple commercials a day, Mr. Romney’s campaign has been tightfisted with its advertising budget, leaving him at a disadvantage in several crucial states as President Obama blankets them with ads.
One major reason appears to be that Mr. Romney’s campaign finances have been significantly less robust than recent headlines would suggest. Much of the more than $300 million the campaign reported raising this summer is earmarked for the Republican National Committee, state Republican organizations and Congressional races, limiting the money Mr. Romney’s own campaign has to spend.
With polls showing President Obama widening his lead in some of these states and the race a dead heat in others, Mr. Romney’s lack of a full-throttle media campaign is risky, especially as he struggles to get his message out over the din of news about his campaign’s recent setbacks.
In some states the disparity is striking. Mr. Obama and his allies are handily outspending Mr. Romney and the conservative “super PACs [ http://topics.nytimes.com/top/reference/timestopics/subjects/c/campaign_finance/index.html ]” working on his behalf in Colorado, Ohio and New Hampshire.
And in states like Florida, Iowa, Nevada and Virginia, where the Romney and Obama forces are roughly matching their spending dollar for dollar, the super PACs are responsible for nearly half the advertising that is benefiting the Republican nominee.
After three weeks of bad news for Mr. Romney — first that he received a negligible bounce from his convention, then that Mr. Obama was overtaking him in the polls and finally that he had been secretly recorded disparaging the president’s supporters as government-dependent freeloaders — the lack of a more forceful advertising offensive is one more way that the Romney campaign finds its message obscured.
Each day that slips by is a loss of precious television time in an air war that is only going to grow heavier and louder, making it difficult for any ad to leave a lasting impact.
“In a world where we know advertising imbalances lend opportunities for persuasion, it is surprising that any campaign would allow imbalances to continue,” said Erika Franklin Fowler, co-director of the Wesleyan Media Project. “Especially following several weeks of ad dominance by the opponent.”
Mr. Romney’s absence from the air made sense before the party’s convention in late August, since the campaign’s cash flow became so slow over the summer that it was forced to borrow $20 million to carry it through the event, when his formal nomination freed up tens of millions of dollars for the general election.
Yet at the same time Romney aides worked hard to project the image of a fund-raising machine far outpacing the president’s.
Romney aides released informal dollar figures that lumped several pools of money — some available for his use, others not — into a single figure, providing a perception greater than reality: $106 million in June and $101 million in July, far more than Mr. Obama and the Democrats.
Yet those figures obscured the fact that most of the money Mr. Romney was raising was reserved for those other political entities like the Republican National Committee.
And the party committee, which Mr. Romney helped propel to record-breaking receipts in July, is allowed to spend only about $22 million on advertising that is coordinated with Mr. Romney.
Even now, a large though unknown portion of Mr. Romney’s fund-raising is not going directly into his campaign account.
A closer look at Mr. Romney’s own filings revealed that Mr. Obama, while trailing in overall party fund-raising, was pulling far more money than Mr. Romney into his campaign account, the most useful and flexible dollars a candidate has to spend, in part because of strong collection from small donors who could give again and again without hitting federal limits.
Mr. Romney’s aides declined to discuss their advertising plans, saying that unlike the Obama campaign, which has reserved more than $40 million in time through Election Day, it will not telegraph its intentions for competitors to see.
As of the end of July, the Republican Party [ http://topics.nytimes.com/top/reference/timestopics/organizations/r/republican_party/index.html ] had an additional $15 million left to spend in coordination with Mr. Romney before it reaches its federal spending limits. And though no one knows the precise amounts, the Romney campaign will have millions at its disposal that it can drop into a television market at any given moment.
So far it is only buying several days or a week of advertising at a time, a sign that it is being extremely frugal. According to a review of spending figures provided by a group that tracks political advertising, from Sept. 10 through Sept. 24, Mr. Romney and his allies reserved $3.7 million in advertising time in Ohio. That compared with $5.2 million for Mr. Obama and his allies.
In Colorado, Mr. Romney is being outspent $2.2 million to $1.5 million during that same period. In New Hampshire, Mr. Obama is spending $1.2 million, compared with $380,000 to benefit Mr. Romney. The vast majority of that is coming not from the Romney campaign but from American Crossroads, the conservative super PAC.
Asked about the campaign’s budget on Wednesday, Spencer Zwick, Mr. Romney’s finance chairman, said simply, “We have spent our money smartly and efficiently.”
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/20/us/politics/romney-campaign-cautious-with-ad-budget-even-in-key-states.html
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Romney campaign hits a financial snag
September 20, 2012
http://www.washingtonpost.com/politics/decision2012/romney-campaign-hits-a-financal-snag/2012/09/20/b31c568c-0334-11e2-91e7-2962c74e7738_story.html [with comments]
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Pro-Romney Super PAC plowed through cash war chest in August
Sep 20, 2012
http://www.reuters.com/article/2012/09/21/usa-campaign-money-restore-idUSL1E8KKHR320120921 [no comments yet]
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Money Race: Obama Super PAC Beats Romney Super PAC for the First Time
Sep 20, 2012
http://abcnews.go.com/blogs/politics/2012/09/money-race-obama-super-pac-beats-romney-super-pac-for-the-first-time/ [with comments]
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Obama again far outraising, outspending Romney
Challenger’s small-donor haul lags; president’s super PAC nears parity
September 20, 2012
http://www.washingtontimes.com/news/2012/sep/20/romney-raises-67m-obama-tops-him-in-ad-buys/ [with comments]
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Romney rescue plan: More Mitt
9/20/12
http://www.politico.com/news/stories/0912/81428.html [with comments]
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Allen West Targeted By Democratic Super PAC With $1 Million Ad Buy
09/20/2012
http://www.huffingtonpost.com/2012/09/20/allen-west-super-pac-ad_n_1898448.html [with comments] [the above YouTube of the ad, embedded, at http://www.youtube.com/watch?v=rTGNcaC0CkM ]
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John McCain Defends Mitt Romney's '47 Percent' Remarks
09/20/2012
http://www.huffingtonpost.com/2012/09/20/john-mccain-47-percent-mitt-romney_n_1900102.html [with embedded video, and comments]
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Whoopi Goldberg Fires Back At Mitt Romney Over Leaked Comments
09/20/2012
http://www.huffingtonpost.com/2012/09/19/whoopi-goldberg-rips-mitt_n_1898799.html [with embedded video report, and comments]
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'Key & Peele': Obama And Luther Take On Romney's 47 Percent Gaffe (EXCLUSIVE VIDEO)
09/20/2012
http://www.huffingtonpost.com/2012/09/20/key-peele-obama-luther-romney-47-percent-video_n_1899875.html [with embedded video, and comments]
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Why These Kids Get a Free Ride to College
September 13, 2012
http://www.nytimes.com/2012/09/16/magazine/kalamazoo-mich-the-city-that-pays-for-college.html [ http://www.nytimes.com/2012/09/16/magazine/kalamazoo-mich-the-city-that-pays-for-college.html?pagewanted=all ] [with comments]
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For-Profit College Claims Are 'Nonsense,' Obama Administration Says
09/10/2012
http://www.huffingtonpost.com/2012/09/10/for-profit-colleges-nonsense-obama-administration_n_1872305.html [with comments]
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U.S. to File W.T.O. Case Against China Over Cars
September 16, 2012
http://www.nytimes.com/2012/09/17/business/united-states-to-file-wto-case-against-china-over-cars.html
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Bad to the bone: A medical horror story
When medical device company Synthes decided to illegally test a bone cement on people, the results were disastrous. A disturbing tale of corporate crime and punishment.
September 18, 2012
http://features.blogs.fortune.cnn.com/2012/09/18/synthes-norian-criminal/?iid=HP_LN [with comments]
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Georgia Bar Mulligan's Faces Backlash From Civil Rights Group After Posting Racist Obama Sign
09/19/2012
http://www.huffingtonpost.com/2012/09/19/georgia-bar-mulligans-racist-sign_n_1897226.html [with comments] [other Mulligan's signs at http://imgur.com/a/RqJ1r ]
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Empty Chair 'Lynched' By Anti-Obama Texas Republican Bud Johnson
09/20/2012
http://www.huffingtonpost.com/2012/09/20/empty-chair-lynched_n_1899991.html [with comments]
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Gun Sales May Soar If Obama Wins Reelection: Report
Posted: 09/16/2012 10:17 am EDT Updated: 09/16/2012 1:38 pm EDT
President Obama and the Democrats won't be the only big winners if he's reelected in November.
Gun retailers and manufacturers are expecting a significant rise in gun sales [ http://online.wsj.com/article/SB10000872396390444433504577651393759726660.html ( http://online.wsj.com/article/SB10000872396390444433504577651393759726660.html?mod=WSJ_business_LeadStoryCollection )] if the president remains in the White House for a second term, The Wall Street Journal reports.
That's because some perceive the Obama administration to be a threat to gun rights, although the WSJ notes that [id.] "there haven't been any substantial changes to gun-control laws under Mr. Obama."
Gun sales increased sharply [ http://www.huffingtonpost.com/2012/09/12/gun-sales-up-obama_n_1879080.html ] following Obama's election in 2008. Between November 3 and 9 -- the week Obama was elected -- the FBI had a more than 48 percent increase in requests for background checks for gun purchases [ http://articles.cnn.com/2008-11-11/justice/obama.gun.sales_1_gun-shop-brady-campaign-gun-owner?_s=PM:CRIME ] than it received during the same period the previous year, CNN reported at the time.
"I think there's going to be an attack to some degree on the gun owners," Lloyd Clement, a gun owner from New Hampshire, told CNN in 2008 [id.].
But, according to the Associated Press, Obama "[h]as not pushed for gun control measures as president" and has signed legislation increasing the number of places [ http://www.huffingtonpost.com/huff-wires/20120910/us-where-they-stand/ ] -- namely, Amtrak trains and national parks -- where people can have concealed weapons.
The Brady Campaign to End Gun Violence actually gave the president an "F" grade in 2010 [ http://www.bradycampaign.org/media/press/view/1214/ ].
For his part, Mitt Romney, the Republican presidential nominee, says on his website that he [ http://www.mittromney.com/issues/gun-rights ] "strongly supports the right of all law-abiding Americans to exercise their constitutionally protected right to own firearms and to use them for lawful purposes, including hunting, recreational shooting, self-defense, and the protection of family and property."
This isn't the first time that the president has been linked to an increase in firearm sales. In February, Ammo.net, an online ammunition retailer, called President Obama the [ http://www.huffingtonpost.com/2012/02/21/obama-greatest-gun-salesman-in-america_n_1291381.html ] "greatest gun salesman in America."
"President Obama's perceived hostility towards gun owners has been one of the key factors behind the multi-year financial boom the firearms industry continues to enjoy," Ammo.net wrote on its website at the time [id.].
The WSJ has detailed figures from gun manufacturers and spoke to the NRA about why a second Obama term could be different than a first, so click over to the WSJ [ http://online.wsj.com/article/SB10000872396390444433504577651393759726660.html ( http://online.wsj.com/article/SB10000872396390444433504577651393759726660.html?mod=WSJ_business_LeadStoryCollection )] to read more.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/09/15/gun-sales-soar-obama-reelection_n_1886960.html [with comments]
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Rodeo Clown Makes Racist Michelle Obama 'National Geographic' Joke
09/18/2012
[...]
"Playboy is offering Ann Romney $250,000 to pose in the magazine and the White House is upset about it because National Geographic only offered Michelle Obama $50 to pose for them."
[...]
http://www.huffingtonpost.com/2012/09/17/michelle-obama-national-geographic-joke-rodeo-clown-_n_1890697.html [with comments]
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Posted by Jeremiah Goulka [ http://www.tomdispatch.com/authors/jeremiahgoulka/ ] at 5:53pm, September 9, 2012.
Follow TomDispatch on Twitter @TomDispatch.
Here, to my mind, was one strange aspect of the political convention season just past: since the great meltdown of 2008, brilliantly engineered by various giant financial institutions gone wild, we’ve seen a collapse in the wealth of middle-class African Americans [ http://money.cnn.com/2012/06/21/news/economy/wealth-gap-race/index.htm ] and Hispanics [ http://www.nytimes.com/2011/07/26/us/26hispanics.html ], and a significant drop in the wealth of middle-class whites. Only the rich have benefitted [ http://www.huffingtonpost.com/2012/07/19/households-wealth-american-1-percent_n_1687015.html ]. Though the draining of wealth from the middle and its fortification at the top have been a long time coming, the near collapse of the economy four years ago was a disaster whether you look at the rise in unemployment figures, poverty [ http://www.cbsnews.com/2100-201_162-20105376.html ], the use of food stamps [ http://www.sfgate.com/business/bloomberg/article/Food-Stamp-Use-Climbs-to-Record-Reviving-3838495.php ], gauges of upward mobility [ http://www.nytimes.com/2012/01/05/us/harder-for-americans-to-rise-from-lower-rungs.html ], or just about any other grim measure you’d care to employ.
All this suggests that the twenty-first century has largely been an American riches-to-rags story. It was this that gave both political conventions an almost fairy-tale-like quality, since the single life trajectory featured prominently at each of them by just about every speaker you’d want to cite was the opposite. Everybody, even Mitt Romney [ http://www.tampabay.com/news/politics/full-text-of-mitt-romneys-rnc-speech/1249012 ] (“My dad never made it through college and apprenticed as a lath and plaster carpenter...”), was obliged to offer a wrenching, heartwarming tale of rags (or relative rags) to riches (no relative about it). The theme, heavily emphasized at the Republican convention and an undercurrent at the Democratic one, wasn’t I feel your pain, but I celebrate my gain.
There are, in our world, so many journeys of every sort. It’s strange to see only one of them emphasized and celebrated, the one that, at the moment, is perhaps the least likely to speak to the actual experience of most Americans. With this in mind, TomDispatch today offers quite a different journey -- not economic, but political, and of a sort no one usually thinks to write about. It’s Jeremiah Goulka’s trip out of a particular kind of fantasy world and into what, in 2004, Karl Rove (then an unnamed source for journalist Ron Suskind) pejoratively called [ http://www.tomdispatch.com/blog/174791/tomgram%3A_mark_danner,_the_age_of_rhetoric/ ] “‘the reality-based community’ which he defined as people who 'believe that solutions emerge from your judicious study of discernible reality.'” Rove added -- that moment being the highpoint of Bush-era imperial self-celebration -- “We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors... and you, all of you, will be left to just study what we do.'”
Goulka’s is a tale of how one man left a party that, in recent years, has had, in Jonathan Schell’s pungent phrase [ http://www.thenation.com/article/169411/gops-will-fantasy ], “a will to fantasy,” and embarked on a hard-won trip into reality. There are so many more such stories in our country. Maybe someday some political convention will have the nerve to celebrate some of them. (To catch Timothy MacBain's latest Tomcast audio interview in which Goulka discusses his political journey, click here [ http://tomdispatch.blogspot.com/2012/09/confessions-of-former-republican.html ] or download it to your iPod here [ http://itunes.apple.com/us/podcast/tomcast-from-tomdispatch-com/id357095817 ].) Tom
Joining the Reality-Based Community
Or How I Learned to Stop Loving the Bombs and Start Worrying
By Jeremiah Goulka
I used to be a serious Republican, moderate and business-oriented, who planned for a public-service career in Republican politics. But I am a Republican no longer.
There’s an old joke we Republicans used to tell that goes something like this: “If you’re young and not a Democrat, you’re heartless. If you grow up and you’re not a Republican, you’re stupid.” These days, my old friends and associates no doubt consider me the butt of that joke. But I look on my “stupidity” somewhat differently. After all, my real education only began when I was 30 years old.
This is the story of how in New Orleans after Hurricane Katrina and later in Iraq, I discovered that what I believed to be the full spectrum of reality was just a small slice of it and how that discovery knocked down my Republican worldview.
I always imagined that I was full of heart, but it turned out that I was oblivious. Like so many Republicans, I had assumed that society’s “losers” had somehow earned their desserts. As I came to recognize that poverty is not earned or chosen or deserved, and that our use of force is far less precise than I had believed, I realized with a shock that I had effectively viewed whole swaths of the country and the world as second-class people.
No longer oblivious, I couldn’t remain in today’s Republican Party, not unless I embraced an individualism that was even more heartless than the one I had previously accepted. The more I learned about reality, the more I started to care about people as people, and my values shifted. Had I always known what I know today, it would have been clear that there hasn’t been a place for me in the Republican Party since the Free Soil days of Abe Lincoln.
Where I Came From
I grew up in a rich, white suburb north of Chicago populated by moderate, business-oriented Republicans. Once upon a time, we would have been called Rockefeller Republicans [ http://www.tnr.com/blog/timothy-noah/98542/rockys-ghost ]. Today we would be called liberal Republicans or slurred by the Right as “Republicans In Name Only” (RINOs).
We believed in competition and the free market, in bootstraps and personal responsibility, in equality of opportunity, not outcomes. We were financial conservatives who wanted less government. We believed in noblesse oblige, for we saw ourselves as part of a natural aristocracy, even if we hadn’t been born into it. We sided with management over labor and saw unions as a scourge. We hated racism and loved Dr. Martin Luther King, Jr., particularly his dream that his children would “live in a nation where they will not be judged by the color of their skin but by the content of their character.” We worried about the rise of the Religious Right and its social-conservative litmus tests. We were tough on crime, tough on national enemies. We believed in business, full stop.
I intended to run for office on just such a platform someday. In the meantime, I founded the Republican club at my high school, knocked on doors and collected signatures with my father, volunteered on campaigns, socialized at fundraisers, and interned for Senator John McCain and Congressman Denny Hastert when he was House Majority Whip Tom DeLay's chief deputy.
We went to mainstream colleges -- the more elite the better -- but lamented their domination by liberal professors, and I did my best to tune out their liberal views. I joined the Republican clubs and the Federalist Society, and I read the Wall Street Journal and the Economist rather the New York Times. George Will was a voice in the wilderness, Rush Limbaugh an occasional (sometimes guilty) pleasure.
Left Behind By the Party
In January 2001, I was one of thousands of Americans who braved the cold rain to attend and cheer George W. Bush’s inauguration. After eight years hating “Slick Willie,” it felt good to have a Republican back in the White House. But I knew that he wasn’t one of our guys. We had been McCain fans, and even if we liked the compassionate bit of Bush’s conservatism, we didn’t care for his religiosity or his social politics.
Bush won a lot of us over with his hawkish response to 9/11, but he lost me with the Iraq War. Weren’t we still busy in Afghanistan? I didn’t see the urgency.
By then, I was at the Justice Department, working in an office that handled litigation related to what was officially called the Global War on Terror (or GWOT). My office was tasked with opposing petitions for habeas corpus brought by Guantánamo detainees who claimed that they were being held indefinitely without charge. The government’s position struck me as an abdication of a core Republican value: protecting the “procedural” rights found in the Bill of Rights. Sure, habeas corpus had been waived in wartime before, but it seemed to me that waiving it here reduced us to the terrorists’ level. Besides, since acts of terrorism were crimes, why not prosecute them? I refused to work on those cases.
With the Abu Ghraib pictures [ http://www.antiwar.com/news/?articleid=8560 ], my disappointment turned to rage. The America I believed in didn’t torture people.
I couldn’t avoid GWOT work. I was forced to read reams of allegations of torture, sexual abuse, and cover-ups in our war zones to give the White House a heads-up in case any of made it into the news cycle.
I was so mad that I voted for Kerry out of spite.
How I Learned to Start Worrying
I might still have stuck it out as a frustrated liberal Republican, knowing that the wealthy business core of the party still pulled a few strings and people like Richard Lugar and Olympia Snowe remained in the Senate -- if only because the idea of voting for Democrats by choice made me feel uncomfortable. (It would have been so… gauche.) Then came Hurricane Katrina. In New Orleans, I learned that it wasn’t just the Bush administration that was flawed but my worldview itself.
