AROUND NEW HAMPSHIRE
1. Event Reminder
RECEPTION HOSTED BY LISA DIMARTINO
Wednesday, October 14th at 6:00 PM
The DiMartino Home
23 Williamsburg Avenue, Gilford, NH
Wednesday, October 14th at 6:00 PM
The DiMartino Home
23 Williamsburg Avenue, Gilford, NH
Please RSVP To Lisa DiMartino at garylisa@metrocast.net
2. NH Unemployment Rate Down
September unemployment rate down a bit
by the Associated Press, vnews.com, October 13, 2015
CONCORD, N.H. (AP) — New Hampshire's unemployment rate went down a bit in September.
The state employment security office says the preliminary seasonally adjusted unemployment rate was 3.4 percent in September, a decrease of a two tenths of a percentage point from the August rate of 3.6 percent.
The September 2014 seasonally adjusted unemployment rate was 4.1 percent.
The state estimates that 718,340 people were employed last month, a decrease of 2,210 from the previous month and an increase of 8,370 from September 2014.
Nationally, the seasonally adjusted unemployment rate for September was 5.1 percent, unchanged from August.
3. Drug Court Legislation
Lawmakers propose $2.5 million drug court grant program
by the Associated Press, concordmonitor.com, October 13, 2015
MANCHESTER, N.H. (AP) — Lawmakers on Tuesday said they'll propose legislation to create a $2.5 million grant program that would help fund more drug courts as New Hampshire battles an ongoing opioid abuse crisis.
State Sens. Jeb Bradley of Wolfeboro and David Boutin of Hooksett made the proposal in Manchester alongside Mayor Ted Gatsas and other public officials. Gatsas has called for a drug court in the state's largest city.
Boutin called the abuse epidemic unprecedented and said the courts would help addicts get substance abuse treatment, an alternative that is both less expensive than prison and one that cuts down on the number of repeat offenders.
"It's a lot cheaper to get somebody back on their feet versus what it costs to send someone to prison," he said.
Drug courts already exist in Cheshire, Grafton, Rockingham, Strafford and Hillsborough counties along with the city of Laconia. Several of the courts were started with federal grant money.
Under the legislation, the state would provide 50 percent of the cost to open drug courts, and counties would kick in the rest. The bill also would establish an office in the judicial branch focused on drug courts. Counties would need to arrange with a treatment center to ensure the courts have somewhere to send people. New Hampshire's existing treatment facilities already experience long waiting lists, and efforts are underway to open more treatment beds statewide.
More than 300 people died from drug overdoses in New Hampshire last year, and officials say the state is on pace to reach or top that number this year. Other initiatives passed earlier this year include a bill that allows doctors to prescribe naloxone — also known by its trade name Narcan — to people at risk of an overdose or their loved ones.
"We must do what we can to provide a wholesome approach that both treats individuals experiencing substance abuse problems as well as address recidivism as it relates to public safety in our communities," Bradley said.
Gov. Maggie Hassan said expanding access to drug courts should be part of a comprehensive approach to the drug crisis that includes more treatment beds and reauthorization of Medicaid expansion.
4. Expanding NH Manufacturing
tent=NH+Business+Review+News+
‘Time is now’ for action on manufacturing
by Liisa Rajala, nhbr.com, October 12, 2015
New England has the potential to be a world-class manufacturing cluster, but “the time is now to act and we have to act together,” Alison Lands, senior manager in Deloitte’s Strategy & Operations practice told the crowd at the 13th Annual Governor’s Advanced Manufacturing and High Technology Summit, held Oct. 9 in Manchester.
Lands presented the findings from an April report Deloitte compiled jointly with the New England Council. The report identified high concentrations of firms and employees in industry clusters, including aerospace and defense; medical devices and biotechnology; semiconductors and complex electronics; signal processing, navigation, optics and measurement; and precision machining. The report also identified capability clusters in software and artificial intelligence, sensors and automation, and advanced materials.
“These advantaged clusters in New England, in New Hampshire, they’re enhanced by the capabilities, and they’re positioned for some game-changing technologies that will reinvent the way manufacturing is done,” said Lands, who focused on its impact on product design.
“Advanced manufacturing tends to focus on innovative design, and it combines this innovative design usually with some kind of innovative or advanced material, advanced manufacturing technology or production process, and superior management methods,” Lands explained.
Workforce needs
Lands said advanced manufacturing also relies on data to improve the process that could lead to machines talking to each other based on data picked up from sensors, to not only improve themselves if a component breaks but also improve the product and process.
“There’s a set of capabilities, things like artificial intelligence and software, additive manufacturing that … position New England to be at the forefront of disruptive technologies, things like the Internet of Things, 3D printing, digital design and prototyping,” that New England can use to its advantage, said Lands.
For instance, Raytheon has an immersive design cave where people around the world can co-design a product in a “space-age” theatre to tweak the design “in a much shorter time frame than ever before,” said Lands. That means the product can be perfected before the physical prototype exists.
“In a perfectly working system, we see a high-skilled workforce feeding into a broad industry network that has enough capacity to hire them, train them, adapt their skills and technologies, and this reinforces itself in a virtuous circle of learning and growth,” said Lands.
Despite high energy costs and regulations, businesses will want to move to New England to take part of the producer network and trade of industry knowledge, she said.
STEM skills
But a skills gap will dampen the industry, said Lands, and all of the manufacturers Deloitte surveyed cited that as a problem, some stressing it by listing it as their first, second and third issue.
