Humor: The Borowitz Report

Sentiment Building to Deport Nation’s Billionaires

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Credit PHOTOGRAPH BY SPENCER PLATT/GETTY

THE HAMPTONS (The Borowitz Report)—They don’t pay taxes. They circumvent our laws. They get free stuff from the government. They are America’s billionaires, and many would like to see them gone.According to a new survey by the University of Minnesota’s Opinion Research Institute, the American people hold the nation’s billionaires in lower esteem than ever before, and a majority would like to see new laws enacted to deport them.

“They come here, take thousands of our jobs, and export them overseas,” one respondent said, in an opinion echoed by many others in the survey.

“They are part of a shadow economy that sucks billions of dollars out of the United States every year and puts it in Switzerland and the Caymans,” another said.

Images of hedge-fund managers arriving via helicopter in the Hamptons this summer have only reinforced the impression that authorities have turned a blind eye to their movements.

“Many of these people should be in prison, and the government is looking the other way,” one respondent said.

Stirring even more controversy is the billionaires’ practice of having babies in the United States and using the nation’s porous estate-tax laws to pass down untold wealth to the next generation.

“They should leave and take their children with them,” one respondent said.

Even after it is pointed out to respondents that some billionaires, such as Warren Buffett and Bill Gates, have made significant philanthropic contributions to the world, a majority of those polled stubbornly maintained their negative views of billionaires.

“Look, in every group you’re going to have some good ones,” one of the respondents said. “But that doesn’t take away from the fact that the vast majority of these people are destroying this country.”

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Naked Capitalism on the Robin Hood Scam

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Meet the Hedge Funders and Billionaires Who Pillage Under the Shield of Philanthropy

Yves here. This post is a tad on the shrill side, but as you’ll see from the information marshaled, the vitriol is well warranted.

By Lynn Parramore, s contributing editor at AlterNet and senior editor at INET. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of “Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.” She serves on the editorial board of Lapham’s Quarterly. Follow her on Twitter @LynnParramore. Originally published at Alternet

America’s parasitical oligarchs are masters of public relations. One of their favorite tactics is to masquerade as defenders of the common folk while neatly arranging things behind the scenes so that they can continue to plunder unimpeded. Perhaps nowhere is this sleight of hand displayed so artfully as it is at a particular high-profile charity with the nerve to bill itself as itself as “New York’s largest poverty-fighting organization.”

British novelist Anthony Trollope once wrote, “I have sometimes thought that there is no being so venomous, so bloodthirsty as a professed philanthropist.”

Meet the benevolent patrons of the Robin Hood Foundation.

Robin Hood in Reverse

The Robin Hood Foundation, named for that green-jerkined hero of redistribution who stole from the rich to give to the poor, is run, ironically, by some of the most rapacious capitalists the country has ever produced — men who make robber barons of previous generations look like small-time crooks. Founded by hedge fund mogul Paul Tudor Jones, the foundation boasts 19 billionaires on its leadership boards and committees, the likes of which include this sample of American plutocracy:

-Hedge fund billionaire Steven A. Cohen, who, when he is not being probed for insider trading  (his company, SAC Capital Advisors, pled guilty to securities and wire fraud) is busy throwing parties for himself worthy of a Roman emperor at his Hamptons palace and bragging about his $700 million art collection. He suspends a 13-foot shark in formaldehyde from the ceiling his office, perhaps as an avatar of his business practices.

-Billionaire Home Depot founder Ken Langone, who threatened to turn off the charity donations if Pope Francis dared to continue criticizing capitalism and inequality, and also likened the plight of the wealthy in America to Nazi Germany. The GOP megadonor doesn’t care for bank regulation and it’s no surprise that he is the main booster for New Jersey Governor Chris Christie’s presidential bid, as his plan to shred Social Security is a fond wish of the tycoon’s.

– Hedge fund billionaire Stanley Druckenmiller, funder of right-wing causes who dedicates himself to spreading deficit hysteria and ginning up generational warfare on college campuses by trying to convince young people that they are being robbed by seniors using Social Security and Medicare. A long-time anti-tax crusader and supporter of such anti-labor enthusiasts as Wisconsin Governor Scott Walker, Druckenmiller warned President Obama that any attempt to tax the rich to pay for social services for the poor would be futile.

By occupation (the more useless and parasitical the better), it comes as no surprise that 12 of the 19 men in leadership positions at the Robin Hood Foundation happen to be hedge fund managers. A group called Hedge Clippers, supported by a coalition of labor unions and community groups and devoted to exposing how billionaires scheme to inflate their wealth and influence, has pointed out in a scathing report that the Robin Hood Foundation has close ties to an organization called the Managed Funds Association (MFA) that — shocker! —lobbies tirelessly for unjustified tax breaks for hedgies. Paul Tudor Jones’s top deputy, John Torell, chairs the MFA, and 31 members of Robin Hood’s governing board and leadership committees are executives at firms that belong to the highest membership levels of the organization.

The MFA was relatively small until 2007, when Congress started eyeing the “carried interest” tax loophole. Then it brought out the heavy artillery to protect elites from paying their fair share. The carried interest loophole is the MFA’s top priority.

