Tea Partyers should be angry about income inequality

The American middle class is rapidly losing ground as the top one percent get richer. John Hamilton says the tea party crowd is angry about the wrong things. The real issue is a growing income inequality which has been fueled by years of free trade policies, corporate offshoring of jobs, tax cuts for the rich and deregulation of the financial industry.

Hamilton writes:

The tea partyers have a right to be angry. They are just focused on the wrong thing.

What they should be mad about — hopping mad — is the growing inequality of income in the United States.

The distribution of our national income has become severely skewed. It is worse than in every single country of the Middle East and approaches Latin America's discord-sowing levels. On the Gini Index, where higher numbers represent higher inequality, the U.S. comes in at 45. For comparison, the numbers in Latin America range from 41 in Venezuela to 59 in Haiti. With a score of 23, Sweden leads all nations in having the most equal distribution of income.

Does this matter? It does. As a U.S. diplomat in Latin America, I saw what severe income inequality does to a society: it generates pervasive grievances that fuel a volatile and often violent politics; it fractures social cohesion; and it throttles economic development. The last point is critical. In the United States, the economic activity of a robust middle class has been an important driver of growth. Until recently, that is. In 1970, when our Gini coefficient was 39.4, the wealthiest 1 percent of Americans took in 9.7 percent of national income. That was a lot, but today the equivalent figure is 23.7 percent. The wealthiest one-tenth of 1 percent receives an astonishing 12.3 percent of national income.

According to former Secretary of Labor Robert Reich, middle-class economic activity is no longer generating new growth and jobs. As the purchasing power of the middle classes declined after 1970, families coped for a time. Women earned a second income; all workers put in longer hours and families drew on the equity in their homes. As those strategies are now exhausted, job growth is anemic. And because the wealthy can spend only a fraction of their income, they are not generating new growth either. (To spend an annual income of $10 million — not uncommon in the corporate world — one has to spend $27,397 every day.) Extreme income inequality benefits no one — not even the wealthy.

The growth of inequality, according to Jacob Hacker and Paul Pierson (authors of Winner-Take-All Politics), was largely caused by public policy. Left alone, robust capitalism tends to produce inequality, as it did by the 1890s and again during the 1920s. It took the reforms of the Progressive Movement and New Deal to restore balance.

The New Deal and such post-war measures as the GI Bill contributed to the "great prosperity" of 1945-1970, when middle income gains actually exceeded upper income increases. After 1970, however, a "drifting" public policy ignored growing income inequality or even abetted it through de-regulation and tax policy. Hedge fund managers, for example, have their fee-derived income taxed at 15 percent. As Warren Buffet famously noted, he pays a lower rate of income tax than his salaried secretary.

A focus on income inequality lends an alternative optic on the tea party and conservative narrative that our economic difficulties have their origin in too much government — too much regulation, too much spending on the poor. Rather, the political class has been lax in its stewardship of societal good health. Remedies call for policies that would not have to be more than mildly redistributive — boosting the Earned Income Tax Credit, for example, imposing higher marginal tax rates on the wealthy and taxing capital gains at the same rate as wages and salaries. Such policies are unlikely to be adopted, however, until the public better understands income inequality in all its pernicious dimensions.

As a diplomat who spent most of his career in Latin America, I came to love the region — its peoples and cultures — and to admire many things about it. But not its inequality of income. We should not go there.

John Hamilton of Shelton, Wash., is a retired U.S. Foreign Service officer. He was U.S. Ambassador to Peru in 1999-2002 and to Guatemala in 2002-2005.

http://seattletimes.nwsource.com/html/opinion/2014449005_guest10hamilton.html

China space weapons pose threat to U.S. Navy

A warning about a military threat posed by China from space comes to us via Space Ref. Craig Vovault reports:

China's Military Space Surge

By Craig Covault,Aerospace America

China's surging military space program is poised to challenge U.S. aircraft carrier operations in the Pacific, as Chinese military spacecraft already gather significant new radar, electrooptical imaging, and signal intelligence data globally.

During 2010, China more than doubled its military satellite launch rate to 12. This compares with three to five military missions launched each year between 2006 and 2009. Since 2006, China has launched about 30 military related spacecraft. Its total of 15 launches in 2010 set a new record for China and for the first time equaled the U.S. flight rate for a given year.

Most U.S. public and media attention has focused on China's occasional manned flights and its maturing unmanned lunar program. But China's military space surge reveals a program where more than half of its spacecraft are like 'wolves in sheep's clothing,' posing a growing threat to U.S. Navy operations in the Pacific. India's navy is also concerned.

