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Posts Tagged ‘ALEC’

Just Raise Taxes

Sat ,18/07/2015

Being fiscally conservative requires making a sound national budget and raising the revenue to fund our nation’s needs.  The logical approach to paying off our national debt is to find middle ground between raising taxes and cutting spending. The tax rates, particularly those at the top of the earning scale, need to be adjusted upward,and there is also a grave need for spending restraint, elimination of duplicate efforts, and the elimination of waste and wasteful projects driven by special interest groups on both sides of the aisle. Since few Congressmen are willing to vote to cut pet projects, and perhaps lose their own, it leaves us with just one alternative:        ” Just raise taxes”.

As the chart below shows, cutting taxes does not necessarily lead to greater economic growth, but it certainly means a large increase in our national debt. The high tax rates and increasing national debt under the Eisenhower administration were mostly to pay off our war debts and rebuild Europe, yet there was also growth in GDPand and jobs. Reagan dramatically cut taxes, and experienced a lower growth in GDP, more jobs, but also a large increase in peacetime national debt.

Article PhotoTax Rates and Economic Indicators

 

If you wonder why a country as rich as ours is going broke, it may be because of Arthur Laffer‘s economics, Grover Norquist’s anti-tax pledge, and ALEC.   We should not let men we did not elect or some secretive organization that represents special interest groups determine our tax policy. If you will remember, under Eisenhower, the top tax rate was 90% and we used the money to take care of our soldiers, send them to college, rebuild the countries devastated by war, and build the interstate highway system that fueled economic development for the next several decades. Now we have cut the top tax rate, the corporate tax rate, the capital gains tax, and were now working on cutting the inheritance tax, while we are also cutting the safety nets and help for the poor because we cannot pay for them. We are better country than that.

Norquist claims 235 US Representatives and 41 US Senators have signed his Pledge. In doing so, they have clearly given up their responsibility as our elected representatives.   Those in the US Legislature who have signed the pledge are listed here. You may wish to check see who from your state has signed the pledge and contact them. Since Norquist claims that signing the pledge is binding into perpetuity, I would suggest that we make sure none of those who signed his pledge are re-elected.

 

Help Keep Electric Rates Low – No Extra Fees On Solar Energy

Thu ,19/03/2015

Article Photo

Many states are now seeing laws being introduced like Oklahoma SB 1456 , dubbed the Sun Tax. It is not a tax, but allows power companies to assess an extra fee on distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup. The end result will be higher electric rates as they reduce competition from renewable energy. Here is why.

ALEC: At the 2013 American Legislative Exchange Council (ALEC) meeting in Chicago, the Energy Committee, dominated by power and fossil fuel companies, decided one of  ALEC’s goals should be to discourage the spread of renewable energy. Their plan to do so was by weakening renewable portfolio standards (RPS), by claiming that renewable energy systems would make electric rates go up, and by promoting the idea that net energy metering (NEM) customers who install their own solar panels and use the grid for backup were “free riders” who did not pay their fair share of infrastructure costs. Legislation has since been introduced in a number of states intended to increase fees on NEM customers and to reduce the state’s RPS requirements.

SB 1456: Oklahoma passed SB 1456 the next year, which allows power companies to assess an extra fee on distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup. The law was designed to discourage the investment in renewable energy by private individuals, but it may have unintended consequences for the power companies pushing the fees. Under the law, both PSO and OG &E have filed a request with the Corporation Commission to assess additional fees on DG customers. Public hearings on the law will be held in Oklahoma City on March 31 at 1:30 on the third floor of the Corporation Commission Building. Studies (see below) have shown, when all things are considered, that DG customers provide a net benefit for all other customers. It is in the public’s best interest to request that not only should the fees be denied but, to be fair, the power companies should be required to compensate NEM customers for the extra power they produce.

Fairness: The rationale for SB 1456 was fairness, so the decision should be fair to NEM customers as well. First, NEM customers should be charged as any other customer for the electricity they use. DG  customers who use the grid for backup are required to have a net energy metering (NEM) contract with their power company which requires they pay for the installation and inspection of safety equipment. They also pay a customer fee which goes toward fixed costs and infrastructure, and they are currently not reimbursed for any extra power they produce, essentially providing free energy for the other customers, and they help to conserve energy. AEP/PSO’s states one of its mission is to “help customers use less energy and spend less for it”. Is it fair, then, that customers who cut their energy use in half by installing extra insulation are appreciated while those who cut their energy use in half by installing solar energy are charged an extra fee?

Second, NEM customers should be compensated fairly for the excess energy they provide. Research shows that states which encourage NEM customers have found they provide a small positive benefit both to other customers and to the power grid.  Why, then, should they be charged an extra fee?

Research: Studies have found that states which encourage net energy metering (NEM) experience a net benefit to all electric customers. A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account to 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Another important study was performed at the request of the Vermont Legislature who specifically charged the Vermont Department of Public Service with determining if there is a cross-subsidization with net metering and other retail customers. They were also asked to examine any benefits or cost of NEM customers to the distribution and transmission system.  The report found the specific ratepayer benefits, the statewide, and societal benefits of NEM as: “Avoided energy costs, including costs of line losses, capacity costs, and avoided internalized greenhouse gas emission costs; avoided regional transmission costs; avoided in-state transmission and distribution costs; solar’s coincidence with times of peak demand; and the additional benefit of the economic multiplier associated with the local investment and jobs created from the local manufacturing and installation of net metering systems. The report concludes, “ Even considering subsidies, solar net metering is a net-positive for the state of Vermont.”

