Doth We Protest Too Little?

After interning for Morse in ’68, I served as a Philadelphia parade marshal for the half-million protesters who descended on Washington for the Peace Moratorium in 1969. The chairman of the Joint Chiefs of Staff characterized us as, “interminably vocal youngsters, strangers alike to soap and reason.”

On the very day alt-press publisher, Jed Morey, was covering “Occupy Wall Street” insurgents in lower Manhattan, I was taking a meet at a major bank nearby.  While an early morning text from Jed alerted me to the “Anonymous” event, the bank folks were alerting me to potential traffic jams engendered by the 66th convening of the UN General Assembly.  The NYPD so effectively contained and marginalized the protests that I had to wait on YouTube coverage to check it out.  Just as well.  Reminding the “99%” that they’re being had by the privileged 1% is a sharp message, but the rag-tag brigade from Liberty Square crying for attention aren’t the most effective messengers. (At Right – Mark Rudd, leading the takeover of Hamilton Hall at Columbia University in 1968)

My forbearers have long challenged authority and questioned conventional wisdom.  Back in 1954, with impending defeat of the French at the hands of the Viet Minh, my grandfather, an intelligence analyst with the U.S. Army, wrote, “It seems highly doubtful whether U.S. intervention would ever be able to hold Indochina.”  As he was born in western Sumatra, he had a better handle on Southeast Asia than most Americans and passed that understanding along to his off-spring. 

So it was in 1965, at age fifteen, I found myself at my first Vietnam rally in the old Madison Square Garden.  Among the keynoters, were famed baby doctor Benjamin Spock, Coretta Scott King and Senator Wayne Morse of Oregon, one of only two members of Congress to vote against the Gulf of Tonkin Resolution which Lyndon Johnson used as a blank check to escalate the conflict.  Bayard Rustin, who had organized the landmark Civil Rights march on Washington in ’63, challenged the Garden crowd of 18,000: “We must stop meeting indoors and go out into the streets.” 

A few thousand of us took up the challenge and started wending our way from 50th & 8th down through the Theatre District and over to the UN.  Filing across seedy 42nd Street in the dark of night, big, beefy red-neck types yelled, “Commies, love it or leave it!”  My 5’3” mother was accompanying me and, with a mouth that made truckers blush, dished dirtier than she got, scaring the be-Jesus out me and the red-necks too, it seemed.  It hardened me for events to come. 

After interning for Morse in ’68, I served as a Philadelphia parade marshal for the half-million protesters who descended on Washington for the Peace Moratorium in 1969.  The chairman of the Joint Chiefs of Staff characterized us as, “interminably vocal youngsters, strangers alike to soap and reason.”  Participants were definitely hairier than earlier peaceniks, but the DC police remained chilled, in stark contrast to the Chicago police riot at the Democratic convention the year before.

The following year I moved from protest to an “environmental teach-in,” helping to organize the first Earth Week.  We drew support from across the board with some sixty corporate sponsors such as GE, Rohm&Hass, Scott Paper and Bell Tel.  At the feel-good culmination in Phillie’s Fairmont Park, Senator Ed Muskie, sponsor of the landmark Clean Air Act of 1970 delivered the keynote and the cast of “Hair” sang “Hello Carbon Monoxide.”  By the end of the year, Richard Nixon, perhaps as a tactical diversion from other deeds, created the Environmental Protection Agency.

Right now, if you go around the country,” Tom Steyer said upon receiving the 2011 Rage for Justice Award, “the fight is about the right of the Environmental Protection Agency to protect the environment.”  Rage for Justice Award is not brought to us by the Day of Rage folks who Occupied Wall Street but from Consumer Watchdog who “expose rip-offs and injustice.”  And Tom Steyer is not your usual activist, but a billionaire hedge fund manager.  He received the award in recognition of facing down the gas-producing Koch brothers and their Texas oil brethren who attempted, in 2010, with Proposition 23, to overturn AB 32 that has turned California into the beacon of the clean energy economy.

“They we’re in a situation where they [Koch bros] were going to make a bet about protecting their bottom line,” Steyer said.  “So it was always a risk/reward bet the way businesses work.  So if they started to get behind that meant that the risks were higher and the reward less likely to pursue the fight.  So that, in a funny way, it’s like being in a fight with a bully.  You know that if you can ever get him scared, he’ll quit.

