Conservative donors eye independent groups with new skepticism

By Matea Gold, Published: June 22, 2013

Charlie Spies knows how to raise money. The Republican lawyer helped rake in $153 million for Restore Our Future, the pro-Mitt Romney super PAC.

But he’s had a harder slog with one of his latest projects, Republicans for Immigration Reform, a super PAC that aims to be a dominant force in the fight over revamping the country’s immigration laws. So far, the organization has made just a tiny ad buy in South Carolina and financed a poll with two other advocacy groups.

“It has been a challenge to get donors on the Republican side to reengage,” Spies said.

Seven months after the 2012 election, a lingering hangover among conservative donors has stalled efforts by right-leaning independent groups to fill their coffers. Wealthy contributors who dashed off six- and seven-figure checks last year are eyeing super PACs and other politically active groups more skeptically, frustrated that the hundreds of millions of dollars spent to elect Romney went for naught.

“There’s donor fatigue,” said Fred Malek, a veteran GOP operative wired into high-net-worth circles. “Everyone was in a frenzy of giving up until the November elections, and then everyone was sort of worn out on the whole process. It’s very hard to raise money after an election, especially after you lose.”

Several Republican fundraisers said they remain optimistic that the money spigot will reopen as the 2014 congressional elections approach. But this time around, donors are seeking to be more judicious about where they put their money, asking groups for detailed strategy and spending plans.

“At the moment, I’m kind of in a waiting and watching mode,” said Howard Leach, an ambassador to France under President George W. Bush. In 2012, Leach gave $100,000 each to Restore Our Future and American Crossroads, the conservative super PAC co-founded by former Bush political strategist Karl Rove.

Post-election donor apathy is not limited to the political right. Organizing for Action, a nonprofit group launched by former advisers to President Obama to back his agenda, has halved a $50 million fundraising goal for its first year after slower-than-expected fundraising, according to people familiar with the group’s plans. The decision came after the group reversed course and said it would not accept corporate funds.

But the pressure to bring in big checks is greater for pro-Republican groups, which have not been able to match the extensive small-donor network that was built by Obama’s campaign and that OFA is now drawing on.

There are signs that donor reticence stems in part from dissatisfaction with the uneven track record of super PACs, which report their funding sources, and opaque nonprofit groups, which do not disclose their donors. Both types can raise unlimited funds.

One well-connected Republican donor and fundraiser, who has held off writing big checks to outside groups since the election, said he is among a group of top contributors now questioning the value of financing such organizations, which operate independently of candidates and party leaders.

“I do find it a little worrisome, frankly, that there’s so much more money and so few people behind it,” said the contributor, who requested anonymity to speak candidly about his misgivings. “I am concerned that all that money didn’t seem to bring results.”

Frank VanderSloot, chief executive of an Idaho nutritional-supplement company who gave abundantly to Romney and groups backing him, said he has concluded that it is not effective to finance tax-exempt advocacy groups that can only spend a limited amount on politics.

“If you can’t say what candidate you’re for, it’s hard,” said VanderSloot, who said he gave “several million” in all to various groups, including $1.1 million to Restore Our Future.

From now on, he said, he is sticking with super PACs, which have more latitude to directly engage in elections: “That’s where my money is going.”

Major conservative groups such as Crossroads have stayed out of Tuesday’s special election for a U.S. Senate seat in Massachusetts, leaving Republican Gabriel Gomez outmatched against the resources of Democrat Edward J. Markey and his allies.

Conservative donors said they have not softened in their opposition to Obama or stopped trying to stymie his presidency. If anything, recent revelations about the National Security Agency’s data gathering and the Internal Revenue Service’s scrutiny of conservative groups have intensified those sentiments, they said.

Having failed to deny Obama a second term, some contributors said they plan to work on flipping the Senate to Republican control in 2014 in order to block the president legislatively. Obama is “taking this country down the tubes,” said Andrew Sabin, owner of a New York-based precious-metal refining business, who gave $100,000 to American Crossroads in the last election cycle. “I’m extremely motivated.”

One fundraiser for a top conservative group, who requested anonymity to discuss private conversations with donors, said contributors understand that the midterms will be important. “I think they just have to understand how the money is being spent,” the fundraiser said.

New conservative outfits are finding that they have to work much harder to win over donors, some of whom now hire lawyers to conduct due-diligence inquiries about the organizations soliciting their support.

“We’ve learned to ask people: ‘What is your message? Where are you going to spend the money, and how?’” said VanderSloot, who said that he also requests information about how much of a group’s budget goes to paying people running the organization. “In some cases, you may want to get that answer in writing.”

The intense scrutiny “is winnowing the field of consultants who are able to raise significant funds,” said Robert Kelner, a Washington campaign finance lawyer who heads the political law practice at Covington & Burling.

“You’re seeing more impressive business plans, on better paper with fancier graphics,” Kelner added, referring to the efforts of political groups. “They look more like the kind of proposals someone would submit to a private equity fund.”

In their pitches, many organizations are pledging to diversify their approaches and not rely as heavily on expensive television advertising as they did in the last election, when the airwaves were crowded with discordant messages. The new emphasis is on digital campaigns and get-out-the-vote organizing — strategies that some groups expect to test this year in Virginia’s governor’s race and New Jersey’s U.S. Senate contest.

The desire of donors to see specific political plans has slowed the efforts of Republican groups seeking to promote their preferred versions of immigration reform, strategists said. The Senate is on track to approve a bipartisan compromise by the end of next week, but prospects in the House are less certain.

It remains to be seen whether any groups on the right will provide significant air cover for lawmakers who support the legislation.

So far, Crossroads GPS, the nonprofit sister of American Crossroads, has spent less than $100,000 to run a newspaper and online ad calling for comprehensive immigration reform. A spokesman declined to comment on whether the organization’s modest efforts so far were due to fundraising challenges.

One of the biggest players was expected to be Republicans for Immigration Reform, which Spies launched in the fall with Carlos Gutierrez, a former Kellogg chief executive who served as commerce secretary under Bush.

“This is not small ball,” Gutierrez told The Washington Post in November. “We’re serious, and we are going to push the debates on immigration reform to a place where I believe the Republican Party should be in the 21st century.”

Spies said that the group still hopes to launch a paid media campaign this summer but that no plans have been finalized.

The Four Plagues: New Strategies for Social Change Are Necessary

by Don Hazen, Executive Editor, AlterNet, June 22, 2013

Almost two weeks ago, I wrote an article:  “4 Plagues – Getting a Handle on the Coming Apocalypse.”  Reader response was strong, and the article quickly shot to top of our most-read list. I detailed the “plagues” that dominate our economy and way of life: financialization, militarization, and criminalization — forces that exacerbate the huge array of problems we face—poverty, unemployment, mass incarceration, climate destruction, gun violence, financial corruption, spying and privacy, and much more. They threaten democracy, fray our social order, worsen conditions in communities round the world, and damage our psychological health.

As a result, many of us are alarmed at the direction of our country, and rightly so. By many measures, our society is a depressing mess. Tens of millions are severely suffering economically, while many more are stressed out and traumatized, desperately attempting to cope with both chronic and acute problems they have never faced before.

Things Must Change

Clearly things must change. But what can really deliver the scope of change we need? The progressive response to the mounting array of negatives in our society is inadequate. The progressive movement lacks teeth. The focus is dispersed.  Often tactics are based on outdated assumptions or illusions, even nostalgia for past approaches that no longer deliver. We need to fight back more effectively— but how do we hone the right strategy?

The great movements of the past decades — civil rights, gay and women’s rights, the environmental movement, great anti-war marches  — they all are inspiration. But we are now in a very different reality. Many of us have been working hard to change things for a long time.  We are dedicated and persistent. And there is much going on across the country, primarily in small protests and grass roots activities. AlterNet reports on these activities every day. They give us small doses of hope.
But We Have Not Been Successful

Still, we have not won in the larger sense. We have not slowed the corporate juggernaut that crushes everyday Americans at every turn. The worst of corporate America effectively uses the radical conservatives as their shock troops to achieve economic policies that exploit 90% of Americans, and the corporate media joins in. 

But it isn’t just the evil doers who are responsible. We must face the music as well for what we have failed to do. Are we trying new approaches, bridging long-term divisions, challenging our own privileges?  We need fresh thinking and strategies that go beyond petitions, exchanges among ourselves, and reluctant support for often mediocre Democratic candidates who so often disappoint us when in office.

AlterNet doesn’t have the answers. But we have a lot of questions. And concerns about our future. 