These studies show that NEM customers provide a net benefit to ratepayers in states which encourage investments in solar and wind generation by private individuals. To be fair, NEM customers should be charged for the energy they use just as any other customer and they should be compensated for the extra energy they produce just as any other energy provider.

Unintended Consequences: Though SB 1456 was intended to discourage private investment in renewable energy, it may not turn out that way. Upon signing the bill, Gov. Mary Fallin attached a letter requiring “the Corporation commission to conduct a transparent evaluation of distributed generation consistent with the Oklahoma First Energy Plan. It also said, ” This evaluation mandates inclusion of all stakeholders including representatives of the solar distributed wind energy industries and utilities.” and “A proper and required examination of these other rate reforms will ensure an appropriate implementation of the Oklahoma first energy plan while protecting future distributed generation customers.”

The Oklahoma First Energy Policy encourages development of wind and solar energy, but it relies heavily on the increasing development of our natural gas resources. However, fracking and the associated disposal wells may be related to the increased incidences of earthquakes in Oklahoma.  If a definite link is established between fracking activities and earthquakes, it might greatly curtail Oklahoma’s production of natural gas. Oklahoma is now in the process of replacing some of its coal-fired power plants with natural gas plants. It would be prudent for Oklahoma to encourage the development of renewable energy systems. Recently, OG&E asked to increase its customer charges by $1.1 billion for federal environmental compliance and to replace an aging natural gas plant. Encouraging distributed generation customers to install extra capacity would not only help with the environmental compliance, but could eventually reduce the need to replace aging plants. Requiring that DG investors be compensated fairly for excess energy they provide would encourage them to install excess capacity to meet future demands.

A Model: Some electric co-ops , such as Oklahoma’s Indian Electric Cooperative, recognize the value of net energy metering. IEC allows net metering customers to accumulate credit for excess power and pays them at the end of the year for any excess credit at the wholesale rate, essentially treating them as any other power provider. If the Oklahoma Corporation Commission would adopt a similar model and require that NEM customers be compensated for the excess power they produce, it would greatly encourage private investments in renewable energy installations.

(C) 2015  J.C. Moore

More on ALEC: Beware the influence of ALEC in Oklahoma

Sun ,03/08/2014

This article by the author  was first posted in the Oklahoma Policy Institute’s blog.  

The American Legislative Exchange Council (ALEC) has a great influence on our Oklahoma state politics, but many Oklahomans ALEC2have heard little about the organization. On the surface,  ALEC is an organization made up of corporations and state-level elected officials which meets three times a year to write “model legislation” for states. Officials can then take the model legislation back to their state for consideration. That sounds like a good process, except that what goes on under the surface of ALEC is kept secret.

In May of 2013, ALEC met in Oklahoma City. While corporate representatives from ALEC met with our legislators, a group of citizens protested across the street. The protesters, as well as members of the press, had been barred from attending by security guards. The agenda of the meeting was secret and an elaborate drop box system was created to avoid FOIA requests. Now, over a year later, there is still little known about the meeting or its influence on our legislators.

Rep. Gary Banz, who organized the 2013 event, described it as “a giant coaches clinic for legislators” and said that, though ALEC has been criticized for its secrecy, “The bottom line is if it’s not on our website, it’s not an issue or area that we have embraced.” That’s not quite right.  While ALEC’s website lists some of its policies and model laws, a part of the website is off limits for non-members. The public, journalists, and small business owners are excluded from ALEC membership by steep fees and by a screening process which insures new members are in harmony with ALEC’s mission. ALEC’s membership and funding sources are kept secret .

Much of what is known about ALEC has been discovered by leaked documents and by citizen’s watchdog groups, such as SourceWatch.  ALEC is a 501(c)(3) organization which is not required to reveal its donors or its funding. It has 300 corporate and 1,800 legislative members, but it will not release its membership lists. Rep. Banz said 70 Oklahoma legislators are members, but  SourceWatch lists only 38, leaving 32 members’ identities secret.

Because of the secrecy, it is hard to know what legislation comes from ALEC. Legislators can copy the bills, change them to disguise their source, and present them as their own. Most voters, the press, and even legislative colleagues often do not realize that the legislation came from ALEC. Sponsoring ALEC legislation ensures politicians they will receive support for their re-election campaigns. ALEC’s legislation is often supported by one-sided research, talking points, and op-ed articles designed to convince voters that the politicians are really looking after their best interests.

Many of ALEC’s model laws claim to promote freedom, fairness, and reform, but the end result is often that average citizens lose out in the process.  Citizen’s watchdog groups, such as Common Cause and SourceWatch, are critical of ALEC, saying its bills undercut health care reform, undermine environmental regulations, promote school and prison privatization, limit workers’ rights, restrain legislatures’ abilities to raise revenue through taxes, and mandate strict election laws that disenfranchise some voters, among many other issues.