“Clearly this state is focused on fixing this skills gap,” said Lands, referring to Gov. Maggie Hassan’s announcement of a new director of STEM education, Dr. Eric Feldborg, who will implement initiatives from the state’s STEM taskforce regarding integrating technology into the classroom and what level of math students need to be at.
The NH Department of Resources and Economic Development is also holding its second annual video contest, with 8th-graders partnering with local manufacturers to submit videos highlighting the advantages of a career in manufacturing. And New Hampshire is the only state to hold a Manufacturing Week – which the summit was part of – when students tour local manufacturers and learn about career opportunities.
“New Hampshire’s high-tech and manufacturing companies are struggling to fill job openings, even for jobs with wages over 25 percent higher than average,” said Governor Hassan earlier in the summit. “That’s why we’re exploring innovative ways to reach our students at a young age, and help them understand they can stay in New Hampshire, find jobs here that are interesting and exciting and build careers here that will allow them to support their families and to climb the ladder of opportunity.”
ConVal Regional High School in Peterborough will launch a new course this January involving eight to 12 juniors and seniors who will learn advanced manufacturing principles and spend a couple of days per week at NH Ball Bearings, where they will observe processes and perform hands on problem solving tasks. The ConVal teacher spent a month performing an externship at NH Ball Bearings to prepare for the course.
“It’s evolved as we got into the curriculum and working with the teacher,” Emma Johnson, HR manager at NH Ball Bearings told NH Business Review. “Some of those days are still in the works as far as planning what they’re going to do when they come in, but precision measurement is obviously a big one for us, and tying back to common core with precision measurement systems, they can fulfill math requirements.”
5. Banning Toxic Therapy
Lawmaker seeks ban on LGBT conversion therapy
by Kathleen Ronayne, Associated Press, nashuatelegraph.com, October 13, 2015
CONCORD - A young Republican lawmaker is proposing legislation in New Hampshire to ban therapy aimed at changing the sexual orientation of minors, a move that is sure to cause friction within the GOP when lawmakers reconvene in January.
State Rep. Eric Schleien, 27, said he doesn't think it's possible to change someone's sexual orientation through so-called conversion therapy, and research has led him to believe trying to do so can be dangerous. But some fellow Republican lawmakers say the effort could undermine religious liberty and parental rights.
"I think our culture grows stronger when we're able to accept different people's lifestyles and treat people with honor and respect. I don't think that's that radical," Schleien said. "You can't convert people's sexuality. I think most people get that."
If Schleien's bill passes, New Hampshire would become the fifth state to ban the practice. The American Psychological Association and other major health organizations have discredited its efficacy, but some Republican lawmakers think the practice is appropriate.
"There's no way anyone's going to convince me that it's proper or good to ban therapy for children, or a person of any age, that thinks that they are or want to be a gender other than what they biologically are," Rep. David Bates, 52, said.
Schleien said he expects opposition will center on parental rights or religious liberty. The U.S. Supreme Court's decision to legalize gay marriage nationwide earlier this year ignited a new fight over religious liberty, with some people arguing that being forced to recognize gay marriage violates religious freedom.
"We always see backlash when a minority group starts to gain rights," said Samantha Ames of the National Center for Lesbian Rights, which is driving a nonpartisan campaign to ban the therapy nationwide. "Unfortunately, this particular backlash is falling on our youth."
Research shows that lesbian, gay, bisexual and transgender teenagers who go through the therapy are at higher risk of suicide, substance abuse and depression. The White House announced support for state bans earlier this year.
California became the first state to ban conversion therapy for minors in 2012, with Washington, D.C., New Jersey, Oregon and Illinois following suit. In Illinois and New Jersey, Republican governors signed the legislation.
A study by the Family Acceptance Project found that roughly one-third of people who identify as LGBT went through some type of conversion therapy effort as an adolescent, Ames said. It's harder to tell how many people offer conversion therapy, and Schleien doesn't know how frequently it is practiced in New Hampshire.
The APA says conversion therapy can employ methods such as inducing nausea while showing homoerotic images, providing electric shocks and using hypnosis.
Under Schleien's bill, any licensed professional counselor providing conversion therapy to minors would be engaging in unprofessional conduct and subject to discipline by the licensing authority. The bill would also make it easier for authorities to charge people who practice conversion therapy with fraud. A group of men successfully sued a nonprofit in New Jersey for practicing conversion therapy under the state's consumer fraud laws.
Republican state Rep. Josh Moore, 26, worries the bill could make churches that preach against homosexuality subject to attacks or legal jeopardy. He also believes parents should have the right to bring their child to church in an effort to discourage homosexuality.
"What are we leading people into when we're not attempting to help them out and show them purpose in life?" Moore said.
Schleien said the bill doesn't aim to clamp down on freedom of speech or religion. As for parental rights, he said sometimes there needs to be a limit.
"Just because you're under 18 doesn't mean that someone owns you to the point they can harm you," he said.
6. Water Carrier for the Kochs
Kelly Ayotte Tries To Solve the Koch Brothers’ Problems Nearly 90% Of The Time
by Lprice, nhdp.org, October 12, 2015
Concord, N.H. – As No Labels hosts its “Problem Solver” convention in New Hampshire today, it’s important to remember that instead of working to get results for New Hampshire’s families and small businesses, Kelly Ayotte tries to solve the Koch Brothers’ problems nearly 90% of the time.
The Koch Brothers’ main political arm, Americans for Prosperity, gives Ayotte an 88% lifetime score (having voted with the Koch Brothers on 55 out of 62 scored votes since going to Washington). Ayotte’s support for the Koch Brothers’ priorities extends to a wide range of issues, including voting in favor of the Koch-backed Ryan budget that would have slashed Pell Grants for New Hampshire students and turned Medicare into a voucher system, while protecting $40 billion in oil tax breaks.
