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Time for an Economic Bill of Rights: Ellen Brown

Time for an Economic Bill of Rights

Posted on November 12, 2011 by Ellen Brown 

 

Henry Ford said, “It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

We are beginning to understand, and Occupy Wall Street looks like the beginning of the revolution. 

We are beginning to understand that our money is created, not by the government, but by banks.  Many authorities have confirmed this, including the Federal Reserve itself.  The only money the government creates today are coins, which compose less than one ten-thousandth of the money supply.  Federal Reserve Notes, or dollar bills, are issued by Federal Reserve Banks, all twelve of which are owned by the private banks in their district.  Most of our money comes into circulation as bank loans, and it comes with an interest charge attached. 

According to Margrit Kennedy, a German researcher who has studied this issue extensively, interest now composes 40% of the cost of everything we buy.  We don’t see it on the sales slips, but interest is exacted at every stage of production.  Suppliers need to take out loans to pay for labor and materials, before they have a product to sell.

For government projects, Kennedy found that the average cost of interest is 50%.  If the government owned the banks, it could keep the interest and get these projects at half price.  That means governments—state and federal—could double the number of projects they could afford, without costing the taxpayers a single penny more than we are paying now. 

This opens up exciting possibilities.  Federal and state governments could fund all sorts of things we think we can’t afford now, simply by owning their own banks.  They could fund something Franklin D. Roosevelt and Martin Luther King dreamt of—an Economic Bill of Rights. 

A Vision for Tomorrow

In his first inaugural address in 1933, Roosevelt criticized the sort of near-sighted Wall Street greed that precipitated the Great Depression.  He said, “They only know the rules of a generation of self-seekers.  They have no vision, and where there is no vision the people perish.” 

Roosevelt’s own vision reached its sharpest focus in 1944, when he called for a Second Bill of Rights.  He said:

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights . . . . They were our rights to life and liberty.

As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

He then enumerated the economic rights he thought needed to be added to the Bill of Rights.  They included:

The right to a job;
The right to earn enough to pay for food and clothing;
The right of businessmen to be free of unfair competition and domination by monopolies;
The right to a decent home;
The right to adequate medical care and the opportunity to enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.

Times have changed since the first Bill of Rights was added to the Constitution in 1791.  When the country was founded, people could stake out some land, build a house on it, farm it, and be self-sufficient.  The Great Depression saw people turned out of their homes and living in the streets—a phenomenon we are seeing again today.  Few people now own their own homes.  Even if you have signed a mortgage, you will be in debt peonage to the bank for 30 years or so before you can claim the home as your own. 

Health needs have changed too.  In 1791, foods were natural and nutrient-rich, and outdoor exercise was built into the lifestyle.  Degenerative diseases such as cancer and heart disease were rare.  Today, health insurance for some people can cost as much as rent. 

Then there are college loans, which collectively now exceed a trillion dollars, more even than credit card debt.  Students are coming out of universities not just without jobs but carrying a debt of $20,000 or so on their backs.  For medical students and other post-graduate students, it can be $100,000 or more.  Again, that’s as much as a mortgage, with no house to show for it.  The justification for incurring these debts was supposed to be that the students would get better jobs when they graduated, but now jobs are scarce.

After World War II, the G.I. Bill provided returning servicemen with free college tuition, as well as cheap home loans and business loans.  It was called “the G.I. Bill of Rights.”  Studies have shown that the G.I. Bill paid for itself seven times over and is one of the most lucrative investments the government ever made. 

The government could do that again—without increasing taxes or the federal debt.  It could do it by recovering the power to create money from Wall Street and the financial services industry, which now claim a whopping 40% of everything we buy.

An Updated Constitution for a New Millennium

Banks acquired the power to create money by default, when Congress declined to claim it at the Constitutional Convention in 1787.  The Constitution says only that “Congress shall have the power to coin money [and] regulate the power thereof.”  The Founders left out not just paper money but checkbook money, credit card money, money market funds, and other forms of exchange that make up the money supply today.  All of them are created by private financial institutions, and they all come into the economy as loans with interest attached. 

Governments—state and federal—could bypass the interest tab by setting up their own publicly-owned banks.  Banking would become a public utility, a tool for promoting productivity and trade rather than for extracting wealth from the debtor class.

Congress could go further: it could reclaim the power to issue money from the banks and fund its budget directly.  It could do this, in fact, without changing any laws.  Congress is empowered to “coin money,” and the Constitution sets no limit on the face amount of the coins.  Congress could issue a few one-trillion dollar coins, deposit them in an account, and start writing checks.    

