Category: Public Policy

A Big Deal on Climate

The details are barely in, but it seems, at long, long last, that the number 1 and number 2 world economies – also the number 2 and number 1 world polluters – have finally come to an agreement on carbon emissions. This is such a big deal, and such good news, that conservatives are tripping over themselves to take a giant dump on it – as a preemptive first strike, since this deal is poised to take a giant dump on them.

That’s because conservatives for years have used China as a shield to avoid serious discussion of the issues related to climate change. Cap and trade, the subsidization of renewable energy sources, new EPA standards on greenhouse gases: name a climate-change initiative, and you can line up conservatives around the block to oppose it, with China the first and last word they utter. They’ve been telling us for years that the US would be a sucker to work toward any reduction in emissions, because the US would merely be encouraging Chinese polluters – with the logic that whatever the US doesnt pump into the atmosphere, the Chinese will pump extra to compensate, taking American jobs and profits along the way.

China, for their part, have long opposed adhering to a common set of standards with the developed West, reasonably asserting that (1) present atmospheric CO2 levels are chiefly attributable to the past activity of Western economies, not China; and (2) unfettered Chinese development has lifted hundreds of millions of people from poverty, and promises to lift hundreds of millions more – just as it did in the West over the past two centuries.

The rest of the world has thus been held hostage to the intransigence of the world’s two largest economies and polluters. After all, any deal on climate change that doesnt include the US and China leaves out nearly half the world’s emissions and half the world’s economy.

But everything changed when US President Barack Obama and Chinese President Xi Jinping announced that they reached agreement on greenhouse gas emissions. China has finally agreed to capping emissions, while the US has agreed to steeper reductions. And now there is every reason to be optimistic that the US, China, and the rest of the world can hash out the deal that has long eluded them, when the climate summit meets in Paris in late 2015.

Obama seems ready to do an end-run around the US Senate, which is now controlled by conservatives, and headed by Mr. Coal himself, Kentucky’s Mitch McConnell. Any further international deals on climate are likely to be styled as “Agreements” – as opposed to “Treaties” – further to a 1992 treaty, the United Nations Framework Convention on Climate Change. Treaties require 67 votes in the Senate, where even 50 are now impossible. In past decades, what was once the world’s preeminent deliberative body could have been relied upon to see past partisan posturing on the most critical issues of the day, to at least have an intelligent debate. No more: the cancer that is conservatism has made the US Senate so dysfunctional that it cannot even meaningfully address matters concerning the planet’s long-term ability to support life.

 

Refs:

http://www.motherjones.com/blue-marble/2014/11/awkward-supercut-republicans-using-china-excuse-climate-inaction?utm_source=huffingtonpost.com&utm_medium=referral&utm_campaign=pubexchange_article

http://news.yahoo.com/angry-gop-backlash-obamas-historic-climate-accord-171428262.html

http://www.nytimes.com/2014/08/27/us/politics/obama-pursuing-climate-accord-in-lieu-of-treaty.html?_r=0

http://www.nytimes.com/2014/11/13/world/asia/deal-on-carbon-emissions-by-obama-and-xi-jinping-raises-hopes-for-upcoming-paris-climate-talks.html?_r=0

http://www.nytimes.com/2014/11/13/opinion/climate-change-breakthrough-in-beijing.html

http://en.wikipedia.org/wiki/United_Nations_Framework_Convention_on_Climate_Change

http://en.wikipedia.org/wiki/Kyoto_Protocol

http://en.wikipedia.org/wiki/Post%E2%80%93Kyoto_Protocol_negotiations_on_greenhouse_gas_emissions

 

 

 

 

 

The Simmering Pot Movement

Seems hardly an election cycle passes without several marijuana initiatives on the ballot. This season’s players are Washington, Alaska and the District of Columbia. The states would allow for retail pot shops, like those recently established by law in Colorado. D.C.’s ballot measure would merely legalize possession. And for what it’s worth, Oregon Senator Jeff Merkley recently announced he would himself vote for the Oregon ballot measure – to become the first US senator to ever support marijuana legalization.

The tide for pot legalization is rising nearly as fast as that for gay marriage – and, reassuringly, it doesnt depend on the learned liberalism of federal judges; it is rather the consequence of its popularity in an increasingly liberal electorate. Medical marijuana is now legal under state law in nearly half the states, and possession has been decriminalized in about one-third of all states.

