Posts tagged ‘Wall Street’

The Untold Secrets Of the Federal Reserve


The Untold Secrets Of the Federal Reserve

The Federal Reserve fought tooth and nail for over two years to keep their actions hidden from the American people. The central bank lost part of their battle for secrecy when they were court ordered through a Freedom of Information Act request to release 29,000 pages of documents earlier this year. Although it was just a one-time and limited release of their records, the papers revealed that among the largest recipients of the Fed’s money were foreign banks during the 2008 economic meltdown. Bloomberg News has further examined the thousands upon thousands of pages of transactions to discover more Fed secrets. 

The Federal Reserve had committed $7.77 trillion as of March 2009 to “rescuing” the financial system, according to a new study from Bloomberg News. The Fed also kept secret which banks were in trouble during the height of the financial crisis while bankers were taking in tens of billions of dollars in emergency loans. Bloomberg has calculated that the secret Fed loans helped banks net a whopping $13 billion. All of these numbers are staggering but not exactly surprising. The unelected bureaucrats at the Federal Reserve have fought to keep their dealings behind closed doors for a reason. 

Fed Chairman Ben Bernanke is desperate to protect his privileged secrecy. Bloomberg writes that he “argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as lender of last resort — and that needy institutions would be reluctant to borrow in the next crisis.” Helicopter Ben, a nickname he acquired by essentially stating that the government could “defeat” deflation by dropping money out of helicopter, cares more about protecting the reputation of his cronies than letting the American people know where their money is going. 

Bloomberg reports that Fed officials haven’t told the truth about the bank bailouts. The news agencywrites that, “while Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.” The Federal Reserve is ripping off the American people by printing money out of thin air which devalues the value of the dollar to bail out the big banks. 

As Senator Rand Paul (R-Ky.) writes, “this is just one more reason why we need a full audit of the Fed.” The court ordered released documents are disturbing enough. But imagine what kind of mischief we would find out through a comprehensive audit. A real audit of the Fed would also inspect how it determines interest rates, which is one of the most crucial activities of the central bank. We still need to pass a true audit of the Fed such as Sen. Rand Paul and Rep. Ron Paul’sFederal Reserve Transparency Act of 2011, which would require comprehensive audits on a regular basis. 

An overwhelming 75% of Americans want a comprehensive audit of the Federal Reserve, according to a recent Rasmussen poll. The calls for a true audit are getting louder and stronger by the day. More Republican presidential candidates are starting to echo Ron Paul’s long held beliefs on the Fed. The fight for transparency is transcending party lines, with fiscal conservatives such as Ron Paul and self-identified Democratic socialist Senator Bernie Sanders working together to remove the Fed’s cloak of secrecy.

We will win our immediate goal when the Fed is thoroughly audited. Then the next step becomes ending the Federal Reserve and finally restoring sound money in America.

 

 
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Are the Koch Brothers Borrowing from the KGB?


The Koch Brothers Are Vultures

Are the Koch Brothers Borrowing from the KGB?.

re the Koch Brothers Borrowing from the KGB?

By: Adalia WoodburySeptember 21st, 2012see more posts by Adalia Woodbury

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In the name of fulfilling their number one priority of making Obama a one term president, Republicans dedicated millions of dollars (2 million in Texas alone) to suppress the vote. Manipulating the vote is nothing new, be it with flawed voting machines or circulating misinformation to deceive Democrats into staying home.

These pale in comparison to the Republican war on the vote through legislative measures that include restricting early and absentee voting, restricting registration drives; and new voter ID requirements . In some cases like Florida, Republicans have gone to the extreme of purging voter registration lists.

Civil Rights Groups and the DOJ have battled these vote suppression laws in the courts and some cases are still working their way through the judicial system. In most cases (exception being Pennsylvania) voter suppression tactics were struck down because they violated the Voting Rights Act.

All voters should confirm that you are registered to vote no matter what state you live in. You should also confirm that the information is accurated. Make sure that the name you are registered under is exactly the same as the name on the ID you present at the polls.

The ALEC designed new rules are meant to make voting harder and in some cases impossible. It is important that you know if there are changes in your state and what those changes are. This is especially true if:

• You’re married and changed your name

• You’re a student and want to vote where you go to school

• You’ve recently moved

• You don’t have a birth certificate and can’t afford to get one

• You’re a working parent, a small business owner, or a young professional who relies on weekend voting

Perhaps the most insidious tactic is the change in voter ID requirements which unsurprisingly adversely affect minorities, people who work for a living and seniors. Generally, states that have enacted these rules require government issued photo ID that is current.

