Weekly Mulch: Fighting the Joe Millers of the World
by Sarah Laskow, Media Consortium blogger
Joe Miller, Sarah Palin's choice candidate for one of Alaska's Senate seats, does not believe in climate change. That didn't bother Alaska voters: this week, Miller bested Sen. Lisa Murkowski in the state's Republican primary. If that weren't worrisome enough, it also emerged that the fossil fuel industry spent eight times more than environmental groups on lobbying in 2009, the year the House passed the climate change bill. It's been a bad year already for environmental causes, and as the November election edges closer, progressives might want to start working overtime to regain momentum on climate and energy issues.
One of the most delightful news articles I have seen in months, years- okay, maybe ever- was in The Washington Post today. This was the headline:
Lobbyists Fear Overhaul Driven by Anti-Bank Fear
Some of the quotes inside the article were truly choice:
"You've got an environment, six months before an election, where politicians are acting like politicians," said Sam Geduldig, a financial lobbyist and former Republican staffer. "They are viewing any vote as a potential campaign ad. And that might not be good for any of us."
And here's another great one, from "one of the many lobbyists who spoke on the condition of anonymity":
"Every amendment you hear about is emotionally driven. . . . The Senate has turned from a deliberative body into an emotional reactor."
Now what emotions would this lobbyist be referring to? Anger at these bankers' destroying the economy for their own greed? Disgust at their arrogance? Fear that their concentration of market power is distorting our economy? A belief in the basic human decency? Oh wait, sorry, that last one is more a value than an emotion. But yes, there is some emotionalism here. Thank God. Because while being a cold heartless lizard-like creature is an advantage for a Wall Street banker, for the rest of us, we do feel a sense of emotion at the destruction you guys have wrought.
The lobbyists want all of the deals done behind closed doors. Speaking of emotion, they fear and hate open democracy because they know politicians who have to face voters and explain their voters in the light of day are going to have trouble explaining how they were defending these bankers. That's why conservatives from the founding of our country to today have federal democracy: it gets in the way of backroom deals between elites. Alexander Hamilton called democracy "a great beast" because when that beast gets mad at the insiders cutting their quiet deals, things can happen to upset the status quo.
But fear not for our lobbyist friends: at the end of the WaPo story, another unnamed lobbyist chuckled and said, "I think it's going to be job employment for me for the next decade, doing some of this stuff."
Last night, Senate Republicans proved beyond any doubt that when it comes to the economy, they stand with Wall Street and against everybody else. Joined by lone Democrat Sen. Ben Nelson (D-NE), Republicans successfully filibustered the procedural technicality of opening debate on Wall Street reform. It's an unmistakable ploy to kill the bill and collect campaign cash from bigwig bankers. The coming weeks won't be pretty.
Republicans are going to be battered by this filibuster. Financial reform is popular, and nobody on Capitol Hill wants to be seen as the agents of Wall Street in Washington come November. Republicans are hoping to rhetorically counter Obama's proposals, negotiate a fatally weakened reform package, and then vote with Democrats for reform-in-name-only before the elections. But the U.S. financial system is broken and voters know it needs strong medicine.
In a speech last week before Cooper Union Hall in New York City, Obama laid out what's at stake in the reform fight. Our biggest banks don't fear failure because they know the government will bail them out in a crisis. As a result, they take massive risks that endanger the economy. Our current regulators ignored predatory lending in order to protect Wall Street profits. To top it off, the risky, multi-trillion-dollar market for derivatives-the financial weapons of mass destruction that brought down AIG-remains beyond the scope of regulatory authority altogether.
Without major changes, the U.S. economy is doomed to repeat the destruction of the past two years. Epic bailouts, consumer predation and heavy job losses will become the new national norm, not just the conditions of a single, terrible crisis. Last night's Republican-plus-Nelson filibuster was an effort to preserve an unacceptable status quo.
Phony populism
As Matthew Rothschild emphasizes in a podcast for The Progressive, Wall Street Republicans have been spreading all kinds of crazy lies about Obama's reform legislation. While the legislation that cleared the Senate Banking Committee in March isn't perfect, it isn't a massive bailout for Wall Street, either. But Senate Minority Leader Mitch McConnell (R-KY) has been making the rounds calling it just that, in a dishonest effort to kill the bill. This is phony populism. McConnell says he's against bailouts, but his goal is to prevent reform from overturning the current system, which, as we saw in 2008, has bailouts baked in.
While Obama did a good job identifying what's wrong on Wall Street, the solutions he proposed are either too weak to end abuses, or simply not included in the Wall Street reform bill in its current form. Obama's initial proposal for a new Consumer Financial Protection Agency was great, but Sen. Chris Dodd (D-CT) watered down in the Senate Banking Committee to appease Republicans. The same thing happened to Obama's proposal to fix the wild market for derivatives, the financial weapons of mass destruction that brought down AIG.
How to make reform a reality
As Sarah Ludwig of the Neighborhood Economic Development Advocacy Program (NEDAP) emphasizes in an interview with GRITtv's Laura Flanders, most of the reforms currently under consideration are a "good first step." That is to say they are useful and productive-but not enough to fundamentally change the way Wall Street does business.
Fortunately, there are several amendments that can fix these shortcomings, most notably the SAFE Banking Act, introduced by Sens. Sherrod Brown (D-OH) and Ted Kaufman (D-DE). As Peter Rothberg emphasizes for The Nation, the amendment would force our largest banks to split up into institutions that could fail without jeopardizing the broader economy. It would also place a hard cap on the total amount that banks could bet in the financial markets.