We are a non-profit media company that has published tens of thousands of articles over the years by the smartest critics and analysts.  There are lots of ideas. But there is not remotely enough energy invested in how we might get those ideas implemented.  All the creative things that people write don’t lead to enough action, mobilization, resistance. We have to do more.

It’s Time To Do Things Differently

We at AlterNet are not going to keep doing what we have always done. We are going to do more than publish great writing, investigations, and analysis. We are going a step further to challenge ourselves and our readers and supporters, along with progressive thinkers and organizers.

It’s time for a consciousness-raising, and so AlterNet is going to invest time and resources in examining and evaluating strategies for change. Not just the ideas. But how to get there. How to bridge the huge gap between the ideas and the action, between theory and practice.

 We are going to engage our best thinkers and challenge them. We are going to take a close look at our most prominent social change activities and evaluate what they are accomplishing.

This is work beyond what we usually do, so we need to raise some extra money to do it. Will you help us? 

 We can’t guarantee that we will come up with great solutions. But we are going to try. And we will start by kicking off conversations that look for strategies that are inclusive and not primarily for elites. We will be exploring ways that progressives can marshal necessary resources for an independent politics without being heavily dependent on foundations.

And we want to hear from you. This is an open-ended process.  No one person’s or group’s ideas will trump the rest of us.  Hopefully we will end up with a clearer picture of what it will take to make progress toward a fair humane future we can believe in.

We very much appreciate your support as donors, readers, and promoters of AlterNet content. Now we are asking for something a little bit extra. We need your support as we take a tough look at progressive politics in America and see how it could be more effective and successful. Please join us.

Thank you,

Don Hazen
Executive Editor, AlterNet

Don Hazen (

Big Lie: America Doesn’t Have #1 Richest Middle-Class in the World…We’re Ranked 27th!

AlterNet [1] / By Les Leopold [2]  June 18, 2013  |


America is the richest country on Earth. We have the most millionaires, the most billionaires and our wealthiest citizens have garnered more of the planet’s riches than any other group in the world. We even have hedge fund managers who make in one hour as much as the average family makes in 21 years! This opulence is supposed to trickle down to the rest of us, improving the lives of everyday Americans. At least that’s what free-market cheerleaders repeatedly promise us. Unfortunately, it’s a lie, one of the biggest ever perpetrated on the American people. Our middle class is falling further and further behind in comparison to the rest of the world. We keep hearing that America is number one. Well, when it comes to middle-class wealth, we’re number 27….Wealth is measured by the total sum of all our assets (homes, bank accounts, stocks, bonds etc.) minus our liabilities (outstanding loans and other debts). It the best indicator we have for individual and family prosperity…”Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies.”…In short, financialization is when making money from money becomes more important that providing real goods and services….Once we unleashed Wall Street, their salaries shot up, while everyone else’s stood still…

Full text

America is the richest country on Earth. We have the most millionaires, the most billionaires and our wealthiest citizens have garnered more of the planet’s riches than any other group in the world. We even have hedge fund managers who make in one hour as much as the average family makes in 21 years!

This opulence is supposed to trickle down to the rest of us, improving the lives of everyday Americans. At least that’s what free-market cheerleaders repeatedly promise us.

Unfortunately, it’s a lie, one of the biggest ever perpetrated on the American people.

Our middle class is falling further and further behind in comparison to the rest of the world. We keep hearing that America is number one. Well, when it comes to middle-class wealth, we’re number 27.

The most telling comparative measurement is median wealth (per adult). It describes the amount of wealth accumulated by the person precisely in the middle of the wealth distribution—50 percent of the adult population has more wealth, while 50 percent has less. You can’t get more middle than that.

Wealth is measured by the total sum of all our assets (homes, bank accounts, stocks, bonds etc.) minus our liabilities (outstanding loans and other debts). It the best indicator we have for individual and family prosperity. While the never-ending accumulation of wealth may be wrecking the planet, wealth also provides basic security, especially in a country like ours with such skimpy social programs. Wealth allows us to survive periods of economic turmoil. Wealth allows our children to go to college without incurring crippling debts, or to get help for the down payment on their first homes. As Billie Holiday sings, “God bless the child that’s got his own.”

Well, it’s a sad song. As the chart below shows, there are 26 other countries with a median wealth higher than ours (and the relative reduction of U.S. median wealth has done nothing to make our economy more sustainable).

Here’s a starter list:

  • We don’t have real universal healthcare. We pay more and still have poorer health outcomes than all other industrialized countries. Should a serious illness strike, we also can become impoverished.
  • Weak labor laws undermine unions and give large corporations more power to keep wages and benefits down. Unions now represent less than 7 percent of all private sector workers, the lowest ever recorded.
  • Our minimum wage is pathetic, especially in comparison to other developed nations [3]. (We’re # 13.) Nobody can live decently on $7.25 an hour. Our poverty-level minimum wage puts downward pressure on the wages of all working people. And while we secure important victories for a few unpaid sick days, most other developed nations provide a month of guaranteed paid vacations as well as many paid sick days.
  • Wall Street is out of control. Once deregulation started 30 years ago, money has gushed to the top as Wall Street was free to find more and more unethical ways to fleece us.
  • Higher education puts our kids into debt. In most other countries higher education is practically tuition-free. Indebted students are not likely to accumulate wealth anytime soon.
  • It’s hard to improve your station in life if you’re in prison, often due to drug-related charges that don’t even exist in other developed nations. In fact, we have the largest prison population in the entire world, and we have the highest percentage of minorities imprisoned. “In major cities across the country, 80% of young African Americans now have criminal records” (from Michelle Alexander’s 2010 book, The New Jim Crow: Mass Incarceration in the Age of Colorblindness).
  • Our tax structures favor the rich and their corporations that no longer pay their fair share. They move money to foreign tax havens, they create and use tax loopholes, and they fight to make sure the source of most of their wealth—capital gains—is taxed at low rates. Meanwhile the rest of us are pressed to make up the difference or suffer deteriorating public services.
  • The wealthy dominate politics. Nowhere else in the developed world are the rich and their corporations able to buy elections with such impunity.
  • Big Money dominates the media. The real story about how we’re getting ripped off is hidden in a blizzard of BS that comes from all the major media outlets…brought to you by….
  • America encourages globalization of production so that workers here are in constant competition with the lower-wage workers all over the world as well as with highly automated techonologies.

Is there one cause of the middle-class collapse that rises above all others?

Yes. The International Labor organization produced a remarkable study (Global Wage Report 2012-13) [4] that sorts out the causes of why wages have remained stagnant while elite incomes have soared. The report compares key causal explanations like declining bargaining power of unions, porous social safety nets, globalization, new technologies and financialization.

Guess which one had the biggest impact on the growing split between the 1 percent and the 99 percent?


What is that? Economist Gerald Epstein offers us a working definition [5]:

“Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies.”

This includes such trends as:

  • The corporate change during the 1980s to make shareholder value the ultimate goal.
  • The deregulation of Wall Street that allowed for the creation of a vast array of new financial instruments for gambling.
  • Allowing private equity firm to buy companies, load them up with debt, extract enormous returns, and then kiss them goodbye.
  • The growth of hedge funds that suck productive wealth out of the economy.
  • The myriad of barely regulated world financial markets that finance the globalization of production, combined with so-called “free trade” agreements.
  • The increased share of all corporate profits that go to the financial sector.
  • The ever increasing size of too-big-to-fail banks.
  • The fact that many of our best students rush to Wall Street instead of careers in science, medicine or education.

In short, financialization is when making money from money becomes more important that providing real goods and services. Here’s a chart that says it all. Once we unleashed Wall Street, their salaries shot up, while everyone else’s stood still.


Do we still know how to fight!

The carefully researched ILO study provides further proof that Occupy Wall Street was right on the money. OWS succeeded (temporarily), in large part, because it tapped into the deep reservoir of anger toward Wall Street felt by people all over the world. We all know the financiers are screwing us.

Then why didn’t OWS turn into a sustained, mass movement to take on Wall Street?

One reason it didn’t grow was that the rest of us stood back in deference to the original protestors instead of making the movement our own. As a result, we didn’t build a larger movement with the structures needed to take on our financial oligarchs. And until we figure out how to do just that, our nation’s wealth will continue to be siphoned away.

Our hope, I believe, lies in the young people who are engaged each day in fighting for the basic human rights for all manner of working people—temp workers, immigrants, unionized, non-union, gays, lesbians, transgender—as well as those who are fighting to save the planet from environmental destruction. It’s all connected.

