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Since leaving the White House, the Clintons have earned at least 100 million dollars and currently have a net worth of up to 50 million dollars. So why in the world do the taxpayers need to give Bill Clinton $944,000 to fund his extravagant lifestyle in 2014? If ordinary Americans truly understood how much money [...]
La Obamacare Cosa Nostra Navigators: “Hit Jobs on Taxpayers Resemble… Money Laundering Operations by...
The U.S. Postal Service (USPS) is the nation’s second largest civilian employer after WalMart. Although successfully self-funded throughout its long history, it is currently struggling to stay afloat. This is not, as sometimes asserted, because it has been made obsolete by the Internet. In fact the post office has gotten more business from Internet orders than it has lost to electronic email. What has pushed the USPS into insolvency is an oppressive 2006 congressional mandate that it prefund healthcare for its workers 75 years into the future. No other entity, public or private, has the burden of funding multiple generations of employees who have not yet even been born.
The Carper-Coburn bill (S. 1486) is the subject of congressional hearings this week. It threatens to make the situation worse, by eliminating Saturday mail service and door-to-door delivery and laying off more than 100,000 workers over several years.
The Postal Service Modernization Bills brought by Peter DeFazio and Bernie Sanders, on the other hand, would allow the post office to recapitalize itself by diversifying its range of services to meet unmet public needs.
Needs that the post office might diversify into include (1) funding the rebuilding of our crumbling national infrastructure; (2) servicing the massive market of the “unbanked” and “underbanked” who lack access to basic banking services; and (3) providing a safe place to save our money, in the face of Wall Street’s new “bail in” policies for confiscating depositor funds. All these needs could be met at a stroke by some simple legislation authorizing the post office to revive the banking services it efficiently performed in the past.
Funding Infrastructure Tax-free
In a July 2013 article titled “Delivering A National Infrastructure Bank . . . through the Post Office,” Frederic V. Rolando, president of the National Association of Letter Carriers, addressed the woeful state of US infrastructure. He noted that the idea of forming a national infrastructure bank (NIB) has had bipartisan congressional support over the past six years, with senators from both parties introducing bills for such a bank:
An NIB would provide a means to channel public funds into regional and national projects identified by political and community leaders across the country to keep the economy healthy. It could issue bonds, back public-private partnerships and guarantee long-term, low-interest loans to states and investment groups willing to rebuild our schools, hospitals, airports and energy grids. An NIB with $10 billion in capital could leverage hundreds of billions in investments.
What has blocked these bills is opposition to using tax money for the purpose. But Rolando asks:
[W]hat if we set up the NIB without using taxpayer funds? What if we allowed Americans to open savings accounts in the nation’s post offices and directed those funds into national infrastructure bonds that would earn interest for depositors and fund job-creating projects to replace and modernize our crumbling infrastructure?
A post office bank . . . would not offer commercial loans or mortgages. But it could serve the unbanked and fund infrastructure projects selected by a non-partisan NIB.
The Unbanked and Underbanked: A Massive Untapped Market
The “unbanked” are not a small segment of the population. In a 2011 survey, the unbanked and underbanked included about one in four households. Without access to conventional financial services, people turn to an expensive alternative banking market of bill-pay, prepaid debit cards, check cashing services, and payday loans. They pay excessive fees and are susceptible to high-cost predatory lenders.
Globally, postal banks are major contributors to financial inclusion. Catering to this underserved population is a revenue-generator for the post office while saving the underbanked large sums in fees. Worldwide, according to the Universal Postal Union, 1 billion people now use the postal sector for savings and deposit accounts, and more than 1.5 billion take advantage of basic transactional services through the post. According to a Discussion Paper of the United Nations Department of Economic and Social Affairs:
The essential characteristic distinguishing postal financial services from the private banking sector is the obligation and capacity of the postal system to serve the entire spectrum of the national population, unlike conventional private banks which allocate their institutional resources to service the sectors of the population they deem most profitable.