Those amendments, of course, can only be added to the bill if Republicans allow debate on financial reform to begin. Progressives should be fighting hard to make sure that the break-up-the-banks measure is included in the bill that the Senate eventually votes on. And as Rothberg notes, there will be plenty of opportunities to do so this week. Protests calling for Major Wall Street reform have been organized all over the country. On Tuesday, protesters will speak out against predatory banking behemoth Wells Fargo in San Francisco. On Wednesday, they will target too-big-to-fail titan Bank of America in Charlotte, N.C. On Thursday, reformers will march straight into the lion's den on Wall Street itself to demand change. It's called the Showdown in America, and you can find out more here.
It's only just begun-but how did we get here in the first place?
But whatever happens with this bill, the fight to rein in Wall Street is just beginning. As Robert Kuttner emphasizes for AlterNet, President Franklin Delano Roosevelt had no shortage of verve for Wall Street reform, but it still took him seven years to enact all of the New Deal banking laws. And as Simon Johnson and James Kwak detail for The American Prospect, reining in Wall Street means overturning the ideology that has dominated the halls of power in Washington, D.C. for three decades.
Since the Reagan era, politicians from both political parties have sincerely believed that what is good for Wall Street is good for America. The subprime mortgage monstrosity and Great Crash of 2008 put cracks in the foundation of that ideology. But the process of demolishing it may very well take longer than the legislative cycle that will end with the November elections.
Even if we do get a strong bill-one that breaks up the biggest banks, bans them from placing risky bets in the derivatives and securities markets and establishes a new Consumer Financial Protection Agency-other important aspects of the financial sector will need to be addressed in other legislation. Hedge funds, whose pivotal role in the crisis is only now being identified, will need to be reined in. Rating agencies, who actively fueled the subprime bubble, and whose business models are founded on conflicts of interest, must be restructured. The future of Fannie Mae and Freddie Mac must be decided. Families across the country still need foreclosure relief.
We need a strong Wall Street reform bill. There is no excuse for any politician from either party to be standing with bigwig bankers against the rest of the country. And with two-thirds of the nation supporting reform, any political party that throws in its lot with Wall Street will pay a major price come November. No amount of Wall Street campaign cash can counter the voter outrage over bank bailouts and bonuses. There's no way to know when Republicans will come to their senses, but whatever happens this week, there will still be much work to do this year and the next.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Last night, Senate Republicans proved beyond any doubt that when it comes to the economy, they stand with Wall Street and against everybody else. Joined by lone Democrat Sen. Ben Nelson (D-NE), Republicans successfully filibustered the procedural technicality of opening debate on Wall Street reform. It's an unmistakable ploy to kill the bill and collect campaign cash from bigwig bankers. The coming weeks won't be pretty.
Republicans are going to be battered by this filibuster. Financial reform is popular, and nobody on Capitol Hill wants to be seen as the agents of Wall Street in Washington come November. Republicans are hoping to rhetorically counter Obama's proposals, negotiate a fatally weakened reform package, and then vote with Democrats for reform-in-name-only before the elections. But the U.S. financial system is broken and voters know it needs strong medicine.
In a speech last week before Cooper Union Hall in New York City, Obama laid out what's at stake in the reform fight. Our biggest banks don't fear failure because they know the government will bail them out in a crisis. As a result, they take massive risks that endanger the economy. Our current regulators ignored predatory lending in order to protect Wall Street profits. To top it off, the risky, multi-trillion-dollar market for derivatives-the financial weapons of mass destruction that brought down AIG-remains beyond the scope of regulatory authority altogether.
Without major changes, the U.S. economy is doomed to repeat the destruction of the past two years. Epic bailouts, consumer predation and heavy job losses will become the new national norm, not just the conditions of a single, terrible crisis. Last night's Republican-plus-Nelson filibuster was an effort to preserve an unacceptable status quo.
Phony populism
As Matthew Rothschild emphasizes in a podcast for The Progressive, Wall Street Republicans have been spreading all kinds of crazy lies about Obama's reform legislation. While the legislation that cleared the Senate Banking Committee in March isn't perfect, it isn't a massive bailout for Wall Street, either. But Senate Minority Leader Mitch McConnell (R-KY) has been making the rounds calling it just that, in a dishonest effort to kill the bill. This is phony populism. McConnell says he's against bailouts, but his goal is to prevent reform from overturning the current system, which, as we saw in 2008, has bailouts baked in.
While Obama did a good job identifying what's wrong on Wall Street, the solutions he proposed are either too weak to end abuses, or simply not included in the Wall Street reform bill in its current form. Obama's initial proposal for a new Consumer Financial Protection Agency was great, but Sen. Chris Dodd (D-CT) watered down in the Senate Banking Committee to appease Republicans. The same thing happened to Obama's proposal to fix the wild market for derivatives, the financial weapons of mass destruction that brought down AIG.
How to make reform a reality
As Sarah Ludwig of the Neighborhood Economic Development Advocacy Program (NEDAP) emphasizes in an interview with GRITtv's Laura Flanders, most of the reforms currently under consideration are a "good first step." That is to say they are useful and productive-but not enough to fundamentally change the way Wall Street does business.
Fortunately, there are several amendments that can fix these shortcomings, most notably the SAFE Banking Act, introduced by Sens. Sherrod Brown (D-OH) and Ted Kaufman (D-DE). As Peter Rothberg emphasizes for The Nation, the amendment would force our largest banks to split up into institutions that could fail without jeopardizing the broader economy. It would also place a hard cap on the total amount that banks could bet in the financial markets.
