The Big Lie Coup d'Etat

By Robert Reich, cross-posted from his website

JP Morgan Chase,  Goldman Sachs, BP, Chevron, WalMart, and billionaires Charles and David Koch are launching a multi-million dollar TV ad buy Tuesday blasting President Obama over the national debt.

Actually, I don’t know who’s behind this ad because there’s no way to know. And that’s a big problem.
The front group for the ad is Crossroads GPS, the sister organization to the super PAC American Crossroads run by Republican political operative Karl Rove.

Because Crossroads GPS is a tax-exempt nonprofit group, it can spend unlimited money on politics — and it doesn’t have to reveal where it gets the dough.

By law, all it has to do is spent most of the money on policy “issues,” which is a fig leaf for partisan politics.
Here’s what counts as an issue ad, as opposed to a partisan one. The narrator in the ad Crossroads GPS is launching solemnly intones: “In 2008, Barack Obama said, ‘We can’t mortgage our children’s future on a mountain of debt.’ Now he’s adding $4 billion in debt every day, borrowing from China for his spending. Every second, growing our debt faster than our economy,” he continues. “Tell Obama, stop the spending.”
This is a baldface lie, by the way.

Obama isn’t adding to the debt every day. The debt is growing because of obligations entered into long ago, many under George W. Bush – including two giant tax cuts that went mostly to the very wealthy that were supposed to be temporary and which are still going, courtesy of Republican blackmail over raising the debt limit.

In realty, government spending as a portion of GDP keeps dropping.

As I said, I don’t know who’s financing this big lie but there’s good reason to think it’s some combination of Wall Street, big corporations, and the billionaire Koch brothers.

According to the reliable inside-Washington source “Politico,” the Koch brothers’ network alone will be spending $400 million over the next six months trying to defeat Obama, which is more than Senator John McCain spent on his entire 2008 campaign.

Big corporations and Wall Street are also secretly funneling big bucks into front groups like the U.S. Chamber of Commerce that will use the money to air anti-Obama ads, while keeping secret the identities of these firms.

Looking at the all the anti-Obama super PACs and political fronts like Crossroads GPS, Politico estimates the anti-Obama forces (including the Romney campaign) will outspend Obama and pro-Obama groups by 2 to 1.

How can it be that big corporations and billionaires will be spending unlimited amounts on big lies like this one, without any accountability because no one will know  where the money is coming from?

Blame a majority of the Supreme Court in its grotesque 2010 Citizens United vs. Federal Election Commission decision — as well as the IRS for lax enforcement that lets political front groups like Crossroads GPS or the U.S. Chamber of Commerce pretend they’re not political.

But you might also blame something deeper, more sinister.

I’m not a conspiracy theorist (you can’t have served in Washington and seriously believe more than two people can hold on to a big story without it leaking), but I fear that at least since 2010 we’ve been witnessing a quiet, slow-motion coup d’etat whose purpose is to repeal every bit of progressive legislation since the New Deal and entrench the privileged positions of the wealthy and powerful — who haven’t been as wealthy or as powerful since the Gilded Age of the late 19th century.

Its technique is to inundate America with a few big lies, told over and over (the debt is Obama’s fault and it’s out of control; corporations and the very rich are the “job creators” that need tax cuts; government is the enemy, and its regulations are strangling the private sector; unions are bad; and so on), and tell them so often they’re taken as fact.

Then having convinced enough Americans that these lies are true, take over the White House, Congress, and remaining states that haven’t yet succumbed to the regressive right (witness Tuesday’s recall election in Wisconsin).

I desperately hope I’m wrong, but all there’s growing evidence I may be right. 


Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Beyond Outrage

The Bain Of Our Existence

By Mike Lux, cross-posted from Crooks and Liars

I love this Bain debate. It is exactly the kind of debate about the nature of business and job creation we need to be having in this campaign. The Republicans, along with pro-Wall Street Democrats, are squealing like stuck pigs about the Obama campaign “attacking free enterprise” because they want to change the subject fast. They are saying to themselves: please, let’s talk about anything else. Deficits would be their first choice, but anything would be preferable. Maybe we’ll see them start talking about contraceptives and how people shouldn’t have sex again just to change the subject. Because this debate goes straight to the heart of what kind of economy we should be trying to build in this country.

This is isn’t about being for or against free enterprise. This is about how the economy should work better for everyone in it, not just the top 1 percent. The Republicans -- and Democrats like Cory Booker and Harold Ford, who both have raised millions of dollars in Wall Street money (including money from Bain) for their campaigns -- say that it is great when financial corporations like Bain make money by loading up the companies they buy with debt, taking all the tax write-offs the law allows, and then walking away with tons of money whatever happens to the original company. In fact, the companies Bain bought frequently went bankrupt, and Bain usually profited when those companies did go belly-up because of tax write-offs and sucking the companies’ assets dry. But in this line of reasoning, it’s all good, because capitalism should be unrestrained and some people got very rich.

What Obama and other Democrats are arguing is that our government should be on the side of the businesses that create not just wealth for a few at the top, but jobs and incomes for a lot of people. That is why Obama made the incredibly gutsy move to save the American auto industry, a policy that saved 1.45 million jobs in the short run, and kept desperately needed manufacturing jobs in this country for years to come. It is why Obama has made big investments in the budget for Small Business Administration jobs. It is why investments have been made in clean energy jobs of the future. It is why the U.S. Department of Agriculture has emphasized rural economic development and small business development in areas where jobs and incomes are desperately needed.

Democratic policies are in fact far more pro-business than policies like the Romney-Ryan budget, which independent studies estimate would cost the nation more than 4 million jobs in the next two years. That’s a lot of business customers who no longer have money to spend.

The Republican attack machine (helped by Democrats like Booker and Ford who have been feeding at the Wall Street trough for their entire careers) wants to intimidate the Obama campaign by making the claim that any attack on greedy business practices like the ones Romney perfected at Bain is an attack on all business and the market. It’s the same kind of argument Republicans make when they complain about class warfare politics when Democrats suggest that millionaires ought to pay a little more in taxes. It is an utterly soulless, amoral argument. But this is a fight Democrats can and will win if we make our case, because I think most people understand that there are ethical and unethical business practices. And they get that there is a difference between making money by manipulating the tax code and squeezing all the value out of businesses before throwing them away, and making money by making and selling good products that people want to buy. Biden laid this case out beautifully in a speech in Youngstown:





And the President got it right when he said “when you are President, as opposed to the head of a private equity firm, then your job is not simply to maximize profits. Your job is to figure out how everybody in the country has a fair shot.”

This debate about Bain Capital is one we need to have. What kind of business activity, and what kind of government policy, is better for America? Republicans, you better batten down the hatches, because we are going to have this debate. Whiny Wall Street Democrats, get over it, this is a fight we are taking on. This is a make or break moment for America’s middle class, and we aren’t going to let Republican bullies and Wall Street Democrat whiners from making Bain the bain of Romney’s existence.

The Facebook IPO: Unlike

DonkeyHotey

It has been widely reported that the underwriters for Facebook's initial public offering reduced the revenue forecasts for the company before the IPO, but only shared this information with big, institutional investors. 

As Travis Waldon and Pat Garofalo at ThinkProgress explain, the Facebook IPO fiasco provides us with several examples of how Wall Street games the system:

1. Facebook may have hid information about weak revenue growth: According to one lawsuit launched since the company went public, Facebook “concealed crucial information” regarding weak revenue growth, failing to disclose a revised revenue forecast, much like Wall Street banks failed to provide key information about mortgage securities they were peddling before the financial crisis.

2. Morgan Stanley alerted “preferred” investors to Facebook’s poor growth forecasts: Facebook’s Wall Street underwriters are facing scrutiny from regulators for only alerting certain “preferred” investors about Facebook’s declining revenue stream, leaving many potential shareholders in the dark.