The reasons for this begin with the fact that Republicans don’t like the vote because when people vote, Republicans don’t do very well.

There are other more insidious reasons, like racism, whereby there are some people who believe the vote is a privilege only to be enjoy by old, white men who are ideally rich and own property.

Of course, Republicans won’t come out and say any of these things. Rather they resort to disinformation and propaganda about voter fraud. When it comes down to it, however, voter fraud is statistically non-existent in the United States. When pressed to point to examples of voter fraud in their state or in others under oath, Republicans will finally admit they cannot point to one example in their state or in another state.

Lipstick Liberal http://www.politicususa.com/gop-holds… explains the possible source for the tactics Republicans are using in their war on the vote.

Video:

Transcript

Lipstick Liberal – KOCH Bros. Voter ID ENGLISH Dialogue

Tea-partier, Republican and Conservative American, Russia is very impressed with way your American KGB men, Take control of country!

(Envelope “KGB Tactics for Voter Suppression”)

Mind Control!

Disinformation!

Propaganda!

Smoke Screens!

Censorship!

Just like my KGB man.

Now to suppress Russian voters, he just paid little money to many people, so they knew who to show their love too!

But, I mean…Just look at him.

Your Two KGB Men, they pay many, MANY more money to little people…so they know who to show their hate too!

But, I mean, just look at them?

Now, their comrades scream, “We must…

Interrogate!

Ask for papers!

Limit their freedoms!

Give them a little hope!

Then CRUSH them!

So now mjority who do not want American KBG Men to have such power, become little minority with no power at all.

Yes, very impressed with way KGB men take control of country! Just like my KGB Man!

Lipstick Liberal – KOCH Bros. Voter ID Russian Dialogue

Tea-partier, Republican and Conservative American, Russia is very impressed with way your American KGB men, Take control of country!

End of Transcript

In Memory of Jannan W. Ransom who worked tirelessly throughout her life in the name of protecting our freedoms, including the right to vote.

A Rare Look at Why The Government Won’t Fight Wall Street | Matt Taibbi | Rolling Stone


A Rare Look at Why The Government Won't Fight Wall Street | Matt Taibbi | Rolling Stone.

The great mystery story in American politics these days is why, over the course of two presidential administrations (one from each party), there’s been no serious federal criminal investigation of Wall Street during a period of what appears to be epic corruption. People on the outside have speculated and come up with dozens of possible reasons, some plausible, some tending toward the conspiratorial – but there have been very few who’ve come at the issue from the inside.

We get one of those rare inside accounts in The Payoff: Why Wall Street Always Wins, a new book by Jeff Connaughton, the former aide to Senators Ted Kaufman and Joe Biden. Jeff is well known to reporters like me; during a period when most government officials double-talked or downplayed the Wall Street corruption problem, Jeff was one of the few voices on the Hill who always talked about the subject with appropriate alarm. He shared this quality with his boss Kaufman, the Delaware Senator who took over Biden’s seat and instantly became an irritating (to Wall Street) political force by announcing he wasn’t going to run for re-election. “I later learned from reporters that Wall Street was frustrated that they couldn’t find a way to harness Ted or pull in his reins,” Jeff writes. “There was no obvious way to pressure Ted because he wasn’t running for re-election.”

Kaufman for some time was a go-to guy in the Senate for reform activists and reporters who wanted to find out what was really going on with corruption issues. He was a leader in a number of areas, attempting to push through (often simple) fixes to issues like high-frequency trading (his advocacy here looked prescient after the “flash crash” of 2010), naked short-selling, and, perhaps most importantly, the Too-Big-To-Fail issue. What’s fascinating about Connaughton’s book is that we now get to hear a behind-the-scenes account of who exactly was knocking down simple reform ideas, how they were knocked down, and in some cases we even find out why good ideas were rejected, although some element of mystery certainly remains here.

There are some damning revelations in this book, and overall it’s not a flattering portrait of key Obama administration officials like SEC enforcement chief Robert Khuzami, Department of Justice honchos Eric Holder (who once worked at the same law firm, Covington and Burling, as Connaughton) and Lanny Breuer, and Treasury Secretary Tim Geithner.

Most damningly, Connaughton writes about something he calls “The Blob,” a kind of catchall term describing an oozy pile of Hill insiders who are all incestuously interconnected, sometimes by financial or political ties, sometimes by marriage, sometimes by all three. And what Connaughton and Kaufman found is that taking on Wall Street even with the aim of imposing simple, logical fixes often inspired immediate hostile responses from The Blob; you’d never know where it was coming from.

