Economic Elites Rule

From Talking Points Memo:

Asking “[w]ho really rules?” researchers Martin Gilens and Benjamin I. Page argue that over the past few decades America’s political system has slowly transformed from a democracy into an oligarchy, where wealthy elites wield most power.

Using data drawn from over 1,800 different policy initiatives from 1981 to 2002, the two conclude that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of or even against the will of the majority of voters.

TPM

TPM does an interview with one of the authors, Professor Martin Gilens of Princeton.

If you had 30 seconds to sum up the main conclusion of your study for the average person, how would you do so?

I’d say that contrary to what decades of political science research might lead you to believe, ordinary citizens have virtually no influence over what their government does in the United States. And economic elites and interest groups, especially those representing business, have a substantial degree of influence. Government policy-making over the last few decades reflects the preferences of those groups — of economic elites and of organized interests.

You say the United States is more like a system of “Economic Elite Domination” and “Biased Pluralism” as opposed to a majoritarian democracy. What do those terms mean? Is that not just a scholarly way of saying it’s closer to oligarchy than democracy if not literally an oligarchy?

People mean different things by the term oligarchy. One reason why I shy away from it is it brings to mind this image of a very small number of very wealthy people who are pulling strings behind the scenes to determine what government does. And I think it’s more complicated than that. It’s not only Sheldon Adelson or the Koch brothers or Bill Gates or George Soros who are shaping government policy-making. So that’s my concern with what at least many people would understand oligarchy to mean. What “Economic Elite Domination” and “Biased Pluralism” mean is that rather than average citizens of moderate means having an important role in determining policy, ability to shape outcomes is restricted to people at the top of the income distribution and to organized groups that represent primarily — although not exclusively — business.

An interesting addendum to this study is a brief article by Kathleen Geier for the Washington Monthly in which she calls attention to a White House meeting with teen-age billionaire philanthropists:

Today’s New York Times — in the Fashion and Style section, but of course! — reports on a White House meeting of “100 young philanthropists and heirs to billionaire family fortunes.” Some of the people quoted in the article are as young as 19, and they are from family names you’ll recognize: Marriott, Pritzker, Rockefeller, etc.

The whole article is creepy beyond belief. Let me count a few of the ways: And, do read!

Of course it’s nice that the young want to find good ways to help others but the point of living in a democratic society is that we-the-people should be deciding the major items on the agenda.  If the wealthy want to help around the edges, fine.  But when the billionaire few call the shots what you get is what they want.

 


Gabo, Gone

Gabriel García Márquez, the Colombian novelist whose “One Hundred Years of Solitude” established him as a giant of 20th-century literature, died on Thursday at his home in Mexico City. He was 87.

Magic realism, he said, sprang from Latin America’s history of vicious dictators and romantic revolutionaries, of long years of hunger, illness and violence. In accepting his Nobel, Mr. García Márquez said: “Poets and beggars, musicians and prophets, warriors and scoundrels, all creatures of that unbridled reality, we have had to ask but little of imagination. For our crucial problem has been a lack of conventional means to render our lives believable.”

NY Times

Maybe this will be the year to tackle Cien Años de Soledad in the original, though Gregory Rabassa’s translation is superb.


President Carter Adds His No

In an open letter to President Obama, former president Jimmy Carter put it plainly”

“You stand on the brink of making a choice that will define your legacy on one of the greatest challenges humanity has ever faced — climate change,” reads the letter from Carter and nine other Nobel Peace Prize recipients. “As you deliberate the Keystone XL tar sands pipeline, you are poised to make a decision that will signal either a dangerous commitment to the status quo, or bold leadership that will inspire millions counting on you to do the right thing for our shared climate.”

Talking Points Memo  and Bloomberg can help you out on the celebrity No list, if you like.


Protesting the Corporate Tax Breaks/Evasions

Some working folks took to the street yesterday to point out the hidden obvious — the big get away with big breaks, while the little guy east dust.

City nurses, janitors and other workers marched to Twitter’s headquarters on tax day Tuesday to deliver a symbolic tax bill for tens of millions of dollars for the “corporate tax giveaway” that helped persuade the company to move to San Francisco’s Mid-Market area

SF Gate

SEIU Twitter

Protesters target Apple for offshore tax shelters

Protesters dressed up as Apple Store employees in telltale blue t-shirts marched in front of the Union Square store Tuesday morning, calling on Apple to pay taxes on the $102 billion they said the company holds overseas.