As Bill Moyers argues in his documentary, United States of ALEC, ALEC is undermining our system of democracy. The strength of the United States is its unity, but some corporations are working through ALEC to undermine that unity at the state level so they can escape regulation and avoid taxes. ALEC is designed to give more power to corporations, claiming that businesses making decisions in their self-interest will lead to the most good for everyone, but the reality is that it does the most good for the already wealthy. We live in a state with enough resources to ensure that every citizen has food, shelter, medical care, education, and an opportunity to contribute back to society. That won’t happen if our state legislature is unduly influenced by ALEC.

What to do about ALEC is the hard question. ALEC hides its members and its funding sources, and it operates as an educational organization to escape lobbying restrictions. There are apparently 32 ALEC members in our state legislature who have not been identified. My plan is to give ALEC as much publicity as possible and to make it a campaign issue by asking candidates to pledge they will not join any organization which will keep them from representing the best interests of Oklahoma citizens.

J.C. Moore is a retired science teacher, a member of the the American Geophysical Union, and co-founder of OKcitizensfirst.org.

Oklahoma SB 1456: It’s Not Really a Sun Tax

Sun ,15/06/2014

asolar Oklahoma just passed and signed into law SB 1456, meant to allow power companies to assess an extra fee on  distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup. It is not really a tax as the extra fee will go to the power company instead of the state. The law was designed to discourage the investment in renewable energy by private individuals, but it may have unintended consequences for the power companies pushing the law.

Fairness:  The rationale for SB 1456 is based upon fairness arguments which have two very erroneous assumptions. It assumes it is not fair (1) that DG customers are being subsidized by other customers and (2) that DG customers cause an extra burden on the power grid. Research shows that states which encourage DG customers have found they provide a small positive benefit both to other customers and to the power grid.  Research (see below) indicates that distributive energy generation may require fewer upgrades to the power grid, benefiting all customers. Customers who use the grid for backup are required to have a net energy metering (NEM) contract with the power company. Under those agreements, they still pay a customer fee, which defrays the cost of infrastructure, and they are usually not reimbursed for any extra power they produce, essentially providing free energy for the other customers. The power companies agree that we should encourage people to use less energy as AEP/PSO’s states its mission is to “help customers use less energy and spend less for it”. Is it fair then that customers who cut their energy use in half by installing extra insulation are appreciated while those who cut their energy use in half by installing solar energy are charged an infrastructure fee? To be fair, DG customers should be charged as any other customer for the electricity they use and they should be compensated fairly for the excess energy they provide. 

ALEC: Since the author the law is AJ Griffin, my State Senator, I contacted her about the rationale for the law. She provided me with a document called Facts and Fiction, which was very similar to the rationale developed by the American Legislative Exchange Council (ALEC) to discourage the development of renewable energy. At their Chicago meeting last year, ALEC adopted discouraging the spread of renewable energy as one of its goals. Their plan to do this was by weakening renewable portfolio standards (RPS), by claiming that it would make electric rates go up, and by promoting the idea that those who install their own solar panels were “free riders” who did not pay their fair share of infrastructure costs.

When I asked Senator Griffin if she was a member of ALEC, she said that it she had attended one of their events, which turned out to be a trip to Alberta, but she did not know if she was a member or not. ALEC is apparently a very secretive organization. She denied that ALEC had anything to do with the bill, and I believe her, as she is apparently unaware of the connection.  Sen. Griffin told me the Facts and Fiction rationale, which was distributed to the legislators in support of the bill, was prepared by a group of people who represent the electric cooperative and the investor owned power companies. It is no wonder that it was very biased toward the position of the power companies.

Senator Griffin told me she had help writing SB 1456 from Kenny Sparks at the Oklahoma Association of Rural Electric Cooperatives. When I contacted him, he said that the idea of the bill had grown out of discussions with a consortium of power producers in Oklahoma which included representatives from investor owned companies. He said electric companies were worried that distributive generation might eventually increase their costs. One of the investor owned companies was AEP/ PSO, which is a member of ALEC, and the impetus and the rationale for SB 1456 likely came from them. Mr. Sparks told me that neither the consortium, nor the group which developed the Fact and Fiction rationale for SB1456, had a representative from any renewable energy group. It also apparently did it  consider the research which shows that private investors in renewable energy provide a net benefit to the other customers.

Research: There has been credible research which establishes that there is a net benefit to all electric customers in states where net energy metering has been encouraged. A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account to 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Another important study  was performed at the request of the Vermont legislature and carried out by the Vermont Department of Public Service. They were charged with determining if there is a cross-subsidization with net metering and other retail customers and to examine any benefits or cost of net metering systems to the distribution and transmission system.  The report addressed the specific ratepayer benefit as well as the statewide, societal benefit of solar net as: “Avoided energy costs, including costs of line loses, capacity costs, and avoided internalized greenhouse gas emission costs.; Avoided regional transmission costs.; Avoided in-state transmission and distribution costs.; Solar coincided with times of peak demand and market price suppression.; And an additional benefit explicitly not covered in the study is the economic multiplier associated with the local investment and job creation created from the local manufacturing and installation of net metering systems. “ Even considering subsidies, the report found that solar net metering was a net-positive for the state of Vermont.

It appears from these studies that net energy metering provides a benefit to the states which encourage the installation of solar and wind generation by private individuals. That benefit even extends to other customers.

