Thursday Links: “Fix Our T,” SEC, TPP, etc.

by Chris Sturr | June 18, 2015

Fix-Our-T-Petition(1) Fix “Our” T:  On my walk from Boston’s South Station to the D&S office this morning, I encountered an army of people in red “Fix Our T” t-shirts asking commuters to sign a petition to “Fix Our T.” (The “T” is Boston’s public transit systems, including a subway, buses, and commuter rail.) When I asked one of the petition-wielders what it was all about, she mumbled something about “increasing transparency and accountability.” I said that wasn’t enough information for me to sign anything, and asked if she had any handouts. (Lots of other people were just signing–people are really fed up with the T, especially after terrible service this winter in the wake of multiple blizzards!) She gave me a flyer which revealed that the petition was to “tell Beacon Hill [the state legislature] to work with Governor Baker and fix our T” and to “to adopt the responsible bipartisan reform proposed by Governor Baker.”

It turns out that the website mentioned on these people’s t-shirts, www.FixOurT.com, was put up by a group called the Coalition for a World Class public Transit System. It is made up of area chambers of commerce (the North Shore Chamber of Commerce, Metro South Chamber of Commerce, etc.), industry organizations (Massachusetts Lodging Association, Massachusetts Restaurant Association, Massachusetts Petroleum Council (!)), and free-market, pro-business lobbying organizations (the Massachusetts Business Roundtable, Massachusetts Taxpayers Foundation). The list of “solutions” to the T’s problems is mostly bland and meaningless, but key items tip their hand as anti-union (“Provide greater accountability and transparency for the T’s governance and management practices to ensure the entity is efficiently and effectively run while employing a productive workforce”) and against increased funding for the T (“Ensure that the T balances its operating budget without the need for ever-increasing state assistance each year”). So it’s pretty shady to be asking commuters to sign a petition without revealing that this is a big business group with an agenda that many commuters would disagree with.  (As my co-editor Alejandro Reuss likes to point out, nobody ever suggests that the military should “balance its operating budget without the need for ever-increasing state assistance each year” they way fiscal conservatives seem to think actual public goods like Social Security, public transit, or USPS should.)

At least the Boston Globe got it right about the petition with this story: Business Groups Lobby in Favor of Baker’s MBTA Plan. All these pro-business organizations give the lie to the claim (however technically true) on the group’s Facebook page to be a “nonprofit organization,” and also makes you wonder what they mean by “Our” T.  It reminded me of a Short Run from our April 1975 issue that we republished in our Nov/Dec 2009 35th anniversary issue:

You Make It Work (April 1975)
The Reader’s Digest editorial staff is preparing a year-long series of articles defending the U.S. economic system. The Business Roundtable, made up of top executives of 150 major corporations, is paying $1.2 million for the series, which will run under an “[advertisement]” label in each month’s Digest and will be placed in 50 college newspapers as well.
The chairman of the Business Roundtable public information committee, which will supervise the series, is Vice President Paul M. Lund of AT&T. The title of the series is surprisingly up front (emphasis added): “OUR Economic System—YOU Make It Work.”

(2) The SEC:  Rootstrikers has a new report out about how compromised the current head of the Securities and Exchange Commission is, Mary Jo White, the SEC, and the Revolving Door. It is a great follow-up to Elizabeth Warren’s June 2 letter to White criticizing her performance at the SEC, and it is a great riposte to the notion that White would be someone Wall St. wouldn’t want to “mess with.” From the executive summary:

A deeper dig into White’s career indicates that not only has White’s tenure at the SEC
been troubling, it has been a disappointment very much in keeping with her
professional track record. Her defenders are right in one very important regard: White
has in fact led the SEC exactly as one might expect she would based on her career.
White’s career serves as an emblematic example of what is problematic about the
revolving door; indeed, she is also a proponent of the revolving door in her hiring and in
her personal statements. Her position on the SEC leads to an insolvable dilemma: her
lengthy and lucrative ties to Wall Street (Section A below) lead to justifiable calls for
frequent recusal, and her frequent recusals (see Section F) lead to frequent deadlock in
the commission, preventing adequate enforcement. White’s tendency to hire people
for high ranking jobs at the SEC who are likely to avoid stringently enforcing laws
protecting society from the dangers of the insiders and large banks for whom they will
go to work for next (see Section E) is emblematic of her ideology opposing strong white
collar criminal enforcement (see Sections (C) and (D)).

Here’s something from Bloomberg Business about the report:  SEC Chair’s Conflicts Fuel Sympathy for Wall Street, Group Says.

Meanwhile, Bloomberg Business also reported (here) that the SEC could act as soon as August 5th to (finally) implement a Dodd-Frank rule “that will force public companies to publish a ratio that compares the chief executive officer’s reported pay with that of their typical worker.”

