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Quite a rap sheet

I have, in the past, compared our bigger banks (looking at you, JP Morgan Chase) to organized crime. It's hardly an original idea; in fact, only our major media and law enforcement agencies appear to have missed the parallels. Still, it's good to see someone do the work of putting the pieces together for future reference. Check out JP Morgan's rap sheet here.

The Mafia is small potatoes compared to this one bank, and while JP Morgan Chase may be first among equals, it's not the only bank that is a serial lawbreaker. Not a single banker has gone to jail. One would think that putting them there would be a politically popular move. The lack of prosecution is proof, if any were needed, that our politicians are not solely concerned with winning elections. Far more important to stay on the good side of the powerful, who will ease your transition back to the working world if and when you're voted out.

Sympathy for the Devil

Now here is a religious group performing a public service:

The Orange County School Board last week discussed reversing its policy that allows religious groups to hand out materials at public schools after the Satanic Temple began handing out coloring books to students, the Orlando Sentinel reported.

“This really has, frankly, gotten out of hand,” board chairman Bill Sublette said during a workshop on Thursday. “I think we've seen a group or groups take advantage of the open forum we've had.”

Though the board discussed reversing the policy on Thursday, it won't vote on the matter until early next year.

The policy allows groups to hand out Bibles and some atheist pamphlets, and the Satanic Temple decided to start handing out its own materials about Satanism to make sure that students are exposed to various beliefs.

“We would never seek to establish a precedent of disseminating our religious materials in public schools because we believe our constitutional values are better served by respecting a strong separation of Church and State,” Doug Mesner, co-founder and spokesman for The Satanic Temple, said in a statement under the pseudonym Lucien Greaves. “However, if a public school board is going to allow religious pamphlets and full Bibles to be distributed to students — as is the case in Orange County, Florida — we think the responsible thing to do is to ensure that these students are given access to a variety of differing religious opinions, as opposed to standing idly by while one religious voice dominates the discourse and delivers propaganda to youth.”

via Talking Points Memo

There is something satisfying about seeing these “Christians” hoist by their own petard. What is interesting is the sense of entitlement that leads them into these situations. Years ago, they got Congress to pass a law that forced public schools to allow religious groups to sponsor after school activities. Now several states have abolished after school activities, because, guess what, if the Christians get to proselytize so do the gays and the atheists. It never seems to occur to them to be careful what you ask for.

Not alone, at any rate

I have to pass this along, just to prove that I'm not entirely crazy. A few days ago I made a list of a number of policy positions the Democrats should take to attract, you know, voters. Among my suggestions: forgiveness of student debt and free college education. Well, I'm not alone at any rate. From an article by Joe Firestone at Naked Capitalism, discussing Elizabeth Warren's somewhat vague pronouncements about what people in this country actually want from their government; Firestone gets specific:

They also want more than a Government that will just help out students, but rather a Government that will forgive student debt, and, going forward, will provide free education for all Americans through College. They have it in Germany. Of course, we can afford it here too. Why isn’t Warren, one of our two supposedly most progressive professional politicians, advocating that.

We forget our past quite readily. There was a time when college educations were free in California, and almost free everywhere else. When I went to law school at UConn, and that, remember, is a graduate level school, tuition was either $300.00 or $600.00 a semester (I can't recall which, but it was one of those numbers). It is now $24,714 in-state and about double that for out of state. I don't need to do the math; inflation doesn't explain the difference (I'm not that old). If you go directly from college to law school chances are you come out with a mortgage on your life of around $300,000.00, assuming your parents can't afford to pay the freight, and the mortgage is only slightly less if you stop at the college degree level. It's hard to pay that kind of mortgage when the odds are good you'll still end up flipping burgers for our sub-poverty minimum wage.

We should recall, as well, the GI Bill, which after WWII offered educational opportunities to returning GIs that most would never have had otherwise. The nation got a solid return for that investment. There's no reason to limit such good social policy to veterans. Everyone has a right to an education.