I had fallen in love with New Orleans during a post-law-school year spent in Louisiana clerking for a federal judge, and the Bush administration’s callous (non-)response to the storm broke my heart. I wanted to help out, but I didn’t fly helicopters or know how to do anything useful in a disaster, so just I sat glued to the coverage and fumed -- until FEMA asked federal employees to volunteer to help. I jumped at the chance.
Soon, I was involved with a task force trying to rebuild (and reform) the city’s criminal justice system. Growing up hating racism, I was appalled but not very surprised to find overt racism and the obvious use of racist code words by officials in the Deep South.
Then something tiny happened that pried open my eyes to the less obvious forms of racism and the hurdles the poor face when they try to climb the economic ladder. It happened on an official visit to a school in a suburb of New Orleans that served kids who had gotten kicked out of every other school around. I was investigating what types of services were available to the young people who were showing up in juvenile hall and seemed to be headed toward the proverbial life of crime.
My tour guide mentioned that parents were required to participate in some school programs. One of these was a field trip to a sit-down restaurant.
This stopped me in my tracks. I thought: What kind of a lame field trip is that?
It turned out that none of the families had ever been to a sit-down restaurant before. The teachers had to instruct parents and students alike how to order off a menu, how to calculate the tip.
I was stunned.
Starting To See
That night, I told my roommates about the crazy thing I had heard that day. Apparently there were people out there who had never been to something as basic as a real restaurant. Who knew?
One of my roommates wasn’t surprised. He worked at a local bank branch that required two forms of ID to open an account. Lots of people came in who had only one or none at all.
I was flooded with questions: There are adults who have no ID? And no bank accounts? Who are these people? How do they vote? How do they live? Is there an entire off-the-grid alternate universe out there?
From then on, I started to notice a lot more reality. I noticed that the criminal justice system treats minorities differently in subtle as well as not-so-subtle ways, and that many of the people who were getting swept up by the system came from this underclass that I knew so little about. Lingering for months in lock-up for misdemeanors, getting pressed against the hood and frisked during routine traffic stops, being pulled over in white neighborhoods for “driving while black [ http://www.theatlantic.com/magazine/archive/2009/07/driving-while-black/307625/ ]”: these are things that never happen to people in my world. Not having experienced it, I had always assumed that government force was only used against guilty people. (Maybe that’s why we middle-class white people collectively freak out at TSA airport pat-downs.)
I dove into the research literature to try to figure out what was going on. It turned out that everything I was “discovering” had been hiding in plain sight and had been named: aversive racism, institutional racism, disparate impact and disparate treatment, structural poverty, neighborhood redlining, the “trial tax,” the “poverty tax,” and on and on. Having grown up obsessed with race (welfare and affirmative action were our bête noires), I wondered why I had never heard of any of these concepts.
Was it to protect our Republican version of “individual responsibility”? That notion is fundamental to the liberal Republican worldview. “Bootstrapping” and “equality of opportunity, not outcomes” make perfect sense if you assume, as I did, that people who hadn’t risen into my world simply hadn’t worked hard enough, or wanted it badly enough, or had simply failed. But I had assumed that bootstrapping required about as much as it took to get yourself promoted from junior varsity to varsity. It turns out that it’s more like pulling yourself up from tee-ball to the World Series. Sure, some people do it, but they’re the exceptions, the outliers, the Olympians.
The enormity of the advantages I had always enjoyed started to truly sink in. Everyone begins life thinking that his or her normal is the normal. For the first time, I found myself paying attention to broken eggs rather than making omelets. Up until then, I hadn’t really seen most Americans as living, breathing, thinking, feeling, hoping, loving, dreaming, hurting people. My values shifted -- from an individualistic celebration of success (that involved dividing the world into the morally deserving and the undeserving) to an interest in people as people.
How I Learned to Stop Loving the Bombs
In order to learn more -- and to secure my membership in what Karl Rove sneeringly called the “reality-based community [ http://www.dailykos.com/story/2012/05/23/1094237/-Scott-Walker-s-alternate-universe ]” -- I joined a social science research institute. There I was slowly disabused of layer after layer of myth and received wisdom, and it hurt. Perhaps nothing hurt more than to see just how far my patriotic, Republican conception of U.S. martial power -- what it’s for, how it’s used -- diverged from the reality of our wars.
Lots of Republicans grow up hawks. I certainly did. My sense of what it meant to be an American was linked to my belief that from 1776 to WWII, and even from the 1991 Gulf War to Kosovo and Afghanistan, the American military had been dedicated to birthing freedom and democracy in the world, while dispensing a tough and precise global justice.
To me, military service represented the perfect combination of public service, honor, heroism, glory, promotion, meaning, and coolness. As a child, I couldn’t get enough of the military: toys and models, movies and cartoons, fat books with technical pictures of manly fighter planes and ships and submarines. We went to air shows whenever we could, and with the advent of cable, I begged my parents to sign up so that the Discovery Channel could bring those shows right into our den. Just after we got it, the first Gulf War kicked off, and CNN provided my afterschool entertainment for weeks.
As I got older, I studied Civil War military history and memory. (I would eventually edit a book [ http://www.amazon.com/dp/0807828645 ] of letters by Union Gen. Joshua Lawrence Chamberlain.) I thought I knew a lot about war; even if Sherman was right that “war is hell,” it was frequently necessary, we did it well, and -- whatever those misinformed peaceniks said -- we made the world a better place.
But then I went to a war zone.
I was deployed to Baghdad as part of a team of RAND Corporation researchers to help the detainee operations command figure out several thorny policy issues. My task was to figure out why we were sort-of-protecting and sort-of-detaining an Iranian dissident group [ http://www.rand.org/pubs/monographs/MG871.html ] on Washington’s terrorist list.
It got ugly fast. Just after my first meal on base, there was a rumble of explosions, and an alarm started screaming INCOMING! INCOMING! INCOMING! Two people were killed and dozens injured, right outside the chow hall where I had been standing minutes earlier.
This was the “surge” period in 2007 when, I was told, insurgent attacks came less frequently than before, but the sounds of war seemed constant to me. The rat-tat-tat of small arms fire just across the “wire.” Controlled detonations of insurgent duds. Dual patrolling Blackhawks overhead. And every few mornings, a fresh rain of insurgent rockets and mortars.
Always alert, always nervous, I was only in Iraq for three and a half weeks, and never close to actual combat; and yet the experience gave me many of the symptoms of PTSD. It turns out that it doesn’t take much.
That made me wonder how the Iraqis took it. From overhead I saw that the once teeming city of Baghdad was now a desert of desolate neighborhoods and empty shopping streets, bomb craters in the middle of soccer fields and in the roofs of schools. Millions displaced [ http://www.tomdispatch.com/post/174892/michael_schwartz_the_great_iraqi-brain_drain ].
Our nation-building efforts reeked of post-Katrina organizational incompetence. People were assigned the wrong roles -- “Why am I building a radio station? This isn’t what I do. I blow things up…” -- and given no advance training or guidance. Outgoing leaders didn’t overlap with their successors, so what they had learned would be lost, leaving each wheel to be partially reinvented again. Precious few contracts went to Iraqis. It was driving people out of our military.
This incompetence had profound human costs. Of the 26,000 people we were detaining in Iraq, as many as two-thirds [ http://www.npr.org/templates/story/story.php?storyId=112051193 ] were innocent -- wrong place, wrong time -- or, poor and desperate, had worked with insurgent groups for cash, not out of an ideological commitment. Aware of this, the military wanted to release thousands of them, but they didn't know who was who; they only knew that being detained and interrogated made even the innocents dangerously angry. That anger trickled down to family, friends, neighbors, and acquaintances. It was about as good an in-kind donation as the U.S. could have made to insurgent recruitment -- aside from invading in the first place.
So much for surgical precision and winning hearts and minds. I had grown up believing that we were more careful in our use of force, that we only punished those who deserved punishment. But in just a few weeks in Iraq, it became apparent that what we were doing to the Iraqis, as well as to our own people, was inexcusable.
Today, I wonder if Mitt Romney drones on about not apologizing [ http://factcheck.org/2012/08/romneys-sorry-apology-tour-dig/ ] for America because he, like the former version of me, simply isn’t aware of the U.S. ever doing anything that might demand an apology. Then again, no one wants to feel like a bad person, and there's no need to apologize if you are oblivious to the harms done in your name -- calling the occasional ones you notice collateral damage (“stuff happens [ http://articles.cnn.com/2003-04-11/us/sprj.irq.pentagon_1_looting-defense-secretary-donald-rumsfeld-coalition-forces?_s=PM:US ]”) -- or if you believe that American force is always applied righteously in a world that is justly divided into winners and losers.
A Painful Transition
An old saw has it that no one profits from talking about politics or religion. I think I finally understand what it means. We see different realities, different worlds. If you and I take in different slices of reality, chances are that we aren’t talking about the same things. I think this explains much of modern American political dialogue.
My old Republican worldview was flawed because it was based upon a small and particularly rosy sliver of reality. To preserve that worldview, I had to believe that people had morally earned their “just” desserts, and I had to ignore those whining liberals who tried to point out that the world didn’t actually work that way. I think this shows why Republicans [ http://www.aei.org/article/politics-and-public-opinion/lets-just-say-it-the-republicans-are-the-problem/ ] put so much effort [ http://www.tennessean.com/article/20120905/COLUMNIST0150/309050062/Fact-checking-is-beneath-Romney-campaign ] into “creat[ing] our own reality [ http://www.dailykos.com/story/2012/05/23/1094237/-Scott-Walker-s-alternate-universe ],” into fostering distrust [ http://www.fair.org/index.php?page=4541 ] of liberals, experts, scientists, and academics, and why they won’t let a campaign “be dictated by fact-checkers [ http://www.nytimes.com/2012/09/01/us/politics/fact-checkers-howl-but-both-sides-cling-to-false-ads.html ]” (as a Romney pollster put it). It explains why study after study shows -- examples here [ http://www.alternet.org/story/154252/the_republican_brain%3A_why_even_educated_conservatives_deny_science_--_and_reality?page=entire&paging=off ], here [ http://articles.nydailynews.com/2011-11-22/news/30431182_1_fox-news-results-show-viewers ], and here [ http://www.huffingtonpost.com/2012/05/23/fox-news-less-informed-new-study_n_1538914.html ] -- that avid consumers of Republican-oriented media are more poorly informed than people who use other news sources or don’t bother to follow the news at all.
Waking up to a fuller spectrum of reality has proved long and painful. I had to question all my assumptions, unlearn so much of what I had learned. I came to understand why we Republicans thought people on the Left always seemed to be screeching angrily (because we refused to open our eyes to the damage we caused or blamed the victims) and why they never seemed to have any solutions to offer (because those weren’t mentioned in the media we read or watched).
My transition has significantly strained my relationships with family, friends, and former colleagues. It is deeply upsetting to walk on thin ice where there used to be solid, common ground. I wish they, too, would come to see a fuller spectrum of reality, but I know from experience how hard that can be when your worldview won’t let you.
No one wants to feel like a dupe. It is embarrassing to come out in public and admit that I was so miseducated when so much reality is out there in plain sight in neighborhoods I avoided, in journals I hadn’t heard of, in books by authors I had refused to read. (So I take courage from the people who have done so before me like Andrew Bacevich [ http://www.tomdispatch.com/archive/175290/ ].)
Many people see the wider spectrum of reality because they grew up on the receiving end. As a retired African-American general in the Marine Corps said to me after I told him my story, “No one has to explain institutional racism to a black man.”
Others do because they grew up in families that simply got it. I married a woman who grew up in such a family, for whom all of my hard-earned, painful “discoveries” are old news. Each time I pull another layer of wool off my eyes and feel another surge of anger, she gives me a predictable series of looks. The first one more or less says, “Duh, obviously.” The second is sympathetic, a recognition of the pain that comes with dismantling my flawed worldview. The third is concerned: “Do people actually think that?”
Yes, they do.
Jeremiah Goulka writes about American politics and culture. His most recent work has been published in the American Prospect [ http://prospect.org/authors/jeremiah-goulka ] and Salon [ http://www.salon.com/2012/03/28/guest_op_ed_mek_and_its_material_supporters_in_washington/ ]. He was formerly an analyst at the RAND Corporation, a recovery worker in New Orleans following Hurricane Katrina, and an attorney at the U.S. Department of Justice. He lives in Washington, D.C. You can follow him on Twitter @jeremiahgoulka or contact him at jeremiah@jeremiahgoulka.com. His website is jeremiahgoulka.com [ http://www.jeremiahgoulka.com/ ]. To listen to Timothy MacBain's latest Tomcast audio interview in which Goulka discusses his political journey, click here [ http://tomdispatch.blogspot.com/2012/09/confessions-of-former-republican.html ] or download it to your iPod here [ http://itunes.apple.com/us/podcast/tomcast-from-tomdispatch-com/id357095817 ].
Copyright 2012 Jeremiah Goulka (emphasis in original)
http://www.tomdispatch.com/post/175590/tomgram%3A_jeremiah_goulka%2C_confessions_of_a_former_republican/
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(linked in):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=4393656 (the post linked in the board intro) and preceding and following;
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=4391159 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=26760893 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=54101660 and preceding and following
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'Dead voters' exposed as phantom scandal
The Rachel Maddow Show
September 20, 2012
Veronica Degraffenreid, elections liaison for the North Carolina State Board of Elections, talks with Rachel Maddow about the burden on the election boards in her state to address the frivolous claims of dead voters on the rolls by a tea party group called the Voter Integrity Project.
© 2012 NBCNews.com
http://www.msnbc.msn.com/id/26315908/vp/49112935#49112935 [show links at http://maddowblog.msnbc.com/_news/2012/09/20/13998211-links-for-the-920-trms (with comments)]
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US Chamber launches ads in Maine, Montana, Ohio
September 18, 2012
http://www.stamfordadvocate.com/news/article/US-Chamber-launches-ads-in-Maine-Montana-Ohio-3872959.php [no comments yet]
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Goldman Sachs CEO: 'You Can't Austere Yourself Into A Higher GDP'
By ROB GILLIES
Posted: 09/19/2012 11:34 am EDT Updated: 09/19/2012 12:14 pm EDT
TORONTO (AP) — The chief executive of Goldman Sachs says he's against austerity measures in the short term as the U.S. fiscal cliff looms.
Lloyd Blankfein, also chairman of the investment bank, said Wednesday during a talk at the Canadian Club of Toronto that he's all for budget cutbacks in the long term but not in the short term.
Blankfein says "you can't austere yourself into a higher GDP" and says "it's not going to be very good if the medicine kills the patient."
The U.S. faces the prospect of a debilitating "fiscal cliff" in January when Bush-era tax cuts expire and across-the-board spending cuts are set to take effect at the same time. Economists warn that unless Congress acts, the one-two austerity punch would send the fragile economy back into recession.
Copyright 2012 The Associated Press
http://www.huffingtonpost.com/2012/09/19/goldman-sachs-austerity_n_1896973.html [with comments]
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Money-Laundering Inquiry Is Said to Aim at U.S. Banks
By JESSICA SILVER-GREENBERG and BEN PROTESS
Published: September 14, 2012
Federal and state authorities are investigating a handful of major American banks for failing to monitor cash transactions in and out of their branches, a lapse that may have enabled drug dealers and terrorists to launder tainted money, according to officials who spoke on the condition of anonymity.
These officials say they are beginning one of the most aggressive crackdowns on money-laundering in decades, intended to send a signal to the nation’s biggest banks that weak compliance is unacceptable.
Regulators, led by the Office of the Comptroller of the Currency [ http://topics.nytimes.com/top/reference/timestopics/organizations/c/comptroller_of_the_currency/index.html ], are close to taking action against JPMorgan Chase [ http://topics.nytimes.com/top/news/business/companies/morgan_j_p_chase_and_company/index.html ] for insufficient safeguards, the officials said. The agency is also scrutinizing several other Wall Street giants, including Bank of America [ http://topics.nytimes.com/top/news/business/companies/bank_of_america_corporation/index.html ].
The comptroller’s office could issue a cease-and-desist order to JPMorgan in coming months, an action that would force the bank to plug any gaps in oversight, according to several people knowledgeable about the matter. But the agency, which oversees the nation’s biggest banks, has not yet completed its case. JPMorgan is in the spotlight partly because federal authorities accused the bank last year of transferring money in violation of United States sanctions against Cuba and Iran.
In addition to the comptroller, prosecutors from the Justice Department and the Manhattan district attorney’s office are investigating several financial institutions in the United States, according to law enforcement officials.
The surge in investigations, compliance experts say, is coming now because authorities were previously inundated with problems stemming from the 2008 financial turmoil. “These issues may have been put on hold during the financial crisis, and now regulators can go back to focus on money-laundering and other compliance problems,” said Alma M. Angotti, a director at Navigant, a consulting firm that advises banks on complying with anti-money-laundering rules.
Until now, investigators have primarily focused on financial transactions at European banks, most recently Standard Chartered. The authorities accused several foreign banks of flouting American law by transferring billions of dollars on behalf of sanctioned nations.
As the investigation shifts to American shores, the Justice Department and the Manhattan district attorney’s office are moving beyond those violations to focus on money-laundering, in which criminals around the globe try to hide illicit funds in United States bank accounts. If these new cases follow the pattern of previous ones, prosecutors could follow up on regulatory actions with their own complaints.
Despite shortcomings, banks spend millions of dollars a year to guard against money-laundering. Compliance experts argue that violations are typically unintentional and often harmless because they aren’t always exploited by criminals.
Still, prosecutors and regulators have spotted gulfs in the way financial institutions oversee suspicious cash transfers, according to the federal and state officials. Under the Bank Secrecy Act, financial institutions like banks and check-cashers must report any cash transaction of more than $10,000 and bring any dubious activity to the attention of regulators. The federal law also requires banks to have complex controls in place to detect any criminal activity.
The comptroller’s office, JPMorgan and Bank of America declined to comment.
The investigations are gaining momentum as concern is growing in Washington that illicit money is coursing through the American financial system.
Back in July the Senate Permanent Subcommittee on Investigations accused HSBC of exposing “the U.S. financial system to money-laundering and terrorist financing risks” between 2001 and 2010. The British bank, which is also under investigation by federal and state prosecutors, is suspected of funneling cash for Saudi Arabian banks with ties to terrorists, according to federal authorities with direct knowledge of the investigations. HSBC officials have pointed out that they had strengthened controls to prevent money-laundering and replaced employees tainted by the allegations. Standard Chartered maintains that “99.9 percent” of the transactions under scrutiny complied with that rule and involved legitimate Iranian banks and corporations.
The case against HSBC alarmed banking regulators, who wondered if monitoring flaws could be pervasive in the banking industry. The comptroller’s office, which lawmakers accused of missing warning signs about HSBC’s weaknesses, has stepped up its scrutiny of American banks in recent months.
In April, the regulator issued a cease-and-desist order against Citigroup for gaps in its oversight of cash transactions. The order cited “internal control weaknesses including the incomplete identification of high-risk customers in multiple areas of the bank.” A person close to the bank attributed part of the problem to an accident when a computer was unplugged from anti-money-laundering systems.
Citi did not admit or deny wrongdoing, but said in April that it had already undertaken many of the reforms required.
Federal officials are now examining whether problems run even deeper and if criminals have managed to exploit these vulnerabilities. An example of how criminals can evade the system surfaced publicly in a federal drug case in a Texas court this summer. Mexican drug cartels hid proceeds from cocaine-trafficking in two accounts at Bank of America, according to law enforcement testimony in the case, and some of the money was used to buy racehorses.
Bank of America was not accused of wrongdoing, and the comptroller’s office has said privately it is unlikely to bring an action related to the case, according to a person with knowledge of the matter.
Authorities have not disclosed the scope of their inquiries at Bank of America and JPMorgan, or the period being examined.
Any regulatory action against JPMorgan would be another black eye for its chief executive, Jamie Dimon, and the bank, which was rattled this spring by a $5.8 billion trading loss. That misstep brought additional scrutiny of the bank’s risk controls and compliance efforts.
