Government Reform

Does Wall Street Bleed Your Retirement Savings?

Eduardo Porter: “Here is something every non-rich American family should know: The odds are that you will run out of money in retirement.”

“The Center for Retirement Research at Boston College estimates that more than half of all American households will not have enough retirement income to maintain the living standards they were accustomed to before retirement, even if the members of the household work until 65, two years longer than the average retirement age today.”

“The standard prescription is that Americans should put more money aside in investments. The recommendation, however, glosses over a critical driver of unpreparedness: Wall Street is bleeding savers dry.”

“If there is an industry rived with conflicts of interest, it is the financial conglomerates that advise Americans on investing these savings. Yet nobody was paying attention to the safeguards that might be needed when corporate retirement funds managed by sophisticated professionals were replaced by individual 401(k)s and Individual Retirement Accounts.”

“Imposing tighter standards on I.R.A.s will not end suspect advice … But the new rule could move American retirement saving one step closer to the goal: getting almost everybody to stop trying to beat the market, put their money in low-cost index funds and leave it there. Then Americans might reach retirement better prepared.”

The Death of American Democracy

Matthew Yglesias: “America’s constitutional democracy is going to collapse.”

“Some day … there is going to be a collapse of the legal and political order and its replacement by something else.”

“The breakdown of American constitutional democracy is a contrarian view. But it’s nothing more than the view that rather than everyone being wrong about the state of American politics, maybe everyone is right. Maybe Bush and Obama are dangerously exceeding norms of executive authority. Maybe legislative compromise really has broken down in an alarming way. And maybe the reason these complaints persist across different administrations and congresses led by members of different parties is that American politics is breaking down.”

“Within a presidential system, gridlock leads to a constitutional trainwreck with no resolution. The United States’s recent government shutdowns and executive action on immigration are small examples of the kind of dynamic that’s led to coups and putsches abroad.”

“America’s escalating game of constitutional hardball isn’t caused by personal idiosyncratic failings of individual people. Obama has made his share of mistakes, but the fundamental causes of hardball politics are structural, not personal.”

“The idea that America’s constitutional system might be fundamentally flawed cuts deeply against the grain of our political culture. But the reality is that despite its durability, it has rarely functioned well by the standards of a modern democracy.”

Scrutinizing the Funding Behind Climate Studies

The Hill: “Sen. Ed Markey (D-Mass.) wants oil and coal companies to reveal the extent to which they have funded research questioning the causes of climate change.”

“He said he will soon write to various companies, trade organizations and others involved in fossil fuels in an attempt to find whether they are paying for skeptical climate research.”

“Markey’s comments came after The New York Times reported that Willie Soon, a prolific scientist questioning the human role in climate change, received more than $1.2 million from the industry and did not consistently report that funding when publishing his research.”

Meanwhile, the Guardian reports that “Richard Berman, a one-time lobbyist turned industry strategist, has zeroed in on another target: Barack Obama’s new power plant rules.”

Nicknamed “Dr. Evil” by Washington insiders, Berman “has secretly routed funding for at least 16 studies and launched at least five front groups attacking Environmental Protection Agency rules cutting carbon dioxide from power plants, the Guardian has learned.”

“The Employment Policies Institute, a tax-exempt organisation headed by Berman and operating out of his office according to tax filings, funded a series of reports by an ultra-conservative thinktank, the Beacon Hill Institute.”

“The reports, claiming the power plant rules would lead to rolling blackouts, send electricity prices skyrocketing, and devastate local economies, are being published in 16 states by a network of pro-corporate and ultra-conservative thinktanks.”

“Those familiar with Berman say he is a prime example of a new industry strategy of bypassing traditional lobbying organisations, and using thinktanks, foundations, experts, and social media to shape the public conversation and – ultimately – legislation.”

Building a Wall of Red Tape to Thwart EPA’s Climate Rule

Inside Climate News: “State legislatures in coal-dependent parts of the country are taking action to delay complying with the Obama administration’s Clean Power Plan.”

“Since the 2015 legislative session convened last month, at least a dozen states have introduced bills that effectively increase bureaucratic red tape and stall states from submitting compliance plans to the Environmental Protection Agency (EPA). And, in some cases, the bills grant legislatures the power to veto their states’ carbon emission reduction plans.”

“The maneuvering has quickly spread well beyond the borders of coal-rich states. In Nebraska, Arizona and South Dakota, lawmakers are trying to require that their states’ environmental agencies prepare a preliminary report detailing the plans’ impact on the economy.”

“‘The overall strategy is to find ways to choke the state plan with red tape one way or the other,’ said Aliya Haq, a director in the climate-and-clear-air program at the Natural Resources Defense Council. ‘These bills are all misguided in that they ironically limit the state’s options,’ she said.”

A New Political Era Where Facts Don’t Matter

Paul Krugman observes that “evidence doesn’t matter for the ‘debate’ over climate policy, where I put scare quotes around ‘debate’ because, given the obvious irrelevance of logic and evidence, it’s not really a debate in any normal sense. And this situation is by no means unique. Indeed, at this point it’s hard to think of a major policy dispute where facts actually do matter; it’s unshakable dogma, across the board. And the real question is why.”

