“Over the last decade or so, economists have become a lot more creative in figuring out where corruption is taking place, or firms are cheating,” explains Edward Miguel, a scholar at UC Berkeley. “There’s a lot more data publicly available than there used to be, and the basic idea is to try to assemble as much data as you can, and then look for patterns that are inconsistent with each other, but are consistent with someone cheating.” MORE
Money & Politics
A hundred pages into his study of Washington’s elite “Club,” Mark Leibovich pauses to “proffer a brief tutorial on the recent history of the Washington entourage.” This excerpt recounts the evolution of the entourage — back some four decades, to the days when “Big Money” first rolled into town.
Now those subindustries not only have exploded but have been folded under a colossal umbrella of “consulting” or “government affairs.” “No single development has altered the workings of American democracy in the last century so much as political consulting,” Jill Lepore wrote in the New Yorker. “In the middle decades of the twentieth century, political consultants replaced party bosses as the wielders of political power gained not by votes but by money.”
Over the last dozen years, corporate America (much of it Wall Street) has tripled the amount of money it has spent on lobbying and public affairs consulting in D.C. Relatively new businesses such as the Glover Park Group—founded by three former Clinton and Gore advisers—provide “integrated services” that include lobbying, public relations, and corporate and campaign consulting. “Politics” has become a full-grown and dynamic industry, a self-sustaining weather system all its own. And so much of its energy is directed inward.
Whenever there is an aura of money and power, an entourage grows up, and that is what’s happened in D.C. For much of the last century, the notion of a permanent D.C. was a handful of power brokers embodied by Clark Clifford. Clifford, an adviser to four presidents, was the town’s original Beltway superlawyer and wise eminence—at least until he was indicted for bank fraud. They also included a few “celebrity journalists” like James “Scotty” Reston of the New York Times and Jack Nelson of the Los Angeles Times. But the political entourage was not an industry on a par with Hollywood or Wall Street. Nor were they packaged like celebrities, with pictures splashed on blogs, stories blasted out on Twitter, and agents working multiplatform deals.
In that era, a former campaign official or White House staffer—a 1960s version of, say, Republican TV pundit Mary Matalin—might have hung around and accepted a political appointment if her candidate won. But she never would have joined a mega-industry inside The Club. “Those inside the process had congealed into a permanent political class, the defining characteristic of which was its readiness to abandon those not inside the process,” Joan Didion wrote in Political Fictions.
Perhaps more than anything, Watergate—and All the President’s Men—made journalists a celebrated class in This Town unlike in any other. The triumphs of Woodward and Bernstein and the killer persona of Ben Bradlee defined a sector of Washington at its romantic best, even while the city, during Watergate, exhibited her disgraceful worst. Bradlee partook fully of that. “We became folk heroes,” he said, while knowing that the postgame high of Watergate would never last. After the Post won the Pulitzer in 1973 for its Watergate reporting, Bradlee wrote a letter in anticipation of that day when “this wild self-congratulatory ski-jump” would end and they would all “hit solid ground again.” It would happen soon enough, with a meteor crash in 1981, when the Post was forced to give back a Pulitzer Prize won by a young Post reporter who fabricated a story about an eight-year-old heroin addict. Yet the celebrity aura of the news business in This Town never really abated.
The cable news boom of the 1990s—the Clinton years—accelerated this exponentially. It created a high-profile blur of People on TV whose brands overtook their professional identities. They were not journalists or strategists or pols per se, but citizens of the green room. Former political operatives sought print outlets, not so much because they wanted to write, but because it would help get them on TV. After leaving Tip O’Neill’s office, for example, Chris Matthews got himself a column for the San Francisco Examiner. He was even named the Examiner’s Washington bureau chief, though he was the only one in Washington for the Examiner and it had no footprint beyond being the Bay Area’s sleepy afternoon newspaper. But the affiliation and title helped Matthews get on TV. He begged himself onto political shout fests like The McLaughlin Group. Hardball had its debut in 1997, on CNBC, and was catapulted by the Clinton–Lewinsky scandal. In his book about the media’s conduct during the Monica saga, Bill Kovach, the founding chairman of the Committee of Concerned Journalists, anointed Matthews as part of a “new class of chatterers who emerged in this scandal… a group of loosely credentialed, self-interested performers whose primary job is remaining on TV.”
Now the likes of Matthews are full-throttle personalities commanding five figures a pop on the speaking circuit, big book advances, and—in Matthews’s case, at least for a while—a $5 million-a-year contract at MSNBC. Fame and celebrity feed on themselves, to a point where people outgrow their first public identities—say, in Mary Matalin’s case, as a Republican strategist. A few years back, Matalin signed a deal as a celebrity voice to present the safety instructions before takeoff on Independence Air. She is brand-oriented.
