Tag Archives: Taibbi

Candidates Routinely Threaten Wall Street, Follow Through with Little More than a Stern Scolding

In this post, Part 2 in a series on Democratic presidential candidate Hillary Clinton, Emilio da Costa documents some of the actions that President Barack Obama has taken in the interests of the very wealthy. Emilio, who holds a master’s degree in City and Regional Planning from Berkeley and a bachelor’s degree in Urban Studies from Stanford, argues that Clinton is likely to follow suit – she has much deeper ties to Wall Street than to those whose votes she will be seeking on the campaign trail.

 Part 1 of the series, which focused on Obama’s political appointments, can be found here.

Emilio da Costa

Emilio da Costa

As was required at the time, Obama made promises during his campaign to rein in Wall Street and introduce regulatory reforms to the financial industry. All of the grumbling about Obama’s tax policy being socialist makes it hard to believe the extent to which he supported legislation that so disproportionately benefited the very wealthy. Obama not only extended the Bush tax cuts that he said he would repeal, but in the case of the estate tax, supported the even more regressive policy of lowering the rate and raising the exemption limit in 2010’s $858 billion tax-cut legislation. Although Democrats claim they were forced to compromise on a 35% rate with a $5 million per-person exemption to prevent a worse outcome in the future, if no law were to have passed that year, a 55% rate with a $1 million exemption would have taken effect. When introduced, the exemption limit of $5 million meant that only 0.2 percent of all estates would be eligible to owe any tax, the smallest percentage since 1934 – except for 2010, which Bush’s 2001 tax-cut legislation mandated would be totally estate-tax-free. Days after Obama signed the 2010 legislation, while interviewing Chris Hedges for Democracy Now, Amy Goodman summarized the impacts more generally: “At least a quarter of the tax savings under the deal will go to the wealthiest one percent of the population. The only group that will see its taxes increase are the nation’s lowest-paid workers.” During this interview Hedges argues that “one of the most pernicious things that Obama did in this tax bill was reduce contributions to Social Security, because of course that’s next on the target.” With Obama’s 2013 budget plan having cut Social Security and Medicare by much more than the GOP alternative, it appears Hedges’s predictions were well-founded.

Similarly, Clinton has been diligently working to pander to the masses as a candidate with a tough stance on white-collar crime while at the same time assuring her most devoted backers that they have nothing to worry about. In response to this delicate balancing act she has embarked upon, within days of Clinton announcing her entry into the presidential race, Matt Taibbi wrote a piece for Rolling Stone entitled “Campaign 2016: Hillary Clinton’s Fake Populism Is a Hit.” Few journalists are better suited to the task of exposing a fraud than Matt Taibbi. In typically hilarious fashion (the subtitle of the piece reads: “Pundits say her idealist porridge is not too hot, not too cold, but just fake enough”), Taibbi focuses primarily on Clinton’s position on the carried interest tax break to reveal the way that she, like so many high-ranking politicians, twists her words to manipulate the lower-income and middle-class masses while remaining faithful to the wealthy, high-powered constituency that she actually represents:

“There’s something wrong,” she told a crowd of Iowans, “when hedge fund man­agers pay lower taxes than nurses or the truckers I saw on I-80 when I was driving here over the last two days.”

Oh, right, that. The infamous carried interest tax break, the one that allows private equity vampires like Mitt Romney and Stephen Schwartzman to pay a top tax rate of 15 percent while all of the rest of us (including the truckers Hillary “saw” – note she didn’t say “hung out with Bill and me over chilled shrimp at the Water Club”) pay income taxes.

The carried interest loophole is an absurd, completely unjustifiable handout to the not merely well-off but filthy rich, and it’s been law in this country for about three decades.

Raise your hand if you really think that Hillary Clinton is going to repeal the carried interest tax break.

Whether or not the crowd of Iowans was convinced that Clinton legitimately planned to repeal the carried interest tax break, major media outlets published headlines that took the language from her campaign announcement as evidence that Hillary is a concerned populist dedicated to helping out struggling middle-class American families, until, as Taibbi documents, editorials with a conflicting message began popping up:

“Hillary Clinton’s Wall Street Backers: We Get It,” announced Politico, which polled Democrat-leaning Wall Streeters about the anti-wealthy rhetoric and reassured us that none of them took her seriously.

It’s “just politics,” said one major Democratic donor on Wall Street, explaining that some of her Wall Street supporters doubt she would push hard for closing the carried interest loophole as president, a policy she promoted when she last ran in 2008. [emphasis his]

Failing to follow through on campaign promises is no deviation from convention, and considering her convivial relationship with Wall Street, it’s no shocker that no one is worried that she would actually take any actions to her donors’ detriment. In particular, when it comes to the carried interest tax break, Taibbi demonstrates that there has been a distinctly noticeable pattern forming among Democratic candidates:

Yes, back to that, the carried interest issue. Promising, and then failing, to repeal the carried interest tax break is fast becoming a Democratic tradition, so much so that I’m beginning to wonder if not fixing this problem is an intentional move, designed to ensure that Democrats always have something to run on in election seasons.