"This is a really big deal. These military spacecraft are being launched at a very rapid pace" says Andrew S. Erickson, a Naval War College expert on China's naval and space forces. China is becoming a military space power within a global context." At least three or four different Chinese military satellite systems are being networked to support China's 1,500 km+ range DF-21D antiship ballistic missile (ASBM) program, say U.S. analysts. The DF-21D is being designed to force U.S. Navy aircraft carrier battle groups and other large U.S. allied warships to operate hundreds of miles farther away from China or North Korea than they do today.

The ASBM "has undergone repeated tests and has reached initial operational capability," Adm. Robert Willard, commander of the U.S. Pacific Command said recently in Tokyo. The new Chinese space capabilities, combined with development of the DF-21D, are already having an effect on the planning of future operations in the Pacific, says Secretary of Defense Robert Gates.

"I'm trying to get people to think about how do we use aircraft carriers in a world environment where other countries [China specifically] will have the capability, between their missile and satellite capabilities, to knock out a carrier," Gates said recently at Duke University. "How do you use carriers differently in the future than we've used them in the past?" he asked.

The full article appears in the March 2011 issue of Aerospace America published by the American Institute of Aeronautics and Astronautics (AIAA)

http://www.spaceref.com/news/viewnews.html?id=1510

http://www.aerospaceamerica.org/

Downstate Democrats Back Illinois Concealed Carry Law

Lobbying their legislators in support of a concealed carry law in Illinois, hundreds of Illinois gun owners marched yesterday at the state capitol in Springfield as a part of Illinois Gun Owners Lobby Day (IGOLD). Illinois is one of two states in the country that does not allow concealed carry. Past attempts to pass a law have stalled.

Senate Bill 82, the Family and Personal Protection Act sponsored by State Senator Gary Forby (D – Benton), would legalize concealed carry in Illinois. The bill creates procedures by which county sheriffs could issue concealed carry permits to persons at least 21 years old with no record of felonies, violence, mental illness, or substance abuse. Applicants would also be required to complete specific trainings, including classroom instruction and live firing exercises.

State Senator John Sullivan (D – Rushville), Chairman of the Senate Democratic Downstate Caucus and co-sponsor of SB 82, noted the support of several other members of the downstate caucus, including Senator Mike Frerichs (D – Champaign), Senator William Haine (D – Alton), Senator Mike Jacobs (D – Moline), and Senator Dave Koehler (D – Peoria).

Senator Sullivan has created an online petition where citizens can show their support for concealed carry in Illinois. To sign, please visit http://www.senatorjohnsullivan.com/concealedcarry.

“I agree with many people in my district that it’s time to allow responsible gun owners the right to conceal and carry in Illinois,” said Sullivan. “I invite everyone to stand with me by signing the petition on my website.”

In addition to Senator Sullivan, the following senators issued statements in support of SB 82 and concealed carry in Illinois:

Senator Gary Forby (D – Benton):
“Over 290 million people in 48 other states can responsibly exercise their right to carry concealed weapons,” said Forby. “It’s outrageous that five million people that don’t trust their law-abiding neighbors enough are blocking this right from seven and a half million other citizens.”

Senator William Haine (D – Alton):
“It is time that Illinois joins 48 other states in the Union to allow responsible citizens to exercise their Second Amendment rights and protect themselves and their families,” Haine stated. “This bill assures that only well-trained, responsible citizens are allowed to carry their firearms in a concealed capacity.”

Senator Dave Koehler (D – Peoria):
“Many, many people in my district have made it clear that they support legalizing conceal and carry,” Koehler said. “I stand with them and urge them to sign Senator Sullivan’s petition. We need to show the other senators in Springfield how strongly the people of Central and Southern Illinois feel about this issue.”

House Democrats support rebuilding America's intrastructure

The Hill's Finance and Economy Blog reports:

House Ways and Means Committee Democrats introduced legislation Thursday to provide financing for infrastructure investments around the nation.

The measure extends eight bond, tax credit and loan guarantee programs for states and municipalities, anchored by the Build America Bonds (BAB) program, which helped finance $181 billion in infrastructure projects in the past two years, according to the committee.

“These proven programs are vital in our effort to rebuild America’s infrastructure and economy," said Ways and Means Ranking Member Sander Levin (D-Mich.). “There are still far too many states and municipalities, in addition to the 14 million unemployed Americans, struggling to regain their footing after the Great Recession, and this legislation gives them the tools to make long-needed investments."

There is an appetite in the Senate to finance an overhaul of the nation's infrastructure that could align with the Obama administration's $556 billion proposal, or at least provide some funding for the projects included in the fiscal year 2012 budget request.

