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Monday, December 09, 2019 {{ new Date().getDay() }}

How You — And Congress — Subsidize The Richest Americans

Reprinted with permission from DC Report

ProPublica scored a fantastic scoop when it obtained and meticulously analyzed 15 years of raw income tax data on the wealthiest Americans. This leak of Internal Revenue Service records is by far the biggest and most important tax news in the 55 years that I've reported on taxes.

Thanks to the leaker, we now know beyond any doubt that the endless claims that America has a progressive income tax system are bunk. A progressive system means that the more you make, the greater the share of your income you pay in taxes. Back in 2005, I got the George W. Bush administration to acknowledge that the system stops becoming progressive near the top.

But, unfortunately, ProPublica shows that it's even worse than what I reported back then.

Working people pay a larger share of their income in tax than the wealthiest of the wealthy. The top marginal tax rate on labor income is almost double that of capital gains.

Jeff Bezos, the richest man in America, paid no income tax in 2007 and 2011. He doesn't dispute that.

Bezos was not alone. Multi-billionaires Elon Musk, Michael Bloomberg, Carl Icahn, and George Soros all pulled off the same trick at least once in recent years, ProPublica reported after analyzing the IRS data. Warren Buffet pays less in tax than millions of Americans, something he and Soros have said is wrong.

Bloomberg, the former New York City mayor and owner of the financial data and news business bearing his name, paid over five years an income tax rate lower than that of the poorest half of American taxpayers.

Bloomberg Pays Just Three Percent

On his income tax returns, Bloomberg reported making $10 billion. Yet, he paid just three percent .

The bottom half of income taxpayers averaged $17,200 of income in 2017 and paid four percent.

A system in which people who gross about $330 a week pay a much higher tax rate than someone who makes billions each year is not just regressive; it's an outrage. It violates principles of taxation that date to the Old Testament and ancient Athens.

I couldn't help but notice that my wife, a charity CEO, and I pay a higher income tax rate than Bezos, Bloomberg, and Buffett.

By the grace of Congress, those billionaires get to take unlimited losses when they make losing stock investments while Jennifer and I—and you—can deduct only $3,000 a year. So even if my wife and I live into our 90s, we will die with losses we never got to deduct.

That's just the kind of unfairness Professor Dorothy A. Brown compellingly demonstrates in her insightful and readable new book The Whiteness of Wealth.

Until now, the Wealth Defense Industry—armies of accountants, lawyers and wealth managers who specialize in using trusts, tax loopholes, off-shore corporations and foundations to benefit their 0.05 percent clients—tricked people. They pointed to posted tax rates, not actual rates paid by the super-super-super rich, and asserted with cherry-picked data that the rich pay a lot.

Salaried Workers Pay More

The granular data ProPublica obtained proves that the tax rates Congress puts in the law and the tax rates people pay only match up for working Americans in the bottom 99.5 percent.

Congress taxes workers much more heavily than billionaire capitalists who, ProPublica showed, can live income tax-free.

All of the people ProPublica wrote about are white men. Professor Brown of Emory University shows how our existing tax system favors wealth above income and discriminates against Black Americans. The design of our tax system plays a significant role in the vast wealth disparities between white Americans and people of color.

ProPublica's reporting backs her up. It showed that for most Americans, annual income taxes far exceed yearly increases in wealth.

Good Debt

At the apex of American wealth, you can live tax-free, as I showed many years ago. That is thanks to rules favoring the rich, loopholes Congress refuses to close, and minimal enforcement of our tax laws against the plutocrat class.

One simple technique is borrowing against your assets. Congress doesn't count that borrowed money as income.

For example: Let's say you're a 60-year-old founder-CEO holding $10 billion of stock in your company, which grows in value at a modest rate of five percent, or $500 million, a year. You determine that you can live comfortably on $50 million a year.

You then borrow that money, putting that much of your holdings up as collateral.

Do you see where this is going? You can borrow and live on $50 million a year every year for the rest of your life without paying a cent of federal income tax.

It gets better. The IRS determines interest rates on intra-family loans. The current rates are next to zero, less than even our modest inflation rate. Given that, why would anyone sell stock and pay a 20 percent tax rate to buy a yacht or a new jet when they can borrow against themselves almost interest-free and watch their stocks keep rising in value?

Hunting For The Leaker

The Biden White House announced late Tuesday that law enforcement is hunting for the leaker, who faces up to a decade in prison.

Whoever dared to do this should be hailed as a national hero on a par with Darnella Frazier, the fearless teenage girl with a steady hand who last summer recorded the slow, agonizing murder of George Floyd by Minneapolis police.

We should be building statues to honor this leaker, if he or she is ever identified, just as we should erect one to honor Remy Welling, the IRS corporate auditor whose leak to me 17 years ago proved corruption in the Silicon Valley stock options system.

Thanks to ProPublica and its source, maybe Americans will at long last wake up and realize that our federal income tax, as currently designed, is a massive subsidy system for the super-rich.

And the source of those subsidies for Bezos, Bloomberg, Buffett, Musk, and other multibillionaires? That would be you.

Why You Shouldn't Be Scared By Inflation Headlines

Reprinted with permission from DC Report

Lots of luck right now trying to find a bicycle for under a thousand dollars. And if you insist on building a new house right now the price of lumber will be dear, adding perhaps $4,000 to construction costs for a typical home.

But don't assume that ruinous inflation is on the way. It's not. These are just temporary bumps and those who just wait a bit will see prices fall back.

It may be hard to appreciate this given all the scary stories in the news about inflation, stories that often lack context and nuance. But don't be scared.

And don't pay attention to the brief ups and downs in the price of stocks because half of American stock tradingis done not by investors but by traders whose computers move so fast they can be in and out of a stock in less than a second. Besides, stocks don't make goods or services so they aren't part of the economy that creates jobs and produces paychecks.

Yes, the news is full of unsettling stories about inflation, but if you read carefully, you'll notice that the talk is about prices rising perhaps four percent this year. Not a big deal.

Indeed, the highest inflation rate ever in our country was 29.8 percent in 1778. Since 1913, the highest rate was 19.7 percent in 1917, according to Investopedia. In 1946, inflation was 18.1 percent

In 1979 and 1980 combined, prices rose by a quarter. Now that would be scary today, but that is not what is happening.

Post-World War II Boom

This is more like 1946 when soldiers and sailors came home and wartime rationing left huge deficits in people's demand for goods. No cars or trucks had been built in America, other than to prosecute World War II, since 1941. People were getting married, so they needed homes and apartments and there was a boom in babies that lasted until the end of 1964. That made prices soar even though the economy fell into a brief recession as we moved from a wartime economy to a peacetime economy.

That was then; this is now. The pent-up demand from the pandemic is for only 15 months, not almost four years as in the 1940s.

Also, today, we have 8.2 million fewer jobs than before the Covid pandemic. We should have added another three million or so jobs since the coronavirus first appeared in America. That means millions of households are struggling just to pay the rent and eat. But for the social safety net spending under both Trump and Biden, we would be in a very deep recession. Instead, our economy grew six percent in the first quarter, roughly double the growth under Trump in his first three years.

At the same time many millions of households, a large majority of them, continued working. Their spending fell, however, because they didn't have to go into work. They stopped going out to restaurants as they ate at home. Dry cleaners saw their customers evaporate. These people deferred spending on vacations and big purchases like cars and trucks.

Some of those who kept on working paid down or paid off their debt. Others added to their savings. In both cases they are primed to spend. That will mean a surge in consumption, but it won't last.

'Price Indifferent'

These folks can afford to be what economists call price indifferent. They may not be happy about it, but if the price of a bicycle doubles, they can just hand over the money. That won't go on for long. Bicycles are still being manufactured and once the surge in demand is fulfilled retailers will no longer be able to charge premium prices.

For the 12 months ending in April overall inflation, before adjusting for seasonal factors, was 4.2 percent, according to the government Bureau of Labor Statistics. That's the highest rate in this century, but it's not ruinous.

Prices of used cars and trucks accounted for a third of the inflation in the past 12 months. These prices were up ten percent in April, the government reported. Prices surged because people who have put off buying used vehicles rushed to market as the economy and jobs began opening.

The prices of some foods are up right now because after 15 months of limited mobility, some shortages of crop workers and weather, both droughts and deluges. Trump's tariffs that savaged the price of American soybeans and enriched Brazilian soybean farmers also played a role.

These are temporary effects. We always see such temporary effects after a major shock to the economy.

We still have a shortage of money in the hands of most Americans. Purchasing by those who were able to save a great deal more during the pandemic in the short term is causing this blip of inflation.

Think Peaches vs. Plums

This is pretty much the same effect we see when bad weather ruins the peach crop and prices rise so much that many people decide to eat plums, apricots, or apples instead. Likewise, when a bumper crop of peaches hits the market and prices fall, people buy fewer plums, apricots. and apples.

The key reason inflation is not going to turn long-term and ruinous is the huge excess cash held by those toward the top of the income and wealth ladders. They have far more cash than can be profitably invested. Just a year ago there was serious talk the banks might start charging people to hold their cash, which we have seen in a very limited fashion in Europe.

America is so awash in cash, though highly concentrated cash, that banks pay a tiny fraction of one percent on savings accounts. If you have $25,000 in your bank it may pay just 20 cents interest each month.

That's because demand for cash in the business world is extremely weak compared with the oceans of greenbacks being held in checking, savings, and money-market accounts.

Every day, banks pitch mortgages to people with solid credit scores at about two percent interest. Back in the early 1980s, mortgages ran 12 to 14 percent.

So, if all the flowers budding in the warming Spring weather are making you desire a new bicycle, just hold off for a bit. Ride your old bike, arrange to borrow your neighbor's, or take a walk. As soon as the people who are price indifferent have fulfilled their demand for new bikes, prices will fall back.

Let’s Mock The Idiots Who Think Vaccines Are More Dangerous Than Covid-19

Reprinted with permission from DC Report

The arrival of effective Covid vaccines has revealed a grave failure in American education. Tens of millions of Americans, the ones who say they will never get vaccinated because there's no need or because they don't trust the vaccines, somehow made it through years of mandatory schooling without learning numbers.

That they failed grammar school 'rithmetic is obvious if you ask two questions:

  1. How many unvaccinated Americans has Covid killed?
  2. How many vaccinated Americans has Covid killed?

The answers: 577,000 and 74.

That's 7,800 unvaccinated people dying for each one who was vaccinated.

And what of infectious cases? The latest Centers for Disease Control and Prevention count is 32,472,201 Americans infected of whom just 5,800 were vaccinated. Only 396 of those vaccinated yet sick required hospitalization.

No vaccine is totally effective, especially not at first. When I was a boy in the 1950s, about 160,000 people a year, mostly children, contracted polio. More than a thousand died each year. Then we got the polio vaccines. First came the dead virus Salk vaccine in 1955, and then in 1961 the much more effective Sabin vaccine, which used a weakened but living poliovirus.