The party that addresses this issue directly and effectively will win elections. But you can't eat around the edges. Lowering student loan interest rates by a percent or two is all very nice, but it doesn't effectively address the problem and it won't drive those swamped with student loan debt to the polls. This is an issue made for Democrats; the Republicans will never embrace real reform; they'd much rather hand the student loan industry back to the banks and the “servicers”. It's an equal opportunity issue; it affects people of all hues, genders and geographic origins. It doesn't only affect students; pity the parents who are trying to help out their struggling offspring.

The Democrats would be crazy not to take up this issue; but then, the Democrats are arguably only the less crazy party in this nation.

20141111 We don’t need no wonky politics

The meme seems to be taking hold, at least among the citizens of Left Blogistan, that Democrats lost big this year because they have no coherent message and offer voters no particular reason to vote for them, relying instead on the argument, express or implied, that you should vote against Republicans. While that latter statement is true, it doesn't sell.

Nor, in my opinion, do some of the issues we are told that the Democrats should push. A good example of what I'm talking about is here. I don't argue with any of these proposals on a theoretical basis; they are all good. But many achieve their results at second or third remove, becoming more diffuse and less effective in the process. Far better to push for things whose immediate impact is clear, unambiguous and meaningful; something people will turn out to prevent Republicans from taking away (Democrats ran on the threat to social security for years). For instance, the aggregate impact of a $500 per person increase in the personal exemption might be significant, but you need to be an economist to appreciate that. To the average voter it amounts to a small reduction in taxes that, while nice, is not life changing. Not the kind of thing to get a reluctant voter to the polls. Even the suggested raise in the minimum wage is weak beer. Why not go for a wage that is equivalent to that which prevailed when we had a middle class? That would mean a more than $17.50 minimum wage, against which a wage of $12.50 looks pretty weak. We have a tendency to advocate for things we think we might get after compromising rather than the things we actually want (or claim we want). We’ve seen the result of starting negotiations from what we think will sell to the nonexistent moderate Republicans; we end up with muddled results such as the ACA, which pleased no one. Imagine what Social Security would look like today if FDR had proposed a system he thought might be acceptable to Republicans. At least then, some Republicans might have listened, and they might have allowed a vote. That’s not happening now.

One would also hope that Democrats have learned that you can succeed through obstruction, as the Republicans have done in spades. That doesn’t mean we should obstruct; it does mean that if we can retake the majority we should destroy the means of obstruction and push through our programs. Better to lose because your policies failed than to lose because they were never implemented in the first place, which is precisely why we just lost.

Equal Justice for All

I don't pretend to be an expert in the criminal law, but I'm sure if you're average street person violates again while they're on probation, their violation is rarely “waived”. But, not surprisingly, it's different for banks. It seems that the SEC often makes deals with banks that provide that, should they run afoul of the law again, some sanction or other will kick in. But the SEC staff (after all, they've got future jobs at the bank to think about) routinely grant waivers and allow the banks to accept another wrist slap for whatever new crime they've committed. (And yes, I know the SEC has no criminal authority; I'm exercising blogger's license). New SEC commissioner Kara Stein pushed for, and got, a requirement that any such waiver be approved by the commission.

Obama's appointee as SEC chair, Mary Jo White, is in the pocket of the banks, but, alas for them, even she has to observe the proprieties, so she must recuse herself when the case in question involves one of her former clients, which, and it turns out this is lucky for us, it often does. That means there are two Democrats standing against two Republicans. Since White will usually vote with the Republicans, the waivers would go through were she to vote, but when she can't, well, a tie vote means the waiver is not granted, and the bank in question must actually suffer a penalty that actually hurts.

In a letter last week, the bank’s top lawyer Gary Lynch made a pitch to the agency’s commissioners to waive additional sanctions set to kick in when the settlement is entered in court, said the people, who asked not to be named because the entreaty was private. Lynch argued in part that the firm is being unfairly treated because other banks had been given waivers in similar cases.