Opposition to marijuana legalization is as lovely a dunce cap as a conservative ever wore. People who claim to fear government power, and who eschew a state’s paternalism toward its adult citizens, should arrive easily to the policy position of marijuana legalization. Not so for conservatives, whose fear of government power is somehow not triggered by the American gulag system, which has given the US the highest incarceration rate in the world, driven significantly by drug prohibition. Conservative esteem for “personal responsibility” is somehow inapplicable to the idea of letting adults decide what’s best for their minds and bodies. One hears conservatives babble about the need to “protect society” from the scourge of individual drug use, and wonders why they dont have a similar desire to protect society from individual decisions to go without health insurance, acquire firearms, or not save for retirement.

Conservatism, after all, is defined by its lack of principles. Compared to real political philosophies, such as liberalism, conservatism is ten pounds of crap crammed into a five-pound bag, thrown together by historical accident, and bound together by the perspicacious philosophical insight that everything was better in the old days. Except for slavery, women’s subjugation, Jim Crow, witch burnings, the Japanese internment, the eugenics movement and the McCarthy hearings, America’s past is a veritable touchstone of enduring values and right-mindedness – ah, the good ol’ days….

One day – hopefully soon – people who come out opposed to slam-dunk liberal policies like gay marriage and marijuana legalization will sound as loony as advocates for slavery and the repeal of women’s right to vote – policy positions so extreme that they have become publicly unspeakable, relegated to extremist movements like the Taliban or white supremacists. This is why elements within American conservatism are branded as the “American Taliban”: they espouse policies as comparably baseless, venal and backwards. Opposition to science – whether on the subject of evolution, global warming, or the safety and efficacy of medical cannabis – is indistinguishable from opposition to rationality itself. And once untethered from reality, human belief systems are free to wander among the fields and streams of mythology, leaving infinitely every viewpoint as valid as any other.

 

 

 

 

Stealing Votes from Prisoners

With the midterm elections fast approaching, a little-known and unfortunate quirk in the American electoral system merits attention. It may surprise you to learn that prisoners are counted as residents of whatever town, county, and-or state in which they are imprisoned. And since most states do not permit prisoners to vote, counting prisoners in this way artificially inflates the voting power of people who happen to live close to prisons. Upon incarceration, an American adult isnt merely stripped of the right to vote – his vote is taken from him and given, collectively, to people who share the prison’s political subdivision.

This policy reduces the electoral representation of cities and sends it out to rural areas where large prisons are most commonly situated. In some cases, the residents of sparsely populated areas have double the voting power of other voters – courtesy of the incarcerated, who havent even necessarily been found guilty!

This policy is worse than was the three-fifths compromise, itself a high-water mark for cynicism. While slavery was still legal in the US south, southerners wanted to have their pecan pie and eat it too. With respect to civil and political rights, they didnt want to regard blacks as human beings; but in order to gain more representation in Congress and more votes in the electoral college for presidential elections, southern politicians needed to maximize their headcount. And so for purposes of the US Census, if the South had its way, lawsy mercy, yes: blacks are people too!

North and South struck an unseemly compromise, which permanently mars the US Constitution: a slave was to be treated as three-fifths of a human being for purposes of apportionment. Of course slaves werent allowed to vote – the votes their bodies accrued went, perversely, to free white southern voters, who consequentially got 30% more Congressman and 30% more electors in the Electoral College.

Though their absolute numbers are smaller, US electoral practices with respect to prisoners are even more unjust. They are denied the right to vote in 48 of 50 states. (Maine and Vermont are the exceptions.) And yet they are counted as full-fledged residents of their place of incarceration – literally transferring their voting power, intact, to others. Since the federal prison system often shifts inmates across state lines, this practice serves to arbitrarily transfer voting power from states with high crime rates to states with large prison populations.

This practice isnt confined to the usual backward states. In New York City, prisoners incarcerated on Rikers Island are counted as residents of Astoria, inflating the voting power of that neighborhood’s residents on the City Council. Similar distortions are seen in municipal governing bodies all across New York State.

It was only recently that college students were finally treated as residents where they attend college, to allow them to participate in the politics of the place they spend most of their time. By a similar logic, prisoners who are allowed to vote should either be counted as residents of their place of incarceration, or of their last place residence. But for the 99% of US prisoners who are not allowed to vote, their voting power should not be arbitrarily bestowed on the people who happen to live near the prison. Instead, it should remain in the community where the prisoner last resided. Even better, if states insist on denying the right to vote to prisoners and felons, their representation should be accordingly diminished for purposes of federal elections.