Last year, JPMorgan agreed to pay $88.3 million to the Treasury Department, which had accused the bank of thwarting United States sanctions by processing roughly $178.5 million for Cubans in 2005 and 2006. Even after bank officials spotted the questionable transactions in 2005, the Treasury said, they failed to report the problem to federal authorities. JPMorgan also made an improper $2.9 million loan in 2009 to a bank tied to Iran’s government-owned shipping line, according to the Treasury Department.
In a 2011 statement, Treasury officials called the bank’s actions “egregious,” adding that JPMorgan’s “managers and supervisors acted with knowledge of the conduct constituting the apparent violations and recklessly failed to exercise a minimal degree of caution or care.” At the time, JPMorgan said that it had not dealt directly with institutions in Cuba and Iran and that it had merely acted as a middleman.
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/15/business/money-laundering-inquiry-said-to-target-us-banks.html [ http://www.nytimes.com/2012/09/15/business/money-laundering-inquiry-said-to-target-us-banks.html?pagewanted=all ]
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A Lonely Redemption
ANGRY
Sandy Lewis, an ex-broker who once manipulated a stock price to make a point, at his Essex, N.Y., farm. “There’s no rational structure” on Wall Street, he says.
Fred R. Conrad/The New York Times
Mr. Lewis in the '80s.
Estate of Eddie Adams/Dolph Briscoe Center for American History, via The University of Texas at Austin
RANT
Sandy Lewis in 2008. Now 73, he said he saw what was coming, warning a Bear Stearns executive in 2006: "Bear is toast. Get out now!"
Nathaniel Brooks for The New York Times
FAMILY
Mr. Lewis's father, Cy, left, here in the 1950s, was managing partner at Bear Stearns. Mr. Lewis, right, after his sentencing in 1989.
Left, collection of S. B. Lewis; right, Bill Swersey for The New York Times
SUNNY, FOR NOW
Mr. Lewis and his wife, Barbara. He sees more dark economic times ahead.
Fred R. Conrad/The New York Times
By MICHAEL POWELL and DANNY HAKIM
Published: September 15, 2012
ESSEX, N.Y. — Striding barefoot through the fields of his farm in the Adirondacks, S. B. Lewis, known as Sandy, is talking without pause, gesturing this way and that in a soft summer rain.
That Mr. Lewis is in a rage is not unusual. A few days earlier, he had watched as the computerized stock trading of Knight Capital ran amok.
“If Knight blows, six firms follow, and the whole corrupt thing goes up,” he said. “Predator banks and hedge funds run the market for their pleasure — there’s no rational structure, nothing!”
He is just warming up. News reports have revealed a world he knows intimately. Goldman Sachs pays vast fines to avoid prosecution for mortgage securities fraud. Barclays manipulates interest rates. The Senate exposes HSBC as a racketeering enterprise, laundering money for drug cartels. Banks are laden with bad assets.
And Wall Street, Washington, the press corps, everyone sits and stares like so many dumb cows.
“The complicity on Wall Street is sickness!” Mr. Lewis says. He fixes you with his laser stare. “If you think the big firms are being honest” — his tone slides streetwise — “well, sweetheart, go think something else!”
The temptation is to dismiss Mr. Lewis, 73, as a crank, except he once ruled as an eccentric genius of arbitrage, with a preternatural feel for the tectonic movements of the markets. He has railed for decades about venalities now on daily display. Rude truth is his currency.
He knows Wall Street’s heights. He helped hire Michael R. Bloomberg, and he invested the money of two former Securities and Exchange Commission chairmen, making a fortune in the 1980s. And he knows its depths, since he pleaded guilty to stock manipulation in 1989, and was barred from the Street.
President Bill Clinton pardoned him, and a federal court judge later said Mr. Lewis acted out of pure reforming impulse.
But he remains in self-imposed exile.
Mr. Lewis wants to flip over Wall Street’s paving stones and search for worms. He relies on his singular strength: he discerns patterns where most see random data. He forecast the financial meltdown of 2008 that vaporized Bear Stearns, Merrill Lynch and Lehman Brothers. In 2006, he warned a Bear Stearns executive: “Bear is toast. Get out now!”
Lehman Brothers, he notes, certified it was in good health in June 2008 and issued stock, attracting investment, including from the New Jersey Teachers’ Pension and Annuity Fund. Secretly, Lehman was on an intravenous drip, poisoned by bad debt.
“My respect for their brains is too great to think Lehman’s top guys didn’t know they were conveying the cynical impression of health,” Mr. Lewis said.
He is no less suspicious of Goldman Sachs, which has alumni sprinkled across the upper reaches of government. In a tough spot, Goldman obtained extraordinary permission to make an overnight metamorphosis from investment bank to traditional bank holding company.
“Can I prove this was a wired deal? Absolutely not,” Mr. Lewis said. “Am I certain of it? Only 100 percent.”
As for the whirling, three-million-shares-per-second casino of Wall Street? He sees it as rigged. “I would not risk stocks under any circumstances,” he said, “because we don’t know when this thing is going to blow.”
Nothing about Mr. Lewis is easy. He delights in sending scabrous, insulting, free-associative mass e-mails to journalists, financiers and members of Congress. Show annoyance, and he doubles down. “You know what I do with tension?” he said. “I ratchet it up!”
Not surprisingly, some dismiss him as a nut. As striking are those who pay careful heed.
“Sandy’s right; government created a banking oligopoly with no accountability,” said Peter Solomon, a friend of Mr. Lewis’s who runs an investment banking firm.
Arthur Aeder, a retired accounting executive, was twice fired by Mr. Lewis. “Not many antagonize Goldman just for the hell of it,” Mr. Aeder said. “Most people think, ‘I have a family to feed.’ ”
Mr. Lewis is no less harsh on himself. After a visit, he handed us laptops containing every furious e-mail he had sent and received over 10 years.
“The Wall Street ethic broke decades ago,” he said by way of goodbye. “The stink is terrible.”
MR. LEWIS was born to Wall Street royalty — his father, Cy, was managing partner at Bear Stearns from 1949 to 1978. His parents were characters out of a Fitzgerald novel: his father was Jewish, debonair and domineering; he desired power, wealth and a beautiful woman — wife or mistress, that mattered little. His mother, Diana Bonnor, a member of the Protestant establishment, was beautiful, brilliant and no less formidable. She cared about social justice and status and was profoundly uninterested in mothering.
“I never remember her at breakfast,” recalled Roger Lewis, Mr. Lewis’s younger brother. “High tea? Oh, yes. Cocktails? Yes! But breakfast? Never.”
Cy doted on Sandy while Diana screamed at the boy, striking him with a hair brush when he refused to read, he said. A willful child, the boy stopped speaking for days and sometimes retreated onto a window ledge, sitting high above Park Avenue.
Another brother, John, renounced wealth, bought clothes in thrift shops and became a well-known legal-aid lawyer. Roger got off to a fine start on Wall Street until the Grateful Dead moved into his town house before Woodstock. He ingested gobs of LSD, was arrested on charges of selling drugs and served time. “I broke all the bonds of polite behavior,” Roger said. “Prison was pretty fascinating.”
When Sandy Lewis was 10, his parents shipped him off to Chicago and Bruno Bettelheim’s Orthogenic School, an institution for emotionally disturbed children. The first day, he held his breath until he nearly passed out. But he credits the school with saving his life; Bettelheim became a second father.
“He had Bruno’s traits: he was arrogant, controlling, all powerful — and generous,” recalled George Kaiser, a former teacher at the school.
Mr. Lewis saw in Wall Street a three-dimensional chess game played at great velocity. “Brain not brawn, and the smartest wins, yes!” he said.
He came to conceive of the Street as a drainage system, every pipe connected to another. Inside information sluiced from brokerages to white-shoe law firms to investment houses.
He glimpsed this world when he returned to New York in 1964. He said he sat in the front of his father’s Cadillac limousine, listening as Cy and friends talked angrily about a partner who had impersonated a reporter for The New York Times and got a half-hour drop on a Supreme Court decision. The firm profited by trading ahead of the news.
Mr. Lewis said he confronted his father that night. Dad, you must fire that man. Cy shook his head: He is too valuable, Son.
“That,” Mr. Lewis said recently, “was when I realized that the trouble on Wall Street was systemic.”
He refused to sit at the Four Seasons trolling for inside tips and paying for call girls for clients.
He was fired by all the best firms: Salomon Brothers, White Weld, Dean Witter and Merrill Lynch. At Merrill, the chief executive officer at the time, Donald Regan, pursued a system to buy and sell stocks without using the exchange floor. Mr. Lewis came to see this creation as unfair to the public.
So Mr. Lewis, in speeches and work with the S.E.C., fought to make all sales transparent on the floor of the exchange. “In one of my periodic periods of unemployment, I walked down the street thinking, ‘O.K., now I’m going to sabotage Don Regan,’ ” he said. “I have six kids and I’m going to be eating worms.”
He worked briefly for Ivan F. Boesky, until he realized the arbitrage specialist was trolling for inside information. Mr. Lewis quit and Mr. Boesky was later imprisoned.
To find a place that would not fire him, in 1980 Mr. Lewis established S. B. Lewis and Company. The company’s returns were meteoric — over 50 percent annual returns after expenses. Former employees recall a brilliant arbitrageur who could, without warning, go to “Sandy World,” a mental planetoid with a population of one.
Mr. Lewis brokered the merger between Sandy Weill’s Shearson and James Robinson’s American Express.
“I told Robinson: ‘Weill’s got the brains; you’ve got great class. It’s perfect,’ ” Mr. Lewis recalled.
He had found success, a lovely wife and five boys and a girl, with a home in Short Hills, N.J. Except his volcanic pit never stopped rumbling.
IN November 1988, Rudolph W. Giuliani, the United States attorney, indicted Mr. Lewis on 22 charges, accusing him of manipulating the stock of a large insurer. Mr. Giuliani was a Savonarola in the canyons of mammon, and Mr. Lewis would fall beneath his sword.
Rivals shared laughs at Sandy the Moralist laid low. The trouble, however, took root not in venality but in his mania to police his industry. He had watched as insiders reaped profits by driving down prices before shares went public.
He laid a trap. He asked another securities firm to buy stock in the insurer to shore up the price. I’ll cover your losses and describe the payments as “investment banking services,” he told them.
Mr. Lewis hoped to deliver a delicious kick to the teeth of the insiders. He made not a dime; his firm was not involved in the offering.
Years later, a federal judge, William C. Conner, described Mr. Lewis’s action as “an act of market vigilantism in which Lewis in no way personally profited.” He was infuriated, the judge wrote, “by what he viewed as the unethical actions of arbitrageurs.”
“He was the Lone Ranger,” Mr. Solomon recalled, “and Giuliani treated him like a member of the corrupt club.”
Prosecutors threatened Mr. Lewis with 15 years if he went to trial. His wife, Barbara, urged him to cut a deal. He argued prison would be interesting. His bravado reinforced her fears.
Silver haired and trim, she looks at Mr. Lewis, still consumed: “I thought he would die. That was weak of me.”
He pleaded guilty to three charges, and the judge handed him three years’ probation and a $250,000 fine.
TELL us about Bill Clinton. Mr. Lewis cannot resist a smile; even by his standards, this is a weird tale.
In the summer of 1994, Mr. Lewis — in exile — got a phone call at his Maine home from his friend, Douglas S. Eakeley. Mr. Eakeley was also an old friend of Mr. Clinton’s.
I want you to go to a fund-raiser in Portland, Mr. Eakeley said, and talk with the president about his womanizing.
Is this, Mr. Lewis asked, an intervention?
As it happens, Mr. Lewis possesses a sixth sense for psychic pain. He can pick the addicted, the sick and the depressed out of a crowd. His fractured childhood and pathological candor give him an expert hand with the singed.
He rounded up Barbara and a friend, Dr. Stanley Evans, and drove to see Mr. Clinton at the Holiday Inn by the Bay.
Mr. Lewis introduced himself. “You’re Doug’s friend?” the president said, according to Mr. Lewis and Dr. Evans. “Wait, we’ll talk.”
The Secret Service escorted Mr. Lewis, his wife and the doctor into the kitchen, and the president followed.
“Sir,” Mr. Lewis recalled saying as he stared at Mr. Clinton. “Doug thought maybe I should spend a weekend with you. It would be the two of us only.”
Mr. Lewis said the president was taken aback. “What is this about?”
“Sir,” Mr. Lewis said, “this is about your most personal business. You probably won’t be too happy with me by Monday morning, but I think we can avoid a train wreck.”
The president’s face flushed. Dr. Evans realized his friend was confronting the president about his extramarital affairs. “I thought Sandy had lost his mind,” he said.
The weekend session never took place. Revelations of the president’s sexual dalliance with Monica Lewinsky came years later.
Mr. Eakeley is circumspect. “Sandy has incredible intuition and intellect, and I knew he could help if the president could stand it,” he said. “Sandy may have alarmed the president, but I don’t think he repelled him.”
Mr. Clinton’s office declined to comment.
So it goes for Mr. Lewis on his walk, decades long, through the wilderness. One night, he said, he yanked a truck driver out of a fiery wreck on the New Jersey Turnpike, only to discover that the driver had Mafia connections. He said a mob representative told him he could call in his i.o.u. anytime; Mr. Lewis declined, politely.
He became the de facto impresario of the Clinton Correctional Facility, a prison near his farm in the Adirondacks, arranging frequent performances. The prison has housed a who’s who of the criminal and homicidal, from Lucky Luciano to the serial killer Joel Rifkin.
Recently, Mr. Lewis brought in Helena Baillie, 30, an accomplished violinist who is akin to his surrogate daughter, to perform Bach’s “Chaconne” in the Church of St. Dismas, the Good Thief. Many prisoners were in tears.
Mr. Eakeley said Mr. Lewis might be better for his exile. One of Mr. Lewis’s sons, John, is not convinced. He sees a father become “walking id.”
“Giuliani,” he said, “obliterated some part of him.”
In 2000, Mr. Eakeley and former Attorney General Nicholas deB. Katzenbach worked pro bono and submitted a pardon application to Mr. Clinton. In January 2001, just before leaving office, the president signed it.
Six years later, Judge Conner overturned the S.E.C. order that barred Mr. Lewis from Wall Street. “Federal regulations now outlaw the very practice his actions were meant to thwart,” the judge noted.
No cloud of mellow descended. Mr. Lewis trailed the S.E.C. counsel out of the courthouse. “I will rip your guts out,” he bellowed. “Letter to follow!”
A few days later, he looked at the mountains and experienced an epiphany: “I’ve gotten my redemption, and no one cares.”
THE phone rings and Mr. Lewis, in midsentence of a long disquisition, picks up the receiver. A North Country car dealer asks about the economy.
“Yes? Yes!” he listens for 30 seconds. “It’s going to get a lot worse. We’ll be burning scrap wood in our fireplaces before it’s over. Goodbye!”
Among residents of this rural land, Mr. Lewis has a reputation as a savant. He warned that the housing market was overheating years ago and sold several properties. He converted to cash before the 1987 stock crash.
Still, he could not complete the last act in his redemptive play. Financiers with White House connections solicited his advice during the 2008 crisis. But he was not invited into the circle of advisers who, to his mind, poorly served this young president.
As a Wall Street friend warned in an e-mail: “Sandy, you constantly kill yourself. You exhaust folks.”
Mr. Lewis considers his plight over a dinner with Barbara. His eyes are red, his voice a rasp. “I’m bright as hell, but I’m impossible to live with.” Barbara nods. “I am in a state of outrage all the time.” Barbara nods. “I bring this Orthogenic morality to everything on Wall Street, and it’s unsustainable.” Barbara, dry as gin, says, “No kidding.”
Mr. Lewis sees a banking system in unstable remission. Goldman answers to no one. China and Europe are wobbling, deflation is at the door, another crash is coming.
“The criminality is astounding,” he says. “You have a complete confusion between principal and principle.”
He is pacing again. “You don’t understand what it is to find someone on Wall Street who tells it like it is. You want to get real? Baby, let’s do the full root canal!”
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/16/nyregion/the-lonely-redemption-of-sandy-lewis-wall-street-provocateur.html [ http://www.nytimes.com/2012/09/16/nyregion/the-lonely-redemption-of-sandy-lewis-wall-street-provocateur.html?pagewanted=all ] [with comments]
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Apple, Google, Microsoft Avoid Taxes By Keeping Billions In Profits Offshore: Senate Report
The Google and Apple logos. Google, Apple and other companies have been accused of using complicated schemes to avoid paying taxes.
By Mark Gongloff
Posted: 09/20/2012 4:50 pm EDT Updated: 09/20/2012 7:33 pm EDT
American multinational corporations have something in common with Republican presidential nominee Mitt Romney, aside from being people, too [ http://www.huffingtonpost.com/2011/08/11/mitt-romney-heckled-iowa_n_924426.html ]: They both keep a lot of their income overseas [ http://www.huffingtonpost.com/2012/08/23/mitt-romney-bain-capital_n_1825140.html ] to cut their tax bills.
Companies such as Microsoft and Apple quietly dodge billions of dollars in taxes each year with potentially illegal schemes to move their profits offshore, according to a Senate subcommittee report [ http://www.hsgac.senate.gov/download/?id=7B9717AF-592F-48BE-815B-FD8D38A71663 ] released on Thursday.
"Some multinationals use our current tax system to engage in gimmicks to avoid paying taxes they owe," Sen. Carl Levin (D-Mich.), chairman of the Senate Permanent Subcommittee On Investigations, said in a hearing on Thursday. Levin described "a system used to shift billions of dollars of profit offshore and avoid billions in taxes."
Microsoft, Apple, Google and Hewlett-Packard were among the companies Levin singled out for criticism over their tax-avoidance practices, but they are not alone. Most multinational companies pay a tax rate well below the 35 percent rate [ http://www.huffingtonpost.com/2012/08/06/most-profitable-corporations-tax-rate_n_1746817.html ] mandated by law. Some avoid paying taxes altogether, or even get the government to pay them money [ http://www.huffingtonpost.com/2012/04/09/corporate-tax-rates_n_1413268.html ]. These loopholes cost the U.S. government billions of dollars in revenue that could be used to help close the budget deficit.
Using complex schemes to shift U.S. revenue overseas, Microsoft was able to avoid paying taxes on $21 billion in revenue between 2009 and 2011, amounting to about half its total U.S. sales, according to the subcommittee report. The company avoided paying $4.5 billion in taxes, or about $4 million per day, during that time, according to the report.
Using similar schemes, Levin said, Apple avoided taxes on $34.5 billion between 2009 and 2011, and Google has dodged taxes on $24 billion.
Hewlett-Packard, meanwhile, used a series of constantly revolving short-term loans between itself and its subsidiaries that have helped it avoid paying billions of dollars in taxes since at least 2008, according to Levin. Though he didn't say how much money H-P has avoided paying, Levin did say that H-P has kept billions of dollars in cash offshore -- more than $17 billion in 2010, for example -- that it would then "lend" to its U.S. parent company in a steady stream.
"HP has complied fully with all applicable provisions of the U.S. Internal Revenue Code and auditor Ernst & Young has consistently reviewed and approved the accuracy of HP’s financials," Hewlett-Packard responded in a statement emailed to the Huffington Post. "HP has always had an extremely productive and professional relationship with the IRS, who has permanent offices at two of our facilities and has been continually auditing HP since the filing of our 1962 tax return. They have never raised any concerns about these programs. We are disappointed to see what appears to be a politically motivated attack on one of America’s largest employers.”
Apple and Google did not immediately return requests for comment. A Microsoft representative was scheduled to address the subcommittee later on Thursday.
"In conducting our business at home and abroad, we abide by U.S. and foreign tax laws," Microsoft said in a statement emailed to the Huffington Post. "That is not to say that the rules cannot be improved -- to the contrary, we believe they can and should be. U.S. international tax rules are outdated and not competitive with the tax systems of our major trading partners."
