January 25, 2021

Leo Hindery closes out 2012

Posted on 19. Dec, 2012 by Stephan Helgesen in Politics

We’re pleased to bring a collection of Leo Hindery’s most recent articles for the months of November and December and thank him for his contributions over the course of 2012 – Editor

ARTICLE: Elections have consequences – and carry messages

Dick Gephardt, the esteemed former House Leader, often said that “elections have consequences” and always “carry messages.”

The consequence of the elections just past is pretty obvious. Despite a staggering $6 billion having been spent on all of the federal races (“Consider the Source,” Center for Public Integrity, 11-05-12), and all those speeches and all those political ads, we still have the makings of further partisan gridlock.

Yet the message to the new Congress from the electorate is nonetheless quite precise: get on with it! And coming as this message appears to out of the expressed anxiety of millions of voters regarding their prolonged un- or under- employment, their stagnant wages and their economic insecurity, “it” is an immediate comprehensive effort aimed at rebuilding our middle class economy.

A thoughtful look at how the elections played out in Ohio – the state that largely gave President Obama his reelection victory and reelected Sherrod Brown its Senator – suggests what that economic agenda should look like.

There, a majority of the voters understood the imperative of bailing out the auto industry and committed themselves to a future that still includes manufacturing as a cornerstone of a balanced economy. And in doing so, they and a majority of voters throughout the country rejected the philosophy that government plays no constructive role in our economy, clearly preferring instead that, when needed, it help protect and foster high quality jobs which meet the diverse needs of our society.

Of course, they also rejected the Governor Romney’s belief that there is nothing fundamentally wrong with offshoring jobs to China, which he did repeatedly when he ran Bain. And they also rejected his jobs policy which largely consisted of more tax cuts for the wealthy rather than meaningful investment in our middle class and resuscitation of our manufacturing sector.

If Congress listens to this message, it will develop and pursue an agenda based on the core economic premises that:

·         Near-term large-scale job creation through government stimulus efforts, on the one hand, and long-term deficit cutting, on the other, are not mutually exclusive;

·         Government does create good jobs, millions of them in fact; and

·         Government cannot continue to gut the principle of progressive individual taxation without further eviscerating the middle class.

Well-conceived employment stimulus efforts are, because of their very large multiplier effects, at least deficit neutral in the medium term and, most likely, substantially deficit reducing. Thus Congress doesn’t have to choose between stimulus and austerity – it just has to get each challenge’s priority and timing right. And when it does it will also be able to find responsible pathways to resolving the recommendations of the National Commission on Fiscal Responsibility and Reform (i.e., ‘Simpson-Bowles’), major entitlement reform and the pending ‘fiscal cliff’.

Implicit in achieving this balance, however, must be immediately resuscitating and then materially growing our depleted manufacturing sector.

Over the past 12 years, U.S. manufacturers have cut 31% of their workforce, or nearly 6 million workers, and manufacturers’ contribution to GDP has fallen to just 12.2%, from 22.7% in 1970. Yet despite this, the sector still has by the largest multiplier of all sectors of the economy, its productivity and jobs-producing R&D consistently outpace all other sectors, and it more effectively and respectfully employs workers of all skill and education levels.

In order for the American manufacturing sector to again have an employment base of 20% or more of total U.S. employment and contribute a fairly similar percent of the nation’s GDP – which is what’s required to stop our economy from lurching from one consumer-credit-driven bubble to another – we need:

i.            An American manufacturing policy that integrates government policies related to access to financing, R&D and investment tax credits, taxation, trade and subsidies, and domestic procurement;

ii.            An all-of-government effort to make the new abundant reserves of lower-cost natural gas and alternative energy sources quickly available to the nation’s manufacturers;

iii.            An independent National Infrastructure Bank, with a capitalization of at least $1 trillion, to invest in the large-scale rebuilding and upgrading of our country’s much depleted infrastructure;

iv.            Fundamental corporate tax reform that changes the provisions of the tax code which currently discourage some American manufacturers from expanding domestically and eliminates the incentives which encourage other manufacturers to close plants here and ship jobs overseas; and

v.            Reformed trade with China.

Regarding the second premise, of course government creates good jobs, right now 22 million of them that the private sector can’t fill, including teachers, police officers, firefighters, soldiers, epidemiologists and anti-terrorism agents (“The Myth of Job Creation,” New York Times, 10-21-12). We are already far past the point where further cuts of these jobs are appropriate by any measure, and preserving the ones remaining must be a priority of any new stimulus initiatives. This said, however, when it comes to these jobs, we must much more responsibly and sensitively address the related pension burdens which already exist and any new ones that might be created.

Finally, there is the reality of our broken individual income tax system, with its resultant extreme income inequality which, according to recent research by economists at the IMF, indisputably slows economic growth, causes financial crises and weakens business demand. Just since 1980, the share of national income going to the richest 1% of Americans has doubled, from 10% to 20%, and more recently, more than 90% of all of the income gains since the Great Recession began have gone to the top 1% (“The rich and the rest,” The Economist, 10-13-12).