 

Refs:

http://www.acslaw.org/acsblog/counting-on-prisoners-the-use-of-inmates-in-apportionment

http://www.prisonersofthecensus.org/faq.html

http://www.nytimes.com/2007/08/07/nyregion/07inmates.html?_r=3&

http://en.wikipedia.org/wiki/Three-Fifths_Compromise

ACA – No Retreat

The average rust-, corn- or biblebelter never had a passport, and might regard as exotic travel a trip to another county’s fair. To them, Copenhagen is chewing tobacco, Dutch Masters are fancier tobacky, and Monte Carlo was the best durn Chevy ever built. The notion that America is just one among a growing number of rich, developed countries is at best an abstraction. And so when they’re told that, relative to the residents of other rich countries, Americans live shorter lives, American babies are less likely to survive infancy, and American children are less likely to see 1st grade, they become angry, confused and incredulous.

And then come the usual lame excuses. Americans are richer, have cheaper happy meals, and watch hours of TV on their ginormous flatscreens. And over in fascist Western Europe you cant buy a gun at a show, plug a pesky co-worker, and be home in time for dinner, y’all.

But as a matter of empirical fact, Americans are not particularly sedentary. And while they are fatter (and better armed!) than other westerners, neither diet nor guns adequately explain why Americans are so much more likely to die from the day they’re born till age 75, compared to people in other rich countries. The most comprehensive review to date significantly blames the US healthcare system itself for poor US health outcomes – while costing Americans double the OECD average in per capita healthcare expenditures.

Enter the Affordable Care Act, also known as the ACA, or Obamacare. The ACA has several policy objectives – chief among them are reducing the number of uninsured, and controlling the growth of healthcare costs. And contrary to misinformation passed on by conservatives at every opportunity, the ACA is proving to be a great success.

Rates of uninsured are dropping nationwide – fastest in states that have participated in expanded Medicaid, but rates are even dropping in those who opted out. Enrollment through the exchanges has exceeded its target, despite a sloppy rollout that cost HHS Secretary Sebelius her job. And, amazingly, the growth in healthcare costs has slowed to its lowest level since measurements were first taken in the 1960s, which is all the more remarkable given that the economy is still recovering from a sharp recession – a period during which health care costs have traditionally spiked.

The notion that a country can pay less for healthcare and get better health outcomes is not theoretical – it is demonstrable. Nearly every western country pulls off this feat vis-a-vis the US, year-in and year-out. The notion that public health insurers (like Medicare) can outperform private insurers is likewise not theoretical, but demonstrable, both between and within countries. Medicare beats Medicare Advantage. Other countries’ primarily public systems beat the US’ primarily private system.

The GOP has a good chance of taking control of the Senate in the coming midterm elections, and should that happen, we should expect to see yet more congressional attempts to repeal the ACA. But Americans should be steadfast in their support of the law – there can be no going back to the failed system of old.

Texas Needs UN Observers

A newly released UN report expresses concern over the high number of executions being carried out in Iraq. The report found implementation of the death penalty in Iraq to be particularly problematic because “many… convictions are based on questionable evidence and systemic failures in the administration of justice.”

You must be thinking – wow, the Iraqi Government must be offing folks left and right to be the target of this kind of UN criticism. After all, conditions in Iraq are dire. There’s a civil war, headed by an armed insurgency, now ongoing across much of the country. Terrorist bombings in Baghdad have become so commonplace that they frequently go unreported. So how many people has Iraq put to death so far in 2014? Answer: 60.

Hmmm. Iraq has a population of 33 million. Assuming Iraq continues on its execution-rampage, they will have put 80 people to death by year’s end, making for an execution rate of 2.4 per million. Texas, by comparison, has a population of 26 million, and has put 39 people to death so far this year, putting them on track for about 42 by year’s end. That gives Texas an execution rate of 1.6 per million. Not sure whether congratulations are due – Texas has managed to be only two-thirds as brutal to its peacetime population compared to wartime Iraq.

