Elizabeth Warren for President (in 2016)

She's the only candidate on any horizon who comes close to embodying what I'm saying here, and (not coincidentally) the only one I can imagine going along with my cottage-cheese requirement.  She recognizes that nobody gets rich by themselves, and she might actually be able to whip up some support for enforcing the social contract I've been talking about.  Here's a link to a Nov. 18 NYT profile.

She'll become a Senator in 2012, and will probably not be as careful with her votes as Senator Obama was.  But that's fine, that's WHY we'll vote for her in 2016.

You can just tell that she's not interested in the money or the perks.  I'd love to see what happens when some lobbyist offers her tickets to a hockey game.

TED Talks

A handy spreadsheet with available TED talk downloads is here.  Many good talks on many subjects by a variety of speakers, all free to download under a Creative Commons license.

Hypocrisy Gingrich-Style

I actually like to hear Newt Gingrich speak.  He is very articulate, and sometimes what he says makes sense.  (Of course, sometimes it doesn't -- see post on OWS).  But the idea that he could make $1.6 to $1.8 million in "consulting fees" for trying to help Freddie Mac bolster its image with Republicans is sickening on many levels. 

It's the worst kind of influence peddling -- he went against his supposed principles for the sake of money.  So although it's sickening, it's also very sweet to see it come home to roost.  When Freddie Mac and Fannie Mae were deemed to have been a big part of the meltdown problem, Gingrich immediately remembered how much he didn't like them (and could only remember getting about $300K from Freddie Mac).  Now that this has been disclosed, he's trying to tell us that he was merely giving Freddie Mac history lessons.  Bye Newt, and good riddance.

But Gingrich is far from unique.  I just read somewhere that either one hundred or two hundred K Street lobbyists are former Capitol Hill staffers.  And it's a rare lobbyist that will refuse a client or a position based on principles.  So how does one find a truly principled (current or former) politician or staffer?  Is there some kind of a test we can give them?


The answer is probably not.  The system simply has to be changed so that it's simply not worth it for people to become lobbyists -- either because the politicians can't be influenced, or because there isn't enough money to be made. 

Which brings me back to my point from previous posts.  Here, we've got a perfect example of someone in the 1% who is making money in a way that does more harm than good to society.  Gingrich is not a job creator.  Clearly, it was in Freddie Mac's interest to pay Gingrich those fees -- they wouldn't have done so if it wasn't.  So the "free market" is not the answer here.  Why can't we just impose a gigantic tax on income from this kind of work?

Just to bring it home, take a look at Jack Abramoff, who made $20 million a year buying politicians and their staffers.  He feels bad about it now, and he explained the system to the rest of us on Sixty Minutes a couple of weeks ago.

Here are some of the highlights of the Sixty Minutes appearance:

Abramoff: When we would become friendly with an office and they were important to us, and the chief of staff was a competent person, I would say or my staff would say to him or her at some point, "You know, when you're done working on the Hill, we'd very much like you to consider coming to work for us." Now the moment I said that to them or any of our staff said that to 'em, that was it. We owned them. And what does that mean? Every request from our office, every request of our clients, everything that we want, they're gonna do. And not only that, they're gonna think of things we can't think of to do.

Abramoff: At the end of the day most of the people that I encountered who worked on Capitol Hill wanted to come work on K Street, wanted to be lobbyists.

Stahl: You're telling me this, the genius of figuring out you could own the office by offering a job to the chief of staff, say. I'm having two reactions. One is brilliant. And the other is I'm sick to my stomach.

Abramoff: Right. Evil. Yeah. Terrible.

Stahl: 'Cause it's hurting our country.

Abramoff: Shameful. Absolutely. It's the worst thing that could happen. All parts of the system.

Stahl: I'm mad at you.

Abramoff: I was mad at me-- 

Stahl: Was buying favors from lawmakers easy? 

Abramoff: I think people are under the impression that the corruption only involves somebody handing over a check and getting a favor. And that's not the case. The corruption, the bribery, call it, because ultimately that's what it is. That's what the whole system is. 

Stahl: The whole system's bribery? 

Abramoff: In my view. I'm talking about giving a gift to somebody who makes a decision on behalf of the public. At the end of the day, that's really what bribery is. But it is done everyday and it is still being done. The truth is there were very few members who I could even name or could think of who didn't at some level participate in that.

Abramoff: If you make the choice to serve the public, public service, then serve the public, not yourself. When you're done, go home. Washington's a dangerous place. Don't hang around.

Anti-Business or Anti-1%

Jennfer Rubin in today's Washington Post had the following to say about Newt Gingrich's performance in last night's GOP debate:

"He shines with the putdowns of the media, chiding them for failing to confront the OWS protestor with the inanity of their own anti-business rhetoric."


