On TAP: Kuttner + Meyerson

Kuttner
December 19, 2018

Corporate Free Speech and the Israel Lobby. As you may have read, the latest ploy by the Netanyahu government and its allies in the U.S. Senate is a provision that would apply criminal penalties against U.S. corporations that boycott companies that operate in the occupied West Bank. This is opposed by the liberal pro-Israel organization, J Street, and the ACLU. 

The measure, in the form of a Senate rider to the emergency bill to keep the government open, is one of those ideas that gives bipartisanship a bad name. Its lead cosponsors are Ben Cardin, a Maryland Democrat, and Rob Portman, Republican of Ohio.

The rider is especially sneaky in that it makes no distinction between the occupied West Bank, where the boycotts have broad support, and the attempt by some in the Boycott, Divestment, and Sanctions (BDS) movement to impose boycotts on Israel itself, which liberals tend to reject for good reason.  

This measure is unwise—and maybe it’s also unconstitutional. Prior to the far-right hijacking of the Supreme Court, this argument would have been far-fetched. If Congress wants to regulate corporate behavior, fine. But the Roberts Court has been highly inventive in redefining corporations as citizens—for purposes of making campaign donations, undermining reproductive rights, discriminating against gays and lesbians—all in the name of corporate free speech.

So, hey, if our corporate brethren want to boycott some sweatshop in the occupied West Bank, that’s their right as citizens, isn’t it? Maybe we’ll get one decent, accidental byproduct of the wretched Roberts doctrine on corporate citizenship.

As my grandfather use to say, “Shouldn’t be a total loss.” 

Meyerson
December 18, 2018

Corporate America’s Only Priority: Rewarding the Rich. The stock market may be tanking, but investors—make that, major investors—are doing great nonetheless.

How, you may ask, is this possible? It’s because corporations have showered them with heretofore unimaginable dividends and share buybacks.

According to a front-page story in Monday’s Wall Street Journal, “companies in the S&P 500 have spent nearly $421 billion on dividends through November,” which is more than they spent on dividends in all of 2017. And this doesn’t take into account the amount of money corporations are devoting to share buybacks, which is more than twice the amount they’ve shoveled into dividends this year. Indeed, both dividends and share buybacks have already broken their all-time yearly record—and the Journal predicts that next year’s levels will surpass this year’s, notwithstanding the downward direction of the market.

In recent months, both wages and domestic capital investment have inched up, but at nowhere near the level of the increase in the return to shareholders. As the terrific new study by Josh Bivens and Heidi Shierholz of the Economic Policy Institute makes clear, the single most important factor in the past-four-decades’ diversion of business income from workers to shareholders and executives is the success of business’s assault on worker power, and the concomitant success of business’s insistence that government favor the rich over everyone else.

The last time I looked, the theory behind the government’s decision to tax capital gains at a lower rate than income from work was that investors bolstered the economy by investing. Now that corporation’s main mission is to reward investors at the expense of all other conceivable ways to spend its revenues, however, the capital gains tax has become purely a way to reward investors for extracting money from corporations, for siphoning funds from what otherwise might be productive enterprise.

Kuttner
July 13, 2018

Trump Gave Theresa May What She Deserved. Poor Prime Minister May. She has not been able to get her Conservative Party to agree on a Brexit formula, members of the cabinet are deserting her left and right (mostly right), and now she gets sucker-punched by Donald Trump.

May, braving broad hostility to Trump throughout Britain, went out of her way to host a friendly visit for our lunatic president, assuming that Trump might reciprocate with a bit of gratitude. But Trump doesn’t know from quid pro quo gratitude, except maybe when it comes to Vladimir Putin.

So while May and Trump were concluding a cordial dinner (salmon, beef, clotted cream ice cream) at Blenheim Palace, the right-wing tabloid The Sun published a startling interview in which Trump virtually endorsed the crackpot demagogue Boris Johnson to replace May as prime minister.

Johnson is basically the British Trump. He resigned as foreign minister earlier this week, ostensibly to protest the terms of May’s proposed Brexit deal, but actually to plot a campaign to oust her in favor of himself.

Steve Bannon has been in Britain this week. He’s a big fan of Johnson, and is working much of Europe to try to get more Trump-like figures to oust establishment pols.

