Tag Archives: Elizabeth Warren

2020 Democratic Primary, Democrats

Donald Trump ran and won as a moderate – more moderate than Clinton (in voters’ eyes)

Quote of the day (Editor’s emphasis added):

” Many progressives have what they believe to be a knock-down answer to nervous Nellies who fret that talking about desegregation busing, decriminalizing illegal entry into the United States, banning assault weapons, and replacing private health insurance will kill them at the polls in 2020: Donald Trump is president.
If Trump is president, the thinking goes, it’s the ultimate proof of “lol nothing matters” politics. And if anything does matter, it’s riling up your base to go to war, not trimming and tucking to persuade precious swing voters. The old rules no longer apply, or perhaps they were never true at all.
Activists are pressing candidates to take aggressively progressive stands on broad issues like Medicare-for-all but also narrower ones like including undocumented immigrants in health care plans and providing relief from graduate school debt.
This is, however, precisely the wrong lesson to learn from the Trump era.
It’s true that Trump is president, but it’s not true that Trump ran and won as an ideological extremist. He paired extremely offensive rhetoric on racial issues with positioning on key economic policy topics that led him to be perceived by the electorate as a whole as the most moderate GOP nominee in generations. His campaign was almost paint-by-numbers pragmatic moderation. He ditched a couple of unpopular GOP positions that were much cherished by party elites, like cutting Medicare benefits, delivered victory, and is beloved by the rank and file for it. ” – Matthew Yglesias

Yglesias provides documentation justifying my headline and the selected quotation, which begins his piece. I’ll add that Democrats flipped the House in 2018 by presenting a clear contrast with Donald Trump’s Republican Party, not by reaching to the left edge of the Democratic Party.*

Fearless editor’s fretting: Elizabeth Warren is far and away my favorite United States Senator. I’d like to vote for her for president. Warren’s stance on Medicare for All (rather than Pete Buttigieg’s Medicare for All Who Want It) and the elimination of private insurance strikes me as a huge political miscalculation – and, independently, as bad public policy** – for someone who wishes to turn Trump out of office in November 2020.

I’ve voted for Kamala Harris in several statewide elections. She is high on my list of prospective Democratic nominees. Harris has twice endorsed the elimination of private insurance and twice walked it back the next day. This, much more than her past hedging (“We should have that conversation“), sows doubts about whether her tool chest of political skills – while impressive – is stocked with everything she needs to run a high stakes national campaign against Trump. She’s very good when she’s well scripted (though perhaps the script isn’t always reliable). And I’m not yet convinced that she’s “quick on her feet.”

* Taxing the rich is popular. I’m ready to take that stride to the left. Taking away someone’s health insurance is highly unpopular, for reasons – I’d argue – that are sound. See the note below.

** In my view, this policy shift is a heavy lift, which cries out for an incremental approach as we figure out in stages how to do it right and how to ameliorate the unwanted consequences. Furthermore, without a Democratic lock on the White House, the Congress, and the Supreme Court, the risk of Republicans sabotaging things during the transition (as they’ve done with ACA and Warren’s CFPB) are far too high. If the shift to Medicare for All Who Want It is done well, this will serve to reassure the public on the wisdom of a more radical change.

Democrats, Donald Trump, Income Inequality

The Howard Schultz campaign is already helping Donald Trump

“After this week’s CNN town hall, it’s more and more clear that any money Howard Schultz might spend on an independent presidential bid would function as an in-kind campaign contribution to Donald Trump.” – Ronald Brownstein

“To win a majority of electoral college votes, which Schultz says would be his goal, he would have to ultimately replace the Democratic nominee as the favored choice of voters who do not want Trump to win a second term.” – Michael Scherer

Schultz has praised the “thoughtful analysis” of a conservative commentator who fears the Democrats will nominate a “hard-left” candidate and – in the course of the column – demeans Kamala Harris (“shrill … quasi-socialist promising pie in the sky”), Elizabeth Warren (“Fauxcahontas … playing a game of socialist one-upmanship”), and “supposedly centrist” Joe Biden. The critic also name-checks Bernie Sanders and, of course, Alexandria Ocasio-Cortez. 

Schultz, who claims to be a “lifelong Democrat” – but not a very attentive one (“Schultz voted in just 11 of 38 elections dating back to 2005”), took back the praise he had offered after folks actually read the “thoughtful analysis” he was promoting;  he deleted the tweet when he was asked about it by the Washington Post, and blamed someone else for posting the link on his personal Twitter account.

