12/09/2014 archive

Make no mistake about it, Parties are machines to win elections.  When there is no electoral victory, there is no reason for their continued existence except sentiment and inertia.

Wall Street’s Democrats

Robert Reich

Monday, December 8, 2014

In Washington’s coming budget battles, sacred cows like the tax deductions for home mortgage interest and charitable donations are likely to be on the table along with potential cuts to Social Security and Medicare.

But no one on Capitol Hill believes Wall Street’s beloved carried-interest tax loophole will be touched.

Don’t blame the newly elected Republican Congress.

Democrats didn’t repeal the loophole when they ran both houses of Congress from January 2009 to January 2011. And the reason they didn’t has a direct bearing on the future of the party.

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Carried interest allows hedge-fund and private-equity managers, as well as many venture capitalists and partners in real estate investment trusts, to treat their take of the profits as capital gains – taxed at maximum rate of 23.8 percent instead of the 39.6 percent maximum applied to ordinary income.

It’s a pure scam. They get the tax break even though they invest other peoples’ money rather than risk their own.

The loophole has no economic justification. As one private-equity manager told me recently, “I can’t defend it. No one can.”

It’s worth about $11 billion a year – more than enough to extend unemployment benefits to every one of America’s nearly 3 million long-term unemployed.

The hedge-fund, private-equity, and other fund managers who receive this $11 billion are some of the richest people in America. Forbes lists 46 billionaires who have derived most of their wealth from managing hedge funds. Mitt Romney used the carried-interest loophole to help limit his effective tax rate in 2011 to 13.9 percent.

So why didn’t Democrats close it when they ran Congress?

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The Democrats’ unwillingness to close the carried-interest loophole when they could also goes some way to explaining why, almost six years after Wall Street’s near meltdown, the Obama administration has done so little to rein in the Street.

Wall Street’s biggest banks are far bigger now than they were then, yet they still have no a credible plan for winding down their operations if they get into trouble.

The Dodd-Frank Act, designed to prevent another Wall Street failure, has been watered down so much it’s slush. There’s been no move to resurrect the Glass-Steagall Act separating investment banking from commercial banking.

Not a not a single Wall Street executive has been prosecuted for his involvement in the frauds that caused the mess.

Wall Street was the fourth-largest contributor to Barack Obama’s presidential campaign in 2008, and is already gearing up for Hillary Clinton’s 2016 run.

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This must stop. America can’t tackle widening inequality without confronting the power and privilege lying behind it.

If the Democratic party doesn’t lead the charge, who will?

Addition by Subtraction

by Gaius Publius, Hullabaloo

12/08/2014 10:00:00 AM

Democratic voters again showed they don’t want corporate Democrats in office, which hands wins to Republicans. More and more it seems entirely likely – it’s at least worth considering – that to defeat Republicans, we have to take control of the party first and remove bought “leaders” who are electorally weaker than we are. Because more and more, electoral losses are on them and not on us.

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Klein compares Lieu’s electoral results to Waxman’s in the same district. Then he compares Lieu’s results to California Assemblyman Muratsuchi’s, whose Assembly district lies within Lieu’s congressional district.

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Klein offers other examples as well, including the fact that a corporatist will set up the party’s “Post Mortem” committee. (That committee will include the ultimate corporatist, Google’s Eric Schmidt.) The lesson of these examples is clear. In today’s electoral climate, progressives mainly win and corporate Democrats mainly lose. (Muratsuchi’s loss just cost the Democrats their super-majority in the CA Assembly.) Yet as seems more and more obvious, corporate Democrats in leadership positions would rather keep Money happy than keep voters happy, and it’s costing the party at the booth.

If they’re the reason the party is losing, not us, shouldn’t they be taken out first? After all, as the Piketty world grows darker and more stark, it’s our solutions that voters are looking for. Should we let “party loyalty” prevent us from giving the country and its voters what they both want and need?

In that sense, perhaps the 2014 election was a win after all. Addition by subtraction. Also, a useful signal that 2016 may not be Ms. Clinton’s Dem-corporate cakewalk and needs a rethink. Time to start challenging those “leaders” for party control? I would say Yes, and firmly.

