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Entries since January 2013Page Previous 1 • 2 • 3
January 9, 2013 · By Sarah Anderson
I happily joined the more than 200,000 people who’ve signed the “Paul Krugman for Treasury Secretary” progressive fantasy petition. It was a clever way to tell the administration to reject this nutty austerity craze.
Now, however, President Obama has made the far less exciting choice of his Chief of Staff, Jack Lew, for the job. And especially given the experience with Timothy Geithner over the past four years, it’s time to develop some more modest wishes for the new top dog at 1500 Pennsylvania Avenue.
1. If you were complicit in the 2008 crash, please fess up and make a convincing case that you’ve seen the light.
Lew was the chief operating officer of Citigroup's Alternative Investments unit from 2006 through the crash (he left in 2009) and he should reveal more about what he did there. This should also apply to other top Treasury leaders. Since Lew, a former head of the Office on Management and Budget, is considered more of a budget guy than a financial markets guy, there are rumors that President Obama is planning to install a Wall Street executive as his deputy.
When Geithner was up for confirmation in 2009, Senator Carl Levin asked him to respond in writing to 38 hard-hitting questions. Many of his answers were the evasive inanities you’d expect from someone trying to squeak through a polarized Senate (e.g., “I believe that we need more transparency to promote transparency”). But the only questions he flat out refused to answer had to do with his role in the Clinton Treasury’s push to deregulate over-the-counter derivatives. The law that resulted, the Commodity Futures Modernization Act of 2000, gave rise to the explosion of credit default swaps that were a key factor in the crash.
We should’ve known then that Geithner was insufficiently reformed. In fact recently he was back at it, exempting foreign exchange derivatives from the new Dodd-Frank regulations over the objections of other regulators and consumer protection groups.
2. If you oppose a popular progressive reform, have the decency to explain your position.
The current deficit fixation could be turned into an opportunity for bold, creative thinking on how to use fiscal policy to shift our economy in ways that would make it more equitable, green, and secure. At the Institute for Policy Studies, we’ve compiled a long list of fair and environmentally friendly proposals that could generate hundreds of billions in additional money per year.
One of our favorites is the idea of a small financial transaction tax that could raise massive revenue while discouraging short-term financial speculation. Over the past four years, much of Obama’s core base – including major labor unions and environmental, anti-poverty, public health, and consumer organizations – have been pushing for such taxes. The International Monetary Fund has documented that they are administratively feasible and could be a significant revenue raiser. The European Commission has also produced reams of analysis on the potential benefits, prompting a dozen European governments to commit to implementing such taxes this year.
Here’s Geithner’s most substantive public statement on the issue: “I have not seen the version of that that I think works.” The Obama Treasury has never published a research paper on the topic. Never offered a thoughtful response to the IMF and European Commission analyses. Never engaged in a meaningful debate. Never even responded to the many civil society letters calling for such taxes.
So Mr. Lew, if you’re confirmed, please at least be open to a respectful dialogue over this and other bold progressive tax and financial reform ideas.
3. Please don’t help rich people and corporations hide their money in overseas tax havens.
In Geithner’s response to Senator Levin’s questions, he pledged to “treat the offshore tax abuse issue as a high priority.” Behind closed doors, he has reportedly advocated a shift to a “territorial” tax system that would exempt U.S. corporations’ foreign earnings, giving them even more incentive to disguise U.S. profits as income earned in tax havens. In his most recent book, Bob Woodward wrote that in negotiations with House Speaker John Boehner, Geithner said “The goal is territorial.” Boehner’s staff confirmed the accuracy of the quote.
As a Senator, Obama co-sponsored legislation with Levin to crack down on tax haven abuse – a practice that drains an estimated $100 billion per year from Uncle Sam’s coffers. Fixing the problem would also help level the playing field for small businesses that provide more than half of U.S. jobs – and don’t have accounts in the Caymans. Mr. Lew, you could help make this a legacy issue for Obama.
4. Don’t be a jerk to other governments
Lew doesn’t seem to have much international experience, but he wouldn’t have to do much to improve on the current Secretary’s record. Geithner has sparked animosity by attempting to impose his opposition to some fair taxation ideas on other countries. After receiving a lecture against financial transaction taxes from her U.S. counterpart, the Austrian finance minister commented dryly, “I found it peculiar that even though the Americans have significantly worse fundamental data than the euro zone that they tell us what we should do and when we make a suggestion ... that they say no straight away.”
