Wall Street Journal

Mitt Romney Enjoys Your Pain

Leo Gerard — Tue, 05 Jun 2012 09:58:16 -0400

GOP presidential candidate Mitt Romney’s reaction to high unemployment is creepy.

During an interview with CBS reporter Jan Crawford last week, Romney smirked as he mentioned that unemployment has remained above 8 percent for 39 months. Then, as the interview ended, he smirked again after saying President Obama had hoped the Recovery Act would reduce joblessness to 6 percent by now.

Romney is loving high unemployment. Just like the Republican majority in the U.S. House of Representatives that has repeatedly blocked President Obama’s proposals to increase hiring, Romney believes high joblessness is good for the GOP. It’s one thing for a politician to know in his heart of hearts that a calamity for the country may help him achieve his ambitions. It’s another to be so callous as to beam about it on TV.

The nation’s sustained high unemployment disheartens any normal human being. Friday’s report that only 69,000 jobs were created in May was troubling -- that is to anyone who has ever been laid off or had a friend or relative or neighbor who lost a job. They know the feelings of fear, depression and guilt that accompany job loss. They’ve experienced the suffering as job applications are rejected, bills pile up and foreclosure is threatened. Normal people don’t smile about high unemployment; they cringe.

Romney contends he’s the fella to fix those unemployment numbers. But his record as CEO of Bain Capital and governor of Massachusetts provides little evidence of that. The focus of Bain was never job creation. It was money making. And if making money meant destroying jobs, that’s what Bain did.

An analysis by the Wall Street Journal of the companies Bain bought in the 15 years Romney ran it found that 22 percent went bankrupt or closed within eight years. That’s untold thousands of workers who lost their jobs and untold thousands of Bain creditors who endured losses because of bad Bain business practices.

Romney has frequently contended Bain created 100,000 jobs while he led it. The Washington Post fact checker awarded that claim three Pinocchios. After Republican rivals Newt Gingrich and Rick Perry chanted, “show us the jobs,” Romney lowered the number. Kinda significantly. Down to tens of thousands of jobs. Finally, Romney cut the figure even further, releasing a campaign video saying he’d created “thousands of jobs.”

If “thousands” is true, that’s good. But, frankly, “thousands” over 15 years is hardly a bragging point for a candidate who contends his private sector experience will enable him to create the millions of jobs the nation needs.

Romney’s job generation as governor of Massachusetts doesn’t instill much confidence in his ability to perform on the national level either. Massachusetts added 45,800 jobs in the four years he was governor. While that’s positive, it occurred during a time of economic expansion nationally, not during the grave recession President Obama inherited.

In addition, Massachusetts’ net jobs growth declined to 1.4 percent during Romney’s governorship, significantly lower than the 5.8 percent growth in the rest of the nation. In fact, Massachusetts dropped to 47^th for job growth during Romney’s reign, far lower than during his predecessor’s time.

Romney claimed at one point during the campaign that he was unemployed, and laughed about it. But this quarter billionaire doesn’t have a clue what it’s like to really be jobless or desperate. This is the silver-spoon son of a car company executive, a man who attended exclusive private schools, a man who handed his own son $10 million to help start his business, a man who has a car elevator in his $9 million California beach house.

This is a candidate who mocked NASCAR fans for wearing cheap rain slickers while his wife wears $1,000 silk t-shirts. This is owner of three homes valued at a total of $20 million who opposed helping underwater homeowners, saying the foreclosure crisis should “run its course and hit bottom.”

This is a man who actually said he likes to fire people. Not hire people. Fire people. Here’s what he said:

“I like being able to fire people who provide services to me.”

The slow jobs growth in May is not surprising, frankly, considering the economic contraction occurring in Europe and even in China. In the 17-nation EuroZone, unemployment now has risen to a record 11 percent, far higher than in the United States where Obama’s Recovery Act prevented the country from falling off the cliff into another Great Depression.

Unlike the United States and China, both of which invested in stimulus, Europe chose austerity. Greece, Spain, Italy, Ireland and Great Britain now are suffering economic contraction and distress caused by austerity.

That’s what Romney and the Republicans propose for America. Austerity. Job contraction. Recession. Suffering.