We need to bury once and for all the thoroughly discredited ‘trickle down’ philosophy, and three perfect places to start would be to treat “carried interest” as the ordinary income which it indisputably is, increase capital gains tax rates for the extremely wealthy back to the levels they were under President Reagan, and bring fairness and fair tax treatment back to executive compensation which today is on average the most extreme in the developed world.

The recent elections clearly showed that in the minds of the electorate it’s past time to restore vibrancy to the middle class and restore for all citizens the American Dream of equal opportunity, economic advance and fair employment. What the elections also clearly showed was that the American people want a government that, when appropriate, will intervene in the economy to protect jobs and promote job creation.

ARTICLE: Campaign Finance is a Women’s Democracy Issue

Which corporations are financing whose campaigns? What are their political surrogates saying about Planned Parenthood and rape? Should we boycott? After 2012 these are big civil rights questions for women to consider.

(WOMENSENEWS)–As a “white male feminist” (and businessman) — I know this description of myself sounds strange, but I’m going to try to make a point — I’ve been asking myself what would happen if progressives, especially women, used their combined political and economic muscle to bring corporate political donors to heel.

What if women lead the charge to make campaign finance reform the next great civil rights fight?

Two Supreme Court decisions (Citizens United v. Federal Elections Commission and, later, American Tradition Partnership v. State of Montana) and an appellate court decision (SpeechNow v. Federal Election Commission) have fundamentally transformed our political system and our democracy to a degree we’ve just been able to grasp from the results of this year’s elections, when an unprecedented $6 billion was spent on the federal elections: presidential, Senate and House combined. Never has our electoral process been more captive to vast sums of money from a handful of large corporations and wealthy individuals.

And for all the scorn rightfully heaped on Citizens United, it’s actually the SpeechNow case that’s been the most destructive.

SpeechNow allows not-for-profit organizations to accept unlimited contributions from individuals for independent expenditures, which birthed (i) “super PACs,” which can accept unlimited contributions but must disclose donors and (ii) especially pernicious, tax-exempt — or 501copyright — organizations (often referred to as non-disclosing groups or dark money groups), which are not required to disclose the sources of their funding — especially pernicious. Under the current Supreme Court and Congress, the prospect of putting reasonable curbs on the political contributions of the extremely wealthy seems quixotic at best.

However, I’m convinced that curbing the political spending of corporations — their disclosed contributions and, especially, their masked contributions through intermediaries and their anonymous contributions through tax-exempt organizations — needs to turn into a civil rights fight for this time, of the sort in which we engaged in the ’60s and ’70s. Only this will allow us to see a future where the nation’s large corporations are no longer unfairly influencing our federal elections and, in the process, often helping to steal our civil liberties.

Attack on Rights

None of the large corporations currently dominating federal elections is, as far as I know, opposed to civil liberties. However, these companies — of which American Electric Power, Aetna, Prudential Financial, Dow Chemical, Merck, General Electric and the oil companies rank among the nation’s most significant political contributors –consistently fund (usually anonymously through an intermediary such as the U.S. Chamber of Commerce or through one of the new tax-exempt organizations) federal candidates who enable attacks on reproductive rights for women; resist equal rights for gays and lesbians and fair immigration reform; advance regressive tax policies; and/or seek to limit the influence of unions.

Remember it was Congressman (and vice president “wannabe”) Paul Ryan who believes that the women’s health exception in abortion laws is a “loophole big enough to drive a Mack Truck through,” and it was Congressman Todd Akin who dismissed the significance of rape as he opposed contraception and abortion. And it’s Ryan and Akin and their ilk who’ve been receiving massive amounts of corporate campaign contributions.

The U.S. Chamber of Commerce, arguably the largest and most prominent of the so-called intermediaries, earlier this year indicated that it planned to spend as much as $100 million on the 2012 elections. An analysis of campaign spending data from the Center for Responsive Politics by Public Citizen’s Chamber Watch and the Main Street Alliance shows that in 29 of 35 Senate and House races where the Chamber contributed money, it was the biggest or second biggest “dark money spender” in the race.

There is no “freedom to spend anonymously” in the Constitution; so once we know which companies are dominating political giving, and to whom they’re donating, we should take action. Product boycotts, as we used them widely in the 1960s, spring to mind.

Representing America

Civil rights organizations have so far mainly hung back from campaign finance reform, believing, understandably, that each organization’s primary concern is its respective community of interest.

However, we are entitled to a government that represents all of America — women, not just largely white males; people of color; the working class, not just management; and small business owners, not just large corporations — rather than one that is controlled by the wealthiest individuals and the largest companies. Otherwise, our civil liberties will be recast by those who are little more than prejudicially elected puppets of those who’ve become the oligarchs of America.

If we cannot stop unrestrained spending through legislative action, which seems unlikely, then we need to at least ensure that strong disclosure laws are in place to guarantee transparency and begin the process of re-establishing our electoral rights.

We especially have the right to know if we are supporting hate and discrimination when we go buy a light bulb or a gallon of gasoline or a chicken sandwich, and we always have the right to protest and boycott.

