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Conservative pundits on Fox News and other media outlets falsely claim that President Obama ceded the government’s authority over its economy to an international consortium during the G-20 summit, which concluded on April 2, 2009 in London. On April 3, pundit Dick Morris appears on Fox News’s America’s Newsroom to claim that Obama “effectively ceded massive areas of American sovereignty to Europe and to the global economic mavens.… [T]his literally is a massive surrender of sovereignty to an essentially European body.” On April 3, US Representative Don Manzullo (R-IL) tells CNN’s Kitty Pilgrim that Treasury Secretary Timothy “Geithner’s proposing, with the help of the administration, a worldwide international control over all financial interests—in fact, over any corporation, to the extent of even controlling the compensation of the employees. That’s not only radical, Kitty, that’s frightening.” Pilgrim responds, “Yeah, it certainly is.” On April 5, Fox News host Monica Crowley, appearing on the syndicated McLaughlin Group, says the G-20 agreement is “the first step to abrogating American sovereignty here, because… it is going to allow European bureaucrats to step in, not just on the hedge fund regulation and the other explicit things that they agreed to, but buried deep down in this communiqué was the ability for European bureaucrats sitting in Brussels to decide what kind of executive compensation American executives should—” Financial Times US managing editor Chrystia Freeland interjects, “No, there was no authority like that there, Monica.” Crowley responds, “I read it in the communique this morning.” [Media Matters, 4/7/2009] In an April 6 column titled “The Declaration of Independence Has Been Repealed,” Morris writes: “On April 2, 2009, the work of July 4, 1776 was nullified at the meeting of the G-20 in London. The joint communique essentially announces a global economic union with uniform regulations and bylaws for all nations, including the United States. Henceforth, our SEC [Securities and Exchange Commission], Commodities Trading Commission, Federal Reserve Board, and other regulators will have to march to the beat of drums pounded by the Financial Stability Board (FSB), a body of central bankers from each of the G-20 states and the European Union.… Obama, perhaps feeling guilty for the US role in triggering the international [economic] crisis, has, indeed, given away the store. Now we may no longer look to presidential appointees, confirmed by the Senate, to make policy for our economy. These decisions will be made internationally.” Noting that the FSB is numerically dominated by European members, Morris writes: “The Europeans have been trying to get their hands on our financial system for decades. It is essential to them that they rein in American free enterprise so that their socialist heaven will not be polluted by vices such as the profit motive. Now, with President Obama’s approval, they have done it.” [Dick Morris, 4/6/2009] On the evening of April 6, Morris makes the same claims on Fox News’s Hannity, telling viewers: “Basically, from an economic standpoint, [Obama’s] repealed [the Declaration of Independence]. We no longer have economic sovereignty.” [New York Times, 4/3/2009] None of these claims are true, as Freeland tried to assert. The FSB has no cross-border authority and therefore no authority over American economic decisions. On April 3, the New York Times reports, “While the [G-20] leaders agreed to create a new Financial Stability Board to monitor the financial system for signs of risks, they stopped well short of giving regulators cross-border authority, something France has long advocated.” [New York Times, 4/3/2009; Media Matters, 4/7/2009]
Screenshot of Fox News promoting the ‘Tea Party’ rally in Houston. [Source: Fox News / Media Matters]Republican lawmakers announce their intention to join with right-wing protesters on April 15, 2009, in what is envisioned as a nationwide protest against the Obama administration’s tax policies. The primary organizers are the think tanks Americans for Prosperity and Freedom Works, and right-wing bloggers such as Michelle Malkin. They say that under President Obama, taxes are “too high” and freedoms are being “eroded.” They have also called for Obama’s impeachment and refer to him as “Obama bin Lyin” and other derogatory nicknames.
Republicans, Neo-Nazis, Secessionists Joining in 'Tea Party Protests' - Malkin has called the movement the “Tea Party Protests,” in an attempt to connect the protests with the American Revolution’s Boston Tea Party. Senator David Vitter (R-LA) is sponsoring legislation to honor the protests. Representatives David Davis (R-TN), Jason Chaffetz (R-UT), Rob Bishop (R-UT), Todd Tiahrt (R-KS), John Fleming (R-LA), Ander Crenshaw (R-FL), Bob Latta (R-OH), John Shadegg (R-AZ), Sue Myrick (R-NC), Bill Posey (R-FL), and Louie Gohmert (R-TX) will attend local protests, as will Governor Mark Sanford (R-SC) and former Representative J.D. Hayworth (R-AZ). Officials from Senator Bob Corker’s (R-TN) and Representative Sam Graves’s (R-MO) office will attend the rallies as well, and Representatives Denny Rehberg (R-MT), Jack Kingston (R-GA), and Tom Rooney (R-FL) are urging their constituents to attend tea party protests. Former House Speaker Newt Gingrich (R-GA), who heads American Solutions for Winning the Futures (ASWF) and who will speak at the New York City rally, is encouraging his supporters to join the protests, and has provided them with what he calls a “toolkit” of talking points. ASWF is funded by oil and energy interests, and led the recent “Drill Here, Drill Now” campaign. ASWF has been an official “partner” in the Tea Party campaign since March. The Tea Party Protests are being joined by gun rights militias, secessionists, and neo-Nazi groups.
Protests Orchestrated by Lobbyist Organizations and Promoted by Fox News - The protests are being heavily promoted on Fox News, which intends to hold all-day “news reports” on April 15 featuring several of its commentators, including Glenn Beck (see March 3, 2009), Sean Hannity, Neil Cavuto, and Greta Van Susteren, live at different venues. Many of the protest organizers’ Web sites feature one or more of the Fox commentators as part of their promotion efforts (see October 13, 2009). Beck is one of several Fox commentators and hosts who claims that the protests are “grassroots” organizations “spontaneously” led by “ordinary people,” but in reality, the protests are being orchestrated by two lobbyist-run and lobbyist-organized organizations, Americans for Prosperity and Freedom Works. According to progressive news site Think Progress, “[t]he two groups are heavily staffed and well funded, and are providing all the logistical and public relations work necessary for planning coast-to-coast protests.” Freedom Works staffers are coordinating conference calls among protesters and working with conservative organizers to give them what it calls “sign ideas, sample press releases, and a map of events around the country” as well as guides featuring talking points and instructions on delivering a “clear message” to the public and the media. Freedom Works has set up numerous Web sites, some of which Think Progress claims are deliberately constructed to appear as the work of amateurs, to promote the protests. In Florida, Freedom Works took over the planning of events. Americans for Progress is writing press releases and planning events in New Jersey, Arizona, New Hampshire, Missouri, Kansas, and several other states. Think Progress calls these activities “corporate ‘astroturfing,’” which it defines as corporations’ attempts to orchestrate events appearing to be grassroots, citizen-led actions. Freedom Works is headed by former Texas Republican Representative Dick Armey, who is a lobbyist for the firm DLA Piper; Americans for Prosperity is headed by Tim Phillips, who is a former partner of right-wing activist Ralph Reed in the lobbying firm Century Strategies. Americans for Prosperity has organized numerous pro-oil company “grassroots” events. [Think Progress, 4/8/2009; Media Matters, 4/8/2009; Think Progress, 4/9/2009]
Entity Tags: Newt Gingrich, Neil Cavuto, Louis Gohmert, Marshall Clement (“Mark”) Sanford, Jr, Obama administration, Michelle Malkin, Rob Bishop, Sue Myrick, Sean Hannity, Tom Rooney, Todd Tiahrt, Tim Phillips, Think Progress (.org), John Shadegg, Sam Graves, John Fleming, Jason Chaffetz, Jack Kingston, Bob Latta, Bill Posey, Century Strategies, Barack Obama, Americans for Prosperity, American Solutions for Winning the Futures, Ander Crenshaw, DLA Piper, Bob Corker, David Vitter, Greta Van Susteren, J.D. Hayworth, Freedom Works, Fox News, Denny Rehberg, David Davis, Glenn Beck, Dick Armey
Timeline Tags: Domestic Propaganda, 2010 Elections
In a speech to the Tulsa Chamber of Commerce, Federal Reserve Bank of Kansas City President Thomas Hoenig declares that US banks’ ability to remain viable during a deeper recession—while undergoing federal government stress tests—demonstrates that most don’t need more taxpayer money. “Although the United States has several thousand banks, only 19 have more than $100 billion of assets,” Hoenig says. “After supervising authorities evaluate their condition, it is likely that few would require further government intervention.” Designed to demonstrate how much extra capital banks may need to survive a deeper economic downturn, the stress tests are to conclude by April 30, 2009, with the 19 biggest banks’ test results to be disseminated to President Barack Obama in meetings with his economic team. Hoenig reiterates his view that the government shouldn’t prop up failing financial institutions but take them over temporarily and wind them down, as with the 1984 takeover of Continental Illinois National Bank & Trust Co. “I encourage Congress to enact a new resolution process for systematically important firms,” he says. “There has been much talk lately about a new resolution process for systemically important firms that Congress could enact, and implement it as quickly as possible, but we do not have to wait for new authority. We can act immediately, using essentially the same steps we used for Continental. An extremely large firm that has failed would have to be temporarily operated as a conservatorship or a bridge organization and then reprivatized as quickly as is economically feasible. We cannot simply add more capital without a change in the firm’s ownership and management and expect different outcomes.” Hoenig declares that calling a firm “too big to fail” is a “misstatement” because a bank deemed insolvent “has failed.” “I believe that failure is an option,” he says. After the government’s fourth rescue of American International Group Inc. (AIG), Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke called for new powers to take over and sell off failing financial companies, and also called for stronger regulation to constrict risks that might endanger the financial system. The Federal Deposit Insurance Corporation has the authority to take over failing firms, and dispose of their assets, but no such authority exists for non-banking financial firms such as a hedge fund or AIG, which have extensive links throughout the banking system. During a Q&A after his speech, Hoenig tells the audience that the Fed must be prepared to make a timely removal of its stimulus to deter a period of high inflation that could be likened to that of the early 1980s. “You cannot wait until you know for sure the economy is recovering,” Hoenig says, adding that “employment growth tends to lag” and may not be the best indicator of recovery. “We will watch every indicator of data that suggests we have a recovery under way.” He also says that if the US manages its economy well, the US dollar should remain the world’s reserve currency. “It is a matter of running your economy properly,” he says. “When the US does that, and I think we will, I think we will remain the largest, most successful reserve currency on the face of the earth.” [Bloomberg, 4/9/2009]
FreedomWorks logo. [Source: FreedomWorks]The progressive news and advocacy site Think Progress profiles FreedomWorks, a conservative lobbying firm that uses the practice of “astroturfing” to press its agenda home. FreedomWorks is one of the organizations behind the anti-tax “tea party” movement (see April 8, 2009). The organization denies that it is “astroturfing”—creating fake “citizens groups” that purport to be spontaneously organized grassroots organizations—and compares its work to that of liberal activism group MoveOn.org. However, Think Progress notes that MoveOn is a citizen-organized group, while FreedomWorks is headed by former Republican activists and corporate officials, and is funded by oil, energy, and tobacco companies. Former House Majority Leader Dick Armey and current Washington lobbyist (R-TX) leads FreedomWorks. [Think Progress, 4/14/2009]
'Amateur-Looking' Astroturfing Sites - Last year, the Wall Street Journal exposed FreedomWorks’ use of “amateur-looking” Web sites for its “astroturf” groups to bolster their credibility as purported “citizen groups” pushing for corporate interests (see May 16, 2008). [Think Progress, 4/14/2009]
Represented by PR Firm with GOP Links - FreedomWorks is represented by the Washington public relations firm Shirley & Banister Public Affairs. Shirley & Banister also represents conservative organizations such as the National Rifle Association, Citizens United, news outlet Human Events, and organizer Richard Viguerie’s direct-mail firm. (It also represents the Bradley Foundation, a conservative funding organization that in 2008 gave $25,000 to both FreedomWorks and Americans for Prosperity [AFP], gave FreedomWorks $75,000 in 2009, and is considering a grant request from AFP.) One of Shirley & Banister’s partners is Craig Shirley, a veteran Republican PR operative who helped develop the overtly racist 1988 “Willie Horton” political ad (see September 21 - October 4, 1988). Progressive MSNBC host Rachel Maddow tells her audience: “This is a perfect system for the Republican Party. It’s a constant feedback loop. The Republican Party activists stir up fear and anger on the Internet… Fearful, angry people go to town hall events and then Republican Party officials say they are just responding to that anger and they have no idea where it came from. It’s [a] perfect cycle. Rile them up with made-up stuff and then sympathize with them that are so riled.” [MSNBC, 8/14/2009; MSNBC, 8/17/2009]
Led by Millionaires - Three of FreedomWorks’ most prominent senior officials are millionaires. Armey makes over $500,000 a year working for the organization, and lives in a Texas home valued at $1.7 million. FreedomWorks president Matthew Kibbe lives on Capitol Hill in Washington, DC, in a home valued at $1.17 million. Board member Steve Forbes, the billionaire publisher of Forbes magazine, lives in a New Jersey home valued at $2.78 million, owns a chateau in France, and recently sold a private island in Fiji and a palace in Morocco. [Wall Street Journal, 5/16/2008]
FreedomWorks Supports Armey's Lobbying Efforts - Armey’s lobbying firm, DLA Piper, represents pharmaceutical firms such as Bristol-Myers Squibb, medical device supplier SleepMed, health care provider Metropolitan Health Networks, and another pharmaceutical firm, Medicines Company. One member of FreedomWorks’s board of directors is Richard Stephenson, the founder and chairman of Cancer Treatment Centers of America. He is also the president of International Capital and Management Company, which runs a hospital consulting company. The president of FreedomWorks is Matt Kibbe, the former senior economist for the Republican National Committee and the former chief of staff for Representative Dan Miller (R-FL). FreedomWorks is organizing protests against health care reform that would cut into pharmaceutical firms’ profits. DLA Piper represents a number of life insurance firms; FreedomWorks has organized support for the deregulation of the insurance industry. DLA Piper represents not only several American oil firms, but also Sheikh Mohammed Bin Rashid Al Maktoum, prime minister of the United Arab Emirates (UAE), on energy related issues such as maintaining the close ties between the US and the UAE. US oil firms are deeply involved in the UAE’s oil industry. [Center for Responsive Politics, 2009; Think Progress, 4/14/2009; MSNBC, 8/12/2009] In August 2009, after reporting on FreedomWorks, MSNBC host Rachel Maddow will tell her audience: “Washington lobbyists and health care executives and former Republican Party officials have just as much a right to shout down the policy debate about health care reform as anyone else does. These folks have just as much a right to try to derail this entire process as anyone else does. But we have a right to know who they are and who is paying them for their efforts. These guys are pros. This is an industry. This is beltway politics being organized and played out in town halls across the country.” [MSNBC, 8/12/2009] DLA Piper has also received $830,000 this year, so far, from the pharmaceutical firm Medicines Company; the same firm paid DLA Piper $1.5 million in 2008. [MSNBC, 8/7/2009]
FreedomWorks Lobbying on Behalf of DLA Piper? - In August 2009, Maddow will ask, “[W]hy are DLA Piper’s clients relevant?” She answers herself, “There appears to be some pretty good evidence that when you pay Dick Armey’s lobbying firm, DLA Piper, you get what Dick Armey’s grassroots organization FreedomWorks does.” In the first half of 2007, the American Council of Life Insurers paid DLA Piper $100,000 to lobby on its behalf. During that time span, FreedomWorks began lobbying Congress on a “grassroots” basis to deregulate the life insurance industry. Maddow will sarcastically ask: “And, of course, perhaps it is just mere coincidence that FreedomWorks happened to have a newfound, ideological, purist grassroots commitment to life insurance deregulation at the same time the American Council of Life Insurers hired Dick Armey’s lobbying firm. It could just be a coincidence. Could be, right?” In 2006, DLA Piper began lobbying for the Senado de Republica, the Mexican Senate, for the purpose of “enhancing US-Mexico relations.” At the same time, FreedomWorks began promoting itself as “one of the few organizations willing to aggressively promote meaningful immigration reform.” In 2004, during the Bush administration’s push to privatize Social Security, a single mom from Iowa was introduced at a White House economic conference as a supporter of privatization. That mom was a FreedomWorks employee. Maddow will say: “This is how FreedomWorks does their work. They try to create the impression that their just regular grassroots Americans without any financial or political interests in the outcome of these policy fights.” [MSNBC, 8/12/2009]
Entity Tags: MoveOn (.org), Steve Forbes, Think Progress (.org), Mohammed bin Rashid Al Maktoum, Wall Street Journal, Matt Kibbe, Bristol-Myers Squibb, DLA Piper, Medicines Company, FreedomWorks, Dick Armey
Timeline Tags: US Health Care, Domestic Propaganda, 2010 Elections
The Center for American Progress (CAP), a progressive think tank and lobbying organization, releases a report that says the “tea party” movement protesting the various policies of the Obama administration (see April 8, 2009) is not, as purported, entirely a grassroots movement of ordinary citizens, but an “astroturf” movement created, organized, and funded by powerful conservative and industry firms and organizations. (CAP notes that the anti-tax “tea parties,” with “tea” standing for “Taxed Enough Already,” fail to note that President Obama’s recent legislation actually has cut taxes for 95 percent of Americans.) Two of the most prominent organizations behind the “tea parties” are FreedomWorks and Americans for Progress (AFP). FreedomWorks (see April 14, 2009) is a corporate lobbying firm run by former House Majority Leader Dick Armey (R-TX), and organized the first “tea party,” held in Tampa, Florida, on February 27. It then began planning and organizing “tea parties” on a national scale; officials coordinated logistics, called conservative activists, and provided activists with sign ideas and slogans and talking points to use during protests. AFP has coordinated with FreedomWorks. AFP is a corporate lobbying firm run by Tim Phillips, a former lobbying partner of conservative activist Ralph Reed, and funded in part by Koch Industries, the largest private oil corporation in America (see May 29, 2009). Former House Speaker Newt Gingrich (R-GA) is also involved, through his lobbying form American Solutions for Winning the Future, which is supported by oil companies.
Support, Promotion from Fox News - On cable news channels, Fox News and Fox Business have run promotions for the “tea parties” in conjunction with enthusiastic reports promoting the affairs (see April 13-15, 2009, April 15, 2009, April 15, 2009, and April 6-13, 2009); in return, the organizers use the Fox broadcasts to promote the events. Fox hosts Glenn Beck, Neil Cavuto, and Sean Hannity all plan to broadcast live reports from the events. Fox also warns its viewers that the Obama administration may send “spies” to the events. (Fox justifies its depth of coverage by saying that it provided similar coverage for the 1995 Million Man March. However, Fox did not begin broadcasting until 1996—see October 7, 1996.)
Republican Support - Congressional Republicans have embraced the “tea parties” as ways to oppose the Obama administration. Many leading Republicans, such as Minority Leader John Boehner (R-OH), Paul Ryan (R-WI), and some 35 others, will speak at AFP-funded “tea parties.” Republican National Committee Chairman Michael Steele has moved the RNC to officially support the protests. And Senator David Vitter (R-LA) has introduced legislation formally honoring April 15 as “National Tea Party Day.” “It’s going to be more directed at Obama,” says reporter and commentator Ana Marie Cox. “This is very much, I think, part of the midterm strategy” to win elections in 2010.
Fringe Elements - According to CAP, many “fringe” elements of the conservative movement—including “gun rights militias, secessionists, radical anti-immigrant organizations, and neo-Nazi groups”—are involved in the “tea parties.” [Think Progress, 4/15/2009; Think Progress, 5/29/2009]
Entity Tags: Ralph Reed, Republican National Committee, Paul Ryan, Tim Phillips, Obama administration, Sean Hannity, Newt Gingrich, John Boehner, Michael Steele, Barack Obama, Neil Cavuto, Center for American Progress, Ana Marie Cox, Americans for Progress, Fox Business Channel, Fox News, Koch Industries, David Vitter, American Solutions for Winning the Future, FreedomWorks, Glenn Beck, Dick Armey
Timeline Tags: Domestic Propaganda, 2010 Elections
The various “tea party” organizations around the nation (see After November 7, 2008, February 1, 2009, February 16-17, 2009, February 19, 2009, and February 19, 2009 and After) host rallies and protests throughout the day. The date has been chosen because April 15 is the day American citizens must submit individual income tax returns to the IRS; some tea party members say “tea” stands for “Taxed Enough Already?” The number of rallies is anywhere between 200 and 750, depending on who does the estimating; similarly, national attendance is later estimated at anywhere from 250,000 to 500,000. Some protests, such as the one in Atlanta, Georgia, draw thousands of participants and onlookers, whereas other rallies draw only a few people. A protest outside the White House is broken up by police when a demonstrator tosses a box of tea bags over the fence. This is the first time that a series of protests by tea party groups has been orchestrated on a national level. [Beth Rowen, 2/9/2010] Fox News provides nationwide coverage, both on the national cable news channel and for local affiliates, promotes and markets the rallies, and provides blogs and forums for scheduling, outreach, and coordination (see April 6-13, 2009, April 13-15, 2009, and April 15, 2009). The network promotes the rallies as “FNC [Fox News Channel] Tax Day Tea Parties.”
Chyron displayed during Fox News broadcast touting Republican ‘watchdog’ efforts on Democratic spending. [Source: Media Matters]Fox News anchor Bill Hemmer tells his viewers that Fox is “keeping up” with four “interesting” projects reportedly funded by the economic stimulus act. Hemmer says that the research on the projects was done by Fox News itself. He does not tell viewers that the research, and the text and graphics displayed on-screen during his report, come directly from the Web site of Eric Cantor (R-VA), the Republican House Minority Whip. Cantor’s site lists 12 so-called “wasteful spending” projects funded by the recovery act. The four cited by Hemmer are from a section of Cantor’s site called “Washington Watch Report,” which calls itself “your one stop shop to learn about examples of government waste that have been uncovered by House Republicans.” The four projects include a skate park in Pawtucket, Rhode Island; an “art walk” in Rochester, New York; funding for a homeless project in Union, New York; and a transportation study in Ohio. Hemmer and guest Representative Mike Pence (R-IN) list each project and then criticize it. During the segment, Pence twice promotes Cantor’s Web site, and concludes by saying: “I commend you all. I commend my colleagues and the Republicans’ whip’s office with the Washington Watch Web site. People can go online and read more of these—we’re finding more everyday.” During Pence’s concluding statement, Fox News displays a “chyron” at the bottom of the screen that reads, “GOP Watchdog Exposes Wasteful State Spending of Gov’t Money” (see October 13, 2009). [Media Matters, 4/23/2009]
An opinion column posted in Yale Environment 360, a publication by Yale University’s School of Forestry and Environmental Studies, calls for the US to “dramatically accelerate the development of clean energy technology.” Authors Mark Muro, a fellow of the Brookings Institution, and Teryn Norris, a project director at the Breakthrough Institute, echo the words of Energy Secretary Stephen Chu, who has called for “Nobel-level” breakthroughs and a “second industrial revolution” in clean energy technology to overcome what they term “the world’s interlinked energy and climate challenges.” Muro and Norris write: “To renew the US economy, respond to global climate change, foster the nation’s energy security, and help provide the energy necessary to sustainably power global development, America must transform its outdated energy policy. Innovation and its commercialization must move to the center of energy system reform. The nation must move urgently to develop and harness a portfolio of clean energy sources that are affordable enough to deploy on a mass scale throughout the US and the world. In short, we must make clean energy cheap.” Muro and Norris propose the creation of a series of “renewable energy research hubs,” also called “energy discovery-innovation institutes,” or e-DIIs, funded with a combination of federal, state, university, and private funds. These e-DIIs would, they write, “take the lead in accelerating the development of reasonably priced alternative energy technologies and bringing them to the marketplace.” E-DIIs in different regions would focus on different technologies, they write. Institutes in the Southwest might focus on solar technologies, while institutes in the Great Lakes might focus on advanced battery technologies or hydrogen fuel cells, and institutes in the Great Plains might work on developing sustainable sources of biofuels. Muro and Norris envision successful institutes garnering as much as $6 billion a year in funding, while producing breakthroughs in a variety of renewable energy technologies. By the 2040s, global energy demands are expected to triple from current energy needs, while global greenhouse gases must be reduced by up to 85 percent to avert what the authors call “disruptive climate change.” Nations emerging into the community of developed nations, such as China, India, and Brazil, will lead the demand for additional energy, and will turn to increased use of fossil fuels if cheap and viable renewable energy platforms are not readily available to them. Muro and Norris write: “[I]n the absence of similarly affordable and large-scale clean energy sources, the nations of the developing world will turn to coal and other fossil fuels to power their development, just as we in the United States have done. And that would virtually assure massive climatic destabilization, regardless of what occurs in the developed nations of the world.” Market-based solutions such as carbon taxes and cap-and-tax policies do not do enough to spur renewable energy development, the authors contend. They conclude: “In important ways, the energy innovation institute concept represents a contemporary adaptation of the research paradigm created through the land-grant acts passed by Congress in the 19th century. Then, federal investments established a network of university-based agricultural and engineering experiment stations, augmented by extension services capable of interacting directly with the marketplace. That program was instrumental in developing and deploying the technologies necessary to build a modern industrial nation for the 20th century, while stimulating local economic growth. Today, the US needs a similarly bold campaign to enlist America’s universities, laboratories, and companies in solving one of the most complex and important problems—the transition to a clean-energy economy—that the nation has ever faced.” [Yale Environment 360, 4/30/2009; Breakthrough Institute, 4/30/2009]
The Australian government announces it will invest $4.5 billion ($3.4 billion in US dollars) in developing the infrastructure necessary to generate energy from solar and wind power, and to reduce carbon emissions. It will also invest in low-emission coal technologies and in large-scale solar electricity generation projects. $465 million goes to a new governmental organization, “Renewables Australia,” intended to lead development in renewable energy research, development, and deployment. The investment plans go against years of Australian governmental policy that forbid spending funds on building clean energy infrastructure. [Breakthrough Institute, 5/18/2009]
The federal government sets a fuel efficiency standard of 35 miles per gallon or more for all cars and trucks sold in the US by 2016. The rationale is that raising the fuel efficiency standards will increase fuel economy and reduce greenhouse gas pollution. The measure is projected to save 1.8 billion barrels of oil between 2012 and 2016, and reduce greenhouse gas emissions by about 900 million metric tons. The measure goes into effect in 2012. President Obama says: “In the past, an agreement such as this would have been considered impossible. That is why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington. As a result of this agreement, we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. And at a time of historic crisis in our auto industry, this rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century.” The policy was developed in a collaboration between the Department of Transportation (DOT), the Environmental Protection Agency (EPA), the nation’s major auto manufacturers, the United Auto Workers, environmental organizations, the State of California, and other state governments. EPA head Lisa P. Jackson says: “The president brought all stakeholders to the table and came up with a plan to help the auto industry, safeguard consumers, and protect human health and the environment for all Americans. A supposedly ‘unsolvable’ problem was solved by unprecedented partnerships. As a result, we will keep Americans healthier, cut tons of pollution from the air we breathe, and make a lasting down payment on cutting our greenhouse gas emissions.” Carol Browner, Obama’s assistant for energy and climate change, says: “A clear and uniform national policy is not only good news for consumers who will save money at the pump, but this policy is also good news for the auto industry which will no longer be subject to a costly patchwork of differing rules and regulations. This an incredible step forward for our country and another way for Americans to become more energy independent and reduce air pollution.” Daniel Becker of the Safe Climate Campaign, an organization which for two decades has advocated tougher mileage and emissions standards, says: “This is a very big deal. This is the single biggest step the American government has ever taken to cut greenhouse gas emissions.” The measure is based in part on a 2007 application by California to put its emissions standards in effect, an application rejected by the Bush administration. The measure complements fuel efficiency guidelines set by the Department of Energy in January 2009. [White House, 5/19/2009; New York Times, 5/19/2009; Adam Johnston, 7/2013]
The US spends more than any other nation in the world on health care, but ranks only 50th among 224 nations in life expectancy, according to the 2009 CIA World Factbook. Experts say that this fact could raise serious questions in the debate over health care reform. Americans have an average life span of 78.1 years; the populations of 49 other nations live longer, on average. Japan is first in life expectancy, at 83 years; Australia, Iceland, Italy, San Marino, Switzerland, Andorra, Canada, and France round out the top 10 countries. Other countries, such as Sweden, Norway, Denmark, Singapore, Greece, Spain, and Portugal also do better than the US in life expectancy. The bottom 10 nations are, in reverse order, Sierra Leone, Afghanistan, Zimbabwe, Lesotho, Zambia, Chad, Uganda, Swaziland, Mozambique, and Guinea-Bissau, with life spans ranging from averages of 41 to 48 years. Some experts note that the US is the only developed nation to have a virtually completely privatized health care system. “What we are able to find in the industrialized world is that life expectancy will be influenced in a beneficial manner to the extent that health care expenditure is publicly financed,” says public health professor Harvey Brenner. “The higher the government expenditure on health care, the lower will be the mortality rate.” A study from the University of Chicago shows that a single-payer system—government-run health care—may be associated with higher life expectancy. The governments of such nations as Norway, Sweden, Denmark, Australia, and Canada have government-run health care, and their citizens have some of the longest life spans in the world. The author of the study, Bianca Frogner, writes: “Inevitably the conversation about reforming our health care system focuses on the question of what are we getting for our money and how are others doing with their health care dollars. Life expectancy, along with mortality and morbidity rates, are fairly straightforward numbers to rely on.” Other comparisons show that Scandinavian and other European countries have lower birth mortality numbers than the US, though babies born with abnormally low birth weights tend to fare better in the US system than in the Scandinavian systems. [CNN, 6/11/2009]
The Center for American Progress releases a study that shows how economically viable a transition from the US’s current dependence on carbon-intensive and fossil fuels to a clean energy economy can be. Making this transition is a necessity, the study says, due to “global climate change due to rising carbon emissions” forcing the US to “dramatically cut its consumption of traditional fossil fuels, the primary source of carbon dioxide (CO2) delivered into our atmosphere by human activity.” The transition must achieve three interrelated goals:
Dramatically increasing energy efficiency;
Dramatically lowering the cost of supplying energy from such renewable sources of energy as solar, wind, and biomass; and
Mandating limits and then establishing a price on pollution from the burning of oil, coal, and natural gas.