In both the 2008 and 2012 election cycles, Barack Obama either decried the tax “trick” or overtly promised to close the loophole.

Obama’s remarks about carried interest pretty much always sound exactly like Hillary’s remarks this week. He gave a Rose Garden speech in 2011, in advance of his race against Romney, in which he rejected ‘the notion that asking a hedge fund manager to pay the same tax rate as a plumber or teacher is class warfare.’”

Taibbi then remarks on how, instead of holding politicians to their campaign vows or referring to them flat-out as disingenuous manipulation, media outlets tend to give such promises the designation of idealism. That makes the media complicit in politicians’ immunity from accountability:

Editorialists like to talk about the two things, ideals and reality, as totally separate and distinct. Idealism, the stuff of campaign promises, is usually pooh-poohed as “purity politics,” while the cold transactional politics of Beltway dealmaking and incremental change are usually applauded as “pragmatism.”

All of which is a roundabout way of saying that Hillary’s first official week as a presidential candidate went exactly as her handlers must have hoped.

At launch she talked a streak of anti-elitist rhetoric that was taken seriously for a few days, until the punditry took the temperature of her populism and declared to it be the right kind: the fake kind, the purely strategic kind.

In the same Politico article that Taibbi referenced above, Democratic strategist Chris Lehane, a veteran of Bill Clinton’s White House who now advises billionaire environmentalist hedge-fund manager and donor Tom Steyer, was quoted reiterating the notion that Hillary’s populist claims are totally hollow: “The fact is that any Democrat running for president would talk about this. It’s as surprising as the sun rising in the east.”

Considering Americans’ widespread disdain toward Wall Street banksters, Clinton is keenly aware of the importance of polishing over her strong ties to the financial industry. However, Matt Taibbi isn’t the only journalist that sees through her newfound appreciation for economic populism. Writing for the International Business Times, Andrew Perez and David Sirota looked through the publicly available data to follow the money beyond the baloney. They summarize how Clinton, in a recent speech, “call[ed] for Wall Street executives who engage in financial wrongdoing to be held accountable more than they have been under President Barack Obama.” But a quick look at the financial disclosure data for the Clinton Foundation suggests she would be unlikely to follow through:

Clinton’s outrage, though, did not stop her family’s foundation from raking in donations from many of the same banks that secured government fines rather than face full-scale prosecution. The Clinton Foundation has accepted $5 million worth of donations from at least nine financial institutions that avoided such prosecution — even as they admitted wrongdoing.

In that same speech, Clinton said, “HSBC allowing drug cartels to launder money, five major banks pleading guilty to felony charges for conspiring to manipulate currency exchange and interest rates. There can be no justification or tolerance for this kind of criminal behavior.” If Clinton believes that there can be “no tolerance for this kind of criminal behavior,” then it is a bit strange that, “in 2014, two years after HSBC admitted to major violations of U.S. laws, the firm was the top sponsor at a Clinton Global Initiative (CGI) event, paying at least $500,000 to the Clinton Foundation.” In fact, in addition to the CGI and the Clinton Foundation both having an illustrious record for accepting sponsorships and donations from criminal banks, both Clintons have accepted outrageous speaking fees from them, too.

The HSBC relationship — taking money from a bank after the firm admitted wrongdoing — was not unique. In 2009, UBS avoided prosecution by the Justice Department when it agreed to pay a $780 million fine and admitted to defrauding the United States by allowing American citizens to hide income from the IRS. The Swiss bank has since entered into two more agreements with the Justice Department — one for rigging the municipal bond market and the other for manipulating global interest rates. UBS has paid former President Bill Clinton more than $1.5 million for speeches since 2009, and the firm has given more than $550,000 to the family’s foundation.

In 2010, the British banking firm Barclays entered into a settlement agreement with the Justice Department, and admitted to violating U.S. sanctions by making transactions for customers in countries such as Libya, Sudan and Myanmar. Weeks later, Barclays was  sponsor at the annual CGI event. Barclays has remained a CGI sponsor in the years since, even after the bank paid more fines under a new agreement with the Justice Department for manipulating worldwide interest rates. Barclays has paid the Clinton family $650,000 for speeches since 2009. The firm has given at least $1.5 million to the Clinton Foundation.