It’s not true what Romney says about Americans. They aren’t jealous of his wealth. They don’t care that he and his wife ride $100,000 horses. They just want to be able to afford a rocking horse for their kid. They don’t care about the Romneys’ vacations in France. They just want to be able to save enough to get the kids a season pass to the municipal pool.

They don’t, however, want their country run by a guy who can’t conceive what it’s like to be unemployed and has made no effort to find out. They don’t want to be led by a guy who likes firing people. They don’t want a president who finds enjoyment in high unemployment.

Romney Economics: Cheat Main Street

Leo Gerard — Tue, 29 May 2012 08:59:23 -0400

Mitt Romney made a boatload of money for himself and his fellow fat cats. No doubt about it. Billions. But he made it the way Americans hate most – Wall Street style wheeling and dealing.

Americans hate it because when all that scheming went bad, when the market collapsed, it was the 99 percent who footed the bill to bailout Wall Street. The same is true of Romney and Bain. When Bain bankrupted the companies it bought – and Bain did that shockingly often – workers and Main Street businesses paid the price.

Romney contends his money making as CEO of Bain qualifies him to be President of the United States. That’s true if Americans believe money should flow out of their pockets, out of the cash registers of Main Street shops and into the Swiss bank accounts of Romney and his 1 percenter cronies.

Here are some of Romney’s victims, Main Street businesses owed money by just one bankrupted Bain company, American Pad and Paper Co. (Ampad): Technical Coatings Laboratory, owed $125,191.20 and paid in bankruptcy $237.03; Services Plus Inc., owed $12,064.71, paid $22.84; Crown Vantage, owed $32,155.26, paid $60.89.

In the 15 years Romney ran Bain from 1984 to 1999, 22 percent of the companies it invested in went bankrupt or closed within eight years, according to a study by the Wall Street Journal.

In fact, according to the Wall Street Journal, the bulk – 70 percent – of the $2.5 billion Bain made for investors during that time came from just 10 deals. Four of those ended up in bankruptcy as well – killing jobs and jilting Main Street businesses. Despite that, Romney and the Bain investors fattened their Swiss bank accounts.

More Main Street victims: Lakeway Container Inc., owed $47,143.56 by Ampad, paid $89.26 in bankruptcy; Olympic Adhesives, owed $6,566, paid $12.43; American Chain and Gear, owed $505.54, paid 96 cents.

Bain’s handling of Ampad illustrates how the rich extract money from these deals and leave behind wounded workers and Main Street shops. Bain bought Ampad from Mead Corp. in 1992 and added SCM Office Supplies to the holdings two years later. Like many leveraged buyout deals, these were financed with loans secured by the purchased companies’ assets.

Within hours after buying SCM, Bain fired every one of its 350 workers in Marion, Ind. Bain, through Ampad, told the shocked and terrified workers they could apply for their former positions if they wanted them back – at less pay, fewer benefits and worse working conditions.

One way leveraged buyout firms like Bain make money is by taking it from workers – slashing their pay, benefits and pensions. This also makes companies look more productive, enabling buyout firms like Bain to make money on taking them public.

Bain bought SCM early in July, 1994. Within two months, the workers went out on strike, seeking restoration of some of their pay and benefits. Workers sought help from Romney, who rebuffed them as he was running for Ted Kennedy’s U.S. Senate seat. After losing that race, Romney returned to Bain, permanently closed the Marion plant and moved its equipment to other Ampad facilities.

More Main Street victims of Ampad bankruptcy: Green Bay Packaging Inc., owed $75,551.92, paid $137.37; Springfield Electric, owed $3,919.88, paid $7.23; American Coffee Break Service, owed $1,349.73, paid $2.56.

Through 1999, Bain continued to be the single largest shareholder in Ampad, and three Bain executives sat on its board of directors. Ampad struggled to meet the low price demands of big box retailers – like Staples, in which Bain had also invested and where Romney sat on the board of directors.

Ampad fell into bankruptcy in 2000. Companies besieged with debt -- as Ampad was -- because of leveraged buyouts often fail because they are too weakened to deal with normal business adversity.

More Main Street victims of Ampad bankruptcy: Economy Plumbing Co., owed $1,505.69, paid $2.85; Hohner Stitching Products, owed $2,095.76, paid $3.97; Mount Tom Box Co. Inc., owed $34,351.96, paid $65.04.

