ROBERT B. REICH, Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written thirteen books, including the best sellers “Aftershock" and “The Work of Nations." His latest, "Beyond Outrage," is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause. His new film, "Inequality for All," is now available on Netflix, iTunes, DVD, and On Demand.

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COLBERT REPORT, NOVEMBER, 2013

WITH BILL MOYERS, SEPT. 2013

DAILY SHOW, SEPTEMBER 2013, PART 1

DAILY SHOW, SEPTEMBER 2013, PART 2

DEMOCRACY NOW, SEPTEMBER 2013

INTELLIGENCE SQUARED DEBATES, SEPTEMBER 2012

DAILY SHOW, APRIL 2012, PART 1

DAILY SHOW, APRIL 2012, PART 2

COLBERT REPORT, OCTOBER, 2010

WITH CONAN OBRIEN, JANUARY, 2010

DEBATING RON PAUL, JANUARY, 2010

DAILY SHOW, OCTOBER 2008

DAILY SHOW, APRIL 2005

DAILY SHOW, JUNE 2004

  • The Limits of Corporate Citizenship: Why Walgreen Shouldn’t Be Allowed to Influence U.S. Politics If It Becomes Swiss


    Sunday, July 6, 2014

    Dozens of big U.S. corporations are considering leaving the United States in order to reduce their tax bills.

    But they’ll be leaving the country only on paper. They’ll still do as much business in the U.S. as they were doing before.

    The only difference is they’ll no longer be “American,” and won’t have to pay nearly as much taxes to the U.S. government. 

    Okay. But if they’re no longer American citizens, they should no longer be able to spend a penny influencing American politics.

    Some background: We’ve been hearing for years from CEOs that American corporations are suffering under a larger tax burden than their foreign competitors. This is mostly rubbish.

    It’s true that the official corporate tax rate of 39.1 percent, including state and local taxes, is the highest among members of the Organization for Economic Cooperation and Development.

    But the effective rate – what corporations actually pay after all deductions, tax credits, and other maneuvers – is far lower.

    Last year, the Government Accountability Office, examined corporate tax returns in detail and found that in 2010, profitable corporations headquartered in the United States paid an effective federal tax rate of 13 percent on their worldwide income, 17 percent including state and local taxes. Some pay no taxes at all.

    One tax dodge often used by multi-national companies is to squirrel away their earnings abroad in foreign subsidiaries located in countries where taxes are lower. The subsidiary merely charges the U.S. parent inflated costs, and gets repaid in extra-fat profits.   

    But apparently that’s not enough of a dodge for some companies. They want to reduce their U.S. taxes to the bone by becoming a foreign company. It’s an even bigger accounting gimmick. The American company merges with a foreign competitor headquartered in another nation where taxes are lower, and reincorporates there.

    This “expatriate” tax dodge (its official name is a “tax inversion”) is now at the early stages but is likely to spread rapidly because it pushes every American competitor to make the same move or suffer a competitive disadvantage.

    For example, Walgreen, the largest drugstore chain in the United States with more than 8,700 drugstores spread across the nation, is on the verge of moving its corporate headquarters to Switzerland as part of a merger with Alliance Boots, the European drugstore chain.

    Founded in Chicago in 1901, with current headquarters in the nearby suburb of Deerfield, Walgreen is about as American as apple pie — or your Main Street druggist.

    Even if it becomes a Swiss corporation, Walgreen will remain your Main Street druggist. It just won’t pay nearly as much in U.S. taxes.

    Which means the rest of us will have to make up the difference. Walgreen’s morph into a Swiss corporation will cost you and me and every other American taxpayer about $4 billion over five years, according to an analysis by Americans for Tax Fairness.

    The tax dodge likewise means more money for Walgreen’s investors and top executives. Which is why its large investors – including Goldman Sachs — have been pushing for it.

    Some Walgreen customers have complained. A few activists have rallied outside the firm’s Chicago headquarters.

    But hey, this is the way the global capitalist game played. Anything to boost the bottom line.

    Yet it doesn’t have to be the way American democracy is played.

    Even if there’s no way to stop U.S. corporations from shedding their U.S. identities and becoming foreign corporations, there’s no reason they should retain the privileges of U.S. citizenship.  