Those amendments, of course, can only be added to the bill if Republicans allow debate on financial reform to begin. Progressives should be fighting hard to make sure that the break-up-the-banks measure is included in the bill that the Senate eventually votes on. And as Rothberg notes, there will be plenty of opportunities to do so this week. Protests calling for Major Wall Street reform have been organized all over the country. On Tuesday, protesters will speak out against predatory banking behemoth Wells Fargo in San Francisco. On Wednesday, they will target too-big-to-fail titan Bank of America in Charlotte, N.C. On Thursday, reformers will march straight into the lion's den on Wall Street itself to demand change. It's called the Showdown in America, and you can find out more here.
It's only just begun-but how did we get here in the first place?
But whatever happens with this bill, the fight to rein in Wall Street is just beginning. As Robert Kuttner emphasizes for AlterNet, President Franklin Delano Roosevelt had no shortage of verve for Wall Street reform, but it still took him seven years to enact all of the New Deal banking laws. And as Simon Johnson and James Kwak detail for The American Prospect, reining in Wall Street means overturning the ideology that has dominated the halls of power in Washington, D.C. for three decades.
Since the Reagan era, politicians from both political parties have sincerely believed that what is good for Wall Street is good for America. The subprime mortgage monstrosity and Great Crash of 2008 put cracks in the foundation of that ideology. But the process of demolishing it may very well take longer than the legislative cycle that will end with the November elections.
Even if we do get a strong bill-one that breaks up the biggest banks, bans them from placing risky bets in the derivatives and securities markets and establishes a new Consumer Financial Protection Agency-other important aspects of the financial sector will need to be addressed in other legislation. Hedge funds, whose pivotal role in the crisis is only now being identified, will need to be reined in. Rating agencies, who actively fueled the subprime bubble, and whose business models are founded on conflicts of interest, must be restructured. The future of Fannie Mae and Freddie Mac must be decided. Families across the country still need foreclosure relief.
We need a strong Wall Street reform bill. There is no excuse for any politician from either party to be standing with bigwig bankers against the rest of the country. And with two-thirds of the nation supporting reform, any political party that throws in its lot with Wall Street will pay a major price come November. No amount of Wall Street campaign cash can counter the voter outrage over bank bailouts and bonuses. There's no way to know when Republicans will come to their senses, but whatever happens this week, there will still be much work to do this year and the next.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
On Monday, climate activists, nonprofit leaders, and governmental officials will gather in Cochabamba, Bolivia, to look for new ideas to address climate change. The conference, organized by leading social organizations like 350.0rg, "will advocate the right to "live well," as opposed to the economic principle of uninterrupted growth," as Inter Press Service explains. In the absence of real leadership from the world's governments, the conferees at Cochabamba are looking for solutions "committed to the rights of people and environment."
The United States certainly isn't stepping up. Sen. John Kerry (D-MA), along with Sen. Joe Lieberman (I-CT) and Sen. Lindsay Graham (R-SC), were supposed to release their climate legislation next week, just in time for Earth Day. But yesterday the word came down that the release was being pushed back by another week, to April 26.
No matter when it finally arrives, like other recent environmental initiatives, this round of climate legislation falls short. Even if Congress manages to pass a bill-and there's no guarantee-it will likely leave plenty of room for the coal, oil, and gas industries to continue pouring carbon into the atmosphere. And a wimpy effort from Congress will hinder international work to limit carbon emissions: As a prime polluter, the United States needs to put forward a real plan for change.
Kerry, Graham, and Lieberman
Although the text of the bill is not public yet, it is likely that this attempt at Senate climate legislation will limit carbon emissions only among utilities and gradually phase in other sectors of the economy. On Democracy Now!, environmentalist Bill McKibben called the bill "an incredible accumulation of gifts to all the energy industries, in the hopes that they won't provide too much opposition to what's a very weak greenhouse gas pact."
Climate reform began with a leaner idea, a cap-and-trade system that limited carbon emissions while encouraging innovation. The Nation's editors document the transformation of climate reform from the Obama administration's original cap-and-trade proposal to the behemoth tangle it has become. Both the House and the Senate fattened their versions of climate legislation with treats for the energy industry. The Senate's new idea to gradually expand emissions reduction through a bundle of energy bills only opens up more opportunities for influence.
"Some of these pieces of legislation may pass; others may fail; all are ripe for gaming by corporate lobbies," the editors write. "Kerry-Lieberman-Graham would also skew subsidies in the wrong direction, throwing billions at "clean coal" technologies, nuclear power plants and offshore drilling, a questionable gambit favored by the Obama administration to garner support from Republicans and representatives from oil-, gas- and coal-producing states."
Even with these goodies, the climate bill may not pass. The Washington Independent rounds up the D.C. players to watch as the next fight unfolds, including the Chamber of Commerce's William Kovacs and the Environmental Protection Agency's Lisa Jackson.
Green leftovers
In theory, the climate bill should not be America's only ride to a greener future. But the other vehicles for green change choked during start-up. The EPA was going to regulate carbon emissions, but Congress has reared against that effort. The climate bill could snatch away that power from the executive branch.
If companies won't limit their carbon emissions, individuals still have the option for action. But as Heather Rogers explains in The Nation, carbon offsets, one of the most popular mechanisms for minimizing carbon use "are a dubious enterprise."
"To begin with, they don't cut greenhouse gases immediately but only over the life of a project, and that can take years--some tree-planting efforts need a century to do the work. And a project is effective only if it's successfully followed through; trees can die or get cut down, unforeseen ecological destruction might be triggered or the projects may simply go unbuilt."
The pull of carbon offsets should diminish as energy use in buildings, cars, food, and flights gains in efficiency and uses less carbon. But if the green jobs sector is any indication, that revolution has been slow in coming. ColorLines reports that "there are no firm numbers on how many newly trained green workers are still jobless. But stories abound of programs that turn out workers with new, promising skills-in solar panel installation and weatherization, in places like Seattle and Chicago-and who nonetheless can't find jobs."
