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	The New Gilded Age by Robert Reich Goldman School of Public Policy - Berkeley USA   The election of 2012 raises two perplexing questions. The first is how the GOP could put up someone for president who so brazenly epitomizes the excesses of casino capitalism that have nearly destroyed the economy and overwhelmed our democracy. The second is why the Democrats have failed to point this out. The White House has criticized Mitt Romney for his years at the helm of Bain Capital, pointing to a deal that led to the bankruptcy of GS Technologies, a Bain investment in Kansas City that went belly up in 2001 at the cost of 750 jobs. But the White House hasn’t connected Romney’s Bain to the larger scourge of casino capitalism.   Not surprisingly, its criticism has quickly degenerated into a “he said, she said” feud over what proportion of the companies that Bain bought and loaded up with debt subsequently went broke (it’s about 20 percent), and how many people lost their jobs relative to how many jobs were added because of Bain’s financial maneuvers (that depends on when you start and stop the clock).   But the real issue here isn’t Bain’s betting record. It’s that Romney’s Bain is part of the same system as Jamie Dimon’s JPMorgan Chase, Jon Corzine’s MF Global and Lloyd Blankfein’s Goldman Sachs—a system that has turned much of the economy into a betting parlor that nearly imploded in 2008, destroying millions of jobs and devastating household incomes. The winners in this system are top Wall Street executives and traders, private-equity managers and hedge-fund moguls, and the losers are most of the rest of us.   The system is largely responsible for the greatest concentration of the nation’s income and wealth at the very top since the Gilded Age of the nineteenth century, with the richest 400 Americans owning as much as the bottom 150 million put together. And these multimillionaires and billionaires are now actively buying the 2012 election—and with it, American democracy.   The biggest players in this system have, like Romney, made their profits placing big bets with other people’s money. If the bets go well, the players make out like bandits. If they go badly, the burden lands on average workers and taxpayers.   The 750 people at GS Technologies who lost their jobs thanks to a bad deal engineered by Romney’s Bain were a small foreshadowing of the 15 million who lost jobs after the cumulative dealmaking of the entire financial sector pushed the whole economy off a cliff. Connect the dots of casino capitalism, and you get Mitt Romney. The fortunes raked in by financial dealmakers depend on special goodies baked into the tax code such as “carried interest,” which allows Romney and other partners in private-equity firms (as well as in many venture-capital and hedge funds) to treat their incomes as capital gains taxed at a maximum of 15 percent.   This is how Mr.Romney managed to pay an average of 14 percent on more than $42 million of combined income in 2010 and 2011. But the carried-interest loophole makes no economic sense. Conservatives try to justify the tax code’s generous preference for capital gains as a reward to risk-takers—but Romney and other private-equity partners risk little, if any, of their personal wealth. They mostly bet with other investors’ money, including the pension savings of average working people.   Another goodie allows private-equity partners to sock away almost any amount of their earnings into a tax-deferred IRA, while the rest of us are limited to a few thousand dollars a year. The partners can merely low-ball the value of whatever portion of their investment partnership they put away—even valuing it at zero—because the tax code considers a partnership interest to have value only in the future. This explains how Romney’s IRA is worth as much as $101 million. The tax code further subsidizes private equity and much of the rest of the financial sector by making interest on debt tax-deductible, while taxing profits and dividends.   This creates huge incentives for financiers to find ways of substituting debt for equity and is a major reason America’s biggest banks have leveraged America to the hilt. It’s also why Romney’s Bain and other private-equity partnerships have done the same to the companies they buy.   These maneuvers shift all the economic risk to debtors, who sometimes can’t repay what they owe. That’s rarely a problem for the financiers who engineer the deals; they’re sufficiently diversified to withstand some losses, or they’ve already taken their profits and moved on. But piles of debt play havoc with the lives of real people in the real economy when the companies they work for can’t meet their payments, or the banks they rely on stop lending money, or the contractors they depend on go broke—often with the result that they can’t meet their own debt payments and lose their homes, cars and savings.   