Economy

Nothing Certain But Death and Tax Evasion

Today's Balance Sheet: Romney meets the 99 percent, and the 1 percent avoids paying taxes. 

The Internal Revenue Service recently updated its tax-gap estimate using 2006 tax year liabilities, and the numbers show that underreported income—largely from the one percent—remains a big obstruction to collecting taxes. Even though 83 percent of the country voluntarily pays its taxes, there are still $450 billion worth left unpaid. The IRS believes tougher enforcement could help it collect an additional $65 billion, but that still leaves $385 billion that will never be paid. That's a lot of money—enough to pay for more than 11 payroll-tax-cut bills like the one passed by Congress at the end of last year. A study into the collection gap found that over 50 percent of tax evasion was undertaken by individuals with business income, and that misreporting is highest among those who have an adjusted gross income between $500,000 and $1,000,000. Even as tax evasion has increased, the number of IRS workers has decreased —falling from 116,673 in 1992 to 84,711 in 2010—leaving the institution...

Same Schtick, Different Day

AP Images/Vince DeWitt
DERRY, NEW HAMPSHIRE— Newt Gingrich is a master of Stalinist history. In the New Hampshire campaign’s closing days, he made much of his own role in the job creation of the Reagan and Clinton years (though he never mentioned Clinton by name) and contrasted himself with his rivals by touting his ability to reach across the aisle during Clinton’s presidency. As Gingrich recounted it to a crowd of 300 gathered in a high-school auditorium in Derry late yesterday afternoon, he and Clinton both “concluded very early on that we really wanted to get together to do something for the country.” They would meet privately, he said, while bashing each other publicly. His account is notable for its obvious omissions. It makes no mention of Gingrich’s forcing Clinton to close the government down at the end of 1995 (Clinton wouldn’t accede to Gingrich’s demands to cut Medicare). It leaves out Gingrich’s decision to have congressional Republicans campaign for office in 1998 on a platform of impeaching...

Romney's Mini-Flub

Thanks to the array of options to watch TV online, I don't bother paying for cable at my home in DC. But I've been able to reacquaint myself with the hyperbole of cable news as I've been on the road reporting. This morning I learned of Mitt Romney's "breaking news" flub from MSNBC. At a morning stop in New Hampshire, Romney said, "I like being able to fire people who provide services to me." With increased attention being paid to Mitt Romney's time buying and selling companies, now might not be the best moment to revel in handing out pink slips. Hours later, Jon Hunstman has already incorporated the line into his attacks on Romney and the DNC was quick to push out this video clip: Politicians always disavow these kinds of quotes as being taken out of context by the media, and this is the rare instance where that's a proper defense. Here's the full quote from Romney discussing health insurance: I want individuals to have their own insurance. That means the insurance company will have...

Battle of the Supremes

The Montana high court upholds the state's anti-corruption laws—and challenges Citizens United in the process.

The Montana Supreme Court in Helena stands just off the main drag, dramatically called Last Chance Gulch Street. The picturesque setting is fitting for an institution that has just challenged the U.S. Supreme Court to a legal showdown on the enormously important question of whether corporations should have an unfettered right to dominate elections or whether citizens have the right to adopt commonsense protections to defend democratic government from corruption. Get the kids off the streets, because this could be an epic confrontation. In upholding the section of Montana’s Corrupt Practices Act that restricts direct corporate political spending, the Montana Supreme Court attacked the Citizens United fiction that independent expenditures aren’t corrupting and that corporate political spending isn’t a danger to democratic government. The Montana jurists’ decision in Western Tradition Partnership states unequivocally, “The impact of unlimited corporate donations creates a dominating...

Occupying Grand Central Station

OWS rings in the new year with a fight against NDAA.

Sargeant Shamar Thomas protests against NDAA Tuesday at Grand Central Station.
Five hundred people returned to Zuccotti Park on New Year's Eve, with drums, chants of "Whose Year? Our Year!", and a tent, which they say they gave to police in exchange for entrance to the park. An hour before midnight, police and occupiers attempting to remove metal barricades around Zuccotti had a violent confrontation and, by 1:30 a.m., police had cleared activists from the park. Tuesday, occupiers mobilized against the National Defense Authorization Action signed by President Obama on New Year's Eve. After a lunchtime march to the offices of New York senators, occupiers gathered in the Grand Central train station, where multiple people were arrested while leading "People's Mic" recitations of an anti-NDAA script. The indefinite detention provisions of the NDAA have become a lightning rod for Occupy actions, including Philadelphia—where activists presented "Fascist of the Year" awards to actors portraying their Senators—and Iowa, where they occupied the hotel headquartering the...