Expanding to include postal financial services has been crucial in many countries to maintaining the profitability of their postal network. Maintaining post offices in some rural or low-income areas can be a losing proposition, so the postal service often cross-subsidizes with other activities to maintain its universal network. Public postal banks are profitable because their market is large and their costs are low. The infrastructure is already built and available, advertising costs are minimal, and government-owned banks do not reward their management with extravagant bonuses or commissions that drain profits away. Profits return to the government and the people.
Wall Street Is No Longer a Safe Place to Keep Our Money
A postal bank could have appeal not just to the unbanked but to savers generally who are concerned about the safety of their deposits. Traditionally, people have deposited their money in banks for three reasons: safety from theft, the convenience of check writing and bill paying, and to earn some interest. Today, not only do our bank deposits earn virtually no interest, but they are not safe from theft – and the prospective thief is Wall Street itself.
The Financial Stability Board (FSB) in Switzerland has mandated that “systemically important” banks come up with “living wills” stating what they would do in the event of insolvency. The template set out by the FSB is for these too-big-to-fail banks to confiscate their creditors’ funds and convert them to bank equity or stock. Legally, “creditors” include the depositors. In fact depositors compose the largest class of creditors of any bank.
In 2009, President Obama agreed along with other G20 leaders to be bound by the regulations imposed by the FSB, giving them the force of law. This agreement should properly have been a treaty, subject to the approval of two-thirds of the Senate; but the deal was sealed on a handshake, ostensibly to prevent another Lehman-style banking collapse. Thus the next time JPMorganChase or Bank of America finds itself on the wrong side of a massive derivatives bet, it can avoid insolvency by recapitalizing itself with our deposits. Both JPM and BOA hold over $1 trillion in deposits and over $70 trillion in derivatives; and with the repeal of Glass-Steagall, the banks have been able to merge these operations. The FDIC deposit insurance fund has only $32 billion in it to cover losses for the entire country.
For guaranteed safety, we need a network of publicly-owned banks devoted solely to taking deposits and providing check-cashing services – no gambling with deposits allowed. The US Post Office can safely and efficiently provide the infrastructure for such a banking network, as it did from 1911 until 1967. The post office is ubiquitous, with branches in every town and community.
A Proven Model
Postal banking systems are also ubiquitous in other countries, where their long record of safe and profitable public banking has proved the viability of the model. The mother of all postal banks was in Great Britain in the 19th century. The leader today is Japan Post Bank (JPB), now the largest depository bank in the world. Not only is it a convenient place for Japanese citizens to save their money, but the government has succeeded in drawing on JPB’s massive deposit base to fund a major portion of the federal budget. Rather than using its deposits to back commercial loans as most banks do, Japan Post invests them in government securities. That means the government is borrowing from its own bank and its own people rather than from foreign bondholders.
That is the basic idea behind the national postal savings and infrastructure bank. The deposits of the nation’s savers can be invested in government securities that are in turn used for rebuilding the nation. It is a win-win-win, providing a way to save the post office while at the same time protecting our deposits and rebuilding our decaying roads and bridges without dipping into taxes. It is also a way to vote with our feet, moving our money out of an increasingly risky and rapacious Wall Street into a network of publicly-owned banks that serves rather than exploits us.
Another Option: Rescind the Prefunding Requirement
Another alternative for putting the USPS in the black, of course, is simply to rescind the healthcare pre-funding requirement that put it in the red. The mandate to fund healthcare 75 years into the future appears so unreasonable as to raise suspicions that the nation’s largest publicly-owned industry has been intentionally targeted for takedown. Why? Is it because competitors want the business, or because private developers want the valuable postal properties that are being systematically sold off to meet its now-crippled the budget?
In a revealing exposé in the September 18th East Bay Express, Peter Byrne provides evidence that C.B. Richard Ellis (CBRE), the company holding the exclusive contract to negotiate sales for the $85 billion postal real estate portfolio, has sold off 52 postal properties for at least $79 million less than their fair market value. Worse, the buyers included its own business partners and shareholders, including Goldman Sachs. CBRE is chaired by Richard C. Blum, the husband of US Senator Dianne Feinstein, a family Byrne says has a history of accessing public pension funds to make private investments (citing here and here).
