DC Report

Biden lets Trump tax favor for the rich to carry on

After months of delay, the Biden administration is moving ahead with a diabolical Trump era tax favor for the super-rich. This decision will cost our government billions of dollars and further entrench dynastic wealth in America while working people are fully taxed.

We call the Trump era plan diabolical because on the surface it looks like a severe crackdown on wealthy tax cheats. In fact, it makes cheating easier and much less likely to be detected by IRS auditors.

The Trumpian scheme increases by more than half the number of personnel auditing gift and estate tax returns, areas where the IRS has told Congress for decades that cheating is rampant. The current — and much shrunken — staff of 137 auditors would be expanded with 71 hires.

Last week job offer letters went out to the first 11 applicants, IRS spokesman Anthony Burke confirmed to DCReport.

Colonels and Corporals

But while the existing auditors have advanced degrees in accounting and tax law, the new hires don’t even have to be lawyers or accountants. Think of this as replacing the colonels among our national tax police with corporals.

By the way, dear taxpayer, you will pay the same salary to each of the newly hired corporals as the colonels now earn. If you’re at a loss to make sense of that, so are we. Think of it as more bucks for less bang.

Worse, the existing crop of auditors will be blocked from career advancement at the IRS. That’s a clear bureaucratic signal to quit and find work elsewhere.

We taxpayers have invested a lot of money in the training and education of the 137 gift and state tax auditors so telling them to find new jobs is a waste of taxpayer resources. Those who do leave may well find work helping the wealthy escape taxes on gifts to descendants, mistresses and the like, applying their taxpayer-financed education and training against the interests of honest and compliant taxpayers.

This downgrade in skills and education matters because the accountants and lawyers who advise the super-wealthy have already created myriad techniques to slip fortunes past the taxman. By design, these techniques are difficult to detect, even for the existing staff of highly trained auditors.

Orwellian Scheme

To think that the new hires, with far less education and training, will detect these tax schemes is Orwellian.

Of course, this Trump-era scheme that President Joe Biden has embraced does make perfect sense if the unstated but de facto tax policy of both parties in Washington is to help the rich escape taxes.

That was explicit Trump policy, but Biden said he would raise taxes on the roughly 2% of households making more than $400,000 per year while cutting taxes for nearly all of the 98%. Biden’s plan died for lack of full support by his own party and total opposition by Republicans in the House and Senate.

Internal IRS documents obtained by DCReport last Spring characterized the hiring of lesser skilled auditors without a pay reduction as nothing more than a subtle change to comply with arcane civil service policy. But at least one high-level IRS manager saw through this façade and fought the plan, an email obtained by DCReport showed.

Slow WalkIng

After we revealed this scheme last June, the IRS slow-walked the plan for months. But then earlier this year, noticing that the rest of the news media had ignored the matter, began moving ahead with the Trump era scheme to help wealthy tax cheats.

We exposed the stealth plot to help the super-rich just days after DCReport revealed a nearly total collapse of audits of super high-income Americans, those making on average $30 million a year.

The IRS audited just 38 of the 26,517 households in this rarefied income stratum in 2018. Recommended additional taxes after audit fell 99.1% from 2010, my analysis of new IRS data tables found.

Our June 2021 expose was published soon after ProPublica and The New York Times published separate reports showing how many of the wealthiest Americans pay little to no taxes. DCReport revealed how this forces everyone else to subsidize their lifestyles. All these reports dealt in part with weak enforcement of the tax laws regarding the highest income and wealthiest Americans.

Generous Opportunities

It’s important to understand that Congress has already granted massive opportunities for the rich to pass money on to heirs and others. A married couple age 40 who lived to age 90 and have four children can legally pass more than $27 million of wealth to those children without incurring any tax. (Adjusted for future inflation the untaxed gifts would be much greater.)

More than 26,000 American households report an annual income of $10 million or more, the IRS has disclosed in Table 18 of its annual Data Book. More than two decades ago I got the IRS to confirm that it had received tax returns showing annual incomes in the billions of dollars — that’s not wealth, but a single year’s income. The service emphasized that there were only a few such returns, but in the years since the turn of the century wealth at the top has been piling up like a Spring snow dump in the Great Lakes region.

Ayn Rand’s Acolyte

Alan Greenspan, then the Federal Reserve chairman, told Congress in 2004 about wealth concentrating at the top. The testimony was surprising given Greenspan’s views generally. He was an acolyte of Ayn Rand, the extreme libertarian novelist, and executor of her estate. But even Greenspan warned that increasing concentration of wealth “for the democratic society, that is not a very desirable thing to allow it to happen.”

The gift tax buttresses the estate tax, which applies only to huge fortunes. Most of the money that the super-wealthy hold at death consists of capital gains that have never been taxed.

Congress allows people of means to give $16,000 this year to as many others as they choose without paying any tax and without filing a gift tax return. A wealthy married couple can give $32,000 a year to each of their children. If those children are grown and married the older couple can make tax-free gifts of $64,000 each year to each of their grown children and spouse plus additional gifts to grandchildren.

Gifts above these levels are tax-free up to a lifetime total of a skosh more than $12 million, a total adjusted annually for inflation. Again, double those numbers for married couples.

Once gifts exceed those amounts, they are subject to tax at rates from 18% to 40%.

These huge exemptions from tax make clear that auditors are, or should be, focused on tax cheating by people with tens of millions of dollars of assets if not tens or even hundreds of billions of dollars.

Folks with those kinds of riches can hire the very best tax avoidance lawyers and accountants for a few pennies or dimes on each dollar of gift and estate tax they are escaping. By lowering the qualifications of gift and estate tax auditors, the odds that these wealthy tax cheats and chiselers will get caught shrink dramatically.

Biden White House Unaware

In June last year, when DCReport asked about this Trump era scheme to help the rich avoid taxes, we learned the Biden White House was unaware of it.

That wasn’t surprising because the IRS remains under the control of Charles Rettig, a holdover from the Trump era. Rettig was a Beverly Hills tax lawyer who helped the super-wealthy escape taxes and—if the IRS caught them cheating—negotiated secret settlements that avoided public humiliation while minimizing taxes and penalties.

Rettig is one of many Trump-era appointees who Biden has inexplicably left in place. Others include FBI Director Christopher Wray, who serves the pleasure of the president, and Louis DeJoy, the logistics entrepreneur who has been degrading mail delivery and is credibly accused of violating campaign finance laws before becoming postmaster general under a board whose members Biden appoints.

We’ve asked the Biden White House several times about the reasons it would allow this Trumpian plan to help tax cheats in chiselers go forward. Our emailed questions have been ignored. That’s the right of every administration.

Taxpayers would do well to ask themselves why Biden would embrace a Trump policy to make it less risky for those among the wealthiest Americans who cheat on gift and estate taxes to get away with these crimes.

Data shows California is not the disaster that right-wingers claim: analysis

Unless you’ve been hiding under a rock for decades, you’ve probably noticed that conservatives hate California. It’s an obsession.

Donald Trump’s disdain for the state is well known. But conservative anti-California hatred goes far beyond the ex-occupant of the Oval Office.

The enduring sources of these fusillades are conservative thought leaders. And as they portray it, California is a failing Banana Republic.

In their jaundiced view, the Golden State is a violent, poverty-stricken homeless dystopia that is overrun by thieves.

The facts show that California attracts more capital, creates more wealth, generates jobs with better pay, suffers lower rates of work-related fatalities and has safer streets and longer lives.

Short on facts, they’ve even stooped to posting a doctored video in an attempt to show that Black gang members were so fed up with crime that they stopped looters in Long Beach, a city of a half-million people. And they assert that California is run by street gangs and misled by incompetent criminal-coddling politicians whose radical, immigrant-loving, left-wing agenda is horrible for businesses, which supposedly are leaving the state in droves.

Yet some states beloved by the right are far more dangerous, data on reported crimes show.

For the haters, California is the quintessence of liberalism’s—or socialism’s—failure. All of the state’s problems, in the view of these self-proclaimed conservatives, are always the direct fault of its “far-left” policies. Always.

In a broadcast called “The slow, painful death of California,” Fox News host Tucker Carlson asserted: “The policies that destroyed America’s largest and most economically important state are heading your way.” Significantly, Carlson got out of a lawsuit after Carlson’s lawyers argued that you can’t believe what he says.

Never one to resist attacking California, The Wall Street Journal editorial board ran an editorial titled “California’s Covid Woes.” It obsessed over overcrowded hospitals and long wait times, which it blamed on MediCal, the state’s medical care program for the poor. It is another favorite target of Journal editorial disdain.

Curiously, the WSJ’s attack, which compared California’s Covid record unfavorably with Texas’, never mentioned a crucial fact: California’s Covid mortality rate was 30% below that of Texas and 36% below the nation as a whole.

Of course, there’s little wonder why the Journal editorial board omitted that statistic: including it would vitiate their argument. After all, it’s pretty hard to portray California’s response to the pandemic as a horror when its death rate from this pernicious virus is well below the rest of America.

That omission illustrates what’s missing from conservative jeremiads. It’s their tell.

Here’s what you won’t read in their screeds, starting with what arguably is the biggest lie about California:

Business and Investment

While California is home to 12% of the U.S. population, it attracted 47% of the most sought-after investment dollars deployed nationwide last year, according to National Venture Capital Association data.

The $156 billion of venture capital invested in California firms in 2021 was a 79% increase over its 2020 haul. And the 2020 sum was a 29% increase over 2019.

Far from a state in economic decline, California attracted more capital last year than at any point in the NVCA’s data set going back to 2005.

California is the most populous state so those total figures could suggest the state fell short in these investments when examined per person. But no. California got nearly four times its share per capital of all such investments in America.

Productivity

California is the fifth most productive population in the country, federal Bureau of Economic Analysis data posted at Statista.com show.

In 2019, California’s economic output per person was $79,000, almost 22% above the national average of $65,000, (Editor’s note: adjusted the data to 2019 dollars.)

Income, Wealth and Poverty

The typical California household took home more than 45 other states; 22% more than American households overall. The nearly $15,000 in extra income has not, however, deflated the state’s poverty rate. It is persistently high at 11.8%, yet still below such darlings of conservatives as Mississippi (19.5%), Louisiana (18.8%), Arkansas (16%), Alabama (15.6%) and Oklahoma (15.1%), federal data show.

A state study in 2019 found that while California is 12% of the American population, its residents own 17% of American wealth despite its high taxes and environmental protections. Of course it’s hard to get rich in states that don’t provide the commonwealth benefits that foster wealth creation and high-paying jobs with benefits such as quality research universities that Californians have long supported.

Crime

You were more likely to get killed in 27 other states than in California, the federal Center for Disease Control (CDC) reported for 2020. Interestingly, you were far more likely to get killed in Mitch McConnell’s Kentucky than the Golden State. The highest rates were in Louisiana and Mississippi, more than triple the California rate, while the rates in Arkansas and Missouri were more than double the California rate.

Workplace Deaths

In 2019, California employees were less likely to die on the job than in 43 other states, according to the federal Bureau of Labor Statistics. The California rate was 2.5 deaths per 100,000 workers compared with double that or slightly more in Louisiana, Montana and West Virginia; more than three times more in Alaska and four times more in Wyoming.

Longevity

CDC data show that Californians live longer than the residents of all but one state – Hawaii, another state conservatives love to bash. Life expectancy in California is 80.8 years, more than six years longer than in bottom-ranked Mississippi and West Virginia, both beloved of conservatives. Hawaii bests California by about two months of extra life.

These are among many inconvenient facts for conservatives about how California, with its high taxes and environmental protections, outperforms America overall and the Southern, Midwest and Rocky Mountain states where conservatives have the most sway.

There’s a reason the right omits the facts in their commentaries, columns, editorials and cable television rants attacking California, its voters and their elected leaders.

California’s successes defy conservative cosmology, which holds that taxes, unions, workplace safety rules, environmental protections and immigrants repel capital, kill economies, hurt families and denigrate life itself.

The facts show that California attracts more capital, creates more wealth, generates jobs with better pay, suffers lower rates of work-related fatalities and has safer streets and longer lives.

Those successes flatly contradict what GOP orthodoxy predicts. But rather than confronting reality, conservatives are trying to re-write it by leaving out salient facts and as a result producing political fiction.

Why you can't afford a place to live

Want to rent a place in Manhattan? Buy a house in the Sun Belt? Live virtually anywhere in the U.S.? That’ll cost you more than ever before.

It’s easy to suppose that the reason is another Wall Street movie moment where Gordon Gekko argues for the beneficence of greed. And, yes, that’s part. But the dynamics of the housing market are far more complicated and subtle. A lack of effective national housing policy combined with an easy monetary strategy turned into a major aggravating factor.

Too Much Money

Plenty of money would keep people happy, you’d think. And it does, except when it comes to money pouring into investment areas.

For almost 14 years, ever since the Great Recession that started in 2008, the Federal Reserve has kept interest rates historically low to encourage companies to invest and expand their businesses. The Fed also bought an enormous number of Treasury securities to keep credit markets from freezing up by injecting massive amounts of capital through these purchases. As of Feb. 2, the Fed had a total of $5.7 trillion of securities, as the graph from the Federal Reserve Bank of St. Louis shows below.

The Fed has vastly increased its holdings of Treasury bonds and notes.

The institution opened the financial flood gates and left them that way for years, releasing a torrent of cash. Those selling bonds to the Fed were already typically well-off. They did what they had been taught to do, which was invest that extra money to make even more.

That started a financial feedback loop. Assets like stocks and real estate shot up in value because investors bid up the price. As the apparent values rose, more money went in to get some of that gain because low interest rates meant bonds and other so-called fixed-income vehicles didn’t pull their weight.

But with barrels of bucks floating into the real estate market, prices of properties, including apartment buildings and single-family homes being turned into rentals, kept rising.

Sky-High Construction Costs

One other part of the investment aspect is the cost of building. A sound investment means that if the owner ever needs to make improvements or, heaven forbid, rebuild after an accident, the cost would not be prohibitive. But if you think inflation is high for you, it’s much worse for construction. Prices of basic materials in December 2021 were up 13.5% over the same month in 2020, and that wasn’t counting scarcity of getting materials or labor.

When property gets more expensive, owners want to ensure they’re making enough to warrant the cost. And so, rents go up. There’s a secondary smack on the housing front. As more investors seek not just apartment buildings but houses to rent out, prices rise.

The St. Louis Fed also has data from the Census Bureau and the Department of Housing and Urban Development. The median sales price of houses in the fourth quarter of 2021 was $408,100. Five years before at the end of 2017, that number was $337,900. It’s almost a 21% increase in five years. Most people can’t keep up with this rate.

House prices (blue line) are far outpacing income.

Too Little Building

A reason investment dollars have such an impact is a lack of available housing. After the Great Recession, developers, banks and others got spooked. Property values had tumbled. Those who normally would buy land to build new homes weren’t interested in doing so until they knew prices had stabilized so the projects wouldn’t be money-losers. Lenders didn’t want to take the chance that more loans would go underwater.

The result was such a drop in building that the nation has a major shortage of houses, according to a report by real estate economics consultancy Rosen Consulting Group and the National Association of Realtors. “While the total stock of U.S. housing grew at an average annual rate of 1.7% from 1968 through 2000, the U.S. housing stock grew by an annual average rate of 1% in the last two decades, and only 0.7% in the last decade,” the report notes.

Combined with the loss of existing units through obsolescence or demolition and the gap between availability and need is 6.8 million houses.

There’s a parallel problem for apartments according to the National Multifamily Housing Council. To meet demand, the country needs “an average of 328,000 new apartments per year at a variety of price points,” and that’s happened only three times since 1989.

It’s not so much a lack of interest on the part of developers, because they are busy building housing in the Sun Belt for significant population migration from other parts of the country.

However, in older metropolis in regions land is scarce and frequently zoning regulations discourage new development because many existing residents—often those with money and political influence—don’t want more people moving into their neighborhoods.

Too Little Income

Most of the country knows this viscerally. Housing takes up an increasingly large portion of their income, as the graph below, which DCReport generated from data the St. Louis Fed collects, shows.

The graph shows indexes that represent how quickly something grows over time by comparing it with an initial value. The blue line, starting in December 2012, is growth in rents. The red line is growth in per capita income after inflation. For most people, pay doesn’t come close to keeping up, so renting an apartment or house races ahead…which most everyone who has to pay rent at the beginning of the month knows.

If you were buying a house, here’s a similar graph that shows how much faster prices grow than personal real income.

How do you get ahead if you aren’t toward the upper end of the income spectrum or lack family who can help you gather the down payment?

And greed

Developers and property owners are in this for the money, and they want to keep making more. With all the other reasons, there’s a focus on increasing house prices and rents because it’s a way to keep investments ahead of inflation. They aren’t typically focused on trying to control an important cost of living.

Governmental and Societal Inaction

In one sense, what caps it all is the lack of action on the part of governments and society. The more the nation trusts in pure market solutions, the greater a chance that things spiral out of control.

Not that smart and effective government action is easy. For instance, most rental properties are owned by smaller companies and individuals. Say that there should be a cap on rents, and you could drive those owners out of business, or at least see them give up on maintenance and repair because it becomes a losing proposition.

And yet, government could push for different zoning, offer more financing to see more housing constructed and so on. Make it easier to get people into places they rent or even own. But given the financial forces at work in politics, that doesn’t seem so likely.

Just what about Jan. 6 was ‘legitimate political discourse’?

That description was meant to sideswipe Representatives Liz Cheney (R-Wyo.) and Adam Kitzinger (R-Ill.) for joining the select House committee to investigate who brought about “discourse” that saw thousands of Donald Trump fans breaking into the Capitol, threatening leaders, and resulting in deaths and injuries.

Politically, it is understandable, if disappointing, that the RNC wants to slap the pair for breaching what they see as a need to offer only unyielding defense of Trump’s continuing wails about losing the 2020 election. The rest of us see a kind of bravery in their decision to find out why Jan. 6 came about.

You might as well call Afghanistan an underrated tourist spot or suggest that North Korea is doing interesting engineering studies by launching test nuclear weapons.

But to call what is emerging and extensive coup plot as “legitimate political discourse” is just nuts. Apparently, even the RNC saw the need to clarify that language, saying it was never meant to apply to MAGA rioters who violently stormed the Capitol. But by omission, it was okay to call plotting to overthrow the Constitution and democratic elections “legitimate”? It was legit to plan and coordinate such a riot? It was okay to use the military to seize voting machines and file fake elector slates? It was all right to involve Republican congress members in a plan to overturn Electoral Votes?

Just what here is “legitimate political discourse”?

You might as well call Afghanistan an underrated tourist spot or suggest that North Korea is doing interesting engineering studies by launching test nuclear weapons.