At some point these deeply committed activists also will understand that financialization both here and abroad stands in the way of justice and puts our planet at risk. When they see the beast clearly, I am confident they will figure out how to slay it.

The sooner, the better.

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9 Ways the Right’s Ayn Randian Experiment Screws Over the Young

Blog for Our Future, By RJ Eskow, June 17, 2013

Conservatives keep claiming liberals want a “cradle-to-grave nanny state.” That rhetoric has distracted us from the real social re-engineering taking place all around us. The right, along with its “centrist” collaborators, is transforming our nation into a bloodless and soulless Randian State.

Their decades-long assault on our core social values is on the verge of consuming its first complete generation of Americans. Born at the dawn of the Reagan era, Millennials were the first to be fully subjected to this all-out attack on the idea that we take care of each other in this country, and they’ll pay for it from the cradle to the grave.

Some of us are the parents of Millennials. Who’ll fight with them, and for them?

The Psychosis

The Simpsons made a running joke out of Springfield’s “Ayn Rand School for Tots [3],” where toddlers fend for themselves in playrooms whose signs say things like “Helping is Futile.” That’s very funny. What is happening to our country isn’t.

A successful social contract has bound us together since the FDR era. The Randian State is an effort to dismantle it, replacing our nation’s web of mutual trust and support with a lifelong helplessness and dependence on the whims and generosity of corporations and ultra-wealthy individuals.

The Randian State is built in the morally depraved mold of right-wing über-heroine Rand, who reviled the less fortunate – and even those who tried to help them – as “parasites [4],” while at the same time idolizing sociopathic killers.

That last statement isn’t rhetoric. It’s reporting. “He has the true, innate psychology of a Superman,” Rand wrote admiringly of child murderer and dismemberer William Edward Hickman. “He can never realize and feel ‘other people.’”

As Mark Ames [5] points out, this echoes Rand’s description of her hero in The Fountainhead:  “He was born without the ability to consider others.”

Hickman’s actions were certainly not those of a “nanny.” But, while most conservatives undoubtedly disapprove of his deeds, the glorification of sociopathic selfishness represents the mentality with which the Administration is perpetually seeking “compromise.” It has infected everything from the Beltway’s “bipartisan” consensus to the content of our national media.

Where’s Julia?

Conservatives went into rhetorical overdrive last year after the Obama campaign released an “infographic” ad called “The Life of Julia,” depicting ways Obama’s policies help women throughout their lives.

A typical reaction came from self-declared moralizer, former Reagan official, and chronic excessive gambler [6] William Bennett. Bennett intoned [7] that “Julia’s entire life is defined by her interactions with the state … Notably absent in her story is any relationship with a husband, family, church or community … Instead, the state has taken their place and is her primary relationship.”

That’s deceptive, of course. The presentation focused on government because it wasabout government.  The Obama campaign wasn’t proposing to marry her or drive her to church. But reason rarely intrudes on such arguments. The Romney campaign quickly prepared a counter-slide show and the “socialist” debate was on.

Obama won.

Curiously, “Julia’s” story seems to have disappeared from the BarackObama.Com [8] and Organizing For Action websites now that victory’s been achieved. Old links to it are dead, and attempts to click on this introduction [9] only lead back to the site’s main page.


Bennett’s phrasing was drawn from conservative avatar Margaret Thatcher [10]. Thatcher represented a radically un-American vision of life which lacks either our sense of community or our bonds of mutual trust, and which denies even the existence of society itself.

“Who is society?” demanded Thatcher. “There is no such thing! There are individual men and women and there are families …”

Conservatives went searching for evidence that centrist Obama was really pushing cradle-to-grave socialism. The only target they could find for their faux outrage was Michelle Obama’s campaign [11] to encourage breastfeeding, an embarrassing right-wing misfire which suggests there may be Freudian overtones to their “nanny” outrage.

Instead of pushing “cradle to grave” statism, the Administration pivoted immediately after the election to government-shrinking Grand Bargains. A “sequester” agreed to by both parties began slashing services on both ends of life. And the Administration’s attempting to end the sequester, not by calling for its straight repeal (as it should), but by offering cuts to Social Security at the later end of that “cradle to grave” span.

Come to think of it, maybe that’s why “Julia” has disappeared from the Obama website.

The Manifesto

The Randian State’s first manifesto may have been the startling document produced by Ronald Reagan’s “blue ribbon” education commission in 1983, which proposed to use schools as factories for more effectively turning Millennials – and every generation that follows – into usable raw material for corporate production.

The commission approached American education in a self-declared state of crisis, saying it was asked to address “the widespread public perception” – held by whom, exactly? – “that something is seriously remiss in our educational system.”

The sternly ideological report which resulted was called “A Nation At Risk [12].” Though right-wing in content, it reads like a Soviet proclamation on industrial production. Students are redefined as inputs in a system to maximize American corporate competitiveness, productivity and profits.

“History is not kind to idlers,” says the report. “We live among determined, well-educated, and strongly motivated competitors. We compete with them for international standing and markets …”

The rhetoric is hectoring and fierce:

“(T)he educational foundations of our society are presently being eroded by a rising tide of mediocrity that threatens our very future as a Nation and a people.”

The “problem” was stated in terms that were both militaristic – “We have, in effect, been committing an act of unthinking, unilateral educational disarmament” – and moralistic: “Our Nation’s schools and Colleges … are routinely called on to provide solutions to personal, social, and political problems that the home and other institutions either will not or cannot resolve.”

That was an assault on an idea that had been uncontroversial among Americans of all political persuasions for generations: that education can and should help children learn to participate more effectively in society. The authors had more concrete objectives in mind.  Like Communist commissars plumping next year’s wheat harvest, their goal was productivity, productivity, productivity.

“Knowledge, learning, information, and skilled intelligence are the new raw materials of international commerce,” wrote the Commission.  And by “raw materials,” Millennials, they meant you.

The rest of the Commission’s report is largely taken up by a) platitudes, and b) statistical studies which soon challenged aggressively [13].  But the Randian State moved on, Millennials firmly in its maw. And while A Nation At Risk only targeted students, it soon had Americans of all ages in its sights.

Birth School Work Death

During the Thatcher years a British punk group called The Godfathers put out a song called “Birth School Work Death.” Here are nine ways the Cradle to Grave Randian State is harming Millennials in those four stages of life.

1. Prenatal Nutrition

For some the new regime began even before they were born. The Reagan Administration moved to cut nutrition funding [14] for 600,000 pregnant women, a particularly hypocritical act for a movement which claims to be concerned about the rights of unborn children.

2. Early Childhood Nutrition

The same cuts also lowered food budgets for children in 4.6 million households, eighty-seven percent of which lived below the poverty line.

3. School lunches

The National School Lunch Act of 1946 and the Child Nutrition Act of 1966 both promoted healthy meals for America’s schoolchildren.  Seems benign and even wise – unless you’re a Randian, of course. The Reagan Administration added to cuts in 1980 budget, then passed into infamy when it stated that ketchup and pickle relish [15] could be considered “vegetables” when designing a balanced diet.

Few, if any, parents adopted this approach at the family dinner table. “Kids, finish your vegetables!” never became “Kids, finish sucking the factory produced, sugar-drenched condiments out of those little folding packets!”

4. Cutting education funds.

The Reagan Administration’s cuts to the Department of Education, some occurring under Education Secretary William Bennett, eventually totaled $19 billion.

The right has continued to mount an assault on school funding at every level ever since, from local school boards up to the state and Federal level. They’ve been joined by “centrist” Democrats like Rahm Emanuel in their efforts to demonize teachers and privatize schools.

5. Making college unaffordable.

The University of Virginia’s Miller Center conducted a study for the National Center for Public Policy and Higher Education and found that “Since the mid-1980s” – roughly the start of the Millennial Generation -”the costs of higher education in America have steadily shifted from the taxpayer to the student and family.”

Median family income have risen by 147% since then, while college tuition and fees rose 439%, a tripling of education costs in real dollar terms. The impact has been greatest on lower-income families, sounding a potential death knell for social mobility.

From the New York Times: “Among the poorest families … the net cost of a year at a public university was 55 percent of median income, up from 39 percent in 1999-2000.”

6. Leaving graduates drowning in debt.

The misguided ‘privatization’ of Sallie Mae, the government’s student loan enterprise, led to a series of political and financial scandals. (See “Sallie Mae’s Jets [16].”) It also contributed to an explosion of student loans, many of which went to highly dubious ‘colleges’ which issued high-cost, worthless degrees. Many other students went to more legitimate institutions, but found themselves drowning in debt.