3. Facebook stock dropped, Wall Street got rich: Facebook stock plummeted on its second day of trading and has continued its decline since, but Morgan Stanley and the other underwriters are still turning massive profits by “shorting” its stock. “In fact,” Fortune’s Steven Gandel wrote, “Morgan Stanley and the other banks who were selling Facebook shares to the public were positioned to make more money the lower Facebook’s shares went.” As of Tuesday, the group of Wall Street banks that underwrote the IPO could have topped more than $450 million in profits — on top of more than $170 million in underwriting fees.

4. Facebook will dodge billions in taxes after its IPO: Corporate tax law allows companies that issue stock options to make huge deductions to their tax liabilities, helping Facebook avoid $16 billion in taxes. CEO Mark Zuckerberg could possibly never pay taxes again, using a series of loopholes to avoid them after the initial hit he’ll take after selling shares.

5. Facebook is spending big on politics: Just like the Wall Street banks and other big companies that spend huge amounts of cash lobbying Washington, Facebook jumped into the fray, giving $119,000 in donations to lawmakers through March 31. The money went to leaders of both parties and those lawmakers who “serve on House and Senate committees that handle Internet and online privacy issues.”

Obama Should Be Attacking Casino Capitalism

By Robert Reich, cross-posted from his website
 

I wish President Obama would draw the obvious connection between Bain Capital and JPMorgan Chase.

That way his so-called “attack” on private equity is neither a personal attack on Mitt Romney nor a generalized attack on American business.

It’s an attack on a particular kind of capitalism that Romney and JPMorgan both practice: Using other peoples’ money to make big bets which, if they go wrong, can wreak havoc on the economy.
It’s the substitution of casino capitalism for real capitalism, the dominance of the betting parlor over the real business of America, financial innovation rather than product innovation.

It’s been terrible for the American economy and for our democracy.

It’s also why Obama has to come out swinging about JPMorgan. The JPMorgan Chase debacle would have been prevented if the Volcker Rule were sufficiently strict, prohibiting banks from using commercial deposits to make bets except very specific offsetting bets (hedges) on narrow classes of trades.

But Jamie Dimon and JPMorgan have been lobbying like mad to loosen the Volcker Rule and widen that exception to include the very kind of reckless bets JPMorgan made. And they’re still at it, as evidenced by Dimon’s current claim that the rule that eventually emerges would allow those bets.

As a practical matter, the Volcker Rule is hopeless. It was intended to be Glass-Steagall lite — a more nuanced version of the original Depression-era law that separated commercial from investment banking. But JPMorgan has proven that any nuance — any exception — will be stretched beyond recognition by the big banks.

So much money can be made when these bets turn out well that the big banks will stop at nothing to keep the spigot open.

There’s no alternative but to resurrect Glass-Steagall as a whole. Even then, the biggest banks are still too big to fail or to regulate. We also need to heed the recent advice of the Dallas branch of the Federal Reserve, and break them up.

At the same time, there’s no point to the “carried interest” loophole that allows private-equity managers like Mitt Romney to treat their incomes as capital gains, taxed at only 15 percent, when they’ve risked no money of their own.

If private equity were good for America it wouldn’t need this or the other tax preference it depends on, elevating debt over equity. But the private equity industry has huge political clout, which is why these tax preferences remain.

Get it? Bain Capital and JPMorgan are parts of the same problem. The President should be leading the charge against both.

What The Bain Debate Is Really About

By Terrance Heath, cross-posted from Campaign for America's Future

DonkeyHotey

The 2012 presidential election may go down as one of the strangest political seasons in recent memory, for the simple reason that the influence of the financial sector in politics, policy and the economy has caused Republicans to sound like Democrats and Democrat to sound like Republicans — usually with confounding results.

When Republicans sound like Democrats, like Newt Gingrich attacking Mitt Romney's record at Bain Capital, they tend to start arguments they can't win. When Democrats start sounding like Republicans, like Cory Booker defending Bain Capital, they tend forfeit arguments they could win. That's because, in both cases, the politicians are arguing about the wrong things, in order to avoid the real argument  — the one America needs to have, and Americans need to win; the argument over what kind of economy we will have going forward.

Gingrich's attack on Romney's record confused many conservatives, who equated it with an attack on capitalism itself. Newark Mayor Cory Booker echoed the concerns of confused conservatives when he called the Obama campaigns ads attacking Romney's record at Bain Capital a "nauseating" attack on private equity, labeling them a distraction. "It's either going to be a small campaign about this crap or it's going to be a big campaign, in my opinion, about the issues that the American public cares about," Booker said.

What Booker, Democrats like him, and conservatives now lauding his diatribe ignore or don't realize is that the issues affecting voters don't come much bigger and don't get much more real than the kind of capitalism Bain represents.

Bain Capitalism

As Digby said, if Romney is going to run on his Bain Capital record and tout his private equity background as his main qualification for the presidency, then his track record at Bain is fair game. I summed up that track record in my original post about his brand of "vulture capitalism."

A former managing partner at Bain, in an interview with the Los Angeles Times, made it clear that job creation was never the point at Bain.

Bain managers said their mission was clear. "I never thought of what I do for a living as job creation," said Marc B. Walpow, a former managing partner at Bain who worked closely with Romney for nine years before forming his own firm. "The primary goal of private equity is to create wealth for your investors."

Under Romney's leadership, Bain certainly created wealth for its investors, no matter what happened to the companies it acquired or the the people worked for them. The Wall Street Journal's revealing look at Romney's time at Bain shows that 22% of the companies Bain invested on under Romney's watch either filed for bankruptcy, reorganized, or closed their doors — sometimes with substantial job losses. As Pat Garofalo pointed out, that's nearly one fourth of the companies Bain invested in.



Some failed so badly that Bain lost its investments. That didn't put a damper in returns, though. Bain produced about $2.5 billion in returns for its shareholders, out of just $1.1 billion invested. (Romney did alright, too. His campaign estimates his take during his term at Bain as anywhere from $190 million to $250 million. That's enough for a lot of $10,000 bets.)

The LA Times piece makes it clear that Bain and its investors profited, no matter what happened to the companies in its portfolio. According to the Wall Street Journal, 70% of Bain's returns came from just 10 deals. The LA Times article notes that "Four of the 10 companies Bain acquired declared bankruptcy within a few years, shedding thousands of jobs." Still, Bain profited in eight of those ten deals, including three of the four that went bankrupt.

That's the way "vulture capitalism" (as I like to call it) works. Bain and its shareholders profited in the end, no matter what else happened.

That's the part of the story that the Gingrich movie seems to tell: what else happened. We know what happened on Wall Street when Mitt Romney came to town. A few people — Mitt Romney included — made a lot of money. Now we know what else happened on Main Street when Mitt Romney came to town.

What happened to those companies and the people who worked for them begins to read like a casualty list: 1,700 jobs lost at Dade International, more than 700 jobs lost at GS Industries, 200 jobs lost at American Pad and Paper (Apmad). After a while, it's easy to forget that these numbers represent the lives of real people, whose job loss sent shock waves through their families and communities; people like Donny Box and Randy Johnson.

It's also easy to miss the point that this is just how the brand of "head I win, tails you lose" capitalism Bain practiced under Romney's leadership is suppose to work; as the Obama campaign illustrates in a new video and slideshow about how Bain made $100 million on its $5 million investment in Ampad, even while sending the company into bankruptcy and its 1,500 employees to the unemployment line. Bain Capital made profits no matter what happened the companies in its portfolio. Nearly one fourth of the companies Bain invested in during Romney's tenure either went bankrupt, reorganized, or simply shut down — often with significant layoffs. Seventy percent of Bain's profits came from just 10 deals, four of which resulted in bankruptcy.

"Extracting Value"

Romney's factually challenged, incredible shrinking claims of being a "job creator" at Bain notwithstanding, his former Bain colleague got it exactly right. Bain wasn't in the business of creating jobs, and Romney wasn't in the business of creating jobs. Bain's mission, and Romney's job as its chief, was simply to "create wealth" for its investors. Period.