The GOP's Bogus Attack on Jobs

By now, you’ve probably heard that the December jobs report was pretty good; the economy grew by 200,000 jobs, and unemployment declined to 8.5 percent. Still high, but a positive trend given the circumstances. As you might imagine, this presents a problem for the Republican presidential candidates, who routinely accuse President Barack Obama of destroying jobs with his policies. Their solution has been to fudge the numbers. To wit, here’s Mitt Romney with a statement on today’s report: Under President Obama, we have lost 1.7 million jobs — America deserves better. Eventually our economy will recover, America always does. But President Obama’s policies have slowed the recovery and created misery for 24 million Americans who are unemployed, or stuck in part-time jobs when what they really want is full-time work. As President, I will refuse to accept high unemployment as the ‘new normal’ for our economy. [Emphasis mine] This is only possible if you include every job loss in 2009,...

Hitting the Ground Running

Richard Cordray wastes no time introducing a financial supervision plan with the Consumer Financial Protection Bureau.

Republicans are still huffing and puffing about President Barack Obama’s recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau, but that hasn’t stopped the new director from getting right to work. Cordray announced Thursday the launch of a nonbank supervision program to supplement the agency’s monitoring of banks. In layman’s terms, a "nonbank" is a business that doesn’t accept deposits but provides financial services that include pay day loans, credit ratings, debt collection and some mortgage lending. Until now, most of these nonbanks have operated without federal regulation. The new supervision program will be equipped to investigate them and enforce rules. After months of cooling his heels while Republicans blocked his nomination, Cordray can finally address some of the predatory lending and usury that led in part to the financial crisis.

The Problem with Right to Work

One of the things to pay attention to in Mitt Romney’s latest South Carolina ad is his implicit defense of the state’s “right to work” law, which makes it more difficult for unions to organize. “The National Labor Relations Board, now stacked with union stooges selected by the president, says to a free enterprise like Boeing, ‘You can’t build a factory in South Carolina because South Carolina is a Right to Work state,’” Romney says in the ad. “That is simply un-American. It is political payback of the worst kind.” Combine this with his attack on President Obama as a “crony capitalist,” and I wouldn’t be surprised to see Romney tout right-to-work laws as part of his strategy for reviving the economy. The problem, of course, is that said laws do nothing of the sort. The Economic Policy Institute has a great primer on the actual effect of right-to-work laws on workers, wages, and employment. On the whole, RTW laws “reduce wages by $1,500 a year, for both union and nonunion workers”; “...

You're One of the Richest People in the World. You.

CNN Money delivered some startling news yesterday. Reporting on World Bank economist Branko Milanovic's book, "The Haves and the Have-Nots," you are one of the haves. Here's the deal: It only takes $34,000 a year, after taxes, to be among the richest 1% in the world. That's for each person living under the same roof, including children. (So a family of four, for example, needs to make $136,000.) ... In the grand scheme of things, even the poorest 5% of Americans are better off financially than two thirds of the entire world. Do check out the chart : I could be wrong, but I'm guessing that you're in the global one percent, or close to it.

Earning Their Hatred

Thank God for elections and election years. An election gives our president, who must face the voters in November, permission to think and act like a partisan. It’s long overdue. President Obama has boldly made key recess appointments to the National Labor Relations Board (NLRB) and to the Consumer Financial Protection Bureau (CFPB). The Republican strategy has been to destroy these agencies by failing to confirm appointees. In the case of the new CFPB, that meant nobody in charge to make key decisions to make the new bureau operational. In the case of the NLRB, it meant the lack of a quorum would paralyze the agency altogether. In naming Richard Cordray to head the CFPB, the president has called the Republicans’ bluff. This was the agency that Elizabeth Warren invented and dearly hoped to lead. Republicans made clear they would block her appointment. When Obama passed her over in favor of the less-well-known Cordray, former Ohio Attorney General and also a strong consumer advocate,...