    By treaty, the U.S. government can’t (and shouldn’t) discriminate against foreign corporations offering as good if not better deals than American companies offer. So if Walgreen as a Swiss company continues to fill Medicaid and Medicare payments as well as, say, CVS, it’s likely that Walgreen will continue to earn almost a quarter of its $72 billion annual revenues directly from the U.S. government.

    But as a foreign corporation, Walgreen should no longer have any say over the size of those payments, what drugs they cover, or how they’re administered.

    In fact, Walgreen should no longer have any say over how the U.S. government does anything.

    In 2010 it lobbied for and got a special provision in the Dodd-Frank Act, limiting the fees banks are allowed to charge merchants for credit-card transactions — resulting in a huge saving for Walgreen. If it becomes a Swiss citizen, its days of lobbying and obtaining special provisions should be over. 

    The Supreme Court’s “Citizens United” decision may have opened the floodgates to American corporate money in U.S. politics, but not to foreign corporate money in U.S. politics.

    The Court didn’t turn foreign corporations into American citizens, entitled to seek to influence U.S. law and regulations.

    Since the 2010 election cycle, Walgreen’s Political Action Committee has spent $991,030 on federal elections. If it becomes a Swiss corporation, it shouldn’t be able to spend one penny more.

    Walgreen is free to become Swiss but it should no longer be free to influence U.S. politics.

    It may still be the Main Street druggist, but if it’s no longer American it shouldn’t be considered a Main Street citizen.

     

     

     

     

     

     

     

     

     

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  • Thursday, July 3, 2014

    ASPEN IDEAS FESTIVAL LECTURE ON INEQUALITY

    Here’s the Aspen Lecture I gave recently at this year’s Aspen Ideas Festival. The irony of talking about inequality with an audience composed almost entirely of the richest one-tenth of 1 percent of Americans was not lost on me. When I suggested that we return to the 70 percent income-tax rate on top incomes that prevailed before 1981, many looked as if I had punched them in the gut.

    But I stressed it’s not a zero-sum game, and they’d do better with a smaller share of a rapidly-growing economy — growing because the vast middle class and the poor had the purchasing power to get the economy back on track — than they’re doing with a large share of an economy that’s barely growing at all.

    It’s crucial that America’s most powerful and privileged understand what’s happening, and why they must support fundamental reform.

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  • Freedom, Power, and the Conservative Mind


    Wednesday, July 2, 2014

    On Monday the Supreme Court struck down a key part of the Affordable Care Act, ruling that privately-owned corporations don’t have to offer their employees contraceptive coverage that conflicts with the corporate owners’ religious beliefs.

    The owners of Hobby Lobby, the plaintiffs in the case, were always free to practice their religion. The Court bestowed religious freedom on their corporation as well – a leap of logic as absurd as giving corporations freedom of speech. Corporations aren’t people.

    The deeper problem is the Court’s obliviousness to the growing imbalance of economic power between corporations and real people. By giving companies the right not offer employees contraceptive services otherwise mandated by law, the Court ignored the rights of employees to receive those services.

    (Justice Alito’s suggestion that those services could be provided directly by the federal government is as politically likely as is a single-payer federal health-insurance plan – which presumably would be necessary to supply such contraceptives or any other Obamacare service corporations refuse to offer on religious grounds.)

    The same imbalance of power rendered the Court’s decision in “Citizens United,” granting corporations freedom of speech, so perverse. In reality, corporate free speech drowns out the free speech of ordinary people who can’t flood the halls of Congress with campaign contributions.

    Freedom is the one value conservatives place above all others, yet time and again their ideal of freedom ignores the growing imbalance of power in our society that’s eroding the freedoms of most people.

    This isn’t new. In the early 1930s, the Court trumped New Deal legislation with “freedom of contract” – the presumed right of people to make whatever deals they want unencumbered by federal regulations. Eventually (perhaps influenced by FDR’s threat to expand the Court and pack it with his own appointees) the Court relented. 

    But the conservative mind has never incorporated economic power into its understanding of freedom. Conservatives still champion “free enterprise” and equate the so-called “free market” with liberty. To them, government “intrusions” on the market threaten freedom.