Unintended Consequences: Though SB 1456 was an anticompetitive bill designed to discourage private investment in renewable energy, it may not turn out that way. Upon signing the bill Gov. Fallin attached a letter requiring “the Corporation commission to conduct a transparent evaluation of distributed generation consistent with the Oklahoma First Energy Plan. It also said, ” This evaluation mandates inclusion of all stakeholders including representatives of the solar distributed wind energy industries and utilities.” and “A proper and required examination of these other rate reforms will ensure an appropriate implementation of the Oklahoma first energy plan while protecting future distributed generation customers.”

The Oklahoma First Energy Policy encourages development of wind and solar energy, but it relies heavily on the increasing development of our natural gas resources. However, fracking and the associated disposal wells may be related to the increased incidences of earthquakes in Oklahoma. Oklahoma is now in the process of replacing some of its coal-fired power plants with natural gas plants. It would be prudent to encourage a greater development of renewable resources in case a definite link was established between fracking activities and earthquakes, which might greatly curtail Oklahoma’s production of natural gas.

Some electric co-ops , such as Oklahoma’s Indian Electric Cooperative, apparently recognize the value of net energy metering. The company allows net metering customers to accumulate credit for excess power and pays them at the end of the year for any excess credit at the wholesale rate, essentially treating them as any other power provider. If the Oklahoma Corporation Commission would adopt a similar model and require that NEM customers be compensated for the excess power they produce, it would greatly encourage private investments in renewable energy installation. It seems it would be in Oklahoma’s best long-term interest to encourage private investment in renewable energy, and SB 1456 may be the vehicle for that to happen.

(C) 2014 J.C. Moore

Bits and Pieces: ALEC at Work in the Oklahoma Legislature

Mon ,02/06/2014

In a Readers Forum article in the Tulsa World, “Responsible, conservative reforms working”, Brian Bingman, president pro tem of the Oklahoma Senate, states how proud he is of what the legislature has been able to accomplish. Mr. Bingman is rather quick to pat himself and the legislature on the back, as the reforms he cites were more to the benefit of corporations than of the average citizen. The tax reform and tax cut leaves the state badly underfunded. The balanced budget, achieved by cutting needed services, does not meet the needs of the state. The Capitol building repair was funded by bonds, rather than taxes, which has further indebted the state in the future. The education system is badly underfunded and the tax cuts have only made the situation worse in the future.

The workers compensation reform limits an injured workers right to full compensation for his injuries. Tort reform makes it harder for the average citizen to seek redress in court and limits the liability of corporations. The reform to the state’s public employee pension system, by privatizing the future pension system, destabilizes the existing program, and is a boon to private fund managers. The failure to expand Medicaid will cost the state billions of dollars in Federal funds, that we pay as taxes, and has left 144,000 Oklahomans without adequate healthcare. The hastily passed changes and extensions to corporate oil and gas subsidies, demanded by Oklahoma’s three largest oil and gas companies,  were unnecessary and will make the state’s budget problems worse in future  – and were likely unconstitutional.

Next to the Governor, Mr. Bingman is the highest ranking member of ALEC in our state and his achievements are  high on the list of ALEC’s model legislation. Many of those “accomplishments” benefit  ALEC’s corporate members, but in the end they will hurt Oklahoma and its citizens.  The Governor and 70 of our 149 legislators are members of ALEC, so what chance does an average citizen have?

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If you would like to end the influence of ALEC on politics in Oklahoma, please go to http://okcitizensfirst.org/2014/04/24/alec/ and ask your candidates for office to pledge that they will put the needs of Oklahoma citizens first. Let’s vote out anyone who won’t.

Note: The related Credo Petition to Governor Fallin about Medicaid expansion is at:  https://www.credomobilize.com/petitions/governor-fallin-release-the-31-e-mails-about-medicaid-expansion

McCutcheon vs FEC: Destroying Democracy $1 Million at a Time

Wed ,09/04/2014

“Americans need to take responsibility for government” – Steve Fair

Steve Fair’s article  in the Tulsa World, by that title,  was meant to describe how we should  address the McCutcheon versus FEC Supreme Court ruling. However, it turned out to be a rationale for putting more money into politics and blaming the citizens for allowing it. The ruling  furthered the damage done by Citizens United, which essentially ruled money was the same as speech, corporations were entitled to free speech, and corporations could express their political opinion by donating money. McCutcheon versus FEC essentially removed the restrictions on how much could be donated.

McCutcheon vs. FEC  was supported by the Republican National Committee and applauded by Chairman Reince Priebus: “Today’s court decision is an important first step toward restoring the voice of candidates and party committees and a vindication for all those who support robust, transparent political discourse.” However, when someone speaks, we know who is speaking, while much of the money in politics is funneled through 501C(3) foundations and other tax-exempt organizations, which hides the identity of those giving the moneyand the amount given.  So much for transparency.

Mr. Fair had three points to his article:

First, the Supreme Court got it right. The First Amendment trumps federal campaign laws. Americans have a constitutional right to participate in the political process at whatever level they want, whether it be volunteering for a candidate or contributing money to their campaign.

Second, it is indisputable that money rules in the political process. Candidates at all levels now must raise large sums of money to “get their message” to voters. State legislative and county candidates must solicit donors for money in order to be competitive in the political arena.