The Fed’s own figures show that the money supply has shrunk by $3 trillion since 2008.  That sum could be spent into the economy without inflating prices.  Three trillion dollars could go a long way toward providing the jobs and social services necessary to fulfill an Economic Bill of Rights.  Guaranteeing employment to anyone willing and able to work would increase GDP, allowing the money supply to expand even further without inflating prices, since supply and demand would increase together. 

Modernizing the Bill of Rights

As Bob Dylan said, “The times they are a’changin’.”  Revolutionary times call for revolutionary solutions and an updated social contract.  Apple and Microsoft update their programs every year.  We are trying to fit a highly complex modern monetary scheme into a constitutional framework that is 200 years old. 

After President Roosevelt died in 1945, his vision for an Economic Bill of Rights was kept alive by Martin Luther King.  “True compassion,” King declared, “is more than flinging a coin to a beggar; it comes to see that an edifice which produces beggars needs restructuring.” 

MLK too has now passed away, but his vision has been carried on by a variety of money reform groups.  The government as “employer of last resort,” guaranteeing a living wage to anyone who wants to work, is a basic platform of Modern Monetary Theory (MMT).  An MMT website declares that by “[e]nding the enormous unearned profits acquired by the means of the privatization of our sovereign currency. . . [i]t is possible to have truly full employment without causing inflation.”  

What was sufficient for a simple agrarian economy does not provide an adequate framework for freedom and democracy today.  We need an Economic Bill of Rights, and we need to end the privatization of the national currency.  Only when the privilege of creating the national money supply is returned to the people can we have a government that is truly of the people, by the people and for the people.

——————

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.  In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back.  Her websites are http://WebofDebt.com and http://EllenBrown.com.

On Wall Street’s Private Police in NYPD Uniforms

Posted: 10 Oct 2011 09:47 PM PDT Naked Capitalism

We reported a bit more than a week ago on how JP Morgan had given a troublingly large donation of $4.6 million to the New York City Police Foundation. As we recounted, that foundation was established in 1971, which was when the city was sliding into its fiscal crisis, as a way for companies and individuals to bolster the NYPD’s budget. And even though in theory contributions go into a general coffer, one has to suspect in practice that big donors will get more attention from the cops. Even though this donation was the biggest the police foundation had ever received, it was still peanuts relative to the total NYPD budget. Nevertheless, as Richard Kline pointed out, the gesture was significant:

To me, the telltale with the JippyMo ‘donation’ is that it was _publicly_ announced. Jamie the Demon and his top heads want the public to know that the banksters LIKE the police, as opposed to those daft, sloppy, protestors.

The bankster/Kochster assault on unions was excruciatingly badly timed. It aims directly at public service unions. At their pensions. At their staffing levels. At their equipment. One of the most cogent remarks coming out of the intitial Wisconsin action (before the org-heads diverted it into failing to elect more Democrats) came from the police there, to the effect that lower staffing levels threatened _their_ safety. The local police were markedly sympathetic to the capitol building occupation in Madison. Some of this has clearly been whispered in the ear of the financial oligarchs by their paid consultants to the effect that alienating the police is not in the interests of the 1%. I don’t think that the sum of money is especially relevant or substantial. What matters is that it is a public demonstration that the banksters _like_ the police, with the implication that they will be prepared to drop a little more loose change on them if they’ll clap the rabble into Rikers like good fellows.

And it turns out that big financial service firms have also been buying protection via the NYPD. Literally.

Pam Martens in Counterpunch (hat tip reader 1sk) describes a program which allows private firms to pay the city to put a cop on the street to police for them. I am not making this up. Oh, and the white shirted cops that seem to be more aggressive in going after protestors (most notably, the one that infamously maced a group of women?) The assumption has been that they are supervisors. Martens suggests they are in the employ of businesses:

If you’re a Wall Street behemoth, there are endless opportunities to privatize profits and socialize losses beyond collecting trillions of dollars in bailouts from taxpayers. One of the ingenious methods that has remained below the public’s radar was started by the Rudy Giuliani administration in New York City in 1998. It’s called the Paid Detail Unit and it allows the New York Stock Exchange and Wall Street corporations, including those repeatedly charged with crimes, to order up a flank of New York’s finest with the ease of dialing the deli for a pastrami on rye.
The corporations pay an average of $37 an hour (no medical, no pension benefit, no overtime pay) for a member of the NYPD, with gun, handcuffs and the ability to arrest. The officer is indemnified by the taxpayer, not the corporation.
New York City gets a 10 percent administrative fee on top of the $37 per hour paid to the police. The City’s 2011 budget called for $1,184,000 in Paid Detail fees, meaning private corporations were paying wages of $11.8 million to police participating in the Paid Detail Unit. The program has more than doubled in revenue to the city since 2002.
The taxpayer has paid for the training of the rent-a-cop, his uniform and gun, and will pick up the legal tab for lawsuits stemming from the police personnel following illegal instructions from its corporate master. Lawsuits have already sprung up from the program.

