Saving Capitalism
Page 26
Harold Denton: Zeller, “Experts Had Long Criticized Potential Weakness in Design of Stricken Reactor.” (http://www.nytimes.com/2011/03/16/world/asia/16contain.html?_r=1&ref=asia)
A follow-up report: Paul Gunter, “Hazards of Boiling Water Reactors in the United States,” Nuclear Information and Resource Service website, last updated March 2011 (http://www.nirs.org/factsheets/bwrfact.htm).
In the presidential election year of 2012: Center for Responsive Politics, “General Electric: Profile for 2012 Election Cycle,” OpenSecrets.org website (https://www.opensecrets.org/orgs/summary.php?id=D000000125&cycle=2012).
104 of its 144 lobbyists: Center for Responsive Politics, “Influence and Lobbying: Lobbyists Representing General Electric, 2012,” OpenSecrets.org website (http://www.opensecrets.org/lobby/clientlbs.php?id=D000000125&year=2012).
BP failed to adequately supervise: See National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling, U.S. Government Publishing Office website, January 2011. See also Stephen Power and Ben Casselman, “White House Probe Blames BP, Industry in Gulf Blast,” Wall Street Journal, January 6, 2011 (http://www.gpo.gov/fdsys/pkg/GPO-OILCOMMISSION/pdf/GPO-OILCOMMISSION.pdf) (http://www.wsj.com/articles/SB10001424052748704405704576064122843672118).
the Minerals Management Service: Stephen Power, “Regulators Accepted Gifts from Oil Industry, Report Says,” Wall Street Journal, May 25, 2010 (http://www.wsj.com/news/articles/SB10001424052748704026204575266112115488640?mg=reno64wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052748704026204575266112115488640.html).
the National Highway Traffic Safety Administration: “Chronology: A Regulatory Free Ride? NHTSA and the Hidden History of the SUV,” PBS website (http://www.pbs.org/wgbh/pages/frontline/shows/rollover/unsafe/cron.html).
“You didn’t hear that”: See “The Secret Recordings of Carmen Segarra,” radio broadcast, This American Life, Chicago Public Media, September 26, 2014 (http://www.thisamericanlife.org/radio-archives/episode/536/transcript).
the West, Texas, chemical and fertilizer plant: Daniel Gilbert, Alexandra Berzon, and Nathan Koppel, “Deadly Explosion Prompts Fresh Look at Regulation,” Wall Street Journal, April 19, 2013 (http://www.wsj.com/news/articles/SB10001424127887324763404578433133700195590?mod=_newsreel_2).
only 2,200 inspectors: “Statement of David Michaels, PHD, MPH, Assistant Secretary Occupational Safety and Health Administration U.S. Department of Labor Before the Committee on Education and the Workforce Subcommittee on Workforce Protections,” October 5, 2011 (https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=TESTIMONIES&p_id=1482).
Its $134 million budget for 2013: For the NHTSA budget, see “National Highway Traffic Safety Administration Budget Information: Fiscal Year 2015 Budget Overview,” NHTSA website, p. 14. For the cost of protecting the Baghdad embassy, see U.S. Department of State and the Broadcasting Board of Governors, Inspection of Embassy Baghdad and Constituent Posts, Iraq, U.S. State Department, Office of Inspector General website, May 2013 (http://www.nhtsa.gov/Laws+&+Regulations/NHTSA+Budget+Information) (http://oig.state.gov/system/files/210403.pdf).
the IRS lost more than ten thousand staff: John Koskinen, speech at the National Press Club, April 2, 2014 (https://www.youtube.com/watch?v=MuIMC7syoX0&feature=youtu.be).
For every dollar that goes into IRS enforcement: “IRS Releases FY 2012 Data Book,” Internal Revenue Service website, March 25, 2013 (http://www.irs.gov/uac/Newsroom/IRS-Releases-FY-2012-Data-Book).