The ranking Republican on the subcommittee, Tom Coburn (R-Okla.), defended the companies, saying they were following the letter of the law to avoid what he called onerous tax rates and an overly complex tax code.
"This is perfectly legal tax avoidance," Coburn said, arguing that the 35 percent corporate tax rate mandated by law is twice that of the average rate around the world. "They take advantage of every loophole we have created in the tax system. There is nothing heinous in that. Nothing illegal in that."
Levin responded that he wasn't sure, but it seemed "highly dubious" that Hewlett-Packard's revolving loan program, for example, "complies with current tax law." He also blamed the IRS for lax enforcement of that law.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/09/20/microsoft-taxes-profits-offshore_n_1901398.html [with comments]
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Deutsche Bank Allegedly Denied Kelley Voelker Pay, Promotions Because Of Maternity Leave
09/20/2012
http://www.huffingtonpost.com/2012/09/20/kelley-voelker-deutsche-bank-pregnancy-lawsuit_n_1900325.html [with comments]
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Mitt Romney: '95% Of Life Is Set Up For You If You're Born In This Country'
By Ryan Grim and Arthur Delaney
Posted: 09/20/2012 2:04 pm EDT
WASHINGTON -- In a less-examined portion of the recently revealed remarks Mitt Romney made during a private fundraiser in May, the presidential candidate told donors that "95 percent of life is set up for you if you're born in this country."
Romney told the donors there are people who say to him, "'Oh, you were born with a silver spoon,' you know, 'You never had to earn anything,' and so forth. And, and frankly, I was born with a silver spoon, which is the greatest gift you could have, which is to get born in America. I'll tell ya, there is -- 95 percent of life is set up for you if you're born in this country."
Romney delivered his comments in the context of a story he told about observing miserable labor conditions in a Chinese factory he had visited. (Watch the remarks above, clipped from the full video courtesy of Mother Jones [ http://www.motherjones.com/politics/2012/09/full-transcript-mitt-romney-secret-video ].)
If 95 percent of life is set up in this country, however, it certainly doesn't reach 95 percent of the people. The U.S. poverty rate has hovered at or near 15 percent for the past few years. Moreover, the same 15 percent of the population is not constantly poor. In fact, recent research suggests that only 15 percent of Americans will not experience some type of economic insecurity in their lives.
Fully 85 percent of Americans by age 60 will have experienced unemployment, sharply lower income, poverty or the use of welfare for at least a year of their adult lives, according to a 2012 longitudinal analysis by Mark R. Rank [ http://gwbweb.wustl.edu/FACULTY/FULLTIME/Pages/MarkRank.aspx ], the Herbert S. Hadley professor of social welfare at Washington University in St. Louis. For black people born in America, life is even less set up. Whites by age 60 were 43 percent less likely than blacks to have been poor and 42 percent more likely to have experienced affluence, according to Rank.
Rank examined social mobility in the U.S. and the likelihood that Americans would face economic fortune or misfortune. His research shows that a large percentage of Americans are poor at some point in their lives and that safety net programs don't eliminate the sting.
Romney's reference to the 95 percent "set up" sheds further light on his attitude toward the 47 percent of Americans he said don't take personal responsibility and care for themselves.
"There are 47 percent who are with [President Barack Obama], who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it," Romney said at the same fundraiser. "And so my job is not to worry about those people -- I'll never convince them that they should take personal responsibility and care for their lives."
If Romney believes, as he said, that "95 percent of life is set up for you if you're born in this country," then people who fail to become successful have only themselves to blame, which helps explain why Romney feels he'll never be able to redeem such people. He said in February that he is "not concerned about the very poor [ http://www.huffingtonpost.com/2012/02/02/mitt-romney_n_1250094.html ]" because the government's social programs take care of them.
But the safety net is porous.
By age 30, Rank's research shows, more than 35 percent of Americans have experienced at least one year of poverty or near-poverty, and 11.2 percent have been poor for three or more consecutive years -- not including any time spent poor as children. Nearly a quarter have experienced a 50 percent drop in household income. Yet only 27.3 percent have availed themselves of a safety net program, with just 16.8 percent using such a program for two years or more.
By age 60, more than 54 percent of Americans have been poor for at least a year, with 22.2 percent poor for at least three consecutive years. Nearly two-thirds have experienced a 50 percent drop in household income. Forty-four percent have used a safety net program of some kind, while 28.4 percent have used the safety net for two years or more.
On the brighter side, 76.8 percent of Americans by age 60 will have experienced at least one year earning $100,000 or more, either alone or combined with a spouse, with slightly more than half earning six figures for at least five years.
Despite the United States' famed economic mobility, many Europeans have it better. Among American families in which the father's earnings put him in the bottom 20 percent of incomes, 42.2 percent of the sons remain in the bottom fifth as adults, while only 7.9 percent make it to the top fifth. For sons raised in the top 20 percent, 36 percent stay in the top fifth as adults, while fewer than 10 percent sink to the bottom, according to Rank's research. By comparison, in Denmark, Finland, Norway, Sweden and the United Kingdom, a lower percentage of sons raised in poor families stay poor, and a greater percentage become rich.
Romney's life fits the pattern identified by Rank. He was born to a wealthy and powerful family. While his father was governor of Michigan, the son attended an elite boarding school. His father also paid for his undergraduate education and his graduate study at Harvard Business School. His father then bought the younger Romneys a beautiful house in Massachusetts, lending them $42,000 in the 1970s. "We stayed there seven years and sold it for $90,000, so we not only stayed for free, we made money. As I said, Mitt's very bright," Ann Romney noted in 1994 [ http://www.theatlanticwire.com/politics/2012/08/fact-checking-ann-and-mitt-romneys-hardknock-early-years/56321/ ].
The way Ann Romney has described her family's early years also helps to explain why Mitt Romney thinks it's easy to succeed in America. She apparently believes that all her husband's advantages don't count in judging his success -- he still made it on his own. "Mitt will be the first to tell you that he is the most fortunate man in the world. He had two loving parents who gave him strong values and taught him the value of work. He had the chance to get the education his father never had. But as his partner on this amazing journey, I can tell you Mitt Romney was not handed success," she told [ http://www.theatlanticwire.com/politics/2012/08/fact-checking-ann-and-mitt-romneys-hardknock-early-years/56321/ ] the Republican National Convention.
Mitt Romney believes the same thing. "By the way, both my dad and Ann's dad did quite well in their life, but when they came to the end of their lives and, and passed along inheritances to Ann and to me, we both decided to give it all away. So I had inherited nothing. Everything that Ann and I have, we earned the old-fashioned way, and that's by hard work," he told the gathering of wealthy donors in May.
The Romneys have described their early years as ones of real hardship, hardship they overcame through hard work -- and income from stocks.
"They were not easy years. You have to understand, I was raised in a lovely neighborhood, as was Mitt, and at [Brigham Young University], we moved into a $62-a-month basement apartment with a cement floor and lived there two years as students with no income ... Neither one of us had a job, because Mitt had enough of an investment from stock that we could sell off a little at a time," Ann Romney told the Boston Globe in 1994. "We had no income except the stock we were chipping away at. We were living on the edge, not entertaining."
Perhaps most interesting, however, is that in crediting 95 percent of an American's success to the country in which he or she was born, Mitt Romney was saying that something else was responsible for that success. In other words, if you've got a business, you didn't build that.
Copyright © 2012 TheHuffingtonPost.com, Inc. (emphasis in original)
http://www.huffingtonpost.com/2012/09/20/mitt-romney-95-percent-video_n_1900608.html [with comments]
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Rural Minorities Ponder The American Dream From The Bottom Rung Of The Economic Ladder
Cary, Miss., is a case study in persistent rural poverty. Government programs have lifted most, though not all, families out of shotgun shacks and into an assortment of small single-family homes, trailers or other low-income housing. But jobs remain scarce and government dependency is rampant.
By Tom Zeller Jr.
Posted: 09/20/2012 9:21 am EDT Updated: 09/20/2012 9:54 am EDT
About 22 miles northeast of Laredo, Texas, in an otherwise desolate and unincorporated stretch of Webb County, a roughed-out grid of unnamed dirt roads cuts through a maze of half-built cinderblock homes and dilapidated trailers.
Israel Reyna, a local attorney and advocate for the poor, has been driving me through this and similar communities, and we've stopped amid a haphazard cluster of residences a few hundred yards off the main highway. As I linger at the side of the road, a yellow school bus inches past, taking care not to savage its struts on a path rutted by poor drainage and cycles of fierce, mud-churning rain and baking prairie sun.
Reyna calls from the side of a tidy trailer where he is chatting with its owners, Elia De La O and her husband, Rogelio. The couple invites us inside.
Like most of the homes in this ostensibly planned subdivision, the De La Os' trailer, with its exposed beams and jerry-rigged wiring, is a work in progress. The family is blessed with electricity -- still a luxury for some impoverished communities along the Texas-Mexico border -- but they lack running water. For this residents queue up, sometimes for hours, at a county-run spigot a couple miles away, where they fill huge plastic drums of varying shapes and vintage with foul-smelling water that officials describe as potable. Elia and Rogelio, like most residents, won't drink it, preferring to visit a private, for-profit water vendor in Laredo, or nearby Rio Bravo, for jugs to slake their thirst.
The De La Os were not born here and they have not yet sought full citizenship, they say, in part because they've struggled with the language. But they've learned enough to find steady work as seasonal agricultural hands in states across the Midwest, and they have been permanent, legal and taxpaying residents of the United States for more than a dozen years. They take great care to say that they are proud of their home, and that they are grateful to have gained a foothold on the American dream. But Elia, 64, also shares that, growing up in Mexico, she once imagined that dream rather differently.
"I never thought there were people living like this, like we're living here, in the United States," she says. "We always thought, 'This is the United States -- it's the United States, it's the best.' We didn't think when we came here that we would live like kings, but we didn't imagine there would be places like this."
From the borderlands of Texas and the cotton fields of the Mississippi Delta to the reservations of the Great Plains, there are many places like this, and they have remained as such, generation after generation -- all of them easy to find. While much has improved since this sort of grinding poverty was first identified as a national disgrace more than 40 years ago, advocates for the rural poor say the pace of change has been glacial. They also say that persistent, multigenerational poverty continues to plague millions of people living in rural areas, particularly blacks, Hispanics and Native Americans who languish in small towns and isolated outposts where dollars are scarce, development is difficult and discrimination is historically rampant.
In a nation struggling with record levels of poverty [ http://www.washingtonpost.com/business/census-bureau-us-poverty-rate-stood-at-15-percent-in-2011-record-numbers-of-poor-continue/2012/09/12/aab19912-fce5-11e1-98c6-ec0a0a93f8eb_story.html ]; where the gap between rich and poor is is wider than ever [ http://www.latimes.com/business/la-fi-census-poverty-rate-20120913,0,4738274.story ]; where upward economic mobility is increasingly rare [ http://www.tnr.com/article/politics/magazine/100516/inequality-mobility-economy-america-recession-divergence ]; and where a breathtaking 46 million people [ http://www.marketwatch.com/story/household-income-falls-as-46-million-in-poverty-2012-09-12 ] are now living below the poverty line, these destitute, rural, largely minority communities represent the poorest of America's poor -- the very bottom of an economic ladder that fewer and fewer have the capacity to climb.
Viewed against the nation's larger urban and suburban populations, their numbers are small. Only about 51 million Americans -- less than 20 percent of the population -- are considered nominally rural anymore, and minorities make up a fraction of that: about 10 million, all told. But their share of the poverty burden is, by any calculus, wildly disproportionate, making them emblematic of some of the country's more unsettling and persistent truths.
Several anti-poverty advocates summed up the situation in a word: "embarrassing."
In May, the Census Bureau reported [ http://www.census.gov/newsroom/releases/archives/population/cb12-90.html ] that the number of minority births in the U.S., for the very first time, had exceeded the number of white births.
For whatever else that statistic might mean, it suggests that, as a new generation of black and brown Americans comes of age in these forgotten communities, they will increasingly find themselves at the center of the philosophical tug-of-war now paralyzing the nation and animating a presidential election. It is a debate that turns on fundamental questions of wealth, advantage and the role of government in mitigating, even minimally, the influence of discrimination and dumb luck -- of where and to whom we are born -- on the odds of acquiring an equitable piece of the American dream.
Just this week, the ideological poles were brought into stark relief when news broke [ http://www.huffingtonpost.com/2012/09/17/mitt-romney-video_n_1829455.html ] of a grainy video showing Republican presidential contender Mitt Romney telling a group of wealthy donors, "If the Hispanic voting bloc becomes as committed to the Democrats as the African-American voting bloc has in the past, why, we're in trouble as a party and, I think, as a nation."
The video also recorded the candidate disparaging "47 percent" of the nation -- all presumably supporters of President Barack Obama, the candidate quipped -- as under-taxed, dependent on government programs, and unwilling to "take responsibility for their lives."
Critics, of course, quickly pointed out that many of the households Romney dismissed out-of-hand are, in fact, among the nation's poorest [ http://www.taxpolicycenter.org/taxtopics/federal-taxes-households.cfm ], and whose subsistence income is mercifully exempt from federal income tax. Others noted that Romney's own father benefitted from welfare and other government programs [ http://www.washingtonpost.com/blogs/election-2012/wp/2012/09/18/mitt-romneys-fundraising-comments-would-mom-approve/ ] early in life.
In broader terms, however, concern and finger-pointing over the persistence of grinding poverty in the U.S. is not a purely partisan affair. Many activists on the ground in the most distressed communities I visited for this article also criticized the current leadership in Washington for cutting housing and loan programs that are vital to the rural poor; for favoring cities over small towns; or for lavishing subsidies on corporate agriculture while ignoring millions of struggling rural residents who have no connection to farming.
Other stakeholders gave the Obama administration high marks for taking what they viewed as an unprecedented interest in rural development generally, and for targeting persistently poor, minority communities specifically, even as budgets have shrunk.
"We keep thinking that maybe if we tell this story one more time, it will provoke enough shame in people and finally spur real action," says Israel Reyna.
(Photo: Tom Zeller Jr.)
The reality is surely some blend of all these observations, but what remains clear is that allowing these pockets of deep poverty to persist, generation after generation, is in no one's interest.
"Rural Americans are often overlooked and under-appreciated," said Tom Vilsack, who heads up the U.S. Department of Agriculture, the primary federal agency charged with overseeing rural development.
In a phone call, Vilsack underscored hundreds of millions of dollars of Obama-era programs, grants and loans aimed at revitalizing rural communities and reaching disenfranchised populations that have struggled for decades. "I strongly believe that through the sustained commitment of this administration," he said, "the best days for rural America are yet to come."
In the meantime, Elia De La O says that despite the faint scent of rotten eggs left on her washed clothes, and a vaguely slimy feeling left on the skin after bathing, the water she and Rogelio cull from the county spigot serves most of their household needs. "We are content," she says.
Reyna, who works with Texas RioGrande Legal Aid [ http://www.trla.org/ ], which represents low-income and seasonal workers in nearly 70 counties of Southwest Texas, isn't convinced.
"Entire generations have passed through, from birth to adulthood, living without water or without electricity, without plumbing," he says. "It doesn't have to be this way, and that's part of the tragedy of all this. We keep thinking that maybe if we tell this story one more time, it will provoke enough shame in people and finally spur real action.
"Unfortunately, it hasn't happened that way so far," he adds. "Progress moves at a snail's pace."
DISPROPORTIONATE POVERTY
The story of miserably poor Latinos, African and Native Americans eking out hardscrabble lives beyond the bustle of the city is hardly new. Such places were the impetus, more than 40 years ago, for President Lyndon B. Johnson's formation of a National Advisory Commission on Rural Poverty and that body's subsequent report, titled "The People Left Behind." In 1967, places like this drew Robert F. Kennedy, then a junior senator from New York, to the Mississippi Delta, where he encountered, to his and subsequently the country's dismay, a harsh landscape of plank-wood outhouses, dirt floors and affectless children with bellies distended from hunger.
In the 1980s, Richard Woodbury, writing for Time Magazine, exposed the struggle "to bring drinking water to thousands of impoverished families" in ramshackle communities along the Mexican border. In 1990, reporters from the Associated Press noted that the infant mortality rate in the Delta ranked below that in some Third World nations. Last October, ABC's Diane Sawyer described the "unthinkable conditions" on the Pine Ridge Indian reservation of South Dakota.
In many of these places, basic amenities like plumbing and electricity have improved standards of living, even if jobs remain scarce and dependence on government assistance remains widespread. In some outposts, however, households lacking even these most basic of basics can still be found.
The Economic Research Service, the data-gathering arm of USDA, notes that while the gap in poverty rates between the nation's urban areas and its rural outposts has been shrinking over time, families living away from the bustle of city and suburban life have had a higher rate of poverty every year since data on the subject was first officially recorded in the 1960s.
The ERS lists the current overall poverty rate in rural America at 16.6 percent, the highest rate since 1993. The poverty rate among children in rural areas is now roughly 27 percent -- an increase of 6 percentage points over 2000 -- according to an analysis prepared by the Southern Rural Development Center at Mississippi State University.
These statistics often conjure visions of Appalachia, and not without reason. More than 90 counties in the Southern Highlands of the Virginias, eastern Kentucky and parts of Missouri and Oklahoma -- all predominantly white -- are considered "high poverty," according to federal data.
No matter where poverty is measured, however -- whether in urban, suburban or rural areas -- minorities always fare worse. According to a 2011 analysis by the National Poverty Center [ http://npc.umich.edu/publications/u/2011-16%20NPC%20Working%20Paper.pdf ], a nonpartisan research center at the University of Michigan, roughly 26 million of the nation's poor are racial or ethnic minorities.
Put another way: Of the 46 million U.S. residents who now live below the poverty line, nearly 60 percent are minorities. This is despite the fact that all racial and ethnic minorities combined comprise just 37 percent of the U.S. population [ http://www.census.gov/newsroom/releases/archives/population/cb12-90.html ].
In rural areas, the disparities are particularly pronounced. Of the more than 400 rural counties with poverty rates exceeding 20 percent, which are considered "high poverty" counties, roughly three-fourths were "linked directly to the economic circumstances of racial and ethnic minorities," according to the NPC report.
About 47 percent of those counties are largely African-American; 17 percent are mostly Hispanic; and about 9 percent are Native American. These include places like predominantly black Isaquenna County in Mississippi's Delta region, where 60 percent of children were living in poverty in 2010, or Todd County, S.D., with its large Native American population, where the child-poverty figure is 59 percent.
"Despite advances made through the civil rights movement, labor struggles and increased self-determination, the experiences and conditions of rural minorities are often overlooked given their relatively small populations," noted the Housing Assistance Council, a Washington-based nonprofit that tracks rural poverty issues, in a recent report [ http://hac.nonprofitsoapbox.com/storage/research_notes/rrn-race-and-ethnicity-web.pdf ]. "Moreover, it is often assumed that the conditions that led to these upheavals have been addressed."
These numbers suggest, of course, that they have not.
Disparities in standards of living, wherever they occur, are often dismissed as the result of poor personal choices or cultural decay. A 2012 survey commissioned by the Salvation Army [ http://www.salvationarmy.com/usn/2012povertyreport.pdf ], for example, suggested that 27 percent of Americans believe people are poor because they are lazy. Nearly 30 percent of respondents said poor people have lower moral values, while 43 percent believed poor people could find a job if they really wanted one. Fully half of those surveyed said a good work ethic was all that was needed to escape poverty.
Epidemics of drug and alcohol abuse, low educational attainment, teen pregnancies and long-term, multigenerational dependence on government subsidies in these rural outposts, as in areas of urban decay, can lend a superficial legitimacy to such assessments.