When Ampad went under, it owed $182.6 million to its suppliers across America. The bankruptcy left only $328,633 to pay nearly 1,300 unsecured creditors – that worked out to 10 cents for every $10 Ampad owed. That’s how a company liked Hometown Café & Catering, owed $600.60 by Ampad, got all of $1.14. And Hometown Café received that big fat check 11 years after Ampad filed for bankruptcy.

These Main Street shops and businesses are the heart of American communities, supporting the local United Way, Little League teams and Memorial Day parades. Debts never paid mean less money for them to hire their own workers, fewer dollars for them to contribute to their communities and a higher probability they’ll be forced into bankruptcy.

Bain invested $5 million in Ampad and took more than $100 million out, through numerous methods, including fees. That $100 million would have gone a long way toward paying the debts Ampad owed to Main Street businesses across the country. It wouldn’t be surprising if they felt a little like Romney and Bain robbed them at gunpoint.

But everything Bain did was legal. It’s Romney economics, working for the wealthy while double crossing Main Street.

Retirees Occupy Century Aluminum

Leo Gerard — Tue, 31 Jan 2012 09:48:55 -0500

On Dec. 18, a dozen retirees, men and women in their 60s, 70s, even 80s, began occupying a median strip along Route 33 in front of the closed Century Aluminum smelter in Ravenswood, W.Va. In tents and under tarps, a small group stays overnight, despite hypertension, arthritis and other old age ailments. One has suffered a stroke.

These vulnerable people expose themselves to weather extremes although some have no health insurance at all. Century cancelled it. That’s why they’re occupying Century.

The retirees labored their entire lives for wages and pensions comparably lower than those of other aluminum workers. They did it believing they made those sacrifices in exchange for good, lifelong health coverage. Over the past two years, however, Century evicted them, about 540 retirees altogether, from the insurance plan.

The betrayal burns. Executives at Century, corporate 1 percenters, committed the same sort of treachery that is being condemned by Occupy Wall Street demonstrators representing the victimized 99 percent across the country. Thus the retirees adopted the grandchildren’s protest tactic of encampment.

Century shuttered the 50-year-old Ravenswood smelter in February of 2009, throwing 651 workers out of jobs. Century, headquartered in Monterey, Calif., didn’t go bankrupt though. It still operates aluminum plants in Kentucky, South Carolina and Iceland. And it didn’t immediately cancel promised insurance for retirees.

Nine months after the shutdown, it announced it would terminate as of June 1, 2010 health benefits for retirees eligible for Medicare. Then on Nov. 1, 2010, Century told its retirees who weren’t yet eligible for Medicare that it would stop paying for their coverage as of Jan. 1, 2011.

This revoking of earned benefits isn’t an isolated incident or a fluke. It is part of a pattern documented by Wall Street Journal investigative reporter Ellen E. Schultz in her new book “Retirement Heist.” The subtitle is, “How companies plunder and profit from the nest eggs of American workers.

She describes in gory detail how corporations raided worker pension accounts, siphoning off surpluses that would be needed later to prop up plans damaged by the Wall Street collapse. She provides detailed accounts of executives gouging the funds to pay for their own exorbitant retirement packages. She tells of corporate executives ending retiree health insurance and freezing pensions but deceptively calling the changes improvements, so that CEOs could pump up company profits with money that had been pledged to workers.

While breaking promises to workers and violating contracts, these CEO 1 percenters falsely portrayed themselves as beleaguered champions of workers, valiantly attempting to preserve underfunded pensions. Like Costa Concordia Captain Francesco Schettino saving himself while abandoning passengers on his sinking cruise ship, the captains of industry padded their own pockets with pension and health care funds intended for retirees, then deserted the workers. Schultz describes the CEO scams this way in the book:

“In reality, they’re the silent pirates who looted the ships and left them to sink, along with the retirees, as they sailed away safely in their lifeboats.”

Most of the Costa Concordia passengers survived, but more than a dozen drowned. In West Virginia, most of the retirees are still kicking. A leader among the Century occupiers, Karen Gorrell, explained:

“We may have one foot in the grave, but we are kicking like hell with the other.”

But some have succumbed. Gorrell, wife of a 33-year veteran aluminum worker, says Century has retiree blood on its hands.