According to the study, a dramatic decrease in CO2 emissions can be achieved alongside an increase in employment opportunities, individual incomes, and economic growth. The authors of the study say their work is done within the parameters of two government initiatives: the American Recovery and Reinvestment Act (ARRA—see February 2009) and the proposed American Clean Energy and Security Act (ACESA), which remains to be passed by Congress. Taken together, the authors claim, the two measures can generate roughly $150 billion per year in new clean-energy investments in the United States over the next decade. Most of this new spending will be undertaken by the private sector, the authors say, triggered by the ARRA and the yet-to-be-passed ACESA, and will, they predict, create some 1.7 million new jobs that will be sustained if the spending continues year after year. That job gain would drop the unemployment rate about one percent, “even after taking into full account the inevitable job losses in conventional fossil fuel sectors of the US economy as they contract.” The authors say the clean energy program would do a great deal to combat the recession. The program would rely on three elements:
Regulations aimed at promoting clean energy;
A mandated cap on carbon emissions that will be phased in through 2050; and
Measures designed to help businesses, communities, and individuals successfully manage the transition to a clean-energy economy.
The authors conclude: “To be sure, any economic modeling effort that estimates changes in employment growth, economic growth, and income growth will result in forecasts that are problematic by nature. We make this clear in our paper wherever we rely on our own economic models and those employed by others. But we also take pains to examine the relative strengths and weaknesses of all the modeling approaches—including our own. This enables us to cross check our own conclusions with those of other researchers to reach the most reliable possible understanding of the overall impact of advancing a clean-energy agenda within the US economy.” [Center for American Progress, 6/18/2009; Robert Pollin, James Heintz, and Heidi Garrett-Peltier, 6/18/2009 ]
Representative Tim Bishop (D-NY) holds a “town hall” meeting in Setauket, New York, to attempt to discuss the White House’s health care reform package. However, the town hall is disrupted by a large number of angrily shouting conservatives, there to protest the reform proposals. The protesters hound Bishop throughout the meeting, shouting him down when he attempts to speak, and accusing him of “selling out” the country through his positions on the White House’s energy, economic, and health care policies. The mob becomes so threatening that five police officers are forced to escort Bishop to his car for his own safety. In part because of the incident, Bishop will suspend further town hall meetings until August 2009. Bishop has held over 100 such meetings since his election to Congress in 2002. [Politico, 7/31/2009; MSNBC, 8/4/2009]
President Obama, in a televised “town hall” event held in the White House to discuss health care reform, suggests that one way to trim medical costs might be to cease performing expensive and futile treatments—“extraordinary measures”—on terminally ill patients who do not want such interventions and would not benefit from them. Currently, doctors who have no particular instructions will perform “extraordinary measures” to stave off a terminally ill patient’s death, even for a matter of hours, no matter how intrusive or expensive the procedure. Obama tells his listeners that families need better information so they don’t unthinkingly approve “additional tests or additional drugs that the evidence shows is not necessarily going to improve care.” In some instances, he says, “Maybe you’re better off not having the surgery, but taking the painkiller.” He notes the experience of his recently deceased grandmother, Madelyn Dunham, was diagnosed with terminal cancer and given less than nine months to live. When she broke her hip, she and her family had to decide whether to put her through a long, expensive, and painful hip-replacement procedure. “[A]nd the question was, does she get hip replacement surgery, even though she was fragile enough they were not sure how long she would last?” he says. [Los Angeles Times, 6/25/2009] Obama is not advocating that life-extending treatments be forcibly denied to terminally ill or elderly patients (see July 23, 2009 and July 23, 2009), but his remarks will be misconstrued as advocating just such a position (see June 25, 2009, July 10, 2009, July 16, 2009, July 17, 2009, July 21, 2009, July 23, 2009, July 23-24, 2009, and July 24, 2009, July 28, 2009, July 28, 2009, July 28, 2009, July 31, 2009 - August 12, 2009, August 7, 2009, August 10, 2009, Shortly Before August 10, 2009, August 11, 2009, and August 12, 2009).
Capital Research Center senior editor Matthew Vadum writes an op-ed for the conservative American Spectator magazine claiming that President Obama is sending a message to America’s elderly in his health care reform proposals: “Screw you.” Referring to a statement made by Obama at a “town hall” forum on health care reform, where the president noted that money could be saved by trimming unwanted and unneeded “extraordinary measures” carried out on terminally ill patients (see June 24, 2009), Vadum writes: “So, old people: screw you. In the future Uncle Sam will put you on an ice floe and let you float away to your heavenly reward. It gives new meaning to the Latin phrase ‘Dulce et decorum est pro patria mori.’ (In English, How sweet and glorious it is to die for one’s country.) Medical decisions should be made by patients, their families, and their doctors, not by government bureaucrats, but that’s ObamaCare for you.” [American Spectator, 6/25/2009]
Fake ‘ObamaCare’ card distributed by FreedomWorks. [Source: FreedomWorks]The corporate lobbying firm FreedomWorks (see April 14, 2009) sends out a detailed memo, written in part by founder Dick Armey (R-TX), laying out strategies for protesting the Obama administration’s health care reform proposals. The memo claims that the White House intends to supplant the current privately owned and operated health care system with a “government-run” system “that would cost taxpayers trillions of dollars in new taxes” and feature “government bureaucrats,” not doctors and patients, deciding who received what health care. “This takeover of the health care system would be costly in terms of our money, our freedom, and even our lives,” the memo states. Members and sympathizers should descend on the “town hall” meetings and other venues hosted by their Congressional representatives and demand that they oppose the proposals. The memo states that its “action kit” should be used at the “tea parties” being sponsored by FreedomWorks and other right-wing organizations (see April 14, 2009, April 15, 2009, and May 29, 2009). The memo contains talking points, slogans, sample questions, a “sample” letter to the editor that members can copy and sign, a petition, and a satirical “Obamacare Card” issued to “Nancy P. Pelosi,” the Democratic Speaker of the House, saying that the bearer is entitled to “rationed health care, long waits, less choice and control, poorer care, fewer doctors and drugs, massive government, higher taxes, growing debt, zero innovation, rising costs, waste, fraud, and abuse, [and] anxiety, pain, [and] fear of death.” [Dick Armey, 6/26/2009 ]
Group of 8 (G-8) leaders from across the globe release a statement from their meeting in L’Aquila, Italy, saying that economic recovery from the worst recession since World War II is too frail for them to consider repealing efforts to infuse money into the economy. US President Barack Obama, British Prime Minister Gordon Brown, European Commission President Jose Barroso, German Chancellor Angela Merkel, Canadian Prime Minister Stephen Harper, French President Nicolas Sarkozy, Japanese Prime Minister Taro Aso, Italian Prime Minister Silvio Berlusconi, and Russian President Dmitriy Medvedev assembled for the annual gathering where Obama pressed to maintain an open door for additional stimulus actions. A new drop in stocks generated global concern that, to date, the $2 trillion already sunk into economies had not provided the economic bump that would bring consumers and businesses back to life. “The G-8 needed to sound a second wakeup call for the world economy,” Brown told reporters after the gathering’s opening sessions. “There are warning signals about the world economy that we cannot ignore.” A G-8 statement embraces options ranging from a second US stimulus package—advocated by some lawmakers and economists—to an emphasis by Germany on shifting the focus to deficit reduction.
What Next? - Disagreements over what to do next, as well as calls from developing nations to do more to counteract the slump, emphasize that the Group of 8 has little if any room to maneuver, since the largest borrowing binge in 60 years has, so far, failed to stop rising unemployment and has left investors doubting the potency of the recovery. Even as G-8 leaders held their first meeting, the Morgan Stanley Capital International (MSCI) World Index of stocks continued a five-day slide, and the 23-nation index had dropped 8 percent since its three-month rally that ended on June 2. The International Monetary Fund (IMF) upgraded its 2010 growth forecast, saying the rebound would be “sluggish,” and urged governments to stay the course with economic stimuli. The IMF also said that emerging countries such as China would lead the way, with an expansion of 4.7 percent in 2010, up from their April prediction of 4 percent. “It’s a very volatile situation,” said European Commission President Barroso in a Bloomberg Television interview from L’Aquila. “We are not yet out of the crisis, but it seems now that the free fall is over.”
Exit Strategems Discussion - “Exit strategies will vary from country to country depending on domestic economic conditions and public finances,” the leaders conclude, but deputy US National Security Adviser Mike Froman tells reporters, “There is still uncertainty and risk in the system.” Froman says that although exit strategies should be drawn up, it’s not “time to put them into place.” The IMF forecasts that, in 2014, the debt of advanced economies will explode to at least 114 percent of US gross domestic product because of bank bailouts and recession-battling measures. German Chancellor Merkel, campaigning for re-election in September and the leading opponent of additional stimulus, warned against burgeoning budget deficits, which the IMF has predicted will rise to an average of 6 percent of the EU’s 2009 gross domestic product, from 2.3 percent in 2008. At last month’s European Union summit, Merkel pushed through a statement that called for “a reliable and credible exit strategy,” and insisted, “We have to get back on course with a sustainable budget, but with the emphasis on when the crisis is over.” [G8 Summit 2009, 7/2/2009; Bloomberg, 7/9/2009]
Entity Tags: Morgan Stanley Capital International (MSCI) World Index, Mike Froman, Jose Manuel Barroso, International Monetary Fund, Taro Aso, National Security Council, Nicolas Sarkozy, Silvio Berlusconi, Angela Merkel, Gordon Brown, Barack Obama, Standard & Poor’s, Stephen Harper, Dmitriy Medvedev
Timeline Tags: Global Economic Crises
Senator Tom Coburn (R-OK), speaking on the Washington Times’s America’s Morning News television broadcast, says the Democrats’ proposed government-run health care system—the so-called “public option”—will “absolutely” kill more people than it will save. Will “government-run health care… end up killing more people than it saves?” the interviewer asks Coburn. He responds, “Absolutely.” Coburn’s comments are echoed on the floor of the House by two Republicans. Steve King (R-IA) tells members that the government is “going to save money by rationing care, getting you in a long line. Places like Canada, United Kingdom, and Europe. People die when they’re in line.” And Louis Gohmert (R-TX) states: “One in five people have to die because they went to socialized medicine!… I would hate to think that among five women, one of ‘em is gonna die because we go to socialized care.” [Real Clear Politics, 7/16/2009; Think Progress, 7/16/2009]
Tom Raum, a reporter and analyst for the Associated Press (AP), calls Social Security “a giant federal Ponzi scheme” destined to “bury… the nation ever deeper in debt.” Raum then writes: “Although calling Social Security a Ponzi scheme—think of the huge frauds that sent billionaires Bernard Madoff (see August 14, 2009) and R. Allen Stanford to prison—may be a bit of a stretch, there is one clear similarity. As in a Ponzi scheme, the concept works fine at first. So long as there are more new ‘investors’ pumping money into the system to pay off the earlier ones, everyone is happy. But at some point not enough new money is coming in and the scheme collapses.” Raum claims that Social Security system trustees have reported that by 2016, money paid out in benefits will exceed the revenues flowing in, and in 2037, the system will be entirely penniless. Thusly, Raum writes, Social Security “is projected to go insolvent in 2017.” [Associated Press, 8/16/2009] (The Raum article is reprinted over several days by different press outlets, but according to progressive media watchdog organization Media Matters, originally appears on August 12.) [Media Matters, 8/12/2009] However, the trustees did not say what Raum claims they said. In their May 12, 2009 report, the trustees said that the Social Security trust fund, not Social Security itself, will be completely depleted in 2037. And after that happens, according to the trustees, revenue from payroll taxes will be sufficient to pay about three-quarters of scheduled Social Security benefits through 2083: “Under the intermediate assumptions, the OASDI cost rate is projected to increase rapidly and first exceed the income rate in 2016, producing cash-flow deficits thereafter. Redemption of trust fund assets will allow continuation of full benefit payments on a timely basis until 2037, when the trust funds are projected to become exhausted. This redemption process will require a flow of cash from the general fund of the Treasury. Pressures on the federal budget will thus emerge well before 2037. Even if a trust fund’s assets are exhausted, however, tax income will continue to flow into the fund. Present tax rates are projected to be sufficient to pay 76 percent of scheduled benefits after trust fund exhaustion in 2037 and 74 percent of scheduled benefits in 2083.” The Associated Press accurately reported on the trustees’ report the same day it was issued. [Administration, 5/12/2009 ; Associated Press, 5/12/2009; Media Matters, 8/12/2009] Stephen Moore of the Wall Street Journal made a similar claim to Raum’s in February (see February 2, 2009).
Eric Bolling, a host on Fox Business Channel, appears as a guest on Fox News’s The Live Desk, where he attacks Social Security as a “Ponzi scheme.” Bolling explains that a lack of increase in July’s Consumer Price Index (CPI) means that Social Security benefits also fail to increase, but then shifts into a claim that Social Security is “underfunded or almost unfunded.… People are paying into Social Security. That money’s being used to pay for seniors right now, so, it’s kinda like a Ponzi scheme.… They should rename it the Madoff Social Security system, because down the road, there’s not going to be enough money.” Bolling is making reference to Wall Street financier Bernie Madoff, who stole billions of dollars from clients through a web of fraudulent schemes. [Media Matters, 8/14/2009; Media Matters, 9/7/2010] In February, the Wall Street Journal’s Stephen Moore made a similar claim (see February 2, 2009). And an Associated Press reporter made a similar claim two days before Bolling (see August 12-16, 2009).
Since implementing a program to help millions of homeowners restructure their mortgages to prevent foreclosure, only 235,247 loans have actually been modified, according to the US Treasury Department in its first progress report. After the plan was announced in February, the first banking institutions began accepting applications in April. Between now and 2012, the Obama administration says it is on track to assist 4 million homeowners. The report occurs a week after the administration summoned institutions to Washington to discuss speeding up the program after large numbers of borrowers’ complaints that assistance was barely occurring. The Obama administration plans 500,000 modifications by November 1, and hopes to hold the institutions responsible for their performance with the release of monthly reports that allow consumers to see which banks are slow to implement the plan. So far, institutions have extended offers to 15 percent or 406,542 homeowners in danger of losing their homes, with uneven performances by 38 participating servicers. Morgan Stanley’s subsidiary, Saxon Mortgage Services, tops the list with 25 percent of its delinquent loans placed in trial modifications. Saxon is followed by Aurora Loan Services, a Lehman Brothers Bank subsidiary, with 21 percent. GMAC Mortgage, partially owned by the US government, has put 20 percent of its troubled loans into trial modifications, while major banks JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America have late loan trial modifications of 20 percent, 15 percent, 6 percent, and 5 percent respectively. The lenders acknowledge that they must improve their performance, and say that they are committed to President Obama’s foreclosure prevention plan, stressing that they were already performing modifications prior to the administration’s program. Wells Fargo says that it will soon have the ability to send eligible borrowers trial modification agreements within 48 hours. “We set a high bar for ourselves in terms of customer service, and we didn’t hit that bar in all cases in the first seven months of this year,” says Mike Heid, co-president of Wells Fargo Home Mortgage, “We have added 4,000 employees to our loan workout division this year. JPMorgan Chase says it has another 150,000 applications in need of processing and is currently training an extra 950 workout specialists hired earlier in 2009, bringing its modification staff to 3,500 people. “We know we’ve got more work to do,” says Chase spokesman Tom Kelly. “But the bank is pleased with its performance to date.” CitiGroup’s mortgage agency, CitiMortgage, added 1,400 staffers to its modification team, with 800 dedicated to loss mitigation at its recently opened Tucson, AZ call center. It began placing troubled borrowers in trial modifications in early June. “In the next quarter, one can expect the pace will be even higher,” Sanjiv Das, CitiMortgage head, says. Bank of America says it needs to improve its reach out efforts, while noting that it holds nearly one in four trial modifications offered under the Obama plan and has extended nearly 100,000 offers, although only 28,000 trial modifications are in process. Bank of America purchased mortgage giant Countrywide Financial last year, and has the largest number of eligible delinquent loans with almost 800,000. Borrowers have been pressuring the Obama administration as well as servicers and are complaining that servicers are not responding to applications and calls, are losing their paperwork, and are not making timely decisions. Servicers say they are increasing their staffing and upgrading their computer systems to handle the hefty increase in applications. Says Michael Barr, assistant US Treasury secretary for financial institutions, “We are working with servicers to ensure that they can adequately implement the program and servicers are increasing staff and training, but they must also treat borrowers more respectfully and respond in a much timelier manner.” [CNN News, 8/9/2009]
Entity Tags: Countrywide Financial, Wells Fargo Bank, N.A., Bank of America, Aurora Loan Services, US Department of the Treasury, Citigroup, Tom Kelly, Sanjiv Das, GMAC, JP Morgan Chase, CitiMortgage, Lehman Brothers, Morgan Stanley, Michael Barr, Saxon Mortgage Services
Timeline Tags: Global Economic Crises
Van Jones. [Source: Politico]White House official Van Jones, the Obama administration’s special advisor for environmental jobs, resigns after a barrage of criticism from conservative critics and Republican officials. Jones is an author, community organizer, and “green jobs” expert from the San Francisco area; before his resignation, he was in charge of a small White House program advocating for jobs in energy-efficient industries. Indications are that Jones was asked by White House officials to resign, in part because administration officials wanted to “move beyond” the criticism of him as Obama prepares to address Congress on the subject of health care reform (see September 9, 2009). In 2004, Jones signed a petition asking for an investigation into whether the Bush administration had allowed the 9/11 terrorist attacks in order to provide a pretext for war in the Middle East, though he has always said he does not support the so-called “truther” movement that features allegations of Bush officials’ involvement in the 9/11 attacks. Shortly before joining the administration, Jones used the term “_ssholes” to characterize Republicans. He is a public supporter of Mumia Abu-Jamal, convicted of murdering a Philadelphia police officer. Conservatives have termed him a “radical Communist” for his affiliation with some left-wing protest movements. The New York Times calls the controversy around Jones a “significant distraction” to Obama’s health care agenda. Critics have attacked Jones specifically as well as administration officials such as him, sometimes called “czars,” who are appointed to positions of some influence in the White House without having to be approved by Congress. White House officials say that they were unaware of Jones’s more controversial statements and positions because his position was not considered senior enough to warrant complete vetting. Press secretary Robert Gibbs says that Obama does not endorse Jones’s views and did not hesitate to accept his resignation: “Well, what Van Jones decided was that the agenda of this president was bigger than any one individual. The president thanks Van Jones for his service in the first eight months, helping to coordinate renewable energy jobs and lay the foundation for our future economic growth.” [New York Times, 9/6/2009; Politico, 9/7/2009] The online news site Politico writes: “Jones’ departure from the position is the first real scalp claimed by the Republican right, which stoked much of the criticism of Jones.… Jones’ controversial statements fit snugly into the narrative woven by some conservative critics of Obama as a dangerous leftist, a critique that goes back to the campaign and was based as much on his past work as a community organizer and associations with the likes of the Rev. Jeremiah Wright and William Ayers as on his policies. Jones’ roots in radical politics, and a spate of newly surfaced links Saturday documenting his advocacy for convicted cop killer and former Black Panther Mumia Abu Jamal—a death row prisoner who many in the activist left view as an unjustly convicted political prisoner—threatened to play into that narrative.” [Politico, 9/7/2009] One of Jones’s loudest critics was Fox News’s Glenn Beck, who has repeatedly targeted Jones on his show since July 2009. Beck regularly calls Jones a “Communist-anarchist radical.” Some speculate that Beck began attacking Jones because an organization co-founded by Jones, Color of Change, began a movement to force Beck’s resignation after Beck called Obama a “racist” (see July 28-29, 2009). The influential conservative news blog World Net Daily (WND) has attacked Jones since at least April 2009, calling him “an admitted radical communist and black nationalist leader” who “sees [the] environment as [a] racial issue.” Beck has used much of WND’s rhetoric in his attacks on Jones. [WorldNetDaily, 4/12/2009; Washington Independent, 9/4/2009; New York Times, 9/6/2009] In recent days, Representative Mike Pence (R-IN) called on Jones to resign, and Senator Christopher “Kit” Bond (R-MO) called for an investigation into Jones’s appointment, labeling Jones as “erratic and unstable” in a letter to Senator Bernie Sanders (I-VT), the chairman of the Green Jobs and New Economy Subcommittee. Former Democratic National Committee chairman Howard Dean defends Jones, saying he was being penalized for not realizing what the petition he signed in 2004 was: “This guy’s a Yale-educated lawyer. He’s a best-selling author about his specialty. I think he was brought down, and I think it’s too bad. Washington’s a tough place that way, and I think it’s a loss for the country.” In his resignation letter, Jones writes: “On the eve of historic fights for health care and clean energy, opponents of reform have mounted a vicious smear campaign against me. They are using lies and distortions to distract and divide.” However, he writes, though many have advised him to stay and fight for his position: “I cannot in good conscience ask my colleagues to expend precious time and energy defending or explaining my past. We need all hands on deck, fighting for our future.” [New York Times, 9/6/2009; Politico, 9/7/2009]
Entity Tags: Barack Obama, Glenn Beck, Bush administration (43), Howard Dean, New York Times, Mike Pence, WorldNetDaily, Obama administration, Mumia Abu-Jamal, Politico, Van Jones, Robert Gibbs, Christopher (“Kit”) Bond
Timeline Tags: Domestic Propaganda
The tasks before the forthcoming Group of 20 (G-20) summit to be hosted by President Barack Obama in Pittsburgh, Pennsylvania, are rolled out in the media. The number one agenda item for global leaders will be restraining financial institutions’ compensation and forcing them to clean their balance sheets to avert a duplicate of the near-meltdown of global financial systems. They will also attempt to find new methods for controlling over-the-counter derivatives markets, which are said to have augmented the global crash. The leaders are also scheduled to “increase oversight of hedge funds, credit rating agencies, and debt securitization.” Most leaders agree that it is essential to find a resolution for the huge financial imbalances in trade, savings, and consumption, all of which played a role in the global financial crisis, and ultimately may leave global economies vulnerable to future financial shocks. Christine Lagarde, the French Finance Minister, says that signs of economic recovery should not act as an excuse to avoid economic reforms. Officials of France and Germany are recommending stringent financial sector regulations, which incorporate limits on executive pay. The mandate of the G-20 is to “promote open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability.” The G-20 is comprised of finance ministers and central bank governors from 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States, and the European Union, which is represented by the rotating council presidency and the European Central Bank. [Reuters, 9/22/2009; New York Times, 9/22/2009; Voice of America, 9/22/2009; G-20.org, 9/22/2009]
Having received what the Obama administration calls “exceptional assistance,” American International Group (AIG), Citigroup, Bank of America, General Motors (GM), GMAC, Chrysler, and Chrysler Financial are now meeting with executive pay czar, Kenneth Feinberg, and must submit 2009 pay plans for their top 25 executives. In turn, Feinberg must perform a 60-day assessment while working with the seven companies on their salary configurations. Plans for the other 75 executives of the seven corporations are due later. Exorbitant executive pay and bonuses has its critics, with many outraged that the companies are collecting taxpayer money only to pay out expensive bonuses during a massive recession. Others fear that the feds have insinuated themselves too deeply into private business affairs. Feinberg himself admits that his job has built-in conflicts. “Historically, the American people frown on the notion of government insinuating itself into the private marketplace,” he says in an interview, one day after his appointment. “My answer to those critics is I understand that concern, I share that concern, and the question is how do you strike a balance between that legitimate concern and the populist outrage at prior industry compensation practices?” The Obama administration has already seen and experienced taxpayers’ fury; Feinberg hopes to avoid such outrage. Corporations must prove to him that they are rewarding good performance and discouraging undue risk-taking. “We are not going to provide a running commentary on that process, but it’s clear that Mr. Feinberg has broad authority to make sure that compensation at those firms strikes an appropriate balance,” say US Treasury Department spokespersons, while noting that Feinberg can’t force companies to renege on contract obligations executed prior to February 12, 2009. However, this hasn’t prevented cries of foul play by critics upset over excessive government interference in private businesses. “No matter which way I turn, you’re facing criticism either from those who are appalled at what these companies did versus those who question the value of the government getting involved,” Feinberg says. The recently appointed executive compensation czar is used to dealing with contentious sides having served as compensation fund chairman for the families of victims of the September 11 attacks. [ABC News, 8/12/2009]
Max Baucus (D-MT), chairman of the Senate Finance Committee, makes several revisions to the “final” draft of the Chairman’s Mark of the America’s Healthy Future Act (AHFA, the name for health care reform legislation—see September 16-17, 2009). The “chairman’s mark” is a recommendation by a committee or subcommittee chair of measures to be considered in a markup, and is usually drafted as a bill. Baucus says in a statement: “The modifications focus largely on making care more affordable for low and middle income Americans by increasing the Health Care Affordability Tax Credit, lowering the penalties for people who fail to meet the individual requirement to have health insurance, and increasing the High Cost Insurance Excise Tax threshold for people whose basic health care is more expensive… and effectively slows the growth of skyrocketing health care costs.… This modification incorporates important ideas from my colleagues on both sides of the aisle.” According to Baucus, AHFA as it now stands will make it easier for families and small businesses to buy health care coverage, ensure Americans can choose to keep the health care coverage they have if they like, and slow the growth of health care costs over time. “It will bar insurance companies from discriminating against people based on health status, denying coverage because of pre-existing conditions, or imposing annual caps or lifetime limits on coverage.” Baucus continues to assert that AHFA will not add to the federal deficit. Some of the new provisions include:
Lowering the amount that insurance companies can vary premiums based on age, ensuring that these companies cannot charge elderly clients far more than younger ones. The provision was first submitted by Senators John Kerry (D-MA) and Ron Wyden (D-OR).
Providing $5 billion in additional assistance to small businesses attempting to provide coverage for their workers. The provision was first submitted by Senators Kerry and Debbie Stabenow (D-MI).
Including more senior citizens in the Medicare Advantage program.
Making prescription drugs more affordable for senior citizens by reducing co-payments. This provision was first submitted by Senators John D. Rockefeller (D-WV), Jeff Bingaman (D-NM), and Ben Nelson (D-NE).
Improving Medicare beneficiary access to bone density tests, a provision first submitted by Senator Blanche Lincoln (D-AR).
Creation of a three-year Medicare Hospice Concurrent Care (HCC) demonstration program that would provide Medicare patients eligible for hospice care with all other Medicare-covered services during the same period of time. This provision was first submitted by Senator Wyden.
Improving access to Home and Community Based Services (HCBS) for low income individuals in Medicaid who are in need of long-term care, a provision first submitted by Senator Kerry.
Creating nursing home alternatives for patients in need of long-term care, a provision first submitted by Senator Maria Cantwell (D-WA).
Provide alternatives to nursing home care for disabled individuals on Medicaid, a provision first submitted by Senator Charles Schumer (D-NY).
Improving access to mental health care for Medicaid patients, a provision first submitted by Senator Olympia Snowe (R-ME).
Financial assistance for “high-need” states having difficulty paying for their Medicaid obligations, and use of surplus Medicaid funds to improve the program.
Create an exemption to encourage health care beneficiaries to use generic prescription drugs by waiving co-payments, a provision first submitted by Senator Stabenow.
Remove the mandate that would require states to cover all prescription drugs for Medicaid beneficiaries.
Direct the secretary of health and human services to implement programs to reduce waste in the way drugs are dispensed to seniors in long term care facilities. [Senior Journal, 9/22/2009; New York Times, 9/22/2009; The Capitol (.net), 2011]
Entity Tags: Blanche Lincoln, Ben Nelson, Debbie Stabenow, Jeff Bingaman, Charles Schumer, John D. Rockefeller, America’s Healthy Future Act, Maria Cantwell, Max Baucus, Olympia Snowe, Ron Wyden, Senate Finance Committee, John Kerry
Timeline Tags: US Health Care
Israeli Prime Minister Benjamin Netanyahu tells journalists for the Jerusalem Post that President Obama’s maiden UN speech was “good and positive” for Israel. Netanyahu expresses his belief that Obama’s speech stressed the legitimacy of a Jewish state as well as backing Israel’s right to live in security. He says that Obama’s address urged Palestine leaders to restart peace negotiations. “He said what we have been saying for months, that we need to restart negotiations without preconditions.” In his speech, Obama also addressed threats posed by Iran and North Korea, and spoke strongly against al-Qaeda and terrorism. “All of us, not just the Israelis and the Palestinians, but all of us, must decide whether we are serious about peace, or whether we only lend it lip service,” said Obama. “To break the old patterns—to break the cycle of insecurity and despair—all of us must say publicly what we would acknowledge in private. Nations within this body do the Palestinians no favors when they choose vitriolic attacks over a constructive willingness to recognize Israel’s legitimacy, and its right to exist in peace and security,” he said. “The United States does Israel no favors when we fail to couple an unwavering commitment to its security with an insistence that Israel respect the legitimate claims and rights of the Palestinians. The time has come to re-launch negotiations—without preconditions. The goal is clear: two states living side by side in peace and security—a Jewish state of Israel, with true security for all Israelis, and a viable, independent Palestinian state with contiguous territory that ends the occupation that began in 1967, and realizes the potential of the Palestinian people.” Michael Oren, Israel’s ambassador to the US, says Obama’s reference to Israel as a Jewish state is vital recognition on which “Israel insists as part of any final status deal with the Palestinians.” Oren says that Israel “was gratified to hear the president reiterate US commitment to Israel’s security,” as well as pleased that the president supported a multilateral rather than bilateral means for bringing peace between Israel and its neighboring states. Netanyahu tells Israeli reporters that he “listened very carefully to President Obama’s call to the Arab countries to publicly support moving regional peace forward.” He also praises Obama for expressing his appreciation about restrictions that have been eased between Judea and Samaria in the last few months to improve the quality of living and upgrade the economy for the Palestinians in the region. However, Obama also said in his address that “America does not accept the legitimacy of continued Israeli settlements,” while simultaneously calling on Palestinians to end provocations against Israel and emphasizing that the settlements issue should not deter talks. [Jerusalem Post, 9/24/2009]
With unemployment rates for American Indians at 27 percent, African-Americans logging jobless rates of 15 percent, and Hispanics at 13 percent, experts say that for these ethnic groups, the economic recession is more of a “Great Depression.” The foreclosure crisis is equally ominous, having worsened with increasing joblessness, unduly impacting minority groups at a staggering rate. Dr. James Carr, chief operating officer of the National Community Reinvestment Coalition, explains: “The crisis is now fueled by unemployment and loss of income. In 2009, nearly 60 percent of foreclosures are triggered by unemployment.… The Obama administration’s endeavors to curtail foreclosures aren’t working.” He emphasizes that the loan modification program has “plenty of carrots” for the banks, “but no meaningful sticks to compel more responsible actions.” On average, lenders lose 10 times as much on foreclosures than loan modifications, or about $144,000 as opposed to a loan modification tax write-off of $14,000. Because they can, banks are choosing to deduct the greater loss on their current tax bill by foreclosing rather than modifying the loan. Consequently, only 12 percent of homeowners eligible for modification have received such through voluntary Making Home Affordable program set up by the Obama administration. According to Raymond Skinner, Maryland’s secretary of housing and community development: “Foreclosures are taking on a different face. As of the second quarter of 2009, the majority of the nation’s foreclosures are now on prime loans.”