Nonetheless, he embraces the conservative views expressed in the deleted column. It’s the “hard-left,” “quasi-socialist” Democrats that Schultz fears and, most scary and objectionable of all, the proposal (broached by conservatives’ favorite new Democratic Member of Congress, Ocasio-Cortez) to raise the marginal tax rate for incomes over $10 million to 70% (the level in the United States in 1980).

When asked at his CNN Town Hall what he thinks his personal income tax rate – as a billionaire – should be, Schutz concedes that he “should pay more taxes,” but tap dances for more than a minute (with platitudes about corporate taxes, the Republican tax bill, comprehensive tax reform, as well as personal income tax rates for millionaires) without giving an answer, at which point the moderator Poppy Harlow reminds him of the question and asks, “Give me a sense. Are you talking about you should pay 2% higher? Ten percent higher, twenty percent higher federal income tax?”

He stammers and says, “I don’t – Poppy, I don’t know what the number is….”

“Ballpark it for people,” she asks.

He won’t. He finally gets to the heart of his concern, “I think that what’s being proposed at 70% is a punitive number. And I think there are better ways to do this.”

Better ways. In other words, instead of significant increases in the personal tax rates of billionaires, we should seek revenue increases somewhere else.

Brownstein notes that on issue after issue, Schultz’s positions align with Democrats, while alienating Trump’s Republican base.

“To obscure his tilt toward the Democrats on almost all issues, Schultz has quickly settled on a strategy of loudly criticizing ideas popular on the party’s far-left flank.”

Brownstein perceives in Schultz’s strategy echoes of the (now defunct) centrist group, the Democratic Leadership Council, which Bill Clinton embraced in his trek to the White House.  But there’s a huge difference in the two strategies. The DLC and Clinton worked for years “inside the Democratic Party.” Regardless of what you think of Clinton or his policies, he sought to “rebuild a political majority that would allow Democrats to regain control of the national agenda from the increasingly militant conservatism within the GOP.”

Schultz seeks to do the opposite: to split the Democrats and peel off Democratic voters to his independent campaign.

‘Exaggerating the power of the left in the Democratic coalition, he’s portraying the party as beyond redemption for anyone holding centrist views. To make that case, Schultz is echoing claims from Trump and other Republicans that Democrats have become radical. At times, Schultz has even called some of the Democratic ideas he opposes “un-American” or “not American,” not to mention “punitive” and “ridiculous.”

By validating the Republican efforts to portray Democrats as outside the mainstream, Schultz is helping Trump already.’

2020 Democratic Primary, Democracy

Whether or not she’s running for president, Elizabeth Warren is picking a fight by introducing the Anti-Corruption and Public Integrity Act

The first line of the Boston Herald ’s story about Elizabeth Warren’s introduction of the Anti-Corruption and Public Integrity Act begins, “Warren will announce an ‘anti-corruption’ initiative tomorrow at the National Press Club in Washington, D.C. – a move political operatives say looks like another blatant push toward a 2020 run.” (That would be a run for president.)

The Nation ’s opening sentence is, “Elizabeth Warren’s proposed sweeping anti-corruption legislation—which would, among other things, ban members of Congress and White House aides from owning individual stocks—has generated speculation about her plans for 2020.”

The Washington Post doesn’t mention such speculation until the fourth paragraph: “The speech also emphasized Warren’s clout at a time when Democratic bills have little chance of passage but media attention is beginning is beginning to turn to the 2020 presidential race. Reporters sprawled from chairs to the walls of a midsize room, including next to TV cameras that were capturing a six-part government reform agenda.”

Will she run or won’t she? Who knows. What’s clear is that Elizabeth Warren has long been a passionate advocate for shifting the power balance from corporations to consumers, from the abundantly wealthy to folks who work for a living, from richly paid lobbyists to voters stretching to make ends meet. This is a woman who has never forgotten her working-class roots.

The Anti-Corruption and Integrity Act isn’t a campaign ploy; it’s a timely expression of an enduring commitment.

