AROUND NEW HAMPSHIRE
1. Upcoming Event
Laconia Democrats Meeting
Thursday, October 15
6:00 pm
Unitarian Universalist Church, 172 Pleasant St.
Also, please check out "Breaking News" on our website at the link below:http://www.laconiademocrats.
2. The Importance of CPP for New Hampshire
EPA Clean Power Plan will benefit the state’s outdoor industry
by Tim Moore, concordmonitor.com, October 9, 2015
Last month, I traveled to Washington, D.C., to lobby support for the EPA’s Clean Power Plan, which sets standards to reduce carbon pollution from power plants by 32 percent (from 2005 standards) by 2030.
The plan sets standards that offer each state the flexibility to achieve the carbon reductions on a case-by-case basis, while creating jobs and reducing energy costs. I went to Capitol Hill representing New Hampshire sportsmen among a group of business owners, the N.H. Public Health Association, Moms Clean Air Force and the faith community, all from New Hampshire. Our group was part of a large lobby group put together by the Climate Action Campaign to gain support for the Clean Power Plan and stop any legislative attacks that could threaten it.
During our day on Capitol Hill, we attended a morning coffee with Sen. Kelly Ayotte, then had a meeting with Sen. Jeanne Shaheen, which was followed by a more in-depth meeting with a member of Sen. Ayotte’s staff. We finished the day in a meeting with Rep. Annie Kuster.
Our goal was to thank Sen. Shaheen and Rep. Kuster for their support of the CPP and ask that they oppose any legislative actions that might block it. Our group also had the task of telling Sen. Ayotte, who remains undecided on the CPP, why each of us thought she should support it.
As a professional hunting and fishing guide in New Hampshire, I feel the effects of pollution and climate change first-hand. I feel these effects more during the winter months than any other time of year.
I make more than 50 percent of my annual income guiding ice anglers, mostly on Lake Winnipesaukee, so any changes in our winter patterns immediately translate into dollars and cents lost from my business.
Shorter and warmer winters are causing later ice-in and earlier ice-out on New Hampshire’s lakes and ponds.
In the past five years, the earliest ice-out ever recorded happened on Lake Winnipesaukee, twice. Shortening the length of the ice-fishing season not only means less income for my household, it creates a domino effect that means less revenue generated in-state for things such as meals, lodging and fuel, as well as fishing license sales needed by the self-supporting and financially struggling New Hampshire Fish and Game Department.
The CPP is a huge step toward a cleaner, more sustainable future because it focuses on our nation’s leading contributor of air pollution, power plants.
As a sportsman, I may have it easy when it comes to being convinced of the realities of climate change. New Hampshire’s fish and wildlife don’t belong to political parties. For outdoor enthusiasts, carbon pollution is a bad thing, no matter what your political views. Pollution is a nonpartisan issue.
I urge readers to contact Sen. Ayotte (ayotte.senate.gov) and ask that she support the EPA’s Clean Power Plan. Our wildlife, water, air and economy are depending on it.
3. Van Ostern's Policy Agenda
Van Ostern shares policy priorities on campaign’s first day
by Allie Morris, concordmonitor.com, October 9, 2015
Kicking off his campaign for governor, Democrat Colin Van Ostern pledged to extend commuter rail from Boston to Manchester and laid out an agenda geared toward boosting business and attracting young people to the state.
“We have to make sure everyone has access to opportunity and really have a plan for how we create a brighter economy moving forward,” said Van Ostern, chief marketing officer at Southern New Hampshire University’s College for America.
Van Ostern, 36, is a two-term Executive Councilor from Concord who was first elected in 2012 after running on a platform to expand commuter rail and fund Planned Parenthood.
Van Ostern announced his campaign Thursday during a roundtable with education and business leaders from Dyn and Stonyfield at Silvertech, a Manchester tech firm.
He reiterated his support to expand passenger rail from Boston, through Nashua, to Manchester, saying it would create jobs and bring more young people to the state. The proposal has faced opposition in the Legislature, and this year Republicans blocked $4 millionin funding to study the expansion, arguing the cost of rail outweighs any possible benefits.
“We’ve seen good, but too slow, progress on rail,” Van Ostern said. “It is unfortunate it has been made a partisan or ideological issue by some politicians, but that’s not where the people in New Hampshire stand, and it’s one of the reasons we have elections.”
Van Ostern voiced support for renewable energy, panning a state-set cap on solar reimbursements that some say will stifle industry growth. And he talked about a need to expand broadband service to rural parts of the state, reduce student loan debt, invest in public universities and expand public full-day kindergarten.
“That’s not just something we need to do for the kids, it’s also for their parents who want to be able to work and participate in our economy but sometimes, frankly, childcare costs are more expensive then they would be able to earn if they were working,” said Van Ostern, who has two young sons. “We need a governor who is going to really put a focus on those issues.”
A focal point of the campaign, he said, will be proposing policies that attract young people, young families and new companies and startups to the state. Van Ostern opened a campaign office Thursday in Alpha Loft, a business incubator in downtown Manchester.
The average age in New Hampshire hovers above 41 years old, one of the oldest in the nation, according to the 2010 census. Bringing in, and retaining, fresh blood is a perennial goal of lawmakers in Concord.