I checked the right-leaning websites to see how they treated this formal arrival of doublespeak. Breitbart, Newsmax, OANN, which have all given extensive coverage to election-rigging claims and voice to those who decry investigation, all carried accounts of the voice vote to censure Cheney and Kinzinger but did not dwell on or explore the re-labeling of Jan. 6 as “legitimate.”

An Ever-Spreading Plot

There now are so many coup plot line investigations afoot that the public hearings planned by the House committee are being delayed another couple of months.

On Friday, we saw even former Vice President Mike Pence publicly rebuke Trump as “wrong” in asserting that Pence could have overturned the election result. We heard more partial reports from now multiple investigations that put Trump at the center of a web of plans to send fake electors to Congress, to illegally consider using the military or other federal agencies to grab voting machines, to demand National Security Administration actions to find election fraud.

Taken together, the picture emerging is that election fraud manufacture was the only business being done in the White House.

Friday’s vote was dramatically different in tone from a statement the Republican National Committee released the day of the attack, when it said, “these violent scenes we have witnessed do not represent acts of patriotism, but an attack on our country and its founding principles.”

But, as we all painfully know, Trump makes it his business every day to insist that we all need to justify any action that would put him back in the White House – even as polling is beginning to show some cracks in his political base.

It’s all so inside-out that we need to stop periodically to remind ourselves what we all witnessed after November 2020 and through to the violence of Jan. 6. Thousands of Trump supporters stormed the Capitol that day, smashing windows, assaulting police officers and sending lawmakers and then-Vice President Mike Pence running for their lives.

That has led to this summary from Ronna McDaniel, RNC chairwoman: “Liz Cheney and Adam Kinzinger crossed a line. They chose to join Nancy Pelosi in a Democrat-led persecution of ordinary citizens who engaged in legitimate political discourse that had nothing to do with violence at the Capitol.”

Say what?

What’s Important

Look, let the RNC eat its own and issue its self-serving censure, itself apparently the result of intra-party negotiation over whether to expel Cheney and Kinzinger from their congressional caucus altogether. Cheney already faces a problematic re-election, and Kinzinger won’t run again anyway.

What’s more important here is that this is an attempt to minimize what happened on Jan. 6 and to keep alive as legitimate the still-baseless claims of widespread election fraud. In pursuit of those claims, states with Republican-majority legislatures are flooding us with laws to restrict voting in one fashion or another, but always affecting Democratic areas with concentrations of voters of color.

Amid the issues stemming from Covid, economy, international war and peace, Republicans apparently want the top-line concern to be a replay of an election more than a year old. As The Times summarized, “In approving [the censure resolution] and opting to punish two of its own, Republicans seemed to embrace a position that many of them have only hinted at: that the assault and the actions that preceded it were acceptable.”

It meshes perfectly with new promises from Trump himself, that if re-elected in 2024, he would consider pardons for those convicted in the Jan. 6 attack.

No problem ever gets resolved without acknowledging what went wrong, nor can there be any effective solution. Censuring, expelling, slapping two Republicans for taking part in a committee to ask questions doesn’t dismiss the extraordinary plot that apparently was under way to overturn our government.

Suddenly calling an insurrection-fueled riot at the Capitol “legitimate political discourse” doesn’t make it so.

How red states are raking in Biden’s infrastructure dough

When President Joe Biden signed his $1.2-trillion infrastructure bill in early November, two California Democrats — Vice President Kamala Harris and Sen. Dianne Feinstein — stood grinning beside him. Just the day before Speaker Nancy Pelosi, who represents most of San Francisco, looked ecstatic as the chamber she leads passed Biden’s infrastructure bill.

Gov. Gavin Newsom put out a list of the dozens of projects celebrating $44.5 billion worth of federal funds coming to the Golden State over five years.

Good as all that seems on the surface, examine the when the funded projects on a per person basis — the only basis that makes any sense — and Californians are getting a lousy deal. So are residents of New York, New Jersey, Texas and some other states.

We have a federal spending system maximizing the greatest good for the smallest number, not the greatest good for the greatest number.

So which states’ leaders should be smiling? Those with the fewest people.

Our federal government will spend less than $1,250 per Californian on infrastructure over the next five years. Texas will get slightly less while New York and New Jersey can expect just a few hundred more per person than California.

Alaska Wins

Our least populous state, Wyoming, will get four times as much per person as California, about $4,475 per resident, none of which will be spent on public transit. But even the Cowboy State pales next to Alaska. The Last Frontier state will receive $6,700 per resident.

How Much Each States Get Back for Each Federal Tax Dollar paid as calculated by the Rockefeller Institute on GovernmentHow Much Each States Get Back for Each Federal Tax Dollar paid as calculated by the Rockefeller Institute on Government

Think about it this way: Every Monday Californians each get a federal benefit to improve infrastructure. That’s it for the week. But people in Alaska will get the same size benefit on Monday followed by another on Tuesday and then Wednesday and on through Saturday.

These gross disparities are emblematic of how federal spending tends to short big and often blue states like California while showering money on states like Wyoming and Alaska with few people who elect politicians who often vote against infrastructure spending.

Here’s a stark indication of just how much small states with delegations benefit by paying attention to the dollars their constituents send to Washington and how much they get back, courtesy of the Rockefeller Institute of Government and its nifty map on tax dollars flows. It shows that eight states give while 42 take.

For each dollar Californians send to Uncle Sam, they get back in federal spending of all kinds almost 99 cents.

Kentucky Rakes It In

In Mitch McConnell’s Kentucky, however, each dollar sent to Uncle Sam returns $2.89 in federal spending. McConnell, of course, would never call that welfare for the Blue Grass state.

The formulas Congress has put in place favor lightly populated states over heavily populated ones, but Capitol Hill voting patterns are not consistent on that.

Alaska’s two senators, Lisa Murkowski and Dan Sullivan voted for the Biden bill as did the state’s sole congressman, Rep. Don Young. Voting against it were Wyoming Senators John Barrasso and Cynthia Lummis along with Rep. Liz Cheney, that state’s only congressperson. All six are Republicans.

A census study last March found California’s cities have some of the country’s longest commutes. Indeed, in the morning a crush of cars can be seen filling roads from Central Valley towns like Manteca for the entire 80 miles of freeway to the Bay Area with its high-paying jobs, this slow-moving traffic jam reversing in the late afternoon.

Yet California had the most congested urban highways and most daily interstate traffic nationwide, according to an analysis last June by a nonprofit research group funded by roadbuilders, unions and insurance companies. Relieving such congestion is a major reason that about 80% of California’s infrastructure money will go to mass transit, compared to zero in Wyoming.

Commuters Lose

States where people don’t spend hours commuting on Interstates—the Dakotas, Vermont, West Virginia—will get more than double Californians’ share of the Biden bill money. Biden lost all of those states except Vermont.

So even with California sending to Washington the vice president, speaker and House Minority Leader Kevin McCarthy, why couldn’t it get as good a deal as deep red Arkansas, which gets $1.64 back from Washington each dollar it sends in?

Partisan politics don’t explain this. Population politics do.

California’s scanty share reveals the state’s, not its leaders’, impotence in a federal system that discounts its numbers and needs.

The Constitution’s allotment of two senators per state amplifies the negotiating power of small states over large ones.

The Senate’s structure means one Wyomingite has as much power as 67 Californians.

The 164 million Americans who live in the 10 largest states have as many senators among them as the 7.9 million Americans who live in the ten least populous states.

18th Century Policy

California’s bad deal isn’t an accident. It’s the symptom of this 18th Century system that was designed, in part, to protect slavery.

The funding formulas controlling this $1.2 trillion have been shaped by politicians from small states. They’ve stuck to their knitting for decades, generations even. Over time, spending rules containing “small-state minimums” have guaranteed these states disproportionate-to-population shares of federal spending on transportation, education and health.

It’s a fact documented by decades of political science research.

The result? An inversion of logical policymaking: we have a federal spending system maximizing the greatest good for the smallest number, not the greatest good for the greatest number.

The state with the fewest people, Wyoming, got the biggest benefit while the state with the most people, California, got the smallest.

Overall, it’s the states that tend to vote Republican and whose delegations typically oppose improvements such as infrastructure spending, along with increased spending on education and health, that get disproportionately large slices of the federal spending pie. This makes no sense.

Beware of investment firms pitching themselves as the saviors of rural America

A Kentucky House committee last week approved the Rural Kentucky Jobs Act of 2022.

Are such programs enacted throughout the country boondoggle upon boondoggle for the wealthy or genuine help for the little guy? Keep reading.

Proponents in Kentucky say that the goal of the legislation is to promote investment in parts of the state that don’t see much influx of outside money. “This will be another tool in the box for those rural small businesses,” said Republican Rep. Myron Dossett.

But the bill is actually part of a long con being perpetuated on states by a group of investment firms pitching extremely expensive and inefficient ways of trying to boost local economies.

The benefits redound to financiers, not the communities to which they’re ostensibly aimed.

The Kentucky proposal would give credits against insurance premium taxes to corporations who provide funds to investment firms that then turn around and invest money in smaller businesses in rural Kentucky.

If it seems like that’s needlessly complicated, well, it is. More on that later.

Investment firms have been pushing similar bills through state legislatures all over the country: Funnel public money through these private firms and supposedly good things will happen to downtrodden places. Except it never really does.

The key thing to know is that a group of investment firms have been pushing similar bills through state legislatures all over the country, always making the same case, for decades.

They come with different names and targets, and slightly different funding mechanisms, but the overall point is the same: Funnel public money through these private firms and supposedly good things will happen to downtrodden places. Except abundance never really materializes for the poor.

How to Make Money

The investment firms in question are Advantage Capital, which testified in favor of the Kentucky bill and is the most active proponent among them, it seems Enhanced Capital; and Stonehenge Capital. They have pushed similar legislation under a slew of different names — including CAPCO (for Capital Companies), the New Market Tax Credit and now these rural jobs acts — for years, and have benefited significantly.

Most of the programs cropped up in the late ’90s and early 2000s, with more popping up in the last few years.Those same three firms have been there, over and over, pushing for them every step of the way.

In 2017, a Stateline analysis found that, “Under those programs, about $2.6 billion in state tax credits was allocated, and $1.6 billion was managed by Advantage, Enhanced, Stonehenge or their affiliates.” This enables them to collect all the fees and commissions associated with holding all that money. As one professor said last year when a bill was under consideration in Florida: “That’s really how they make their money — selling the legislatures on these programs.”

The results for the actual places that were supposed to benefit, meanwhile, were underwhelming. In fact, state after state over the years have looked into whether these programs work and found them wanting.

Audits in Washington, D.C., and Missouri, Alabama, Colorado, and New York found they underdelivered — creating few jobs at an astronomical cost per position — and recommended they be ended.

72-Year Payoff

Just last month, a Georgia audit found that the Peach State’s version of the program, the Georgia Agribusiness and Rural Jobs Act, will barely cover its own cost even with generous assumptions about secondary benefits, and will take 72 years to pay off for the state if looking strictly at revenue generated.

Massachusetts Gov. Charlie Baker vetoed a program last year, saying that too many other states already had bad experiences with the same thing.

Why the underwhelming results? Well, now we can get back to the flaws in the very design of these programs, the first of which is that they require passing public money through several middlemen who take a cut while doing nothing for the actual public. Instead of directly funding local businesses or using taxpayer dollars to build the infrastructure and social safety net that would help them thrive, these rural programs fund tax credits, which fund investors, which fund businesses, giving everyone a chance to take a cut before the money materializes for any actual residents on the back end.

This comment from an economic development commission that opposed a bill in Arkansas really sums it up: “The state money goes in and starts falling down the waterfall. At every level there are lawyers and investment bankers there raking money out of the deal. The fees and the profits for the investment banks is incredibly high.”

The one Kentucky House member who voted against the bill in committee last week — Democratic Rep. Josie Raymond — made this exact point: “I don’t understand why you all can’t come and invest in rural Kentucky businesses that show a lot of promise on your own, and why this coupon is necessary for some very large, very wealthy investors.”

Inefficient and Wasteful

These programs suffer from many of the same flaws the federal Opportunity Zone program has: Filtering taxpayer money through investors is simply less efficient and productive than making public investments in those places directly.

Remember, rural areas pay a huge premium for receiving far less under most corporate incentive programs.

Where, in theory, there should be some sort of multiplier effect, because investors bring more of their own dollars to a project than the amount in tax credits they receive, in practice that effect is blunted by money leaving the community as various parties take their cuts.

But even if there were some sort of significant multiplier effect, these programs, like Opportunity Zones, suffer from a more fundamental issue: The communities supposedly benefiting from investor interest wind up receiving investments based on what faraway financiers think is the most profitable project, rather than based on what they say they need.

So public money goes to pad things with higher rates of return in the short term, rather than what will build long-term prosperity or raise quality of life for the local residents.

And that’s the best case scenario.

More often, investment funds just chase positive things that were already happening.

You can see this clearly with Opportunity Zones, where funds ended up going to places that were already gentrifying; investors were riding the wave, not creating it.

The result was a waste to taxpayers, because the money wasn’t creating anything new that wasn’t going to happen anyway.

Meanwhile, the program did nothing but juice displacement and increased cost of living for folks already in those communities because so much of it was concentrated in luxury real estate. Residents probably wanted specific things, but OZs were never going to bring them.

To complete the doom loop here, a close look at Kentucky’s bill reveals that, despite its name, it doesn’t only apply to rural areas: Urban ones that have Opportunity Zone designation for purposes of the federal program can also qualify for investments. So the state is proposing to build a new boondoggle on top of an existing one.

With the sheer weight of history and evidence against them, you’d think no one would entertain starting another one of these programs for even a second. But there’s always pressure on state lawmakers to do something about rural areas that are getting left behind as more and more of our economy concentrates in a few metro areas. And because so many of those lawmakers and the people they hear from on a regular basis are trapped by the big myth of economic development — that there’s nothing to be done other than bribe someone to move a company or invest a few dollars in a particular place — they keep coming back to these ridiculous bank shot programs that provide a windfall to wealthy investors but don’t help many people on the ground.

So here we are, talking about the same thing that’s failed repeatedly for decades as if it’s something new and worthy of debate.

Florida’s snowflakes can’t handle the state’s vile racial history

We finally have a bill about feelings.

Set aside decisions about building infrastructure and fixing bridges or creating pre-kindergarten or considering sheltering the homeless or even preserving voting rights – things governments might do either federally or locally to deal with social problems.

This one is about the preservation of emotions.

A bill gained the approval of the Florida Senate Education Committee this week that seeks to bar public schools or workplaces from making people feel “discomfort” or “guilt” about their race during lessons or training focused on inequality.

The bill doesn’t really lay out what happens if a white Christian majority has teachings that prompt discomfort to Jews, Muslims, Blacks, Latinx, Asian Americans, LBGTQ or transgender students and parents.

It is unclear what exactly would happen if someone feels discomfort or guilt or how this bill’s effects would be measured or enforced.

As a columnist for MSNBC wrote: Senate Bill 148, “which should really be called the ‘sad white people bill.’ [would] effectively codify white fragility into law” though it never mentions individual races or backgrounds.

Republican Gov. Ron DeSantis has endorsed the bill, which includes several provisions outlined in his Stop the Wrongs to Our Kids and Employees Act or Stop W.O.K.E., a purported ban on critical race theory that was introduced last month in the state legislature.

Of course, as has been pointed out repeatedly, Critical Race Theory is a college-level area of study not taught in K-12 schools. Nevertheless, the label has been adopted by conservative governors, school board members and parents who object to any teaching that suggests that racism and residual effects of slavery, Jim Crow and segregation are alive and well in these United States.

Funny, the bill doesn’t really lay out what happens if a white Christian majority has teachings that prompt discomfort to Jews, Muslims, Blacks, Latinx, Asian Americans, LBGTQ or transgender students and parents.

Reacting to Critical Race Theory


A historical marker about the Rosewood Massacre is located on State Road 24 in Rosewood, Fla.
The marker on the text reads as follows:

SIDE 1: “Racial violence erupted in the small and quiet Rosewood community January 1-7, 1923. Rosewood, a predominantly colored community, was home to the Bradley, Carrier, Carter, Goins, and Hall families, among others. Residents supported a school taught by Mahulda “Gussie” Brown Carrier, three churches, and a Masonic lodge. Many of them owned their homes, some were business owners, and others worked in nearby Sumner and at the Cummer Lumber Mill. This quiet life came to an end on January 1, 1923, when a white Sumner woman accused a black man of assaulting her. In the search for her alleged attacker, whites terrorized and killed Rosewood residents. In the days of fear and violence that followed, many Rosewood citizens sought refuge in the nearby woods. White merchant John M. Wright and other courageous whites sheltered some of the fleeing men, women and children. Whites burned Rosewood and looted livestock and property; two were killed while attacking a home. Five blacks also lost their lives: Sam Carter, who was tortured for information and shot to death on January 1; Sarah Carrier; Lexie Gordon; James Carrier; and Mingo Williams. Those who survived were forever scarred.”

Sponsored or placed by: The Real Rosewood Foundation, Inc. and the Florida Department of State

“Critical Race Theory” has become a rallying cry making the rounds in elections and politics, particularly since The New York Times published its 1619 Project last year aiming to reframe the country’s history by placing the consequences of slavery.

As Education Week explains, “The events of the last decade have increased public awareness about things like housing segregation, the impacts of criminal justice policy in the 1990s, and the legacy of enslavement on Black Americans. But there is much less consensus on what the government’s role should be in righting these past wrongs. Add children and schooling into the mix and the debate becomes especially volatile.”

Like similar efforts to block the specific teaching of critical race theory, now comes the Florida legislation to alter how history is taught, seeking to tamp down suggestions that current-day white majority populations have any responsibility for whatever slavery sins forebears committed.

What’s different here is that this is a bill about feelings: “An individual, by virtue of his or her race or sex, does not bear responsibility for actions committed in the past by other members of the same race or sex,” the bill states. “An individual should not be made to feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race.”

Lessons about racism or sexism are allowed, but only if they meet the specific inclusions or deletions outlined in the bill – basically statements that the bill suggests will not offend anyone. School or professional instructors can use lesson plans “to address, in an age-appropriate manner, the topics of sexism, slavery, racial oppression, racial segregation, and racial discrimination,” according to the bill. But “classroom instruction and curriculum may not be used to indoctrinate or persuade students to a particular point of view inconsistent with the principles of this subsection or state academic standards,” it states.

