Medicare turns fifty next week. It was signed into law July 30, 1965 – the crowning achievement of Lyndon Johnson’s Great Society. It’s more popular than ever. 

Yet Medicare continues to be blamed for America’s present and future budget problems. That’s baloney. 

A few days ago Jeb Bush even suggested phasing it out. Seniors already receiving benefits should continue to receive them, he said, but “we need to figure out a way to phase out this program for others and move to a new system that allows them to have something, because they’re not going to have anything.”

Bush praised Rep. Paul Ryan’s plan to give seniors vouchers instead. What Bush didn’t say was that Ryan’s vouchers wouldn’t keep up with increases in medical costs – leaving seniors with less coverage.

The fact is, Medicare isn’t the problem. It’s the solution.

Its costs are being pushed upward by the rising costs of health care overall – which have slowed somewhat since the Affordable Care Act was introduced but are still rising faster than inflation. 

Medicare costs are also rising because of the growing ranks of boomers becoming eligible for Medicare.

Medicare offers a way to reduce these underlying costs – if Washington would let it.

Let me explain.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is almost two and a half times the average of other advanced nations.

Yet the typical American lives 78.1 years – less than the average 80.1 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.

Medical costs continue to rise because doctors and hospitals still spend too much money on unnecessary tests, drugs, and procedures.

Consider lower back pain, one of the most common ailments of our sedentary society. Almost 95% of it can be relieved through physical therapy.

But doctors and hospitals often do expensive MRI’s, and then refer patients to orthopedic surgeons for costly surgery. Why? Physical therapy doesn’t generate much revenue.

Or say your diabetes, asthma, or heart condition is acting up. If you seek treatment in a hospital, 20 percent of the time you’re back within a month.

It would be far less costly if a nurse visited you at home to make sure you were taking your medications, a common practice in other advanced nations. But nurses don’t do home visits to Americans with acute conditions because hospitals aren’t paid for them.

America spends about over $19 billion a year fixing medical errors, the worst rate among advanced countries. Such errors are the third major cause of hospital deaths. 

One big reason is we keep patient records on computers that can’t share the data. Patient records are continuously re-written and then re-entered into different computers. That leads to lots of mistakes.

Meanwhile, administrative costs account for 15 to 30 percent of all health care spending in the United States, twice the rate of most other advanced nations. 

Most of this is to collect money: Doctors collecting from hospitals and insurers, hospitals collecting from insurers, insurers collecting from companies or policy holders. A third of nursing hours are devoted to documenting what’s done so that insurers have proof.

Cutting back Medicare won’t affect any of this. It will just funnel more money into the hands of for-profit insurers while limiting the amount of care seniors receive.

The answer isn’t to shrink Medicare. It’s to grow it – allowing anyone at any age to join.

Medicare’s administrative costs are in the range of 3 percent.

That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums).

And it’s way, way lower than the administrative costs of individual insurance (40 percent). It’s even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.

Meanwhile, as for-profit insurance companies merge into giant behemoths that reduce consumer choice still further, it’s doubly important to make Medicare available to all.  

Medicare should also be allowed to use its huge bargaining leverage to negotiate lower rates with pharmaceutical companies – which Obamacare barred in order to get Big Insurance to go along with the legislation.

These moves would give more Americans quality health care, slow rising healthcare costs, help reduce federal budget deficit, and keep Medicare going.

Let me say it again: Medicare isn’t the problem. It’s the solution.

A new report finds more U.S. children living in poverty than before the Great Recession. According to the report, released Tuesday from the Annie E. Casey Foundation, 22 percent of American children are living in poverty (as of 2013, the latest data available) compared with 18 percent in 2008.

Poverty rates are nearly double among African-Americans and American Indians. Problems are most severe in South and Southwest. Particularly troubling is a large increase in the share of children living in poor communities marked by poor schools and a lack of a safe place to play.

Which brings me to politics, power, and the progressive movement. 