In the recent elections it was women — white, African American, Latina and Asian (and pension-recipients and small business owners) — who essentially reelected President Barack Obama and elected four new pro-choice senators and 20 new female pro-choice representatives.

Leading New Charge

Now it should be women (and the progressive “male feminists” who respect and love them) who lead this new charge. A charge which says no more purchasing from anti-women and anti-civil liberties companies, no more turning a blind eye to the harmful social agendas of extremist candidates, no more anti-Planned Parenthood efforts, no more deportation of Mexican mothers whose children were born here, no more “knocking off” Big Bird and no more same-sex-marriage resistance.

And while they’re at it, women should say to the managers of the nation’s pension plans — public (e.g., CalPERS) and private (e.g., GE) alike — that it’s past time to use their massive shareholdings to force public disclosure of all corporate political contributions and lobbying expenses.

They should also press the Securities and Exchange Commission to compel public companies to disclose their direct and indirect political contributions, since they might affect shareholders’ decisions to invest.

I end with a plea that all civil rights, civil liberties and labor organizations start demanding — through marches and boycotts — an end to corporate political contributions that work against a fair and inclusive society. In order to restore balance to our democracy we have no choice — in terms of our civil rights — but to march again against hostile companies, refuse again to buy the products of these companies and decline again to invest in them.


ARTICLE: It’s nonsense to suggest the state has no role in commerce

Obama’s proposed ‘one-stop-shop’ business department would help American companies to succeed, writes Leo Hindery. President Barack Obama said that the most “salient message” from the election was the voters’ demand that all levels of government and the private sector work together to “help the middle class move forward”. He’s right.

Real unemployment, in all categories, remains above 16 per cent; wages for 90 per cent of workers remain stagnant; there is little business confidence despite cash-rich treasuries; and the trade deficit in manufactured goods is a persistent $300bn each year.

Voters, particularly those in the industrial heartland, and only slightly less so on each coast, have demanded a more balanced economy. They want an economy that restores the vitality of the manufacturing sector. These workers supported the bailout of the auto industry because they believed there was no reasonable alternative. And they feel that the private sector, acting alone, cannot sufficiently advance the economy or protect their interests.

It is no surprise then that during the campaign Mr Obama called frequently for combining the executive branch’s nine distinct department and agency commerce-related efforts into a reconfigured “department of business”. It is not a new department but, rather, under a reconstituted and renamed commerce department, a consolidation of responsibilities and activities.

Given the complexity of the steps that need to be taken to speed up economic recovery, Mr Obama’s proposal is not just practical and expedient, it is also imperative.

The steps to be taken are obvious. First, adopt a manufacturing and industrial policy that integrates the government’s policies related to financing, research and development, and investment tax credits, taxation, trade, subsidies and domestic procurement.

Second, overhaul the corporate tax code to change the provisions that discourage some US companies from expanding domestically. Eliminate the incentives that encourage other companies to ship jobs overseas and lower tax rates in exchange for eliminating certain special tax breaks.

Third, invest significantly in the rebuilding and upgrading of the nation’s infrastructure, ideally through a new, independent national infrastructure bank, with a capitalisation of at least $1tn.

Finally, create a justice department bureau to enforce trade agreements and protect the nation’s intellectual property. The current system places trade agreement negotiation side-by-side with enforcement, often in the same hands, and without prescribed IP protection protocols.

With Mr Obama’s proposed “one-stop-shop” reform of the commerce-side of the executive branch, whose stated goal is to “help American businesses succeed”, there would just be a single, encompassing department of business with focused front-end guidance, resource allocation and follow-up. It would replace the nine disconnected agencies whose efforts are further complicated by the multiplicity of Congressional oversight committees.

A rationalised business department is the best hope for a unified, national effort to boost productivity. We last saw such an effort during the extraordinary inter-department, inter-agency period of co-operation of the second world war.

“Helping the middle class move forward” and “helping American businesses succeed” means, of course, creating millions of high-quality jobs. In this, business leaders have a vital and primary role to play – from identifying the steps that the administration and Congress should take to helping the administration be as effective as possible.

In difficult times, what distinguishes great business leaders is an ability to position their companies – and in the process the national economy – for growth and success. While Mr Obama undertakes his executive branch reform, chief executives should be supporting this reform rather than falling back on the discredited libertarian canard that government has no meaningful role to play in the nation’s commerce. It is imperative in these challenging times to find a way to cut deficits while at the same time investing for the future. The creation of a department of business would be a reflection of enlightened political and corporate leadership.

These articles were submitted by Leo Hindery Jr. who is chair of the U.S. Economy-Smart Globalization Initiative at the New America Foundation, co-chair (with United Steelworkers President Leo Gerard) of the Task Force on Jobs Creation, founder of Jobs First 2012 and a member of the Council on Foreign Relations. He is the former CEO of ATandT Broadband and its predecessors, Tele-Communications, Inc. (TCI) and Liberty Media, and is currently an investor in media companies.


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