The governor explains: “In Florida, we are taking a stand against the state-sanctioned racism that is critical race theory. We won’t allow Florida tax dollars to be spent teaching kids to hate our country or to hate each other. The WOKE Act extends similar means “to protect Florida workers against the hostile work environment that is created when large corporations force their employees to endure CRT-inspired ‘training’ and indoctrination.”

The Bill and Feelings

You can read through Senate Bill 148: It promotes teaching of history and content of the Declaration of Independence, equality of all persons, inalienable rights of life, liberty and property, the Federalist papers and flag education. It includes education about the Holocaust and about slavery, adding that teaching must include that no race is superior to others or inherently racist, sexist or oppressive.

Oddly, it strikes language about mental health from the list of health topics and retains the rights of parents to exempt students from some health topics touching on sex.

This particular bill does not address library books, as in some states, but does repeat the rights of parents to raise challenges.

The governor argues that this bill would build on existing rules that are part of the Florida administrative code. They specifically state that teachings based on CRT, saying, instruction on the required topics must be factual and objective, and may not suppress or distort significant historical events. He offered a curated list of incidents nationally in which he argues the spirit of critical race theory is coloring lessons in school and workplace trainings.

A much different reading is offered by a strident MSNBC columnist Ja’han Jones who argues, “Educating people about the inhumane ways white people positioned themselves atop America’s social hierarchy is a direct threat to the racist power structure. White people are most likely to feel discomforted by these lessons. . . it’s clear that the Florida bill is designed to coddle white people, even though it doesn’t mention them specifically.

The columnist adds, “So, to clarify: Florida conservatives are prioritizing white hypersensitivity over truthful teachings. They’re apparently saying lessons about America’s racist and sexist past are acceptable only if they don’t offend white people.”

A realistic snapshot of America today would reflect lots of race problems, and substantial frustration arising from them in multiple directions.

What I hadn’t really seen was a bill directed at feelings rather than acts. If feelings are the new measure, one might imagine a wholesale remake of our laws.

Biden pursues Trump plan that creates big profits by denying health care

In 2020, the Trump administration launched a plan to hand traditional Medicare over to Wall Street. Inexplicably, the Biden administration is playing along.

The overwhelming evidence demonstrates that the plan will drive up healthcare costs, inhibiting people from getting needed care.

So-called Direct Contracting Entities, DCEs, must pay for the care of the people assigned to them.

Here’s the sweet part for Wall Street: In addition to the normal profits from providing services, these firms can keep as much as 40 percent of the money they don’t spend on care.Talk about a financial incentive to deny treatments.

President Joe Biden won in part because of his commitment to science and data. Yet politics, so far, has gotten in the way of cost-effective health care. The Biden administration is forcing our nation’s elderly into a new form of Medicare Advantage plans, against their will and generally without their knowledge or consent.

In addition, a new safe harbor rule lets DCEs owned by the same investors shuffle money between them without risking civil or criminal penalties for paying kickbacks. That’s the kind of system that makes profiteering easy.

In phase one of this healthcare experiment, the Centers for Medicare and Medicaid Services, CMS, pays 53 DCEs. They receive a fixed amount of money to cover care for each traditional Medicare enrollee whose primary care doctor signs up with that DCE. The government already auto-assigned hundreds of thousands of people to DCEs.

Since people on Medicare did not sign up for this, they likely do not know or understand what’s in store. Yes, they should have received written notice of their new status. But the Centers for Medicare and Medicaid Services, CMS, treats the change as if it does not affect the quality of care provided to these older and disabled people.

Hiding a Right

Astonishingly, CMS does not require DCEs to tell people that they have the right to opt out, let alone alert them that there is good reason to do so.

Anyone enrolled in a DCE should worry that their primary care doctors will limit their access t costly necessary care. The DCEs are likely paying these doctors more to keep patients away from specialty care or providing them with guidance to delay and withhold care. We have seen this profit-maximizing approach before and it isn’t pretty.

With Medicare Advantage, which corporate health insurers administer, the Office of the Inspector General found widespread and persistent inappropriate delays and denials of care and coverage.

The Biden administration continues to mislead people about Medicare Advantage or Part C of Medicare with information claiming it offers people more than traditional Medicare without explaining its risks, including considerable financial and administrative barriers to care.

Conflicts of Interest Abound

These business models mean that providing quality health care and abiding by their legal obligations is at odds with profiting handsomely, reports by government agencies and independent researchers have shown again and again.

Private equity firms and corporations that own or operate dialysis centers, hospice programs, long-term care programs and even dermatology practices put their own interests first, to the detriment of their patients, government watchdogs found.

Similarly, the DCEs can deliver more for their investors when they avoid paying for costly care.

How can they do that? Unlike other wealthy countries and large employers in the United States, our government pays a flat fee per person to insurers regardless of the amount they spend on care. Unlike other wealthy countries, our government does not dictate the terms for providing care. Instead, our government lets DCEs decide when to cover care and to do so without accountability. The DCEs don’t even have to make public their coverage policies.

Covering Medicare benefits, which DCEs must do, is very different from providing people with the medically necessary services and treatments they need.

For example, as far as a DCE is concerned, three physical therapy visits might be all that is medically necessary after a hip replacement, even though many more are needed. Likewise, a DCE may decide a plain old X-ray will suffice when the treating physician has determined that an MRI is required.

What Wall Street Loves

Why would the Biden administration want to give corporations control over the health care of the most vulnerable Americans?

Wall Street loves it. And the Trump administration, which promised to drain the swamp and stop Wall Street predations, instead turned Washington into a prosperous paradise for the worst Wall Street predators.

This move away from quality healthcare service to profit-oriented denials of care is worth hundreds of billions of dollars a year in taxpayer money flowing to private industry.

The CMS description of the program shows how much it is directed at Wall Street, not to the quality of care.

The DCE approach “draws upon private sector approaches to risk-sharing arrangements and payment with reduced administrative burden commensurate with the level of downside risk.

“The risk-sharing options… also includes a reduced set of quality measures that focuses more on outcomes and beneficiary experience than on process.

“By providing flexible options with regard to, for example, risk-sharing arrangements, financial protections, and benefit enhancements” they are expected to be attractive to people with Medicare but also to “organizations that have experience with risk-based contracts.” That’s a euphemistic way to refer to the DCEs financed by Wall Street.

That description, interestingly, is contained in an announcement about a new rule that effectively exempts related DCEs from civil and criminal liability for paying kickbacks so long as they pay in accord with the new rule.

If that sounds like a license to loot the Treasury, it’s because that is precisely what it can and likely will become.

Basically, one DCE can make payments to a brother or sister entity, which can become a way for these related businesses to keep more of the money taxpayers pay them.

President Joe Biden won in part because of his commitment to science and data. Yet politics, so far, has gotten in the way of cost-effective health care.

Consequently, the Biden administration is forcing our nation’s elderly into DCEs, essentially a new form of Medicare Advantage plans, against their will and generally without their knowledge or consent.

These private business dis-Advantage plans are a far less cost-effective, quality-questionable arm of Medicare.

Pilot Program Metastasizes

Direct contracting is supposed to be a pilot program, yet Medicare has no plans to limit the number of people it enrolls in these new plans. Instead, Medicare has announced plans to enroll 100% of traditional Medicare members into DCE-like programs by 2030.

This massive handover appears to violate the limited authority that Congress granted to conduct an experiment. Without any Congressional oversight, CMS is moving all people on Medicare into these private business plans by the Orwellian redefining of its direct contracting authority with providers and suppliers.

Through the Medicare Innovation Center, Congress gave CMS authority to test new models for paying for care provided that they neither increase costs nor undermine quality.

Our Congress did not authorize models that are known to be more costly, that are subject to large-scale inappropriate denials of care or to systems that involve private insurers and investors as intermediaries with complete control over people’s care.

Our Congress did not authorize the wholesale overhaul of traditional Medicare, so why is this happening?

The Biden administration should be held to account immediately and pressured to halt this dangerous and costly Medicare transformation. And members of Congress, especially on the committees that oversee Medicare, need to hold public hearings where people denied care would testify to their experiences.

ATF doing a lousy job at policing 3D guns

The federal agency that oversees guns is largely failing to monitor a technology that the extremist anti-government Boogaloo movement used to convert semiautomatic weapons to machine guns.

Officials from the Bureau of Alcohol, Tobacco, Firearms and Explosives could only come up with 12 cases in the last four years using 3D-printed guns. The Transportation Security Administration found 3D-printed firearms six times at its checkpoints in airports from January 2017 to July 2020, but 3D-printed firearms often can’t be detected by metal detectors.

“These low figures might not present a complete picture,” wrote investigators for the Office of Inspector General at the Justice Department.

ACTION BOX / What You Can Do About It

Tell the ATF your thoughts on 3-D printed firearms. Call the agency at 202-648-7800 or write the ATF at 99 New York Ave., NE, Washington, D.C. 20226.

Join a chapter of Brady which works to reduce gun violence.

In March, federal prosecutors said that Timothy John Watson of Ranson, W. Va., used 3D printing to make hundreds of devices to convert semiautomatic weapons to machine guns. Watson sold the devices online to adherents of the Boogaloo movement and described them as wall hangers to hold keys and other items.

Boogaloo followers say they are preparing for a second American Civil War.

Watson’s customers included Steven Carrillo who is accused of ambushing three deputy sheriffs in California. One died. The device Carillo and others bought, a drop in auto sear, converts an AR-15 rifle into a machine gun. They are illegal.

In October, Judge Gina Groh sentenced Watson to five years in prison after he pled guilty to possessing an unregistered firearm silencer. Three other charges were dismissed.

Alphonso Hughes of the ATF wrote that the agency agrees that more monitoring of 3D printed firearms is appropriate and that the ATF agreed with the report’s recommendations.

“We are grateful for OIG’s thorough and thoughtful review of this important topic,” Hughes wrote.

Federal auditors recommended that the agency consider changing eTrace, its online system for police to submit information about guns recovered in criminal investigations. Police can’t easily submit information about whether guns are made by 3-D printing which means that the ATF can’t track emerging trends about 3-D printed firearms.

Federal auditors also recommended that the ATF work with the firearms industry to get information about 3-D printed firearms and work on evaluating potential threats of specific 3-D printed firearms.

Republicans show their fake anti-corporate ‘populism’

Some analyses of Trumpism and Republican populism have claimed to detect a strain of anti-corporate sentiment. It is true that today’s right-wingers are willing to criticize big tech companies for supposedly treating them unfairly. But most of the time the GOP continues to serve the interests of big business.

That was clear during an important hearing held by the House Judiciary Committee’s subcommittee on antitrust, commercial and administrative law. Subcommittee chair David Cicilline (D-R.I.), vice-chair Pramila Jayapal (D-Wash.), other Democratic members and the witnesses all raised serious questions about the current regulatory system, focusing on issues such as disclosure and social equity.

The Republicans, on the other hand, did their best to change the subject or spoke in favor of less rather than more oversight. Ranking member Ken Buck (R-Colo.) used his opening remarks to attack executive overreach and praise the Trump administration’s wholesale attack on regulation.

Jim Jordan (R-Ohio) spent his time attacking what he claimed was a plan by the Justice Department to treat parents critical of school boards as domestic terrorists. One of the witnesses, NAACP climate justice director Jacqueline Patterson, was asked by Dan Bishop (R-N.C.) whether she was a revolutionary. She was also chastised for a facetious tweet about vaccines. The comments of GOP members on regulation were mainly limited to attacks on so-callled woke bureaucrats.

Despite these antics, there was a serious exchange between the Democrats and the witnesses on the failures of the current regulatory system. These issues are also addressed in the Stop Corporate Capture Act introduced by Jayapal.

The legislation would create more transparency in rulemaking, reduce corporate influence over the process and create a framework for considering social equity. It would fine companies that lie about the impact of public interest rules. It would also create a public Advocate to provide for more robust public participation.

It turns the usual discussion on its head. Rejecting the idea of executive overreach, the bill correctly diagnoses the problem as a situation of what one might call regulatory anemia. Agencies are not aggressive enough in tackling serious problems relating to the environment, the workplace and the marketplace. The parties meant to be targeted instead are playing an outsized role in creating the rules. Hence the reference in the bill’s title to regulatory capture.

Jayapal’s proposal is what one might call a populist approach to reforming the regulatory system—one that is not likely to receive support from corporate lobbyists. When they are not simply kicking up dust, Republicans, by contrast, are doing the bidding of big business by continuing the Trump Administration’s drumbeat against regulation.

This is one of those areas in which the conventional labels of U.S. politics continue to baffle me. Why are those working to benefit giant corporations called populists, while those who are seeking to rein in that power are called elitists?

The Jan. 6 committee fillets the contemptuous Mark Meadows

It has never been clear how effective a chief of staff Mark Meadows proved to be for Donald Trump. Trump always has been too concerned with self over governing. But it was clear in hearing out the Jan. 6 committee that Meadows came across to that group as a willful buffoon.

The Jan. 6 Select Congressional Committee dramatically dispatched Meadows last night with a recommended 9-0 contempt of Congress vote. It was as dripping in scorn and disappointment for a former colleague’s disrespect to the House as it was filled with questions that go well beyond his failure to testify.

It seems certain that Meadows is headed for a full House contempt vote, which could come as early as Tuesday, and recommended prosecution for refusing to answer his subpoena, as with Trump adviser Steve Bannon. But the case against Meadows suggests actual criminal complicity in a conspiracy to overthrow the government through the subversion of electoral votes.

Republicans and Democrats on the panel made clear that the contempt they felt for a former colleague reflected personal contempt as well as the more official sort.

The committee, with seven Democrats and two Republicans, openly mocked Meadows’ claims of executive privilege clearly thrust upon him by Trump. Meadows already had turned over 9,000 emails, texts, phone calls and records to the panel; he has published and promoted a book purporting to discuss exact topics for which the committee has questions; he took part in television interviews in which he covered similar ground in political cover for his former boss.

Indeed, after the committee had disclosed that the documents included in a Jan. 5 email which, per the White House, said the National Guard was on standby to “protect pro-Trump people.” Anyone following the inquiries into the insurrection attempt would have serious questions about Meadows’ knowledge of events leading to it.

Meadows, Filleted

Before television cameras, the Republicans and Democrats on
the panel made clear that the contempt they felt for a former colleague reflected personal contempt as well as the more official sort. For years, Meadows, former ranking member of the Government and Operations Committee and leader of the House Freedom Caucus until taking over as Trump’s top counselor, was strident in calling out members of the Barack Obama administration who did not satisfy his own subpoenas and questions.

At this hearing, committee members placed Meadows in a central position in dealing with other unnamed Republican Congress members to derail the Jan. 6 election certification; in repeated meetings with conspiracists aiming to overthrow the election results; and as a go-between among Congress members under siege, Trump family members and Trump himself as the Jan. 6 violence continued to play out.

As The Times noted, according to dozens of text messages that members of the panel read aloud, Meadows fielded requests from terrified lawmakers and even members of Trump’s family begging for Meadows to persuade Trump to call off the rioters.

Others noted that he was neck-deep in attempts to overturn election results. He traveled to Georgia on Trump’s behalf before that phone call in which Trump asked the secretary of state to “find” sufficient votes to change the outcome. The committee report detailed communications showing that Meadows met with and coordinated information in a 38-page PowerPoint on how state delegations, Congress members and Vice President Mike Pence could stop the certification by ordering martial law and tossing votes; and he coordinated with Jan. 6 rally organizers.

Even at best, executive privilege is not a blank check to refuse a House subpoena particularly to answer a whole lot of questions that fall outside any direct advisory communications with Trump. For that matter, we’re seeing the same refusal attitude extending now to former trade representative Peter Navarro before a different committee looking at Covid policies.

Meadows, Absent

All there was on the other side was ordered silence – and a legal lawsuit that the subpoena was overly broad. But, to anyone listening to the hearing, the committee’s questions all sounded, well, reasonable.

Of course, the missing link here is Trump himself, who is stopping anyone from testifying whose recollections might show him in an unfavorable light. As I have argued previously, if Trump believes in his own legal cause, it is maddening that he doesn’t stand up and testify proudly about his actions before, during and since.

It all would be absurd if it were not so deadly serious.

Jan 6 was a symptom, not the disease itself. We’re watching our election and voting rights, our democracy itself under continuing attack by a populism that demands authoritarianism – and a Donald Trump who wants to return to don that monarchial crown.

Trump’s PowerPoint coup plotters were crackpots, argues Washington Post columnist Dana Milbank, who adds, “We may not be so lucky next time.”

The hearing itself was only 45 minutes, an effective round-robin of congressional outrage that left only one question: Where is the Justice Department’s parallel investigation of those who led and planned the overthrow of our government?

The Covid death count no one knows about

Donald Trump, the one-term former President who has been teasing a third run in 2024 will visit a massive Dallas, Texas megachurch Sunday for a Christmas worship service as the nation sees the omicron coronavirus variant exploding across the country. Experts believe the omicron variant of the deadly virus that has killed well over 800,000 Americans to date will become the dominant variant in a matter of weeks.

"Omicron may multiply 70 times faster than delta," USA Today reports. A massive study in the UK shows contrary to earlier reports, there "was no evidence of omicron cases being less severe than delta," Bloomberg News reports.

When Trump enters First Baptist Dallas church on Sunday, he'll be facing thousands of people. Masks are "encouraged" but not required. A massive crowd will be present for hours before Trump shows.

"The auditorium where Trump will attend the 11 a.m. Sunday service holds 3,000," The Dallas Morning News reports. "Seats are first come first served, with security lines opening two hours earlier."

"A full choir of 250 to 300 singers, plus orchestra, will present Christmas music," and there's another room where another 1600 can watch via livestreaming, "plus assorted overflow space."

"In all, about 6,000 people will be on campus with Trump, according to senior pastor Robert Jeffress.

Few worshipers will be wearing masks. The church encourages face coverings for anyone who hasn’t been vaccinated against COVID-19 but “the vast majority of our people have been vaccinated,” Jeffress said, and of course, “We don’t have deacons wrestling people if they don’t have masks on.”

The church has a lengthy statement promoting "the safety of every person on campus." The word "mask" does not appear, nor is there any mention of coronavirus protocols.

Photo: Trump with Jeffress and the First Baptist Choir & Orchestra at the Kennedy Center, 2020

Attempts to read broad political conclusions into these 3 jury decisions feel like overreach

Legally speaking, the jury in the Kyle Rittenhouse trial in Kenosha, Wisc., only cleared him of the specific charges of intentionally killing two and injuring a third. Whatever way the verdict is being celebrated in conservative quarters, it was not a blanket promotion of self-defense laws as a blind for carrying semi-assault weapons in a protest over another racial policing incident.