The main event at the Netroots Nation conference in Phoenix, Arizona last weekend was a “Presidential Town Hall” featuring one-on-one discussions between journalist and undocumented American Jose Antonio Vargas and presidential candidates Governor Martin O’Malley and Senator Bernie Sanders.

It was upstaged by ‪#‎BlackLivesMatter activists who demanded to be heard.

It’s impossible to overcome widening economic inequality in America without also dealing with the legacy of racial inequality.

And it is impossible to overcome racial inequality without also reversing widening economic inequality.

They are not the same but they are intimately related.

Racial inequalities are baked into our political and economic system. Police brutality against black men and women, mass incarceration disproportionately of blacks and Latinos, housing discrimination that has resulted in racial apartheid across the nation, and voter suppression in the forms of gerrymandered districts, voter identification requirements, purges of names from voter registration lists, and understaffed voting stations in black neighborhoods – all reveal deep structures of discrimination that undermine economic inequality.

Black lives matter.

But it would be a terrible mistake for the progressive movement to split into a “Black lives matter” movement and an “economic justice” movement.

This would only play into the hands of the right.

For decades Republicans have exploited the economic frustrations of the white working and middle class to drive a wedge between races, channeling those frustrations into bigotry and resentment.

The Republican strategy has been to divide-and-conquer. They want to prevent the majority of Americans – poor, working class, and middle-class, blacks, Latinos, and whites – from uniting in common cause against the moneyed interests.

We must not let them.

Our only hope for genuine change is if poor, working class, middle class, black, Latino, and white come together in a powerful movement to take back our economy and democracy from the moneyed interests that now control both.

The Greek debt crisis offers another illustration of Wall Street’s powers of persuasion and predation, although the Street is missing from most accounts.

The crisis was exacerbated years ago by a deal with Goldman Sachs, engineered by Goldman’s current CEO, Lloyd Blankfein. 

Blankfein and his Goldman team helped Greece hide the true extent of its debt, and in the process almost doubled it. And just as with the American subprime crisis, and the current plight of many American cities, Wall Street’s predatory lending played an important although little-recognized role.

In 2001, Greece was looking for ways to disguise its mounting financial troubles. The Maastricht Treaty required all eurozone member states to show improvement in their public finances, but Greece was heading in the wrong direction. 

Then Goldman Sachs came to the rescue, arranging a secret loan of 2.8 billion euros for Greece, disguised as an off-the-books “cross-currency swap”—a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate.

As a result, about 2 percent of Greece’s debt magically disappeared from its national accounts. Christoforos Sardelis, then head of Greece’s Public Debt Management Agency, later described the deal to Bloomberg Business as “a very sexy story between two sinners.” 

For its services, Goldman received a whopping 600 million euros ($793 million), according to Spyros Papanicolaou, who took over from Sardelis in 2005. That came to about 12 percent of Goldman’s revenue from its giant trading and principal-investments unit in 2001—which posted record sales that year. The unit was run by Blankfein.

Then the deal turned sour. After the 9/11 attacks, bond yields plunged, resulting in a big loss for Greece because of the formula Goldman had used to compute the country’s debt repayments under the swap. By 2005, Greece owed almost double what it had put into the deal, pushing its off-the-books debt from 2.8 billion euros to 5.1 billion. 

In 2005, the deal was restructured and that 5.1 billion euros in debt locked in. Perhaps not incidentally, Mario Draghi, now head of the European Central Bank and a major player in the current Greek drama, was then managing director of Goldman’s international division.

Greece wasn’t the only sinner. Until 2008, European Union accounting rules allowed member nations to manage their debt with so-called off-market rates in swaps, pushed by Goldman and other Wall Street banks. In the late 1990s, JPMorgan enabled Italy to hide its debt by swapping currency at a favorable exchange rate, thereby committing Italy to future payments that didn’t appear on its national accounts as future liabilities.

But Greece was in the worst shape, and Goldman was the biggest enabler. Undoubtedly, Greece suffers from years of corruption and tax avoidance by its wealthy. But Goldman wasn’t an innocent bystander: It padded its profits by leveraging Greece to the hilt—along with much of the rest of the global economy. Other Wall Street banks did the same. When the bubble burst, all that leveraging pulled the world economy to its knees.