The King of Scams

The carried interest loophole, as economist Dean Baker put it, is likely the worst of all the “sneaky and squirrelly ways that the rich use to escape their tax liability.”  It goes down like this: Hedge fund managers brazenly claim they deserve to pay a special low tax rate on the money they earn overseeing the funds they manage because, um, it’s not guaranteed. So they pay 20 percent instead of the 39.6 percent they would pay if the money were taxed as ordinary income. They get very rich from this windfall, just ask Mitt Romney. But you know what? Lots of workers have no guarantee about the money they’ll earn, from people selling cars to the guy who just served you a burger. Do they get a special tax rate? No, they don’t. They pay full freight. In fact, almost nobody’s income is guaranteed. You could get a pay cut tomorrow. Or a pink slip. Do you still pay regular income tax? Yep, you do.

This unfair tax break basically allows hedge fund managers to screw their fellow Americans out of money that could do things the illustrious patrons of the Robin Hood Foundation claim are so dear to their hearts, like building schools and feeding the poor. According to a Congressional Research Service cited in the Hedge Clippers report, closing the carried interest loophole would generate $17 billion a year. How many hungry children in New York City could that feed? All of them.

The loophole makes absolutely no economic or social sense, it’s just a way for the rich to say, hey, we’re powerful enough to lobby for this insanity, so you little people just go ahead and pay for that airport where our private jets are about to land and that road where our Porsches and limos cruise. It’s a middle finger held up to every hard-working person in America. Dirt kicked in the face of the poor.

It’s a driver of inequality and encourages risky speculation on Wall Street. Hillary Clinton, perhaps hoping to ward off the threat of Bernie Sanders, has been making noise about closing the carried interest loophole, which many a politician has made before. Given the cultural focus on inequality and the egregiousness of the policy, it may just be vulnerable. Let’s hope so.

Den of Thieves

The mission statement of the Robin Hood Foundation brays about all the funding it provides for school programs, generating “meaningful results for families in New York’s poorest neighborhoods.” Soup kitchens! Homeless shelters! Job training! The tuxedoed tycoons throw money at all these causes “to give New York’s neediest citizens the tools they need to build better lives.”

How far does this largesse actually go toward ameliorating New York’s poverty problem? Unsurprisingly, not very far at all. In fact, as Hedge Clippers points out, the poverty rate in the city has grown over the course of the Robin Hood Foundation’s history, from 20 percent in 1990 to 21.2 percent in 2012.

Guess what’s also grown? The bank accounts of 19 billionaires on the Robin Hood Foundation’s boards, which have ballooned 93 percent since 2008.

Hedge Clippers applied a delicious tactic to expose the hypocrisy at the heart of the Robin Hood Foundation with stark mathematical precision— they used the organizations own metrics as an analytical tool. The foundation is famed for using grantee evaluations, cost-benefit analyses, and performance measures, including a metrics system freakishly named “relentless monetization.” So the Clippers applied these methods to the foundation’s hedge fund backers themselves, systematically exposing the degree to which they increase inequality and poverty.

How bad it is?  A chilling ratio summarizes just how bad— 44:1. That is to say, for every dollar the Robin Hood Foundation hedge fund managers studied give to the organization’s antipoverty efforts, they soak up $44 from the public in the form of tax avoidance and anti-tax advocacy.  The authors of the report believe that to be a conservative estimate.

Take the case of Steve Cohen, he of the shark in formaldehyde, and board member emeritus of the Robin Hood Foundation.

The tally of his recent donations to the foundation: $4,850,000.

The estimated amount he ripped off the public in 2014 by paying special low tax rates: $1,300,000,000.

Quite a difference.

When they aren’t advocating tax swindles, members of the Robin Hood Foundation put in plenty of time fighting fair wages, trying to shred the social safety net, and killing worker protections through their associations with organizations like the Manhattan Institute, the Partnership for New York City (the voice of big business in NYC and a big foe of paid sick leave), and Fix the Debt (a notorious group devoted to crushing Social Security and Medicare).

When you think about it, it looks as if the Robin Hood Foundation members are actively trying to strip the public and strangle working people to such a degree that poverty and nickels thrown by billionaires will be all that’s left of America.  The rest of us will all be living in Sherwood Forest.

The Robin Hood Foundation’s new motto: Increasing poverty is our business.

Naked Capitalism on Gutting Financial Reform

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Republican Rank-and-File Lines Up Against Financial Regulation

Yves here. Let us not kid ourselves that the Democratic party is also for the most part out to gut financial regulation, as exemplified by Democratic party SEC chairman Mary Jo White stalling on Dodd Frank rule-making and regularly granting waivers to sanctions mandated under Dodd Frank. Or how about Janet Yellen, who had a complete deer-in-the-headlights look when Elizabeth Warren challenged her for failing to take on banks that had not delivered living wills, and comes up with lame justifications for Fed subsidies to banks?

The only reason that there is more space between Congressional Republicans and Democrats than usual is the pro-business, pro-bank “blue dog” wing of the Democratic party has gotten deservedly slaughtered in the last two Congressional elections for selling out what used to be the American middle class. So the more progressive-minded survivors are a bigger faction on a relative basis than they once were.

This Real News Network interview with Bill Black covers both a critical slice of the history of financial regulations (or more accurately, its rollback) as well as some of the current dynamics.

JAISAL NOOR, PRODUCER, TRNN: Welcome to the Real News Network. I’m Jaisal Noor in Baltimore. And welcome to this latest edition of the Black Financial Fraud Report.

Now joining us from Bloomington, Minnesota is Bill Black. He’s a former bank regulator and author of The Best Way to Rob a Bank is to Own One. As always, Bill, thanks for joining us.

