In Sickness and in Wealth

I agree with Elliot Spitzer when he asks the all important question of: "... why we have socialized the risk of failure but allowed the rewards of success to remain private."

The debate about bank bailouts and health care is missing a critical piece of context: The American economy hasn't been working for the working- and middle class for decades. It is impossible to determine who should pay for what or whether it is "fair" to ask the wealthy to contribute more to the health care of those who are uninsured, without better understanding the winners and losers in the U.S. economy over the past several decades.

One of the great accomplishments of the American economy, or at least the mythology so claims, is the creation of an enormous middle class after World War II. Americans all shared in the wealth generated by the most dynamic economy the world had ever seen. At one end of the economic spectrum, we reduced the number of people living in poverty, while at the other end, we applauded those whose work benefited the entire economy.

Between 1947 and 1967, this was a somewhat accurate image, as the distribution of income made the population look more and more like a bell curve with each passing year. Yet since 1967, this story has reversed course. For more than 40 years, income has been distributed less equitably. As we consider the policy remedies to crises that are of immediate impact—such as the crisis in health care or in our financial system—it is critical to understand the larger arc of this socioeconomic narrative. How we think of distributing the costs of reform should be informed by this larger story.

It's no secret that the rich keep getting richer, while the rest of us struggle to keep the bills paid. It's one of the reasons the public is so ready for true health care reform. Unfortunately, it doesn't appear we are going to get it.

Before 1987, it might have been reasonable to argue that overall income growth was softening the effects of rising inequality. But since then, the rate of overall growth for all but the top quintile has slowed dramatically, with the lowest quintile seeing its income grow by only 7.8 percent in the last two decades, while income for the top quintile grew by 28 percent. And looking at after-tax income, which factors in the impact of favorable tax policy for the rich, the numbers are even starker: Between 1979 and 2004, the top 1 percent of all earners saw their income grow by an astounding 176 percent.

So what does this have to do with the current health care debate?

It points to the justification for asking the wealthy to step up to the plate and give a little back!

The outcry over Wall Street salaries and bonuses is more understandable when you realize that, over the last 40 years, there has been an inexorable shift of wealth and income toward the upper end of the income spectrum. With the return to profitability of many of the institutions that needed bailouts, taxpayers are wondering why we have socialized the risk of failure but allowed the rewards of success to remain private. Where is the public's fair payback for playing banker to the bankers?

But the significance of this 40-year cycle of income distribution may be playing out most clearly in the context of health care. One of the current debates is how to pay for the costs of expanded access to health insurance. A restructuring of the system will save some money, but more will be needed, and one proposal is to get it from a higher tax on the upper strata of income earners. Given income distribution trends over the past four decades, it is difficult not to support asking wealthier Americans for some help in closing the gap in our effort to give all Americans health insurance.

Sounds like a good idea to me.

Bernard Madoff Gets Maximum Sentence

Mega-swindler Bernie Madoff will have 150 years to think about his crime, as U.S. District Judge Denny Chin issued the maximum sentence to the 71-year-old defendant.

Historic swindler Bernard Madoff was sentenced to 150 years in prison Monday for a fraud so extensive that the judge said he needed to send a symbolic message to potential imitators and to victims who demanded harsh punishment.

Scattered applause and whoops broke out in the crowded Manhattan courtroom after U.S. District Judge Denny Chin issued the maximum sentence to the 71-year-old defendant, who said he lives "in a tormented state now, knowing all the pain and suffering I've created."

Chin rejected a request by Madoff's lawyer for leniency and said he disagreed that victims of the fraud were seeking mob vengeance.

"Here the message must be sent that Mr. Madoff's crimes were extraordinarily evil and that this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll," Chin said.

The judge said the estimate that Madoff has cost his victims more than $13 billion was conservative because it did not include money from feeder funds.

"Objectively speaking, the fraud here was staggering," he said.

Finally there is some justice for those who have suffered due to Madoff's actions.

"Life has been a living hell. It feels like the nightmare we can't wake from," said Carla Hirshhorn.

"He stole from the rich. He stole from the poor. He stole from the in between. He had no values," said Tom Fitzmaurice. "He cheated his victims out of their money so he and his wife Ruth could live a life of luxury beyond belief."

Dominic Ambrosino called it an "indescribably heinous crime" and urged a long prison sentence so "will know he is imprisoned in much the same way he imprisoned us and others."

He added: "In a sense, I would like somebody in the court today to tell me how long is my sentence."

I truly hope others who might have been tempted to follow in Madoff's greedy footsteps will now think again. What he did was unconscionable, and it's only fitting that he live the rest of his life in prison.

