SCOTUS Has Taken a Sledgehammer to the New Deal!

From the Guardian: SCOTUS Has Taken a Sledgehammer to the New Deal

HT: MT

Author Heather Cox Richardson, a professor of history at Boston College, warns us all that the “historic battles between business and ordinary people have played out in America’s top court before.  Now it’s happening again.” 

Read here:

https://www.theguardian.com/commentisfree/2018/jun/30/supreme-court-sledgehammer-new-deal-republicans

“Of the three decisions the US supreme court handed down this week, the gay wedding cake case and travel ban cases were the latest battles in the culture wars that Republicans long have waged. The Janus decision declaring that public sector employees cannot be required to pay fees to the unions that represent them went beyond culture to the very meaning of the American government and how Republicans define it.

“Since the 1930s, when then president Franklin Delano Roosevelt promised to break the hold of moneyed men on the government and broker ‘a new deal for the American people’, a cabal of reactionaries resolved to destroy the new government Democrats created. Roosevelt’s New Deal regulated business, protected social welfare and promoted national infrastructure on the principle that the role of government was not simply to protect the property of the wealthy, but rather was to promote equality of opportunity for all. The popularity of both Roosevelt and his agenda showed that Americans recognized that the government must rein in the runaway capitalism that had brought the nation to its knees.

“But not everyone was on board. A group of reactionary Republicans sided not with the cosmopolitan eastern Republicans who came around to the New Deal but with Ohio senator Robert Taft, a proud representative of small-town, traditional America who maintained that the New Deal undermined liberty and snaked socialism into the nation. They hated government rules and laws that protected their workers, and the need for new taxes to pay for bureaucrats and welfare programs. Above all, they rejected the idea that workers should have a say equal to theirs in what the government did. They loathed the Wagner Act, which empowered workers to unionize and bargain collectively.

“The ‘completely one-sided’ Wagner Act, they complained, enabled labor leaders to challenge business leaders. In 1947, when Republicans regained control of Congress, their first step in their quest to roll back the New Deal was to weaken the political power of unions. The Taft-Hartley Act outlawed closed union shops and weakened union political activism. It passed over then president Harry Truman’s veto.

“Taft-Hartley seemed destined to be the last gasp of reaction in the face of the overwhelming popularity of the newly active government. Republicans rejected Taft as their standard-bearer in 1952, turning instead to Dwight Eisenhower, who launched the ‘Middle Way’, his version of the New Deal. The Middle Way included the largest public works project in American history: the Interstate Highway system, which updated American roads for a driving generation with leisure time on their hands, but expanded the federal government’s purview. 

“But Eisenhower’s policies extended some opportunities to people of color, and race gave the Taft Republicans a wedge to begin razing the activist state. Equality of opportunity for African Americans could only be achieved through the use of state power, and that would cost tax dollars. Equal rights, Taft Republicans insisted, simply redistributed wealth from hardworking white taxpayers to undeserving people of color.

"Now, ​Donald Trump is achieving their dream. But this scheme has created a crisis in American democracy.

“And now, Donald Trump is achieving their dream. But this scheme has created a crisis in American democracy. New Deal-era programs are as popular now as they were in the 1950s, and voters have come to recognize that Republican policies have hurt them. After the American people did not condemn the Democratic president Bill Clinton as Republicans expected, the Republican party has maintained control by gaming the system. Since 2000, Republican policies have suppressed Democratic voting; since 2010, Republican gerrymandering has given the Republicans a heavy systematic advantage in Congress; and the last two Republican presidents have won the White House while losing the popular vote to their opponents.

"Movement conservatives have always known their program appealed to only a minority of Americans, and from the start they have worked to pack the courts with allies. Reagan named more than 375 federal judges, and while Trump has let vacancies eat holes throughout the government, he has concentrated on filling judicial vacancies. That strategy is now paying off. While the Janus ruling strikes at the power of public unions, the other, limited decisions reinforce the cultural parameters of the 1920s: traditional religion and the president’s power to determine immigration, a power rooted in a law from 1924. FDR promised “to restore America to its own people”, and the coffin seems to have closed on that principle."

Please read the entire article in the Guardian.

By the way, also from this magnificent site: 

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Happy Juneteenth Day

Tuesday, June 19^th is the 153^rd Juneteenth Independence Day  

The date celebrates the June 19, 1865, announcement of the loss of the Civil War and the abolition of all slaves in the state of Texas.  This was two and a half years after Lincoln’s Emancipation Proclamation went into effect on January 1^st. 

In Chicago, many events will be held on the following weekend, and a  number of concerts will be held by the Old Town School of Music.  Customary celebrations, like those held in Texas in the late 1800’s and early 1900’s provided an opportunity for simple freedoms like singing, dancing, and readings from worshipped artists.