Bain Capital and Mitt Romney were in the business of creating even more wealth for its already-wealthy investors. They were apparently very good at it, too. But the kind of wealth Bain and Romney worked to create isn't the kind of wealth that leads to more widely shared prosperity. It's not the kind of wealth that grows the economy, according to the CBO. Nor is it the kind of wealth that leads to job creation, according to Moody's Analytics, because it doesn't get put back into the economy to support existing jobs or spur job creation by boosting demand. The wealthy don't spend their tax cut windfalls, but save them and invest them in the stock market instead; putting their money to work making money, rather than putting their money to work keeping people working and putting people to work.

The success or failure of the companies in its portfolio were beside the point. When he's not claiming the mantle of "job creator," Romney casts himself and Bain as "fixers" who acquired "broken" companies and made them better —more efficient, and more profitable. But that wasn't the point at Bain. To some extent, Bain and Romney profited from practices that were more about extracting value from its acquisitions than "fixing" them. (The language about "extracting value" is even repeated in some of Bain's own material.)

That's what Bain Capitalism is about: "extracting value" with no investment in the fate of the companies in its portfolio, the people who work from them, or the communities that rely on them.

 "What This Job Is All About"

Cory Booker called the debate over Bain Capital a "distraction" that threatened to make the election a "small campaign" about small ideas, instead of a "big campaign" about "the issues the American public cares about." In his remarks at yesterday's NATO summit, President Obama made the case for why Romney's record at Bain Capital is relevant to a "big campaign" about "issues the American public cares about." (And he managed it without even calling Booker a "jackass.")

… [T]he reason this is relevant to the campaign is because my opponent, Governor Romney, his main calling card for why he thinks he should be President is his business expertise. He is not going out there touting his experience in Massachusetts. He is saying, I’m a business guy and I know how to fix it, and this is his business.

And when you’re President, as opposed to the head of a private equity firm, then your job is not simply to maximize profits. Your job is to figure out how everybody in the country has a fair shot. Your job is to think about those workers who got laid off and how are we paying for their retraining. Your job is to think about how those communities can start creating new clusters so that they can attract new businesses. Your job as President is to think about how do we set up a equitable tax system so that everybody is paying their fair share that allows us then to invest in science and technology and infrastructure, all of which are going to help us grow.

And so, if your main argument for how to grow the economy is I knew how to make a lot of money for investors, then you’re missing what this job is about. It doesn’t mean you weren’t good at private equity, but that’s not what my job is as President. My job is to take into account everybody, not just some. My job is to make sure that the country is growing not just now, but 10 years from now and 20 years from now.

So to repeat, this is not a distraction. This is what this campaign is going to be about -- is what is a strategy for us to move this country forward in a way where everybody can succeed? And that means I’ve got to think about those workers in that video just as much as I’m thinking about folks who have been much more successful.

The president is off to a good start on taking the debate where it needs to from here; from the particulars of Romney's record at Bain Capital to what it represents, and the economic choices facing America. But, as I pointed out before, the business practices of companies like Bain mean profit for the investor class, and pain for the 99%. Now, president Obama needs to make it personal.

This is pretty good, but I think it's going to have to get a lot more forceful. Obama has this habit, which you learn as a writer over time is really unconvincing. He very often makes an assertion without illustrating it, without saying why. It leaves listeners confused because he hasn't really put meat behind the assertion.

But he is on the right track here. I don't think this is such a difficult needle to thread. In fact he could get a lot more emotional mileage out of this sort of thing. Like how? Like so:

"The people who lost their jobs because of Mitt Romney's creative destruction, those are precisely the people the president has to think about most. Those are the people who write the letters that I read every night before I go to bed. Those are the people who need my help the most of all. Mitt Romney and his fellow investors will mostly be just fine. I think about the other people. Governor Romney says, explicitly, has said many times, of lost jobs, that's capitalism, that's just the way it goes. Do you want a president who watches an American factory shut down and says, 'Well, that's capitalism?'"

Choosing Capitalism

"Do you want a president who watches an American factory shut down and says, 'Well, that's capitalism?'"

It recasts Romney's answer to questions about bankruptcies, shutdowns, and layoffs Bain left in its wake as a Rumsfeldian "stuff happens" response to the economic consequences of Bain's practices. Stuff doesn't just happen. Stuff happens because other stuff happens. The debate is basically about whether we should regulate some stuff in order to keep it from happening, and what we should do about the stuff that happens as a result.

We are, as E.J. Dionne writes, not in the middle of a national argument about capitalism versus "socialism," but a much needed discussion about what kind of capitalism we want.

The Bain conversation has already been instructive. Romney’s friends no less than his foes have had to face the fact that Bain’s purpose was never about job-creation. Its goal was to generate large returns to Bain’s partners and investors. It did that, which is why Romney is rich.

Romney wants to focus on the positive side of his business dealings that did create jobs. He wants to brag about the companies Bain helped bring to life, among them Staples, Sports Authority and Domino’s.

That’s fair enough. But having made an issue of Bain on the plus side, he also has to answer for the pain and suffering — or, as defenders of capitalism like to call it, the “creative destruction” — that some of Bain’s deals left in their wake.
This leads naturally to the question of how creative the destruction wrought by our current brand of capitalism actually is. Since the dawn of the leveraged buyout era three decades ago, many friends of capitalism have questioned whether loading companies with debt as part of these deals is good for companies and for the economy as a whole.

What's the alternative to the "vulture capitalism" practiced by firms like Bain Capital? What it's called varies, I've heard it called "Inclusive Capitalism" and "the New Economy movement." It's components are just beginning to take shape, as more people envision a capitalism that better spreads the benefits of the "productivity revolution," that regulates the worst of capitalism's "creative destruction," and incorporates a safety net to catch those left behind by the market.
This may be another debate in which President Obama could benefit from following Vice President Biden's lead.

Vice President Biden’s speech last week in Youngstown, Ohio, drew wide attention for its criticism of Romney as someone who just doesn’t “get it.” But when Biden moved beyond Romney, he offered an energetic broadside against the new world of finance, and he picked the right venue to make his case: a noble blue-collar town that has been battered by the winds of globalization and economic change.

“You know the difference between having an economy that makes things that the rest of the world wants, and having an economy that is based on financialization of every product,” Biden told his listeners. “You know the difference between an economy . . . that’s built on making things rather than on collateralized debt, creative credit-default swaps, financial instruments like subprime mortgages. That’s not how you build an economy.”

This campaign isn't just about Bain, or Mitt Romney's past. It's about our future. It's about the kind of new economy we want to build.

Wall Street, Romney, And Obama

By Mike Lux, cross-posted from Crooks and Liars

The most critical battle in this election year is the battle over Wall Street. Candidates all over the place, from the high profile candidates like Elizabeth Warren to a slew of others all over the country, are battling over who is on Wall Street’s side, who wants to keep bailing them out, and who is pushing them to go to jail. But nowhere is this battle being played out more prominently than in the race for the White House.

The Obama campaign is doing a major push in the coming weeks on Mitt Romney’s sordid history at the helm of Bain Capital. His fellow Republicans called it vulture capitalism, and they were right. Mitt bought companies (many of them doing just fine at the time he bought them), loaded them up with massive amounts of debt that Bain could write off on their taxes, in many cases destroyed and outsourced jobs and cut pay and benefits, and then frequently carved them up and sold off the pieces to maximize short-term profits. A few of these companies ended up surviving this brutal process and becoming more profitable, and we will hear a lot from Mitt about those examples. But way too many times, Mitt and Bain left these companies, and especially their workers, far worse for the wear, leaving behind a lot of shattered lives in the process, while Mitt and his fun-loving pals stuffed money in their pockets and walked away. High School wasn’t the only place Mitt brutalized those weaker than him, and he enjoyed doing it.

