October 05th, 2018

REAL left social progressives KNEW back in 1990s that global banking 5% Clinton neo-liberals were staging this attack on our strong, highly functioning SOCIAL SECURITY TRUST when far-right wing Clinton neo-liberals SUBPRIMED Social Security policies in what was sold as a SOCIAL BENEFIT for our 99% of disabled citizens. The article yesterday discussed how the changing of payroll tax allocation to SS DISABILITY from 2.7% to 50% deliberately reduced the funding to OLD AGE while preparing for massive unemployment moving our US 99% of citizens black, white, and brown onto SS DISABILITY.



'Budget Deal Robs $150 Billion from Social Security
www.dailysignal.com/2015/10/27/budget-deal-kicks...
Instead, Congress should allow the disability insurance program to temporarily borrow from the Social Security Trust Fund while it establishes meaningful reforms, such as a flat benefit, a private ...'


Below we see from FDR era to Eisenhower era-----the Federal laws surrounding our SS Trust do not ALLOW for these policies-----Clinton era policies were ILLEGAL.



'Blahous noted that President Eisenhower’s signing statement cited the separate trust fund as one of the features that enabled him to sign the bill:
“A separate trust fund was established for the disability program in an effort to minimize the effects of the special problems in this field on the other parts of the program – retirement and survivors’ protection.”


As today in TRUMP era these SS TRUST reforms are wrapped in policies throwing BONES at one population group with the intent of killing all US 99% regarding these vital safety net programs.


Clinton came to office 1993-----and the reforms subpriming SS TRUST hit Congress right away. Our young adults and new to US 99% of immigrants need to understand we have known this attack was unfolding since 1990s--Clinton/Bush/Obama turned a highly functional SS TRUST into a POVERTY PIMPING PONZI SCHEME.


We simply need to rebuild our local domestic small business economies in all US cities to eliminate the need to push hundreds of millions of US citizens into SS DISABILITY to survive.

'Bill Clinton is an American politician from Arkansas who served as the 42nd President of the United States (1993-2001).


In 1993, the Omnibus Budget Reconciliation Act (OBRA)
increased the share of some Social Security and Railroad Retirement
Tier I benefits
that are taxable
.
That law taxes up to 85% of benefits for individuals whose provisional income exceeds $34,000 and for married couples
whose provisional income exceeds $44,000. The additional
proceeds from that law are credited to the Medicare Hospital Insurance (HI) Trust Fund'


Congress Seeks To Limit Transfers Between Social Security And Disability Funds

By Mary Agnes Carey January 12, 2015


A sweeping rules package the House approved at the start of the 114th Congress includes a provision that has set off a war of words about the future of Social Security and benefits for disabled workers.


The measure would stop House lawmakers  from transferring money from Social Security’s Old-Age and Survivors Insurance Trust Fund to the program’s Disability Insurance Trust Fund unless lawmakers took steps to “improve the actuarial balance” of both funds.


To improve that balance, Congress would have to cut benefits, raise taxes, or find another way to put both the retirement and disability funds on firmer footing.  Lawmakers have in the past transferred funds from the retirement to the disability fund, and vice versa, nearly a dozen times.


Hmmmm, what if we simply recover tens of trillions of dollars in fraud against our US SS Trust?  Funny, that is never one of the solutions.

Proponents of the change say it is needed to strengthen both the underlying Social Security program and its disability fund. Advocates for the poor and disabled say the move could harm millions of the nation’s most vulnerable Americans by reducing the level of benefits they now receive.



What follows are some frequently asked questions about Social Security’s Disability Insurance, also known as SSDI.



Q: What is Social Security Disability Insurance?
A: This part of the Social Security program provides cash payments to workers when they are disabled and off-the-job as a result. According to the Social Security Administration, the number of work credits you need to qualify for disability benefits depends on your age when you become disabled. Generally, though, you need 40 credits, 20 of which were earned in the last 10 years, ending with the year before the disability. Younger workers may qualify with fewer credits.



Q: How many people receive it?
A: Nationwide, approximately 11 million Social Security disability beneficiaries receive about $12 billion in monthly benefits, acting Social Security Administration Commissioner Carolyn W. Colvin told aHouse Ways and Means subcommittee last year.  Due to a variety of demographic trends — including overall population growth, more women in the workforce, the aging of the Baby Boom generation and the increase in the full retirement age for Social Security — the number of disabled workers has tripled since 1980 and doubled since 1995, according to the Center on Budget and Policy Priorities.


The typical beneficiary is in his or her late 50s and has a severe mental, musculoskeletal or other debilitating impairment. Program payments also went to family members – 160,000 spouses and 1.9 million children, according to the center. Disability beneficiaries receive an average of about $14,000 a year in payments.


This KHN story can be republished for free (details).Q: How is the program financed and is it running out of money?

A: The entire Social Security Program – including the Disability Insurance Trust Fund — is funded through a 12.4% payroll tax assessed on the first $118,500  of income.  Employees are taxed 6.2% of their income, and employers match the employee taxes by paying the other 6.2%. Individuals who are self-employed are responsible for paying the entire 12.4%.


Within the 6.2 percent, 5.3 percent finances the retirement and survivor programs and 0.9 percent funds the disability payments. Unless Congress takes action to bolster the disability trust fund, beneficiaries would see disability payments cut by about 20 percent in late 2016, according to program trustees.


According to Kathy Ruffing, a senior fellow at the Center on Budget and Policy Priorities, reallocating some taxes between the retirement and disability trust funds is a historically noncontroversial measure that Congress has taken 11 times in both directions, depending on which fund was running short. “Another reallocation to replenish the DI trust fund wouldn’t threaten seniors, contrary to the [House measure’s] implicit attempt to put retirement and disability beneficiaries against each other,” Ruffing wrote.


Reallocating taxes from the retirement fund to the disability fund to put both on equal financial footing would increase the solvency of the DI fund until 2033 while advancing the retirement fund’s depletion by one year, from 2034 to 2033. Since the retirement fund is much bigger than the disability fund, “a modest reallocation barely dents” the retirement fund, Ruffing added.


Q: Why do some lawmakers want to stop funds being transferred between the two programs?
A: Proponents of the House rules change say it’s necessary to preserve both the core Social Security program and the disability program.


“Anyone who cares about finding a fair solution for both the catastrophically disabled who depend on SSDI and senior citizens who depend on Social Security knows that we must find a long-term solution which protects both of them rather than a short term band aid which threatens them both,” said Rep. Tom Reed, R-N.Y., who co-sponsored the rules change along with Rep. Sam Johnson, R-Texas.  In July, Johnson, who chairs the House Ways and Means Social Security Subcommittee, sponsored legislation to deal with fraud in the disability program, noting that “recent scandals in Puerto Rico, West Virginia, and New York have highlighted the DI program’s growing vulnerability to sophisticated fraud rings.”