It took more than a decade for America to recover from the Great Crash of 1929 after the financial sector had gorged itself on debt, and it’s taking years to recover from the more limited but still terrible crash of 2008. The same kinds of convulsions have occurred on a smaller scale at a host of companies since the go-go years of the 1980s, when private-equity firms like Bain began doing leveraged buyouts—taking over a target company, loading it up with debt, using the tax deduction that comes with the debt to boost the target company’s profits, cutting payrolls and then reselling the company at a higher price.   Sometimes these maneuvers work, sometimes they end in disaster; but they always generate giant rewards for the dealmakers while shifting the risk to workers and taxpayers.   By the time Romney co-founded Bain Capital in 1984, financial wheeling and dealing was the most lucrative part of the economy, sucking into its Gordon Gekko–like maw the brightest and most ambitious MBAs, who wanted nothing more than to make huge amounts of money as quickly as possible. Between the mid-1980s and 2007, financial-sector earnings made up two-thirds of all the growth in incomes. At the same time, wages for most Americans stagnated as employers, under mounting pressure from Wall Street and private-equity firms like Bain, slashed payrolls and shipped jobs overseas.   The 2008 crash only briefly interrupted the bonanza. Last year, according to a recent Bloomberg Markets analysis, America’s top fifty financial CEOs got a 20.4 percent pay hike, even as the wages of most Americans continued to drop.   * * *   We’ve entered a new Gilded Age, of which Mitt Romney is the perfect reflection. The original Gilded Age was a time of buoyant rich men with flashy white teeth, raging wealth and a measured disdain for anyone lacking those attributes, which was just about everyone else. Romney looks and acts the part perfectly, offhandedly challenging a GOP primary opponent to a $10,000 bet and referring to his wife’s several Cadillacs. Four years ago he paid $12 million for his fourth home, a 3,000-square-foot villa in La Jolla, California, with vaulted ceilings, five bathrooms, a pool, a Jacuzzi and unobstructed views of the Pacific. Romney has filed plans to tear it down and replace it with a home four times bigger.   We’ve had wealthy presidents before, but they have been traitors to their class—Teddy Roosevelt storming against the “malefactors of great wealth” and busting up the trusts, Franklin Roosevelt railing against the “economic royalists” and raising their taxes, John F. Kennedy appealing to the conscience of the nation to conquer poverty. Romney is the opposite: he wants to do everything he can to make the superwealthy even wealthier and the poor even poorer, and he justifies it all with a thinly veiled social Darwinism.   Not incidentally, social Darwinism was also the reigning philosophy of the original Gilded Age, propounded in America more than a century ago by William Graham Sumner, a professor of political and social science at Yale, who twisted Charles Darwin’s insights into a theory to justify the brazen inequality of that era: survival of the fittest.   Romney uses the same logic when he accuses President Obama of creating an “entitlement society” simply because millions of desperate Americans have been forced to accept food stamps and unemployment insurance, or when he opines that government should not help distressed homeowners but instead let the market “hit the bottom,” or enthuses over a House Republican budget that would cut $3.3 trillion from low-income programs over the next decade. It’s survival of the fittest all over again. Sumner, too, warned against handouts to people he termed “negligent, shiftless, inefficient, silly, and imprudent.”   When Romney simultaneously proposes to cut the taxes of households earning over $1 million by an average of $295,874 a year (according to an analysis of his proposals by the nonpartisan Tax Policy Center) because the rich are, allegedly, “job creators,” he mimics Sumner’s view that “millionaires are a product of natural selection, acting on the whole body of men to pick out those who can meet the requirement of certain work to be done.” In truth, the whole of Republican trickle-down economics is nothing but repotted social Darwinism.   The Gilded Age was also the last time America came close to becoming a plutocracy—a system of government of, by and for the wealthy. It was an era when the lackeys of the very rich literally put sacks of money on the desks of pliant legislators, senators bore the nicknames of the giant companies whose interests they served (“the senator from Standard Oil”), and the kings of finance decided how the American economy would function.   