In one amazing example described in the book, Kaufman decided he wanted to try to re-instate the so-called “uptick rule,” which had existed for seventy years before being rescinded by the SEC in 2007. The rule prevents investors from shorting a stock until the stock had ticked up in price. “Forcing short sellers to wait for the price to tick up before they sell more shares gives a breather to a stock in decline and helps prevent bear raids,” Connaughton writes.

The uptick rule is controversial on Wall Street – I’ve had some people literally scream at me that it doesn’t do anything, while others have told me that it does help prevent bear attacks of the sort that appeared to help finally topple already-mortally-wounded companies like Bear Stearns and Lehman Brothers – but what’s inarguable is that Wall Street hates the rule. Hedge fund types or employees of really any company that engages in short-selling will tend to be most venomous in their opinions of the uptick rule.

Anyway, Connaughton and Kaufman were under the impression that new SEC chief Mary Schapiro would re-instate the uptick rule after taking office. When she didn’t, Kaufman wrote her a letter, asking her to take action. When that didn’t do the trick, he co-sponsored (with Republican Johnny Isakson) a bill that would have required the SEC to take action.

Nothing happened, and months later, Kaufman gave a grumbling interview to Politico about the issue. One June 30, the paper’s headline read: “Ted Kaufman to SEC; Do Your Job.”

The next day, the Blob bit back. Connaughton was in the basement of the Russell building when a Senate staffer whose wife worked for Shapiro shouted at him. From the book:

“Hey, Jeff, you’re in the doghouse.” He meant: with his wife.

“Why?” I asked.

“That Politico piece by your boss.”

I was taken aback but tried to downplay the matter. “We just want the SEC to get its work done.”

“Remember,” he said. “We all wear blue jerseys and play for the Blue Team. I just don’t think that helps.”

When Connaughton told Kaufman over the phone what the staffer said, Kaufman exploded. “You call him back right now and tell him I said to go fuck himself in his ear,” Kaufman said.

Similarly, when Kaufman tried to advocate for rules that would have prevented naked short-selling, Connaughton was warned by a lobbyist that it would be “bad for my career” if he went after the issue and that “Ted and I looked like deranged conspiracy theorists” for asking if naked short-selling had played a role in the final collapse of Lehman Brothers. Naked short-selling is another controversial practice. Essentially, when you short a stock, you’re supposed to locate shares of that stock before you go out and sell it short. But what hedge funds and banks have discovered is that the rules provide “leeway” – you can go out and sell shares in a stock without actually having it, provided you have a “reasonable belief” that you can locate the shares.

This leads to the obvious possibility of companies creating false supply in a stock by selling shares they don’t have. Without getting too much into the weeds here, there is an obvious solution to the problem, which essentially would be forcing companies to actually locate shares before selling them. In their attempt to change the system, Kaufman and Connaughton discovered that the Depository Trust Clearing Corporation, the massive quasi-private organization that clears most all stock trades in America, had come up with just such a fix on their own. Kaufman recruited some other senators to endorse the idea, and as late as 2009, Connaughton and Kaufman were convinced they were going to get the form. “I said to Ted, ‘We’re going to change the way stocks are traded in this country.'”

But before the change could be made, Goldman, Sachs issued “data” showing that there was “no correlation” between naked short selling and price movements. When Connaughton asked an Isakson staffer what the data said, the staffer, intimidated by Goldman, replied, “The data proves we’re full of shit.” Connaughton looked at the data and realized instantly that it was a bunch of irrelevant gobbledygook, even firing off an angry letter to Goldman telling them the tactic was beneath even them.

But Goldman’s tactic worked. A roundtable to discuss the idea was scheduled by the SEC on September 24, 2009. Of the nine invited participants, “all but one” were for the status quo. Connaughton expected the DTCC representatives to unveil their reform idea, but they didn’t:

Afterwards, I went over to [the DTCC representatives] and asked, “What happened?” Sheepishly, and to their credit, they admitted: “We got pulled back.” They meant: by their board, by the Wall Street powers-that-be.