Bankruptcy Law Reform, Homeowners Loan Corporation - What is needed, says Carr, is bankruptcy reform to allow judges to modify mortgages using the same methods they use to modify yacht and investment property payments; at least 30 percent of loans on the way to foreclosure could be helped by reformation of bankruptcy laws. Still, experts agree that even loan modifications won’t help many unemployed persons. Carr is calling for “a new version of the Great Depression-era Homeowners Loan Corporation” (HOLC) to allow the use of eminent domain to purchase loans between current market value and face value cost. The discount could then be used to modify the loans so that the unemployed homeowner could enter into rental agreements to stay in their homes, or even obtain emergency grants or loans to continue paying their mortgages. HOLC, however, is not under consideration by either Congress or the Obama administration.
Insufficient American Recovery and Reinvestment Act Resources - Some argue that the 2009 American Recovery and Reinvestment Act did not provide the resources needed by those hardest hit by the recession, which was supposedly the goal of the bill. As a result, there is now an immediate need for a targeted stimulus for job creation and unemployment benefits extension. “Channeling dollars to the individuals and communities that need them most will immediately stimulate the economy and save and create jobs for both the neediest households and the US population generally,” Carr says. “Families that live on the edge of survival will pour these recovery dollars immediately back into the economy through spending on groceries, medicine, clothing, childcare, energy, transportation, and other basic necessities. That spending would support multiple sectors of the economy and have positive impacts far outside of the communities where dollars are immediately spent.” Additionally, racial barriers and continuing discrimination need to be addressed to guarantee access to affordable housing alternative, transportation, education, and economic opportunity. [Nation, 9/25/2009; NPR, 9/28/2009]
Frances Kissling. [Source: University of Pennsylvania]Frances Kissling, the former head of pro-choice organization Catholics for a Free Choice, writes that the pro-choice movement made a grievous mistake in not successfully opposing the so-called “Hyde Amendment,” which since 1976 has denied federal funding for abortions in most instances (see September 30, 1976). Kissling is spurred to write in part by President Obama’s recent characterization of the Hyde Amendment as an “American tradition.” She writes: “It seems that pro-choice legislators, following the president’s lead, now explicitly consider that throwing women who cannot afford to pay for their own abortions under the bus is a reasonable compromise between those who favor and those who oppose legal abortion and a sensible concession to those who think abortion is immoral. The compromise is the logical outcome of one of Roe’s essential weaknesses: the fact that the constitutional right to abortion was based on the principle of privacy rather than non-discrimination. A private right, even a fundamental one, did not, according to the Supreme Court, require the state to pay for its implementation.” Kissling notes that in the years when Hyde was under consideration, the nascent pro-choice movement, in a decision “[b]ased substantially on the advice of direct-mail and political consultants,” decided to let Hyde go through without serious opposition, and focused instead on the “less real” threat of an anti-abortion constitutional amendment. Kissling writes: “The advice was clear and classist. It accepted the racism that lay buried in middle class hostility to poor women, ‘welfare queens,’ and the ‘sexually promiscuous’—all those who might be expected to look to Medicaid to pay for abortions—whom the rest of us should not support.” In hindsight, Kissling writes: “[n]ot concentrating on overturning Hyde was arguably the worst decision the mainstream choice movement made.… [T]he largely unchallenged Hyde Amendment emboldened anti-abortion groups to pick off powerless constituencies one at a time.” Instead of working to restore federal funding for abortions for women unable to pay for their own procedures, the pro-choice movement has, Kissling writes, taken on far more unpopular issues such as so-called “partial-birth” abortions (see April 1996 and November 5, 2003), but has never mounted a clear and unified challenge to Hyde. Kissling calls on the pro-choice movement to mount just such a challenge, and to continue to do so until Hyde is overturned. [Women's Media Center, 1/3/2010]
US News and World Report reporter Paul Bedard notes that CNBC commentator Rick Santelli is being lauded as a “founding father” of the right-wing “tea party” movement. Santelli is cited in a number of sources, including the recently published A New American Tea Party by former Bush administration official John O’Hara, as having “kicked off” the tea party movement with his “impromptu” rant against the Obama administration’s economic policies on CNBC (see February 19, 2009 and February 27, 2009). Santelli has refused to become a tea party spokesman (see April 2, 2009), but he says, “I still think that all the dynamics that I felt as it was happening are still in place today.” Santelli adds that like many “tea partiers,” he opposes the Obama administration’s health care reform efforts. O’Hara has written, “Santelli was very important” to the tea party movement. Before Santelli’s on-air rant, most Americans had just accepted the Bush and Obama administration claims that they had to bail out Wall Street and Detroit to avert catastrophic failures. “Santelli said what a lot of people were thinking and afraid to say” when he told viewers that “government is promoting bad behavior.” Santelli says: “It’s very gratifying to me that four minutes out of my life made a difference.… It seems to me that any reason for people getting more active in running or taking part in politics and government I think is just terrific.” Santelli says he has repeatedly turned down offers to run for public office in his home state of Illinois. [US News and World Report, 1/25/2010] In an interview shortly after the US News and World Report article is published, Santelli says that he and the “tea parties” share many goals and beliefs. “I feel bad to a certain extent because, even though I may share many of the philosophies of the tea party and many believe I was instrumental in being a catalyst for its formation, I also think that considering what I do for a living—and I take it very seriously—I try to avoid political ties.” He then criticizes the mainstream media for not paying more attention to the tea parties and the economic issues that motivate them, saying: “Most of the mainstream coverage of most of the crisis—the economy, the road to get here, and the tea party—has been very much lacking. The fact that many traditional media avenues that have ignored or belittled the tea parties all of a sudden seem to be spending an inordinate amount of time trying to understand and explain them, I think that alone gives credibility to their girth.” [Daily Caller, 2/2/2010]
Fox News host Glenn Beck says that Social Security and Medicare are “socialist” programs that “should have never been created.” Beck tells his viewers: “Do you think programs like Social Security and Medicare represent socialism and should have never been created in the first place?… I’m an American. I read. I believe in the Constitution. And, of course, Social Security and Medicare represent socialism and should have never been created. Since FDR and his progressive buddies started Social Security, not our Founding Fathers, that should be fairly obvious to people.” Beck tells his viewers that Social Security was created by Harry Hopkins, an adviser to then-President Franklin Roosevelt who, Beck says, “had a relationship with [Josef] Stalin,” the then-dictator of the Soviet Union. Therefore, Beck says, Social Security is a Stalinist “redistribution of wealth” program that is inherently Marxist in its nature. [Media Matters, 1/27/2010; Media Matters, 9/7/2010] Beck’s allegation that Hopkins was some sort of “Stalinist” is false. The allegation originally came from KGB defector Oleg Gordievsky, who wrote a sensationlist book, KGB: The Inside Story, where he alleged Hopkins was “an unconscious spy” for the Soviet Union during World War II. In reality, Hopkins was the top official in the Roosevelt administration charged with dealing with Soviet officials during World War II. His job involved explaining American policies and positions to Stalin and other top Soviet officials. Since Soviets who spoke to Hopkins routinely reported the contacts to the Soviet national security agency, the NKVD, Hopkins was listed as a “source” or “agent” of information for Moscow. No evidence has ever surfaced that Hopkins provided any classified or unauthorized information to the USSR, or in any way worked to advance the cause of Soviet Communism. [New York Times, 10/28/1990]
President Obama signs an executive order affirming the “Hyde Amendment,” which bars federal funding for most abortions (see September 30, 1976). The White House does not hold a press conference to highlight the signing of the order, and administration officials have acknowledged that Obama agreed to sign it to keep the support of conservative Democrats in Congress for the health care reform package. William Galston of the Brookings Institution says of the order: “The executive order found a sweet spot, which I’m surprised existed. Something that didn’t send the base of the party into a tizzy but seems to have satisfied a very important minority within the party. It was the model of win-win pragmatism.” Pro-choice activists condemn the decision to sign the order, and anti-abortion organizations insist the order does little to advance the cause of making access to abortions all but impossible. The National Organization for Women (NOW) says that Obama’s commitment to abortion rights is “shaky at best,” and adds that his willingness to sign the order demonstrates that “it is acceptable to negotiate health care on the backs of women.” NOW president Terry O’Neill says: “What we need to hear our leaders say is that the Hyde Amendment is bad law. It needs to ultimately be repealed. It hurts women.” Cardinal Francis George, president of the US Conference of Catholic Bishops, says the order does not go far enough: “We do not understand how an executive order, no matter how well intentioned, can substitute for statutory provisions.” Bart Stupak (D-MI) says that the order “protects the sanctity of life.” [Washington Post, 3/24/2010; US Catholic, 3/25/2010; Los Angeles Times, 3/25/2010]
Fox News host Glenn Beck, touting his “Plan” for government entitlement spending, tells his viewers: “Tomorrow, we’re going to roll up our sleeves and begin. We’re going to cut health care. Right now, Medicare, Medicaid, and Social Security are 40 percent of our budget. They’re going away. It’s going to be ugly, a lot of crying, but America needs a cure.” [Media Matters, 4/12/2010; Media Matters, 9/7/2010]
Conservative pundit and columnist Tucker Carlson says it is “unfortunate” that Republicans won’t “state unequivocally” that they “want to do away with” Medicare and “most” Social Security. Carlson, a guest on Fox News talk show host Sean Hannity’s broadcast, is asked by another guest, Fox News contributor Bob Beckel, “Why don’t you just state unequivocally that you want to do away with Medicare, which is what the Republicans want to do, and do away with most Social Security?” Carlson replies: “Unfortunately, they don’t. Unfortunately, they don’t. Unfortunately, most Republicans in positions of elected authority are unwilling to—are unwilling to look right in the camera and say, ‘We’re going to have to pull back on entitlements.’” [Media Matters, 9/7/2010]
Fox News host Glenn Beck, speaking on his daily radio show, says that “progressives build the structure that a communist, a Marxist, a Nazi would love to have.” Beck is accusing the Obama administration of emulating Nazis and Communism by its programs of what he calls the “redistribution of wealth and social justice of wealth—engineered justice.” [Media Matters, 4/22/2010]
David White, who chairs the Energy Practice Group at Oregon’s Tonkon Corporation, writes in the Portland, Oregon, Daily Journal of Commerce about a pilot program going into effect that affects Oregon solar energy users. The Oregon Public Utility Commission (OPUC) is starting a program that White says “offers a promising alternative to more traditional financing of solar projects.” Traditionally, solar projects in Oregon have been financed with a combination of state business energy tax credits (BETCs), incentives from the Energy Trust of Oregon (ETO), federal tax credits, and credits from the utility based on the energy produced by the solar facility but not used by the customer. The BETCs are set to expire in 2012, thusly the new program offers new incentives for solar energy producers. White writes: “Under the pilot program, solar owners will be able to sell the energy they produce back to the utility at rates more than five times retail electricity rates. They also will be eligible for federal tax credits, but not BETCs or ETO incentives. The program is geared primarily to small (less than 10 kilowatt) and medium-sized (10 kilowatt to 100 kilowatt) solar producers, but systems of up to 500 kilowatts will qualify. That’s pretty big when you think of two acres covered with solar panels.” Net metering will be an option for systems generating 100 kilowatts or less, essentially allowing those producers to receive monthly credits equal to the electricity they generate. Solar producers can even sell excess energy to the utility at market rates. White acknowledges that the reception to the program has been mixed. Supporters say similar programs in Germany made that country the world’s largest solar energy producer; critics say the program has limited capacity and relies on an uncertain bidding process. White says the program “provides financial incentive options for solar owners in the short-term and for Oregon’s solar industry in the long-term.… The pilot program reflects a new public policy perspective. Rather than having solar development hinge on the inherently unstable BETC approach, which is funded by the general public, this pilot program is paid for by utility customers through higher retail rates. Businesses and homeowners should sharpen their pencils and compare the options based on their individual needs.” [Portland Daily Journal of Commerce, 6/16/2010]
On Fox News’s business show Bulls and Bears, Fox Business Channel host Eric Bolling tells viewers that he is glad young Americans will not have Social Security and will have to work instead of relying on what he calls that “Ponzi scheme” of a program. When Bolling calls Social Security a “Ponzi scheme,” the host and four other guests laugh and call out approving statements; host Brenda Buttner shouts repeatedly, “I love his show!” Bolling says that it is good young people “realize they’re not going to be able to suck at the teat of the nanny state too much longer, get off their butt, work, put some money away, and not have to rely on a system that’s gonna fold, probably by the time they get to collect a check.” [Media Matters, 7/24/2010; Media Matters, 9/7/2010] In February 2009, the Wall Street Journal’s Stephen Moore made a similar claim (see February 2, 2009).
Stephen Schwarzman. [Source: Time magazine]Stephen Schwarzman, one of Wall Street’s leading hedge fund managers, equates the Obama administration’s plan to levy taxes on the private equity industry as akin to Adolf Hitler’s invasion of Poland, London’s Daily Telegraph reports. Schwarzman says America faces a “crisis of leadership” that is hindering the nation’s economic recovery. His concerns are echoed by Daniel Loeb, the founder of the Third Point fund, who accuses the Obama administration of attempting to implement economic “redistribution rather than growth.” Loeb decries an April 2010 lawsuit brought by the Securities and Exchange Commission (SEC) against Wall Street investment firm Goldman Sachs as “politically laced,” and blames the lawsuit for making investors lose confidence in the economic recovery. Loeb says that “so long as our leaders tell us that we must trust [them] to regulate and redistribute our way back to prosperity, we will not break out of this economic quagmire.” [Daily Telegraph, 8/31/2010]
A portion of the Forbes magazine cover featuring Dinesh D’Souza’s article on President Obama. [Source: Forbes magazine / PBS]In a cover story for Forbes magazine, conservative author and pundit Dinesh D’Souza claims that President Obama is using the Oval Office to pursue Kenyan anti-colonial policies once advocated by his father, Barack Obama Sr., a Harvard-trained economist and Luo tribesman from Kenya. D’Souza has a long history of race-baiting and using inflammatory rhetoric (see March 15, 1982, October 1982, October 4, 1990, and June 5, 2004). [Forbes, 9/27/2010] The story is loosely based on D’Souza’s upcoming book, The Roots of Obama’s Rage. [Washington Post, 9/16/2010] It is dated September 27, 2010, but is published on the Internet two weeks earlier. After tarring Obama as “the most antibusiness president in a generation, perhaps in American history” and a strong advocate of expanding the federal government into all aspects of America’s commercial existence, D’Souza turns to his perception of Obama’s “strange” foreign policy. He cites several instances of Obama’s stated intention to reach out to Muslims across the globe, calling these initiatives “anomal[ies],” and proposes an explanation: Obama does not hold to the American dream, in any form, but instead hews to what D’Souza characterizes as the “Kenyan” dreams of his father, who D’Souza says was a champion of anticolonialism. The elder Obama advocated that native Kenyans “control the economic means of growth” in their country, D’Souza quotes him as writing in 1965, and also wrote, “We need to eliminate power structures that have been built through excessive accumulation so that not only a few individuals shall control a vast magnitude of resources as is the case now.” Obama, D’Souza writes, is following his father’s policies in his governance. “It may seem incredible to suggest that the anticolonial ideology of Barack Obama Sr. is espoused by his son, the president of the United States,” D’Souza writes. “That is what I am saying. From a very young age and through his formative years, Obama learned to see America as a force for global domination and destruction. He came to view America’s military as an instrument of neocolonial occupation. He adopted his father’s position that capitalism and free markets are code words for economic plunder. Obama grew to perceive the rich as an oppressive class, a kind of neocolonial power within America. In his worldview, profits are a measure of how effectively you have ripped off the rest of society, and America’s power in the world is a measure of how selfishly it consumes the globe’s resources and how ruthlessly it bullies and dominates the rest of the planet. For Obama, the solutions are simple. He must work to wring the neocolonialism out of America and the West. And here is where our anticolonial understanding of Obama really takes off, because it provides a vital key to explaining not only his major policy actions but also the little details that no other theory can adequately account for.” D’Souza cites Obama’s support for offshore oil drilling in Brazil, his support for repealing the Bush-era tax cuts for the wealthy, and his refusal to consider nationalizing American financial or health care institutions as “evidence” that he intends “to decolonize these institutions, [to bring] them under the government’s leash.” D’Souza goes even farther, accusing Obama of idolizing the 9/11 terrorists as anticolonial heroes whose acts were justified by their ideology; D’Souza cites Obama’s support for the building of a Muslim community center several blocks from the site of the World Trade Center, and his support for the release of one of the Lockerbie bombers on medical grounds, as “evidence” of his favoring of Islamist terrorists. Finally, D’Souza cites the statements of one of Obama’s grandfather’s wives, Sarah Obama, and Obama’s own writings about weeping at his father’s grave in Kenya as conclusive evidence of Obama’s secret anticolonial ideology. “Obama takes on his father’s struggle, not by recovering his body but by embracing his cause,” D’Souza writes. “He decides that where Obama Sr. failed, he will succeed. Obama Sr.‘s hatred of the colonial system becomes Obama Jr.‘s hatred; his botched attempt to set the world right defines his son’s objective. Through a kind of sacramental rite at the family tomb, the father’s struggle becomes the son’s birthright.” D’Souza calls colonialism a “dead issue,” and terms Obama “the last anticolonial.” [Forbes, 9/27/2010] Many conservatives have long accused Obama of being un-American because of his Kenyan ancestry (see February 25, 2008, August 1, 2008 and After, October 8-10, 2008, June 25, 2009, June 29, 2009, and August 11, 2009). D’Souza’s article will be lambasted by a wide swath of media figures (see September 12, 2010 and After) and will be shown to be riddled with factual errors (see September 16, 2010). It will be praised by former House Speaker Newt Gingrich, who is widely believed to be pursuing the 2012 Republican presidential nomination (see September 12, 2010 and After). [Media Matters, 9/12/2010]
Newt Gingrich, the former Republican House speaker and an apparent candidate for the presidency in 2012, tells the conservative National Review that President Obama only pretends to be a “normal” American, but in reality is driven by his belief in “Kenyan, anti-colonial behavior.” Gingrich cites a recent article by conservative author Dinesh D’Souza (see September 12, 2010), calling D’Souza’s insight into Obama’s behavior “stunning… [the] most profound insight I have read in the last six years about Barack Obama.… What if [Obama] is so outside our comprehension, that only if you understand Kenyan, anti-colonial behavior, can you begin to piece together [his actions]? That is the most accurate, predictive model for his behavior.… This is a person who is fundamentally out of touch with how the world works, who happened to have played a wonderful con, as a result of which he is now president. I think he worked very hard at being a person who is normal, reasonable, moderate, bipartisan, transparent, accommodating—none of which was true.… In the Alinksy [Saul Alinsky, a liberal community organizer] tradition, he was being the person he needed to be in order to achieve the position he needed to achieve.… He was authentically dishonest.” The progressive media watchdog organization Media Matters calls Gingrich’s comments the latest in a long line of “not-so-subtle race baiting” by right-wing media figures. Gingrich is a frequent guest on Fox News. [Media Matters, 9/12/2010] White House press secretary Robert Gibbs accuses Gingrich of “trying to appeal to the fringe.” In response, Gingrich tells the Daily Caller that his own remarks “seemed to touch some kind of irrational nerve on the left.” [Washington Post, 9/16/2010] Days later, Washington Post columnist Eugene Robinson asks if Gingrich is “just pretending to have lost his mind, or has he actually gone around the bend?” Robinson answers his own question: “His lunacy certainly seems genuine enough. It’s one thing to be a rhetorical bomb-thrower, as Gingrich has long fancied himself, and another to lob damp squibs of pure nonsense into the fray. The man’s contributions to the public discourse have become increasingly unhinged.” Robinson calls Gingrich’s assertions about Obama’s supposed “Kenyan, anti-colonial behavior” “bizarre.” If Gingrich is indeed rational, Robinson continues, then he is probably attempting to promote the “birther” conspiracy theory that Obama is not a US citizen, but instead “foreign, exotic, alien, somehow not American.” Moreover, Gingrich is trying to promote a much larger conspiracy theory: “that American democracy—indeed, the whole Anglo-American-Judeo-Christian enterprise—is under attack in a titanic clash of civilizations. In this view, we are threatened most acutely by the Islamic civilization. But we must also be on guard against the ‘Sinic’ civilization of China, the ‘Hindu’ civilization of India, and assorted others. This analysis was developed by Samuel P. Huntington, a Harvard professor who died in 2008—and who said he never intended his work to be read as a battle plan. Gingrich seems to believe that our culture and values are also threatened from within—by black and brown people who demand that they, too, be given a voice in defining that culture and those values.” [Washington Post, 9/14/2010] Post media observer Howard Kurtz observes on Twitter that he is “amazed that Newt Gingrich said Obama has a Kenyan view of politics. Not exactly subtle.” [Media Matters, 9/13/2010] Many conservatives have long accused Obama of being un-American because of his Kenyan ancestry (see February 25, 2008, August 1, 2008 and After, October 8-10, 2008, June 29, 2009, and August 11, 2009).
Kathleen Parker, a conservative columnist who is highly critical of the Forbes article depicting President Obama as a ‘Kenyan sympathizer.’ [Source: Crooks and Liars]Forbes Magazine encounters a firestorm of criticism due to its publication of a cover story alleging President Obama is driven by “anti-colonial” sentiments garnered from his Kenyan father (see September 12, 2010). The story was written by Dinesh D’Souza, a prominent conservative author and pundit, and has been praised and reiterated by conservative politician Newt Gingrich (see September 12, 2010 and After).
White House: 'New Low' for Forbes - White House press secretary Robert Gibbs says of the article: “It’s a stunning thing, to see a publication you would see in a dentist’s office, so lacking in truth and fact. I think it represents a new low.” He asks, “Did they not fact-check this at all, or did they fact-check it and just willfully ignore it?” In response, the magazine releases a statement saying: “Dinesh D’Souza’s cover story was presented as an analysis of how the president thinks. No facts are in contention. Forbes stands by the story.” D’Souza says that his article is based on a “psychological theory,” but insists, “the idea that Obama has roots that are foreign is not an allegation, it’s a statement of fact.” Washington Post media critic Howard Kurtz notes that Obama’s father abandoned his family when Obama was two years old, and Obama only saw his father once more after that. Gibbs says that D’Souza’s article is another illustration of the fact that there is “no limit to innuendo” against the president. Forbes, he says, “left the facts on the cutting-room floor.” [Washington Post, 9/16/2010]
Columbia Journalism Review: 'Singularly Disgusting' and 'Racist' - The Columbia Journalism Review (CJR) calls the D’Souza article “a fact-twisting, error-laden piece of paranoia” and “the worst kind of smear journalism—a singularly disgusting work.” Reviewer Ryan Chittum writes: “Forbes for some reason gives Dinesh D’Souza the cover and lots of space to froth about the notion popular in the right-wing fever swamps that Obama is an ‘other’; that he doesn’t think like ‘an American,’ that his actions benefit foreigners rather than Amurricans. It’s too kind to call this innuendo. It’s far too overt for that.… This is loathsome stuff. And, again, it’s the cover story of one of the three big mainstream financial magazines.” Chittum continues: “The veneer of respectability, if you can call it that, that D’Souza and Forbes put on this noxious near-McCarthyite junk is that Obama is an ‘anticolonialist.’ It’s thin gruel. And, hey—I’m an anticolonialist, too. And so were George Washington, Thomas Jefferson, James Madison, and the rest of the gang.” He concludes, “Forbes has shamed itself with this one.” [Columbia Journalism Review, 9/13/2010] D’Souza responds to the CJR review by accusing Chittum of being one of what he calls the “confirmed Obamorons, who are only satisfied with hosannas and genuflections before the Anoin[t]ed One.” Chittum responds with a more detailed dissection of the lies, errors, and misinformation in the article, and concludes: “D’Souza denies in his blog post that the piece is racist, but of course it is. Indeed, it’s racist at its rotten core. That’s the whole point. You can’t write stuff like ‘Incredibly, the US is being ruled according to the dreams of a Luo tribesman of the 1950s,’ and credibly assert that it’s not racist.… That Forbes gave the cover of its mainstream magazine to this piece will be a black mark on its reputation for a long, long time.” [Columbia Journalism Review, 9/16/2010]
Washington Post Columnist: 'Big Gob of Gibberish' - Washington Post columnist Eugene Robinson calls D’Souza’s article “a big gob of gibberish,” reading like something written by “one of those conspiracy theorists who believe the CIA is controlling our brain waves.” The article “makes assertion after assertion that is plainly, demonstrably unsupported,” he continues. [Washington Post, 9/14/2010]
Post Columnist: 'There's Nothing Here of Any Benefit' - Washington Post columnist Kathleen Parker says that D’Souza has “jump[ed] the shark” with his article, and asks sarcastically: “What’s next? Obama is an extraterrestrial pod deposited on Planet Earth to occupy a human shell and get elected leader of the free world so that he can lull the population into complacent dependency in advance of a full invasion of body snatchers?” She labels the article a “Republican revenge fantasy” and concludes: “It’s time to move on, gentlemen. There’s nothing here of any benefit, whatsoever.” [Washington Post, 9/15/2010]
Media Matters: 'Completely Ridiculous' - The progressive media watchdog organization Media Matters calls D’Souza’s arguments “completely ridiculous… an impressive combination of factual distortions and twisted logic.” [Media Matters, 9/12/2010] Author Eric Boehlert, a Media Matters contributor, asks if Forbes believes so strongly in the story as to give it the cover, why won’t the magazine defend it? He writes: “I think the Obama cover story has done extraordinary damage to the Forbes brand. But I’d actually respect the magazine if someone—anyone—on staff in a position of power had the courage to come forward and be held accountable for, or even try to argue on behalf of, the D’Souza train wreck.” [Media Matters, 9/16/2010]
Entity Tags: Howard Kurtz, Eric Boehlert, Barack Obama, Dinesh D’Souza, Forbes magazine, Eugene Robinson, Ryan Chittum, Kathleen Parker, Media Matters, Columbia Journalism Review, Robert Gibbs, Newt Gingrich
Timeline Tags: Domestic Propaganda
The progressive media watchdog organization Media Matters disproves a number of “factual” claims in a recent article by conservative author Dinesh D’Souza, who claims that President Obama is driven by “anticolonial” rage sparked by his alleged identification with his Kenyan father (see September 12, 2010). Media Matters notes the following:
D’Souza claims that Obama “supported the conditional release” of Abdel Baset al-Megrahi, the “Lockerbie Bomber,” because he sees al-Megrahi as a “fellow anticolonialist,” when in reality the Obama administration informed Scotland that it opposed al-Megrahi’s release.
D’Souza claims that Obama supports “oil drilling off the coast of Brazil but not in America,” in the form of a $2 billion Export-Import (Ex-Im) Bank loan to Brazil for exploratory drilling. In reality, the Obama administration had no say in the Ex-Im’s decision, and all five members of the bank’s board of directors were Bush administration appointees. (Forbes will conduct a fact-check after publication that garners harsh criticism from the bank over D’Souza’s misrepresentation of facts—see September 23-24, 2010.)
D’Souza claims that Obama spent the first 17 years of his life “in Hawaii, Indonesia, and Pakistan.” D’Souza admits that he erred in this claim, as Obama never visited Pakistan until he was 20, and then only for three weeks.
D’Souza claims that Obama’s June 2010 speech in response to the Gulf oil spill did not focus on cleanup strategies, but instead lambasted the US for its outsized oil consumption. While Obama did mention America’s disproportionate oil consumption, the central focus of his speech was the federal government’s response to the spill. (Forbes will correct this error and acknowledge that Obama’s speech indeed focused on cleaning up the oil spill—see September 23-24, 2010.)
D’Souza claims that the 2009 economic stimulus (see November 18, 2008, February 10, 2009, February 13, 2009, February 17, 2009, February 23, 2009, February 28, 2009, March 9, 2009, April 9, 2009, April 16, 2009, June 9, 2009, and August 9, 2009) failed to reduce unemployment; the Congressional Budget Office (CBO) has stated that unemployment would be as much as 1.8 percent higher without the stimulus, numbering up to 3.3 million people who would not have jobs. Private analysts such as the Council of Economic Advisers agree with the CBO’s assessment.
D’Souza claims that a controversial New York City Islamic center, which he calls a “mosque,” is to be built “near the site where terrorists in the name of Islam brought down the World Trade Center… at Ground Zero.” In reality, the proposed Islamic community center, Cordoba House (later renamed Park51), is two city blocks away from the site of the World Trade Center.
D’Souza claims Obama does not believe in “American exceptionalism,” and says that Obama’s dreams are not “the American dreams,” but “something else… certainly not the American dream as conceived by the founders.” In reality, Obama has said time and again that he unequivocally believes in American exceptionalism, and has repeatedly stated his pride in being an American.
