Archive for ‘Corporatism’

June 3, 2012

Income Inequality Affects Voter Turnout!

We have noticed that money has become dangerously intertwined with politics, but studies find that the spiraling imbalance between rich and poor may only worsen the democratic political process we so much value as Americans.

As Ari Berman at The Nation notes,

“Electoral politics and the 2012 presidential election have become almost exclusively defined by the 1 percent. Or, to be more precise, the .000063 percent. Those are the 196 individual donors who have provided nearly 80 percent of the money raised by Super PACs in 2011 by giving $100,000 or more each.”

The OECD Better Life Index states that that high voter turnout is a measure of public trust in government and of a citizen’s participation in politics and that high voter turnout also promotes democracy and legitimacy of a government. Their research finds that:

“How well-off you are also affects how likely you are to vote. Voter turnout generally increases with individual income and on average there is a 7% difference between the top 20% of the population and the bottom 20%. This gap reaches 32% in Korea and 28% in the United States.”

In response to the OECD reports, Bryce Covert at The Nation comments:

“Those whose income is in the top 20 percent experience a near 100 percent turnout rate, making full use of their right to vote. But the rate for those in the bottom group is less than three-quarters. That makes for a whopping 28 percent gap between the two on Election Day, which again seems only to be beaten by South Korea.”

As wealth influences politics to favor the rich, and the rich can now purchase the American vote with post-Citizen’s United SuperPACs, together with the defunding of education and other public services ~ we should expect to see a further weakening of the democratic political process.

February 16, 2012

Contraceptives & “Religious Freedom”: A Cold Political Calculation

Elizabeth Warren, Democratic Massachusetts Senate Candidate, spoke tonight on Rachel Maddow about the very broad language in the recent contraception legislation introduced in the House. According to Warren, the legislative language is so broad (including “any moral objection” by an employer to cover “any type” of health care costs) that it opens the door wide open for employers to diminish and eliminate health care coverage for employees.

She calls it “a cold political calculation” to further diminish worker’s rights and benefits. She makes a very good point!

January 20, 2012

Mitt’s Unconventional IRA: Doesn’t Add Up

In an article titled, “The End of Romney” Huffington Post’s John Talbot wrote today,

“For Mitt Romney to have accumulated $20 to $100 million in his IRA suggests that somehow he had found a way around this $2,000 a year limit to contributions as there is no way contributing $2,000 a year could ever grow to $20 million in one’s lifetime, much less $100 million, regardless of how good an investor one is.

One method Mitt Romney may have employed is to have made his initial investments in a 401(k) plan on a pre-tax basis because 401(k) plans allowed up to $30,000 a year in annual contributions back in the 1980’s without the payment of ordinary income taxes. But even with making $30,000 contributions each year, it is hard to see how a $20 to $100 million fortune could be amassed in such a short time.

This suggests, and the Wall Street Journal article hints at this, that Romney was not making cash contributions to his IRA but rather parking equity shares of his companies’ investment funds there, or quite possibly putting shares of private companies that his firm bought into his 401(k).”

And regardless of whether Romney’s unconventional IRA is legal or not, he clearly represents the interests of the 1%  and appears to support a further division between rich and poor by way of tax loopholes.  

Read more

This is not the type of President we need right now.

January 17, 2012

Romney Admits to 15% Tax Rate

Former Massachusetts governor Mitt Romney admitted today that he pays “close to the 15% rate” in taxes, and that most of his income are from investments.

The middle class, stuck with increased costs and decreased pay, are the suckers paying around 30% of their income to taxes.

Read more at USA today!

December 1, 2011

1% Hide That They Are Richer Than Ever

Even though the housing market bubble burst in 2008, the apartments and homes of the super rich have done nothing but gone up in worth!

However, they try to hide their spending behavior by pretending to downsize. Read more about this at the Daily Beast!

November 4, 2011

The Root of our Problems

A common misconception of the Occupy movement, one that has been repeated within the national media ad nauseam, is that they don’t have any specific demands. Well, anyone with a reasonable amount of knowledge about the movement knows that this assertion is patently false. A central message emerges from amongst the crowds and signs of Zuccotti Park: the elimination of the rampant corporate influence and corruption found within our political sphere. As well it should be.

If you think about it, nearly all of our woes as a country appear to be symptoms of this larger problem. Our massive amount of defense spending? Consider how much we spend on private contractors, like the now-defunct Blackwater. Our faulty health care industry? Consider the millions in political donations made by health insurance and pharmaceutical corporations. The financial crisis, of which Main Street has yet to emerge, and the subsequent watered-down attempt at reform known as Dodd-Frank? Consider the millions in political donations made by major financial institutions (of which some of that was our own money that we used to keep them from collapsing). Our increasing prison population and our persistence in maintaining a failed war on drugs? Consider privately-owned penal systems. Income inequality? Well, you get the idea.

And that’s not to mention the apparent revolving-door employment policy between lobbying organizations and public office.

These are just a few of the systemic issues plaguing us as citizens and the list goes on and on. So, what do we do about it?