Cochabamba's unique approach
These failures and setbacks don't just affect Americans; they keep our leaders from negotiating with their international peers. The United Nations led a conference last winter in Copenhagen that promised to hash out carbon limits, yet produced no binding agreement. This coming winter, the UN will try again in Mexico, but if the United States shows up with the scant plan put forward by Kerry, Graham, and Lieberman, those negotiations have little promise.
In Cochabamba, leaders from inside and outside the government will attend a summit to discuss the future of climate change action. In The Progressive, Teo Ballve writes that,
"One of the bolder ideas is the creation of a global climate justice tribunal that could serve as an enforcement mechanism. And conference participants are already working on a "Universal Declaration of Mother Earth Rights" meant to parallel the U.N.'s landmark Universal Declaration of Human Rights of 1948."
With U.S. government action paling, it might take outside ideas like these to revitalize the push towards a green future. By the end of next week, we'll see if the Cochabamba group made any more progress than the bigwigs at Copenhagen.
This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Congress returns from its April recess this week with financial reform at the top of its to-do list. With millions of Americans still bearing the brunt of the worst recession in 80 years, Congress needs to start protecting our economy from Wall Street excess, and repair the shredded social safety net that has allowed the Great Recession to exact a devastating human cost.
Big banks are an economic parasite
In an excellent multi-part interview with Paul Jay of The Real News, former bank regulator William Black explains how the financial industry has transformed itself into an economic parasite. Black explains that banks are supposed to serve as a sort of economic catalyst-financing productive businesses and fueling economic growth. This was largely how banks operated for several decades after the Great Depression, because regulations had ensured that banks had incentives to do useful things, and barred them from taking crazy risks.
The deregulatory movement of the past thirty years destroyed those incentives, allowing banks to book big profits by essentially devouring other parts of the economy. Instead of fueling productive growth, banks were actively assaulting the broader economy for profit. None of that subprime lending served any economic purpose. Neither do the absurd credit card fees banks charge, or the deceptive overdraft fees they continue to implement.
As Matt Taibbi explains in an interview with Amy Goodman and Juan Gonzales of Democracy Now!, banks didn't just cannibalize consumers. They also went directly after local governments, bribing public officials to ink debt deals that worked wonderfully for the banks, and terribly for communities. In Jefferson County, Ala., J.P. Morgan Chase helped turn a $250 million sewer project into a $5 billion burden for taxpayers. The deal generated nothing of value for either citizens or the economy, but J.P. Morgan Chase was still able to line the pockets of its shareholders and executives. This kind of behavior was illegal, but the transactions involved were complex financial derivatives, which are not currently subject to regulation. To this day, nobody at J.P. Morgan Chase has been prosecuted for bribery or corruption.
Congress set to avoid tough regulations
There is a clear need for Congress to enact some firm restrictions against risky and predatory bank activities. But at the behest of Treasury Secretary Timothy Geithner, Congress is doing its best to avoid inserting any hard terms in legislative language, instead leaving the specifics to federal regulators to work out. As Tim Fernholz emphasizes for The American Prospect, this is an exercise in futility. Regulators already have the power to impose more stringent rules on nearly every arena of Wall Street business that matters (derivatives are a very noteworthy exception). If they wanted to fix things, they could do it without Congressional help. The trouble is, the financial sector has polluted most of the regulatory agencies, so that many regulators now act more like lobbyists for the banks they regulate, rather than law enforcers. Indeed, as I note for AlterNet, the top bank regulator in the U.S. spent over a decade lobbying for the nation's largest banks before taking up his current job. If Congress doesn't establish firm rules, regulators under future administrations would be free to simply undo any measures that the current agencies actually implement.
Megabanks equal mega risks
As Stacy Mitchell illustrates for Yes! Magazine, most of the problems in the financial sector are connected to the size of our banking behemoths. Big banks have enormous power-if they fail, the economy goes off a cliff. As a result, any responsible government wouldn't allow any of our megabanks to actually fail. But knowing that the government will protect them from any true catastrophes, big banks take bigger risks-if the risk pays off, they get rich, if it backfires, taxpayers will suck it up. That puts the interests of big banks at odds with the public interest, and creates an economy where bankers don't try to finance useful projects with a safe and steady return, but instead back crazy bets that just might pay off.
You can't fix that problem with regulations or idle threats of taking down a big bank when it gets itself in trouble-the markets won't believe it, and the banks will still take risks. The only solution, Mitchell notes, is to break up the banks into smaller institutions that can fail without wreaking havoc on the economy.
Economic inequality weakening the economy
All of this ties into rampant economic inequality in the United States. Since the 1970s, conservatives have waged a constant battle on the social safety net, shredding protections for ordinary people, while empowering corporate executives to take advantage of them. In an illuminating blog post for Mother Jones, Kevin Drum highlights the fact that average income has only rose from about $20 an hour in 1972 to $23 an hour today. This isn't because workers were slacking off-productivity has increased at roughly five times that rate. In other words, nearly all of the economic gains since the Nixon era have accrued to the wealthy.
When people don't have access to strong and improving income, they finance things with credit. But if wages never actually improve, that debt becomes a significant burden. When an entire society finds itself overly indebted, people stop buying things, and the economy tanks. The predation in the American financial sector makes this problem even worse.
But political theatrics are even trumping efforts to provide relief to those hit hardest by the recession. Sens. Jim Bunning (R-KY) and Tom Coburn (R-NE) have blocked the extension of unemployment benefits twice in the past month. As Kai Wright emphasizes for ColorLines, that recklessness puts up to 400,000 Americans at risk of losing their unemployment checks. That's a human tragedy-hundreds of thousands of people will have no way to pay the bills. It's also bad for business, since those people won't have any money to buy things that businesses produce. It is, in short, short-sighted economic insanity.