D’Souza claims that Obama sees his father as a “hero” who “represented a great and noble cause.” In reality, Obama’s memoir, Dreams from My Father, offered a largely critical portrait of Obama’s father. As Washington Post media critic Howard Kurtz notes, “[T]hat book describes a young man’s struggle to understand his African roots and the father he never really knew, and offers a largely critical portrait of the Harvard-educated man who left his family.” Media Matters cites numerous other historians and reviewers who read Obama’s memoir as being highly critical of his father. As Reason Magazine’s Tim Cavanaugh wrote on the day D’Souza’s article was published, the memoir is “a narrative of Obama’s non-relationship with his father,” and continued, “[T]here is no evidence for the claim that the elder Obama bequeathed his son a coherent or even a partial political philosophy.”
D’Souza claims that Obama opposes US military action in Afghanistan, because of his “anticolonial” bent. In reality, Obama campaigned on the idea that the US invasion of Afghanistan was an “absolutely vital” response to 9/11, and has made statements to that effect as far back as October 2001. As president, Obama has increased troop levels in Afghanistan and has said that US “security is at stake in Afghanistan.”
D’Souza claims that Obama views “free market” as “code words for economic plunder,” saying that Obama views “the rich as an oppressive class, a kind of neocolonial power within America.” In reality, Obama has repeatedly praised the free market, and has consistently supported America’s large and small businesses in his economic policies. [Media Matters, 9/16/2010]
Jack Burkman, in a 2005 appearance on MSNBC. [Source: Postman Patel (.com)]In a debate on Fox News over whether the Post Office should continue to exist, Republican strategist Jack Burkman, who favors privatizing postal services, opens his remarks by saying most postal workers “should be driving cabs, and I think we should stop importing labor from Nigeria and Ethiopia, that’s about the skill level—they’re only in there because of massive union protection.” Attorney Tamara Holder chides Burkman for his “somewhat racist comments” about African immigrants, prompting Burkman to shout, “That’s crazy!” and laugh over Holder’s statement. Burkman reiterates his comment about “unskilled labor[ers]” driving taxicabs, and restates his opposition to the country “importing labor to drive cabs.” Former Republican Senator Alfonse D’Amato (R-NY) lambasts Burkman for his racism. “You are a nasty racist,” D’Amato says, and continues: “You brought in the fact that it’s a bunch of Nigerians.… Let me just tell you. That’s a bunch of bullsh_t. And you should be ashamed of yourself and have your mouth washed out. What the hell are you talking about?” When Burkman tries to interject, “We are importing—” D’Amato shouts over him, “It’s one thing to say that they’re out of control—wait a minute, shut up, I listened to your racist bullsh_t—it’s one thing to say that they’re hiring people who are unskilled, that they’re—that you can save money, that you can run it better, that it is inefficient, ineffective, and I agree to all of those things, but for you to bring in this bullsh_t about, oh, a bunch of Nigerians, etc., it’s out of line.” At this point, both Burkman and host Eric Bolling attempt to talk over D’Amato, but he refuses to stop speaking, adding: “And you hurt the cause, you hurt the cause, you hurt the cause of saying, ‘Guess what? A combination of private/public—a private/public partnership could do much better than what is being done now.’” Bolling allows Burkman to have the final word, and Burkman restates his contention that the Post Office employs “unskilled labor who should have been pushed down because of market reasons,” but who have had protection from unions and government; Bolling does not reiterate his statements about importing Nigerians and Ethiopians to perform unskilled tasks. [AmericaBlog, 9/18/2010]
Fox News host Sean Hannity has as a guest Fox business commentator Stuart Varney. Varney accuses the Obama administration of implementing “socialist,” “un-American” economic policies. “We’ve had an 18-month experiment with American socialism,” Varney claims, and “we do not like it, we want to reverse it.” President Obama’s economic policies, Varney says, are “un-American.” [Media Matters, 11/17/2010]
Tim Wise (L) and Laura Flanders during their interview. [Source: GRIT TV / Nation of Change (.org)]Progressive author and columnist Laura Flanders interviews author and activist Tim Wise, an expert on white supremacist ideology and movements. They begin by discussing President Obama’s incremental, “race-neutral” approach to solving racial problems in America, agreeing that Obama tends to believe that racial problems can best be alleviated by economic solutions. However, Wise says, “racial disparities that are caused by racial discrimination—by race-specific injury—can’t be solved with race-neutral analysis or race-neutral policy.” Wise says that long-term studies show that the single biggest reason why support for social safety-net programs has dropped so steadily in America over the last few decades has been the perception that those programs will be abused by minorities, a perception Wise says is shaped in part by racist beliefs. Ironically, that lack of citizen support, which has translated into a lack of governmental support, means that when white Americans need those programs themselves, they do not get the services they require; in the last decade, many more whites have begun to suffer economic plights, and they now need the programs they have largely opposed. Wise says that the liberal strategy of ignoring racism from the right, pretending it does not exist, and/or trying to “rise above it,” just gives the implied racism of conservatives like Rush Limbaugh and many “tea party” activists that much more influence and power. The more the idea of racism is openly addressed, Wise says, the less effective racial overtones and implications are in politics. Historically, Wise says, white Americans strongly support federally funded social programs as long as they do not perceive minorities as being the primary beneficiaries of those programs. After 1971-72, he says, the media began portraying the recipients of welfare, Medicaid, and other safety-net programs as largely African-American. Before, he says, the media usually showed whites in Appalachia, for example, with whites standing in soup-kitchen lines and so forth. When the media began portraying safety-net recipients as mostly minorities, white support of those programs began to plummet. Flanders turns the conversation to the “tea party” movement, and, after citing Wise’s recent article, “Imagine If the Tea Party Was Black” (see April 25, 2010), she asks about the racism that infuses much of the tea party’s ideology and activism (see April 25, 2010). Obviously, Wise says, if tea partiers were black, “they wouldn’t be able to surround lawmakers and scream at them at the top of their lungs like petulant children.” Even if one does not accept the allegations of racial slurs and spitting that have been made against tea partiers (see March 20, 2010), which Wise does accept as true, “just the notion that a thousand white people can get around a bunch of lawmakers, some of whom are white and some of whom are of color, and scream and yell at them and tell them how to vote…” It is inconceivable that black protesters and activists could “get away with that,” he says, “without being seen as criminals.” And the idea of Arab-Americans or Latinos trying to do something similar, he says, is even harder to conceive, he says: Arab-Americans would be vilified as terrorists, and Latinos would be smeared as illegal aliens. The political impact of the tea partiers has been far stronger than anything black and other minority civil rights and political pressure groups have been able to bring to bear. “In every sense,” he says, “the tea party is able to get away with things—say things, do things, make the kinds of statements about public leaders and officials—that no group of color could ever possibly do.” [GRIT TV, 9/25/2010]
President Obama tells how his ideas of bipartisan compromise with Republican lawmakers were dashed. Obama reflects on the American Recovery and Reinvestment Act of 2009, signed into law in February 2009. Interviewer Jann Wenner of Rolling Stone asks: “When you came into office, you felt you would be able to work with the other side. When did you realize that the Republicans had abandoned any real effort to work with you and create bipartisan policy?” Obama responds: “Well, I’ll tell you that given the state of the economy during my transition, between my election and being sworn in, our working assumption was that everybody was going to want to pull together, because there was a sizable chance that we could have a financial meltdown and the entire country could plunge into a depression. So we had to work very rapidly to try to create a combination of measures that would stop the free-fall and cauterize the job loss. The recovery package we shaped was put together on the theory that we shouldn’t exclude any ideas on the basis of ideological predispositions, and so a third of the Recovery Act were tax cuts. Now, they happened to be the most progressive tax cuts in history, very much geared toward middle-class families. There was not only a fairness rationale to that, but also an economic rationale—those were the folks who were most likely to spend the money and, hence, prop up demand at a time when the economy was really freezing up. I still remember going over to the Republican caucus to meet with them and present our ideas, and to solicit ideas from them before we presented the final package. And on the way over, the caucus essentially released a statement that said, ‘We’re going to all vote “No” as a caucus.’ And this was before we’d even had the conversation. At that point, we realized that we weren’t going to get the kind of cooperation we’d anticipated. The strategy the Republicans were going to pursue was one of sitting on the sidelines, trying to gum up the works, based on the assumption that given the scope and size of the recovery, the economy probably wouldn’t be very good, even in 2010, and that they were better off being able to assign the blame to us than work with us to try to solve the problem.” No House Republican voted for the package; only three Republican Senators voted for it. [BBC, 2/14/2009; Rolling Stone, 9/28/2010]
US Representative Cynthia Lummis (R-WY) says some of her constituents are so worried about the upcoming reinstatement of federal estate taxes—so-called “death taxes” that impose taxes on estates worth over $3.5 million—that they are planning to discontinue dialysis and other life-extending medical treatments so they can die before December 31. Loomis declines to name anyone who is making such plans. Instead, she says many ranchers and farmers in the state would rather pass along their businesses—“their life’s work,” she says—to their children and grandchildren than see the federal government take a large chunk. “If you have spent your whole life building a ranch, and you wanted to pass your estate on to your children, and you were 88-years-old and on dialysis, and the only thing that was keeping you alive was that dialysis, you might make that same decision,” she tells reporters. Congressional Republicans are fighting to renew the tax cuts on wealthy estates which were implemented during the Bush administration. The cuts exempt large inheritances as well as certain wage income, interest, dividends, and capital gains. In 2009, the tax’s top rate was 45 percent, but estates worth less than $3.5 million, or $7 million in the case of married couples, were exempt. That left less than 1 percent of all estates subject to the tax. Loomis and many Republicans have falsely characterized the tax as negatively impacting family farms and small businesses. The tax cuts are slated to expire in 2011. The exemption will shrink to $1 million and the top rate will rise to 55 percent. Lummis says the children of some people choosing death over taxes told her of their parents’ decision. She refuses to identify them and says it will be their decision to come forward. [Associated Press, 10/29/2010]
Protesters in Los Angeles demonstrate against Proposition 23 outside a Tesoro refinery in Wilmington, California. [Source: Los Angeles Times]The liberal news Web site AlterNet shows that a very small number of wealthy, influential donors are driving campaign efforts to pass Proposition 23, a California ballot initiative that would suspend state legislation designed to help reduce carbon emissions and hold polluters accountable. The legislation, AB 32, is already in effect, and requires California to decrease global warming emissions to 1990 levels by 2020, beginning in 2012. Prop 23, as it is called, would suspend AB 32 until the state’s unemployment rate drops below 5.5 percent for four consecutive quarters. Currently unemployment in California is around 12 percent. AlterNet provides data showing that AB 32 will actually create jobs developing “clean” technologies and energies, an industry sometimes called “green tech.” Venture capitalist Vinod Khosla recently said: “AB 32 created markets. Prop. 23 will kill the market and the single largest source of job growth in California in the last two years.” The funding for the advertising and other political activities pushing Prop 23 comes from two primary sources: Texas oil giant Valero Energy Corporation and Tesoro Corporation. Both companies have refineries in California that make them two of the state’s biggest polluters. The two oil companies are aided by large donations from the Koch brothers, who own oil conglomerate Koch Industries (see 1977-Present, 1979-1980, 1981-2010, 1984 and After, May 6, 2006, April 15, 2009, May 29, 2009, December 6, 2009, November 2009, July 3-4, 2010, August 28, 2010, August 30, 2010, and September 24, 2010). Valero has spent $5 million to bolster Prop 23 and Tesoro has spent $2 million. Flint Hill Resources, a Koch Industries subsidiary, has spent $1 million. Marathon Petroleum has spent $500,000, as has the conservative Adam Smith Foundation of Missouri. Occidental Petroleum has spent $300,000; Tower Energy Group, $200,000; CVR Energy, $150,000; and about $100,000 each has been spent by the Howard Jarvis Taxpayers Association, the National Petrochemical and Refiners Association, and World Oil Corporation. Of the $10.6 million raised so far to push Proposition 23, only 30 percent of it comes from inside California. In contrast, opponents to Proposition 23 have raised $30.6 million to defeat it, with 70 percent of that money coming from inside California. Jorge Madrid of Climate Progress recently warned: “If we allow Prop 23 to succeed, big oil refineries in the state could continue to spew greenhouse gases without strict regulation. Even worse, a victory for big oil in California could mean certain death for greenhouse gas regulation for the rest of the nation.” [AlterNet, 10/30/2010; Los Angeles Times, 11/2/2010] Prop 23 will lose by a 61-39 margin, with analysts noting that the anti-proposition forces gained ground by pointing out the support for the proposition coming primarily from Texas oil interests. Even many of California’s largest oil companies either stayed neutral or opposed the initiative. The anti-proposition forces were fueled primarily by financiers such as San Francisco hedge fund manager Tom Steyer, the National Wildlife Federation and the ClimateWorks Foundation, and green-tech moguls such as Khosla and John Doerr. Governor Arnold Schwarzenegger (R-CA) stumped in opposition to the initiative, attacking the “self-serving greed” of Valero and Tesoro. The Environmental Defense Fund’s Fred Krupp says of the defeat: “It is the largest public referendum in history on climate and clean energy policy. Almost 10 million Californians got a chance to vote and sent a clear message that they want a clean energy future. And this was in an economic downturn. There has never been anything this big. It is going to send a signal to other parts of the country and beyond.” [Los Angeles Times, 11/2/2010]
Entity Tags: Fred Krupp, David Koch, World Oil Corporation, Charles Koch, CVR Energy, Arnold Schwarzenegger, Valero Energy Corporation, Adam Smith Foundation, AlterNet (.org), Tower Energy Group, Vinod Khosla, Tesoro Corporation, Marathon Petroleum, National Petrochemical and Refiners Association, Koch Industries, Howard Jarvis Taxpayers Association, Jorge Madrid, National Wildlife Federation, Proposition 23 (California), ClimateWorks Foundation, Tom Steyer, Occidental Petroleum
Timeline Tags: Civil Liberties
Katha Pollitt. [Source: Katha Pollitt]Columnist Katha Pollitt, writing for the liberal magazine The Nation, believes that the newly elected Republican majority in the US House of Representatives will do its best to restrict abortions. Pollitt notes that when the newly elected Congress members take their seats in January 2011, there will be 53 additional anti-abortion voices in the House and five in the Senate. Some, like Senator-elect Rand Paul (R-KY) and Representatives-elect Mike Fitzpatrick (R-PA) and Tim Walberg (R-MI) oppose most methods of birth control, in vitro fertilization, and stem cell research, and join Senators-elect Marco Rubio (R-FL) and Pat Toomey (R-PA) in opposing abortions even in the cases of rape or incest. Toomey supports incarcerating doctors who perform abortions. Pollit writes, “Supporters of reproductive rights are looking at the most hostile Congress since abortion was legalized in 1973” (see January 22, 1973). Pollitt writes that in 2011, Republicans in Congress will try to:
Reinstate the global gag rule, lifted by President Obama on his first day in office, which bars recipients of US foreign aid from so much as mentioning abortion in their work, and make it permanent.
Pass the No Taxpayer Funding for Abortion Act, which will make the Hyde Amendment (see September 30, 1976) permanent and reinterpret it to forbid any government agency from funding any program which has anything to do with abortion. Pollitt writes: “For example, if your insurance plan covered abortion, you could not get an income tax deduction for your premiums or co-pays—nor could your employer take deductions for an employer-based plan that included abortion care. (This would mean that employers would choose plans without abortion coverage, in order to get the tax advantage.) The bill would also make permanent current bans like the one on abortion coverage in insurance for federal workers.”
Pass the Title X Abortion Provider Prohibition Act, which would ban federal funds for any organization that performs abortions or funds organizations that do so. Pollitt says the aim of this legislation “is to defund Planned Parenthood, the nation’s largest network of clinics for family planning and women’s health, and in many regions the only provider within reach.”
Beef up so-called conscience protections for health care personnel and hospitals.
Ban Washington, DC, from using its own money to pay for abortions for poor women.
Revisit health care reform to tighten provisions barring coverage for abortion care.
Preserve the ban on abortions in military hospitals.
Pollitt says that the idea behind all of these legislative initiatives is not the banning of abortion, but the disallowing of taxpayer dollars to fund it. Planned Parenthood head Cecile Richards says: “This election was not about choice. The bottom line was jobs and the economy. But if you look at close races where the prochoice candidate won, and where women knew the difference between the candidates on reproductive rights, they voted prochoice and arguably made the difference.” Richards says that if Democrats want to successfully oppose Republicans on these and other legislative initiatives, they will need the active support of pro-choice women. [Nation, 11/10/2010]
Entity Tags: Katha Pollitt, Rand Paul, Marco Rubio, Mike Fitzpatrick, Cecile Richards, Barack Obama, Pat Toomey, Tim Walberg, Title X Abortion Provider Prohibition Act, US House of Representatives, Planned Parenthood, No Taxpayer Funding for Abortion Act
Timeline Tags: US Health Care
Former Alaska Governor Sarah Palin (R-AK), a Fox News contributor and possible 2012 presidential candidate, castigates President Obama for being what she calls the “most pro-abortion president to occupy the White House,” and warns that health care reform will lead to more abortions in America. At an event in Dallas, Palin tells her audience: “It is even worse than what we had thought. The ramifications of this legislation are horrendous.” Palin calls on the newly elected Republican majority in the US House of Representatives to repeal the health care reform legislation passed in 2010. “The biggest advance of the abortion industry in America has been the passage of Obamacare,” she says. Although Obama signed an executive order prohibiting the use of federal funds for abortions, Palin calls the order “nonbinding” and irrelevant. She also says that the Obama administration has allowed federal funding for some “high risk” insurance pools in states that allow elective abortions. [ABC News, 11/11/2010] Liberal blogger Heather Parton, writing for her blog Hullabaloo, says Palin is “lying through her teeth. In fact, the opposite is true because the administration tightened the rules for the sickest women.… [Palin and her supporters] actually want women who are battling terrible diseases to go through impossible hoops rather than have their sacred tax dollars touch dollars that paid for a necessary abortion.” [Heather Parton, 7/17/2010; Heather Parton, 11/13/2010]
China is among the nations spending the most on clean and renewable energy technologies, according to investment figures released by the advisory company Bloomberg New Energy Finance. Overall, the world’s nations invested $243 billion in clean energy in 2010, up from $185.5 billion in 2009 and double the amount of money invested in 2006. Bloomberg CEO Michael Liebriech says: “This is a spectacular result, beating previous record investment levels by a clear margin of more than $50 billion. It flies in the face of skepticism about the clean energy sector among public market investors.” Small-scale distributed generation projects such as rooftop solar arrays saw the biggest increase, with Germany investing the most and nations like the Czech Republic, Italy, and the US following behind. China invested more than any other nation in clean energy, spending over $51 billion. Nations in Europe, the Middle East, and Africa still spend the most, collectively, on clean energy technology, but the nations of Asia and Oceania have surpassed American spending and are closing the gap on the regional leaders. Public market investment rose in 2010 after recession-driven lows in 2008 and 2009. [RenewableEnergyWorld, 1/11/2011]
A post on the conservative Internet forum Free Republic triggers a wave of overtly racist comments and death threats towards African-Americans. The post links to an Associated Press article, “GOP Spending Cuts Would Affect Millions of People,” which projects some of the funding cuts that would ensue if the new Republican majority in the House were able to pass its “Pledge to America” economic legislation. The “Pledge” demands $84 billion in appropriations cuts. The article notes that “[l]ow-income students may get smaller grants”; low-income Americans would lose home heating subsidies; low-income mothers would lose food subsidies for their infant children; disabled Americans will have benefits delayed; public schools will suffer draconian funding reductions; the FBI, the IRS, and the National Parks Service, among other government bureaus and agencies, would lose millions in funding; and more. Many posters on Free Republic immediately begin pointing to African-Americans as the main ones to suffer the cuts. One poster, “traditional1,” posts a picture of a department store entrance crowded with African-American shoppers and writes: “Start defunding here. Then we’ll see who will ‘tone down the rhetoric.’” His signature line, a crude parody of what he apparently considers to be “black English,” reads, “Don’t gotsta worry ‘bout no mo’gage, don’t gotsta worry ‘bout no gas; Obama gonna take care o’ me!” Another poster, “Hoffer_Rand,” references the EBT (Electronic Benefit Transfer) government assistance program by saying the picture depicts “EBT night at Wally World,” meaning Wal-Mart. “Something like that. It was a program to apply for rent assistance, but the word got out that they were giving out money to help pay people’s rent. They just about had riots when people in the crowd found out that all they were handing out were applications and not free money, especially because they’d been standing in line for hours. I said at the time they needed to send somebody with a bullhorn up and down through the crowd, telling people that they were only going to get an application and not any cash. That crowd would have been cut by 90 percent in no time.” Another poster, “cripplecreek,” warns of urban violence, presumably among African-Americans, if the budget cuts pass: “Better lay in some extra ammo, though, if you live near a major urban area… the Dem voterbase will be heading to the suburbs to take what they believe that they have a ‘right’ to.” Poster “Dick Bachert” advises Free Republic readers to shoot down angry welfare recipients: “My guess is that the REAL ‘trouble’ will start when the welfare checks stop going out. If you live in a major urban area, lock and load ‘cause I suspect it WILL be a target-rich environment.” Poster “Panzerlied,” whose nickname references a song made famous by the Nazi Wehrmacht, writes in response to Bachert’s post, “I’ll deliver what they deserve, 9mm from a MAC-11. 900 RPM.” [Free Republic, 1/19/2011; Associated Press, 1/19/2011]
Michael Beard. [Source: MinnPost]Michael Beard, a Republican state representative from Minnesota and an eight-year veteran of the Minnesota House Environment, Energy and Natural Resources Policy and Finance Committee, advocates resuming coal mining in his state. His reasoning: God has created a planet that provides unlimited natural resources. “God is not capricious. He’s given us a creation that is dynamically stable,” he tells a reporter. “We are not going to run out of anything.” Beard is drafting legislation that would overturn Minnesota’s moratorium on coal-fired power plants. He says that God will not allow humans to destroy the planet, no matter what they do. He recalls working on his family farm in Pennsylvania, which he says was mined three times for coal and now produces barley, wheat, and pine trees. “Did we temporarily disrupt the face of the earth? Yes, but when we were done, we put it all back together again.” He continues: “It is the height of hubris to think we could [destroy the earth].… How did Hiroshima and Nagasaki work out?” he asks, referring to the two Japanese cities destroyed by atomic bombs in World War II. “We destroyed that, but here we are, 60 years later and they are tremendously effective and livable cities. Yes, it was pretty horrible. But, can we recover? Of course we can.” Beard’s thesis is at odds with most climate scientists, who say that burning coal results in severe and perhaps irreparable harm to the planet, and contributes to widespread human suffering. According to columnist Dan Shelby, “Most of them are convinced that there is a point at which we will never be able to put it all back together again.” John Abraham, a professor of thermal sciences, writes a response to Beard’s statements noting the flaws in Beard’s reasoning. Beard tells Shelby that he reads a lot about science, and cites a number of conservative blogs as his sources. His primary source is Dr. Patrick Michaels, who has admitted that he receives the bulk of his funding for research from fossil fuel producers. Shelby writes: “It is understandable. Mike Beard is a free-market conservative and pro-business. No one who calls himself those things can afford global warming to be true. There is a political belief that solving global warming will destroy American business. American business deplores government interference. Global warming regulation and legislation requires governments to act.” Both Abraham and Beard have expressed a desire to open a dialogue on the subject. [MinnPost, 2/15/2011; Huffington Post, 2/16/2011]
A list of 10 companies that have avoided paying US income taxes is provided by Senator Bernie Sanders (I-VT), who is pushing for legislation that will close the legal tax loopholes that allow large corporations to avoid the bulk of their tax responsibilities. Chicago Sun-Times reporter Lynn Sweet writes, “Some people call the income tax system with generous loopholes for big companies corporate welfare or corporate entitlements.” Sanders’s list, based on returns and Securities and Exchange Commission (SEC) documents filed in 2009 and earlier, includes:
ExxonMobil. The oil giant made $19 billion in profits in 2009, but paid no federal income taxes, and received a $156 million tax rebate.
Bank of America (BoA). The financial corporation made $4.4 billion in profits in 2009, and received nearly $1 trillion in Federal Reserve and Treasury Department “bailout” funds. The bank received a $1.9 billion tax refund.
General Electric. This multinational conglomerate made $26 billion in profits in the US, and over the last five years has received $4.1 billion in tax refunds.
Chevron. The oil giant made $10 billion in profits in 2009, and received a $19 million refund from the IRS.
Boeing. The defense contractor received a $30 billion contract from the US Department of Defense in 2009 to build 179 airborne tankers, and received a $124 million tax refund.
Valero Energy. This energy corporation, the 25th largest company in the US, garnered $68 billion in sales in 2009, and received $157 million in tax refunds. Over the last three years, Valero has received a $134 million tax break from the oil and gas manufacturing tax deduction.
Goldman Sachs. The financial giant paid only 1.1 percent of its income in taxes in 2008, though it recorded $2.3 billion in profits. It also received nearly $800 billion from the Federal Reserve and the Treasury Department.
Citigroup. The financial conglomerate made over $4 billion in profits in 2010, but paid no federal income taxes. It received a $2.5 trillion “bailout” from the Federal Reserve and Treasury.
ConocoPhillips. The oil conglomerate garnered $16 billion in profits from 2007 through 2009, paid no taxes, and received $451 million in tax breaks through the oil and gas manufacturing deduction.
Carnival Cruise Lines. This entertainment giant made over $11 billion in profits between 2006 and 2011, but paid only 1.1 percent of its income in taxes during that period.
In a press release calling for “shared sacrifice,” Sanders writes: “While hard working Americans fill out their income tax returns this tax season, General Electric and other giant profitable corporations are avoiding US taxes altogether.… [T]he wealthiest Americans and most profitable corporations must do their share to help bring down our record-breaking deficit.” Sanders writes that “it is grossly unfair for Congressional Republicans to propose major cuts to Head Start, Pell Grants, the Social Security Administration, nutrition grants for pregnant low-income women, and the Environmental Protection Agency while ignoring the reality that some of the most profitable corporations pay nothing or almost nothing in federal income taxes.” Sanders calls for closing corporate tax loopholes and eliminating the deductions for oil and gas companies. He is also introducing legislation that would impose a 5.4 percent surtax on millionaires that would garner as much as $50 billion a year in tax revenues. Sanders says: “We have a deficit problem. It has to be addressed, but it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country. The wealthiest people and the largest corporations in this country have got to contribute. We’ve got to talk about shared sacrifice.” [Chicago Sun-Times, 3/27/2011]
Entity Tags: Boeing Company, Carnival Cruise Lines, Citigroup, Bernie Sanders, Bank of America, ConocoPhillips, Goldman Sachs, Chevron, Lynn Sweet, Valero Energy Corporation, General Electric, ExxonMobil
Timeline Tags: Global Economic Crises
Bryan Fischer, the director of issue analysis for government and public policy at the American Family Association (AFA), says that the government should stop spending any money at all on anti-poverty efforts because such spending encourages African-Americans to “rut like rabbits.” In a blog post on the AFA Web site titled “Poverty has won,” Fischer says welfare and anti-poverty programs have done nothing but led to the destruction of marriage and harmed African-American children. “We have spent over $16 trillion fighting the war on poverty, and it’s time to run up the white flag of surrender,” he writes. “Poverty has won.” In the post, Fischer says that welfare has destroyed the African-American family by providing incentives for fornication instead of marriage. “It’s no wonder we are now awash in the disastrous social consequences of people who rut like rabbits,” he writes. “Welfare has destroyed the African-American family by telling young black women that husbands and fathers are unnecessary and obsolete. Welfare has subsidized illegitimacy by offering financial rewards to women who have more children out of wedlock.” In previous statements on the AFA blog and on his talk radio show, Fischer has claimed that WikiLeaks is about nothing more than gays in the military (see December 7, 2010), that President Obama wants to give the entire North American landmass to Native Americans (see December 22, 2010), and the constitutional right to freedom of religion does not apply to Muslims (see March 24, 2011). Fischer has had as guests on his show potential Republican presidential candidates Tim Pawlenty, Mike Huckabee, Michele Bachmann, Newt Gingrich, and Haley Barbour. [Raw Story, 4/5/2011; Right Wing Watch, 4/5/2011] The link that originally went to the “Poverty has won” post subsequently goes to an entirely different post; the post Fischer originally made subsequently seems to have been deleted. [Bryan Fischer, 4/5/2011]
Bruce Caswell. [Source: Hillsdale County GOP]Michigan State Senator Bruce Caswell (R-Hillsdale) suggests legislation that would force foster children to use their state-funded clothing allowance only in thrift stores. Caswell says that foster children should get “gift cards” to be used only at Salvation Army, Goodwill, or other thrift stores. He explains: “I never had anything new. I got all the hand-me-downs. And my dad, he did a lot of shopping at the Salvation Army, and his comment was—and quite frankly it’s true—once you’re out of the store and you walk down the street, nobody knows where you bought your clothes.” Gilda Jacobs of the Michigan League for Human Services says, “Honestly, I was flabbergasted” to hear of Caswell’s proposal. “I really couldn’t believe this. Because I think, gosh, is this where we’ve gone in this state? I think that there’s the whole issue of dignity. You’re saying to somebody, you don’t deserve to go in and buy a new pair of gym shoes. You know, for a lot of foster kids, they already have so much stacked against them.” Caswell initially admits his proposal would not save Michigan any money, but later says that the proposal would save money. He insists he has no interest in stigmatizing foster children. [Hillsdale County GOP, 2011; Michigan Radio 91.7 FM, 4/15/2011; Michigan Messenger, 4/22/2011] Jessica Pieklo of the humanitarian organization Care2 writes that the proposal is another example of what she calls “the single-focused attack on the poor and politically powerless” being carried out by Michigan’s Republican leadership. “Reasonable checks and transparency in the administration of public benefits is one thing, but Caswell’s proposal is hardly that. It is a pronouncement on the value of these kids, poor and almost homeless usually through no fault their own.” [Care2 (.org), 4/24/2011] In a post on Twitter, MSNBC talk show host Rachel Maddow says: “This is cartoon evil, right? This can’t be real. This cannot be a real thing. Gotta be performance art.” [Talksy, 4/24/2011]
The Republican-dominated Oklahoma legislature approves a bill outlawing affirmative action programs in that state. The proposal would prohibit special treatment based on race or sex in public employment, education, or contracts. Supporters say it would underscore the importance of equality, even though no preferences are now given for jobs, contracts, or college admission. Critics say the proposal plays on racial fears. It will appear on the 2012 ballot for approval by voters. [Associated Press, 4/6/2011] Explaining why he sponsored the bill, T.W. Shannon (R-Lawton) says: “I believe discrimination exists. I don’t think affirmative action has been as successful as we like to believe.” However, Shannon’s colleague Sally Kern (R-Oklahoma City) has her own explanation: blacks do not work as hard as whites and have less initiative. Kern says: “We have a high percentage of blacks in prison, and that’s tragic, but are they in prison just because they are black or because they don’t want to study as hard in school? I’ve taught school, and I saw a lot of people of color who didn’t study hard because they said the government would take care of them.” Kern says women earn less than men because “they tend to spend more time at home with their families.” One of the opponents of the bill, Mike Shelton (D-Oklahoma City), says: “This body will quote the Bill of Rights and then talk about Muslims every day. They’ll talk about illegal immigrants every day. They’ll talk about homosexuals. Oklahoma is a great state—as long as you fit the profile.” [Tulsa World, 4/27/2011] Think Progress reporter Alex Seitz-Wald writes of Kern, “[H]er bigoted comments reflect a disturbing trend among even mainstream conservatives to blame valuable social safety net programs for creating a culture of dependency or even ‘slavery.’” [Think Progress, 4/28/2011] The Oklahoma House speaker, Republican Kris Steele, refuses to reprimand Kern, saying that a written apology she issues is enough. On May 2, the House votes to reprimand Kern anyway, led by Shelton, who will say: “We are trying to be a player within the United States as well as the world. The comments by Sally Kern make us step back and it makes people look at the state of Oklahoma as a different place.” Republican Paul Wesselhoft is harshly critical of the reprimand, saying it “flies in the face of every Sunday school lesson I’ve ever had. Kern issued a sincere apology. My faith teaches me that I’m to forgive.” Republican Randy Grau will say that the reprimand may have a “chilling effect on free speech.” [Think Progress, 5/3/2011] Three years ago, Kern said on the Oklahoma House floor that homosexuality was more dangerous than terrorism; she was not reprimanded (see March 3-27, 2008).