Others say the House rules change could cause harm.. In an open letter to Congress, Max Richtman, president and chief executive officer of the National Committee to Preserve Social Security & Medicare, said the shift would “cut benefits for Americans who have worked hard all their lives, paid into Social Security, and rely on their Social Security benefits, including Disability Insurance, in order to survive.” In a Jan. 6 letter to House lawmakers, AARP opposed the House measure as well, writing that it “undermines Congress’s ability to fully consider all potential legislative solutions – particularly options successfully considered many times in the past.”


Q: Does the House rules change mean that Congress cannot shift money between two funds?
A:  Since this is a House rules change, it does not apply to the Senate. While a House member could raise a point of order against any reallocation, that could be defeated if enough members wanted to shift funds between the two accounts.


The House measure fuels the politically explosive debate over Social Security, especially ahead of the 2016 presidential election. “It really is a very strong message from the House Republican leadership that this is on their radar screen and that they do not want to transfer money from the old age program to the disability program unless there are some significant changes in the way the disability program is run. I think that’s the message here,” said Howard Gleckman, a senior fellow at the Urban Institute and editor of the TaxVox blog.


Q: Does the House rules change mean that Congress cannot shift money between two funds?
A:  Since this is a House rules change, it does not apply to the Senate. While a House member could raise a point of order against any reallocation, that could be defeated if enough members wanted to shift funds between the two accounts.


In a letter to Senate Majority Leader Mitch McConnell, R-Ky., seven Senate Democrats and one Independent asked the Senate leader not to pursue the House rules change, a move the Democrats said is “particularly audacious in the light of the fact that past reallocations have been commonplace and bipartisan.” While “an earnest debate” over how to improve the solvency of the Social Security Trust Funds is needed, they wrote, “Americans with disabilities who receive Social Security benefits [should be] held harmless as Congress debates that issue.”  Democrats who signed the letter include Ron Wyden of Oregon, the ranking member of the Senate Finance Committee, and several members of the Senate Democratic leadership team.


The House measure fuels the politically explosive debate over Social Security, especially ahead of the 2016 presidential election. “It really is a very strong message from the House Republican leadership that this is on their radar screen and that they do not want to transfer money from the old age program to the disability program unless there are some significant changes in the way the disability program is run. I think that’s the message here,” said Howard Gleckman, a senior fellow at the Urban Institute and editor of the TaxVox blog.
_____________________________


The article above from KAISER PERMANENTE a raging great big global corporate health system is telling us it is the RIGHT WING REPUBLICANS who want to stem this 1990s Clinton era subpriming of SS TRUST----when of course this subpriming was written by and voted for by RIGHT WING THINK TANKS......well, more specifically WORLD BANK INTERNATIONAL INEQUITY INDUSTRY.

“It really is a very strong message from the House Republican leadership that this is on their radar screen and that they do not want to transfer money from the old age program to the disability program unless there are some significant changes in the way the disability program is run. I think that’s the message here,” said Howard Gleckman, a senior fellow at the Urban Institute and editor of the TaxVox blog'.

We discuss often THE URBAN INSTITUTE is that far-right wing global banking 1% FAKE LEFT social progressive NGO-----so, GLECKMAN is not CARING about fixing our US Social Security, he is simply selling more POVERTY PIMPING policies called REFORM.

Indeed, MOVING FORWARD US FOREIGN ECONOMIC ZONES has always intended to END SUBPRIMED SS DISABILITY ---it has always intended to end US FEDERAL PUBLIC SOCIAL SECURITY.

THE CENTER ON BUDGET AND POLICY PRIORITIES is a far-right wing global banking 1% CLINTON NEO-LIBERAL outlet so RUFFING is not working to SAVE Social Security, she is pretending these TRANSFERS were helpful to our US 99% WE THE PEOPLE pushed into DISABILITY.  This is a FAR-RIGHT WING voice and not a REAL LEFT SOCIAL PROGRESSIVE voice.


'According to Kathy Ruffing, a senior fellow at the Center on Budget and Policy Priorities, reallocating some taxes between the retirement and disability trust funds is a historically noncontroversial measure'

OH, REALLY MS RUFFING?????

Oh, yeah!  There is that global banking 1% PERSONAL INJURY/DISABILITY industrial complex created from these FAKE SOCIAL BENEFIT disability policies.    Yes, global banking 5% freemason/Greek LAWYERS feed off this PONZI SCHEME.

ALL of our US 99% WE THE PEOPLE forced to deal with SS DISABILITY know this scheme is filled with fraud, corruption and KEEPS PEOPLE DOWN.


Reallocate Payroll Taxes to Shore Up Social Security Disability Trust FundIn American politics, partisan gridlock is the norm.


 It is therefore not terribly surprising that Congress has so far delayed reforming Social Security for retirees. After all, reforms to extend the program’s solvency would require increases to payroll taxes, cuts to benefits, or both – all politically toxic proposals. And the program’s trust fund is forecast to be solvent until 2035 – a virtual eternity in the political world.



Social Security Disability Insurance (SSDI) is another story altogether. That program draws from a separate trust fund – one that is forecast to be depleted in 2016. If that happened, benefits could only be paid to the extent they were covered by incoming payroll tax revenue. That would mean an immediate benefit cut of some 20 percent to each and every disabled beneficiary.


One temporary solution is actually quite simple. A small portion of revenues from payroll taxes could be reallocated from the retirement program to disability. Reallocations are nothing new – Congress has enacted them at least six times already, most recently in 1994. According to Social Security Administration chief actuary Stephen Goss, shifting just one tenth of 1 percent of revenues would bring the forecast depletion date of both trust funds in line with each other.


To be clear, this would accelerate the depletion of the retirement program’s trust fund, and thus it is not necessarily a politically simple fix despite being logistically simple. But the reallocation itself would not result in any workers having to pay more in taxes, nor any beneficiaries – retired or disabled – suffering a cut in benefits. This should spare the measure from significant controversy, as past reallocations have been.


The SSDI program has recently faced intense scrutiny and criticism because of its rapidly swelling roll of beneficiaries. There is a sense among some that fraud is rampant in the program and that unemployed baby boomers who do not yet qualify for retirement benefits are freeloading despite being physically capable of work. This makes disabled Americans pawns in games of political brinksmanship as Congress argues over fiscal policies and debt ceilings.


The reality is that while examples of fraud may be found in the SSDI program, its growth was predicted by simple demographics. Baby boomers are nearing retirement age. The rate of physical disability among those age 40 is half that of 50-year-olds, which itself is half that of 60-year-olds. Moreover, women’s increased participation in the labor force over the last several decades means they are increasingly eligible for disability benefits.