    Yet the “free market” doesn’t exist in nature. There, only the fittest and strongest survive. The “free market” is the product of laws and rules continuously emanating from legislatures, executive departments, and courts. Government doesn’t “intrude” on the free market. It defines and organizes (and often reorganizes) it.

    Here’s where the reality of power comes in. It’s one thing if these laws and rules are shaped democratically, reflecting the values and preferences of most people.

    But anyone with half a brain can see the growing concentration of income and wealth at the top of America has concentrated political power there as well — generating laws and rules that tilt the playing field ever further in the direction of corporations and the wealthy.

    Antitrust laws designed to constrain monopolies have been eviscerated. Competition among Internet service providers, for example, is rapidly disappearing – resulting in higher prices than in any other rich country. Companies are being allowed to prolong patents and trademarks, keeping drug prices higher here than in Canada or Europe.

    Tax laws favor capital over labor, giving capital gains a lower rate than ordinary income. The rich get humongous mortgage interest deductions while renters get no deduction at all.

    The value of real property (the major asset of the middle class) is taxed annually, but not the value of stocks and bonds (where the rich park most of their wealth).

    Bankruptcy laws allow companies to smoothly reorganize, but not college graduates burdened by student loans.

    The minimum wage is steadily losing value, while CEO pay is in the stratosphere. Under U.S. law, shareholders have only an “advisory” role in determining what CEOs rake in.  

    Public goods paid for with tax revenues (public schools, affordable public universities, parks, roads, bridges) are deteriorating, while private goods paid for individually (private schools and colleges, health clubs, security guards, gated community amenities) are burgeoning. 

    I could go on, but you get the point. The so-called “free market” is not expanding options and opportunities for most people. It’s extending them for the few who are wealthy enough to influence how the market is organized.

    Most of us remain “free” in limited sense of not being coerced into purchasing, say, the medications or Internet services that are unnecessarily expensive, or contraceptives they can no longer get under their employer’s insurance plan. We can just go without.

    We’re likewise free not to be burdened with years of student debt payments; no one is required to attend college. And we’re free not to rent a place in a neighborhood with lousy schools and pot-holed roads; if we can’t afford better, we’re free to work harder so we can. 

    But this is a very parched view of freedom. 

    Conservatives who claim to be on the side of freedom while ignoring the growing imbalance of economic and political power in America are not in fact on the side of freedom. They are on the side of those with the power. 

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  • Hillary’s Hardest Choice (and the Democrat’s Dilemma)


    Sunday, June 29, 2014

    What’s the reason for the tempest in the teapot of Hillary and Bill Clinton’s personal finances?

    It can’t be about how much money they have. Wealth has never disqualified someone from high office. Several of the nation’s greatest presidents, who came to office with vast fortunes – JFK, Franklin D. Roosevelt, and his fifth cousin, Teddy – notably improved the lives of ordinary Americans.  

    The tempest can’t be about Hillary Clinton’s veracity. It may have been a stretch for her to say she and her husband were “dead broke” when they left the White House, as she told ABC’s Diane Sawyer. But they did have large legal bills to pay off.

    And it’s probably true that, unlike many of the “truly well off,” as she termed them in an interview with the Guardian newspaper, the Clintons pay their full income taxes and work hard.

    Nor can the tempest be about how they earned their money. Most has come from public speaking and book royalties, the same sources as for most ex-presidents and former First Ladies.

    Then what’s it about?  

    The story behind story is that America is in an era of sharply rising inequality, with a few at the top doing fabulously well but most Americans on a downward economic escalator.

    That’s why Diane Sawyer asked Hillary about the huge speaking fees, and why the Guardian asked whether she could be credible on the issue of inequality.

    And it’s why Hillary’s answers – that the couple needed money when they left the White House, and have paid their taxes and worked hard for it — seemed oddly beside the point. 

    The questions had nothing to do with whether the former first couple deserved the money. They were really about whether all that income from big corporations and Wall Street put them on the side of the privileged and powerful, rather than on the side of ordinary Americans.

    These days, voters want to know which side candidates are on because they believe the game is rigged against them.

    According to new Pew survey, 62 percent of Americans now think economic system unfairly favors the powerful, and 78 percent think too much power is concentrated in too few companies. Even 69 percent of young conservative-leaning voters agree the system favors the powerful.