BILL BLACK, ASSOCIATE PROF. OF ECONOMICS AND LAW, UMKC: Thanks for having me.

NOOR: So Bill, tell us what you have for us this week.

BLACK: Okay. So we have the gift that keeps on giving. This is Phil Graham, former Republican senator from the state of Texas, former chairman of Senate Banking Committee. The lead person in Congress on the repeal of Glass-Steagall through the Gramm-Leach-Bliley Act of 1999 with the active support of President Clinton and such, who the Republicans chose to make their lead featured witness in an attack on financial regulation just a few days ago in which Phil Graham said that the only still-legitimate form of bigotry in the United States as treated by the media was to attack the successful.

PHIL GRAHAM: It goes way beyond paperwork. What all this is about is political demagoguery. It’s the one form of bigotry that is still allowed in America, and that’s bigotry against the successful.

BLACK: And in particular he was outraged on attacks on his friend, the guy stepping down from running AT&T who he said was only going to get something like $68 million. And he considered people like this CEO to be the most exploited people in America, because they added so much value.

NOOR: It sounds like it. Yeah, it sounds like pure exploitation.

BLACK: Yeah. It’s the first word that came to mind when I heard that he got roughly $150 million. I don’t think that could serve him, at his age, through more than about 100,000 times his lifespan that remains.

NOOR: So Bill, talk about more of his comments. We understand that this was an effort to repeal the Dodd-Frank Act.

BLACK: Yeah. It’s part of a general assault. It’s interesting given the Republican primaries as well, that they’re making it so absolutely frontal that they want to A, destroy Dodd-Frank and free up bankers, the exploited class in America. But this is not just the Dodd-Frank repeal. The House is also passing bills that effectively would destroy pretty much all regulation, not just financial regulation.

And so it’s an incredibly broad assault on the entire concept, really, that there should be regulation. That instead that we should go to almost complete laissez-faire system and let bankers and CEOs do pretty much whatever they please without even the pretense of regulation, which is of course what we have now.

NOOR: So we know that with President Obama in the White House for the time being, these proposals have very little chance of advancing and becoming into law. But talk about what would happen if a Republican such as frontrunner Donald Trump would take over when President Obama’s term expires.

BLACK: Oh, well I think enough of us would probably leave the country that that would be the real problem for the United States.

But you don’t need a Trump. And that’s really the point. This is getting, these votes that I’m talking about to destroy Dodd-Frank and to pretty much destroy financial regulation are getting 95 percent support or more among rank and file Republicans in the House and the Senate. So if they had the White House, these things would already be law. And of course on the margins they are chipping away at Dodd-Frank. President Obama agreed to a quote-unquote compromise that already delayed significant important sections of Dodd-Frank, and the Republicans are making it clear that they’re going to use every vote possible on things like the debt ceiling, on things like the transportation bill to demand further weakening of regulation, particularly financial regulation in the United States.

So this isn’t just an issue if the Republicans get control of all three branches of government. It’s a very live issue now.

NOOR: And Bill, I didn’t want to pass up the opportunity to discuss former senator Graham’s history and involvement in repealing things like Glass-Steagal and the Commodity Futures Modernization Act. Give us a little more about his history, and more about–so just to contextualize the fact that it’s this particular person giving this testimony in front of Congress.

BLACK: So Phil Graham is an economist. He was an academic. Very conservative. Came to Washington eager to roll back financial regulation. This is well before Dodd-Frank, of course. Ended up being chairman of Senate Banking. Was incredibly active, as you said, in both of these so-called modernization acts that President Clinton was also heavily supportive of. One got rid of Glass-Steagall, violating the rule that if it ain’t broke, don’t fix it. So Glass-Steagall had worked brilliantly for nearly 50 years before the regulators, particularly Alan Greenspan, turned it into swiss cheese by regulatory exceptions, but that wasn’t good enough for Graham and Clinton. They decided to virtually eliminate the act.

The second one was of course the destroy Brooksley Born law. That’s Commodities Future Modernization Act, which is an oxymoron, that was designed to essentially make it impossible to regulate broad classes of financial derivatives. And that too ended in disaster.

But it isn’t just Phil Graham. It’s also his wife Wendy Graham. Also an economist, also extremely conservative, who ended up as chair of the Commodities Future Trading Commission after Brooksley Born. And so in addition to that act that I talked about, Wendy Graham in her role as chair of the CFTC as Brooksley Born’s actually sort of second successor, passed a special rule that was of enormous benefit to Enron’s fraudulent leaders in producing the California energy crisis. So this further eliminated jurisdiction over another class of trading derivatives that Ken Lay and Skilling used to create the California energy crisis. And of course, Wendy Graham at that point was on the board of directors of Enron. And Phil Graham was taken care of very nicely by a very large bank after his, he retired from the government as well.

So these are, this family, the Graham family, are principal architects. If you want to blame members of the legislature if would be Phil Graham, if you’re going to blame members of the regulatory ranks. It would be Alan Greenspan, of course, first, but Wendy Graham second. And then of course you can add President Clinton to that list, because he was not forced into either of these things. He was a strong proponent of gutting all financial regulation.

NOOR: Well Bill, thanks so much for that report. And of course it makes total sense why former senator Graham would be giving this testimony in front of Congress.

BLACK: It is deliberate symbolism on the part of the Republican party. This–we are the architects of this, and you put us back in power and we plan to go to the max.