The economy is supposed to work for everybody, not just the rich, not just bankers. For that to happen, politicians have to establish meaningful regulations to make sure finance works for the greater good-- and safety nets to make sure that anyone who falls through the cracks doesn't see her life prospects permanently diminished.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Climate legislation is returning to the Senate's docket, and leaders on Capitol Hill are hoping that this version, a compromise bill spearheaded by Sens. John Kerry (D-MA), Lindsey Graham (R-SC) and Joe Lieberman (I-CT), can pass without getting caught in the morass of money and politics that has delayed action so far.
A long, long time ago...
Remember, there was a time when Congress was going to pass climate legislation before the international climate change negotiations in Copenhagen. President Barack Obama was going to show up with a bill in hand and lead the world towards a better climate future. After the House passed its climate bill in June 2009, the Senate began discussing climate change, and a first stab by Sen. Kerry and Sen. Barbara Boxer (D-CA) went nowhere. Now, Kerry has turned to less liberal colleagues to draft an alternative that would appeal to moderates and even Republicans.
Now the Massachusetts senator is promising that climate change isn't dead. A new bill is coming-more information may be in the offing as early as today, as Kate Sheppard reports at Mother Jones.
Third time's the charm
Sen. Kerry is trying a new tactic to pass climate legislation. He's waiting to release his plan until he knows the bill has the 60 supporters it needs to circumvent a filibuster. The details have not been hammered out yet, and even the Senators who've been in talks with Kerry, Graham, and Lieberman don't seem to have a clear sense of what will be in the version that will emerge.
In the House, Rep. Henry Waxman (D-CA), chair of the Energy and Commerce Committee, released an ambitious draft of the legislation, let lobbyists and members of Congress fight over it, and passed a much-changed edition months later. Sen. Kerry tried a similar plan on his side of Capitol Hill (that was the Kerry-Boxer bill), but it did not work.
With this piece of legislature, Sens. Kerry, Graham, and Lieberman are working out the compromises before they release the legislation. Both reporting and speculation about their bill say that it will abandon the cap-and-trade system passed in the House. Cap-and-trade restricts carbon emissions across the economy; a variation on that policy that the Kerry-Graham-Lieberman bill may favor will limit the system to a few sectors.
Will it work?
Kerry's expected bill may be a much weaker plan than any proposed so far, yet it is still not certain that the Senate will support it. The lead authors of the bill have been meeting with conservative Democrats and moderate Republicans, as Sheppard reports, but those targets have not promised support yet. Coming out of a meeting, Sen. George Voinovich (R-OH) told reporters: "There were some interesting things that were discussed in there and like everything else in the United States Senate, the devil is in the details."
From a distance, banner-day climate legislation still seems possible. Environmental groups like the Sierra Club, the National Wildlife Foundation, and the National Resources Defense Council believe that they will see a bill this year that caps carbon. These green groups would be able to live with the incentives handed to industry groups so far, according to Campus Progress' Tristan Fowler.
"There are compromises [that can go] too far. Fortunately, I don't think we're getting near that territory at the moment," Josh Dorner, a spokesman for the Sierra Club, told Fowler.
Sickly green
Before getting too excited about stamping a green seal of approval on Congress' legislation, consider Johann Hari's testimony in The Nation about the relationships between environmental groups and the industries that they oppose.
Hari has reported on climate change issues for years, and at first, he "imagined that American green groups were on these people's side in the corridors of Capitol Hill, trying to stop the Weather of Mass Destruction. But it is now clear that many were on a different path-one that began in the 1980s, with a financial donation."
Hari argues that as environmental groups began to reach out to polluters, handing them awards for green behavior and accepting support from their deep pockets, they learned to compromise too readily and accept political excuses for delaying action on climate change. While in other realms these compromises might fly, when the stakes are as high as they are on environmental issues, that behavior turns the stomach.
"You can't stand at the edge of a rising sea and say, 'Sorry, the swing states don't want you to happen today. Come back in fifty years,'" Hari writes.
The green future
When Kerry, Lieberman and Graham do release the compromised bill, watch for a tsunami of money and influence that could pack the bill with prizes for specific industries-or derail it altogether. Just this week, the natural gas industry's lobbyists told The Hill, a D.C.-based newspaper, that they were ready to fight with the coal industry over incentives in the Senate bill. At AlterNet, Harvey Wasserman writes that the nuclear industry spent $645 million in the past decade to get back into the energy game, according to a new report from American University's Investigative Reporting Workshop. (Hint: that $645 million is working in their favor.)
In the Senate, the influence of oil companies will play an important role, according to David Roberts at Grist.
"While coal has a lot of power in the House, oil has enormous power in the Senate, particularly over the conservadems and Republicans needed to put the bill over the top," Roberts explains.
No matter what legislation passes and what incentives it contains, environmentalists need to continue putting pressure on their representatives in Congress and on national environmental groups to push back against polluting industries and work to fix the world's climate.
This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
You will be shocked, shocked to hear that a Blue Dog Democrat who made a career out of undermining his own party is sucker-punching them on his way out. Sen. Evan Bayh of Indiana abruptly announced this week that he would not seek reelection in November. Bayh's departure is ratcheting up insecurity in the Democratic caucus at the very moment they need to take decisive action to pass health care reform.
Bayh could easily have won a third term, but it's unclear whether any other Democrat can hold the seat. To add insult to injury, Bayh waited until 24 hours before the filing deadline for Democratic primary candidates, sending Indiana Dems scrambling to find a candidate to run in his place. Bayh's tardiness was calculated. Since no Democrats were ready to file by the deadline, the Indiana Democratic establishment will get to handpick Bayh's successor.