The bill, as Senator Warren describes it, would:

  • Padlock the Revolving Door and Increase Public Integrity by eliminating both the appearance and the potential for financial conflicts of interest; banning Members of Congress, cabinet secretaries, federal judges, and other senior government officials from owning and trading individual stock; locking the government-to-lobbying revolving door; and eliminating “golden parachutes”.
  • End Lobbying as We Know It by exposing all influence-peddling in Washington; banning foreign lobbying; banning lobbyists from donating to candidates and Members of Congress; strengthening congressional independence from lobbyists; and instituting a lifetime ban on lobbying by former Members of Congress, Presidents, and agency heads.
  • End Corporate Capture of Public Interest Rules by requiring disclosure of funding or editorial conflicts of interest in rulemaking comments and studies; closing loopholes corporations exploit to tilt the rules in their favor and against the public interest; protecting agencies from corporate capture; establishing a new Office of Public Advocate to advocate for the public interest in the rulemaking process; and giving agencies the tools to implement strong rules that protect the public.
  • Improve Judicial Integrity and Defend Access to Justice for All Americans by enhancing the integrity of the judicial branch; requiring the Supreme Court follow the ethics rules for all other federal judges; boosting the transparency of federal appellate courts through livestreaming audio of proceedings; and encouraging diversity on the federal bench.
  • Strengthen Enforcement of Anti-Corruption, Ethics, and Public Integrity Laws by creating a new, independent anti-corruption agency dedicated to enforcing federal ethics laws and by expanding an independent and empowered Congressional ethics office insulated from Congressional politics.
  • Boost Transparency in Government and Fix Federal Open Records Laws by requiring elected officials and candidates for federal office to disclose more financial and tax information; increasing disclosure of corporate money behind Washington lobbying; closing loopholes in federal open records laws; making federal contractors – including private prisons and immigration detention centers – comply with federal open records laws; and making Congress more transparent.

The sweep of these proposals is breathtaking. One is tempted to argue that they may go too far. Here are three reasons to push back on that notion.

First, there is a strong presumptive case for the proposals.

Consider one of the most far-reaching ideas: “banning Members of Congress, cabinet secretaries, federal judges, and other senior government officials from owning and trading individual stock.” What if, for instance, a corporate titan decided to run for Congress? I am highly unlikely to be enamored of any such candidates, but my fellow citizens might beg to differ. If, say, Mark Zuckerberg decided he wanted to represent the Silicon Valley in Congress, or California in the U.S. Senate – should we insist that he give up his stock in Facebook in order to serve?

It only takes a moment’s thought to decide: Why, yes! This makes perfect sense if we want to root out corruption, self-dealing, and the failure to represent voters who can’t afford to contribute enough money to ensure ‘access’ and a respectful hearing from their Member of Congress. If the man’s ego or fortune is so closely tied to a corporate stock that divesting himself of it, and settling for investing in mutual funds (or another sound alternative), represents an obstacle to serving in Congress – then he should dismiss the idea of running for public office. He could never be expected to put aside his financial self-interest, or his pride of ownership, to focus on doing his job. The conflicts of interest would virtually ensure that he would forever be doing the wrong things for the wrong reasons.

And Zuckerberg isn’t the exception; he’s the rule.  Conflicts of interest – between the public good and individual self-interest – are at the heart of corruption in government. Money infects the process. We need tough rules to change this.

Getting rid of these conflicts is essential for responsive representation and meaningful democracy.

Second, the ‘goes too far’ argument looks much shakier when we look at where we are today.

The system is corrupt. Warren’s unforgiving vision is far and away better than the ugly situation we find ourselves in now.  Donald Trump was never serious about “Drain the swamp” (as he acknowledges in this video). He didn’t like the expression, had no interest in what it conveyed, but consistently got huge cheers whenever he said it. So he said it again and again. His voters – and not just fans of an outspoken woman representing the Commonwealth of Massachusetts in the U.S. Senate – recognized the endemic corruption in Washington.  With all our tribal divisions, with Red America on one side and Blue America on the other, this is something that Americans have in common: disdain for a corrupt political system.

Once in office Trump, of course, turned to crooks and grifters to staff the White House and fill his cabinet. That’s the ugly situation we find ourselves in. Deeper in the swamp than any time in memory.

In Warren’s words:

There’s no real question that the Trump era has given us the most nakedly corrupt leadership this nation has seen in our lifetimes. But they are not the cause of the rot — they’re just the biggest, stinkiest example of it.

Corruption is a form of public cancer, and Washington’s got it bad. It’s time for treatment, time to isolate and quarantine the ability of big money to infect the decisions made every day by every branch of our government.