The Trump-Johnson caper bears the characteristic signature of a Bannon operation. Trump doesn’t quite have the deftness or knowledge of British politics to think it up himself.

Serves May right for giving a warm welcome to Trump. Lie down with dogs, wake up with fleas.

Meyerson
July 12, 2018

Germany a “Captive of Russia”? How About America a Captive of Texas? Germany, President Trump charged yesterday at the NATO summit, is “a captive of Russia.” He was referencing the Nord Stream 2 pipeline, which, when completed, will enable Germany to get much of its natural gas from Russia.

By any other criteria, Germany might be said to be less of a Russian captive than Trump himself, though what Russian bounty has flowed to Trump over the years remains the subject of investigation—and is not the subject of these jottings.

Because the phenomenon of energy dependency upon a politically backward state compromising a nation’s values is one Americans should know all too well. If Germany is a captive of Russia, then America is a captive of Texas.

The baleful influence of the oil industry on U.S. policy extends well beyond the climate-worsening policies of the Trump administration and the Republican Party (and some of the Democratic Party) generally. Dating back to the Hunt family and beyond, the oil fortunes of Texas, Oklahoma, and the rest of the fossil-fuel belt have funded generations of reactionary campaigns against liberal and moderate candidates in races where energy policy didn’t figure at all.

For that matter, energy dependency has been the basis of U.S. support for the repressive monarchy of Saudi Arabia since 1945, even though the Islamic fundamentalism that the regime has supported and fostered has helped spawn the very terrorist organizations the U.S. has spent a fortune combating.

So Trump should be careful about alleging that energy dependency can compromise a nation’s values and safety. By that metric, it’s us—not the Germans—who are the club champions. 

Kuttner
July 11, 2018

If Putin Is Trump’s Chum, Why the Pressure to Spend More on NATO? OK, it’s not exactly news when Trump contradicts himself, but consider this doozie:

Trump is excoriating America’s NATO allies for failing to meet the agreed-upon target of spending at least 2 percent of GDP on the military. The U.S. spends close to 4 percent, and Trump has just urged NATO members to double their target to 4 percent, too.

But hold on. If memory serves, NATO was created to protect Western Europe against Soviet Russia.

The Kremlin is no longer Soviet, but its near-neighbors like the Baltic republics and Ukraine are all too aware that Russian territorial swagger has not disappeared. Donald Trump, however, seems to believe otherwise. If things go according to plan, he will go directly from the summit meetings bashing our NATO allies to a love-fest session with Putin.

So please explain: If Putin is a benign pussycat, why does NATO need to spend more money on the military—to contain a nation that Trump no longer considers a threat?

a) This is just an excuse to bash Europe.

b) Trump doesn’t know, and he is oblivious to contradictions.

c) Whacking NATO is another way to suck up to Putin.

d) Europe is spending plenty, even if Putin is a problem.

e) All of the above.

Meyerson
July 10, 2018

Questions for Kavanaugh. From what we’re now learning about Brett Kavanaugh, it’s clear he thinks indicting a sitting conservative president would be a disaster. Whether he feels that way about a sitting liberal pope—in this case, Francis—isn’t so clear. President Trump’s pick to succeed Anthony Kennedy on the Supreme Court has written a great deal about how our system needs to defer to presidential power, and it’s also apparent that he’s a charter member of the Antonin Scalia/Pope Benedict Society for the Preservation of Patriarchal Norms (the Older, the Better).

One newer norm that Kavanaugh looks poised to uphold is that of answering no substantive questions during his upcoming Senate confirmation hearings. A newly released study documents that Trump’s previous court pick, Neil Gorsuch, set the record for the highest percent of questions evaded during his hearings. Kavanaugh may well try to shatter Gorsuch’s record, but if the senators on the judiciary committee allow him to get away with that, they’ll not be doing their jobs.

The business of the Supreme Court is policymaking—that is, politics. It ratifies, modifies, or rejects the laws our elected officials enact, and in so doing, advances, confirms, or sets back the norms that we elect our legislators and chief executives to codify. As the replacement for the Court’s longtime swing vote, Kavanaugh, not just a jurist but a longtime Republican operative, would have it in his power to repeal reproductive rights, uphold Republican gerrymanders, rule for corporations over workers and the claims of the environment, strike down the Affordable Care Act, and protect the man who nominated him from investigation and prosecution. These are all momentous questions of public policy, and as senators are presumably in the business of creating public policy, they need to ask him where he comes down on these issues.