Bye Bye Bachmann

AP Photo/Chris Carlson
WEST DES MOINES, IOWA —Less than 12 hours ago, Michele Bachmann seemed determined to prove all the haters wrong and vowed to waste the next several weeks of her life in South Carolina. Turns out it was all a ruse to gather the media for one last headline-grabbing event. Bachmann announced that she would suspend her presidential campaign this morning at the Marriott in west Des Moines. For the first time in her career, Bachmann seemed to have landed on planet Earth. "Last night, the people of Iowa spoke with a very clear voice, so I have decided to stand aside," she said. Boy, they sure were clear. She came in second to last, just ahead of Jon Huntsman, who drew 5 percent of the vote. That equals 6,073 votes, only a slight increase from the 4,823 people who supported her at the Ames Straw Poll in early August. Back then it looked as if Bachmann could threaten Mitt Romney for the GOP nomination. But the entry of Rick Perry into the race stole her momentum, and she never recovered. Her...

Calling for a Convention

Amending the Constitution is our best bet for fixing Congress.

To keep money from corrupting our democratic politics, we need constitutional change. No doubt lots can be done by statute alone—meaningful transparency rules, such as the Disclose Act, and small-dollar public funding, such as the Fair Elections Now Act. The Supreme Court, however, has all but guaranteed that these won’t be enough. Transparency by itself won’t build trust; public funding can only be voluntary; and independent expenditures are all but certain to swamp even the best reforms tolerated by the Court. If we’re ever going to get a Congress “dependent,” as James Madison put it in Federalist Paper No. 52, “upon the People alone,” and not “the Funders,” it is clear that Congress will need new constitutional authority. Yet it is also clear that Congress won’t ask for this authority itself. The chance that this Congress, or any Congress elected in the current environment, could muster 67 votes in the Senate to alter Washington’s economy of influence is zero. Congress is the...

Toppling the Money Empire

Grassroots movements can lead the way in taking big money out of politics.

Election Day 2012 looks like it is going to be Groundhog Day 2012. Another election dominated by money. Another series of promises made on the campaign trail, broken as soon as donors and lobbyists come calling when legislatures convene. For the public and most lawmakers, the problem is clear. Our present system has long rewarded politicians who rely on deep-pocketed supporters to provide massive amounts of cash to pay for increasingly costly campaigns. A string of recent Supreme Court decisions has exacerbated the problem, allowing corporations nearly free rein to attack candidates who present a threat to their bottom line, pushing officeholders to seek even more money. This adds to the pervasive sentiment that our elected officials’ primary function is to raise money. Large numbers of voters have disengaged from a system in which they don’t seem to matter. With no end in sight and increasing frustration driven by a stagnant economy, American democracy is in peril. The good news is...

Stephen Lerner's 2011

“We must expand from one-day marches and demonstrations to weeks of creative direct action and activities,” wrote Stephen Lerner in New Labor Forum , a quarterly left-labor journal, several weeks before Occupy Wall Street took shape. One way to do that, he continued, “is to build these kinds of longer and more involved protests around students and community groups that have the energy and willingness to take time off from their day-to-day lives to engage in more intense activity (which includes the risk of getting arrested.)” Lerner wasn’t volunteering activists to do anything that he hadn’t already done. As the primary architect of the Service Employees International Union’s Justice for Janitors campaign, which remains the most successful (and against-the-odds) private-sector organizing campaign of the past quarter-century, Lerner had planned and participated in dozens, if not hundreds, of disruptive demonstrations over the years to dramatize the janitors’ cause. At the same time, he...

The SEC Does Wall Street's Bidding

The SEC Doing Wall Street’s Bidding Robert Kuttner In the right-wing revisionism of what caused the financial collapse, Fannie Mae and Freddie Mac are leading villains with the federal Community Reinvestment Act in a supporting role. Supposedly, Fannie and Freddie lowered their standards, purchased lots of subprime mortgages, and were major contributors to the housing bubble and crash. In this fable, government pressured banks to make unsound mortgage loans to meet the goals of CRA. Just about everything in this story is wrong. For starters, subprime was invented on Wall Street, by private investment bankers. Fannie and Freddie did buy some of the paper, but only very late in the game in 2005 and 2006, when the bubble was already about to burst. As for CRA, most of the lenders that originated sub-prime loans were unregulated mortgage companies, not subject to CRA. But the fable is very useful to the right, on three counts. It shifts the blame from Wall Street banks and the culture of...

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