Bain Capital was Wall Street at its worst. But the cutthroat, anything-goes-in-the-pursuit-of-one-more-dollar culture at Bain has infected our entire banking system. The Obama campaign is right to attack on Bain and on the culture of Wall Street; it is in my view their single most powerful attack line. However, that attack will be undercut unless they buttress their own credibility on taking on Wall Street. Republicans aren’t going to hesitate coming after Obama hard on his ties to Wall Street (ironically with a lot of Wall Street money) in order to weaken the campaign’s credibility when they attack Bain, and we are seeing signs of that right now.

Look at how the issue has played out in recent days. Over the course of the last week, we have seen Jamie Dimon twisting himself into a pretzel trying to explain why his bank’s dangerous and irresponsible trades don’t merit any regulation, stories on how the Obama campaign is being hurt by not being tougher on Wall Street, like this one from Politico, a major new ad campaign by a Republican group attacking Obama for his ties to Wall Street, and new polling paid for by an anti-Wall Street coalition showing Obama’s numbers on housing/banking issues in swing states being pretty bad. These issues are clearly going to be huge in this campaign, and the Republicans will do everything in their power to exploit any Obama weakness in this area.

The Obama team, in the White House and in the campaign, in order to win on the Bain attack, needs to face—and turn around —the perception that the administration has been weak on Wall Street. They need to be willing to shed past caution and take Wall Street titans head on.

One of the toughest problems they have to work through is that the most visible vehicle for action on holding Wall Street accountable is the financial fraud task force announced with great fanfare at the State of the Union. This task force raised hopes that an aggressive investigation was forthcoming, that perhaps some of the big bankers who intentionally pumped up the housing market and then dumped the securities, would be brought to justice. But the best case scenario (and that is only if things really start moving) is that indictments won’t start rolling out until September, and that is a very long time to wait given the narrative being written as we speak on the Wall Street issue. And even in terms of that best case scenario, unfortunately questions continue to be raised by sources I am talking to about whether the DOJ is slow-walking this investigation, whether enough resources are being given to the task force, and whether key staff at the White House are paying enough attention. Those questions ultimately won’t be answered until the task force starts to produce something tangible, and if we have to wait until the fall, these questions are going to keep building.

The administration should act right now to give the DOJ much more in the way of staff resources to the task force, and the President and White House senior staff need to send signals that they care about what is going on and that this is a high priority for them. If, for example, the DOJ is slow-walking, the White House needs to lean hard on the DOJ to make sure they aren’t. It seems like politics 101 to me to make sure the task force has the person-power to be successful in its work, but they are failing the test.

Given that (even with extra resources, by the way) the task force isn’t going to be moving fast enough for any of us who care about the political calendar, the entire Obama administration needs to show every day that they are willing to take on the big banks on behalf of homeowners, students, credit card consumers, and everyone else who is getting taken advantage of every day by bankers. Their reaction to the JP Morgan news, for example, has been far too low key. They should be banging away on Dimon and the other speculative bankers every single day, using this news to drive and build a narrative about reckless bankers rather than being restrained in their messaging about it. When a retiring bank CEO mentions in passing that the repeal of Glass-Steagall had something to do with the banking collapse, they should have used that as part of their narrative, too. Same when a trader at Goldman Sachs quits because the ethics at the firm have gone so far south. In every case, these were tailor-made opportunities for the White House and campaign to jump in with both feet and build that narrative about how this is why we need a President willing to take on bankers rather one who was the worst kind of one at Bain Capital.

Speaking of message restraint, though, there is some major restraint they do need to employ, and that is on their lame duck Treasury Secretary. In recent weeks, Geithner has stabbed the task force in the back by downplaying banker fraud, has rejected the idea that the repeal of Glass-Steagall was a problem in the 2008 collapse, and has similarly dismissed credit default swaps as a big problem. He seems more like a spokesperson for Wall Street than a member of the Obama administration. He needs to be shut up or eased out before he destroys any chance of the President getting re-elected.

Team Obama is on the knife’s edge right now. The economy is still too slow, with too many bridges out along the way, to build up much if any speed as we head down the home stretch to the election. Even if it does pick up a little bit, voters are still in a very bad mood because things have been so slow for so long. Focusing voters’ ire on the people who set off this crisis, the Wall Street pump-and-dump gang, is our best shot at winning this election, most especially with one of their ultimate homies, Mitt Romney, as the Republican candidate. But for that to work, the White House and campaign need to be focused like a laser beam at telling the story of how Wall Street greed brought us down, and how putting Wall Street’s guy in the White House would be the ultimate mistake—and they need to have their own credibility in terms of holding Wall Street accountable built up considerably. Getting resources to the fraud task force and making sure everyone at the DOJ knows it is a priority is a huge deal in that regard. Bottom line: Team Obama needs to be focused on the Wall Street credibility dynamic every single day.

Bain Capital shows that Mitt Romney’s high school career was no fluke: He has proven himself to be the ultimate pick-on-the-weak bully. His Wall Street values are definitional about the kind of man he has always been. Obama needs to show that his values are the opposite by being tough on Wall Street, while Romney is shown to be the personification of it.

Robert Reich Explains How We Need A New Era Of Reform Based On Public -- Not Private -- Morality

Romney Has Public Morality And Private Morality Upside Down

by Robert Reich, cross-posted from his website



Mitt Romney’s reaction to J.P. Morgan Chase’s mounting losses from reckless trades is “the market will take care of it.” His spokesman says “no taxpayer money was at risk” so we don’t need more financial regulation. Romney has even promised to repeal Dodd-Frank if he’s elected president.

Yet at the same time, Romney has come out strongly against same-sex marriage. He’s also against abortion. He has no problem with government intruding on the most intimate of decisions a person makes.

He’s got private and public morality upside down. He doesn’t want to regulate where regulation is necessary — at the highest reaches of the economy, where public immorality has cost us dearly, and will cost even more unless boardroom behavior is constrained. Yet he wants to regulate where regulation is least appropriate — at the level of the individual, in bedrooms and other intimate spaces, where private morality should govern.

This is a dangerous confusion. It should be a matter of personal choice whom to marry and when to have children. But it is undoubtedly a matter of public choice whether big banks should be allowed to take the kind of risky bets that plunged the economy into the worst downturn since the Great Depression, and whether people with great wealth and should be able to buy our democracy with huge campaign contributions.

Please see the attached video and pass it on.

 Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Beyond Outrage.

JP Morgan: Bank Or Casino?

Robbie Conal

The New York Times reports that JP Morgan, "which emerged from the financial crisis as the nation’s biggest bank, disclosed on Thursday that it had lost more than $2 billion in trading, a surprising stumble that promises to escalate the debate over whether regulations need to rein in trading by banks."  Its CEO, Jamie Dimon, blamed “errors, sloppiness and bad judgment” for the loss, which stemmed from "a hedging strategy that backfired."

Surprising?  Hardly.  As Travis Waldon writes at ThinkProgress, these are the kind of errors that "could have been prevented were it not for extensive lobbying efforts from banks like JPMorgan, which has spent nearly $10 million on lobbying since the beginning of 2011 (including nearly $2 million already this year)."

Robert Reich reminds us that Dimon has incessantly argued against government regulation of Wall Street:

Last year he vehemently and loudly opposed the so-called Volcker rule, itself a watered-down version of the old Glass-Steagall Act that used to separate commercial from investment banking before it was repealed in 1999, saying it would unnecessarily impinge on derivative trading (the lucrative practice of making bets on bets) and hedging (using some bets to offset the risks of other bets).

And since then, Reich continues, "J.P. Morgan’s lobbyists and lawyers have done everything in their power to eviscerate the Volcker rule — creating exceptions, exemptions, and loopholes that effectively allow any big bank to go on doing most of the derivative trading it was doing before the near-meltdown."

As Waldon writes, "Thursday’s events prove that Wall Street hasn’t learned its lesson from the last crisis, and that America’s 'too big to fail' institutions are too irresponsible to avoid failure. The Volcker Rule, watered down as it may be, is aimed at preventing that. Unfortunately, Dimon and his Wall Street colleagues remain committed to making sure it won’t."