But they rankle experts like Meizhou Lui, the former director of the Closing the Racial Wealth Gap Initiative [ http://www.insightcced.org/index.php?page=Closing-RWG ] at the Insight Center for Community Economic Development, a California-based nonprofit, and the lead author of the 2006 book, "The Color of Wealth: The Story Behind the U.S. Racial Wealth Divide [ http://www.dollarsandsense.org/bookstore/color.html ]."
For starters, Lui points out that numerous studies have shown that economic collapse or struggle in any American enclave -- urban, rural, white, black, Latino -- is often attended by higher rates of depression, drink, drug abuse and other social ills. She also notes that a more humane social safety net has been documented to prevent similar outcomes in European communities where factories have closed up or job opportunities have otherwise shriveled.
High unemployment in rural areas, Lui says, also makes competition for whatever jobs might be available -- meatpacking, poultry processing, light factory work -- incredibly fierce, ensuring that wages remain at or near the minimum. Even when combined with government assistance, such wages are typically unable to lift families out of poverty.
"People can be working full-time and still be living under the poverty line," Lui said.
"You have all these people in these rural areas that don't have great schools, they don't have great amounts of skill, and they don't have jobs. Everybody is saying, 'You need to have a college degree,' but there aren't even enough jobs that require a college degree to go around. As it is, today white middle-class kids are graduating from college and not finding jobs," Lui said. "So what's a poor person from a rural area, especially given the cost of college these days, supposed to do?
"The opportunities just are not there, and I think that even conservatives have recognized that we have systemic unemployment problems," Lui added. "They think the solution is to give tax breaks to the wealthy, but if a few wealthy people are not paying as much taxes, are they then going to create employment programs in rural Mississippi for African Americans?
"I don't think so," Lui said, "unless you make them do it."
THE POVERTY TRAP
In 1992, the late Willie Morris, a chronicler of the American South and then a writer-in-residence at the University of Mississippi, described the experience of escorting visitors to Yazoo City and other parts of his native flatlands that extend eastward from the Mississippi River:
Over the years I have taken countless outlanders through the Delta: peregrinating Yankee scholars, writers, journalists, civil rights activists, and more than a few of the merely idle and professionally despondent curious. Their reaction has often been a singular blend of bafflement, titillation, anger, and, not the least of it, fear; yet to the person they are struck nearly dumb by its brooding quintessential sadness.
Morris' words were written when Lakeisha Davis, another Delta native, was just 2 years old. Today, the 22-year-old Davis sits on a concrete slab skirting the Anguilla Family Houses, a low-rise, low-income housing project in Mississippi's Sharkey County, one of the poorest counties in one of the poorest regions of one of the poorest states in the nation. Her daughter, 2-year-old Josmin, plays in a nearby patch of dying grass, unaware that she is likely the latest installment in what seems a forever unfolding tale of brooding, quintessential sadness.
Davis and I take a seat on a pair of orange cafeteria chairs, which have been reclaimed as porch furniture, and I ask her to tell me what life is like in this rural outpost.
"There just ain't nothing here," she says. "That's it."
Davis' response is an abridged version of a story told to me by just about every resident, academic or politician I met in a week of touring the area. These plainspoken observations are typically delivered without affect or complaint: The Delta, one resident told me, never changes.
I arrived in Jackson, the state capital, just as the wet, leaden weight of summer was settling on the South. I headed westward across the eternal flatness of the Yazoo, aka the Delta basin, a wide shelf of cotton, soybeans, rice and catfish farming that stretches like a black cherry leaf [ http://is.gd/tUOVVc ] -- wide in the middle and pinched at both ends -- from Vicksburg in the south to Southaven in the north, along the border with Tennessee.
This roughly 15-county floodplain, bounded by the Bluff Hills [ http://mshistorynow.mdah.state.ms.us/images/604.jpg ] to the east, was essentially a swamp in the antebellum years, prompting many locals to remind visitors that there never really was slavery in the Delta. Rather, levees and other post-war infrastructure created an expanse of fertile cotton land for white farmers, and free blacks flocked to the area as sharecroppers. Its population is now predominantly African-American.
But just as the untameable Mississippi still rises here, often leaving many of the poorest residents vulnerable to devastating floods, so too does the residue of racism and discrimination linger in the Delta. In the tiny town of Cary, I visited the town hall, a two-room, one-story building adjacent to an empty field where a lumber mill once stood. Inside, the walls of the building are lined with carefully framed memorabilia reaching back decades: black-and-white yearbook photos and sepia snapshots of local sports teams, high school dances, returning war heroes.
i.huffpost.com/gen/757942/thumbs/o-RURAL-POVERTY-CARY-MISSISSIPPI-570.jpg?4
The town hall in Cary, Miss., features a variety of memorabilia, but few black faces.
Virtually every smiling face in every photograph is white.
Cary's population, on the other hand, is two-thirds black.
I asked Leslie Brock, the deputy clerk and the only occupant of the building, why that's the case. "Well, you've got to think about, at that time, things were segregated," said Brock, who grew up in the area around Cary and is black. I suggested to her that there must be at least a few contemporaneous photographs of African-American families from the area -- black schools, black proms?
"You would think so," she replied.
Brock, who left the Delta for Los Angeles at 18 before returning in her early 40s two years ago, grew up in the sort of sparse "shotgun house" that predominated among black families here in the 1960s and '70s: narrow shacks, typically without water or plumbing, that skirted the cotton fields where many blacks found work. These were the places where Robert Kennedy often encountered hungry, barefoot children [ http://bobby-kennedy.com/photos/campaign/bob10.jpg ] during his 1968 anti-poverty tour of the Delta.
Government programs have lifted most families out of shotgun shacks and into an assortment of small single-family homes, trailers or government-subsidized housing of varying quality. Most have the basics: electricity, running water, plumbing.
But the ability to flip on a light switch, flush an indoor toilet, or draw a glass of water from a kitchen tap has not created new opportunities for poor black Delta residents to thrive, and many continue to languish in a limbo of dependence and the sort of social strife that comes with long-term disinvestment: drug and alcohol abuse, teen pregnancy, truancy, poor health and crime.
Asked why these trends continue generation after generation, Brock said part of it is the mentality of the people who live here. "They've heard for so long that they can't have anything, that they cannot be anything, that they cannot do anything, that they start to believe it," she said. "People are a product of their environment."
Paulette Meikle [ http://www.deltastate.edu/pages/3936.asp ], the director of the Center for Community and Economic Development at Delta State University [ http://www.deltastate.edu/pages/426.asp ] in Cleveland, Miss., 40 miles north of Greenville, expounds on this notion. "When you drive through parts of the Delta, you can see, it's like, 'Wow, this is a wealthy place,'" she said. "There is wealth, because we have the power elite, the ones who own the means of production, who control the land. That economy, which grew out of the plantation economy, still survives. You have wealth here that emerged out of that structure."
But that wealth was not shared by -- and, as researchers have frequently shown, was actively withheld from -- black workers and sharecroppers. As the 20th century wore on and mechanization eliminated work opportunities for low-skilled blacks, nothing emerged to take its place.
"The intersection between race and social class, it's so locked-in," Meikle explains. "So when you look at the data: if you're born in poverty and you're a minority group member, a large percentage of those who are born into that kind of situation will remain that way. An intergenerational exchange of poverty occurs."
Such has been the fate of Lakeisha Davis and her daughter. There once was a peanut factory in Anguilla, she tells me offhandedly, but that's long gone. Today, the town has a mini-mart and little else.
Davis managed to complete high school, though now she mostly gets by on food stamps and other government assistance, much as her mother did before her, and her grandmother before that. She enlisted in job training in Greenville, about 40 miles northwest of Anguilla, but she has no car, and the difficulty in finding a ride to and from the city, along with the dearth of even low-paying opportunities within a wide radius of her home, made the effort Sisyphean.
By her calculus -- and that of many in her station -- it's safer to maintain her benefits than to suffer the subsidy cuts that come with a minimum-wage income and long-distance travel to and from home. "If you move a little forward, they push you right back," Davis said. "It doesn't make sense."
That sentiment is echoed by Marion Tyler, a licensed social worker with the Cary Christian Center [ http://www.carychristiancenter.org/ ], a nonprofit organization that has helped Davis navigate the vagaries of her young pregnancy. Tyler, once a teen mother herself, said she benefited from the benevolence of an employer who was willing to support her as she earned a bachelor's and then master's degree. Without that support -- exceedingly rare, she said -- she would likely still be spinning her wheels on subsidies.
Far more often, the young and poor wash up at low-paying service or fast-food jobs. Tyler recalls flipping burgers at McDonald's, which caused her government benefits -- $96 in cash assistance at the time, along with $118 in food stamps for her and her son each month -- to plummet.
"So I quit my job," she says. "Any step up is a step back, so why step up? That's the whole trap with everybody out here, and I understand it."
TELL THEM TO COME HELP US
All of this, of course, raises the question: Why not just leave?
Charles Fluharty [ http://truman.missouri.edu/People/Charles-WFluharty ], the founding director of the Rural Policy Research Institute [ http://www.rupri.org/ ] and a professor at the Harry S. Truman School of Public Affairs at the University of Missouri, suggests that's a facile question.
"That is like saying to someone in a five-block area of the Bronx, 'You should leave here now.' And they look at you and say, 'What are you talking about? This is my neighborhood. I'm the fourth generation on this block, you've got to be kidding me.'"
In economic terms, Fluharty said, it's a given that some people will always take less money to stay where they’re comfortable. In many of the most impoverished, minority-dominated rural communities, the proclivity to stay put despite poor prospects can be particularly strong.
Combine those who won't leave with those who, for a variety of reasons, can't -- lack of means or connections elsewhere, or family obligations -- and the result is substantial pockets of gnawing economic need.
That raises another key quandary, Fluharty said. "There's an ongoing argument in the social welfare literature about whether you invest in people or in places. There's a pretty strong argument for both sides."
On one hand, he explained, if you invest in people, they will move away to improve their social mobility. But if you only invest in people, it will ignore the problems of place that attend those who stay behind. "If you don't invest in the places where those people stay," Fluharty said, "you are giving them an uphill battle that's almost impossible."
A recent analysis [ http://www.newgeography.com/content/002223-the-new-geography-population-loss-and-gain ] by Richard Morrill, a professor of geography and environmental studies at the University of Washington, showed the Mississippi Delta to have experienced some of the highest population losses in the country between 2000 and 2010. Several counties in the Delta have shed 15 percent to 20 percent of their populations over that period, according to census data.
Empty storefronts in Cary, Miss.
Sharkey County, where Davis and her daughter idly watch the hot sun rise and fall each day, lost more than a quarter of its population. These are areas "where significant development investment simply did not occur," Morrill writes. "Race matters."
Karl Stauber [ http://www.drfonline.org/staff/staff09.php ], president and CEO of the Danville Regional Foundation [ http://www.drfonline.org/ ], a Virginia-based nonprofit, and a former undersecretary for research, education and economics with the USDA, explained the dynamic. "The two challenges I have to the 'just move' argument are that the people most likely to move are the people that are the most skilled," he said. "So then we're back to the rural ghetto.
"We spent a lot of the 1960s to the 1980s trying to overcome the concentration of poverty in places like Appalachia, the Delta," Stauber added. "If we had been a little more sophisticated, we would have included Indian reservations, we would have included the colonias, which were already existing along the U.S.-Mexico border. We would have produced a more nuanced picture.
"What we know will happen, because it's already happening, is that people that are the most skilled and the people who are often the best educated are the folks that are most likely to move and successfully relocate. And then we end up with this poverty concentration, and we go back to the 'Two Americas' problem."
A measure of this sort of economic divide can be found in any number of statistics. Mississippi, for example, now ranks first in children born underweight; it is among the five states spending the least amount of money per pupil; it ranks first for obesity, second for diabetes, and has the highest teen pregnancy rate in the country. In infant mortality -- often correlated with the worst sorts of endemic poverty -- Mississippi ranks second, just behind the nation's capital.
The infant mortality rate for blacks in Mississippi, roughly 14 deaths per 1,000 live births [ http://msdh.ms.gov/msdhsite/_static/resources/4619.pdf ], is more than double the rate for whites, more than double the national average, and considerably higher than the rates in Botswana and Sri Lanka.
Cuts in government benefits after the wholesale reformation of the welfare system in 1996 have been blamed for a worsening in many of these metrics, although small social service agencies, like the Cary Christian Center 13 miles south of Anguilla, have made in-roads in turning them around. The Center's prenatal program, funded through donations, involves intensive outreach and home visits by social workers like Tyler, and has been credited with keeping infant mortality rates markedly lower in Sharkey and Issaquenna Counties, compared to rates in other parts of the Delta.
Yet endeavors like these, along with the slow drip of food stamps and cash assistance, stakeholders suggest, are mere bandages on a much more systemic problem. "We need the powers that be, the policymakers and the landowners -- they need to create opportunities for people to benefit from living in a rural community," says Dorsey Johnson, a co-director of the Cary Christian Center. "We have to create something, you know, that will have some longevity and will help to sustain our community."
Not doing so can be expensive. In a recent essay published in The Clarion Ledger, Charlie Mitchell, a syndicated columnist and assistant dean of the Meek School of Journalism and New Media at the University of Mississippi, lambasted state and federal officials for watching the Delta languish and letting taxpayers foot the bill:
Take Humphreys County. There, the cost of direct government aid, in all forms, per person, was $11,385.31 in 2010. The same cost in DeSoto County, which was Mississippi's fastest growing in the last census, was $4,717.20. So, clearly, given that the expense to the taxpaying public can be 2.5 times greater per person where poverty rules than where there's an economic pulse, there's an economic imperative (on top of the social imperative) to seek a turnaround for the region as aggressively as possible.
Mitchell decried the fact that major assembly plants for brands like Toyota and Nissan have found their way to other parts of the state in recent years, and he had special opprobrium for Democratic Rep. Bennie Thompson, the powerful member of Congress who has represented the Delta counties for more than 20 years. "He practices politics the old-school way," Mitchell wrote [ http://djournal.com/view/full_story/18752550/article-CHARLIE-MITCHELL--Fiscal-conservatives-take-note--Poverty-is-expensive?instance=secondary_stories_left_column ]. "Reward your friends, punish your enemies, tell your constituents repeatedly they are hapless victims of an unfair world and then dance off to enjoy junket after junket."
Thompson declined to be interviewed for this article, but in a phone call, a spokesman for his office, Cory Horton, ticked off a number of programs and federal funds that the congressman had secured for his district over the years, including substantial funding for Army Corps of Engineer improvements to the levees that keep the entirety of the Delta from going underwater. He also points to funds that have augmented agriculture, catfish farming and casinos in the Delta.
"You know, it's going to take everybody working together to fix these things," Horton said. "There's just this one congressman from this district, but there are also two senators. There's a governor. Everything can't be put off on one person."
Heather McTeer [ http://heathermcteer.com/ ], a former mayor of Greenville who ran unsuccessfully against Thompson for the Democratic nomination in a primary earlier this year, suggested that everyone has copped out. "There are a number of reasons I think we're still in this situation, and one is leadership," she said. "When you have leadership on a state and a federal and a local level that's not really addressing the true issues of poverty and how you change a community, when they're not identifying what factors are critical to helping to change poverty, then you're always going to stay in that situation."
Back in Anguilla, I asked Davis what she aspired to as a child. "I wanted to go all over the world," she declared. "I wanted to go to Canada."
Today, she talks of making it to Jackson, the state capital 100 miles to the south, or to Memphis, 200 miles north, where she reckons she'd have higher odds of finding a job -- any job. At the moment, though, she's got little in the way of means to make this happen, and those faraway cities, which are facing [ http://www.bizjournals.com/memphis/news/2012/06/21/memphis-msas-unemployment-rate-up-to.html ] their own tough times [ http://www.jacksonfreepress.com/news/2011/nov/03/study-jackson-6th-largest-metro-for-concentrated/ ], might as well be in another country.
"Tell them to come help us. We need some real help down here," Davis said when asked if she had a message for people outside the Delta. "We sure need some help."
DIFFERENT STARTING LINES
In the book "The Color of Wealth," Lui and her co-authors take on those who would suggest [ http://img.rushlimbaugh.com/home/daily/site_081111/content/01125111.guest.html ] that enough help has already been given, or that people in Davis' shoes just haven't tried hard enough [ http://mediamatters.org/research/2004/06/16/oreilly-irresponsible-and-lazy-thats-what-pover/131278 ].
"Individual effort does make a difference in financial success, compared to how the same individual would have fared without putting forth an effort," they wrote. "But Americans begin the race from different starting lines. Not only do well-off people, primarily whites, have significant head starts, but even many working-class whites have had modest advantages when compared with working-class people of color, most of whom begin far behind whites' starting line."
At the point of birth, that starting line might be thought of as wealth, a nugget of potentiality and as-yet-unrealized opportunity that individuals, families and communities carry with them, nurture, contribute to and pass on, sometimes in imperceptible ways, to subsequent generations.
Beyond revealing that net worth for all families plummeted between 2007 and 2010, data from the Federal Reserve Board's most recent survey of consumer finances, released in June, show a marked and continued disparity in the size of that carrying resource among racial groups.
The median value of net worth for white, non-Hispanic families in 2010 was about $131,000, according to the survey. For non-whites and Hispanics, the amount was just over $20,000. The data also showed that the median value of immediately available financial assets for white families was $37,000. For non-whites, it was just $6,000.
Studies have also shown that anywhere from a quarter to a third of white families will, at some point in their lifetimes, augment their net worth with an inheritance of some kind -- but even the majority who don't receive such endowments often fail to recognize the variety of other windfalls that come their way. Citing research from Thomas Shapiro, a professor of sociology and public policy at Brandeis University, Lui explains in her book:
These numbers show that most white people do not receive any inheritances from deceased relatives' estates. But in interviewing black and white working-class families, Shapiro found that modest amounts of money passed down by living relatives were also far more common in white families than in black families. Whites who get such help often don't think of themselves as inheritors, but consider such transfers to be just a normal part of family life. Contributions to a down payment on a house and college tuition are the most common forms of family financial aid. Shapiro calls these "transformative assets," because they boost lifelong prosperity and security.
"Transformative assets" or "transformative wealth" are key words in the study of persistent poverty. These are the sorts of windfalls, even small ones, that can lead upward to new rungs on the economic ladder. It's cash to buy a reliable car, for example, which can lead to new job opportunities and upward progress. For some, it may simply be enough money to buy a decent suit for a job interview.
For those already halfway up the ladder, transformative nuggets like these, if they initially came from family, come later in the form of commercial loans or credit, ideally at interest rates that aren't ruinous. For the rural poor, neither avenue is available, and the dribble of government benefits or minimum-wage work tends to keep the unlucky on a treadmill of subsistence.
It is worth noting, for example, that in 2011, the average monthly food stamp outlay in the U.S. was just $133, according to data compiled by the Kaiser Family Foundation [ http://www.statehealthfacts.org/comparetable.jsp?cat=1&ind=26 ]. Families that qualify for temporary cash assistance have also seen the purchasing power of that benefit plummet. In all but two states, cash assistance benefit levels in 2011 are actually lower, in real dollars and despite inflation, than they were in 1996, according to the Center On Budget and Policy Priorities [ http://www.cbpp.org/cms/?fa=view&id=3625 ] in Washington.
Jim Richardson [ http://www.nrfc.org/our_staff.asp ], the executive director of the National Rural Funders Collaborative [ http://www.nrfc.org/ ], a philanthropy aimed at addressing persistent poverty, particularly in minority communities, argues that it's this inability to get any sort of foothold that has kept so many poor families poor. It also explains why they remain disenfranchised socially, politically and culturally.
"Our initial understanding was simply that from years of disinvestment and disenfranchisement of people at low wealth, you basically got these deep pockets of poverty. We knew that these have to be addressed, and can only be addressed, through building family wealth, increasing family sufficiency and then increasing civic participation within the communities," Richardson said.
"But what we found over the first four or five years was that persistent poverty, especially in rural communities, was inextricably linked with race. And if you look at the disparities not only in income but in wealth, in rural areas by race, the statistics are really pretty staggering."