Koch Industries is the fifteenth top contributing donor to Ayotte over her federal career with more than $24k in campaign contributions, and the Kochs’ political operation has already spent more than $1 million this cycle to try to protect Ayotte.
“Kelly Ayotte has worked overtime to solve the Koch Brothers’ problems since going to Washington, but if you don’t happen to be a well-connected Washington lobbyist or special interest then unfortunately you’re out of luck with Ayotte,” said New Hampshire Democratic Party Chair Ray Buckley. “It’s deeply concerning that the Koch Brothers brag that Kelly Ayotte votes with their interests nearly 90% of the time, and New Hampshire’s families and small businesses deserve better.”
BACKGROUND
Kelly Ayotte Had A Lifetime Score Of 88% On The Americans For Prosperity Legislative Scorecard. Ayotte has voted with AFP on 55 out of 62 scored votes since taking office. [Americans for Prosperity, Accessed 10/12/15]
Koch Industries Was The Fifteenth Top Contributing Donor To Ayotte Over Her Federal Career With More Than $24k In Campaign Contributions. According to the Center for Responsive Politics, Koch Industries was the fifteenth top contributing donor to Ayotte over her career as a Federal candidate. Koch Industries has contributed $24,100 to her campaigns. [Center for Responsive Politics, Accessed 1012/15]
Aug. 2015: Americans For Prosperity Aired Attack Ad In New Hampshire Which Democrats Said Was An Attempt To Help Ayotte. “The conservative issues group Americans for Prosperity on Monday will begin a more than $1 million, 20-day television advertising buy to criticize Gov. Maggie Hassan… Democrats are calling the ad by the Koch brothers-funded group a ‘completely false’ and ‘dishonest attempt’ by an out-of-state group to ‘meddle in New Hampshire’s budget process’ and help Republican U.S. Sen. Kelly Ayotte.” [WMUR, 8/6/15]
Ayotte Voted For The AFP-Backed Ryan Budget That Would Protect $40 Billion In Tax Breaks For Oil Companies
Ayotte Voted For FY 2013 Ryan Budget Plan. In May 2012, Ayotte voted in favor of a: “Conrad, D-N.D., motion to proceed to the concurrent resolution that would allow $2.794 trillion in new budget authority for fiscal 2013, not including off-budget accounts.” The motion was rejected 41-48. [CQ,5/16/12; H.Con.Res. 112, Vote 98, 5/16/12]
Ryan Budget Would Protected $40 Billion In Tax Breaks For Oil Companies. “American families have been plagued by higher oil and gasoline prices over the past several years despite a significant increase in domestic oil production and rigs, and decline in consumption. But while high prices threaten the economy and family budgets, they enrich American oil companies with huge profits. Yet it appears that House Budget Committee Chairman Paul Ryan’s (R-WI) proposed FY 2013 budget resolution would retain a decade’s worth of oil tax breaks worth $40 billion.” [Center for American Progress, 3/20/12]
Americans For Prosperity Called Changing Section 199 As It Relates To Oil Producers An “Attack.” “Americans for Prosperity opposes changing these rules only on the oil and gas industries. Changing these provisions to attack a politically unpopular industry is an inappropriate use of the tax code. Section 199 Domestic Production Activities Deduction provides all qualified domestic manufactures with a 9 percent deduction in their taxable income. The oil and gas industry are already singled out under this rule and are only allowed to use a 6 percent deduction. This rule was put in place to support domestic production and it is ironic that the same people who claim to want to ‘reduce our dependence on foreign oil’ would seek to further isolate oil and gas companies from tax deductions design to support domestic production.” [Energy Tax Policy, Americans For Prosperity]
Americans For Prosperity Supported The FY 2013 Ryan Budget. On Americans for Prosperity’s scorecard for the 112th Congress, the group backed the FY 2013 Ryan budget by urging a yes vote on its passage in the House. [Americans for Prosperity, Accessed 10/12/15]
AND NATIONALLY
7. Previewing the Debate
Rolling the dice in Vegas: What the Democrats need to do
by David Axelrod, cnn.com, October 12, 2015
If presidential campaigns were decathlons, Tuesday's CNN debate from Las Vegas would be Hillary Clinton's event.
The former secretary of state took part in 25 debates in the 2008 cycle and was a strong, commanding presence in each.
Fluent in detail, crisp in delivery, Clinton is comfortable on a debate stage and has no problem jousting with opponents when the moments arise. Expect all of that to be on display Tuesday in Vegas.
But her task, as the undisputed front-runner and putative nominee, will be to give Democrats reason to believe.
There has been a strange disconnect between Clintonand Democratic voters this year and a sense of resignation, rather than excitement, about her candidacy. This challenge is reflected in the contrast between the large, enthusiastic crowds Sen. Bernie Sanders is drawing with his populist crusade and the more tepid reaction Clinton is generating. (To be fair, the word from the trail is that for all the jitters about the relative size of her crowds, she is connecting well in the small rooms and town hall meetings, which is meaningful in the early states.)
Whatever else you think about him, Sanders is utterly authentic. And right now, that is Clinton's challenge. It has been exacerbated by her clumsy, ever-evolving approach to the email issue -- something certain to come up again in the debate -- and her rapid-fire race to the left to co-opt Sanders' positions on trade, climate change and other issues that fire up the Democratic base.
Clinton's mission on Tuesday is to rise above the tactical and present a coherent, value-laden vision that will make her flood of policy papers seem like something more than positions of convenience.