This was the case when the food industry: Rob Nixon, “Funding Gap Hinders Law for Ensuring Food Safety,” New York Times, April 8, 2015.
The commission thereafter considered fifteen thousand comments: Commissioner Michael V. Dunn, “Opening Statement, Public Meeting on Final Rules Under the Dodd-Frank Act,” U.S. Commodities Futures Trading Commission website, October 18, 2011 (http://www.cftc.gov/PressRoom/SpeechesTestimony/dunnstatement101811).
Its lawyers then filed a lawsuit: SIFMA v. U.S. CFTC, 1:11-cv-02146-RLW (2011) (http://www.scribd.com/doc/74545374/Financial-industry-groups-lawsuit-against-the-C-F-T-C).
Wall Street sued the SEC: Business Roundtable and Chamber of Commerce v. U.S. Securities and Exchange Commission, U.S. Chamber Litigation Center website. See also Christopher Doering, “Wall St. Sues CFTC Over Commodity Trading Crackdown,” Reuters, December 2, 2011 (http://www.chamberlitigation.com/business-roundtable-and-chamber-commerce-v-us-securities-and-exchange-commission-sec) (http://www.reuters.com/article/2011/12/02/us-financial-limits-lawsuit-idUSTRE7B11XJ20111202).
the bank lost $6.2 billion: U.S. Senate Permanent Subcommittee on Investigations, “JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses,” U.S. Senate Committee on Homeland Security and Government Affairs website, March 15, 2013, p. 1.
All this caused the Justice Department: Jessica Silver-Greenberg and Ben Protess, “JPMorgan Caught in Swirl of Regulatory Woes,” New York Times, May 2, 2013 (http://dealbook.nytimes.com/2013/05/02/jpmorgan-caught-in-swirl-of-regulatory-woes/).
JPMorgan’s financial report: “Form 10-Q, Quarterly Report,” JPMorgan, filed August 7, 2013, pp. 198–206 (http://investor.shareholder.com/jpmorganchase/secfiling.cfm?filingID=19617-13-354). See also Stephen Gandel, “JP Morgan’s Legal Problems Continue to Mount,” Fortune, August 19, 2013 (http://fortune.com/2013/08/19/jpmorgans-legal-problems-continue-to-mount/).
Yet $6.8 billion was a pittance: Floyd Norris, “The Perils When Megabanks Lose Focus,” New York Times, September 5, 2013 (http://www.nytimes.com/2013/09/06/business/the-perils-when-megabanks-lose-their-focus.html?_r=0).
Not even JPMorgan’s $13 billion settlement: Francesco Guerrera, “The J.P. Morgan Settlement: Misconceptions Debunked,” Wall Street Journal, November 25, 2013 (http://www.wsj.com/news/articles/SB10001424052702304607104579214020264011030?mod=ITP_moneyandinvesting_0).
Citigroup’s $7 billion settlement: Michael Korkery, “Citigroup Settles Mortgage Inquiry for $7 Billion,” New York Times, July 14, 2014 (http://dealbook.nytimes.com/2014/07/14/citigroup-and-u-s-reach-7-billion-mortgage-settlement/).
in the days leading up to the Bank of America settlement: Christina Rexrode and Andrew Grossman, “Record Bank of America Settlement Latest in Government Crusade,” Wall Street Journal, August 21, 2014 (http://www.wsj.com/articles/bank-of-america-reaches-16-65-billion-settlement-1408626544).
At least $7 billion of Bank of America’s $16.65 billion settlement: “Bank of America to Pay $16.65 Billion in Historic Justice Department Settlement for Financial Fraud Leading Up to and During the Financial Crisis,” U.S. Department of Justice website, August 21, 2014 (http://www.justice.gov/opa/pr/bank-america-pay-1665-billion-historic-justice-department-settlement-financial-fraud-leading).
Bank of America’s pretax income: Bank of America Corporation 2013 Annual Report, Bank of America website, table 2, p. 23 (http://media.corporate-ir.net/media_files/IROL/71/71595/AR2013.pdf).