NOOR: Well, thanks so much for joining us, Bill.

BLACK: Thank you.

NOOR: Thank you for joining us at the Real News Network.

Naked Capitalism on Iran: It’s All About the Money

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The Balance of Power in the Middle East Just Changed, U.S.-Iranian Relations Emerge from a 30-Year Cold War

By Peter Van Buren, who blew the whistle on State Department waste and mismanagement during the Iraqi reconstruction in We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People. Van Buren writes about current events at We Meant Well. His latest book is Ghosts of Tom Joad: A Story of the #99Percent. His next work will be a novel, Hooper’s War. Originally published at TomDispatch

Don’t sweat the details of the July nuclear accord between the United States and Iran. What matters is that the calculus of power in the Middle East just changed in significant ways.

Washington and Tehran announced their nuclear agreement on July 14th and yes, some of the details are still classified. Of course the Obama administration negotiated alongside China, Russia, Great Britain, France, and Germany, which means Iran and five other governments must approve the detailed 159-page “Joint Comprehensive Plan of Action.” The U.N., which also had to sign off on the deal, has already agreed to measures to end its sanctions against Iran.

If we’re not all yet insta-experts on centrifuges and enrichment ratios, the media will ensure that in the next two months — during which Congress will debate and weigh approving the agreement — we’ll become so. Verification strategies will be debated. The Israelis will claim that the apocalypse is nigh. And everyone who is anyone will swear to the skies that the devil is in the details. On Sunday talk shows, war hawks will fuss endlessly about the nightmare to come, as well as the weak-kneedness of the president and his “delusional” secretary of state, John Kerry. (No one of note, however, will ask why the president’s past decisions to launch or continue wars in the Middle East were not greeted with at least the same sort of skepticism as his present efforts to forestall one.)

There are two crucial points to take away from all the angry chatter to come: first, none of this matters and second, the devil is not in the details, though he may indeed appear on those Sunday talk shows.

Here’s what actually matters most: at a crucial moment and without a shot being fired, the United States and Iran have come to a turning point away from an era of outright hostility. The nuclear accord binds the two nations to years of engagement and leaves the door open to a far fuller relationship. Understanding how significant that is requires a look backward.

A Very Quick History of U.S.-Iranian Relations

The short version: relations have been terrible for almost four decades. A slightly longer version would, however, begin in 1953 when the CIA helped orchestrate a coup to oust Iran’s democratically elected prime minister, Mohammad Mosaddegh. A secular leader — just the sort of guy U.S. officials have dreamed about ever since the ayatollahs took power in 1979 — Mosaddegh sought to nationalize Iran’s oil industry. That, at the time, was a total no-no for Washington and London. Hence, he had to go.

In his place, Washington installed a puppet leader worthy of the sleaziest of banana republics, Shah Mohammad Reza Pahlavi. The U.S. assisted him in maintaining a particularly grim secret police force, the Savak, which he aimed directly at his political opponents, democratic and otherwise, including the ones who espoused a brand of Islamic fundamentalism unfamiliar to the West at the time. Washington lapped up the Shah’s oil and, in return, sold him the modern weapons he fetishized. Through the 1970s, the U.S. also supplied nuclear fuel and reactor technology to Iran to build on President Dwight Eisenhower’s “Atoms for Peace” initiative, which had kicked off Iran’s nuclear program in 1957.

In 1979, following months of demonstrations and seeing his fate in the streets of Tehran, the Shah fled. Religious leader Ayatollah Khomeini returned from exile to take control of the nation in what became known as the Islamic Revolution. Iranian “students” channeled decades of anti-American rage over the Shah and his secret police into a takeover of the American Embassy in Tehran. In an event that few Americans of a certain age are likely to forget, 52 American staffers were held hostage there for some 15 months.

In retaliation, the U.S. would, among other things, assist Iraqi autocrat Saddam Hussein (remember him?) in his war with Iran in the 1980s, and in 1988, an American guided missile cruiser in the Persian Gulf would shoot down a civilian Iran Air flight, killing all 290 people on board. (Washington claimed it was an accident.) In 2003, when Iran reached out to Washington, following American military successes in Afghanistan, President George W. Bush declared that country part of the “Axis of Evil.”

Iran later funded, trained, and helped lead a Shiite insurgency against the United States in Iraq. In tit-for-tat fashion, U.S. forces raided an Iranian diplomatic office there and arrested several staffers. As Washington slowly withdrew its military from that country, Iran increased its support for pro-Tehran leaders in Baghdad. When Iran’s nuclear program grew, the U.S. attacked its computers with malware, launching what was in effect the first cyberwar in history. At the same time, Washington imposed economic sanctions on the country and its crucial energy production sector.

In short, for the last 36 years, the U.S.-Iranian relationship has been hostile, antagonistic, unproductive, and often just plain mean. Neither country seems to have benefited, even as both remained committed to the fight.

Iran Ascendant

Despite the best efforts of the United States, Iran is now the co-dominant power in the Middle East. And rising. (Washington remains the other half of that “co.”)