Back then some polio cases were associated with vaccination, mostly because one manufacturer had poor quality controls. That's an argument for rigorous regulation and inspection backed up by severe punishments like prison time for owners and managers who play cheapskates on safety. It's not an argument for avoiding vaccines.

The polio vaccines worked although the United States approved the Sabin vaccine only after the Soviet Union allowed it to be administered to children in then-Communist Russia.

Parents today have no idea about the universal pre-1955 fear among parents that their babies would end up in iron lungs or worse. The last time a new polio case originated in America was 1979.

Few Deaths Among Vaccinated

As for the current pandemic, death is rare among people who are fully vaccinated. That means up to two shots and two weeks out from the date of the last shot. Covid deaths will become even rarer going forward, provided that vaccination becomes near-universal.

And yet 10s of millions of Americans believe—with absolutely no basis in verifiable fact—that the Covid vaccines are riskier than going without.

Rampant innumeracy helps explain the insane news that almost one in five healthcare workers doesn't plan to get vaccinated, as The Washington Post reported in March. Almost a third of Massachusetts State Police have not been vaccinated, and say they don't plan to be, either.

Ditto for thousands of healthcare workers in North Carolina hospitals. To persuade all state employees to get vaccinated, Maryland pays $100 but does not punish those who refuse.

Consider what a friend paraphrased this week: A doorman at her Manhattan apartment said he thought his risk was higher if he got vaccinated.

Here's the other side of the story if tens of millions never get vaccinated:

The coronavirus will keep spreading to new human hosts. It randomly will mutate until a new variant proves even more infectious than the viruses circulating now, which will likely spark another pandemic, putting us all back into lockdown.

Virus Runs Rampant

Oh wait, that's already happening with pernicious new variants in Brazil, Britain, and South Africa. Look at the contagion gone wild in India where a lack of beds, supplies, and oxygen means hospitals turn away people.

Sorry, you're just going to die because Prime Minister Narendra Modi failed to prepare for a pandemic even after seeing Donald Trump's lethally incompetent pandemic mismanagement in America.

Now imagine a new coronavirus variant with characteristics like MERS, the Middle East Respiratory Syndrome. In the past decade, it's only infected about 2,600 people—a third of them died. MERS is still around. It's just been contained, which is what vaccination is supposed to do with Covid.

A mutated virus that kills not fewer than two percent of those infected, as with Covid, but 33 percent of those infected, would devastate American society for decades.

It would mean death on the scale of the recurring Black Death pandemics that ravaged Europe for three centuries killing a third of the populace. Had that been the mortality rate for Covid, more than 11 million Americans would be dead.

Viruses don't respect borders, beliefs or governments. They operate on the same principle as cancer cells—growth for the sake of growth, even though they kill the host and thus their own colonies.

Thoughtless as the coronavirus is, it moves around the globe efficiently, carried to every corner of Earth by human hosts in jetliners. And that means we need universal global vaccination because people in India are dying from this virus and its variants are a threat to people in Indiana.

Wealthy Nations Need To Step Up

At two shots per person that's close to 16 billion doses, though it may well be that half as many will do the trick because we don't all live in packed modern urban areas.

That will cost a fortune and yet we as Americans have a direct interest, just as do residents of other wealthy countries, in paying to vaccinate people in poor countries because it's for our own well-being, our own protection.

This global cost brings us back to innumeracy. How did tens of millions of our fellow Americans get high school diplomas without grasping simple issues about numbers?

Students, which of these is more? 577,000 or 74?

Aw, gee, teacher, I can't tell the difference.

How do people like the quarter of New York City cops who have not been vaccinated even get hired for a job that requires critical thinking skills, while distinguishing between 577,000 and 74 is pretty basic? (This may help explain why we have so many bad shootings by police; too little emphasis during hiring on critical mental skills.)

Surely the public schools—as well as private and parochial schools that are supposed to meet government standards— are failing to teach about numbers and about the basics of science in a meaningful way.

Stupid Republican

We have numerous members of Congress, Republicans all it turns out, who are proudly anti-science or scientific illiterates. They are so ill-informed they don't know the difference between "climate" and "weather" and evidently don't want to learn, either.

Such ignorance is found across America. Some people moronically believe that science is just another religion.

Then there are the fools who teach the absurd notion that people and dinosaurs coexisted.

Innumeracy would be less common but for a decision by PBS more than four decades ago to cancel The Electric Company, the daily kids show about numbers and their relationships. It lasted for only 780 episodes over six seasons.

The Electric Company died because there were no puppets, toys and related merch to sell to kids, unlike Sesame Street, which lasted 51 seasons on public television before moving to HBO, making it unavailable to millions of children whose parents can't afford the pay-TV service.

If only someone had created the Sign family of puppets—Equals, Plus, Minus, and all their symbolic cousins. Then maybe the total numbers from puppet sales would have multiplied into enough funds to cover production costs, adding up to a positive product, namely more Americans learning their numbers and relationships between numbers.

There are, of course, other factors influencing those saying no to vaccination.

Religious Foolishness

Some hold mystical beliefs, like the Ohio woman on CNN who said she would never get infected nor would those around her because she was "covered in the blood of Jesus Christ." Some anti-mask and anti-social distancing pastors insisted that Covid was no danger, punishment for fornication, or other nonsense—only to die from the disease.

Then there are the lies posed as questions by Tucker Carlson of Fox, who falsely says officials won't answer questions about vaccination, questions that have been answered without hesitation both broadly and in fine detail. Some Trumpers see vaccination as supporting President Joe Biden, oblivious that Donald Trump and Melania got vaccinated in secret even though he had the disease and recovered.

And then there are the crazy and incoherent QAnon-type conspiracy theorists who spread the silly lie that Big Brother plants tracking agents in the vaccine. Can we recognize and discuss mass paranoia, per the many DCReport essays by Dr. Bandy X. Lee?

In California, Orange County Supervisor Don Wagner asked Dr. Clayton Chau, the county's chief public health officer, about trackers in the vaccines. Dr. Chau laughed openly.

Later Wagner said that laughing was what he wanted because he was trying to persuade some constituents that the idea of a tracker in the vaccines is loony.

Taking the supervisor at his word, I think he's on to something. The smart response to anyone who says the vaccine is riskier than not is to laugh—loudly, openly and heartily. That's not taking away their free speech; it's using our free speech to respond with the derision their idiocy deserves.

We have good reason to mock and shame these people by calling them out for what they are: stupid, uneducated fools; children posing as adults; selfish little spirits who care only about themselves and not their neighbors.

We should make them social pariahs because they are endangering us all by needlessly increasing the risk of a new pandemic or a deadly future wave of the current Covid crisis.

How Biden Can Curtail Terrorism, Tax Evasion, And Money Laundering

Reprinted with permission from DC Report

Money laundering, both for terrorist finance and tax evasion, threatens national security. Now a private group that watches the quality of anti-money laundering efforts has put forth a smart plan to modernize and upgrade our government's capacity to track illicit cross-border financial transactions.

This is news you will be hard-pressed to find elsewhere.

Global Financial Integrity has a plan, and it's a good one, to better America's Financial Crimes Enforcement Network. FinCEN, as it's known, is a critical government agency housed at Treasury and staffed heavily with IRS financial sleuths. It doesn't get nearly the respect or budget it deserves.

Global Financial Integrity is itself an under-appreciated Washington nonprofit funded by a host of sources including the Ford Foundation and five governments, though not the United States. On a budget of not much more than $1 million per year, it has done solid work calling attention to the growing problem of illicit finance.

Jim Henry, DCReport's economics correspondent, has spent decades documenting the flow of illicit money. He estimates from analysis of official banking and trade documents that at least $40 trillion of illicit money sloshes around the globe. The total may be $50 trillion.

To get an idea of the gigantic size of that bag of corrupt money consider this: Henry's lower-end estimate almost equals the combined annual economic output of the world's two largest economies, America and China.

Global Financial Integrity, in a report titled "Enhancing National Security by Re-imagining FinCEN," makes these recommendations:

  1. Give the FinCEN director a seat on the Deputies Committee of the National Security Council (NSC) to raise the agency's stature within the national security community.
  2. Create within FinCEN a National Anti-Money Laundering Data Center for advanced data collection, synthesis, analysis, and distribution to law enforcement for AML activity.
  3. Establish a "Manhattan Project" to identify, develop, and use state-of-the-art technologies needed to fulfill the technology for that data center.
  4. Launch within FinCEN a National Anti-Money Laundering Training Center which will be an anti-money laundering knowledge and education hub for FinCEN staff, financial institution regulators, law enforcement at the federal, state, and local levels and for both state and federal prosecutors.
  5. Create a Strategic Analysis Team to examine emerging and long-term trends in money laundering methods and computer technologies to counter those threats.

Those are superb ideas all. But will Congress care?

A core problem with hunting for terrorist finance is that the tools used to sift through billions of transactions involving trillions of dollars are the financial equivalent of trawling the ocean bottom for cod. Trawlers catch plenty of cod, but they also drag in many unwanted species.

Tax Cheats Off The Hook

The George W. Bush administration was averse to a serious hunt for big-league tax cheats. It disconnected from a nascent movement by major countries to coordinate their tax policies, a boon to tax cheats. It even refused to hire 80 more IRS investigators to hunt for transactions by Al Qaeda and other terrorist groups in the wake of 9/11.

Source: UN Office on Drugs and Crime

The official excuse was that taxpayers couldn't afford an extra $12 million in spending. That is an absurdity when trillions were being spent on the wars in Afghanistan, still underway, and Iraq. But the funding denial made perfect sense if you knew that anti-money laundering nets catch tax cheats along with terrorists. And since the political donor class is rife with tax cheating, catching tax cheats can be inconvenient for politicians in power, and fellow party members, as a Congressional staffer recently reminded me.

In writing about money laundering in casinos since 1988, in my coverage of taxes since 1995, and on terrorist finance after 9/11, I developed a deep appreciation for the unsung work of FinCEN – and recognition of its weaknesses.

More People, Better Tech

What is needed now to strengthen FinCEN: more staff, super-sophisticated computers on par with the National Security Agency, and, most of all, adding a seat for FinCEN at White House National Security Council meetings.

A FinCEN director once told me that given enough time and resources his staff could find a single $19.99 credit card transaction anywhere in the world. The 9/11 attacks were cheap, costing only about $100,000. We shouldn't forget that relatively small expenditures can be used to cause enormous harm.

To find the little transactions behind big attacks in the future FinCEN needs enormous computer power to separate golden nuggets of fact from the massive overburden of routine financial transactions. FinCEN also needs to be set free to find not just terrorists, but tax cheats.

With trillions of dollars of illicit money in the hands of criminals, kleptocrats, and terrorists, and hundreds of billions of dollars of federal income taxes evaded each year, it's long past time to upgrade FinCEN.

It’s Time For Corporate America To Step Up And Defend Democracy

Reprinted with permission from DC Report

As the Senate minority tries to kill H.R. 1, which would add many more Americans to the voting rolls, there is a simple and effective mechanism to build support for the bill to expand the franchise.