The post office has been made to look inefficient and obsolete, as if public enterprises are incapable of generating public revenues; yet the postal service has been both self-funding and profitable for over two centuries. If we refuse to allow our government to make money through public enterprises, we will be destined to bear the burden of supporting government with our taxes, while we watch countries such as China, Korea and Japan, which do allow public industries, enjoy the fruits of that profitable and efficient arrangement.
Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200-plus blog articles are at EllenBrown.com.
Filed under: Ellen Brown Articles/Commentary
Bad police behavior runs roughshod over civil liberties, and costs cities millions of dollars in payouts to those who successfully sue.
Photo Credit: Shutterstock.com
March 4, 2013 |
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When it comes to interactions between regular citizens and police on the street, the police hold all the cards. They can, and often do, act however they want. One of the few meaningful mechanisms for restitution if you are a victim of police misconduct is to sue for damages. The costs of these lawsuits and payouts add up, and bad police behavior takes a toll not only on our civil liberties, but also on a city's budget.
It's worth mentioning that lawsuits against the police rarely result in million-dollar payouts for victims, are difficult to win, and represent only a fairly small slice of total reports of police misconduct. Also, the reported costs of settlements and judgments to victims often exclude fees paid to attorneys representing the city, so in many cases the real numbers are higher.
This list doesn't include every example of police misconduct or every study about how much it costs, but below are some recent instances of reports that detail just how much money police misconduct costs taxpayers. The point here isn't to argue that people shouldn't sue cops. They should, if they have a good case. The cops should simply give people fewer reasons to sue them.
Lieutenant Jon Burge is in many ways the posterchild for police brutality. He oversaw a torture regime at the Chicago Police Department from 1973-1991 that included 64 other cops directly and an untold number of police who were aware of what was going on. According to a recent report, over 100 African Americans were allegedly tortured under his watch.
As the Chicago Reader reported in 2003, charges against Burge and his crew included “electric shock, suffocation, burnings, attacks on the genitals, severe beating, and mock executions.”
Burge was eventually prosecuted by the US attorney and sentenced to four and a half years for perjury, though according to the report the Cook County State Attorney never prosecuted any officers for torture or for covering it up. The “blue code of silence” plays a large role in perpetuating corruption.
The report, by the University of Illinois at Chicago, claims that corruption and abuse of power are rampant problems in the Chicago Police Department. The authors looked at CPD corruption dating back to 1960, and conclude that “[t]oleration of corruption, or at least resigned acceptance, appears to be the order of the day for at least the past 50 years.”
Top Chicago officials have allowed (or created) a culture of impunity for officers. A separate study the authors cite claims only “19 of 10,149 (or less than 2%) civilian complaints of excessive force, illegal searches, racial abuse, sexual abuse and false arrests between 2002 and 2004 led to police suspensions of a week or more.”
Over the last decade, police misconduct lawsuits against the city and out-of-court settlements “have cost taxpayers several hundreds of millions of dollars at a time when all levels of government have to cut services and raise taxes,” according to the University of Illinois report. Defending cops against litigation has cost Chicago more than $82.5 million since 2003, and “Jon Burge cases have cost local taxpayers more than $53 million since 1998.”
2. New York
According to a 2012 report from NYC's Comptroller's office, the city paid out $185.6 million in claims for fiscal year 2011. That's a 35% increase over the previous year, which came in at $137.3 million in settled claims. Fiscal year 2011 saw “an historical high of 8,882 claims filed” against the NYPD, with a 55% rise in claims against the NYPD over the past five years.
Should Taxpayers Be Funding Private Schools That Teach Creationism?
Posted on Feb 1, 2013
|John Scalzi (CC BY 2.0)|
Part of an exhibit at the Creation Museum in Petersburg, Ky.
By Zack Kopplin
According to so-called education reform advocates like former Florida Gov. Jeb Bush and his Foundation for Excellence in Education, school vouchers, which allow parents to direct state money to private schools of their choice, are essential because “families need the financial freedom to attend schools that meet their needs.” From Louisiana Gov. Bobby Jindal, a Republican, to Newark, N.J.’s Democratic Mayor Cory Booker, these programs are backed by politicians on both sides of the aisle, and they enjoy the support of powerful interest groups such as the Friedman Foundation for Educational Choice and the American Federation for Children.