Washington’s exportable sex appeal has continued to grow even as the modern political game has grown so repellent to so many Americans. It is hard to pinpoint exactly when this started, but it seemed to again coincide with the arrival of Bill Clinton. As big money is an inherently sexy lure, Clinton’s hiring of a Wall Street mega-titan, Robert Rubin, to be his Treasury secretary created an aura of wealth creation in the city that hadn’t existed under George H. W. Bush (who presided over a bad economy) and Ronald Reagan (under whom the lobbying culture certainly thrived, but nowhere near to the degree it does now). The Clinton years also brought a new generation of staffers to routinely parlay their “service” positions into lucrative financial services jobs. Few of them had MBAs or banking experience, but the mystique of having served at high levels of politics—particularly in the White House—had become instantly bankable. Rahm Emanuel, for instance, resigned his job in the Clinton White House in 1998 to join the investment banking firm of Wasserstein Perella. Emanuel was not a “numbers guy,” he admitted, but more of a “relationship banker.” Relationship banking paid well. By the time he left to run for Congress in 2002, Emanuel had amassed more than $18 million in two and a half years and was then free to return to his life of “public service.”
Clinton also represented a killer hybrid of pop culture cachet. He was telegenic, young, and willing to discuss his underwear on MTV—and, of course, had a titillating penchant for Big Trouble in his personal life. All this lent Clinton a box-office allure. Hollywood types started showing up at the annual White House Correspondents’ Association dinner, which had previously been a musty spring affair and the highlight of the local social calendar by default. The dinner has sold out every table since 1993 at a price, in recent years, of about $2,500 per, and the spectacle has festered into a glitzy cold sore of pre-parties, after-parties, and live television coverage from the red carpet.
Bill Clinton’s winning presidential campaign of 1992 also spawned the Rise of the Celebrity Operative. While there have always been famous or infamous political aides (Ted Sorensen for JFK, Lee Atwater for Reagan and Bush 41), the Clinton campaign ushered in a fascination with “entourage” characters such as James Carville and George Stephanopoulos, among others, who themselves became stand-alone brands. Carville, for instance, was a journeyman political gym rat who had never advised a winning national campaign until Clinton’s in 1992 and has not played a major role in advising a domestic one since. Yet with his direct and homespun drawl, urchinlike appearance, and bipartisan romance to a well-known Republican pundit—Matalin—Carville has become a marquee imprint whose five-figure speaking fees, TV pundit deals, and book projects have made him and Matalin exceedingly wealthy.
The Carville–Matalin merger was not so much a joining of two warring tribes as it was the sanctification within the political class. Carville quotes Walter Shapiro, the veteran political reporter for Time and other publications, who marveled that anyone would treat the Carville–Matalin union as some kind of exotic mixed marriage. “If either of them had been in love with a tree surgeon from Idaho,” Shapiro said, “that really would have been something.” His larger point is that Political Washington is an inbred company town where party differences are easily subsumed by membership in The Club. Policy argument can often devolve into the trivial slap fights of televised debate: everyone playing a role, putting on a show, and then introducing a plot twist—in this case, “Hey, these people yelling at each other on TV are actually a couple and they’re getting married.”
This post first appeared at The Nation.
How’s this for irony:
When the City of Kenosha, Wisconsin, was preparing to formally petition Congress to take the necessary actions to get corporate money out of politics and to restore grassroots democracy, the congressman who represents the community was meeting secretly with the Koch brothers to plot election strategies and policy agendas.
Kenosha is the largest city in Wisconsin’s first congressional district, which Congressman Paul Ryan has represented since 1999 — thanks to gerrymandered district lines and heavy infusions of cash from out-of-state special interests. With Congress out of session for the August recess and Ryan expected to head home to meet with constituents, members of the Kenosha City Council decided to deliver a message. They voted overwhelmingly to ask Ryan and other Wisconsin representatives “to amend the Constitution to bar corporate wealth from unduly influencing elections.”
That’s not a particularly radical request.
Sixteen states and roughly 500 communities have petitioned Congress to support a constitutional amendment to restore the power of the people—through their federal, state and local representatives — to place limits on the influence of big money, especially corporate money, in American politics. The official calls from states across the country, and from cities such as Kenosha, come in response to the high court’s decision to remove restrictions on corporate spending to buy elections, which capped a series of rulings that undermined limits on the power of wealthy Americans to dominate the political and governing processes of the nation with unprecedented infusions of campaign money.
Ryan has been among the prime beneficiaries of the money-in-politics moment ushered in by the high court. As the House Budget Committee chairman, he has collected millions of dollars from individuals and groups that stand to benefit from initiatives such as Social Security privatization and the development of voucher schemes to “reform” Medicaid and Medicare. The congressman has become a favorite of many of the biggest donors in the country, including billionaire industrialists Charles and David Koch.