In Charlottesville, Va., the jury decision in a lawsuit that slapped $25 million in penalties on nine white supremacists for organizing hate rioting that ended in a fatality specifically stopped short of finding broader hate crimes at play.

What we should take away from all three trials is that race is a live issue in America, critical theories taught or not. Our state and federal lawmakers and courts are ill-prepared or ill-motivated to fix the root problems.

And in Brunswick, Ga., on Wednesday, state prosecutors won guilty findings against three white defendants who chased and killed Ahmaud Arbery for jogging while Black. But race was specifically downplayed through a trial that almost never came about. The jury decision could not be read as a broad rejection of laws allowing citizen arrest.

What we should take away from all three trials is that race is a live issue in America, critical theories taught or not. Our state and federal lawmakers and courts are ill-prepared or ill-motivated to fix the root problems.

There are those who want to pat the justice system on the back a couple of times in praise that the system worked as intended. If anything, the system barely worked in each case.

Taking a Closer Look

On cue, after each individual decision, we see the pundits, the hangers-on and the official trial watchers take the verdicts as a Go sign to launch broadsides about the state of American values. It may be a valiant effort to find meaning, but these are opinions based on too little information.

In Kenosha, the prosecutors proved inadequate, and the defense managed to turn a story about a teen crossing state lines to pick up a rifle into a specific couple of moments before the gun went off – three times – in self-defense.

Donald Trump unartfully even told his followers that Rittenhouse never should have been prosecuted in the first place. The political Right is falling over itself to make Rittenhouse a hero rather than worrying about the obvious conclusion that the self-defense argument is going to spawn more incidents.

In Charlottesville, the lawsuit seeking financial penalties came about because the feds could not prosecute a criminal case.

There is no chance that a white nationalist movement will go out of business; it will continue to return, as it is in Europe, under different stripes.

And in Brunswick, Ga., the county district attorney who had original control of the case did not bring charges at all, botched the investigation and now faces criminal charges herself.

The prosecution itself flowed by several offices before a state agency took it out of the hands of local district attorneys.

It doesn’t sound like the justice system working as intended. It sounds more like something between luck and persistence to even get these cases to court.

And it will require another federal prosecution of the same circumstances to even air the arguments about race and seeing this killing as a hate crime.

Perhaps the best television comment was that the guilty verdicts in Georgia represented relief, not rejoice.

Hyper-Sensitivity on Race

We’ve become hyper-sensitized to these individual trial outcomes, just as we are to so many localized election decisions, state laws or protests that become nationalized by television. They have become our surrogates for national discussions and our leaders, our businesses, our academicians all become invested in using their pretext to push a point of view.

Just as America complains through school board protests and book bans that it is upset just to hear about Race and Divide, we are fixated exactly on Race and Divide.

So, half the country is delighted that there is no legal problem with teen Rittenhouse deploying and shooting a semi-assault rifle to defend against Black Lives Matter protesters. Half the country celebrates joyously that three self-styled enforcers are convicted for hunting down Arbery in a mostly white neighborhood.

  • The difference between conviction and blanket release may rest:
  • in the weirdness of jury makeup
  • whether the prosecution picked the right charges for this jury
  • over the procedural rulings of the individual trial judge
  • over whether there were enough citizen-generated video to show more than one version of events

The trials are not national votes about policing, race or public policies over stand-your-ground laws.

The sad truth in all these trials is that the incidents should never have happened. The teen had no business being in Kenosha in the first place. The three guys in Georgia had no business stalking Arbery.

We continue to see these aberrant trials because we have accustomed ourselves to fear of The Other and the need for self-protection and self-comfort in all things.

That, in turn, has created an interpretation of the Second Amendment to:

  • allow and encourage vigilantes
  • spread concealed carry permissions for legal guns
  • put police and protesters alike in personal danger
  • create laws that should have no need to exist, particularly with loose language that can be stretched to absurdity

It’s time for some critical justice thinking.

Is that a good guy with a gun or bad guy with a gun?

Judges increasingly rule that armed people frisked by police are not dangerous, reflecting gun rights laws that allow countrywide carrying of concealed weapons in public.

Judge Jeffrey Sutton wrote in 2015 for the Sixth Circuit that a Toledo, Ohio, man can sue a city police officer for detaining him for openly carrying a semiautomatic handgun in his neighborhood. Ohio doesn't require gun owners to produce or even carry their licenses.

Shawn Northrup and his wife were walking their Yorkshire terrier with their daughter and grandson when a motorcyclist challenged him for carrying a gun and called 911.

The assumption that mere possession of a firearm constitutes a crime is crumbling. Jeffrey Bellin, William & Mary Law School

"Ohio law permits the open carry of firearms. . . .and thus permitted Northrup to do exactly what he was doing," Sutton wrote.

Courts in Arizona, Idaho and New Mexico have also found that having a gun isn't enough on its own to conclude that someone is dangerous.

All but three states and the District of Columbia allow people to openly carry firearms in public, according to the Giffords Law Center to Prevent Gun Violence. The exceptions are Florida, Illinois and California.

"The assumption that mere possession of a firearm constitutes a crime is crumbling," said Jeffrey Bellin, a law professor at William & Mary Law School.

Giffords says open carry laws create confusion for police responding to shootings and endanger public safety.

Under the Fourth Amendment, passed as part of the Bill of Rights, people are protected from unreasonable searches and seizures. The Fourth Amendment is based on colonists' experience with smuggling investigations. Courts have interpreted this right to apply to everything from hidden cameras to searches for guns.

In 1968, when it was illegal for anyone in Ohio besides a police officer to carry a concealed firearm, the Supreme Court decided that the Fourth Amendment applied to stop-and-frisk searches. Cleveland police detective Martin McFadden testified he saw John Terry and another man who looked like they were casing a jewelry store to rob it.

McFadden stopped Terry and searched him, finding a .38-caliber revolver in his coat pocket. McFadden also found a gun on another man. In an 8-1 decision, the Supreme Court upheld the search, writing that police could search a suspect if the officer has "reason to believe that he is dealing with an armed and dangerous individual."

Police have used stop and frisk to target minorities. In New York City, more than 80% of the 4.4 million stops police made from January 2004 to June 2012 were Blacks or Hispanics. Only 10% of the people stopped were white.

Weapons were seized in about 1% of the stops.

In Philadelphia, cops are three times as likely to stop Black people while either walking or driving than white people.

Breaking down the mangled history of mainstream media and the Steele dossier

Inevitably, this week, we started to see the news media backing off – even adjusting their files – over stories published about the so-called Steele dossier a couple of years ago. The effect is to force renewed thinking about links between Donald Trump and Russia.

The reason for reconsideration about what was said at the time is the recent indictment of Igor Danchenko, a Russian analyst facing charges of lying to the FBI over information he supplied for the dossier by former British intelligence Christopher Steele and the FBI that was used as justification for initial inquiries into the all-things-Russia links with the Donald Trump 2016 campaign.

The 39-page grand jury indictment of Danchenko for making false statements was the result of more than two years of investigation by a special counsel, John H. Durham. The indictment – there has been no trial yet – is being hailed among conservatives as definitive in defending Trump from any eventual conclusions about the degree to which The Former Guy colluded, cooperated or otherwise was open to arrangements with the Russians.

So, this week, just as the media herd had flocked to the story of the Steele dossier, now the media, herd-like, is taking a step back.

Nevertheless, besides any overreach by the FBI, there are two essential truths here: First, press outlets have been careful throughout to say that large portions of the dossier have remained unverified. And second, the case outlined by Special Counsel Robert S. Mueller III outlined lots of contact and arrangements among the Trump campaign and transition team members and Russian operatives.

Adjusting Archived Articles

The Washington Post, Politico and others are adjusting stories in their electronic files to reflect yet more doubt on references to the Steele dossier, first published by BuzzFeed in January 2017. These include rewrites to show new questions or newly created omissions in already published stories to fit with new information.

The dossier contained a range of allegations about candidate Trump that were picked up and amplified in news reports, talk shows and social media.

Steele himself last month offered interviews defending his 17-memo compilation — paid for first by Republican, then-Democratic political opponents of Trump—as apolitical. Last year, Justice Department Inspector General Michael Horowitz found errors in the FBI review of data and its use in obtaining special wiretapping authority for a Trump associate. One FBI lawyer pleaded guilty to a criminal charge.

Former Attorney General William P. Barr appointed Durham to lead a wider investigation into the origins of the Russia connections. That inquiry has produced little until this recent indictment.

How the media acted in all this is now the new focus in articles in:

  • Politico, where press critic Jack Schafer discusses media transparency
  • The Washington Post, where media critic Eric Wemple has extensively looked at media coverage of the Steele dossier over time
  • The New York Times opinion essays, where Bill Grueskin, a Columbia journalism professor, considers the herd response of a too-believing media
  • Also, columnist Bret Stephens, an avowed conservative thinker, finds consistent fault with both the FBI and the media for lack of questions.

Most of the important claims in the dossier have not been proven, and some have been refuted.

But No Exoneration

Still, Wemple, among others, conclude that just because all that Steele gathered, including the notorious reports of a Trump pee tape, didn't pan out didn't mean that there wasn't plenty of fishy Russian business during the 2016 presidential campaign.

Despite all the Trump and Republican denials – containing lies and misstatements themselves, the Mueller Report detailed multiple instances of what would constitute bad, even potentially criminal behavior in that presidential campaign and the weeks following the 2016 election.

Trump has never disowned his special regard for Russian leader Vladimir Putin and went to great lengths to align U.S. policies with what have comported well with Russian outlooks over a weakened NATO, concessions in the Middle East and a view toward international chaos that has advanced Russian interests. The Trump position, simply stated, remains all about himself, about America First thinking and disowning leadership in international cooperation.

For the media, the questions raised in the various essays over the dossier are about this industry's responsibility toward rigor and about accountability when there are errors. As columnist Schafer notes, accountability requires journalists to show how their work was flawed if they choose to correct or retract. The current archive changes instead rely on rewriting historical articles to reflect more current doubt – an endless process for sure if applied to all errors with political overtones.

If Danchenko is convicted of lying to Steele and then to the FBI, we must accept that sourcing media stories to those lies creates problems over just what to believe went on in the past. But even without those lies, we should not forget that the Muller Report outlined serious abuses, whether called collusion or cooperation, between an election campaign and a foreign foe.

When Trump abandoned the Kurds

While a majority of Americans say they continue to react poorly to an apparent lack of planning in the hastened, chaotic withdrawal from Afghanistan, maybe we should be looking more closely at the distinctly Republican attempt to politicize the efforts of the Biden administration to quickly organize an unprecedented airlift rescue of 120,00 under fire as a disastrous failure.

Those same polls say we should be out of Afghanistan.

Americans are reacting to images that are embarrassing not to executing U.S. strategy.

No one, including Team Biden, would argue against the argument that withdrawal should have gone better, for all the reasons that by now we can all recount. The Afghan government and army collapsed, and within several days, created conditions that made a pullout of military and civilians dangerous and nearly impossible.

No one, including Team Biden, disputes that perhaps 100 to 200 individuals holding U.S. citizenship, shared citizenship, or special status for expedited removal, remain in Afghanistan. What Biden and company dispute is whether various diplomatic and economic levers will suffice to get those people, at least those who want out, a chance to leave under Taliban aegis.

Somehow, magically, the argument is, we should have poured more U.S. troops in, one way or another, to have them stay until all who wanted out – perhaps 300,000 Afghan citizens whom many in the U.S. don't want to provide a new home – could be airlifted out with no harm even from rogue Taliban forces or unaffiliated terrorists who showed us with a bomb and other threats that they were not heeding any Taliban orders any more than quaking under threat of American weapons.

But missing in the various explanations is a quick look back at the last two years, when Donald Trump, who now insists that any Afghan pullout he had worked out with the Taliban would be conditioned by events on the ground, pulled out from Syria and Iraq. That rewrite of recent history by Trump, former Secretary of State Mike Pompeo, and a bevy of Republican congressional leaders whose opinions were not part of any practical discussions towards pullouts, rather overlooks Trump's history here – which is still fresh in memory.

That withdrawal in Syria and Iraq abandoned Kurds – American allies in the fight against the Islamic caliphate – in the face of oncoming conflicts with the Turks, who historically have seen the Kurds as domestic rebels, if not terrorists. It will be interesting how Trump retells his own story as his all-but certain candidacy emerges.

In other words, can we look at what happened?

Abandoning Kurds

In October 2019, Trump, and Defense Secretary Mark T. Esper basically declared victory over an Islamic caliphate in Syria and Iraq and ordered a withdrawal of American forces from northern Syria. About 1,000 American troops, mostly Special Operations forces, left quickly, following a period in which the Pentagon had slow-walked compliance with Trump's directions to move towards withdrawal, remaining inside Iraq or southern Syria.

But the decision drew criticism, now apparently forgotten, that doing so effectively ceded control of the area to the Syrian government, Russia, and the Turks, and resulted in abandoning the Kurds, America's allies in actual combat in the area. By comparison, the current debate involves rescue of local Afghans who worked as interpreters, drivers, clerical help, and cooks. There was no airlift at all of civilians who had worked with the U.S. forces; indeed, Trump barred Syrian immigration totally.

And, critics made clear, the abandonment of the area would allow renegade, fleeing ISIS fighters to regroup elsewhere to fight another day. That's exactly the current week's criticism for Biden returning Afghanistan to a would-be teeming training ground for international terrorists, including those same fleeing ISIS fighters.

Whatever rebound terrorists might make, one thing was clear: American forces would not be coming to the aid of their Kurdish allies in the face of the Turkish-backed offensive. Trump went defended the abandonment, saying he was fulfilling a campaign promise to withdraw from "endless war" in the Middle East (familiar?), "appearing largely unconcerned at the prospect of Turkish forces attacking the Kurds, who include a faction he described as "natural enemies" of the Turks," and saying he would use economic leverage over the Turks to keep Turks from killing too many Kurds. He didn't.

How are we supposed to take current Republican criticism seriously now when they left American allies to die on the same battlefield?

Setting Up Afghan Problems

In November 2020, right after the election, the Trump White House announced that it would pull thousands of troops out of Iraq and Afghanistan by Jan. 15. In January 2021, as the new administration was just coming in, acting Defense Secretary Christopher Miller announced that the U.S. had withdrawn forces in Iraq and Afghanistan down to 2,500 in each war zone.

It was an unusual major policy shift announced during a lame duck period, clearly setting up problems for the incoming Biden administration.

It also was a change that defied clear instructions from Congress in its broadly bipartisan military budget bill not to use that money to withdraw forces in either Afghanistan or Iraq below 4,000 without providing clear evidence to Congress about the viability of the plan.

In February 2020, Pompeo and Trump completed a negotiation with the Taliban, after even considering inviting the Taliban leaders to Camp David. So much for outrage over Biden now talking with the Taliban about security arrangements during the pullout.

As one analyst wrote in a New York Times op-ed this week, "Trump agreed to withdraw all coalition forces from Afghanistan in 14 months, end all military and contractor support to Afghan security forces and cease "intervening in its domestic affairs." He forced the Afghan government to release 5,000 Taliban fighters and relax economic sanctions. He agreed that the Taliban could continue to commit violence against the government we were there to support, against innocent people and against those who'd assisted our efforts to keep Americans safe. All the Taliban had to do was say they would stop targeting U.S. or coalition forces, not permit Al Qaeda and other terrorist organizations to use Afghan territory to threaten U.S. security and subsequently hold negotiations with the Afghan government.

Not only did the agreement have no inspection or enforcement mechanisms, but despite Trump's claim that "If bad things happen, we'll go back with a force like no one's ever seen," the administration made no attempt to enforce its terms.

Read it. There are no conditions on the ground outlined.

They Agree, Even if We Don't

Biden's arguments are about what we are doing overall in Afghanistan. So are Trump's.

For good or bad, the two political ends are arguing over something for which they both agree on the fundamentals. We can, and are, having a ruckus over how well the mechanics of pulling out went, but few Republican opponents are suggesting that we re-commit the kind of numbers to Afghanistan to make a major difference. From polling and endless interviews, it is clear that Americans don't have the stomach for generations-long wars to prevent possible terrorism, insisting instead that a vibrant and strong military and an effective intelligence array can respond as needed, anywhere in the world.

We can and will argue endlessly about that too.

But we should dismiss this notion that Trump, the magician, was going to extract hundreds of thousands from Afghanistan in any manner that was without the messiness of these last two weeks. And we should dismiss the defensiveness of the Biden team in insisting that the inevitability of chaos absolved them from better preparations about the processing and withdrawal of populations of this size from halfway around the world.

This article was paid for by Raw Story subscribers. Not a subscriber? Try us and go ad-free for $1. Prefer to give a one-time tip? Click here.

J.D. Vance thinks George Washington wasn’t fit to be president

Unless we are pursuing politics for a living, we generally try to avoid spending actual time outside of elections thinking about individual candidates.

That is, we ignore them unless they do and say things that are just so nuts that we question whether we live on the same planet.

Enter venture capitalist, author and Ohio Republican Senate candidate J.D. Vance, the emergent conservative in next year's race who has landed on a core issue. Democrats have "become controlled by people who don't have children," he says.

Thus, as he explained in a speech to the Future of American Political Economy Conference hosted by the Intercollegiate Studies Institute, the politicians running the country do not have a "personal indirect stake" in improving it because they do not have children.

It's not quite Jewish space lasers starting wildfires in the West or seeing Capitol rioters as "loving people," but it comes close.

Vance himself adopted belated love for the Donald Trump he used to detest. He noted that potential presidential candidates in the Democratic Party including Vice President Kamala Harris, Transportation Secretary Pete Buttigieg, Sen. Cory Booker (D-N.J.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) do not have children.

Don't Harris' step-children count? What about adopted kids?

Why, he asks publicly, is it just a "normal fact of American life that the leaders of our country should be people who don't have a personal indirect stake in it via their own offspring, via their own children and grandchildren," Vance asked.

He says he was not referring to people who are unable to have children.

In Vance's world, apparently, only pols with kids who have their DNA can think seriously about the national debt or committing U.S. troops to foreign locations or whether we should erect, and I choose that word carefully, Border Walls.

By the way, George Washington had no children of his own, but did have a step-daughter via Martha. But isn't he father of the country? Didn't he sleep around?

Children, No Children?

Wait a minute! Isn't the Republican line on Democrat Joe Biden a constant near-impeachment because he does have a son Hunter who possesses an unerring ability to stick his business foot in his famous-name-influenced mouth?

And is Vance really arguing here that Trump, who loves to claim that he knows nothing of how government actually works or how policy is made, is more responsible because he has three millionaire children who run his businesses and violate every ethical line government lawyers can invent?