Even with the global economy reeling from Wall Street’s excesses, Goldman offered Greece another gimmick. In early November 2009, three months before the country’s debt crisis became global news, a Goldman team proposed a financial instrument that would push the debt from Greece’s healthcare system far into the future. This time, though, Greece didn’t bite.

As we know, Wall Street got bailed out by American taxpayers. And in subsequent years, the banks became profitable again and repaid their bailout loans. Bank shares have gone through the roof. Goldman’s were trading at $53 a share in November 2008; they’re now worth over $200. Executives at Goldman and other Wall Street banks have enjoyed huge pay packages and promotions. Blankfein, now Goldman’s CEO, raked in $24 million last year alone.

Meanwhile, the people of Greece struggle to buy medicine and food.

There are analogies here in America, beginning with the predatory loans made by Goldman, other big banks, and the financial companies they were allied with in the years leading up to the bust. Today, even as the bankers vacation in the Hamptons, millions of Americans continue to struggle with the aftershock of the financial crisis in terms of lost jobs, savings, and homes.

Meanwhile, cities and states across America have been forced to cut essential services because they’re trapped in similar deals sold to them by Wall Street banks. Many of these deals have involved swaps analogous to the ones Goldman sold the Greek government. 

And much like the assurances it made to the Greek government, Goldman and other banks assured the municipalities that the swaps would let them borrow more cheaply than if they relied on traditional fixed-rate bonds—while downplaying the risks they faced. Then, as interest rates plunged and the swaps turned out to cost far more, Goldman and the other banks refused to let the municipalities refinance without paying hefty fees to terminate the deals.

Three years ago, the Detroit Water Department had to pay Goldman and other banks penalties totaling $547 million to terminate costly interest-rate swaps. Forty percent of Detroit’s water bills still go to paying off the penalty. Residents of Detroit whose water has been shut off because they can’t pay have no idea that Goldman and other big banks are responsible. 

Likewise, the Chicago school system—whose budget is already cut to the bone—must pay over $200 million in termination penalties on a Wall Street deal that had Chicago schools paying $36 million a year in interest-rate swaps.

A deal involving interest-rate swaps that Goldman struck with Oakland, California, more than a decade ago has ended up costing the city about $4 million a year, but Goldman has refused to allow Oakland out of the contract unless it ponies up a $16 million termination fee—prompting the city council to pass a resolution to boycott Goldman. When confronted at a shareholder meeting about it, Blankfein explained that it was against shareholder interests to tear up a valid contract.

Goldman Sachs and the other giant Wall Street banks are masterful at selling complex deals by exaggerating their benefits and minimizing their costs and risks. That’s how they earn giant fees. When a client gets into trouble—whether that client is an American homeowner, a US city, or Greece—Goldman ducks and hides behind legal formalities and shareholder interests.

Borrowers that get into trouble are rarely blameless, of course: They spent too much, and were gullible or stupid enough to buy Goldman’s pitches. Greece brought on its own problems, as did many American homeowners and municipalities.

But in all of these cases, Goldman knew very well what it was doing. It knew more about the real risks and costs of the deals it proposed than those who accepted them. “It is an issue of morality,” said the shareholder at the Goldman meeting where Oakland came up. Exactly.

[This article first appeared in the Nation magazine.]

Hillary Clinton won’t propose reinstating a bank break-up law known as the Glass-Steagall Act – at least according to Alan Blinder, an economist who has been advising Clinton’s campaign. “You’re not going to see Glass-Steagall,” Blinder said after her economic speech Monday in which she failed to mention it. Blinder said he had spoken to Clinton directly about Glass-Steagall.

This is a big mistake. 

It’s a mistake politically because people who believe Hillary Clinton is still too close to Wall Street will not be reassured by her position on Glass-Steagall. Many will recall that her husband led the way to repealing Glass Steagall in 1999 at the request of the big Wall Street banks.