 “We view the environmental fight as something where the message is really important and the messenger is really important.  We believe that if people are going to understand it, they are not only going to have to hear something true, they’re going to have hear it from someone they trust.”

In the battle against Prop 23, Steyer was aligned with former Marine captain George Schultz who held four cabinet posts under Nixon and Reagan.  In the posturing over tax misrepresentation, Obama finally invoked Warren Buffet’s year-old call to tax the very rich.  While guerilla street theater can be tippingly pointed, establishment messengers of principle will likely gain far more traction in today’s America.  Which is why this 60s organizer found himself at a big bank during the Occupation of Wall Street looking for ways to make energy efficiency pencil out.

Fat Cat Manifesto

Dorian Dale examines the success of Grover Norquist’s No Tax Pledge and argues that the benefits should extend to everyone. Why waste perfectly good tax cuts and loopholes just on the rich?

In the wake of the Big, Bad Debt Deal, Grover “No Tax” Norquist declared victory.  We should all concede.  If you can’t beat ‘em, join ‘em.  Every Man & Woman a Fat Cat!  Warren Buffet keeps griping that his secretary shouldn’t be paying taxes at a rate 67% higher than he and his fellow billionaires. So level the playing field.  The Fat Cat Manifesto proposes to extend billionaire/ corporate breaks, subsidies, loopholes and deductions to everyone:

ESSENTIAL POINTS OF THE FAT CAT MANIFESTO:

  1. Any wage earner will avail themselves of the same 15% capital gains rate heretofore available only to hedge fund managers the likes of Bain Capital’s Mitt Romney.
  2. Cars, ATVs, jet skis, bicycles etc. will be depreciated at the same rate as corporate jets.
  3. Backyard gardens will be subsidized at levels comparable to “genteel farmers” like Dave Letterman and the Waltons of Wal-Mart.  The cost of looking for vehicular and housing fuel will also be subsidized.
  4. Joe & Jo Q Citizen will get to incorporate and catch all the breaks of corporations. This follows the logic of the Citizens United v FCC ruling delivered by the activist majority on the Supreme Court in 2010 declaring that corporations are just like citizens and will have unrestricted First Amendment rights to lavish unlimited amounts of money electing their quislings.

Who is this Grover Norquist, Patron Ain’t of taxation misrepresentation?  First, know that he is a Harvard grad, not the effete, elitist type of Harvard grad like Obama and the Winklevoss twins, but the regular-guy type like George Bush and Bill O’Reilly. After his Americans for Tax Reform pitched in to help Reagan chop the top tax rate from 50% to 28% in 1986, Grover declared he was out to “reduce government down to the size where it’s small enough to drown in a bathtub.”  Drowning the Federal government in the tsunami of debt that swept over America in the first decade of the new millennium is not exactly the same principle, but the result is the same. 

To date, Grover has gotten 336 congressmen, 41 senators, 13 governors and 1,247 state legislatures to sign his Taxpayer Protection Pledge otherwise known as the “No Tax” pledge.  Stephen Colbert pressed Grover on whether there were any circumstances under which he would accept a tax increase:

“Terrorists have kidnapped all of our grandmothers and they’ve got them in a subterranean burrow and all of them have been slathered with honey and they’re going to release fire ants into this burrow that will bite them to death.  Their only demand is that we increase the marginal tax rate for the top 2% and they will release them.  Do we increase the tax rate or do we let our grandmothers die from ant bites?”

“I think we console our self with the fact that we have pictures,” quipped Grover

Momentarily jaw-drop speechless, Colbert blurts “That’s the right answer!”

A few years back, Grover served up a bigger whopper of a jaw-dropper to NPR’s Terry Gross.  At the time, Grover was representing for another one of his noble causes – elimination of the estate tax which he had renamed the Death Tax while successfully convincing many average folks that it applied to far more than the top 1%.  Never one to shy away from over-the-top metaphors, Grover was claiming that arguments for higher taxes on rich people echo the ones Nazis used to single out Jews for gas chambers.