Matt Taibbi explains why we should care "if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon."

Because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.

Taibbi concludes:

 If J.P. Morgan Chase wants to act like a crazed cowboy hedge fund and make wild exacta bets on the derivatives market, they should be welcome to do so. But they shouldn’t get to do it with cheap cash from the Fed’s discount window, and they shouldn’t get to do it with money from the federally-insured bank accounts of teachers, firemen and other such real people. It’s a simple concept: you either get to be a bank, or you get to be a casino. But you can’t be both. If we don’t have rules to enforce that concept, we ought to get some.

Welcome To The 2012 Hunger Games

Sending Debt Peonage, Poverty, and Freaky Weather Into The Arena

By Rebecca Solnit, cross-posted from TomDispatch

When I was growing up, I ate books for breakfast, lunch, and dinner, and since I was constantly running out of reading material, I read everyone else’s -- which for a girl with older brothers meant science fiction. The books were supposed to be about the future, but they always turned out to be very much about this very moment.

Some of them -- Robert Heinlein’s Stranger in a Strange Land -- were comically of their time: that novel’s vision of the good life seemed to owe an awful lot to the Playboy Mansion in its prime, only with telepathy and being nice added in. Frank Herbert’s Dune had similarly sixties social mores, but its vision of an intergalactic world of disciplined desert jihadis and a great game for the substance that made all long-distance transit possible is even more relevant now.  Think: drug cartels meet the oil industry in the deep desert.

We now live in a world that is wilder than a lot of science fiction from my youth. My phone is 58 times faster than IBM’s fastest mainframe computer in 1964 (calculates my older brother Steve) and more powerful than the computers on the Apollo spaceship we landed on the moon in 1969 (adds my nephew Jason). Though we never got the promised jetpacks and the Martians were a bust, we do live in a time when genetic engineers use jellyfish genes to make mammals glow in the dark and nerds in southern Nevada kill people in Pakistan and Afghanistan with unmanned drones.  Anyone who time-traveled from the sixties would be astonished by our age, for its wonders and its horrors and its profound social changes. But science fiction is about the present more than the future, and we do have a new science fiction trilogy that’s perfect for this very moment.

Sacrificing the Young in the Arenas of Capital 

The Hunger Games, Suzanne Collins’s bestselling young-adult novel and top-grossing blockbuster movie, is all about this very moment in so many ways. For those of you hiding out deep in the woods, it’s set in a dystopian future North America, a continent divided into downtrodden, fearful districts ruled by a decadent, luxurious oligarchy in the Capitol. Supposedly to punish the districts for an uprising 74 years ago, but really to provide Roman-style blood and circuses to intimidate and distract, the Capitol requires each district to provide two adolescent Tributes, drawn by lottery each year, to compete in the gladiatorial Hunger Games broadcast across the nation.

That these 24 youths battle each other to the death with one lone victor allowed to survive makes it like -- and yet not exactly like -- high school, that concentration camp for angst and competition into which we force our young. After all, even such real-life situations can be fatal: witness the gay Iowa teen who took his life only a few weeks ago after being outed and taunted by his peers, not to speak of the epidemic of other suicides by queer teens that Dan Savage’s “It Gets Better” website, film, and books aspire to reduce.

But really, in this moment, the cruelty of teens to teens is far from the most atrocious thing in the land. The Hunger Games reminds us of that.  Its Capitol is, of course, the land of the 1%, a sort of amalgamation of Fashion Week, Versailles, and the KGB/CIA. Collins’s timely trilogy makes it clear that the 1%, having created a system of deeply embedded cruelty, should go, something highlighted by the surly defiance of heroine Katniss Everdeen -- Annie Oakley, Tank Girl, and Robin Hood all rolled into one -- who refuses to be disposed of.

Now, in our world, gladiatorial entertainment and the disposability of the young are mostly separate things (except in football, boxing, hockey, and other contact sports that regularly result in brain damage, and sometimes even in death). But while the Capitol is portrayed as brutal for annually sacrificing 23 teenagers from the Districts, what about our own Capitol in the District of Columbia? It has a war or two on, if you hadn’t noticed.

In Iraq, 4,486 mostly young Americans died.  If you want to count Iraqis (which you should indeed want to do), the deaths of babies, children, grandmothers, young men, and others total more than 106,000 by the most conservative count, hundreds of thousands by others. Even the lowest numbers represent enough kill to fill nearly 5,000 years of Hunger Games.

Then, of course, there are thousands more Americans who were so grievously wounded they might have died in previous conflicts, but are now surviving with severe brain damage, multiple missing limbs, or other profound mutilations. And don’t forget the trauma and mental illness that mostly goes unacknowledged and untreated or the far more devastating Iraqi version of the same. And never mind Afghanistan, with its own grim numbers and horrific consequences.

Our wartime carnage has been on a grand scale, but it hasn’t been on television in any meaningful way; it’s generally been semi-hidden by most of the American media and the government, which censored images of returning coffins, corpses, civilian casualties, and anything else uncomfortable (though in our science-fiction era when every phone is potentially a video camera, the leakage has still been colossal). Most of us did a good job of being distracted by other things -- including reality TV, of course.  The US Ambassador and military commander in Afghanistan were furious not that our soldiers struck jokey poses with severed limbs, but that the Los Angeles Times dared to publish them last month. And those whistleblowers who took the effort to reveal the little men behind the throne are facing severe punishment.  Witness one Hunger-Games-style hero, Bradley Manning, the slight young soldier turned alleged leaker, long held in inhumane conditions and now facing a potential life sentence.


The Return of Debt Peonage

In The Hunger Games, kids in poor families take out extra chances in their District lottery -- that is, extra chances to die -- in return for extra food rations; in ours, poor kids enlist in the military to feed their families and maybe escape economic doom. Many are seduced by military recruiters who stalk them in high school with promises as slippery as those the slave trade uses to recruit poor young women for sex work abroad.

And then there’s another form of debt peonage that is far more widespread in our strange and ever-changing land: student loans. The young are constantly told that only a college education can give them a decent future. Then they’re told that, to pay for it, they need to go into debt -- usually into five figures, sometimes well into six. And these debts are, in turn, governed by special laws that don’t allow you to declare bankruptcy -- no matter what.  In other words, they are guaranteed to follow you all your life.

One of my close friends wept when her husband began to earn enough money to pay off her $45,000 loan, structured so that it looked like she would continue to pay interest on it for the rest of her life; not so dissimilar, that is, from the debts sharecroppers and workers in company towns used to incur.

In other words, we’re creating a new generation of debt peonage. And she’s not the worst case by far. Early in the Occupy Wall Street moment, she told me, someone arrived at Zuccotti Park in downtown Manhattan with markers and cardboard on which participants were to write their debt.  What shocked her was how many of the occupiers in their early twenties were already carrying huge debt burdens.

According to the website for Occupy Student Debt, 36,000,000 Americans have student debts.  These have increased more than fivefold since 1999, creating a debt load that’s approaching a trillion dollars, with students borrowing $96 billion more every year to pay for their educations. Two-thirds of college students find themselves in this trap nowadays. As commentator Malcolm Harris put it in N + 1 magazine:

“Since 1978, the price of tuition at U.S. colleges has increased over 900%, 650 points above inflation. To put that number in perspective, housing prices, the bubble that nearly burst the U.S. economy, then the global one, increased only fifty points above the Consumer Price Index during those years. But… wages for college-educated workers outside of the inflated finance industry have stagnated or diminished. Unemployment has hit recent graduates especially hard, nearly doubling in the post-2007 recession. The result is that the most indebted generation in history is without the dependable jobs it needs to escape debt.”

About a third are already in default. You can only hope that this bubble will burst in a wildcat strike against student debt, and if we’re lucky, a move to force tuition lower and have a debt jubilee.