“On issues that range from monetary policy to the control of infectious disease, a big chunk of America’s body politic holds views that are completely at odds with, and completely unmovable by, actual experience. And no matter the issue, it’s the same chunk.”

“Well, it strikes me that the immovable position in each of these cases is bound up with rejecting any role for government that serves the public interest.”

“And why this hatred of government in the public interest? Well, the political scientist Corey Robin argues that most self-proclaimed conservatives are actually reactionaries. That is, they’re defenders of traditional hierarchy — the kind of hierarchy that is threatened by any expansion of government, even (or perhaps especially) when that expansion makes the lives of ordinary citizens better and more secure.”

Time for a New Energy Policy: Slash Subsidies; Impose a Carbon Tax

The Economist: “The plunging price of oil, coupled with advances in clean energy and conservation, offers politicians around the world the chance to rationalise energy policy.”

“Falling prices provide an opportunity to rethink this nonsense … rich countries still underwrite the production of oil and gas. Why should American taxpayers pay for Exxon to find hydrocarbons? All these subsidies should be binned.”

“An obvious starting point is to target petrol. America’s federal government levies a tax of just 18 cents a gallon (five cents a litre)—a figure that it has not dared change since 1993. Even better would be a tax on carbon. Burning fossil fuels harms the health of both the planet and its inhabitants. Taxing carbon would nudge energy firms and consumers towards using cleaner fuels. As fuel prices fall, a carbon tax is becoming less politically daunting.”

“Governments have a legitimate role in making sure that energy is abundant, clean and secure. But they need to learn the difference between picking goals and deciding how to reach them. Broad incentives are fine; second-guessing scientists and investors is not. A carbon tax, in other words, is a much better way to reduce emissions of greenhouse gases than subsidies for windmills and nuclear plants.”

Making a Lame Duck Presidency Relevant

E.J. Dionne calls on President Obama and House Democrats to stick together in order to “prevent the next two years from becoming a festival of reaction.”

“If Obama and progressives can cooperate to keep the worst from happening, they — and particularly the president — can also get things done. Obama’s executive actions on immigration squarely challenge congressional Republicans to put up or shut up on their claims that they actually want reform.”

“The Obama administration moved on another front last week to curb ozone emissions linked to asthma and heart disease. Republicans said they would try to block the new anti-pollution regulations. Okay, let’s fight it out. Again, conservatives will have to explain why they want to reverse an initiative rather than obstruct action altogether and then blame Obama for being ineffectual.”

“Yes, such steps will call forth enraged rhetoric about ‘the imperial president.’ But guess what? Starting in the Reagan era, when Democrats controlled Congress, the Heritage Foundation and other conservative groups put out studies and books attacking ‘the imperial Congress’ because they didn’t like any interference with a president from their own side. It seems that altered political circumstances can lead to neck-snapping changes in convictions that are allegedly rooted in constitutional principle.”

When Government Actually Works

Citing the hysteria over Ebola and inaccurate claims of Obamacare failure as examples, Paul Krugman claims we can find a moral to these stories:

“Modern American political discourse is dominated by cheap cynicism about public policy, a free-floating contempt for any and all efforts to improve our lives. And this cheap cynicism is completely unjustified. It’s true that government-hating politicians can sometimes turn their predictions of failure into self-fulfilling prophecies, but when leaders want to make government work, they can.”

“And let’s be clear: The government policies we’re talking about here are hugely important. We need serious public health policy, not fear-mongering, to contain infectious disease. We need government action to promote renewable energy and fight climate change. Government programs are the only realistic answer for tens of millions of Americans who would otherwise be denied essential health care.”

“Conservatives want you to believe that while the goals of public programs on health, energy and more may be laudable, experience shows that such programs are doomed to failure. Don’t believe them. Yes, sometimes government officials, being human, get things wrong. But we’re actually surrounded by examples of government success, which they don’t want you to notice.”

Americans: Fix the Government!

Gallup: “The economy in general and government are the issues Americans are most likely to name as the most important problems facing the country in November. These are followed closely by mentions of immigration and unemployment.”

“Americans are more likely to say they want the new Republican Congress rather than Obama to set the nation’s course in January. But more than anything, Americans want Congress to fix itself and begin compromising, a view reinforced by Americans’ continuing to name the government itself as the most important problem facing the nation.”

Recent Trends in Top Four "Most Important" U.S. Problems

Obama Embraces His Liberal Side by Endorsing Net Neutrality

Rebecca Leber: “On Monday, President Barack Obama effectively endorsed ‘net neutrality’the idea that Internet providers should treat all content equally, without giving or selling preferential treatment to some. In doing so, Obama has picked a big fight with corporate lobbyistsand created a stark contrast with the Republican Party.”

“The net neutrality episode is a reminder that Democrats, like Obama, also take strong stands against big business from time to timeand Republicans rarely do.”

John Judis adds “Obama didn’t just uphold the important principle of net neutralitythat internet providers not be allowed to discriminate among providers and customersbut he did so in the only way that counted: by advocating that the FCC change the classification of internet companies from ‘information providers’ to ‘telecommunications companies.’ That’s a seemingly technical change, but it lies at the heart of whether government can force megaliths like Comcast, Verizon, and AT&T to act in the public interest.”