Fox News talk show host Glenn Beck, speaking on his daily radio program, claims that President Obama released his “long form” birth certificate (see April 27, 2011) to distract the press from a press conference being given by Federal Reserve chairman Ben Bernanke. Beck says: “The president of the United States is about to speak shortly [about his birth certificate]. Stations, we will carry it live, live, live on this program. Gas prices, sure, out of control. Middle East, sure, on fire. Ben Bernanke going to give the first press conference for the Fed for the first time in 97 years today, but today is the day the birth certificate is released. You have got to be kidding me. Are we really down to this? We’re really down to this? The birth certificate? I mean, it was bad when we were down to the, you know, Final Four in the brackets, but now we’ve got the birth certificate talk and the president is going to hold a press conference.… [T]his is because Bernanke is speaking today. Watch the markets move today. Why is the Fed—this is what I’ve been trying to figure out—why is the Fed holding a press conference for the first time in 97 years? Why? Something is coming gang, something is coming. Now at the same day, the same time, why is the president of the United States choosing today to release the birth certificate?… There is no way this is being released today for no reason. There’s no way. They’ve had this for two years—three years this has been going on. This rumor was started by Hillary Clinton. This was a Clinton tactic.… So now they’ve had it since Clinton. They could have done this since Clinton. So why?” [Media Matters, 4/27/2011; Media Matters, 4/27/2011] Former Governor Sarah Palin (R-AK) makes the same claim. In a post on her Twitter account, Palin writes: “Media, admit it. Trump forced the issue. Now, don’t let the WH distract you w/the birth crt from what Bernanke says today. Stay focused, eh?” [Media Matters, 4/27/2011]
Representative Michele Bachmann (R-MN), a contender for the 2012 Republican presidential nomination, says Congress should not raise the nation’s debt limit (sometimes called the “debt ceiling”) even though many economists and financial leaders warn of economic catastrophe if the US does not raise that limit. Bachmann says Congress is considering bills that would force the government to make payments on debts even if the debt ceiling remains unchanged. [Associated Press, 4/30/2011]
Alan Binder. [Source: PBS]TPMDC reporter Brian Beutler notes that many Congressional Republicans, led by but not limited to those who consider themselves “tea party” members (see April 30, 2011), are heeding the advice of a small number of unorthodox financial experts who go against the “common wisdom” that a possible credit default by the US would lead to potential catastrophe among national and global financial markets. The issue centers on Congressional Republicans’ insistence that they will not raise the US debt limit, or debt ceiling, unless the Obama administration gives them a wide array of draconian spending cuts; in the past, raising the US debt limit has been a routine matter, often handled with virtually no debate and little, if any, fanfare. Beutler says that the most influential of these advisors is Stanley Druckenmiller, who made billions managing hedge funds. Druckenmiller’s advice was that the US could weather several days of missed interest payments if the US debt ceiling were not immediately raised without serious consequences. House Budget Committee chairman Paul Ryan (R-WI), House Majority Leader Eric Cantor (R-VA), and Senator Pat Toomey (R-PA) are all echoing Druckenmiller’s claims in media interviews and in Congress. Beutler writes that the newfound popularity of Druckenmiller’s claims “alarms everyone from industry insiders to Treasury officials to economists, conservative and liberal, to non-partisan analysts who say the consequences of the US missing even a single interest payment to a debt-holder would be catastrophic—even if it was followed immediately by a legislative course correction.” Former Federal Reserve chairman Alan Binder, now a Princeton economist, warns that if the US were to default on its debt even for a few days, the US dollar would crash in value, interest rates would spike, and the US economy would find itself spiraling into a full-blown recession. Binder writes: “For as long as anyone can remember, the full faith and credit of the United States has been as good as gold—no one has better credit. But if investors start to see default as part of US political gamesmanship, they will demand compensation for this novel risk. How much? Again, no one can know. But even if it’s as little as 10-20 basis points on the US government’s average borrowing cost, that’s an additional $10 billion to $20 billion in interest expenses every year. Seems like an expensive way to score a political point.” JPMorgan CEO Jamie Dimon agrees, telling PBS viewers: “Every single company with treasuries, every insurance fund, every—every requirement that—it will start snowballing. Automatic, you don’t pay your debt, there will be default by ratings agencies. All short-term financing will disappear. I would have hundreds of work streams working around the world protecting our company for that kind of event.” JPMorgan issued a statement after Dimon’s comment saying that even a brief default would trigger “a run on money market funds… that would leave businesses unable to meet their short-term obligations and teetering on the bring of bankruptcy.” JPMorgan compares the money-market run to the aftermath of the 2008 Lehman Bros collapse, which sent the US into a recession. Analyses and reports by the Treasury Borrowing Advisory Committee and Government Accountability Office have warned of dire consequences following a default even of a day or two. Toomey and others insist that a credit default would simply make the Treasury Department find other ways to avoid missing interest payments, but, economists and financial leaders warn, the consequences of that would be enormous. Binder writes: “If we hit the borrowing wall traveling at full speed, the US government’s total outlays—a complex amalgam that includes everything from Social Security benefits to soldiers’ pay to interest on the national debt—will have to drop by about 40 percent immediately. That translates to roughly $1.5 trillion at annual rates, or about 10 percent of GDP. That’s an enormous fiscal contraction for any economy to withstand, never mind one in a sluggish recovery with 9 percent unemployment.” Druckenmiller and some Republicans believe that forcing a credit default would end up benefiting the country, as the Obama administration would give in to Republican demands for enormous spending cuts in return for Republicans’ agreement to raise the debt ceiling. Business Insider reporter Joe Weisenthal recently wrote: “Of course, a default by the world’s most stable nation would probably have impacts in ways nobody can imagine, but one thing seems to be clear. The notion—as some people suggest—that a default would somehow increase US credit-worthiness is absurd.” [Business Insider, 4/20/2011; New York Times, 4/26/2011; TPMDC, 5/20/2011]
Entity Tags: Government Accountability Office, Eric Cantor, US Department of the Treasury, Alan Binder, Treasury Borrowing Advisory Committee, Stanley Druckenmiller, US Congress, Brian Beutler, JP Morgan Chase, Jamie Dimon, Paul Ryan, Pat Toomey, Joe Weisenthal, Obama administration
Timeline Tags: Global Economic Crises
Eurozone policymakers fail to reach an agreement over the weekend on financial aid to bail out Greece, resulting in a sharp market drop on Monday morning as disappointed traders react to the leaders’ failure to guarantee the next €12 billion installment of Greece’s original bailout. Widespread speculation is that a disorganized Greek default will send Eurozone single-currency nations, as well as nations around the globe, into another panic. [Guardian, 6/20/2011]
Representative Michele Bachmann (R-MN) tells a CBS News viewing audience that the Obama administration is lying when it says the US government would default on its loans if Congress refuses to raise the US debt ceiling. Bachmann accuses the Obama administration of using “scare tactics” to push for a debt-ceiling increase. Bachmann has said previously that Congress should not raise the debt ceiling (see April 30, 2011). Treasury Secretary Timothy Geithner and other Obama adminstration members, along with a bevy of economists and financial leaders including Federal Reserve Chairman Ben Bernanke and former Chairman Alan Greenspan, have urged Congress to raise the debt ceiling by August 2 to avoid the US defaulting on its outstanding loans and engendering what many call an economic catastrophe (see May 20, 2011). The US Treasury has used accounting steps, what it calls “extraordinary measures,” to avoid default since the nation reached its debt limit on May 16. The final deadline for the US to raise its debt limit is August 2. Bernanke and others have said that even a brief US default could cause an uproar in the global economy. But Bachmann says she has “no intention” of voting for a hike to the limit, saying instead: “It isn’t true that the government would default on its debt. Because, very simply, the Treasury secretary can pay the interest on the debt first, and then, from there, we have to just prioritize our spending.” Face the Nation host Bob Schieffer asks Bachman: “Experts inside and outside the government say that, if we don’t raise the debt ceiling, we face the United States having to default on its financial obligations. Are you saying these are scare tactics? Or are you saying that’s not true? How can you say that?” Bachmann replies: “It is scare tactics. Because, Bob, the interest on the debt isn’t any more than 10 percent of what we’re taking in. In fact, it’s less than that. And so the Treasury secretary can very simply pay the interest on the debt first, then we’re not in default.… What it means is we have to seriously prioritize. It would be very tough love. But, I have been here long enough in Washington, DC, that I’ve seen smoke and mirrors time and time again.” Bachmann says if elected president, she would end the nation’s deficit problem by making extreme cuts in spending. “I would begin very seriously by cutting spending,” she says. “President Obama, again, he spent a trillion dollar stimulus program that’s been an abject failure. We need to seriously cut back on spending first and foremost, and then prioritize.” Her only recommendation to handle the job crisis is to cut corporate tax rates; she explains: “We have one of the highest corporate tax rates in the world; we need to drop that significantly, so that we have a pro-business, pro-job creation environment. So if we cut back the corporate tax rate, if we would zero out the capital gains rates, allow for 100 percent expensing when a job creator buys equipment for their business, that would go a long way toward job creators recognizing that this is a pro-business environment.” She says that the administration’s health care package, which she calls “Obamacare,” will cost “800,000 jobs.” Schieffer says, “That is data that other people would question,” and she retorts by saying the Congressional Budget Office (CBO), not she herself, has made that claim. A recent analysis by the St. Petersburg Times’s PolitiFact showed that Bachmann’s claim of “Obamacare” costing 800,000 jobs is an “exaggeration” of the CBO’s figures, and is “misleading.” Bachmann dodges questions about the elimination of the minimum wage, which she has advocated since 2005, and the elimination of farm subsidies, from which she and her family have benefited. [CBS News, 6/26/2011]
Entity Tags: CBS News, Alan Greenspan, Barack Obama, Bob Schieffer, US Department of the Treasury, PolitiFact (.org ), Congressional Budget Office, Ben Bernanke, Obama administration, Michele Bachmann, Timothy Geithner
Timeline Tags: Global Economic Crises
President Obama tells CBS News interviewer Scott Pelley that he cannot guarantee Social Security recipients will get paid on August 3 if Congressional Republicans block the government from raising its debt ceiling by August 2. If the debt ceiling is not raised by that date, the US will go into default on the debt it owes to other nations. “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue,” he says, “because there may simply not be the money in the coffers to do it.” The Obama administration and a large number of economists and financial leaders have warned of economic catastrophe if America defaults on its debt (see May 20, 2011); many Congressional Republicans, led by the House Tea Party Caucus, have refused to consider the idea of raising the debt ceiling (see April 30, 2011 and June 26, 2011), and some even welcome the idea of a debt default. Many Republicans and Democrats are attempting to use the debt ceiling issue to work out a larger economic approach to long-term deficit reduction. Republicans want huge federal spending cuts, mostly from social safety-net programs such as Social Security, Medicare, and Medicaid, while Democrats want smaller spending cuts balanced by increased revenue through tax increases on the wealthy and the closing of corporate tax loopholes. Obama warns: “[T]his is not just a matter of Social Security checks. These are veterans checks, these are folks on disability and their checks. There are about 70 million checks that go out.” Senate Minority Leader Mitch McConnell (R-KY) states flatly that Congressional Republicans have no intention of attempting to work with Democrats or the Obama administration to balance the budget or reduce the deficit, saying, “After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.” However, McConnell says Congressional Republicans would work to avoid default. “The president has presented us with three choices: smoke and mirrors, tax hikes, or default,” McConnell says in remarks on the Senate floor. “Republicans choose none of the above. I had hoped to do good, but I refuse to do harm. So Republicans will choose a path that actually reflects the will of the people, which is to do the responsible thing and ensure that the government doesn’t default on its obligations.” Obama says he would refuse to sign a short-term debt ceiling increase, a tactic advocated by Republican strategists who want to bring the issue up again, and perhaps force another economic crisis, in the middle of the 2012 presidential campaign. “This is the United States of America and, you know, we don’t manage our affairs in three-month increments,” Obama tells reporters. “You know, we don’t risk US default on our obligations because we can’t put politics aside.” [CBS News, 7/12/2011; Daily Mail, 7/13/2011] The next day, McConnell offers an “alternative” debt ceiling plan which many see as fraught with political costs for Obama and Congressional Democrats (see July 13, 2011).
Mitch McConnell. [Source: Daily Political (.com)]Senate Minority Leader Mitch McConnell (R-KY) proposes an alternative to the Obama administration’s economic proposal to raise the nation’s debt ceiling and avoid the US defaulting on its debt. Republicans in the House and Senate have repeatedly refused to consider raising the debt ceiling (see April 30, 2011, June 26, 2011 and July 13, 2011); some have welcomed the possibility of a default, simultaneously saying that the nation will suffer little real economic damage by defaulting on its debt and blaming the Obama administration for any such damage. Obama officials and an array of economists and financial leaders have warned that if the US defaults on its debt, such a default could trigger a national economic collapse and send the world’s economies into a downward spiral (see May 20, 2011). McConnell’s alternative would raise the debt ceiling in three short-term increments of up to $2.5 trillion in total over the next year, as long as President Obama matched the raises with equivalent spending cuts; House Republicans could vote for non-binding resolutions of disapproval. The London Daily Mail notes that McConnell’s proposal would put the onus of raising the debt ceiling, and the negative impact of draconian spending cuts, directly on Obama and the Democrats, absolving the Republicans of blame and giving Republican presidential candidates the opportunity to slam Obama’s economic policies during the height of the 2012 presidential campaign. McConnell has blamed what he calls the intransigence of the Obama administration for the nation’s deficit, which was largely inherited from the Bush administration, and has told the Senate, “After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.” Obama has said that if Congress does not raise the debt ceiling by August 2, Social Security recipients and veterans may not get the checks they are due to receive on August 3. Few Obama officials or Congressional Democrats have any positive remarks about McConnell’s plan, and House Speaker John Boehner (R-OH) refuses to endorse it. [Daily Mail, 7/13/2011]
Three members of the US House of Representatives’ “tea party” caucus introduce a measure to force the federal government to pay the principal and interest on the debt, and to continue to pay military personnel, even if the government goes into default because Congress refuses to raise the debt ceiling. The Obama administration and a bevy of economists and financial leaders have warned that if Congress refuses to raise the debt ceiling by August 2, the US will go into default on its debt, sending the nation’s economy into a tailspin and perhaps triggering a worldwide economic downturn (see May 20, 2011). Representatives Michele Bachmann (R-MN), Steve King (R-IA), and Louis Gohmert (R-TX) introduce House Resolution 2496, the PROMISES Act (Payment Reliability for Our Obligations to Military and Investors to Secure Essential Stability Act). All three accuse the Obama administration of lying about the potentially disastrous effects of a national default (see April 30, 2011 and June 26, 2011). President Obama recently said he could not promise that Social Security and disability checks would go out to senior citizens and veterans on August 3 if the nation defaulted on its debt on August 2 (see July 11-12, 2011); Bachmann and the others accuse Obama of lying and “fear mongering.” Bachmann says, “Don’t allow military men and women to dangle over a fire and claim they won’t get paid.” All three say that even if the government defaults on its loans, there is enough money to pay the Defense Department, Medicare, Medicaid, and Social Security benefits. Gohmert says that Obama should have told the nation, “The only thing that you have to fear is fear itself,” and says House Speaker John Boehner (R-OH) should “not… trust the president anymore.” King says of Obama, “I can’t imagine what his argument would be against paying our military and keeping our credit rating up.” Obama has offered Congress a package containing $4 trillion in spending cuts and small tax increases on the wealthy, a package that has been rejected by Congressional Republicans. Instead, Bachmann says, “President Obama is holding the full faith and credit of the United States hostage so he can continue his spending sprees.” Bachmann refuses to say who would not get paid if the nation went into default, saying instead, “We want to take the politics out of this issue.” [Minnesota Independent, 7/13/2011]
Mo Brooks. [Source: Public domain / Wikimedia]Many Congressional Republicans, particularly “tea party” freshmen, believe that not only is the Obama administration lying about the potentially catastrophic consequences of a US credit default that would follow the failure of Congress to raise the nation’s debt ceiling (see April 30, 2011, May 20, 2011, June 26, 2011, and July 11-12, 2011), but some even say that a credit default would be ultimately good for the nation. President Obama is joined by House Speaker John Boehner (R-OH), the chairman of the Federal Reserve, and Moody’s credit rating agency in saying that Congress’s failure to raise the debt ceiling by August 2 would be an economic disaster and must be avoided. But Representative Eric A “Rick” Crawford (R-AK) says otherwise. Crawford says all Obama would have to do to handle a default and the subsequent halt in US borrowing would be to use existing tax revenue to pay for what Crawford sees as “essential” federal services: the military, Medicare and Social Security, and interest on existing debt. If other government services, programs, and agencies such as the FBI, veterans’ benefits, and others would be interrupted, Crawford says that would be acceptable. “That wouldn’t work for just a few days. That would work for a few years,” he says, adding that he will not vote for a debt ceiling increase unless it is coupled with massive federal spending cuts. Budget deficits require “that we take some painful measures now. I’d rather swallow that bitter pill today.” Most of the cuts Crawford and fellow Republicans want would be in social safety-net programs, from Social Security, Medicare, Medicaid, and disability benefits to funding for education and veterans programs. Crawford and a number of House Republicans simply refuse to accept statements that economic calamity would result from a missed deadline, the Washington Post reports. That opinion, the Post says, will make raising the debt ceiling far more difficult than similar ceiling raises of previous years. Representative Mo Brooks (R-AL) says that not raising the debt ceiling would actually benefit the economy in the long run. Raising the debt ceiling, he says, just enables the federal government to spend itself into more debt. “A debt ceiling problem, as large as it is, is not anywhere near as a big or as bad as” more debt, he says. He adds that the government can continue paying creditors even if it is refused further credit. “There should be no default on August 2,” he says. “In fact, our credit rating should be improved by not raising the debt ceiling.” Most financial leaders in government and the private sector believe that the US credit rating will be dropped, perhaps significantly, if the US defaults on its debt, and the consequences of that drop could send the nation’s economy into a full-blown recession or even a depression. Even Boehner says the debt ceiling must be lifted. “Missing August 2nd could spook the [stock] market,” he says. “And you could have a real catastrophe. Nobody wants that to happen.” An Obama official recently said of legislators like Crawford and Brooks, “These are the kinds of people who get eaten by bears.” Washington Monthly editor Steve Benen writes: “The problem that plagues the nation is not about competing parties, ideologies, or creeds. It comes down to a dispute between those who believe empirical reality exists and deserves to be taken seriously vs. those who don’t. With Republican members of Congress and their supporters choosing the latter, it’s increasingly difficult to imagine the United States thriving in the 21st century.” [Politico, 5/13/2011; Washington Post, 7/14/2011; Washington Monthly, 7/15/2011]
Entity Tags: Morris Jackson (“Mo”) Brooks, Jr., Barack Obama, Eric A. (“Rick”) Crawford, Moody’s Investors Service, US Congress, John Boehner, Washington Post, Obama administration, US Federal Reserve, Steve Benen
Timeline Tags: Global Economic Crises
In an interview with CBS News’s Scott Pelley, House Speaker John Boehner (R-OH) says that he got “98 percent” of what he wanted in a deal with Senate Democrats and the White House in the just-concluded debt ceiling extension legislation. Boehner says he and his House Republicans successfully blocked a comprehensive “grand bargain” with the Obama administration because, as he says, the “president was insisting on more taxes [and] never got serious about the kind of spending cuts that were necessary in order to get America back on a sound fiscal footing.” He tells Pelley that he “walked away” from Obama’s final proposal. “We had a lot of productive conversations, a lot of tense conversations,” Boehner says. “But it became pretty clear to me that I wasn’t going to be for higher taxes, and the president wasn’t going to cut spending as he should.… I told the president: ‘I’m not going there. I can’t do that.’” Boehner says that he has no intention at this time of ever supporting revenue increases of any sort, whether it be tax increases, closing of corporate tax loopholes, or other ways to bring more revenue into federal government; instead, he hopes that the future focus of Congressional debate “will be on reducing expenditures coming out of Washington.” Asked if Republicans would ever support tax increases, Boehner says: “I think that would be a stretch. It doesn’t seem likely to me that that would be recommended, much less supported, but I’ve been surprised before.” He concludes: “When you look at this final agreement that we came to with the White House, I got 98 percent of what I wanted. I’m pretty happy.” Sixty-six House Republicans voted against Boehner’s final plan, though it passed both chambers and was signed into law by Obama hours before the US would have defaulted on its debt. According to the Congressional Budget Office, the deal cuts federal deficits by $2.1 trillion over 10 years while also raising the debt limit by an equal amount. The deal also creates a joint, bicameral committee of legislators charged with finding additional cuts. [CBS News, 8/1/2011; The Hill, 8/1/2011] Days later, Standard & Poor’s cuts the US credit rating (see August 5, 2011). Republicans, including Boehner, will blame Obama for the legislation and the resulting credit reduction (see August 6-9, 2011).
The outside of the Standard & Poor’s office complex on Wall Street. [Source: Satellite Radio Playground (.com)]The US loses its top-rank AAA credit rating from the financial services company Standard & Poor’s; the firm drops the US credit rating one notch to AA-plus. The US has never had anything but top-tier credit ratings in its financial history, and has top credit ratings from S&P since 1941. S&P makes its decision based on the huge Congressional battle over raising the US’s debt ceiling, normally a routine procedural matter that was used by Congressional Republicans, who threatened to block the ceiling raise unless they were given dramatic spending cuts by the entire Congress and the White House. (House Speaker John Boehner (R-OH) boasted that he and his Republican colleagues got “98 percent” of what they wanted in the debt ceiling deal—see August 1, 2011.) Because of the dispute, the US was hours away from an unprecedented credit default until legislation was finally signed and the default avoided. S&P also cites the government’s budget deficit and rising debt burden as reasons for the rating reduction, saying in a statement, “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” The drop in the US credit rating will result in a rise in US borrowing costs for American consumers, companies, and the government. US treasury bonds, once seen as the safest securities in the world, are now rated lower than bonds issued by countries such as Britain, France, Germany, and Canada. S&P says the outlook on the US’s credit rating is “negative,” implying another downgrade is possible in the next 12 to 18 months. A senior investment officer with a West Coast management company says such a downgrade was “once unthinkable,” and says the entire global economic system will be affected. After the fierce Congressional battle, President Obama signed legislation mandating $2.1 trillion in spending cuts over the next decade, but S&P officials had asked for $4 trillion in savings as a “down payment” for restoring the US’s financial stability. Part of S&P’s rationale for the downgrade is its assumption that Congressional Republicans will not allow tax cuts implemented by the Bush administration in 2001 and 2003 to expire as scheduled by the end of 2012. The Obama administration immediately notes that S&P’s made a $2 trillion error in calculating the US debt, an error that the firm acknowledges but says does not affect its decision to downgrade the US credit rating. A Treasury Department spokeswoman says, “A judgment flawed by a $2 trillion error speaks for itself.” [New York Times, 8/5/2011; Reuters, 8/6/2011] Credit rating agencies such as S&P have suffered tremendous damage to their credibility in recent years; a Congressional panel called the firms “essential cogs in the wheel of financial destruction” after what the New York Times calls “their wildly optimistic models [that] led them to give top-flight reviews to complex mortgage securities that later collapsed.” [New York Times, 8/5/2011]
S&P Explains Decision: 'Political Brinksmanship' - S&P explains its decision in a press release. The firm is “pessimistic about the capacity of Congress and the [Obama a]dministration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.” Fiscal policy decisions between Congress and the White House, the firm says, “will remain a contentious and fitful process.” The firm accuses Congressional Republicans in particular of “political brinksmanship” in threatening to allow a debt default if their conditions were not met, and says such tactics destabilize both the US and the global economy. “The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy,” the firm says. “[T]he majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the” legislation. “The outlook on the long-term rating is negative.” [Standard and Poor's, 8/5/2011] In an email before the debt ceiling was raised, S&P’s global head of sovereign ratings wrote: “What’s changed is the political gridlock. Even now, it’s an open question as to whether or when Congress and the administration can agree on fiscal measures that will stabilize the upward trajectory of the US government debt burden.” [New York Times, 8/5/2011]
GOP Presidential Candidates, Congressional Members Blame Obama - The day after the downgrade, Republicans in Congress and on the campaign trail blame the Obama administration for the downgrade (see August 6-9, 2011).
Economist Lambasts S&P, Blames Congressional Republicans - Nobel Prize-winning economist Paul Krugman lambasts S&P and blames Congressional Republicans for the downgrade (see August 5-6, 2011).
Hours after financial services firm Standard & Poor’s downgrades the US credit rating from AAA to AA+ (see August 5, 2011), Paul Krugman, a liberal economist and Nobel Prize winner, blasts both the firm and Congressional Republicans for the downgrade. “On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation,” he writes. “And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency. On the other hand, it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?” Krugman states that he and other economists believe S&P’s call for a $4 trillion cut in US spending is “nonsense,” writing: “US solvency depends hardly at all on what happens in the near or even medium term: an extra trillion in debt adds only a fraction of a percent of GDP to future interest costs, so a couple of trillion more or less barely signifies in the long term. What matters is the longer-term prospect, which in turn mainly depends on health care costs.” He concludes that S&P is “in no position to pass judgment” on the US economic situation. [New York Times, 8/5/2011] The next day, the National Journal’s Edmund Andrews agrees with Krugman, writing: “[I]t’s hard to read the S&P analysis as anything other than a blast at Republicans. In denouncing the threat of default as a ‘bargaining chip,’ the agency was saying that the GOP strategy had shaken its confidence. Though S&P didn’t mention it, the agency must have been unnerved by the number of Republicans who insisted that it would be fine to blow through the debt ceiling and provoke a default.” [National Journal, 8/6/2011] Krugman’s criticisms are echoed a week later by an array of economists and private-sector financial leaders (see August 12, 2011).