The rest of us, the 99%, need to remember that, when it comes to public education, the crisis has everything to do with slashed tax rates -- to the wealthy and corporations in particular -- over the last 30 years. We went into bondage so that they might be free. Getting an education to make your way out of poverty and maybe expand your mind is becoming another way of being trapped forever in poverty. For too many, there’s no way out of the hunger labyrinth.

The Labyrinths of Poverty 

Which brings us to the hungriest in our 2012 real-life version of the Hunger Games: the poor. The wealthiest and most powerful nation the world has ever seen is full of hungry people. You know it, and you know why. In this vast, bountiful, food-producing, food-wasting nation, it’s a crisis of distribution, also known as economic inequality, described at last with clarity and force by the Occupy movement.

One of the sad and moving spectacles of camps like Occupy Oakland last year was the way they became de facto soup kitchens as the homeless and hungry came out of the shadows for the chance at a decent meal. Some of the camps had really dedicated chefs who cooked superbly.  They also had rudimentary medical clinics where the poor received the healthcare they couldn’t get anywhere else.

We are in a new era of desperation, when lots of people who were getting by these last several decades aren’t anymore. There are no jobs, or the jobs available pay so abysmally that workers can barely survive on them.

Of course, we do have one arena in which meals are guaranteed, and the population there keeps growing. Six million Americans live there, and it often does get gladiatorial inside. It’s called prison, and we have the highest percentage of prisoners per population in the world, higher than in the USSR gulags under Stalin. Half of them are there for drug offenses, 80% of those for simple possession.

Which, as I’m sure you’ve noticed, hasn’t stopped the flow of drugs meant to numb the pain we’re so good at creating here.  We should create a measure for Gross National Suffering (GNS) before we even think about the Gross National Happiness they measure in Bhutan.

And once our prisoners get out, they’re a stigmatized caste, uniquely ill-suited to survival in this economy -- speaking of hunger, debt, poverty, being branded for life, and hopelessness. Like universities, prisons are profitable industries, though not for the human beings who are the raw material they process.  In this age, both systems seem increasingly like so many factories.

In the Shadow of 900 Tornados

But if you want to think about all the ways we’re dooming the young, there’s one that puts the others in the shade, a form of destruction that includes not just American youth, or human youth, but all species everywhere, from coral reefs to caribou. That’s climate change, of course.

Our failure to do anything adequate about it has rocketed us into the science-fiction world Bill McKibben so eloquently warned us about in his 2010 book Eaarth. His argument is that we’ve so altered the planet we live on that we might as well have landed on a new one (with an extra “a” in its name), more turbulent and far less hospitable than the beautiful Holocene one we trashed.
There were 160 tornados reported on March 2nd of this year. Remember that, in April of 2011, 900 tornadoes were ripping up interior United States, and this April was similarly volatile.  Remember the unprecedented wildfires, the catastrophic floods, the heat waves, the bizarrely hot North American January and other oddities? That’s science fiction of the scariest sort, and we’re in it. Or on it, on the crazy new planet we’ve made ourselves. Here in the USA sector of Eaarth in the year 2012, 15,000 high-temperature records were broken in March alone, and summer is yet to come. A town in north-central Texas hit 111 degrees -- in April! What turbulent planet is this?

One grain of good news: a lot of us, even in this country, finally seem to be of aware of the strangeness of the planet we’re now on. As the New York Times reported, a new survey “shows that a large majority of Americans believe that this year’s unusually warm winter, last year’s blistering summer, and some other weather disasters were probably made worse by global warming. And by a 2-to-1 margin, the public says the weather has been getting worse, rather than better, in recent years.”
If you want to talk about hunger, talk about the unprecedented flooding that’s turned Pakistan from one of the world’s breadbaskets into a net food-importing nation, with dire consequences for the agricultural poor. Talk about China’s many impending ecological disasters, its degraded soil, contaminated air and water, its many systems ready to collapse. There’s more disruption of food production to come, a lot more, and lots more hunger, too.

Around this point in science fiction books and even history books, a revolution seems necessary. The good news I have for you this May Day is that it’s underway.

Revolution 2012

2011 was the year of strange weather, but it was also the year of global uprisings, and they’re far from over. They erupted in Russia, Israel, Spain, Greece, Britain, much of the Arab-speaking world, parts of Africa, and Chile, among other spots in Latin America (some of which got their revolutions underway earlier in the millennium). Uprisings have blossomed even in what the rest of the hungry world sees as the elite Capitol, the United States, and much of the English-speaking world, from London to New Zealand.

Remember that revolution doesn’t look much like revolution used to. That might be the most retrograde aspect of the very violent Hunger Games trilogy, the way in which the author’s imagination travels along conventional or old-fashioned lines. There, violence is truly the arbitrator of power, along with cunning, whether in the ways the teenagers survive in the gladiatorial arena or the Capitol, or how both sides operate in conflicts between the Districts and the Capitol. In our own world, the state is very good at violence, whether in its wars overseas or in pepper-spraying and clubbing young demonstrators. You’ll notice, however, that neither the Iraqis, nor the Afghanis, nor the Occupiers were subjugated by these means.

Violence is not power, as Jonathan Schell makes strikingly clear in The Unconquerable World, it’s what the state uses when we are not otherwise under control. In addition, when we speak of “nonviolence” as an alternative to violence, we can’t help but underestimate our own power.  That word, unfortunately, sounds like it’s describing an absence, a polite refraining from action, when what’s at stake -- as demonstrators around the world proved last year -- is a force to be reckoned with; so call it “people power” instead.

When we come together as civil society to exercise this power, regimes tremble and history is made. Not instantly and not exactly according to plan, but who ever expected that?

Still, many regimes have been toppled by this power, and the capacity to do so is ours in the present.  As Erica Chenoweth and Maria Stephan point out in their recent Why Civil Resistance Works: The Strategic Logic of Nonviolent Conflict, since 1900 people-power campaigns have been successful in achieving regime change more than twice as often as violent campaigns.

It’s May Day, a worldwide General Strike has been called, and last week tiny Occupy Norman (Oklahoma) announced that it “had won a major battle”: their city is moving all its money out of Bank of America into a local bank. Last fall’s Move Your Money campaign included city money from the outset and quiet victories like this could begin to reshape our economic landscape. Activism in the streets is so intimidating that next month's G8 Summit scheduled for Chicago will hole up at Camp David instead.

Meanwhile last week, both the Wells Fargo and General Electric shareholders’ meetings were under siege from Occupy activists.  The Wells Fargo meeting and protests took place in San Francisco, and afterward an arrested friend of mine posted this on Facebook: “I forgot to mention that Max gave me the Hunger Games salute in jail today. It was awesome.”

In this way do fiction and reality meld in misery and triumph as, this very day, janitors in California go out on strike, and even Golden Gate Bridge workers will be protesting. May Day actions are planned across the globe.

Still alive and kicking, Occupy is chipping away in a thousand places at the status quo. 350.org, the little organization that defeated the Keystone XL Pipeline (so far), is holding a global Climate Impacts Day on May 5th and plans to take on the petroleum industry in its next round of actions.
Of course, this is only a beginning, and the banking and oil companies, the 1%, and the prison and education rackets are more than capable of pushing back.  So we need one more tool in our arsenal, and that’s a picture of what we want, of what a better world looks like. McKibben’s Eaarth and Deep Economy offer such a picture, as does William Morris’s News from Nowhere, even 120-odd years later, but we won’t get that from The Hunger Games, which, for all its thrilling, subversive, and surly delights, is all dystopia all the way home. We may still get it, however, on our stranger-than-fiction planet.

May Day is a day of liberation -- a day to be seized and celebrated, a day to remember who was shot down on it and who fought for it.  It’s a day to join those who fought and fight for liberation, to imagine what its most delicious and profound possibilities might look like.

So skip work, flip a bird at the Capitol, commit your deepest love and solidarity to the young whose lives are being gambled away, feed the hungry, take a long look at how beautiful our planet still is, find your way into solidarity and people power, and dream big about other futures. Resistance is one of your obligations, but it’s also a pleasure and a way of stealing back hope. 