Another quick plunge into largely forgotten history: the U.S. stumbled into the post-9/11 era with two invasions that neatly eliminated Iran’s key enemies on its eastern and western borders — Saddam Hussein in Iraq and the Taliban in Afghanistan. (The former is, of course, gone for good; the latter is doing better these days, though unlikely to threaten Iran for some time.) As those wars bled on without the promised victories, America’s military weariness sapped the desire in the Bush administration for military strikes against Iran. Jump almost a decade ahead and Washington now quietly supports at least some of that country’s military efforts in Iraq against the insurgent Islamic State. The Obama administration is seemingly at least half-resigned to looking the other way while Tehran ensures that it will have a puppet regime in Baghdad. In its serially failing strategies in Yemen, Lebanon, and Syria, Washington has all but begged the Iranians to assume a leading role in those places. They have.

And that only scratches the surface of the new Iranian ascendancy in the region. Despite the damage done by U.S.-led economic sanctions, Iran’s real strength lies at home. It is probably the most stable Muslim nation in the Middle East. It has existed more or less within its current borders for thousands of years. It is almost completely ethnically, religiously, culturally, and linguistically homogeneous, with its minorities comparatively under control. While still governed in large part by its clerics, the country has nonetheless experienced a series of increasingly democratic electoral transitions since the 1979 revolution. Most significantly, unlike nearly every other nation in the Middle East, Iran’s leaders do not rule in fear of an Islamic revolution. They already had one.

Why Iran Won’t Have Nuclear Weapons

Now, about those nukes. It would take a blind man in the dark not to notice one obvious fact about the Greater Middle East: regimes the U.S. opposes tend to find themselves blasted into chaos once they lose their nuclear programs. The Israelis destroyed Saddam’s program, as they did Syria’s, from the air. Muammar Qaddafi’s Libya went down the drain thanks to American/NATO-inspired regime change after he voluntarily gave up his nuclear ambitions. At the same time, no one in Tehran could miss how North Korea’s membership in the regime-change club wasn’t renewed once that country went nuclear. Consider those pretty good reasons for Iran to develop a robust nuclear weapons program — and not give it up entirely.

While, since 2002, Washington hasn’t taken a day off in its saber-rattling toward Iran, it isn’t the only country the clerics fear. They are quite convinced that Israel, with its unacknowledged but all too real nuclear arsenal, is capable and might someday be willing to deliver a strike via missile, aircraft, or submarine.

Now, here’s the added irony: American sabers and Israeli nukes also explain why Iran will always remain a nuclear threshold state — one that holds most or all of the technology and materials needed to make such a weapon, but chooses not to take the final steps. Just exactly how close a country is at any given moment to having a working nuclear weapon is called “breakout time.” If Iran were to get too close, with too short a breakout time, or actually went nuclear, a devastating attack by Israel and/or the United States would be a near inevitability. Iran is not a third world society. Its urban areas and infrastructure are exactly the kinds of things bombing campaigns are designed to blow away. So call Iran’s nuclear program a game of chicken, but one in which all the players involved always knew who would blink first.

The U.S.-Iran Nuclear Accord

So if Iran was never going to be a true nuclear power and if the world has lived with Iran as a threshold state for some time now, does the July accord matter?

There are two answers to that question: it doesn’t and it does.

It doesn’t really matter because the deal changes so little on the ground. If the provisions of the accord are implemented as best we currently understand them, with no cheating, then Iran will slowly move from its current two- to three-month breakout time to a year or more. Iran doesn’t have nukes now, it would not have nukes if there were no accord, and it won’t have nukes with the accord. In other words, the Vienna agreement successfully eliminated weapons of mass destruction that never existed.

It does really matter because, for the first time in decades, the two major powers in the Middle East have opened the door to relations. Without the political cover of the accord, the White House could never envisage taking a second step forward.

It’s a breakthrough because through it the U.S. and Iran acknowledge shared interests for the first time, even as they recognize their ongoing conflicts in Syria, Yemen, and elsewhere. That’s how adversaries work together: you don’t have to make deals like the July accord with your friends. Indeed, President Obama’s description of how the deal will be implemented — based on verification, not trust — represents a precise choice of words. The reference is to President Ronald Reagan, who used the phrase “trust but verify” in 1987 when signing the Intermediate-Range Nuclear Forces Treaty with the Russians.

The agreement was reached the old-school way, by sitting down at a table over many months and negotiating. Diplomats consulted experts. Men and women in suits, not in uniform, did most of the talking. The process, perhaps unfamiliar to a post-9/11 generation raised on the machismo of “you’re either with us or against us,” is called compromise. It’s an essential part of a skill that is increasingly unfamiliar to Americans: diplomacy. The goal is not to defeat an enemy, find quick fixes, solve every bilateral issue, or even gain the release of the four Americans held in Iran. The goal is to achieve a mutually agreeable resolution to a specific problem. Such deft statecraft demonstrates the sort of foreign policy dexterity American voters have seldom seen exercised since Barack Obama was awarded the 2009 Nobel Peace Prize (Cuba being the sole exception).

It’s All About the Money

While diplomacy brought the United States and Iran to this point, cash is what will expand and sustain the relationship.

Iran, with the fourth-largest proven crude oil reserves and the second-largest natural gas reserves on the planet, is ready to start selling on world markets as soon as sanctions lift. Its young people reportedly yearn for greater engagement with the West. The lifting of sanctions will allow Iranian businesses access to global capital and outside businesses access to starved Iranian commercial markets.