She tells of two tragedies. There’s Bryce Earl Turner who Karen encountered after her first meeting with Century retirees in Ravenswood. He was scared and sick. Both alternatives he faced -- buying private insurance or paying for his leukemia treatments out of pocket -- were way beyond his means. Losing his insurance was a death sentence. The retirees worked desperately to get him more time.

With the help of West Virginia’s U.S. senators, Jay Rockefeller and Joe Manchin, and a provision in Obama’s health care reform law, the retirees managed to get coverage extended to Sept. 1, 2011. Bryce Earl Turner, 59, who worked 37 years at the aluminum plant, died the next day.

The other tragedy is Sam McKinney. He attended a meeting of the retirees on Feb. 14, 2011. He said he feared losing the insurance because his wife was ill. Karen recounts:

“He was very emotional because he had taken his wife to Charleston to try to get some assistance with her health care costs and had been turned down.”

He said, she recalled, that it was hard to believe that in America after a person expended his usefulness to industry, a corporation could coldly cast him aside as if his life had no value.

After the meeting, Sam McKinney took his wife to Outback Steakhouse in Parkersburg for Valentine’s Day. As they left, he collapsed and died in the parking lot. Karen is sure the stress killed him. Wrongful stress. Stress he’d not have experienced if Century was good for its word.

Karen says of Turner and McKinney:

“It was murder without a gun.”

Though Century failed to fulfill its obligation to pay for retiree health care, it handed its last CEO, Logan W. Kruger, $4.9 million in 2010. That’s twelve times more than Americans pay their president, the leader of the free world. Century gave Kruger another $6.2 million to leave last November. Still, he’s suing for $20 million on top of that. Century also is defending against a lawsuit filed for the retirees by the United Steelworkers (USW) union, which represented most of the Century workers.

The USW hopes, however, to resolve the dispute outside the courtroom, with the help of the retirees and West Virginia lawmakers. The elderly agitators managed to win the support of the state’s U.S. senators, its governor and its legislature. So last year when Century went begging to the state for $20 million it claimed it needed to re-open the Ravenswood smelter, the lawmakers sent Century away empty handed with a directive to settle with the retirees before seeking reconsideration.

Not long afterward, Century booted Kruger, and the new management team is negotiating with the USW and the retirees.

The protesters don’t have what they want yet, and they’re not leaving their tents until they do.

Century gave the retiree occupiers port-o-potties and installed concrete barriers to prevent cars careening on an icy Route 33 from plowing through the encampment.

Very nice gesture. But resuming payment for promised health insurance would be a whole lot better.

If the Super Committee Doesn't Cut Your Medicare, Santa Claus Will Die!

Richard Eskow — Mon, 14 Nov 2011 13:12:40 -0500

This holiday season, let's spare a kind thought for the decent people who toil inside Washington's legislative machinery. These good folk must live and work inside the dreamlike bubble that is today's policy and media world. Each day they strain to see reality through the reflected light of the false but colorful narratives projected against the bubble's surface.

Or would it be a better metaphor to say they're prisoners in some cold underground cell? No matter how many polls are conducted, no matter how many economic analyses are performed, no matter how many bitter lessons are taught and re-taught, there are those who hope to deny them even a glimpse of reality.

Instead these good people are forced to stare into the harsh glare of synthetic reality, hour after hour, as if were a naked lightbulb in windowless room. Only a few precious slivers of genuine sunlight penetrate the dank basement of illusion that imprisons them.

Well-intentioned staffers in Washington need good information to do their jobs well. Instead they're being inundated with confusing pseudo-facts and empty fear-mongering. This week's case in point? The Congressional "Super Committee." Did you know that unless they come up with their cuts there will be no Christmas this year? You didn't? Then you haven't been reading the Wall Street Journal.

Unfortunately, that kind of distortion isn't the exception. It's the rule. 

The War (on Christmas) Comes Home

As we reported the other day, Democrats on the Committee are on the verge of offering a disastrous and unjust "compromise" that would punish millions of innocent people for the excesses of a few - and probably doom their own party's electoral chances.

As the Committee approaches its final days, the pressure is building ... and so is the media misinformation. The most darkly comical example of this comes from the Wall Street Journal, where a headline tells us that "Supercommittee Failure Could Throttle Holiday Spending."