“This case shows”: James Kwak, “Why Is Credit Suisse Still Allowed to Do Business in the United States?” The Atlantic, May 20, 2014 (http://www.theatlantic.com/business/archive/2014/05/why-is-credit-suisse-still-allowed-to-do-business-in-the-united-states/371238/).
financial markets shrugged off: “Credit Suisse Pleads Guilty, Pays $2.6 Billion to Settle U.S. Tax Evasion Charges,” Forbes, May 20, 2014 (http://www.forbes.com/sites/greatspeculations/2014/05/20/credit-suisse-pleads-guilty-pays-2-6-billion-to-settle-u-s-tax-evasion-charges).
the bank’s shares rose: Katharina Bart, Karen Freifeld, and Aruna Viswanatha, “Credit Suisse Guilty Plea Has Little Immediate Impac
t as Shares Rise,” Reuters, May 20, 2014 (http://www.reuters.com/article/2014/05/20/us-creditsuisse-investigation-idUSBREA4I0E620140520).
“Our discussions with clients”: John Cassidy, “Credit Suisse Got Off Lightly,” New Yorker, May 20, 2014 (http://www.newyorker.com/news/john-cassidy/credit-suisse-got-off-lightly).
“What GM did was break the law”: Jonathan Berr, “GM’s Pain Will Exceed That $35 Million Fine,” CBS News website, June 1, 2014 (http://www.cbsnews.com/news/gms-pain-will-exceed-that-35-million-fine/).
The firm also agreed: Clifford Krauss, “Halliburton Pleads Guilty to Destroying Evidence After Gulf Spill,” New York Times, July 25, 2013 (http://www.nytimes.com/2013/07/26/business/halliburton-pleads-guilty-to-destroying-evidence-after-gulf-spill.html?_r=0).
Halliburton’s revenues in 2013: Halliburton, “Halliburton Announces Fourth Quarter Income,” press release, January 21, 2014, p. 1 (http://www.halliburton.com/public/news/pubsdata/press_release/2014/Q4_2013_Earnings.pdf).
This was a carefully crafted fraud: “Court-Appointed Lehman Examiner Unveils Report,” New York Times, March 11, 2010 (http://dealbook.nytimes.com//2010/03/11/lehman-directors-did-not-breach-duties-examiner-finds/#reports).
Thirty-two states hold elections for judges: Adam Liptak, “Rendering Justice with One Eye on Re-election,” New York Times, May 25, 2008 (http://www.nytimes.com/2008/05/25/us/25exception.html?pagewanted=all).
“No other nation in the world does that”: Ibid (http://www.nytimes.com/2008/05/25/us/25exception.html?pagewanted=all).
In the 2012 election cycle: Alicia Bannon, Eric Velasco, Linda Casey, and Lianna Reagan, The New Politics of Judicial Elections 2011–12, New York University, Brennan Center for Justice, October 2013, p. 5 (http://newpoliticsreport.org/report/2012-report/).
A 2013 study by Professor Joanna Shepherd: Joanna Shepherd, “Justice at Risk: An Empirical Analysis of Campaign Contributions and Judicial Decisions,” American Constitution Society for Law and Policy website, June 2013 (http://www.acslaw.org/ACS%20Justice%20at%20Risk%20%28FINAL%29%206_10_13.pdf).
“In the span of a few short years”: Billy Corriher, “No Justice for the Injured,” Center for American Progress website, May 2013 (http://cdn.americanprogress.org/wp-content/uploads/2013/05/NoJusticeforInjured.pdf).
major law firms were funneling: Eric Lipton, “Lobbyists, Bearing Gifts, Pursue Attorneys General,” New York Times, October 28, 2014 (http://www.nytimes.com/2014/10/29/us/lobbyists-bearing-gifts-pursue-attorneys-general.html).