The Koch brothers, prime funders of conservative causes and Republican politicians, were enthusiastic backers of placing Ryan on the 2012 Republican ticket. That move entered in a fiasco that saw Ryan fail to deliver Wisconsin for the ticket led by Mitt Romney. Ryan not only lost his hometown of Janesville but many of the other communities in his district, including Kenosha.
Casual observers might guess that Ryan would be listening a little more to his district, especially to the voters in cities such as Kenosha.
But they would guess wrong. MORE
Reviews of the effectiveness of Federal Election Commission — mandated by Congress back in 1975 to regulate campaign finance — have never been stellar, but lately the word most commonly used to describe it is “dysfunctional.” In the audio interview below, Michael Winship speaks with the Washington Post’s Matea Gold about what, if anything, can be done to break the gridlock at the FEC. MORE
This economist was not a Heritage Foundation scholar or Ayn Rand Institute fellow. The speaker that June was none other than Lawrence Summers, who had just finished up his role as director of the White House National Economic Council, where he was President Obama’s top economic adviser.
While working for the anti-corruption blog Republic Report last year, I reached out to conference organizer Kartik Kilachand to ask him about the speaking fee Summers was given and why his full remarks were never posted to the website (only a snippet was published). Kilachand replied that this was “confidential information” because the conference had signed a non-disclosure agreement with Summers that concealed both his full remarks and speaking fee. I also made a query to Julie Shample, Summers’s assistant at Harvard. “I wouldn’t have any information about this, you may want to check with the forum,” replied Shample.
This practice of giving private paid speeches to big corporations was nothing new for Summers. Before joining the Obama administration, he received hundreds of thousands of dollars in speaking fees from financial institutions that the White House was involved in bailing out and then shielding from more intense regulation. For Summers, the speech at the outsourcing conference was simply a relapse. MORE
Fast food workers in seven U.S. cities are walking off the job this week in what organizers say is the largest strike in the industry’s history.
The wave of protests began Monday in New York City, where workers earning as little as the federal minimum wage of $7.25 per hour — in a town where the average rent is over $3,000 a month — demanded $15 per hour and the right to organize.MORE
Update: On September 11, 2013, the Richmond City Council voted 4-3 to move forward with a controversial plan to aid underwater homeowners that has been blasted by mortgage lenders, including federally owned Fannie Mae and Freddie Mac, the National Association of Realtors, as well as federal and state politicians.
This post outlining the proposed plan first appeared in The Nation blog on July 12, 2013.
In 2005, Rodney Conway and his wife, Vicki, paid $340,000 for their 950-square-foot two-bedroom home in Richmond, Calif., a blue-collar city in the Bay Area. Today the home is worth about $140,000. But the couple still owes $320,000 and makes monthly mortgage payments to the Bank of America. “We’re basically renting this house for $2,000 a month,” said the 52-year-old Conway, who was disabled while serving on a Navy ship in Lebanon in 1983.
With her office job and his disability income, the Conways can barely make ends meet. “We don’t take trips or go to restaurants. We just went to a movie for the first time in a year,” said Conway, who spent twenty-six years as a letter carrier before being laid off in 2009. “I’d like to be able to give my wife a nice birthday present, but I can’t afford it.”
In almost every part of the country, entire neighborhoods — and in some cases, whole cities — are underwater. They are not victims of natural disasters like Hurricanes Katrina and Sandy. Like the Conways, they are drowning in debt, victims of Wall Street’s reckless and predatory lending practices.
Since 2006, when the speculative housing bubble burst, home prices have plummeted; homeowners have lost more than $6 trillion in household wealth. Many now owe more on their mortgages than their homes are worth. Despite rising home prices in some parts of the country, more than 11 million American families — one-fifth of all homeowners with mortgages — are still underwater, through no fault of their own. If nothing is done, many will eventually join the more than 5 million American homeowners who have already lost their homes to foreclosure. MORE
Academic and political activist Lawrence Lessig will be in the studio this morning with Bill to discuss how a very exclusive, very wealthy group of Americans have used their money to purchase our political system — and the various ways in which we might take it back. Lessig is the director of the Edmond J. Safra Center for Ethics at Harvard University and the Roy L. Furman Professor of Law at Harvard Law School. Previously, he was a professor of law at Stanford Law School and founder of the Center for Internet and Society.
In 2011, he and political consultant Joe Trippi founded Rootstrikers, a nonpartisan group dedicated to reforming our campaign finance system. The group’s name draws on a quote by Henry David Thoreau: “There are a thousand hacking at the branches of evil to one who is striking at the root.” The “branches of evil,” in this metaphor, are the many issues taken up by activists, from climate change to media reform, civil liberties to education. The corrupting influence of money in politics, Lessig argues, is the “root.”