A former SEC enforcement director, Lynch said saddling the bank with a penalty that could include barring it from selling investments in hedge funds would be unprecedented and cause reputational damage, the people said. The case remains in purgatory because SEC Chairman Mary Jo White is recused, while the agency’s Democratic and Republican members are deadlocked.

via Bloomberg News via Naked Capitalism.

I'm straining here to find a comparison to some other situation in the legal system that would illustrate how ludicrous this argument is. How's this: this is sort of like a cop convicted of murdering an unarmed black guy claiming he should be allowed to walk because all the other cops who've murdered unarmed black guys have been allowed to walk. Closer to the subject: this is like the first banker to actually be convicted of tanking the economy arguing that he should go free because Jamie Dimon still walks the streets. But who knows, the Supreme Court might buy into this sort of argument, so long as it is restricted to banks. That way, a soft glove administration, such as those run by W and Obama, could tie the hands of some future president or attorney general, who might just think we ought to enforce the laws when it comes to banks and bankers. Don't expect it to work in your neighborhood criminal court, though. Any public defender who made such an argument would be laughed out of court, and possibly sued for malpractice.

The road that will not be taken

So, I'm beginning to decompress from Tuesday's disaster. Overall, I think I agree with the analysis here. In a nutshell, we lost because the national party has sold its soul to Wall Street and corporate interests, but it is still not as satisfactory to those interests as the Republican Party, which is a wholly owned subsidiary of corporate America. Read the whole thing.

Personally, I shudder at the thought of the 2016 election. The Democrats should win big, but they are fully capable of throwing the election away, and this time the stakes could be huge. What are the odds that young people will turn out in droves to vote for a seventy year old woman who might throw some platitudes at them, but is, in fact, a tool of Wall Street? I firmly believe that in 2016 the crazies on the Republican side will get what they claim is their due: a candidate as crazy as them. The Democrats may just be setting up the country and the world for the election of a president of the United States who is certifiably nuts, or, at the very least, a science denying, religion embracing (though not necessarily believing) right wing extremist.

If you want people to vote for you, you have to give them something worth voting for. There are a number of things the Democrats could push that would be hugely popular that we can safely assume the Republicans would never endorse. Moreover, I would argue that each of them would be good public policy and many of them would be incredibly useful in pulling us out of the economic doldrums in which the Republicans, with a lot of Democratic help, have insisted we remain.

Consider this: the people of Arkansas just voted overwhelmingly for a minimum wage hike while also electing a Senator who would do whatever he could to make sure such a thing never happens at the Federal level. It seems like all those folks who came to vote to give themselves a raise should have been Democratic voters. You'd think so wouldn't you? But the guy they sent packing, Mark Pryor, couldn't see past the interests of Wal-Mart. He supported the relatively meagre raise in the state initiative, but opposed the still meagre Obama proposal to raise the federal minimum wage to $10.10. A real Democrat should have owned that issue, but he was pretty much indistinguishable from his opponent.

So, a few suggestions for some issues that would really bring people out to vote.