Millions of Americans depend on disability benefits to make ends meet, and many more depend on retirement benefits for the same. Reforming both these programs in order to make them solvent long into the future may be a lengthy political process. In the meantime, reallocating funds to SSDI is the right thing to do to protect the livelihood of those who depend on it.

______________________________________

Here is SHERROD BROWN a great big global banking 1% Clinton neo-liberal telling us REALLOCATION IS NOT CONTROVERSIAL-----oh, really?  And Sherrod thinks all those tens of millions of people pushed onto SS Disability these few decades feel like they are WINNING? What a POVERTY PIMP.

'Sen. Sherrod Brown, who chairs the Subcommittee on Social Security, Pensions and Family Policy, argued in a May hearing that Congress should reallocate the disability trust fund. “Reallocation is not controversial,” the Ohio Democrat said at the hearing'.

There are indeed REAL disabled US citizens on SS DISABILITY who need our original SS Disability TRUST to WORK PROPERLY.  What those tens of millions of US citizens having been pushed into these once FUNCTIONING disability programs need is a FUNCTIONING US SOVEREIGN ECONOMY.

MOVING FORWARD ONE WORLD ONE GOVERNANCE kills that goal of rebuilding an economy driven by goals of FULL EMPLOYMENT.  The REAL LEFT SOCIAL PROGRESSIVE policy for our US unemployed pushed into DISABILITY is to get the economy working.  The same global banking 5% Clinton/Obama neo-liberals saying these allocations are SOCIAL BENEFIT---are the ones MOVING FORWARD mass unemployment in US FOREIGN ECONOMIC ZONES.

WE CANNOT MOVE OUR US 99% OFF FAKE DISABILITY ROLLS IF WE ARE NOT BUILDING A REAL LOCAL DOMESTIC FREE MARKET CAPITALIST ECONOMY.

DON'T WORRY SAY GLOBAL BANKING 1% POVERTY PIMPS---WE ARE GOING TO INSTALL 'BASIC INCOME' TO REPLACE YOUR PERMANENT ROLL AS UNEMPLOYED.

Sadly, this article shows our new to US 99% of Asian, African, Arabic citizens becoming trapped in FAKE DISABILITY.

Disabled Recipients of Social Security Fund Face Hefty Benefits Cut


Jun.10.2014 / 8:21 PM EDT / Updated Jun.22.2014 / 4:56 AM EDT

Alan Choy chats with his daughter Yvania, 8, about her day at their home in San Francisco, on June 17, 2014. The Choys, who receive Social Security Disability Insurance, are struggling financially.

Sarah Rice / for NBC News


Congressional gridlock is threatening the already thin lifeline of Social Security benefits that nearly 9 million disabled American workers rely on to feed, clothe and shelter their families.



Known as SSDI, the trust fund is one of two administered by the Social Security Administration (the other is for senior citizens), and its reserves will run dry in late 2016, if lawmakers don’t act sooner to shore them up. But the timing is poor; it falls in an election year and experts say it could become a target for political infighting as Americans gear up to go to the polls.


“I think it’ll probably come down to the wire,” said Mark Duggan, a professor of business economics and public policy at the Wharton School of the University of Pennsylvania.


And that’s what worries people like Erica Choy. The 45-year-old San Francisco resident is struggling to raise the youngest four of her five kids on about $2,100 a month, a combination of SSDI and SSI — supplemental security insurance. “It’s a constant struggle for us,” she said.


“We don’t have enough to pay the PG&E bills,” she said of her power company. And although three of her kids needed braces, she had to pick just one — even on a payment plan, it was all the family could afford.


“It’s like, who do you choose … and trying to tell your children it’s not because you love one more than the other,” she said.


“For folks who are at the very edge of their financial resources … this is going to have serious consequences.”Karl Robillard, communications and outreach senior manager for the nonprofit St. Anthony Foundation in San Francisco, sees the challenges facing his clients, including Choy.
“It’s an indication of how our social safety net is fraying,” Robillard said. “In some ways they’ve already fallen through what’s already an eroding safety net.”


After Choy's husband suffered brain damage in a fall, short-term memory loss made it hard for him to hold down a job at places like Home Depot or UPS, and his former career as an X-ray technician was out of the question, she said. A fracture in her back left her unable to return to work at either of her former jobs at a day care or a collections agency. The family collects about $500 a month in food stamps and lives in a three-bedroom subsidized apartment; monthly rent costs a third of their Social Security benefits.

The empty DI reserves aren’t a surprise.


“When Congress last reallocated the tax rates between the programs, they actually projected it would be adequate through 2016,” said Kathy Ruffing, a senior fellow at the left-leaning Center on Budget and Policy Priorities. Past reallocations have sometimes gone the other way around, she pointed out, funneling more money into the retirement pool at the expense of the disability program.


Sen. Sherrod Brown, who chairs the Subcommittee on Social Security, Pensions and Family Policy, argued in a May hearing that Congress should reallocate the disability trust fund. “Reallocation is not controversial,” the Ohio Democrat said at the hearing.


Experts are skeptical, though. Formerly uncontroversial legislation like raising the debt ceiling has become a platform for political skirmishes, and the election-year timing might prove to make disability insurance a tempting target.


“My expectation is that Republicans will demand a price for changing the allocation," said Wharton's Duggan. "I think ultimately that is what will happen, but whether or not there will be reform bundled with that will be interesting to see.”


Playing chicken with the trust fund would be devastating, Ruffing said. “If Congress allows the disability trust fund to run dry, then what will happen is benefits to all recipients will be cut by approximately 20 percent, which is obviously an unacceptable outcome,” she said. “It’s a completely unnecessary form of brinkmanship.”

Robillard said when the stimulus-related supplemental food stamp funding expired last fall, the number of families St. Anthony’s serves in its soup kitchen skyrocketed. “For folks who are at the very edge of their financial resources … this is going to have serious consequences,” he warned.


SSDI provides an average monthly benefit of a little more than $1,100. Social Security Administration data as of December 2012 show that just over 7 percent of disabled workers get less than $500 a month, and roughly a quarter get between $750 and $999.


“We find that DI payments account for the majority of family income for nearly half of all beneficiaries,” a 2013 Urban Institute report said. “Many DI beneficiaries live in poverty.”



“People are not getting rich off SSDI benefits,” said Kristin Lupfer, project director at the Substance Abuse and Mental Health Services Administration’s SSI/SSDI Outreach, Access, and Recovery Technical Assistance Center. “It's definitely a myth that getting by on benefits is easy.”