In particular, the two pro-choice Republican senators, Maine’s Susan Collins and Alaska’s Lisa Murkowski, should announce—if they’re really serious about preserving women’s right to choose—that they won’t vote to confirm Kavanaugh unless he declares publicly that we won’t vote to repeal Roe v Wade. Democratic Senators Joe Donnelly, Heidi Heitkamp, and Joe Manchin should announce they won’t vote to confirm Kavanaugh unless he publicly declares he won’t vote to strike down the Affordable Care Act. The public policy questions involved here are too fundamental to give Kavanaugh a pass on.

This is not a course of action that senators have taken before, at least that I’m aware of. But it should be precisely this course that the many groups opposing Kavanaugh’s confirmation demand of the senators who’ll cast the deciding votes. It should be the course that Democratic Senate Leader Chuck Schumer demands of his colleagues, and that Dianne Feinstein, the ranking Democrat on the Judiciary Committee, sets as the norm when or before the hearings commence.

Americans elect their legislators and executives based on those candidates’ positions on fundamental questions of national direction. Now that the Supreme Court may be handed over to a new majority that could well reverse or retard fundamental national directions, the positions that Kavanaugh would take if confirmed are no less important than the positions of a candidate for president. The only way that he could be compelled to reveal those positions would be if Collins, Murkowski, Manchin, & Co. announced he wouldn’t get their vote if he evaded answering where he stood. Americans demand that standard of their candidates; our elected officials should demand no less of a nominee who could yank the nation back to a radically less egalitarian time if confirmed as the next justice of the Supreme Court. 

Kuttner
July 9, 2018

As Ohio Goes. Donald Trump beat Hillary Clinton in Ohio by more than 450,000 votes in 2016. Yet Ohio could well lead the blue wave in 2018.

Senator Sherrod Brown, a progressive who was once a key target of Republicans, is up by 13 to 17 points in his re-election campaign, depending on which poll you follow. Former Attorney General Richard Cordray, who also served as head of the Consumer Financial Protection Bureau, is leading in the race for governor.

Several House seats could also flip. In their extreme gerrymandering of Ohio, Republicans got so greedy that they distributed likely Republican voters rather thinly—so that in a state where the popular vote for Congress hovers around 50–50, the result was 12 seats for Republicans and just four for Democrats. But in a wave election, where swing voters switch to Democrat, there aren’t enough Republican voters to go around, and several of these designer seats could fall to the Democrats.

Brown, as much as any progressive Democrat in public life, emphasizes pocketbook issues. He is also a down-the-line progressive on social issues such as abortion and LGBT rights—but he leads with the economics. That’s why socially conservative blue-collar voters cut Brown some slack on the avant-garde social stuff. They know he is on their side. The rest of the party could learn something from Brown.

So, for that matter, could political commentators, who keep blathering on about the dangers of Democrats moving “too far to the left.” But you need to distinguish economics from social issues. 

Progressive populism on economics is always a winning formula for Democrats. It is indeed possible to move too far left-fringe on social issues and scare off mainstream voters, but popular economics provides a lot of inoculation on issues like abortion rights, civil liberties, immigration reform, criminal justice reform, and civil and human rights broadly defined.

Commentators need to get it through their heads that there is a difference between left on economic issues and left on social issues. And of course Wall Street on economics and left on social issues is the worst of all worlds. RIP Hillary ’16.

Kuttner
July 6, 2018

Kielbasa Republic. Question for today: What exactly is the difference between the way Poland’s autocratic rulers have disabled its Supreme Court and the way the Republicans have taken over the U.S. courts?

Poland, where the governing party has an absolute majority in parliament, is in trouble with the leaders of the European Union and many of its own outraged citizens for jamming through a measure requiring mandatory retirement at 65 for Supreme Court justices. This thinly disguised coup will force the ouster of some 27 of 72 sitting justices, and turn the Court into a rubber stamp, removing the last obstacle to full dictatorship.