At the event, Van Ostern didn’t mention party affiliations, or any of his competitors. Executive Councilor Chris Sununu, a Newfields Republican, is the only other candidate who is officially running for governor, however several other Democrats and Republican are reportedly weighing a campaign. Democratic Gov. Maggie Hassan is running for U.S. Senate and will not seek a third term.
Republican groups took aim at Van Ostern on Thursday, calling him a career politician “with few real life accomplishments.”
“Granite Staters deserve an independent voice with commonsense values and a willingness to compromise, not a rigid ideologue whose commitment to party politics runs deeper than his commitment to New Hampshire’s best interests,” state GOP chariwoman Jennifer Horn said in a statement.
Van Ostern will continue to roll out his campaign with a series of roundtables across the state, he said, one in Nashua on rail and solar energy, and one on the Seacoast focused on student debt, among others.
4. Sen. Shaheen's Amendment to Help Small Business
Shaheen-sponsored amendment to ACA gets President's signature
by Dave Solomon, unionleader.com, October 8, 2015
WASHINGTON — President Obama on Wednesday signed into law a bipartisan measure co-sponsored in the Senate by Democratic Sen. Jeanne Shaheen, amending the Affordable Care Act to prevent anticipated increases in health insurance for mid-sized businesses.
The Protecting Affordable Coverage for Employees Act is the first tweak to Obamacare that has been passed by both chambers and signed into law by the president.
Previously, Republicans were reluctant to vote for any ACA-related measure short of outright repeal, while the White House had been unwilling to sign off on any legislative changes to the president’s signature health care law.
“We worked to find common ground to keep this from becoming a partisan issue,” said Shaheen in a telephone conference with reporters on Wednesday. “Hopefully it will be a model that can be used again in the future. The legislation passed through both chambers by unanimous consent, and with overwhelming support.”
The definition of the small group market on the online insurance exchange was scheduled to change under the ACA from employers with up to 50 employees to include employers with up to 100 employees on January 1, 2016.
The change would have subjected many small- and mid-sized businesses to different rating rules and requirements, with the potential of increasing the premiums on businesses and their employees.
“With the PACE Act now signed into law, states will have the flexibility to determine whether to keep small group market sizes the same or to update them,” Shaheen said. Most are likely to keep small groups at 50 or less.
The bill was first introduced in the House of Representatives in May, was passed by the House on Sept. 28 and by the Senate on Oct. 1. It was co-sponsored in the Senate by Republican Tim Scott of South Carolina.
Group health insurance for small businesses with 50 or fewer employees under the ACA is priced on the basis of “community rating,” which relies on the demographic characteristics of the employee group, such as age, locale, family size and tobacco use.
Health insurance for larger businesses, with 51 or more employees, is priced on the basis of claims experience within the group.
Most of the businesses with employees in the 51 to 100 range do better under experience rating, particularly those with a relatively healthy workforce.
Had they been forced into community rating, many would choose to self-insure. That would shrink the risk pool and raise prices for everyone.
A study done for Blue Cross Blue Shield calculated that roughly two-thirds (64 percent) of its customers in groups with 51-100 employees would receive a premium increase in 2016 if the change in rating rules took effect, with an 18 percent increase on average.
“As the ACA gets implemented, I think it’s important to take a look at what’s working and what’s not, and to make the changes that will make it work better,” Shaheen said. “The PACE act is one of those changes.”
The Protecting Affordable Coverage for Employees Act is the first tweak to Obamacare that has been passed by both chambers and signed into law by the president.
Previously, Republicans were reluctant to vote for any ACA-related measure short of outright repeal, while the White House had been unwilling to sign off on any legislative changes to the president’s signature health care law.
“We worked to find common ground to keep this from becoming a partisan issue,” said Shaheen in a telephone conference with reporters on Wednesday. “Hopefully it will be a model that can be used again in the future. The legislation passed through both chambers by unanimous consent, and with overwhelming support.”
The definition of the small group market on the online insurance exchange was scheduled to change under the ACA from employers with up to 50 employees to include employers with up to 100 employees on January 1, 2016.
The change would have subjected many small- and mid-sized businesses to different rating rules and requirements, with the potential of increasing the premiums on businesses and their employees.
“With the PACE Act now signed into law, states will have the flexibility to determine whether to keep small group market sizes the same or to update them,” Shaheen said. Most are likely to keep small groups at 50 or less.
The bill was first introduced in the House of Representatives in May, was passed by the House on Sept. 28 and by the Senate on Oct. 1. It was co-sponsored in the Senate by Republican Tim Scott of South Carolina.
Group health insurance for small businesses with 50 or fewer employees under the ACA is priced on the basis of “community rating,” which relies on the demographic characteristics of the employee group, such as age, locale, family size and tobacco use.
Health insurance for larger businesses, with 51 or more employees, is priced on the basis of claims experience within the group.
Most of the businesses with employees in the 51 to 100 range do better under experience rating, particularly those with a relatively healthy workforce.
Had they been forced into community rating, many would choose to self-insure. That would shrink the risk pool and raise prices for everyone.
A study done for Blue Cross Blue Shield calculated that roughly two-thirds (64 percent) of its customers in groups with 51-100 employees would receive a premium increase in 2016 if the change in rating rules took effect, with an 18 percent increase on average.
“As the ACA gets implemented, I think it’s important to take a look at what’s working and what’s not, and to make the changes that will make it work better,” Shaheen said. “The PACE act is one of those changes.”