Imagine: No gifts will glitter under the tree. The elves will join the ranks of the unemployed. The North Pole will fall into darkness as its failing economy threatens the Eurozone, if not the world. Rudolph will shrug off his harness and slink into the forest as the other reindeer look on mournfully.

Listen up, Congress: Give us those cuts or the fat guy in the red suit gets it!

But, absurd as it sounds, it's not far from what the Journal is saying: "Consumers are starting to feel a bit more confident about the economy," writes Josh Mitchell, citing the most recent index of consumer sentiment from Thomson Reuters and the University of Michigan. "But," adds Mitchell, "a cloud forming over Washington threatens to darken the mood."

A securities analyst is quoted as saying this: “Although investors have found it easy to ignore the US deficit problem against the backdrop of the European crisis, the calm before the storm is about to end and with it risks of a further downgrade by at least one rating agency ..."

Adds Mitchell: "Such a scenario can’t be good for consumer confidence heading into the holiday shopping season."

This would be nothing more than comic relief if it weren't so typical of the entire media narrative around the Committee, and if this narrative weren't taken so seriously inside the Beltway.

Confidence Game

We've already explained why a Super Committee failure will not necessarily lead to another downgrade of US debt - and that, contrary to another media myth, the last downgrade didn't affect the stock market at all. It was the last austerity deal, the debt-ceiling agreement between Barack Obama and John Boehner, that tanked the market this summer.

But that's only addressing the world's markets. What about American consumers? They're the engine of economic growth. Will their confidence in the economy really be shattered if a Congressional committee doesn't recommend cutting their entitlements and raising their taxes? (It sounds silly, but that's the proposition being put forward.) A new Politico/George Washington University Battleground poll gives us the answer:

No.

At least half of those people weren't even familiar with the Super Committee or its mission. Once it was described, nearly 70% said they expect it to fail and only 21% expect it to succeed. If they've either never heard of it or expect it to fail, how could its failure undermine their confidence in the economy? It could certainly undermine their confidence in the parties making the deal, however. The people who were polled made it clear that they're adamantly opposed to the very kind of deal the Democrats are now proposing as a "compromise."

Lumps of Coal in the Christmas Stocking

The centerpiece of the Democratic proposal was a series of cuts to Medicare and Medicaid. What's the number one item people did not want to see cut? Medicare and Medicaid. The second most unpopular target was Social Security. Between Medicare and Social Security, 56% of people polled felt that these entitlements were (in the poll's words) "the worst possible thing to cut." By contrast, only 20% of people polled felt that way about defense spending.

When asked whether they supported "hundreds of millions of dollars in spending cuts to Medicare and Medicaid through increasing beneficiary costs" (the Democratic offer includes $100 billion of such costs for Medicare and an additional amount for Medicaid), 76% were opposed -- and 52% were "opposed strongly."

Overall, 21% of people polled thought "the economy" was our most urgent problem, and 21% thought it was our second-most urgent problem. 18% thought that jobs are our most urgent problem, with 15% rating jobs at second place. That's 40% who think that jobs and the economy are our most urgent problem and 33% who place them second. Deficits and government spending, the focus of this committee, is rated at 19% and 13% respectively.

In other words: There's a committee which people have either never heard of or expect to fail. It's prepared to do things they hate to solve a problem they don't consider very important. And yet Washington's gripped with a fear that this committee will fail. It should be terrified that it will succeed.

(To ask Sen. Reid and Minority Leader Pelosi to protect Medicare and Medicaid, click here)

Robin Hood Tax Gains Ground at the G-20

Mary Bottari — Fri, 04 Nov 2011 09:46:02 -0400

The G-20 meeting in Cannes got underway yesterday. The sunny beach resort, playground to movie stars and media moguls was an odd choice for a somber G-20 meeting. As President Obama and Treasury Secretary Tim Geithner touched down in Air Force One, the Greek government was on the verge of collapse, austerity was sweeping Europe and the future of the Eurozone in doubt.

But the first day of talks offered a ray of hope for the entire global economy. For the first time, the 20 most powerful countries in the world sat down to discuss taxing the financial service industry. And for the first time, the U.S. blinked.