If you assume a policeman works 48 weeks a year, that equates to 166 private goons masquerading as law enforcement. And remember, the corporate sponsors don’t pay for any benefits. The rule of thumb I’m used to is 25% to 30% of cash comp. And that’s before, as Marten stresses, training and litigation costs.

Lehman failed and owed the NYPD for 21 Paid Detail policemen. Goldman, the New York Stock Exchange, and the World Financial Center have all used Paid Detail. Martens points out that the New York Stock Exchange used its force to act under its direction (rather than the city’s):

On September 8, 2004, Robert Britz, then President and Co-Chief Operating Officer of the New York Stock Exchange, testified as follows to the U.S. House Committee on Financial Services:

“…we have implemented new hiring standards requiring former law enforcement or military backgrounds for the security staff…We have established a 24-hour NYPD Paid Detail monitoring the perimeter of the data centers…We have implemented traffic control and vehicle screening at the checkpoints. We have installed fixed protective planters and movable vehicle barriers.”

Military backgrounds; paid NYPD 24-7; checkpoints; vehicle barriers?..In his testimony, the NYSE executive Britz states that “we” did this or that while describing functions that clearly belong to the City of New York.

Martens also describes how the suit over the arrest of 700 OWS protestors on Brooklyn Bridge 30 members of the NYPD and 10 “law enforcement officers not employed by the NYPD”. 

I found this report to be very troubling. Even though I’ve written how the US is moving towards becoming a Mussolini-style corpocracy, we are further down that path than I realized. 