5. Funny-Money-Frank is Falling
WMUR poll: Support for Frank Guinta continues to deteriorate
by John DiStaso, wmur.com, October 8, 2015
DURHAM, N.H. —U.S. Rep. Frank Guinta’s standing among his 1st Congressional District constituents has worsened in the past three months, as his campaign finance violations have continued to be a political albatross.
According to a new WMUR Granite State Poll released Thursday evening, only about one-fifth of the Manchester Republican’s constituents view him favorably, while half view him unfavorably. And half of his constituents think he should resign his seat.
But Guinta is not the only New Hampshire member of Congress who is unpopular. Democratic U.S. Rep. Ann Kuster of Hopkinton is also “underwater,” with fewer than one-third of her 2nd Congressional District constituents viewing her favorably.
Guinta has tried to turn the page on his conciliation agreement with the Federal Election Commission regarding $355,000 in 2010 campaign contributions that came from his parents. He has tried to focus on his congressional duties and constituent service, while also engaging in political fundraising for a possible re-election campaign.
Since his settlement with the FEC became public in May, several top Republicans, including U.S. Sen. Kelly Ayotte, have called on him to resign. He has refused.
Despite Guinta’s efforts to rehabilitate his political standing, the new poll shows, as did the previous WMUR Granite State Poll in July, that far more of his constituents want him to resign than stay in Congress.
The poll shows that 50 percent think he should resign, while 22 percent believe he should continue to serve out his term, and 28 percent said they did not know.
Even 34 percent of self-identified Republicans said he should resign, as did 65 percent of Democrats and 44 percent of independents.
In July’s WMUR Granite State Poll, 44 percent of his constituents said he should resign.
The new poll was conducted Sept. 24-Oct. 2 by the University of New Hampshire Survey Center, included 286 residents of the 1st Congressional District and 301 residents of the 2nd Congressional District. It has margins of error of 5.8 percent in the 1st District and 5.6 percent in the 2nd District.
Signed conciliation agreement
Earlier this year, Guinta signed a conciliation agreement with the FEC, whose staff attorneys found that in 2010, he loaned his campaign $355,000 in contributions that came from his parents. The FEC staff said it was an illegal contribution because it was far in excess of the legal limit for contributions from individuals.
But Guinta maintained that the money was his and came from a “family pot” account in his parents’ names, to which he contributed over many years more money than he received. There is no limit on the amount of money a candidate can contribute to his campaign.
Despite disputing the conclusion of the FEC staff, Guinta agreed to pay a $15,000 fine and return the $355,000 by next spring. The six-member commission approved the agreement.
Guinta has indicated that he intends to run for reelection in 2016. And he is expected to face stiff competition.
Republican Dan Innis has filed a statement of candidacy with the FEC to run for the seat, while another Republicans, UNH Law School Rudman Center interim executive director Rich Ashooh, has shown strong interest.
On the Democratic side, Guinta’s three-time foe, former U.S. Rep. Carol Shea-Porter, and Bedford businessman Shawn O’Connor, a political newcomer, have announced candidacies for the seat.
According to the poll, 56 percent of Guinta’s constituents said that if he is on the ballot in 2016, they will definitely vote for another candidate, while 4 percent said they would definitely vote for him and 16 percent said they would consider voting for him. Those findings are slightly worse for Guinta than July.
Among Republicans, 33 percent said they would definitely vote for another candidate. Half of independents and 77 percent of Democrats said they would not vote for Guinta.
The overall view of Guinta in the 1st District has also worsened since July. At that time, 25 percent of those polled viewed him favorably, 49 percent viewed him unfavorably and 21 percent did not know enough about him to say.
In the new poll, Guinta is viewed favorably by 21 percent, unfavorably by 50 percent, while 23 percent did not know.
The poll also found that 18 percent have heard a “great deal” about the FEC issue, while 30 percent have heard a fair amount, 23 percent have heard “only a little” and 18 percent have heard nothing about it.
View of Shea-Porter, O’Connor
Among Guinta’s potential Democratic opponents, Shea-Porter is viewed favorably by 37 percent of those polled and unfavorably by 30 percent, while 25 percent said they do not know enough about her to say.
The last time Shea-Porter was included in a WMUR Granite State Poll was October 2014, before she lost to Guinta. At that time, she was viewed favorably by 41 percent, unfavorably by 29 percent while 22 percent said they did not know.
O’Connor, meanwhile, is unknown to 81 percent of adults in the 1st Congressional District, while 4 percent view him favorably and 4 percent view him unfavorably.
Kuster unpopular
In the 2nd Congressional District, Kuster easily won re-election in November, but she has dropped in popularity since July.
She currently is viewed favorably by 29 percent of those polled, as compared to 33 percent in July. Currently, she is viewed unfavorably by 33 percent, while 30 percent do not know.
In July, Kuster was viewed unfavorably by 37 percent, while 25 percent did not know.
6. Ayotte's Vote Against NH's Infrastructure
ICYMI: NRSC’s Clueless Attack Ad Backfires on Kelly Ayotte
by Ttaraila, nhdp.org, October 9, 2015
Washington Republicans’ Attack Highlights Ayotte Was Only Member of NH’s Congressional Delegation To Vote Against Funds for Expansion of I-93
Concord, N.H. – Yesterday, the National Republican Senatorial Committee released a clueless attack aimed at Governor Maggie Hassan.