Corporate America needs to step up or face a serious reputational risk for not supporting the For The People Act.

That bill would ensure voting by mail, which, despite fact-free Trumpian claims of fraud, works as well or better than in-person voting, It would make sure people are not limited to Tuesdays to cast ballots, a practice enacted early in America's history when men with property voted, but few working men cast ballots.

Passage in the Senate requires a 60-vote majority. How absurd. A minority of senators hold the power to prevent majority rule. Repealing or revising the filibuster rule would allow a majority vote to pass H.R. 1, with Vice President Kamala Harris casting the tie-breaking vote if Republican resolve endures against popular voting.

But imagine if Corporate America comes out for H.R. 1 as strongly as it did recent efforts to oppress Latinx and LGBTQ Americans, which it would if pressure is brought to bear hard and credibly.

The most powerful economic force in America is corporations. Fewer than 3,300 companies control more than 80% of all business assets. This tiny slice of America's nearly six million companies rings up more than half the total corporate sales each year. And if there is one thing many of these corporation's CEOs have said again and again is that discrimination is bad for business.

Limiting the franchise is rank discrimination at its most base level, a threat to the strength of our democracy. Blocking voting is exactly what is sought by the Russian president and meddler, Vladimir Putin, who says democracy is a joke and less bluntly that dictators should rule. Putin, the man Trump said he admires and trusts, knows that over time a narrower voter base will divide and weaken the United States. Deny people their right to vote or impose barriers to casting ballots and America represents the privileged, not the people.

What could be more un-American than to keep people from voting? We literally fought a war over this since enslaved people, who by law were not human, could not vote. America spent more than seven decades seeking suffrage until women, at least nominally, got the right to vote a century ago in the 19th Amendment.

I can't imagine that a single one of those 3,266 big companies would publicly take a stand against enabling citizens to vote. That doesn't mean they don't practice racial, gender, and religious bigotry with their workers and customers, good intentions or not. All of the many formal complaints and lawsuits tell you that many of them do discriminate.

What you don't see is major companies proclaiming, as many did before the Civil Rights, Feminist and Gender equality movements, "bigots are us."

A Stain On America

Bigotry, especially racial and gendered bigotry, has been a stain on our country from before its founding. It's a stain that millions of people want to protect from the political solvent of government by the people because of their own prejudice and the benefits they perceive flow to them from limiting who votes.

Putting big companies on the spot can help change that. In the past, we've seen how as the dominant force in American life, the biggest corporations, can influence the law to reduce discrimination. These moves have not always been successful. But on the whole, they have been tremendously positive in moving America toward a society of equal justice for all.

In 2015 nearly 400 companies joined in asking our Supreme Court to strike down state laws barring same-sex marriage. The firms ranged from Aetna, Amazon, and Apple to Northrup Grumman to Zoom and Zynga. By a 5-4 vote, our Supreme Court in Obergefell v. Hodges held that denying same-sex marriage violated a fundamental Constitutional right and violated the 14th Amendment due process and equal protection clauses.

That post-Civil War reform amendment has been under attack by Donald Trump, GOP leader Mitch McConnell, and a few senators because it grants citizenship to anyone born in American territory. Some people such as anti-taxers want to repeal the entire amendment, an argument I've heard at national gatherings. Some conventioneers believe our federal government is a criminal organization.

Proposals to repeal the 15th Amendment, which guarantees the right to vote regardless of race, have been under way among conservatives for more than a century. The libertarian Cato Institute has published in favor of enabling states to discriminate by effectively ignoring parts of our Constitution.

Corporate Interventions

Corporate America intervenes when it is smart for business. And that means when the public makes clear they will move their dollars to a competitor. Here are some examples of Corporate America doing the right thing to oppose bigotry laws.

Consider the silly bathroom bills that discriminated against people whose sexual orientation isn't binary. Republicans in North Carolina said their discriminatory legislation wouldn't cost the state a dime. In fact, the state suffered $3.8 billion in lost business over a dozen years, according to a richly detailed Associated Press investigation.

Brian Moynihan, CEO of Bank of America, North Carolina's biggest company, was front and center in saying discrimination is bad for business. He told a March 2017 World Affairs Council meeting in Charlotte, just after a loudmouth bigot became president:

"Companies are moving to other places because they don't face an issue that they face here. What's going on that you don't know about? What convention decided to take you off the list? What location for a distribution facility took you off the list? What corporate headquarters consideration for a foreign company — there's a lot of them out there — just took you off the list because they just didn't want to be bothered with the controversy?"

A year earlier, Disney took a public stand against bigotry in Georgia. "Although we have had great experiences filming in Georgia, we will plan to take our business elsewhere should any legislation allowing discriminatory practices be signed into state law." The company said the legislation would permit religious groups and organizations to discriminate based on sexuality.

The legislature passed that law, but Republican Nathan Deal, at the time Georgia's governor, vetoed it. "Our people work side by side without regard to the color of our skin, or the religion we adhere to. We are working to make life better for our families and our communities. That is the character of Georgia. I intend to do my part to keep it that way," the governor said.

Arizona Discriminates

In 2010, after Arizona passed what amounted to a "show me your papers" law designed to discriminate against Latinx people, numerous companies, trade associations, and individual businesses canceled conventions, sales meetings, and other events in the Copper State, which as a territory was part of the Confederacy.

The companies were not alone. Cities from St. Paul to San Francisco adopted policies that banned most official travel to Arizona.

In 2012 our Supreme Court struck down most of Arizona's anti-Latinix law. It upheld only the section requiring police officers who lawfully stop someone for an unrelated reason to determine immigration status.

That surviving provision created a zone of bigotry so wide that one of my middle-aged children was caught in it. She looks as Latinx as I do, which is to say not at all. An Arizona patrol officer stopped and questioned her for 20 minutes. His grounds? Oregon license plates were on her car.

Repeatedly he asked where in Mexico she grew up, ignoring her New York driver's license, proper registration, and insurance documents and her careful civil statements that she was born in Northern California and had never been to Mexico. Such harassment under the pretense of law in Arizona remains commonplace.

Corporate pressure doesn't always work.

Indiana still has a bigotry law signed by Mike Pence more than a decade ago.

In 2016 more than 80 CEOs sent a letter to North Carolina's governor telling him they would invest and spend their money elsewhere if a bill barring any future protections for lesbian, gay, bisexual and transgender people became law. Gov. Pat McCrory signed the bill anyway.

Politicians depend on donations from PACs, which in good measure are funded with corporate money. Money talks, especially in the Senate.

The smart move for those who want universal voting would be to put the heat on Corporate America and its trade associations. Organize friends in phone call chains and dial up the "stand up for America" U.S. Chamber of Commerce, the National Association of Manufacturers or these Digital Age trade associations.

How Gov. Abbott Is Helping Power Companies Rob Texans Of Billions

Reprinted with permission from DC Report

The pocketbooks of electricity customers across America are under renewed assault by politicians and friends in the electric power generation business.

Unless America restores a sound economic and legal principle that has protected both consumers and electricity companies for more than a century, Texans and the rest of us can expect bigger and bigger electric bills and possibly more ruinous price gouging.

Odds are you haven't heard that in the news. No one announced it, and most journalism is about covering official announcements. At DCReport we look at facts and decide what we think you need to know. Policies and facts affecting how much you pay for electricity each month are typically news only after a crisis, not as an ongoing news story.

Regulation of electricity is based on the principle of "just and reasonable" rates. That means consumers pay prices they can afford while investors are assured a reasonable profit, typically a ten percent or so return on their assets. Half the states still follow this principle, but half do not.

'Unjust, Unreasonable'

This principle is so thoroughly enshrined in American law that courts have held that when a utility banks a single dollar more than earned, the profit is "unjust and unreasonable."

Texas politicians last week delivered the latest blow to this sound economic principle following the winter freeze debacle that left millions without power and, eventually, water.

Texas electricity producers charged an extra $47 billion during the February 14-19 freeze. Only $10 billion of extra charges were imposed in all of 2020.

It turns out that a third of these extra charges were bogus. Yet amazingly, Texas regulators plan to let power producers keep the $16 billion they improperly overcharged.

The overcharges average $550 per Texan. Steal that much just once in the Lone Star state and you can get a fine of up $2,000 plus a six-month stay at the local sheriff's gray-bar hotel.

Harsh as Texas is on criminals, it goes all soft and fuzzy when it comes to businesses ripping off millions of people for $550 each.

The mistake enabling the overcharges was made by the grid operator, the Energy Reliability Council of Texas. Six of the council's seven members, who do not live in Texas, said they were resigning.

The $16 billion of improper overcharges took place during the final 33 hours, the company that monitors compliance with the Texas rules revealed. Not correcting this "will result in substantial and unjustified economic harm," wrote Chris Bivens, a vice president of Potomac Economics, the Texas market monitor.

Ironically, about $1.5 billion of the overcharges were paid to electric generating station owners to produce electricity in freezing weather, according to Potomac Economics.

For those 33 hours producers sold power at the maximum allowable price of $9,000 per megawatt-hour. The average cost of producing each megawatt ranges from roughly $11 to $37 dollars depending on what fuel is used.

During the freezing weather, the costs of generating power did not go up much or at all. But so many power plants shut that those still running were allowed to boost their prices sky-high.

The typical residential customer in America uses electricity by the kilowatt. For a megawatt, a unit 1,000 times greater, the typical residential cost is in the range of $130.

But Texas electricity generators charged almost 75 times that much. Price markups on that scale are so one-sided that the law treats them as unconscionable, and judges often refuse to enforce such contracts.

Correcting the overcharges would just be too complicated, said Arthur C. D'Andrea, the Texas Public Utilities Commission chairman. "It is impossible to unscramble this sort of egg," D'Andrea said last week.

That's nonsense. It's actually easy.

Letting the excess charges stand would also be bad for attracting digital industries to Texas, a major goal of Gov. Greg Abbott. His administration is courting Silicon Valley firms because California housing prices are so high it's hard to attract young workers. But digital industries require electricity that is both reliably available and predictably priced and Texas just proved it can't deliver.

Electricity shortages are almost certain to worsen in the next few years, as we reported on February 19.

Evidently, PUC chairman D'Andrea didn't get the governor's memo on bringing digital firms to Texas.

Regulation is a dirty word to Abbott and other top Texas officials, Republicans all. But because of its unique nature, electricity regulation is crucial because the modern world runs on it and it is created and used in the same instant.

Electricity is what most distinguishes us from the ancients. People in ancient Athens, Rome and other cities had paved streets, lodging houses, restaurants, retail shops and even resorts. What they lacked were the electrons needed for automobiles and jetliners, night lighting, elevators, refrigerators and computers.

Some Texans are faced with depleting their savings, drawing money from their retirement savings, mortgaging their homes or filing for bankruptcy even though they used the same or less power during the freeze as on other days.

The Texas rules, which I've warned about for 15 years, are clear, the failure to follow them was blatant and the plan to let producers keep the $16 billion of overcharges is unfair, unnecessary and, if litigated, likely to be found unconscionable.