Iraq may be bad now, but it’s much improved much since when Saddam Hussein was in power. However you can say the same about Texas, which has also come a long way since the dark days of Governor Bush Duh, who in 1999 oversaw 98 executions for a population of 20 million, for an execution rate of nearly 5 per million, double that of present day Iraq. Bush Duh’s Texas had no civil war and no terrorist bombings – it was just folks killin’ folks, Texas style – with nary a UN monitor in sight.

As the UN report points out, the problem in Iraq isnt just the sheer number of executions – it’s the shoddy system of justice that produces them. The Texas comparison is here, again, unavoidable, where people are put to death without competent legal representation, and where many have been found to be innocent while on death row – others, after their execution has been carried out.

All modern, civilized people should oppose the death penalty under all circumstances. In fact, the reason why it’s virtually disappeared in the West is that it is inconsistent with all modern political ideologies – except fascism. The comparison with war-torn Iraq serves to show just how backwards are certain parts of the US, where an extraordinary degree of barbarism is brought into higher relief when it occurs in a relatively affluent, peacetime population – without enough of an outcry from human rights organizations, foreign or domestic.

 

 

 

 

Kansas Voodoo

Perhaps even conservatives can only be fooled so many times before they get wise. In Kansas, Democrat Paul Davis has pulled even with Republican incumbent Sam Brownback in the race for governor. Davis has even received the endorsement of numerous Republican officials across Kansas, who find Brownback’s dalliance with Voodoo Economics too spooky for their taste.

Credit for the term “Voodoo Economics” goes to George Bush. While he was competing for the 1980 GOP presidential nomination, he applied it to describe Ronald Reagan’s economic proposals, which relied on the notion that tax cuts pay for themselves. To George Bush, and to most of us, Reagan’s policies seemed like a crackpot idea at the time. Our experience over the past 30 years have borne out Bush’s skepticism.

Fiscally, the US never recovered from Reagan’s tax cuts. Deficits remained sky high for twelve years, right through the departure of his successor from the White House in 1993. That not-so-grand experiment only ended with Clinton’s tax increases, which, instead of bringing the disasters predicted by conservatives, delivered the longest economic expansion in US history, and replaced Reagan and Bush’s deficits with surpluses projected far into the future.

Under Bush Duh, the US again endured the folly of Voodoo Economics. His tax cuts gave away the surplus to the very rich, and left the country’s fiscal health permanently compromised. The cure only came via Obama’s tax increases on the wealthy – and the sustained economic recovery that’s (again) happened with conservatives (again) predicting gloom and doom.

But these experiences werent enough to deter Kansas from embarking on the very same, failed supply-side Voodoo. Conservative Sam Brownback was elected governor in 2011, and in 2012 pushed through a massive tax cut, slashing the top income tax rate by 25%, and eliminating income taxes on small businesses entirely. Brownback was hoping for a little of that ol’ black magic: to see state tax revenue grow, even though almost all Kansans were going to be paying a lower tax rate.

For all its voodoo, Kansas is now in deep budgetary doo-doo – because Voodoo Economics has failed Kansas too. With tax receipts falling short of expenses by hundreds of millions of dollars, education, along with other government services have been slashed, and the state’s credit rating has been downgraded. And in addition to all that red ink, Kansas is adding jobs at a slower pace than the national average. With inept governance, deficits, and weak job growth, one might regard today’s Kansas as a time capsule of the Bush Duh years – from which even Kansas Republicans seem eager to escape.

 

 

 

 

 

 

Voter ID Laws: More Conservative Shenanigans

No sooner do conservatives come to power, but they begin chipping away at voting rights. What choice do they have, after all, given their lack of electoral support. Democrats consistently win more votes than Republicans in congressional elections – the Republican House majority is a creature of gerrymandered districts, and nothing more – it is not the result of greater popularity.

Preventing votes has long been a favorite conservative pastime, going back to Reconstruction, when black men had only recently secured the right to vote through the 15th amendment. The US South had a 100 year tradition of denying suffrage to blacks when the Voting Rights Act was passed in 1965. That law created a special class of states, which were to be subject to special scrutiny because of their poor record of voting rights abuses.

In 2013, Chief Justice John Roberts and the Supreme Court’s four other conservatives decided that the South had grown up, and no longer needed special oversight to ensure that they would not mistreat minorities. In her dissent, Justice Ginsburg predicted that abuses would immediately resume. She thought the majority’s reasoning was foolish, and asserted that close scrutiny was precisely what kept miscreant states in line – that getting rid of “preclearance” (their special statutory regime) was akin to throwing away an umbrella in a thunderstorm because you werent getting wet.