In a Republican presidential primary debate in Iowa, candidate Michele Bachmann (R-MN) claims that the recent decision by financial services firm Standard & Poor’s to downgrade the US credit rating (see August 5, 2011) proved that she and her fellow “tea party” Republicans in the House of Representatives were right to resist an increase in the debt ceiling. S&P itself (see August 11, 2011), along with an array of economists and private-sector financial leaders (see May 20, 2011, August 5-6, 2011, and August 12, 2011), says that the battle by Bachmann and her fellow House Republicans to refuse a debt-ceiling increase, even if it meant the US would default on its debt, is what led to the downgrade. But Bachmann sees the issue very differently. She reiterates her position in a post-debate interview on Fox News, saying, “Standard & Poor’s essentially proved me right.” The firm’s decision to downgrade the US credit rating came about, she says, because “we don’t have an ability to repay our debt.… We just heard from Standard & Poor’s, when they dropped our credit rating and what they said is we don’t have an ability to repay our debt. That’s what the final word was from them. I was proved right in my position. We should not have raised the debt ceiling.” Pat Garofalo of the progressive news Web site Think Progress writes that “it’s blatantly clear that Bachmann has no idea what S&P said, because just about every word out of her mouth regarding the agency’s decision was incorrect.” Garofalo notes that “S&P never said ‘we don’t have an ability to pay our debt.’ After all, the agency still rates the US as AA+, meaning it has a ‘very strong capacity to meet financial commitments.’ One S&P analyst characterized the difference between AA+ and AAA as just ‘degrees of excellence.’” Moreover, Garofalo notes, S&P downgraded the nation’s credit rating because, as it said in its own press releases and subsequent statements, “the use of the debt ceiling as a political football and GOP intransigence on taxes.” Bachmann has long derided the idea that not raising the debt ceiling would be detrimental to the US economy (see June 26, 2011, and July 13, 2011). [Think Progress, 8/12/2011]
Joydeep Mukherji, the senior director for the credit firm Standard & Poor’s, says that one of the key reasons the US lost its AAA credit rating (see August 5, 2011) was because many Congressional figures expressed little worry about the consequences of a US credit default, and some even said that a credit default would not necessarily be a bad thing (see May 20, 2011). Politico notes that this position was “put forth by some Republicans.” Mukherji does not name either political party, but does say that the stability and effectiveness of American political institutions were undermined by the fact that “people in the political arena were even talking about a potential default. That a country even has such voices, albeit a minority, is something notable. This kind of rhetoric is not common amongst AAA sovereigns.” Since the US lost its AAA credit rating, many Republicans have sought to blame the Obama administration (see August 6-9, 2011), even though House Speaker John Boehner (R-OH) said that he and his fellow Republicans “got 98 percent” of what they wanted in the debt ceiling legislation whose passage led to the downgrade (see August 1, 2011). Representative Michele Bachmann (R-MN), running for the Republican presidential nomination in 2012, led many Republican “tea party” members in voting against raising the nation’s debt ceiling, and claimed that even if the US did not raise its debt ceiling, it would not go into default, a statement unsupported by either facts or observations by leading economists (see April 30, 2011, June 26, 2011, July 13, 2011, and July 14, 2011). “I want to state unequivocally for the world, as well as for the markets, as well as for the American people: I have no doubt that we will not lose the full faith and credit of the United States,” she said. Now, however, one of Bachmann’s colleagues, Representative Tom McClintock (R-CA), says that the media, and S&P, misinterpreted the Republican position. “No one said that would be acceptable,” McClintock says of a possible default. “What we said was in the event of a deadlock it was imperative that bondholders retain their confidence that loans made to the United States be repaid on schedule.” Treasury Secretary Timothy Geithner says of S&P’s response to the default crisis: “They, like many people, looked at this terrible debate we’ve had over the past few months, should the US default or not, really a remarkable thing for a country like the United States. And that was very damaging.” [Politico, 8/11/2011] TPMDC reporter Brian Beutler recalls: “For weeks, high-profile conservative lawmakers practically welcomed the notion of exhausting the country’s borrowing authority, or even technically defaulting. Others brazenly dismissed the risks of doing so. And for a period of days, in an earlier stage of the debate, Republican leaders said technical default would be an acceptable consequence, if it meant the GOP walked away with massive entitlement cuts in the end.” He accuses McClintock of trying to “sweep the mess they’ve made down the memory hole” by lying about what he and fellow Republicans said in the days and weeks before the debt ceiling legislation was passed. Beutler notes statements made by House Budget Committee chairman Paul Ryan (R-WI) and House Majority Leader Eric Cantor (R-VA), where they either made light of the consequences of a possible credit default or said that a default was worthwhile if it, as Cantor said, triggered “real reform.” Representative Louis Gohmert (R-TX), one of the “tea party” members, accused the Obama administration of lying about the consequences of default; Beutler writes, “This was a fairly common view among conservative Republicans, particularly in the House” (see July 14, 2011). [TPMDC, 8/11/2011]
Entity Tags: Michele Bachmann, Eric Cantor, Brian Beutler, Joydeep Mukherji, US Congress, Standard & Poor’s, Timothy Geithner, Paul Ryan, Obama administration, John Boehner, Tom McClintock, Politico
Timeline Tags: Global Economic Crises
New Republic senior editor John Judis writes of his disappointment that the financial services firm Standard & Poor’s did not explicitly cite the actions of House Republicans as the reason why it issued its downgrade to the US credit rating (see August 5, 2011). One of the reasons why S&P issued its credit downgrade, it said, was because of the “political brinksmanship” waged by members of Congress, resulting in policymaking that has become “less stable, less effective, and less predictable.” Judis notes that while it is virtually indisputable that the firm was referring to the actions of House Republicans who worked furiously to block debt-ceiling legislation (see July 13, 2011 and August 11, 2011), “the statement was sufficiently vague that Republicans could take it as laying the blame on the Obama administration for not agreeing to their proposals for raising the debt ceiling. And, indeed, Mitt Romney and other Republican presidential candidates have blamed President Barack Obama for S&P’s decision” (see August 6-9, 2011). “[T]hose appearing to discount the danger of a default were right-wing Republicans like Representative Michelle Bachmann and Senator Pat Toomey, who are identified with the Tea Party,” Judis writes. Senior S&P director Joydeep Mukherji “acknowledged that a major factor driving the downgrade was the utter irresponsibility and ignorance of a significant minority of Republican legislators,” but refused to cite those Republican lawmakers as responsible for the downgrade. Judis writes: “Why didn’t S&P say this more clearly in the original statement? I suspect it was out of a desire to appear non-partisan, but the effect was to apportion the blame equally on both parties. That is a disservice to the country because it allows a deranged faction of the Republican Party to continue to run riot in the Congress and to undermine any possible of a constructive response to the economic crisis.” Judis concludes, “I stand second to no one in criticizing the White House for failing to fight the Republicans, but it is worth recalling here that the principal cause of our counterproductive fiscal policy is the Republican opposition.” [New Republic, 8/12/2011]
Business Insider reporter Zeke Miller says flatly that Representative Michele Bachmann (R-MN), a leading candidate for the 2012 Republican presidential nomination, is the reason why the US suffered a recent credit downgrade (see August 5, 2011). Yesterday, Bachmann insisted that the credit downgrade proved her argument against raising the US debt ceiling was correct (see August 11, 2011), but, Miller writes, the evidence, including statements by Standard & Poor’s, the agency that lowered the nation’s credit rating, shows that she and her fellow Congressional Republicans who fought to prevent Congress from authorizing the raising of the debt ceiling (see April 30, 2011, June 26, 2011, July 13, 2011, July 13, 2011, and July 14, 2011), are themselves responsible. S&P officials have said that Congress’s intransigence on raising revenues in any fashion is one of the central reasons why it lowered the US’s credit rating (see August 11, 2011). Bachmann led “tea party” Republicans in voting against every plan offered to raise the debt ceiling; she told reporters that the only way she would even consider voting for a raise in the debt ceiling was if the same legislation repealed entirely the health care reform act recently passed by Congress. Miller goes on to note that all eight Republican presidential candidates, including Bachmann, have said that they would not sign a bill into law that provided 10 times the amount of government spending cuts as it authorized tax and revenue increases. Miller concludes: “Bachmann’s statements on the debt ceiling come off either as stunningly uninformed about the issue, or deliberately misleading. Either way, this line of attack will only weaken her campaign with mainstream and business voters.” [Business Insider, 8/12/2011]
Ethan Harris of Bank of America. [Source: National Association for Business Economics]Many prominent economists and financial leaders lay the blame for the US credit rating downgrade (see August 5, 2011) at the feet of Congressional Republicans. Republicans have been unified in blaming the Obama administration’s economic policies for the downgrade (see August 6-9, 2011), though House Speaker John Boehner boasted that he and his fellow Republicans received “98 percent” of what they wanted in the debt-ceiling legislation that led to the downgrade (see August 1, 2011). Nobel Prize-winning Paul Krugman, a self-described liberal, blamed Congressional Republicans for the downgrade hours after credit rating agency Standard & Poor’s announced it (see August 5-6, 2011), and S&P itself implied that Republicans were at fault for the downgrade for being willing to risk sending the nation into default if they were blocked from getting their way in the debt-ceiling legislation (see August 11, 2011). Even before the credit rating downgrade, the New York Times reports, “macroeconomists and private sector forecasters were warning that the direction in which the new House Republican majority had pushed the White House and Congress this year—for immediate spending cuts, no further stimulus measures and no tax increases, ever—was wrong for addressing the nation’s two main ills, a weak economy now and projections of unsustainably high federal debt in coming years” (see May 20, 2011). These economists and forecasters generally agree with the Obama administration’s wishes to immediately stimulate the economy to include greater private-sector spending and create more jobs, with spending cuts more useful as a long-term remedy. Republicans in Congress and on the presidential campaign trail, however, continue to insist that their policies are what will rescue the US economy; House Majority Leader Eric Cantor (R-VA) says that he and his fellow Republicans “were not elected to raise taxes or take more money out of the pockets of hardworking families and business people,” and will never consider tax or revenue increases of any sort. Even Republican economic figures such as Reagan advisor Martin Feldstein and Henry Paulson, the Treasury secretary under President George W. Bush, say that revenue increases should balance any spending cuts, a position Congressional Republicans—particularly “tea party” Republicans such as presidential candidate Michele Bachmann (R-MN)—refuse to countenance. Bank of America senior economics research official Ethan Harris writes: “Given the scale of the debt problem, a credible plan requires both revenue enhancement measures and entitlement reform. Washington’s recent debt deal did not include either.” Ian C. Shepherdson, the chief US economist for research firm High Frequency Economist, says, “I think the US has every chance of having a good year next year, but the politicians are doing their damnedest to prevent it from happening—the Republicans are—and the Democrats to my eternal bafflement have not stood their ground.” Joel Prakken, chairman of Macroeconomic Advisers, and Laurence H. Meyer, former Federal Reserve governor, both call the Republicans’ calls for spending cuts “job-kill[ers].” Bill Gross, head of the bond-trading firm Pimco, lambasts Republicans and what he calls “co-opted Democrats” for throwing aside widely accepted economic theory for Republican-led insistence that draconian spending cuts, largely in social safety-net programs such as Social Security and Medicare, will “cure” the US’s economic ills. Instead, Gross writes: “An anti-Keynesian, budget-balancing immediacy imparts a constrictive noose around whatever demand remains alive and kicking. Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy. It will not.” [New York Times, 8/12/2011]
Entity Tags: Ian Shepherdson, US Congress, Eric Cantor, Bill Gross, Standard & Poor’s, Henry Paulson, Paul Krugman, New York Times, Joel Prakken, John Boehner, Laurence H. Meyer, Martin Feldstein, Michele Bachmann, Ethan Harris, Obama administration
Timeline Tags: Global Economic Crises
Allen West. [Source: Newscom / Zumawire]US Representative Allen West (R-FL), a hard-right African-American conservative who won the 2010 race for his seat with a large contingent of “tea party” support, accuses black Democrats of being “overseers” on what he calls a “21st century plantation.” West says he is a “modern-day Harriet Tubman” leading people away from the “plantation.” West, discussing unemployement issues among black Americans with Fox News host Laura Ingraham, says: “So you have this 21st Century plantation… where the Democrat party [sic] has forever taken the black vote for granted, and you have established certain black leaders who are nothing more than the overseers of that plantation. And now the people on that plantation are upset because they’ve been disregarded, disrespected, and their concerns are not cared about. So I’m here as the modern-day Harriet Tubman to kind of lead people on the Underground Railroad away from that plantation into a sense of sensibility.” West, a member of the heavily Democratic Congressional Black Caucus (CBC), agrees with Ingraham when she says that Democratic members of the CBC such as Maxine Waters (R-CA) and Barbara Lee function as “plantation boss[es].” He adds civil rights leaders Jesse Jackson and Al Sharpton to his list of “overseers,” and accuses Jackson, Sharpton, and others of bowing to the wishes of white liberals. “What you end up having—I’m going to be brutally honest—is that white liberals have turned over to certain leaders or ‘perceived leaders’ in the black community, like a Jesse Jackson, Al Sharpton, or Maxine Waters or Barbara Lee, and said, you know, pacify and keep the black community firmly behind us, regardless of the failures of our social welfare policies.” Black Democrats have done nothing to address the issue of rampant unemployment among African-Americans, he says: “That’s the absence of this ‘leadership’ in the black community, which as I say are nothing more than overseers of this 21st century plantation.” West later issues a statement clarifying his “Harriet Tubman” analogy: “Harriet Tubman is known for her efforts to rescue slaves and bring them off of the plantations to freedom. It took one person to begin a process which eventually led to the end of slavery. Today in the black community, we see individuals who are either wedded to a subsistence check or an employment check. Democrat [sic] physical enslavement has now become liberal economic enslavement, which is just as horrible. When unemployment is at more than 15 percent in the black community and we see the vicious cycle of fatherless children generation after generation, we need to find a new path. I am willing to stand up for the conservative principles that I believe can help move our community forward.” Lee spokeswoman Kristal DeKleer responds, “Congressman West’s comments are absurd on their face, and are simply another in a long stream of incendiary comments designed to fan the flames of the extreme right while they continue to do nothing to create jobs and address the tremendous disparities we face in this nation.” Waters says of West’s comments: “It’s a little bit outrageous. It’s a little bit ridiculous” and “hard to respond to.” Waters also notes that she and other CBC members were at a CBC-sponsored job fair in Atlanta, where West’s brother Arlen West, unemployed for two months, came looking for a job; according to Waters, Arlen West told job fair staffers that when he asked his brother for assistance in finding a job, Allen West advised him to go to the CBC job fair. West, interviewed by MSNBC’s Ed Schultz, says that his brother’s incendiary rhetoric is “not productive.” Asked about his advice to his brother, West tells Schultz’s producers in a statement that he has “stood by” his brother like millions of other Americans have been forced to do, saying that he has given his brother “suggestions and encouragement” on finding a job. He then blames “the economic policies of President Obama” for his brother’s inability to find a job along with others in “the black community.” In a rejoinder, Schultz says to West, “You have not offered one jobs initiative” during his time as a congressman. “You have not put your name to one effort to get Americans back to work, other than to sit on the sidelines and heckle the president, and heckle the Democrats, and complain about the economy, but you haven’t done a damn thing about it. In fact, you told your brother to go to a jobs fair that was hosted by the Democrats. So hypocritical, isn’t it?” [New York Times, 5/4/2010; Huffington Post, 8/18/2011; USA Today, 8/18/2011; MSNBC, 8/18/2011]
Entity Tags: Fox News, Arlen West, Allen West, Al Sharpton, Barbara Lee, Edward Andrew (“Ed”) Schultz, Jesse Jackson, MSNBC, Maxine Waters, Laura Ingraham, Congressional Black Caucus, Kristal DeKleer
Timeline Tags: Domestic Propaganda
After President Obama exhorts Congress to pass his jobs legislation package, which he calls the “American Jobs Act of 2011,” during his address to a joint session on September 8, some Republican lawmakers note that no legislator has officially submitted the bill and thusly there is no legislation to pass. Representative Louis Gohmert (R-TX) submits his own quickly written “American Jobs Act of 2011” hours before a Democratic House member can submit Obama’s 155-page, $447 billion legislative package. Gohmert’s bill is two pages long and would “amend the Internal Revenue Code of 1986 to repeal the corporate income tax.” Gohmert issues a press release that reads: “We have heard a lot of rhetoric about job creation from President Obama over the last several days. After waiting to see what the president would actually put into legislative language, and then waiting to see if anybody would actually introduce the president’s bill in the House, today I took the initiative and introduced the ‘American Jobs Act of 2011.’ It is a very simple bill, which will eliminate the corporate tax which serves as a tariff that our American companies pay on goods they produce here in America. This bill will actually create jobs in America. Right now, American manufacturing jobs are shipped overseas. What is really insidious about this tax is that corporate taxes are paid by the consumer—built in to the cost of the good or service. Corporate taxes are paid for by people in the form of lower wages to American workers and less money paid out in dividends in everything from 401K retirement accounts and to those who would risk their capital in business ventures. This type of capital investment is where jobs come from. Unlike President Obama’s bill, which clocks in at 155 pages, the ‘American Jobs Act’ is only two pages. The American people want to see jobs and economic growth and this bill guarantees that outcome. America would instantly become a safe haven for businesses resulting in an explosion in revenue increases. If we really want to create jobs and grow the economy, we must pass ‘The American Jobs Act’ now.” [Daily Caller, 9/14/2011; Louis Gohmert, 9/14/2011; Los Angeles Times, 9/15/2011] Gohmert objects to a provision in the Obama legislative package which would forbid employers from discriminating against unemployed workers, accusing Obama of trying to create a “new protected class” of Americans and saying that the point of the anti-discrimination language would be to give “trial lawyers… 14 million new clients.” The National Employment Law Project (NELP) says that Gohmert is wrong in his accusations, and that the legislation “would not make employment status a protected class like race or sex,” but “simply bans hiring discrimination against the jobless.” Employer discrimination against unemployed job applicants is well-documented and on the rise, according to NELP. [Huffington Post, 8/11/2011; Huffington Post, 9/14/2011] Kirsten Boyd Johnson of the satirical political news Web site Wonkette calls Gohmert’s legislation “childish,” and says that, according to recent polls, Americans largely blame Congressional Republicans for, as she writes, “destroying America with their petulant refusal to govern like a dignified body of elected lawmakers in favor of running around like naughty children stealing other peoples’ homework.” Bloomberg News, which reports on the polling, quotes retired New York citizen Ray DiPietro as saying: “I’ve been a registered Republican for 50 years or more, but I don’t like what they are doing. [Republicans] are more concerned about getting Obama out of office than with making things right.” DiPietro says he receives emails on a daily basis from Republicans who denigrate Obama and “tear him apart, and that’s no way for grownups to talk.” Indianapolis Republican Nicole Olin agrees, saying: “I do put the majority of the blame on the Republicans, because they seem to be the least willing to give up anything. Just because a majority votes you in doesn’t mean you don’t have to compromise in one way, shape, or form to make sure you do what’s good for everyone.” Senator Mike Lee (R-UT) warns of the dangers of taking any set of polls in “isolation,” and says the poll result “highlights a broad dissatisfaction among the American people with the way their government has been operating.” [Wonkette, 9/15/2011; Bloomberg, 9/15/2011] David Weigel of Slate writes that Gohmert “prank[ed]” the White House in submitting his legislation, which has no real chance of ever being enacted. Although House Democrats have not yet formally submitted the actual American Jobs Act, it has been posted online by the Obama administration. [Slate, 9/12/2011; Slate, 9/15/2011] Democrats can submit the bill under its original title, as House rules do not forbid two separate pieces of legislation having the same name, though as Los Angeles Times reporter James Oliphant notes, “[I]t could result in a lot of Democrats and Republicans shouting on the floor about two different bills.” [Los Angeles Times, 9/15/2011] In the past, Gohmert has accused the Obama administration of orchestrating the deaths of “one in five” Americans through its health care legislation (see July 16, 2009), of implementing “eugenics” and creating Nazi-like “youth brigades” (see July 24, 2009), and of lying about the likelihood that failing to raise the debt ceiling would lower the nation’s credit rating (see July 13, 2011).
Entity Tags: Kirsten Boyd Johnson, Obama administration, Nicole Olin, Louis Gohmert, Michael Shumway (“Mike”) Lee, James Oliphant, National Employment Law Project, David Weigel, US House of Representatives, Barack Obama, Bloomberg News, Ray DiPietro, US Congress
Timeline Tags: Global Economic Crises, Domestic Propaganda
The US Defense Department increased its spending on clean and renewable energy sources by 300 percent, from $400 million to $1.2 billion, between 2006 and 2009, according to a Pew Research report. By 2010, the Defense Department had spent upwards of $10 billion on clean energy. CleanTechnica reports that the “investments are helping spur development and deployment of clean energy technologies in three key areas: vehicle efficiency, advanced biofuels, and the installation of renewable energy systems at military bases.” Phyllis Cuttino, head of the Pew Clean Energy Program, says: “As one of the largest energy consumers in the world, the Department of Defense has the ability to help shape America’s energy future. DoD’s efforts to harness clean energy will save lives, save money, and enhance the nation’s energy and economic future. Their work is also helping to spur the growth of the clean energy economy.” Fuel shipments make up 80 percent of all supply convoys in Iraq and Afghanistan, and those convoys are premium targets for insurgents. Deploying clean energy alternatives will reduce the number of convoys needed to be dispatched, and as a result will save lives and improve the security of American military operations. Secretary of the Navy Ray Mabus says: “For the Department of the Navy to meet the challenges we face in the 21st century, we must reduce our dependence on foreign oil and find ways to use energy more efficiently. We must ensure that we remain the most formidable expeditionary force in the world, even in these challenging economic times. We can do that in part by changing the way we use, acquire, and produce energy. Before the end of the decade, our programs to develop and use alternative sources of energy, on shore and at sea, will pay for themselves. We will save the department money, but more importantly, these energy initiatives will make us better war fighters and will saves lives.” [CleanTechnica, 9/23/2011]
Republican presidential candidate Newt Gingrich (R-GA) issues accusations that Americans on government aid programs are in many cases wasteful drug users who use their aid money to go on lavish vacations. Gingrich, riding a surge of popularity as the Iowa caucuses approach, calls President Obama “the food stamp president” during his stump speeches. In an appearance in Council Bluffs, Iowa, Gingrich says: “Remember, this is the best food stamp president in history. So more Americans today get food stamps than before. And we now give it away as cash—you don’t get food stamps. You get a credit card, and the credit card can be used for anything. We have people who take their food stamp money and use it to go to Hawaii. They give food stamps now to millionaires because, after all, don’t you want to be compassionate? You know, the Obama model: isn’t there somebody you’d like to give money to this week. That’s why we’re now going to help bailout Italy because we haven’t bailed out enough people this week, the president thought let’s write another check. After all, we have so much extra money.” The nonpartisan fact-checking entity PolitiFact calls Gingrich’s accusations complete lies. The “food stamp program,” known as the Supplemental Nutrition Assistance Program (SNAP), has very strict guidelines about what can and cannot be bought with federal aid dollars. Except for very limited exceptions, SNAP recipients cannot use aid money for restaurant meals or to buy anything other than groceries. SNAP funds cannot be used to buy alcoholic beverages. The “electronic benefits transfer” card, or EBT cards, are similar in appearance to credit cards, but have a very different function. EBT cardholders cannot use their cards to buy airline tickets, whether it be for Hawaiian vacations or anything else. PolitiFact doubts that any recipients would have enough funds to buy such tickets in the first place; the average monthly SNAP benefit is $134 per person. Julia Isaacs of the Brookings Institution says, “There is undoubtedly some illegal bartering of EBT cards—though I understand trafficking in EBT cards is less than under the old food stamps—but I am having trouble imagining how you could barter an EBT card for an airplane ticket.” PolitiFact notes that Gingrich’s claims may have come from a recent news broadcast in St. Louis, which found that some Missouri SNAP recipients spent $2,737 on food in Hawaii in January 2011. The money, though spent out of state, was spent on legitimate goods such as groceries. The amount was .07 percent of the total money allocated to SNAP residents in Missouri for January 2011. And the Missouri beneficiaries had legitimate reasons to be in Hawaii—some of them were members of the military transferred to new duty bases, for example. If the Missouri story is the source of Gingrich’s claims, PolitiFact notes, then Gingrich completely misrepresented the facts of the story. As far as the “food stamps for millionaires” claim, anyone who earns over 130 percent of the poverty line cannot receive benefits. No such beneficiaries have been identified, and if they do exist, they are breaking the law. Michael Wiseman of George Washington University says, “I would challenge Newt Gingrich to find a millionaire in annual income who gets on food stamps legally.” PolitiFact says that Gingrich’s claims are “so ridiculous” that the researchers thought for a time that he might be joking. Think Progress reporter Marie Diamond calls Gingrich’s claims “absurd.” At a recent campaign event in Iowa, citizen Don Brantz confronted Gingrich, saying: “You don’t always tell the truth, Mr. Gingrich, and that food stamp thing is one of them. Iowa already has a computer system. We do not pay money so the people on food stamps can buy beer and anything else. It’s a very specific thing.” (Diamond notes that Gingrich is a frequent world traveller, taking lengthy vacations in luxury spots around the world. In one instance, he told reporters that after taking a luxury cruise in Greece, he came away with a deeper understanding of the European financial crisis.) [St. Petersburg Times, 12/1/2011; Think Progress, 12/2/2011; ABC News, 1/2/2012] MSNBC talk show host Ed Schultz will say that Gingrich, like fellow Republican candidate Rick Santorum (R-PA), “is also quick to connect programs like food stamps to the African-American community.” Schultz’s guest, author and radio host Michael Eric Dyson, says: “I don’t think we need Newt Gingrich’s pedagogy in the NAACP. I think this is condescension at its most poignant. And, as with Rick Santorum, when you have pet Negro causes, you tend to treat Negros like pets.” New York Times columnist Charles Blow will say of Gingrich’s remarks that “this sort of racial pandering is exactly what happens at this point in a race.” Blow calls Gingrich’s remarks “extreme, very racist.” [Politico, 1/6/2012]
Entity Tags: Michael Wiseman, Don Brantz, Charles M. Blow, Barack Obama, Edward Andrew (“Ed”) Schultz, Michael Eric Dyson, PolitiFact (.org ), Supplemental Nutrition Assistance Program, Marie Diamond, Newt Gingrich
Timeline Tags: Global Economic Crises, Domestic Propaganda, 2012 Elections
Rick Santorum, campaigning in January 2012. [Source: New Orleans Times-Picayune]Republican presidential candidate Rick Santorum (R-PA), enjoying a surge of popularity among Iowa caucus voters, makes what many perceive as a racially biased attack on poor black Americans. At a campaign stop in Sioux City, Iowa, Santorum points to African-Americans as being the major recipients of federal economic assistance, and tells a largely white audience that he does not want to “make black people’s lives better by giving them somebody else’s money.” The federal social welfare system is being used to exploit its beneficiaries, Santorum says, according to a CBS News transcript, and adds: “It just keeps expanding—I was in Indianola a few months ago and I was talking to someone who works in the Department of Public Welfare here, and she told me that the state of Iowa is going to get fined if they don’t sign up more people under the Medicaid program. They’re just pushing harder and harder to get more and more of you dependent upon them so they can get your vote. That’s what the bottom line is.… I don’t want to make black people’s lives better by giving them somebody else’s money; I want to give them the opportunity to go out and earn the money.” Santorum’s original question was about reducing foreign influence on American culture. Asked about his statement by CBS reporter Scott Pelley, Santorum says he is not aware of the context of his remark, but says he recently watched the documentary Waiting for Superman, which examines American public schools. Apparently referring to his own statement, he says: “I’ve seen that quote, I haven’t seen the context in which that was made. Yesterday I talked for example about a movie called, um, what was it? ‘Waiting for Superman,’ which was about black children and so I don’t know whether it was in response and I was talking about that.” (The film depicts students from a variety of races, and does not focus on a particular racial group.) He adds: “Let me just say that no matter what, I want to make every lives [sic] better—I don’t want anybody—and if you look at what I’ve been saying, I’ve been pretty clear about my concern for dependency in this country and concern for people not being more dependent on our government, whatever their race or ethnicity is.” (Think Progress reporter Marie Diamond calls Santorum’s response “bizarre.”) CBS finds that 84 percent of Iowa’s welfare recipients are white; only 9 percent of Iowans on welfare are black. Nationally, 39 percent of welfare recipients are white, 37 percent black, and 17 percent Hispanic. The poverty statistics between the three races are heavily skewed, with 27.4 percent of blacks living in poverty, 26.6 percent of Hispanics, and 9.9 percent of whites. Diamond writes, “Santorum’s decision to single out black welfare recipients plays right into insulting—and inaccurate—stereotypes of the kind of people some voters might expect to want a ‘handout.’” [CBS News, 1/2/2012; Raw Story, 1/2/2012; Think Progress, 1/3/2012]
Appeal to Conservative Iowa Voters? - Raw Story’s Stephen C. Webster writes that Santorum may be trying to appeal to conservative Iowan voters with his thinly veiled racial attack. Ninety-one percent of Iowans are white. [Raw Story, 1/2/2012]
Santorum Claims He Said 'Blah,' Not 'Black' - Two days after making the remark, and one day after acknowledging to Pelley that he had intended to single out blacks in his statement, Santorum denies using the word “black” in his statement, and denies making any racial allusion. He tells CNN’s John King: “I’ve looked at that quote, in fact I looked at the video. In fact, I’m pretty confident I didn’t say black. I started to say is a word and then sort of changed and it sort of—blah—mumbled it and sort of changed my thought.” On Fox News, Santorum says: “I don’t single out on any group of people, that’s one thing I don’t do. I don’t divide people by group and race and class. I believe that in no people in this country. And I condemn all forms of racism. There’s no one that’s been out here working, as you know, in the inner city, and with people of all different races.” He says that the criticism over the remark is from “someone trying to cause trouble.” [Raw Story, 1/3/2012; Think Progress, 1/5/2012] Conservative blogger Ed Morrissey pins the blame on CBS for using the word “black” in its transcript of Santorum’s remarks. According to Morrissey’s interpretation of the video, Santorum said, stumbling over the key word, “I don’t want to make [pause] lives, people’s lives better by giving them somebody else’s money.” CBS “put words in [Santorum’s] mouth,” Morrissey accuses. [Ed Morrissey, 1/3/2012] Mediaite’s Tommy Christopher says there is room for doubt that Santorum used the word, and writes that Santorum said, “I don’t want to make… mmbligh… people’s lives better.” Christopher believes that Santorum may have intended to say the word “black,” but choked it off in mid-word. Christopher embeds a video clip from CBS in his article, and concludes, “The viewer can judge, but even as an LGBT-friendly liberal, I’m inclined to give Santorum the benefit of the doubt here.” [Mediaite, 1/3/2012] NPR also reported Santorum as using the word “black” in his comment. [National Public Radio, 1/3/2012] The National Urban League takes the stance that Santorum indeed singled out blacks for his criticism. NUL president Marc Morial accuses Santorum of pandering to racists in the GOP, and says: “Senator Santorum is perpetuating a thoroughly false and destructive racial stereotype in a desperate attempt to score political points. He is appealing to the lowest common denominator within the electorate and quite frankly should be ashamed of himself.… Social safety net programs serve families in dire circumstances from all walks of life. Many of those who now find themselves in need, whatever their ethnic background, are the very people who have contributed into these programs throughout their entire working lives. By falsely suggesting that people of color are a disproportionate drain on resources provided mainly by whites, Santorum deliberately fans the flames of racial divisiveness.” Morial notes that in 2005, Santorum admitted that he earned over $162,000 a year as a US senator and lived in a $643,361 home, but depended on his parents, retired federal employees, for financial assistance. Morial notes, “Most people receiving assistance are not earning six-figure salaries and living in a lavish suburban mansion.” [National Urban League, 1/3/2012] The NAACP’s Benjamin Jealous, appearing on a show hosted by MSNBC’s Ed Schultz, later says that it is obvious Santorum did say “black people” and Santorum’s denials “defy logic.” Jealous says Santorum’s comments were “divisive, wrong, and based on stereotypes.” The vast majority of SNAP recipients are non-blacks, Jealous says, “and yet, when [Santorum] thinks public assistance, he thinks black, and that’s just unfortunate.” [MSNBC, 1/5/2012] Think Progress’s Alex Seitz-Wald will later write, “There’s ample video evidence suggesting that Santorum did, in fact, say ‘black,’ but Santorum’s denial is especially surprising considering that he seemed to acknowledge making the comments earlier yesterday.” [Think Progress, 1/5/2012] NewsOne’s Terrell Jermaine Starr later writes that it is obvious Santorum said “black,” and observes: “Rick Santorum must think we’re stuck on stupid.… [E]ven if he was referring to ‘blah people,’ from which demographic do they come? Is this racial category (if ‘blah people’ are a race at all) on the US Census?” [NewsOne, 1/5/2012] Santorum will later claim that he actually said the word “plives,” and not “black.” He will explain that he was briefly tongue-tied while trying to say “people’s lives,” and had no intention of saying “black people’s lives.” He will also claim that he has done more in black communities “than any Republican in recent memory.” [Think Progress, 1/10/2012]
Entity Tags: Marc H. Morial, CBS News, Ed Morrissey, Edward Andrew (“Ed”) Schultz, John King, Alex Seitz-Wald, Marie Diamond, Benjamin Jealous, Terrell Jermaine Starr, Tommy Christopher, National Public Radio, National Urban League, Stephen C. Webster, Scott Pelley, Rick Santorum
Timeline Tags: Domestic Propaganda, 2012 Elections
The presidential campaign of Newt Gingrich (R-GA) expresses its anger at media coverage of its candidate’s recent remarks alleging that African-Americans rely more on food stamps than other ethnic groups, and seemingly prefer that reliance to actual work (see January 5, 2012). Campaign spokespersons tell reporters that Gingrich’s words were misquoted and taken out of context. Gingrich himself, asked about the remarks, says: “I know that the left has a passion for defending its right to be the only moral arbiter in America. Therefore… if you in fact talk openly and honestly about the failure of liberal institutions and the way they hurt the poor, there becomes a sudden frenzy of a herd of people running screaming, ‘racism, racism.’ It is a fact that liberal institutions in inner cities have failed the poor. It’s a fact that bad schools trap poor children. It’s a fact that bad public safety policies lead to the collapse of cities like Detroit. It is a fact that high taxation drives jobs out. It’s a fact that the approach that favors unemployment compensation and food stamps over work and pay checks has failed. I’m happy to have that debate. I believe all Americans of every ethnic background has been endowed by their creator with the right to pursue happiness. I’m prepared to discuss that even if it makes liberals uncomfortable. For the life of me I cannot understand why having a conservative Republican who cares about young people having jobs should be seen as such a terrible idea. Or should be seen as somehow a racist characterization. I think all young people of all backgrounds should have jobs.” MSNBC’s Ed Schultz calls Gingrich’s comments “racially insensitive” and “simply not true.” He then shows the statistics of Americans given benefits under the Supplemental Nutrition Assistance Program (SNAP). Around 40 million Americans receive SNAP benefits: 59 percent of those are white and 28 percent are black. Thirty percent of SNAP recipients have jobs and depend on SNAP to supplement their income. Forty-seven percent of SNAP recipients are children. Seventy-six percent of SNAP households contain a child, an elderly person, and/or a disabled person. Schultz says Gingrich’s comments were reported accurately, regardless of Gingrich’s protestations that the media “distorted” his comments and crafted “an attack” with the misreported words. NAACP president Benjamin Jealous calls Gingrich’s remarks “extremely frustrating” to hear, and says Gingrich is trying to “divide” the country along racial lines for his electoral gain. Gingrich uses “stereotypes… not rooted in fact” on which to base his arguments, Jealous says, and adds, “His facts are wrong, the implications are wrong, and the effect is wrong.” [MSNBC, 1/5/2012; Politico, 1/6/2012]