Covering a speech Clinton gave on July 13thBen White for Politico reported on, among other things, her continued promise to repeal the carried interest tax break. She also “pledged to both defend existing financial reform and go even further, almost hinting at a need to break up the largest banks, something sure to go down poorly with some of Clinton’s biggest supporters on Wall Street.” However, financial reformers like Dennis Kelleher of Better Markets expect more: “The American people deserve a concrete, specific, comprehensive plan that really protects them from Wall Street recklessness and that she as president can be held accountable for once in office.” Others wonder whether she will “put in place a team of advisers who have a demonstrated history of supporting meaningful reform and tough enforcement, or chooses instead to surround herself with the same crowd of revolving door insiders.” Given the actions of the Clinton Foundation and Hillary’s personal ties to Wall Street, it is no wonder that financial reformers are skeptical she will follow through with policies that are as progressive as her vague pledges.

Click here to read Part 3 of the series.

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Filed under 2016 Election, US Political System

Objectivity and Credibility

Most of the people reading this post will be friends and family who have received my political emails for the past five years.  If you don’t fall into that category, however, you have most likely stumbled across this blog by accident.  Maybe 34 is your favorite number and your dog’s name Justice; you wanted to find out what hooligans had stolen your rightful domain name.  Or perhaps you conducted the same Google image search that I did last week, looking for a banner featuring Martin Luther King, Gandhi, and Cesar Chavez (I still think it’s awesome that we found one).  Whatever the reason, you’re here, and I figure it’s incumbent upon me to tell you a little bit about the perspective from which I’ll be writing.

I don’t believe any writing is “objective.”  I have held that view since tenth grade, when Mike Levy and Jack Schneider decided to use Howard Zinn’s A People’s History of the United States as my history textbook.  I highly recommend Zinn’s entire first chapter, but I’ve tried to capture in the following excerpt the argument that fundamentally altered how I read anything from that point forward:

…The treatment of heroes (Columbus) and their victims (the Arawaks) – the quiet acceptance of conquest and murder in the name of progress – is only one aspect of a certain approach to history, in which the past is told from the point of view of governments, conquerors, diplomats, leaders…My viewpoint, in telling the history of the United States, is different…The history of any country, presented as the history of a family, conceals fierce conflicts of interest (sometimes exploding, most often repressed) between conquerors and conquered, masters and slaves, capitalists and workers, dominators and dominated in race and sex. And in such a world of conflict, a world of victims and executioners, it is the job of thinking people…not to be on the side of the executioners.

…[T]his book will be skeptical of governments and their attempts, through politics and culture, to ensnare ordinary people in a giant web of nationhood pretending to a common interest. I will try not to overlook the cruelties that victims inflict on one another as they are jammed together in the boxcars of the system. I don’t want to romanticize them. But I do remember (in rough paraphrase) a statement I once read: ‘The cry of the poor is not always just, but if you don’t listen to it, you will never know what justice is.’

That, being as blunt as I can, is my approach to the history of the United States. The reader may as well know that before going on.

What I continue to find so striking and compelling about what Zinn writes is not that I agree with his perspective.  I do – I love the idea that it is the job of thinking people to adopt the perspective of the disadvantaged as much as possible – but what I really respect about Zinn is that he states his opinions upfront.  That meant I could agree or disagree with his conclusions based on the merits of the case he presented.  I didn’t need to try and discern his biases and agenda because he told me what they were.  That chapter, to me, instantly made Howard Zinn the most credible writer I had ever encountered.  It also made me skeptical of anyone claiming to deliver an objective assessment of facts.  Whether we’re aware of them or not, our values and assumptions dictate what we say and when we say it.

Right after Glenn Greenwald broke his first story on the NSA, articles popped up asking whether Greenwald could be called a journalist.  They argued that Greenwald’s espoused views on civil liberties and Edward Snowden make him different from traditional reporters engaged in “the dispassionate reporting of facts.”  It is precisely those reporters who proclaim they are dispassionately reporting facts that we should view with skepticism, however.  As Matt Taibbi writes, “journalists can strive to be balanced and objective, but that’s all it is, striving.”

NYU professor Jay Rosen is more forgiving of journalists who try to report objective truth, calling their brand of journalism “politics: none.”  But he calls Greenwald’s brand of reporting, in which the writer’s perspectives are clearly stated for the reader, “politics: some,” and writes that, “if you’re persuaded that transparency is the better route to trust, politics: some is the better choice.”  So, to be fully transparent, here is my brief overview of the perspective I will be writing from in all my posts on this blog:

I believe a just society is one in which all its members have all basic needs met and equal opportunity to succeed.  The current state of the US and the world is incredibly far away from this ideal, and as Chris Hayes argued in Twilight of the Elites: America After Meritocracy, equality of opportunity will never be achieved while we allow a gross inequality in outcomes. Correct policy lies not somewhere in the middle of two opposing points of view, but in whatever measures will help us achieve this ideal.

That is my approach to political issues.  I hope that’s helpful as you read this blog.

Update (9/8):
Conor Friedersdorf has an interesting article on Syria that examines press objectivity.

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Filed under Philosophy