By the reckoning of numerous researchers, the comparative absence of such transformative assets among communities of color -- particularly those in areas where land and labor were the only assets available -- is no mere accident. Some have attempted to calculate, for example, the real loss of wealth that attended slavery and subsequent discriminatory policies. Among these are Joe Feagin [ http://sociweb.tamu.edu/faculty/feagin/ ], a professor of sociology at Texas A&M University and a leading expert on the racial weath gap.
Writing in the 2010 edition of his book "Racist America [ http://books.google.com/books/about/Racist_America.html?id=0stwPeRea2MC ]," Feagin cited a variety of estimates for the value of the free labor provided by enslaved African Americans, with the cumulative losses for subsequent generations of American black families ranging between $2.1 trillion and $4.7 trillion.
The "40 acres and a mule" that were historically promised as a way to allow freed slaves and their families to begin building real wealth never materialized for the most part, Feagin noted. Through much of the 20th century, and particularly in the South, deliberate and codified exclusion from land acquisition, access to credit, equal education and even political power continued to prevent the wider community of African Americans from developing the sort of wealth that has passed through and improved the lot of generations of whites.
"A simple total of the current economic worth of all black labor stolen by whites through the means of slavery, segregation, and contemporary discrimination is huge -- perhaps six to ten trillion dollars," Feagin wrote. "This latter figure is staggeringly high, indeed about 70 percent of the Gross Domestic Product generated by the United States in a recent year. In addition, these monetary figures do not include other major costs -- the great pain and suffering inflicted, the physical abuse, or the many untimely deaths."
This is not ancient history.
What land had been acquired by African Americans in the early part of the 20th century -- more than 15 million acres at its peak -- was systematically whittled away through a variety of post-slavery structural barriers to only 2 million acres by the 1990s. Part of this was almost certainly due to a lack of wills, estate planning and basic legal representation among African American landowners -- tools that that would have helped to protect and foster wealth. As intestate land accrued to disparate and far-flung heirs over generations, state acquisition and redistribution to white or corporate interests was made easier, and common.
But the federal government was also instrumental in preventing black landowners from profiting from their properties. According to a 2011 report by the nonpartisan Congressional Research Service [ http://www.nationalaglawcenter.org/assets/crs/RS20430.pdf ], which reviewed the findings of a 1994 study commissioned by the USDA, agency loans granted to black farmers were $4,000 less, on average, than those given to white farmers. The study also found that less than 1 percent of disaster payments went to black farmers.
The largest agency loans went to corporations and white male farmers.
In 1997, African-American farmers filed a class action suit against the USDA, Pigford v. Glickman, claiming the agency had discriminated against black farmers in the issuance of money for crop payments, disaster payments and loans between the late 1980s and late 1990s. An initial settlement was reached in 1999, resulting in some $1 billion in payouts to more than 13,000 black farmers to date. Another $1.2 billion was agreed upon in 2008 to cover the large number of farmers and their families who missed the original cut-off for filing claims.
The deadline for filing new claims passed on May 11 of this year.
Conservative critics have slammed some of these efforts. In particular, the USDA suit -- among the largest civil-rights settlements in history -- was labeled a "shakedown" and a "fraud" by right-wing pundit Andrew Breitbart [ http://mediamatters.org/research/2011/02/10/breitbarts-pigford-report-distortions-and-shady/176264 ], among others, in large part because the number of claimants exceeded federal data on black-owned farms for the period in question.
Extensive under-counting of black farmers, as well as shared land development among minorities, have been offered as explanations for the disparity.
But even if every one of the nearly 100,000 claimants in the Pigford case were fraudulent, and they somehow managed to game the system to secure what amounts, in most cases, to a one-time $50,000 payout, the total $2.2 billion price tag for the case would still only amount to a tiny fraction -- far less than 1 percent -- of the estimated wealth that has been extracted from the African-American community over time, if Feagin's upper-end estimate is accurate.
IF ONE PERSON IS POOR, WE ARE ALL POOR
Eileen Briggs, a member of the Cheyenne River Sioux [ http://www.sioux.org/ ] reservation in central South Dakota, joins me for a 50-mile drive along Route 212 from Eagle Butte to the reservation's eastern edge. A herd of buffalo, property of the tribe, grazes on the crest of a low hill off to the right, beyond which an empty, yellow-green prairie spills southward to the horizon.
Briggs, an articulate and passionate host, has been educating me about her tribe's role in an otherwise familiar narrative arc for all Native Americans, one of displacement, disenfranchisement and unabashed double-dealing. This has been particularly true for tribes of the desert and prairie West, where, over the last century or so, tribal culture has been deliberately undermined, land has been given and taken away, and geographic isolation has made gaining a meaningful foothold in the American economy particularly difficult.
By at least one recent census measure, Ziebach County, one of two South Dakota counties that comprise most of the Cheyenne River reservation, is currently the nation's poorest.
At the point where 212 meets Lake Oahe, a massive reservoir formed by the damming of the Missouri River north of Pierre two generations ago, Briggs points toward a manicured, roadside pull-out punctuated by a large granite monument.
The boulder, cleaved to expose a broad, polished face, is inscribed with a tribute to Cheyenne River leadership. At the bottom, behind a clutch of wildflowers placed by an unknown visitor, the monument notes that the tribe's burial sites have been relocated from their original site nearby, along the banks of the pre-dammed Missouri.
The Cheyenne River Sioux lost more than 100,000 acres, including huge swaths of valuable timber and range land, to intentional flooding when the federal Oahe Dam project got underway in the 1950s.
The dam now provides electricity for millions of residents and businesses across the north-central United States, but the federal government originally offered little to the Cheyenne River tribe in return. Dogged legal battles, spearheaded by tribal leaders over the last 40 years, finally prompted the U.S. Treasury in October of last year to set aside roughly $145 million in interest, along with $293 million in principal, for the tribe as compensation for the land lost in the dam project.
That's good news, Briggs says, but all of this -- the damming, the exhumation of tribal graves by the Army Corps of Engineers, the wholesale relocation of the tribal agency to Eagle Butte and the high-handed behavior of the federal government -- are simply part of a long list of insults that this and other tribes have borne. Briggs says it all weighs heavily on minds here, and that healing from all that, both economically and culturally, takes time.
"Our thinking, our culture tells us, that if one person is poor, we're all poor," she said. "And we are someone struggling in this country. We are part of this great American story that we all believe in, that we all want to see happen -- a future for any dream that we want. There should be some understanding and some newly raised awareness and compassion for these Americans who have been suffering for a very long time."
Unemployment figures on the reservations of South Dakota are staggering: averaging about 70 percent year over year, and peaking as high as 90 percent when seasonal work dries up. Not surprisingly, drunkenness, drug abuse and crime are problems, as are high-school dropouts and teen pregnancies.
Among the unemployed is Ronnie Bowker, a 50-year-old tribal member who last found work two years ago installing fencing around the cemeteries, scattered about the reservation, where the Army Corps of Engineers relocated the tribe's graves. He has not worked since.
Bowker grew up on the reservation in abject poverty, with no running water and no electricity. He now has a subsidized trailer in a community called La Plant, not far from the stone monument at the reservation's end, that he struggles to maintain against the harsh prairie winters and wicked spring and summer storms. A span of shingles is missing, torn off by high winds a year ago, and a broken gutter hangs across one of the front windows.
Ronnie Bowker
(Photo: Aaron Packard)
Like many of the residents with whom I spoke, Bowker has his own particular understanding of his station. He complained of racism within the tribe, where "half-breeds" with lighter skin wield more power and have more opportunity than "full-bloods" like him. He blamed himself for the indiscretions of his youth: dropping out of school, drinking heavily, fighting and spending time in prison.
But he also said that despite his efforts at reform -- he no longer drinks, he earned his GED, and he has become a something of a spokesman for the poorest and most remote residents on the reservation -- he has a hard time identifying opportunities that might better his lot in life, and that of his wife and children.
"I often say it in a joking way, that La Plant is like a retirement home: You come here to die," he tells me. "There's just nothing to do."
It's easy to dismiss Bowker's lot as self-inflicted, and there's little question that, had he followed a different path early in life, he might have found better fortunes. But as with African Americans, it's also fair to say that a great deal more wealth -- transformational wealth -- would have been coursing through La Plant, and Cheyenne River, and among many other tribes of the Great Plains, had it not been for decades of discriminatory policy.
This, too, would likely have made a difference in Bowker's trajectory.
Consider the trust system set up by the U.S. government under the Dawes Act of 1877, which essentially broke up tribal lands and assigned parcels, ranging in size from 40 to 160 acres, to individual tribal members as a way of assimilating Native Americans into the economy through land ownership. But rather than grant the parcels outright, the government held the land in trust -- at first temporarily, but in the end, in perpetuity -- and in many cases, it was leased for exploitation to the timber industry, miners and oil and gas companies.
Presumably, the tribal owners of each parcel would profit from such leasing, but the royalties collected from industries active on trust land was wildly mismanaged by the Department of the Interior. A lawsuit filed by a tribal member in 1996 seeking to find out the extent of the mismanagement discovered that the department had also failed to keep track of the heirs to the original allotments. And as had happened with black landowners, nominal ownership of intestate tribal allotments had multiplied exponentially over the generations.
In his 2004 testimony before Congress [ http://naturalresources.house.gov/uploadedfiles/swimer_6.23.04.pdf ], Ross Swimmer, the former special trustee for American Indians at the Interior Department, noted that there are now tribal properties "with ownership interests that are less than 0.0000001 percent." That fraction would afford an interest holder, Swimmer said, about four one-thousandths of a penny.
In the end, the lack of records made it virtually impossible for government officials to sort out what it owed and to whom. Even if it were possible to forensically create records for every potential beneficiary, Swimmer said, doing so would have cost vastly more than what most account holders were actually owed.
More than a dozen years of litigation yielded a $3.4 billion settlement that was ultimately upheld in May of this year. It will provide payments of between $800 and $1,000 to individual claimants. A large chunk of the settlement will also be used to allow the government to buy up some of the hopelessly fractionated land and turn the consolidated allotments back over to the tribes.
The federal judge who presided over the case for 10 years before being removed by an appeal panel in 2006, called the Interior Department and its handling of tribal interests "the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government."
Despite all of this, the Cheyenne River Sioux have been remarkably entrepreneurial, establishing a number of tribally owned ventures that have created jobs and small measures of growth and opportunity over the last few decades. These include a telephone authority, which now has some $10 million in annual revenues, and Lakota Technologies [ http://www.lakotatechnologies.com/ ], an information technology firm that provides call centers and other services to government and commercial customers.
On a recent visit to the facility, a handful of young workers operated the phones as part of work performed for the federal government under contract. Odds are good that a foreigner phoning the U.S. State Department in pursuit of an entry visa will actually be connected to this warehouse on Eagle Butte's Main Street, where a young Native American woman earning a little bit more than minimum wage will take the call.
Still, many stumbling blocks remain. There is not nearly enough housing for the reservation's population, and overcrowding inside crumbling housing stock is common. Attempts to attract outside businesses to the area -- an assembly plant, say, or a livestock processing facility -- are stymied by the tribe's antiquated and overtaxed water system, which has been unable to support new connections for years.
Kevin Keckler, chairman of the Cheyenne River Sioux tribe, reckoned a proper upgrade to the water system would cost about $65 million. He said the tribe has lobbied the federal government for funding assistance with limited success, estimating that about half the necessary amount is still needed. He guessed it would be another four or five years, even in the best of circumstances, before a new water system might be in place. He also said hundreds of millions more dollars would be needed to distribute the water to the remote communities like La Plant and others scattered across the reservation.
Keckler held up his index finger to indicate the size of the tubing that currently snakes out under the prairie to reach far-flung homes. When more than a few of these households turn on a spigot at the same time, the pressure can drop to a trickle.
"If we could get that water system built," Keckler said, "I think we could see a better quality of life."
Meanwhile, even tribal members who sit on substantial and intact parcels of trust land with clear title have had difficulty using the holding as collateral to secure loans and otherwise spur economic activity that would improve their lot. Commercial banks often avoid lending against trust land, they say, for fear of unfamiliar paperwork and complicated jurisdictional issues should the debt go bad. This in turn makes it more difficult for tribal members to develop the sort of credit histories that are so key to upward mobility in modern society.
Zach Ducheneaux, a tribal member who sits on the board of directors of the Intertribal Agriculture Council [ http://www.indianaglink.com/ ], an organization founded in 1987 to promote the development of agricultural resources in tribal territories, traveled to Capitol Hill in June. He was armed with a request that the Government Accountability Office undertake a study of "credit deserts," areas of the U.S. that are statistically underserved by bank financing and other credit opportunities.
"We think if you did a map of credit deserts, places where there is a lack of available credit and affordable credit to acquire assets to produce income and build wealth, it would lay right over the poorest places in the country, including this reservation," Ducheneaux said. "It's a real problem here."
Officials at the USDA said they are working on programs to help ease the commercial credit gap on tribal land. The agency also noted in June [ http://blogs.usda.gov/2012/06/25/usda-highlights-efforts-to-give-tribes-the-tools-to-improve-basic-services/ ] that it was taking advantage of a new rule, authorized in the 2008 Farm Bill, that "will make it much easier for Tribes to gain access to USDA funding for water and sewer improvement projects, electrical system upgrades and telecommunications services including broadband."
In the minds of tribal members attempting to turn things around, such incremental programs and investments are a pittance compared to what's been taken away, and to what was promised in treaties signed with their people.
"The reality is that the federal government has a trust responsibility with the Cheyenne River Sioux Tribe and every other tribe in this country," Briggs said. She is currently the executive director of Tribal Ventures [ http://www.crtribalventures.org/ ], a 10-year, $11 million poverty-reduction plan funded largely by the Northwest Area Foundation, a Minnesota-based philanthropy. The Tribal Ventures program seeks to spur community and economic development opportunities on the reservation, and by its conclusion in 2016, Briggs hopes to be able to provide insight for other tribes on what works and what doesn't in the struggle to lift reservations out of poverty.
"My relatives, my ancestors, gave up much for this country to be prosperous, to be what it is today," Briggs says, "and if people cannot remember that, if they have forgotten that, we will continue to remind them. This is not about handouts. The government has not provided assistance for tribal lands because they felt it was the charitable thing to do. It's because they have a treaty obligation to the Sioux Nation and to our tribe. This was an exchange. This was a business deal.
"This whole economic downturn and the country's struggle, we have compassion and recognize that many people in this country have suffered a great deal because they lost their homes and their jobs and their savings. We have a lot of compassion for that," Briggs added. "But that's been our reality for 100 years."
TURNING THINGS AROUND
On a blazing June afternoon, Ale Obregon, one of the leaders of the community where Elia and Rogelio De La O live, stands at the local county watering hole armed with a video camera. He's arranged to meet with the Webb County utility supervisor, Johnny Armaya, to discuss the lack of official supervision at the site, the need for better maintenance of the pump, which occasionally breaks down, and the inadequacy of the facility to meet growing needs of residents.
As he waits for Armaya to arrive, a queue of cars pulling flatbed trailers and assorted pickup trucks -- all bearing empty plastic tubs and drums -- begins to form. As their turn arrives, drivers maneuver their vehicles under a fat hose dangling alongside a rusty steel box the size of a small van. They stuff the hose into the mouth of a container and then drop a couple of quarters into a slot on the side of the box: 50 cents for 150 gallons. The pump motor inside the box revs to life, and a stream of water begins to flow. The stink of sulfur fills the air.
A man fills a container at the community spigot.
When Armaya arrives, Obregon complains that many customers are taking more than their prescribed limit, 500 gallons, which is laid out on a small sign nearby. He asks why the county doesn't keep someone posted at the water point to oversee the operation, and why another water point couldn't be set up nearby to help alleviate what can be grindingly long waits in line -- sometimes hours. Armaya, a small man with dusty boots and the weary carriage of an empathetic bureaucrat -- someone who would like to do more but can't -- listens patiently and says he will look into the problem.
Later, Armaya tells me that his staff has tried to regulate matters better at the water point, but that tensions and tempers run high in the queue. Heated words and threats have been exchanged, he says, and guns have been drawn. He also notes that the water, a third of which comes from an aquifer underfoot, with the rest being trucked in from Laredo, is provided by the county at a substantial loss. The coin box generates about $30,000 a year, he says. The cost to pump and truck water there, and otherwise maintain the facility, is more than ten times that.
Underserviced communities like this are found all along the U.S.-Mexico border, from New Mexico and Arizona to California, but the largest share of them is in Texas. Some 400,000 Texans call these colonias home. The vast majority -- including 85 percent of colonias residents under 18 -- are American citizens born in the United States.
Taking advantage of lax authority on unincorporated county land, developers in the 1950s began creating ad hoc subdivisions outside of city boundaries, often in agriculturally fallow or dangerously flood-prone areas. "They divided the land into small lots," the Secretary of State's website explains, "put in little or no infrastructure, then sold them to low-income individuals seeking affordable housing."
What the site doesn't say, poverty advocates argue, is that demand is and has long been high among low-income buyers in part due to a lack of affordable housing inside border cities. And while the Texas legislature has passed numerous zoning laws, beginning in the 1990s, to curb the proliferation of the colonias, the lack of housing alternatives remains a problem. Often enough, colonias residents informally subdivide their own small plots to make room for family and other new neighbors, who plop down low-budget trailers or begin stacking cinder blocks in pursuit of a home.
Tangled networks of orange extension cords sometimes crisscross these complexes, linking those who don't have power to those who do.
Just how all of these pockets of need -- or those in the Delta, or those on tribal lands -- can ultimately be turned around is a matter of great debate. Karl Stauber believes that part of the problem is that per capita government spending has traditionally favored metropolitan areas over rural areas.
Given the billions of dollars in agricultural subsidies that arise every five or so years from the Farm Bill, that might seem a flawed assumption, but there's some evidence to support it, including a recent analysis by Bill Bishop, a long-time Texas-based journalist covering rural affairs and a co-editor of the web-based newspaper The Daily Yonder.
Using data from the Economic Research Service, Bishop found [ http://www.dailyyonder.com/federal-spending-rural-lags-cities/2012/02/24/3780 ] that federal spending on cities outstripped rural spending every year between 2004 and 2009. Per capita spending on non-agricultural development -- that is, on community facilities, the environment, housing, regional development, transportation and Native American programs -- has been substantially lower in rural areas in recent years.
"I think the Obama administration is the most metropolitan-focused administration in my lifetime," Stauber told me, "and I'm over 60 years old."
Secretary Vilsack took great umbrage at that suggestion, noting that President Obama signed an executive order last year that created the very first White House Rural Council [ http://www.whitehouse.gov/administration/eop/rural-council ] specifically to address the challenges facing rural communities.
"For the first time we actually have a damn plan to build a rural economy that will support middle-class families, and we don't get credit for it and don't get recognition for it by anybody," said Vilsack, who heads up the year-old council. "Pardon me for being frustrated about this, but we're working our tails off here and you know, this rural council doesn't get the recognition it deserves. For someone to say [the President] is urban-centric, it's crazy."
Stauber and other critics also argue that government strategies aimed at rural development have traditionally focused too heavily on subsidizing farming, and that this inevitably drives dollars into the pockets of big agriculture -- a highly mechanized affair that has slowly shed jobs even as output has increased -- at the expense of real solutions for America's poorest citizens.
"I think the reality is, as long as the dominant federal frame that gets applied to rural development is agriculture, then I think we're actually forcing people to leave," Stauber said. "If you want to look at one of the great economic success stories of the 20th century, it's agriculture. You look at the yield per unit of labor and the yield per unit of capital, and it's just remarkable.
"There's nothing wrong with helping farmers create new competitive advantage," he added, "but the answer to that is not the same thing as the answer to the question: 'How do you help rural communities create new competitive advantage?'"