    Other potential presidential candidates are using every opportunity to tell voters they’re on their side. Speaking at last week’s White House summit on financial hardships facing working families, Vice President Joe Biden revealed he has “no savings account” and “doesn’t own a single stock or bond.”

    The same concern haunts the Republican Party and is fueling the Tea Party rebellion. In his stunning campaign upset, David Brat charged that Eric Cantor “does not represent the citizens of the 7th district, but rather large corporations seeking insider deals, crony bailouts, and constant supply of low-wage workers.”

    But the Republican establishment doesn’t think it has to choose sides. It assumes it can continue to represent the interests of big business and Wall Street, yet still lure much of the white working class though thinly-veiled racism, anti-immigrant posturing, and steadfast opposition to abortion and gay marriage.

    The Democratic Party, including Hillary Clinton, doesn’t have that option.

    Which means that, as the ranks of the anxious middle class grow, the winning formula used by Bill Clinton and Barack Obama may no longer be able to deliver.

    That formula was not just to court minorities and women but also to appeal to upscale Republican-leaning suburbs, professionals, moderates on Wall Street, and centrist business interests.

    Accordingly, both Bill Clinton’s and Barack Obama’s economic plans called for deficit reduction as part of a “responsible” fiscal policy, trade expansion, and “investments” in infrastructure and education to promote economic growth. 

    But in a world of downward mobility for the majority, Democrats need to acknowledge the widening divide and propose specific ways to reverse it.

    These might include, for example, raising taxes on the wealthy and closing their favorite tax loopholes in order to pay for world-class schools for everyone else; enacting a living wage and minimum guaranteed income; making it easier to unionize; and changing corporate and tax laws to limit CEO pay, and promote gain-sharing, profit-sharing, and employee ownership.

    In this scenario, Democrats would seek to forge a new political coalition of all the nation’s downwardly mobile – poor, working class, and middle class; white and black and brown.

    It’s a gamble. It would make big business and Wall Street nervous, while ignoring Republican-leaning suburbs and upper-middle class professionals. The GOP would move in to fill the void.

    But as the middle class shrinks and distrust of the establishment grows, a new Democratic strategy for the downwardly mobile may be both necessary and inevitable. If she runs, Hillary may have to take the gamble.

    And if America is to have half a chance of saving the middle class and preserving equal opportunity, it’s a gamble worth taking. 

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  • Friday, June 27, 2014

    BREAK THE KOCH MACHINE

    A number of billionaires are flooding our democracy with their money, drowning out the voices of the rest of us. But Charles and David Koch are in a class by themselves. They’re using their fortune – they’re the fifth and sixth richest people in the world — to create their own political machine designed to protect and advance their financial interests. The Koch machine includes:

    1. Political front groups pouring hundreds of millions of dollars into elections at every level of our democracy, while disguising the sources of the money.

    2. Giant advertising campaigns to convince Americans climate change is a myth, the Affordable Care Act will harm them, unions are bad, and wealthy people deserve tax cuts.

    3. A network of think tanks designed to come up with findings the Kochs want. For example, over $23 million for studies arguing we should abolish the minimum wage or keep it where it is forever.

    4. A campaign to suppress the votes of minorities. In the last presidential election, funding white “poll-watchers” where minorities vote, leading to complaints of voter intimidation. And peddling a Voter ID bill to state legislators across the country, designed to make it harder for many to vote.

    5. A nationwide effort to bust unions.  Funding anti-union campaigns in states like Wisconsin, and pushing an anti-union law that’s been used in dozens of states to undermine workers’ collective bargaining rights.

    And 6. A long-term strategy to unravel America’s campaign finance laws, even organizing secret meetings with sympathetic Supreme Court justices. 

    The Koch political machine would be troubling in any circumstance. But it’s especially dangerous in present-day America, where wealth is more concentrated than it’s been in over a century and the Supreme Court has opened the floodgates to big money.

    The problem isn’t that the Kochs are so rich, or their political views are so regressive. The problem is they’re using their exorbitant wealth to impose those views on the rest of us, undermining our democracy.

    More than 200,000 of you have already signed my MoveOn petition denouncing the Koch brothers for undermining our democracy.