Essentially the same thing happened in Kaufman’s biggest reform attempt, the amendment to the Dodd-Frank bill he co-sponsored with Ohio’s Sherrod Brown, which would have broken up the Too-Big-To-Fail banks. But the Brown-Kaufman amendment, which was really the meatiest thing in the original Dodd-Frank bill, the one reform that really would have made a difference if it had passed, just died in the suffocating mass of the Blob. The key Democrats one after another failed to line up behind it, and in the end it was defeated soundly, with Dick Durbin, the number two man in the Democratic leadership, giving it this epitaph: “a bridge too far.”

Again, those interested in understanding the mindset of the people who should be leading the anti-corruption charge ought to read this book. It’s the weird lack of concern that shines through, like Khuzami’s comment that he’s “not losing sleep” over judges reprimanding his soft-touch settlements with banks, or then Southern District of New York U.S. Attorney Ray Lohier’s comment that the thing that most concerned him – this is the period of 2008-2009, the middle of a historic crimewave on Wall Street – was “cyber crime.”

On the outside we can only deduce the mindset from actions and non-actions, but Connaughton’s actually seen it, and with the book you get to see it too. It’s scary and definitely worth a read.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/a-rare-look-at-why-the-government-wont-fight-wall-street-20120918#ixzz26sqMxULA

FOCUS | With Deficit Hawks Circling Overhead


FOCUS | With Deficit Hawks Circling Overhead.

ith deficit hawks circling overhead, the responsibility for creating jobs has fallen by default to Ben Bernanke and the Federal Reserve. Last week the Fed said it expected to keep interest rates near zero through mid 2015 in order to stimulate employment.

Two cheers.

The problem is, low interest rates alone won’t do it. The Fed has held interest rates near zero for several years without that much to show for it. A smaller portion of American adults is now working than at any time in the last thirty years.
So far, the biggest beneficiaries of near-zero interest rates haven’t been average Americans. They’ve been too weighed down with debt to borrow more, and their wages keep dropping. And because they won’t and can’t borrow more, businesses haven’t had more customers. So there’s been no reason for businesses to borrow to expand and hire more people, even at low interest rates.

The biggest winners from the Fed’s near-zero rates have been the big banks, which are now assured of two or more years of almost free money. The big banks haven’t used the money to refinance mortgages – why should they when they can squeeze more money out of homeowners by keeping them at higher rates? Instead, they’ve used the almost free money to make big bets on derivatives. If the bets continue to go well, the bankers will continue to make a bundle. If the bets sour, well, you know what happens then. Watch your wallets.

The truth is, low interest rates won’t boost the economy without an expansive fiscal policy that makes up for the timid spending of consumers and businesses. Until more Americans have more money in their pockets, government spending has to fill the gap.

On this score, the big news isn’t the Fed’s renewed determination to keep interest rates low. The big news is global lender’s desperation to park their savings in Treasury bills. The euro is way too risky, the yen is still a basket case, China is slowing down and no one knows what will happen to its currency, and you’d have to be crazy to park your savings in Russia.

It’s a match made in heaven – or should be. Because foreigners are so willing to buy T-bills, America can borrow money more cheaply than ever. We could use it to put Americans back to work rebuilding our crumbling highways and bridges and schools, cleaning up our national parks and city parks and playgrounds, and doing everything else that needs doing that we’ve neglected for too long.

This would put money in people’s pockets and encourage them to take advantage of the Fed’s low interest rates to borrow even more. And their spending, in turn, would induce businesses to expand and create more jobs. A virtuous cycle.

Yet for purely ideological reasons we’re heading in the opposite direction. The federal government is cutting back spending. It’s not even helping state and local governments – which continue to lay off teachers, fire fighters, social workers, and police officers.

Worst of all, we’re facing a so-called “fiscal cliff” next year when $109 billion in federal spending cuts automatically go into effect. The Congressional Budget Office warns this may push us into recession – which will cause more joblessness and make the federal budget deficit even larger relative to the size of the economy. That’s the austerity trap Europe has fallen into.

Mitt Romney has been criticizing the Obama administration for not doing more to avoid the cliff, but he seems to forget that congressional Republicans brought it on when they refused to raise the debt ceiling. They then created the cliff as a fall-back mechanism. Romney’s vice-presidential pick Paul Ryan, chair of the House budget committee, voted for it.

It’s a mindless gimmick that presumes our biggest problem is the deficit, when even the Fed understands our biggest problem right now is unemployment. Yet even the nation’s credit-rating agencies have bought into the mindlessness. Last week Moody’s said it would likely downgrade U.S. government bonds if Congress and the White House don’t come up with a credible plan to reduce the federal budget deficit. (Standard & Poor’s has already downgraded U.S. debt.)