The protest called on tech’s ethos of making the world a better place. Flyers handed out at the protest to shoppers passing by the store pointed them to www.techcandobetter.org, which pushes for better wages for security guards at tech companies.

SEIU USWW, the union that organized the march, represents security guards and janitors at many companies, not just tech, in San Francisco and the East Bay.

SF Gate


CO2 Accumulating Faster than Ever

Front page around the world about the latest IPCC report/warning.  It’s bad and getting badder….

The countries of the world have dragged their feet so long on global warming that the situation is now critical, experts appointed by the United Nations reported Sunday, and only an intensive worldwide push over the next 15 years can stave off potentially disastrous climatic changes later in the century.

NY Times

Global greenhouse gas emissions over the past decade were the “highest in human history”, according to the world’s leading scientific body for the assessment of climate change. Without further action, temperatures will increase by about 4 to 5C, compared with pre-industrial levels, it warns, a level that could reap devastating effects on the planet.

The Independent

Though it’s small solace, innovations keep coming.  Here’s one from Seattle.

At the end of last week, the Federal Energy Regulatory Commission gave the go-ahead for a 10-year project testing our ability to generate electricity from the movement of the ocean.

The license permits Public Utility District No. 1 of Snohomish County to install two underwater turbines in the Admiralty Inlet near Seattle, Washington. The turbines will be provided by OpenHydro, and should produce 300 kilowatts a piece. Each turbine is nearly 20 feet high and will be mounted to the sea floor by triangular bases, about 200 feet underwater. They’re designed to generate power over a range of water flow velocities regardless of which direction the tide is flowing. Two 7,000 foot cables will carry the electricity they generate to shore.

Climate Progress

 

 


Free Markets, Not So Free –Again

Every few weeks we get another example of how the deified Free Markets of the Western World are not so free at all.  Free markets suppose that information about the goods being bought and sold is full, and that all interested parties have access to it, so that a ‘fair’ agreement can be reached between seller and buyer as to its value.

Full knowledge about the goods being sold is the first thing a budding entrepreneur seeks to hide.  The most recent way to do this is through complexification:  make a financial derivative so complex that no one can understand it, then pitch it hard enough and the buyer goes on hope and greed, never mind the knowing.

Books Flash BoysMichael Lewis, in his newest book, Flash Boys, shows us another cohort of free-market fanatics who sell the line and don’t believe in it at all:  high-speed traders.  Throw enough money and technology to sneak a peak and jump the line in trades, making pennies per share for multi-million share trades and a very nice profit happens — at the expense of those who, not knowing, pay a little “value-stolen” tax.

Lewis appeared on 60 Minutes Sunday, March 30, 2014 in a piece called “Is the U.S. Stock market rigged?

High-frequency traders, big Wall Street firms and stock exchanges have spent billions to gain an advantage of a millisecond for themselves and their customers, just to get a peek at stock market prices and orders a flash before everyone else, along with the opportunity to act on it.

Michael Lewis: The insiders are able to move faster than you. They’re able to see your order and play it against other orders in ways that you don’t understand. They’re able to front run your order.

Steve Kroft: What do you mean front run?

Michael Lewis: Means they’re able to identify your desire to, to buy shares in Microsoft and buy ‘em in front of you and sell ‘em back to you at a higher price. It all happens in infinitesimally small periods of time. There’s speed advantage that the faster traders have is milliseconds, some of it is fractions of milliseconds. But it”s enough for them to identify what you’re gonna do and do it before you do it at your expense.

Steve Kroft: So it drives the price up.

Michael Lewis: So it drives the price up, and in turn you pay a higher price.

Lewis also had a compressed version of the book in the Sunday New York Times Magazine, April 6, 2014  with much more of the technical details of how the skimming worked.

Katsuyama and his team did measure how much more cheaply they bought stock when they removed the ability of some other unknown trader to front-run them. For instance, they bought 10 million shares of Citigroup, then trading at roughly $4 per share, and saved $29,000 — or less than 0.1 percent of the total price. “That was the invisible tax,” Park says. It sounded small until you realized that the average daily volume in the U.S. stock market was $225 billion. The same tax rate applied to that sum came to nearly $160 million a day. “It was so insidious because you couldn’t see it,” Katsuyama says. “It happens on such a granular level that even if you tried to line it up and figure it out, you wouldn’t be able to do it. People are getting screwed because they can’t imagine a microsecond.”

Joe Nocera, at the Times, is impressed with the detective work of the small group who figured out what was happening and came up with a solution, of sorts, to keep the high-speed traders at the same speed as everyone else, though he thinks Lewis tells a story too perfectly at times.