In a call with state Democratic officials, Bayh said his abrupt departure is for the best, as Evan McMorris-Santo reports for TPMDC. According to Bayh, he's doing the party a favor by sparing them a contentious primary process. Thanks a lot.
What does this mean for health care reform?
What does Bayh's departure portend for health care reform? Monica Potts of TAPPED argues that replacing a conservative Democrat like Bayh with a moderate Republican won't make that much difference. Bayh was never a reliable Democratic vote.
But Tim Fernholtz of TAPPED dismisses this view as naive. Fernholtz predicts that, for all of Bayh's faults, the senate will be much worse without him: "In essence, the difference between this insubstantial Hoosier and, say, GOP hopeful Dan Coats, is simple: You can buy off Bayh." Bayh voted for health care reform and the stimulus, no Republican, no matter how "moderate" is going to vote that way.
Anyone who expects a moderate Republican from Indiana to support any part of the Democratic agenda is deluded. On the other hand, the Senate Democrats already passed their bill, their only remaining task would be to pass a "fix" through budget reconciliation to make changes in the legislation that would be acceptable to the House. Of course, reconciliation will be a bitter political fight. One wonders whether the demoralized Senate Democrats will have the stomach for it.
About that health care summit...
Note that congressional Republicans have yet to commit to attending the "bipartisan" health care summit that they called for. Christina Bellatoni of TPMDC reports that yesterday White House Press Secretary Robert Gibbs wondered why the Republicans were for the summit before they were against it:
"Right before the president issued the invitation, the-the thing that each of these individuals was hoping for most was an opportunity to sit down on television and discuss and engage on these issues. Now, not accepting an invitation to do what they'd asked the president to do, if they decide not to, I'll let them leap the-leap the chasm there and try to explain why they're now opposed to what they said they wanted most to do," Gibbs said.
Busting the filibuster
On the bright side, the Democrats still have a sizable majority in the Senate, with or without Bayh. Republicans would have to beat all 10 vulnerable Democratic incumbent senators in the next election in order to regain control of the Senate. The more immediate threat to health care reform and the Democrats' ability to govern in general is the institutional filibuster. Structural reform is needed to break the impasse. Lawyer and author Tom Geoghegan talks with Amy Goodman on Democracy Now! on strategies for busting the filibuster.
Public option resurfacing
Mike Lillis of the Washington Independent reports that four senate Democrats have thrown their lot in with progressives clamoring for a public option through reconciliation. Sens. Sherrod Brown (OH), Jeff Merkley (OR), Kirsten Gillibrand (NY) and Michael Bennet (CO) argue for the public option in an open letter to Majority Leader Harry Reid. The letter reads:
There are four fundamental reasons why we support this approach - its potential for billions of dollars in cost savings; the growing need to increase competition and lower costs for the consumer; the history of using reconciliation for significant pieces of health care legislation; and the continued public support for a public option....
Big pharma's lobby
That's nice, but let's not forget who's really in charge. In AlterNet, Paul Blumenthal recaps the sorry history of collusion between the White House, the pharmaceutical lobby group PhRMA, and the Senate. According to Blumenthal the White House steered pharmaceutical lobbyists directly to Sen. Max Baucus (D-MT), chair of the powerful Finance Committee, who was entrusted with crafting the White House's favored version of health care reform.
Abortion and health care reform
As if we didn't have enough to worry about, Nick Baumann of Mother Jones notes that the National Right to Life Committee (NRLC) is making abortion is an obstacle to passing health care reform through reconciliation. The NRLC is insinuating that Bart Stupak (D-MI) and his coalition of anti-choice Democrats will vote against the Senate health care bill because it it's slightly less restrictive of abortion than the bill the House passed. The good news is that it's procedurally impossible to insert Stupak's language into the Senate bill through reconciliation. The bad news is that Speaker Nancy Pelosi (D-CA) needs every vote she can get to pass the Senate bill and anti-choice hardliners could be an obstacle.
This post features links to the best independent, progressive reporting about health care by members of The Media Consortium. It is free to reprint. Visit the Pulse for a complete list of articles on health care reform, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
The next United Nations climate change conference is almost a year away, and health care is still dominating the legislative agenda in Washington. That means climate reform opponents, from the coal industry to the global warming skeptics, have plenty of time to work, out of the spotlight, to derail progress. Here's a glimpse of the enemies of reform-and the companies and individuals that are still fighting for change in 2010.
By proposing financial reforms that won't curb Wall Street excess, U.S. policymakers have offered an unacceptably weak response to our enormous financial crisis. If voters don't demand that their elected representatives help workers and consumers instead of simply boosting corporate profits, the economic downturn will last for several more years and leave the economy vulnerable to another bank-induced meltdown.
The banks have unbelievable lobbying clout. In an interview with Cenk Uyger of The Young Turks, Heather Booth, executive director of Americans for Financial Reform, describes how one-sided the Wall Street reform fight has been. Despite broad public support for a fundamental financial overhaul, going up against the bank lobby is, as Booth describes, "a David and Goliath fight." It's basically Americans for Financial Reform against every major corporation in the U.S.
Booth notes that the Chamber of Commerce has vowed to spend $100 million on a campaign to defend the "so-called free enterprise system"-you know, the "free market"-in which corporate lobbyists spend millions of dollars to write the rules of the economic game. Just seven financial lobby groups have spent a massive $147 million peddling influence over the past two years.
In fact, as Janine Wedel observes for Salon, the U.S. economic system is starting to look an awful lot like the clannish systems of government that looted Eastern European countries in the early 1990s. Today, the public good takes a backseat to the narrow interests of powerful corporations.