The State and Local Budget Crisis: Micheal Hudson

The State and Local Budget Crisis By Michael Hudson

URL of this article: www.globalresearch.ca/index.php?context=va&aid=26420

Global Research, September 6, 2011

The cost of the 2011 cutbacks in federal spending will fall most directly on consumers and retirees by scaling back Social Security, Medicare, Medicaid and social spending programs. The population also will suffer indirectly, by lower federal revenue sharing with U.S. states and cities. The following chart from the National Income and Product Accounts (NIPA, Table 3.3) shows how federal financial aid has helped cities shift the tax burden off real estate, although the main shift has been off property taxes onto income – and onto consumption (sales) taxes. State and local revenue, 1930-2007. Untaxing real estate has served mortgage bankers by freeing more rental income (the land’s site value) to be paid as interest. Property taxes have not absorbed anywhere near the rise in debt-leveraged housing and commercial prices. However, this has not lowered the cost of housing for most people. New buyers must pay a price that capitalizes the property’s rental value. Less and less of this payment has taken the form of local property taxes. More and more has been paid to mortgage lenders as interest. So cutting property taxes has simply left more revenue to be capitalized into higher debt-financed prices. While homeowners saw their carrying charges rise, they nonetheless felt more affluent as real estate prices rose – inflated on easier and easier credit terms. Prices rose faster than mortgage debt as long as (1) interest rates were declining; (2) loan maturities were stretched out (ultimately reaching the point of zero amortization rather than the old-fashioned 30-year self-amortizing mortgages); (3) down payments were shrinking toward zero (rather than requiring 20 percent equity as used to be the case) and indeed as “liars’ loans” led prices to be bid up recklessly; and finally (4) cities refrained from raising property taxes as fast as market prices were rising. This left more revenue to be capitalized into higher prices, providing capital gains that home owners were encouraged to treat like “money in the bank” – by taking out home equity loans. This rising mortgage debt was increasingly important in enabling people to maintain their living standards, especially as they had to pay more for housing. So what appeared to be affluence and rising net worth from the value of one’s home on the asset side of the balance sheet found its counterpart in debt on the liabilities side. From the local fiscal vantage point, these debt-leveraged price gains represented uncollected user fees for the site value provided by public infrastructure and rising prosperity. The bankers ended up with the rising flow of rental value, not the cities. This obliged tax collectors to look to other sources of revenue. So homeowners paid out what they seemed to be saving in modest property taxes in the form of rising sales taxes and income taxes. By 2008 these financial system’s easing of credit terms had reached its limit. No more room for credit inflation remained, so speculators began to withdraw from the market. (They accounted for about one-sixth of demand for housing.) When the credit spigot was turned off, prices plunged – leaving the debts in place. (So taking out a home-equity mortgage was not really like drawing down money from a piggy bank after all. Years of future income had to be diverted to spend for past shortfalls.) Now that federal aid is falling – along with revenue from sales and income taxes – local budgets are falling into deficit. But for many cities and states, their constitutions and regulations prevent them from running deficits. So they face a number of hard choices. It is hard to raise property taxes back toward earlier rates, because the rental income already has been pledged to the mortgage bankers. To tax heavily indebted property would lead to more foreclosures and abandonment. And the Obama Administration’s hope that banks somehow will use the Federal Reserve’s tsunami of cheap (0.25%) reserves and credit to re-inflate a new real estate bubble is in vain, because bankers have little interest in lending to property that is still sinking in market price. It is easier to speculate on interest-rate arbitrage with the BRICS and get a foreign-exchange premium as well, or simply to play the market. Banks report winnings in the derivatives trade day after day, with nary a loss – an indication of how poorly their hapless customers and other outsiders must be doing! So the path of least resistance for most cities and states is to cut back spending on public services, and above all on pension plan contributions. The ultimate sacrifice (and the aim of financial predators) is to sell off public land and buildings, roads and other transportation services, sewer systems and other basic infrastructure. In this aim, the investment bankers are being aided and abetted by the credit ratings industry, threatening to downgrade cities that do not sell off their public domain. In this respect the financial end-game of privatization is similar in the United States to pressures by the European Central Bank to force the indebted PIIGS economies to engage in privatization sell-offs, Third World and post-Soviet style. Just as in Europe, when revenues are squeezed and something must give – either debt service, payment to pensioners or current payments to labor – the financial sector is seeking to take all the available surplus for itself. This puts creditors in the forefront of today’s class war against labor. On the eve of the September 2008 financial crash, cities such as Birmingham, Alabama and Chicago already were looking for ways to cope with the fiscal squeeze imposed by political pressures from the major local campaign contributors – the real estate and banking sectors – to cut property taxes. One seeming path of little resistance was to gamble in the Wall Street financial casino, hoping to make easy gains rather than making landlords, wage earners or consumers pay higher taxes. Landlords and bankers encouraged this speculation as an alternative to taxing property. Landlords wanted to pay less in property taxes, and banks knew that whatever rental value buyers could save in the form of lower taxes would end up being used to bid up prices to capitalize into debt service for mortgages to buy properties up for sale. Here is the dilemma that states and cities now face: So much urban property is sinking into negative equity territory that a rise in property taxes will lead to even more foreclosures and abandonments, and hence even lower fiscal returns. To avoid this, cities are seeing Chapter 9 bankruptcy as the main route to free themselves, especially from problems that stem from an unwarranted trust in bankers to help them out of the earlier fiscal squeeze by putting them into losing financial gambles. Orange County in California successfully sued Merrill Lynch to recover damages, and Birmingham also was awarded recovery payments from JP Morgan Chase. Birmingham and Chicago as microcosms of the national debt squeeze Now that financial fraud has been decriminalized for all practical purposes, most financial victims are obliged to sue for reimbursement in civil court without much help from prosecutors. Alabama’s state capital Birmingham is a case in point. After a predatory financing arrangement to upgrade its sewers in 2008 forced its Jefferson County into bankruptcy, the Securities and Exchange Commission (S.E.C.) negotiated $75 million in fines and reimbursement of fees to be paid by JP Morgan Chase as lead lender and negotiator for the complex interest-rate swaps they had advised the country to take, ostensibly to protect its economic interest. The banks also forfeited nearly ten times this sum ($647 million) in termination fees. But the court-appointed receiver grabbed the $75 million settlement for payment on the debts the country still owed. As usual, the banks had paid the fine and made reimbursement without admitting any wrongdoing. To the financial sector, deception and fraud is part of the game, after all, not a tactic that can be prosecuted as criminal. They paid their fines without admitting any wrongdoing, and without even admitting the S.E.C. charges. They merely paid up and kept silent – while the Justice Department and Internal Revenue Service were still in the time-taking process of ruling on legal claims brought by Jefferson County. The case prompted bankers and bondholders to bring pressure on the state of Alabama to take responsibility (that is, take on the debt liability) all on behalf of statewide taxpayers, and to demand that all lawsuits brought for financial fraud to be dropped.