Voucher programs have been established in 12 states and the District of Columbia, and they are spreading as Texas and Tennessee attempt to create ones of their own. As the use of vouchers has expanded across the country in recent years, new questions have arisen that extend beyond concerns about their appropriateness and legality. We’ve pushed standards, testing and accountability for public schools, so why shouldn’t private institutions receiving vouchers have to meet those same requirements? Should private institutions be allowed to ignore state science standards and teach their students creationism while receiving taxpayer money? Does learning about biblical creation, rather than evolution, really help to meet students’ needs?
I first investigated the relationship between creationism and voucher programs after reading an AlterNet article in June about Eternity Christian Academy in Louisiana. Now removed from the state’s voucher program, the school was using the Accelerated Christian Education curriculum to teach students that the mythical Loch Ness Monster existed and somehow disproved evolution. As I looked further into Louisiana’s program, I found that there wasn’t just one school but at least 20 private ones getting vouchers and thus receiving millions of taxpayer dollars. After reviewing my research, New Orleans Times-Picayune columnist James Gill wrote that “vouchers have turned out to be the answer to a creationist’s prayer.”
This isn’t just a Louisiana problem. It seems clear that the U.S. is facing a national creationism epidemic. In an exposé I wrote posted by MSNBC host Melissa Harris-Perry, I identified hundreds of additional voucher schools in nine states and the District of Columbia using dozens of different creationist curriculums. These schools are receiving tens of millions of dollars, and maybe even hundreds of millions, to teach religious beliefs in violation of state science standards. With 164 such campuses, Florida’s John M. McKay Scholarships for Students With Disabilities Program contained the highest concentration of creationist voucher schools I was able to uncover. Indiana, which has been marketed as the “gold standard” for voucher accountability, has at least 37 such schools teaching creationism. A couple of its campuses proudly advertise that their students are taken to the Creation Museum on field trips. So far, I’ve discovered 311 creationist voucher schools across the country.
Those 311 schools are not the only taxpayer funded institutions teaching creationism. There are likely hundreds more. Although many are difficult to find, either because they don’t have websites or don’t advertise their creationist curriculum, lots of voucher schools fit the profile of creationist campuses that are already known. On top of this, two states, Arizona and Mississippi, have voucher programs but don’t release the names of participating schools. Officials with the Arizona Department of Education confirmed to me that every private school in the state is eligible to participate in the program, and since I’ve identified private creationist schools there that could be involved, there is little doubt that Arizona is funding some of them. I believe it’s a safe bet that every school voucher program in the country is financing creationism.These campuses would be shut if they were subject to the same standards as public institutions. The courts have shot down the teaching of creationism and intelligent design with public money over and over again, so why are we letting taxpayer funded private voucher schools teach them? The scientists and educators who devised both state science standards and the national common core standards knew creationism was pseudo-science that would not help American students get the education they need to succeed in a global, 21st century economy. That’s why we don’t teach creationism in public schools. Taxpayers should be outraged that their hard-earned dollars are enabling the mis-education of private school students.
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The bill that averted the fiscal cliff included a largely unnoticed section that granted world’s largest biotechnology firm a two-year delay in regulations of its drugs – even though the firm has just pleaded guilty in a federal fraud case.
The bill, H.R. 8, was passed with a paragraph that lawmakers included to give the biotechnology firm Amgen two years to sell Sensipar without government price regulations. Sensipar, an expensive prescription drug produced by Amgen and used by kidney dialysis patients, is projected to cost Medicare up to $500 million over the next two-year period, since the legislation delays Medicare price restraints of End Stage Renal Disease (ESRD) drugs, the New York Times reports.
Section 632 of the bill announces the “two-year delay of implementation of oral-only ESRD-related drugs in the ESRD prospective payment system; monitoring.” Even though the bill does not specify Amgen by name, it mainly affects the sale of Sensipar, costing the government millions while allowing the firm to keep its prices unregulated.