With the Obama administration working with advisers from Citigroup and Goldman Sachs, we're not just watching Wall Street write its own regulations. We're watching the financial sector re-write the official role of the government in the economy. In this new role, the government's top priority is securing profits for corporate America.
"The intertwined coterie of financial and policy deciders in the United States is creating not only the financial architecture of the future, backed by the power and billions of the state, but, more generally, new relationships between the bureaucracy and the market," Wedel writes.
GRITtv's Laura Flanders echoes this theme in an interview with John Perkins, author of Confessions of an Economic Hit Man, and journalist Russ Baker. Lobbyists have so thoroughly hijacked the U.S. economy, Perkins argues, that the nation's government now resembles those of Latin American nations he worked with in the 1980s and 1990s.
"I don't think the U.S. president has much power these days, to be honest with you. . . . It's the big corporate executives who call the shots today, and let's face it, they financed Obama's campaign," Perkins says.
The very efforts the government deployed to save the financial system are being perverted to create another disaster. In a five-part interview with Paul Jay of The Real News, Jane D'Arista, an influential economist and author of The Evolution of U.S. Finance, explains how Wall Street destroyed itself over the past decade. By borrowing massive amounts of money, Wall Street was able to place bigger bets in the capital markets casino, resulting in huge profits when those bets paid off. But when the bets backfired, the losses were just as massive. Companies couldn't pay them off, so the government stepped in to support them.
One of those support mechanisms came from the Federal Reserve, which began making incredibly cheap loans to firms that engaged predominantly in speculative trading. The Fed used to lend exclusively to commercial banks, which used the money to make loans that helped grow the real economy. But now those loans are being used to support risky securities trading, so we're seeing big profits in the financial sector, without much help for workers and consumers. This is a major long-term problem-if the economy can't keep pace with the Wall Street casino, those speculative trades are going to backfire and we'll be right back to the chaos of September 2008, only with an even weaker economy.
All hope is not lost. As Perkins and Baker emphasize in their interview with Flanders, citizens have to demand corporate accountability and a government that actually serves the public good. For much of the past decade in Latin America, governments have been elected that stood up to major corporations and demanded that they stop pillaging their nation's resources at the people's expense.
In addition to demanding much stronger reforms for the financial sector, we have to demand that the government respond seriously to problems facing workers. With the unemployment rate at 10.2% and expected to go still higher, we need jobs. As Steve Benen notes for The Washington Monthly, Obama's economic stimulus package helped stave off total economic devastation. What we need now is another stimulus to get people back to work, not just slow the pace of job losses.
"A bold, ambitious jobs bill can make a huge difference-the stimulus got us out of the ditch, a new effort can get us going in the right direction again," Benen writes.
And the only argument against this plan is that we "can't afford it." That is-the government's fiscal deficit is too high, and we just can't spend money to help people in real economic trouble.
But as Christopher Hayes writes for The Nation, the deficit excuse is pretty pathetic. Economic stimulus bolsters economic growth, thus improving tax returns for the government in the future. And any spending on any project can be taken out of the budget from other measures. Hayes notes that our massive military spending is almost never included in discussions about "fiscal responsibility." If we were really worried about how much it would cost to fix the economy, we could stop spending so much money killing people.
"Fiscal conservatism and deficit concern is nearly always code speak in Washington for something else," Hayes writes. "Most often, when someone in Washington says they're concerned about the deficit, what they're really saying is, 'I would like to make sure we have a government that focuses maximally on blowing people up.'"
The government has to start saying 'no' to corporate America. Corporate profits are not the same thing as a strong economy. We need to demand an economic policy that answers to workers, not just bank balance sheets.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Natasha's post last night on the DNC/OFA throwing pro-choice advocates and women everywhere under the bus got me thinking about the role of those organizations in general, and the Administration's choices of late.
There is a general belief, both in the Village and even among some people I know in progressive politics, that the DNC's role is to expand Democratic majorities and that's it. For all my criticism of OFA's role in Maine, I've had a few people say to me they shouldn't get involved in ballot fights. It's a D vs. R apparatus and that's that.
OFA's primary focus is to advance the president's agenda. If you advance the president's agenda that's going to translate politically and help Democrats throughout the country. And frankly keeping people engaged on the issues in an off year is going to translate in a mid-term year. They are going to continue to be engaged.
So that expands the definition. What does that mean in terms of OFA's actions of late? Well, they didn't lift a finger to help in Maine- even to the point of diverting resources to New Jersey. They knew about the Stupak amendment for quite awhile and didn't lift a finger. But Obama (if tepidly) came out against Question 1 in Maine and against the Stupak amendment, even pledging to work to remove it in conference. This is the President's agenda. And Sevugan said winning these fights helps Democrats around the country. And that keeping people engaged on the issues- and certainly, choice is an "issue"- helps.
So my question is, why isn't OFA doing its job? I realize OFA is an arm of the DNC. But should it exist to re-elect Democrats, or to actually carry out what Stewart and Sevugan say it should?
There are a number of arguments I've heard against OFA getting involved. One is that OFA should only work on issues that "everyone" agrees on. Another is that pressuring members violates the DNC's core mission of electing Democrats, because having a bunch of people call their members' office and ask the intern to tell the member to vote a certain way will somehow cause them to lose their re-election. Another is that if you "make aware" Obama supporters (also known as citizen engagement) in, say, John Tanner's district that he might suck on women's reproductive health, you'll rile them up and Tanner might lose Democratic votes for re-election, which violates the core mission of the DNC. None of these arguments are very persuasive. OFA could have even done a bland, list-wide "call your member and ask him/her to x". That way you don't name someone specifically, and you can reason that you're targeting all members of Congress because it's such a critical issue, not just Democrats.