Now 7.4 million students [17] are about to see a doubling of their interest rates unless something is done.  Elizabeth Warren [18] has proposed given them access to the Fed’s ultra-low rates for banks, while more modest proposals would keep current rates in place.

The student debt situation for Millennials would be morally unconscionable even if rates remain at current levels.  Anything else is shocking to contemplate.  The UPI reports today [19] that Sen. Lamar Alexander said the President and Republicans “agree” on what should be done.

That’s not reassuring.

7. Massive unemployment.

There are 10 million unemployed young people [20] in the United States. The official youth unemployment rate is 16.2 percent, the adjusted rate (including discouraged workers) is22.9 percent [21] – not much better than the Eurozone’s – and the anemic ‘jobs recovery’ is even weaker for Millennials.

The crisis covers everything from high-school-age summer and after-school jobs to employment after graduation.

Studies show that youth unemployment lowers income for the rest of a person’s life. That means this crisis is urgent as well as massive. Every passing month harms the future of an entire generation. What immediate, major measures are being proposed to address this emergency?


8. An increasingly inequitable, wage-stagnating economy.

When Millennials do find jobs – hopefully – they’ll enter a marketplace and economy plagued by historic levels of wage inequality and stagnation.

That’s not an accident: It’s policy.Tax rates favor inequality [22].  Right-wing Republicans and “centrist” Democrats have savaged unions, an effective counterweight against growing inequality. And both parties have served the growing financialization of our economy (although the GOP does it with more gusto), making things worse for everybody except Wall Street.

9. Greater fear and insecurity in old age.

Now the President has proposed cutting Social Security benefits through the cynical “chained CPI.” The “Chain” is also a tax increase, but only on income below the highest level, which means it will aggravate the inequalities that are hurting the vast majority of Americans.

Every generation will suffer if it passes, including those who have already retired. But for Millennials it will be a final late-life kick from the Randian State.

A Letter to Millennials

The year was 1984. Wham! and Cyndi Lauper were topping the charts.  The top movie of the year was, appropriately enough, The Terminator.  And the nation was re-electing Ronald Reagan. Americans are now suffering from birth to death as a result of this triumphal year for Randians, which plunged us deeper into a red-in-tooth-and-claw world and left millions struggling with its social consequences.

As they used to say back then: Have a nice day!

Dear Millennials:  We tried to stop them. We failed. We’re sorry.  Now we need a party – and more importantly, a movement – that will refuse to allow the continued destruction of government’s vital role in our social fabric.

Until we do, every generation will suffer. But you, the Millennials, will continue to carry the dubious distinction of being the first generation of Americans to have been assaulted from the cradle to the grave. For your sake and everyone’s else, you must fight back.

This Father’s Day, here’s a promise: Some of us will be right there beside you.

(This piece has been edited slightly since first published, mostly to replace the awkward phrase ‘Rand-y’ with ‘Randian.’)


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The American Legislative Exchange Council Is Hard at Work Privatizing America, One Statehouse at a Time By Bill Moyers, June 22, 2013 


A national consortium of state politicians and powerful corporations, ALEC — the American Legislative Exchange Council — presents itself as a “nonpartisan public-private partnership”. But behind that mantra lies a vast network of corporate lobbying and political action aimed to increase corporate profits at public expense without public knowledge.

In state houses around the country, hundreds of pieces of boilerplate ALEC legislation are proposed or enacted that would, among other things, dilute collective bargaining rights, make it harder for some Americans to vote, and limit corporate liability for harm caused to consumers — each accomplished without the public ever knowing who’s behind it. Using interviews, documents, and field reporting, “United States of ALEC — A Follow-Up” explores ALEC’s self-serving machine at work…

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A national consortium of state politicians and powerful corporations, ALEC — the American Legislative Exchange Council — presents itself as a “nonpartisan public-private partnership”. But behind that mantra lies a vast network of corporate lobbying and political action aimed to increase corporate profits at public expense without public knowledge.

In state houses around the country, hundreds of pieces of boilerplate ALEC legislation are proposed or enacted that would, among other things, dilute collective bargaining rights, make it harder for some Americans to vote, and limit corporate liability for harm caused to consumers — each accomplished without the public ever knowing who’s behind it. Using interviews, documents, and field reporting, “United States of ALEC — A Follow-Up” [3] explores ALEC’s self-serving machine at work, acting in a way one Wisconsin politician describes as “a corporate dating service for lonely legislators and corporate special interests.”

Former health care industry executive Wendell Potter [4] says, “Even though I’d known of [ALEC] for a long time, I was astonished. Just about everything that I knew that the health insurance industry wanted out of any state lawmaker was included in that package of bills.”

Following up on a 2012 report, this update [5] includes new examples of corporate influence on state legislation and lawmakers, the growing public protest against ALEC’s big business-serving agenda, and internal tactics ALEC is instituting to further shroud its actions and intentions.

“United States of ALEC” Executive Producer Tom Casciato says people who saw the first report [6] “might be surprised to learn that, despite more than 40 companies having dropped out of ALEC [7], the organization is still going very strong.” He adds, “ALEC doesn’t publish a list of its members, so covering will always be hard, but in a democracy it’s a good idea for people to know where their laws originate.”

In addition to watching the show, you should follow our “Eye on ALEC” blog [8] and see all of our features and articles [9] related to ALEC. Also, you can help us build a national map [10] of state representatives who are members of ALEC.

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Profits Without Production

By PAUL KRUGMAN, June 20, 2013

One lesson from recent economic troubles has been the usefulness of history. Just as the crisis was unfolding, the Harvard economists Carmen Reinhart and Kenneth Rogoff — who unfortunately became famous for their worst work — published a brilliant book with the sarcastic title “This Time Is Different.” Their point, of course, was that there is a strong family resemblance among crises. Indeed, historical parallels — not just to the 1930s, but to Japan in the 1990s, Britain in the 1920s, and more — have been vital guides to the present.

Yet economies do change over time, and sometimes in fundamental ways. So what’s really different about America in the 21st century?

The most significant answer, I’d suggest, is the growing importance of monopoly rents: profits that don’t represent returns on investment, but instead reflect the value of market dominance. Sometimes that dominance seems deserved, sometimes not; but, either way, the growing importance of rents is producing a new disconnect between profits and production and may be a factor prolonging the slump.

To see what I’m talking about, consider the differences between the iconic companies of two different eras: General Motors in the 1950s and 1960s, and Apple today.

Obviously, G.M. in its heyday had a lot of market power. Nonetheless, the company’s value came largely from its productive capacity: it owned hundreds of factories and employed around 1 percent of the total nonfarm work force.

Apple, by contrast, seems barely tethered to the material world. Depending on the vagaries of its stock price, it’s either the highest-valued or the second-highest-valued company in America, but it employs less than 0.05 percent of our workers. To some extent, that’s because it has outsourced almost all its production overseas. But the truth is that the Chinese aren’t making that much money from Apple sales either. To a large extent, the price you pay for an iWhatever is disconnected from the cost of producing the gadget. Apple simply charges what the traffic will bear, and given the strength of its market position, the traffic will bear a lot.

Again, I’m not making a moral judgment here. You can argue that Apple earned its special position — although I’m not sure how many would make a similar claim for Microsoft, which made huge profits for many years, let alone for the financial industry, which is also marked by a lot of what look like monopoly rents, and these days accounts for roughly 30 percent of total corporate profits. Anyway, whether corporations deserve their privileged status or not, the economy is affected, and not in a good way, when profits increasingly reflect market power rather than production.

Here’s an example. As many economists have lately been pointing out, these days the old story about rising inequality, in which it was driven by a growing premium on skill, has lost whatever relevance it may have had. Since around 2000, the big story has, instead, been one of a sharp shift in the distribution of income away from wages in general, and toward profits. But here’s the puzzle: Since profits are high while borrowing costs are low, why aren’t we seeing a boom in business investment? And, no, investment isn’t depressed because President Obama has hurt the feelings of business leaders or because they’re terrified by the prospect of universal health insurance.

Well, there’s no puzzle here if rising profits reflect rents, not returns on investment. A monopolist can, after all, be highly profitable yet see no good reason to expand its productive capacity. And Apple again provides a case in point: It is hugely profitable, yet it’s sitting on a giant pile of cash, which it evidently sees no need to reinvest in its business.

Or to put it differently, rising monopoly rents can and arguably have had the effect of simultaneously depressing both wages and the perceived return on investment.