In the U.S., Republicans under Senate Majority Leader Mitch McConnell pursued a policy of blocking as many Obama judicial appointments as possible, slowing the process way down, and bargaining with the administration to appoint more centrist nominees as a condition of agreeing to a vote at all. This was in sharp contrast to the way Democrats treated appointees of President George W. Bush, when only the most extreme nominees were challenged.

When a Supreme Court seat came open after the death of Justice Antonin Scalia in February 2016, McConnell pursued the unprecedented course of simply refusing to act on Obama’s nomination of the relatively moderate appellate judge Merrick Garland. As a consequence, Trump got to fill a seat that was rightfully Obama’s.

So, what is the difference between destruction of an independent judiciary in Poland and the U.S.? Mainly, timing. In Poland, the coup has been abrupt. In the U.S., it has been a slow roll. The outcome isn’t that different—hijacked, politicized courts. 

Meyerson
July 5, 2018

Adding Insult (More Precisely, Discomfort and Anger) to Injury. Airline passengers, abandon all hope. On Tuesday, Donald Trump’s Federal Aviation Administration decreedthat it would do nothing about the relentless shrinkage of airplane seats and legroom. Rejecting a plea from Flyers’ Rights (a passengers’ organization) and a judge’s order that it reconsider its position, the FAA said that such concerns as passenger comfort were none of its business.

Over the past couple of decades, the average width of a coach airline seat has shrunk from 18.5 inches to 17 inches. The average amount of seat pitch (the distance between your seat and the seat in front of you) in coach has shrunk from 35 inches to 31 inches, though on some airlines it’s been scrunched to 28 inches.

The size of the average passenger has not shrunk correspondingly.

If passengers flying in steerage—excuse me, in coach—have problems with the FAA’s obeisance to the airlines, they’re left with what is effectively the non-option of imploring the airlines themselves. However, the years of seat shrinkage coincide with the years that airlines have increasingly come under the control of private-equity firms and other large-scale investors bent on squeezing more seats on to the planes and more profits out of the airlines. In 2015, a former private-equity executive and American Airlines board member penned a gushing column in The Wall Street Journal, celebrating how private equity’s ownership of American had eliminatedthe “inefficiencies” (such as the decent treatment of passengers) that had reduced the airline’s profits. Just yesterday, the Journal reportedthat a private-equity firm had purchased Sun Country Airlines.

Squeezed between the voraciousness of finance capital and the indifference to public welfare of Trump’s regulatory agencies, the American airline passenger has been officially told to lump it—and the lump had better be small.

Meyerson
July 3, 2018

How Big Business and Big Banks Are Using Their Tax Windfalls. In the topsy-turvy world of the past few weeks, it’s comforting to know that some things haven’t changed. Economic inequality, for instance, continues to surge.

Recent data make clear what any sentient observer could have predicted a year ago: The benefits of the Trump tax cut have gone chiefly to major shareholders, with little to no impact on either corporate investment or workers’ wages. “For the remainder of 2018,” S&P Global’s Howard Silverblatt toldThe Washington Post’s Heather Long, “expectations are high for record corporate expenditures in both buybacks and dividends.”

Indeed, in the first quarter of 2018, stock buybacks were the highest ever recorded ($189 billion). By contrast, wage increases are just keeping pace with inflation, and Morgan Stanley reports that capital spending by American corporations is “past its peak.”

Of course, you can’t invest or give your employees raises if you dole out all your money to your shareholders. Last week, after the Federal Reserve announced that all six U.S. mega-banks had passed their stress tests, the banks announced how much they planned to funnel to their shareholders over the coming year. The New York Times compared those numbers to the banks’ forecasts of how much they’d earn in the coming year, and the results tell us a good deal about the absurd state of the American economy. Bank of America planned to direct 95 percent of its anticipated profits to its shareholders in buybacks and dividends; JP Morgan Chase came in at 98 percent; Citigroup raised the ante to 128 percent; and not to be outdone, Wells Fargo won the bidding at 141 percent. (Morgan Stanley and Goldman Sachs came in at 80 percent and 69 percent, respectively, but these lowball numbers may be due to the fact that, as investment banks, they not only have to pay their shareholders but their many partners as well.)

How much, exactly, that leaves for loans is a good question.

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