As if it were a scripted comedy routine, Texas and Mississippi responded within hours by implementing voter ID laws that adversely impacted minority voting. In the year since that decision, voter ID laws have multiplied. And the Supreme Court has decided to leave the Texas law in place for the coming election.

Voter ID laws invariably function as a poll tax. Such laws take away your constitutional right to vote, and substitute it with a limited right, conditioned upon obtaining particular documents – a process that’s never free, and whose costs tend to be greater for the young, poor, elderly and minorities because they are less likely to have the needed documents readily at hand, and because they are more burdened by efforts to obtain them.

These laws are offered as a means of protecting society from the crime of voter impersonation. However numerous investigations have found that crime to occur so infrequently that it has virtually no chance of impacting an election, even if it were to somehow spike in frequency by a factor of one hundred! On the other hand, voter ID laws powerfully reduce the turnout of legitimate voters. It’s sort of like adopting a new police procedure to reduce homicides – which has the side-effect of killing one thousand people for every homicide it prevents.

And that is precisely why these laws exist, and why they are almost always passed by Republican legislatures and signed into effect by Republican governors. Voter ID laws serve no purpose other than to prevent the young, poor, elderly and minorities from voting – all of whom are more likely to vote democratic. You’d think these laws might set off conservative alarm bells, because they require ordinary citizens to obtain government-issued ID cards as a prerequisite to voting – conservatives, after all, are prone to whining and complaining about the threat posed by Big Government. But lacking any principles whatsoever, conservatives are content to expand government power whenever its convenient.

 

 

 

 

How Jim Crow Holds Florida

In denying the right to vote to criminals, even after they have been released from prison, the US is an outlier with respect to much of the world. Let alone allowing ex-cons to vote, numerous countries permit inmates to vote from prison, including Australia, Canada, the Czech Republic, Denmark, Finland, France, Germany, Israel, Japan, Netherlands, Norway, Poland, Romania, Serbia and Sweden. Among US states, only Maine and Vermont let everyone vote, including prisoners.

With America’s skyrocketing prison population, felony disenfranchisement affects an increasing fraction of the US population. While it denied suffrage to about 1 million Americans the in the early 70s, 3 million were disenfranchised by the mid-90s, and nearly 6 million are disenfranchised today. Across much of the south, upwards of 7% of the adult population cannot vote because of past convictions.

Relative to the irrevocable, lifetime disenfranchisement that the Constitution permits (for the moment), states are generally much more liberal about allowing convicted criminals to vote after they’ve completed their sentences, if not parole or probation. As usual, it’s regressive southern states who are the most unforgiving, with a few effectively disenfranchising convicted criminals forever.

Disenfranchisement disproportionately affects blacks. Across the country, about 8% of blacks, and some 13% of black men cannot vote – compared to about 2% of all other adults. Florida is the worst case of all. In 2011, its GOP governor gave the state the most extreme felony disenfranchisement law in the country. With just 6% of the US population, Florida is home to 25% of all of America’s disenfranchised. 20% of all blacks in Florida – and about 35% of all black men – cannot vote. One neednt wonder at the GOP’s zeal for felony disenfranchisement. In its absence, Florida would not be a swing state – it would be solidly democratic.

US AG Eric Holder has been pressing states to reform these outmoded laws – many of which date back to Reconstruction, a living remnant of the Jim Crow south, whose purpose was, then and now, to suppress the black vote. Felony disenfranchisement is an ugly anachronism, with no place in a modern law or governance.

 

Refs:

https://www.aclu.org/maps/map-state-criminal-disfranchisement-laws

http://www.washingtonpost.com/world/national-security/eric-holder-makes-case-for-felons-to-get-voting-rights-back/2014/02/11/b0556492-932b-11e3-84e1-27626c5ef5fb_story.html

http://en.wikipedia.org/wiki/Felony_disenfranchisement#Other_European_countries

http://www.washingtonpost.com/blogs/govbeat/wp/2014/02/12/how-felon-voting-policies-restrict-the-black-vote/

http://www.fairvote.org/research-and-analysis/voting-rights/felon-disenfranchisement/

http://www.demos.org/blog/2/13/14/racist-history-behind-felony-disenfranchisement-laws