It’s a big mistake economically because the repeal of Glass-Steagall led directly to the 2008 Wall Street crash, and without it we’re in danger of another one.

Some background: During the Roaring Twenties, so much money could be made by speculating on shares of stock that several big Wall Street banks began selling stock along side their traditional banking services – taking in deposits and making loans.

Some banks went further, lending to pools of speculators that used the money to pump up share prices. The banks sold the shares to their customers, only to have the share prices collapse when the speculators dumped them. 

For the banks, it was an egregious but hugely profitable conflict of interest.

After the entire stock market crashed in 1929, ushering in the Great Depression, Washington needed to restore the public’s faith in the banking system. One step was for Congress to enact legislation insuring commercial deposits against bank losses. 

Another was to prevent the kinds of conflicts of interest that resulted in such losses, and which had fueled the boom and subsequent bust. Under the Glass-Steagall Act of 1933, banks couldn’t both gamble in the market and also take in deposits and make loans. They’d have to choose between the two. 

“The idea is pretty simple behind this one,” Senator Elizabeth Warren said a few days ago, explaining her bill to resurrect Glass-Steagall. “If banks want to engage in high-risk trading — they can go for it, but they can’t get access to ensured deposits and put the taxpayers on the hook for that reason.”

For more than six decades after 1933, Glass-Steagall worked exactly as it was intended to. During that long interval few banks failed and no financial panic endangered the banking system. 

But the big Wall Street banks weren’t content. They wanted bigger profits. They thought they could make far more money by gambling with commercial deposits. So they set out to whittle down Glass-Steagall. 

Finally, in 1999, President Bill Clinton struck a deal with Republican Senator Phil Gramm to do exactly what Wall Street wanted, and repeal Glass-Steagall altogether. 

What happened next? An almost exact replay of the Roaring Twenties. Once again, banks originated fraudulent loans and sold them to their customers in the form of securities. Once again, there was a huge conflict of interest that finally resulted in a banking crisis. 

This time the banks were bailed out, but millions of Americans lost their savings, their jobs, even their homes. 

A personal note. I worked for Bill Clinton as Secretary of Labor and I believe most of his economic policies were sound. But during those years I was in fairly continuous battle with some other of his advisers who seemed determined to do Wall Street’s bidding. 

On Glass-Steagall, they clearly won.

To this day some Wall Street apologists argue Glass-Steagall wouldn’t have prevented the 2008 crisis because the real culprits were nonbanks like Lehman Brothers and Bear Stearns. 

Baloney. These nonbanks got their funding from the big banks in the form of lines of credit, mortgages, and repurchase agreements. If the big banks hadn’t provided them the money, the nonbanks wouldn’t have got into trouble. 

And why were the banks able to give them easy credit on bad collateral? Because Glass-Steagall was gone.

Other apologists for the Street blame the crisis on unscrupulous mortgage brokers. 

Surely mortgage brokers do share some of the responsibility. But here again, the big banks were accessories and enablers. 

The mortgage brokers couldn’t have funded the mortgage loans if the banks hadn’t bought them. And the big banks couldn’t have bought them if Glass-Steagall were still in place.

I’ve also heard bank executives claim there’s no reason to resurrect Glass-Steagall because none of the big banks actually failed. 

This is like arguing lifeguards are no longer necessary at beaches where no one has drowned. It ignores the fact that the big banks were bailed out. If the government hadn’t thrown them lifelines, many would have gone under. 

Remember? Their balance sheets were full of junky paper, non-performing loans, and worthless derivatives. They were bailed out because they were too big to fail. And the reason for resurrecting Glass-Steagall is we don’t want to go through that ever again.

As George Santayana famously quipped, those who cannot remember the past are condemned to repeat it. In the roaring 2000’s, just as in the Roaring Twenties, America’s big banks used insured deposits to underwrite their gambling in private securities, and then dump the securities on their customers.

It ended badly. 

This is precisely what the Glass-Steagall Act was designed to prevent – and did prevent for more than six decades.