Third, big donors and political consultants are not to blame for money in politics. A common misconception is if big donors and political operatives were taken out of the process, big money in politics would dry up. That is simply not true. The reason we have so much money in politics is because we have an unengaged and ignorant electorate.

Equating money with speech means that those who donate large sums money have a much louder voice than the ordinary citizen. Money did have a role in the political process before, but it was limited so that an average citizen could at least make a reasonable donation. This ruling, and Citizens United , means that money will have even a larger role. Republican presidential candidates are already trekking to Las Vegas to be anointed by Sheldon Adelson. The third point  blames an “unengaged and ignorant electorate” which seems to echo our Republican leader’s perception of American voters. Does it mean you’re “unengaged” if you can’t donate millions and that you are “ ignorant” if you can’t sort through all the propaganda, misinformation, and lies created by those with money.

Quid pro quo corruption:  Chief Justice John Roberts tried to justify the decision when he wrote in the majority opinion. “We have, however, held that this interest must be limited to a specific kind of corruption — quid pro quo corruption — in order to ensure that the government’s efforts do not have the effect of restricting the First Amendment right of citizens to choose who shall govern them.”

By requiring proof of quid pro quo corruption,i.e. outright bribery, the decision fails to address the problem of indirect bribery. An example of that is the effect of ALEC in Oklahoma politics. ALEC is composed of about 300 corporations and special interest groups who supposedly help our legislators write model laws. Those laws, of course reflect the interests of the corporations and the special interest groups, often over those of the citizens. The legislators who are members and support ALEC’s goals are guaranteed the support of the special interests and their money in the next election. Not only does ALEC provide money, but it also provides propaganda support such as letters to the editor of newspapers and op-ed pieces that favor the special interest’s viewpoint – and praise the politicians who support them.  And, ALEC does not thrive on openness as it keeps its agendas, meetings, members, and proposed legislation secret.

Mr. Fair finished by emphasizing again that the voters are at fault,  “ Ignorant voters believe candidate propaganda, and whichever candidate in a race that is the most effective at ‘marketing their message’ wins.  America is a country founded on the principle of self-governance. If we have poor government, it’s our fault. If we have too much money in politics, it’s our fault. It’s time Americans took responsibility for the mess we call our government and quit blaming the system. ” He says,  “ First, don’t just swallow a candidate’s  propaganda without researching the facts. Stay engaged in your government at all levels 24/7/365. Second, hold elected officials and our government accountable. Trust, but verify. Once elected, watch what they do and not what they say.’’

Mr. Fair is right that much of the influence of money in politics could be overcome if voters were more informed, but they can’t research everything they read in the paper or hear on television. It is unrealistic to ask, as he does, that citizens spend 24/7/365 working to ensure that what they read is true. Only politicians and pundits have that kind of time to spend on politics.

Justice Stephen Breyer, writing for the minority, said the decision “understates the importance of protecting the political integrity of our governmental institutions. Today’s decision eviscerates our nation’s campaign finance laws, leaving a remnant incapable of dealing with the grave problems of democratic legitimacy that those laws were intended to resolve.” It is too bad that some Republicans see money as a way to gain power and the spoils of power, rather than seeing it as an impediment to democracy, which it is.

Frank Kennedy, in a post in the Tulsa World summed it up quite nicely,” Freedom of speech, guaranteed in the First Amendment, is not unqualified: one cannot falsely yell fire in a crowded theater. Nor should corporations and billionaires, under the guise of free speech, be able to nullify the concept of one man, one vote with mountains of cash to politicians. It is the job of the Supreme Court to decide among contending rights which have priority. This time the Roberts court got it wrong.” Again.

(c) 2014 J.C. Moore

More on ALEC

Tue ,25/02/2014

This is a continuation in the series  Who Is ALEC ? and Academic Freedom and Democracy – ALEC Style, as it is important to keep the light on ALEC. On the surface, the American Legislative Exchange Council provides model legislation for state and national legislatures. Its membership boasts 300 corporations and special interest groups, and about 2000 state legislators, governors, US Congressmen, and US Senators. ALEC sponsors meetings where corporations and their representatives entertain our legislators and help craft “model legislation”. From the corporation’s viewpoint, it is “dream legislation” – and ALEC is the organization that helps their dreams come true. What corporation wouldn’t want legislation designed to limit liability, provide subsidies, weaken regulations, criminalize whistleblowing, lower taxes, provide an edge over competing technologies, or to transfer public funds to them by privatizing education, health care, workers comp, public pensions, and prison systems?

About 1000 model bills are available from ALEC. Legislators can copy the bills, change them to disguise their source, and present them as their own. Most voters, the press, and even legislative colleagues often do not realize that the legislation came from ALEC. ALEC’s hidden hand was exposed when a Florida lawmaker introduced a resolution urging “Congress to Cut the Federal Corporate Tax Rate” that carelessly included ALEC’s mission statement. Sponsoring ALEC legislation insures politicians they will receive support for reelection campaigns. ALEC’s legislation is supported by biased research, talking points, and slick ads to convince voters that the politicians are really looking after their best interests. 