You might suspect that this can’t be good for the broader economy, and you’d be right. If household income and hence household spending is held down because labor gets an ever-smaller share of national income, while corporations, despite soaring profits, have little incentive to invest, you have a recipe for persistently depressed demand. I don’t think this is the only reason our recovery has been so weak — weak recoveries are normal after financial crises — but it’s probably a contributory factor.

Just to be clear, nothing I’ve said here makes the lessons of history irrelevant. In particular, the widening disconnect between profits and production does nothing to weaken the case for expansionary monetary and fiscal policy as long as the economy stays depressed. But the economy is changing, and in future columns I’ll try to say something about what that means for policy.

Government, War, and Hollow Principles


“Our primary long range interest in Geneva, however, is general and complete disarmament, designed to take place by stages, permitting parallel political developments to build the new institutions of peace which would take the place of arms. . . .

“While we proceed to safeguard our national interests, let us also safeguard human interests. And the elimination of war and arms is clearly in the interest of both.”

That was President John F. Kennedy speaking to the 1963 graduating class of American University —announcing that the human race was ready to move beyond war. This was the speech in which he revealed that talks on a Nuclear Test-Ban Treaty with the Soviet Union had begun, and that the U.S. was unilaterally suspending atmospheric nuclear testing.

Fifty years later, the words seem like an archaeological find — quaint, strange, shocking. Look, common sense! Perfectly preserved. Once upon a time, such a goal — disarmament, the end (good God!) of war itself —had political cred at the highest levels.

Kennedy even had the audacity to proclaim that peace wasn’t totally a matter of our enemy du jour, the Soviets, changing their behavior. “I also believe,” he said, “that we must reexamine our own attitudes, as individuals and as a nation, for our attitude is as essential as theirs.”

Politics that makes room for self-reflection? While he proceeds to bash the Communists for bad-mouthing the U.S., he calls their rhetoric “a warning to the American people not to fall into the same trap as the Soviets, not to see only a distorted and desperate view of the other side, not to see conflict as inevitable, accommodation as impossible, and communication as nothing more than an exchange of threats.”

This is politics outside the simple zone of winning and losing. Kennedy dared to suggest that that peace was complex, that it was not a mere matter of military strength and the power to dominate, and that “our enemy” was not subhuman. The American public was ready to hear this half a century ago. What happened? And more to the point, how do we return to this cutting edge of political sanity?

As I listened to Kennedy’s speech, which a number of people have pointed out to me recently, what struck me even more, perhaps, than the words themselves, was that the president seemed to be speaking from a position independent of the American and global military-industrial consensus. That this should stand out as unusual — that my inner political child should feel moved to ask, “Is a president allowed to do that?” — is truly unnerving.

Once upon a time, not all that long ago, the highest levels of American government were capable of representing more than just the status quo, and were not irrelevant to real social change. Once upon a time, principles stood independent of politics. It was always shaky, of course. The Kennedy presidency was flawed; the Vietnam War was set at simmer. But once upon a time, one could look for real values in the political arena . . . and find them.

What has happened in the intervening years has been a hollowing out of those principles and of democracy itself — a moral bottoming out, you might say. What has happened is that the military-industrial consensus has taken control. No more nonsense. War wins. We’re addicted to it.

“But any awake American can see that PRISM is only one sock on a long line of dirty laundry,” Erin Niemela wrote recently at Common Dreams. “The list of U.S. government abuses and failures to protect stretches far and wide. . . .

“While PRISM and the rest of the gang are individually sordid, when combined they are the track marks of a far more pervasive, widespread, life-wasting problem. One that has systematically attacked not just the Fourth Amendment, but also the First, Second, Fifth, Sixth, Eighth, and 10th. No matter how hard we advocate for the Fourth Amendment now, others will fall so long as this substance burns through the veins of the Republic.

“This is your government on war.”

Whatever the threats that emanate from beyond or within the national borders, the overwhelming condition that concerned citizens — the ones, for instance, in sync with Kennedy’s 1963 speech — must address is that the government itself is the problem, and its abuses both at home and abroad are only going escalate until its addiction to war is curbed. And the first step in this process is to declare: no future wars. The seductive rhetoric pushing “the next war” is a lie. It’s always a lie, concealing the addiction. The game stops here. No future wars!

Niemela proposes a constitutional amendment: “The American people, in accordance with the promotion of international justice, peace, human rights and dignity, hereby renounce the use of organized, armed force to resolve intra- and inter-state conflict; neither war nor war-making processes shall exist within the United States, or any place subject to their jurisdiction.”

David Swanson, in response, proposed enforcing the 1928 Kellogg-Briand Pact, which the United States along with more than 80 other nations signed, agreeing that the settlement of all disputes between signatory nations “shall never be sought except by pacific means.”

The precedent is there. I don’t doubt that the moral passion, in the U.S. and around the globe, is there as well. The idea of ending war can no longer be compromised. Can it regain the political presence it had 50 years ago? That part is up to us.

Robert Koehler is an award-winning, Chicago-based journalist and nationally syndicated writer. His new book, Courage Grows Strong at the Wound (Xenos Press) is now available. Contact him at, visit his website at or listen to him at Voices of Peace radio.

7 Institutions That Have Grown So Monstrously Big They Threaten to Destroy America

AlterNet [1] / By Richard Eskow, June 21, 2013

Bigger isn’t always better. From the Tower of Babel to Teddy Roosevelt’s trust-busting, that principle’s been enshrined in law and legend since the dawn of history. Have we forgotten the lesson?

Corporations, databases, storehouses of personal and institutional wealth all are expanding at ever-increasing speed, threatening to engulf our economy and our lives as they do. That’s the problem with Big Things: Once they reached a certain size, they keep on getting bigger.

Here are seven ways the runaway power of Bigger in finance and in data is threatening to overwhelm us all.

1. Bigger Corporations

Americans have known about the danger of overly large corporations since the founding of the Republic. “I hope that we shall crush in its birth the aristocracy of our monied corporations,” said Thomas Jefferson, “which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”

“The money powers prey upon the nation in times of peace and conspire against it in times of adversity,” Abraham Lincoln observed. “The banking powers are more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy.”

Even an unlikely populist, Grover Cleveland, said this: “As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear, or is trampled beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.”

Oversized corporate power is why Congress passed the Sherman Antitrust Act of 1890. It’s why Theodore Roosevelt broke up the railroad. When businesses become so large that competition’s squeezed out, everybody suffers.

And yet today we’re confronted with the largest corporations in history, with predictable, even inevitable, results. In real dollar terms, the minimum wage is less than half what it was in 1968. One of the main reasons for that is that most minimum-wage employees work for large corporations [3] who dominate both their labor markets and the political process.

The Census Bureau [4] reported in 2008 that 33 million Americans—more than 25 percent of the total workforce—worked for corporations with 10,000 employees or more. The largest employer is Walmart, with an astonishing 1,400,000 employees, followed by the company that owns Taco Bell, Pizza Hut and KFC, and then McDonald’s.

With that kind of clout it’s easy to keep wages low while doling out record payouts to executives and shareholders. Walmart, for example, paid $11.3 billion in dividends and share buybacks [3] last year. That comes to more than $8,000 per worker. McDonald’s shareholder payouts came to nearly $7,000 per worker.

What’s more, despite their PR campaigns, there’s no evidence that shoppers benefit by paying less for their goods. Walmart aggressively forces prices downward for its suppliers, sometimes below the cost of production. But the suppliers have to make up the difference somewhere, either by over-charging other stores or underpaying their own employees and suppliers.

Either way, it comes out of the public’s pocket in the end.

Companies like Walmart don’t create jobs, either. They take them from elsewhere, and frequently pay less in wages. A Pennsylvania study [5] found a correlation between the presence of Walmart and increases in county-wide poverty, which the authors speculated might have been because “Walmart stores destroy civic capacity in the communities in which they locate by driving out local entrepreneurs and community leaders.”

They can kill leadership at the national level, too.

2. Bigger Banks

The statistics on too-big-to-fail banks and financial institutions are staggering: The largest 0.2 percent of US banks—12 of them, altogether—control 69 percent of the industry’s total assets [6], while 98.6 percent of all banks held only 12 percent of assets.

The four biggest banks still control 83 percent of the derivatives market, and only 25 commercial banks—out of a total of 8,430 FDIC-insured commercial banks in the United States—control roughly 90 percent of the market.

With the exception of struggling Bank of America, the top five banks all grew even more [7] in the first quarter of this year. Richard Fisher, president of the Dallas Federal Reserve Bank, co-authored a plan [8] to address the unfair advantage these banks receive because everybody knows the government won’t let them fail.

And while the mega-banks tell us that customers can benefit from their “economies of scale,” customers have not seen lower rates or charges as the result of their extraordinary consolidation.