Violence: Connecting the Dots

Francie Billotti-Wood and her three children are dead. So is her husband, Christopher Wood. This is a tragedy that never should have happened.

Despondent over excessive debts, Christopher Wood shot and then nearly decapitated his family before turning a gun on himself.

The man who killed his wife and three young children and then himself in a tiny town in northwest Maryland last week was at least $460,000 in debt and owned a Florida house that was in foreclosure, according to property records and police.

In one of six notes he left scattered about the rented house in Middletown, Christopher Wood, 34, described his financial hardships and his struggle with depression and anxiety -- factors that investigators believe contributed to the killings. [...]

At a news conference, authorities released a raft of details about the killings, describing a scene more ghastly than what had been known since the bodies were discovered Saturday morning.

According to investigators, Francie Billotti-Wood, 33, and the couple's 5-year-old son, Chandler, were each shot twice in the head with a .25-caliber handgun. Chandler's younger brother, 4-year-old Gavin, was shot three times; daughter Fiona, 2, was shot once.

After they were shot, their throats were slashed almost to the point of decapitation, officials said. Wood killed himself with a shotgun. [...]

Several experts said slayings of entire families by fathers and husbands are often associated with economic hardship. Some men get to the point where it becomes impossible to tell family members that they're going to lose the house or that the kids can't go to college, said Richard J. Gelles, dean of the University of Pennsylvania School of Social Policy and Practice and an expert on family violence.

"If you have built your identity around that you're the breadwinner, you're the backbone, and that becomes unglued, it undermines your sense of self," Gelles said.

Regular readers know that when tragedies like this happen I often suggest the man simply kill himself and leave his family alone. If a man is so unhappy (for whatever reason) and he sees no way out, why does his family have to pay such a high price?

The particulars of this case point to the need for change in at least three areas:

1) We MUST have affordable and readily available mental health care in this country. People under this much stress need help.

2) We MUST change our culture to embrace feminism. Rigidly defined roles contributed to why Christopher Wood must have felt he could not admit to his family his "failure" to provide for them.

3) We MUST change the culture of greed that fueled our current economic meltdown. Greed on the part of CEO's, bankers, and Wall Street investors whose actions have this country on the brink of another great depression.

This may seem oversimplified, but we must start somewhere to end violence against women and children.

Have You No Shame, Sir

Congress is moving as quickly as it can to recoup some, or all, of the $165 million paid out in bonuses to AIG executives. The behavior of these individuals is truly shameless.

Senate Majority Leader Harry M. Reid (Nev.) said Finance Committee Chairman Max Baucus (Mont.) would unveil a proposal by tomorrow that would tax up to 98 percent of the bonus money. "That will certainly send a message to the people at AIG and all others who try to benefit from the hardships the American people face," Reid said.

In the House, Reps. Steve Israel (N.Y.) and Tim Ryan (Ohio) introduced the "Bailout Bonus Tax Bracket Act" to create a 100 percent tax on bonuses over $100,000 that are distributed to employees of financial firms receiving federal bailout funds. Currently, the IRS withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million dollars. The Israel-Ryan proposal would apply to all bonuses to government-supported firms such as AIG that have been given since Jan. 1.

The congressional efforts come as New York Attorney General Andrew M. Cuomo announced that at least 73 employees of AIG's Financial Products unit -- the London-based division of the insurance giant that sold the high-risk derivatives blamed for the company's near-collapse -- got bonuses of at least $1 million. He sent AIG subpoenas yesterday seeking data on who received the bonuses and the justification for them.

I like the House plan. Why not tax at 100% BONUS money going to incompetent executives? If they want to receive their bonuses, then get off the Corporate Welfare train. Many of these same individuals have no problem attacking the truly poor who receive benefits.

The bonuses, guaranteed through employment contracts that had been made public to the government earlier and paid out on Friday, were offered as a way to lure or keep top talent to help sort out the financial situation at AIG, officials there said. But when news of the payments surfaced in recent days, lawmakers turned to the Obama administration, demanding that the U.S. Treasury attempt to claw back some of the money.

WHAT "top talent"?? You mean the people who got their company INTO this mess? It's time to clean house.

On Monday Sen. Charles Grassley had a suggestion for top AIG executives:

A prominent U.S. senator gibed that executives of the troubled insurer American International Group Inc might consider suicide, adopting what he called a Japanese approach to taking responsibility for their actions.

Senator Charles Grassley, the top Republican on the Senate Finance Committee, made the comments Monday in an interview with a radio station in his home state of Iowa.