  1. We should free our young people from debt peonage. All federal student loan debt should be forgiven. As I'll argue below, higher education should be free in the first place. Forgiving student loan debt would free up a generation burdened by heavy debt to spend that money elsewhere, stimulating the economy and making at least some progress toward restoring the middle class. If they could forgive debt in ancient times we can do it now, in these allegedly more enlightened times, particularly because the creditor in this case is the U.S. government, which doesn't need the money and whose economy would be better off for the cancellation.
  2. Make public higher education free, obviating the need for student loans in the future. There was a time when getting a high school education was considered an achievement on its own, and all that most people needed to get a good job. Nowadays, a college degree is a necessary prerequisite for almost any job that doesn't involve flipping burgers or stocking shelves. It is the 21st century equivalent of a mid twentieth century high school diploma. High school was free in 1880; free in 1900; free in 1950; and free today. It's time we made a university education free. It would be an investment in our future well worth the relatively meagre cost. Private universities could charge what they like, but don't believe for a second that costs at Harvard and Yale wouldn't also come down, and, for purposes of this post, don't believe for a minute that prospective students and the parents who are faced with a choice between crippling payments, indebted children, or uneducated children condemned to a life at Wal-Mart wouldn't be eager to vote for the party that promised some relief.
  3. Raise taxes on the rich. Really. Another no brainer. In particular, raise the estate tax on billion dollar estates. The Kochs are bad enough. We don't need their offspring retaining ownership of one of our political parties. They call it the death tax, but surely we can come up with a competing and more accurate moniker.
  4. Abolish the social security cap. When the present cap on social security taxes was enacted, it was calculated using the assumption that the distribution of income would remain fairly stable. It's only because of the rising level of inequality that the Social Security trust fund faces a problem in the out years. Abolish the cap and the problem disappears. In fact, if we abolished the cap, we could probably lower the overall rate, raise benefits, and still fully fund the system. One small step toward reversing the march of inequality.
  5. Don't like Obamacare? Okay, how does Medicare for all sound? Why give away money to the insurance companies when the government can do a far better job of providing insurance for far fewer dollars.
  6. Be louder and prouder about raising the minimum wage, and don't argue for half measures. Go the distance, all the way back to 1968 or so, and demand a minimum wage equivalent to that we had in those bygone years.
  7. Mandatory sick leave, another no-brainer.
  8. Child care. Yet another no-brainer.

Recently, someone read a list of Dan Malloy's progressive achievements to me. It was not inconsiderable, but only a few items on the list affected the broader population. Immigration policy, for instance, affects some people quite a lot; but for most it is a blip. We can't win by focusing like a laser on identity politics issues. We shouldn't abandon them, but front and center should be issues that affect almost everyone. Nor should we shy away from an issue on the grounds that we might not be able to succeed right away. Republicans never give up; Democrats never try. The college loan issue would be a winning one for us, whether or not the Republicans can ultimately prevent its passage. If they do, then we can beat them over the head with that. Another thing: there are certain people we are never going to get: the total gun nuts, the religious whackos, etc. Stop trying. It's a futile endeavor and it only makes us look weak.

My list is not all inclusive, but you get the gist.

Finally, we need to take another page from the Republican play book. You see it all the time. Ask them a question, and they have an answer, and oddly enough, every one has the same answer using the same phrases. Ask them about global warming, and they duck by telling you that “I am not a scientist”. Sure it's intellectually barren, but it works. The Democrats have to start messaging like that. One nice thing about this election was that it stripped us of a lot of Blue Dogs, which means the remaining Democrats, should they wish to survive, can start talking together like real Democrats.

The fact is, we can't get by on just being the non-crazy party. It's amazing how quickly people forget the effects of crazy, particuarly when, like this year, the media is determined not to remind them.

Epilogue: I'm not kidding myself. The Democrats won't advocate much, if any of the above. They are far too beholden to Wall Street.

A Nation of Hypocrites, Religious Edition

Have you ever noticed that the more loudly people proclaim their Christianity, the less like Christ they behave? I don't think anyone would argue with the premise that Bible Thumping gets louder the farther south you go, yet only in the South would they pass a law against feeding the hungry.

It outlaws the public sharing of food. Of course, in reality, were you to share food with a middle class person you wouldn't have a problem, but try sharing with the homeless and you get yourself arrested.

Let's see, I know there was someone who publicly shared food:

As evening approached, the disciples came to him and said, “This is a remote place, and it’s already getting late. Send the crowds away, so they can go to the villages and buy themselves some food.”

Jesus replied, “They do not need to go away. You give them something to eat.”

“We have here only five loaves of bread and two fish,” they answered.