“I mean, that’s the morality of the Holocaust,” said Grover.  “‘Well, it’s only a small percentage,’ you know. ‘I mean, it’s not you, it’s somebody else.’” 

It took Terry Gross twenty-six seconds to lift her jaw off her microphone and say, “Excuse me. Excuse me one second. Did you just …”

Norquist: “Yeah?”

Gross: “…compare the estate tax with the Holocaust?”

I ran into Grover’s dad at a fraternal gathering in Langley soon after Gross’ interview and suggested his son might want to reign in the Holocaust Tax metaphor, particularly when he is talking to a Jewish host.  Unbeknownst to me, at that point, was that papa Norquist was the one who had given little Grover his first taste of anti-tax fervor.  Copping bites from his son’s ice cream cone, he labeled each bite “sales tax” or “income tax.”  But was the ice cream loaded with loopholes and subsidies trickled on top?

America has come full spiral since Louisiana’s Huey ‘Kingfish’ Long delivered his ‘Every Man a King’ speech during the Great Depression proposing to ‘Share Our Wealth’ (SOW): “It is not the difficulty of the problem we have; it is the fact the rich people of this country – and by rich people I mean the super-rich – will not allow us to solve the problems.”  Within a year, 7.5 million Americans had joined ‘Share Our Wealth’ clubs. A year later the Kingfish was assassinated.

Today Grover Norquist & Co has convinced the descendants of SOWers that the acronym stands for Spare Our Wealthy.  Super-rich job-creators are the solution, not the problem.  Their cause is everyone’s because we all aspire to be wealthy.  Who Wants to Be a Millionaire then Pay Taxes?  Soon the average Jersey Shore Fat Cat wannabes who get hit with 50% higher tolls to drive over the bridges into Manhattan to maybe glimpse Donald Trump gnawing his way through  rib eye at the ‘21’ Club will be able to deduct those tolls from their taxes.  Got that Grover?

The Dow of Poo

Of all the opiate-like recovery indicators, it’s the Dow Jones Industrial Average that offers the greatest high when injected into the American psyche and, in this case, keeps the bubble inflated.

 

Tao of PoohPart III of The Season of Our Disconnect

Benjamin Graham and David Dodd published a book titled Security Analysis in 1934 that would become a staple financial resource for the investment industry. In the foreword of the sixth edition the great Warren Buffet himself described their book as a “roadmap for investing that I have now been following for 57 years.” With the stock market crash of 1929—a result of the excesses during the preceding decade—fully in the authors’ rearview mirror, they described the collapse in stark, honest light:

“The relaxation of investment bankers’ standards in the late 1920s, and their use of ingenious means to enlarge their compensation, had unwholesome repercussions in the field of corporate management. But it may not be denied that devious and questionable means were frequently employed to secure these large bonuses to the management without full disclosure of their extent to the stockholders.”

The sound investment philosophy behind Security Analysis followed assiduously by the old Oracle of Omaha and tens of thousands of investors who came before him was established as a reaction to the corrupt practices of the Roaring Twenties. Here we are again, lo these many decades later, none the wiser. Taxpayers have been picked up by the ankles and shaken furiously for any remaining change, having been duped by the same Wall Street con artists who employed “devious and questionable means” as described above. Only this time, less than a century later, the bankers weren’t doing swan dives out their windows because they did learn one invaluable lesson from the past: If you’re going to bilk the system, make sure when it all goes bad that you control the release valve on the money flow by installing bankers inside the tank.

While most of America didn’t know what was going on behind the scenes of the recent financial crisis, people like Buffet sure did. Though no longer the wealthiest person in the world (he’s the third), Buffet has maintained his reputation as the preeminent investor on the planet for quite some time in a folksy and unassuming way. He’s the Wilford Brimley of investing, giving us a wink and telling us to eat our oatmeal and buy IBM. But his $5 billion bailout (what else can you call it?) of Goldman Sucks in 2008 shows that the old codger knows a good bet when he sees one, even if the company is rolling with loaded dice. (He got his money back, with a handsome interest payment, and retained warrants on $5 billion more of Goldman stock at what looks to be a favorable strike price.) From a bird’s-eye view, here was the con in a nutshell: Goldman CEO Lloyd Blankfein and company fleece the government for gobs of free money during the bailout—with people like Buffet backstopping their liquidity—to buy up the shitty investment packages they created, sold to their investors, and then bet against themselves.

