I recently re-watched the 2010 Oscar winning documentary “Inside Job,” http://www.imdb.com/title/tt1645089/ and was reminded just how little things have changed since it first came out. Especially since most of the circumstances which lead to the “Great Recession” of 2008 which cost the middle class 40% of their wealth remain in place.
2010 saw many sweeping changes in how politics and business were done in this country, starting with the Supreme Courts “Citizens United” decision http://en.wikipedia.org/wiki/Citizens_United_v. Federal_ Election_Commission which struck down provisions of 2002 McCain-Feingold Act prohibiting corporations, nonprofits, and unions from making independent expenditures and “electioneering communications” within 60 days of a general election or 30 days of a primary.
It should be noted that then Senate Minority leader Mitch McConnell, and now Senate Majority Leader was one of the plaintiffs in a losing case heard by the Supreme Court in 2003 – claiming this was an unconstitutional infringement on First Amendment rights, and that he led several Senate filibusters to block its passage.
Predictably, the Supreme Courts January 2010 decision unleashed a flood of campaign contributions that year which swept the Tea Party influenced Republicans back into control of the House. Four years later that same dynamic helped Republicans regain control of the Senate
Senator McConnell was one of the driving forces behind Congress’s recent “CRomnibus” session which tacked on several last minute and from all appearances unread riders onto the appropriations bill (H.R. 83). Changes which rewarded Wall Street by allowing a ten fold increase in campaign contributions and relaxing the regulations on derivatives which were at the heart of the financial meltdown back to pre-meltdown standards.
The language for this rider in the appropriations bill was literally taken from Citibank’s legislative proposal.
Nor is it any coincidence that Senator McConnell’s has publicly stated his first priority as the new Senate leader is to further reward his party’s benefactors … I mean pass the Keystone XL bill.
Also hidden in this appropriations bill H.R. 83 http://www.gpo.gov/ fdsys/pkg/CPRT-113HPRT91668/pdf/CPRT-113HPRT91668.pdf was another rider (see pages 809-829) which essentially gives Wall Street unilateral power to cut retirement benefits to millions of current retirees whose pension accounts are in the same private plans that they nearly wiped out six years ago. Allowing them to effectively gut the 1974 Employee Retirement Income Security Act (ERISA) in a way they were unable to do with the proposal to privatize the Social Security Trust Fund first introduced during the Bush era.
What few people realize about the recently passed “CRomnibus” appropriations bill is just how radical it really is. Budget laws are supposed to decide what to fund and what to cut. A budget bill is not supposed to make new laws, or to rewrite laws, but that is what happened.
Nor do most people know that this special “rider” to the budget bill was first introduced last spring by the House Budget Committee. Yet somehow when the committee approved this anti-labor pension rule, no record could be found listing which members voted for the radical change, and who opposed it. http://www.alternet.org/economy/how-wall-street-and-its-democratic-allies-are-waging-war-against-pension-funds
Riders like this are not isolated incidents, they are part of a rapacious mindset summarized by Goldman Sachs CEO Lloyd Blankfien who said in 2012 that people expecting to receive Social Security and pensions in their twilight years “are not going to get it,” claiming that their lifelong investments are something that “we can’t afford.” Apparently he is convinced that that “what’s yours in now mine,” that this money somehow belongs to the entitled “we” of corporate CEO’s and the 1%, not to the people who paid into them throughout their working lives.
If you want to know how this scam works in Virginia, look no further than how McDonnell and the Republican House borrowed against the Virginia Retirement System for years to cover the Commonwealth’s operational expenses, concealing their sleight of hand in plain sight with deferred pension contributions. In the case of the 2010-11 budget these deferments accounted for nearly one-fourth of the budget.
The General Assembly as a whole and particularly the Republican dominated House of Delegates knew full well when they set up their plan to repay the retirement fund in 2010 with a 10 year IOU that would be paid back at 7.5% interest a year starting in 2013 that all they were doing was kicking their long term financial responsibilities down the proverbial road. http://www.richmond.com/news/state-will-dip-into-pension-fund-repay-with-interest/article_5fc2cbea-c766-53af-9e9b-188950f8ae8d.html
The intent behind the General Assemblies delaying tactic is simple, to set the stage for defunding and ultimately bankrupting the states pension plan. It is a tactic that fits in nicely with conservatives of both parties long standing desire to privatize the assets of what remains of America’s middle class. Starting with their pension plans, and ending with privatizing that last remaining pot of gold, Social Security.
Another way to view what is happening is that as an economic system, capitalism has reached its “mature” and perhaps terminal phase. One which has evolved from making its profits by selling their customers the best possible product at the lowest cost possible, to focusing on capturing increasing numbers of customers in domestic and international markets, to engaging in monopolistic and anti-competitive practices to maintain their stranglehold on their customers, and finally to exploiting and extracting whatever wealth their “customers” have left.
In that regard, the General Assemblies strategy is not a new one, or a particularly creative one. It mirrors how the Republicans in Congress during the Bush era designed their tax cuts for the so called “job creators” to expire in 2010, conveniently during the middle of the next administrations term, leaving their mess for someone else to clean up.