Hillary Clinton, of all people, should remember.

robertreich:

President Obama is said to be considering an executive order requiring federal contractors to disclose their political spending. He should sign it immediately.

But he should go further and ban all political spending by federal contractors that receive more than half their revenues from government.

Ever since the Supreme Court’s shameful Citizens United decision, big corporations have been funneling large amounts of cash into American politics, often secretly. 

Bad enough. But when big government contractors do the funneling, American taxpayers foot the bill twice over: We pay their lobbying and campaign expenses. And when those efforts nab another contract, we pay for stuff we often don’t need.

This is especially true for defense contractors – the biggest federal contractors of all. 

A study by St. Louis University political scientist Christopher Witko reveals a direct relationship between what a corporation spends on campaign contributions and the amount it receives back in government contracts. 

A case in point is America’s largest contractor – Lockheed Martin. More than 80 percent of Lockheed’s revenues come from the U.S. government, mostly from the Defense Department.

Yet it’s hard to say Lockheed has given American taxpayers a good deal for our money.

For example, Lockheed is the main contractor for the F-35 Joint Strike Fighter – the single most expensive weapons program in history, and also one of the worst. It’s been plagued by so many engine failures and software glitches that Lockheed and its subcontractors practically had to start over this year.

Why do we keep throwing good money after bad?

Follow the money behind the money.  According to the Center for Responsive Politics, Lockheed’s Political Action Committee spent over $4 million on the 2014 election cycle, and has already donated over $1 million to candidates for 2016.

The top congressional recipient of Lockheed’s largesse is Mac Thornberry (R-Texas), Chairman of the House Armed Services committee. Second-highest is Rodney Frelinghuysen (R-New Jersey), Chair of the Defense Subcommittee of the House Appropriations Committee. Third is Kay Granger, the Subcommittee’s Vice-Chair.

Lockheed also maintains a squadron of Washington lawyers and lobbyists dedicated to keeping and getting even more federal contracts. The firm spent over $14 million lobbying Congress last year.  

Remarkably, 73 out of Lockheed’s 109 lobbyists are former Pentagon officials, congressional staffers, White House aides, and former members of Congress.

You and I and other taxpayers shouldn’t have to pay Lockheed’s lobbying expenses, but these costs are built into the overhead Lockheed charges the government in its federal contracts.

And we shouldn’t foot the bill for Lockheed’s campaign contributions, but these are also covered in the overhead the firm charges  – including the salaries of executives expected to donate to Lockheed’s Political Action Committee. 

The ten largest federal contractors are all defense contractors, and we’re indirectly paying all of them to lobby Congress and buy off politicians.

To state it another way, we’re paying them to hire former government officials to lobby current government officials, and we’re also paying them to bribe current politicians – all in order to keep or get fat government contracts that often turn out to be lousy deals for us. 

Fifty six years ago, President Dwight Eisenhower warned of the dangers of an unbridled “military-industrial complex,” as he called it. Now it’s a military-industrial-congressional complex. After Citizens United, it’s less bridled than ever.

That’s why President Obama shouldn’t stop with an executive order requiring government contractors to disclose their political contributions.

He should ban all political activities by corporations getting more than half their revenues from the federal government. 

That includes Lockheed and every other big defense contractor.  
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(Source: robertreich)

The Supreme Court’s recent blessing of Obamacare has precipitated a rush among the nation’s biggest health insurers to consolidate into two or three behemoths.

The result will be good for their shareholders and executives, but bad for the rest of us – who will pay through the nose for the health insurance we need.

We have another choice, but before I get to it let me give you some background.

Last week, Aetna announced it would spend $35 billion to buy rival Humana in a deal that will create the second-largest health insurer in the nation, with 33 million members.

The combination will claim a large share of the insurance market in many states – 88 percent in Kansas and 58 percent in Iowa, for example.

A week before Aetna’s announcement, Anthem disclosed its $47 billion offer for giant insurer Cigna. If the deal goes through, the combined firm will become the largest health insurer in America.