AT&T was a major contributor: Ibid (http://www.nytimes.com/2014/10/29/us/lobbyists-bearing-gifts-pursue-attorneys-general.html).
in AT&T Mobility v. Concepcion: AT&T Mobility LLC v. Concepcion et ux., 563 U.S. 321 (2011) (http://www.supremecourt.gov/opinions/10pdf/09-893.pdf).
according to a survey by Carlton Fields Jorden Burt: Jeremy B. Merrill, “One-Third of Top Websites Restrict Customers’ Right to Sue,” New York Times, October 23, 2014 (http://www.nytimes.com/2014/10/23/upshot/one-third-of-top-websites-restrict-customers-right-to-sue.html?abt=0002&abg=1).
in their 2013 decision Comcast v. Behrend: Comcast v. Behrend, 569 U.S. ____ (2013) (http://www.supremecourt.gov/opinions/12pdf/11-864_k537.pdf).
9 SUMMARY: THE MARKET MECHANISM AS A WHOLE
In 2014, corporate profits before taxes: Floyd Norris, “Corporate Profits Grow and Wages Slide,” New York Times, April 4, 2014 (http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-grow-ever-larger-as-slice-of-economy-as-wages-slide.html?_r=1).
Between 2000 and 2014: “Corporate Profits After Tax with Inventory Valuation Adjustment (IVA) and Capital Consumption Adjustment (CCAdj),” Federal Reserve Bank of St. Louis Economic Research website, updated December 23, 2014 (http://research.stlouisfed.org/fred2/series/CPATAX).
labor’s share of nonfarm business income: Robert J. Samuelson, “Robert Samuelson: Capitalists Wait, While Labor Loses Out,” Washington Post, September 8, 2013 (http://www.washingtonpost.com/opinions/robert-samuelson-capitalists-wait-while-labor-loses-out/2013/09/08/649dcc1a-1711-11e3-be6e-dc6ae8a5b3a8_story.html).
In 2013, it was 57 percent: Ibid (http://www.washingtonpost.com/opinions/robert-samuelson-capitalists-wait-while-labor-loses-out/2013/09/08/649dcc1a-1711-11e3-be6e-dc6ae8a5b3a8_story.html).
Piketty posits: Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Harvard University Press, 2014), p. 25.
10 THE MERITOCRATIC MYTH
“I say for these people making their millions”: See Inequality for All, dir. Jacob Kornbluth, 72 Productions, 2014.
During his twenty years at the helm of SAC Capital Advisors: See Agustino Fontevecchia, “Steve Cohen Personally Made $2.3B in 2013 Despite Having to Shut Down SAC Capital,” Forbes, March 13, 2014 (http://www.forbes.com/sites/afontevecchia/2014/03/13/steve-cohen-personally-made-2-3b-in-2013-despite-having-to-shut-down-sac-capital/).
“Private hedge fund people”: Quoted in Joshua Rhett Miller, “Ex-Clinton Official Robert Reich Delivers Lecture on Greed While Earning $240G to Teach One Class,” FoxNews.com website, August 10, 2014. (For the record, the statement in this Fox News headline was, and still is, false.) (http://www.foxnews.com/us/2014/08/10/ex-clinton-official-robert-reich-delivers-lecture-on-greed-while-earning-240g/)
insider trading at SAC Capital under Cohen’s leadership: See U.S. District Court Southern District of New York, sealed indictment, United States of America v. SAC Advisors L.P., et al., July 25, 2013 (http://www.justice.gov/usao/nys/pressreleases/July13/SACChargingAndSupportingDocuments.php).
Had the firm’s insider trading been discovered: See John Cassidy, “The Great Hedge Fund Mystery: Why Do They Make So Much?” New Yorker, May 12, 2014 (http://www.newyorker.com/news/john-cassidy/the-great-hedge fund-mystery-why-do-they-make-so-much).
One of the most broadly held assumptions: See Stephen J. McNamee and Robert K. Miller, Jr., The Meritocracy Myth (Lanham, MD: Rowman & Littlefield, 2009).