Here's the relevant part of the transcript from the debate.

CRAMER: Governor Perry, 30 seconds to you.
Do you think that companies can both be profitable and be able to create jobs? Do you think it's a dichotomy? Do you think they can do it?
PERRY: There better be. And that's the reason the tax plan that I laid out, a 20 percent flat tax on the personal side and a 20 percent corporate tax rate, that will get people working in this country. We need to go out there and stick a big old flag in the middle of America that says "Open for business again."
(APPLAUSE)
CRAMER: Mr. Speaker, how about to you, can corporations do both?
GINGRICH: Sure. Look, obviously, corporations can and should do both. And what is amazing to me is the inability of much of our academic world and much of our news media and most of the people on Occupy Wall Street to have a clue about history.
(APPLAUSE)
GINGRICH: In this town, Henry Ford started as an Edison Electric supervisor who went home at night and built his first car in the garage. Now, was he in the 99 percent or the one percent?
Bill Gates drops out of college to found Microsoft. Is he in the one percent or the 99 percent?
Historically, this is the richest country in the history of the world because corporations succeed in creating both profits and jobs, and it's sad that the news media doesn't report accurately how the economy works.
(APPLAUSE)
BARTIROMO: Mr. Speaker -- I'm sorry, but what is the media reporting inaccurately about the economy?
GINGRICH: What?
BARTIROMO: What is the media reporting inaccurately about the economy?
(LAUGHTER)
GINGRICH: I love humor disguised as a question. That's terrific.
I have yet to hear a single reporter ask a single Occupy Wall Street person a single rational question about the economy that would lead them to say, for example, "Who is going to pay for the park you are occupying if there are no businesses making a profit?"
(APPLAUSE)

Both Rubin and Gingrich are taking the typical GOP line against OWS, which is to equate it with socialism.  As I've said before, if OWS includes anti-capitalistic elements, that's just an artifact of the movement's inclusiveness.  The single unified message I hear from OWS is that there is a problem when 1% of the people are taking home a disproportionate share of the wealth generated by our economy, while the bottom 99% struggle to find jobs, and struggle even more to prepare for their retirements.

Gingrich was a history professor and purports to be schooling OWS on history.  But seriously -- what does the fact that Henry Ford and Bill Gates managed to get rich in the US have to do with the OWS movement?  Let's take that argument apart piece by piece.

First of all, Bill Gates?!  After Henry Ford, the first poster-child for beneficial entrepreneurship is Bill Gates?!  Creator and perpetuator of the Microsoft monopoly on bad, buggy, virus-attracting software?  About Henry Ford, I get it:  he built good cars, and made he them cheap enough -- and paid his workers well enough -- that workers on his innovative assembly line could afford to buy them.

But Microsoft?  Great business strategy, yes.  But DOS was awful compared to Apple's original operating system, which is why Microsoft came up with Windows, which also was awful for many years.  And Word was inferior to WordPerfect for the longest time, until Microsoft was able to leverage its monopoly in its crummy operating system into a virtual monopoly on word processing programs.  Yes, Gates is currently redeeming himself, and that's all to the good.  But it's quite far fetched to assume that Microsoft -- which could be a poster-child for everything WRONG with capitalism -- has been an engine of job growth and economic benefit.  Microsoft is a monopoly; if Microsoft hadn't gotten it, some other corporation would have.  Or perhaps we would all be using an open source operating system, and we'd have more disposable income to pump into the economy for other things.  Bill Gates is smart, and I think even a nice guy, and was at the right place at the right time, but I'd be very interested in hearing a theory on how a US economy without Bill Gates would have been worse than the one with him.

But that's not even the main problem with Gingrich's point.  OWS is not fed up with the Henry Fords of the world.  That's something like at most 0.001 percent of the 1%, probably less.  OWS is fed up with the 99.99% of the 1% that are NOT creating jobs; i.e. the ones that are skimming off a system that in reality does not behave the way Economics 101 tells us a capitalist economy should behave.  These are the people who are taking home several hundred dollars an hour for every hour they "work," when their "work" is at least as likely to harm the economy as to benefit it.  Yes, this group includes some people who figure out ways to bring great products to the market.  But it also includes people who figure out ways to maximize corporate profits at the expense of consumers and labor.  The end result of the dialog OWS has started should be to figure out which of the 99% fall into the former category, and which fall into the latter, and then use the tax system to curb the excesses of the latter.  Only a Randian believes that the market never needs correction from outside; once you admit that the market is imperfect, you can see the tax system as one way to address market failure.  That's not the same as socialism.

Back to Gingrich's question: "I have yet to hear a single reporter ask a single Occupy Wall Street person a single rational question about the economy that would lead them to say, for example, 'Who is going to pay for the park you are occupying if there are no businesses making a profit?'"