    The Kochs won’t care what we say, but when a half a million of us stand up to them, politicians will have to think twice before taking their money. When a million of us stand up to them, their money will be a political liability.

    Standing up to bullies is the hallmark of a civilized society. Please join our petition — and stand up for our democracy. The link to the petition is at the end of the video.

    Or go to http://petitions.moveon.org/sign/we-denounce-the-koch

    Our democracy is not for sale.

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  • Real Business Leaders Want to Save Capitalism


    Wednesday, June 18, 2014

    A few weeks ago I was visited in my office by the chairman of one of the country’s biggest high-tech firms who wanted to talk about the causes and consequences of widening inequality and the shrinking middle class, and what to do about it.

    I asked him why he was concerned. “Because the American middle class is the core of our customer base,” he said. “If they can’t afford our products in the years ahead, we’re in deep trouble.”

    I’m hearing the same refrain from a growing number of business leaders.

    They see an economic recovery that’s bypassing most Americans. Median hourly and weekly pay dropped over the past year, adjusted for inflation. 

    Since the depths of the Great Recession in 2009, median real household income has fallen 4.4 percent, according to an analysis by Sentier Research. 

    These business leaders know the U.S. economy can’t get out of first gear as long as wages are declining. And their own businesses can’t succeed over the long term without a buoyant and growing middle class.

    They also recognize a second danger.

    Job frustrations are fueling a backlash against trade and immigration. Any hope for immigration reform is now dead in Congress, and further trade-opening agreements are similarly moribund. Yet the economy would be even worse if America secedes into isolationism.

    Lloyd Blankfein, CEO of Goldman Sachs, warned recently on “CBS This Morning” that income inequality is “destablilizing” the nation and is “responsible for the divisions in the country.” He went on to say that “too much of the GDP over the last generation has gone to too few of the people.” 

    Blankfein should know. He pulled in $23 million last year in salary and bonus, a 9.5 percent raise over the year before and his best payday since the Wall Street meltdown. This doesn’t make his point any less valid. 

    Several of business leaders are suggesting raising the minimum wage and increasing taxes on the wealthy.

    Bill Gross, Chairman of Pimco, the largest bond-trading firm in the world, said this week that America needs policies that bring labor and capital back into balance, including a higher minimum wage and higher taxes on the rich. 

    Gross has noted that developed economies function best when income inequality is minimal.

    Several months ago Gross urged his wealthy investors, who benefit the most from a capital-gains tax rate substantially lower than the tax on ordinary income, to support higher taxes on capital gains. “The era of taxing ‘capital’ at lower rates than ‘labor’ should now end,” he stated. 

    Similar proposals have come from billionaires Warren Buffett and Stanley Druckenmiller, founder of Duquesne Capital Management and one of the top performing hedge fund managers of the past three decades. Buffett has suggested the wealthy pay a minimum tax of 30 percent of their incomes.

    The response from the denizens of the right has been predictable: If these gentlemen want to pay more taxes, there’s nothing stopping them. 

    Which misses the point. These business leaders are arguing for changes in the rules of the game that would make the game fairer for everyone. They acknowledge it’s now dangerously rigged in the favor of people like them.

    They know the only way to save capitalism is to make it work for the majority rather than a smaller and smaller minority at the top.

    In this respect they resemble the handful of business leaders in the Gilded Age who spearheaded the progressive reforms enacted in the first decade of the twentieth century, or those who joined with Franklin D. Roosevelt to create Social Security, a minimum wage, and the forty-hour workweek during the Depression.

    Unfortunately, the voices of these forward-thinking business leaders are being drowned out by backward-lobbying groups like the U.S. Chamber of Commerce that are organized to reflect the views of their lowest common denominator.

    And by billionaires like Charles and David Koch, who harbor such deep-seated hatred for government they’re blind to the real dangers capitalism now faces.

    Those dangers are a sinking middle class lacking the purchasing power to keep the economy going, and an American public losing faith that the current system will deliver for them and their kids.

    America’s real business leaders understand unless or until the middle class regains its footing and its faith, capitalism remains vulnerable.