Rebecca Solnit grew up in California public libraries and is thrilled to be revisiting them all over the state as part of the Cal Humanities California Reads project, which is now featuring five books, including her A Paradise Built in Hell: The Extraordinary Communities That Arise in Disaster. 

Occupy May Day

Eric Drooker

 By Sarah Van Gelder, cross-posted from Yes Magazine

If the mainstream media was confused about Occupy Wall Street in its early days in Zuccotti Park, they’re bound to be completely befuddled this May Day.

May Day already has a lot piled on it. In pre-Christian Europe, May Day was a time to dance, light bonfires, sing, and carry on in celebration of the changing seasons. May Day also marks the anniversary of the 1886 Haymarket massacre, which occurred during a Chicago strike for the eight-hour work day. Also called International Workers’ Day, it’s a holiday in more than 80 countries.

And most recently, the U.S. immigrants right movement has used May 1st for massive street demonstrations and strikes aimed at reforming laws and policies that result in imprisonment, deportation, and discrimination against undocumented people.

This May Day, the Occupy movement is getting involved, calling it “The day without the 99 percent.” What will May Day look like with so many traditions riding on it?

May Day Collaborations—from Bike Caravan to Free University

The way plans are shaping up, in at least some locations around the United States, it could be big, festive, and importantly, include elements of all the May Day traditions. And it could be profoundly different than the big days of action we’ve seen in the past. In the weeks leading up to May Day, various movements have been collaborating. And people will not only be protesting, they’ll be liberating spaces for education, the arts, general assemblies, and teach-ins.

There will be marches, of course. Some permitted, planned, and predictable. Others will be spontaneous, possibly disruptive. In spite of all the police planning (and collaboration with Wall Street private security forces) law enforcement will be kept guessing.

There will be fairs, free food, teach-ins, music, bicycling, marches, and fiestas.

In New York, occupiers are leading up to May Day by organizing 99 pickets in support of workers around the city, from jazz musicians to taxi drivers to laundry workers. The LGBTQTSGNC (Lesbian, Gay, Bisexual, Queer, Trans, Two-Spirit and Gender Non-Conforming) contingent will be out in force. They’ll be a “Guitarmy” marching from New York’s Bryant Park to Madison Square Park, with 1,000 guitars.

At Madison Square Park, there will be a Free University, organized by students fed up with tuition hikes and a student debt burden that’s now reached $1 trillion. Educators will bring classes to the park, there will be skill sharing and workshops.

At Bryant Park, they’ll be a “free” market—where everything is actually free— as well as public art and “opportunities for action.”

In Los Angeles, bike and car caravans will travel to the city center from the four cardinal directions. Along the way, there may be union strike action, and there will be “flash occupations,” free food, and direct action along the way, targeting the foreclosure crisis. Tuition hikes, income inequality, immigrant rights, police violence, the criminalizing of the homeless—the Los Angeles caravans each will focus on some combination of these topics.

In the San Francisco Bay area, nurses and social workers have declared a strike. Bridge and transportation workers and occupiers will attempt to shut down the Golden Gate Bridge. There will be “flying pickets” to shut down banks and business associations.

In Seattle, the group Hip Hop Occupiers to Decolonize is inviting artists, families, and the general public to a day of music, dance, live art, and speakers. There will also be marches of immigrants, occupiers, and workers.

Seattle occupiers will be serving free breakfasts to get the day off to a good start, something that can get you fined in Philadelphia, where the mayor has made it illegal to feed the hungry in city parks.
In Portland, occupiers plan to occupy a vacant home and hold a block party.

In Kalamazoo, Mich., they’ll be camped out on the sidewalk in front of the Bank of America, and there’s a good chance they’ll be doing civil disobedience to stop the auction of public land for hydraulic fracking.

The list goes on and on, from small towns in Wyoming to the place where it all started, lower Manhattan.

This broad range of topics and tactics may bewilder mainstream pundits, but it reflects a transformation in activism as profound as anything that’s happened in social change over the past decades. People are moving out of their isolated interest groups and causes. They’re coming together in a shared analysis, demonstrating their agreement about sources of some of our biggest problems—the overwhelming power of Wall Street and big corporations and our society’s continuing struggle with exclusion of people based on their race, gender, sexual orientation, immigration status, etc. And they’re developing shared ambitious goals and bold strategies that add up to real power and real possibility.

As often happens in the planning of a big event, some of the most important work began well before the actual day, with undocumented workers, union organizers, occupiers, and students coming together to plan events. They’re mixing it up across races, ages, backgrounds, and interests.

It’s a day without the 99 percent, say organizers. No work. No school. No housework. No shopping. No banking.

Even more than what people won’t be doing on May 1, though, the day is about showing up and protesting, but also building the world we want.



Creating a Different World

That part of Occupy seldom gets reported on. The media is too fixated on police action and on its own angst over whether Occupy has (or should have) a list of demands. What is too often missed is that the movement is about occupying the space and the time to create a different world. People outside the political establishment understand that conventional way of doing things doesn’t work anymore. Too many people are hurting.

The wealth of the 1 percent, dangled in front of the rest of us like a carrot, is more and more out of reach. The austerity budgets, the decaying of our towns and cities, the decline of schools and rising costs of college, the disruption of people’s live through immigration raids and deportations, the foreclosures, evictions, homelessness are increasing people’s thirst for change.

And we’re using up our heritage of natural resources, undermining the stability of the climate and the ecological systems that support life in order to channel more and more wealth to the 1 percent?
Few now believe that one or two changes in policy will solve The Mall of this. A financial transaction tax and the restoration of Glass-Steagall would help—and there will be people calling for both on May Day. But what people increasingly understand is that these fixes would not be enough.
Instead, it will take we the people recreating a society, way of life, democracy, and livelihoods that make sense for today.

This May Day—of, by, and for working people (and people who wish they had work), immigrants, and everyone else in the 99 percent—could be a place to begin creating that new world.

Sarah van Gelder is co-founder and executive editor of YES! Magazine and editor of This Changes Everything: Occupy Wall Street and the 99 Percent Movement. She will be doing live commentary on May Day at Free Speech TV, as part of a collaborative effort of independent media organized by The Media Consortium.

A Progressive Budget Or The Ryan Plan: American Dream Or American Nightmare

 Who Pays The Bill For Wall Street's Mess?

By Robert Borosage, cross-posted from Campaign For America's Future

DonkeyHotey

Yesterday, House Republicans rolled out their budget plan in the Washington version of a Hollywood movie opening. There was a star turn for Budget Chair Paul Ryan at a conservative think tank. Gaseous rhetoric -- "liberties endangered, time to choose" -- fouled the air. There were dueling videos, and furious salvos of partisan messaging. And a backup document -- the "Path to Prosperity" -- festooned with tables for wonks to wallow in.

Today, with fewer trumpets and less fanfare, the Congressional Progressive Caucus releases its budget plan -- A Budget for All.

Each of the two documents is designed to define a message. Their contrasts help clarify the real choices the country faces. Federal deficits exploded after Wall Street's excesses blew up the economy. The questions now are who gets the bill and when does the payment start? Ryan's Republican budget and the CPC's offer starkly different answers that would take the country in starkly different directions.

The Bathtub Fantasy

"My goal is to cut government... to get it down to the size where we can drown it in the bathtub." Grover Norquist.

Ryan's Republican budget, like a speedo bathing suit on a corpulent geezer, is revealing, but not flattering. Even by Washington standards, this is a remarkably dishonest document. It claims to be serious, but offers targets that are simply preposterous. It calls for leveling with the American people, but cravenly ducks laying out who will pay for top end tax cuts. It calls itself a "blueprint for American renewal" while systematically trampling the American dream.

Republicans have lined up like lemmings to sign Grover Norquist's infamous pledge never to raise taxes on anyone at any time. But turns out they even treat the quips of the conservative gadfly as gospel. As the Center for Budget and Policy Priorities pointed out, the Ryan budget, by its own numbers, assiduously pursues Grover's bathtub fantasy.