But the attack from Washington Republicans ended up backfiring on Kelly Ayotte, as it highlighted that Ayotte was the only member of New Hampshire’s congressional delegation to vote against securing funding for the long-overdue completion of I-93.
“Given that Kelly Ayotte was the only member of New Hampshire’s congressional delegation to vote against securing funding for the long-overdue completion of I-93, this desperate attack from national Republicans is sure to backfire,” said NHDP Chairman Ray Buckley… “While Kelly Ayotte has been looking out for her special interest backers in Washington, Governor Maggie Hassan actually brought together members of both parties and the business community to pass a transportation bill that is beginning to fix highways, roads and bridges across our state, including finishing the expansion of I-93,” he added.
BACKGROUND
Ayotte Was The Only Member Of The NH Congressional Delegation To Vote Against A Transportation Bill With Funding For Interstate 93, With Guinta And Bass Voting For The Bill.”“A federal transportation bill passed by Congress Friday secures funding for the widening of Interstate 93 from the Massachusetts border to Exit 3 in Windham and the completion of several interchanges along the way, officials said […] While Democrat Shaheen and the state’s two Republican House members, Frank Guinta and Charles Bass, voted for the bill, Republican Sen. Kelly Ayotte was one of only 19 senators to oppose it. The House vote was 373-52, while the Senate passed it, 74-19. Ayotte said that while Interstate 93 is a worthy project, the bill ‘continues Washington’s addiction to irresponsible borrowing’ and is ‘yet another ‘buy now, pay later’ scheme that fails to fundamentally reform how we pay for highway projects.’” [Union Leader, 6/30/12]
AND NATIONALLY
7. Taking On Wall Street
Hillary Clinton to Propose High-Frequency Trading Tax, Volcker Rule Changes
Former New York senator taking aim at dark pools, bank investing in hedge funds.
by Jennifer Epstein, bloomberg.com, October 7, 2015
Hillary Clinton will propose a tax aimed at penalizing “harmful” high-frequency trading strategies and offer ways to strengthen the Volcker Rule, as she unveils another set of proposals Thursday aimed at what she has termed risky Wall Street behavior.
The Democratic presidential front-runner plans to call for a tax targeting trading strategies that rely heavily on order cancellations, a Clinton aide said Wednesday, previewing her announcements on the condition of anonymity.
Coming one day after she strengthened her position with the Democratic Party's powerful labor constituency by announcing her opposition to the Obama administration's Trans-Pacific Partnership trade deal, Clinton's proposals amount to a doubling down on her bet that appeasing her party's populist base is worth more than the possibility of alienating wealthy donors. Among other things, they take aim at the traders author Michael Lewis dubbed "flash boys" and at banking industry's biggest recent lobbying win on financial regulations.
And it gives her ammunition for her first face-to-face confrontation with Senator Bernie Sanders, the Vermont socialist who has become Clinton's surprise chief rival for the Democratic nomination. The two meet in the Democrats' first nationally televised presidential debate on Tuesday.
In what her campaign is billing as an effort to put the interests of the investing public before those of high-frequency traders and "dark pools," where securities are traded privately, Clinton will suggest that the Securities and Exchange Commission launch an overhaul of stock market rules to allow for equal access to markets, greater transparency and the minimization of conflicts of interest.
She also would overturn a recent legislative win for the banking industry's by reinstating a Dodd-Frank requirement that banks move certain derivatives activities into separate business units that lack government support, such as deposit insurance. Senator Elizabeth Warren spurred a populist outcry over Wall Street's December victory on the issue, which is known as swaps push out. Former Massachusetts Representative Barney Frank, the coauthor of the Dodd-Frank bill, has been advising Clinton and her team. Another key player: former Commodities Futures Exchange Commission Chairman Gary Gensler, now the Clinton campaign's chief financial officer.
Ty Gellasch, a former Senate aide who helped draft the Volker Rule into law said that Clinton's proposals "will likely go over well with progressives for two reasons: they will like the policies and they also show Gary Gensler, the progressives' favorite post-crisis regulator, is shaping her economic plans."
Clinton's targeting of high frequency trading may amount to her most meaningful punitive move against Wall Street so far. The proposal would also take aim at the practice of spoofing, the practice of rapidly submitting fake orders and then withdrawing them to try to move asset prices in a desired direction.
The Justice Department and the Commodity Futures Trading Commission recently accused a London trader of spoofing that contributed to the May 2010 flash crash, when close to $1 trillion in U.S. stock value vanished in minutes before prices recovered.
Though Clinton, who served eight years as a senator from New York, has considerable Wall Street backing, she is under pressure from the left wing of her party. In Bloomberg focus groups earlier this week, voters cited Sanders' championing of middle class workers as a reason for his appeal.
Clinton, who plans to release more details on her plan Thursday, is calling for corporate fines for wrongdoing to come with penalties that hit individual workers’ bonuses and for extending the statute of limitations for major financial fraud to 10 years. Her tax proposal would punish trading firms that use computer formulas to constantly update the prices they offer to buy or sell securities.