Hello? Can we please stop obsessing about the federal budget deficit? Repeat after me: America’s #1 economic problem is unemployment. Our #1 goal should be to restore job growth. Period.

The Federal Reserve Board understands this. And at least it’s trying. But it can’t succeed on its own. Global lenders are giving us a way out. Let’s take advantage of the opportunity.

Robert B. Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers “Aftershock” and “The Work of Nations.” His latest is an e-book, “Beyond Outrage.” He is also a founding editor of the American Prospect magazine and chairman of Common Cause.

Comments

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+24 # Barbara K 2012-09-16 09:38
Absolutely, Mr. Reich, I’ve been wondering why the Rs are sulking so about the deficit. It cannot be fixed until people are working and paying taxes. Can’t pay down the debt until more money is coming in. End the tax cuts, that would help to take care of the deficit. It is like a family sitting around the kitchen table trying to pay its bills when it just threw out half their income. Not possible. Of course the Rs are so irresponsible, after all most of the debt was incurred before Obama even got there. We have the Rs to thank for the deficit in the first place. They howl over it now to make it look like they are really worried about it. If they were really worried about it, they would stop so much military spending. Buying things we don’t need.

OBAMA/BIDEN 2012
The alternatives are liars, cheats, thieves and greed. Loss of Medicare, Medicaid, and Social Security, just to name a few.

AIG ex-CEO Greenberg eyes reversing NY fraud case | Reuters


 

Times editorial on how his country’s political system wasted years of prosperity and put the euro at risk.   Read more at Counterparties

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AIG ex-CEO Greenberg eyes reversing NY fraud case

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Former American International Group (AIG) CEO Maurice Greenberg testifies before a House Oversight and Government Reform hearing on “The Collapse and Federal Rescue of A.I.G. and What It Means for the U.S. Economy” on Capitol Hill in Washington April 2, 2009. REUTERS/Kevin Lamarque

Former American International Group (AIG) CEO Maurice Greenberg testifies before a House Oversight and Government Reform hearing on “The Collapse and Federal Rescue of A.I.G. and What It Means for the U.S. Economy” on Capitol Hill in Washington April 2, 2009.

Credit: Reuters/Kevin Lamarque

By Jonathan Stempel

Mon May 14, 2012 6:03pm EDT

(Reuters) – Former American International Group Inc Chief Executive Maurice "Hank" Greenberg said New York’s attorney general should be barred from invoking a 91-year-old state law in a fraud case over two suspect reinsurance transactions.

Greenberg and co-defendant Howard Smith, AIG’s former chief financial officer, sought permission on Monday to appeal to the state’s highest court, the Court of Appeals, a May 8 appellate ruling letting Attorney General Eric Schneiderman pursue civil fraud claims against them under the state’s Martin Act.

That ruling by the Manhattan appeals court cleared the way for the 7-year-old case to go to trial.

Investigators claim a transaction with General Re Corp, a unit of Warren Buffett’s Berkshire Hathaway Inc, helped AIG inflate loss reserves by $500 million without transferring risk, while a transaction with Capco Reinsurance Co helped AIG hide more $200 million of losses. Both transactions took place more than a decade ago.

Unlike under federal law, the Martin Act does not require investigators to prove intent in order to prevail on a securities fraud claim.

According to David Boies, a lawyer for Greenberg, a key issue is whether Schneiderman may use the Martin Act "to pursue a de facto securities class action" on behalf of shareholders, despite conflicting federal laws designed to promote "uniformity and certainty" in regulating securities.

In a court filing, Greenberg and Smith said that power would make "every executive of a New York company or a company with shares traded on the New York Stock Exchange potentially liable – personally – for substantial damages for misstatements" by their companies, even absent proof of intent or reliance.

Granting such power would have "far-reaching implications for New York’s continuing role as an economic and financial capital," they added.

James Freedland, a spokesman for Schneiderman, said: "We are confident that their latest attempt to reverse decades of settled law to escape responsibility for their misconduct will be rejected."

Greenberg and Smith were first sued in 2005 by Eliot Spitzer, then New York’s attorney general. Spitzer’s successors Andrew Cuomo and Schneiderman have continued to pursue the case.

Greenberg, 87, left New York-based AIG in March 2005 after nearly four decades at the insurer’s helm.

AIG’s transaction with General Re led to five convictions and two guilty pleas of former officials of those companies. A federal appeals court threw out the convictions in August and a new trial has been scheduled for January 2013. Buffett was not accused of wrongdoing.