The Congressional Budget Office reports that under the Ryan budget, by 2050 most of the federal government would simply cease to exist. Ryan's budget would shrink all federal expenditures outside of interest payments, Social Security, Medicare, Medicaid and children's health to 3.75 percent of gross domestic product (GDP).

To translate that arcane measure, CBO notes that "spending for defense alone has not been lower than 3 percent of GDP in any year [since World War II]. " Ryan and Republicans call for increasing defense spending -- so the rest of the government would have to be cut to bathtub size. Ryan argues that the "challenges this nation faces are among the largest in its history," but the budget target he offers is, well, goofy.


Tribunes of the 1%

With this budget, Republicans choose to be the tribunes of the 1%. They send the bill not to the banks that blew up the economy or the wealthy that enjoyed the party, but to the elderly, the middle class and the poor.
 Consider:

• Cut Taxes on The Rich. At a time of extreme inequality -- with the top 1 percent capturing a staggering 93 percent of all income gains in 2010 -- Republicans would dramatically lower taxes on the wealthiest Americans and, by definition, raise them on working families.

[Ryan isn't candid enough to admit to that, of course. He extends the top end Bush tax cuts, cuts top income tax rates to 25 percent, sustains lower rates on wealth (capital gains, dividends, millionaires' estates) while claiming the reforms will raise as much money by eliminating loopholes and tax breaks that he refuses to specify. But the only way to raise enough money to do that is to go after the biggest deductions -- limit the mortgage deduction for middle class homeowners and/or cut the tax benefits for employers provided health care. The first would add to housing woes; the second would lead more employers to stop providing health care. Both reforms that would directly hit working families.]

• Cut Health Care for Millions. With health care costs soaring and employers cutting back on health insurance benefits, the Republican budget would add millions to the rolls of the uninsured by eliminating the Obama health care reforms, with no program in its place.

• End Medicare as We Know It. With boomers headed into retirement and soaring Medicare and Medicaid costs driving projected deficits, we have to get health care costs under control. But instead of taking on the drug and insurance companies and the hospital complexes that drive up costs, the Republican budget would end Medicare as we know it, requiring seniors to pay more. When today's 55-year-olds retire, they would discover that Medicare has been turned into a voucher or "premium support" program that will not keep up with health care costs, forcing them to pay thousands more out of their own pockets. The Republican budget would also cut Medicaid support drastically for the most vulnerable -- the impoverished, the disabled, and the terminally ill.

• Cut Access to College. With college tuition soaring and more and more people being priced out of the education they have earned and need, the Republican budget would solve the problem by cutting back on student loan and grant programs. They would ration college admission by income rather than by merit.

• The Poor Pay for Deficit Reduction. And with poverty rising, the Republican budget would require that the poorest and most vulnerable Americans bear much of the burden of reducing the deficits that exploded when Wall Street blew up the economy. (Although, again, Republicans don't admit which domestic programs would take the hit. But, by reducing spending on domestic discretionary programs by one third in 10 years, they insure devastating cuts in everything from Head Start to education to disease control.)

• Let America Decline. With our basic infrastructure -- from roads to schools to sewage systems -- in dangerous decline, the construction industry flat on its back, and interest rates near record lows, Republicans call for spending less, not more, on rebuilding America, costing jobs, and rendering our economy less competitive and putting more lives at risk.

• Make the World a Tax Haven. With global corporations growing ever more adept at using transfer pricing and overseas tax havens to avoid taxes here at home, Republicans would make the entire world outside the U.S. a corporate tax haven, ending any taxation on profits reported abroad, encouraging companies to move jobs and book profits abroad.

• Pad the Pentagon. With the U.S. spending almost as much on its military as the rest of the world combined, Republicans demand that we raise, not pare, Pentagon spending.

The Austerity Trap

Ryan's Republican Budget has one other fundamental message -- that America must turn its attention immediately to the "crushing burden of debt." Ryan would cut spending by over $500 billion in the first two years compared to the president's budget, while claiming to lower taxes by about $131 billion. That takes nearly a 2 percent of GDP boost out of an economy growing at about the same rate. Ryan brags that the Republican budget reduces deficits faster and lower than the president's budget. (Although given that he won't reveal how he pays for over $4 trillion in tax cuts and what programs would take the spending cuts, that is far from proven.)

Lost in the race for austerity is the reality that we desperately need jobs and growth. Although the economy has started to generate jobs, 25 million Americans are still in need of full time work. We have fewer jobs than we had a decade ago, and millions more people. This debate should be focused on jobs, not cuts.
Ryan and Republicans duck this by arguing that austerity will increase confidence, and "job creators" will get to work. But we have seen how austerity works in Europe, now teetering on the edge of recession. It not only costs jobs; it makes deficit reduction harder. Ryan's budget assumes a rate of growth that his spending cuts and layoffs are likely to undermine.

The Budget for All

In stark contrast, today the Congressional Progressive Caucus releases its FY2013 "Budget for All." (Not yet posted on web as this is written.) This will be offered as an alternative to the Ryan budget on the floor of the Congress and in the halls of public opinion. It, too, is a message document -- designed to show that common sense priorities do add up.

The CPC budget reduces deficits faster than Ryan does over the first 10 years. But the CPC begins sensibly, by boosting the economy with jobs measures in the early years. It calls for direct hiring programs -- a Student Jobs Corps and a School Improvement Corps among others. It would rebuild America with an infrastructure bank and bigger investment in roads, bridges and trains. It sustains investment in research and development, clean energy and manufacturing. And it repeals the austerity inflicted by the debt ceiling agreement.

The CPC assumption is that putting people back to work is the priority. And its budget shows this is not incompatible with deficit reduction.

As the economy recovers, the CPC would send the bill for deficit reduction to those who contributed to or benefited from the mess. It focuses on the "true drivers of our deficit -- unsustainable tax policies, the wars overseas, and the causes and effects of the recent recession" -- rather than going after programs for the poor and the elderly.

Hold Wall Street Responsible. The CPC would hold the banks accountable, imposing a "financial crisis responsibility fee" on the banks, raising $90 billion over 10 years and putting a brake on computer driven, nano-second financial speculation by imposing a financial transactions tax raising nearly $850 billion over 10 years.

Tax the Rich. Instead of lowering taxes on the rich, the CPC would raise them -- repealing the top end Bush tax cuts, taxing income from wealth at the same rate as income from work, raising tax rates on millionaires. The CPC would even impose a small temporary surcharge on individual fortunes over $10 million.

The CPC embraces Obama's minimum tax on overseas profits, curbs deductions for CEO stock options, and ends fossil fuel preferences. Perhaps its most controversial clause is its most sensible -- putting a price on carbon emissions, while aggressively refunding costs to working and poor families.

Reform Health Care. On soaring health care costs, the CPC would seek to limit costs, not send them to the most vulnerable. It would embrace the reforms built into the health care bill, add a public option to compete with private insurers, and require bulk purchase negotiations with drug companies for lower prices on drugs.

Pare the Pentagon. The Pentagon budget would be modestly pared over 10 years. Where Ryan ducks on Social Security, the CPC would act, lifting the income cap on Social Security taxes to secure the program.

The Choice

In his budget, Ryan suggests, "Americans, not Washington, deserve to choose the path their nation takes." These two budgets make that choice clear. The CPC would invest in jobs, preserve Social Security and Medicare, and call on the banks and the wealthy to pay a hefty share for getting us out of the hole we are in. Ryan's Republican budget would impose austerity, lavish benefits on the rich, end Medicare as we know it and send the bill for the mess to working families, the poor and the elderly. The CPC would invest in rebuilding the country and reviving the American Dream. Ryan would invest in policing the world and protecting the tax havens of multinationals, and turn the Dream into a fantasy. The Ryan budget stands with the 1%. The CPC with the rest of us. You get to choose.