Transportation Secretary Ray LaHood has said he'd like to see a six-year transportation infrastructure bill ready before the August recess.

Sens. Ron Wyden (D-Ore.) and John Thune (R-S.D.) have recently discussed renewing the BAB program, which expired Dec. 31, with a focus on transportation projects to attract a broader range of support.

The Building American Jobs Act of 2011 includes:

• Build America Bonds — extend the program through 2012, with a 32 percent subsidy rate in 2011, and 31 percent subsidy rate in 2012.

• Recovery Zone Bonds — make an additional allocation of Recovery Zone bonds to ensure each local municipality receives a minimum allocation equal to at least its share of national unemployment in December 2009. The bill would also extend the authorization for issuing bonds through 2011.

• Water & Sewer Bonds — exclude bonds financing facilities that furnish water and sewage facilities from state volume caps. The bill would also exclude bonds financing facilities that furnish water and sewage facilities from certain limitations on tribal government issuances.

• AMT/Private Activity Bonds — extend both provisions for one year (i.e., exempt from AMT tax-exempt private activity bonds issued in 2011 and current refunding of private activity bonds issued after 2003 and refunded during 2011).

• New Markets Tax Credit — allow NMTC to be claimed against the AMT with respect to qualified investments made between March 15, 2010 and January 1, 2012.

• Federal Home Loan Bank Bond Guarantees — extends ability of FHLBs to guarantee tax-exempt bonds through 2011.

• Small Issuer Exception for Bank-Qualified Bonds — extends the ability of financial institutions to purchase tax-exempt bonds of up to $30 million per issuer (from $10 million) through 2011.

• Low-Income Housing Tax Credit (LIHTC) Exchange Program — extends the ability of states to receive a portion of their LIHTC allocation as a direct payment through 2011.

http://thehill.com/blogs/on-the-money/budget/148707-house-democrats-introduce-legislation-to-provide-infrastructure-financing

Congressman Ben Chandler Fights High Gas Prices

Congressman Ben Chandler (D-KY) has filed a bill with his colleagues in Congress to lower prices at the pump. This bill will authorize penalties of up to $500 million for large companies selling oil, gasoline, and diesel at excessive prices or taking unfair advantage of circumstances during an international crisis.

“Greedy oil companies and CEOs shouldn’t be allowed to take advantage of Kentuckians trying to make ends meet in this tough economy,” Chandler said. “It is unacceptable. Gas prices are high enough already, we need to put an end to price gouging and price speculation once and for all.”

H.R. 964, the Federal Price Gouging Prevention Act, will empower the Federal Trade Commission (FTC) and state attorneys general to institute civil and criminal penalties for fuel price gouging during periods proclaimed by the president as an international crisis affecting oil markets. This legislation could also apply to speculation in the oil futures market. The civil penalty for engaging in price gouging would be a fine of not more than $100 million. The criminal penalty for a corporation engaging in price gouging would be up to $500 million.

Originally introduced by Rep. Tim Bishop, Chandler is an original cosponsor of the bill with Representatives John Yarmuth (KY), Jerry McNerney (CA), Tim Walz (MN), Mike McIntyre (NC), and Bruce Braley (IA).


H.R.964 -- Federal Price Gouging Prevention Act (Introduced in House - IH)


112th CONGRESS

1st Session

H. R. 964
To protect consumers from price-gouging of gasoline and other fuels, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

March 9, 2011
Mr. BISHOP of New York (for himself, Mr. MCNERNEY, Mr. WALZ of Minnesota, Mr. MCINTYRE, Mr. BRALEY of Iowa, Mr. YARMUTH, and Mr. CHANDLER) introduced the following bill; which was referred to the Committee on Energy and Commerce

A BILL
To protect consumers from price-gouging of gasoline and other fuels, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Federal Price Gouging Prevention Act'.

SEC. 2. UNCONSCIONABLE PRICING OF GASOLINE AND OTHER PETROLEUM DISTILLATES DURING EMERGENCIES.

(a) Unconscionable Pricing-

(1) IN GENERAL- It shall be unlawful for any person to sell, at wholesale or at retail in an area and during a period of an international crisis affecting the oil markets proclaimed under paragraph (2), gasoline or any other petroleum distillate covered by a proclamation issued under paragraph (2) at a price that--

(A) is unconscionably excessive; and

(B) indicates the seller is taking unfair advantage of the circumstances related to an international crisis to increase prices unreasonably.