The U.S. government still owns 61 percent of AIG, following $182.3 billion of taxpayer-funded bailouts.

Greenberg’s company, Starr International Co, once AIG’s largest shareholder, has sued the government for $25 billion over the bailouts, which it has called unconstitutional.

The case is New York v. Greenberg et al, New York State Supreme Court, Appellate Division, 1st Department, No. 5297.

(Reporting by Jonathan Stempel in New York; editing by Andre Grenon)

U.S.

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AIG ex-CEO Greenberg eyes reversing NY fraud case | Reuters

The upper class is more Republican


A few months ago I listened to Frank Newport of Gallup tell Kai Ryssdal of Marketplace that upper class Americans tend to be Democrats. Ryssdal was skeptical, but Newport reiterated himself, and explained that’s just how the numbers shook out. This is important because Newport shows up every now and then to offer up numbers from Gallup to get a pulse of the American nation.

Frankly, Newport was just full of crap. I understand that Thomas Frank wrote an impressionistic book which is highly influential, What’s the Matter with Kansas, while more recently Charles Murray has come out with the argument in Coming Apart that the elites tend toward social liberalism. I’m of the opinion that Frank is just wrong on the face of it, but that’s OK because he’s an impressionistic journalist, and I don’t expect much from that set beyond what I might expect from a sports columnist for ESPN. Murray presents a somewhat different case, as outlined by Andrew Gelman, in that his “upper class” is modulated in a particular manner so as to fall within the purview of his framework. Neither of these qualifications apply to Frank Newport, who is purportedly presenting straightforward unadorned data.

When the “average person on the street” thinks upper class they think first and foremost money. This is not all they think about, but in the rank order of criteria this is certainly first on the list. We can argue till the cows come home as to whether a wealthy small business owner in Iowa who is a college drop out is more or less elite than a college professor in New York City who is bringing home a modest upper middle class income (very modest adjusting for cost of living). But to a first approximation when we look at aggregates we had better look at the bottom line of money. After that we can talk details. And the first approximation is incredibly easy to ascertain. Below is a table and chart which illustrate the proportion of non-Hispanic whites after 2000 who align with a particular party as a function of family income, with family income being indexed to a 1986 value (so presumably $80,000 hear means what $80,000 would buy in 1986, not the aughts).

Family Income Strong Dem Dem Lean Dem Ind Lean Rep Rep Strong Rep
Less than $20,000 12 15 12 24 9 15 12
$20-$40,000 12 15 10 18 11 19 15
$40-$80,000 11 14 10 13 11 24 18
More than $80,000 12 12 10 11 11 23 21

The results are straightforward: the more income a family has, the more likely they are to be Republican. There is a lot of nuance and geographical detail to be fleshed out in these results. But these facts are where we need to start.

Andrew Gelman has much more as usual. For example, this chart:

Why do I keep posting this stuff? Because facts matter. That’s my hope, my faith. Tell people facts, and they will open their eyes. Tell your friends, tell your family. Have whatever opinion you want to have, but start with the facts we know. Look up facts, calculate facts, analyze facts. They are there for us, we just need to go look. Google is your friend, Wikipedia is your friend. The General Social Survey is your friend.

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March 25th, 2012 Tags: ,
by in Data Analysis | 19 comments | RSS feed | Trackback >

19 Responses to “The upper class is more Republican”

  1. 1.   Cathy Says:

    So, the more money a person has, the more likely they are to vote Republican. But the more education a person has, the less likely they are to vote Republican – with the exception of those who never finished high school yet have a very high income (which, I’d guess, has a lot of IT folks.)

  2. 2.   Razib Khan Says:

    with the exception of those who never finished high school yet have a very high income

    the error bars there are huge. don’t trust that. as i imply above aggregating all these groups into one pot can mislead. but yes, to a first approximation what you say is correct (though dems have traditionally had a bimodal distribution, the last and most educated vote for them, repubs tend to be in the middle).

  3. 3.   Anthony Says:

    Part of the issue is defining “elite”. If you looked at the politics of America’s approximately 300 billionaires, it might look very different than the politics of people who have an income over $1 million, or over an income of $80,000.

    My impression is that Charles Murray is trying to define “elite” as “opinion leaders” or something similar, which means people with non-STEM college degrees in fields like the media or teaching, which generally means poorly paid relative to their education, which would tend to skew very Democrat.