What I find hilarious about the resistance to this rule is that corporations, exhibiting that “can’t do attitude,” have been whining about how much time it would take for them to calculate the pay rate of the “average” worker (with the median pay). But the Stanford University Engineering website has a delightful piece explaining how a doctoral student there, Michael Ohlrogge, figured out a way to do it using statistical sampling:

He began to contemplate how the SEC might use statistical sampling to calculate the required median compensation at a reasonable cost. His quantitative training in engineering had taught him that highly accurate statistical estimates could be derived using relatively small samples drawn from large populations. On the other hand, his legal training taught him that the SEC has broad discretion in interpreting and implementing such laws as it deems appropriate.

“You can actually get a very accurate median estimate by sampling as little as one-half of 1 percent of a company’s workforce, even for massive multi-national companies,” Ohlrogge said.

Ohlrogge submitted several comment letters to the SEC, building his case for statistical sampling. He analyzed legal precedent to argue that, despite there being no specific mention of statistical sampling in Dodd-Frank, the SEC would be justified in using sampling. Then, relying on his engineering skills, he crafted the sampling technique companies could use to estimate median income.

Well done.  You can bet, though, that the corporations wouldn’t have found it so burdensome to figure out if they thought they could profit from it (vs. the pay ratio promising to expose the ludicrousness of their executives’ pay).

(3) TPP:  Just two items to pass on about the TPP:

(4) Rana Plaza Victory:  To end on an up note:  we have been covering the efforts to get clothing retailers whose goods were being made in the Rana Plaza factory that collapsed in Bangladesh on April 24, 2013, in John Miller’s articles After Horror, Apologetics, and After Horror, Change? (his columns in our last two Sept/Oct annual labor issues). Finally, change has arrived, as announced by the International Labor Rights Forum:

The International Labor Rights Forum is thrilled to announce that two years of campaigning, with over one million people participating, has succeeded in securing $30 million in compensation for the victims of the Rana Plaza building collapse – the deadliest disaster in the history of the global garment industry.

“This campaign victory would not have been possible without the hard work of workers’ rights groups and labor unions on the ground in Bangladesh, and activism from a wide array of allies around the world who held more than a hundred store actions and demonstrations at corporate headquarters,” said Judy Gearhart, Executive Director of the International Labor Rights Forum.

Maybe we’re overcoming the dynamic Barry Deutsch documented in his cartoon for our March/April 2014 issue:

0314toon--500x483

That’s it for now.

 

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Two Illinois Victories

by Chris Sturr | May 27, 2015

Last month (in this post) I blogged about Doug Henwood’s great interview with Jane McAlevey and her comments about billionaire Illinois governor Bruce Rauner and his relentless campaign against labor.  Since then, Rauner has been handed some stinging defeats, which is great news.

First, the Illinois Supreme Court ruled unanimously that the state’s 2013 pension overhaul (under the previous, Democratic Governor Pat Quinn) is unconstitutional. From the NYT piece (Illinois Supreme Court Rejects Lawmakers’ Pension Overhaul):

All seven members of the state’s highest court found that a pension overhaul lawmakers had agreed to almost a year and a half ago violated the Illinois Constitution. The changes would have curtailed future cost-of-living adjustments for workers, raised the age of retirement for some and put a cap on pensions for those with the highest salaries. But under the state Constitution, benefits promised as part of a pension system for public workers “shall not be diminished or impaired.”

“Crisis is not an excuse to abandon the rule of law,” Justice Lloyd A. Karmeier wrote in an opinion. “It is a summons to defend it.”

So even in our plutocracy, if the state constitution says, clear as day, that you can’t do something, then you can’t do it. Here’s the article on this from the Tribune: Illinois Supreme Court rules landmark pension law unconstitutional.

Our friends at the Chicago Political Economy Group (CPEG) rightly view this as an opportunity to push for the “Lasalle Tax,” a Chicagoans call the transaction tax, aka Tobin tax, applied to Chicago trading. Here’s CPEG’s Ron Baiman (via the CPEG email list):

As many predicted, see:  http://www.cpegonline.org/2014/01/16/illinoiss-new-class-based-pension-math/ [posted at the D&S blog here –CS]

I don’t think there is any viable solution left that could raise the multi-billions needed to dig the state and city out of their financial holes other than a LaSalle Street tax  (see: http://www.cpegonline.org/2015/03/22/restoring-chicagos-fiscal-and-economic-health-a-cpeg-report-on-options-for-the-citys-next-mayor/ ).  Again, the link above explains in great detail why an LST would not cause the traders or exchanges (or their switches) to move out of state and would be perfectly legal (New York State already has a local  FTT – though it unfortunately gets rebated back). The LST would be the least painful, most practical, most politically popular, and fairest and most beneficial in terms of economic justice and restructuring the overall economy, of any option that I think of.

The other great defeat for Rauner’s anti-labor agenda was that right-to-work, which Rauner was trying to impose on public workers at the county level, was rejected by the Illinois house.  From the Sun-Times:  Right-to-work goes down in flames in Illinois House with zero yes votes.

 

 

 

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