“Bring them here to me,” he said. And he directed the people to sit down on the grass. Taking the five loaves and the two fish and looking up to heaven, he gave thanks and broke the loaves. Then he gave them to the disciples, and the disciples gave them to the people. They all ate and were satisfied, and the disciples picked up twelve basketfuls of broken pieces that were left over. The number of those who ate was about five thousand men, besides women and children.

Yes, I know it's a fable and it never really happened. But those folks down south are supposed to believe every word of it.

Reflections, take one

We just returned from Drinking Liberally. I'm happy to report that turnout was up (misery loves company), and so were spirits. After all, if we don't find a way to blow it, 2016 should be our year.

But I must comment on a phenomenon that we observed here, though it was obviously not so pronounced elsewhere in the state. We lost a number of state legislative races. Previously Southeastern Connecticut was solid blue; we are now half red. Each loss had its own story, but I think there was a common thread in each.

My own feeling, and I've heard the same analysis from others, is that Dan Malloy did some of the Democrats in, but in a rather strange way. For example: Malloy won every district in Groton.

Okay, we interrupt this train of thought to digress. For us Groton Democrats this was a delicious thing, as it was a fairly good indication that Heather Bond had no business being on a state wide ticket, inasmuch as she couldn't deliver a single district in her own home town. In off years Groton is by no means solid blue. If Heather had any home town pull, then Foley should have swept the town. Hopefully, this means we have seen the last of Heather, Connecticut's answer to Sarah Palin (the main difference being that Heather is more all about Heather than Sarah is all about Sarah).

Okay, back on the train we go. As I said, Malloy won every district, but the incumbent Democratic state legislative candidates lost every district but one. That seems counterintuitive, given Malloy's unpopularity. My take is that a number of voters concluded that, while they disliked Malloy intensely, they loathed Foley even more; so their thinking went roughly like this: Okay, I'll vote for Malloy, but I'm not voting for any more fucking Democrats. Folks like Lisa Wright and Betsy Ritter lost because Dan Malloy won. Had the Republican alternative been more acceptable, one or both of them would likely have won.

So that's my take on things at the local level. Nationally, I think there was a different dynamic, and I'll get to that when I have a few minutes to put my thoughts together.

Flash Boys (Book review, sort of)

I just finished Michael Lewis's Flash Boys. I know I'm late to the game commenting on this book, but my take on it might be a little different. To me, it illustrates what comes of good timing, good publicity, or both.

First, the basic premise of the book: the stock market is rigged. Every time an investor buys a stock the price is just a little teeny bit inflated by high frequency traders, who essentially impose a tax on almost every stock market transaction that takes place. Were the U.S. government to impose such a tax, and put the money to good use, every Republican politician would be up in arms. But since this money, billions of dollars, goes into the pockets of the already rich, who perform no useful function (in fact, almost no function at all-the computers do all the work), we hear nary a word of protest. Flash Boys never lose money; they can't, almost by definition. If you want to buy a stock, they push in front of you, buy it for slightly less than you will eventually pay, and sell it to you in a nanosecond for slightly more. It all adds up to billions of dollars siphoned from the economy into the pockets of sociopaths.

What I thought was interesting about the book is that it was so similar to another book that came out a few years ago: Dark Pools-the Rise of the Machine Traders and the Rigging of the U.S. Stock Market, by Scott Patterson. It tells much the same story in much the same way. Honest trader can't understand why the (always a he-I don't think there was a female of note in either book) price of stocks he wants to buy shoot up the second he pushes the buy button. Eventually he finds out about the Flash Boys, etc. Both books are told through the stories of people trying to push back against the system. Both are worth reading, by the way. I'm not taking anything away from Lewis. Patterson's book was released in 2012, and while I'm sure it caused some ripples on Wall Street, I'm also sure it didn't get the attention Flash Boys got. I'm sure the 60 minutes profile of Lewis didn't hurt and, maybe, Lewis's title is a bit sexier. Also, and I think this may be key, Lewis's timing just may have been better. Personally, I think disgust with the banks and the markets has been growing as it's sinking in that we are being systemically fleeced and impoverished.