That part is history. The ensuing game of smoke and mirrors—to restore sanity and transparency into the shit show they created—was to get the government to pony up billions more for their coffers at no cost (and no risk) so they could “invest” this money back into the economy.

Only it never went back into the real economy, instead weaving its way through the banking backchannels where free money flowed to investment banks, who gave it to hedge funds, who invested in government-backed securities, mega-corporations and, yes, even the same kooky “off-balance sheet” investments like swaps and derivatives being traded on offshore exchanges none of us can track. If you failed to spot the point where it actually came back to the taxpayers or funneled through the economy, you’re not crazy because it never happened.

Buffet may have built the most successful investment enterprise in history with Berkshire Hathaway by following the sound advice of people like Graham and Dodd, but it probably didn’t hurt to know that out of all the players in the multiple-bailout fiascos beginning in 2008, Goldman Sucks would wind up on top since nearly everyone involved in engineering the bailouts were former Goldman Suckers or beholden to them. Now we’re stuck in a bizarre carnival mirror economy with high unemployment, low consumer confidence, dwindling savings, and a global debt crisis while we’re being told at the same time the country is in a recovery, Wall Street firms and major corporations are posting incredible profits and the Dow Jones Industrial Average is trading above 12,000. Quite the disconnect, indeed.

It’s called a bubble, and it’s the last one left.

When I asked my friend Peter Klein, a financial advisor on Long Island, how he would characterize our current situation, he referred to it as “the stimulus bubble.” Now the question isn’t whether the bubble will pop, but when. And it’s people like Lloyd Blankfein that are holding the pin. But like every bubble, the average person never fully realizes when he or she is floating inside of it, particularly when receiving mixed messages like the ones above. But of all the opiate-like recovery indicators, it’s the Dow Jones Industrial Average that offers the greatest high when injected into the American psyche and, in this case, keeps the bubble inflated. As average citizens we tend to look at the Dow as the answer to the eternal Ed Koch question: “How am I doing?” Every top-of-the-hour market report on radio and television begins with a Wall Street update tethered to the performance of this antiquated measure of economic health.

For his part, Peter takes little comfort in the Dow’s astounding recovery from its low of around 6,600 in 2009, preferring to monitor indices such as the S&P 500 or the Russell 2000, which have a wider breadth and reach. The Dow, after all, is only comprised of 30 companies with familiar names like Coca-Cola, WalMart and General Electric, which give the illusion that these are somehow the type of corporations our economy is based on. It’s not that these are bad companies or even that the Dow is a lousy index, it’s just that they’re no longer relevant in today’s economy as an indicator of performance. Furthermore, it doesn’t claim to be. The problem is that the Dow is financial pabulum being fed to us by the media and Wall Street alike.

Because the Dow has traditionally been the criterion by which the average person gauges America’s overall economic health, there is a tendency to believe in its healing power. And to an extent it does make a little sense. After all, stocks don’t invest in themselves, right? The money has to come from somewhere. So, if the trading volume is still high, and our major corporations are swimming in investment cash, the logical question is: “Where is the money coming from?” When I asked Peter about this, he didn’t hesitate to respond: “Hedge funds are more or less controlling daily market flows.”

This is an astounding revelation, considering hedge funds didn’t even exist 20 years ago. But today, they are the henchmen that front the investment bank cartel because unlike mutual funds that dominated institutional trading before the rise of the hedge fund, these funds can be leveraged. So not only have the investment banks like Goldman seeded these funds with investment money, they provided them with tremendous loans comprised of…you guessed it… taxpayer money. All it takes is a little reverse engineering and logic to figure out why the Dow is still riding the wave while most Americans are out to sea believing a life raft is coming at any moment. Essentially, we’ve been had, because the only safe harbor is what writer Matt Taibbi sublimely refers to as the Grifter Archipelago—islands of entities teeming with corporate raiders accountable to no one and in control of everyone. It’s a beautiful thing, really, if you’re one of them.