Welcome Change of Tune for the U.S. Government

President Sarkozy of France has long championed a small sales tax on the financial services industry. "At a time when states are making remarkable efforts to restore their public finances... how can the financial sector triumphantly continue to march, indifferent to the world around it, carelessly and without a care for the disorder it has more than its share in causing," Sarkozy said. Angela Merkel of German agrees.

President Obama too has supported the idea. Ron Suskind revealed in his new book Confidence Men that Obama thought the tax was a no brainer right after the banks collapsed the global economy -- until his economic team told him otherwise.

Behind the scenes, the “opponent in chief” has been U.S. Treasury Secretary Tim Geithner who has protected his friends on Wall Street by privately characterizing the tax as unworkable, easy to evade and not likely to bring in much income. Geithner doesn't just oppose the tax for the U.S., he has opposed the tax in the context of the G-20 and as EU member nations move forward to apply the tax in their member states.

Now the White House appears to be changing its tune. Reuters is reporting that the U.S. government is backing down from its long standing opposition to the tax.

An unnamed source told Reuters the United States now seemed "less problematic than the U.K." in resisting the idea. The U.S. is still opposed to the idea in principle but would not block others from going ahead. The Wall Street Journal confirmed the story quoting White House adviser Mark Froman as saying that the governments had decided to pursue different financial taxes, but: “I think there is broad consensus between the Europeans that the president met with this morning and ourselves about the ability of each to pursue this in their own way, whatever way they see to be most effective." Translation: Go for it, but the U.S. won’t join you.

The Wall Street Journal editorial board wasted no time, savagely attacking the idea and calling on Geithner for help.

Nurses Hold Geithner's Feet to the Fire

The news reports hit the wire almost at the exact same moment that thousands of nurses took the fight for a fair economy right to Tim Geithner’s doorstep with signs demanding "An Economy for the 99%" and “Tax Timmy’s Friends.” Nurses and other groups are fed up with Geithner's soft pedaling every action that might hold the big banks accountable for the meltdown of the global economy.

The noon rally at the Treasury marks an increased effort by unions to convince the Obama administration that more needs to be done to fix the country’s broken financial system and create jobs. Obama's reelection campaign recently announced that they were hoping to turn anger against Wall Street to their advantange in the next election cycle. Hard to do if the 99% are knocking on your door, calling for meaningful measures to make Wall Street pay. The nurses later fanned out across Capitol Hill, delivering 322,844 petition in support of the idea to Finance Chair Max Baucus and other members of the Joint Select Committee on Deficit Reduction (the Super Committee).

“It is long past time for Secretary Geithner and President Obama to get on board with other world leaders in supporting this common-sense approach to raise badly needed revenues to help fund the critical programs we need to revive the U.S. and other global economies,” said NNU Executive Director RoseAnn DeMoro, who traveled to Cannes to join with nurses from around the world at a press conference and rally close to where world leaders were meeting.

AFL-CIO President Richard Trumka was also in Cannes, quietly pushing the White House to do the right thing. The American labor leader was joined by one of the richest men on the planet, Microsoft co-founder Bill Gates, who presented a paper to the G-20 leaders advocating for the transaction tax to aid the developing world. An increasing number of unions and grassroots groups, including SEIU, AFSCME, Oxfam, Public Citizen, Rebuild the Dream and National People's Action are adopting the tax and campaigning on it, and the Occupy Wall Street crowd has embraced it as well holding small actions across the country October 29th.

The Pope was not present, and neither was the Archbishop of Canterbury, but both men came out for a financial transaction tax as economically feasible and morally right in recent days.

Actor Bill Nighy, the British actor who has long campaigned for the "Robin Hood Tax" as it is called in the U.K. and who did a wonderful video to popularize the idea joined the nurses in Cannes. “I heard a banker remark the other day that 'the time for atonement is over'. I must have been out of the country at the time, or looked away momentarily because I don't remember that period of atonement taking place. It would not affect their multimillion bonuses, “ Nighy dryly observed to the Guardian.

Tax Faces Continued Opposition in the United States

While the domestic implementation of the tax faces continued opposition from the U.S. Congress, Geithner and the White House, proponents reintroduced the legislation this week and are rapidly picking up co-sponsors. Oregon Rep. Pete DeFazio and Iowa Senator Tom Harkin introduced a modest version of the transaction tax (HR 3313) in an effort to get the Super Committee to take a closer look. While the financial services industry will work hard to convince Congress that any tax will result in the immediate collapse of the global financial system and that grannie will be hardest hit, the facts are that the modest fee proposed in this legislation is miniscule in comparison to the management fees applied by some mutual funds.