Geithner has also been the main advocate of using U.S. trade agreements to limit other governments’ ability to control volatile financial flows. When more than 250 economists urged the administration to lift current trade restrictions on the use of capital controls, Geithner was dismissive. As a result, U.S. trade officials are pressuring the 10 countries negotiating a Trans-Pacific Partnership trade deal to give up this legitimate policy tool. By contrast, the International Monetary Fund’s new “institutional view" in support of capital controls makes them look like a beacon of enlightenment. Mr. Lew could make sure governments around the world have all the tools they need to prevent financial crisis.
This humble wish list doesn’t cover every important issue on the next Treasury Secretary’s plate. I haven’t even gotten into the core question of whether he or she will put the interests of ordinary homeowners and Main Street businesses above those of Wall Street. But it has allowed me to get some of my gripes about Geithner off my chest. And I can only hope that the incoming Secretary may learn a few lessons from his predecessor’s shortcomings.
Sarah Anderson directs the Global Economy project at the Institute for Policy Studies. IPS-dc.org
January 8, 2013 · By Phyllis Bennis
Phyllis Bennis wrote this blog post for The Nation.
Chuck Hagel isn’t anyone I’d pick to be in a position of power. He’s a conservative Republican, a military guy who volunteered to fight in Vietnam. According to Forbes magazine, during Hagel’s tenure in the Senate “he favored school prayer, missile defense and drilling in Alaska, while opposing abortion, same-sex marriage and limits on assault guns. He voted in favor of every defense authorization bill that came up during the dozen years he served, while opposing extension of Medicare benefits to prescription drugs. Such stances earned him a lifetime rating of 84 percent from the American Conservative Union.” Forbes, of course, thinks this is all great.
Me, not so much. But okay, we’re talking about Secretary of Defense, not someone responsible for domestic and social policy. Well, first of all, if I had to choose a secretary of defense, I’d start with someone who recognized that their first requirement would be to transform the US war machine from an aggressive into a defensive institution…something it’s never been before. If we assume it had to be a member of Congress, I’d start with Barbara Lee or Dennis Kucinich, not Chuck Hagel.
But that isn’t the choice we face. The alternatives to Hagel won’t be the heroic Oakland congresswoman or the committed defender of the Department of Peace, they’ll be military bureaucrats who have never said a word outside their respective boss’s talking point boxes.
At the end of the day, this isn’t about Hagel vs. anybody. This is about what President Obama is signaling by his nomination of Hagel as Secretary of Defense—and about the political forces arrayed against him.
Over the last three months, the Fix the Debt campaign, led by more than 100 big company CEOs, has unleashed a firestorm of ads, blanketing political news web sites and entirely plastering the Capitol South Metro station used by most Congressional staffers.
In late October, the Institute for Policy Studies began exposing the Fix the Debt campaign's Trojan Horse. While they presented themselves as a patriotic bipartisan group, merely seeking a “balanced” deal, their own lobby materials revealed they were out to use the fiscal cliff as an opportunity to win massive new corporate tax breaks paid for with cuts to earned benefit programs like Social Security and Medicare.
The hypocrisy was stunning. We documented, for example, how many of the campaign’s leaders had contributed massively to the national debt through tax-dodging tricks. Twenty-four of them had even paid their CEOs more in 2011 than their firms paid in corporate income taxes. We also calculated that the average Fix the Debt CEO calling for cuts to Social Security themselves had pension assets of $12 million, enough to garner a $65,000 monthly retirement check starting at age 65.
Did all their high-priced subterfuge pay off? The New Year’s deal was a huge disappointment for those of us hoping that President Barack Obama would use his bargaining position to strike a strong blow against the extreme inequality that is undermining our economy and democracy. But the Fix the Debt campaign also suffered a loss. After one of the most ambitious corporate lobby campaigns in history, they failed to win any of their three major objectives:
- Cutting earned benefit programs such as Social Security and Medicare
- Cutting corporate tax rates (“pro-growth tax reform” in Fix the Debt speak)
- Shifting to a territorial corporate tax system, which would grant a permanent corporate tax holiday on offshore income, including the hundreds of billions stashed in the world’s tax havens. Fix the Debt companies alone stood to gain an immediate $134 billion windfall from this reform, according to an IPS analysis.
In a press release, Fix the Debt leaders lamented that “Washington missed this magic moment to do something big to reduce the deficit, reform our tax code, and fix our entitlement programs.”