In Aurora, Events With Elegance, a member of the National Association of Juneteenth Lineage, will sponsor it's 2nd Juneteenth Dinner Dance at six o'clock in the evening on Saturday, June 21, 2003, at the Hyatt Hotel located in Lisle, IL. The Event will also consist of a Speaker and Live Entertainment. African American entrepreneurs will have a chance to display and sell their products to promote their business to other African American consumers. For more information or updates, please send an e-mail to: eventswithelegance@msn.com

Why June 19^th?  It was on that date in 1865 that Union soldiers under the command of General Granger finally washed ashore in Galveston to inform the Texans of what had transpired.  By and large, Texas and its citizens were not impressed.  The limited size of the Union force and the increased numbers of slave-holders fleeing southern states to Texas as the war ravaged their plantations made for little response or acceptance of the news.

Other stories and conspiracy theories, most likely apocryphal, surfaced as reasons for the delay in the announcement for over two years after the President’s Proclamation.  The soldier sent to carry the news to Texas was murdered by those who wanted to prevent such information from reaching the fields.  Plantation owners kept the information from their work force to maintain order and production.  The Union soldiers were complicit in keeping the information from slaves to assure cotton crops were picked before freedom.

In fact, slaves worked and tilled the fields for over two years after they had been acknowledged free men and women in the Capitol.

Despite the Lone Star pushback, after Lee surrendered in April of 1865, it was only a matter of time before the tide of change would sweep across the nation.  Texas Supreme Court decisions in the next decade reaffirmed the status of freedom for those brave African Americans who had cautiously celebrated their liberty in June in the streets of Galveston upon first hearing the news.

Other racial justice organizations will mark the day remembering the horrific history of the slave trade and its everlasting impact on a people and two continents separated by over 5000 nautical miles. 

Over 2 million died while crossing the Middle Passage into America. 

At least as many others perished during the forced transportation across West Africa to the waiting ports.

Estimates of total captives brought to America for slavery run as high as 12 million.

Several hundred captives were chained together below decks in deplorable conditions, suffering cramped contagion and death on the journey.

Insurance brokers provided for coverage in cases of drowning, but not simply deaths.  As a result, some historians visualize the Atlantic sea bottom marking the exact paths of ships with the mountains of bones left from throwing strings of sick or unwanted slaves overboard. Deplorable.

It’s small wonder that Juneteenth will likewise mark the strong, resentful argument for reparations by racial justice organizers like the Black Land and Liberation Initiative.  They and others symbolically revisit the issue by highlighting General William Sherman’s original order in 1865 by recognizing a national day of action.  According to writer Aviana Willis, “In 40 acres across 40 cities black people will take nonviolent direct action to occupy and reclaim spaces such as abandoned schools and empty lots, with the goal of putting these spaces into service of the community.”

(http://inthesetimes.com/article/20249/black-land-and-liberation-forty-acres-mule-juneteenth)

Black Land and Liberation Initiative states it clearly:  “We are people who have been enslaved and dispossessed as a result of the oppressive, exploitative, extractive system of colonialism and white supremacy.  In this system, our labor and its products have been taken from us for generations for the accumulation of wealth by others.”(http://blacklandandliberation.org/)

“We have been taught in school that the source of the policy of “40 acres and a mule” was Union General William T. Sherman’s Special Field Order No. 15, issued on Jan. 16, 1865. (That account is half-right: Sherman prescribed the 40 acres in that Order, but not the mule. The mule would come later.) But what many accounts leave out is that this idea for massive land redistribution actually was the result of a discussion that Sherman and Secretary of War Edwin M. Stanton held four days before Sherman issued the Order, with 20 leaders of the black community in Savannah, Ga., where Sherman was headquartered following his famous March to the Sea. The meeting was unprecedented in American history.

“Today, we commonly use the phrase “40 acres and a mule,” but few of us have read the Order itself. Three of its parts are relevant here. Section one bears repeating in full: “The islands from Charleston, south, the abandoned rice fields along the rivers for thirty miles back from the sea, and the country bordering the St. Johns river, Florida, are reserved and set apart for the settlement of the negroes [sic] now made free by the acts of war and the proclamation of the President of the United States.”

“Section two specifies that these new communities, moreover, would be governed entirely by black people themselves: ” … on the islands, and in the settlements hereafter to be established, no white person whatever, unless military officers and soldiers detailed for duty, will be permitted to reside; and the sole and exclusive management of affairs will be left to the freed people themselves … By the laws of war, and orders of the President of the United States, the negro [sic] is free and must be dealt with as such.”

“Finally, section three specifies the allocation of land: ” … each family shall have a plot of not more than (40) acres of tillable ground, and when it borders on some water channel, with not more than 800 feet water front, in the possession of which land the military authorities will afford them protection, until such time as they can protect themselves, or until Congress shall regulate their title.”