In the end, sadly, neither book has had much real world impact. Obama's SEC commissioner quickly stepped up to assure us that the rigged markets aren't rigged (pay no attention to those men behind the curtain); a few Senators blustered, but nothing concrete was proposed or done, and the Flash Boys continue to siphon money from productive uses. It affects even those of us who own no stock directly, if we have a 401k, for the funds in which we put our money are prime victims of the practice. So not only do we lose thousands over our lifetime due to excessive fees imposed by the funds in which we have no choice but to invest, those funds themselves lose thousands on our behalf by getting ripped off in turn by the bankers and brokers that execute their orders.

If things go as expected on Tuesday, the American people will vote to make double sure that nothing will be done to stop this systematic theft of their money, but we can take some comfort by considering that this problem is insignificant compared to other crises, such as global warming, that we'll also be voting to ignore.

Non Sequiturs anyone?

This morning's Times tells us that in Denmark McDonalds pays $20.00 an hour. Not, of course, because it wants to, but because it has to in order to do business in Denmark. It's employees can actually live on what they make working there. An amazing thing! The downside is that MacDonalds can't make the same obscene profits (although they do turn a comfortable profit) it makes here, and the CEO of MacDonalds Denmark likely doesn't make as much as his American counterparts. So sad.

But I come not to praise Denmark.

The Times, of course, being staffed with good journalists, searched out some right wing voices who could tell us why such pay would never do here in the land of “We're Number 1!”. Check this out:

Many American economists and business groups say the comparison is deeply flawed because of fundamental differences between Denmark and the United States, including Denmark’s high living costs and taxes, a generous social safety net that includes universal health care and a collective bargaining system in which employer associations and unions work together. The fast-food restaurants here are also less profitable than their American counterparts.

“Trying to compare the business and labor practices in Denmark and the U.S. is like comparing apples to autos,” said Steve Caldeira, president of the International Franchise Association, a group based in Washington that promotes franchising and has many fast-food companies as members.

“Denmark is a small country” with a far higher cost of living, Mr. Caldeira said. “Unions dominate, and the employment system revolves around that fact.”

via The New York Times

The argument seems to be that a lesser degree of inequality would never work here because we have a high degree of inequality, that high degree of inequality brought to you by the very people who are telling us that a lesser degree of inequality would never work here because we have a high degree of inequality. What they're really saying is that they pay well in Denmark only because they have to, and they damn well won't pay more here unless someone forces them to, and they'll sure as hell do everything in their power to make sure that never happens.

But I must justify the name of this post. The article quotes a number of “liberals” (code for rational), who take the not unreasonable position that if MacDonalds can make money paying a decent wage in Denmark, it can do so here. None of the factors cited by the unnamed “economists and business groups” have any bearing on the question of whether the liberals are correct. The cited factors may enable Danes to get paid decently, but, for example, the absence of universal health care here doesn't prevent MacDonald's from paying decent wages here. The conclusion we're supposed to reach simply doesn't flow from the cited facts.

What this does help prove is that individual states here in the land of the free can help their own citizens by raising the minimum wage. Most minimum wage workers work for entities such as MacDonalds. MacDonald's can scream all it wants about the job destroying effects of the minimum wage, but the fact is that if it's given the choice between making less money or leaving a state entirely, it will shut its yap and pay, just like it's paying in Denmark. Here in Connecticut, the money that we diverted to workers through our minimum wage increase will, for the most part, stay right here in Connecticut, where it will provide a little extra stimulus, instead of being exported to wherever the Dark Lords that run MacDonalds have their lair. Of course, optimally, we would re-empower the unions, so that, as in Denmark, they would make minimum wage laws unnecessary, but that's not in the cards, and the reason for that is a post for another day.