Since November 2014, the Chinese, for example, have already doubled their investment in Iran. European companies, including Shell and Peugeot, are now holding talks with Iranian officials. Apple is contacting Iranian distributors. Germany sent a trade delegation to Tehran. Ads for European cars and luxury goods are starting to reappear in the Iranian capital. Hundreds of billions of dollars worth of foreign technology and expertise will need to be acquired if the country is to update its frayed oil and natural gas infrastructure. Many of its airliners are decades old and need replacement. Airlines in Dubai are fast adding new Iran routes to meet growing demand. The money will flow. After that, it will be very hard for the war hawks in Washington, Tel Aviv, or Riyadh to put the toothpaste back in the tube, which is why you hear such screaming and grinding of teeth now.

The Real Fears of the Israelis and the Saudis

Neither Israel nor the Saudis ever really expected to trade missile volleys with a nuclear-armed Iran, nor do their other primary objections to the accord hold much water. Critics have said the deal will only last 10 years. (The key provisions scale in over 10 years, then taper off.) Leaving aside that a decade is a lifetime in politics, this line of thinking also presumes that, as the calendar rolls over to 10 years and a day, Iran will bolt from the deal and go rogue. It’s a curious argument to make.

Similarly, any talk of the accord touching off a nuclear arms race in the Middle East is long out of date. Israel has long had the bomb, with no arms race triggered. Latent fears that Iran will create “the Islamic Bomb” ignore the fact that Pakistan, with own hands dirty from abetting terror and plenty of Islamic extremists on hand, has been a nuclear power since at least 1998.

No, what fundamentally worries the Israelis and the Saudis is that Iran will rejoin the community of nations as a diplomatic and trading partner of the United States, Asia, and Europe. Embarking on a diplomatic offensive in the wake of its nuclear deal, Iranian officials assured fellow Muslim countries in the region that they hoped the accord would pave the way for greater cooperation. American policy in the Persian Gulf, once reliably focused only on its own security and energy needs, may (finally) start to line up with an increasingly multifaceted Eurasian reality. A powerful Iran is indeed a threat to the status quo — hence the upset in Tel Aviv and Riyadh — just not a military one. Real power in the twenty-first century, short of total war, rests with money.

The July accord acknowledges the real-world power map of the Middle East. It does not make Iran and the United States friends. It does, however, open the door for the two biggest regional players to talk to each other and develop the kinds of financial and trade ties that will make conflict more impractical. After more than three decades of U.S.-Iranian hostility in the world’s most volatile region, that is no small accomplishment.

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Discretionary Spending 2016

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Naked Capitalism on Government Corruption

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The Augean Stables – How Corruption Has Amended the Constitution

By Gaius Publius, a professional writer living on the West Coast of the United States and frequent contributor to DownWithTyranny, digby, Truthout, and Naked Capitalism. Follow him on Twitter @Gaius_Publius, Tumblr and Facebook. This piece first appeared at Down With Tyranny. GP article archive here.
Not something you don’t already know if you’re a regular reader of these pages, but it’s becoming more and more mainstream to deliver a radical* analysis of government in the U.S. That’s why I found the following so interesting — the source is former U.S. Senator and former presidential candidate Gary Hart. And believe me, this is a radical analysis.

But first, two definitions. The Augean Stables is a reference to the Fifth Labor of Hercules, one of the Twelve (click to read the context). The task was to clean the king’s stables, which housed 1,000 cattle and which hadn’t been cleaned in 30 years, the life of the man who owned it. Cleaned of what? Surely you know:

The fifth Labour of Heracles (Hercules in Latin) was to clean the Augean (/ɔːˈən/) stables. Eurystheus [the king assigning the tasks to Hercules] intended this assignment both as humiliating (rather than impressive, like the previous labours) and as impossible, since the livestock were divinely healthy (immortal) and therefore produced an enormous quantity of dung (ἡ ὄνθος). These stables had not been cleaned in over 30 years, and over 1,000 cattle lived there. However, Heracles succeeded by rerouting the rivers Alpheus and Peneus to wash out the filth.

The second definition — corruption. Most think of corruption as an outcome that’s perverted for the sake of money. Hart, correctly, says, Not so:

From Plato and Aristotle forward, corruption was meant to describe actions and decisions that put a narrow, special, or personal interest ahead of the interest of the public or commonwealth. Corruption did not have to stoop to money under the table, vote buying, or even renting out the Lincoln bedroom. In the governing of a republic, corruption was self-interest placed above the interest of all—the public interest.

Corruption is “self-interest placed above the interest of all,” or in some cases, one’s legal or contractual obligation. Thus, for example, some college football referees and refereeing groups are obviously corrupt. When Conference A plays Conference B using Conference B’s referees, and year after year the bad calls go Conference B’s way, especially with the game on the line, the referees are corrupt.

Are they betraying their obligation for money? No, likely not. Are they betraying their obligation in order to satisfy animus against Conference A, or to make sure the “home teams” win? That’s an obvious explanation, and by this definition (and mine), that’s corrupt.

Or take another situation. By this definition, the Supreme Court since at least 2000 and likely before has acted corruptly, if the definition is “self-interest placed above the interest of all.” No legal analysis of Bush v. Gore passes the “upholds the interest of all” test — the Republicans on the Court simply put a Republican (the home team candidate) in the White House because they could. Nor do the major decisions around money and corporate rights, like Citizens United or even Buckley v. Valeo, the 1976 Burger Court decision that lifted restrictions on campaign contributions, and its follow-up, First National Bank of Boston vs. Bellotti, whose majority opinion was authored by Lewis Powell, of the infamous Powell memo.