It's reasonable to wonder whether the regulators, all political appointees, made a convenient mistake, in effect subtly telling generating plant owners:

"Fellas, stuff your saddlebags with all you can and ride over to the bank with your ill-got gains while we sightless sheriffs take a nap."

That may sound cynical, but utility regulation is a revolving door everywhere. Commissioners who set electricity rates and grid rules overwhelmingly come from the executive offices at utilities where they return after their stints as public officials. Consumer advocates are as rare as snow in Houston.

The Ghost of Enron

The problem with electricity overcharges extends far beyond Texas, but it began there in the mid-1990s with lobbying by Enron, the fundamentally corrupt energy price manipulator that later went bankrupt.

Enron persuaded the Texas legislature in the mid-1990s to fundamentally change the way electricity is financed and sold. The idea was that while distributing electricity is best done by a monopoly so multiple power lines are not needed everywhere, there's no natural monopoly in generating power. That's more than reasonable — on the surface.

Eventually, half the states decided to replace vertically integrated electric utilities which generated, transmitted and distributed electricity. Instead, independent firms would generate power and bid to sell it to distribution companies in so-called single-price auctions.

Enron argued that when there was more demand for power than expected prices would spike and those spikes would attract new investors who would build more power plants and in the long run prices would come down.

I've yet to meet a businessperson eager to invest in a business where it takes years to go from concept to operation with the expectation that future profits will be smaller than today.

The biggest flaw in the Enron idea, however, is that idea is that doing the opposite is faster, cheaper and comes with less risk while virtually guaranteeing fat profits. You can read our DCReport stories here and here as well as here and here.

Enron sold Texas lawmakers on "single price" electricity auctions.

Here's how a single-price electricity auction works. The grid operator, in this case, the Electric Reliability Council of Texas, calls for bids to supply power for periods that can be as long as a year and as short as a few minutes. Bidders offer to sell power at whatever price they chose.

When bidding closes, everyone whose bid is at or below the price needed to supply all the juice the market needs wins. The winning bidders also get the highest price bid. So even if the average bid was, say, $100, if the highest winning big was $9,000 then every winner gets the $9,000.

Lose-Lose Deals

That means a hydroelectric dam operator with costs of maybe $120 per megawatt-hour can bid one penny to ensure their bid is a winner and then collect thousands of dollars. So, when they throw open the floodgates to make turbines spin, it's almost as if greenbacks instead of water flow like Niagara Falls.

What Wall Street investors figured out, as I did, was another flaw in the Enron plan.

Owners of a single power plant must bid low enough to make sure their electricity is purchased, but owners with a fleet of electricity generators can bid strategically to jack up prices.

Experiments with college students, simple bots and actual bidding records showed years ago that this is exactly what happens, as explained in my 2007 book, Free Lunch.

There are rules against this kind of manipulation, which is why grid operators hire independent market monitors like Potomac Economics. But some market monitors have been less than diligent while others have had their advice ignored as right now in Texas.

On top of this, in one of his first official actions as president in 2017, Donald Trump signaled to Wall Street that fleet owners were pretty much free to manipulate electricity markets, the subject of the second story DCReportpublished.

As for unscrambling that egg, the task that Texas PUC Chairman D'Andrea says is too hard, here is one of several ways to restore fairness.

The Texas PUC can reject charges that exceed the pre-crisis price during those 33 hours. The independent power producers all keep detailed time and price records and can issue revised invoices. They can also sue the state if they want, knowing they risk being tossed out for trying to enforce unconscionable contracts.

Undoing the improper excess charges involves accounting and math but since, unlike the ancients, we have electricity to power computers it's not all that hard to make the calculations necessary to uphold the just and reasonable principle.

To Save Americans From Starving, Congress Must Raise The Minimum Wage

Reprinted with permission from DC Report

Imagine Washington announcing today that for the next three decades your pay will increase each January. You'll get a boost to cover inflation plus 10-cents more an hour. That means your real pay next year, before taxes, will be $4 more per week.

Ask yourself, would you even notice an extra $4 a week in gross pay? Would you feel like playing by the rules and being a good worker was worth it?

Well, that's what has happened to the typical American worker since 1990, but no one announced it back then. And it's happened as unions have been pretty much destroyed, representing only about one in 15 private-sector workers.

As a middle-aged widow who lost her job and took minimum-wage work at a major national retailer to feed herself and her son, who live together in a town with low-cost housing, told me:

"You can't make ends meet on the minimum wage no matter how much you try. It is just not possible."

That's the prime reason Congress and President Biden must raise the minimum wage.

As private-sector unions have faded away, wages have fallen in tandem. The numbers and the pain of people like the widow show that Congress must step in, acting as a proxy union for the lowest-paid workers by raising the floor on wages in America. If lawmakers fail then taxpayers should expect rising costs for welfare to cope with social pathologies. We should all expect popular support for our tattered democracy will wither even more, putting our liberties in danger.

Inflation Toll

The story I pulled from the official data shows things are much worse than just the awful fact that the minimum wage has been stuck since 2009 at $7.25 an hour, its value being eroded by inflation even as America grows ever richer.

Each year, I do detailed analyses of W-2 wage and salary reports that employers send to the Social Security Administration. Its computers add up every filing and then a report shows how many people make how much in broad pay categories whether they had one employer or many.

What the wage data show is disturbing. America is becoming two nations separate and unequal, one with a minority of workers who are prospering, some making each year enough for a hundred families for a lifetime. Across the income divide more than 130 million workers struggle.

Republicans and some Senate Democrats claim that raising the minimum wage will kill jobs and force small businesses to close. That's not what past actual experience shows, at least not on this planet.

Faulty Argument

That argument is actually silly because it assumes that prices never increase so if wages go up businesses must fail. Nonsense. But should you find a dealer advertising new cars today at 1990 prices please let me know.

What the facts show that since 1990 our national wage pie, adjusted for inflation, has grown much bigger. Adjusted for inflation it was $8.8 trillion in 2019, up from $5 trillion in 1990.

But the way the wage pie was cut into slices changed significantly.

Let's look first at workers who always earn only the minimum wage. Such people exist, though they are not common.

In 1990 the minimum wage was $3.80. Adjusted for inflation it would have to have risen to $7.48 in 2019 just to stay even. But the minimum wage was only $7.25, the same as today. In absolute terms these workers are worse off, their meager slice of income pie shrinking.

In 2019 half of America's 169 million workers made less than $35,000; a third made less than $20,000. Only one in three workers earn more than $1,000 per week.

$620 a Week

What about the typical worker? That's measured by examining median pay; half make more, half less. In 2019 the median wage was $34,250 or $620 a week.

That's a real increase since 1990 of $5,712. That sounds good until you realize that in round numbers it works out to that dime an hour raise every January.

How about the average wage which includes those with ginormous paychecks? Real average pay rose by $12,225 to $51,916. That's two dimes and a penny more per hour each January. How much would you notice an extra $8.40 a week – before taxes?

Now let's turn to the extremely well paid, people whose pay increases alone meant they gorged on wage pie while most everyone else got crumbs.

Let's consider all workers making $1 million or more, roughly one in every thousand workers. Their share of the national wage pie rose mightily, from 3 cents in 1990 to a nickel in 2019. That leaves everyone else with a smaller share of the pie to divvy up.

What about the super-paid workers who made $10 million or more in 1990 and 2019 using 2019 dollars?

More Super-Rich

The number of super-paid workers is for sure small. But it grew five-fold from 739 to 4,024.

Their average gross pay increased from just shy of $2 million to almost $2.5 million. Simply put in 2019 they got six days of pay for five days of 1990 work.

Also, a record 222 of these workers were paid more than $50 million in 2019, averaging $89 million each.

Even if we assume that employers pay these top earners what they are worth, a society whose rules and regulations lavish every more pay on those to the top while hardly growing wages for two-thirds or more of the workforce is neither stable nor enduring. The chasm between the super-paid and everyone else is huge and widening and can destroy support for democracy, as we saw with the failed coup on Jan. 6.

Without unions to bargain for workers pay simply is not going to improve. Indeed, our government has put downward pressure on wages through the welfare "reform" act President Bill Clinton signed, which flooded the market with women who have few job skills and little education, a stealth subsidy for many employers because they could pay less. The child tax credit for working parents has morphed over time into a subsidy for employers who now capture its benefits by not raising pay. Those are just of many anti-worker policies our government put in place during the past 40 years.

Congress can fix this. It has to step in as a proxy union for powerless workers and raise the minimum wage. If we could afford a minimum wage in the 1960s that's equal to about $12 an hour today then we can afford to raise our pay standards in today's much wealthier America.

And to those small businesses that say they will fold if they have to pay their workers more there is an answer: Raise prices.

If you can't afford to pay a living wage and you can't raise prices, your business is already failing so put it out of its misery. You can always start a new business in the future — and with people making more money your chances of success will be much better because more customers will have more money to spend.

Rising Income Data Looks Good, But Hides A Grimmer Truth

Reprinted with permission from DC Report

We have stunningly good news today: Wages in 2020 grew at by far the fastest rate in the last 45 years.

The bad news: It's a statistical anomaly caused by Donald Trump's lethal mishandling of the coronavirus pandemic. The scourge wiped out almost eight million jobs held by lower-paid workers and only two million better-paying jobs.

The worse news: Two Republican senators who publicly profess their Christian faith to win over voters want to oppress millions of people trapped in poverty. With straight faces, they call their plan the Higher Wages for American Workers Act.

The good news starts out this way—in 2020, average wages grew a stunningly robust 7.2% over the previous year.

That's by far the greatest one-year growth in wages in the past 45 years. In fact, it's 80% more than the fastest previous year's wage growth, analysis of Census data shows.

Typical Pay

The better measurement, however, is the median wage. It indicates what the typical worker makes. The median marks the halfway point in wages with half of workers making more, half less. The median wage grew 6.9 percent, as a new report by the Economic Policy Institute shows.

EPI is a nonprofit research organization that advocates for poorly paid workers and regularly issues The State of Working America report with lots of interactive graphics. I've checked its work and always find it rock solid.

EPI's latest by Elise Gould and Jori Kandra is available here.

The obvious question is how could wages skyrocket during a pandemic that created the worst joblessness since the Great Depression? How could wages rise at all since by the end of May more than 42 million Americans, a quarter of those with any paid labor, had filed for jobless benefits?

Just beneath the surface, we find a compelling and distorting fact: More than 80% of the 9.6 million jobs that disappeared in the pandemic paid in the bottom quarter of wages. Wipe out those jobs and the statistics on wages show an increase. What's surprising is that the increase is only about 7%.

America's low-paid jobs are disproportionately held by women, especially those with children and little education, and by minorities. In real terms, these groups have been losing ground for years even as the economy keeps growing.

But by killing their jobs, at least until the pandemic is over and recovery is complete, the data in wages paid were distorted by the fact that most of those who are out of work were in the bottom half of the pay ladder.