Skipping over the fact that Harris has two step-children from her husband Doug Emhoff's previous marriage, the Vance doctrine seems to be that parents who go to the polls should have more power than adults who do not have children.

"When you go to the polls in this country as a parent, you should have more power, you should have more of an ability to speak your voice in our Democratic republic, than people who don't have kids," he said.

"Let's face the consequences and the reality; if you don't have as much of an investment in the future of this country, maybe you shouldn't get nearly the same voice."

So, parents with several children should get yet more votes, right?

Maybe the Republican stereotype of a welfare queen mom with a hive of kids should then have multiple votes as opposed to say a single, unattached big financial guy and would-be predator like, say, Jeffrey Epstein, who long was befriended by Donald Trump and Bill Clinton. Is that what Vance wants?

In a conversation with conservative media personality Charlie Kirk earlier this year, Vance explained, "We need more American children because American families, American children are good for us.

"They make fathers more invested — there's all kinds of research on this. They make our economy more dynamic. They make fathers more empathetic, more invested in their communities." And so they should have more votes?

But, he noted, he is always accused of being racist for elevating new children over population increases through immigration because "just no comparison between the positive effects of children and the positive effects of an immigrant."

Immigrants apparently don't have children, but then again, non-citizens don't vote at all, unless Donald Trump is counting their imagined ballots as part of fraudulent elections.

So, is Vance just arguing that we need more white children, more white politicians with children? Or is he actually ready to acknowledge that demographic shifts show more children in non-white families?

Who's Got Children?

Just as a reality check: The National Opinion Research Center at the University of Chicago conducts a biennial national General Social Survey. It is a broad poll of Americans on a range of social issues that includes questions specifically about politics and children.

The most recent data says conservatives are more likely to have children than liberals — and are also more likely to have more children—but not children at home because conservatives also tend to be older.

Families with children at home are more or less equal between liberals and conservatives.

None of that explains how people vote or how they view the current culture wars.

Do you have to have aging parents to be able to vote about Medicare? Do you have to be an excluded voter of color to consider national questions of voting rights?

If we were really voting with children in mind, wouldn't we be seeing wide votes of support in Congress for widening child care, adding to food stamps, public education and health care?

As a party, Republicans, kids or not, obviously don't think so on any of these issues.

Maybe Vance should be graded on his support for actual policies relating to the well-being of children and the future, from economic justice to climate.

Vance believes that conservatives "have lost every single major cultural institution in this country. Think about it. Big Finance, Big Tech, Wall Street, the biggest corporations, the universities, the media and the government…

"There is not a single institution in this country that conservatives currently control, but there is one of them, just one, that we might have a chance of actually controlling in the future and that's the constitutional republic that our founders gave us," Vance said.

"My argument is that we need to fight woke capital, woke corporations and the governments that enable them, because we can't win anywhere else."

Maybe we should skip the middleman and give the votes directly to kids.

Vance said that the culture war is a class war against middle- and working-class Americans, and also claimed that it's an economic war against conservatives.

Vance wrote a memoir called Hillbilly Elegy, about the Appalachian values of his Kentucky family and their relation to the social problems of his hometown of Middletown, Ohio, where his mother's parents moved when they were young. He now is a principal at Peter Thiel's venture capital firm, Mithril Capital, far from Appalachia, where he took interest in biotechnology issues before entering a primary to succeed retiring Sen. Rob Portman.

Thankfully, he has two sons and therefore can be a serious candidate.

NRA affiliate's challenge to strict New York handgun law could trigger a new Constitutional test

Federal judges have rejected most Second Amendment arguments of gun rights activists since a 2008 landmark case. Now the Supreme Court will hear a case that could invalidate state laws restricting who can be armed on our streets.

The New York State Rifle & Pistol Association, which is affiliated with the NRA, and two men who couldn't get gun permits in New York, sued. The judges Donald Trump put on the Supreme Court – Amy Coney Barrett, Neil Gorsuch and Brett Kavanaugh – are all endorsed by the National Rifle Association.

"I don't think people really understand the gravity of this case," said Kris Brown, president of the Brady Campaign to Prevent Gun Violence. "It would upend the very framework of the country's public safety laws."

New York is one of eight states that limit who can carry a gun in public. The others are California, Delaware, Hawaii, Maryland, Massachusetts, New Jersey and Rhode Island.

New York's law was passed in 1911 after the attempted assassination of a mayor and the murder of novelist David Graham Phillips.

New York's Sullivan Act, named after Tammany Hall politician Timothy Sullivan, was passed in 1911 after the attempted assassination of a mayor and the murder of novelist David Graham Phillips.

New York also has the second-lowest rate of deaths from gun violence in our nation. In 2019, about four people per 100,000 died from gun violence in New York. Alaska had the highest death rate.

"Gun violence has only worsened during the pandemic, and a ruling that opened the door to weakening our gun laws could make it even harder for cities and states to grapple with this public health crisis," said Eric Tirschwell. He is managing director of Everytown Law which represents survivors of gun violence in lawsuits against the gun industry and gun dealers.

People seeking licenses to carry concealed weapons in New York must show "a special need for self-protection." The licensing officer for Rensselaer County rejected attempts by Robert Nash and Brendan Koch, who are also plaintiffs in the case, to get gun permits.

Bars Carrying Handguns Outside the Home

The association asked the Supreme Court to decide whether the Second Amendment allows the government to prohibit ordinary law-abiding citizens from carrying handguns outside their homes for self-defense.

In 2008, the Supreme Court ruled that that the District of Columbia must issue security guard Dick Heller a license to allow him to keep his gun at home. The city had banned handguns.

The justices affirmed prohibiting possession of firearms by felons and the mentally ill and supported laws forbidding the carrying of firearms in like schools and government buildings.

Since the Heller case, federal and state courts have generally used a two-part test in more than 1,000 gun cases, looking at whether the activity is protected by the Second Amendment and then scrutinizing it. Judges have used this test to reject most of the gun rights claims.

Court Could Set New Constitutional Test

"From a constitutional law perspective, the big question is whether the justices will announce a new test for the constitutionality of gun laws going forward," said Duke law professor Joseph Blocher. "If the Supreme Court decides to replace that consensus with some other test, like one based solely on text, history, and tradition, then everything changes."

Paul Clement, the lead attorney in the case, was a clerk at the Supreme Court at the same time as Kavanaugh and testified at Kavanaugh's Senate confirmation hearing. Clement was solicitor general under former President George W. Bush and has argued more Supreme Court cases since 2000 than any other attorney.

Clement represented the NRA in a lawsuit by former janitor Otis McDonald against Chicago. That 2010 Supreme Court decision, which built on the Heller case, allowed people in Chicago to keep guns in their homes for self-defense, ending the city's handgun ban of nearly 30 years.

The association's attorneys argue that the Second Amendment also allows people to carry guns outside their homes for self-defense.

"The Revolutionary War was not won with muskets left at home; nor were the Minutemen saddled with the need to return home before achieving readiness for action," they wrote.

But even during the Wild West, frontier towns typically allowed only lawmen to carry guns in public.

A 2018 Stanford paper found that right-to-carry laws are associated with an increase of 13-15% higher violent crime rates a decade later.

Gangs have used right-to-carry laws by having gang members with clean criminal records get permits and then hold the guns after they are used. Darrail Smith of Wisconsin was stopped three times carrying guns away from crime scenes before he was charged with criminal conspiracy.

Estimated 100,000-plus guns a year belonging to permit holders are stolen.

The whole world could have been vaccinated already

The big drug companies are killing people.

I get to say this about the drug companies, now that President Biden has said that Facebook is killing people because it was allowing people to use its system to spread lies about the vaccines. There is actually a better case against the drug companies.

After all, they are using their government-granted patent monopolies, and their control over technical information about the production of vaccines, to limit the supply of vaccines available to the world. As a result, most of the population in the developing world is not yet vaccinated. And, unlike the followers of Donald Trump, people in developing countries are not vaccinated because they can't get vaccines.

The TRIPS Waiver Charade

The central item in the story about speeding vaccine distribution in the developing world is the proposal put forward at the WTO last October (yes, that would be nine months ago), by India and South Africa, to suspend patents and other intellectual property rules related to vaccines, tests, and treatments for the duration of the pandemic. Since that time, the rich countries have been engaged in a massive filibuster, continually delaying any WTO action on the measure, presumably with the hope that it will become largely irrelevant at some point.

Suppose that during World War II a military contractor developed a new sonar system to detect German submarines. What would we do if this company refused to share the technology with the U.S. government?

The Biden administration breathed new life into the proposal when it endorsed suspending patent rights, albeit just for vaccines. This is the easiest sell for people in the United States and other rich countries since it is not just about humanitarian concerns for the developing world. If the pandemic is allowed to spread unchecked in the developing world it is likely only a matter of time before a vaccine-resistant strain develops. This could mean a whole new round of disease, death, and shutdowns in the rich countries until a new vaccine can be developed and widely distributed.

After the Biden administration indicated its support for this limited waiver, many other rich countries signed on as well. Germany, under longtime chancellor Angela Merkel, has been largely left alone to carry water for the pharmaceutical industry in opposing the vaccine waiver.

I had the chance to confront the industry arguments directly last week in a web panel sponsored by the International Association for the Protection of Intellectual Property (link included when it becomes available). It's always educational to see these arguments up close and real people actually making them.

The first line of defense is that the waiver of patent rights by itself does not lead to any increase in vaccine production. This is of course true. Vaccines have to be manufactured, eliminating patent rights is not the same thing as manufacturing vaccines.

But once we get serious, the point is that many potential manufacturers of vaccines are being prevented from getting into the business by the threat of patent infringement suits. In some cases, this might mean reverse-engineering the process, something that might be more feasible with the adenovirus vaccines produced by Johnson and Johnson and AstraZeneca, than with the mRNA vaccines. The manufacturing process for these vaccines is similar to ones already used by manufacturers in several countries in the developing world, as well as several in the rich countries that are not currently producing vaccines against the pandemic.

Another possible outcome from eliminating patent rights is that the drug companies may opt to do more voluntary licensing agreements under the logic that it is better to get something than nothing.

If manufacturers use reverse engineering to produce vaccines, the patent holders get nothing. They would be much better off with a limited royalty on a licensing agreement, even if it is less than they could have expected if they had been able to maintain an unchecked patent monopoly.

(Editor: Reverse engineering is how startup computer companies built "clones"of the early PCs or personal computers. They bought IBM personal computers and paid one set of engineers to take it apart and describe what they found. Then a second set of engineers used the descriptions to build a personal computer. Voila no royalties to IBM.)

The other route that suspending patent monopolies may open is one where former employees of the pharmaceutical companies may choose to share their expertise with vaccine manufacturers around the world. In almost all cases these employees would be bound by non-disclosure agreements. This means that sharing their knowledge would subject them to substantial legal liability. But some of them may be willing to take this risk. From the standpoint of potential manufacturers, the patent waiver would mean that they would not face direct liability if they were to go this route, and the countries in which they are based would not face trade sanctions.

Open-Sourcing Technology

While suspending patent rights by itself could lead to a substantial increase in vaccine production, if we took the pandemic seriously, we would want to go much further. We would want to see the technology for producing vaccines fully open-sourced. This would mean posting the details of the manufacturing process on the web, so that engineers all over the world could benefit from them. Ideally, the engineers from the pharmaceutical companies would also be available to do webinars and even in-person visits to factories around the world, with the goal of assisting them in getting their facilities up-to-speed as quickly as possible.

The industry person on my panel didn't seem to understand how governments could even arrange to have this technology open-sourced. He asked rhetorically whether governments can force a company to disclose information.

As a legal matter, governments probably cannot force a company to disclose information that it chooses to keep secret. However, governments can offer to pay companies to share this information. This could mean, for example, that the U.S. government (or some set of rich country governments) offer Pfizer $1-$2 billion to fully open-source its manufacturing technology.

Suppose Pfizer and the other manufacturers refuse reasonable offers. There is another recourse. The governments can make their offers directly to the company's engineers who have developed the technology. They can offer the engineers say $1-$2 million a month for making their knowledge available to the world.

This sharing would almost certainly violate the non-disclosure agreements these engineers have signed with their employers. The companies would almost certainly sue engineers for making public disclosures of protected information. Governments can offer to cover all legal expenses and any settlements or penalties that they faced as a result of the disclosure.

The key point is that we want the information available as soon as possible. We can worry about the proper level of compensation later. This again gets back to whether we see the pandemic as a real emergency.

Suppose that during World War II Lockheed, General Electric, or some other military contractor developed a new sonar system that made it easier to detect the presence of German submarines. What would we do if this company refused to share the technology with the U.S. government so that it was better able to defend its military and merchant vessels against German attacks?

While that scenario would have been almost unimaginable – no U.S. corporation would have withheld valuable military technology from the government during the war – it is also almost inconceivable that the government would have just shrugged and said "oh well, I guess there is nothing we can do." (That's especially hard to imagine since so much public money went into developing the technology.) The point is that the war was seen as a national emergency and the belief that we had to do everything possible to win the war as quickly as possible was widely shared. If we see the pandemic as a similar emergency it would be reasonable to treat it in the same way as World War II.

Perhaps the most interesting part of this story is what the industry representative saw as the downside of making their technology widely available. The argument was that the mRNA technology was not actually developed to be used against Covid. Its value against the pandemic was just a fortunate coincidence. The technology was actually intended to be used for vaccines against cancer and other diseases.

From the industry perspective, the downside is that if they made their technology more widely available, then other companies may be able to step in and use it to develop their own vaccines against cancer and other diseases. In other words, the big fear is that we will see more advances in health care if the technology is widely available, pretty much the exact opposite of the story about how this would impede further innovation.

I gather most of us do not share the industry's concerns that open-sourcing technology could lead to a proliferation of new vaccines against deadly diseases, but it is worth taking a moment to think about the innovation process. The industry has long pushed the line that the way to promote more innovation is to make patent and related monopolies longer and stronger. The idea is that by increasing potential profits, we will see more investment in developing new vaccines, cures, and treatments.

But these monopolies are only one way to provide incentives, and even now they are not the only mechanism we use. We also spend over $40 billion a year in the United States alone on supporting biomedical research, primarily through the National Institutes of Health. Most of this money goes to more basic research, but many drugs and vaccines have been developed largely on the government dime, most notably the Moderna vaccine, which was paid for entirely through Operation Warp Speed.

If we put up more public money, then we need less private money. I have argued that we would be best off relying pretty much entirely on public money. This would take away the perverse incentives created by patent monopoly pricing, like the pushing of opioids that was a major factor in the country's opioid crisis. It would also allow for the open-sourcing of research, which should be a condition of public funding. This could create the world the industry fears, as many companies could jump ahead and take advantage of developments in mRNA technology to develop vaccines against a variety of diseases.

But even if we don't go the full public funding route, it is pretty much definitional that more public funding reduces the need for strong patent monopolies to provide incentives. If we put up more dollars for research, clinical testing, or other aspects of the development process, then we can provide the same incentive to the pharmaceutical industry with shorter and/or weaker monopoly protections.

In the vaccine context, open-source means not only sharing existing technology, but creating the opportunity for improving it by allowing engineers all of the world to inspect production techniques. While the industry would like to pretend that it has perfected the production process and possibilities for improvement do not exist, this is hardly plausible based on what is publicly known.

To take a few examples, Pfizer announced back in February that it found that changing its production techniques could cut production time in half. It also discovered that its vaccine did not require super-cold storage. Rather, it could be kept in a normal freezer for up to two weeks. In fact, Pfizer did not even realize that its standard vial contained six doses of the vaccine rather than five. This meant that one sixth of its vaccines were being thrown into the toilet at a time when they were in very short supply.

Given this history, it is hard to believe that Pfizer and the other pharmaceutical companies now have an optimal production system that will allow for no further improvements. As the saying goes, when did the drug companies stop making mistakes about their production technology?

Has Anyone Heard of China?

It is remarkable how discussions of vaccinating the world so often leave out the Chinese vaccines. They are clearly not as effective as the mRNA vaccines, but they are nonetheless hugely more effective in preventing death and serious illness than no vaccines. And, in a context where our drug companies insist that they couldn't possibly produce enough vaccines to cover the developing world this year, and possibly not even next year, we should be looking to the Chinese vaccines to fill the gap.

China was able to distribute more than 560 million vaccines internally, in the month of June, in addition to the doses it supplied to other countries. Unless the country had a truly massive stockpile at the start of the month, this presumably reflects capacity in the range of 500 million vaccines a month. The Chinese vaccines account for close to 50 percent of the doses given around the world to date.

It would be bizarre not to try to take advantage of China's capacity. There obviously are political issues in dealing with China, but the U.S. and other Western countries should try to put these aside, if we are going to be serious about vaccinating the world as quickly as possible.

'Mistakes Were Made'—NOT Our National Motto

If a vaccine-resistant strain of the coronavirus develops, and we have to go through a whole new round of disease, deaths, and shutdowns, it will be an enormous disaster from any perspective. The worst part of the story is that it is a fully avoidable disaster.

We could have had the whole world vaccinated by now, if the United States and other major powers had made it a priority. Unfortunately, we were too concerned about pharmaceutical industry profits and scoring points against China to go this route.

Nonetheless, we may get lucky. Current infection rates worldwide are down sharply from the peaks hit in April, but they are rising again due to the Delta variant. It is essential to do everything possible to accelerate the distribution of vaccines. It is long past time that we started taking the pandemic seriously.

How to order plans for an untraceable plastic gun

A Texas organization, Defense Distributed, has posted plans online to help anyone—including terrorists and criminals—make plastic guns that can't be traced.

The move came after a Trump-appointed federal Judge Ryan Nelson wrote an April decision for the three-judge panel of the Ninth Circuit Court of Appeals clearing the way for sales of the gun plans. Judge Robert Whaley dissented.

"Congress expressly precluded review of the relevant agency actions here," wrote Nelson, a longtime member of the Federalist Society.

Nelson ordered the dismissal of a lawsuit challenging Trump rules allowing plans for 3D-printed guns to be sold on the internet.

Buyers of the gun plans don't have to undergo background checks. The guns don't have serial numbers so they can't be traced.

Our nation already has the 32nd-highest death rate from gun violence in the world, almost four deaths per 100,000 people in 2019. The highest death rate in the United States is the District of Columbia with 18.5 deaths per 100,000.

If deaths due to armed conflict are excluded, the United States is worse than even nations like Lebanon and Afghanistan. The countries with higher gun death rates in the United States are countries troubled by gangs and drug trafficking like El Salvador and Guatemala.

President Joe Biden has said he could take executive action to limit the availability of 3D guns.