As in the tale of the Trojan Horse, however, we cannot assume that the Fix the Debt army is going to just sail away. Corporate tax reform is expected to be a major focus of Congress in 2013, starting as early as the debt ceiling fight, which is likely to come to a head in March. (By then, we expect to be able to report on how many profitable U.S. corporations avoided paying taxes in 2012.)
Congress’s New Year’s Eve capitulation to its wealthiest benefactors heightens the stakes for the corporate tax fight. Because Congress and the White House lavished so much on high-income individual taxpayers, they may well find themselves with fewer goodies to pass out to corporations. These will have to be paid for with either higher deficits or even more draconian cuts to Social Security, Medicare, and other programs ordinary Americans depend upon.
As Iowa Senator Tom Harkin stated in opposition to the fiscal cliff deal: “Every dollar that wealthy taxpayers do not pay under this deal, we will eventually ask Americans of modest means to forgo in Social Security, Medicare and Medicaid benefits.”
The Fix the Debt gang is likely to be a major force for the duration. Last fall they boasted of having $60 million for the “initial phase” of their campaign. Even if they’ve completely blown through that pile of dough, they will likely have no trouble securing additional mega-millions for the battles to come.
January 1, 2013 · By Lacy MacAuley
The Institute for Policy Studies is celebrating its 50th year in 2013. For 50 years, we’ve been turning ideas into action to support peace, justice, and the environment. From the antiwar and civil rights movements in the 1960s to the peace and global justice movements of the last decade. Some of the greatest progressive minds of the 20th and 21st centuries have found a home at IPS, starting with the organization's founders, Richard Barnet and Marcus Raskin. IPS scholars have included such luminaries as Arthur Waskow, Gar Alperovitz, Saul Landau, Bob Moses, Rita Mae Brown, Barbara Ehrenreich, Roger Wilkins and Orlando Letelier.
This timeline represents a small sampling of the bright spots throughout the years.
Highlights Over the Past 50 Years
1961 – At the height of the Cold War, a high-powered State Department meeting full of generals and defense industry executives. When one official declared, "If this group cannot bring about disarmament, then no one can," two young men in the audience couldn’t help but snicker. The culprits, White House staffer Marcus Raskin and State Department lawyer Richard Barnet, looked across the room and decided to get to know each other. Raskin and Barnet would go on to become the co-founders of the Institute for Policy Studies. (Note that we realize that this happened over 50 years ago, but it seems notable nonetheless.)
1963 – The Institute for Policy Studies was founded with offices in Washington DC.
1964 – Freedom Summer, a central campaign to the civil rights movement, was directed by IPS Fellow Bob Moses. The campaign helped scores of black Americans register to vote and set up dozens of Freedom Schools, Freedom Houses, and community centers in small towns throughout Mississippi. The project became nationally known when three Freedom Summer volunteers, James Chaney, Michael Schwerner, and Andrew Goodman, went missing and then were found dead, having been killed by Ku Klux Klan members.
1965 – Co-founder Marcus Raskin and IPS Associate Fellow Bernard Fall edited The Vietnam Reader, which became a textbook for teach-ins across the country.
mid-1960s – IPS Fellow Bob Moses organized efforts for the Student Nonviolent Coordinating Committee (SNCC), challenging racial segregation and the disenfranchisement of people of color throughout the country.
1966 – Fellow Charlotte Bunch organized a groundbreaking women’s liberation conference. She later launched two influential feminist periodicals, Quest and Off Our Backs.
1967 – Co-founder Marcus Raskin and IPS Fellow Arthur Waskow penned "A Call to Resist Illegitimate Authority," a document signed by dozens of well-known scholars and religious leaders that helped launch the draft resistance movement.
1973 – Rita May Brown publishes her path-breaking lesbian novel Rubyfruit Jungle, widely considered the first of the emerging genre of lesbian coming-of-age novels, while on staff at IPS.
1974 – Co-founder Richard Barnet publishes Global Reach, an examination of the power of multinational corporations which is still required reading in many college courses today.
1974 – IPS founded the Transnational Institute, a worldwide fellowship of scholar activists, as its international program. The international organization now operates as a sister organization to IPS. For more than 30 years, TNI’s history has been entwined with the history of global social movements and their struggle for economic, social and environmental justice.
mid-1970s – IPS Fellow Jim Ridgeway, now a renowned investigative reporter, published The Elements, a monthly IPS newsletter on ownership and control of the world’s natural resources.