 The press, average citizens, and small business owners are excluded from ALEC by steep fees and screening to insure harmony with ALEC’s mission. An elaborate system insures that information cannot be obtained by Freedom of Information Act requests. Much of ALEC’s secret activity is coordinated through Americans for Prosperity, a Libertarian think tank, which now has offices in all 50 states. ALEC takes great pains to keep secrets, as several corporations have withdrawn when their participation was discovered. Clearly, transparency and full, honest disclosure is need.  However, ALEC has 401(C)3 status, which makes it tax exempt and allows it to hide its agenda and the identity of donors. Although ALEC claims it is not a lobbying group, it is hard to see how claiming they are “coaching” and “educating” legislators exempts them from laws requiring disclosure of lobbying activities.

ALEC’ s most shameful activity is attempts to suppress the votes of those not likely to support its agenda – the poor, the elderly, minorities, college students, and working people. Paul Weyrich, the founder of ALEC, once explained why, saying “our leverage in the elections goes up, quite candidly, as a number of voters go down.” One of ALEC’s favorite tactics is to accuse detractors of being leftists or liberals to discredit them with religious groups and Conservatives. However, the network of think tanks and donors that support ALEC are not Conservative, but Libertarian, and their low regard for the for the truth  or the poor or is hardly Christian.  Citizens United gave corporations a large voice with their money, but it could not give them a heart or a soul.

 According to  Bill Moyer , ALEC is undermining our democracy. The strength of the United States is its unity. Corporations, through ALEC , Libertarian think tanks, and the far right wing of the Republican Party, are working to destroy that unity so they can escape regulation and avoid taxes. We live in a country with enough resources to insure that every citizen has food, shelter, medical care, education, and an opportunity to contribute back to society. That won’t happen as long as our legislatures are willing to let some citizens go without so others can have more. The best situation is a balance in power between business, labor and government. However, modern-day Libertarians want to give all the power to businesses, claiming that businesses making decisions in their self interest will lead to the most good for everyone, but the reality is that it makes the most good for the already wealthy.

Laffer Economics: The Long Spiral into Debt

Wed ,28/08/2013

The Laffer Curve: Laffer economics, or supply side economics, is based on the idea that cutting taxes will provide more money for investments and job creation. That in turn should increase economic growth, resulting in an increase in tax revenue. That has not worked well in practice.

The idea was not new to Arthur  Laffer, but he used it to greatly shape the United  States’ economic policies during the Reagan Administration and to this day.  Laffer used the curve  below to argue his case:

LafferIt is based on the idea that at a zero tax rates, the government collects no taxes – and at a 100% tax rate,  the economy would collapse, resulting in zero tax collected.  If taxes are too high, then cutting them will cause a move to the left on the curve, toward higher tax revenue. The top tax rate when Reagan came into office was 60%.  Laffer used his curve to convince the Reagan Administration that lowering the tax rate would move the country to the left on the curve, stimulating the economy, and increasing tax revenue.  Did it work?

Empirical data: Laffer, and those favoring  supply-side economics, often point to the 3.5%  growth in GDP during the Reagan years as validating their theories. However, the GDP growth was less under Reagan and George W. Bush, when tax rates were low, than under administrations where the tax rates were higher.  The table below compares economic indicators among administrations:

President Top Tax Rate  GDP Growth  Job Growth    Public Debt
D. Eisenhower 90% 4% 7.20%      +14.9% GDP
Ronald Regan 28% 3.50% 16.40%        +7.1% GDP
Bill Clinton 39.60% 3.90% 19.60%       -13.6% GDP
George W. Bush 35% 2.50% 1.40%        +5.6% GDP
Source Historical CBO Records Bureau of Labor        CBO

Laffer was certainly wrong about tax cuts leading to GDP growth and increasing tax revenue. Certainly, the public debt grew substantially when taxes were lower. Public debt was high during Eisenhower’s administration because of war debts and because he built the interstate highway system that accelerated economic growth under following administrations.

What went wrong?   Basing economic decisions on Laffer’s theory involves accepting the assumption that tax rates are the main factor driving economic growth, an assumption not borne out by the empirical evidence. Also, Laffer did not present evidence showing that the maximum in his curve was at 50% . Some economists argue that the curve should  actually look like this :

Laffer2

If that is the case,  cutting the tax rate from 60%  would not necessarily stimulate the economy, but certainly would decrease tax revenue, as happened.  Taxes need not be as high as the optimum rate,  but they should be high enough to pay the country’s debts .

Recent tax cuts: Despite its failures, Congress is still trying to justify tax cuts using Laffer’s Theory. A recent survey of 40 economists found that not one agreed with Mr. Laffer that reducing the top tax rate would lead to economic growth over the next five years. A University of Chicago poll  taken in 2012 found that of 40 leading economists, not one agreed with the statement: ”  A cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut. ”  The results of the survey is listed below:

Laffer survey

  Still, Paul Ryan has proposed  a budget that would reduce the top tax rate to 25%. The nonpartisan Tax Policy Center estimated Ryan’s budget would add $5.7 trillion to the deficit over the next decade and would increase the after-tax income of the top 1% of citizens by 18%.  His budget is a case of ideology trumping practical economics.