The potential of great wealth in the hands of a relative few to undermine democratic institutions was a continuing concern in the nineteenth century as railroad, oil and financial magnates accumulated power. “Wealth, like suffrage, must be considerably distributed, to support a democratick republic,” wrote Virginia Congressman John Taylor as early as 1814, “and hence, whatever draws a considerable proportion of either into a few hands, will destroy it. As power follows wealth, the majority must have wealth or lose power.” Decades later, progressives like Louis Brandeis saw the choice starkly: “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”   The reforms of the Progressive Era at the turn of the twentieth century saved American democracy from the robber barons, but the political power of great wealth has now resurfaced with a vengeance. And here again, Romney is the poster boy. Congress has so far failed to close the absurd carried-interest tax loophole, for example, because of generous donations by Bain Capital and other private-equity partners to both parties.   * * *   In the 2012 election, Romney wants everything Wall Street has to offer, and Wall Street seems quite happy to give it to him. Not only is he promising lower taxes in return for its money; he also vows that, if elected, he’ll repeal what’s left of the Dodd-Frank financial reform bill, Washington’s frail attempt to prevent the Street from repeating its 2008 pump-and-dump. Unlike previous elections, in which the Street hedged its bets by donating to both parties, it’s now putting most of its money behind Romney. And courtesy of a Supreme Court majority that seems intent on magnifying the political power of today’s robber barons, that’s a lot of dough. As of May, thirty-one billionaires had contributed between $50,000 and $2 million each to Romney’s super-PAC, and in June another—appropriately enough, a casino magnate—gave $10 million, with a promise of $90 million more. Among those who have contributed at least $1 million are former associates from Romney’s days at Bain Capital and prominent hedge-fund managers.   To be sure, Romney is no worse than any other casino capitalist of this new Gilded Age. All have been making big bets—collecting large sums when they pay off and imposing the risks and costs on the rest of us when they don’t. Many have justified their growing wealth, along with the growing impoverishment of much of the rest of the nation, with beliefs strikingly similar to social Darwinism. And a significant number have transformed their winnings into the clout needed to protect the unrestrained betting and tax preferences that have fueled their fortunes, and to lower their tax rates even further. Wall Street has already all but eviscerated the Dodd-Frank Act, and it has even turned the so-called Volcker Rule—a watered-down version of the old Glass-Steagall Act, which established a firewall between commercial and investment banking—into a Swiss cheese of loopholes and exemptions.   But Romney is the only casino capitalist who is running for president, at the very time in our nation’s history when these views and practices are a clear and present danger to the well-being of the rest of us—just as they were more than a century ago. Romney says he’s a job-creating businessman, but in truth he’s just another financial dealmaker in the age of the financial deal, a fat cat in an era of excessively corpulent felines, a plutocrat in this new epoch of plutocrats. That the GOP has made him its standard-bearer at this point in American history is astonishing.   It’s not as if Americans harbor great admiration for financial dealmakers. According to the newly released twenty-fifth annual Pew Research Center poll on core values, nearly three-quarters of Americans believe “Wall Street only cares about making money for itself.” That’s not surprising, given that many are still bearing the scars of 2008. Nor are they pleased with the concentration of income and wealth at the top. Polls show a majority of Americans want taxes raised on the very rich, and a majority are opposed to the bailouts, subsidies and special tax breaks with which the wealthy have padded their nests.   Part of the answer, surely, is that elected Democrats are still almost as beholden to the wealthy for campaign funds as the Republicans, and don’t want to bite the hand that feeds them. Wall Street can give most of its largesse to Romney this year and still have enough left over to tame many influential Democrats (look at the outcry from some of them when the White House took on Bain Capital). But I suspect a deeper reason for their reticence is that if they connect the dots and reveal Romney for what he is—the epitome of what’s fundamentally wrong with our economy—they’ll be admitting how serious our economic problems really are. They would have to acknowledge that the economic catastrophe that continues to cause us so much suffering is, at its root, a product of the gross inequality of income, wealth and political power in America’s new Gilded Age, as well as the perverse incentives of casino capitalism.   Yet this admission would require that they propose ways of reversing these trends—proposals large and bold enough to do the job. Time will tell whether today’s Democratic Party and this White House have the courage and imagination to do it. If they do not, that in itself poses almost as great a challenge to the future of the nation as does Mitt Romney and all he represents.   * Robert B. Reich, is Chancellor’s Professor of Public Policy at the University of California, Berkeley. Watch a video of Professor Reich discussing the struggle between regressive and progressive groups in America:   http://www.huffingtonpost.com/robert-reich/political-battle-2012_b_1665888.html Visit the related web page