Meanwhile, middle-sized and small insurers are being gobbled up. Centene just announced a $6.3 billion deal to acquire Health Net. Earlier this year Anthem bought Simply Healthcare Holdings for $800 million.

Executives say these combinations will make their companies more efficient, allowing them to gain economies of scale and squeeze waste out of the system.

This is what big companies always say when they acquire rivals.

Their real purpose is to give the giant health insurers more bargaining leverage over employees, consumers, state regulators, and healthcare providers (which have also been consolidating).

The big health insurers have money to make these acquisitions because their Medicare businesses have been growing and Obamacare is bringing in hundreds of thousands of new customers. They’ve also been cutting payrolls and squeezing more work out of their employees.

This is also why their stock values have skyrocketed. A few months ago the Standard & Poor’s (S&P) 500 Managed Health Care Index hit its highest level in more than twenty years. Since 2010, the biggest for-profit insurers have outperformed the entire S&P 500.

Insurers are seeking rate hikes of 20 to 40 percent for next year because they think they already have enough economic and political clout to get them.

That’s not what they’re telling federal and state regulators, of course. They say rate increases are necessary because people enrolling in Obamacare are sicker than they expected, and they’re losing money.

Remember, this an industry with rising share values and wads of cash for mergers and acquisitions. 

It also has enough dough to bestow huge pay packages on its top executives. The CEOs of the five largest for-profit health insurance companies each raked in $10 to $15 million last year.

After the mergers, the biggest insurers will have even larger profits, higher share values, and fatter pay packages for their top brass.

There’s abundant evidence that when health insurers merge, premiums rise. For example, Leemore Dafny, a professor at the Kellogg School of Management at Northwestern University, and her two co-authors, found that after Aetna merged with Prudential HealthCare in 1999, premiums rose 7 percent higher than had the merger not occurred.

The problem isn’t Obamacare. The real problem is the current patchwork of state insurance regulations, insurance commissioners, and federal regulators can’t stop the tidal wave of mergers, or limit the economic and political power of the emerging giants.  

Which is why, ultimately, American will have to make a choice.

If we continue in the direction we’re headed we’ll soon have a health insurance system dominated by two or three mammoth for-profit corporations capable of squeezing employees and consumers for all they’re worth – and handing over the profits to their shareholders and executives.

The alternative is a government-run single payer system – such as is in place in almost every other advanced economy – dedicated to lower premiums and better care.

Which do you prefer?

President Obama is said to be considering an executive order requiring federal contractors to disclose their political spending. He should sign it immediately.

But he should go further and ban all political spending by federal contractors that receive more than half their revenues from government.

Ever since the Supreme Court’s shameful Citizens United decision, big corporations have been funneling large amounts of cash into American politics, often secretly. 

Bad enough. But when big government contractors do the funneling, American taxpayers foot the bill twice over: We pay their lobbying and campaign expenses. And when those efforts nab another contract, we pay for stuff we often don’t need.

This is especially true for defense contractors – the biggest federal contractors of all. 

A study by St. Louis University political scientist Christopher Witko reveals a direct relationship between what a corporation spends on campaign contributions and the amount it receives back in government contracts. 

A case in point is America’s largest contractor – Lockheed Martin. More than 80 percent of Lockheed’s revenues come from the U.S. government, mostly from the Defense Department.

Yet it’s hard to say Lockheed has given American taxpayers a good deal for our money.

For example, Lockheed is the main contractor for the F-35 Joint Strike Fighter – the single most expensive weapons program in history, and also one of the worst. It’s been plagued by so many engine failures and software glitches that Lockheed and its subcontractors practically had to start over this year.

Why do we keep throwing good money after bad?

Follow the money behind the money.  According to the Center for Responsive Politics, Lockheed’s Political Action Committee spent over $4 million on the 2014 election cycle, and has already donated over $1 million to candidates for 2016.

The top congressional recipient of Lockheed’s largesse is Mac Thornberry (R-Texas), Chairman of the House Armed Services committee. Second-highest is Rodney Frelinghuysen (R-New Jersey), Chair of the Defense Subcommittee of the House Appropriations Committee. Third is Kay Granger, the Subcommittee’s Vice-Chair.