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  • The Three Biggest Right-Wing Lies About Poverty


    Friday, June 13, 2014

    Rather than confront poverty by extending jobless benefits to the long-term unemployed, endorsing a higher minimum wage, or supporting jobs programs, conservative Republicans are taking a different tack.

    They’re peddling three big lies about poverty. To wit:

    Lie #1: Economic growth reduces poverty.

    “The best anti-poverty program,” wrote Paul Ryan, the House Budget Committee chairman, in the Wall Street Journal, “is economic growth.”

    Wrong. Since the late 1970s, the economy has grown 147 percent per capita but almost nothing has trickled down. The typical American worker is earning just about what he or she earned three decades ago, adjusted for inflation.

    Meanwhile, the share of Americans in poverty remains around 15 percent. That’s even higher than it was in the early 1970s.

    How can the economy have grown so much while most people’s wages go nowhere and the poor remain poor? Because almost all the gains have gone to the top.

    Research by Immanuel Saez and Thomas Piketty shows that forty years ago the richest 1 percent of Americans got 9 percent of total income. Today they get over 20 percent.

    It’s true that redistributing income to the needy is politically easier in a growing economy than in a stagnant one. One reason so many in today’s middle class are reluctant to pay taxes to help the poor is their own incomes are dropping.

    But the lesson we should have learned from the past three decades is economic growth by itself doesn’t reduce poverty.

    Lie #2: Jobs reduce poverty.

    Senator Marco Rubio said poverty is best addressed not by raising the minimum wage or giving the poor more assistance but with “reforms that encourage and reward work.”

    This has been the standard Republican line ever since Ronald Reagan declared that the best social program is a job. A number of Democrats have adopted it as well. But it’s wrong. 

    Surely it’s better to be poor and working than to be poor and unemployed. Evidence suggests jobs are crucial not only to economic well-being but also to self-esteem. Long-term unemployment can even shorten life expectancy.

    But simply having a job is no bulwark against poverty. In fact, across America the ranks of the working poor have been growing. Around one-fourth of all American workers are now in jobs paying below what a full-time, full-year worker needs in order to live above the federally defined poverty line for a family of four.

    Why are more people working but still poor? First of all, more jobs pay lousy wages.

    While low-paying industries such as retail and fast food accounted for 22 percent of the jobs lost in the Great Recession, they’ve generated 44 percent of the jobs added since then, according to a recent report from the National Employment Law Project. 

    Second, the real value of the minimum wage continues to drop. This has affected female workers more than men because more women are at the minimum wage.

    Third, government assistance now typically requires recipients to be working. This hasn’t meant fewer poor people. It’s just meant more poor people have jobs.

    Bill Clinton’s welfare reform of 1996 pushed the poor into jobs, but they’ve been mostly low-wage jobs without ladders into the middle class. The Earned Income Tax Credit, a wage subsidy, has been expanded, but you have to be working in order to qualify.

    Work requirements haven’t reduced the number or percent of Americans in poverty. They’ve merely increased the number of working poor — a term that should be an oxymoron.

    Lie #3: Ambition cures poverty.

    Most Republicans, unlike Democrats and independents, believe people are poor mainly because of a lack of effort, according to a Pew Research Center/USA Today survey. It’s a standard riff of the right: If the poor were more ambitious they wouldn’t be poor.

    Obviously, personal responsibility is important. But there’s no evidence that people who are poor are less ambitious than anyone else. In fact, many work long hours at backbreaking jobs.

    What they really lack is opportunity. It begins with lousy schools.

    America is one of only three advanced countries that spends less on the education of poorer children than richer ones, according to a study by the Organization for Economic Cooperation and Development. 

    Among the 34 O.E.C.D. nations, only in the United States, Israel and Turkey do schools serving poor neighborhoods have fewer teachers and crowd students into larger classrooms than do schools serving more privileged students. In most countries, it’s just the reverse: Poor neighborhoods get more teachers per student. 

    And unlike most OECD countries, America doesn’t put better teachers in poorly performing schools, 

    So why do so many right-wing Republicans tell these three lies? Because they make it almost impossible to focus on what the poor really need – good-paying jobs, adequate safety nets, and excellent schools.

    These things cost money. Lies are cheaper. 