Forgotten Americans Forgotten

What was it that Trump promised The Forgotten Men and Women? Oh yes, "The forgotten men and women of our country will be forgotten no longer." Well, he forgot about them and in addition to a real jobless rate of about 10% plus more than a half-million Americans needlessly dead. Had Trump followed sound public health advice, as we saw South Korea do, the coronavirus butcher's bill would be only about 10,000 dead Americans.

So how to alleviate the misery of America's working poor?

Senators Mitt Romney (R-Utah) and Tom Cotton (R-Ark.) say they are coming to the rescue. In a display of chutzpah and cluelessness that is extraordinary even for rich white men in high government positions, they call their bill the Higher Wages for American Workers Act.

Their bill's provisions are at odds with their professed devotion to a religion that imposes as a core duty alleviating the suffering of the poor. Cotton is a Methodist. Romney belongs to the Church of Jesus Christ of Latter-day Saints.

Cotton and Romney say the Biden administration plan for a $15 minimum wage in 2025 is way too much money. They propose a minimum wage of $10 an hour in 2025.

How much higher would real wages rise under the Cotton-Romney plan?

$12 A Week

Given the expected rate of inflation, that $10 an hour in 2025 would mean about 30-cents more in real pay than the current federal minimum of $7.25 an hour. That's $12 a week more for a full-time week. The current minimum wage has been in place since 2009 under legislation signed by President George W. Bush. Inflation since 2009 has shaved roughly a buck off each hour's minimum wage.

Measured back to President George W. Bush, the Cotton-Romney plan leaves workers worse off in 2025 than in 2009.

Now watch the news and see if the record rise in median and average wages is reported. Where it is, pay close attention—especially in reports by Fox News and its like—whether they say the increase is a statistical anomaly or proclaim a miracle wrought by Trump.

Having read this at least you won't be fooled.

Why The Rigged Energy System In Texas Won’t Improve Anytime Soon

Reprinted with permission from DC Report

The misery and death in Texas, where the state electric grid was taken down by unusual but predictable cold weather, underscore the misguided conservative Republican values of less regulation, devil-may-care burning of fossil fuels, dangerous tax cuts and unfettered trust in markets as the universal problem solver.

In Texas, the blame for the unheated homes, the dark urban skylines, and winter water shortages is on just one politician—Greg Abbott. He has been governor of the Lone Star state for more than six years.

Abbott gained notoriety in the past few days for making the ridiculous claim that Texans are freezing because windmills fail in the cold. The fact is that they are running just fine in such spots as Iowa, Minnesota, Alaska, Finland and even Siberia.

Texans froze because Texas state government:

  • Failed to require that natural gas pipelines be built in anticipation of severe weather
  • Didn't require sufficient natural gas storage for electric power plants
  • Neglected to insist that the electric grid itself be hardened against severe heat and cold, more of which is certain as climate change generates raucous weather

What did Abbott do? He appointed all three members of the Texas Public Utility Commission -- who failed to ensure the adequacy of the Texas electric grid for all weather.

Inadequate Reserves

Abbott's commissioners, embracing his anti-regulatory philosophy, did not require adequate power generation reserves. That's crucial. When electric generators go down in extreme weather, accidents or even planned maintenance, there needs to be plentiful additional capacity to ensure the juice flows.

The savings from cheap-skating in this area are quickly overwhelmed by the damage done by blackouts and days without power in either extreme cold or extreme heat.

Allowing utilities to slash the size of their staffs, especially line workers, compounds a disaster.

The set-up for this disaster began years before Abbott was born in 1957. Two decades earlier, during the Great Depression, Texas exempted itself from the then newly established federal regulation of electricity reliability and pricing.

Separate Power Grid

Most of Texas has its own power grid that doesn't connect to the massive Eastern U.S. or Western U.S. grids. The Panhandle and most of East Texas are on the Eastern Interconnection. The El Paso area is connected to the Western grid.

The rest of the state is under the system operator laughably named Electric Reliability Council of Texas, better known as ERCOT. Significantly, those areas connected to the rest of the country have not had issues.

That the Texas grid was not designed for predictable severe weather and lacked backup generating capacity has been known and documented for years. Yet under Abbott, the situation festered.

A blistering assessment of the Texas situation was provided to DCReport by two deeply informed electricity experts, Larry Kellerman, managing director of private equity investor I Squared Capital, and Robert McCullough, an independent utility economist in Oregon. They said: "The unfortunate state of the ERCOT power system can be summarized in two words: systematic unpreparedness. The origins of this disaster included the lowest reserve margins in North America, ignoring basic maxims of preparing for bad winter weather, and a market design that rewards shortages at the cost of consumers."

Kellerman's firm is a $24.5 billion private equity fund that invests in modernizing electric utility systems. McCullough is feared by utilities because of his ability to cut through their obfuscations with killer facts and smart financial analysis.

Getting Worse

The problems that Kellerman and McCullough documented in their report are only going to get worse so long as Abbott does what he has been doing. The governor comes up with crazy lies like blaming the proposed Green New Deal for his state's current electricity fiasco. His Republican allies in the legislature, by the way, are just as dishonest about the reasons the juice stopped flowing.

Indeed, anti-regulation ideology is so deep in the heart of Texas that Abbott's predecessor, Rick Perry, the Trump energy secretary, says Texans would rather freeze without electric power than let Washington regulate their grid.

Texas will have a terrible shortfall in its capacity to generate electricity at least through 2024, a National Electricity Reliability Council report shows. That means extreme hot or cold weather will result in more blackouts just when people most need air-conditioning or heating.

Texas fully embraced the idea of electricity markets to make for a stronger and more efficient electric system. It did so under auction rules sold to the Texas legislature by lobbyists for Enron. You remember Enron? It was the utterly corrupt, electricity-price manipulating Texas company whose top executives were tried and imprisoned after the company collapsed.

Some 14 years ago, I exposed the Enron-designed "electricity markets" for rules that inherently made prices rise, allowing power profiteers to gouge their customers' wallets.

Defenders of the Enron design of electricity auctions say that higher prices will prompt consumers to reduce their use of juice during peak demand periods. But without a convenient price change notification system how would you know that the price of power jumped ten-fold from five minutes ago?

Poor Economics

How can consumers respond to prices they don't know are rising – or falling? The only honest and economically sound answer is they can't. Abbott and his ill-informed appointees don't understand that, and don't want Texans to understand.

Kellerman and McCullough said Thursday the theory that "mandating even higher prices" will prevent blackouts "is simply poor economics." In Texas, the "widespread blackouts show that mandating high prices during emergencies has not created an incentive to build enough generation, make sure that it is operational during extreme weather or served consumers adequately."

And they note that the "privilege—not the inherent right—to participate in ERCOT's power marketplace" comes with a responsibility to apply well-established investment, design and operation practices "necessary to assure operational integrity during inclement weather."

Instead, the regulators appointed by Republican governors produced "a 20th-century solution for what should no longer be a 21st-century problem."

The cheapest and smartest way for electricity profiteers to fill their pockets is to eliminate generating capacity. Buying a fleet of power plants and then shutting one down allows profiteers to rig electricity markets so their profits balloon, as I showed here and here.

From $30 to $9,000

In Texas electricity that last week cost $30 soared to $9,000 once the bitter cold brought down much of the grid.

I've written about electricity regulation for more than four decades and taught its fundamentals for eight years to graduate business and law students at Syracuse University.

In 2006 in The New York Times, I showed how vulnerable the Texas electricity "market" is to manipulation by profiteers.

Creating electric grids that aren't up to the task is one of the ways that profiteers benefit. No American politician has done more to help profiteers than Abbott.

That Texans seem bewildered about their plight even though the problems have been known for years is not surprising. Texas utilities and their friends in office felt free under Abbott and his two Republican predecessors, Rick Perry and George W. Bush, to attack honest journalism about the electricity situation in Texas.

In particular there's the harassment of a Galveston newspaper reporter who wrote accurate pieces about facts that the Houston-based Reliant utility wanted to hide from its customers. Only one other Texas newspaper journalist wrote about the issue after which he was laid off.

One thing Texans should know is that going forward more deadly disasters caused by a lack of electricity generating capacity are predictable. The North American Electric Reliability Corp., assigned by Congress in 2005 to monitor reliability, found that only two of the 21 electric grids it studied will lack enough capacity to meet demand in 2024. That is a very short time in which to increase generating capacity.

The Canadian system serving Ontario province will be short 615 megawatts of capacity. The Texas shortfall will be six times that at 4,819 megawatts.

That electric generating capacity shortfall equals all the power needed to serve about 3.1 million homes. Texas has almost 10 million households.

When the predictable blackouts happen in the future will Texans know who is to blame for their misery? Or will they believe official fairy tales about wind turbines freezing up and the Green New Deal which as of now is only an idea?

The Senate Must Convict Trump

Reprinted with permission from DC Report

Anyone who believes that it doesn't matter whether the Senate convicts Donald Trump because the former president has no political future hasn't examined the razor-thin margins that produced Joe Biden's Electoral College victory.

Biden beat Trump by eight million votes, but when you look closely at the state-by-state results the race was much closer.

Had Trump won just 43,921 more votes in three states–Arizona, Georgia and Wisconsin—the Electoral College would have been tied at 269 each for Trump and Biden. That would have thrown the election to Congress where Trump almost certainly would have been awarded a second term under Constitutional rules.

Switching 33,597 votes in a fourth state would have given Trump a victory in Nevada with its six Electoral College votes. And that would have given Trump 275 votes, five more than needed to win the Electoral College.

Think about that—just 76,518 votes were the difference between Biden or Trump in the White House.

Are you willing to bet our democracy on a margin that thin?

Proved Beyond Doubt

Now think about that in terms of what the House managers prosecuting the second impeachment of Trump showed in their masterful presentation in the Senate. They proved beyond any doubt, even unreasonable doubt, that Trump knew his followers planned to assassinate Trump's own vice president, Mike Pence, and Speaker Nancy Pelosi, the next two people in the line of succession to the presidency.

During the siege, Trump did nothing to stop the attack. He did, however, egg on the murderous mob hunting for Pence, Pelosi and others. Indeed, after it was over, he never inquired about the safety of his runningmate, and he has never shown remorse for the attack.

Five people died on Jan. 6. Since then, two Capitol Police officers who engaged in hand-to-hand combat with Trump's mob have taken their own lives.

If The Mob Had Succeeded

Had the mob that Trump spent months courting and encouraging succeeded think of where America might well be today.

Trump would've been in a position to take a whole series of actions to seize power including the suspension of habeas corpus, which is the right to be brought before a judge instead of being tossed in a dungeon and the keys thrown away.

Trump could have declared martial law, forcing senior military commanders into an agonizing decision about whether to follow his orders.

It's important to remember here a crucial but not widely known fact about one of the bulwarks of our civilian control of the military. Enlisted men and women take an oath to follow the orders of the president and to defend our Constitution, but military officers take an oath only to uphold our Constitution.

Nonetheless, had the vice president and the speaker been assassinated it may have augured in favor of the Pentagon chiefs agreeing to temporarily do as Trump ordered.