“With this Order, 400,000 acres of land — “a strip of coastline stretching from Charleston, South Carolina, to the St. John’s River in Florida, including Georgia’s Sea Islands and the mainland thirty miles in from the coast,” as Barton Myers reports — would be redistributed to the newly freed slaves. The extent of this Order and its larger implications are mind-boggling, actually.” (http://www.pbs.org/wnet/african-americans-many-rivers-to-cross/history/the-truth-behind-40-acres-and-a-mule/)

Stanton had gone to a group of African American preachers and ministers at the conclusion of the war, asking what would be an appropriate payment for the debasing of a race and people.  The answer was the assurance of future economic freedom by receiving land on which to farm, land that had been taken in Sherman’s march along the southeastern coast of the United States.  Sherman later threw in the single mule with the 40 acres – as many of the pack animals were now available after the war.

“And what happened to this astonishingly visionary program, which would have fundamentally altered the course of American race relations? Andrew Johnson, Lincoln’s successor and a sympathizer with the South, overturned the Order in the fall of 1865, and, as Barton Myers sadly concludes, “returned the land along the South Carolina, Georgia and Florida coasts to the planters who had originally owned it” — to the very people who had declared war on the United States of America.”

Only a small handful of states – Hawaii, Montana, New Hampshire, North Dakota and South Dakota – do not recognize the date as a day for observance, a ceremonial holiday or state sanctioned holiday.  45 other states, including Illinois, recognize the date’s importance and its observance of the participation and achievements of African-Americans in the progress of our country. 

Senator Don Harmon Defends the 3% Cap on Locals' Collective Bargaining

Senator Harmon (Oak Park)

3% Caps?  We Did It To Stop the Cheating.  Sure…

I sometimes listen to Dick Kay’s Saturday afternoon program on WCPT while working in the yard or around the house. I like Mr. Kay because he often reminds me of myself.

Out of place in today’s political world, an analog guy stuck in a fast-moving and unfamiliar digital world.  Yesterday was not different, and poor Dick’s phone systems were down for the better part of the show and once he finally got them back anyone speaking to him was forced to compete with an echoing feedback which made thinking impossible.

Senator Don Harmon from Oak Park, Illinois, was on yesterday afternoon, and  the snafu in the phone lines gave him time to talk politics on many levels with Dick, who had been congratulating him for the end of the budget impasses.  Senator Harmon reminded Mr. Kay that he was happy with the bill, but reminded, “ You can’t please everyone all the time.”

That was exactly what I was thinking.  The budget bill had some carefully wrapped poison pills for public workers folded inside.

A ridiculous pension buyout plan that was so diminishing only a fool or a sadly terminally ill person would take it.   Also, a once-in-a-lifetime opportunity for a Tier One retiree to elect a cash payout instead of the constitutionally guaranteed compounded cost of living increases. 

I chose another venomous seed in the bill.

Eventually, I talked with Sen. Harmon of Oak Park to ask if he even felt

a little unsettled about passing a budget in which a 3% limit was

included in local districts’ bargaining before the district itself was

faced with paying the pension amount to the annuitant for life.

The answer was NO.

In fact, Sen. Harmon's defense was that some years ago local districts

were spiking, so the General Assembly put in a 6% limit which would be a cap and

the locals would have to pay anything above 6%.  “Still,”he said, “ there's been a

lot of fudging and manipulation, but we (GA) noticed that the 6%

really worked well in keeping people from spiking; thus, why not 3%?

That should work as well if not better than the 6%.”

When I asked about why the arbitrary assignment of 3%, the multi-year

contracts that might add up to beyond 3%, the possibility of an

Inflationary economy, the intrusion into collective bargaining by the

General Assembly - he dismissed that as a necessary means to limit the costs of

pension abuses.

When I reminded him that the pension abuses were the result of the

State’s not paying the required payments so that we are now looking at an

unfunded liability of $150 billion for which we all pay an 8% interest, I was dismissed from the discussion.

You sit down with the devil (Rauner), my friends, and you do his work.

Before I was dropped from the echoing conversation, I told Senator Don Harmon that he and the GA were responsible for completing and creating a legacy for the hopefully one-time Governor.

Earlier, when the phones and poor Dick Kay was in confusion, he and Dick had been talking about the dangers of JANUS.

 The General Assembly is JANUS.

PENSION BUYOUT OFFERS

Pension Buyout: “Tell ‘Em What They’ve Won, Governor!”

Any teacher who has considered retirement in the foreseeable future has witnessed the constant plots of the General Assembly and the histrionics of the current Governor to find methods to short those people leaving state employment:  Adding a Tier Two and now Tier Three, extending service requirements, subtracting payments for not doing so, restricting pay raises in the last years of employment, etc. 