[1] “Responsibility” is supposed to be only for debtors, not for the financial sector itself. This is how the banks have managed to rewrite the laws, after all. Jefferson County is now debating whether to declare Chapter 9 bankruptcy to free itself from debts that can be paid only at the cost of disrupting economic continuity and living standards. The city’s debt quandary is a microcosm for the U.S. economy as a whole. Its lowest-income residents are burdened with financialized charges for sewer-system debt payments so far beyond their ability to pay that they face the same fate as Latvians, Irish and Greeks: As the local economy shrinks, they must move in order to find jobs – in places less debt-burdened and hence lower-cost. The “free market” choice is to emigrate to flee the debts imposed on their economies and on themselves personally. Well-to-do Birmingham families have yards large enough to have their own septic tanks as an alternative to paying for access to sewers, but lower-income families living in small houses or apartment buildings lack this option. One county commissioner asked: “Why should the poor have to pay for the ill-gotten gain of some of these banks who poisoned the well in the very first place?”[2] Other commissioners demanded that bondholders “bear the entire cost of a $20 million fund that is being created to help low-income residents pay their sewer bills.”[3] But the government usually provides relief only for creditors – above all, relief from criminal prosecution for their business plan that involved making loans beyond the debtors’ ability to pay. Some states have fraudulent conveyance laws to prevent this, as well as to prevent banks from misrepresenting the quality of their loans to outside investors. There are laws to punish appraisers who give false appraisals, and mortgage brokers who fill in false income reports to qualify for loans. But the S.E.C. has seen its staff and budget slashed and deregulators appointed to oversee its affairs. It has no authority to prosecute, only to make recommendations to the Justice Department, where Attorney General Eric Holder has followed the Obama Administration’s support of Wall Street, feeling no obligation to live up to the promises to make that a change from the Bush Administration’s similar lax behavior. The financial sector recognizes a dimension of economic behavior that textbooks politely refrain from citing: the ability to capture regulatory agencies, gain control of the courts and buy control of politics. The Supreme Court has ruled that corporations have the same rights as individuals to contribute to campaigns, a euphemism for buying the loyalty of politicians and judges, and obtaining veto power over regulatory appointees. Corporations pay lower income-tax rates and are free of value-added and excise or other sales taxes paid by consumers. Unlike real people, corporations cannot be sent to jail. Corporate shells shield owners and managers from criminal prosecution for the wholesale frauds that have left Countrywide Financial, Bank of America, Citibank, JP Morgan Chase and other pillars of the banking community free to make civil settlements for deceptive policies without admitting wrongdoing. And whereas individual crooks need to pay their own lawyers, corporations pick up the tab for their managers, while contributing generously to politicians who rewrite the laws to decriminalize fraud and deceptive business dealing. The corporate-backed media applaud politicians who insist that families “take responsibility” for their unemployment risk, debts and health care – while bailouts free the wealthy from having to suffer losses on bad loans. Rhode Island recently rewrote its laws to place bondholders ahead of other creditors, including pension recipients. Under the new law, “city officials who intentionally fail to pay bondholders can be removed from office or held personally liable for the payments.”[4] In contrast to the pro-debtor trend of legislation since the 13th century, wealth at the top of the pyramid takes precedence over retired schoolteachers and other public employees. The effect has been for the city of Central Falls, Rhode Island, to seek Chapter 9 bankruptcy protection to avert a 34 percent cut in pensions to its retirees in order to pay bondholders. Rhode Island is not alone in giving legal priority to bondholders. “Illinois has some of the strongest bondholder protections anywhere, which explains how a state that began its fiscal year with $3.8 billion in unpaid bills from last year – and whose pension system has less than half of the money it needs – is able to keeping selling bonds. State law requires Illinois to make ‘an irrevocable and continuing appropriation’ of tax revenues into a special fund every month that can be used only to pay bondholders.”[5] Chicago has balanced its budget not by taxing finance and real estate gains, but by selling off its roads and other basic infrastructure. Much as in feudal Europe, the leverage is financial. Privatizers are charging tolls and even installing parking meters on the city’s sidewalks to charge cars for parking by the minute. New York City has slashed is public subway and bus service, extending commuting times and making life harder. It has privatized its television and radio, replacing public airtime with commercial advertising. The ending of federal revenue sharing will exacerbate local budget constraints. The fact that many cities and states have constitutional requirements of balanced budgets – just as Republicans advocated for the federal government in the 2011 debt-ceiling agreement – requires that taxes be raised, public services cut, or assets sold off. California’s Proposition 13 prevents the state from raising property taxes in keeping with market prices, tying its hands fiscally and obliging it to commercialize its once-great university system. Students must now take on enormous education debt for what formerly was free or subsidized. New York City’s real estate tax likewise favors large investors and wealthy homeowners, at the expense of co-ops and condominium owners in apartment buildings. The rising rental value that local tax collectors relinquish does not lower housing costs; it merely enables the land’s site value to be paid to bankers. Rising debt-inflated housing prices have priced the city out of the market as the manufacturing center it formerly was. Its textile buildings and other industrial properties have been gentrified, leaving it a one-industry (finance) town focused on Wall Street. At the international level, Irish voters confirmed the policy of taking bad European Central Bank advice to put the interest of bondholders first by taking bad bank loans onto the government’s balance sheet and taxing the population to make up the losses, even at the cost of imposing a generation of debt-strapped depression on their economy. This is the self-destructive road to debt peonage that the IMF and World Bank forced Third World countries to follow for many decades. The fact that this ethic reverses centuries-long social values promises to make the great debate of the 21st century over the issue of which debts are paid and which will not be – and how much debts should be written down. Notes   [1] Mary Williams Walsh, “A County in Alabama Puts Off Bankruptcy,” The New York Times, August 13, 2011. [2] Michael Corkery and Kelly Nolan, “Alabama Bankruptcy Fight Hinges on Sewer-Rate Increase; Impact on Poor Bedevils Deal,” Wall Street Journal, August 11, 2011. [3] Michael Corkery and Michael Aneiro, “Alabama County Rejects Creditor Plan but Delays Bankruptcy Decision,” Wall Street Journal, August 13, 2011. [4] Michael Corkery, “Bondholders Win in Rhode Island,” Wall Street Journal, August 4, 2011. [5] Mary Williams Walsh and Michael Cooper, “Faltering Rhode Island City Tests Vows to Pensioners,” The New York Times, August 13, 2011. The article adds that: “The federal bankruptcy code says pensioners and general-obligation bondholders are both unsecured creditors, stuck at the back of the line and treated as equals. But there is maneuvering room in the welter of state and federal laws.”