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  • Friday, June 6, 2014

    Voting in Mississippi, 2014 and 1964

    Mississippi used its new voter-identification law for the first time Tuesday — requiring voters to show a driver’s license or other government-issued photo ID at the polls.

    The official reason given for the new law is alleged voter fraud, although the state hasn’t been able to provide any evidence that voter fraud is a problem.

    The real reason for the law is to suppress the votes of the poor, especially African-Americans, some of whom won’t be able to afford the cost of a photo ID.

    It’s a tragic irony that this law became effective almost exactly fifty years after three young civil rights workers — Michael Schwerner, James Chaney, and Andrew Goodman – were tortured and murdered in Mississippi for trying to register African-Americans to vote.

    They were killed outside Philadelphia, Mississippi, by a band of thugs that included the sheriff of Neshoba County. The state was deeply implicated: The Mississippi State Sovereignty Commission had kept track of the three after they entered the state, and had passed on detailed information about them to the sheriff. 

    A year after the murders, Congress passed the Voting Rights Act of 1965. It was a direct response to the intransigence of Mississippi and other states with histories of racial discrimination, requiring them to get federal approval for any changes in their voting requirements — such as Mississippi’s new voter ID law.

    But last June the Supreme Court’s five Republican appointees decided federal oversight was outmoded and unconstitutional, and that Congress had to set a new formula for deciding which states required federal review of voting law changes — thereby clearing the way for Mississippi’s new voter ID law.

    Obviously, Congress hasn’t come up with a new formula because it’s  gridlocked, and Republicans don’t want any federal review of state voting laws. 

    I knew Michael Schwerner. He was a kind and generous young man. And he meant a lot to me when I was growing up.

    Now, fifty years after his brutal death and the deaths of his co-workers James Chaney and Andrew Goodman – fifty years after Freedom Summer — the state of Mississippi and the United States Supreme Court have turned back the clock.

    Please urge your senators and representatives to pass a federal law that restores the Voting Rights Act, so Mississippi and other states with histories of repeated violations of voting rights cannot undo what Chaney, Goodman, Schwerner, and thousands of other brave Americans fought to achieve – equal voting rights. 

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  • Seattle is Right


    Thursday, June 5, 2014

    By raising its minimum wage to $15, Seattle is leading a long-overdue movement toward a living wage. Most minimum wage workers aren’t teenagers these days. They’re major breadwinners who need a higher minimum wage in order to keep their families out of poverty.

    Across America, the ranks of the working poor are growing. While low-paying industries such as retail and food preparation accounted for 22 percent of the jobs lost in the Great Recession, they’ve generated 44 percent of the jobs added since then, according to a recent report from the National Employment Law Project. Last February, the Congressional Budget Office estimated that raising the national minimum wage from $7.25 to $10.10 would lift 900,000 people out of poverty.

    Seattle estimates almost a fourth of its workers now earn below $15 an hour. That translates into about $31,000 a year for a full-time worker. In a high-cost city like Seattle, that’s barely enough to support a family.

    The gains from a higher minimum wage extend beyond those who receive it. More money in the pockets of low-wage workers means more sales, especially in the locales they live in – which in turn creates faster growth and more jobs. A major reason the current economic recovery is anemic is that so many Americans lack the purchasing power to get the economy moving again.

    With a higher minimum wage, moreover, we’d all end up paying less for Medicaid, food stamps and other assistance the working poor now need in order to have a minimally decent standard of living.

    Some worry about job losses accompanying a higher minimum wage. I wouldn’t advise any place to raise its minimum wage immediately from the current federal minimum of $7.25 an hour to $15. That would be too big a leap all at once. Employers – especially small ones – need time to adapt.

    But this isn’t what Seattle is doing. It’s raising its minimum from $9.32 (Washington State’s current statewide minimum) to $15 incrementally over several years. Large employers (with over 500 workers) that don’t offer employer-sponsored health insurance have three years to comply; those that offer health insurance have four; smaller employers, up to seven. (That may be too long a phase-in.)

    My guess is Seattle’s businesses will adapt without any net loss of employment. Seattle’s employers will also have more employees to choose from – as the $15 minimum attracts into the labor force some people who otherwise haven’t been interested. That means they’ll end up with workers who are highly reliable and likely to stay longer, resulting in real savings.