A great idea, which has been circulating on the internet for some time, would be to pass a constitutional amendment banning corporate campaign contributions. Realistically, this is extremely difficult to do (there’s a reason why we only have 27 amendments) and it is rife with a few pragmatic concerns, although these could be easily addressed.

For example, limiting or banning corporate contributions would have no affect on lobbying practices. Lobbying, itself, is not a bad thing. In fact, there are many lobbying groups that address our concerns. The problem is that they have no where near as much money as corporate special interest groups. A solution to this, aside from eliminating lobbying all together, would be to regulate lobbying practices and spending.

Another concern would be that such an amendment would not prevent the super-rich from donating much more than your average American. We already have a annual caps on individual donations to campaigns ($2,500 for federal, $5,000 for local and state) as well as to parties and committees ($30,800 for federal, $10,000 for local and state), but they are woefully inefficient at democratizing our campaign process. Considering that the average American family makes around $50,000 a year, there is no way they could contribute anywhere near as much as a person that makes over a million a year. Thus a good argument could be made for the public financing of campaigns.

These are but a few possible solutions we should be considering as we move forward. These will be hard battles, considering how entrenched corruption is within our system, but they will be necessary battles. We are the David to their Goliath, and our sling is armed and ready.

November 3, 2011

Demand Financial Transaction Tax Now!

We must show solidarity in demanding a tax on trades of stocks, bonds, derivatives, and other financial transactions so that large banks and investment firms can be held more responsible for their of their leading roles in the Great Recession.

The E.U currently has a financial transaction tax, and we in the United States had a financial transaction tax from 1914 to 1966. The “Robin Hood Tax” is supported by Bill Gates, the National Nurses Union, and many others.

Today over 150 Massachusetts nurses joined hundreds of protesters at the US Treasury Department to demand that Timothy Geithner and President Obama support financial transaction taxes on Wall Street. “The economic decline is literally making our patients sick,” said a U.S. nurse, “We see more and more children with conditions related to poor nutrition and stress.” Nurses around the globe believe that taxing a small percentage of Wall Street transactions could generate enough revenue to address basic human needs that have gone ignored. Protests also took place in Cannes, France, where the G-20 Summit is taking place.

So far, the US is saying “No” to the Transaction Tax, leaving the people no choice but to demand it!

November 2, 2011

Bloomberg Diverts Blame Away from Wall Street

Bloomberg is attempting to deal with Occupy Wall Street by deflecting blame away from financial institutions. He said,

“I hear your complaints, some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not so sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t have had them without that. But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.”

I wonder who is paying or supporting him to say such things. 

While government agencies such as Fannie and Freddie are not blameless, Federal Reserve data indicates that private mortgage brokers had the largest influence on the Great Recession. 84% of the subprime mortgages were issues by private lending institutions and most of these loans were completely unconnected from government home ownership laws.

Read more and watch the video at 

October 15, 2011

A Global Uprising ~ Worldwide Solidarity




Today, the world is joining Occupy Wall Street in protest. 3,000 people are demonstrating in London, and riots broke out in Rome. Protests have spread to countries across the globe including South Africa, Canada, Portugal, Germany, Australia, Japan, India, South Korea and the Philippines. Cities include Berlin, Frankfurt, Lisbon, Manila, Stockholm, Sydney, Melbourne, Sarajevo and New Delhi.  Occupy Wall Street has declared October 15th as the International Day of Action, and it looks like that is exactly what is happening.

The Fault Line will join the many events scheduled by OWS today to show our support for this worldwide uprising. Human need, not corporate greed.

October 9, 2011

Study: Income Inequality Slows Economic Growth

A new study published in the current issue of Finance & Development, the quarterly magazine of the International Monetary Fund, reported that income inequality was found to be a central component of a slowing economy. Income inequality is the gap between those making the most and least in a nation, which has gotten unusually large in the United States over the last 30 years. Below is a table with the recent ratios of CEO vs average worker pay for several countries.  Most economists suggest that a ratio around 20:1 is ideal for a prosperous economy.

The recent study compared six major economic factors across the world’s economies and found that income inequality was the largest contributor to a slow economy, finding a strong association between equally distributed income (and by equally distributed we mean a ratio around 20:1 instead of 475:1, not socialism) and economic growth.

Corporate and political figures often claim that fixing the US economy depends on lowering government debt, signing new free trade deals and attracting new foreign investments, however, this study finds that the most influential factor is income inequality.

Berg and coauthor Jonathan Ostry were mostly interested in how to sustain economic growth, rather than sparking it. “Getting growth going is not that difficult; it’s keeping it going that is hard,” Berg explains. As we ourselves have seen, the bailouts and stimulus saved us from more severe economic conditions, but have done little to sustain growth. Instead, the numbers indicate that moving toward a fair CEO-vs-average-worker income ratio will provide us a way out of this recession.

Mother Jones included these tables from the study:

Andrew Berg & Jonathan Ostry
Andrew Berg & Jonathan Ostry
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