These banks are holding the economy and the public hostage to their own possible failure. That’s why they—and the bankers who work for them—were publicly notified [9] by the Attorney General of the United States that they needn’t fear prosecution for their crimes. He later tried to walk that statement back, but he had only articulated a policy that had long been obvious among observers and lawmakers.

Our largest banks are becoming bigger than the law.

3. Bigger Investors

Holding companies, hedge funds, and other institutions own more and more of the private-sector economy. That includes groups like Mitt Romney’s Bain Capital, which invests in everything from pharmacies to retail chains to homes for troubled teens.

Edward Snowden’s revelations about the NSA lifted the veil of secrecy surrounding government contractors like his last employer, Booz Allen Hamilton, which is owned by a holding company called the Carlyle Group. Booz Allen brought the Carlyle Group $5.9 billion in revenue last year. In a classic example of Bigger in action, it also announced a new national security deal in February worth $11 billion.

Mega-investors like Bain Capital and the Carlyle Group aren’t like entrepreneurs or investors of the past, who put money and effort into businesses they believed in and then built them to last. They want their payouts on the shortest possible timeline, so they push executives at the companies they own to make the bottom line look as good as possible.

Sometimes that means sacrificing the long-term good of the company for a fast-buck payout to these holding companies. That may be one of the reasons why so many American corporations are giving out so much in dividends and share buybacks, rather than investing in infrastructure and employees.

When investors get Bigger, they insist on getting paid Faster.

4. Bigger Charities

It should be no surprise that all of this, along with government policies toward taxation and other matters, is creating runaway levels of individual wealth. And as a few individuals amass extraordinary wealth, even charitable giving becomes a bigger problem.

The philanthropic world is now dominated by a few players. The Bill and Melinda Gates Foundation is the mega-player, with more than $34 billion in assets. That’s more than the next three foundations combined. As of 2011 [10], the top five foundations held nearly one-third as much in assets as the top 100 foundations put together. As foundations and other philanthropies expand, charitable organizations which are outside their funding protocols are less and less likely to receive funds.

Some players get Bigger within a niche. New York’s Robin Hood Foundation, originally funded by hedge fund donors, was given a great deal of authority over small donors’ funds to aid the region’s victims of Hurricane Sandy. Like similar foundations, Robin Hood has occasionally been used as a propaganda tool [11] for arguing that government “can’t do the job.”

That’s not charity. That’s ideology.

Using aggressive sales tactics and rough elbows, the Susan G. Komen Race for the Cure came to dominate the breast cancer charity world. It became controversial after suing other charities that used some of the same phrases or symbols, even when they would have seemed to be in the public domain. (The word “cure” and the color pink were the subjects of two such lawsuits.)

The Komen group then abruptly defunded Planned Parenthood and other service groups, seemingly for political reasons. The resulting controversy helped the debate in one very real sense: it provided an object lesson in the dangers of Bigger, even in the world of charity.

5. Bigger Corporate Data

The recent NSA scandals have revealed the dangers of Bigger Data. But that phenomenon’s closely linked to Bigger’s other areas of overgrowth, especially in finance and investment. The scandal and controversy surrounding Facebook’s IPO (initial public offering) offered a glimpse into the intersection of Mega-Banks, Mega-Investors, and Mega-Data.

Every large enterprise is now pursuing bigger data. A new private study [12] suggests that there continue to be fewer corporate data centers in the United States, but that each is correspondingly larger. Highly centralized databases leave businesses, economies and societies more vulnerable to disruptions caused by accidents, natural disasters, or acts of terror.

The Big Data vendors include Twitter, Facebook and Google. But they also include niche forms of Big Data, like banking. Newly launched banking investigations involve something called “dark pools [13],” an alternative form of trading that takes place outside the normal stock markets. There is now evidence that the banks and service companies whose data platforms provide this service have been “front-running” trades, using customer information from their data systems to enrich themselves.

Even news organizations are entering the data-selling business. For $2,000 a month, Thomson Reuters offers a service called “ultra-low latency [14]” which gives subscribers access to key economic reports two seconds before they’re released to the public. As Business Insider notes, “two seconds in … trading time is an eternity.” That’s because stock markets are computerized Big Data operations, too, and transactions can occur at nearly light-speed.

Big Data corporations are typically currently valued well in excess of what its real revenues would suggest. That’s certainly true of Facebook, because the world of Bigger believes in the power of data—and Facebook has it.

Most Facebook users would probably say that its interface is hard to use. Its founders aren’t wealthy because they’re brilliant programmers. They’re not visionaries, either. They thought they were creating a relatively small set of social networks for colleges. But they stumbled onto something powerful—the power of data that users volunteered about themselves—and they exploited it aggressively before anyone else could compete with them.

That’s how the world of Bigger works. You don’t need to be the best. You need to be the first. Then you need to be aggressive in order to stay the biggest. The forces of Bigger will do the rest.

6. Bigger Government Data

Mega-data is changing our government, too. The Obama administration’s “Big Data Initiative [15]” suggests a mentality which believes Big Data is more useful than other forms of information.

Big Data has already created a national security apparatus of staggering proportions, as Dana Priest and William Arkin reported [16] for the Washington Post. Large databases can provide enormously useful information, but they can be a distraction too. As Priest and Arkin observed, “lack of focus, not lack of resources,” prevented law enforcement officials from stopping the Fort Hood shootings.

That can happen when too much data is presented without adequate screening. Reports from a smaller data initiative—perhaps even an old-fashioned warrant and search on the radical cleric with whom he was corresponding—might have been much more effective in preventing this tragedy.

We should learn from experience before assuming that the best thing to do with Big Data is make it even bigger. But that’s not the plan: Amazon, one of the corporate world’s biggest data players, has been hired to create a “private cloud” system for the CIA at a cost of $600 billion. That’s more than half a trillion dollars. For what, exactly? We don’t know. Perhaps to ensure that the same technology which keeps recommending those novels you don’t want to read guides the thinking of our intelligence community.

With Bigger Data comes greater temptation. Thanks to the Center for Media and Democracy’s review of [17] Freedom of Information Act documents, we now know that at least one national security “fusion center” strayed from its anti-terrorism mission in order to analyze data on citizens conducting peaceful protests. Why? Because Jamie Dimon, the CEO of Bigger bank JPMorgan Chase, was coming to town and didn’t want to confront protesters.

That’s how Bigger works. Money, data and influence can intersect in unexpected and harmful ways.

7. Bigger Cronyism

As institutions and databases become larger, the temptations of power become bigger too. The Carlyle Group has been able to use its money to attract government figures from both parties, including former President George H. W. Bush and several senior members of the Clinton administration.

For his part, former President Clinton dealt for years with billionaire Ron Burkle, who offered him what the New York Times described [18] as “the potential to make tens of millions of dollars without great effort and at virtually no risk.” For her part, former Secretary of State and leading presidential contender Hillary Clinton was on the board of directors of Walmart.

Big Power Often Follows Big Money

The Clinton, Bush and Obama Treasury Departments and regulatory agencies each became revolving-door operations for Wall Street. Officials and bank executives must have grown accustomed to seeing one another on the Acela train that runs from New York to Washington. The ones headed south are taking government jobs, where their friends will be well protected.

The ones headed north are cashing in.


We’ve seen the spectacle of three former presidents, two Republicans and a Democrat, unable to resist the lure of big wealth. We’ve seen the 21st century’s two sitting presidents, one from each party, unable to resist the power of big data. With power increasingly corrupted by ever-bigger forces, who will speak for the individual citizens of this country?

Obama advisor Cass Sunstein attributes a wise quote to legal scholar Karl Llewellyn: “Technique without morals is a menace, but morals without technique is a mess.” But while Sunstein is presumably arguing against the latter, today’s more urgent and difficult task is to put an end to the former.

That’s why we need a new system of checks and balances. We need to recognize that Bigger needs to be tempered by fairer, that top-down control needs to be replaced with lateral decision-making, that a centralized financial, corporate, and government complex must never replace the smaller and more humane systems of democracy and small-business free enterprise.

The universe offers us a warning in the astronomical phenomenon known as a “singularity,” or “black hole.” If a star becomes too large, it begins to draw everything around it into its gravity field. Nothing can escape the hole around it, not even light. Then the star begins to collapse in upon itself, compressed by the irreversible force of its own mass growing greater and greater.

We don’t deserve Bigger, we deserve better.