Slaughter in the Capitol

Imagine if there had been wholesale slaughter of lawmakers, Capitol Police, staff, and journalists. Trump could have seized power, claiming it was for the good of the republic—and the Congressional approval of Biden's Electoral College victory that the mob temporarily blocked might never have occurred.

In that event to complete his goal of becoming our dictator Trump would only have needed to find a way to make temporary emergency support from our military permanent.

It matters greatly for the future of our nation and its standing in the world that Trump be convicted. That requires two-thirds of senators present in the chamber when the vote is taken.

Senators Walking Out

About 15 Republican senators walked out of the proceedings, pool reporters allowed into the chamber reported Thursday.

If those 15 and just one more stay away when a vote is taken, it would require only 56 senators to convict Trump. That's 48 Democrats, two independents who caucus with the Democrats and only six Republicans.

Public comments by some senators suggest six of them can be persuaded that Trump must be convicted and then, by a simple majority, barred from public office for life.

We can only hope that 16 Trumpist senators decide, since they don't think the entire proceeding is legitimate, to boycott it when it's time to vote on conviction or acquittal.

QAnon Cultists And Evangelical Theocrats Baptize The GOP In Crazy

Reprinted with permission from DCReport

Donald Trump is out, but parts of the Republican Party warmly embrace his dark legacy of white supremacy, the crazy QAnon conspiracy and civil war wrapped in faux Christianity.

Like Trump, these fake Christians reject turning the other cheek in favor of threatening or promoting violence.

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No, Trump Didn’t Bring Back Jobs From China And Mexico

Reprinted with permission from DC Report

Now that his term finally is over, let's examine Donald Trump's performance on a key promise: reclaiming manufacturing jobs, especially from China and Mexico, to raise U.S. wages.

Evaluation first, then a grade. (Can you guess?)

Our trade representative, Robert Lighthizer, last summer praised several companies that dropped plans to move jobs offshore. The "era of reflexive offshoring is over," he claimed in a New York Times op-ed last May.

Facts show the opposite. Team Trump encouraged offshore manufacturing, not that you'd likely know that from following the news.

In his State of the Union address last year Trump proclaimed a "blue-collar boom." It was fact-free nonsense. It didn't happen, not even before Trump's incompetent and malicious pandemic response threw 10s of millions of people, including many factory workers, onto the unemployment lines.

"Even before the coronavirus outbreak, the promised benefits of the president's $1.9 trillion tax cuts hadn't materialized and manufacturing had fallen into a slump," Rep. Don Beyer, a Virginia Democrat, wrote in a report. "After a brief upturn in 2018, manufacturing had fallen into a slump by the first quarter of 2019."

Factory job losses continued in 2019 as federal Bureau of Labor Statistics data show:

Bring Back Jobs from China and Mexico? Trump couldn't

Our goods trade with Mexico had a negative shortfall of almost $101.4 billion in 2019. That's 60% worse than the $63.3 billion shortfall under the Obama administration in 2016.

Using 2019 as the benchmark avoids pandemic effects. But data on the first three months of 2020, before the pandemic, show our trade deficit with Mexico was exploding, up 21% in one year. That shows the abject failure of Trump's Mexico trade policy measured on his terms.

Job Quality Suffered

Yes, China lost jobs … to Vietnam and other countries with even cheaper labor costs.

Under Trump job stability and quality – pay, fringe benefits, working conditions – suffered.

"Job quality in the U.S. remains tepid," the Coalition for Prosperous America reported this month. The coalition promotes balanced trade deals. Jeff Ferry, the coalition's chief economist and creator of its Job Quality Index, said on Jan. 8 that "restoring the health of our manufacturing sector is the best way to restore prosperity to millions of middle class and struggling Americans."

Trump's 2016 campaign promises about manufacturing jobs raised the hopes of people who worked in the 91,000 American factories that have closed since 1997 under Congressional policies which in some cases subsidized moving jobs offshore.

But the carnage continued. In the two years from 2016 under Obama through 2018 under Trump 1,800 American factories closed.

Overall, we suffered a net loss of more than 91,000 manufacturing plants and nearly 5 million manufacturing jobs since 1997. Nearly 1,800 factories have disappeared during the Trump administration between 2016 and 2018.

Trump's 2017 tax cut added to those subsidies by enabling American firms to earn untaxed or minimally taxed profits so long as they invest offshore.

Minorities were hardest hit by the loss of factory jobs to China. Economist Robert E. Scott, who tracks trade issues for the Economic Policy Institute, estimated that 958,800 minority factory workers were displaced with wage-related losses of $10,485 per worker – and that was in 2011. Today jobs and pay are worse, not better, for blue-collar minority workers.

Weak Demand

The problem with Trump's promise and the wish for more factory jobs is with the two sources of such manufacturing jobs.

One is the diminished demand for goods, which in turn reduces the demand for workers to make, package, ship and market those goods. The other: Advances in efficiency that reduce the number of workers needed to produce goods.

Demand is weak because 90% of Americans — before the pandemic — were losing ground as the cost of living grew faster than incomes and job security evaporated in one industry after another.

The failure of political leaders in both parties to adapt to the long-running shift from factory jobs that paid well because of union contracts to moving manufacturing work offshore began long before Trump. So did the rise of low-paid unskilled and semi-skilled jobs, which has devastated the finances of most families. Trump promised voters he would reverse these trends.

The bottom 90 percent of Americans had less real income in 2018 than in 1973, the peak year for the share of production jobs in union shops. The 2018 households collected 4% less money than the 1973 households, the equivalent of having no income for the last two weeks of 2018.

Even worse for most Americans, incomes fell under Trump despite his baseless claims of huge income rises, often uncritically repeated in news reports.

In 2018 the nearly 87 million taxpayers making less than $50,000 had to get by on $307 less per household than in 2016, the year before Trump took office, my analysis of the official data shows. The gains were further up the income ladder.

That 57 percent of American households were better off under Obama contradicts Trump's often-repeated claim he created the best economy ever until the pandemic. To be sure there was a lot of income growth but it was largely among the fast-growing ranks of $1 million and up households. Their numbers grew 27 percent in 2019 compared with 2016, IRS data show.

The economic pain for most can be seen in broad economic changes that disfavor manufacturing workers, especially those in the 97,000 factories that have closed since 1997. Overall, manufacturing workers make more than service workers.

Minimum wage for waiters is just $2.13 an hour.

In December the average weekly wage for manufacturing workers was $955, compared with $823 in the service sector. That's an $8,700 annual difference. Factory workers also are more likely to have retirement plans, including the fast-disappearing traditional pension, making their total compensation even greater than the wage data show.

And thanks to former President Bill Clinton and a Tea Party activist, the late Herman Cain, since 1993 the minimum wage for wait staff has been frozen at $2.13 an hour—just $1.18 in today's money. Food server is the fifth most common job in America. Whatever these workers get above that comes from tips —when they have work.

With most workers in the lower-paying service sector, and wages for all but the top 25 percent or so of workers flat to falling for decades, people simply do not have the capacity to buy more manufactured goods. The advent of seven-year zero-interest loans for new cars and trucks doesn't hint at that, it screams demand is weak.

Increased Efficiency, Fewer Jobs

The second factor in shrinking manufacturing jobs is efficiency.

In December, America had 12.3 million manufacturing jobs, the same as in the summer of 1941 just as America entered World War II. Back then America had 204 million fewer people than now.

Factory jobs peaked at 19.5 million in 1979 when Jimmy Carter was president. There were 103 million fewer Americans then.

In 2020 we lost 577,000 manufacturing jobs, a huge toll not just on those workers but on the communities where they are concentrated.

We experienced a net loss of manufacturing plants (establishments) in every year since 1998.

Fewer workers can make more goods because refining manufacturing processes enables owners to use capital rather than labor to make things.

Capital Replaces Labor

Professor Robert Ashford, my colleague at Syracuse University College of Law and an advocate of paying all workers partly with shares of stock, explains how capital replaces labor with a simple story:

A poor young man gets a job hauling sacks of grain across town and out of his meager pay saves enough money to buy a donkey. Now he can carry more grain sacks which means he can save more so he buys a cart for the donkey to pull. With his even greater income, he next buys a truck to haul tons of grain each day. Along the way, labor is performed by capital in the form of a donkey, a cart and a truck.

When steel was first created in India about 3,000 years ago, it took years of labor to create one ton of steel. Today it takes under 40 minutes. The high cost of steel explains why in the ancient world the commanders of conquering armies were far more interested in tribute paid in that durable metal than gold and jewelry. The efficiency of steelmaking today is why the ranks of steelworkers have shriveled, especially in the last half-century.

Similarly, American lumber mills that in the mid-20th Century required hundreds of men now operate with only a dozen or so workers, including front office staff. That was thanks to computerized cranes and saws paired with lasers which measure logs to get the maximum yield in board feet of finished lumber.

The efficiency trend is likely to accelerate, not diminish. Trump's rhetoric about manufacturing jobs is as hollow as proposing a job stimulus by banning earth-moving equipment to create jobs for men wielding shovels. Or demitasse spoons.

A related problem was Trump's intense focus on China. It missed how America's trade imbalance with Vietnam is growing and how rising labor costs in China are causing it to lose factory jobs to Vietnam.

"Vietnam is gaining massive traction into the U.S. manufactured goods business," said the Coalition for a Prosperous America's Kenneth Rapoza. That's because labor is cheaper in Vietnam than in China so even some Chinese firms are shifting production there.

The key trend, Rapoza wrote: "China is slipping in our supply chains, but Mexico and Vietnam are largely taking their place."

So, overall, and considering only the period before the pandemic began, while Trump's rhetoric got him votes from desperate and gullible citizens in 2016, he oversaw fewer factory jobs and less pay for all but highly paid workers. It's the opposite of his promise.

The grade Trump earned on returning manufacturing jobs and raising pay?

F.

Trump Launched A Civil War — Now We Must Defeat His ‘Army’

Reprinted with permission from DC Report

The second American Civil War is here.

No official announced Trump's civil car. That's why our major news organizations dance around the awful truth, using confusing language.

But we don't need a press release to recognize that Trump directed his white supremacist followers to attack a branch of our national government on Jan. 6. The treasonous assault capped years of undermining the judiciary and the executive branch's intelligence, law enforcement and health agencies.

Trump apologists will quarrel with the word directed. Yes, Trump spoke, as he often does, out of four sides of his mouth when he said he would march with the throng to our Capitol. Recordings show people shouting they were invited by the president, and doing his will. It is the message the mob understood that matters, as well as video during the siege where Trump expressed love for the insurrectionists.

That Trump will not attend the inauguration of Joe Biden should make you shudder. Without him on the outdoor platform, rebels hellbent on overthrowing our government could assassinate Biden and incoming Vice President Kamala Harris with no risk to messianic and delusional Trump.

This is why police and National Guard will flood that zone on Jan. 20. And it explains why Biden and Harris insist on being sworn in outdoors to signal that fear has no place in the land of the free and home of the brave.