Choy is far from the only American struggling to raise a family on these meager payments. The average age of recipients has dropped even as program participation has risen, a function of a growing population overall, more women in the workforce and the large Baby Boomer demographic reaching the age when disabilities are more likely to hinder their ability to work. Changes made in 1995 also made it easier for people with certain types of disorders to obtain benefits.


“The place where there’s been truly explosive growth is in musculoskeletal conditions and mental health disorders,” Duggan said.



“People are not getting rich off SSDI benefits. It's definitely a myth that getting by on benefits is easy.”This swelling of the SSDI rolls and the impending depletion of its trust fund reserves puts this already-vulnerable population in the political cross-hairs. The crux of the argument is whether or not disability recipients can and should work — a determination that’s especially hard to make with “invisible” ailments like mental disorders or bad backs.


While stories about disability fraud do make headlines, these represent “a very small minority” of SSDI recipients, according to Lupfer. “In reality, it's extremely difficult to get approved for disability benefits,” she said.


Applications for SSDI do tend to rise during bad economies, but people aren’t accepted at a greater rate. In 2013, just under 34 percent of applications were approved for benefits.



Some critics of the program’s growth say workers are using disability as a kind of extended unemployment insurance. “We just don’t see it in the data,” said Columbia Business School assistant professor of finance and economics Andreas Mueller, who conducted research to find out if this was true. The people who apply for unemployment benefits and disability insurance are two different groups, he said.


Matthew Rutledge, a research economist at the Center for Retirement Research at Boston College, said another way economists tried to ferret out the scope of legitimate disability was looking at the subsequent labor market participation of people whose disability applications were narrowly turned down.



“They find that most of them don’t work ... and a fair number wind up reapplying,” he said. “The large majority are people who definitely deserve to be on the program. If anything, these numbers suggest that there are people who should be on the program who aren’t getting on,” he said.

_____________________________________________


MOVING FORWARD Clinton/Bush/Obama global banking 1% pretending to care for the poor will morph from sending our US 99% WE THE PEOPLE to FAKE SS DISABILITY because WORLD BANK international inequity industry has a new FAKE 'LEFT' POPULIST policy for global banking 5% freemason/Greek POVERTY PIMPS to push------FAKE SS DISABILITY policies become BASIC INCOME promises---we promise MOVING FORWARD MASS UNEMPLOYMENT will include BASIC INCOME FOR ALL says global banking 1% OLD WORLD KINGS AND QUEENS--TRIBE OF JUDAH KNIGHTS OF MALTA.

Please know that saving our REAL US Social Security Trust is critical not only because it is the most successful safety net program in WORLD HISTORY----but because our US 99% WE THE BABY BOOMERS have already PRE-PAID for these SS benefits through all of 21st century----as well as PRE-PAYING SS DISABILITY for our 99% of REAL DISABLED citizens.  If we allow CLINTON/BUSH/OBAMA global banking 1% POVERTY PIMPS to create another structure with goal of ending US SOCIAL SECURITY we leave tens of trillions of dollars in the pockets of global banking 1% and their BEOWULF players.


But the CLINTONS are a DYNASTY ---but the BUSHES are a DYNASTY---no, we are positive they are simply a global criminal cartel.


A Critic at Large
July 9 & 16, 2018 Issue


Who Really Stands to Win from Universal Basic Income?


It has enthusiasts on both the left and the right. Maybe that’s the giveaway.


By Nathan Heller



In 1795, a group of magistrates gathered in the English village of Speenhamland to try to solve a social crisis brought on by the rising price of grain. The challenge was an increase in poverty, even among the employed. The social system at the time, which came to be known as Elizabethan Poor Law, divided indigent adults into three groups: those who could work, those who could not, and those—the “idle poor”—who seemed not to want to. The able and disabled received work or aid through local parishes. The idle poor were forced into labor or rounded up and beaten for being bums. As grain prices increased, the parishes became overwhelmed with supplicants. Terrorizing idle people turned into a vast, unmanageable task.


The magistrates at Speenhamland devised a way of offering families measured help. Household incomes were topped up to cover the cost of living. A man got enough to buy three gallon loaves a week (about eight and a half pounds of bread), plus a loaf and a half for every other member of his household. This meant that a couple with three children could bring home the equivalent of more than twenty-five pounds a week—a lot of bread. The plan let men receive a living wage by working for small payments or by not working at all.



Economics is at heart a narrative art, a frame across which data points are woven into stories about how the world should work. As the Speenhamland system took hold and spread across England, it turned into a parable of caution. The population nearly doubled. Thomas Malthus posited that the poverty subsidies allowed couples to rear families before their actual earnings allowed it. His contemporary David Ricardo complained that the Speenhamland model was a prosperity drain, inviting “imprudence, by offering it a portion of the wages of prudence and industry.” Karl Marx attacked the system years later, in “Das Kapital,” suggesting that it had kept labor wages low, while Karl Polanyi, the economic historian, cast Speenhamland as the original sin of industrial capitalism, making lower classes irrelevant to the labor market just as new production mechanisms were being built. When the Speenhamland system ended, in 1834, people were plunged into a labor machine in which they had no role or say. The commission that repealed the system replaced it with Dickensian workhouses—a corrective, at the opposite extreme, for a program that everyone agreed had failed.



In 1969, Richard Nixon was preparing a radical new poverty-alleviation program when an adviser sent him a memo of material about the Speenhamland experiment. The story freaked Nixon out in a way that only Nixon could be freaked out, and although his specific anxiety was allayed, related concerns lingered. According to Daniel P. Moynihan, another Nixon adviser, who, in 1973, published a book about the effort, Speenhamland was the beginning of a push that led the President’s program, the Family Assistance Plan, toward a work requirement—an element that he had not included until then.



Nixon had originally intended that every poor family of four in America with zero income would receive sixteen hundred dollars a year (the equivalent of about eleven thousand dollars today), plus food stamps; the supplement would fade out as earnings increased. He sought to be the President to lift the lower classes. The plan died in the Senate, under both Republican and Democratic opposition, and the only thing to survive was Nixon’s late-breaking, Speenhamland-inspired fear of being seen to indulge the idle poor. By the end of his Administration, a previously obscure concept called moral hazard—the idea that people behave more profligately when they’re shielded from consequences—had become a guiding doctrine of the right. A work requirement stuck around, first in the earned-income tax credit, and then in Bill Clinton’s welfare reforms. The core of Nixon’s plan—what Moynihan, in “The Politics of a Guaranteed Income,” called “a quantum leap in social policy”—was buried among his more flamboyant flops.