In June, Sen. Edward Markey (D-Mass.) and Sen. Robert Menendez (D-N.J.) introduced the 3D Printed Gun Safety Act which would prohibit distributing blueprints and instructions online for printing guns.

The State Department previously argued that the proliferation of 3D-printed guns could provide terrorist and criminal organizations with access to dangerous firearms. But under Trump, who had at least $16.3 million in help from the National Rifle Association in his re-election effort, the department flip-flopped.

Twenty-two states and the District of Columbia sued the Trump administration in January 2020 to block the plans from being posted online. They said 3D-printed guns would seriously compromise security in places like courthouses, schools, prisons, airports and stadiums that rely on standard metal detectors.

Arkansas native Cody Wilson, an English major who dropped out of law school, founded Defense Distributed. Wilson is also a registered sex offender because he pled guilty to injury to a child, a felony, in a case involving a 16-year-old girl. He can't buy or sell weapons at gun stores.

Defense Distributed contends that its blueprint files are a form of speech and efforts to block their release violate the First Amendment. Its supporters include the Reporters Committee for Freedom of the Press.

The district judge, Richard Jones, had ordered a preliminary injunction in the case, writing that "the proliferation of 3-D gun files on the internet likely renders ineffective arms embargoes, export controls, and other measures used to restrict the availability of uniquely dangerous weapons."

How the Biden administration's foot-dragging is killing the arts

Few organizations suffered more than nonprofit performing arts venues in the past 16 months of the pandemic. Continued uncertainty surrounds reopenings, in part because of the achingly slow government response in delivering money needed to resume performances.

Unlike restaurants and bars, which have minimal costs to resume operations if they held onto their space and inventory, many performing arts venues say they can't just open up because they need money to rehearse, build sets, advertise, and produce events.

Live performance charities big and small are in deep financial holes. The Metropolitan Opera in New York faces a colossal shortfall of $150 million, Operawire reported. The Opera projected to bring in $49 million in box office revenue this fall, $88 million less than its earnings from the 2019-2020 season that was halted by COVID-19.

Live entertainment venues were among the first businesses to close, and they will almost certainly be among the last to reopen. Sen. Amy Klobuchar

This estimation last year came alongside Metropolitan Opera General Manager Peter Gelb's prediction that it would take years for the company to rake in its usual totals again due to the bleak outlook for tourism, according to Operawire.

The Bootleg Theater, a staple of Los Angeles' arts and cultural scene for over two decades, was not as lucky. It was forced to close its doors just as the city began to reopen.

"We are in a public health and economic crisis, and the live entertainment industry has been particularly hard-hit during the coronavirus pandemic," Sen. Amy Klobuchar (D-Minn.) said on the Senate floor in December. "These live entertainment venues were among the first businesses to close, and they will almost certainly be among the last to reopen."

Half Closed

Almost half of the nonprofit arts and cultural organizations with in-person programming remain closed, and roughly half of those have no scheduled return date, Americans for the Arts found in a June 28 survey.

Many of those nonprofits said they lack funds to reopen. More than two-thirds of these lightly financed arts organizations said they expect that raising enough money to open the doors again will take three months or more, according to the survey.

In an updated report two weeks later, Americans for the Arts reported 39% of organizations with in-person programming still remained closed to the public. Most of these groups aim to resume in-person activities this year.

Many nonprofit theaters have no working capital. Like millions of cash-strapped Americans, they struggle from performance to performance, not unlike those who live paycheck to paycheck with no savings.

"When you produce a show, you're banking money to produce the next show," said Chris Serface, President of the American Association of Community Theaters.

Serface is also managing artistic director for Tacoma (Wash.) Little Theatre. "We've been dark for a long time, so we don't have that capital to just go ahead and produce a show again," Serface told me.

As if financial instability was not enough to endure, even though Congress appropriated money for live performance venues, so far only a trickle of cash flows to them, Serface and others said.

The Save Our Stages Act — a bipartisan bill spearheaded by Klobuchar and Sen. John Cornyn (R-Texas) — was included in the $900 billion stimulus bill last December. It allocated $15 billion for struggling arts and cultural locales through the Shuttered Venue Operators Grant program.

Slowdown at the SBA

The arts and similar grants, administered by the Small Business Administration, were supposed to be easier to apply for than the Paycheck Protection Program loans.

The rollout was shaky at best. Weeks after the early April start date, the SBA blamed "technical difficulties" for not approving requests and sending funds. SBA reported on June 9 it had issued grants to less than 1% of more than 14,000 applicants.

Christopher Mannelli, executive director of the Geva Theatre Center in Rochester, N.Y., applied for a grant in April. It took two months for SBA to notify him that the agency had reviewed his paperwork.

"It's supposed to be emergency funding, and it certainly has not arrived in a timely manner at all — and all of us have emergency needs," Mannelli said.

The SBA's latest report detailed a significant improvement in the distribution of grants because the program got off to such an atrocious start.

The agency has distributed almost 4,000 grants since the earlier debacle at the beginning of June, according to its July 6 report. That's less than a third of the grants sought.

And aside from the bipartisan criticism voiced by Cornyn and Klobuchar of SBA for its botched implementation, there is no indication of more federal help soon.

"I fully expect the performing arts field to feel this is a two-to-three-year pandemic," said Tamara Keshecki, a research associate at UMass Amherst School of Public Policy. She is also on the New York Independent Venue Association board, which represents independent performing arts groups and organizations based in the state.

"It's not going to be like 'we got some grant money, we reopen, and everything goes back to business as normal,'" Keshecki said.

In June, Washington state lifted most COVID-19 restrictions, joining virtually all other state governments in allowing enterprises to function at full capacity. But Serface said that doesn't guarantee audiences will resume buying tickets.

His theater welcomed some people to its summer youth program at the beginning of July, but Serface said there's no way to predict how willing audiences will be to return.

Still, the Tacoma theater plans somehow to resume shows in the fall, when the production season usually begins.

"That's the big question none of us really know the answer to because it's different all across the country," Serface said. "There's a lot of variables that are making a lot of people nervous, and those are some of the struggles we're all going to face going forward."

New York throws a parade -- and essential workers say ‘Fuhgettaboutit!’

New York City threw essential workers a ticker tape parade along the canyon of heroes last week. And somehow, Gotham's gilded oligarchs were spared the unsavory sight of marchers in matching "I Saved Your Asses From COVID-19 And All I Got Was This Lousy T-Shirt" gear.

Exhausted healthcare workers along with their counterparts in children's services, transportation, retail and other frontline sectors appeared too giddy about surviving the one-time epicenter of Covid and putting the worst of the ongoing pandemic behind them to pass up a well-deserved shot at the biggest block party NYC has to offer. Marching together, workers knew they deserved all the accolades the tired town could muster.

Yet even this most forgiving atmosphere where heaps of blue and orange confetti were periodically blasted from the backs of municipal pickup trucks couldn't obscure the level of worker resentment and anger roiling just beneath the highly produced pomp and pageantry.

Parade placards declaring, "Not All Heroes Wear Capes" and "Our Labor Saved Lives" carried an edge. Hearst drivers, embalmers and cemetery staffers made room on their proud banner for an impromptu "FDNY EMS Fair Pay Now!" sign.

As much as he would've liked, hapless outgoing Mayor Bill de Blasio still couldn't get everybody on a float.

The American Federation of State, County and Municipal Employees' District Council 37 [DC 37, AFSME] — the largest public employees union in New York City with some 150,000 members — told Hizzoner just what they thought of his self-serving party by simply not showing up.

Other unions joining DC 37 in its parade boycott, including those representing the Fire Department's Bureau of Emergency Medical Services [EMS] as well as the United Probation Officers Association [UPOA], also had no stomach for the naked hypocrisy of patting bone-weary workers on the back while at the same time continuing to deny them fundamentals including pay parity, early retirement and a fair contract.

Fair Labor Contracts

"If the mayor wants to celebrate the frontline city workers who put their health and safety on the line to keep New York running at the height of the pandemic, he can start by ensuring every city worker has a fair contract that pays a living wage," the UPOA said in a statement.

Just a week before the "Hometown Heroes" parade, some 200 retired city workers took to the streets of lower Manhattan to protest a secretive backroom deal swapping out their Medicare healthcare plans with private Medicare Advantage ones costing them thousands of dollars a year.

"I worked 34 years," retired special education teacher and United Federation of Teachers [UFT] member Gloria Brandman said at the scene. "I was promised Medicare and supplements paid for by the city."

Still Waiting

Nationwide, frontline workers who risked all throughout the pandemic are still waiting for fundamental job protections, vital healthcare coverage, a $15 an hour minimum wage, the right to organize and enforceable workplace safety standards to protect them against the further spread of Covid and its emerging variants.

What they are getting instead is an economic ass-whooping consisting of stagnant wages, vanishing unemployment benefits and rising consumer prices.

The sweet confections baked into ticker tape parades and the like are meant to distract from all that pain and suffering while the country's elite continue to gorge themselves on the $1.6 trillion they've amassed during the pandemic.

In Detroit, for instance, the city's essential workers are being feted to "Thank You Tuesdays" at Comerica [Bank] Park, where home game festivities include special scoreboard shoutouts and base pads reading, "Thank You Frontline Heroes."

Michigan Gov. Gretchen Whitmer, meanwhile, declared June 17, "Essential Worker Appreciation Day" and called on the feds to issue a one-shot bonus for frontline workers.

Liz Hanbidge, a state representative from Harrisburg, Pa., went even further this past spring, introducing a resolution in her state's General Assembly designating 2020 as "Frontline Workers Appreciation Year."

At least Hanbindge backed up the empty accolades with a proposal requiring large businesses to extend hazard pay to essential workers, along with a few other limited pro-worker measures including one offering supplemental payments to frontline workers still earning less than $15 an hour.

But elected officials aren't exactly shutting down traffic or breaking out the yellow vests in order to get working men and women in this country what they need for themselves and their families.

Embattled Governor

Back in New York, where embattled Gov. Andrew Cuomo is doing his best to create his own blue collar bone fides with a problematic new monument at Manhattan's Battery Park dedicated to essential workers, it's much the same thing.

Ahead of the July 7, "Hometown Heroes" parade, City Council Member Margaret Chin expressed her "hope" that "many eyes" have been opened during the pandemic about the "value of these [essential] jobs."

"As the city reopens we must continue to respect and advocate for these workers," the lawmaker, who represents many parts of lower Manhattan including Battery Park City, declared.

As we say in NYC — "That, and $2.75 will get me on the subway."

Hopes and prayers are nothing in the face of an oligarchic onslaught machine that exists to keep exploited farmworkers hidden and out of sight; hard-pressed Amazon employees too exhausted and afraid to raise their heads; and pretty much everyone else in the good 'ol USA in a permanent somnambulistic stupor.

Jeff Bezos, Mark Zuckerberg, Elon Musk and other vaunted captains of industry are among the few who always have their eyes wide open.

When the monied interests oppose unionization, livable wages and universal healthcare — they know it's not about the Benjamins. These economic royalists know it's all about preserving their lofty perches by continuing to deprive working men and women of economic autonomy, strength and power.

Of course, Bezos and the rest of the oligarchic elite have more than enough money to pay workers better wages and benefits [for crying out loud, they're shooting themselves into outer space]. What they absolutely can't afford, however, is to lift their boots off our necks. Not even a little bit.

Public exhibitions and monuments like the ones popping up during the vaccination rollout have always been very powerful tools — whether created to instill particular narratives in the minds of the masses favorable to the ruling elite or making the masses believe the ruling elite actually cares about the concerns of workers.

That statue of Robert E. Lee that recently came down in Charlottesville, Va., was erected a-hundred-some-odd-years-ago with a clear-eyed purpose. In this case, to obscure the ugly fact that the Civil War was fought to perpetuate slavery and not at all about protecting "states rights," "honoring southern heritage," or any other such nonsense.

And despite the genuine earnestness of the participants, Mayor Muriel Bowser's decision to allow "BLACK LIVES MATTER" to be painted on 16th Street in Washington, DC also sought to accomplish the ruling elite's aim of placating the masses without, you know, actually doing anything to stop fascist police from murdering unarmed Black and Brown people.

Either way, it seems like you still can't go wrong with a statue or parade if you want to try and keep the working class in check.

Trump-appointed election commission holdovers accused of delaying campaign finance cases

Holdover Trump election officials are trying to run out the clock on campaign finance cases, including a serious accusation that gun lovers secretly gave Republican leaders millions of dollars.

Charges against the National Rifle Association were leveled by the gun-control group founded by former U.S. Rep. Gabby Giffords, a gunshot victim from Arizona.

The Federal Election Commission generally has five years to act on campaign finance violations. The FEC spent much of the presidential election year of 2020 not even able to meet because it didn't have enough commissioners and has an enormous backlog of cases.

"The court should not allow the FEC to capitalize on its years-long failure to act on these complaints by simply waiting out the clock," wrote the attorneys for Giffords, a nonprofit that sued the FEC in 2019 in federal court.

Trump appointees voted to dismiss a case against former Trump fixer Michael Cohen over his $130,000 payment to porn star Stormy Daniels

Trump appointees Sean Cooksey and Trey Trainor voted to dismiss a case against former Trump fixer Michael Cohen over his $130,000 payment to porn star Stormy Daniels, citing the backlog of cases and the statute of limitations.

Trump appointee Allen Dickerson, Cooksey and Trainor cited the statute of limitations to dismiss a case about allegations filed in 2018 that the son of former Nevada Sen. Dean Heller, a Republican, was paid to do social media consulting for his father's 2016 campaign.

"We believe the Commission is better served prioritizing other investigations," they wrote.

FEC head Shana Broussard and a commissioner, Ellen Weintraub, both Democrats, also voted to dismiss the case against Heller.

Giffords, founded by former Congresswoman Gabby Giffords, who was shot and seriously injured in a 2011 assassination attempt, sued the FEC. She said the commission failed to act on allegations that the NRA coordinated millions of dollars in illegal campaign contributions to Trump and other candidates.

Giffords wants a federal judge to order the commission to act on complaints filed with the FEC. The lawsuit says the NRA used a network of shell corporations to illegally coordinate spending millions with the campaigns of Trump and at least six other federal candidates, including Sen. Josh Hawley (R-Mo.) and Sen. Tom Cotton (R-Ark.)

"The allegations … constitute a substantial and ongoing threat to the integrity of the election system," wrote the attorneys for Giffords.

Giffords said the scheme funneled millions of dollars in illegal, unreported and excessive in-kind contributions. Giffords accused the National Rifle Institute for Legislative Action and the NRA Political Victory Fund of spending more than $25 million during the 2016 election cycle supporting Trump and distributing and placing those ads with the same employees who were placing Trump's own ads.

Other candidates who benefited from NRA scheme in 2014 were:

  • Sen. Thom Tillis (R-N.C.) who defeated Democratic incumbent Kay Hagan
  • Sen. Cory Gardner (R-Co.) who beat Democratic incumbent Mark Udall
  • Cotton who ousted Democratic incumbent Mark Pryor in Arkansas

In 2016, Sen. Ron Johnson (R-Wis.) kept his seat with NRA help.

Hawley beat Democratic incumbent Claire McCaskill in 2018 in Missouri with assistance from the NRA.

Matt Rosendale challenged Democratic incumbent Jon Tester for the U.S. Senate in Montana in 2018 with NRA help but lost.

Rosendale was elected to the U.S. House in 2020.

FEC attorneys argued in 2020 that there had been no unreasonable delay in addressing the complaints and said that the commission was incapable of acting at that time because it didn't have enough commissioners.

In fiscal 2019, the commission started 31 investigations, at least twice as many as were opened in each of the previous six fiscal years.

Trump stuffed the commission with anti-regulation attorneys like Cooksey, previously Hawley's general counsel, and Trainor, who represented Trump's 2016 campaign.

The Supreme Court has permitted unlimited independent political spending by groups like the NRA on the theory that independent spending does not pose the same risk of corruption as direct contributions. Expenditures coordinated with a candidate are not considered independent.

Bradley Todd, one of the founders of a consulting firm named in the Giffords lawsuit, also worked as a consultant for Gardner, Cotton, Johnson and Hawley and as a media strategist for Tillis. Former NRA lobbyist Chris Cox, a friend of Todd's, is also named in the Giffords lawsuit.

The NRA accused Cox of fleecing more than $1 million from the organization from 2015 to 2019. He is cooperating with the investigation of the NRA by New York Attorney General Letitia James.

This is why a conservative Supreme Court is bad for America

The real disappointing impact of the Supreme Court decision upholding Arizona's voting restriction laws will be in the ripples, of course.

The two specific practices that the Supreme Court ruled as constitutional, overturning both the appeals court and district court that heard the challenge, will likely not change election outcomes in Arizona or other states, but the chill emanating from this case will encourage Republican-led states to crack down faster and harder on limits seen as aimed at minority, Democratic voters.

As The New York Times noted, "The decision suggested that the Supreme Court would not be inclined to strike down many of the measures" now spreading among states with Republican legislative majorities.

Legally, the importance of the decision is further eroding the Voting Rights Act of 1965, and shielding those seeking to make voting harder for minorities in the driver's seat.

Congratulations go to Donald Trump, proponents of the Big Steal, and a compliant Supreme Court bound either by its thinking of its conservative majority or over a reluctance to challenge states' rights. In any case, it has immediately become more difficult to put together challenges to any restrictive voting law.

From a racial viewpoint, the big hit to the Voting Rights Bill had come in 2013, in Shelby County v. Holder, which overturned the law's Section 5 requiring prior federal approval of changes to voting procedures in parts of the country with a history of racial discrimination. But Section 2 had still allowed challenges after the fact.

Narrowing the Focus

This decision involved two kinds of voting restrictions in Arizona. One required election officials to discard ballots cast at the wrong precinct. The other made it a crime for campaign workers, community activists and most other people to collect ballots for delivery to polling places, a practice critics call "ballot harvesting." The law made exceptions for family members, caregivers and election officials.

Lower courts found that there was evidence to show that limits would affect Black and Brown voters more than Whites. The Supreme Court decided the opposite way, 6-3, voted along its own conservative-liberal split. It can only be a signal to Republican legislatures that there is no legal way to support more challenges to suppression laws.

Now, Congress is making clear that it cannot pass a necessarily bipartisan bill to keep these voter restrictions from spreading. By defining the issue before it so literal and legally narrow, Supreme Court justices are making clear that had the Congress passed such a bill, they would have been open to challenging the law rather considering Republican bad campaign practices.

What the Court apparently did not consider is how voting restrictions affect living while Black in America.
The decision, written by Justice Samuel A. Alito Jr., argued that the system in Arizona offers ample opportunity for everyone to vote, even if it seems to fall heavier on some people, and concluded that the state's interest in preventing voter fraud outweighs whatever overall disparate impact the law has.