“If we are very generous with ourselves”: See Herbert Simon, “Public Administration in Today’s World of Organizations and Markets,” PS: Political Science & Politics 33, no. 4 (2000): 749–56.
This “enormously productive social system”: See Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez, “Top Incomes in the Long Run of History,” Journal of Economic Literature 49, no. 1 (2011): 3–71.
By 2010, the richest 1 percent of Americans: See Edward N. Wolff, “The Asset Price Meltdown of the Middle Class,” panel paper, 2012 APPAM Fall Research Conference, presented November 10, 2012, National Bureau of Economic Research website (https://appam.confex.com/appam/2012/webprogram/Paper2134.html).
In 2014, more than two-thirds of Americans: See “Getting Paid in America 2014,” American Payroll Association, 2014 (http://www.nationalpayrollweek.com/documents/2014GettingPaidInAmericaSurveyResults_FINAL_000.pdf).
good teachers increase the average present value: See Raj Chetty, John N. Friedman, and Jonah E. Rockoff, “Measuring the Impacts of Teachers II: Teacher Value Added and Student Outcomes in Adulthood,” NBER Working Paper No. 19424, National Bureau of Economic Research website, September 2013.
According to research by sociologist Lauren Rivera: See Amy J. Binder, “Why Are Harvard Grads Still Flocking to Wall Street?” Washington Monthly, September 2014.
At Princeton: See Catherine Rampell, “Out of Harvard, and into Finance,” New York Times, December 21, 2011 (http://economix.blogs.nytimes.com/2011/12/21/out-of-harvard-and-into-finance/?_php=true&_type=blogs&_r=0).
the median wage of the bottom 90 percent: See Thomas Piketty and Emmanuel Saez, “Income In
equality in the United States, 1913–1998,” Quarterly Journal of Economics 118, no. 1 (2003): 1–39 (tables and figures updated to 2012, September 2013, table A6).
CEOs of big companies: See Lawrence Mischel and Alyssa Davis, CEO Pay Continues to Rise as Typical Workers Are Paid Less, Issue Brief #380, Economic Policy Institute website, 2014 (http://www.epi.org/publication/ceo-pay-continues-to-rise/).
A growing portion of the compensation of top corporate executives: For a discussion of the occupations of the top 0.1 percent, see Jon Bakija, Adam Cole, and Bradley Heim, “Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data,” Department of Economics Working Papers 2010-22, Williams College, Department of Economics website, 2008, revised January 2012.
11 THE HIDDEN MECHANISM OF CEO PAY
Anyone who still believes people are paid: See Lawrence Mischel and Alyssa Davis, CEO Pay Continues to Rise as Typical Workers Are Paid Less, Issue Brief #380, Economic Policy Institute website, 2014.
Consider that in 1992: See William Lazonick, Taking Stock: Why Executive Pay Results in an Unstable and Inequitable Economy, white paper, Roosevelt Institute website, June 5, 2014 (http://rooseveltinstitute.org/sites/all/files/Lazonick_Executive_Pay_White_Paper_Roosevelt_Institute.pdf).
Comcast CEO Brian L. Roberts’s total compensation: See Comcast Corporation, Schedule 14A Definitive Proxy Statement, April 5, 2013, p. 42 (http://www.sec.gov/Archives/edgar/data/1166691/000119312513144100/d496632ddef14a.htm). See also Karl Russell, “Executive Pay by the Numbers,” New York Times, June 29, 2013 (http://www.nytimes.com/interactive/2013/06/30/business/executive-compensation-tables.html?_r=1&).
The share of corporate income: Lucian A. Bebchuk and Yaniv Grinstein, “The Growth of Executive Pay,” Oxford Review of Economic Policy 21, no. 2 (2005): 283–303 (http://www.law.harvard.edu/faculty/bebchuk/pdfs/Bebchuk-Grinstein.Growth-of-Pay.pdf).