    Incidentally, Thomas Frank’s thesis is at least partially normative, that people with lower incomes *should* vote for Deomcrats, without ever considering the idea that some “poor” people might believe that Republican economic policies would actually benefit them more. Having not read his book, I don’t know if he notices that in states like Kansas, people do generally vote more Democrat as they have less money, just skewed more Republican than in more liberal states.

  4. 4.   rob Says:

    I believe that Frank Newport was correct the upper CLASS are democrats however the 1% financially are predominantely Republican.

  5. 5.   Razib Khan Says:

    I believe that Frank Newport was correct the upper CLASS are democrats however the 1% financially are predominantely Republican.

    what? what the hell are you saying? it’s awesomely informative that you bolded it?

  6. 6.   Karl Zimmerman Says:

    I read a bunch of left-liberal blogs off and on, and Thomas Frank’s thesis is pretty widely derided now. E.G., look at this post which airs an unfortunately little-commented upon 2006 study, which found that:

    1. Whites without college degrees are not turning towards Republicans.
    2. Lower-income whites, if anything, are turning towards the Democrats, as poor white voters with college degrees have become progressively less inclined to support Republicans.
    3. From 1952 to 2004, the working-class white vote in the South shifted to be 20% more Republican. In the rest of the country – only 1% more Republican!

  7. 7.   Josh Says:

    When you get to define what is wealthy, you can make the facts suit your needs. I’m sorry, but 80k is not what republicans mean when they talk about “the wealthy”. Here is an article from left of center source that shows that a large majority of the wealthiest Americans as well as most of those earning above 200k (as of 2008) vote Democrat. The guys arguing that the wealthiest Americans are on the left aren’t wrong, they just picked a different set of data to work with.

    http://www.addictinginfo.org/2011/08/01/are-wealthy-americans-always-conservative/

  8. 8.   Razib Khan Says:

    Here is an article from left of center source that shows that a large majority of the wealthiest Americans as well as most of those earning above 200k (as of 2008) vote Democrat.

    look, i kind of think it’s moronic to look at the top 20 wealthiest and infer from that. people who are worth billions are kind of beyond standard models. second, i know the 2008 data. it’s suggestive, but

    1) 52% is technically most, but it’s kind of misleading in the context of the comment. don’t be a douche

    2) the sample size in that epoll may be part of the issue (which might explain the huge fluctuation between 2004 and 2008). i would be nice to dig deeper into this, though to my knowledge no one has.

    as you say if you look hard enough you can find countervailing data. the point is not to look hard, but see where the preponderance of the data points. that’s called good faith, and trying to see how reality shakes out, rather than verifying your hypothesis. don’t be so patronizing. you comment was weak.

  9. 9.   Dave Says:

    “so presumably $80,000 hear means what $80,000 would buy in 1986″

    Where’s Waldo…

  10. 10.   DK Says:

    $80K elite? Is this some sort of a joke? Elites are the ones that buy everyone else and you can’t do that for 80K. Try maybe 80,000K.

  11. 11.   Karl Zimmerman Says:

    I think 2008 was a fluke year which shouldn’t really be used as a guide for how the very wealthy vote. The financial crisis, John McCain’s useless stunt during the depths of it, and probably the selection of Sarah Palin pushed a great many generally conservative wealthy people to support Obama, because he seemed the most likely to return the country to stability.

    In general, people should check out this blog. It has a lot of data on occupations by profession. Most of the data is culled from FEC donations, however, which means it’s not the best determination of the truly wealthy, as the upper-middle class donates a fair amount to political campaigns as well.

  12. 12.   Bobby LaVesh Says:

    These graphs probably suggest one common-sense observation:

    – People whether we’re rich or poor, educated or not tend to support their own cause.

    It is no secret that most people believe that left-wing policies tend to benefit the poor and right-wing policies tend to benefit the rich. People tend to vote what they think will help them.

    There really isn’t too much of a surprise there.

    As far as education- whereas increasing education tends to trend less republican- once you get to post-grad, that is where republican’s really lose out. I’m sure a factor in that is- a large number of post-grads are dependant on government funding for their research (or their oft-state funded university). Ones that arn’t are more likely to have peers dependant on it.

    I’m actually very curious on how religion with income maps out. From personal-experience it seems to me that the richest and poorest of society tend to be the most religious- with the middle groups less so. I’m curious if my personal observations match the nation as a whole.

  13. 13.   Bobby LaVesh Says:

    #10 DK.

    $80K from 1986 would be over $100k in today’s dollars. Sure, that’s not “elite” rich- but that’s definately a lot more than those in the lowest brackets.