By this definition — perverting an outcome to benefit a group in which one has a personal interest — the Supreme Court acted corruptly in the cases above. Likely corrupt in Buckley, Citizens United, and First National Bank of Boston. Certainly corrupt in Bush v. Gore, where Republican justices favored a Republican candidate for president over a Democratic one on no defensible grounds. They weren’t metaphorically “corrupt,” with the quotes. They were corrupt by definition.

Gary Hart on the Systemic Corruption of the U.S. Government

Hart’s piece is an interesting Time magazine essay, and also a long section from his new book, The Republic of Conscience (I don’t support Amazon, so no Amazon link). I don’t want to quote a ton of it, since its main argument is likely familiar to you. But he makes a systemic point in a way that seems original; that is, he puts pieces together to make a bigger whole than most of us were aware of. For example, it’s likely that the “army of lobbyists” we all hate aren’t a perversion of government — they are government.

A few notable sections (all emphasis mine):

Gary Hart: America’s Founding Principles Are in Danger of Corruption

Welcome to the age of vanity politics and campaigns-for-hire. What would our founders make of this nightmare?

Four qualities have distinguished republican government from ancient Athens forward: the sovereignty of the people; a sense of the common good; government dedicated to the commonwealth; and resistance to corruption. Measured against the standards established for republics from ancient times, the American Republic is massively corrupt.

From Plato and Aristotle forward, corruption was meant to describe actions and decisions that put a narrow, special, or personal interest ahead of the interest of the public or commonwealth. Corruption did not have to stoop to money under the table, vote buying, or even renting out the Lincoln bedroom. In the governing of a republic, corruption was self-interest placed above the interest of all—the public interest.

By that standard, can anyone seriously doubt that our republic, our government, is corrupt? There have been Teapot Domes and financial scandals of one kind or another throughout our nation’s history. There has never been a time, however, when the government of the United States was so perversely and systematically dedicated to special interests, earmarks, side deals, log-rolling, vote-trading, and sweetheart deals of one kind or another.

What brought us to this? A sinister system combining staggering campaign costs, political contributions, political action committees, special interest payments for access, and, most of all, the rise of the lobbying class.

Worst of all, the army of lobbyists that started relatively small in the mid-twentieth century has now grown to big battalions of law firms and lobbying firms of the right, left, and an amalgam of both. And that gargantuan, if not reptilian, industry now takes on board former members of the House and the Senate and their personal and committee staffs. And they are all getting fabulously rich.

Gargantuan numbers of lobbyists with gargantuan amounts of money. There’s a point where corruption of government on that scale systemically changes government itself.

The “Big Three” Lobbying Conglomerates Are a “Fourth Branch of Government”

For Hart, the movement of office-holders and their staffs between lobbying firms and government is not a “revolving door” to government; that revolving door is government. Hart makes his point by looking at the lobbying firm WPP, the largest of three giant lobbying conglomerates. WPP isn’t just a lobbying firm, it’s an international conglomerate of firms that wields enormous power and wealth.

Consider — WPP has been eating up lobbying firms the way Macy’s, Inc. eats department stores or Darden eats restaurant chains. At some point, you simply own the business you’re in, and the size of your operation changes the nature of the game itself.

Hart on how lobbying at this scale changes our government:

[T]he largest [lobbying “predator” (his term)] by far is WPP (originally called Wire and Plastic Products; is there a metaphor here?), which has its headquarters in London and more than 150,000 employees in 2,500 offices spread around 107 countries. It, together with one or two conglomerating competitors, represents a fourth branch of government, vacuuming up former senators and House members and their spouses and families, key committee staff, former senior administration officials of both parties and several administrations, and ambassadors, diplomats, and retired senior military officers.

WPP has swallowed giant public relations, advertising, and lobbying outfits such as Hill & Knowlton and BursonMarsteller, along with dozens of smaller members of the highly lucrative special interest and influence-manipulation world. Close behind WPP is the Orwellian-named Omnicom Group and another converger vaguely called the Interpublic Group of Companies. According to Mr. Edsall, WPP had billings last year of $72.3 billion, larger than the budgets of quite a number of countries.

With a budget so astronomical, think how much good WPP can do in the campaign finance arena, especially since the Citizens United decision. The possibilities are almost limitless. Why pay for a senator or congresswoman here or there when you can buy an entire committee? Think of the banks that can be bailed out, the range of elaborate weapons systems that can be sold to the government, the protection from congressional scrutiny that can be paid for, the economic policies that can be manipulated.

The lobbying business is no longer about votes up or down on particular measures that may emerge in Congress or policies made in the White House. It is about setting agendas, deciding what should and should not be brought up for hearings and legislation. We have gone way beyond mere vote buying now. The converging Influence World represents nothing less than an unofficial but enormously powerful fourth branch of government.

To whom is this branch of government accountable? Who sets the agenda for its rising army of influence marketers? How easy will it be to not only go from office to a lucrative lobbying job but, more important, from lucrative lobbying job to holding office?

When one lobbying firm has billings of nearly $75 billion, you can “buy committees,” not just individual votes; and you can “set agendas” rather than just pass laws.

Now consider that “revolving door” again. Is that a door out of government and back into it, or is it a door into another branch of government, one where policy decisions also get made?

Does an International Lobbying Firm Serve One Nation’s Interest or Many?

And a final question: If the lobbying firm is international, with international clients and governmental “targets,” are its interests “American” in any way? If not, how compromised are those who take its money?