Recently, a resurrection has occurred. Guaranteed income, reconceived as basic income, is gaining support across the spectrum, from libertarians to labor leaders. Some see the system as a clean, crisp way of replacing gnarled government bureaucracy. Others view it as a stay against harsh economic pressures now on the horizon. The questions that surround it are the same ones that Nixon faced half a century ago. Will the public stand for such a bold measure—and, if so, could it ever work?


“Give People Money: How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World” (Crown), by the economic journalist Annie Lowrey, is the latest book to argue that a program in this family is a sane solution to the era’s socioeconomic woes. Lowrey is a policy person. She is interested in working from the concept down. “The way things are is really the way we choose for them to be,” she writes. Her conscientiously reported book assesses the widespread effects that money and a bit of hope could buy.


A universal basic income, or U.B.I., is a fixed income that every adult—rich or poor, working or idle—automatically receives from government. Unlike today’s means-tested or earned benefits, payments are usually the same size, and arrive without request. Depending on who designs a given system, they might replace all existing governmental assistance programs or complement them, as a wider safety net. “A UBI is a lesson and an ideal, not just an economic policy,” Lowrey writes. The ideal is that a society, as a first priority, should look out for its people’s survival; the lesson is that possibly it can do so without unequal redistributive plans.

People generally have a visceral reaction to the idea of a universal basic income. For many, a government check to boost good times or to guard against starvation in bad ones seems like an obviously humane measure. Others find such payments monstrous, a model of waste and unearned rewards. In principle, a government fixes the basic income at a level to allow subsistence but also to encourage enterprise and effort for the enjoyment of more prosperity. In the U.S., its supporters generally propose a figure somewhere around a thousand dollars a month: enough to live on--somewhere in America, at least—but not nearly enough to live on well.


“So basically you’re a dog now.”

Recent interest in U.B.I. has been widespread but wary. Last year, Finland launched a pilot version of basic income; this spring, the government decided not to extend the program beyond this year, signalling doubt. Other trials continue. Pilots have run in Canada, the Netherlands, Scotland, and Iran. Since 2017, the startup incubator Y Combinator has funded a multiyear pilot in Oakland, California. The municipal government of Stockton, an ag-industrial city east of San Francisco, is about to test a program that gives low-income residents five hundred dollars a month. Last year, Stanford launched a Basic Income Lab to pursue, as it were, basic research.



One cause of the program’s especial popularity in Northern California is also a reason for the urgency of its appeal: it is a futurist reply to the darker side of technological efficiency. Robots, we are told, will drive us from our jobs. The more this happens, the more existing workforce safety nets will be strained. In “Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream” (2016), the labor leader Andy Stern nominates U.B.I. as the right response to technological unemployment. Stern, a lifetime labor guy, is a former president of the two-million-member Service Employees International Union. But he thinks that the rise of robots and the general gig-ification of jobs will “marginalize the role of collective bargaining,” so he has made a strategic turn to prepare for a disempowered working class. “You go into an Apple store and you see the future,” he quotes an economist saying. “The future of the labor force is all in those smart college-educated people with the T-shirts whose job is to be a retail clerk.” (This presumes that people will frequent brick-and-mortar shops in the first place.)

WE HAVE DISCUSSED IN DETAIL ANDY STERN'S FRAUDS AGAINST SEIU AND HIS DEVOTION TO FAR-RIGHT WING GLOBAL BANKING 1% CLINTON NEO-LIBERALISM---HE IS A 5% FREEMASON/GREEK PLAYER-----NOT LEFT LABOR 99% POPULIST.


By Lowrey’s assessment, the existing system “would falter and fail if confronted with vast inequality and tidal waves of joblessness.” But is a U.B.I. fiscally sustainable? It’s unclear. Lowrey runs many numbers but declines to pin most of them down. She thinks a U.B.I. in the United States should be a thousand dollars monthly. This means $3.9 trillion a year, close to the current expenditure of the entire federal government. To pay, Lowrey proposes new taxes on income, carbon, estates, pollution, and the like. But she is also curiously sanguine about costs, on the premise that few major initiatives balance out on the federal books: “The Bush tax cuts were not ‘paid for.’ The wars in Iraq and Afghanistan were not ‘paid for.’ ” When the country wants to launch a big project, she insists, the double joints and stretchy tendons of a giant, globalized economy come into play.


This open planning won’t exactly soothe the cautious. A big reason for chariness with a U.B.I. is that, so far, the program lives in people’s heads, untried on a national scale. Then again, by the same mark, the model couldn’t be called under-thunk. The academic counterpart to Lowrey’s journalistic book is Philippe Van Parijs and Yannick Vanderborght’s recent “Basic Income: A Radical Proposal for a Free Society and a Sane Economy” (Harvard), a meticulously comprehensive, frequently persuasive accounting of U.B.I.’s superiority by measures economic, philosophical, and pragmatic. Like Lowrey, they see basic income as a sound social program and a corrective “hope”: not a perfect system, but better than anything else.


Traditionally, a challenge for means-tested aid is that it must determine who is most deserving—a vestige of the old Elizabethan system. Often, there’s a moralizing edge. Current programs, Lowrey points out, favor the working poor over the jobless. Race or racism plays into the way that certain policies are shaped, and bureaucratic requirements for getting help can be arcane and onerously cumulative. Who will certify the employee status of a guy who’s living on the streets? How can you get disability aid if you can’t afford the doctor who will certify you as disabled? With a universal income, just deserts don’t seem at issue. Everybody gets a basic chance.



Observers often are squeamish about that proposition. Junkies, alcoholics, scam artists: Do we really want to hand these people monthly checks? In 2010, a team of researchers began giving two-hundred-dollar payments to addicts and criminals in Liberian slums. The researchers found that the money, far from being squandered on vice, went largely to subsistence and legitimate enterprise. Such results, echoed in other studies, suggest that some of the most beneficial applications of a U.B.I. may be in struggling economies abroad.



Like many students of the strategy, Lowrey points to Kenya, where she reported on a U.B.I. pilot in a small village. (She won’t say which, for fear of making it a target for thieves—a concern worth counting as significant.) The pilot is run by a nonprofit called GiveDirectly, and is heavily funded through Silicon Valley; in that respect, it’s a study in effective philanthropy, not a new model of society. But the results are encouraging. Before GiveDirectly sent everyone the equivalent of twenty-two U.S. dollars a month (delivered through a mobile app), Village X had dirt roads, no home electricity, and what Lowrey genteelly calls an “open defecation” model for some families. Now, by her account, the village is a bubbling pot of enterprise, as residents whose days used to be about survival save, budget, and plan. (The payments will continue until 2028.)