Republican presidential candidate Newt Gingrich (R-GA), continuing his rhetorical attacks on President Obama, singles out African-Americans as largely dependent on “food stamps.” Appearing at campaign rallies in New Hampshire, Gingrich repeatedly calls Obama “the best food stamp president in history,” says he would be “the best paycheck president in American history,” and says of African-Americans that he wants to tell them why they should “not be satisfied with food stamps.” Gingrich says he would be willing to discuss the topic at the next NAACP convention. Gingrich says: “More people are on food stamps today because of Obama’s policies than ever in history. I would like to be the best paycheck president in American history. Now, there’s no neighborhood I know of in America where if you went around and asked people, ‘Would you rather your children had food stamps or paychecks?’ you wouldn’t end up with a majority saying they’d rather have a paycheck. And so I’m prepared, if the NAACP invites me, I’ll go to their convention and talk about why the African-American community should demand paychecks and not be satisfied with food stamps. And I’ll go to them and explain a brand new Social Security opportunity for young people, which should be particularly good for African-American males—because they’re the group that gets the smallest return on Social Security because they have the shortest life span.” Think Progress reporter Tanya Somanader calls Gingrich’s take on food stamp recipients both “prejudicial” and “false.” The food stamp program, officially known as the Supplemental Nutrition Assistance Program (SNAP), has white Americans as the majority of its recipients. Most Americans receiving food stamps are either children or elderly retirees. Working-age women of all races represent only 28 percent of SNAP beneficiaries, and working-age men represent only 17 percent. Many SNAP beneficiaries actually have jobs and bring home paychecks that are their primary source of income; 85 percent of those recipients live below the poverty line. Somanader writes, “Thus, SNAP benefits provide a necessary safety net to families trying to stay afloat in a sluggish economy.” [ABC News, 1/2/2012; Think Progress, 1/5/2012] NAACP president Benjamin Jealous will note that Gingrich rejected multiple invitations to speak at the NAACP convention in past years. [MSNBC, 1/5/2012] Gingrich’s fellow Republican candidate Rick Santorum (R-PA) recently said that he wanted to end the cycle of blacks “taking someone else’s money” via SNAP and other federal safety-net programs (see January 1-3, 2012). Gingrich recently advocated firing most school custodial and maintenance workers and forcing poor children (presumably federal aid recipients) to fill the positions instead (see November 18, 2011 and After and December 1-2, 2011). Previously, Gingrich has accused food stamp recipients of being millionaires and using the money to “go to Hawaii” (coincidentally Obama’s home state). Government and independent experts say that the surge in federal aid recipients—higher now than in any time in US history—is because of policies instituted under George W. Bush and, in some cases, continued by Obama. The stories Gingrich tells of millionaire food stamp recipients vacationing in Hawaii have been shown to be false (see November 30 - December 2, 2011), though under a now-obsolete form of food stamp distribution, some recipients were able to use the proceeds to buy beer or trade them for small amounts of cash. [ABC News, 1/2/2012]
The nonpartisan Center on Budget and Policy Priorities (CBPP) finds that the Supplemental Nutrition Assistance Program (SNAP), formerly the “food stamp” program, is playing a critical role in keeping American citizens from starving during the economic recession. The program has long been reviled by Republicans and conservatives, and recently Republican presidential contender Newt Gingrich (R-GA) smeared President Obama as “the food stamp president” (see November 30 - December 2, 2011 and January 5, 2012), and falsely claimed that Obama has presided over the largest increase of Americans receiving SNAP assistance in US history (see January 17, 2012). The program benefits a disproportionately large number of children and disabled and elderly people, according to the CBPP. Since the recession began in late 2007, the CBPP says, “SNAP has responded effectively to the recession” in providing much-needed assistance to Americans, particularly since the recession has driven many families into “low-income” status. “According to the Census Bureau’s Supplemental Poverty Measure, which counts SNAP as income, SNAP kept more than 5 million people out of poverty in 2010 and lessened the severity of poverty for millions of others.” As the economy recovers and legislative provisions expire, SNAP spending will decrease, according to Congressional Budget Office (CBO) predictions. “By 2022 SNAP is expected to return nearly to pre-recession levels as a share of GDP. Over the long term, SNAP is not growing faster than the overall economy and thus is not contributing to the nation’s long-term fiscal problems.” The payment accuracy of SNAP is extraordinarily high, the CBPP claims, refuting the claims of massive fraud made by Gingrich and other opponents of the program. And, according to the CBPP, economists say that the program is “one of the most effective forms of economic stimulus,” helping grow the economy as it protects poverty-stricken families. [Center on Budget and Policy Priorities, 1/9/2012]
The nonpartisan FactCheck.org finds that recent claims by presidential candidate Newt Gingrich (R-GA) that “more people have been put on food stamps by Barack Obama than any president in American history” are wrong. In fact, far more Americans were added to the Supplemental Nutrition Assistance Program (SNAP) rolls under President George W. Bush than under Obama. Gingrich has made the claim in a number of political speeches (see November 30 - December 2, 2011 and January 5, 2012), but his reiteration of the claim during a recent Republican debate in South Carolina has drawn a great deal of media attention (see January 16, 2012). FactCheck finds: “Gingrich would have been correct to say the number now on food aid is historically high. The number stood at 46,224,722 persons as of October, the most recent month on record. And it’s also true that the number has risen sharply since Obama took office. But Gingrich goes too far to say Obama has put more on the rolls than other presidents.” Information from the US Department of Agriculture (USDA)‘s Food and Nutrition Service going back to January 2001 “show[s] that under President George W. Bush the number of recipients rose by nearly 14.7 million. Nothing before comes close to that.” Moreover, “the program has so far grown by 444,574 fewer recipients during Obama’s time in office than during Bush’s.” The trend in recent months has been for the number of food-stamp recipients to decline, another fact Gingrich fails to note. FactCheck finds that the rise in the number of Americans on food stamps—currently one out of seven—began during the second term of the Bush presidency. “In the 12 months before Obama was sworn in, 4.4 million were added to the rolls, triple the 1.4 million added in 2007,” the organization writes. “To be sure, Obama is responsible for some portion of the increase since then. The stimulus bill he signed in 2009 increased benefit levels, making the program more attractive. A family of four saw an increase of $80 per month, for example.… The stimulus also made more people eligible. Able-bodied jobless adults without dependents could get benefits for longer than three months.” Part of the reason for the higher number of recipients under Obama is the new outreach to eligible citizens by state governments, according to the USDA; many state governments have worked harder to inform eligible citizens of their right to apply for government assistance, and have reduced the amount of information that claimants must provide to receive assistance. FactCheck concludes: “We don’t argue that the program is either too large (as Gingrich does) or too small. It has certainly reached a historically high level, and may or may not grow even larger in the months to come. But the plain fact is that the growth started long before Obama took office, and participation grew more under Bush.” And it quotes the USDA’s Kevin Concannon, who recently told a Wall Street Journal reporter, “I realize Mr. Gingrich is a historian, but I’m not sure he’d get very high marks on that paper.” [USA Today, 1/17/2012] CBS News notes that the White House has called Gingrich’s claims “crazy,” and finds: “While the number of people on food stamps is indeed at a record level, that’s in part because of eligibility rules being relaxed under the administration of George W. Bush. It’s also due in part to the economic downturn that began under Mr. Bush.… [T]hat percentage increase hardly makes Obama the ‘best food stamp president in American history,’ at least when you look at the question proportionally. The percent increase in beneficiaries during Mr. Bush’s presidency was higher than it has been under Mr. Obama: The number of beneficiaries went from 17.3 million in 2001 to 28.2 million in 2008—an increase of 63 percent in years that are mostly considered non-recessionary.” [CBS News, 1/17/2012] US News and World Report agrees with FactCheck, finding that “SNAP participation has been on the rise since well before President Obama took office. Nearly 17.2 million people in FY 2000 participated in the program, a figure that increased by nearly 64 percent by 2008.” [US News and World Report, 1/17/2012] The Associated Press accuses Gingrich of distorting the facts and notes: “It’s gotten easier to qualify for food stamps in the past decade but that is because of measures taken before Obama became president. It’s true that the number of people on food stamps is now at a record level. That’s due mainly to the ailing economy, which Republicans blame on Obama, as well as rising food costs. The worst downturn since the Great Depression wiped out 8.7 million jobs, pushed the unemployment rate to a peak of 10 percent in October 2009, and increased poverty.” [Associated Press, 1/17/2012] The nonpartisan Center on Budget and Policy Priorities has found that SNAP is a critical element in keeping poverty-stricken Americans, particularly children and the elderly, from starving during the economic recession (see January 9, 2012).
Entity Tags: Kevin Concannon, CBS News, Barack Obama, Associated Press, Center on Budget and Policy Priorities, George W. Bush, US News and World Report, Obama administration, FactCheck (.org), US Department of Agriculture, Supplemental Nutrition Assistance Program, Newt Gingrich
Timeline Tags: Global Economic Crises, Domestic Propaganda, 2012 Elections
Grover Norquist, a highly influential conservative lobbyist and activist, says that if President Obama wins re-election in 2012, Congressional Republicans will impeach him to regain control of the nation’s governance. Norquist, the president of Americans for Tax Reform and a hardline opponent of government taxation, tells the National Journal that he expects Obama to raise taxes on the wealthy in 2013. He is best known for his anti-tax pledge, which almost all Congressional Republicans and a few Democrats have signed, and which states their absolute opposition to any tax hikes of any kind. The online news site National Confidential says that signers who break that pledge will likely “face a primary opponent funded by Norquist and his shadowy multi-millionaire donors.” Norquist says of Obama’s record of cutting taxes on middle- and lower-class taxpayers: “He came up with this idea for the one-year tax holiday so he could claim that he’s for a tax cut. Mind you, it’s a temporary tax cut, but he does not want to run as a tax increaser. I think [Republicans are] in reasonably good shape. Between now and November, I believe we will see a one-year extension of the FICA tax [cut]. I believe we will see the extension of [the break on] depreciation spending. And then the third one that you could have is repatriation. If I was Obama’s political consultant, I’d have put repatriation on the table when he extended the Bush-era tax cuts by two years [in 2010]. The estimates are that it would bring $6 [billion] to $800 billion back. If I were president, I would love to have that money flow back into the real economy, not the Solyndra economy, the year before I’m running for office.” [National Journal, 1/28/2012; National Confidential, 1/28/2012] “Repatriation” is the idea that American corporations can receive one-time tax breaks by putting their foreign earnings into the American economy. Norquist’s reference to “the Solyndra economy” refers to the controversy surrounding the recently bankrupted Solyndra Corporation, which received $528 million in federal loan guarantees and which some conservatives, including Norquist, have attempted to tie to the Obama administration. [Investopedia, 2012; New York Times, 2012] Norquist predicts that if re-elected, Obama will allow a number of tax cuts on large corporations and the wealthy to expire at the end of 2012, and this, he says, will allow Congressional Republicans to begin impeachment proceedings. “We’re focused on the fact that there is this Damocles sword hanging over people’s head,” he says. “What you don’t know is who will be in charge when all of this will happen. I think when we get through this election cycle, we’ll have a Republican majority, [though] not necessarily a strong majority in the Senate, and a majority in the House. The majority in the House will continue to be a Reagan majority, a conservative majority. [House Speaker John] Boehner never has to talk his delegation going further to the right. If the Republicans have the House, Senate, and the presidency, I’m told that they could do an early budget vote—a reconciliation vote where you extend the Bush tax cuts out for a decade or five years. You take all of those issues off the table and then say, ‘What do you want to do for tax reform?’ Then, the question is, ‘OK, what do we do about repatriation and all of the interesting stuff?’ And, if you have a Republican president to go with a Republican House and Senate, then they pass the [Paul] Ryan plan [on Medicare],” referring to House Representative Paul Ryan’s plan to virtually end Medicare and replace it with a privatized voucher system. If the Democrats retain control of Congress and the White House, Norquist says: “Obama can sit there and let all the tax [cuts] lapse, and then the Republicans will have enough votes in the Senate in 2014 to impeach. The last year, he’s gone into this huddle where he does everything by executive order. He’s made no effort to work with Congress.” [National Journal, 1/28/2012] According to the US Constitution, “The President, Vice President, and all Civil Officers of the United States, shall be removed from Office on Impeachment for and Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.” [Constitution of the United States, 6/21/1788] It is unclear how Norquist frames his prediction of Obama’s allowing tax cut legislation to lapse as constituting “Treason, Bribery, or other high Crimes [or] Misdemeanors.”
Shadrack McGill. [Source: Huntsville Times]State Senator Shadrack McGill (R-AL) tells listeners at a prayer breakfast in Fort Payne, Alabama, that state legislators such as himself deserve pay raises, but raising schoolteachers’ pay would lead to less-qualified teachers in the classrooms and violate a “Biblical principle.” Alabama legislators were given a 62 percent raise in 2007, and McGill says the raise discourages corruption among lawmakers. The previous low salaries “played into the corruption, guys, big time,” he says. “You had your higher-ranking legislators that were connected with the lobbyists making up in the millions of dollars. They weren’t worried about that $30,000 paid salary they were getting.” By paying lawmakers more up front, he says, they are less susceptible to taking bribes: “He needs to make enough that he can say no, in regards to temptation.” However, if teachers were given pay raises, then people who are not “called” to teach would begin joining the profession, he says. “Teachers need to make the money that they need to make. There needs to be a balance there. If you double what you’re paying education, you know what’s going to happen? I’ve heard the comment many times, ‘Well, the quality of education’s going to go up.’ That’s never proven to happen, guys. It’s a Biblical principle. If you double a teacher’s pay scale, you’ll attract people who aren’t called to teach. To go in and raise someone’s child for eight hours a day, or many people’s children for eight hours a day, requires a calling. It better be a calling in your life. I know I wouldn’t want to do it, OK? And these teachers that are called to teach, regardless of the pay scale, they would teach. It’s just in them to do. It’s the ability that God give ‘em. And there are also some teachers, it wouldn’t matter how much you would pay them, they would still perform to the same capacity. If you don’t keep that in balance, you’re going to attract people who are not called, who don’t need to be teaching our children. So, everything has a balance.” In 2010, McGill introduced a bill in the Alabama Senate that would tie legislators’ pay to teachers’ pay, requiring the state to give raises to legislators if it gave teachers raises. He claimed, falsely, that Alabama teachers’ salaries were the fourth highest in the nation. Some Alabama Republicans are backing a bill that would give a 2.5 percent raise to teachers with less than nine years’ experience. Representative Craig Ford (D-Gadsden) says the small raise unfairly excludes veteran teachers, and the entire controversy surrounding teachers’ and legislators’ raises is “one of the most absurd things… the Republican supermajority ha[s] ever tried to pull.” [DeKalb County Times-Journal, 1/31/2012; Huffington Post, 2/1/2012] Currently, part-time legislators in Alabama such as McGill make more than full-time teachers with master’s degrees and 15 years of experience. [Think Progress, 2/1/2012] After the national media picks up on McGill’s comments, WAAY-TV airs an interview with McGill taped earlier in the week where he told a reporter he did not believe in the separation of church and state (see 1782-1786). According to a WAAY report, both the television station’s commentators and editorial writers and commentators around the nation “raked [McGill] over the coals” for his comments. McGill tells a WAAY reporter: “Some things got taken out of context. I’m not hearing any negative feedback out of those who were there.” The audience at the prayer breakfast was very supportive of his stance, he says. “The point that I was trying to make in the speech is simply that.… Things ought to be in balance. I believe God made everything to be in balance. He weighed the Earth and the valley and the mountains and the hills on a scale to keep them in balance because he knew he was going to be spinning it real fast, so that’s the [g]ist of it.… Legislators pay ought to be in balance. They don’t need to make too much, they don’t need to make too little, both lead to corruption. Likewise, I think with teachers salaries, things need to be balanced on their education, based on the performance, class size, etc. Work load.… But by no means was I insinuating that a teacher should make less.” McGill says he hopes that after the economy turns around, Alabama teachers can get raises. McGill says he is learning that legislators such as himself are constantly being pursued by those who want to “turn” an innocent statement “into a dagger and stab you with it.” He says that he cannot understand how those who gave him “negative feedback” on his comments can call themselves Christians. [WAAY-TV, 2/2/2012]
The Republican presidential primaries are being largely controlled, at least from a financial standpoint, by a very few extraordinarily wealthy individuals, according to research provided by former Treasury Secretary Robert Reich and the news organization ProPublica. In January 2012, the campaign of frontrunner Rick Santorum (R-PA) was almost entirely funded by billionaires William Dore and multi-millionaire Foster Friess (see February 16-17, 2012), who between them supplied over three-quarters of the $2.1 million donated to Santorum’s “super PAC” “Red White and Blue Fund.” Dore is the president of a Louisiana energy corporation and Friess is a fund manager in Wyoming. Of the $11 million raised by the super PAC supporting Newt Gingrich (R-GA), $10 million came from Sheldon Adelson and his wife, Miriam. Adelson runs a casino ownership group in Las Vegas. Most of the rest of Gingrich’s funding came from Texas billionaire Harold Simmons. PayPal co-founder Peter Thiel provided $1.7 million of the $2.4 million raised in January by the super PAC for Ron Paul (R-TX). As for Mitt Romney (R-MA), himself a multi-millionaire, his super PAC “Restore Our Future” raised $6.6 million in January. Almost all of it came from 40 donors, including hedge fund billionaires Bruce Kovner, Julian Robertson (the largest donor at $1.25 million), and David Tepper, hotel owners J.W. Marriott and Richard Marriott, and Hewlett-Packard CEO Meg Whitman. The lobbying firm FreedomWorks (see 1984 and After, May 16, 2008, February 16-17, 2009, February 19, 2009 and After, February 27, 2009, March 13, 2009 and After, April 2009 and After, April 14, 2009, April 15, 2009, June 26, 2009, Late July, 2009, August 5, 2009, August 6, 2009, August 6-7, 2009, August 10, 2009, August 14, 2009, August 19, 2009, August 24, 2010, September 2010, September 12, 2010 and August 17, 2011) has contributed over $1.4 million to various Republican candidates. Reich writes, “Whoever emerges as the GOP standard-bearer will be deeply indebted to a handful of people, each of whom will expect a good return on their investment.” Reich goes on to cite American Crossroads’s “super PAC” Crossroads GPS, founded by Republican political consultant Karl Rove, and its lineup of corporate moguls contributing hundreds of millions of dollars. The lineup of Crossroads supporters includes Charles and David Koch (see 1940 and After, 1977-Present, 1979-1980, 1981-2010, 1984 and After, 1997, Late 2004, Late 2004, October 2008, August 5, 2009, November 2009, July 3-4, 2010, August 30, 2010, September 2010, August 17, 2011, April 2010 and After and October 4, 2011), and Harold Simmons, owner of Contran Corporation, who has contributed $10 million to the organization. Reich says there is no legal way to know exactly how much the Kochs and their fellows have contributed: “The public will never know who or what corporation gave what because, under IRS regulations, such nonprofit ‘social welfare organizations’ aren’t required to disclose the names of those who contributed to them.” The previous limit of $5,000 per year per individual was erased by the 2010 Supreme Court Citizens United v. Federal Election Commission decision, a decision Reich calls “grotesque.” Reich writes: “In a sense, Santorum, Gingrich, Paul, and Romney are the fronts. Dore et al. are the real investors.… Now, the limits are gone. And this comes precisely at a time when an almost unprecedented share of the nation’s income and wealth is accumulating at the top. Never before in the history of our Republic have so few spent so much to influence the votes of so many.” [The Atlantic, 2/2/2012; Salon, 2/21/2012; ProPublica, 2/21/2012] President Obama’s super PAC, “Priorities USA Action,” has received $2 million from Hollywood mogul Jeffrey Katzenberg and another $1 million from the Service Employees International Union’s Committee on Political Education (SEIU COPE). However, Priorities USA has raised relatively paltry sums in comparison to the monies raised by the Republican super PACs, according to a Reuters report. Obama and his re-election campaign had originally distanced themselves from the super PAC operating in their name, in part because they disapprove of the Citizens United decision and the influence of super PACs in electoral politics. Since the Obama campaign officially endorsed the organization, donations have risen. Obama campaign advisor David Axelrod says that Obama “believes that this is an unhealthy development in our political process, but it is a reality of the rules as they stand. This was not a quick decision, but he also feels a responsibility to win this election. There’s a lot hanging on this beyond him.” By the end of January, Priorities USA had raised $4.2 million. In contrast, Romney’s “Restore Our Future” had raised $36.8 million by the end of last month. [Reuters, 2/2012; ProPublica, 2/21/2012] Partly in response to reports of billionaires’ influence on the 2012 elections, comedian Bill Maher will announce his donation of $1 million to the Obama super PAC. Maher will tell an audience that an Obama victory over any of the Republican contenders is “worth a million dollars” and will describe the donation as “the wisest investment I think I could make.” [Los Angeles Times, 2/24/2012] Friess is often described in the press as a “billionaire,” but both Friess and Forbes magazine say that appellation is inaccurate. [Forbes, 2/8/2012]
Entity Tags: Republican Party, Richard Marriott, Rick Santorum, Peter Thiel, Robert Reich, William Dore, Service Employees International Union Committee on Political Education, Newt Gingrich, Willard Mitt Romney, Sheldon Adelson, Ron Paul, Miriam Adelson, ProPublica (.org), Karl C. Rove, Charles Koch, American Crossroads, David Axelrod, American Crossroads GPS, Meg Whitman, Bill Maher, Barack Obama, David Koch, David Tepper, Foster Friess, Julian Robertson, Jeffrey Katzenberg, Bruce Kovner, J. W. (“Bill”) Marriott, FreedomWorks, Harold Simmons
Timeline Tags: Civil Liberties, 2012 Elections
President Obama speaks on the topic of clean energy in front of the Copper Mountain Solar Project in Boulder City, Nevada, in March 2012. [Source: CleanTechnica (.org)]An analysis by Reuters claims that the $90 billion investment made by the federal government to generate jobs in the field of clean energy (see February 2009) has not produced as many jobs as initially touted. In March 2012, President Obama spoke in front of the Copper Mountain Solar Project in Boulder City, Nevada, which uses 1 million solar panels to power 17,000 homes. The facility only employs 10 people. The green initiative has put people to work retrofitting over a million homes to lower heating and cooling costs, and energy generation from solar and wind sources has nearly doubled since 2008. But some say the program has not created enough jobs. Critics say the program was expected to lower the unemployment rate, currently hovering above 8 percent, and say it has not done so. Supporters say the administration promised too much in the short term and fear a backlash that might undermine support for clean-energy policies across the board. Clean energy specialist Mark Muro of the Brookings Institution says, “All of this stuff is extraordinarily worthy for driving long-term economic transformation but extremely inappropriate to sell as a short-term job program.” Janet Bluman, head of the Foundation for an Independent Tomorrow, says, “From my perspective it makes more sense for us to arm our clients with the basic skills, rather than saying, ‘By golly, you will do something in the green economy or you won’t work.’” Bluman claims that her organization, which trains people for jobs in the Las Vegas area, has seen positions in trucking and accounting go unfilled because training money had been earmarked for green efforts. The federal program earmarked some $500 million for job training, and has employed some 20,000 people, far short of its stated goal. Republicans say the clean-energy program is merely a way for the Obama administration to give money to Obama’s friends (see October 15, 2012). GOP presidential candidate Mitt Romney has claimed, “[Obama] handed out tens of billions of dollars to green energy companies, including his friends and campaign contributors at companies like Solyndra that are now bankrupt.” Romney and other Republicans have not advanced proof of their allegations. Supporters say that in the long term, clean energy will “create a bounty of stable, middle-class jobs and fill the gap left by manufacturing work that has moved overseas,” as Reuters reports. White House officials say that there is more to the clean energy program than creating jobs. “We have a record of success that has created tens of thousands of jobs and is ensuring that America is not ceding these industries to countries like China,” White House spokesman Clark Stevens says. “Thanks to the investments we’ve made, these industries will continue to grow, along with the jobs they create.” Senator Charles Grassley (R-IA), an opponent of the program, says: “The green jobs-training program just didn’t work. It was a poor investment of tax dollars.” Darren Devine of the College of Southern Nevada says: “Will it add a significant number of jobs, enough to make a real dent in our unemployment? No, I don’t see that happening.” What it will do is help the country reduce its energy consumption, lower the amount of carbon dioxide being pumped into the atmosphere, and help create jobs in the clean-energy and other fields, such as health care, education, and technology. [Reuters, 4/13/2012]
A small New Jersey utility leads the nation in providing solar-powered electricity to its customers. The Vineland Municipal Utilities Authority provides solar-generated power to its 25,000 customers, leading the nation on a watts-per-customer basis, according to an analysis by the Solar Energy Power Association. Three of the state’s four electric utilities are among the top 10 nationwide in the amount of electricity generated from solar units installed or the number of watts produced from solar during 2011. The utilities in New Jersey, far from battling solar energy, are embracing it, though some fear this push will be undercut by a proposed cut in the prices solar owners earn for the power their units produce. The New Jersey Board of Public Utilities is considering whether to expand the utilities’ solar promotion efforts, a move supported by the solar industry. Proponents say the move would help stabilize the solar energy market in the state, which is trying to handle a drop in the amount of money solar systems earn for their owners. The Vineland utility, located in Cumberland County, used to operate one of the dirtiest coal plants in the state to provide its customers with electricity. The analysis shows that utilities are increasing their involvement in building solar plants, contrasting the status of a few years ago, when the market was dominated by customer-owned, net-metered systems that do not supply electricity directly to the grid. [NJ Spotlight, 4/18/2012]
The conservative Investors Business Daily (IBD) publishes an op-ed criticizing the White House’s willingness to grant permits for solar energy producers to use public lands to build their solar plants. The editorial says, “Interior Department Secretary Ken Salazar, who has apparently forgotten about the Obama administration’s many solar power scandals, announced the initiative in what he called a ‘proud moment,’” apparently a swipe at the administration over the Solyndra bankruptcy, and then makes the broad claim: “There were no solar projects on federal land when Barack Obama was elected four years ago. And for good reason: Solar is an inferior source of energy.” Fossil fuels are cheaper, more efficient, sun-dependent, and even cleaner, the editorial claims, writing: “Solar power needs a large—and ugly—footprint that creates its own environmental issues. Solar cells contain toxic materials and therefore create toxic waste.” The editorial concludes by lambasting the Obama administration for not opening public lands for oil and gas development. [Investors Business Daily, 8/1/2012] In 2003, the US Department of Energy concluded that most of the land needed for renewable energy sites could be supplied by abandoned industrial sites. Moreover, “with today’s commercial systems, the solar energy resource in a 100-by-100-mile area of Nevada could supply the United States with all of its electricity. If these systems were distributed to the 50 states, the land required from each state would be an area of about 17 by 17 miles. This area is available now from parking lots, rooftops, and vacant land. In fact, 90 percent of America’s current electricity needs could be supplied with solar electric systems built on the estimated 5 million acres of abandoned industrial sites in our nation’s cities.” The federal government is expanding its efforts to find “disturbed and abandoned lands that are suitable for renewable energy development.… Groups concerned with minimizing the impacts of energy development on wildlife prefer prioritizing these areas for development.” The Energy Information Administration says: “Covering 4 percent of the world’s desert area with photovoltaics could supply the equivalent of all of the world’s electricity. The Gobi Desert alone could supply almost all of the world’s total electricity demand.” And a 2009 study found that “in most cases” solar arrays in areas with plenty of sunlight use “less land than the coal-fuel cycle coupled with surface mining.” [National Renewable Energy Laboratory, 1/2003 ; US Energy Information Administration, 12/19/2011; Defenders of Wildlife, 1/14/2013 ; Media Matters, 1/24/2013]
In an editorial claiming that the Obama administration is engaged in giving preferential land-use permits to solar energy producers over fossil fuel corporations, the Wall Street Journal claims, “The dirty secret of solar and wind power is that they are extremely land intensive, especially compared to coal mining, oil and gas drilling, or building a nuclear power plant.” [Wall Street Journal, 8/13/2012] In 2003, the US Department of Energy concluded that most of the land needed for renewable energy sites could be supplied by abandoned industrial sites. Moreover, “with today’s commercial systems, the solar energy resource in a 100-by-100-mile area of Nevada could supply the United States with all of its electricity. If these systems were distributed to the 50 states, the land required from each state would be an area of about 17 by 17 miles. This area is available now from parking lots, rooftops, and vacant land. In fact, 90 percent of America’s current electricity needs could be supplied with solar electric systems built on the estimated 5 million acres of abandoned industrial sites in our nation’s cities.” The federal government is expanding its efforts to find “disturbed and abandoned lands that are suitable for renewable energy development.… Groups concerned with minimizing the impacts of energy development on wildlife prefer prioritizing these areas for development.” The Energy Information Administration says: “Covering 4 percent of the world’s desert area with photovoltaics could supply the equivalent of all of the world’s electricity. The Gobi Desert alone could supply almost all of the world’s total electricity demand.” And a 2009 study found that “in most cases” solar arrays in areas with plenty of sunlight use “less land than the coal-fuel cycle coupled with surface mining.” [National Renewable Energy Laboratory, 1/2003 ; US Energy Information Administration, 12/19/2011; Defenders of Wildlife, 1/14/2013 ; Media Matters, 1/24/2013]
A brief article in the Wall Street Journal claims that solar energy does not reduce greenhouse gas emissions in the aggregate, because the carbon savings from desert-based solar projects will be offset by “disturbing caliche deposits that release carbon dioxide.” The Journal cites a formal complaint filed by three Western environmental organizations claiming that desert-based solar projects not only endanger desert ecosystems, but “soil disturbance from large-scale solar development may disrupt Pleistocene-era caliche deposits that release carbon to the atmosphere when exposed to the elements, thus negat[ing] the solar development C [carbon] gains.” The Journal acknowledges that some aspects of the complaint may be exaggerated. The Journal does not mention that the report cited in the complaint, a 2011 study released by the University of California-Riverside, says that the 560,000 metric tons of carbon saved per year by a single solar plant would more than offset the estimated 6,000 metric tons of carbon released by disturbing caliche deposits. [Wall Street Journal, 9/4/2012; Media Matters, 1/24/2013]
Analyses by the New York Times and FactCheck.org show that presidential candidate Mitt Romney made some fundamental misstatements when he criticized the Obama administration’s green energy program (see February 2009). During the October 3 presidential debate, Romney claimed Obama had given $90 billion of federal money to clean energy programs, saying at one point: “Now, I like green energy as well, but that’s about 50 years’ worth of what oil and gas receives. Ninety billion—that—that would have—that would have hired two million teachers.” The Times reports that while the $90 billion is an accurate number drawn from the 2009 economic stimulus package, not all of it was spent on green energy, and much of the money that was spent on green energy programs was authorized during the Bush administration. Of the $90 billion authorized by the Obama administration, $29 billion went to energy efficiency programs; much of that was spent on retrofitting homes and apartments of low-income households to be more energy efficient and lower their energy costs. $18 billion was spent on fast, energy-efficient trains and $21 billion was spent on wind farms, solar panels, and other renewable energy. Much of these expenditures was matched by private investments. Romney claimed, “I think about half of them, of the ones have been invested in, they’ve gone out of business,” and cited the example of Solyndra, a maker of solar equipment that went bankrupt, costing the government some $528 million. The Times notes that Solyndra began receiving money during the Bush administration, and that the government has been able to recover some of its funds from other firms that went bankrupt. The Times writes, “The defaults were far less than Congress had allocated to cover losses, and far, far less than half of the ventures, although some others may yet fail.” FactCheck, a project of the Annenberg Public Policy Center, goes further, noting, “In summary, Romney said a lot about the $90 billion in stimulus spending on clean energy—and very little of it was accurate.” FactCheck accuses Romney of making “numerous bogus claims” about the $90 billion energy funding. Only six percent of the firms loaned money by the government for clean energy technology have gone bankrupt, it notes, not “about half,” as Romney claimed. Romney also wrongly stated that the entire $90 billion was spent on “solar and wind” projects; in reality, less than a third was spent on those programs. His claim that the $90 billion was equivalent to “about 50 years’ worth of what oil and gas receives” in tax breaks was doubly wrong; by his own figures, it would have been 32 years’ worth, but real data shows it is closer to about 10 years’ worth of oil and gas subsidies. The claim that Obama could “have hired two million teachers” was wrong, since much of that $90 billion was in the form of loans, and, FactCheck notes, “the government can’t hire teachers with loans.” Even data provided by the Romney campaign to back up its claims disproves Romney’s assertions. [New York Times, 10/4/2012; FactCheck (.org), 10/4/2012]
Conservative columnist Charles Lane, writing for the Washington Post, pens a column deriding the renewable energy industry and says that powerful Democratic politicians are using that industry to make themselves rich. He cites the example of former Vice President Al Gore, who has made somewhere around $100 million “partly through investing in alternative energy firms subsidized by the Obama administration.” Lane juxtaposes this information with a note that Republican presidential candidate Mitt Romney earned the cheers of “thousands” when, at a rally in Ohio, he proclaimed his support for the coal industry. Lane writes that liberals and Democrats are profiting handsomely by forcing the government to subsidize what he characterizes as an industry doomed to failure: “As the Democrats become more committed to, and defined by, a green agenda, and as they become dependent on money from high-tech venture capitalists and their lobbyists, it becomes harder to describe them as a party for the little guy—or liberalism as a philosophy of distributive justice.” Lane claims that Gore has an inherent conflict of interest in speaking out about alternative energy and climate change while at the same time investing in alternative energy research and development. He then lambasts the entire renewable energy industry as “not cost-competitive with traditional energy,” and claims that it “won’t be for years. So it can’t work without either taxpayer subsidies, much of which accrue to ‘entrepreneurs’ such as Gore, or higher prices for fossil energy—the brunt of which is borne by people of modest means.” Lane writes that “expensive electricity is bad for industry, as Germany is discovering. Fact is, subsidies for green energy do not so much create jobs as shift them around.” So-called “smart grids,” advanced technology that makes conventional electricity’s transmission more efficient and reliable, is bad, he writes, because it puts “human meter readers” out of work, “just as solar panels put coal miners out of work.” If any new energy technology is worth pursuing, he writes, it is “fracking,” the industry practice that promises to extract millions of tons of natural gas from the ground. Solar and other renewable energy industries would not exist if it were not for government subsidies, he claims, and will never be sustainable without government payouts. [Washington Post, 10/15/2012] Lane’s claim about Germany’s failure to create jobs in its renewable energy industry is contradicted by a German study showing that the industry creates hundreds of thousands of jobs each year (see July 31, 2013). Similarly, his claim that wealthy solar energy producers are sustained by higher rates paid by poor consumers will be strongly challenged (see April 5, 2013).