According to a 2010 report from the Congressional Research Service, even farm families don't make money from farms. "Nearly 90 percent of total farm household income comes from off-farm sources," the report found. Manufacturing accounts for roughly 25 percent of rural private sector earnings and about 12 percent of all rural jobs, according to the report. As in many other places, the service sector is the predominant source for employment opportunities in rural areas.
"Farming, and agriculture more generally, however, remain the major legislative focus for much of congressional debate on rural policy," the report noted.
Other advocates, including John Henneberger, a co-director of the Texas Low-Income Housing Information Service [ http://www.texashousing.org/ ], which works to develop low-income housing opportunities in Texas, have condemned both Congress and the USDA for cutting back on a number of crucial programs. Henneberger is particularly incensed at steady declines in housing loan programs that have helped thousands of very low- and low-income families to build their homes or otherwise become homeowners.
"Vilsack may be investing historic amounts of money in some people in rural America, but it is not getting invested in the homes or lives of poor rural Americans," Henneberger said. "Rural Americans have Congress to thank for acting to reject a portion of Secretary Vilsack's unprecedented transfer of funds to corporate agriculture from programs that help the rural poor afford a home."
On this, and on charges that the administration is too agriculture-focused to really address the problem of rural poverty, Vilsack again becomes incensed. "One of the biggest frustrations I have in life -- in life, not just in this job," he said, "is how few people understand what this department does."
The administration has overseen substantial increases in agricultural production and exports, Vilsack said, which lead to increases in processing and shipping and packaging jobs in rural areas. He points to a recent analysis [ http://www.kc.frb.org/publicat/mse/mse_0212.pdf ] of the rural manufacturing sector by the Federal Reserve Bank of Kansas City, which notes that "rural manufacturing has rebounded with a vengeance" in the last two years.
Vilsack also said the administration has enrolled a record number of acres in conservation, linking that to outdoor recreational opportunities and, in turn, increased jobs in contracting and tourism. The administration has also put a good deal of support behind domestic energy production, including biofuels, which inevitably creates jobs in rural areas.
In an effort to drive USDA resources further into historically disenfranchised minority communities, the agency has also developed a StrikeForce Initiative, which seeks to connect with community-based organizations already on the ground and distribute USDA resources through them. And all of this has been done, Vilsack said, in an era of stiff budget and staffing cutbacks.
"When we're dealing with substantial reductions in our budget, and we're dealing with having to meet a growing demand," Vilsack said, "the challenge for us is to determine where we can do the most good with the least amount of money."
Reyna, the Texas attorney who introduced me to the De La Os, says that's a philosophy that's deeply familiar to residents of the border colonias.
"We send all this foreign aid to other countries to help them develop water resources, and yet there are people living right here without potable water," he told me. "They live on American soil. They live in Texas. They live right here, smack in the middle of the United States. It's really very, very sad to see. I wish we had a magic wand to fix all this, but we don't."
Since the late 1990s, the De La Os have been slowly improving their trailer home, inch by inch, dollar by dollar, with their own hands. A lack of affordable alternatives drove them to this place, and the bare wood framing, floppy panel floors, exposed insulation and unfinished wiring suggest years of sweat equity for a family that has lived -- without government help, they say -- on $10,000 to $15,000 a year.
Until Rogelio, 69, took ill last year, they earned that money, with help from their American-born daughter, working in the canneries of Wisconsin or harvesting beets and potatoes in North Dakota and Minnesota. When harvest season was over, they returned to Texas and took jobs in sewing factories or construction sites around Laredo. For most of this work, the family earned about $8 an hour, Elia said.
At the family's kitchen table, Elia serves her guests tall glasses of distilled water, which she draws from a jug. It is a welcome treat on a day when the outside temperature is now upwards of 105 degrees. I ask the couple if they've ever felt taken advantage of, or abused by a social order that, from the outside, seems very much stacked against them.
Elia quickly answers no, and so I follow with another question: Does she consider herself poor?
"Poverty doesn't make a difference to us. We've always been poor," she replies. "We don't have luxuries. But the things that God has allowed us to do here, we appreciate them. Many people are worse off.
"The only thing that is a great need for us," she adds, "is the water."
Copyright © 2012 TheHuffingtonPost.com, Inc. (emphasis in original)
http://www.huffingtonpost.com/2012/09/20/rural-poverty-minorities_n_1829911.html [with comments]
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In Prosecutors, Debt Collectors Find a Partner
Angela Yartz with debt collection notices on district attorney letterhead. She was threatened with conviction over a $47.95 check to Walmart.
Noah Berger for The New York Times
Interactive Graphic
Letter From Bad Check Restitution Program
http://www.nytimes.com/interactive/2012/09/16/business/20120916_DEBT_LETTER.html
Collection notices.
Noah Berger for The New York Times
By JESSICA SILVER-GREENBERG
Published: September 15, 2012
The letters are sent by the thousands to people across the country who have written bad checks, threatening them with jail if they do not pay up.
They bear the seal and signature of the local district attorney’s office. But there is a catch: the letters are from debt-collection companies, which the prosecutors allow to use their letterhead. In return, the companies try to collect not only the unpaid check, but also high fees from debtors for a class on budgeting and financial responsibility, some of which goes back to the district attorneys’ offices.
The practice, which has spread to more than 300 district attorneys’ offices in recent years, shocked Angela Yartz when she was threatened with conviction over a $47.95 check to Walmart. A single mother in San Mateo, Calif., Ms. Yartz said she learned the check had bounced only when she opened a letter in February, signed by the Alameda County district attorney, informing her that unless she paid $280.05 — including $180 for a “financial accountability” class — she could be jailed for up to one year.
“I was so worried driving my kid to and from school that if I failed to signal, they would cart me off to jail,” Ms. Yartz said.
Debt collectors have come under fire for illegally menacing people behind on their bills with threats of jail. What makes this approach unusual is that the ultimatum comes with the imprimatur of law enforcement itself — though it is made before any prosecutor has determined a crime has been committed.
Prosecutors say that the partnerships allow them to focus on more serious crimes, and that the letters are sent only to check writers who ignore merchants’ demands for payment. The district attorneys receive a payment from the firms or a small part of the fees collected.
“The companies are returning thousands of dollars to merchants that is not coming at taxpayer expense,” said Ken Ryken, deputy district attorney with Alameda County.
Consumer lawyers have challenged the debt collectors in courts across the United States, claiming that they lack the authority to threaten prosecution or to ask for fees for classes when no district attorney has reviewed the facts of the cases. The district attorneys are essentially renting out their stationery, the lawyers say, allowing the companies to give the impression that failure to respond could lead to charges, when it rarely does.
“This is guilty until proven innocent,” said Paul Arons, a consumer lawyer in Friday Harbor, Wash., about two hours north of Seattle.
The partnerships have proliferated from Los Angeles to Baltimore to Detroit, according to the National District Attorneys Association, as the stagnant economy leaves city and state officials grappling with budget shortfalls. Lawyers for the check writers estimate that more than 1 million of them are targeted a year. The two main debt collectors — California-based CorrectiveSolutions and BounceBack of Missouri — return millions of dollars each year to retailers including Safeway, Target and Walmart.
While the number of bounced checks has fallen as more shoppers pay with credit or debit cards, Americans still write billions of dollars worth of bad checks each year. In 2009, $127 billion worth of checks were returned, according to the most recent data from the Federal Reserve. That’s down from $182 billion in 2006.
Because the cases are not fully investigated, there is no way of knowing whether the bad checks were the result of innocent mistakes or intentional fraud. The so-called bad check diversion programs start from the position that a crime has been committed.
Before the first partnerships were rolled out in the late 1980s, merchants who received a bad check typically tried to retrieve the money themselves or through a private collection company, with abysmal results. Those merchants who suspected fraud could send along the checks to their local district attorneys.
The influx of bad-check reports overwhelmed district attorneys’ offices, according to Grover C. Trask, a former district attorney in Riverside, Calif., considered the father of such programs. “It was a way to deal with a fairly serious nonviolent crime going on in the business community, but not overburden the court system or the resources of the district attorneys,” Mr. Trask said.
The programs were quickly challenged by consumer lawyers, who took aim primarily at California-based American Corrective Counseling Services. Facing a barrage of class-action lawsuits, the company reorganized through a Chapter 11 bankruptcy in 2009.
Still, its successor, CorrectiveSolutions, which says it has contracts with more than 140 prosecutors, has been dogged by similar legal challenges, including a class-action lawsuit pending in federal court in San Francisco that claims the company “has constructed an elaborate artifice” to terrify borrowers into paying. CorrectiveSolutions, which did not respond to requests for comment, has contested the claims, court filings show.
For the collection companies, the partnerships offer a distinct financial benefit: the “financial accountability” classes. Typically, a small portion of the class fees, which can exceed $150, are passed on to the district attorneys’ offices. Check writers are led to believe that unless they take the courses, they could end up in jail.
A letter signed by the Santa Clara County district attorney, for example, informed Kathy Pepper that the “bad check restitution program” would allow her to avoid “the possibility of further action against the accused by the District Attorney’s Office.”
Petrified, Ms. Pepper agreed to pay $170 for a class and another $25 to reschedule the class last year after accidentally writing a $68 check in the midst of a divorce last year that upended her finances.
What Ms. Pepper did not know was that her bad check was sent directly from the merchant to the debt-collection company, without any prosecutor determining whether she had actually committed a crime.
Under the terms of five contracts between CorrectiveSolutions and district attorneys reviewed by The New York Times, merchants refer checks directly to the company, circumventing the prosecutors’ offices. While the merchants are required, for example, to attempt to contact the check writer, they can send any bad checks to the collection companies if the shopper hasn’t responded, typically within 10 days.
“No one at the district attorney’s office reviews the cases” before the collection company sends out letters, said Priscilla Cruz, an assistant director in the Los Angeles district attorney’s office.
As of July, CorrectiveSolutions had sent out 16,955 letters on behalf of the Los Angeles district attorney, and during that time 635 people attended the program’s classes, county data show. While few people will be prosecuted for not attending the class, there is a possibility of charges, Ms. Cruz said.
While the percentage of targeted check writers taking the classes is low — 4 percent to 7 percent in recent years — the percentage of cases referred for potential prosecution is much lower, about 0.10 percent.
Few bad-check writers are prosecuted, especially for relatively small sums, lawyers say, because it is hard to prove the person meant to defraud the merchant.
Gale Krieg, a vice president at BounceBack, said he has turned down business from prosecutors who won’t agree to at least have all copies of the checks sent to their offices, where prosecutors can determine if a crime has been committed. Mr. Krieg, who said the company has contracts in 38 states, acknowledges the limitations: “Whether they exert oversight isn’t something that we can control.”
Prosecutors point out that people who write bad checks should be held accountable for paying back what they owe.
“I view it as quite a win-win,” said Baltimore County State’s Attorney Scott D. Shellenberger. “You aren’t criminalizing someone who shouldn’t have a criminal record, and you are getting the merchant his money back.” On its Web site [ http://correctivesolutions.org/ ], CorrectiveSolutions says that its classes result in low rates of recidivism.
Some officials in district attorneys’ offices have quietly raised concerns that the programs are misleading. A November 2009 county audit of Deschutes County, Ore., titled “District Attorney’s Office-Cash handling over revenues,” wondered whether elements of the program could be “disingenuous.” The prosecutor’s office, which did not return requests for comment, contracts with CorrectiveSolutions to handle its bad checks. Ms. Yartz said she accidentally wrote a check for groceries on her credit union account, rather than her bank checkbook. She had recently moved and was in the process of closing that account.
Even after Ms. Yartz paid $100.05 in February to cover the bounced check, the returned item fee and an administration fee, she got a letter signed by the Alameda district attorney informing her that her remaining balance was $180 for the class. After consulting with a lawyer, she decided to take her chances rather than pay for a class she could not afford, to avoid being punished for a crime she said she did not commit. Ms. Yartz also questioned the need for a class on budgeting and financial accountability: “If I meant to bounce this check like a criminal, why do I need a class on budgeting?”
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/16/business/in-prosecutors-debt-collectors-find-a-partner.html [ http://www.nytimes.com/2012/09/16/business/in-prosecutors-debt-collectors-find-a-partner.html?pagewanted=all ]
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U.S. Income Inequality Worse Now Than In 1774: Study
By Harry Bradford
Posted: 09/20/2012 10:09 am Updated: 09/20/2012 10:18 am
Believe it or not, income inequality in the United States is worse today than it was back in 1774.
That’s what a recent report from the National Bureau of Economic Research has found. In “American Incomes 1774 to 1860 [ http://papers.nber.org/tmp/88127-w18396.pdf ],” authors Peter H. Lindert and Jeffrey G. Williamson argue that the American colonies were exceptionally egalitarian, compared to both other nations at the time and the U.S. today. And their data even factors in slavery.
As the Atlantic’s Jordan Weissman points out [ http://www.theatlantic.com/business/archive/2012/09/us-income-inequality-its-worse-today-than-it-was-in-1774/262537/ ], such studies should be taken with a grain of salt, given that making historical economic analyses is like “making a messy collage, collecting the disparate bits and pieces of information we have available and fashioning them into a coherent picture,” Weissman writes.
But NBER's is not the first study to contend that income inequality today is worse than before. A 2009 study looking at data stretching back to 1917 found that American income inequality was at an all-time high [ http://www.huffingtonpost.com/2009/08/14/income-inequality-is-at-a_n_259516.html ]. Likewise, two historians concluded last year that income inequality today is worse even than it was during the Roman Empire [ http://www.huffingtonpost.com/2011/12/19/us-income-inequality-ancient-rome-levels_n_1158926.html ]. The study found that the top 1 percent of Ancient Roman earners controlled 16 percent of the Empire’s riches, compared to the top 1 percent of American earners today who control 40 percent of the country's wealth.
Indeed, signs of America’s yawning income gap aren’t exactly rare. On Wednesday, just days after the first anniversary of Occupy Wall Street [ http://www.huffingtonpost.com/2012/09/16/occupy-wall-street-anniversary_n_1888184.html ], a movement in part dedicated to exposing the nation's income inequality, Forbes released its list of the 400 richest Americans [ http://www.huffingtonpost.com/2012/09/19/richest-people-america-forbes-400_n_1896828.html?utm_hp_ref=business ]. Combined, their net worth is $1.7 trillion, or the combined yearly household income of more than 64 million Americans [ http://www.huffingtonpost.com/2011/10/20/us-incomes-falling-as-optimism-reaches-10-year-low_n_1022118.html ].
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/09/20/us-income-inequality_n_1898539.html [with comments]
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Billionaires Getting Richer As Millionaires Lose Money: Report
By John O'Callaghan
Posted: 09/17/2012 5:30 am EDT Updated: 09/17/2012 8:49 am EDT
SINGAPORE, Sept 17 (Reuters) - Many millionaires got poorer in the last year, but billionaires did just fine, using their heavyweight money management teams to ride out market and economic turmoil that hit the lesser rich, research company Wealth-X said on Monday.
The ranks of people with at least $30 million edged up to 187,380 but their total wealth fell 1.8 percent to $25.8 trillion -- still a sum bigger than the combined size of the U.S. and Chinese economies, Wealth-X said in a report.
Hardest hit globally were those in the $200 million to $499 million range, whose numbers dropped 9.9 percent and whose fortunes shrank 11.4 percent, the World Ultra Wealth Report said, using data for the year through July 31.
But the really, really rich got even richer as the number of billionaires rose 9.4 percent to 2,160 people and their wealth grew 14 percent to $6.2 trillion.
"Even at a billion or two billion, they have a much larger entourage, they have much more in the way of investment advice. They certainly get the attention of every major bank," Mykolas Rambus, Wealth-X's chief executive officer, told Reuters.
"This was the issue about that mid tier, the $100- to $500-million risk land. I don't think it appears these guys employ enough talent to help their own portfolios plus their holding companies to be successful."
As Europe struggles and the U.S. economy recovers fitfully, the affluent are shifting away from speculative investments into private companies, commodities and property, said Wealth-X, a Singapore-based firm that provides intelligence on the ultra-rich to banks, fundraisers and luxury retailers.
Asia suffered the worst regional loss of wealth, with a fall of 6.8 percent to $6.25 trillion due to weaker equity markets and lower export demand from the West, it said.
While wealth also shrank in Europe, Latin America and the Middle East, the rich saw their fortunes grow in North America (up 2.8 percent to $8.88 trillion) and Oceania (up 4.4 percent to $475 billion) -- much of that in Australia.
But Asia's rich cannot be discounted, Wealth-X said, as the fall in wealth in Japan, China and India -- home to 75 percent of ultra high net worth (UHNW) Asians -- will reverse, based on the strength of the region's financial systems and economies.
"Total Asian UHNW wealth is forecast to surpass the U.S. combined wealth by 2020," it said.
The full report is available at http://www.wealthx.com/wealthreport
(Editing by Ron Popeski)
Copyright 2012 Reuters
http://www.huffingtonpost.com/2012/09/17/wealth-x-world-ultra-wealth-billionaires-millionaires_n_1889404.html [with comments]
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Fossil Fuel Industry Ads Dominate TV Campaign
President Obama delivered remarks on energy policy at Prince George's Community College in Largo, Md., in March.
Chip Somodevilla/Getty Images
Video Feature [embedded]
Energy Takes Center Stage in Political Ads
A Shift in Energy Ads
Many energy ads in 2008 emphasized clean energy and conservation. Presidential and policy ads this year are more likely to promote policies that are friendly to fossil fuels.
http://www.nytimes.com/interactive/2012/09/14/us/politics/a-shift-in-energy-ads.html
By ERIC LIPTON and CLIFFORD KRAUSS
Published: September 13, 2012
WASHINGTON — When Barack Obama first ran for president, being green was so popular that oil companies like Chevron were boasting about their commitment to renewable energy, and his Republican opponent, John McCain, supported action on global warming [ http://topics.nytimes.com/top/news/science/topics/globalwarming/index.html ].
As Mr. Obama seeks re-election, that world is a distant memory. Some of the mightiest players in the oil, gas and coal industries are financing an aggressive effort to defeat him, or at least press him to adopt policies that are friendlier to fossil fuels. And the president’s former allies in promoting wind and solar power [ http://topics.nytimes.com/top/news/science/topics/solar_energy/index.html ] and caps on greenhouse gases? They are disenchanted and sitting on their wallets.
This year’s campaign on behalf of fossil fuels includes a surge in political contributions to Mitt Romney, attack ads questioning Mr. Obama’s clean-energy agenda, and television spots that are not overtly partisan but criticize administration actions like new air pollution rules and the delay of the Keystone XL [ http://topics.nytimes.com/top/reference/timestopics/subjects/k/keystone_pipeline/index.html ] oil pipeline from Canada.
“Since Obama became president, gas prices have nearly doubled,” said one advertisement by the American Energy Alliance [ http://www.americanenergyalliance.org/ ], a group financed in part by oil executives. “Tell Obama we can’t afford his failing energy policies.”
With nearly two months before Election Day on Nov. 6, estimated spending on television ads promoting coal and more oil and gas drilling or criticizing clean energy has exceeded $153 million this year, according to an analysis by The New York Times of 138 ads on energy issues broadcast this year by the presidential campaigns, political parties, energy companies, trade associations and third-party spenders.
That tally is nearly four times the $41 million spent by clean-energy advocates, the Obama campaign and Democratic groups to defend the president’s energy record or raise concerns about global warming and air pollution. The Times rated presidential campaign and national policy ads by whether they promoted fossil fuels or pushed clean energy and conservation, regardless of their sponsors, using ad and spending data compiled by Kantar Media [ http://www.kantarmedia.com/ ], a company that tracks television advertising.