(2) ENERGY EMERGENCY PROCLAMATION-

(A) IN GENERAL- The President may issue a proclamation of an international crisis affecting the oil markets and may designate any area within the jurisdiction of the United States, where the prohibition in paragraph (1) shall apply. The proclamation shall state the geographic area covered, the gasoline or other petroleum distillate covered, and the time period that such proclamation shall be in effect.

(B) DURATION- The proclamation--

(i) may not apply for a period of more than 30 consecutive days, but may be renewed for such consecutive periods, each not to exceed 30 days, as the President determines appropriate; and

(ii) may include a period of time not to exceed 1 week preceding a reasonably foreseeable emergency.

(3) FACTORS CONSIDERED- In determining whether a person has violated paragraph (1), there shall be taken into account, among other factors--

(A) whether the amount charged by such person for the applicable gasoline or other petroleum distillate at a particular location in an area covered by a proclamation issued under paragraph (2) during the period such proclamation is in effect--

(i) grossly exceeds the average price at which the applicable gasoline or other petroleum distillate was offered for sale by that person during the 30 days prior to such proclamation;

(ii) grossly exceeds the price at which the same or similar gasoline or other petroleum distillate was readily obtainable in the same area from other competing sellers during the same period;

(iii) reasonably reflected additional costs, not within the control of that person, that were paid, incurred, or reasonably anticipated by that person, or reflected additional risks taken by that person to produce, distribute, obtain, or sell such product under the circumstances; and

(iv) was substantially attributable to local, regional, national, or international market conditions; and

(B) whether the quantity of gasoline or other petroleum distillate the person produced, distributed, or sold in an area covered by a proclamation issued under paragraph (2) during a 30-day period following the issuance of such proclamation increased over the quantity that that person produced, distributed, or sold during the 30 days prior to such proclamation, taking into account usual seasonal demand variations.

(b) Definitions- As used in this section--

(1) the term `wholesale', with respect to sales of gasoline or other petroleum distillates, means either truckload or smaller sales of gasoline or petroleum distillates where title transfers at a product terminal or a refinery, and dealer tank wagon sales of gasoline or petroleum distillates priced on a delivered basis to retail outlets; and

(2) the term `retail', with respect to sales of gasoline or other petroleum distillates, includes all sales to end users such as motorists as well as all direct sales to other end users such as agriculture, industry, residential, and commercial consumers.

SEC. 3. ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.

(a) Enforcement by FTC- A violation of section 2 shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). The Federal Trade Commission shall enforce this Act in the same manner, by the same means, and with the same jurisdiction as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of this Act. In enforcing section 2 of this Act, the Commission shall give priority to enforcement actions concerning companies with total United States wholesale or retail sales of gasoline and other petroleum distillates in excess of $10,000,000,000 per year.

(b) Civil Penalties-

(1) IN GENERAL- Notwithstanding the penalties set forth under the Federal Trade Commission Act, any person who violates section 2 with actual knowledge or knowledge fairly implied on the basis of objective circumstances shall be subject to--

(A) a civil penalty of not more than 3 times the amount of profits gained by such person through such violation; or

(B) a civil penalty of not more than $100,000,000.

(2) METHOD- The penalties provided by paragraph (1) shall be obtained in the same manner as civil penalties obtained under section 5 of the Federal Trade Commission Act (15 U.S.C. 45).

(3) MULTIPLE OFFENSES; MITIGATING FACTORS- In assessing the penalty provided by subsection (a)--

(A) each day of a continuing violation shall be considered a separate violation; and

(B) the court shall take into consideration, among other factors, the seriousness of the violation and the efforts of the person committing the violation to remedy the harm caused by the violation in a timely manner.

SEC. 4. CRIMINAL PENALTIES.

(a) In General- In addition to any penalty applicable under section 3, any person who violates section 2 shall be fined under title 18, United States Code, in an amount not to exceed $500,000,000.

(b) Enforcement- The criminal penalty provided by subsection (a) may be imposed only pursuant to a criminal action brought by the Attorney General or other officer of the Department of Justice. The Attorney General shall give priority to enforcement actions concerning companies with total United States wholesale or retail sales of gasoline and other petroleum distillates in excess of $10,000,000,000 per year.

SEC. 5. ENFORCEMENT AT RETAIL LEVEL BY STATE ATTORNEYS GENERAL.

(a) In General- A State, as parens patriae, may bring a civil action on behalf of its residents in an appropriate district court of the United States to enforce the provisions of section 2 of this Act, or to impose the civil penalties authorized by section 3(b)(1)(B), whenever the attorney general of the State has reason to believe that the interests of the residents of the State have been or are being threatened or adversely affected by a violation of this Act or a regulation under this Act, involving a retail sale.