Nearly 6 Million Americans Can’t Vote Due to Felon Disenfranchisement Laws

http://truth-out.org/buzzflash/commentary/felon-disenfranchisement-the-new-jim-crow/17952-felon-disenfranchisement-the-new-jim-crow

http://en.wikipedia.org/wiki/Reconstruction_Acts

http://en.wikipedia.org/wiki/Reconstruction_Amendments

http://en.wikipedia.org/wiki/Fifteenth_Amendment_to_the_United_States_Constitution

http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

The Constitutionality of Felony Disenfranchisement:

In the aftermath of the US Civil War, with southern states excluded from Congress and yet subject to military rule, northern states changed the Constitution to protect its citizens’ voting rights – somewhat. The 15th amendment, which became law in 1870, is short and simple:

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.

18 months previously, northern states had ratified the 14th amendment. Section 2 is a fine bit of 19th century prose:

Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice President of the United States, Representatives in Congress, the Executive and Judicial officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty-one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens shall bear to the whole number of male citizens twenty-one years of age in such State.

It sprawlingly ties together many areas of law, including apportionment, the legal status of “Indians”, federal and state elections, voting rights and criminal disenfranchisement. That’s a good thing, because it mutually binds, one to another, numerous rights, capacities and effects, forcing courts to interpret them with respect to one another. The bad of it is that it implicitly allows for the unfettered disenfranchisement of convicted criminals. The 15th amendment meanwhile only prevents states from denying the right to vote for 3 specific reasons – leaving other bases for disenfranchisement valid, including not just crime, but gender.

There is hope. See:

http://en.wikipedia.org/wiki/Richardson_v._Ramirez

http://en.wikipedia.org/wiki/Hunter_v._Underwood

n.b. The Reconstruction amendments were drafted, voted up by 2/3 majorities in both houses, and passed on to the states for ratification while southern states had no representation in Congress, were yet subject to military rule, and were effectively territories – not states – governed from Washington, D.C. Their readmission to the Union – and with it, the restoration of their Congressional delegations – was conditioned on their ratification of the these amendments.

Beg, Borrow and Sue

Some beggars wouldnt merely be choosers – they would be plaintiffs. In 2008, AIG was flat on its back, about to take its last breath before going into the corporate afterlife. (The Supreme Court tells us that corporations can hold religious beliefs – so who’s to say their souls dont live on beyond Chapter 11….) AIG’s liabilities outstripped its assets by tens of billions of dollars. Insolvent, AIG would have had little choice but to be dissolved via bankruptcy, its assets liquidated to pay creditors, who would have received pennies on each dollar of debt. Despite AIG’s thousand-dollar share price on the eve of the financial meltdown, its shareholders would have lost their entire investment, their shares zeroed out, without a cent left over.

You’d think those shareholders would be mighty grateful to the US government, which bailed out AIG to the tune of $182 billion. Though AIG’s share-price was pummeled, it’s still around fifty bucks today, which is fifty bucks more than it’d be without the bailout. But some of those shareholders are not grateful – and they are suing the US government because, in their opinion, the bailout AIG received wasnt generous enough.

It’s true that while AIG’s creditors got a sweetheart deal, AIG itself did not. But it wasnt left to die, as was Lehman Brothers, which on September 15th, 2008 departed this world for the dark night of Chapter 11, never to return. Lehman had been the nation’s 4th largest investment bank, and its destruction was a body blow to an already-teetering US economy. The federal government learned its lesson, and resolved to save AIG – the world’s largest insurance company – but it would do so on terms onerous enough to serve as fair warning to other financial firms. The fear was that if AIG’s deal was too good, others might be tempted to make similarly risky bets, with the expectation that the government would bail them out if things didnt pan out. Instead of a golden parachute, AIG got a no-frills heimlich maneuver – but it’s not like the US government owed it to AIG to do anything at all.

AIG itself is not a party to the lawsuit. As AIG CEO Robert Benmosche said in an interview, “It’s not acceptable socially for AIG to have taken this money and think that we could come back and sue the government because [they] made too much money on the deal.” But not all AIG shareholders share Benmosche’s qualms. The suit is led by former AIG CEO Maurice Greenberg, a one-time billionaire, now scraping by on assets worth a paltry $300 million. For Greenberg and his co-plaintiffs, the $182 billion bailout they received from US taxpayers wasnt charity enough – they have demanded that US taxpayers cough up an additional $50 billion.