	Southeast Asian leaders: make your landmark human rights declaration more inclusive by Forum Asia & agencies   November 2012   UN rights chief to Southeast Asian leaders: make your landmark human rights declaration more inclusive.   The top United Nations human rights official today called leaders of the Association of Southeast Asian Nations (ASEAN) to review their efforts to produce the region’s first ever human rights declaration, saying there had been insufficient input from civil society and other stakeholders in the document’s drafting.   “This is not the hallmark of the democratic global governance to which ASEAN aspires, and it will only serve to undermine the respect and ownership that such an important declaration deserves,” the UN High Commissioner for Human Rights, Navi Pillay, said at the 5th Annual Bali Democracy Forum in Indonesia, where ASEAN leaders are among representatives of more than 80 governments and international organizations meeting to discuss promotion of democratic practices.   In expressing her concerns, Ms. Pillay noted that “inadequate involvement of civil society and other stakeholders” had prompted similar reservations “even among some members of the ASEAN institutions,” according to a news release from the Geneva-based Office of the UN High Commissioner for Human Rights (OHCHR).   She highlighted that blanket restrictions in the draft that were “not part of international human rights law,” the release noted, though she also welcomed the inclusion of many fundamental rights.   The declaration is one of the key mandates of the ASEAN Intergovernmental Commission on Human Rights (AICHR), which the association of 10 member states created in 2009, saying it was intended to “promote and protect human rights and fundamental freedom” of the 600 million people within their borders. The declaration, according to OHCHR, is due to be adopted at the ASEAN Summit in the Cambodian capital of Phnom Penh later this month.   In addition to using her remarks in Bali to commend ASEAN’s efforts to strengthen democracy and the rule of law through the creation of AICHR, Ms. Pillay said that “it is very important that the new ASEAN declaration complements and does not undermine international standards.”   “I urge the governments of the region to take the necessary time to develop a Declaration that fully conforms with international human rights standards and is framed with the participation of all key stakeholders,” she said.   According to OHCHR, Ms. Pillay said the “energy and contributions” of all key stakeholders should be additionally harnessed for building ASEAN’s new human rights mechanisms. “This has been the key to success for similar mechanisms in all other regions of the world,” she noted.   The High Commissioner also used her address to welcome the emergence of the Bali Democracy Forum as an “important” platform for the promotion of good governance, the rule of law and human rights in the region.   “The Bali Democracy Forum is particularly relevant at this time when a new wave of democratic aspirations and change is sweeping different parts of the world,” the human rights chief said. “Intergovernmental regional gatherings like this one can provide effective and relevant platforms for bringing stakeholders together – but it is crucial that mechanisms exist for broad and meaningful consultations with civil society.”   http://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=12796&LangID=E http://www.un.org/apps/news/story.asp?NewsID=43446&Cr=human+rights&Cr1=#.UKLZcmdafL0   July 2012   ASEAN, Human rights & AICHR.   We, the undersigned civil society organizations and networks from Southeast Asia, express our grave concern and disappointment over the continuing secrecy in the drafting process of the ASEAN Human Rights Declaration (AHRD).   The ASEAN Intergovernmental Commission on Human Rights (AICHR) is mandated under Article 4.2 of its Terms of Reference to develop an ASEAN Human Right Declaration with a view to establishing a framework for human rights cooperation through various ASEAN conventions and other instruments dealing with human rights. At the 6th meeting of the AICHR in Vientiane on 28 June – 2 July 2011, a Drafting Group was officially established by the AICHR to prepare a draft of the ASEAN Human Rights Declaration. In January 2012, the Drafting Group submitted to the ASEAN Inter-governmental Commission on Human Rights (AICHR) a draft AHRD for deliberation and debate.   