Lockheed also maintains a squadron of Washington lawyers and lobbyists dedicated to keeping and getting even more federal contracts. The firm spent over $14 million lobbying Congress last year.  

Remarkably, 73 out of Lockheed’s 109 lobbyists are former Pentagon officials, congressional staffers, White House aides, and former members of Congress.

You and I and other taxpayers shouldn’t have to pay Lockheed’s lobbying expenses, but these costs are built into the overhead Lockheed charges the government in its federal contracts.

And we shouldn’t foot the bill for Lockheed’s campaign contributions, but these are also covered in the overhead the firm charges  – including the salaries of executives expected to donate to Lockheed’s Political Action Committee. 

The ten largest federal contractors are all defense contractors, and we’re indirectly paying all of them to lobby Congress and buy off politicians.

To state it another way, we’re paying them to hire former government officials to lobby current government officials, and we’re also paying them to bribe current politicians – all in order to keep or get fat government contracts that often turn out to be lousy deals for us. 

Fifty six years ago, President Dwight Eisenhower warned of the dangers of an unbridled “military-industrial complex,” as he called it. Now it’s a military-industrial-congressional complex. After Citizens United, it’s less bridled than ever.

That’s why President Obama shouldn’t stop with an executive order requiring government contractors to disclose their political contributions.

He should ban all political activities by corporations getting more than half their revenues from the federal government. That includes Lockheed and every other big defense contractor.  
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ON PATRIOTISM

A few words about patriotism – something we talk a lot about, especially around July 4th, but seldom stop to examine its real meaning. 

True patriotism isn’t simply about waving the American flag. And it’s not mostly about securing our borders from outsiders.

It’s about coming together for the common good.

Real patriotism is not cheap. It requires taking on a fair share of the burdens of keeping America going – being willing to pay taxes in full rather than seeking tax loopholes and squirreling away money abroad.  

Patriotism is about preserving and protecting our democracy, not inundating it with big money and buying off politicians.

True patriots don’t hate the government of the United States. They’re proud of it. They may not like everything it does, and they justifiably worry when special interests gain too much power over it. But true patriots work to improve our government, not destroy it.

Finally, patriots don’t pander to divisiveness. They don’t fuel racist or religious or ethnic divisions. They aren’t homophobic or sexist.

To the contrary, true patriots seek to confirm and strengthen the “we” in “we the people of the United States.”

Have a happy and safe Fourth of July.

OVERTIME: FINALLY, A BREAK FOR THE MIDDLE CLASS

The U.S. Department of Labor just proposed raising the overtime threshold – what you can be paid and still qualify to be paid “time-and-a-half” beyond 40 hours per week – from $23,600 a year to $50,400.

This is a big deal. Some 5 million workers will get a raise. (See accompanying video, which we made last month.)

Business lobbies are already hollering this will kill jobs. That’s what they always predict – whether it’s raising the minimum wage, Obamacare, family and medical leave, or better worker safety. Yet their predictions never turn out to be true.  

In fact, the new rule is likely to increase the number of jobs. That’s because employers who don’t want to pay overtime have an obvious option: They can hire more workers and employ each of them for no more than 40 hours a week.

It’s high time for this change. When the overtime threshold was at its peak a half-century ago, more than 60 percent of salaried workers qualified for overtime pay. But inflation has eroded that old threshold. Today, only about 8 percent of salaried workers qualify.

Overtime pay has become such a rarity that many Americans don’t even realize that the majority of salaried workers were once eligible for it.

We just keep working longer and harder, for less. A recent Gallup poll found that salaried Americans now report working an average of 47 hours a week—not the supposedly standard 40—while 18 percent of Americans report working more than 60 hours a week.

Meanwhile, corporate profits have doubled over the last three decades – from about 6% of GDP to about 12% – while wages have fallen by almost exactly the same amount.

The erosion of overtime and other labor protections is one of the main factors worsening inequality. A higher overtime threshold will help reverse this trend.