"The first thing that would make me feel a little bit better toward them (is) if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide," Grassley said.

That might be a bit drastic, but I can certainly appreciate Grassley's anger.

Backtracking on his earlier comments, Grassley had this to say today:

"What I'm expressing here, obviously, is not that I want people to commit suicide," Grassley said on Tuesday. "But I do feel very strongly that we have not had statements of apology, statements of remorse, statements of contrition on the part of CEOs of manufacturing companies or banks or financial services or insurance companies that are asking for bailouts, that they understand that they are responsible for running their corporation into the ground."

WAR: good for profiteers, bad for everyone else

Greedy war profiteers are poised to further line their pockets as they launch a new campaign to push the United States into war with Iran. A new advocacy group, Freedom's Watch, will sponsor a private forum of "20 experts on radical Islam" that is expected to make the case that Iran poses a direct threat to the security of the United States. The alleged "experts" have close ties to the White House.

Freedom’s Watch, a deep-pocketed conservative group led by two former senior White House officials, made an audacious debut in late August when it began a $15 million advertising campaign designed to maintain Congressional support for President Bush’s troop increase in Iraq.

Founded this summer by a dozen wealthy conservatives, the nonprofit group is set apart from most advocacy groups by the immense wealth of its core group of benefactors, its intention to far outspend its rivals and its ambition to pursue a wide-ranging agenda. Its next target: Iran policy.

The organization formed in response to MoveOn.org. Since the group is organized as a tax-exempt organization, it doesn't have to reveal its donors -- but clearly a few dozen conservative CEO's with very deep pockets think their point of view should trump the point of view of more than 3.3 million MoveOn.com members

For years, the group’s founders lamented MoveOn’s growing influence, derived in large part from its grass-roots efforts, especially on the debate about the Iraq war. “A bunch of us activists kept watching MoveOn and its attacks on the war, and it just got to be obnoxious,” said Mr. Sembler, a friend of Vice President Dick Cheney.

So a war started on the basis of a lie isn't "obnoxious" -- but bringing it to the public's attention is! I guess if you are going to make money on the backs of our fighting men and women, it would make sense to try and extend the war for as long as possible.

[The group] denies coordinating its activities with the White House, although many of its donors and organizers are well connected to the administration, including Ari Fleischer, the former White House press secretary.

Bradley Blakeman, the president of Freedom’s Watch, is a former deputy assistant to Mr. Bush.

Mr. Blakeman denied the accusation that Freedom’s Watch is a White House front group. “I don’t need their help,” he said of his former colleagues at the White House. “I don’t seek their help. And they don’t offer it.” Mr. Blakeman is a long-time friend of Ed Gillespie, the new counselor to Mr. Bush who succeeded Dan Bartlett. Mr. Blakeman said that he spoke frequently with Mr. Gillespie, but that they were careful not to discuss the activities of Freedom’s Watch.

And neo-con Republicans have the nerve to call Democrates "elite." They invented the term!

So there you have it. A small number of billionaires are planning to buy enough television and advertising time to try and "sell" the American public on going to war with Iran. And why? Not because there is any imminent threat from Iran, but because it's good for business to keep this country at war.

The president said this week he will veto the State Children's Health Insurance Program (SCHIP), because Congress raised the total amount from about $5 billion to $12 billion annually for the next five years. It's okay to bloat the pentagon budget, but funding for health care for children is excessive.

And while we are on the topic of money, Bush did sign a bill to prevent a government shutdown, but not without taking a jab at Congressional Democrats.

"Congress failed in its most basic responsibility," the president said in his weekly radio address.

The bills are tied up because Democrats want to add $23 billion for domestic programs to Bush's $933 billion request for the approximately one-third of the federal budget funded by the yearly spending bills. Bush has threatened vetoes on most of the bills, eager to re-establish his party's reputation as the place to go for fiscal discipline.

The president said Democrats are planning the "biggest tax increase in American history" to pay for the new spending.

"Earlier this year congressional leaders promised to show that they could be responsible with the people's money," he said. "Unfortunately they seem to have chosen the path of higher spending."

Democrats say their spending add-ons are relatively modest given the overall size of the budget and in comparison with Bush's pending $189 billion request for Pentagon operations in Iraq and Afghanistan in 2008. And most of the additional money, Democrats say, simply restores cuts proposed by Bush to popular programs such as community development grants, health research and anti-crime initiatives.

So here it is folks ... Congress is out of control ... and only the President can reign in their irresponsible spending habits. AND, he will have assistance selling his new profit-making venture -- war with Iran -- with the help of a few billionaires.

Good grief!