As a Washington Post columnist noted, "The fact that voter fraud is almost entirely fictional did not disturb the justice."

Building a Pattern

Instead, the Court is following a map of reducing laws meant to maintain voting by all.
In 2010, the justices said corporations have the right to use their billions to influence elections. Since 2010, the Court has killed a public financing law meant to allow candidates relying on small donations to compete with self-financed millionaires and billionaires, squashed the heart of the Voting Rights Act, claiming it was no longer necessary because racism is pretty much over, upheld voter purges that disenfranchise thousands of voters and ruled that partisan gerrymandering, no matter how clearly it disenfranchises people, is beyond the ability of the courts to do anything about.

It is now accepted Republican outlook that if elections were fair, they would lose, we need new laws that tilt those states that accept the challenge to tilt the rules to make "voting more cumbersome, inconvenient and difficult, all aimed directly at populations they believe are more likely to vote for Democrats," argued that Post columnist.

On the same day, the Supreme Court decided by the same 6-3 line-up that California legally could not require charities soliciting contributions in the state to report the identities of their major donors. That requirement had drawn a challenge by Americans for Prosperity Foundation, a group affiliated with the Koch family, and the Thomas More Law Center, a conservative Christian public-interest law firm. They said it violated the First Amendment's protection of the freedom of association by subjecting donors to possible harassment by making the information public.
Again, the court is protecting conservative Republicans seeking to influence public elections. And, again, the court is ignoring the role that dark money plays in elections.

Just curious that these are all rulings by justices labeled as conservative.

Noting originalist here.

How Congress — and your wallet — subsidize the richest Americans

ProPublica scored a fantastic scoop when it obtained and meticulously analyzed 15 years of raw income tax data on the wealthiest Americans. This leak of Internal Revenue Service records is by far the biggest and most important tax news in the 55 years that I've reported on taxes.

Thanks to the leaker, we now know beyond any doubt that the endless claims America has a progressive income tax system are bunk. A progressive system means that the more you make, the greater the share of your income you pay in taxes. Back in 2005, I got the George W. Bush administration to acknowledge that the system stops becoming progressive near the top.

But, unfortunately, ProPublica shows that it's even worse than what I reported back then.

Working people pay a larger share of their income in tax than the wealthiest of the wealthy. The top marginal tax rate on labor income is almost double that of capital gains.

A system in which people who gross about $330 a week pay a much higher tax rate than someone who makes billions each year is not just regressive; it's an outrage.

Jeff Bezos, the richest man in America, paid no income tax in 2007 and 2011. He doesn't dispute that.

Bezos was not alone. Multi-billionaires Elon Musk, Michael Bloomberg, Carl Icahn and George Soros all pulled off the same trick at least once in recent years, ProPublica reported after analyzing the IRS data. Warren Buffet pays less in tax than millions of Americans, something he and Soros have said is wrong.

Bloomberg, the former New York City mayor and owner of the financial data and news business bearing his name, paid over five years an income tax rate lower than that of the poorest half of American taxpayers.

Bloomberg Pays Just 3%

On his income tax returns, Bloomberg reported making $10 billion. Yet, he paid just 3%.

The bottom half of income taxpayers averaged $17,200 of income in 2017 and paid 4%.

A system in which people who gross about $330 a week pay a much higher tax rate than someone who makes billions each year is not just regressive; it's an outrage. It violates principles of taxation that date to the Old Testament and ancient Athens.

I couldn't help but notice that my wife, a charity CEO, and I pay a higher income tax rate than Bezos, Bloomberg and Buffett.

By the grace of Congress, those billionaires get to take unlimited losses when they make losing stock investments while Jennifer and I—and you—can deduct only $3,000 a year. So even if my wife and I live into our 90s, we will die with losses we never got to deduct.

That's just the kind of unfairness Professor Dorothy A. Brown compellingly demonstrates in her insightful and readable new book The Whiteness of Wealth.

Until now, the Wealth Defense Industry—armies of accountants, lawyers and wealth managers who specialize in using trusts, tax loopholes, off-shore corporations and foundations to benefit their 0.05% clients—tricked people. They pointed to posted tax rates, not actual rates paid by the super-super-super rich, and asserted with cherry-picked data that the rich pay a lot.

Salaried Workers Pay More

The granular data ProPublica obtained proves that the tax rates Congress puts in the law and the tax rates people pay only match up for working Americans in the bottom 99.5%.

Congress taxes workers much more heavily than billionaire capitalists who, ProPublica showed, can live income tax-free.

All of the people ProPublica wrote about are white men. Professor Brown of Emory University shows how our existing tax system favors wealth above income and discriminates against Black Americans. The design of our tax system plays a significant role in the vast wealth disparities between white Americans and people of color.

ProPublica's reporting backs her up. It showed that for most Americans, annual income taxes far exceed yearly increases in wealth.

Good Debt

At the apex of American wealth, you can live tax-free, as I showed many years ago. That is thanks to rules favoring the rich, loopholes Congress refuses to close and minimal enforcement of our tax laws against the plutocrat class.

One simple technique is borrowing against your assets. Congress doesn't count that borrowed money as income.

For example: Let's say you're a 60-year-old founder-CEO holding $10 billion of stock in your company, which grows in value at a modest rate of 5%, or $500 million, a year. You determine that you can live comfortably on $50 million a year.

You then borrow that money, putting that much of your holdings up as collateral.

Do you see where this is going? You can borrow and live on $50 million a year every year for the rest of your life without paying a cent of federal income tax.

It gets better. The IRS determines interest rates on intra-family loans. The current rates are next to zero, less than even our modest inflation rate. Given that, why would anyone sell stock and pay a 20% tax rate to buy a yacht or a new jet when they can borrow against themselves almost interest-free and watch their stocks keep rising in value?

Hunting for the Leaker

The Biden White House announced late Tuesday that law enforcement is hunting for the leaker, who faces up to a decade in prison.

Whoever dared to do this should be hailed as a national hero on a par with Darnella Frazier, the fearless teenage girl with a steady hand who last summer recorded the slow, agonizing murder of George Floyd by Minneapolis police.

We should be building statues to honor this leaker, if he or she is ever identified, just as we should erect one to honor Remy Welling, the IRS corporate auditor whose leak to me 17 years ago proved corruption in the Silicon Valley stock options system.

Thanks to ProPublica and its source, maybe Americans will at long last wake up and realize that our federal income tax, as currently designed, is a massive subsidy system for the super-rich.

And the source of those subsidies for Bezos, Bloomberg, Buffett, Musk and other multibillionaires? That would be you.

Crime looms large in the race to run the Big Apple

New York City's mayoral election is a one of a kind, one that draws more than its share of identifying Democrats both as candidates and voters. Candidates want to run a city that has held what the nation would adjudge to be generally progressive social views.

In a city where a steady hand toward small business recovery, homelessness, public transit, education and housing availability ought to dominate the airwaves two weeks out from the end of voting, crime is the hot topic.

How the city assures public safety is more complicated and nuanced than slogans and sound bites allow. Crime may not be the real issue.

Arguments in commercials, debates and social media home in on crime along with coverage that tries to elevate local crime reports into national questions. Various politicians, parties and -isms are seeking to make this election a wider referendum, pitting "defund police" believers against Back the Blue supporters.

"Fear of crime is back as a political issue in New York City. For the first time in years it could be a prime factor in who voters pick as their next mayor," The Associated Press reported matter of factly.

The lead in this contest is difficult to assess because of the number of candidates and the first-time use of a multi-choice ballot. Brooklyn Borough President Eric Adams seems to be ahead. He is a former NYPD captain, who spouts rhetoric about more targeted policing without a lot of specifics.

Several other candidates teeter in agreement to "get guns off the streets," while still trying to adhere to anti-stop-and-frisk thinking.

Of all of them, Maya Wiley, a former legal adviser to current mayor Bill de Blasio and once head of the civilian oversight police board, is most aggressive about looking anew at how police funds are spent.

It has become a slow-rolling sound-bite debate—as if there are only two choices and as if crime is the most important issue facing the city.

Without assured public safety, the general debate goes, we will not see the city fully rebounding from the pandemic.

How the city assures public safety is more complicated and nuanced than slogans and sound bites allow. Crime may not be the real issue.

Crime or Mental Health?

Yes, there is more crime in New York today than a year ago. Of course, a year ago, everyone was locked in at home. Comparisons, particularly when measured by percentages, are skewed.

Year after year, the number of shootings is up. There were 687 injured and 181 homicides as compared with the same period in 2019 (which is described as a whopping 50% increase). By comparison with the 1990s, however, those figures are way down.

Many of the most common types of crime in the city, including robberies, burglaries and grand larcenies, remain near historic lows, AP and others acknowledge.

A few very public shootings, including errant bullets injuring a toddler in Times Square and the fear of random misdoings in the subway, have boosted the public perception of rising crime. A plurality of voters surveyed in a recent NY1/Ipsos poll chose "crime or violence" as the biggest problem facing New York, with racial injustice and police reform also in the top 10.

Police and neighborhood groups are working together to respond to increased reports of guns being delivered into the city by vanloads.

At the same time, the increase of mass shootings nationwide keeps us from accepting that local situations may differ. Through the first five months of 2021, gunfire killed more than 8,100 people in the United States, about 54 lives lost per day, according to a Washington Post analysis of data from the Gun Violence Archive, a nonprofit research organization. That's 14 more deaths per day than the average toll during the same period of the previous six years.

Of course, if we really accept that premise, it begs the question of why we don't do something about limiting guns.

In My Neighborhood

This week, my wife and I dialed into our lightly attended Harlem neighborhood Zoom conversation with two police officers assigned to community outreach. It reflected some of what is going on in a wider sense.

The complaints aired were not so much about crime, or violent crime, as they were about the effects of drugs and homelessness on the streets – incidents of public urination, a guy stripping down, people congregating under the myriad scaffolded areas and a specific corner near three methadone clinics where people from across the entire city seem to congregrate. There were issues of discomfort and feelings of fear, if not actual crime.

Police expressed willingness to respond but did point out that there may be no actual crime involved. There have been nearly 30 arrests at that particular corner for drug selling in recent weeks. But there is an experimental program rolling out in which emergency medical treatment officers are paired with mental health specialists to get those with emotional problems into treatment centers.

Reports of "crime" or bad acts generally have gotten worse with waning pandemic restrictions.

Indeed, the police note that their very presence prompts lingerers at the corner to move onto less-trafficked nearby streets – with further complaints from those residents.The targeted corner resulted from efforts a year ago to clean up a similar intersection a few blocks away.

On the city's Westside, there was a very public debate over the use of an underutilized hotel where the city had sent homeless men. The individuals did not stay inside all the time. Soon normally tolerant Westsiders were complaining mightily about ugly confrontations, thefts and public urination. The city moved the men involved.

Burden on Police

There are no NYPD-equivalent homelessness and mental illness counselors. None of the candidates for mayor is talking about adding thousands of trained personnel to deal with homeless and mental illness.

So the burden for dealing with the results is falling on police to respond or to add lighting or patrols. There is little talk about what to do to reduce the city's 8,900 scaffolds, which keep the homeless out of police view.

Instead, there is fear talk about crime and violence.

The Rev. Al Sharpton, civil rights leader and frequent speaker in the policing issues getting national attention, fully acknowledges that crime and homelessness are issues in the city. "It is not true that those of us that want police reform do not also at the same time want to deal with crime," he told reporters last week.

Candidate Wiley would cut the police budget by $1 billion annually "and invest those funds directly into the communities most impacted by gun violence." A Wiley campaign ad shows police driving into a crowd of Black Lives Matter protesters last year. She says in the ad that it's "time the NYPD sees us as people who deserve to breathe," a reference to the deaths of Eric Garner and George Floyd.

Candidate Scott Stringer, who calls himself a liberal, says he would cut at least $1 billion over four years through measures such as transferring mental health response to non-police crisis teams and reducing police overtime. Kathryn Garcia skips talking about the police budget but says officers' minimum age should be increased from 21 to 25 and new recruits should be required to live in the city. Andrew Yang backs a police residency requirement as well as beefed-up oversight of the department but rejects calls to defund the police.

Adams, an NYPD officer for 22 years talks of having been a victim of police brutality as a teenager. He rejects all calls for budget changes and wants more recruitment of officers of color and less racial profiling.

It's a lively debate, but perhaps unresponsive to what is prompting it.

European Union blacklists big banks

The European Union is shaking up the financial world by excluding a group of large banks from participating in the marketing of bonds being floated to help in the economic recovery of member states.

According to reports in various business publications, the 10 banks are being singled out because of their involvement in cases in which they were accused of manipulating bond and currency markets. In other words, they are being punished for misconduct.

These moves may not have a major bottom-line impact on the banks—which include U.S. giants JPMorgan Chase, Citigroup and Bank of America. But the EU is sending an important message about corporate wrongdoing.


Large companies have come to assume they can essentially buy their way out of legal jeopardy by paying fines and settlements that have grown larger but arein still far from seriously punitive. As Violation Tracker documents, the big banks are Exhibit A for this phenomenon.

The database shows that the financial sector overall has paid more than $300 billion in U.S. penalties in the past two decades, far and away more than any other part of the economy.

Bank of America is at the top of the list of penalty payers, with $82 billion; JPMorgan, second with $35 billion; Citigroup, fourth with $25 billion.

Deutsche Bank on the List

Non-U.S. banks being singled out by the EU have also accumulated substantial U.S. penalties, apart from what they have paid elsewhere. For example, Deutsche Bank paid $18 billion and NatWest (formerly the Royal Bank of Scotland) $13 billion.

The EU's move is focused on a particular set of scandals in which these banks were alleged to have colluded to rig markets.

Among these are cases involving the manipulation of currency markets. In 2015, Citigroup, JPMorgan, Barclays and Royal Bank of Scotland each paid hundreds of millions of dollars in settlements to resolve criminal charges brought by the U.S. Department of Justice.

Unlike many other situations in which large corporations are offered deferred prosecution or non-prosecution agreements, the banks in this case had to plead guilty to the felony charges.

Yet there was little in the way of consequences beyond the penalty payments. The banks were put on probation, on the assumption this would cause them to cease their bad behavior. Yet all the banks continued to rack up regulatory violations in subsequent years.

€86 Million Hit

Reuters estimates that the blacklisted banks will lose out on about 86 million euros in syndication fees. This is a lot less than what the banks have paid in penalties. Yet, if banks begin to see that misconduct will cause them to be excluded from business opportunities, that may be more of an inducement to avoid corrupt behavior.

The dilemma for policymakers is that misconduct is so widespread in the financial sector that it is difficult to find service providers with clean hands. While excluding the 10 banks, the EU turned to a group of others to handle the debt issue. Those included the likes of HSBC and BNP Paribas, which have their own substantial corporate rap sheets. Perhaps a larger blacklist is needed.

This article is from Dirt Diggers Digest.

Congress is close to reversing this Trump-era lending loophole

Finally, there's something 52 senators can agree on: If a legal money lender is charging you Tony Soprano-level interest rates, you're at least entitled to know who they are.

The Senate voted 52 to 47 to repeal the so-called "true lender rule" that consumer advocates and plaintiff lawyers threatened consumers. It was a last-minute banking rule under the Trump administration that covers up who's really behind triple-digit interest rate loans.

If the House follows suit, which it's expected to do, many consumers will get a break they badly need.

The controversy is about non-banks using complex arrangements with banks to offer loans at stratospheric interest rates, and whether consumers were losing legal protections.

Non-bank lenders, like those in fintech (tech companies working in the financial services space), face limits by states on how much interest they can charge.

For banks, it's different. "Every state but New Jersey repealed their interest rate limits on banks," says Lauren Saunders, associate director of the National Consumer Law Center (NCLC). Any officially chartered bank can charge whatever it wants.

By partnering with what are called rent-a-banks in the industry, the non-bank lenders can enable triple-digit interest rates on loans. The actual lenders funnel the money, and the profits, through a rent-a-bank, which puts its name on the document. But critics note that it's still the non-bank company that is really making the loan, which a court might find illegal if challenged by the borrower.

'Rogue Banks'

Most banks have a degree of self-control because it's bad for their image. "You don't see 200% APR [annual percentage rate] bank credit cards out there," Saunders says. But there are a "few rogue banks," she says.

"In recent years, new fintechs have emerged that partner with banks to offer responsible small-dollar loans at affordable rates," said Sen. Sherrod Brown (D-Ohio) in an April 28 Senate hearing on the subject. But, as he noted, partnerships with rent-a-banks are at unaffordable rates.

In an NCLC-hosted webinar, Shane Heskin, a partner in the law firm of White and Williams, discussed a client: a desperate restaurant that supposedly had taken a $67,000 loan at an annual rate of 268% from non-bank World Business Lenders. Heskin said that WBL gets 95% of the payments although rent-a-bank Axos Bank is listed on the paperwork. WBL did not respond to requests for comments. Axos said that it no longer had has a relationship with WBL, that the claim of keeping only 5% of profits "is not accurate," and that "[to] the degree Axos Bank has or had third-party relationships that follow this model, and in order to ensure full compliance with applicable law, we have exercised continuous oversight over third-party service providers pursuant to a rigorous compliance program specifically designed to meet the standards" developed by the OCC.

300% Rates

NCLC says there are non-bank lenders getting upwards of 300% rates.

Some people challenge the arrangements, saying that the non-banks are the real lenders and, so, should be far more limited in rates. That's where the rule passed in late 2020 by the Office of the Comptroller of the Currency (OCC), a federal agency that regulates banks, comes into play.

The "true lender" rule—which opponents deridingly call the "fake lender" rule—says that the bank listed on the loan agreement is always the true lender.

"The predatory lender creates the program, finds the customers, processes the applications, decides who they want to approve, the bank rubber stamps the approval, and then the bank sells the loan or almost all the rights to the non-bank lender," Saunders says. "The non-bank lender is doing almost all the work and making almost all the profits." But because the bank is listed on the original loan agreement, under the recent rule, it would be the lender to a court.

In Heskin's restaurant case, the defendants are already trying to use the OCC rule to argue that claims of a rent-a-bank arrangement are "completely misguided," according to a court filing. If Heskin was able to show that WBL was the actual lender, he could argue that state limits on interest rates would apply.

"This rule eliminated confusion, uncertainty and legal risk for banks and their counterparties to enter into the small-dollar lending space, and increased financial inclusion as well as expanded nationwide availability of credit on reasonable terms," read a statement from non-bank lender Opportunity Financial, commonly called OppFi. "This is crucial for the 150 million everyday consumers who need access to credit but are unable to get it through traditional lenders. Third-party partnerships between banking institutions and fintech providers are critical to expanding access to credit and provide best-in-class marketing acquisition, customer service and technology to assess risk beyond mere credit scores to facilitate broader small-dollar lending access."