Automated trading firms defend the practice, saying cancellations are part of managing risk and aren't manipulative. Orders are often canceled because the speed at which equity markets operate quickly makes many quotes stale, firms say. But James Angel, associate professor of finance at Georgetown University, said that too many cancellations are a burden on the stock market because of the increased messaging traffic and extra effort to process market data. At the same time, he said, market-makers need to cancel and re-enter their orders every time the price of securities change. Angel speculated that if Clinton's proposal were to become law, stock exchanges might respond by issuing new order types that let high-speed traders modify their orders without actually canceling them.
Ever since she launched her campaign earlier this year, Clinton has sounded a markedly populist note. "We also have to go beyond Dodd-Frank. Too many financial institutions are still too complex and too risky," she said in July. On Wednesday, she broke not only with the Obama administration that she served as secretary of state, but with the trade policies of her husband in rejecting TPP. President Bill Clinton signed the NAFTA pact which many union leaders blame for offshoring U.S. jobs.
Hillary Clinton has framed her push to get tough on Wall Street as part of a philosophy of “clear-eyed capitalism,” making sure that fairness for all is part of the equation.
"I believe we have to build a growth and fairness economy. You can’t have one without the other," she said in July during her first major economic speech of the campaign, at the New School University in New York. "We can't create enough jobs and new businesses without more growth, and we can't build strong families and support our consumer economy without more fairness."
Hillary Clinton may be ready to break up the big banks
by Max Ehrenfreund, Wonkblog, washingtonpost.com, October 9, 2015
Breaking up the big banks is one of the rallying cries of liberals when it comes to the economy. Now Hillary Rodham Clinton has all but embraced the cause.
Her campaign announced Thursday that Clinton would seek to break up banks that regulators deem "too large and too risky," according to a proposal her campaign release, a direct strike at the so-called "too big to fail" that have grown larger in the wake of the financial crisis. The proposal is part of a further tightening of financial regulations that she has proposed for Wall Street.
Clinton's proposal also calls for a tax on certain forms of computerized trading that critics say create financial instability; improved transparency in markets where prices aren't publicly disclosed; and harsher penalties for banking executives whose subordinates violate the law.
Another provision would levy a tax on liability held by major banks. This fee could lessen the advantage that banks enjoy when they are seen as too big to fail. Creditors who think the government would bail out a bank in a crisis will accept discounted interest rates on money they lend to the bank, confident it will be repaid no matter what. As a complement to the fee, the proposal suggests Clinton could support rules that banks hold even more money in reserve--known as capital requirements.
In all, Clinton's plan "would make life very difficult for JPMorgan in its current form," said Dean Baker, a director of the liberal Center for Economic and Policy Research and a stalwart advocate of stricter financial regulations.
"She is clearly saying both that we have banks that are too large and pose too much danger to the economy, and that the financial sector has become too big and too complicated," Baker added. "It's really changed the debate."
As president, Clinton would need Congress's approval to implement some important provisions. Others would depend on the Federal Reserve. And in many cases, the devil will be in the details. For example, will the criteria for "too large and too risky" be generous and allow current banking behemoths to operate as they currently do? Will the big ones indeed be forced to break up? Or will there be a compromise?
Despite the Dodd-Frank financial reform that Congress passed in 2010, investors still see some banks as too big to fail.
"The expectation of government support for the largest bank-holding companies is very strong," said Simon Johnson, an economist at the Massachusetts Institute of Technology, adding that the largest banks were so complex and enigmatic, rational investors wouldn't trust them with their money if they weren't counting on help from Uncle Sam in a crisis.
"The businesses would not exist," Johnson said. "Creditors would not take on JPMorgan exposure, with this really opaque structure, unless they believed there is a substantial probability that the government is going to step in and make them whole."
If nothing else, the tone of the proposals may allay concerns among some liberals about Clinton's connections to Wall Street. Many of her advisers previously held
The aggressive proposals from the frontrunner in the Democratic primary suggest a shift in thinking about the financial industry among the party's policymakers and its rank and file, Baker said. When Clinton's husband served as president, many leading Democrats saw financial innovation as beneficial, but the securities developed on Wall Street during that period would later be blamed for the financial crisis.
"We were developing all these new financial instruments, and the view of the people in the Clinton administration was that that was fantastic," Baker said. "It's a remarkable switch."
In 2010, the Senate -- then under Democratic control -- had the opportunity to place an absolute limit on the size of banks. President Obama did not support the measure, and lawmakers voted it down by a wide margin.
Liberal activists such as Sens. Elizabeth Warren (D-Mass.) and Sanders have long sought to break up the country's largest financial institutions. Now, Clinton seems to have thrown her hat in with an emerging consensus among Democratic leaders, including Martin O'Malley, another presidential candidate and the former governor of Maryland.
"I'm seeing parts of the O'Malley framework. I'm seeing things that Bernie Sanders has been talking about for a decade. I'm seeing things that Liz Warren says every day," said Isaac Boltanksy, who is an analyst and a senior vice president at Compass Point, of the elements in Clinton's proposal. Compass Point is an investment bank.
There is some evidence that the Dodd-Frank financial reform Congress passed in 2010 has reduced the size of large firms, Boltansky said. For example, General Electric, which had made finance a central part of its company and required emergency funding during the 2008 financial crisis,sold off its consumer-finance unit over the summer.
In her proposal, Clinton pledged to veto any legislation that would undermine Dodd-Frank —- a pledge that could be difficult to keep. Confronting the possibility that the government would shut down again last year, Obama signed a bill repealing a Dodd-Frank provision on some derivatives.