A widow tells her, “I’ll deal with three things first urgently: the pit latrine that I need to construct, the part of my house that has been damaged by termites, and the livestock pen that needs reinforcement, so the hyena gets nothing from me on his prowls.” A heavy-drinking deadbeat buys a motorbike for a taxi business, sells soap, buys two cows, and opens a barbershop. His work income quadruples. He boasts to Lowrey of his new life.


_____________________________________________


We will end this week's discussion on public policy tied to 99% of citizens' wealth by looking at yet another WORLD BANK global banking 1% POVERTY PIMPING policy. We often discuss how US FED wrote PENSION policies back in early 1900s. It was never a LEFT policy---it was always a far-right wing global banking 1% policy. It's goal back then was exactly what has played out these few decades of CLINTON/BUSH/OBAMA. Just as our US 99% WE THE PEOPLE with pensions whether private or public near retirement age----needing those PRE-PAID RETIREMENT PENSIONS----we see policy killing those pensions---we see our 99% losing their jobs just so they cannot access pensions----we see corporate raiding deliberately sending US corporations into bankruptcy ---ILLEGALLY----to kill pension funds.

Today, we have shouted our US pensions tied to US TREASURY BOND FRAUDS will kill US PENSIONS. Boom and bust global banking NEO-LIBERALISM is designed to direct LOSSES from GAINS to pension funds.

So, here we have that global banking 1% FAKE media outlet pretending to be PRO-LABOR ------IN THESE TIMES------pretending that PENSION POLICY is 'LEFT' when WORLD BANK wrote these policies. Is the LEFT abandoning WORKER PENSIONS?

WE HOPE SO.

Unfortunately, we have no REAL LEFT organizations working for 99% OF WE THE WORKERS whether union or non-union.

We need to end PENSION policy in a way that allows current pension-holders to get their PRE-PAID benefits.


There is NOTHING LEFT coming from BOSTON UNIVERSITY or HARVARD.

OH, REALLY DAVID WEBBER?


David Webber
David Webber is a law professor at Boston University and author of The Rise of the Working Class Shareholder: Labor’s Last Best Weapon (Harvard University Press 2018).





Thursday, Aug 9, 2018, 5:04 pm



Will the Left Get Fooled Into Abandoning Worker Pensions?

BY David Webber


The ideological blinders of some on the left are aiding and abetting the right’s final assault on labor. Workers and their allies should be appalled, and they need to act quickly.

In the past decade, one of the few hopeful developments in an often bleak labor landscape has been the rise of a new form of activism built on the power of labor’s $3.5 trillion pensions. A new class of activists at the AFL-CIO Office of Investment, the American Federation of Teachers, the National Education Association, the American Federation of State County and Municipal Employees, the North America’s Building Trades Union, the Service Employees International Union, UNITE HERE, the California Public Employees’ Retirement System, the New York state and New York City and Illinois and Chicago and Los Angeles pension funds—and smaller state, county and municipal pension funds across the country--have begun to mobilize these funds to advance the interests of the workers who contribute to them. Under their leadership, these pensions have invested to create union jobs for workers, who then strengthen the funds by contributing to them. They have fought privatization of public sector jobs, pushed back on outrageous Wall Street fees, attacked obscene executive compensation, forced disclosure of the CEO-worker pay ratio, resisted hedge fund attacks on pensions and in some cases divested from them entirely, and sued companies like Enron, Worldcom, and now Wells Fargo for fraud. They have divested from gun companies, demanded companies account for their environmental impact, hammered companies over sexual harassment and assault, and attacked pharmaceutical companies that fueled the opioid crisis. For all these reasons, these funds have come under withering attack from the right—empowered by the recent Janus case—which is using a controversy about the funding status of public pensions to ram through crippling reforms to undermine them. The left’s response has been silence and concessions. The left’s pension paralysis can be traced to its entirely ideological and outdated discomfort with what these pensions really are: labor’s own source of capital.  



The best example of this aiding and abetting of attacks on pensions is Doug Henwood and Liza Featherstone’s In These Times piece, “Wall Street Isn’t the Answer to the Pension Crisis. Expanding Social Security Is.” They then double down on their claims here. According to Henwood and Featherstone, pension funds are dead anyway because of systematic underfunding. In support of this conclusion, they cite the research of Joshua Rauh, a Stanford economist affiliated with the conservative Hoover Institution. Rauh is indeed a credible economist. But so is Alicia Munnell of the Boston College Center for Retirement Research, as is Dean Baker of the Center for Economic and Policy Research, and as are others who dispute the conclusion that these pensions are necessarily doomed nationwide, including Max Sawicky, who responded to the Henwood and Featherstone arguments here and here.



Wherever one stands on underfunding, there are cures for it that are worse than the disease itself. The conservative solution is to smash and scatter these pensions into millions of individually managed 401ks. The number one priority on the left should be to stop that from happening, not undermine resistance to this grim fate by scaremongering about the perils of pensions or comparing them to a nonexistent alternative. Turning all these funds into 401ks will do more than just subject workers to a retirement vehicle that has been renounced by its inventors and itself has its own indisputable underfunding crisis. It would also silence worker shareholder voice. This aspect of the argument is repeatedly misunderstood, dismissed, or ignored by parts of the Left.



The necessary precondition for these funds to be able to act on behalf of the workers who contribute to them is to be collective. A pension fund is like a union and a 401(k) is like right to work. Just as an individual worker has little say negotiating pay, benefits or working conditions alone, so an individual shareholder in a company has little say over the fees they are charged or how much the CEO makes. Just as workers are empowered through the collective voice of the union, so they are empowered in their retirement investments through the collective voice of the pension. Divide and conquer the pensions and you kill the shareholder voice that has enabled them to engage in the very activism that promotes their contributors’ interests.



And yet, Henwood and Featherstone’s substitution of Social Security for these pension funds would silence that worker-shareholder voice as surely as 401ks would. They blithely dismiss the power vested in these pension funds by citing three examples of how it has been used against workers. Indeed, this power has been abused, and more than three times. But a more balanced account of this power would also consider the stunning ways in which it has been used to advance worker interests. Ironically, one of the examples Henwood and Featherstone use in their article—KKR profiting off its investment in Safeway supermarkets while laying off workers—ended in a way that demonstrates the very shareholder power they deride and ignore, in which fed up worker pension funds like the California Public Employees Retirement System flipped the script, using their shareholder power to oust several KKR board members from Safeway, demote others, and punish its management for its attack on workers and their benefits. We are seeing echoes of that revolt today in the furious reaction of public pensions to KKR’s handling of the Toys R Us debacle, in which many labor’s capital institutions have pushed hard for Toys R Us workers to receive severance and are reconsidering their KKR investments, as Henwood and Featherstone acknowledge here. What other investors would do that?