The strongest argument I've heard is that OFA pressuring Democrats will cause congressional Democrats to pick up the phone and scream at Obama and screw him, and us, on other legislation. Relationships matter. Okay. But Obama is involved in party primaries, supporting Sens. Bennet, Gillibrand (should she have one), and Specter. His administration is pushing Gov. Paterson to bow out of a re-election bid. George W. Bush got involved in supporting Specter in 2004 and Chafee in 2006 in their respective primaries. Rahm himself got involved in congressional primaries in 2006, and has a reputation for working members hard for votes, engaging allies to pressure them, and so forth. So what's the difference between these actions and asking activists to make phone calls to advance your agenda? Both can damage relationships, both have rewards. If Obama's picks lose, those people can screw him. In this case, the reward is protecting women's reproductive freedom and advancing health care reform. So how come Obama takes a risk by siding with Senate and gubernatorial candidates, but remains silent on core issues of the Party?
In politics, relationships do matter, and I consider that in my own work. But the argument in terms of that here just doesn't hold water. Moreover, we only have a short window in which to enact real progressive change, and I think, within reason and wherever possible, the President should use all available tools to obtain that change and be our "fierce advocate". Please, Mr. President, include OFA among those tools.
So we are now finding out the answers to some of our questions about which members of Congress actually represent We, the People...and which ones represent, Them, the Corporate Masters.
We have seen a Democratic Senator propose a policy that would put people in jail for not buying health insurance and a Democratic President who has taken numerous public beatings from those on the left side of the fence for his inability to ram something through a group of people...and yes, folks, the entendre was intentional.
But most of all, we've been asking ourselves: "why would Democratic Members of Congress who will eventually want us to vote for them vote against something that nearly all voting Democrats are inclined to vote for?"
Today's conversation attempts to answer that question by looking at exactly how money and influence flow through a key politician, Montana's Senator Max Baucus-and in doing so, we examine some ugly political realities that have to be resolved before we can hope to convince certain Members of Congress to vote for what their constituents actually want when it really counts.
The problem with this outrage is that most of the spending overall, and most of the increase is spending, is for congressional staff. If Congress were to cut those salaries or to cut those staff, here is what would happen:
An even higher percentage of Congressional staff would become Ivy League trust-fund babies who don't need the money. Given that Congressional staff salaries are already pretty low compared to other professional jobs in major urban areas, a very high percentage of Congressional staff are already Ivy League trust-fund babies.
Hard for me to see how the "make more Congressional staffers upper-class Ivy Leaguers" platform is a particularly populist way to improve Congressional responsiveness to the economic concerns of anyone but the top 1-10% of income earners.
There are 35,000+ registered lobbyists in D.C. Most of those lobbyists are highly paid (5X to 10X the amount of Congressional staff) corporate shills. These lobbyists perform much of the actual congressional staffing on Capitol Hill, from fundraising, to writing legislation, to informing members of Congress about policy, to connecting members of Congress with each other and on and on. They perform these functions because they are effectively free staff for otherwise overworked and understaffed Congressional offices. They fill a staff vacuum for Congress.
If we were to cut the Congressional budget and reduce the amount of staff available to members of Congress, then these well-heeled corporate shills would perform an even greater percentage of Congressional staff functions. Again, hard for me to see how handing over an even larger percentage of the day to day operations of Congress is a particularly effective way to get Congress to become more responsive to the needs and desires of the American people.
So yeah, let's us on the left bash Congress for increasing its operating budget, most of which goes to staff. I'm sure it will be good for a little populist anger, but the actual policy we are advocating for is a further corporate takeover of government. Which is exactly what all of the right-wing, anti-government populist outrage in this same vein is designed to do.
Look, I love BarbinMD, and I am pretty pissed at Congress right now too, but if you want a government that is not run by the wealthiest people and institutions of our society, then you have to pay for it. People from middle-class backgrounds with huge college debts cannot live in Washington, D.C. on $30,000 a year. Individual members of Congress simply cannot perform all of the duties required of an effective Representative of the people without staff support. And lefties who whip up populist anger about the size of the Congressional operating budget are doing their own ideological and policy causes a real blow by advocating that we cut the Congressional budget.
And for the record, I grew up in an upper middle class household, am a part-owner of an LLC, and attended to St. Catherine's College at Oxford University. So it's not like I am bashing corporations and well-to-do Ivy Leaguers just out of spite. But hey, if you think that only people even more privileged than me should be running the country, by all means, keep advocating for cuts to the Congressional operating budget.
Just when you thought the Baucus revolving door couldn't spin faster: LittleSis has found that the Senate staffer responsible for devising the tax policies at the heart of the Baucus plan is a former lobbyist for health insurance and pharmaceutical interests, including an insurance industry front group.
Cathy Koch, who heads the Senate Finance committee's tax department, was director of global government affairs at pharmaceutical company Amgen until early 2007. Before that, she worked at Ernst and Young, where she lobbied on behalf of a number of large insurance and pharmaceutical companies, including Aetna, Blue Cross, Eli Lilly, and Pfizer.
Tax incentives and calculations are central to health care reform plan that Baucus sent to members of the Gang of Six this weekend, including a penalty on health insurance companies offering expensive plans. The "Cadillac" plan tax has received significant media attention as a particularly important and controversial feature that targets insurance companies.
In theory, constituent phone calls to congressional offices are a means for average citizens to voice their concerns on legislation and general governmental matters to their elected representatives in Congress.
In reality, constituents phone calls to congressional office are a means for corporate lobbying groups to distort public opinion and push legislation to the right on any given issue.
Whatever the idealistic, democratic theory behind constituent phone calls to congressional offices, the reality is that they have become yet another means for right-wing corporate infrastructure to further its interests within the federal government. In the extended entry, I explain why.
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