Now comes the Pension Buyout as part of the “apparently successful” budget process in Springfield.  The birds of a feather in the Capitol Building started counting chickens after the passage of Representative Michael Fortner’s HB 5625.  They estimated an annual savings of $500 million by offering individuals leaving the systems to choose a one-time buyout.

In fact, they’re counting on it and the sale of the Thompson Center for $300 million plus. 

That $800 million and a few budgetary shuffles and voila, you have a pretend “balanced budget.” 

Good luck on both those.

The Thompson Center, aptly named for a Governor who rocketed pension debt from manageable to extra-terrestrial by shorting funding to pay for roads and services, is a white elephant needing “at least $326 million in deferred maintenance,” according to the Chicago Tribune.  I doubt we’ll find any developer seeking a $300 million purchase followed by a more expensive renovation.  But the General Assembly and Rauner seem to think it’s likely – therefore, “balanced” budget.  And poor Rahm thinks he’ll get the windfall.

The other egg awaiting pipping is Representative Fortner’s Pension Buyout plan.  Another Representative remarked once to a friend and me that Mike Fortner was one of those really interesting academic guys who, when asked what time it is, will explain to you how to construct a watch.  “Complicated, mega-mathematical, intellectual, scientific.”

And HB5625 has a number of moving parts, but let’s stay focused on one at a time. 

First, what’s in it for the teacher who says, “that’s what I want!”

The single buyout will be an actuarially determined guess as to 60% of the amount of total payout that would be made IF the retiree had elected a traditional pension.

Example: Teacher Johnson is earning $65,000 at the end of her career. She is retiring at age 67.  She has completed 35+ years of work in DuPage County and will receive her full pension of nearly 75%. She would normally receive an annuity of  $48,750 in her first year of retirement.  Actuarially, she will be expected to live until age 83. 

She would be offered a 60% of her expected total earnings ($780,000) before her expected eventual death, and the buyout will be a single pay out of $468,000.  

That’s a lot of money.  But Teacher Johnson cannot get the cash.  It will need be rolled into a sponsored investment option like a traditional IRA through a state sanctioned sponsor and available in increments or perhaps more with tax consequences. 

By the way, members who went inactive while raising a family or entertaining another responsibility will also be eligible under this new law.  Also eligible are Tier I and Tier II members with 5 and 10 years of service respectively. 

It’s all voluntary.

But you wonder…where in a cash strapped state like Illinois are they going to find the money to pay for these buyouts?  You’re way ahead of me as usual.

Of course, we’ll borrow the money with bonds and pay it back later.  Moody’s was not particularly sanguine about Illinois’ “balanced budget”:

“Moody’s cited the budget’s “substantial implementation risk” when the state’s Baa3 rating was placed on review last week for a possible downgrade to junk. Analyst Ted Hampton said risks include revenue and cost-saving assumptions built in to the budget for the fiscal year that began July 1.”

(https://www.reuters.com/article/us-illinois-budget-idUSKBN19V2PS)

In other words, how do we pay this bill on our Mastercard?" "Visa?"

Once an Illinois retiree elects in…there’s no getting out. 

But Representative Fortner also has an additional offer for those cash challenged Tier I members who are awash in fiscal white caps:  An Accelerated Pension Benefit Payment for Retiring Tier One Members.

Just renounce your rights to a compounded annual increase in your pension benefit after age 67, agree to an annual increase of 1.5% instead that is simple (not compounded) and you win a LUMP SUM “ACCELERATED PENSION BENEFIT PAYMENT” which will reflect 70% of the monetary difference between your current compounded and the 1.5% simple.

Math? I taught Fine Arts, Dude.

I warned you Rep. Fortner was, well, mathematical.

Once again, it’s not cash; instead, another traditional rollover for a state approved investment company to assist you. 

Let’s go back to Teacher Johnson if she accepts this.    If she were receiving the guaranteed compounded 3% rate of interest from the start until 2033, she’d be receiving around $78,000 annually by her life’s expected end. That means that an initial single 70% buyout would give her a bit over $20,000 without much increase in her payments.   I’m not an actuary, but the increases in a compounded rate leading up to an eventual $78,000 will wash over an investment opportunity of $20,000 like a monetary tsunami.

The Pension Buyout Program will exist until June 30, 2021, but we can expect another program or iteration to be developed by that time. And NO MATTER WHAT THEY DO, THE $130 BILLION IN DEBT WILL STILL BE THERE BECAUSE THEY ARE NOT ADDRESSING THE REAL ISSUE: THE STATE'S CHRONIC REVENUE SHORTAGE. 

Maybe Moody’s isn’t impressed with the complicated methodology of the Pension Buyout Plan in Illinois, or they find Illinois’ borrowing again to save money later laughable, or maybe, just maybe, they know that teachers by and large are a pretty smart lot.

And teachers wouldn’t take this ridiculous canard at all.