ALEC's Lackeys: King and Keith: the Cucking Stool

ALEC's Lackeys: King and Keith

In an attempt to pivot away from the consequences of the budget cuts they insisted upon, Minnesota Republicans want to change the conversation. Last week, Republican legislative leaders held a press conference to announce "Reform 2.0." Currently lacking details, Reform 2.0 is supposed to gather ideas through citizen input, but it's more likely to be warmed over leftovers from the last session. It's a virtual certainty that the Reform 2.0 agenda will look almost exactly like the American Legislative Exchange Council's (ALEC) agenda for "state government reform." The 2010 Republican "reform agenda" was cribbed from ALEC, and 2011 will feature more of the same. And in today's episode of ALEC's Lackeys, we'll look at two of the most "reform-minded" Republican members of the House - Reps. Keith Downey and King Banaian.

The Minnesota GOP's "reform (1.0 and 2.0) agenda" seems to be drawn directly from ALEC's 2011 "State Budget Reform Toolkit" in both word and spirit. If you go line by line through the list of ALEC's "Index of Recommendations," the parallels are striking. The deep, original reform ideas of Rep. Keith Downey are nothing more than rewarmed ALEC boilerplate. The dazzling budgetary wizardry of Rep. King Banaian is cut and pasted from the ALEC playbook.

ALEC Recommendation: The legislature should require each agency to have a mission statement with goals and objectives linked to the state’s core functions of government.
ALEC Recommendation: States should adopt a Budgeting for Outcomes (BFO) approach to bring sanity and fiscal sustainability to the state budget process.

At the top of all Minnesota Republican talk about the budget is a buzzword - "priority-based budgeting." That was the basis for Rep. Banaian's HF2, one of the core priorities of the House GOP.

ALEC Recommendation: States should create a permanent sunset review commission to recommend ways the state can cut costs, reduce waste, and improve efficiency and service levels.

HF2 also included a "sunset commission" that would force all state agencies to appear in front of a panel to justify their existence or be eliminated. This was rolled into SF1047 (the omnibus state government bill) which was eventually vetoed by Governor Dayton.
When you get to "Section IV: Tools to Control Cost and Improve Government Efficiency" in ALEC's toolkit, the similarities with the legislative agenda of Keith Downey are downright eerie.

ALEC Recommendation: Adopt a state hiring freeze encompassing all departments.
ALEC Recommendation: Policymakers should delay automatic pay increases for state employees until the rising costs of government are brought under control.
ALEC Recommendation: Increase the use of privatization and competitive contracting to execute tasks to lower costs and improve the quality of service provided.
ALEC Recommendation: Develop a program (or programs) for state employees to allow them to be rewarded for savings generated by new innovations or re-engineering of existing business practices.

HF4: Mandates a 15% reduction in state workforce by 2015 by using a combination of hiring freezes, furloughs, and early retirement incentives.
HF192: The "Reinventing Government Employment Act" would freeze salaries, benchmark future salaries based on a review process, implement an employee "gainsharing program" where employees who save money get a share of the savings, force state employee units to bid for contracted services against private contractors, and propose a constitutional amendment to make Minnesota a "right to work (for less)" state.