To this date, the draft AHRD remains confidential while the public has been excluded from any meaningful participation in the drafting process. There has not been any substantive and broad-based regional consultation with the peoples in the region on the draft AHRD.   While we commend the representatives of the AICHR from Thailand, Indonesia, Malaysia and the Philippines for holding consultation with their civil society at national level, we are disturbed that no such initiative has taken place in the rest of the ASEAN countries.   If ASEAN’s aspiration to be “People-Oriented” is to be achieved, the AICHR that is tasked to defend the fundamental freedoms of the peoples in the region must set a good example in ensuring meaningful and substantive consultation and people’s participation in the drafting of the historic AHRD.   We therefore strongly urge the AICHR to heed the recommendation of the United Nations High Commissioner for Human Rights, Navi Pillay, that “no discussion of human rights can be complete or credible without significant input from civil society and national human rights institutions” and immediately begin dialogues and consultations with civil society organizations on the AHRD.   We further call upon AICHR to implement the following steps to ensure that the drafting process of the ASEAN Human Rights Declaration will be credible, inclusive, transparent, reflective and consistent with universal human rights standards:   1) To immediately publicize the draft AHRD so that the public can meaningfully participate in the drafting process. Consultations will remain meaningless if the draft declaration is kept confidential and out of reach of the peoples.   2) AICHR representatives who are already conducting national consultations in their respective countries must continue to do so, and ensure that these consultations are held nation-wide and in an inclusive and more regular manner. They should further encourage other AICHR representatives that have not taken such initiatives to do the same. The AICHR should also conduct consultations both at national and regional levels, especially if national consultations are not applicable yet in particular places.   3) To translate the draft AHRD into national languages and other local languages of the ASEAN countries in order to encourage broader public participation in the region.   4) To ensure that consultation meetings of the AICHR will be inclusive of all stakeholders, especially civil society organizations and national human rights institutions.   Until and unless the AICHR consults and engages with all stakeholders in a transparent, meaningful and substantive manner, the AICHR should postpone its submission of the final draft of AHRD to the AESAN Ministerial Meeting (AMM), which is scheduled to take place in July 2012.   This call is made to public as wide as possible in the ten countries of ASEAN and is endorsed by different sectors of civil society organizations such as youth organizations, women’s organizations, child rights organizations, migrant workers network organizations, labour unions, farmers organzitions, environmental organizations, human rights organizations, development organizations and some academic institutions.   The joint statement is also translated into ASEAN major languages, Burmese, Bahasa-Indonesian, Bahasa-Malay, Khmer, Lao, Thai and Vietnamese to indicate our commitment to promote the basic human rights of the people that they are entitled to receive information and awareness about ASEAN and its works.   http://www.forum-asia.org/?p=12451   ASEAN Declaration on Human Rights. (Human Rights Watch)   In July, the ASEAN foreign ministers meeting in Phnom Penh will receive one of the most important documents drafted since the adoption five years ago of the ASEAN Charter. The ASEAN Declaration on Human Rights supposedly rings in a “new ASEAN” that is “people-oriented” with popular participation at its core.   Yet when the declaration, known as the ADHR, reaches the ministers, odds are that few citizens of ASEAN member countries will have ever heard of it, no meaningful public participation will have taken place about it and its contents may well call into question whether ASEAN and its members are prepared to abide by universal human rights standards.   *Phil Robertson is Deputy Asia Director of Human Rights Watch. http://www.hrw.org/news/2012/04/26/asean-s-road-nowhere   Southeast Asian Press Alliance news release:   http://www.crin.org/resources/infoDetail.asp?ID=28993&flag=news   International Commission of Jurists: http://documents.icj.org/FINAL_ASEAN_Letter_to_AMM_with_LOGOS.pdf Visit the related web page
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