What Sanders needs to do
Sanders' task is simpler. Still unknown to large numbers of Democrats, he will use this debate to deliver many of the populist arguments that have improbably propelled him into the thick of the Democratic race.
Anger over stagnant wages and growing inequality is an issue that is coursing through our politics and both party primaries. Sanders, the self-styled democratic socialist from Vermont, has made this, the power of money in our politics and abuses on Wall Street, the centerpiece of his campaign.
One thing he hasn't done much, however, is talk about actual people -- flesh-and-blood human beings and their stories. One listens to Sanders' jeremiads and is reminded of the old adage about liberals who "love humanity and hate people."
The debate is an opportunity for Sanders to present a more empathetic side -- less grumpy old man and more caring advocate.
Sanders also almost certainly will field questions about his youthful writings as a left-wing polemicist, which seem a little crazy now, probably even to him. And the Vermonter can expect to be questioned closely, in the wake of theOregon massacre, on his opposition to the Brady law and some other gun safety measures, positions he took to reflect the views of his mostly rural state that are awkward now.
I recently asked Sanders, on my podcast "The Axe Files," whether he would have voted the same way on guns if he represented his native Brooklyn in Congress. "Probably not, I don't know," he said quietly.
It was an honest answer but poses a tricky pass for a man whose candidacy is soaring, in part, because he seems like a guy who uncompromisingly speaks out for what he believes.
The pressure is on O'Malley
The candidate most likely to press Sanders on this, and the man who may have the most on the line on this debate, is former Maryland Gov. Martin O'Malley.
A polished performer, O'Malley began the cycle hoping to be the progressive alternative, burnishing his initiatives in Maryland on gun control, same-sex marriage, the elimination of the death penalty and other touchstone issues for progressive Democrats.
But then the rumpled, edgy Sanders caught fire, totally obscuring any challenger who hoped to rally the left. O'Malley is currently languishing below 1% in an average of national polls and not doing much better in the early states, which makes securing significant money and endorsements next to impossible.
The first Democratic debate is coming six months later than the kickoff debate did eight years ago. By October in that cycle, there already had been 13 faceoffs among the Democratic candidates. The absence of them this cycle has deprived the challengers to Clinton of a major vehicle to lift their profiles, which may well have been the point.
This makes Tuesday's inaugural debate a critical and maybe fleeting chance for O'Malley to insinuate his way into the race. Facing off with Sanders on guns is one vehicle. But confronting either of his more popular opponents carries risk. In the case of Clinton, O' Malley was one of her strongest supporters in 2008, a fact not lost on her, I'm sure.
The generational card
Perhaps the safest route for the Marylander would be to play the generational card. He cut his teeth in politics in 1984, driving a young Sen. Gary Hart around Iowa during Hart's upstart challenge to former Vice President Walter Mondale and the old guard.
Hart did well enough in Iowa, and then ambushed Mondale in New Hampshire, buoyed by the votes of independents who wanted to turn the page on the Great Society class of leaders. I can see the 52-year-old O'Malley pressing the case that the party needs fresh, forward-looking leadership. It also would be a not-so-subtle swipe at Sanders, who is 74, and Clinton, who would be 69 on Inauguration Day, tying Ronald Reagan for America's oldest incoming president.
There will be two other candidates on the platform, though few Americans are likely to recognize them.
Former Sen. Jim Webb of Virginia is a Vietnam veteran and was Navy secretary under Ronald Reagan. He served one term in the U.S. Senate, where he developed a reputation as an intriguing maverick -- populist on economic issues, nuanced on defense policy. He got into the race late and has less money and organization even than O'Malley, meaning the debate is even more important to him, if he is to mount any kind of effort here.
Look for Webb to brandish his national security chops on the discussion of Syria, perhaps setting up a soft contrast with Clinton.
It's difficult to discern a strategy for the final candidate, Lincoln Chafee, because it's hard to know why he'll be there. The earnest but charismatically challenged former senator and governor from Rhode Island -- a Republican turned independent turned Democrat -- has made nary a ripple thus far. He also is a former professional horseshoer, who, having lost the governorship, is accustomed to getting the boot.
The only other player will be the man who isn't there.
If Vice President Joe Biden accepted CNN's invitation and opted, at the last minute, to enter the race and the debate, it would electrify this event. But Biden continues to ponder, and while leaping into the race with a national debate would offer plenty of drama, it also would be fraught with peril for a candidate who hasn't been running or preparing for this high wire.
Biden's staff is doing some of the things behind the scenes that would prepare for an announcement, but he continues to wrestle with the emotional toll on his family of such a race. As time passes, you wonder whether this exploration will end as Mario Cuomo's did in 1992, with a plane sitting on a runway, manifested for New Hampshire, that never took off.
Even as a spectator, however, the VP's presence will be felt. As Clinton is well aware, if she were to stumble, the day after would bring a new round of hand-wringing and Biden-longing among anxious Democrats.
But, for now, this debate and nominating race remain Clinton's to lose.
8. Big Bank Dangers
The Top Four Myths Peddled by the Big Banks
by Wallace Turbeville, demos.org, October 2, 2015
The hyperactivity of the presidential election has raised the level of discussion of financial regulation, at least in terms of noise if not enlightenment. Mr. Glover has provided an instructive insight into the mega-meme that will guide the opponents of regulation:
“What’s good for big finance is good for the US!”