Clinton stopped short of calling for the restoration of the Glass-Steagall law, which barred banks from conducting ordinary commercial banking alongside riskier investment banking until her husband repealed it. O'Malley and Sanders have called for the law to be reinstated, which would force large banks to divest.
Under Clinton's proposal, some banks might be forced to downsize all the same. Financial executives would have to prove that they are capable of managing risk at their firms. If regulators felt that a bank's activities posed a risk to the economy, they would be able to order institutions to reorganize or break apart.
Clinton would also impose a tax on liabilities at banks with at least $50 billion in assets, with high-risk, short-term liability taxed at a higher rate. The fee has some bipartisan support, as Rep. Dave Camp (R-Mich.) included it in his proposal for tax reform, but is unlikely to win the approval of a divided Congress.
The proposal also states, however, that Clinton could support requirements that banks retain more capital on their books as a buffer against crises. Those requirements would be set by the Federal Reserve, a body that the next president could influence through appointments and public statements.
"That may be the key sentence in the whole document," Johnson said. "It's absolutely something the president could sway."
Another measure to limit risk at major banks would be an amendment to a restriction known as the Volcker Rule, established as part of the Dodd-Frank law. Clinton would alter the rule to further restrict banks' ability to make risky investments with federally insured deposits.
Apart from banks, the proposal pledges Clinton's support for continuing discussions among regulators about how to limit risk at so-called "shadow banks" -- Wall Street firms that aren't technically banks and aren't subject to the same rules. The sector has expanded significantly since the passage of Dodd-Frank. Lines of business that traditional banks would have carried out previously have shifted to the shadow banking sector as finance executives have sought to escape new regulations.
And in the stock market, Clinton would impose a tax on automated, high-frequency trading by computers programmed with money-making algorithms. She also called for new rules on so-called "dark pools," stock exchanges in which prices aren't disclosed to the public.
Eric Scott Hunsader, the founder of of the financial data firm Nanex and a critic of high-frequency trading, dismissed Clinton's proposals as "a ruse," saying the candidate relies on financiers for campaign donations.
The definition of "harmful high-frequency trading" in Clinton's proposal is unclear, Hunsader noted. Dark pools only account for about 10 percent of the total volume of securities traded on a daily basis, and a small fraction of what Hunsader describes as manipulation of unwitting investors.
He argues that conventional stock exchanges, such as the New York Stock Exchange, should not be granted legal immunity from lawsuits brought by frustrated investors, as they are under current law. Without that protection, Hunsader contends, the threat of litigation would prevent what, in his view, is abusive high-frequency trading.
8. Dealing with Gun Violence
Top Cop Now
by CAP Action War Room, October 8, 2015
Four Steps The President Can Take Right Now To Address Gun Violence
Republican presidential candidates are adding insult to tragedy in the wake of last week’s massacre at Umpqua Community College in Roseburg, Oregon, as we wrote about yesterday. Meanwhile, there are practical, meaningful steps we can take to strengthen gun safety laws and prevent gun violence. Much of the focus in this realm is reasonably on legislative change: Democrats and Republicans should come together to pass common-sense laws to reduce gun violence. There are some steps, however, that the Obama administration can also take to help enforce the laws on the books and make our nation safer.
Here are four areas in which President Obama could use his executive power to act:
1. Nominate a permanent director for the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). ATF is the federal agency charged with combatting gun crime and regulating the gun industry, yet the agency has been historically crippled by dysfunction and inconsistent leadership. Just today, Politico reported that acting director Thomas Brandon, who assumed the position when the previous ATF director resigned in March after only 20 months in the role, can only remain in that role by law for 120 days, or until Oct. 27. If the president fails to nominate someone to fill the director position, Brandon will be demoted back down to deputy director and expected to continue running the agency from that weakened position, adding yet another chapter in the agency’s history of leadership woes. In addition to that small step, the Center for American Progress has also suggested a bigger fix for the ATF’s problems: merge it with the FBI.
2. Take executive action to stop high-volume gun sellers doing so through the “private sale” loophole. Current federal law requires that those “engaged in the business” of selling firearms must have a federal license, and therefore must perform a background check on all purchases. The statute defining what “engaged in the business” means is vague, and it’s created a loophole allowing unlicensed gun dealers to sell guns by the hundreds with no questions asked, for example at gun shows or over the internet. The Obama administration could clarify the regulation, an idea put forward by presidential candidate Hillary Clinton, to make it easier to prosecute people who abuse the law and claim they are private sellers when they are, in fact, engaged in high-volume retails sales.
3. Develop systems that enable law enforcement to be smarter and more aware of potential threats. Tens of thousands of people each year are prevented from buying guns because a background check identifies them as prohibited purchasers. Yet federal law enforcement generally does little to investigate and prosecute these attempted illegal sales. Information about prohibited individuals who attempt to buy guns would be very valuable to local law enforcement, who are in the best position to take action to prevent these individuals from succeeding in their quest to obtain a firearm. The FBI has a procedure to alert state and local law enforcement when fugitives attempt to purchase firearms. It should develop a similar electronic alert system to advise local law enforcement when any individual in their jurisdiction seeks to purchase a gun but was blocked from doing so because they are prohibited under federal law. Additionally, by analyzing those denials, ATF could work with the FBI to develop a risk-assessment instrument to identify denied gun purchasers who are most at risk for future violence.