 State tax cuts: Arthur Laffer now sits on the Board of Directors of the American Legislative Exchange Council (ALEC).  One of  ALEC’s  goals  is to pass laws at the state level which allow wealthy citizens and corporations to avoid regulation and taxes.  Laffer’s research has been used by members of ALEC to try to justify state tax cuts by claiming  that the nine states that have no income tax had the highest rates of job creation, as shown in his chart below:

 

Laffer5

 It looks impressive, but most of the growth was in Texas and in a carefully chosen time period when job growth was strong because of oil revenues and population growth.  Besides carefully picking his data, Laffer also ignored other economic indicators – and didn’t do a comparison with high tax states. If Laffer were correct, the nine States  with the highest income taxes should have failing economies. However, that is not the case, as shown below:

 

Laffer hgh

  The nine states with high income taxes had higher economic growth , a much smaller decline in household income, and almost exactly the same unemployment rate. Laffer’s research was biased and would never stand up to peer review, yet many states have used it as a justification for income tax cuts for the wealthy.

 Summary: Laffer’s theories are highly popular with the wealthy who want to lower  their income taxes, and with those who want to reduce the size of the Federal government.  While Arthur Laffer may be charismatic, his theories are not borne out by empirical evidence and we should not make economic decisions based upon his theories or his articles. While money may trickle down, it flows upward and pools at the top.  Cutting top tax rates has led to a more regressive tax structure, shifting more of the tax burden to sales taxes, property taxes and a myriad of government fees. Following Laffer’s economics has led to a great disparity in wealth in United States and a crushing national debt.  Arthur Laffer’s legacy is not economic growth, but a long spiral downward into debt and austerity and a tremendous increase in the number of poor Americans. Forbes put it best a couple of years ago – “Economist Arthur Laffer has had a long, distinguished career. Unfortunately one of the things that has distinguished it is that he has often been extremely wrong.”

 

Who Is ALEC ?

Mon ,15/07/2013

On the surface, ALEC is the American Legislative Exchange Council, an organization that provides model legislation for our state and national legislatures. The membership of ALEC is composed of 300 corporations, a number of special interest groups, and many politicians including about 2000 state legislators, governors, US Congressmen, and US Senators. ALEC sponsors meetings where the corporations and their lobbyists entertain the legislators and help craft what they call “model legislation”. From the corporation’s viewpoint, it is “dream legislation” – and ALEC is the organization that helps their dreams come true. What corporation wouldn’t want legislation designed to limit their liability, give them subsidies, shield them from regulation, criminalize whistleblowing, lower their taxes, provide them an edge over competing technologies, or to transfer public funds to them by privatizing health care, workers comp, public pensions, and prison systems?

The press, average citizens, small business owners are excluded from ALEC’s membership and their meetings.  There are steep fees to join, except for legislators, and ther are requirements to insure that members are in harmony with ALEC’s mission. They try to keep keep their membership, agendas, and minutes of their meetings from public scrutiny and most information about them is gained from leaks. An elaborate system has been set up to see that information cannot be obtained from legislators by Freedom of Information Act requests. Often, legislators meet with CEOs and corporate representatives, while citizens gather across the street to protest corporate greed. Much of ALEC’s secret activities are coordinated through Americans for Prosperity, a Libertarian think tank that now has offices in all 50 states.

Over the years, about 1000 model bills have been written, primarily by corporate lawyers with some input from legislators. State legislators copy these bills, change them to disguise their source, and present them as their own. It is like plagiarism with the author’s permission or copying someone elses homework rather than doing the necessary research. The legislation does not arise out of the needs of the state or the nation, but from the need of the corporations to increase their profits. The members of ALEC take great pains to keep the process secret and a number of corporations have withdrawn from ALEC over bad publicity when their participation was discovered.

With so many lawmakers involved, it is hard to keep secrets, particularly when many legislators are proud of their corporate relationships. And then, Murphy’s Law sometimes exposes ALEC’s hidden hand. A Florida lawmaker, Rachel Bergen, introduced a resolution to lower corporate tax rates, but was rather embarrassed when she forgot to remove the mission statement of ALEC.

 

Alec3

Oops, the wording was hastily corrected, but the mistake alerted the press to the source of the proposal. Thom Hartmann took note of this error and proposed that all legislation that came from ALEC  should have a similar disclosure. How would it look if a House Bill to approve the Keystone XL pipeline came with this disclosure?

alec4jpg

 

Would a law to gut Wall Street regulation and the Consumer Protection Act pass if it came with this disclosure?

alec5

Congress has voted 37 times, at last count, to repeal the Affordable Care Act. Would that motion carry again if the bill had this disclaimer?

alec6

Probably. Many politicians have more loyalty to those who fund their campaigns than to the citizens. Supporting ALEC legislation carries an understanding that by sponsoring their bills, politicians will receive support for their reelection campaigns. ALEC’s legislation is supported with biased but academic sounding research, talking points, and slick ads to convince voters that the politicians are really looking after their best interests. Most voters, the press, and even legislative colleagues often do not realize that the legislation came from ALEC.

Clealy,  transparency and full and honest disclosure is need.  However, ALEC has 401(C)3 status as a charity, which makes it tax exempt and hides its motives and the identity of its donors. Although ALEC claims it is not a lobbying group, it is directly lobbying our state and national legislatures while getting around laws that limit lobbying and require disclosures of lobbying activities. One of the most shameful of ALEC’ s activities are attempts to suppress the votes of those not likely to support their agenda. Paul Weyrich, the founder of ALEC was once captured on tape, as shown at 3:49 in this video, explaining that he didn’t want everyone to vote, saying “our leverage in the elections goes up, quite candidly, as a number of voters go down.” That was a long time ago, but Alec is still supporting voter suppression laws that make it more difficult for the poor, the elderly, minorities, college students, and working people to vote.