"Wall Street is 40 percent of the economy. They don't make things. They don't feed people. They churn. They create volatility,” said DeFazio. “The first step on the long path to recovery happens when we rein in the excessive speculative activity that has destabilized our financial system.”

Much more work needs to be done to get the Obama administration to adopt the idea, even more work to get it though Congress, but the tax now has a growing list of powerful allies and a simple common sense appeal.

As Trumka puts it: "It is time to put Wall Street to work rebuilding Main Street with a financial speculation tax to create jobs, rein in speculation and lay the groundwork for long-term economic prosperity."

Murdoch: News Corp. Too Big to Know

Leo Gerard — Thu, 21 Jul 2011 11:10:03 -0400

The Bush administration told taxpayers to hand over hundreds of billions of their hard-earned dollars to bail out Wall Street banks because the financial institutions were too big to fail. Now, Rupert Murdoch, owner of politically powerful publications and broadcast stations, claims his News Corp. is too big to know.

Murdoch, who’s in the news industry, essentially a business based on knowing and knowing first, told an investigating committee of the British Parliament this week that he’s a know-nothing. The CEO of News Corp., owner of Fox News and the Wall Street Journal, said he was clueless about the phone hacking and other illegality endemic at his company. News Corp., he said, was just too big for him to keep track of its criminal activity. Others were to blame, he blathered. Others are responsible. But not him, not the guy in charge. Here’s what he said:

“I feel that people I trusted — I don’t know who, on what level — have let me down, and I think they have behaved disgracefully, and it’s for them to pay.”

Basically, he said, he deserves the profits that his underlings make for him by bribing police officers and hacking phone lines. But if his underlings do something wrong —like bribing police and hacking phones — he can’t be held accountable because News Corp. is too big for him to know. He claims he certainly would not be behaving disgracefully as CEO for failing to know. And he’s saying he certainly shouldn’t have to pay for his underlings’ bad behavior on his watch. No, the way it works is he gets paid. No matter what.

Brilliant, as the Brits would say.

Banks are too big to be held accountable. Murdoch is too big to be held accountable. Only the little guy, like a laid off minimum wage earner, should be held accountable when he can’t make his mortgage or car payment.

In the United States, everyone is equal, except the guys who are more equal, the big shots like Wall Street banksters who rake in tens of millions in bonuses even when they lose gambles on collateralized debt obligations and the likes of Murdoch, now under investigation for violating the U.S. Foreign Corrupt Practices Act — which Murdoch earlier had tried to defang through donations to a Republican congressman who floated legislation to make foreign bribery less, well, illegal, and to a U.S. Chamber of Commerce campaign supporting that.

British Labour Party leader Ed Miliband blamed both the international banking crisis and the Murdoch scandal on those in the more-than-equal class shirking responsibility. Referring specifically to News Corp., he said:

“This was an organization that thought it was beyond responsibility. Its power was so immense, its influence so great, from prime ministers downwards. Nobody confronted them. Nobody held them to account. Nobody seemed willing to challenge them. Not the police, not most front-line politicians, nor most of the press.”

Here’s a little bit of what got News Corp. into trouble: The now-defunct News Corp.-owned The News of the World hacked into the phones of innocent people including, investigators believe, victims of terrorist attacks, the royal family, a prime minister and other politicians, celebrities and a 13-year-old kidnap victim, Milly Dowler. In her case, the paper wrote stories based on her voice mails, and then, police believe, erased some of her messages when her box filled up, leading her family to believe that she might be alive and hindering investigation into what ultimately turned out to be a murder.

News Corp. paid some people who threatened legal action millions for their silence. Evidence indicating that The News of the World paid police for information was withheld from authorities for four years. The corporation destroyed the computer of a key editor at The News of the World and failed to safeguard e-mail evidence. Ten employees and former employees now have been arrested, including a woman described as Murdoch’s most trusted lieutenant, Rebekah Brooks. Britain’s top cop, the commissioner of Scotland Yard, and one of his deputies resigned this week over questions about the delay in investigating the phone hacking.