Where are its [WPP’s] loyalties if it is manipulating and influencing governments around the world? Other than as a trough of money of gigantic proportions, how does it view the government of the United States?

Why would not WPP act to modify the laws of one country to serve the interests of clients in another? And I’ll ask again, are those who take its money compromised by the international goals of these mega-firms?

“Purchasing” Candidates and Office-Holders — Even Former Senators Are Saying It

Just as “corruption” is not a metaphor when it comes to decisions like Bush v. Gore, “buying” and “sponsoring” candidates and office-holders — the way soap is bought and race cars are sponsored — is not a metaphor, at least according to Hart:

The advent of legalized corruption launched by the Supreme Court empowers the superrich to fund their own presidential and congressional campaigns as pet projects, to foster pet policies, and to represent pet political enclaves. You have a billion, or even several hundred million, then purchase a candidate from the endless reserve bench of minor politicians and make him or her a star, a mouthpiece for any cause or purpose however questionable, and that candidate will mouth your script in endless political debates and through as many television spots as you are willing to pay for. All legal now. …

The five prevailing Supreme Court justices, holding that a legal entity called a corporation has First Amendment rights of free speech, might at least have required the bought-and-paid-for candidates to wear sponsor labels on their suits as stock-car drivers do. Though, for the time being, sponsored candidates will not be openly promoted by Exxon-Mobil or the Stardust Resort and Casino but by phony “committees for good government” smokescreens.

I think he’s literally correct. In the old days, it didn’t take much money to wholly own a back-bench Congress person from coal country, say, and one coal company, if big enough, could do it. But the major office-holders had to be funded by competing interests. Now you can tag several  presidential candidates, at least on the Republican side, with the single name of their “benefactor.”

For example:

  • Marco Rubio — Sponsored by Norman Braman & (he hopes) Sheldon Adelson
  • Scott Walker — Sponsored by the Koch Brothers
  • Ted Cruz — Sponsored by hedge fund billionaire Robert Mercer
  • Rick Santorum — Sponsored by Foster Friess
  • Rand Paul — Sponsored by [this slot available]

And so on. Joe Biden’s been called the “Senator from MBNA,” and Chuck Schumer the “Senator from Wall Street.” Seems right. In cases of such complete “sponsorship” I agree that wearing of badges should be required. Partial sponsorship could be handled like NASCAR jackets.

boehner_sponsors_ACFB13

But this treats a serious problem too lightly. Remember, I said this was a radical analysis. In fact, by this practice we’re actually amending the Constitution — not the one as written; the one as practiced.

The Other Way to Amend the Constitution

All constitutions and all systems of laws are amended in two ways, by formal agreement (legal process) and by informal agreement. In England, the second ways is in fact the primary way their “constitution” is amended.

In the U.S., if both parties enforce a law in the same way, even though that way deviates from the way the law is written, the law is amended until forced back to its original form in practice. Thus:

▪ We have, by bipartisan agreement, revoked the Fourth Amendment. Neither party enforces it, so it’s gone. Do you think you’ll see it enforced in your lifetime? It’s possible. Is that likely, do you think, without another radical change?

▪ We have changed the “rule of law” to add a “circle of immunity” amendment. It started with Nixon — the circle of “who cannot be prosecuted” included one person, the president. That was granted him by Gerald Ford’s pardon with no objection from Congress and confirmed by Obama’s refusal to indict Bush II for violating laws against torture. (Can you see Obama being indicted by anyone for extrajudicial murder, assassination really, of Americans, some mere propagandists and some completely innocent?)

Under Reagan–Bush I that circle expanded to include their top cabinet officers, like Defense Secretary Casper Weinberger. Under Bush II–Obama it includes all money-center bankers and former senators (and outright crooks) like Jon Corzine.

▪ Regarding that parenthetical comment about Obama and his drone kills above, we’ve now amended the trial-by-jury section of the Sixth Amendment to allow executive assassination, death by executive fiat. It just awaits a Republican president to confirm it by following suit, but Congress has already approved.

And so on. Now we can add one more:

▪ The mega-lobbying firms, with their combined more-than-$100 billion annual budget, are a fourth branch of government. Policy is set in these firms and passed to Congress and the executive branch to “discuss.” Once discussed and passed, those who passed these policies then return to the firms to set more policy — and receive what’s often the biggest payoff of their lifetime.

Was TPP drafted first in these mega-firms before being negotiated between nations? There aren’t many other ways to convene 600 lobbyists (pdf).

Cleaning the Augean Stables

Back to Hart’s essay and where we started, with the Augean Stables. The way out of this mess, if Greek myth is any indicator, is not incremental. You can’t shovel your way out. Remember, that’s a 1,000-cattle stable, and in our case a literal army of lobbyists. With a mere shovel, we’d be buried to our necks before the fourth toss of filth out the window.

How did Hercules clean his stable? He diverted a river and ran the whole mess out to sea in one pass. There’s a word for that equivalent in government life — radical change, and it comes in several forms.

I recommend the peaceful kind, like backing this guy for president. Click to support; you can adjust the split at the link.

*Did you know that “radical” means “going to the root or source”?

Radically yours,

GP

What the Pope Said

ENCYCLICAL LETTER
LAUDATO SI’
OF THE HOLY FATHER
FRANCIS
ON CARE FOR OUR COMMON HOME

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Encyclical Letter