This problem is enormous – but we’ve dealt with enormous problems before. We just need some big reform ideas and a willingness to fight for real change.

Finally, Warren’s proposals are a good place to begin the discussion. In an up or down vote in Congress today, this legislation wouldn’t come close to passing in either House (or getting a presidential signature). But – if there are Democratic majorities in the future (won with pledges to usher in reform), and a Democrat in the White House – then we can begin a discussion. That’s the first step. Whatever is deemed to ‘go too far’ can be trimmed back, if that’s what it takes to get something done.

There is general agreement – outside of Washington – that something needs to be done. There is little political will – inside Washington – to do anything. Elizabeth Warren just picked a fight on behalf of the folks on the outside.

 

2020 Democratic Primary, Democrats

Companies shouldn’t be accountable only to shareholders – Elizabeth Warren aims to fix what’s wrong with American corporations

“Corporate profits are booming, but average wages haven’t budged over the past year. The U.S. economy has run this way for decades, partly because of a fundamental change in business practices dating back to the 1980s. On Wednesday I’m introducing legislation to fix it.” – Senator Elizabeth Warren, August 14, 2018

The Financial Times Lexicon offers this definition of corporate responsibility: “Corporations have a responsibility to those groups and individuals that they can affect, i.e., its stakeholders, and to society at large. Stakeholders are usually defined as customers, suppliers, employees, communities and shareholders or other financiers.”

During the 1950s, 1960s, and 1970s in the United States, this precept represented the mainstream view embraced by big business. Although, “What’s good for General Motors is good for the country,” is a misquotation of GM’s CEO, this phrase aptly summed up a paradigmatic theme: when GM – and other big companies – did well, everyone benefited. And the broad benefits were direct and tangible, unlike the phantom ‘trickle down’ prosperity we’ve been promised repeatedly since Ronald Reagan became a Republican icon. In the post-World War II era (which stretched over three decades), the American economy was guided by an economic consensus: from the offices of CEOs and other executives to the factory floor – everyone should share the wealth. They all helped build it; they would all benefit from it. Communities with corporate headquarters and factories would also benefit. We were all in it together. Even government had a critical role in encouraging investment, research, education, health and safety, among other elements of a healthy thriving economy.

In Capitalism and Freedom, Milton Friedman’s 1962 offensive against the economic view of the era, he argued that corporations have only one responsibility: to maximize profits for stockholders. He argued against a broader, more inclusive view of corporate responsibility (Chapter VIII – Monopoly and the Social Responsibility of Business and Labor, Social Responsibility of Business and Labor):

“This view shows a fundamental misconception of the character and nature of a free economy. In such an economy, there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.”

Long story short: during the following decades this view took root. Friedman’s vision, which blossomed during the Reagan years, is the economic regime of 21st century America. And actions have consequences. Few Americans – apart from the richest 1% – have reason to celebrate this outcome, as Warren notes:

That shift has had a tremendous effect on the economy. In the early 1980s, large American companies sent less than half their earnings to shareholders, spending the rest on their employees and other priorities. But between 2007 and 2016, large American companies dedicated 93% of their earnings to shareholders. Because the wealthiest 10% of U.S. households own 84% of American-held shares, the obsession with maximizing shareholder returns effectively means America’s biggest companies have dedicated themselves to making the rich even richer.

In the four decades after World War II, shareholders on net contributed more than $250 billion to U.S. companies. But since 1985 they have extracted almost $7 trillion. That’s trillions of dollars in profits that might otherwise have been reinvested in the workers who helped produce them.

Before “shareholder value maximization” ideology took hold, wages and productivity grew at roughly the same rate. But since the early 1980s, real wages have stagnated even as productivity has continued to rise. Workers aren’t getting what they’ve earned.

Accountable Capitalism Act

Her solution – to ensure that “giant American corporations should look out for American interests” – is strikingly simple in concept: The Accountable Capitalism Act would require all corporations with more than one billion dollars in annual revenue to get a federal charter. Currently, companies are incorporated by the states, which creates a ‘race to the bottom’ landscape featuring a surfeit of corporate privileges and a dearth of social responsibilities. With this requirement, we could level the playing field.

Second, the legislation would require that corporate boards consider the interests of all principal stakeholders in making decisions.