Of course, this argument must negotiate past one massive impediment to public acceptance. The financial crisis, caused by big finance, ushered in the Great Recession, the second worst economic catastrophe of the modern era. It is abundantly clear that that was not good for America. But maybe even worse, the financial sector no longer grows jobs and wealth. It does just the opposite, dragging down the middle class and increasing shameful inequality of income and wealth.
Let’s look at the top four tactics for avoiding the truth that underlies the Dodd-Frank Act and, the wisdom of expanding regulation to remove finance’s drag on jobs, incomes and wealth equality.
1. The banks did not cause the crisis; housing policy did.
This argument is downright insulting to the public. It is not beyond the ability of reasonable sentient humans to comprehend that there were multiple causes of the crisis.
It is clear that both the Clinton and George W. Bush administrations encouraged broadened ownership of homes. It may be that they intended to offset the effects of voodoo economics that the Reagan administration had put in motion. These crushed middle and lower class incomes and wealth and immensely enriched the 1 percent. Assistance to acquire an investment in a house was intended to offset that.
Regardless of the fact that an aggressive housing policy was a necessary condition to the occurrence of the crisis, the financial sector facilitated the financing of bad loans and their sale around the globe. It was these financing structures that failed, and it is now clear that many in the sector saw it coming and just kept raking in the profits for as long as they could. To top it off, the financial sector also created a highly concentrated and interconnected system of finance that was (and still is) subject to catastrophic failure. These were the proximate causes, as they say in legalese, meaning the ones that count.
2. The crisis had nothing to do with big banks because no big bank failed.
This, of course, conveniently omits Washington Mutual. But even ignoring this, it is still incorrect. While it is true that Bear Stearns, Lehman, and AIG were not depository institutions, they were elements of a financial sector that was defined by the big banks. When the big depository banks got into the investment banking and trading businesses, the entire financial sector went through a massive consolidation. Commercial banks acquired some investment banks, and the commercial banks merged into mammoth institutions.
The remaining investment banks consolidated and grew by going public. While there were dozens of major investment banks in the 1980’s, by 2008 there were only five. Lehman went bust, and Bear Stearns and Merrill Lynch were merged into big depository banks to technically avoid failure. Goldman and Morgan Stanley converted to depository banks overnight to come under the wing of the US Government, and then there were none.
As for AIG, this behemoth insurance company was known when I was on Wall Street as the place to go if no one else would buy your deal. It was not surprising to me that AIG went down because it was so connected to the big banks as an outlet for risky deals. Regardless, the failures of Lehman, Bear Stearns and even AIG were not the problem.
The problem was that these failures came within a hair’s breadth of bringing the entire financial system and all of the big banks to a crashing stop. The reason was that the big banks were far too big and interconnected.
3. Financial regulation instituted after the crisis is a drag on community banks and business.
It is clear that the community banks were excluded from most regulation in the Dodd-Frank Act pursuant to an agreement reached by Barney Frank and the lobbyist for smaller banks to secure tacit approval of the bill. Nonetheless, there are some compliance burdens and, given the power of the community bank lobby, they will be ratcheted back.
But it is important to note that the troubles of the community banks predate Dodd-Frank and even the crisis itself. Their problems arise from the inability to resist the incursions of the mega-banks and the decline in local business activity. Moreover, companies have benefitted heavily from financial reform, though you would not know it from listening to their complaints. The get better deals from the banks and the reforms protect them from being ripped off by the banks in complex and costly deals.
4. Financial regulation restricts lending and liquidity in the economy.
When all else fails, the financial sector claims that a rule or regulation will kill liquidity. They do this because their target audience is unlikely to understand the nuances of liquidity, much less fact check the claim. The principal claim is that financial regulation has damaged bond market liquidity, which is directly dependent on liquidity in the US Treasury bond market since most prices reference treasury rates.
In a July report, the Fed reports that there has been no discernable decline in liquidity in that bond market. Moreover, Tiemann Investment Advisors has published a thorough analysis that finds that corporate bond market liquidity is not falling. On top of all this, the markets have had an overabundance of liquidity for years and could use some cooling down.
There are plenty more financial regulation myths floating about and expect them all to surface in the presidential debate as well as in the periodic, death-defying showdowns over funding the government. Just remember, they are not true.
Hillary, Bernie, and the Banks
by Robert Reich, robertreich.org, October 9, 2015
Giant Wall Street banks continue to threaten the wellbeing of millions of Americans, but what to do?
Bernie Sanders says break them up and resurrect the Glass-Steagall Act that once separated investment from commercial banking.
Hillary Clinton says charge them a bit more and oversee them more carefully.
Most Republicans say don’t worry.
Clearly, there’s reason to worry. Back in 2000, before they almost ruined the economy and had to be bailed out, the five biggest banks on Wall Street held 25 percent of the nation’s banking assets. Now they hold more than 45 percent.
Their huge size fuels further growth because they’ll be bailed out if they get into trouble again.
This hidden federal guarantee against failure is estimated be worth over $80 billion a year to the big banks. In effect, it’s a subsidy from the rest of us to the bankers.
And they’ll almost certainly get into trouble again if nothing dramatic is done to stop them. Consider their behavior since they were bailed out.
In 2012 JPMorgan Chase, the largest bank on Street, lost $6.2 billion betting on credit default swaps tied to corporate debt – and then publicly lied about the losses. It later came out that the bank paid illegal bribes to get the business in the first place.
Last May the Justice Department announced a settlement of the biggest criminal price-fixing conspiracy in modern history, in which the biggest banks manipulated the $5.3 trillion-a-day currency market in a “brazen display of collusion,” according toAttorney General Loretta Lynch.
Wall Street is on the road to another crisis.