4. Incentivize gun safety through the federal government’s purchasing power. Government agencies account for 40 percent of gun industry revenues. An idea put forward by presidential candidate Martin O’Malley is for the government to use that enormous buying power to favor gun makers that take steps to improve gun safety, such as adding hidden serial numbers to make guns easier for law enforcement to track.
In addition to these four actions, reports from Everytown for Gun Safety, Mayors Against Illegal Guns, and the Center for American Progress have called for more than 40 additional measures the White House and the Department of Justice could take. President Obama took decisive action after Newtown by signing 23 executive actions, including to nominate an ATF director. That action needs to be taken again, and the others outlined above are several more steps to take.
While these are important and achievable goals, responsibility for the most substantial change lies with Congress. Senate Democrats introduced a sweeping new package today that puts the issue front and center and takes a clear position on popular issues like closing loopholes, expanding background checks, and keeping guns out of the hands of domestic abusers. Opponents of these solutions often parrot the gun lobby by saying they want to focus on enforcing the laws on the books. But that’s exactly what expanding background checks would do — make it harder for those already prohibited like felons, abusers, and the severely mentally ill to buy guns.
BOTTOM LINE: After the Oregon shooting, President Obama rightfully urged Americans to “politicize” the issue. While ultimately Congress must act to pass common-sense gun safety reforms, there are steps the president himself can and should take to move beyond the political gridlock and help make the country safer. He has done it before.
9. Tax Evasion
How Tax Evasion Is Fueling Inequality
by Annie Lowrey, nymag.com, October 1, 2015
Have you ever used a tax-avoidance strategy like the “double Irish,” the “Dutch sandwich,” or the “Swiss cheese”? (Only one of those is made up.) Almost certainly not. But some slender, rich proportion of American individuals and companies has, and a new book by a University of California, Berkeley professor is casting the curtain on those fat cats wide open.
The book is The Hidden Wealth of Nations by Gabriel Zucman, and it is a slender, infuriating, and surprisingly readable text about the gnarly topic of tax evasion. Moreover, it is one that is being lauded as the data-driven, inequality-stoking heir to the research of the now-famed French economists Thomas Piketty and Emmanuel Saez.
It all starts with a mystery. The sum of the world’s financial liabilities and financial assets should be precisely the same: Company A issues a bond and makes payments, Company B buys the bond and receives payments. But for decades, economists have noticed a strange thing showing up in the accounts. The liabilities side of the ledger has come in higher than the assets side of the ledger, as if the Earth as a whole were trillions of dollars in debt to Mars, in Zucman’s memorable turn of phrase.
The reason, he shows, is that the wealthy people and corporations holding those earthly assets are tremendously good at hiding them — at least $8 trillion of them, or around 8 percent of all financial assets. They get socked away in accounts in Switzerland, Bermuda, the Cayman Islands, Luxembourg, Singapore, Panama, and elsewhere. Their earnings often never get properly reported to the tax authorities.
Worse, this shocking sum is but a lower bound. In the text, Zucman only looks at things like stocks and bonds. Add in real assets (houses, commercial buildings, land, art, yachts, gold, jewelry, and so on) and cash and you would end up with an even bigger and currently unknowable number. “Think about real estate held by offshore trusts in London and New York and other cities,” he told me. “It’s booming! But there’s basically no macroeconomic data or evidence on that.”
No matter their exact value, the riches held in havens have profound ramifications for all taxpayers, Zucman told me. “In the book, I want to explain how big this is and also why we should care,” he said. “In the United States, I’m struck by the extent of corporate tax avoidance by these Bay Area tech giants. And they seem to totally get away with it! People don’t seem to care.”
That consequence is this, he argues: Big, multinational firms that maneuver themselves into low effective tax rates increase taxes on small, domestic firms. “That’s very contrary to the notion of free-market competition here in the Bay Area,” Zucman noted. And the same goes for wealthy taxpayers. They hide their wealth and shirk Uncle Sam, leaving everyone else paying more.
Much more. Zucman estimates that the use of tax havens by households costs the United States government about $35 billion a year. That might not sound like much, given the government’s $1.5 trillion overall annual personal-income tax haul. But think about it this way: The wealthiest 0.1 percent of taxpayers pay about $200 billion in taxes. Evasion is reducing their annual tax bill by as much as 15 percent. And when it comes to corporate taxes, offshore accounts cost the government $130 billion a year.
The problem is yet worse abroad. Only about 4 percent of the United States’ wealth is held offshore, Zucman shows. Those figures rise to 10 percent for Europe, 22 percent for Latin America, 30 percent for Africa, 52 percent for Russia, and a whopping 57 percent for the Gulf countries. That amounts to billions lost from government coffers every year.
Ultimately, such evasion might exacerbate the inequality plaguing the high-income
world, Zucman said. “It’s not intuitive,” he told me. But “the impact on inequality is very big and could be even bigger down the road.” The reason is again the shifting of the tax burden. “The effective tax rate on wealth and capital is a key determinant of wealth inequality in the long run,” he said. The after-tax rate of return to wealth gets higher than the after-tax rate of return to work. Wealth naturally becomes more and more concentrated in the hands of the wealthy.