In Light of Eric Garner

Ian Welsh

2014 December 5

Understand this, if you understand nothing else:

(T)he system is working as intended.

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What you will hear defenders of the police say is “he was non-compliant.”

Non-compliant.

If a police officer tells you to do anything, you do it immediately.  If you do not, anything that happens to you, up to and including death, is your problem.

The legal system exists, today, to ensure compliance.

American oligarchical society rests on people not effectively resisting.  All gains now go to the top 10%, with the rest of society losing ground.  Incarceration rates blossom in 1980, which is also the year that the oligarchical program is voted in and becomes official.  (Trickle down economics can be understood no other way.)

Any part of the population which is inclined to resist, must be taught that it cannot resist.  Get out millions to demonstrate against the Iraq war: it will not work. Protest against police killings of African Americans, it will not work.

Nothing you do will work.

You will comply, and you will learn that resistance is futile.

The more outside the mainstream you are, the more you will learn it.  African Americans, Latinos, poor whites (in that order.)  Those who are fundamentally authoritarian, but somewhat opposed to the system (like the Bundy ranch) are treated more carefully (though the militia movement has its martyrs).  But the fundamental lesson of life is to do what your lords and masters tell you to, and to not protest any law or order, no matter how nonsensical, trivial, or unjust it is.

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Compliance when given specific orders and learned hopelessness about protest or organizing are the aims.  Ordinary citizens must understand that they cannot change the system if elites do not agree with the changes they want made.  If they try, they will be arrested and receive a criminal sentence, meaning they can never again have a good job.

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The system is doing what it is meant to do.  It teaches compliance, it teaches hopelessness and it identifies those who will not obey laws that don’t make sense (marijuana possession, for example), or who will fight or organize against the system and then it destroys them economically and often psychologically through practices like solitary confinement and prison rape.

The system will not change until those who want it to change have the raw power to force it to change, because it does serve the interests of its masters by destroying or marginalizing anyone who is actually a danger to oligarchical control of the system.

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(U)nderstand this, most of what police are paid in is social coin: the right to demand immediate obedience and fuck people up; the solidarity of the blue line; the feeling of belonging and power, is what makes the job worth having for (probably most) of the people who are now attracted to it.

Being a thug; having social sanction to be a thug, is enjoyable to a lot of people. Since that’s what cops get to do, those are the sort of people who tend to be attracted to the job.  The police are the biggest toughest gang around, and belonging to them has most of the rewards of gang life, without the dangers of going to jail.

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Working as intended.

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A Crisis of Confidence in Prosecutors

It is a long-established and basic reality of law enforcement in America: Prosecutors who want an indictment get an indictment. In 2010 alone, federal prosecutors sought indictments in 162,000 cases. All but 11 times, they succeeded.

Yet the results are entirely different when police officers kill unarmed civilians. In those cases, the officers are almost never prosecuted either because district attorneys do not pursue charges in the first place or grand juries do not indict, as happened most recently in Ferguson, Mo., and Staten Island. [..]

Whether or not bias can be proved in a given case, the public perception of it is real and must be addressed.

The best solution would be a law that automatically transfers to an independent prosecutor all cases in which a civilian is dead at the hands of the police. This would avoid the messy politics of singling out certain district attorneys and taking cases away from them.

Juan Cole: Why the Founding Fathers Thought Banning Torture Foundational to the US Constitution

I have argued on many occasions that the language of patriotism and appeal to the Founding Fathers and the constitution must not be allowed to be appropriated by the political right wing in contemporary America, since for the most part right wing principles (privileging religion, exaltation of ‘whiteness’ over universal humanity, and preference for property rights over human rights) are diametrically opposed to the Enlightenment and Deist values of most of the framers of the Unites States.

We will likely hear these false appeals to an imaginary history a great deal with the release of the Senate report on CIA torture. It seems to me self-evident that most of the members of the Constitutional Convention would have voted to release the report and also would have been completely appalled at its contents. [..]