Senator Warren notes that ‘benefit corporations,’ authorized in 33 states and the District of Columbia, provide a rough working model for her plan. (Some readers may be familiar with B-Corps, closely related – though not identical – to benefit corporations.) The prevailing approach (as articulated by Friedman) excludes consideration by corporate boards of any goals apart from maximizing shareholder value. As a Silicon Valley attorney explains on the American Bar Association website:

This real or perceived duty to maximize stockholder welfare often becomes the core guiding principle.

The benefit corporation changes the game because it turns the corporation into a dual-purpose entity with the twin purposes of optimizing stockholder welfare and creating general public benefit. It expressly authorizes corporations to provide a material positive effect on society and the environment while pursuing profits as usual. The legal architecture of the benefit corporation allows ethical corporations to put the full power of corporate law behind their social and environmental values and higher purposes.

Essentially, benefit corporations broaden the fiduciary responsibilities of corporations beyond stockholder value; our experience with benefit corporations demonstrates that the model Warren proposes has a measure of practical grounding.

Worker participation

Warren’s proposal provides for two significant changes in corporate governance – relating to worker participation and political spending – that would amplify the voices of rank and file corporate employees:

“My bill also would give workers a stronger voice in corporate decision-making at large companies. Employees would elect at least 40% of directors. At least 75% of directors and shareholders would need to approve before a corporation could make any political expenditures.”

The first change would put one of the principal stakeholder groups at the table when corporate decisions are made. Employees – who have a strong stake in the success of the company they work for – would have a voice in the company’s decisions.

Matthew Yglesias cites evidence that worker participation (‘codetermination’) in corporate decision-making has positive effects in Germany, where it is well established:

“Studies from Germany’s experience with codetermination indicate that it leads to less short-termis in corporate decision-making, and much higher levels of pay equality, while other studies demonstrate positive results on productivity and innovation.”

Those are broad, significant benefits, though the presence of employee directors undoubtedly would lead to lower share prices and much less generous compensation for CEOs – hardly welcomed by everyone.

Political reform

The second change, requiring 75% approval for the use of corporate dollars to fund political messages, would have far reaching effects on our political environment. Corruption in Washington is rampant. The Trump administration has brought a wrecking crew to environmental and financial regulation. And ideologues forming a growing majority on the Supreme Court have ushered in a political epoch where corporate dollars – given in secret, often without accountability to candidates or parties, much less to voters – can flood into political campaigns and, after candidates beholden to big business are elected, ensure ‘access’ to elected officials who craft legislation and who can impede enforcement of rules and regulations.

Recall Friedman’s comment about a corporation maximizing profits “so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.” This prerequisite is phony if corporate money – shielded from public view – sways elections and buys access. Corporations – and rich stockholders – are rigging the rules of the game.

This simple 75% rule could be a game changer.

Persons under the Constitution

Though Mitt Romney said, “Corporations are people, my friend,” they are not. They were created by government to advance a public purpose. As Teddy Roosevelt put it: “The great corporations which we have grown to speak of rather loosely as trusts are the  creatures of the State, and the State not only has the right to control them, but it is duty bound to control them wherever the need of such control is shown.”

Louis Brandeis suggested, “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” Dissenting in a 1933 case before the Supreme Court, he endorsed the race to the bottom theory and argued that corporations were created by the state and the state could regulate them to ensure public benefit. Large corporations threaten to monopolize free markets, to infringe on individuals’ liberties and opportunities, and to quash workers’ rights. Most dangerous of all: “Through size, corporations, once merely an efficient tool employed by individuals in the conduct of private business have become an institution—an institution which has brought such concentration of economic power that so-called private corporations are sometimes able to dominate the state.”

Senator Warren asserts the right to make corporations accountable. This is long overdue.

Trampling individual rights

Citizens United unleashed corporate money into our political system with a shrug from Justice Anthony Kennedy that “independent expenditures do not lead to, or create the appearance of, quid pro quo corruption.” Hobby Lobby ruled that corporations can trample on the rights of women – that is to say, of human beings. As Adam Winkler notes, “the rights of employees have to give way to the rights of the corporation.” And, “the data show that the Roberts Court is the most business-friendly Supreme Court in nearly a century.”

Professor Winkler concludes:

So while a business corporation can’t go to church, fast on Yom Kippur, or travel to Mecca for Ramadan, it can still go to court and, on the basis of religious freedom, demand to be exempted from the law that applies to everyone else. Today, women are the victim. Tomorrow, it could be LGBT people. Indeed, after Hobby Lobby, every person is at risk. Everyone, that is, except the corporate person, my friend.