ALEC Recommendation: States should adopt a constitutional revenue or spending limit. Such a limit would impose much needed discipline on profligate spending patterns.
ALEC Recommendation: Pass a balanced budget requirement, mandating that the expenditures included in the budget for the next fiscal year shall not exceed estimated revenues, and create a protected emergency reserve account.

HF1612: Proposes a constitutional amendment limiting spending to the revenue taken in the previous biennium.
HF67: Limits spending in the 2012-13 biennium to forecasted revenues.
Please do go and read the ALEC playbook, erm, "toolkit," if you haven't already. Reform 2.0 will be more of the same. Book it.
Follow me on Twitter @aaronklemz
 

CALL out ALEC members in MN Leg NOW

http://www.facebook.com/event.php?eid=230317733668739

We need your help and voices to fight back against the robbery of our democracy. We've already seen the 

results of the American Legislative Exchange Council (ALEC) in Wisconsin, Michigan, Ohio, and a host of other 

states where ALEC runs the legislature and often the Governorship.  The results have not been pretty.
The American Legislative Exchange Council is responsible for the MN shutdown crisis. This is an organization 

dedicated to (to put it delicately) keeping the rich rich and the corporatocracy going. In other words, stealing 

from those of us on the bottom and ensuring that corporations get legislation enacted to their benefit!  It’s 

a merger of corporations and legislators that masquerades as a “charity," but is involved in enacting precious 

law, drafted and endorsed by corporations in secret. There is nothing educational about it.  ALEC is getting 

more widespread exposure than ever before, as many of the model pieces of legislation have been released 

by a whistleblower.  The right-wing Koch brothers and about 300 right-wing corporations are involved.  The Center 

for Media and Democracy has many great links and information on ALECWatch, including 800 predrafted and 

corporate-approved bills which are then cut-and-pasted to match a particular states prejudice.  Many led to

privatization of important government functions.

See USUncutMN.blogspot.com to discover how they have broken Minnesota State laws on lobbying since 1995. or click the link - http://www.scribd.com/doc/62090619/Campaign-Finance-Decision.

The Minnesota Campaign Finance and Public Disclosure Board has replaced the Ethics Board as the port of call to make our complaints:  http://www.cfboard.state.mn.us/Staff.htm


Email the board:
Registration and Reports: cfb.reports@state.mn.us

Economic Interest Statements: cfb.eis@state.mn.us

General questions or comments: cf.board@state.mn.us

You may also contact the Board as follows:

• By telephone at (651) 296-5148 or toll free (800) 657-3889.
• By TTY by calling (800) 627-3529 and asking for (651) 296-5148.
• By fax to (651) 296-1722 or fax toll free (800) 357-4114.
• By United States mail to:
  
  • Campaign Finance & Public Disclosure Board
    190 Centennial Office Building
    658 Cedar Street
    St. Paul, Minnesota 55155-1603
    
• In person (driving directions and map to the Centennial Building).

We know that Comcast is this session's corporate sponsor, you might ask officials for a total of their contributions, too - that have been officially recorded.  Project Vote Smart always has good information on that issue as well as Follow the Money.

We have identifed many members, have an account of 20 years of ALEC donations to legislators, we have found the ALEC chair hiding her husband's membership fees and travel expenses, are identifying legislation that the "donations" have mandated, and are expecting more information to surface.

We know that the Minnesota ALEC chair for MN is Mary Liffmeyer.  Her phone number is - Mary Kiffmeyer (R), 1-800-920-5875.
And we know about these members being spotted at an ALEC "DO" in Minnesota March 4^th at Bandana Square:

Rep. Matt Dean, Sen. Warren Limmer (32 – Maple Grove) W 651-296-2159 H 763-493-9646, Sen. Gen Olson

The following are admitted ALEC members in Minnesota; (some 37 others are listed but maybe someone paid their membership . and that would prove very interesting, eh?)
Sen. John Sterling Howe (R) 651 296 4264, (c) 651 278 4693
Rep. Mike Benson (R) 651 296 4378, (h) 507 993 1250
Rep. Joyce Peppin (R) 651 296 7806 (h) 763 428 4626