But, as the statement also says, "it's important to note that we built a strong and thriving business over the course of many years prior to the rule being finalized just a few months ago, and we will continue to do so now." Perhaps rejection of the rule won't hurt OppFi, or other non-bank lenders, that much.

Those in the industry point to the cost of low-dollar loans, and losses from loans that are never repaid, as the reason for very high rates.

"Their default rates are high and that's the problem," Saunders says. "That's not an excuse for predatory lending. That's the reason it should be illegal. If people can't handle their current debts, high-cost debt is not the answer."

As for losses, the lenders "figured someone needed to pay 13 months on a 42-month period to break even, then it was profit," says Saunders. "Their goal was to find people to make enough payments to make a profit."

The Federal Reserve in a 2015 study noted that the break-even annual percentage rate, including writing off defaulted loans, for a $594 amount was, indeed, 103.54%. But when the borrowed amount rose to $2,000, the break-even was about 40%. At $13,057, the break-even APR was 16.25%.

In its financial report on 2020 operations, OppFi annual revenue of $291 million and net income of $77.5 million. That's an extremely healthy before-tax profit rate of 26.6%. Profits between 2019 and 2020 were up more than a third.

If for larger amounts a lender charges 50%, 70%, 100%, 200%, or more, on the whole, they're making good money. If a lender ensures a minimum amount of loan, the losses may not be as overbearing as they are often portrayed.

Here's the truth about COVID inflation

Lots of luck right now trying to find a bicycle for under a thousand dollars. And if you insist on building a new house right now the price of lumber will be dear, adding perhaps $4,000 to construction costs for a typical home.

But don't assume that ruinous inflation is on the way. It's not. These are just temporary bumps and those who just wait a bit will see prices fall back.

It may be hard to appreciate this given all the scary stories in the news about inflation, stories that often lack context and nuance. But don't be scared.

And don't pay attention to the brief ups and downs in the price of stocks because half of American stock trading is done not by investors but by traders whose computers move so fast they can be in and out of a stock in less than a second. Besides, stocks don't make goods or services so they aren't part of the economy that creates jobs and produces paychecks.

Yes, the news is full of unsettling stories about inflation, but if you read carefully, you'll notice that the talk is about prices rising perhaps 4% this year. Not a big deal.

Indeed, the highest inflation rate ever in our country was 29.8% in 1778. Since 1913, the highest rate was 19.7% in 1917, according to Investopedia. In 1946, inflation was 18.1%

In 1979 and 1980 combined, prices rose by a quarter. Now that would be scary today, but that is not what is happening.

Post-WWII Boom

This is more like 1946 when soldiers and sailors came home and wartime rationing left huge deficits in people's demand for goods. No cars or trucks had been built in America, other than to prosecute World War II, since 1941. People were getting married, so they needed homes and apartments and there was a boom in babies that lasted until the end of 1964. That made prices soar even though the economy fell into a brief recession as we moved from a wartime economy to a peacetime economy.

That was then; this is now. The pent-up demand from the pandemic is for only 15 months, not almost four years as in the 1940s.

Also, today, we have 8.2 million fewer jobs than before the Covid pandemic. We should have added another three million or so jobs since the coronavirus first appeared in America. That means millions of households are struggling just to pay the rent and eat. But for the social safety net spending under both Trump and Biden, we would be in a very deep recession. Instead, our economy grew 6% in the first quarter, roughly double the growth under Trump in his first three years.

Working, Spending Less

At the same time many millions of households, a large majority of them, continued working. Their spending fell, however, because they didn't have to go into work. They stopped going out to restaurants as they ate at home. Dry cleaners saw their customers evaporate. These people deferred spending on vacations and big purchases like cars and trucks.

Some of those who kept on working paid down or paid off their debt. Others added to their savings. In both cases they are primed to spend. That will mean a surge in consumption, but it won't last.

'Price Indifferent'

These folks can afford to be what economists call price indifferent. They may not be happy about it, but if the price of a bicycle doubles, they can just hand over the money. That won't go on for long. Bicycles are still being manufactured and once the surge in demand is fulfilled retailers will no longer be able to charge premium prices.

For the 12 months ending in April overall inflation, before adjusting for seasonal factors, was 4.2%, according to the government Bureau of Labor Statistics. That's the highest rate in this century, but it's not ruinous.

Used Car Prices Zoom

Prices of used cars and trucks accounted for a third of the inflation in the past 12 months. These prices were up 10% in April, the government reported. Prices surged because people who have put off buying used vehicles rushed to market as the economy and jobs began opening.

The prices of some foods are up right now because after 15 months of limited mobility, some shortages of crop workers and weather, both droughts and deluges. Trump's tariffs that savaged the price of American soybeans and enriched Brazilian soybean farmers also played a role.

These are temporary effects. We always see such temporary effects after a major shock to the economy.

We still have a shortage of money in the hands of most Americans. Purchasing by those who were able to save a great deal more during the pandemic in the short term is causing this blip of inflation.

Think Peaches vs. Plums

This is pretty much the same effect we see when bad weather ruins the peach crop and prices rise so much that many people decide to eat plums, apricots or apples instead. Likewise, when a bumper crop of peaches hits the market and prices fall, people by fewer plums, apricots and apples.

The key reason inflation is not going to turn long-term and ruinous is the huge excess cash held by those toward the top of the income and wealth ladders. They have far more cash than can be profitably invested. Just a year ago there was serious talk the banks might start charging people to hold their cash, which we have seen in a very limited fashion in Europe.

America is so awash in cash, though highly concentrated cash, that banks pay a tiny fraction of 1% on savings accounts. If you have $25,000 in your bank it may pay just 20-cents interest each month.

That's because demand for cash in the business world is extremely weak compared with the oceans of greenbacks being held in checking, savings and money-market accounts.

Every day, banks pitch mortgages to people with solid credit scores at about 2% interest. Back in the early 1980s, mortgages ran 12% to 14%.

So, if all the flowers budding in the warming Spring weather are making you desire a new bicycle, just hold off for a bit. Ride your old bike, arrange to borrow your neighbor's or take a walk. As soon as the people who are price indifferent have fulfilled their demand for new bikes, prices will fall back.

Why Congress and the White House aren't treating the Colonial Pipeline security breach seriously enough

Whether the cyber-attacks that shut 5,500 miles of oil pipeline this weekend are coming from private crooks or a state-sanctioned effort is almost beside the point. Somehow our response to this attack, as the big one apparently triggered by what looked like Russian-sponsored hackers on government agencies and companies last month, ought to be generating a lot more urgency.

The idea that a small group of bad guys in a faraway darkened room can control our electric grid, our fuel supplies, our business functions, our very defenses virtually at will should be as frightening as the prospect of powerful bombs in the likes of Iran or North Korea.

In 10 minutes, these same people will be in a position to send electric cars and trucks awry or kill appliances of industrial-scale built with Internet or network connections.

Instead, what we're hearing is much concern about whether oil and gas costs are going to go up in the next weeks as the result of immediate shortages in delivering 2.5 million barrels of oil a day or almost half of production across the East Coast. Actually, if operations are restored within a week, even that result is unlikely.

What we're not hearing our Democratic and Republican leaders on the barricades over cyber at anywhere near the volume we hear harangues about nonexistent election fraud already six months old or whether so-callef socialism is going to end the American Dream as we know it or about a dozen cancel culture disasters that some perceive.

Instead, our Congressional leaders seem content holding occasional check-in hearings and leaving the actual work to the Cyber Command agencies to resolve.

One might even call such defenses critical to, um, infrastructure in a realistic look at current technology.

It might be nice to see an approach to international policing approach the fervor of our continuing community policing debate.

Colonial Pipeline system map (CP)

In the next week, the administration is expected to issue an executive order intended to bolster the security of federal and private systems after two major attacks from Russia and China in recent months caught by surprise American companies and intelligence agencies.

Meanwhile, Colonial Pipeline, a private company, is being tight-lipped over whether it plans to pay a ransom demanded by the suspected criminal hacker group, or has already paid, or when normal operations will resume from closings ordered to prevent further problems from the hackers.

The FBI, the Energy Department and Cyber Command at Fort Meade, Md., all have dived into the detective work, along with FireEye, a private security company hired by Colonial.

This time, officials said they believed the attack was the act of a criminal group, rather than a nation seeking to disrupt critical infrastructure in the United States. But at times, such groups have had loose affiliations with foreign intelligence agencies and have operated on their behalf. That doesn't make it better.

Breaking In

Ransomware is the uncharted attempt by evildoers to threaten damage to computers connected into a network, encrypting the business data that control increasingly vast operations in return for payment of millions of dollars and the decryption code. It's kidnapping without emotion. When backed by state powers, it veers into somewhere beyond espionage and into an actual act of war.

The recent disclosure of a massive breach of government agencies and corporations explains sanctions against Russia last month. If there is more retaliation planned, we won't know about it until Moscow's red lights turn green. We still don't even know how deep and wide the break was. In either case, this is where I'd like to see all that Law & Order haranguing wasted on suppressing votes and threatening jail time for peaceful protests go instead. Where's the Blue in these cases? Where's the send-troops-to-Afghanistan-for-20-years demand?

Colonial Pipeline, based in Georgia, said the ransomware attack Friday affected information technology systems and that the company moved proactively to take certain systems offline, halting pipeline operations, to forestall further damage.

I've worked in news companies that dealt with hackers who entered networks that were private and not connected to the Internet, and experienced both in the fear that our newsroom operations could be touched—they weren't—and in the difficult creation of defensive shields and practices. Hackers often can find doors opened through getting an employee to unintendingly allow a malicious piece of software to enter through an otherwise innocent-looking email. Or they can criminally seek to obtain employee identification information allowing more direct access.

It can be hard to protect against in a working environment or a society that prizes individualism over security, which is exactly where America finds itself. We're relying more and more on machinery and the networks that increasingly operate it, often without human intervention. That creates opportunity for bad guys.

The Associated Press notes that while there have long been fears about U.S. adversaries disrupting American energy suppliers, ransomware attacks by criminal syndicates are much more common and have been soaring lately. The Justice Department has a new task force dedicated to countering ransomware attacks across types and size of businesses or agencies.

So far, the advice in the security industry and government alike is akin to coronavirus—take heed of the problem and take common-sense steps toward hardening network defenses. There are no vaccines that outlast the latest and greatest hacker attempts.

Rising Attacks

Attacks by criminal syndicates operating out of Russia and other countries reached epidemic proportions last year, costing hospitals, medical researchers private businesses and state and local governments and schools 10s of billions of dollars, AP reports. Average ransoms paid in the United States tripled to more than $310,000 last year, as compared with the cost of an average outage of business for 21 days for each incident, according to security firm Coveware.

American cyber folks say that some of these criminals have worked with Russia's security services and that the Kremlin benefits by damaging adversaries' economies and cover for intelligence-gathering.

Anne Neuberger, the Biden administration's deputy national security adviser for cybersecurity and emerging technology, told AP that the government has an effort under way to help electric utilities, water districts and other industries defend themselves. The goal seems to be to ensure that control systems serving 50,000 or more Americans have the core technology to detect and block attacks. The White House has announced a 100-day initiative aimed at protecting the country's electricity system by encouraging owners and operators of power plants and electric utilities to improve capabilities for identifying cyber threats to their networks.

U.S. Cyber Command and the Department of Homeland Security last month released details on eight code files attributed to the Russian Foreign Intelligence Service that were used in the so-called Solar Winds attacks discovered earlier this year. The disclosure was described as part of "Hunt Forward" operations to generate insights to understand the source of attacks.

It's not exactly 100 million shots of vaccine in the arm in 100 days, but it is a start. I'd prefer that we wipe out the bad guys rather than issuing sanctions and warnings to protect ourselves.

All roads for Biden's infrastructure plan lead through West Virginia

Moderate Republicans announced yesterday, Earth Day, a counter-offer to the Biden administration's $2 trillion-plus infrastructure proposal.

Led by Sen. Shelley Moore Capito (R-W.Va.), the moderates put out a two-page glossy marketing blurb that significantly scales down Biden's package. It cuts critical infrastructure investment and has a price tag of $568 billion.

Some of the ways Republicans suggest going from $2 trillion to $568 billion are by cutting the investments in safe drinking water and essential repairs on public schools.

As it happens, Capito's own state of West Virginia is playing a pivotal role in hindering Biden from moving forward with his historic infrastructure package. The two senators from West Virginia—Capito and Joe Manchin (D-W.Va.)—may be from opposing sides of the aisle, but they have each put up similar obstacles that the Biden team must navigate to get its much-needed infrastructure package through.

No Corporate Tax Increase

The common theme among the two West Virginian senators? Both senators are doing their best to ensure that wealthy corporations don't have to pay for the much-needed upgrades of the nation's infrastructure.

Their views ignore two big problems for the majority of their constituents: West Virginia desperately needs infrastructure improvements, and both senators promised constituents they were going to advocate for, not obstruct, it.

In a unique power dynamic, West Virginia's Manchin is the Democrats' major roadblock in passing Biden's plan by threatening to vote against the bill, while Capito is the GOP's point person in trying to severely trim a package that could add 2.7 million jobs.

Manchin's reasoning? He says he won't vote for the bill if the corporate tax rate is raised from the 21% rate enacted under Trump to 28%. The rate before Trump was 35%, so the Biden plan is a halfway restoration.

The GOP plan announced by Capito doesn't have any mention of corporate America paying for the plan. Instead, the GOP suggests that users of electric vehicles get taxed.

A 51-Vote Majority

The Senate parliamentarian ruled that a simple majority of 51 Democrats can pass Biden's infrastructure package and some other legislation, circumventing the Senate's arcane filibuster rule that requires 60 votes for most legislation.

But this only works so long as all 50 Democrats are unified, allowing Vice President Kamala Harris to break the tie.

That Democrat Manchin won't vote for the bill if the corporate tax is increased, puts the other West Virginia senator in a unique position. Capito is standing somewhere between Biden and Mitch McConnell (R-Ky.) The notoriously obstructionist Senate minority leader, McConnell, vowed that no Republican will vote for Biden's proposal.

But McConnell will have an especially tough time corralling all Republicans. Many promised major infrastructure spending all throughout the Trump presidency but never delivered—not even when the party held majorities in both houses of Congress.

As far back at the Continental Congress, infrastructure spending has been the preferred bring-home-the-bacon move for representatives and senators. There are few less controversial ways to spread federal dollars on home-state projects.

Moderate Republicans

And in recent months a loose, if tight-fisted, coalition of Republican senators has emerged, showing some willingness to stray from McConnell's sternly shepherded senatorial flock. In February, seven senators voted to convict in Donald Trump's second impeachment trial. And 10 Republican senators, including Capito, proffered a Covid relief package that, like Thursday's infrastructure counteroffer, would have cost hundreds of billions less than Biden's.

Both Manchin and Capito say that they want to improve their desperately poor state's infrastructure. Twenty percent of West Virginia's bridges are deemed structurally deficient, the worst in the nation. West Virginia broadband quality and access rank 45 out of 50. And the state has the worst drinking water in the country.

Joint Efforts

In November, Manchin and Capito jointly secured a federal investment of $485,000 to improve water from the Appalachian Regional Commission (ARC), a partnership between the federal government and 13 states. Biden just nominated Joe Manchin's wife Gayle Manchin to be the co-chair of ARC.

The two senators put out a joint statement taking credit for the ARC money, and Manchin promised to keep fighting for more "good-paying jobs and ensuring our fellow West Virginians have access to basic human needs such as clean drinking water."

Biden's infrastructure plan invests $111 billion to improve water infrastructure. So why isn't Manchin advocating for West Virginia's share of this historical and unprecedented level of investment?

"Everything that's being proposed is a drop in the bucket compared to what's needed," said Stephen Smith the co-chair of a group called WV Can't Wait.

Big Campaign Donors

Overall, Smith speaks of West Virginia with pride, but he also points to frustrations after 150 years of "outside interests getting rich off of West Virginia. First timber; then coal; now natural gas, agribusiness and Big Pharma."

So it's no surprise to Smith that Manchin may hold up national legislation to protect corporate interests, "His top donors are financiers, corporate leaders—he doesn't answer to the people of West Virginia. He's made a career of doing for those at the top."

Eric Engle, of the Mid-Ohio Valley Climate Action Group, also supports Biden's infrastructure bill. He considers the climate change component of the bill a game-changer for the Mid-Ohio region.

"This infrastructure bill is an enormous start, and we support it." He points to all of the jobs it probably would create in West Virginia: "Good jobs, union jobs, family-supporting jobs, living wage jobs and all with a focus on a sustainable green economy."

'DINO Joe'

Like Smith, Engle isn't surprised Manchin—whom he calls "DINO Joe," as in Democrat in Name Only—may block any investment:

"If you're a Democrat, why are you blocking your own party's initiatives? Why is it that the vast majority of the time you seem to be more supportive of the Republican objective?"

Arguably, since Trump overwhelmingly won in West Virginia, a Democratic senator is considered especially vulnerable in the state. Both Engle and Smith dismiss this as a media narrative not reflective of reality.

Manchin, who was governor before running for the Senate, is not up for re-election until 2024. "If he keeps holding up progress on the Democratic platform in the Senate," says Engle, "no West Virginia Democrats are going to vote to re-elect him."

Powerful Position

All this again puts Capito in an unusually strong bargaining position. Despite her own low-ball proposal, Capito is on the record saying there's plenty in the Biden plan that she likes. She expressed confidence after a February White House meeting with Biden and Transportation Secretary Pete Buttigieg, and last month she positively promoted parts of Biden's plan.

Capito is leading the infrastructure negotiations. But it remains to be seen whether she—like Sen. Susan Collins (R-Maine), who led moderate Republicans to offer a severely downsized version of the Covid bill—will, in the end, choose to vote no if Biden turns down her skinflint counterproposal.

Unlike Collins, who had no particular dog in the Covid hunt, Capito has long tied her political fortunes to winning federal dollars for West Virginia improvements. To ultimately obstruct her very own pet projects would, no doubt, leave her with a lot to explain to folks back home.

If Biden and the Democrats find themselves scrambling for 50 votes, they might still have to make a pilgrimage to West Virginia—to woo Capito rather than Manchin.

They'll just have to hope that bridge doesn't collapse as they cross it.

BRAND NEW STORIES
@2022 - AlterNet Media Inc. All Rights Reserved. - "Poynter" fonts provided by fontsempire.com.