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Meet the Elite Business and Think-Tank Community That’s Doing Its Best to Control the World [1] / By Andrew Gavin Marshall posted on June 19, 2013

“The corporate-policy network is highly centralized, at both the level of individuals and that of organizations. Its inner circle is a tightly interwoven ensemble of politically active business leaders…” — Academics William K. Carroll and Jean Philippe Sapinski [4]

In an article [5] titled “The Global Corporate Elite” in the journal International Sociology, William K. Carroll and Jean Philippe Sapinski examined the relationship between the corporate elite and the emergence of a “transnational policy-planning network,” beginning with its formation in the decades following World War II and speeding up in the 1970s with the creation of “global policy groups” and think tanks such as the World Economic Forum, in 1971, and the Trilateral Commission, in 1973, among many others.

The function of such institutions was to help mobilize and integrate the corporate elite beyond national borders, constructing a politically “organized minority.” These policy-planning organizations came to exist as “venues for discussion, strategic planning, discourse production and consensus formation on specific issues,” as well as “places where responses to crises of legitimacy are crafted,” such as managing economic, political, or environmental crises where elite interests might be threatened. These groups also often acted as “advocates for specific projects of integration, often on a regional basis.” Perhaps most importantly, the organizations “provide bridges connecting business elites to political actors (heads of states, politicians, high-ranking public servants) and elites and organic intellectuals in other fields (international organizations, military, media, academia).”

One important industry association, according to researchers Carroll and Carson in the journal Global Networks (Vol. 3, No. 1, 2003), is the International Chamber of Commerce. Launched by investment bankers in 1919, immediately following WWI, the Paris-based Chamber groups roughly 7,000 member corporations together across 130 countries, adhering to largely conservative, “free market” ideology. The “primary function” of the ICC, write Carroll and Carson, “is to institutionalize an international business perspective by providing a forum where capitalists and related professionals… can assemble and forge a common international policy framework.”

Another policy group with outsized global influence is the Bilderberg group, founded between 1952 and 1954, which provided “a context for more comprehensive international capitalist coordination and planning.” Bringing together roughly 130 elites from Western Europe and North America at annual closed meetings, “Bilderberg conferences have furnished a confidential platform for corporate, political, intellectual, military and even trade-union elites from the North Atlantic heartland to reach mutual understanding.”

As Valerie Aubourg examined in an article for the journal Intelligence and National Security (Vol. 18, No. 2, 2003), the Bilderberg meetings were organized largely at the initiative of a handful of European elites, with heavy financial backing from select American institutions including the Rockefeller Foundation, the Ford Foundation and the CIA. The meetings incorporate leadership from the most prominent national think tanks, such as the Council on Foreign Relations, Brookings Institution, Carnegie Endowment and others from across the North Atlantic ‘community.’

Hugh Wilford, writing in the journal Diplomacy & Statecraft (Vol. 14, No. 3, 2003), identified major philanthropic foundations such as the Rockefeller, Ford, and Carnegie foundations as not only major sources of funding but also providers for much of the leadership of the Bilderberg meetings, which saw the participation of major industrial and financial firms in line with those foundations (David Rockefeller of Chase Manhattan is a good example). Bilderberg was a major force in helping to create the political, economic and strategic consensus behind constructing a common European market.

With the support of these major foundations and their leadership, the Bilderberg meetings became a powerful global tool of the elites, not only in creating the European Union but in designing the process of globalization itself. Will Hutton, a former Bilderberg member, once referred to the group as “the high priests of globalization,” and a former Bilderberg steering committee member, Denis Healey,once noted [6]: “To say we were striving for a one-world government is exaggerated, but not wholly unfair…we felt that a single community throughout the world would be a good thing.”

The large industrial foundations have played a truly profound – and largely overlooked – role in the shaping of modern society. The ‘Robber Baron’ industrial fortunes of the late 19th century – those of Morgan, Rockefeller, Carnegie, Harriman, Vanderbilt, etc. – sought to shape a new order in which they would maintain a dominant influence throughout society. They founded major American universities (often named after themselves) such as Vanderbilt, or the University of Chicago which was founded by John D. Rockefeller.

It was through their institutions that they sought to produce new elites to manage a new society, atop of which they sat. These universities became the harbingers of modern social sciences, seeking to “reform” society to fit the needs of those who dominated it; to engage in social engineering with the purpose of social control. It was in this context that the Carnegie Corporation, the Rockefeller Foundation, and later the Ford Foundation and others were founded: as engines of social engineering. One of their principal aims was to shape the development of the social sciences – and their exportation around the world to other industrial and imperial powers like Great Britain, and beyond. The social sciences were to facilitate the “scientific management” of society, and the foundations were the patrons of “social control [7].”

The Rockefeller, Carnegie and Ford foundations were instrumental in providing funding, organization and personnel for the development of major American and international think tanks such as the Council on Foreign Relations, which became essential to the emergence of a dominant and entrenched U.S. business class linking academia, political, strategic, corporate and financial elites. The Rockefeller and Ford foundations in particular constructed the field of modern political science and “Area Studies” with a view to educating a class of people [8] who would be prepared to help manage a global empire.

They were also prominent in developing the educational system for black Americans designed to keep them relegated to labor and “vocational” training. They helped found many prominent universities in Africa, Asia and Latin America to train indigenous elites with a “Western” education in the social sciences, to ensure continuity [9] between a domestic and international elite, between core and periphery, empire and protectorate.

Another major policy planning group is the Trilateral Commission, created out of the Bilderberg meetings as a separate transnational think tank and founded by Chase Manhattan CEO (and Chairman of the Council on Foreign Relations) David Rockefeller along with academic-turned-policymaker Zbigniew Brzezinski in 1973. The Trilateral Commission linked the elites from Western Europe, North America and Japan (hence “trilateral”), and it now also includes members from China, India and a range of other Pacific-East Asian countries.

Consisting of a membership of roughly 350 individuals from finance, corporations, media, think tanks, foundations, academia and political circles, the Trilateral Commission (TC) has been immensely influential as a forum facilitating the development and integration of a “transnational elite.” The aim of the TC was “to foster closer cooperation [10] among these core industrialized areas of the world with shared leadership responsibilities in the wider international system.”

The most famous report issued by the Trilateral Commission in the mid-1970s suggested that due to the popular activism of the 1960s, there was a “crisis of democracy” that it defined as an “excess of democracy [11],” which needed to be reduced in order for “democracy to function effectively.” According to the Trilateral Commission, what was needed was increased “apathy and noninvolvement on the part of some individuals and groups” to counter the “crisis” being caused by “a highly educated, mobilized, and participant society.”

Moving elsewhere, the World Economic Forum, founded in 1971, convenes annually in Davos, Switzerland and was originally designed “to secure the patronage of the Commission of European Communities, as well as the encouragement of Europe’s industry associations” and “to discuss European strategy in an international marketplace.” The WEF has since expanded its membership and mandate, as Carroll and Carson noted, “organized around a highly elite core of transnational capitalists (the ‘Foundation Membership’) – which it currently limits to ’1000 of the foremost global enterprises’.” The meetings include prominent individuals from the scientific community, academics, the media, NGOs and many other policy groups.

Another major policy planning group emerged in the mid-1990s with an increased focus on environmental issues, called the World Business Council for Sustainable Development (WBCSD), which “instantly became the pre-eminent business voice on the environment” with a 1997 membership of 123 top corporate executives, tasked with bringing the “voice” of big business to the process of international efforts to address environmental concerns (and thus, to secure their own interests).

Among other prominent think tanks and policy-planning boards helping to facilitate and integrate a transnational network of elites are many nation-based organizations, particularly in the United States, such as with the Council on Foreign Relations, the Brookings Institution and the Center for Strategic and International Studies (CSIS), among many others. The advisory boards to these organizations provide an important forum through which transnational elites may help to influence the policies of many separate nations, and most importantly, the world’s most powerful nation: the United States.

The Council on Foreign Relations, founded in 1921, refers to itself as “an independent, nonpartisan membership organization, think tank, and publisher,” with roughly 4,700 members. It is largely based in New York with affiliate offices in Washington D.C. and elsewhere. The CFR is, and has been, at the heart of the American foreign policy establishment, bringing together elites from academia, government, the media, intelligence, military, financial and corporate institutions.

The CFR worked in close cooperation with the U.S. government during World War II to design the post-War world over which America would reign supreme. The Council was active in establishing the “Grand Areas [12]” of the American Empire, and in maintaining extensive influence [13] over the foreign policy of the United States.

As Carroll and Carson noted, there is a prominent relationship between those individuals who sit on multiple corporate boards and those who sit on the boards of prominent national and transnational policy-planning groups, “suggesting a highly centralized corporate-policy network.”