On the other hand, they are quite correct to condemn outrageous investments by pension funds in businesses that kill workers jobs, particularly the jobs of the very workers who contribute to these funds. I agree and have argued against that practice here and here. But they make an unjustifiable logical leap in arguing that the solution to this problem is widespread divestment and ultimately abandonment of these pensions in favor of a larger Social Security system.


First, divestment. The left has fallen madly in love with divestment. When it comes to investment issues, we have just one move: Divest. But divestment is only one tool in the toolkit, and anyone who has looked carefully at the evidence must conclude that it is often not the best of the lot. Divestment from publicly held companies is often utterly pointless— pure political theater. Consider the Vice Fund (formerly the Barrier Fund), which invests in tobacco companies, casinos and alcohol companies because they sell addictive products and are often targeted for divestment. How many divesters have sold their shares to the Vice Fund? There’s no way to know. But if the shareholders buying your shares are indifferent to the concerns that prompted your divestment, it will have no effect, other than to make yourself look conscientious in a press release. As shareholder advocate Nell Minow has put it, “the day an activist shareholder divests is the day the CEO pops the champagne and breaks out the caviar.” Investors that stay and fight have had a significant impact, like prompting corporate action on the environment or reining in excessive CEO pay practices.


Yes, divestment can be appropriate at times. I applauded CalPERS’s divestment from hedge funds. I researched and told the story of how Dennak Murphy, a quiet SEIU capital strategist, helped to make that happen. Hedge funds have underperformed the market for over a decade and charge outrageous fees, making divestment from them as an asset class often a logical thing to do, though a report from the American Federation of Teachers Capital Strategies group illustrates how pensions could do better by cutting the fees they pay hedge funds. And it is also true that pensions that have stayed in hedge funds have been able to use their investments to push the funds to stop undermining teacher pensions.



Similar issues present themselves with private equity funds, particularly those engaging in practices that undermine labor. Divesting from private equity might undermine the industry. But it might not. It might instead result in the industry proceeding much as before, but without the only investors who care about labor and have any interest in protecting it. That would be KKR and Toys R Us but with no one pushing for worker severance packages. Alternatives exist. For years, ULLICO—founded by Samuel Gompers to provide life insurance policies for industrial workers when the insurance industry wouldn’t write such policies—has been making investments that require companies to use union labor. The AFL-CIO Housing Investment Trust similarly uses union capital to finance housing built with union labor. New York City recently adopted a responsible contractor policy for real estate and infrastructure investment requiring the hiring of responsible contractors who pay workers fair wages and benefits, inducing private equity fund Blackstone to adopt the policy for its infrastructure projects. In fact, the only reason we know about private equity’s many abuses is because the AFL-CIO’s Office of Investment pushed for the adoption of private fund registration in Dodd-Frank. In short, if properly deployed, labor’s capital can be utilized to advance the interests of workers, not just undermine them.


The spread of worker-friendly investment policies may be a far more powerful tool than divestment. It may, in fact, be critical to the future of labor if and when a national infrastructure spending project materializes, which is highly likely to contain some incentives for private sector funding. Scaling up New York City’s responsible contractor policy for private infrastructure investment could make the difference between whether America gets rebuilt using union or nonunion labor. But for such worker-friendly policies to succeed, you’ve got to have pooled investment funds that can implement them, not 401ks. And not just Social Security either.


There are several practical objections to the pursuit of a single-minded plan to expand Social Security. First, it is politically impossible in the near term; if anything, we will be lucky if we complete the year 2018 without it being cut back. Second, going all-in on Social Security implies that our retirement is more secure in the Washington of Trump, McConnell, and Ryan, or their future incarnations, than it is in Sacramento, Boston, or Albany. Third, if pension critics favoring this approach were being intellectually consistent, they would have to describe Social Security the same way they describe public pension funds. That means describing Social Security as zero-percent funded, since there are no funds actually set aside for it, anywhere. That’s a misleading description, but no more misleading than the arguments made about public pensions that Henwood and Featherstone so credulously accept. The federal government can pay for Social Security—even if it is technically zero-percent funded—just as all fifty states can pay for their pensions. Fourth, there is no good reason why we should not simultaneously pursue a policy of expanding Social Security while also fighting to protect worker pensions in collective form. But setting these aside, it’s wrong to argue that Social Security alone is the right ideal, because it entails forfeiting the shareholder power of pooled, collectively managed retirement funds.



One problem with Social Security is that workers contribute to it over a lifetime of work but have absolutely no say over how that money is used in the interim. In contrast, vehicles that set aside those contributions into actual funds with worker representation and often political representation on boards--like public pension funds, and like some sovereign wealth funds—have say over whether, for example, their funds should be invested in apartheid South Africa, not to mention giving workers say over CEO pay, corporate governance or labor practices. Such funds give workers voice in capital markets, arguably the most powerful force on the planet today. They are the 21st century model for retirement security, because they retain that shareholder voice. Social Security gives away all that power for nothing.

OH, REALLY??????  OUR US 99% HAVE SHAREHOLDER VOICE IN PENSION FUNDS?  LIKE PIMCO AS MASSIVE AND SYSTEMIC PENSION FRAUD BEING THE NEXT AIG?


The only plausible argument for forfeiting this massive shareholder power is that it taints workers by making them complicit with the power structures of capital. (“Investing in the stock market achieves the opposite [of guaranteeing future security through social and physical investments]; it expands the wealth and power of Wall Street,” Henwood and Featherstone write.) And indeed, to an extent, participating in the market can make labor complicit in power structures that work against it. So does participating in electoral politics. So does bringing lawsuits. So does organizing into a union that negotiates, and compromises with, management. When running for office, suing, or organizing, you create and enter into power structures that may at times compromise you. The question is not whether this will happen—it will. The question is, would you be better off not voting, suing, organizing? In my view, the answer is no. That same “no” applies just as much to capital markets. Overall, you are worse off if you make no effort to exercise voice within them.


Henwood and Featherstone style their argument as a wake-up call to progressives to “get real” about the purportedly parlous state of pensions. Here is another “get real” wake up call to progressives: capital markets are going nowhere. When corporations operate globally, when capital can flee overnight or starve government functions through punishing bond yields, you cannot rely on the nation state alone to solve all your problems. If it’s the market that is causing those problems, you must have some say inside the market to solve them. You do not empower yourself in the 21st century by unilaterally surrendering your own shareholder voice any more than you empower yourself politically by not voting. Instead, you exercise that shareholder voice, learn to amplify it, organize it to advance the interests of the workers who contribute it, resist the hostile legal interpretations designed to choke it. You engage with it and you fight for it and you push to move it in the right direction. What you definitely do not do is walk away from it in favor of some fantastical, outdated, and nonexistent alternative that keeps you ideologically pure and powerless.