This would take a huge toll. Although the banks have repaid the billions we lent them in 2008, many Americans are still living with the collateral damage from what occurred – lost jobs, savings, and homes.
But rather than prevent this by breaking up the big banks and resurrecting Glass-Steagall, Hillary Clinton is taking a more cautious approach.
She wants to impose extra fees on the banks, with the amounts turning not on the bank’s size but how much it depends on short-term funding (such as fast-moving capital markets), which is a way of assessing riskiness.
So a giant bank that relies mainly on bank deposits wouldn’t be charged.
Clinton would also give bank regulators more power than they have under the Dodd-Frank Act (passed in the wake of the last banking crisis) to break up any particular bank that they consider too risky.
And she wants more oversight of so-called “shadow” banks – pools of money (like money market mutual funds, hedge funds, and insurance funds) that act like banks.
All this makes sense. And in a world where the giant Wall Street banks didn’t have huge political power, these measures might be enough.
But, if you hadn’t noticed, Wall Street’s investment bankers, key traders, top executives, and hedge-fund and private-equity managers wield extraordinary power.
They’re major sources of campaign contributions to both parties.
In addition, a lucrative revolving door connects the Street to Washington. Treasury secretaries and their staffs move nimbly from and to the Street, regardless of who’s in the Oval Office.
Key members of Congress, especially those involved with enacting financial laws or overseeing financial regulators, have fat paychecks waiting for them on Wall Street when they retire.
Which helps explain why no Wall Street executive has been indicted for the fraudulent behavior that led up to the 2008 crash. Or for the criminal price-fixing scheme settled in 2012. Or for other excesses since then.
And why even the fines imposed on the banks have been only a fraction of the banks’ potential gains.
And also why Dodd-Frank has been watered down into vapidity.
For example, it requires major banks to prepare “living wills” describing how they’d unwind their operations if they get into serious trouble.
But no big bank has come up with one that passes muster. Federal investigators have found them all “unrealistic.”
That’s not surprising because if they were realistic, the banks would effectively lose their hidden “too-big-to-fail” subsidies.
Given all this, Hillary Clinton’s proposals would only invite more dilution and finagle.
The only way to contain the Street’s excesses is with reforms so big, bold, and public they can’t be watered down – busting up the biggest banks and resurrecting Glass-Steagall.
9. This Election is Sponsored By... [long read]
Just 158 families have provided nearly half of the early money for efforts to capture the White House
by Nicholas Confessorre, Sarah Cohen and Karen Yourish, nytimes.com, October 10, 2015
They are overwhelmingly white, rich, older and male, in a nation that is being remade by the young, by women, and by black and brown voters. Across a sprawling country, they reside in an archipelago of wealth, exclusive neighborhoods dotting a handful of cities and towns. And in an economy that has minted billionaires in a dizzying array of industries, most made their fortunes in just two: finance and energy.
Now they are deploying their vast wealth in the political arena, providing almost half of all the seed money raised to support Democratic and Republican presidential candidates. Just 158 families, along with companies they own or control, contributed $176 million in the first phase of the campaign, a New York Times investigation found. Not since before Watergate have so few people and businesses provided so much early money in a campaign, most of it through channels legalized by the Supreme Court’s Citizens United decision five years ago.
These donors’ fortunes reflect the shifting composition of the country’s economic elite. Relatively few work in the traditional ranks of corporate America, or hail from dynasties of inherited wealth. Most built their own businesses, parlaying talent and an appetite for risk into huge wealth: They founded hedge funds in New York, bought up undervalued oil leases in Texas, made blockbusters in Hollywood. More than a dozen of the elite donors were born outside the United States, immigrating from countries like Cuba, the old Soviet Union, Pakistan, India and Israel.
But regardless of industry, the families investing the most in presidential politics overwhelmingly lean right, contributing tens of millions of dollars to support Republican candidates who have pledged to pare regulations; cut taxes on income, capital gains and inheritances; and shrink entitlement programs. While such measures would help protect their own wealth, the donors describe their embrace of them more broadly, as the surest means of promoting economic growth and preserving a system that would allow others to prosper, too.
Republicans: 138
“It’s a lot of families around the country who are self-made who feel like over-regulation puts these burdens on smaller companies,” said Doug Deason, a Dallas investor whose family put $5 million behind Gov. Rick Perry of Texas and now, after Mr. Perry’s exit, is being courted by many of the remaining candidates. “They’ve done well. They want to see other people do well.”
In marshaling their financial resources chiefly behind Republican candidates, the donors are also serving as a kind of financial check on demographic forces that have been nudging the electorate toward support for the Democratic Party and its economic policies. Two-thirds of Americans support higher taxes on those earning $1 million or more a year, according to a June New York Times/CBS News poll, while six in 10 favor more government intervention to reduce the gap between the rich and the poor. According to the Pew Research Center, nearly seven in 10 favor preserving Social Security and Medicare benefits as they are.
Republican candidates have struggled to improve their standing with Hispanic voters, women and African-Americans. But as the campaign unfolds, Republicans are far outpacing Democrats in exploiting the world of “super PACs,” which, unlike candidates’ own campaigns, can raise unlimited sums from any donor, and which have so far amassed the bulk of the money in the election.
The 158 families each contributed $250,000 or more in the campaign through June 30, according to the most recent available Federal Election Commission filings and other data, while an additional 200 families gave more than $100,000. Together, the two groups contributed well over half the money in the presidential election -- the vast majority of it supporting Republicans.
“The campaign finance system is now a countervailing force to the way the actual voters of the country are evolving and the policies they want,” said Ruy Teixeira, a political and demographic expert at the left-leaning Center for American Progress.