Studying 622 corporate directors and 302 organizations (five of which were the major policy-planning groups: ICC, Bilderberg, Trilateral Commission, World Economic Forum and World Business Council for Sustainable Development), Carroll and Carson assessed this network of transnational elites with data leading up to 1996, and concluded: “The international network is primarily a configuration of national corporate networks, integrated for the most part through the affiliations of a few dozen individuals who either hold transnational corporate directorships or serve on two or more policy boards.”

Out of the sample of 622 individuals, they found roughly 105 individuals (94 “transnational corporate linkers” and 11 others “whose corporate affiliations are not transnational but who sit on multiple global policy boards”) making up “the most immediate structural contributions to transnational class formation.” At the “core” of this network were 17 corporate directors, primarily European and North American, largely linked by the transnational policy groups, with the Trilateral Commission as “the most centrally positioned.” This network, they noted, “is highly centralized in terms of the individuals and organizations that participate in it.”

In undertaking a follow-up study of data between 1996 and 2006, published in the journal International Sociology (Vol. 25, No. 4, 2010), Carroll and Sapinski expanded the number of policy-planning groups from five to 11, including the original five (ICC, Bilderberg, TC, WEF, and WBCSD), but adding to them the Council on Foreign Relations (through its International Advisory Board), the UN Global Compact (through its advisory board), the European Round Table of Industrialists (ERT), founded in 1983, the EU-Japan Business Round Table, the Transatlantic Business Dialogue, and the North American Competitiveness Council.

The results of their research found that among the corporate directors, “policy-board membership has shifted towards the transnationalists, who come to comprise a larger segment of the global corporate elite,” and that there was a growing group of elites “made up of individuals with one or more transnational policy-board affiliations.” As Carroll and Sapinski concluded:

“The corporate-policy network is highly centralized, at both the level of individuals and that of organizations. Its inner circle is a tightly interwoven ensemble of politically active business leaders; its organizational core includes the Trilateral Commission, the Bilderberg Conference, the European Round Table of Industrialists and the World Business Council for Sustainable Development, surrounded by other policy boards and by the directorates of leading industrial corporations and financial institutions based in capitalism’s core regions.”

Organizations like the European Round Table of Industrialists (ERT) are not think tanks, but rather, industry organizations (exclusively representing the interests and individuals of major corporations), wielding significant influence over political and social elites. As Bastiaan van Apeldoorn wrote in the journal New Political Economy (Vol. 5, No. 2, 2000), the ERT “developed into an elite platform for an emergent European transnational capitalist class from which it can formulate a common strategy and – on the basis of that strategy – seek to shape European socioeconomic governance through its privileged access to the European institutions.”

In 1983, the ERT was formed as an organization of 17 major European industrialists (which has since expanded to several dozen members), with the proclaimed objective being “to revitalize European industry and make it competitive again, and to speed up the process of unification of the European common market.” Wisse Dekker, former Chairman of the ERT, once stated: “I would consider the Round Table to be more than a lobby group as it helps to shape policies. The Round Table’s relationship with Brussels [the EU] is one of strong co-operation. It is a dialogue which often begins at a very early stage in the development of policies and directives.”

The ERT was a central institution in the re-launching of European integration from the 1980s onward, and as former European Commissioner (and former ERT member) Peter Sutherland stated, “one can argue that the whole completion of the internal market project was initiated not by governments but by the Round Table, and by members of it… And I think it played a fairly consistent role subsequently in dialoguing with the Commission on practical steps to implement market liberalization.” Sutherland also explained that the ERT and its members “have to be at the highest levels of companies and virtually all of them have unimpeded access to government leaders because of the position of their companies… So, by definition, each member of the ERT has access at the highest level to government.”

Other notable industry associations include the Canadian Council of Chief Executives [14] (CCCE), formerly called the Business Council on National Issues (BCNI), a group comprised of Canada’s top 150 CEOs who were a major force for the promotion and implementation of the North American Free Trade Agreement (NAFTA). The CCCE remains one of the most influential “interest groups” in Canada.

In the United States there are prominent industry associations like the Business Council, the Business Roundtable, and the Financial Services Forum. The Business Council describes itself as “a voluntary association of business leaders whose members meet several times a year for the free exchange of ideas both among themselves and with thought leaders from

“Free Trade” Was Never Really About Trade

Published on Thursday, June 20, 2013 by Common Dreams

by Stan Sorscher

We need to think differently about trade.

First, let me say that I am 100% in favor of trade. Trade is when we do what we do best, they do what they do best, and we trade. Trade, done right, will raise living standards.

If trade is good, then free trade must be better, right? So consider this old joke about “free trade.”

  • It’s not free.
  • It’s not trade.

Twenty years after NAFTA we can add that it doesn’t work. It’s bad for millions of workers, families and communities around the world.

“Free trade” is not free. Our free trade policy encourages production to leave the country. We’ve lost millions of manufacturing jobs. More than 60,000 manufacturing plants were closed between 2000 and 2010 as production moved overseas. These costs are real.

“Free trade” is not trade. Basically, trade is when each country makes things of value for export and gets things of comparable value in imports. In modern globalization, other countries manipulate their currencies, use tax strategies that distort exports and imports, and apply effective well-designed industrial policies to build manufacturing capacity. They export more products to us, and import fewer products from us.

Our trade deficits since NAFTA are over $8 trillion. With trade deficits this large, we are not trading. We are letting other countries produce for us. We borrow, de-industrialize, and ultimately fail to capitalize on future production opportunities. That’s not trade. That’s getting picked clean.

Additionally, language in trade agreements is not about “trade,” so much as protecting investors. The most charitable explanation I’ve heard for this is global businesses need strong “rule of law” in countries with weak legal systems. They can’t risk investing in Mexico, Peru or Jordan if their property could be taken from them. Patents and intellectual property must be protected from modern global piracy of one form or another. OK. Sure. Investors need rights.

In America, we solved the problem of protecting investor rights. We created rules for commerce among the 50 states. We innovated and helped investors prosper, AND we protected clean water and clean air AND we made social investments in schools, roads, power, arts and sciences, AND we set labor standards so workers could share in gains from productivity. Well, until recently, arguably.

The European Union also solved that problem, protecting investor rights among their 17 or 22 or 27 countries or whatever that number is, AND they invest in research and development AND educate their children AND promote sustainable energy AND share the gains from productivity with workers. Well until recently, arguably.

Modern democracies built policy solutions over generations of political engagement. We achieved an upward spiral, raising living standards for the most part.

However, free trade agreements pursue a very different political process, driven by global companies, and aimed primarily at investor interests.

Free trade agreements are bad for millions of people because they are not really about trade. More importantly, they limit the political process so investors are relieved of responsibility for protecting the environment OR recognizing labor rights or human rights, OR dealing with public health OR worrying about prudent financial regulation.

The overall result is downward pressure that weakens our political and social values, eroding civil society and public interest in all countries.

My Congressman made a compelling argument for public interest, based on his personal experience as a doctor in Africa. Global pharmaceutical companies use patents to charge prices far above market levels. We expect a public good in return. This goes horribly wrong when millions of people with treatable diseases are denied access to life-saving medicine because trade agreements favor investors over people. This is exactly the kind of question we want elected officials to resolve. That’s why we have democracies.

Instead, under “free trade” agreements, a trade tribunal will make those policy decisions for us and for millions of vulnerable people around the world. These shadowy tribunals will enforce rules written into “free trade” agreements, which are all about investor rights, not about trade and not about public interests.

Show me language in free trade deals that protects the environment. Show me language for worker standards. Show me free trade provisions for human rights, public health.

Here’s an easy one – show me any action to stop currency manipulation, which distorts trade, subsidizes global companies who produce offshore, and makes a mockery of any textbook principles of legitimate trade.

We are negotiating two giant new “free trade” agreements, which are not about trade. They are about global governance. One is called the Trans-Pacific Partnership, or TPP. So far, 11 Pacific-rim countries will be included. The other huge deal is for Europe.

The defining characteristic of these agreements is that investor rights will have priority over public interest. They weaken Democracy. They are not really about trade.

If the TPP and the European deal are signed, we will have locked in this new 21st century colonialism for generations to come.

It was never really about trade.

Stan Sorscher is on staff at Society for Professional Engineering Employees in Aerospace (SPEEA), a labor union representing aerospace engineers, scientists and technical workers, and is President of the Washington Fair Trade Coalition. He is active in trade, economic development, and other public policy issues.  Follow Stan on Twitter:

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