In the U.S., the FBI and the Justice Department are probing the actions of the U.S.-based News Corp. because if it bribed British police, that may violate the U.S. Foreign Corrupt Practices Act and because of allegations that the hacking may have included the phones of American families of 9-11 victims.

In addition, Les Hinton, formerly executive chairman of News International, resigned last week as publisher of the Wall Street Journal (WSJ), claiming, like Murdoch, that he “was ignorant of what apparently happened.” Hinton served as executive chairman of the News Corp. unit that oversaw its British tabloids for 12 years, a period during which The News of the World hacking occurred, and he was responsible for News Corp.’s 2007 internal inquiry into the hacking of Milly Dowler’s voice mails. He quit the WSJ after British papers suggested his testimony about the Dowler case to Parliament was, as American conservatives are fond of saying, “not meant to be factual.”

As the scandal escalated, Murdoch withdrew News Corp.’s $12 billion bid to buy controlling interest in British Sky Broadcasting, the country’s dominant satellite TV network. This must have felt like a wooden stake to the heart for the political power broker, to whom candidates for prime minister bowed and scraped. He was, for example, the second person David Cameron invited to Downing Street after Cameron’s 2009 election as prime minister. And Cameron hired as his communications director former The News of the World editor Andy Coulson. Coulson now is one of 10 facing charges in the phone hacking and police bribing debacle.

Murdoch needs to get out of American TV as well. Federal communications law contains a morals clause requiring owners of television stations to be “of good character.” Murdoch has proved that he is not.

He either permitted phone hacking, police bribing and a costly cover-up, or he is so incompetent that he failed to know. Either way, Murdoch’s character could hardly be described as good.

Unlike Britain, the United States doesn’t have kings. But Murdoch assumed the role of kingmaker here — aiming to control American elections with his newspapers including the WSJ, his broadcast stations including Fox, and millions in contributions to conservatives and conservative causes like the Chamber of Commerce. If he can’t be held accountable for his corrupt business dealings because of his self-induced amnesia, at least the FCC can hold him responsible for his corrupt character.

Time for the FCC to oust Mr. Know-Nothing.

Give Mayors a Role in the Obama Administration

Harry Moroz — Tue, 28 Oct 2008 13:58:28 -0400

This year's presidential campaign has not involved the "urban decline" rhetoric that rallied politicians - and policymakers - to the cause of cities in the mid 1960s and late 1970s. Instead, as Alex MacGillis pointed out in Sunday's WaPo, Senator Obama

"has adopted the framing increasingly favored by many mayors and urban-policy types - promoting America's cities based on their strengths, not their failings."

This framing involves a slight shift of perspective from urban cores to metro areas. In many ways, this optimistic view of cities as nestled within metros (which aren't as politically, or racially, charged as cities) is productive. Economics backs up the sunny view, as MacGillis notes, with the majority of the nation's GDP generated and of its population and jobs located in metro areas.

But the champions of the metro perspective fail to defend the political relationship - the partnership - that is necessary between the federal government and cities. In interviewing mayors from cities across the country, I have consistently heard that cities will not truly prosper until mayors are provided more substantive opportunities to influence federal policy. This influence would extend beyond calls for more funds for the CDBG and COPS programs to provide mayors and other parochial officials occasions to highlight model local policies and coordinate with state officers and, indeed, with other officials inside their metro area.

Mayors have already joined together in ad hoc groups to meet Kyoto Protocol targets and in official organizations like the Conference of Mayors, but they have little formal means to influence federal policy. If mayors are heard at all, they are heard to be begging for money; if they receive money, they often receive too little or are constrained in its use. Providing mayors a platform for influence, exchange, and coordination -similar to Senator Obama's White House Office of Urban Policy - would capitalize on the economic power of metro areas while restoring urban policy to its proper place in national discourse. At its best, this would mean strengthening the power and authority of mayors at the federal level--something that Obama's transition team should embrace.

In today's WSJ, June Kronholz points out that few mayors become president. They have often been overlooked when they should be empowered. Today, mayors nationwide overwhelmingly want the next presidential administration to reverse that trend.
A recent interview DMI's MayorTV did with Mayor Dannel Malloy of Stamford, CT explores the much-needed political partnership between cities and the federal government. Check it out.

For similar video interviews, visit MayorTV.