Name	Office	ALEC Task Force
Carol McFarlane	Minnesota Representative	Education  651 296-3135
Chris Gerlach	Minnesota Senator	Commerce, Insurance, and Economic Development Task Force  651 296 4120 (majority whip)  651 296 4120
Michael L. Beard	Minnesota Representative	Commerce, Insurance, and Economic Development Task Force  651 296 5377
Gen Olson	Minnesota Senator	Education  W651 296-1282 H952-472-3306
Pat Garofalo	Minnesota Representative	Education  651 296 1069
Sondra L. Erickson	Minnesota Representative	Education  ) 651 296 6746
Gretchen Hoffman	Minnesota Senator	HHS  651 296 6746
Paul Anderson	Minnesota Representative	HHS  651 296 4317 (h) 320 239 2726
Mary Kiffmeyer	Minnesota Representative	International Relations Task Force (see above)
Matt Dean	Minnesota Representative	International Relations Task Force 651 296 3018
Roger C. Chamberlain	Minnesota Senator	Public Safety and Elections Task Force 651 296 1253
Ron Shimanski	Minnesota Representative	Public Safety and Elections Task 651 296 1534, (h) 320 0112
Ted Daley	Minnesota Senator	Public Safety and Elections Task Force  651 296 2907 (h) 763 784 8822ce
Linda Runbeck	Minnesota Representative	Tax and Fiscal Policy Task Force  651 296 2907 (h) 763 784 8822
Pam Myhra	Minnesota Representative	Tax and Fiscal Policy Task Force  651 296 2907
Bruce D. Anderson	Minnesota Representative	Telecommunications and IT Task Force 651-296 5063
Connie Doepke	Minnesota Representative	Telecommunications and IT Task Force  651 296 4315
Mike Parry	Minnesota Senator	Telecommunications and IT Task Force- 651 296 9457
Steve Drazkowski	Minnesota Representative	Civil Justice  ) 651 296 2273, (h) 507 843 3711

Notice any pattern? Kind of contradicts ALEC's claim to be bi-partisan.   We would "guess" the following are also members: Kurt Zellers, Amy Koch, Geoff Michel, maybe Tony Sutton himself. How about Abeler, Hann? Garofalo?

(1) Pick up the phone one and call.  (2) IF you're unable to reach your chosen ALEC member immediately, wait a few minutes or hours & try again.  (3) BE POLITE! BE POLITE! BE POLITE!  (4) Instead of attempting to change the mind of the person picking up the phone just employ a SIMPLE message:

"Stop threatening the future economic health of the people of Minnesota by refusing to tax the rich."
"I think the health of Minnesotans comes before politics"
"This country was built on compromise, STOP being an obstructionist & do the j-o-b voters elected you to do. Fulfill your oath of office. Represent the citizens not the corporations and the rich."
"Driving the CHILDREN, the poor, the disabled, veterans, students, seniors off a financial cliff in order to WIN a victory against Mark Dayton and the citizens is UNACCEPTABLE & WRONG."

“Next election you are gone.”

A rant against ALEC&Co by USuncut Minnesota on Shutdown day:  http://www.youtube.com/wat​ch?v=RiqBuTRMsvI&feature=f​eedf
POST SHUTDOWN action against ALEC:   http://www.youtube.com/watch?v=rmNU3SumcN8

And how about the MN corporate sponsors ? We need to call out Cargill and other companies eventually, too.

They want to gut our State and our resources as quickly - and as cheaply - as they possibly can. Graft is at new heights in Minnesota. And who is hurt in the process matters not one whit to them. I have posted on ALEC abuse at www.USuncutMN.blogspot.com for months - and it's easy to subscribe.

Write and ASK your legislators - are YOU in ALEC? Did you use taxpayer money to go to the events? Are you ever ashamed of your greed and politicking when ALEC policies hurt REAL people?  Ask your DFL legislators why they say NOTHING about this when they know what is up.  It is important to realize that these ALEC "folks" caused and will continue to aggravate trauma and hardship for THOUSANDS of Minnesotans – particularly CHILDREN who don’t vote. They should all be RECALLED. Besides the lobbying money and perk$ they've taken, most accepted salaries during the shutdown. They do NOT pay tax on campaign funds, although we think that is INCOME. They stole democracy in our State -- and are aligned w/members probably in YOUR state.

Now it is up to us, We the People, to defeat them and their puppets as the media and politicos seem intent to play scared and not confront the real problem - a very deeply entrenched Conservative agenda in America's State houses.

Tweet this !! Like this!! Share this!! It's up to US. Boycott Koch products!!

Don’t let ALEC members get relelected.
Write the media and ask why they don't cover this important story.   #MNrecallGOP
MN statute to recall MN ALEC members:  https://www.revisor.mn.gov/statutes/?id=211c&view=chapter

USuncutMN@gmail.com                Facebook US Uncut Minnesota                  twitter: USuncutMN

See also:  http://paper.li/USuncutMN/1312728764#