Though mainly supporting corporate interests, ALEC legislation often gives a nod to religious groups and to conservatives to win their support. One of its favorite tactics is to accuse detractors of being leftists or liberals to discredit them with conservatives and Christians. However, the network of think tanks and donors that support Alec are not Conservatives, but they are Libertarians . It is also hard to see how an organization that has such little regard for the poor or for the truth can be considered Christian.  Citizens United may have given corporations a large voice with their money, but it could not give them heart or a soul. Besides hiding their funding sources, their agenda, and the identity of those supporting them, ALEC, according to  Bill Moyer ,  is undermining the principles upon which the United States was founded.

The strength of the United States is through its unity. However, Libertarians have been working very hard lately, through ALEC , their think tanks, and the far right wing of the Republican Party, to destroy that unity so they can escape regulation and avoid taxes. We live in a country that has enough resources that we could make sure that every citizen has food, shelter, medical care, education, and an opportunity to contribute back to the society. But that won’t happen as long as Congress follows the wishes of those who are willing to let other citizens go without so they can have more. The best situation would be to have a balance in power between business, labor and government. The modern-day Libertarians want to give all the power to the businesses. Their overarching philosophy is that businesses who make decisions in their self interest will lead to the most good for everyone, but the reality seems to be that it makes the most good for the wealthy.

(c)  2013 J.C. Moore

Academic Freedom and Democracy – ALEC Style

Sun ,23/06/2013

Academic freedom is one of the cornerstones of our educational system, so who could be against it? Representive Gus Blackwell introduced into the 2013 Oklahoma legislature HB 1674, called the “Scientific Education and Academic Freedom Act”. But there was something strange about the bill, as science teachers in Oklahoma already have a system ensuring  academic freedom. And, the bill only insured Academic freedom in four areas which Representative Blackwell deemed controversial, specifically “biological evolution, the chemical origins of life, global warming, and human cloning”. Mr. Blackwell’s education and expertise is in religion and business administration, so it’s unusual that he knows what is controversial in science. Oklahoma scientists and science educators were almost unanimously opposed to the bill as it is their opinion that there is virtually no scientific controversy on the core facts of global warming and evolution.

The bill allowed “teachers to help students understand certain information about scientific theories; disallowing State Board of Education, district boards of education, and certain administrators from prohibiting teachers from helping students understand certain information about scientific theories.”  Perhaps the bill would have been more aptly named the “Freedom from Accountability Act”. Apparently Mister Blackwell had not thought this through. It would also shield any science teacher, no matter of what religion, who wished to introduce their beliefs into their science classes. The bill even had an emergency clause providing that it be enacted immediately with a letter sent to school officials informing them of the decision. And, why is this now an emergency? The bill passed Oklahoma’s education committee by one vote, but fortunately for the quality of science education in Oklahoma, the 2013 session ended without it coming up for a vote. But, you can be sure it will be back.

The unusual nature of this bill can be understood as similar bills, with almost exactly the same wording, have been introduced in about 20 states. It is one of the “model bills” being promoted by the American Legislative Exchange Council (ALEC). ALEC is composed of over 300 special interest groups and corporations such as Exxon Mobile, AT&T, pharmaceutical companies, and Koch Industries. They sponsor conferences where their representatives  meet with state legislative members to collaborate on “model bills” and to draft legislation favoring their special interests. ALEC now has over 1000 “model bills”, many of which seek to limit workers rights, limit corporate liabilities, oppose environmental regulations, cut taxes, oppose universal health care, and to privatize such things as education, workmen’s compensation, and the prison systems.

Though mainly supporting corporate interests, the legislation often gives a nod to religious groups and to conservatives to win their support. The state legislators take the “model bills” back to their respective states, often as their own work. It also carries an understanding that by sponsoring the bill, they will receive support for their reelection campaigns. ALEC has 501(C)(4)status as a charity, which makes it tax exempt and hides its motives and the identity of its donors. Although ALEC claims it is not a lobbying group, it is directly lobbying our state Congressmen while getting around laws that limit lobbying and require disclosures of lobbying activities.

Representative Blackwell is a member of ALEC and, according to Source Watch, used state funds to attend their meetings. His interest in the bill was probably to introduce creationism into science classes, but adding climate change to the “controversy” list aligns with the interests of the fossil fuel companies. A leaked document from the Heartland Institute, a Libertarian think tank funded by fossil fuel interests, showed that introducing doubt about climate change into science classes was one of their goals.

Bill Moyer recently had a program on how ALEC is undermining American democracy. Although ALEC claims to promote capitalism, it is actually the citizens who pay. Not only do many politicians attend their meetings at state expense, members of ALEC get a big tax break for their lobbying activities and our taxes still pay for privatized state functions.  Sourcewatch lists 25 Oklahoma legislators as members of ALEC and Governor Fallin was once ALEC’s woman of the year, which means she favored the needs of large corporations and of the wealthy long before she became governor. We just saw a number of ALEC sponsored laws make their way through the Oklahoma Legislature, much to the detriment of ordinary citizens.

 

(c) 2013 J.C. Moore