“We will never get your issue solved until we fix this issue first,” Lessig said in a TED talk earlier this year. “So it’s not that mine is the most important issue. It’s not. Yours is the most important issue, but mine is the first issue, the issue we have to solve before we get to fix the issues you care about.”
Watch the entire TED talk. MORE
We’re proud to collaborate with The Nation in sharing insightful journalism related to income inequality in America. The following is an excerpt from Nation contributor Greg Kaufmann’s “This Week in Poverty” column.
An update appears below.
Nearly 200 students, parents, community members and union leaders rallied at Sallie Mae’s annual shareholder meeting in Newark, Delaware, last Thursday. On the agenda: first, demand that the nation’s largest private student loan lender meet directly with students to discuss their crushing debt burden; and second, introduce a shareholder resolution calling for disclosure of the corporation’s lobbying practices and membership in groups such as the American Legislative Exchange Council (ALEC).
Outside of Sallie Mae’s corporate headquarters, the activists were met by “dozens of police, blockades and K-9 units,” according to participants. Sarita Gupta, executive director of Jobs with Justice – American Rights at Work, urged the crowd to confront Sallie Mae executives and board members “about their role in America’s student debt crisis.”
More than 38 million people now owe over $1.1 trillion in student debt; Sallie Mae owns approximately 15 percent of that debt, or $162.5 billion. Students owe an average of $27,000 when they graduate from college and many have a debt load several times greater than that amount. Nearly one in ten will default on their loans within two years.
Gupta noted that Sallie Mae “spent $16 million on federal lobbying from 2008 to 2012 and has more than sixty state lobbyists.” The corporation has lobbied at the federal level “to block student loan reform,” and at the state level “for reduced public investment in higher education, forcing more students to rely on private student loans.” MORE
Those of you who read Jane Mayer’s article in The New Yorker about PBS, David Koch and Alex Gibney’s documentary might be interested in watching the film at the center of the controversy. Park Avenue: Money, Power and the American Dream originally aired on public television on November 12, 2012, but is available to watch in its entirety online. In it, the Academy Award-winning director makes the argument that America’s richest citizens have “rigged the game in their favor” and created unprecedented inequality in the United States. MORE
We’re proud to collaborate with The Nation in sharing insightful journalism related to income inequality in America. The following is an excerpt from Nation contributor Greg Kaufmann’s “This Week in Poverty” column.
Gisele Mata of Whittier, California, never considered herself a political activist. Other than making some calls on behalf of President Obama during the 2012 campaign, her focus was on her work, family, church and volunteering as a Girl Scout troop leader.
But on Monday, May 20, 2013, at Freedom Plaza in Washington, D.C., she was ready to march to the Department of Justice, where she would risk arrest in order to save her family’s home and stand up for other people facing foreclosure.
“Banks are doing extreme things to get people out of their homes, so it requires extreme action,” Mata told me. “I wouldn’t be here except the banks are not being monitored so we have to stand up as citizens. They are getting away with acts of inhuman behavior and the Justice Department is not reacting.”
Mata was among 500 activists from across the country who came to the nation’s capital to “Bring Justice to Justice” — participating in three days of action organized by Home Defenders League and Occupy Our Homes. They were calling for the criminal prosecution of banks for ongoing illegal activity, including illegal foreclosures; and for resetting mortgages to a property’s fair market value for the more than 13 million homeowners still at risk of foreclosure. MORE
This article was originally published by ProPublica.
Consider this our Top 6 list of need-to-know facts on social welfare nonprofits, also known as dark money groups because they don’t have to disclose their donors. The groups poured more than $256 million into the 2012 federal elections.
A government report (PDF) released yesterday says that Apple kept billions of dollars in profits in an offshore tax haven that made it possible for them to avoid paying taxes in any country. Reuters reports:
The main subsidiary, a holding company that includes Apple’s retail stores throughout Europe, has not paid any corporate income tax in the last five years.
The subsidiary, which has a Cork, Ireland, mailing address, received $29.9 billion in dividends from lower-tiered offshore Apple affiliates from 2009 to 2012, comprising 30 percent of Apple’s total worldwide net profits, the report said.
“Apple has exploited a difference between Irish and U.S. tax residency rules,” the report said.
This piece first appeared on TomDispatch.
The streets are so much darker now, since money for streetlights is rarely available to municipal governments. The national parks began closing down years ago. Some are already being subdivided and sold to the highest bidder. Reports on bridges crumbling or even collapsing are commonplace. The air in city after city hangs brown and heavy (and rates of childhood asthma and other lung diseases have shot up), because funding that would allow the enforcement of clean air standards by the Environmental Protection Agency is a distant memory. Public education has been cut to the bone, making good schools a luxury and, according to the Department of Education, two of every five students won’t graduate from high school. MORE