What is worse is that the world’s bureaucrats have attempted to tackle tax evasion, and their efforts have largely proven ineffectual. In 2009, in the midst of the global financial crisis, the Group of 20 countries promised a crackdown. The OECD created new rules. Nicolas Sarkozy, then the president of France, declared the “end of tax havens.” But since then, the total proportion of foreign wealth managed in Switzerland has increased 18 percent. Across all tax havens, it is 25 percent. Whistleblowers remain a crucial way to identify tax evaders in the first place. Little has changed, and if anything, things seem to have gotten worse.
But that does not have to be the case, Zucman argues. A global financial register could ensure compliance with tax law, and scofflaw havens could face heavy sanctions. Political pressure around the salience of tax havens to the big debate on inequality could also help bring about that change. “People don’t realize the extent,” Zucman told me. “They think, ‘We know companies avoid taxes, but that’s good for American businesses.’ They don’t understand.”
That might be why populist politicians like Bernie Sanders have seized on the issue of tax evasion, and why many more might do so as campaign season heats up. And it is the eventual, infuriating lesson of this nerdy book. The rich avoiding taxes might seem like a benign, gray-area form of elite wrongdoing. But it’s ultimately you and me left holding the bag.
10. Middle Class Anger
Ignore the Angry Middle Class At Your Peril
by David Atkins, washingtonmonthly.com, October 3, 2015
There’s an interesting article today by John Judis in the National Journal about therise of the “Middle American Radical.” These are essentially Donald Trump’s voters and Ross Perot’s voters, characterized primarily by the belief that the middle class is being disadvantaged by a focus on both the rich and the poor. They earned the moniker Middle American Radical several decades ago:
Warren called these voters Middle American Radicals, or MARS. “MARS are distinct in the depth of their feeling that the middle class has been seriously neglected,” Warren wrote. They saw “government as favoring both the rich and the poor simultaneously.” Like many on the left, MARS were deeply suspicious of big business: Compared with the other groups he surveyed—lower-income whites, middle-income whites who went to college, and what Warren called “affluents”—MARS were the most likely to believe that corporations had “too much power,” “don’t pay attention,” and were “too big.” MARS also backed many liberal programs: By a large percentage, they favored government guaranteeing jobs to everyone; and they supported price controls, Medicare, some kind of national health insurance, federal aid to education, and Social Security.
It’s an interesting point that helps explain why Trump has managed to stay at the top of the GOP field despite significant unorthodoxy on healthcare, taxes and other issues of concern to wealthy Republican donors.
But I would argue that this sentiment extends far beyond just the demographic Judis explains. As a focus group moderator myself and a longtime precinct walker and phonebanker, I’ve talked to countless voters who have expressed similar sentiments—and they have ranged across political parties, age, races and genders.
I particularly remember a series of focus groups I conducted among undecided, infrequent minority voters who were almost universally angry with food stamp and welfare programs because they worked full-time jobs and made just a little too much to qualify for them. They were angry that friends and neighbors of theirs were able to get assistance from the government, and they themselves were being “punished” for working. These were still liberal-leaning voters who were not going to vote for Republicans anytime soon because of their racism and because they wanted those welfare programs to continue to exist in case they themselves lost their job—but it didn’t change their angry perception that American government, in their eyes, seemed to advantage both the rich and the poor at the expense of the middle class.
And, predictably, the effect tends to be even greater among more comfortable white voters, who tend to have an unrealistically romantic idea of what being unemployed and on welfare is really like.
Republicans exploit this sentiment ruthlessly, but are of course hampered by their relentless determination to give the entire private and public treasury to the very richest. They also underestimate the degree to which, while many Americans do feel this frustration about the perceived lack of assistance to the middle class, they don’t necessarily want help for them to come at the expense of help for the poor—in other words, they don’t want to remove assistance to the poor so much as they want to increase assistance for the middle class.
Democrats hurt themselves in this respect through their rhetoric. Especially for neoliberal politicians, Democrats all too often speak as if the economy and government were working fairly well for everyone, but needed to be adjusted to “take care of those left behind.” Voters who hear that rhetoric assume that Democrats are going to take money out of their pockets to give to the poor. When talking about minimum wage, Democrats don’t not to spend enough time mentioning the macroeconomic effects, indicating how higher minimum wages aren’t just helpful to the families who directly receive the raise, but for everyone receiving the benefits of increased consumer demand and spending in the economy.
It’s an artifact of America’s peculiar winner-take-all political system that we only have two functional parties. Economically, this means that the conservative party works to align the middle class with the wealthy against the poor, while the liberal party works to align the poor and the middle class against the rich. But the middle class ideally wants to promote its own interests above all, and all too often it seems to them like no one is doing that.
Fortunately, there is no reason that Democrats need to reduce empathy or benefits to the poor in order to accomplish this. Policies like universal healthcare, student loan reform, housing reform and others serve to benefit everyone in the 99%, and can be accomplishing without making any cuts to the most unfortunate and oppressed in society.
What they don’t like is the comfortable neoliberal “center” in which everyone is supposed to get along with a smiling corporatist agenda, letting the rich use the market to run rampant over the middle class while smoothing out the sharpest edges at the very bottom. That makes almost everyone angry.
In short, there are a lot more “Trump voters” both liberal and conservative in society than many political observers imagine, and it’s only the two-party system that hides that fact. Fortunately, liberals are in a better position to take advantage of this than are conservatives. But doing so would require a much broader agenda of universal benefits.
FINALLY doublet
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