(b) Notice- The State shall serve written notice to the Federal Trade Commission of any civil action under subsection (a) prior to initiating such civil action. The notice shall include a copy of the complaint to be filed to initiate such civil action, except that if it is not feasible for the State to provide such prior notice, the State shall provide such notice immediately upon instituting such civil action.

(c) Authority To Intervene- Upon receiving the notice required by subsection (b), the Federal Trade Commission may intervene in such civil action and upon intervening--

(1) be heard on all matters arising in such civil action; and

(2) file petitions for appeal of a decision in such civil action.

(d) Construction- For purposes of bringing any civil action under subsection (a), nothing in this section shall prevent the attorney general of a State from exercising the powers conferred on the attorney general by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence.

(e) Venue; Service of Process- In a civil action brought under subsection (a)--

(1) the venue shall be a judicial district in which--

(A) the defendant operates;

(B) the defendant was authorized to do business; or

(C) the defendant in the civil action is found;

(2) process may be served without regard to the territorial limits of the district or of the State in which the civil action is instituted; and

(3) a person who participated with the defendant in an alleged violation that is being litigated in the civil action may be joined in the civil action without regard to the residence of the person.

(f) Limitation on State Action While Federal Action Is Pending- If the Federal Trade Commission has instituted a civil action or an administrative action for violation of this Act, no State attorney general, or official or agency of a State, may bring an action under this subsection during the pendency of that action against any defendant named in the complaint of the Federal Trade Commission or the other agency for any violation of this Act alleged in the complaint.

(g) Enforcement of State Law- Nothing contained in this section shall prohibit an authorized State official from proceeding in State court to enforce a civil or criminal statute of such State.

SEC. 6. EFFECT ON OTHER LAWS.

(a) Other Authority of Federal Trade Commission- Nothing in this Act shall be construed to limit or affect in any way the Federal Trade Commission's authority to bring enforcement actions or take any other measure under the Federal Trade Commission Act (15 U.S.C. 41 et seq.) or any other provision of law.

(b) State Law- Nothing in this Act preempts any State law.

Oklahoma "right-to-work" law failed to create jobs

Right-to-work laws do not boost employment growth in the states in which they
are enacted, a new Economic Policy Institute (EPI) Briefing Paper finds. In fact, Right-to-work laws may actually harm a state’s economic prospects. Does “Right-to-Work” Create Jobs? Answers from Oklahoma by Gordon Lafer and Sylvia Allegretto examines the economic consequences of enacting right-to-work laws and uses Oklahoma as a case study; while most right-to-work laws have been in place for three decades or more, Oklahoma’s law was enacted in 2001. http://epi.3cdn.net/fd70a3db178e318a6c_8um6iihw9.pdf

Right-to-work laws make it illegal for unionized workers to negotiate a contract that requires each employee who enjoys the benefit of the contract to pay his or her share of the costs of negotiating and policing it. In effect, right-to-work laws limit the effectiveness of unions to negotiate higher wages and benefits for their members. Right-to-work laws are in place in 22 states, and state legislatures in states including Indiana and Michigan are currently debating passage of new ones.

Because Oklahoma is the only state to have adopted right-to-work in the current era of globalization, its experience is particularly telling. Does “Right-to-Work” Create Jobs? finds that manufacturing employment in Oklahoma, which increased in the 10 years prior to the enactment of the right-to-work law, fell steadily in the years following it, suggesting that the law had little impact on the state’s manufacturing sector. The right-to-work law in Oklahoma did not buffer it from the country’s employment crisis in 2001-2003 or the Great Recession, either. Compared to the six states that border it, Oklahoma was no better off in terms of its unemployment rate or its rate of job growth in 2010 than it was in 2000, prior to enactment of its right-to-work law. Finally, the number of out-of-state businesses opening plants in Oklahoma decreased following the adoption of right-to-work. Furthermore, more than
160 Oklahoma employers have announced mass layoffs and 100 facilities have closed
since right-to-work was enacted.

Right-to-work laws could in fact have a negative effect on a state’s economy. When weakened unions negotiate contracts with lower wages and fewer benefits, workers spend less on housing, food and other necessities. Wages for non-union workers also decline when right-to-work is adopted, because employers no longer face pressure to match union contract standards. Local and state governments therefore receive less in tax revenues and must cut public services—services that are critical to effective economic development. In addition, the economic sectors that hold the most promise for growth are in construction and service industries rooted in local communities, not those dependent on mobile, lower wage manufacturers.