To grasp the enormity of AIG’s bailout, it helps to compare it to other government spending programs. For example, AIG’s bailout is enough to cover all US government expenditures on welfare (TANF) and food stamps (SNAP) – combinedfor two years! The $50 billion that AIG shareholders are suing for would by itself nearly cover the annual cost of the EITC program (a subsidy for the working poor).

Beyond the inanity of conservative talking points, these figures reveal America’s true takers. While millions of working American families receive a pittance in public support, wealthy AIG investors have had their trough filled by US taxpayers – which wont stop them from suing till that trough overflows.

 

Refs:

http://www.reuters.com/article/2013/06/26/us-aig-bailout-lawsuit-idUSBRE95P1G120130626

http://www.cnbc.com/id/100544872

http://www.cnbc.com/id/100367504

http://www.insurancejournal.com/news/national/2011/11/21/224905.htm

 

The Field Guide is off Monday for Columbus Day – we’ll be back with new material on Wednesday, October 15th.

AG Holder

A departure from recent Attorneys General who mindlessly signed on to ever-increasing executive power – whether under the auspices of the Patriot Act, FISA or otherwise – Eric Holder took a stand for civil liberties: voting rights, gay rights, limits on police aggression, and human rights for undocumented immigrants. While previous AGs often sought to increase the power and reach of their office, Holder provided a well-needed retreat from the illiberal policies of his predecessors.

The contrast with Bush Duh’s first two AGs, John Ashcroft and Alvaro Gonzalez, is striking. The former was a renowned cipher who only became AG after losing a Senate election to a dead man – a feat never accomplished before or since. As AG, Ashcroft infamously defended the Patriot Act against all comers, championing, among other things, the government’s new power to search library records to discover the reading habits of individual Americans. (In fairness, Ashcroft took a stand against Stellar Wind, another surveillance program.)

Next came Alvaro Gonzalez, who only lasted two and a half years, and seemed out of his depth from day one. He spent his time in office defending expanded police search and seizure powers, and looking for legal justifications for torture. His prodigious talents prepared him for his current position, the dean of Belmont College of Law. If you’ve never heard of Belmont Law, that may be because it was only founded three years ago.

Comparisons with Clinton’s AG and Holder’s one-time boss, Janet Reno, are no less interesting. Reno was an aggressive, efficient cop in the Rudolph Giuliani and Elliot Ness style. The longest serving US AG in 185 years, Reno gets credit for the capture and conviction of five 1993 World Trade Center bombers, two Oklahoma City bombers, and the Unabomber; and for taking on Microsoft when it was the most valuable corporation in world history. But she is fairly criticized for using excessive force in the Elian Gonzalez matter and the siege at Waco.

Holder, by comparison, has shown leniency – for good and for bad. His “too big to jail” policy with respect to bankers led to zero prosecutions in the wake of the subprime mortgage market collapse. Under him, the DOJ’s prosecution of large financial services firms has fallen to its lowest level in 20 years. However his “Smart on Crime” program seeks to avoid harsh sentencing when the facts of a case do not merit such. He’s also backed off on enforcing federal marijuana laws in states where the drug was decriminalized under state law.

Serving as AG during the so-called war on terror, Holder has been faced with the constant temptation to expand the police power at the expense of personal liberty. Waging that war abroad, he’s been aggressive, penning the legal defense for the operation that assassinated Osama bin Laden, and for the use of drones to assassinate other terrorist leaders abroad, including US citizens. But domestically Holder has been reserved, criticizing Bush Duh’s implementation of the Patriot Act and use of electronic surveillance, and condemning torture. His Justice Department has nonetheless prosecuted six government employees for leaks (compared to just three prosecutions in all of US history before), and has electronically surveilled members of the press, denying the right of journalists to protect the identity of their sources.

Holder’s respect for civil rights and limits on the police power are a major upgrade over Bush Duh’s AGs. His aggressiveness in pursuing politically unpopular liberal causes – fighting Arizona’s ill-considered immigration law, and taking on voter ID laws and redistricting in the deep south – has been laudable. Overall, Holder has been a very good AG, and as his tenure draws to a close, it’s worth pausing to reflect on how fortunate the country has been to have someone with talent, tenacity and conscience in that office – for a change.