The lopsided nature of the energy messages this year contrasts sharply with 2008. Back then, global warming was a top public concern, and green ads greatly outnumbered those for fossil fuels, $152 million to $109 million, according to the analysis by The Times, which looked at 184 energy-related ads. In 2008, Chevron, one of the nation’s leading oil companies, trumpeted its investments in geothermal power [ http://mycmag.kantarmediana.com/videos/ISSUE_CHEVRON_EVERY_DAY.wmv ], and Mr. McCain spent millions of dollars on ads featuring solar panels [ http://mycmag.kantarmediana.com/videos/PRES_MCCAIN_GLOBAL.wmv ] and wind farms [ http://topics.nytimes.com/top/news/business/energy-environment/wind-power/index.html ] as part of a solution to global warming.
But climate change legislation [ http://topics.nytimes.com/top/news/business/energy-environment/climate-and-energy-legislation/index.html ] died in Congress, Republicans gained a majority in the House, and pocketbook issues like the price of gasoline began dominating public discussion. After imposing a yearlong oil and gas drilling moratorium in the Gulf of Mexico in response to the disastrous BP spill in 2010, President Obama recast himself as favoring an “all of the above” energy strategy, allowing the industry to drill offshore as deep as ever and moving to open up new regions like Alaska’s Arctic waters.
The shift left many fossil fuel critics disillusioned and unwilling to do much to support the president. “It’s hard to think of any environmental activist who is enthused about anything Obama does these days,” said Brendan Cummings, senior counsel for the Center for Biological Diversity [ http://www.biologicaldiversity.org/index.html ], which challenges the industry on drilling plans. “Obama’s explicit embrace of fossil fuels and implicit embrace of all the environmental degradation that entails are almost indistinguishable from the policies of the Bush administration.”
Mr. Obama’s policy decisions on the Keystone pipeline and clean air rules did not win him friends in the fossil fuel world, either. Many of the industry’s titans are going all out to elect Mr. Romney, who has promised to open up more land and coastline to oil and gas drilling, end wind and solar power subsidies and curb regulations that discourage burning coal for electricity.
“The stakes are high,” said Steve Miller, the recently retired president of the American Coalition for Clean Coal Electricity [ http://www.cleancoalusa.org/ ], which has spent about $12 million on pro-coal television ads [ http://mycmag.kantarmediana.com/Videos/ISSUE_ACCCE_THREE_SHORT_YEARS.mov ], according to the Kantar data. “Our goal is to assure that whoever is elected will have seen a groundswell for coal in swing states.”
The Times analysis shows that ads with energy themes have played an outsized role in the 2012 campaign season, with energy earning more frequent mentions than every other issue except jobs and the economy.
Energy first emerged as a major advertising topic during the last presidential election. Back then, one of the biggest spenders was the Alliance for Climate Protection, an environmental group backed by former Vice President Al Gore that spent an estimated $32 million on ads urging legislation to combat global warming.
This year, the alliance, now called the Climate Reality Project [ http://climaterealityproject.org/ ], is not buying television ads at all, focusing instead on social media, training and organizing. “Whatever we would spend, it would just be washed away in this sea of fossil fuel money,” said Maggie L. Fox, the group’s chief executive.
Other clean-energy players, particularly from the solar industry, are also keeping a low profile after Solyndra, a California solar module manufacturer that received half a billion dollars in federal loans, declared bankruptcy and became a favorite Republican target.
Certain environmental groups, like the Sierra Club, are still running their own television commercials [ http://mycmag.kantarmediana.com/Videos/ISSUE_SIERRA_AIR_POLLUTION_STANDARDS.mov ] this year in support of Mr. Obama’s policies. And the wind industry is on a campaign to win renewal of a major tax credit. But “we are being outgunned by orders of magnitude,” said Michael Brune, executive director of the Sierra Club [ http://www.sierraclub.org/ ]. “There is just no way we can compete with some of the richest companies in the history of the world.”
The American Petroleum Institute, backed by the nation’s largest oil and gas companies, is the top energy spender this year with its “I’m an energy voter [ http://vote4energy.org/?gclid=CJapz5LWqLICFUJo4Aod9lYANg ]” campaign. Although the ads avoid explicitly endorsing any candidate, they clearly echo policy stands taken by Mr. Romney and the Republicans: opposing regulations that might slow down drilling and denouncing Mr. Obama’s proposal to eliminate oil industry subsidies [ http://mycmag.kantarmediana.com/Videos/ISSUE_API_KEEP_ENERGY_COSTS_DOWN_15.mov ].
“New energy taxes could hurt drivers and families,” one ad says. “Better to produce more energy here, like oil and natural gas [ http://topics.nytimes.com/top/news/business/energy-environment/natural-gas/index.html ]. That will help the economy. That’s good for everyone.”
The petroleum institute has spent an estimated $37 million so far on television ads, according to the Kantar data, more than it spent in all of 2008. And it is just one of nearly two dozen groups — including Americans for Prosperity [ http://mycmag.kantarmediana.com/Videos/PRES_AFP_OBAMA_SACRIFICES_PAWNS_FOR_POLITICS_60.mov ], backed by the oil billionaire David H. Koch, and Crossroads GPS [ http://mycmag.kantarmediana.com/Videos/Pres_CROSSROADSGPS_TOO_MUCH.mov ] — that are running advertisements this year advocating more fossil-fuel production or condemning spending by the Obama administration on solar and wind projects.
“These are companies and industries that clearly feel threatened,” said Ken Goldstein, president of Kantar Media’s Campaign Media Analysis Group. “And when companies and industries with resources feel threatened, they air advertisements.”
The fossil fuel industries have also used more subtle tactics, like mobilizing miners to wear pro-coal hats and shirts at candidate events and placing a coal industry logo [ http://www.americaspower.org/clean-coal-campaign-teams-nascar ] on the cars for Dale Earnhardt Jr.’s Nascar team.
Their trade associations have targeted swing states like Ohio, Colorado, Virginia and Pennsylvania, where there are established operations like coal mines or fast-growing new efforts, like fields where natural gas is extracted through hydraulic fracturing, a technique that could face new restrictions from regulators.
“President Obama has placed a de facto embargo on energy production on American lands and shores,” said Benjamin Cole, a spokesman for the American Energy Alliance, which expects to spend $7 million on television ads and other media to defeat Mr. Obama. “It’s irresponsible and overzealous.”
The imbalance in spending shows up on the campaign finance side as well.
Mr. Romney, the Republican National Committee and Mr. Romney’s political action committee have taken in at least $13 million in campaign contributions from oil, gas and coal industry executives or their related groups.
By comparison, Mr. Obama and the Democratic National Committee have received less than $950,000 from the fossil fuel industry over the past two years, according to data from the Center for Responsive Politics. The clean-energy industry has hardly made up the difference, with Mr. Obama directly collecting only about $78,000 from it so far, according to the center’s data.
The surge in energy-related political spending partly reflects the rise in overall election spending after the Supreme Court lifted limits on corporate contributions in 2010. Mr. Romney, for example, has accepted $3 million in contributions from Oxbow, a coal company controlled by William Koch, a brother of David Koch.
At a $50,000-a-plate shrimp-and-steak lunch in Houston last month, Mr. Romney solicited advice on energy policy from scores of oil and gas executives.
The group — which included Rex W. Tillerson, chief executive of Exxon Mobil, and Harold G. Hamm of Continental Resources, a top adviser to the Romney campaign — told Mr. Romney that the best thing he could do would be to reduce the regulatory burdens on the industry and permit more drilling on federal lands.
“There is a lot more at stake now,” said Amy Myers Jaffe, associate director of the Rice University energy program. “The producers can drill a lot in the United States or they could lose the right to drill in the United States. It’s a campaign about the E.P.A., how the president responds to a major accident, and it’s about do we or don’t we lease on federal lands.”
Eric Lipton reported from Washington, and Clifford Krauss from Houston.
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/14/us/politics/fossil-fuel-industry-opens-wallet-to-defeat-obama.html [ http://www.nytimes.com/2012/09/14/us/politics/fossil-fuel-industry-opens-wallet-to-defeat-obama.html?pagewanted=all ] [with comments]
===
Romney Campaign Cautious With Ad Budget, Even in Key States
By JEREMY W. PETERS and NICHOLAS CONFESSORE
Published: September 19, 2012
Mitt Romney [ http://elections.nytimes.com/2012/primaries/candidates/mitt-romney ] has had a light campaign schedule lately. He held his first rally in five days on Wednesday night.
And there is another place where his presence is oddly lacking: in the television ad wars.
Despite what appears to be a plump bank account and an in-house production studio that cranks out multiple commercials a day, Mr. Romney’s campaign has been tightfisted with its advertising budget, leaving him at a disadvantage in several crucial states as President Obama blankets them with ads.
One major reason appears to be that Mr. Romney’s campaign finances have been significantly less robust than recent headlines would suggest. Much of the more than $300 million the campaign reported raising this summer is earmarked for the Republican National Committee, state Republican organizations and Congressional races, limiting the money Mr. Romney’s own campaign has to spend.
With polls showing President Obama widening his lead in some of these states and the race a dead heat in others, Mr. Romney’s lack of a full-throttle media campaign is risky, especially as he struggles to get his message out over the din of news about his campaign’s recent setbacks.
In some states the disparity is striking. Mr. Obama and his allies are handily outspending Mr. Romney and the conservative “super PACs [ http://topics.nytimes.com/top/reference/timestopics/subjects/c/campaign_finance/index.html ]” working on his behalf in Colorado, Ohio and New Hampshire.
And in states like Florida, Iowa, Nevada and Virginia, where the Romney and Obama forces are roughly matching their spending dollar for dollar, the super PACs are responsible for nearly half the advertising that is benefiting the Republican nominee.
After three weeks of bad news for Mr. Romney — first that he received a negligible bounce from his convention, then that Mr. Obama was overtaking him in the polls and finally that he had been secretly recorded disparaging the president’s supporters as government-dependent freeloaders — the lack of a more forceful advertising offensive is one more way that the Romney campaign finds its message obscured.
Each day that slips by is a loss of precious television time in an air war that is only going to grow heavier and louder, making it difficult for any ad to leave a lasting impact.
“In a world where we know advertising imbalances lend opportunities for persuasion, it is surprising that any campaign would allow imbalances to continue,” said Erika Franklin Fowler, co-director of the Wesleyan Media Project. “Especially following several weeks of ad dominance by the opponent.”
Mr. Romney’s absence from the air made sense before the party’s convention in late August, since the campaign’s cash flow became so slow over the summer that it was forced to borrow $20 million to carry it through the event, when his formal nomination freed up tens of millions of dollars for the general election.
Yet at the same time Romney aides worked hard to project the image of a fund-raising machine far outpacing the president’s.
Romney aides released informal dollar figures that lumped several pools of money — some available for his use, others not — into a single figure, providing a perception greater than reality: $106 million in June and $101 million in July, far more than Mr. Obama and the Democrats.
Yet those figures obscured the fact that most of the money Mr. Romney was raising was reserved for those other political entities like the Republican National Committee.
And the party committee, which Mr. Romney helped propel to record-breaking receipts in July, is allowed to spend only about $22 million on advertising that is coordinated with Mr. Romney.
Even now, a large though unknown portion of Mr. Romney’s fund-raising is not going directly into his campaign account.
A closer look at Mr. Romney’s own filings revealed that Mr. Obama, while trailing in overall party fund-raising, was pulling far more money than Mr. Romney into his campaign account, the most useful and flexible dollars a candidate has to spend, in part because of strong collection from small donors who could give again and again without hitting federal limits.
Mr. Romney’s aides declined to discuss their advertising plans, saying that unlike the Obama campaign, which has reserved more than $40 million in time through Election Day, it will not telegraph its intentions for competitors to see.
As of the end of July, the Republican Party [ http://topics.nytimes.com/top/reference/timestopics/organizations/r/republican_party/index.html ] had an additional $15 million left to spend in coordination with Mr. Romney before it reaches its federal spending limits. And though no one knows the precise amounts, the Romney campaign will have millions at its disposal that it can drop into a television market at any given moment.
So far it is only buying several days or a week of advertising at a time, a sign that it is being extremely frugal. According to a review of spending figures provided by a group that tracks political advertising, from Sept. 10 through Sept. 24, Mr. Romney and his allies reserved $3.7 million in advertising time in Ohio. That compared with $5.2 million for Mr. Obama and his allies.
In Colorado, Mr. Romney is being outspent $2.2 million to $1.5 million during that same period. In New Hampshire, Mr. Obama is spending $1.2 million, compared with $380,000 to benefit Mr. Romney. The vast majority of that is coming not from the Romney campaign but from American Crossroads, the conservative super PAC.
Asked about the campaign’s budget on Wednesday, Spencer Zwick, Mr. Romney’s finance chairman, said simply, “We have spent our money smartly and efficiently.”
© 2012 The New York Times Company
http://www.nytimes.com/2012/09/20/us/politics/romney-campaign-cautious-with-ad-budget-even-in-key-states.html
===
Romney campaign hits a financial snag
September 20, 2012
http://www.washingtonpost.com/politics/decision2012/romney-campaign-hits-a-financal-snag/2012/09/20/b31c568c-0334-11e2-91e7-2962c74e7738_story.html [with comments]
===
Pro-Romney Super PAC plowed through cash war chest in August
Sep 20, 2012
http://www.reuters.com/article/2012/09/21/usa-campaign-money-restore-idUSL1E8KKHR320120921 [no comments yet]
===
Money Race: Obama Super PAC Beats Romney Super PAC for the First Time
Sep 20, 2012
http://abcnews.go.com/blogs/politics/2012/09/money-race-obama-super-pac-beats-romney-super-pac-for-the-first-time/ [with comments]
===
Obama again far outraising, outspending Romney
Challenger’s small-donor haul lags; president’s super PAC nears parity
September 20, 2012
http://www.washingtontimes.com/news/2012/sep/20/romney-raises-67m-obama-tops-him-in-ad-buys/ [with comments]
===
Romney rescue plan: More Mitt
9/20/12
http://www.politico.com/news/stories/0912/81428.html [with comments]
===
Allen West Targeted By Democratic Super PAC With $1 Million Ad Buy
09/20/2012
http://www.huffingtonpost.com/2012/09/20/allen-west-super-pac-ad_n_1898448.html [with comments] [the above YouTube of the ad, embedded, at http://www.youtube.com/watch?v=rTGNcaC0CkM ]
===
John McCain Defends Mitt Romney's '47 Percent' Remarks
09/20/2012
http://www.huffingtonpost.com/2012/09/20/john-mccain-47-percent-mitt-romney_n_1900102.html [with embedded video, and comments]
===
Whoopi Goldberg Fires Back At Mitt Romney Over Leaked Comments
09/20/2012
http://www.huffingtonpost.com/2012/09/19/whoopi-goldberg-rips-mitt_n_1898799.html [with embedded video report, and comments]
===
'Key & Peele': Obama And Luther Take On Romney's 47 Percent Gaffe (EXCLUSIVE VIDEO)
09/20/2012
http://www.huffingtonpost.com/2012/09/20/key-peele-obama-luther-romney-47-percent-video_n_1899875.html [with embedded video, and comments]
===
Why These Kids Get a Free Ride to College
September 13, 2012
http://www.nytimes.com/2012/09/16/magazine/kalamazoo-mich-the-city-that-pays-for-college.html [ http://www.nytimes.com/2012/09/16/magazine/kalamazoo-mich-the-city-that-pays-for-college.html?pagewanted=all ] [with comments]
===
For-Profit College Claims Are 'Nonsense,' Obama Administration Says
09/10/2012
http://www.huffingtonpost.com/2012/09/10/for-profit-colleges-nonsense-obama-administration_n_1872305.html [with comments]
===
U.S. to File W.T.O. Case Against China Over Cars
September 16, 2012
http://www.nytimes.com/2012/09/17/business/united-states-to-file-wto-case-against-china-over-cars.html
===
Bad to the bone: A medical horror story
When medical device company Synthes decided to illegally test a bone cement on people, the results were disastrous. A disturbing tale of corporate crime and punishment.
September 18, 2012
http://features.blogs.fortune.cnn.com/2012/09/18/synthes-norian-criminal/?iid=HP_LN [with comments]
===
Georgia Bar Mulligan's Faces Backlash From Civil Rights Group After Posting Racist Obama Sign
09/19/2012
http://www.huffingtonpost.com/2012/09/19/georgia-bar-mulligans-racist-sign_n_1897226.html [with comments] [other Mulligan's signs at http://imgur.com/a/RqJ1r ]
===
Empty Chair 'Lynched' By Anti-Obama Texas Republican Bud Johnson
09/20/2012
http://www.huffingtonpost.com/2012/09/20/empty-chair-lynched_n_1899991.html [with comments]
===
Gun Sales May Soar If Obama Wins Reelection: Report
Posted: 09/16/2012 10:17 am EDT Updated: 09/16/2012 1:38 pm EDT
President Obama and the Democrats won't be the only big winners if he's reelected in November.
Gun retailers and manufacturers are expecting a significant rise in gun sales [ http://online.wsj.com/article/SB10000872396390444433504577651393759726660.html ( http://online.wsj.com/article/SB10000872396390444433504577651393759726660.html?mod=WSJ_business_LeadStoryCollection )] if the president remains in the White House for a second term, The Wall Street Journal reports.
That's because some perceive the Obama administration to be a threat to gun rights, although the WSJ notes that [id.] "there haven't been any substantial changes to gun-control laws under Mr. Obama."
Gun sales increased sharply [ http://www.huffingtonpost.com/2012/09/12/gun-sales-up-obama_n_1879080.html ] following Obama's election in 2008. Between November 3 and 9 -- the week Obama was elected -- the FBI had a more than 48 percent increase in requests for background checks for gun purchases [ http://articles.cnn.com/2008-11-11/justice/obama.gun.sales_1_gun-shop-brady-campaign-gun-owner?_s=PM:CRIME ] than it received during the same period the previous year, CNN reported at the time.
"I think there's going to be an attack to some degree on the gun owners," Lloyd Clement, a gun owner from New Hampshire, told CNN in 2008 [id.].
But, according to the Associated Press, Obama "[h]as not pushed for gun control measures as president" and has signed legislation increasing the number of places [ http://www.huffingtonpost.com/huff-wires/20120910/us-where-they-stand/ ] -- namely, Amtrak trains and national parks -- where people can have concealed weapons.
The Brady Campaign to End Gun Violence actually gave the president an "F" grade in 2010 [ http://www.bradycampaign.org/media/press/view/1214/ ].
For his part, Mitt Romney, the Republican presidential nominee, says on his website that he [ http://www.mittromney.com/issues/gun-rights ] "strongly supports the right of all law-abiding Americans to exercise their constitutionally protected right to own firearms and to use them for lawful purposes, including hunting, recreational shooting, self-defense, and the protection of family and property."
This isn't the first time that the president has been linked to an increase in firearm sales. In February, Ammo.net, an online ammunition retailer, called President Obama the [ http://www.huffingtonpost.com/2012/02/21/obama-greatest-gun-salesman-in-america_n_1291381.html ] "greatest gun salesman in America."
"President Obama's perceived hostility towards gun owners has been one of the key factors behind the multi-year financial boom the firearms industry continues to enjoy," Ammo.net wrote on its website at the time [id.].
The WSJ has detailed figures from gun manufacturers and spoke to the NRA about why a second Obama term could be different than a first, so click over to the WSJ [ http://online.wsj.com/article/SB10000872396390444433504577651393759726660.html ( http://online.wsj.com/article/SB10000872396390444433504577651393759726660.html?mod=WSJ_business_LeadStoryCollection )] to read more.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/09/15/gun-sales-soar-obama-reelection_n_1886960.html [with comments]
===
Rodeo Clown Makes Racist Michelle Obama 'National Geographic' Joke
09/18/2012
[...]
"Playboy is offering Ann Romney $250,000 to pose in the magazine and the White House is upset about it because National Geographic only offered Michelle Obama $50 to pose for them."
[...]
http://www.huffingtonpost.com/2012/09/17/michelle-obama-national-geographic-joke-rodeo-clown-_n_1890697.html [with comments]
===
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"Eternal vigilance is the price of Liberty."
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