A report by the Edison Electric Institute (EEI) finds that within a decade or so, solar energy and other renewable distributed energy resources (DER) could lay waste to the utility business model and to American power utilities. The utility business model, which has remained relatively unchanged since the early 20th century, is not capable of coping with the “disruptive challenges” posed to it by solar and other renewable energy power generation. David Roberts, a staff writer for the environmental news publication Grist, will write of the EEI report in April 2013: “It is one of the most prescient and brutally frank things I’ve ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.” Standard power utilities are “regulated monopolies,” which means they are the sole providers of power in their service areas. The business model relies on the utilities selling power as “overseen” by public utility commissions (PUCs), which control what utilities can charge for their power. Inexpensive solar (photovoltaic, or PV) power “eats away at [that business model] like acid,” Roberts writes. Solar power is not regulated for the benefit of the utility companies. In simplistic terms, a kilowatt-hour (kwh) of solar energy generated by, say, a rooftop solar array is a kilowatt-hour of reduced demand for the utility. Solar power peaks each day at noon, usually the time of most intense sunlight, which is one of the power utilities’ “peak load” times. Power utilities make much of their profits from peak load electricity, as they charge more per kwh for peak load electricity. Roberts writes, “[W]hen solar panels provide peak power, they aren’t just reducing demand, they’re reducing demand for the utilities’ most valuable product.” The EEI report also challenges the myth that power consumers must rely on grid power and not solar power because solar power is not available when the sun is not shining. Battery storage, micro turbine, and other developing technologies are making it possible for many consumers to go entirely “grid free,” to opt out of grid-generated electricity entirely. Duke Energy CEO Jim Rogers says, “If the cost of solar panels keeps coming down, installation costs come down and if they combine solar with battery technology and a power management system, then we have someone just using [the grid] for backup.” If a large number of consumers begin generating their own power and using the grid for backup alone, the EEI report says, the utilities face “irreparable damage to [their] revenues and growth prospects.” Utilities generally anticipate revenues that allow them to invest heavily in fossil fuel plants that will not recoup costs for 30 years. Those investments could be more difficult to recoup if consumers begin generating their own power via solar and other DER power sources, leading the utility companies to contemplate raising the rates of those consumers who do not opt out of grid-based power. The EEI report states: “The financial implications of these threats are fairly evident. Start with the increased cost of supporting a network capable of managing and integrating distributed generation sources. Next, under most rate structures, add the decline in revenues attributed to revenues lost from sales foregone. These forces lead to increased revenues required from remaining customers… and sought through rate increases. The result of higher electricity prices and competitive threats will encourage a higher rate of DER additions, or will promote greater use of efficiency or demand-side solutions. Increased uncertainty and risk will not be welcomed by investors, who will seek a higher return on investment and force defensive-minded investors to reduce exposure to the sector. These competitive and financial risks would likely erode credit quality. The decline in credit quality will lead to a higher cost of capital, putting further pressure on customer rates. Ultimately, capital availability will be reduced, and this will affect future investment plans. The cycle of decline has been previously witnessed in technology-disrupted sectors (such as telecommunications) and other deregulated industries (airlines).” In other words, as consumers begin to opt out of grid-based power consumption, and utilities raise their rates to compensate for the loss of revenue, more and more consumers will opt out, further shrinking the number of consumers paying the utilities to generate their electricity. Even small numbers of consumers using rooftop solar strikes at the utilities’ main profit centers (one reason why German utilities are already feeling the pinch). Currently, less than 1 percent of US electricity is generated by solar arrays. But a projection by Bloomberg Energy Finance forecasts that in some areas of the nation, up to 10 percent of power load will be generated by solar arrays. The EEI report speculates that utility consumers in those areas will see massive increases in their rates as the utilities compensate for the lost revenues. [Kind, 1/2013 ; Grist Magazine, 4/10/2013]
On Fox News’s morning show Fox and Friends, “expert” commentator Shibani Joshi of Fox Business tells viewers that the reason Germany has had so much success with its solar power industry is that it gets a great deal more sunlight than America does. In reality, Germany gets comparatively little sunlight, comparative to Alaska, the US state that gets the least amount of annual direct solar energy. Neither Joshi nor any of the hosts on the show mention Germany’s long governmental support of solar energy development and its backing of green technology research and development. Host Gretchen Carlson and her fellow hosts deride the Obama administration’s “failed” solar subsidies, with Carlson saying: “The United States simply hasn’t figured out how to do solar cheaply and effectively. You look at the country of Germany, it’s working out great for them.” The future of America’s solar industry, Carlson asserts, “is dim.” She then asks Joshi: “What was Germany doing correct? Are they just a smaller country, and that made it more feasible?” Joshi replies: “They’re a smaller country and they’ve got lots of sun. Right? They’ve got a lot more sun than we do.… The problem is it’s a cloudy day and it’s raining, you’re not gonna have it.” A few American states like California get a relatively plentiful amount of sunshine, Joshi says, and experience some success with generating energy from sunlight, “but here on the East Coast, it’s just not going to work.” Slate reporter Will Oremus will later write: “Gosh, why hasn’t anyone thought of that before? Wouldn’t you think that some scientist, somewhere, would have noticed that the East Coast is far less sunny than Central Europe and therefore incapable of producing solar power on the same scale? You would—if it were true.” According to the US Department of Energy’s National Renewable Energy Laboratory (NREL—see 1977), almost the entire continental US gets more sunlight than the sunniest region of Germany. NREL scientist Sarah Kurtz tells Oremus, “Germany’s solar resource is akin to Alaska’s.” According to an NREL map, the American Southwest is one of the best places in the world to generate solar power, and all of the continental US with the possible exception of the Puget Sound region in Washington state gets far more sunlight than anywhere in Germany. [Slate, 2/7/2013; Media Matters, 2/7/2013] Four days later, Joshi will admit she is wrong. In a post on Fox News’s blog, she will write: “I incorrectly stated that the chief difference between the US and Germany’s success with solar installations had to do with climate differences on a Fox and Friends appearance on Feb. 7. In fact, the difference come down more to subsidies and political priorities and has nothing to with sunshine.” She will then continue to deride solar energy as a minor element in a “divers[ified] energy portfolio,” and will claim that natural gas obtained via “fracking” is a better and more reliable source of energy for the next century. [Fox News, 2/11/2013]
Solar expert David Roberts, a columnist for the online magazine Grist, writes that like most modern industrial systems, the traditional electricity generating utility is extraordinarily “over-engineered,” which he defines as “built to be prepared for maximum demand even though maximum demand is, by definition, rare.” Over-engineering is not necessarily a bad thing; for example, an SUV can be considered “over-engineered” until it becomes involved in a collision, when its capability of protecting its passengers comes into play. The electricity system is also over-engineered, Roberts says, mostly because there is no simple way to store electricity. Demand for electricity must be met by generated electricity; it cannot be stored. “That imposes a certain logic on the system,” he writes. “There must always be enough power generation capacity available to handle the maximum possible demand (what’s called ‘peak load’). The result is that most of our power plants, like most of our cars, spend most of their time parked, idled. They are there for those few minutes of the day when everyone gets home from work and turns on the TV.” Because of the “real-time” nature of the electrical grid, it is susceptible to blackouts. On occasion, less responsive grids are prone to cascade failures, leading to hundreds of thousands of customers being without power. In contrast, Roberts writes, the data grid operating the Internet is “fault-tolerant,” with built-in responsive features to handle blockages, slowdowns, and errors. The Internet uses buffering to increase the durability of the system and reduce the need for overcapacity, and has the capability to isolate and route around faults and failures. Electricity systems generally have neither. These capacities can be built into modern electrical grids, and the costs of such upgrades is declining. But most utility companies do not install such upgrades. Why not? Because, he writes, “the oversight system governing the utilities does not provide incentive for upgrades. These costs must be shared directly with the ratepayer and public service commissions have been reluctant to approve such measures.” Public utility commissions (PUCs) are obliged by law to have utilities provide power at the lowest cost to the consumer, and as a result there is no incentive for utilities to spend more money than necessary upgrading and improving their systems. “There is no way build a new power system while also providing lowest-cost electricity from moment to moment,” he writes. “It’s impossible. The legal and regulatory system is practically built to prevent long-term systemic change.” As the energy production and transmission systems of the United States transform themselves into a 21st-century model, systems will need to be redesigned. Roberts concludes: “We could be doing that with our electrical system. We would be doing it already if we had open, competitive markets for electricity services. Instead we have quasi-public quasi-monopolies practically mandated by law to stick with what they know and nibble around the edges. Until that legal and regulatory system changes, we’ll be stuck with the dumb, over-engineered, wasteful system we have today.” [Grist Magazine, 2/7/2013]
San Antonio electric utility CPS Energy says it intends to cut the amount it pays for solar power generated from residential customers by about half, claiming that some of the city’s power users are not paying their fair share for the utility’s transmission infrastructure. Clean energy activists and system installers say the cuts are intended to cripple the region’s solar industry. Lanny Sinkin of Solar San Antonio says: “There was zero consultation with the solar industry in the development of this proposal. They’re going to kill the solar industry.” CPS, a municipally owned utility that in theory is owned by the ratepayers, wants to end the current system of “net metering,” which allows residential customers with solar panels to use each kilowatt-hour of energy they generate to cancel each kilowatt-hour they draw from the utility’s electric grid—in essence, the residence owners cancel a kilowatt-hour they pay for to CPS (at retail rates) by generating a kilowatt-hour of solar energy. Instead, CPS proposes a system it calls “SunCredit,” which would assign a fixed value to the price of the solar power produced and credit that amount against their accounts. The SunCredit program would give only a little over half of what a kilowatt-hour of solar power is worth under net metering, by crediting residential consumers with solar-produced kilowatt-hours at CPS’s wholesale rate. CPS spokesperson Lisa Lewis says of the existing practice: “I think that it’s not unimportant to recognize that solar customers use poles and wires and the grid. If we move to a situation where more and more customers have solar systems, they leave that infrastructure cost… stranded, and the people who can least afford to pay it are the ones paying for it” (see January 2013). Existing solar power producers would be granted the existing rates until 2023, while new solar producers would begin receiving the new, lower rate immediately.
Decision Already Made? - Although Lewis says the utility is still soliciting feedback on the program and will consider making changes, Sinkin says the utility has already made its decision. Recently, the utility informed the public of its decision during a contentious meeting, when solar installers said the new program would make it impossible for them to sell systems to the public. CPS Energy instituted cuts in its solar subsidies in 2012 when it reduced the size of the rebate it offers to help customers cover the cost of installing their solar power systems at their homes.
Expert Explains Issue - Solar expert David Roberts of Grist explains the issue, writing: “Under net metering, if a rooftop solar customer generates as much electricity as she consumes, she pays nothing. If she generates more than she consumes, the utility pays her. In either case, her portion of the utility’s fixed costs is transferred onto other, non-solar ratepayers. As more and more people opt for solar, fixed costs are paid by a smaller and smaller group of customers, which drives rates up, which drives more and more of them to solar, in a vicious cycle. The utility’s fixed assets are ‘stranded’—it is unable to recover those investment costs because of the shrinking pool of customers. (It’s also worth noting that the first customers to go solar tend to be well-off, which leaves the less well-off paying more, so there’s an economic-justice angle here too.)” Roberts notes that CPS is being ingenuous in its contentions that solar consumers are costing the utility money, as rooftop solar arrays save the utility money in terms of avoided transmission and equipment costs. Moreover, solar power benefits the region in reduced air pollution and carbon emissions. He also notes that CPS did not hesitate to offer its employees $16.4 million in bonuses in 2012 (most of which went to the firm’s top executives), the same year it cut its solar subsidies. Roberts concludes: “The dilemma… is how to align CPS’s incentives so that it can drive rapid solar adoption and reliably recover costs from its fixed assets and protect its lower-income ratepayers from being unfairly burdened. If we can’t figure out a solution to that dilemma, more and more utilities will do what CPS is doing and the spread of rooftop solar in the US, which has barely gotten underway, will slow to a crawl. That isn’t what we want, is it?” [San Antonio Express-News, 6/21/2012; San Antonio Express-News, 4/9/2013; Grist Magazine, 4/12/2013]
Idea that Solar Power Consumers Pay Unfairly Low Share Challenged - Many solar advocates have successfully challenged the idea that solar power consumers cost their area’s utilities revenue (see April 5, 2013).
Utility Agrees to Postpone Implementation - Following the announcement, CPS will agree to postpone implementation of the new policy for a year and to work with solar advocates to craft changes to the policy. [CPS Energy, 5/9/2013; Grist Magazine, 5/15/2013]
In a press release, Kyocera Solar announces the opening of the Arlington Valley Solar Energy II (AV Solar II) installation in Maricopa County, Arizona, near the Hassayampa Substation. Kyocera, one of the world’s largest producers of solar photovoltaic (PV—see 1954) modules and systems, operates the facility in conjunction with LS Power and the state of Arizona; Governor Jan Brewer (R-AZ) is on hand to officially open the facility. Block 1 is online; Blocks 2 through 5 are expected to be complete by the end of the year. Kyocera Solar vice president Steve Hill says: “Today’s opening of the AV Solar II mega-installation marks a major milestone in Kyocera’s four decades of manufacturing high-quality, long-lasting solar modules. We’re proud to provide US-made products to this utility-scale installation, which adds to the mega-installations around the world showcasing Kyocera’s unrivaled solar solutions including a 204MW project in Thailand and a 70MW installation in Kagoshima, Japan.” When complete, the facility will be one of the largest solar PV installations in North America and will provide 127 megawatts of power for the surrounding community. Brewer tells the press: “Thanks to our strategic location, pro-business climate, skilled workforce, and strong incentives for solar development, Arizona is a national leader in the solar industry. As an Arizona-based company, Kyocera Solar understands how critical this industry is to a secure economic and renewable energy future.” [Business Wire, 5/1/2013]
Several of the nation’s largest solar installers, including SolarCity, Sungevity, SunRun, and Verengo, form a lobbying organization, the Alliance for Solar Choice (ASC), to fight back against conventional utilities’ efforts to curtail or cancel programs that support renewable energy in 43 states. The ASC will begin by working to preserve “net metering” policies that require utilities to purchase surplus electricity at retail rates from customers with rooftop solar systems. ASC president Bryan Miller, a SunRun executive, says the group is responding to “the coordinated utility attack on net metering throughout the country.” Many utilities “have opposed net energy metering since its inception.” Utilities argue that as more people install solar arrays and generate power for themselves, non-solar customers are forced to pay higher rates to subsidize utility costs for grid maintenance and the like. (That argument has been strongly challenged—see April 5, 2013.) [Bloomberg, 5/10/2013]
Grist columnist and distributed energy expert David Roberts attempts to explain the viewpoints of the solar and the conventional utility industries over utility regulations as they pertain to solar power generation. He calls the issue “unavoidably wonky” but “a pivotal issue” that is “long overdue” for public understanding. The problem between the two has two components: short-term and long-term. The short-term argument between the two camps involves how electricity rates are structured and how utilities compensate, or do not compensate, customers who generate some of their own power with rooftop solar PV panels. The long-term issue revolves around the creation of “an entirely new business model for utilities, one that aligns their financial interests with the spread of distributed energy.” Battling over the short-term issues delays resolution of the long-term issue, Roberts writes.
Utilities' Perspective - About 70 percent of Americans are served by investor-owned utilities (IOUs), the traditional, for-profit, regulated-monopoly utilities that have what Roberts calls “a captive customer base and profits guaranteed by law.” IOUs are leading the pushback against distributed solar energy. IOUs make their profits by:
estimating how much power their customers will need;
estimating the investments they will need to make in power plants, fuel, transmission lines, and so forth in order to meet that demand;
estimating how much they need to charge customers to cover their investments and offer a reasonable rate of return to their investors;
convincing their state’s public utility commission (PUC) that their rates are warranted and fair; and
charging that rate until they can convince the PUC to let them raise their rates.
Residential customers pay the PUC-approved “retail rate” for their electricity. [Grist Magazine, 5/15/2013]
Net Metering - NC State’s Database for State Incentives for Renewables and Efficiency (DSIRE) defines net metering as “a popular and administratively simple policy option [that] allows electric customers who generate their own electricity using solar or other forms of renewable energy to bank excess electricity on the grid, usually in the form of kilowatt-hour (kWh) credits.… In effect, the customer uses excess generation credits to offset electricity that the customer otherwise would have to purchase at the utility’s retail rate. Traditionally, net metering has been accomplished through the use of a single, conventional, bi-directional meter.” In its most simple terms, customers who participate in net metering programs get rebates or subsidies from their IOUs based on how much solar energy they generate for themselves: if they generate 10 hours of solar power a week, they receive 10 kilowatt-hours (at the retail rate) of credit on their electric bills. The policies are in force in some 40 states, though the details of their implementation vary widely from state to state. The utilities say that net metering is inherently unfair, since a consumer who lowers or even zeroes out their utility bill through solar power generation does not pay enough for fixed costs such as power plant construction, transmission line installation and maintenance, etc., even though these consumers still make use of these services. The utilities argue that the complexity of managing these distributed energy producing consumers increases their costs; net metering, they say, makes customers who cannot afford solar arrays subsidize those who can. (This argument has been strongly challenged—see April 5, 2013.) Utilities in many states are trying to end or dramatically cut back on net metering rebates (see April 9-12, 2013). As noted in a January 2013 report that predicted utilities will be forced into near-bankruptcy by increasing use of solar-generated power (see January 2013), many IOUs are attempting to add “customer service charges” to subsidize their fixed costs, and to lower the subsidies paid to rooftop solar producers. David Rubin of Pacific Gas and Electric has said, “We need to set the stage for continued growth in solar in what we believe will be a sustainable way which is to not have solar customers that are being subsidized by the rest of our customers and producing unsustainable rates for those customers.” [DSIRE Solar, 2013; Grist Magazine, 5/15/2013]
Solar Perspective - The solar community is not convinced, Roberts writes, and is actively, and sometimes angrily, pushing back against the utilities’ stance. Recently, some of the nation’s largest solar installers formed an organization called the Alliance for Solar Choice (see Shortly Before May 10, 2013). Their argument boils down to the contention that utilities raise their rates regardless of who produces solar or wind power for themselves. In fact, they charge, utilities raise their rates far more than is warranted to cover what they argue are higher costs due to solar generation. Because of their monopolistic structure, they are able to make extraordinarily high profits even while bemoaning their costs. PUCs guarantee them hefty profit margins (rates of return on their investments) regardless of whether the investments were necessary. They essentially have a captive customer base, Roberts writes, and are used to charging heavily padded retail rates on the power they sell their customers. Utilities have no interest in innovation or competition, he writes, and as a result their customers “are getting shafted all over the country. Utilities overestimate demand, underestimate efficiency, and contract for gigantic central-generation power plants that customers pay for whether or not they need the power.” Roberts cites the examples of Southern California Edison customers, who are paying $68 million a month to subsidize a nuclear plant in San Onofre that has not produced a watt of energy in over a year. Mississippi customers are paying huge amounts to subsidize a coal-fired plant in Kemper County. We Energies in Wisconsin is trying to force its customers to pay for its Oak Creek coal plant, a hugely expensive facility that has been plagued with outages and breakdowns. Roberts says that utilities are not worried about increasing customers’ rates, but do not like the loss in revenue due to solar consumption. “It’s competition they don’t like,” he writes, “the potential loss of their captive customers.” Homes that are essentially “unplugged” from the grid do not impose costs on the utility, and actually save the utility money on transmission and distribution costs and in other areas. Utilities rely on consumers to pay exorbitant rates for their poorly envisioned and constructed power plants, transmission facilities, and the like, Roberts argues, instead of absorbing the losses themselves. [Milwaukee Journal-Sentinel, 6/27/2012; Grist Magazine, 5/15/2013]
Conclusion - While the solar advocates have a stronger case, Roberts says, some of them have become a bit extreme in their view that all utilities are automatically the enemy. “Some utilities, at least, seem to be grappling with this issue in good faith,” he says. But even these utilities, he says, “are struggling with the question of how to appropriately compensate for distributed solar. The fact is, as long as utilities operate under their current business model, rooftop solar really does hurt them.” Roberts says the best solution is to revamp the business model, particularly the IOU. [Grist Magazine, 5/15/2013] The regulatory contract that most IOUs operate under—existing as corporations legally protected from competition, charging rates as approved by state governments, and receiving guaranteed returns—is almost completely the opposite of the free market concept. “It is the most Soviet of economic sectors,” Roberts writes. Moreover, utilities make most of their profits not from selling electricity, but from making investments and receiving returns on them. The more power lines and plants they build, the more money they earn. In the ideal free market, companies profit by competing, cutting costs, and innovating. None of this applies to the typical American utility. As long as they can make their local PUC happy, utilities are free to generate revenue merely by building more facilities, whether those facilities are needed or even useful. Now, though, the paradigm is not as profitable. Utilities’ profits have peaked, and in coming years they will continue to drop, in large part because of the increase in the usage of renewable energy in place of utility-generated energy. Meanwhile, utilities are locked into paying for facilities and improvements for the next 20 years or so, and want to charge customers as much as possible to help them pay off the debts they have incurred and keep their profit margins in place. Roberts says that while society as a whole needs distributed, renewable energy platforms, the utilities do not want them: “As a society, we need energy efficiency and demand response. We need distributed renewable energy. We need to cancel out future power plants and transmission lines. All those things are to the good, economically and ecologically. Yet utilities have every incentive to oppose them, as they are direct threats to their familiar, comfortable business model, which has survived nearly a century unchanged.… We need a ground-up rethink of how utilities work, how they are structured, and how they can be reformed in a way that enables and accelerates long-overdue innovation in the electricity space.” [Grist Magazine, 5/21/2013]
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