Such short sighted actions have contributed mightily to the states current budget shortfall, and have been hamstringing counties ability to function because over the past few years effectively passing many of what used to be the states “operational” costs downward to the counties. This deferred malfeasance pales in comparison with the way the General Assembly has been inadequately funding the state largest obligation, Medicaid for years.
Here in Virginia, their deliberate underfunding of Medicaid is a slow motion economic disaster. Republicans know that if they were to allow the ACA to pass in Virginia given its huge impact on the states budget they would have little choice but to acknowledge just how much they have been financing the Commonwealths budget on smoke and mirrors.
In this regard, it is a trait they share with many other Republican dominated state assemblies, attempting to hide their fiscal “elephants in the middle of the room” in plain sight hoping no one notices.
Republicans along with their conservative Democratic brethren are deathly afraid that if this information becomes common knowledge, even at this late stage of the game it might tilt public opinion and the balance of power away from them. They are prepared to do whatever is necessary to prevent that from happening, starting with denying there even is a problem no matter what the cost.
It was this mindset that was the heart of the Republican’s vehement obstructionism over “Medicaid Expansion” aka the Affordable Care Act in states that they controlled, and it is essentially the same dynamic that will be driving their resistance to implementing any of the EPA proposals to reduce harmful emissions from coal fired power plants in 2015.
When the General Assembly convenes later in January you will undoubtedly hear Delegate Peter Farrell claiming along with Senators Garrett and Reeves that the Commonwealth needs across the board budget cuts of 5% this year and 7% next over the next 2 years if the state is to balance the budget.
If you’re interested in asking them why, you can contact them at:
DelPFarrell@house.virginia.gov (804) 698-1056,
firstname.lastname@example.org (804) 698-7522,
email@example.com (804) 698-7517.
If you want to see how this fiscal model works in other states, look no further than how Republican Governor Brownback of Kansas grand experiment with “growing” the states economy by introducing radical tax cuts has panned out. Cuts which have resulted in a 45 % reduction in state revenues, the slashing of virtually every program in the state to the bone, including cutting state employee pensions to pay for even more tax cuts. http://www.alternet.org/what-happened-when-extremist-christian-fundamentalist-got-run-whole-state?paging=off¤t_page=1#bookmark
This model is being repeated with different variations in states like; Wisconsin, Michigan, Indiana, Ohio, and Missouri. Make no mistake about what is happening here, this is a dynamic which goes well beyond greed. It is special kind of greed which knows few bounds, a greed that stems from an ideological conviction that no one except for the wealthy elite should or deserves to have anything.
Since the mid 90′s, this greed has metastasized into a lust for the power to make that greed legal and permanent, backed by many bad actors; from the Koch brothers to a host of extractive businesses, particularly the financial industry whose actions continue to undermine our economy and our society. An approach which has fostered a world wide drift toward oligarchy which Thomas Piketty describes in his book, “Capital in the Twenty-First Century.“ http://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century
While as an economic system capitalism has always favored the ultra wealthy and the captains of industry what used to be a economic tilt in their favor has now evolved into a mad dash to collect as much wealth and power as possible, one that threatens to overrun and overwhelm us, unless we stop it.
Now that the Wall Street financiers and like minded ideologues such the Koch Brothers and their network of proxies like Americans for Prosperity (AFP) have successfully captured many state legislatures and now control 68 out of 98 partisan state legislative chambers — the highest number in the parties history.
They will use them, along with majorities in both chambers of Congress to change the laws and regulations even further in their favor. http://www.washingtonpost.com/politics/republicans-in-state-governments-plan-juggernaut-of-conservative-legislation/2015/01/02/6a0a82be-92bd-11e4-a900-9960214d4cd7_story.html
Their control of so many state legislatures will give Republicans an unprecedented degree of influence that makes it even easier for them to use industry proxies like the American Exchange Council (ALEC) to help the states copy …. ahem write their model legislature. Crafting bills designed to eliminate public state and even private sector pensions in the name of “fiscal responsibility” impoverishing much of the population and enriching their benefactors in the process.
Readers of this blog and The Central Virginian should keep in mind that the CV’s unusual and premature disclaimer at the end of my November 20th letter to the editor that … “The Keystone XL project failed by a 59-41 vote in the U.S. Senate on Tues. Nov. 18th” stems from the same unwavering support for the miracles of an unrestricted free market.
This business at any cost ideology driving both the Republicans and the Democrats will lead to their approving the Keystone XL pipeline, along with the Trans-Pacific Partnership Trade Agreement (TTP), the Transatlantic Trade and Investment Partnership (TTIP). At a minimum, they will try to use chained Consumer Price Index (CPI) calculations for Social Security benefits as a pathway to undermining future social security benefits while disingenuously claiming those changes will somehow “reform the system”, with an eye to abolishing Social Security altogether.
What our President will do once these bills arrive on his desk is a matter of conjecture, but if the claims in this article are an accurate description of what has happened to the Democratic party – http://www.salon.com/2015/01/01/democrats_middle_class_hypocrisy_why_omnibus_will_haunt_them_partner/ he will likely sign most if not all of them, calling it a “bi-partisan” effort.
A set of circumstances that the comic Lewis Black once observed, “In our two-party system, the Democrats are the party of no ideas and the Republicans are the party of bad ideas. The only thing dumber than a Republican or a Democrat is when those pricks work together.”