1976 – Agents of Chilean dictator Augusto Pinochet murdered two IPS colleagues on Washington’s Embassy Row. The target of the car bomb attack was Orlando Letelier, one of Pinochet’s most outspoken critics and the head of IPS's sister organization, the Transnational Institute. Ronni Karpen Moffitt, a 25-year-old IPS development associate, was also killed. For more than three decades, IPS’s annual Letelier-Moffitt awards program has recognized new human rights heroes. IPS has also worked with lawyers, Congressional allies, researchers, and activists and through the media to achieve measures of justice: the convictions of two generals and several assassins responsible for the Letelier-Moffitt murders, the declassification of U.S. documents on Chile, Pinochet’s 1998 arrest in connection with a Spanish case brought by former IPS Visiting Fellow Joan Garces, and the indictment of Pinochet by Chilean Judge Juan Guzman, a Letelier-Moffitt human rights awardee.
1977 – The institute launched a South Africa project that went on to produce a series of books and studies on South African apartheid.
1979 – IPS Senior Fellow Saul Landau won an Emmy for his documentary, “Paul Jacobs and the Nuclear Gang.” The documentary tells the story of the cover-up by the U.S. nuclear program and of the hazards of radiation to American citizens.
Early 1980s – Barbara Ehrenreich, the now-renowned author of Nickel and Dimed, led the institute’s Women and the Economy project.
1985 – IPS Fellow Roger Wilkins helped found the Free South Africa Movement, which organized a year-long series of demonstrations that led to the imposition of U.S. sanctions.
1985 – Fellow William Arkin published Nuclear Battlefields: Global Links in the Arms Race, which helped galvanize anti-nuclear activism through its revelations of the impact of nuclear infrastructure on communities across America.
1989 – Amnesty International adopted women’s issues as human rights issues following a speech by former IPS Fellow Charlotte Bunch.
1991 – The pamphlet Crisis in the Gulf was produced by the institute, a text that was widely used by the peace movement during the first military foray into Iraq.
1991 – IPS Fellow Daphne Wysham helped bring to light a private memo by Larry Summers, Chief Economist at the World Bank, in which Summers declared, “the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that… I've always thought that under-populated countries in Africa are vastly underpolluted.”
1993 – The leadership of former IPS Fellow Charlotte Bunch was crucial to the adoption by the 1993 United Nations Conference on Human Rights in Vienna, of strong support for women.
1993 – Sarah Anderson, now director of the Global Economy project at IPS, conceives of and publishes a report on CEO pay that would compare the pay of corporate executives to everyday employees on the shop room floor. This became her first of a series of annual reports on executive pay that has informed and transformed the debate on inequality.
1994 – The institute publishes Global Dreams by current IPS Director John Cavanagh and co-founder Richard Barnet. The book was a follow-up to the groundbreaking work Global Reach. Both books are still required reading in many college classes today.
1998 – Chilean dictator Augusto Pinochet was arrested in connection with a Spanish case brought by former IPS Visiting Fellow Joan Garces, and the indictment of Pinochet by Chilean Judge Juan Guzman, a Letelier-Moffitt human rights awardee.
2003 – The institute convened the meeting that led to the formation of the country’s largest coalition against the war in Iraq, United for Peace and Justice.
2005 – IPS publishes its Field Guide to the Global Economy, revised edition, by IPS Director John Cavanagh, IPS Global Economy Project Director Sarah Anderson, and others. It helps to make sense of the rapidly changing international economy, explaining how global institutions such as the World Bank, International Monetary Fund, World Trade Organization, and North American Free Trade Agreement affect communities, workers, the poor, and the environment. The book dispels the widely disseminated propaganda about current globalization policies and provides an update on the burgeoning movement that is challenging them. The guide has become required reading in many college classes.
2011 – The institute releases its 18th annual Executive Excess report, showing that 25 CEOs of major corporations received more in compensation than their companies paid in federal income taxes, offering an important contribution to efforts to ensure that wealthy Americans pay their fair share to Uncle Sam. The report was coordinated by Sarah Anderson, director of IPS’s Global Economy project, who has pulled together IPS reports on executive pay since 1993.
2011 and 2012 – In a personal capacity, IPS staff and scholars participated enthusiastically in the Occupy movement, including: sleeping at encampments; helping new occupiers navigate the consensus process; providing meeting spaces for Occupy DC participants; and marching in the streets. In a professional capacity, IPS scholars drafted hard-hitting analysis on inequality and corporate power that gave the movement fuel — before, during, and after Occupy's moment in history.
2013 – We'll never stop working to turn ideas into action!