Those who wish to create a category of persons who may be treated by the government with impunity are behaving as fascists like Franco did in the 1930s, who also typically created classes of persons to whom legal guarantees did not apply.

But if our discussion focuses on the Founding Fathers, it isn’t even necessary to look so closely at the Geneva Conventions.

Thomas Jefferson wrote in the Declaration of Independence, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

The phrase “all men” means all persons of any nationality.

We know what the Founding Fathers believed. They believed in universal rights. And they believed in basic principles of human dignity. Above all, they did not think the government had the prerogative of behaving as it pleased. It doesn’t have the prerogative to torture.

Chair of the Senate Intelligence Committee, Senator Dianne Feinstein (D-CA) has released the 500 page torture report. She is now speaking on the Senate floor. Her presentation is expected to take about an hour. She will be followed by Sen. John McCain (R-AZ).

The report was just released, and is online here (pdf), or here (pdf).

H/T Glenn Greenwald, The Intercept

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This Day in History

Britain’s Prince Charles and Princess Diana announce they are separating; The Charge of the Light Brigade – is published in Britain; Solidarity union leader Lech Walesa is elected president in Poland; Actor Kirk Douglas is born.

Breakfast Tunes

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

December 9 is the 343rd day of the year (344th in leap years) in the Gregorian calendar. There are 22 days remaining until the end of the year.

On this day in 1861, The Joint Committee on the Conduct of the War is established by the U.S. Congress.

The Joint Committee on the Conduct of the War was a United States Congressional investigating committee created to handle issues surrounding the American Civil War. It was established on December 9, 1861, following the embarrassing Union defeat at the Battle of Ball’s Bluff, at the instigation of Senator Zachariah T. Chandler of Michigan, and continued until May 1865. Its purpose was to investigate such matters as illicit trade with the Confederate states, medical treatment of wounded soldiers, military contracts, and the causes of Union battle losses. The Committee was also involved in supporting the war effort through various means, including endorsing emancipation, the use of black soldiers, and the appointment of generals who were known to be aggressive fighters. It was chaired throughout by Senator Benjamin Wade of Ohio, and became identified with the Radical Republicans who wanted more aggressive war policies than those of Abraham Lincoln.

History

Union officers often found themselves in an uncomfortable position before the Committee. Since this was a civil war, pitting neighbor against neighbor (and sometimes brother against brother), the loyalty of a soldier to the Union was simple to question. And since Union forces had very poor luck against their Confederate counterparts early in the war, particularly in the Eastern Theater battles that held the attention of the newspapers and Washington politicians, it was easy to accuse an officer of being a traitor after he lost a battle or was slow to engage or pursue the enemy. This politically charged atmosphere was very difficult and distracting for career military officers. Officers who were not known Republicans felt the most pressure before the Committee.

During the committee’s existence, it held 272 meetings and received testimony in Washington and at other locations, often from military officers. Though the committee met and held hearings in secrecy, the testimony and related exhibits were published at irregular intervals in the numerous committee reports of its investigations. The records include the original manuscripts of certain postwar reports that the committee received from general officers. There are also transcripts of testimony and accounting records regarding the military administration of Alexandria, Virginia.

One of the most colorful series of committee hearings followed the Battle of Gettysburg in 1863, where Union Maj. Gen. Daniel Sickles, a former congressman, accused Maj. Gen. George G. Meade of mismanaging the battle, planning to retreat from Gettysburg prior to his victory there, and failing to pursue and defeat Robert E. Lee‘s army as it retreated. This was mostly a self-serving effort on Sickles’s part because he was trying to deflect criticism from his own disastrous role in the battle. Bill Hyde notes that the committee’s report on Gettysburg was edited by Wade in ways that were unfavorable to Meade, even when that required distorting the evidence. The report was “a powerful propaganda weapon” (p. 381), but the committee’s power had waned by the time the final testimony was taken of William T. Sherman on May 22, 1865.

The war it was investigating completed, the committee ceased to exist after this last testimony, and the final reports were published shortly thereafter. The later Joint Committee on Reconstruction represented a similar attempt to check executive power by the Radical Republicans.

Rednecks on Raritan Bay

Trevor Noah

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