One could nitpick here by pointing out that Economics 101 tells us that in perfect competition (for a market in equilibrium), businesses are not supposed to make "profits."  They can only pay their employees and officers competitive wages; if they pay too much, their competitors will undercut them.  But assuming he is speaking more generally about the idea that taxing the 1% will destroy corporations, and thereby cause jobs to be lost, his answer still makes zero sense.

Again, the portion of the 1% that we are concerned about are the people who are skimming money out of the economy, by virtue of the fact that they are in positions where large sums of money (typically from consumer-taxpayers) flow through their hands.  Large corporations handle huge sums of money, so that's where skimmers congregate and thrive.  The skimmers are able to divert some of that huge cash flow into the their own pockets without appreciably affecting the corporation's ability to compete with other corporations, which are in any event doing the same thing.

To be clear, we are not talking about taxing corporations -- we are talking about taxing the money that is siphoned out of corporations -- the incomes of the 1%.  There is no evidence that taxing the 1% more heavily will cause corporations to shut their doors.  The main point is to recapture anti-competitive corporate profits by taxing the income of the people who have been skimming those profits off.  If that means that these skimmers will make less money, so be it.  If the result of the tax is that it won't make sense for corporations to pay their officers more than $300 an hour or so, that's not such a bad thing -- the skimmed money will instead flow back to consumers in the form of reduced prices, or perhaps into research and development.  The corporation's lust for life will cause it to survive regardless:  corporations are just as amoral towards their officers as they are to the rest of us.

And if we more heavily tax the 1%, we will actually get more money to pay for parks.  We could probably even afford some porta-potties.

To be continued . . . .

So: What do we change? Part I

I think I've already come out in favor of term limits.  Still, the counterargument is that this will just put all the power in the hands of political staffers, who have far too much power already.

So the real problem is with the people who are attracted to these jobs -- both as Congresspeople and staffers.  Obviously, many of them are decent citizens, hoping to do their part to make America a better place to live.  But many staffers are shamelessly ambitious, looking forward to high paying lobbying jobs, judgeships, or running for political office themselves.  And of course, the politicians are mainly looking toward the next election.  Nearly all of them -- politicians and staffers -- enjoy the grandeur of the offices on Capitol Hill, and the thrill of having high paid lobbyists and lawyers suck up to them for political favors.  Who wouldn't?

But how about making the job less attractive?  How about this for phase I:  Anyone working on Capitol Hill MUST eat only cottage cheese (or a vegan equivalent) for lunch.  That's it. Nothing else.  Put down that steak sandwich!

Hey -- maybe I will put that down as a petition on change.org.  If enough people sign it, then that would send a clear message to our politicians that they will remember every time they sit down for lunch:  They work for us.

Tax Cuts for the Wealthy -- Then and Now

John Kenneth Galbraith, in The Great Crash, 1929, made two points that are very relevant today.  First, he observed that the 1925-26 tax cuts for the wealthy left the wealthy with lots of cash on hand to dump into an overheating market (according to an internet source, in 1925-26 the top marginal income tax rate decreased from 73% to 25%).   Second, he pointed out that the historically unequal distribution of wealth led to suboptimal consumption of market goods (in other words, if only the rich can afford to buy consumer products, industry suffers from lost potential sales to lower and middle class consumers). 

So it makes sense to tax the rich for their own good -- so they don't pump all that extra wealth into the stock market, causing all these gigantic bubbles.  Instead, let the middle class keep a bit more of their hard-earned income, and maybe they'll spend it in ways that help, rather than hurt, the economy.

Eliot Spitzer has some decent ideas for OWS in Friday Nov. 4's Slate.com, which he breaks down into three organizing ideas and five policy ideas:

Organizing ideas:

1.  Get organizers at each college in the country to get 100 kids to show up for a day-after-Thanksgiving protest.

2.  Conduct rallies against State governments demanding a millionaire's tax.

3.  Recruit some minorities.

 

Policy Ideas:

  

1. Call for a full rollback of the Bush tax cuts for all those above $1 million in annual income. 

2. Demand true accountability on Wall Street; make sure that senior executives of banks that bet against the very products they sold to the public are fired.

3. Demand a financial service transaction fee.  (Not sure why he adds the word "service" here, but I assume he just means a  financial transaction fee).

4. "Start a petition drive in every state demanding that the state municipal governments stop using Goldman Sachs for advice and underwriting until Goldman Sachs returns the $12.9 billion dollars it received, from the taxpayers, as a part of the AIG bailout."

5.  Demand that the New York Fed add “public” board members who truly represent the public.

I endorse all of these ideas, for reasons already expressed.