    Research by Michael Reich (no relation) and Arindrajit Dube confirms these results. They examined employment in several hundred pairs of adjacent counties lying on opposite sides of state borders, each with different minimum wages, and found no statistically significant increase in unemployment in the higher-minimum counties, even after four years. (Other researchers who found contrary results failed to control for counties where unemployment was already growing before the minimum wage was increased.) They also found that employee turnover was lower where the minimum was higher.

    Not every city or state can meet the bar Seattle has just set. But many can – and should.

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  • The Way to Stop Corporate Lawbreaking is to Prosecute the People Who Break the Law


    Wednesday, June 4, 2014

    Today General Motors announced that it has fired 15 employees and disciplined five others in the wake of an internal investigation into the company’s handling of defective ignition switches, which lead to at least 13 fatalities.

    But who’s legally responsible when a big corporation breaks the law? The government thinks it’s the corporation itself.

    Wrong.

    "What GM did was break the law … They failed to meet their public safety obligations,” scolded Sec of Transportation Anthony Foxx a few weeks ago after imposing the largest possible penalty on the giant automaker.

    Attorney General Eric Holder was even more adamant recently when he announced the guilty plea of giant bank Credit Suisse to criminal charges for aiding rich Americans avoid paying taxes. “This case shows that no financial institution, no matter its size or global reach, is above the law.” 

    Tough words. But they rest on a bizarre premise. GM didn’t break the law, and Credit Suisse never acted above it. Corporations don’t do things. People do.

    For a decade GM had been receiving complaints about the ignition switch but chose to do nothing. Who was at fault? Look toward the top. David Friedman, acting head of the National Highway Traffic Safety Administration, says those aware of the problem had ranged from engineers “all the way up through executives.”

    Credit Suisse employees followed a carefully-crafted plan, even sending private bankers to visit their American clients on tourist visas to avoid detection. According to the head of New York State’s Department of Financial Services, Credit Suisse’s crime was “decidedly not the result of the conduct of just a few bad apples.”

    Yet in neither of these cases have any executives been charged with violating the law. No top guns are going to jail. No one is even being fired.

    Instead, the government is imposing corporate fines. The logic is that since the corporation as whole benefited from these illegal acts, the corporation as a whole should pay.

    But the logic is flawed. Such fines are often treated by corporations as costs of doing business. GM was fined $35 million. That’s peanuts to a hundred-billion-dollar corporation.

    Credit Suisse was fined considerably more — $2.8 billion. But even this amount was shrugged off by financial markets. In fact, the bank’s shares rose the day the plea was announced – the only big financial institution to show gains that day. Its CEO even sounded upbeat: “Our discussions with clients have been very reassuring and we haven’t seen very many issues at all.” (Credit Suisse wasn’t even required to turn over its list of tax-avoiding clients.)

    Fines have no deterrent value unless the amount of the penalty multiplied by the risk of being caught is greater than the profits earned by the illegal behavior. In reality, the penalty-risk calculus rarely comes close.

    Even when it does, the people hurt aren’t the shareholders who profited years before when the crimes were committed. Most current shareholders weren’t even around then.

    Calling a corporation a criminal is even more absurd. Credit Suisse pleaded guilty to criminal conduct. GM may also face a criminal indictment. But what does this mean? A corporation can’t be put behind bars.

    To be sure, corporations can effectively be executed. In 2002, the giant accounting firm Arthur Andersen was found guilty of obstructing justice when certain partners destroyed records of the auditing work they did for Enron. As a result, Andersen’s clients abandoned it and the firm collapsed. (Andersen’s conviction was later overturned on appeal). 

    But here again, the wrong people are harmed. The vast majority of Andersen’s 28,000 employees had nothing to do with the wrongdoing yet they lost their jobs, while most of its senior partners slid easily into other accounting or consulting work.

    The truth is, corporations aren’t people — despite what the Supreme Court says. Corporations don’t break laws; specific people do. In the cases of GM and Credit Suisse, the evidence points to executives at or near the top.

    Conservatives are fond of talking about personal responsibility. But when it comes to white-collar crime, I haven’t heard them demand that individuals be prosecuted.

    Yet the only way to deter giant corporations from harming the public is to go after people who cause the harm.

     

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