Like most of the ultrawealthy, the new donor elite is deeply private. Very few of those contacted were willing to speak about their contributions or their political views. Many donations were made from business addresses or post office boxes, or wound through limited liability corporations or trusts, exploiting the new avenues opened up by Citizens United, which gave corporate entities far more leeway to spend money on behalf of candidates. Some contributors, for reasons of privacy or tax planning, are not listed as the owners of the homes where they live, further obscuring the family and social ties that bind them.
But interviews and a review of hundreds of public documents — voter registrations, business records, F.E.C. data and more — reveal a class apart, distant from much of America while geographically, socially and economically intermingling among themselves. Nearly all the neighborhoods where they live would fit within the city limits of New Orleans. But minorities make up less than one-fifth of those neighborhoods’ collective population, and virtually no one is black. Their residents make four and a half times the salary of the average American, and are twice as likely to be college educated.
Most of the families are clustered around just nine cities. Many are neighbors, living near one another in neighborhoods like Bel Air and Brentwood in Los Angeles; River Oaks, a Houston community popular with energy executives; or Indian Creek Village, a private island near Miami that has a private security force and just 35 homes lining an 18-hole golf course.
Sometimes, across party lines, they are patrons of the same symphonies, art museums or at-risk youth programs. They are business partners, in-laws and, on occasion, even poker buddies.
More than 50 members of these families have made the Forbes 400 list of the country’s top billionaires, marking a scale of wealth against which even a million-dollar political contribution can seem relatively small. The Chicago hedge fund billionaire Kenneth C. Griffin, for example, earns about $68.5 million a month after taxes, according to court filings made by his wife in their divorce. He has given a total of $300,000 to groups backing Republican presidential candidates. That is a huge sum on its face, yet is the equivalent of only $21.17 for a typical American household, according to Congressional Budget Office data on after-tax income.
The donor families’ wealth reflects, in part, the vast growth of the financial-services sector and the boom in oil and gas, which have helped transform the American economy in recent decades. They are also the beneficiaries of political and economic forces that are driving widening inequality: As the share of national wealth and incomegoing to the middle class has shrunk, these families are among those whose share has grown.
The accumulation of wealth has been particularly rapid at the elite levels of Wall Street, where financiers who once managed other people’s capital now, increasingly, own it themselves. Since 1979,according to one study, the one-tenth of 1 percent of American taxpayers who work in finance have roughly quintupled their share of the country’s income. Sixty-four of the families made their wealth in finance, the largest single faction among the super-donors of 2016.
But instead of working their way up to the executive suite at Goldman Sachs or Exxon, most of these donors set out on their own, establishing privately held firms controlled individually or with partners. In finance, they started hedge funds, or formed private equity and venture capital firms, benefiting from favorable tax treatment of debt and capital gains, and more recently from a rising stock market and low interest rates. In energy, some were latter-day wildcatters, early to capitalize on the new drilling technologies and high energy prices that made it economical to exploit shale formations in North Dakota, Ohio, Pennsylvania and Texas. Others made fortunes supplying those wildcatters with pipelines, trucks and equipment for “fracking.”
In both energy and finance, their businesses, when successful, could throw off enormous amounts of cash — unlike industries in which wealth might have been tied up in investments. Those without shareholders or boards of directors have had unusual freedom to indulge their political passions. Together, the two industries accounted for well over half of the cash contributed by the top 158 families.
“When I look at these families, these are highly successful people, they’re used to moving mountains, and they love to beat the conventional wisdom,” said David McCurdy, a former Oklahoma congressman who is now president of the American Gas Association.
Indeed, while blue-chip corporations largely shy away from super PACs, wary of negative publicity about unlimited campaign spending, these families have poured millions of dollars into such efforts.
Some are even betting on candidates shunned by their party’s traditional donor establishment. The three families who have provided the largest donations in the campaign to date — the Wilks family of Texas, which made billions providing trucks and equipment in the shale fields; the Mercers of New York, headed by the hedge fund investor Robert Mercer; and Toby Neugebauer, a Texas-born private equity investor — have backed Senator Ted Cruz of Texas, a socially conservative Tea Party firebrand disdained by Republican leaders.
“Making a big bet on something before anyone else really grasps it. That is what success has in common in energy and in equities,” said Tim Phillips, the president of Americans for Prosperity, a conservative advocacy group with ties to Charles G. and David H. Koch.
A number of the families are tied to networks of ideological donors who, on the left and the right alike, have sought to fundamentally reshape their own political parties. More than a dozen donors or members of their families have been involved with the twice-yearly seminars hosted by the Kochs, whose organizations have pressed the U.S. Chamber of Commerce and other business groups to eliminate the Export-Import Bank. They include Mr. Deason and his wife; the brokerage pioneer Charles Schwab, whose wife, Helen, is among the donors; and Karen Buchwald Wright, whose family company makescompressors used to extract and transport natural gas.
“Most of the people at the Koch seminars are entrepreneurs who have built it from the ground up — they built it themselves,” said Mr. Deason, who said he supported eliminating corporate subsidies and welfare, including those that benefit his own investments.
Another group of the families, including the hedge fund investor George Soros and his son Jonathan, have ties to the Democracy Alliance, a network of liberal donors who have pushed Democrats to move aggressively on climate change legislation and progressive taxation. Those donors, many of them from Hollywood or Wall Street, have put millions of dollars behind Hillary Rodham Clinton.