William Alden at the Times’ “Deal Book” has a short precis of the book and alerts us to a live yelling match on CNBC between William O’Brien, the president of the BATS Global Markets exchange, who was clearly enraged and Lewis and Katsuyama.

O’Brien ought to be yelling as investigations of the practice have been begun in multiple places, one of which will certainly make changes to the legality of the peep-hole these traders have enjoyed for years.

It’s all pretty damned interesting.  Probably won’t get people to the barricades but it may be another straw in the growing bale of perception that wealth creation is more and more a rigged game, whose rules are written by the riggers and their hired politicians.


Mud is predictable and was

Eagan has it absolutely right:

DON’T tell me, please, that nobody saw one of the deadliest landslides in American history coming. Say a prayer or send a donation for a community buried under a mountain of mud along a great river in Washington State, the Stillaguamish. Praise the emergency workers still trying to find a pulse of life in a disaster that left 25 people dead and 90 missing.

But enough with the denial, the willful ignorance of cause and effect, the shock that one of the prettiest valleys on the planet could turn in a flash from quiet respite in the foothills of the North Cascades to a gravelly graveyard.

And, as he says, the rain may have been an Act of God but the logging that changed forest to post-forest sponge was not

NYTimes;Eagan


Death by Pollution Soaring

This ain't dusk folks, it's pollution in Guangdong Province, China (Credit Alex Lee/Reuters )

This ain’t dusk folks, it’s pollution in Guangdong Province, China (Credit Alex Lee/Reuters )

“From taxi tailpipes in Paris to dung-fired stoves in New Delhi, air pollution claimed seven million lives around the world in 2012, according to figures released Tuesday by the World Health Organization. More than one-third of those deaths, the organization said, occurred in fast-developing nations of Asia, where rates of cardiovascular and pulmonary disease have been soaring.

Around the world, one out of every eight deaths was tied to dirty air, the agency determined — twice as many as previously estimated. Its report identified air pollution as the world’s single biggest environmental health risk.

… The report found that those who are most vulnerable live in a wide arc of Asia stretching from Japan and China in the northeast to India in the south.

Exposure to smoke from cooking fires means that poor women are especially at risk, the agency said

Indoor air pollutants loomed as the largest threat, involved in 4.3 million deaths in 2012, while toxic air outdoors figured in 3.7 million deaths, the agency said. Many deaths were attributed to both.

See New York Times: Jacobs and Johnson


Yee Indicted in Major FBI Sweep

Update: The dollar speaks!  This is about as big, and ugly, as it gets.

Yee, a Democrat who represents half of San Francisco and most of San Mateo County, was one of 26 people ensnared in a five-year federal investigation that targeted Raymond “Shrimp Boy” Chow, a notorious Chinatown gangster who had claimed to have gone straight, officials said.

An outspoken advocate of gun control and open government, Yee is charged with conspiring to traffic in firearms as well as six counts of scheming to defraud citizens of honest services. He has not commented on the allegations.

SF Gate (With many more links)

I am always suspicious about entrapment cases but what is surely true here is that Lee was entrapped by the need not for personal wealth, at least in the beginning, but for campaign money.  The stories about hours spent, arms twisted, promises made in order to make the daily take are enough to fill the Library of Congress — and ought to be doing so.

*

Wow!  For a moderately interested observer of San Francisco politics this comes as a surprise.

State Sen. Leland Yee has been indicted for public corruption as part of a major FBI operation Wednesday morning spanning the Bay Area, law-enforcement sources said, casting yet another cloud of corruption over the Democratic establishment in the state Legislature and torpedoing Yee’s aspirations for statewide office in California.

Mercury News


Thailand Elections Annulled

Whew!  The turmoil in Thailand just got turned up a notch, and no sign of things cooling down…

Thailand’s Constitutional Court on Friday annulled last month’s general election, leaving the country in political limbo without a full government and further undermining a prime minister faced with impeachment over a failed rice subsidy scheme.

Weakened by five months of unrest, Prime Minister Yingluck Shinawatra is expected to defend herself before an anti-corruption commission by March 31, and a decision to seek her impeachment could come soon after that, with the Senate expected to take up the matter quickly.

As the crisis deepens, there is a growing risk that the “red shirt” supporters of Yingluk and her brother, ex-premier Thaksin Shinawatra could confront their opponents in the streets, plunging Thailand into a fresh round of political violence.

NY Times: Sawitta Lefevre