And it's not just government buildings that require extra protection from disloyal and self-righteous Americans who love Trump more than our Constitutional liberties. Mosques, synagogues, and some churches, especially black churches, will be vulnerable to attack by those who want to make America white again. Many claim to be Christians but are in fact the embodiment of evil.

Trump's mob will not win this war. No matter what buildings they attack, what leaders they assassinate, they cannot win because there are not enough of them to destroy the United States of America in favor of a dictatorship under Trump, his children, or anyone else.

Making America Endure

Eager and willing as Trump's army is to assassinate outgoing Vice President Mike Pence, Speaker of the House Nancy Pelosi (D-CA), Michigan Gov. Gretchen Whitmer, as well as Biden and Harris, our freedom and continuity of our government does not hinge on any individual. Our nation endures so long as we sustain a broad and deep commitment to the six noble purposes articulated in our Constitution's preamble … especially the promise to perfect our union over time.

If you don't know those six purposes please click here and read the 52 words again and again until you memorize them. And take note as you do that riches are neither mentioned or hinted at in the Preamble, while liberty, the general welfare, and justice are, along with their byproducts peace and tranquility.

Still, even though the outcome of Trump's civil war is certain, his band of domestic terrorists can and already have imposed enormous and lasting damage on our society.

These true believers in Trumpian rule can dissuade many from peaceful and joyful mingling in houses of worship, government buildings, sports arenas, and political venues. While Biden and Harris are brave, millions will hold back because of their rational fear of violent attack. Doubt that? How eager are you to visit on vacation or ride a bus in Jerusalem? Kabul? Baghdad?

Our nation's capital is an armed camp today. So are the downtowns of many of our state capitals. Law enforcement and the intelligence community sift through plots organized on the Internet in the hope of disrupting attacks before they occur. The police and soldiers are backups for the inevitable failures to prevent attacks.

Among the Attackers

We also need to recognize that we face danger from more than the lawless Trump mobs that attacked our Capitol and have menaced our state capitols.

We now know that the insurgents attacking the Capitol included rogue active-duty military and police officers. Dozens of people on FBI terrorist watch lists were among the attackers, evidently not being watched at all closely. There are disturbing indications some members of Congress, Republicans all, may have helped the attackers reconnoiter the Capitol, pointing out hidden offices of Democratic Party leaders.

One Republican lawmaker openly encouraged rebellion. Rep. Mo Brooks of Alabama, outfitted in camo, riled up the Trumpian mob before its attack. Another, Rep. Lauren Boebert of Colorado, tweeted out the location of Pelosi while she was being hunted with plans, one of them texted, to put a bullet in her head on television. Think about what America would be like today had the insurgents assassinated Pence, Pelosi, and others by firing squad or hanging them from the gallows they set up outside the Capitol.

Brooks and Boebert must be expelled from the House if their vile and disloyal actions are to have consequences. Failure to do this will only give succor to others tempted by traitorous opportunity.

Even more disturbing, some Democratic lawmakers say that on the day before our Capitol was sacked they observed a few of the most extreme Republicans giving guided tours to people who turned out to be insurgency leaders. Now, they worry that this was a scouting operation supported from within. The coming investigations will tell us the facts, especially if prosecutors are smart about leveraging those who gave such tours in return for lessening the severe sentences they deserve.

That we may have a Fifth Column in Congress immediately alarmed their unwitting collaborators from the dominant economic force in America, big corporations. From American Express and AT&T to Tyson Foods and United Parcel Service, many big companies stopped, at least for now, aiding and abetting with money these faithless enemies of America.

We live in strange times when we need help from soulless corporations to defend our liberties. To be sure, they acted out of self-interest. Under a dictatorship, corporate directors and executives would be forced to bend to the will of an unelected and unaccountable autocrat who could eviscerate their privileges and plunder their wealth.

Disloyalty and oath-breaking by officials also marked the 1860s, when some representatives, senators, and federal judges used their power to wage war on the United States. Until they were stopped. Texas lawyer Barbara Radnofsky tells some of this compellingly in her concise book A Citizen's Guide to Impeachment.

Our Noble Purpose

The costs of Trump's army waging war on our government will drain resources from improving America, from perfecting our union.

To secure our safety, National Guard troops sleep on the cold marble floors of America's Capitol. Fences and walls will become ubiquitous, a twisted outgrowth of Trump's lie that he would build a wall, to fencing and other barriers, metal detectors and other protections against domestic terrorists.

Trump's civil war did not begin with the murderous attack on our Capitol. It dates to at least August 2017 when his violent thugs marched in Charlottesville, Va., shouting Nazi slogans. "Jews will not replace us" and "blood and soil," they chanted while marching past a synagogue. The next day one of them drove his car into a crowd, killing Heather Heyer, the first fatality in Trump's civil war.

What these rebels heard the next day, what instilled them with bravado, was not Trump's confusing comparison between anti-Semitic racists and the counter-demonstrators, but this line about themselves: "very fine people."

Don't make the mistake of thinking there is no Second Civil War just because all is peaceful where you are. Six days before rebels bombarded Ft. Sumter on April 12, 1861, The New York Times reported that an attack was imminent. But once the fighting began, there was no battle of Grand Rapids, no skirmish in Rochester, no siege in Cincinnati. In some states, such as Oregon, all regular Army were withdrawn and volunteers maintained military outposts and kept watch on Confederacy sympathizers.

That is how wars take place. People may be sipping espresso in sidewalk cafes or picnicking beside a stream while soldiers fire on one another within earshot.

As we prosecute this war on Trump's militias and half-organized renegade insurgents, we must give no quarter in terms of criminal prosecution, especially for seditious conspiracy and murder. Where they fire their arms, we must respond with lethal force as the laws of war allow. But we must be better than the attackers.

We must take care not to give Trump's army a perverse victory by destroying the soul of America, by losing sight of our nation's great purpose. We must not descend into a militarized safety zone. Instead, we must build up the institutions we have damaged with decades of malign neglect—schools, colleges, public health, law enforcement as guardians instead of warriors and the public furniture from parks to bridges that make life pleasant and commerce efficient. We must make our union more perfect through caring for our citizens, providing the tools for stable and prosperous lives, and vigorous debate about the way we want to order our liberty.

We must keep in our hearts and our politics the fundamental purpose of our government—to ennoble the human spirit with liberty and fraternity so that our people can attain the best that our nature makes possible.

Trump Signals That His Coup Plotting Isn’t Really Over

Reprinted with permission from DC Report

The violent mob Donald Trump sent to attack and loot our Capitol receded during the night, but his efforts to overthrow our government continue. Trump signaled in a Tweet that even after he leaves office his criminally seditious behavior will persist.

This is "only the beginning of the fight to make America Great Again!" Trump declared at 3:49 a.m. Thursday. (An aide tweeted his message after Twitter locked Trump's own account for spreading dangerous lies.)

While Trump's middle of the night statement also promised a peaceful transition of power when Joe Biden is inaugurated on Jan. 20, it came without a critical word about the chaos and violence Wednesday by fanatical Trumpists in California, Kansas, Georgia, Oregon, Washington, and Utah.


Republican Sen. Josh Hawley of Missouri, among others, defended or excused Trump's solicitation of mob violence. Eight senators and a majority of House Republicans voted to reject the certified election results from two states. Hawley should be ousted by the rest of the Senate, not the least because Hawley gave a raised fist in solidarity with the mob as he entered the Capitol Wednesday.

Support for Rioters

Trump's baseless claims that he won by a landslide in November—for which he produced no evidence in 60 failed lawsuits—are believed by a large share of Republicans. A poll during the siege found that 45% of Republicans support the mob attack while more than two-thirds of the GOP believe the violence and looting pose no threat to our democracy.

If other polls support this finding it is a powerful measure of how much enduring damage Trump has inflicted on our democracy by promoting disrespect for the rule of law. That Republicans, of all people, would support lawlessness and violence after decades of "law and order" sloganeering shows their fervor for authoritarian rule.

Propaganda favoring Trump plays a major role in the willingness of many Republicans to excuse Trump's criminal behavior and contemptuous violation of his oath of office.

Primetime hosts on Rupert Murdoch's Fox News repeatedly told the lie Wednesday evening that Capitol invaders were not Trumpist thugs, but Antifa posing as Trump supporters or at least some of them were Antifa. Fox News even posted a story excusing Trump's attempted coup. Fox politics writer Brooke Singman wrote:

"Trump said 'these are the things and events that happen,' referring to violent protests that sent the U.S. Capitol Building into lockdown when a 'landslide victory' is 'vicously [sic] stripped away from great patriots,' while urging America to 'remember this day forever'. "

Trump's Felonies

Trump's remarks at the rally, where he told the mob to go to the Capitol while he headed in the other direction to the security of the White House, make him liable for prosecution for at least three federal crimes: inciting insurrection, sedition and advocating the violent overthrow of the government. He could be liable for criminal conspiracy charges and local District of Columbia criminal charges.

Adding to the liability for criminal charges over the attack were the words used to rile up the crowd by his son Don Jr. and his lawyer, Rudy Giuliani, who called for "trial by combat."

While some Capitol Police engaged in combat with the attackers, and one lone uniformed agent was forced to retreat up stairways as a menacing crowd closed in on him, some Capitol Police held doors open for the invaders and others smiled at them, video showed.

Had the invaders been Black instead of white it is likely the attack would have been met with batons, handcuffs and even indiscriminate gunfire by Capitol Police. As CNN reporter Omar Jimenez tweeted: "I saw more arrests during protests in Minneapolis this summer than I have watching people storm the US Capitol."

Racists In The Capitol Police?

That conduct raises questions about whether racist and fascist groups have infiltrated the Capitol Police, just as they have many local and state police agencies.

Extensive video, including Congressional security cameras, can be used to identify the perpetrators of the first sacking of our Capitol since the British attacked in 1814. Every one of these insurrectionists must be identified, arrested, indicted, tried and if convicted given long prison sentences.

The most important question that should be asked of Merrick Garland, the federal appeals court judge Biden is nominating to be attorney general, is whether he will commit to ensuring the prosecution of every one of these criminals.

Other than making deals to leverage some perpetrators into admitting guilt to the most serious crimes in return for very slight reductions in sentences, these enemies of America should be shown no mercy by our Justice Department. They also should all be tried in Washington, D.C., where they committed their many felonies.

Beyond D.C.

A variety of actions by Trumpists from Atlanta to the Pacific Northwest on Wednesday showed how deeply their desire to overthrow our government permeates American society. Posing as patriots, these people spout conspiracy theories, make remarks showing they lack even a junior high school civics understanding of our Constitution, and many call for violence against minorities, notably Muslims and Black Americans.