Finally, a bit of good news for hard-working Americans.

[This post is drawn from a piece co-authored with Nick Hanauer with the help of the Center for American Progress.]

Almost lost by the wave of responses to the Supreme Court’s decisions last week upholding the Affordable Care Act and allowing gays and lesbians to marry was the significance of the Court’s third decision – on housing discrimination. 

In a 5-4 ruling, the Court found that the Fair Housing Act of 1968 requires plaintiffs to show only that the effect of a policy is discriminatory, not that defendants intended to discriminate.

The decision is important in the fight against economic apartheid in America – racial segregation on a much larger geographic scale than ever before. 

The decision is likely to affect everything from bank lending practices whose effect is to harm low-income non-white borrowers, to zoning laws that favor higher-income white homebuyers.

First, some background. Americans are segregating ever more by income in terms of where we live. 

Thirty years ago most cities contained a broad spectrum of residents from wealthy to poor. Today, entire cities are mostly rich  (San Francisco, San Diego, Seattle) or mostly impoverished  (Detroit, Baltimore, Philadelphia).

Because a disproportionate number of the nation’s poor are black or Latino, we’re experiencing far more segregation geographically. 

Which is why, for example, black students are more isolated today than they were 40 years ago. More than 2 million black students now attend schools where 90 percent of the student body is minority.

According to a new study by Stanford researchers, even many middle-income black families remain in poor neighborhoods with low-quality schools, fewer parks and playgrounds, more crime, and inadequate public transportation. Blacks and Hispanics typically need higher incomes than whites in order to live in affluent neighborhoods.

To some extent, this is a matter of choice. Many people prefer to live among others who resemble them racially and ethnically.

But some of this is due to housing discrimination. For example, a 2013 study by the Department of Housing and Urban Development found that realtors often show black families fewer properties than white families possessing about the same income and wealth.

The income gap between poor minority and middle-class white communities continues to widen. While the recovery has boosted housing prices overall, it hasn’t boosted them in poor communities.

That’s partly because bank loan officers are now more reluctant to issue mortgages on homes in poor neighborhoods – not because lenders intend to discriminate but because they see greater risks of falling housing values and foreclosures.

But this reluctance is a self-fulfilling prophecy. It has reduced demand for homes in such areas – resulting in more foreclosures and higher rates of vacant and deteriorating homes. The result: further declines in home prices.  

As prices drop, even homeowners who have kept current on their mortgage payments can’t refinance to take advantage of lower interest rates.

Others who owe more on their homes than their homes are worth have simply stopped maintaining them. In many poor communities, this has caused the housing stock to decline further, and home prices to follow.

Adding to the downward spiral is the fiscal reality that lower housing values mean less revenue from local property taxes. This, in turn, contributes to worsening schools, fewer police officers, and junkier infrastructure –accelerating the downward slide.

All of which explains why housing prices in poor neighborhoods remain about 13 percent below where they were before the recession, even though prices in many upscale neighborhoods have fully rebounded.  

And why about 15 percent of the nation’s homes worth less than $200,000 are still underwater while just 6 percent of homes worth more than $200,000 are.

Worse yet for poor communities, most of America’s new jobs are being created in areas where housing already is pricy, while fewer jobs are emerging in places where housing is cheapest.

The toxic mixture of housing discrimination, racial segregation over wide swathes of metropolitan areas, and low wages and few jobs in such places, has had long-term effects.

A Harvard study released in May suggests just how long. The study tracked several million children since 1980s.

It found that young children whose families had been given housing vouchers allowing them to move to better neighborhoods were more likely to do better in later life – attend college and get better jobs – than those whose families hadn’t received the vouchers.

The study points to one solution: housing vouchers that help lower-income families move into better neighborhoods.

It also suggests that federal tax credits to encourage developers to build housing for the poor should be used in racially-integrated communities, rather than mostly in poor ones.

Not incidentally, this is the very issue that sparked last week’s Supreme Court’s decision on fair housing.

If we want to reverse the vicious cycle of economic apartheid in America, that decision offers an important starting place.