    “Elite” may not be the right word- “comfortable” might be a better word. As #3 Anthony commented- it would be interesting to see the “true” elite- how things change then- how they vote.

    I’m sure from a voting perspective the true “elite” (the mega-millionaires/billionaires) are too small a percentage for campaigners to worry about as a group seperate from the “comfortable”.

  14. 14.   Ria Says:

    It seems to me that a realistic analysis of income distribution and voting would have to be done regionally in the US. This is because there is too much variation due to regionality that can confound the results unless you do a more sophisticated analysis than what is being done in these discussions. After all, the exact same position with the exact same experience can command a drastically different salary in New York City versus Tennessee or Montana. As much as $20k. That would easily be a standard deviation.

    I’ve not seen a thorough discussion of the data in terms of median income versus standard deviations as a means of describing the data even in a nation-wide sense (for each census year)…everything in the discussion is focusing on simplistic definitions of salaries that we all have a social recognition as being significant salaries. Let’s just stick to the data, and that will remove the confusion…and allow us to describe the sources of variance most clearly (as in the case of regional variance in salary, for example…since I do not know if all data sets being discussed have been adjusted for cost of living, and even if they have, if such an adjustment truly normalizes across the nation…after all, you can still probably purchase more with an equivalent cost-of-living-adjusted salary in Montana than you can in New York City just because incidentals also cost more in NYC).

  15. 15.   Karl Zimmerman Says:

    14 –

    Such a study has already been done. “Blue” states show little correlation between income and voting patterns, while “red” states show a high correlation. Even though rich people in all states are more likely to support Republicans than poor people, a larger minority in states like Connecticut support Democrats than in states like Mississippi, which explains why higher-income states overall now tilt to the Democrats.

  16. 16.   Curious Says:

    Karl Zimmerman is right (and this was previously discussed at some length here on GNXP.) My personal experience leads me to hazard a guess that the “working rich” ie. those in high effective tax brackets such as those of highly paid professionals, tend to be more Republican than the extremely wealthy who shield their income from taxation of earnings on capital rather than labor via capital gains taxes, municipal bonds, etc…

    BTW, even college professors at Columbia should hardly be considered “upper class” by NYC standards. You will not find many of them living in Larchmont or Rye and will definitely find them thin on the ground (water?) at venues like the American Yacht Club.

  17. 17.   Razib Khan Says:

    BTW, even college professors at Columbia should hardly be considered “upper class” by NYC standards.

    i alluded to that in the post. is there a reason you’re repeating that?

  18. 18.   Curious Says:

    No, I should have read your post more carefully. At any rate after controlling for red state – blue state effects I believe the proclivity towards Republican politics is probably explained more by one’s effective tax rate than by net worth.

  19. 19.   Razib Khan Says:

    blue state effects I believe the proclivity towards Republican politics is probably explained more by effective tax rate than most anything else.

    if you are talking about a model with dependent an independent variables, religious liberalism/conservatism is massively powerful. most poor fundamentalists and rich atheists are not republican, but they are to a far greater extent than people would care. this does not negate that fiscal concerns are extremely important.

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The upper class is more Republican.

Paul Volcker: Obama Socialist Comments Have ‘No Connection With Reality’


Paul Volcker Obama

 

Paul Volcker sounded off on critics of President Obama in an interview with CBS’s Anthony Mason.

 

Asked whether he agrees with accusations that the president is waging class warfare by pushing for Wall Street reforms and higher taxes for the rich, Volcker said, “I don’t understand the depth of that feeling. I really don’t. This business that he’s a great socialist and out to undermine the free enterprise system and so forth, I just think it has no connection with reality.”

 

He balked at the notion that Obama could have taken office without going after the banks.

 

“How could you have a President of the United States taking office in the midst of a financial crisis and a deep recession and not be critical of the financial system? He would have been deaf, dumb and blind,” he said.

 

Volcker, former Chairman of the Federal Reserve and Obama adviser, is the namesake for “the Volcker Rule,” a major provision in the Wall Street reforms that could take effect as early as this July.

 

Though Obama has been critical of Wall Street, a survey from the end of last year found that he had approved fewer regulations than President Bush had at the same point in his presidency.

 

As HuffPost’s Jen Bendery reports, Wall Street executives actually thrive under President Obama. Still, most major Wall Street donations are heading to Mitt Romney, who is perceived as much friendlier to banks.

 

 

 

 

 

Paul Volcker: Obama Socialist Comments Have ‘No Connection With Reality’.