Some of what these American brown shirts did Wednesday:

  • Armed Trumpists marshaled outside the Utah Capitol in Salt Lake City.
  • In Sacramento police arrested 12 Trumpists for illegal possession of pepper spray during protests at the California State Capitol.
  • In Salem, Ore., Trump's Proud Boy thugs fought outside the state Capitol, prompting police to declare an unlawful assembly. A woman burned in effigy Gov. Kate Brown, a Democrat.
  • In Olympia, Wash., Trumpist thugs broke down the fence at the governor's official mansion while Gov. Jay Inslee and his family were inside.
  • In Atlanta, armed Trump thugs gathered outside the Capitol, prompting state police to hustle Brad Raffensperger, the top state elections official, out of the building, partly out of concern about the presence of a former KKK leader who now directs one of Trump's faux patriot support groups. Officials in Fulton County, which surrounds much of Atlanta, suspended vote counting because of safety concerns.
  • Trump's thugs also harassed random people. In Los Angeles, a Black woman walking down the street was surrounded by a score of Trump's thugs who menacingly demanded she declare who she voted for in the November elections.
  • In Topeka, Kansas some demonstrators, echoing Trump's baseless claims he really won the November election by a landslide, entered the state Capitol, but were peaceful.
  • On an American Airlines flight from Texas to Washington, "flight attendants are struggling to control a plane full of Trump supporters as they display a pro-Trump projection and harass others passengers bound for D.C.," freelance journalist Maranie R. Staab reported, posting a video to authenticate her story.

That a poll found many Trumpers support the insurrection Wednesday is not surprising if they rely only on supposed new organizations that act as propaganda arms of Team Trump.

Fox News hosts on Wednesday evening described the violent mob not as Trump supporters, but leftists posing as Trumpists, a conspiracy theory with even less factual basis than Trump's delusional claims of election fraud.

What Trump made clear early Thursday morning is that after his term ends on Jan. 20, he will continue his efforts to overthrow the government he swore on oath to defend.

The question of the day is what Democrats, now that they control the House, Senate and White House, will do to protect our democracy? Will they decide to let bygones be bygones and move ahead, or will they do their duty and bring Trump and those who committed crimes on his behalf to justice?

Trump’s Abuse Of Pardon Power Reveals That He’s Just A Crime Boss

Reprinted with permission from DCReport

The 41 pardons Donald Trump granted last week drew a lot of attention, but few seemed to notice the message Trump sent by not pardoning some.

Trump's choices made clear he is a crime boss.

Four Blackwater mercenaries who, working for Trump ally Erik Prince murdered Iraqi civilians, were pardoned. But there was no pardon for Jeremy Ridgeway, the soldier-for-hire who pleaded guilty to manslaughter, testified against the others and was sentenced to a year and a day in federal prison.

Roger Stone, dirty trickster confidant; former General Michael Flynn, national security adviser who was on the Kremlin payroll; and 2016 campaign manager Paul Manafort were pardoned. But Trump didn't pardon Manafort deputy Rick Gates, who turned state's evidence and confessed.

Earlier, Trump pardoned Rod Blagojevich, the former Illinois governor convicted of trying to sell a Senate seat. But there was no pardon for lawyer Michael Cohen, Trump's longtime fixer who confessed to committing felonies at the direction of unindicted co-conspirator "Individual 1," identified in federal court as Trump.

In true mobster fashion, Trump once referred to Cohen as a "rat" for confessing. He praised Manafort for not "flipping" to testify against him.

A future president could use the pardon power to protect elaborate criminal schemes, to subvert the Bill of Rights, to frame political opponents and even to direct political murders.

The names of those pardoned, and sometimes the names of those not pardoned, have appeared in news reports and opinion columns, but there was no connecting the dots to show the pattern and its meaning. The pattern reveals a crystal clear message to lawyers for those considering ratting out Trump or already working with authorities to rein in the Trump crime family:

The boss takes care of friends and allies if they lie for the boss or keep silent, but does nothing for those who cooperate with law enforcement.

Given Trump's many attacks on the FBI and other law enforcement, this should surprise no one, especially journalists. Yet my fellow journalists didn't point this out.

Missing The Story

How is it that none of our major news organizations figured this out? Hint: They rely too much on the official version of events, official announcements, and access instead of thinking and exercising reportorial authority.They are afraid they will be seen as biased or tendentious.

If Trump declared the sun rises in the West, many news organizations would avoid reporting that as false, crazy, or nonsense. Some would focus on how the sun only appears to rise, never mind that it appears to rise in the East.

The pardons issued so far raise grave questions about the future of our democracy. The actions have received less comment than outrage over the brazen abuse of the pardon power, especially as part of a scheme to obstruct justice.

Think about what will happen if someone as lawless as Trump ever again becomes president. Imagine a president with much more skill, smarts, and vigor, and one with better lawyers. A future president could use the pardon power to protect elaborate criminal schemes, to subvert the Bill of Rights, to frame political opponents, and even direct political murders so long as they were committed in federal jurisdictions. The presidential pardon, remember, applies only to federal crimes.

Trump behaved last week exactly as any crime boss would act if he could exercise the powers of the American presidency:

Show mercy to criminals, especially criminals who have aided your crimes or whose supporters may be useful to you in the future, but do nothing for those who did the right thing once they were caught and helped bring others to justice.

Trump Helped Cocaine Trafficker Buddy

This is exactly what Trump, as a private citizen, did in a series of extraordinary favors for a major international cocaine and marijuana trafficker with whom he had extensive, close business ties.

In that case, Trump sought mercy for three-time felon Joseph Weichselbaum. The trafficker managed and piloted Trump's helicopter in the 1980s, supplied Trump with a fleet of helicopters to ferry high rollers to Atlantic City, and rented a luxury Manhattan apartment from Trump under a lease that obscured rent costs.

In a 1986 letter to the sentencing judge, Trump called Weichselbaum "a credit to the community." Trump wrote Weichselbaum should serve no prison time for a long-running scheme in which 20-year sentences went to the mules—people who drove cars and vans loaded with drugs from Miami to Cincinnati.

Carefully read, Trump's letter was really directed not at the judge, but at Weichselbaum.

Trump's clear message to his buddy: Don't rat me out and I'll take care of you.

Cocaine trafficker Weichselbaum spent just 18 months in a Manhattan prison. He paid only a token sum on his $30,000 federal fine because he said he was broke. Yet, he moved from prison to a $2.4 million double apartment at Trump Tower. The Trump Organization also gave him a new job—as Trump's helicopter consultant.

Now is the time to demand that Congress act to protect us from a future lawless president so the pardon power cannot be a balm to criminal pals and an ax to eviscerate our liberties and our control of our government.

Trump Insists That You Taxpayers Pick Up His Lunch Tab

Reprinted with permission from DC Report

Buried near the end of the 5,593-page law granting new coronavirus relief is a special interest tax favor of the kind that Republican saint Ronald Reagan cut in half when he waged war on the "three-martini lunch."

This new special interest tax break is worth a lot more to business owners than the long-delayed and miserly $600 or smaller checks for most people. The Trump administration and Mitch McConnell, the Senate majority leader, once again favor business over people.

The law doubles the tax deduction for most business meals from 50 percent to 100 percent.

'It just doesn't seem right for a wage earner carrying his tuna fish sandwich to work to subsidize exorbitant business lunches at luxury restaurants.' —President Ronald Reagan

Ever since Reagan's 1986 Tax Reform Act, as a general rule, Section 274 of our tax code allowed only a 50 percent deduction for meals while traveling on business, meeting with customers, partners or associates or attending a business seminar. Employees got fully reimbursed, but employers could only deduct half, which prompted personnel policies restricting how much all but the most highly paid workers could claim for meals while on company business.

This new favor benefits most businesses, but few as much as Donald Trump, who will enjoy a double benefit. The change was introduced at the last minute at the insistence of the Trump White House. There has been no public hearing or even public debate about its merits.

Three Benefits

The 12 lines of revised tax law on Page 4,956 of the Consolidated Appropriations Act, 2021 provide these tax benefits:

  1. Businesses with a lot of employers on the road or many meetings can deduct the full cost of such meals, the equivalent of a slight tax rate cut.
  2. Sole owners, like Trump, who bear the full burden of spending by their enterprises, will feel concentrated benefits. Had the provision been in effect during the last decade it would have saved me thousands of dollars in income taxes because of extensive global travel for investigations and lectures.
  3. Restaurant owners benefit because businesses will be more liberal in expense allowances.

That third point matters because as many as 85 percent of small, individually owned restaurants may go broke due to COVID-19 shutterings, restaurant industry advocates say. But these mom-and-pop operations will benefit far less overall than the kind of expensive dining establishments favored by corporate executives, sales executives and other highly paid workers.

Trump as owner of golf, hotel and restaurant businesses will benefit every time he or his employees wine and dine a customer, vendor or potential customer because he will get to deduct the entire cost of meals instead of just half.

Then he benefits again when others spend money dining at his golf resorts, hotel and restaurants because full deductibility should result in more spending on meals.

But wait, there's more.

This complete deductibility of business meals will continue from New Year's Day until the end of 2022. The pandemic is likely to be history sometime early in 2022, making clear that this tax break is not targeted at the beleaguered restaurant industry but at a return to the era of the three-martini lunch. Expect lobbying to extend the tax break.

Reagan's Tax Policy Killed

Republicans voted to level the playing field when it comes to restaurant meals in 1986. That's when Reagan championed a tax code that actually raised levies on business and reduced deductions for extravagances. Trump, who often claims Reagan's mantle, consistently promotes tax policies that would infuriate The Gipper.

Reagan said this during a June 7, 1985 meeting with economics writers at the White House:

"Why not find smarter ways to put our money to work than investing so heavily in executive lunches? It just doesn't seem right for a wage earner carrying his tuna fish sandwich to work to subsidize exorbitant business lunches at luxury restaurants.

"We'd still allow for legitimate expenses, but to those who complain they can't live quite so high off the corporate account, we can only ask: Why not brown-bag it once in a while?"

Business lobbyists, from the get-go, have been gutting the many level-the-playing field provisions Reagan championed, loading up on favors for themselves and shifting the burden onto working Americans. That includes the massive borrowing required under Trump's 2017 tax law to shower tax savings on the richest among us.

Also, under the 2017 tax law that Trump signed, his only significant legislative achievement, 20 percent of taxpayers lost the ability to deduct mortgage interest, state income tax, local property taxes and other tax breaks. The changes mostly affected married couples with three or more children, especially among the upper-middle class.

This year only about one in ten taxpayers, and perhaps as few as one in 20, will itemize deductions. But those who own their own businesses – from people operating on the scale of Trump to freelance graphic artists – will get benefits. Under Trump the tax code has become more favorable to the self-employed and business owners and less so for employees.

Until He’s Out Of Office, Trump Will Be Very Dangerous

Reprinted with permission from Alternet

America is entering a very dangerous time. For his next 11 weeks in office, Donald Trump will be in a position to exact revenge, a word that by his own account is his entire life philosophy. We should all hope that he goes into one of his down emotional periods for an extended time so that lethargy, not blind rage, dominates his behavior until Jan. 20.

Through phony charges of ballot-box stuffing, firing officials, issuing pardons to friends and family and other acts Trump can do great damage between now and Inauguration Day, when his shield against criminal prosecution vanishes. He can also hobble the transition to a Biden administration.

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