The families who give do so, to some extent, because of personal, regional and professional ties to the candidates. Jeb Bush’s father made money in the oil business, while Mr. Bush himself earned millions of dollars on Wall Street. Some of the candidates most popular among ultrawealthy donors have also served in elected office in Florida and Texas, two states that are home to many of the affluent families on the list.
But the giving, more broadly, reflects the political stakes this year for the families and businesses that have moved most aggressively to take advantage of Citizens United, particularly in the energy and finance industries.
The Obama administration, Democrats in Congress and even Mr. Bush have argued for tax and regulatory shifts that could subject many venture capital and private equity firms to higher levels of corporate or investment taxation. Hedge funds, which historically were lightly regulated, are bound by new rules with the Dodd-Frank regulations, which several Republican candidates have pledged to roll back and which Mrs. Clinton has pledged to defend.
And while the shale boom has generated new fortunes, it has also produced a glut of oil that is now driving down prices. Most in the industry favor lifting the 40-year-old ban on exporting oil, which would give domestic producers access to new customers overseas, and approval of the controversial Keystone XL oil pipeline.
“They don’t want anything from the government except that they’d like to export oil, and most of them want the Keystone pipeline,” T. Boone Pickens, the investor and natural gas advocate, said about his colleagues in the energy business.
“If you look at the oil and gas industry, it has done wonders for the country. They paid a lot of taxes, and people still attack you,” said Mr. Pickens, who has donated $125,000 to groups supporting Mr. Bush or Carly Fiorina. “They’re entrepreneurs, and they have opinions about everything.”
No, the Kochs' Political Spending Is Not "Reported"
by Brendan Fischer, prwatch.org, October 12, 2015
Charles Koch misled CBS when he suggested that the Kochs' political spending is publicly disclosed.
On October 11, the elder Koch brother gave a rare interview to CBS Sunday Morning. Reporter Anthony Mason asked, "Do you think it's good for the political system that so much what's called 'dark money' is flowing into the process now?"
Koch replied: "First of all, what I give isn't 'dark.' What I give politically, that's all reported. It's either to PACs or to candidates. And what I give to my foundations is all public information."
In addition to the hundreds of millions flowing into politics by way of the Kochs' network of foundations and funding vehicles like Freedom Partners, funds from the corporate treasury of Koch Industries--the second-largest privately held company in the world--flow into politics, and Charles' brother David is known to have written millions of dollars in personal checks to political groups each year.
None of this spending is publicly disclosed.
Koch and Koch Industries Donations Offer Snapshot Into Koch Network
Donations made by the Koch family foundations--the Charles G. Koch Foundation, the David Koch Foundation, and the now-closed Claude R. Lambe Foundation--must be publicly reported.
The Koch political network has also established a complicated array of funding vehicles, like Freedom Partners and the Center to Protect Patient Rights (now known as "American Encore"), to funnel hundreds of millions to politically-active nonprofits like Americans for Prosperity and American Future Fund. Although the original donors for these funding vehicles are kept secret, by law, these groups must disclose the grants they make to other groups, providing some insight into the Koch network's political spending.
In contrast, there is no public reporting requirement for donations directly from the personal bank accounts of David and Charles Koch, who together are worth an estimated $83 billion, unless donating directly to a candidate or PAC.
And, there is no public reporting of contributions from Koch Industries itself. Koch Industries is a closely-held company, so its majority owners, David and Charles Koch, do not have to publicly disclose how they use profits from the company's $115 billion in annual revenue to fund their personal political agenda.
Yet documents obtained by CMD show that that the Kochs themselves and Koch Industries are pouring millions into politics, with zero public disclosure.
These documents do not provide a comprehensive list of private Koch donations, but instead offer a glimpse into the nearly incomprehensible breadth of the Koch political universe. That universe goes beyond the $400 million the Kochs and their operatives raised and spent through the Freedom Partners/Center to Protect Patient Rights network in 2013.
It is likely that both David Koch himself and Koch Industries have given more to the groups discussed below and to others in additional years, but those records have not been made available.
Known donations from Koch Industries include:
$25,000 to the American Conservative Union in 2010 from Koch's lobbying arm, Koch Companies Public Sector;
In press releases, Koch Industries has tried to draw a line between its corporate interests and its owners' political interests. It states on the KochFacts website, for example, that "AFP and AFP Foundation operate independently of Koch Industries." Yet, it is now known that Koch Industries itself was pouring as much as $1 million each year into AFP during the early 2000s, the only years that such records are available, in addition to contributions from the Koch family foundations and David Koch himself. It is not known how much Koch Industries or the Kochs may have provided to AFP in more recent years, as the group has played an increasing role in elections and its budget has grown exponentially.
In some cases, donations from Koch Industries exceeded donations from the Koch family foundations. For example, in 2010, the Texas Public Policy Foundation--the State Policy Network affiliate in Texas that once counted Ted Cruz as a fellow--received $159,834 from Koch Industries, nearly double the $69,788.61 that the Kochs' Claude R. Lambe Foundation disclosed as giving to the group.
Known donations from David Koch himself include:
-$850,000 to Americans for Prosperity in 2003 (making him the top donor that year), $1 million to AFP in 2001, and $1 million to AFP's predecessor Citizens for a Sound Economy in 2000
-$125,000 to the Massachusetts-based State Policy Network member think tank Pioneer Institute for Public Policy Research in 2007 (making Koch the largest single donor that year), and $100,000 to the Pioneer Institute in 2005
-$25,000 to the George Washington Institute for Religious Freedom in 2009
All of these contributions are in addition to millions of dollars of donations, cumulatively, from the Koch family foundations.
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