SO, OUR INTERNATIONAL LABOR UNIONS ARE TOP TIER IN COMPLEX FINANCIAL DERIVATIVES---DOES ANYONE BELIEVE THAT???????

_____________________________________________

When our US 99% WE THE PEOPLE go looking to recover all those trillions of dollars looted from our US Social Security and Medicare Trusts----look no further.  Nothing says OFF-SHORED SACKING AND LOOTING then biggest in world global investment corporation CARLYLE GROUP ---home of CLINTON/BUSH 'dynasty' fraudulent gains.  CARLYLE GROUP is attached here in Baltimore to global hedge fund JOHNS HOPKINS----it is attached to global hedge fund STANFORD as well as other former US IVY LEAGUE SCHOOLS.

Our US 99% and global citizens are made to believe these global investment firms are filled with CASH tied to BEOWULFS like Bush and Clinton.  These global funds are controlled by GLOBAL 1% OLD WORLD KINGS AND QUEENS----KNIGHTS OF MALTA TRIBE OF JUDAH-----Bush and Clinton are simply temporary figureheads.  MOVING FORWARD US FOREIGN ECONOMIC ZONE policies come directly from WORLD BANK/IMF----there is no tie to these FAKE AMERICAN PLAYERS.  When our local US city councils/mayors tie all today's city development to more and more global banking loans----they are being CONSPIRATORS/TRAITORS to our US sovereign nation and its US 99% of WE THE PEOPLE.  Let's get serious and get rid of all global banking 5% freemason/Greek players --without THEM, global 1% have NO POWER inside our sovereign US cities/states/nation.

Our US and new to America immigrants are NOT the one's being POWERLESS----it is 5% freemason/Greek players PLEDGED to do ANYTHING GLOBAL BANKING 1% tells them who are POWERLESS.

IT TAKES A VILLAGE ---global banking SEED NGOS-----definitely BAD SEEDS.

I'm confused THE ECONOMIST-----this raging far-right wing global banking 1% NEO-LIBERAL media outlet PROMOTED Clinton/Bush and 'cronyism' as LEFT CENTER.

The Carlyle GroupC for capitalism


The secretive Carlyle Group gives capitalism a bad name.


But dismantling the whole system (see article) may be slightly over the top
Print edition | Books and artsJun 26th 2003

ON the day Osama bin Laden's men attacked America, Shafiq bin Laden, described as an estranged brother of the terrorist, was at an investment conference in Washington, DC, along with two people who are close to President George Bush: his father, the first President Bush, and James Baker, the former secretary of state who masterminded the legal campaign that secured Dubya's move to the White House. The conference was hosted by the Carlyle Group, a private equity firm that manages billions of dollars, including, at the time, some bin Laden family wealth. It also employs Messrs Bush and Baker.

In the immediate aftermath of the attacks, when no one was being allowed in or out of the United States, many members of the bin Laden family in America were spirited home to Saudi Arabia. The revival of defence spending that followed greatly increased the value of the Carlyle Group's investments in defence companies.


The Carlyle Group is a godsend for conspiracy theorists who are convinced that the world is run by, and on behalf of, a shadowy network of wealthy men. Sure enough, it was not long before Cynthia McKinney, a Democrat member of Congress, pointed a finger at Carlyle, noting in an interview that “persons close to this administration are poised to make huge profits off America's new war” and that, despite “numerous warnings”, they did not alert the “people of New York who were needlessly murdered”. “What”, she asked, “do they have to hide?”

You need not be a conspiracy theorist, though, to be concerned about what lies behind Carlyle's success. Can a firm that is so deeply embedded in the iron triangle where industry, government and the military converge be good for democracy? Carlyle arguably takes to a new level the military-industrial complex that President Eisenhower feared might “endanger our liberties or democratic process”. What red-blooded capitalist can truly admire a firm built, to a significant degree, on cronyism; surely, this sort of access capitalism is for ghastly places like Russia, China or Africa, not the land of the free market?


Named after the luxurious New York hotel favoured by the firm's founders, Carlyle even got started by exploiting a tax loophole, a legitimate capitalistic activity, if not an honourable one. This particular loophole bizarrely allowed profitable American firms to enjoy a large tax break by buying the losses incurred by Eskimo-owned companies in Alaska. In 1987, this opportunity brought together a flamboyant dealmaker, Stephen Norris, who left Carlyle in 1995, with David Rubenstein, a former aide to President Carter and still the brains behind the firm.


After this initial success, though, the going got tougher. Carlyle missed out on several attractive deals while completing some duff ones, including buying a stake in Caterair International, a company that later collapsed under the weight of its junk-bond financing. Still, it did introduce them to a man who became well worth knowing: George W. Bush, a director of Caterair.

Carlyle really only took off after it hired Frank Carlucci, a former secretary of defence and deputy director of the CIA, in 1989. Mr Carlucci was able to open doors in Washington that had hitherto been closed to the firm, allowing it to participate in many lucrative deals.


Although Dan Briody's book is useful reading for anybody interested in American politics today, it tells Carlyle's story in the style of a Tom Clancy or John Grisham novel. This is rather a shame. Instead of expanding in an unrelenting tone of shocked disapproval, the author could have offered a serious view on a number of difficult questions.

For instance, if privatisation can increase the efficiency of the notoriously inefficient defence sector, how should the inherent political and security risks best be managed? Given that the rewards for success in the private sector so far exceed those for public service, how can talented people be persuaded to enter public service without their former private-sector activities becoming a source of suspicion?


While some former presidents are happy to play golf, others may feel they can still earn a decent living. What rules should govern the commercial activities of former President Bush; or, for that matter, former British prime minister, John Major; or former South Korean prime minister, Park Tae-joon—all of whom have taken the Carlyle nickel? Mr Bush senior receives private intelligence briefings that are not available to ordinary investors. Does his inside knowledge of, and possible influence over, the administration's political strategy towards, say, North Korea and Saudi Arabia directly benefit Carlyle? If so, does that constitute an unacceptable conflict of interest?


Perhaps there would be less reason to worry about Carlyle if there were rival clubs of ex-political heavyweights competing within the iron triangle. Alas, this firm seems to be an aspiring monopolist, hoovering up former public officials from across the political divide and, increasingly, from across the world. It is becoming more ambitious in Europe, and keenly eyeing China. Perhaps there would be less reason to worry if Carlyle's activities were more open—but as a private equity firm, it has largely escaped America's recent efforts to improve the governance and transparency of companies, which is unfortunate. At a time when America is aggressively promoting democracy and capitalism abroad, including by military means, it would be helpful if its politicians and businesses were regarded as cleaner than clean. Shrouded in secrecy, Carlyle calls capitalism into question.