Amgen employs 74 lobbyists in Washington, DC and was the only company to lobby for this delay, Congressional aides told the Times. Most of the delay’s supporters are leaders of the Senate Finance Committee who have benefited from Amgen’s generous political donations. Critics of the measure discovered that Amgen had won a previous two-year delay already and consider the initiatives driven by personal gain.
“That is why we are in the trouble we are in,” Dennis J. Cotter, a health policy researcher, told the Times. “Everybody is carving out their own turf and getting it protected, and we pass the bill on to the taxpayer.”
Legislatives aides who support the delay said it would give providers like Amgen the time they need to determine the details of federal reimbursements for kidney care.
Most individuals who suffer from ESRD are eligible for Medicare, regardless of their age. Medicare spent about $10.1 billion on dialysis care for these patients in 2011. But the US Government Accountability Office published a report last month that showed a 23 percent decrease in use of ESRD drugs from 2007 to 2011. Still, Medicare is forced to pay a bundle rate for the drugs, and has been paying based on the 2007 utilization levels, which was $650 million to $880 million more than it needed.
Amgen has also been charged for illegally marketing one of its anti-anemia drugs, Aranesp. The firm pleaded guilty last month after a federal criminal investigation discovered evidence of its unlawful engagements. The company must now pay a $762 million settlement, which is its largest yet, but makes a small dent in its $15.6 billion annual revenue.
Still, two weeks after pleading guilty, Amgen was granted another break with the fiscal cliff bill’s section that allows the firm to keep its prices high. Lobbyists and Congressional aides told the Times that many of them first discovered the new language when the final bill was publicly posted, just hours before it was voted upon. With little time left to avert the fiscal cliff, lawmakers approved the bill.
Sodium dichromate is an orange-yellowish substance containing hexavalent chromium, an anti-corrosion chemical. To Lt. Col. James Gentry of the Indiana National Guard, who was stationed at the Qarmat Ali water treatment center in Iraq just after the 2003 U.S. invasion, it was “just different-colored sand.” In their first few months at the base, soldiers were told by KBR contractors running the facility the substance was no worse than a mild irritant.
Gentry was one of approximately 830 service members, including active-duty soldiers and members of the National Guard and reserve units from Indiana, South Carolina, West Virginia and Oregon, assigned to secure the water treatment plant, according to the Department of Veterans Affairs.
Sodium dichromate is not a mild irritant. It is an extreme carcinogen. In November 2009, at age 52, Gentry died of cancer. The VA affirmed two months later that his death was service-related.
In November, a jury found KBR, the military's largest contractor, guilty of negligence in the poisoning of a dozen soldiers, and ordered the company to pay $85 million in damages. Jurors found KBR knew both of the presence and toxicity of the chemical. Other lawsuits against KBR are pending.
KBR, however, says taxpayers should be on the hook for the verdict, as well as more than $15 million the company has spent in its failed legal defense, according to court documents and attorneys involved with the case.
KBR's contract with the U.S. to rebuild Iraq’s oil infrastructure after the 2003 invasion includes an indemnity agreement protecting the company from legal liability, KBR claims in court filings. That agreement, KBR insists, means the federal government must pay the company's legal expenses plus the verdict won by 12 members of the Oregon National Guard who were exposed to the toxin at the Qarmat Ali water treatment plant.
The military disagrees. A U.S. Army Corps of Engineers contracting officer told KBR in November 2011 that litigation costs "are not covered by the indemnity agreement."
The public doesn’t know what the indemnity agreement actually says because the military considers it classified. Until recently, the veterans exposed to the toxin couldn’t know either, nor could attorneys at the Department of Justice, who were left battling the contract in the dark, according to a source there.
Michael Doyle, a Houston-based lawyer who helped the successful suit against KBR, told The Huffington Post the military declassified the indemnification agreement on Dec. 21 and gave it to him under a protective order that banned him from sharing the language to parties not involved in the case. John A. Elolf, a spokesman for KBR, confirmed the declassification of the agreement and said the contractor also was prevented from providing a copy. HuffPost has requested the document under the Freedom of Information Act from the Corps of Engineers. Read on...