Why Are American Taxpayers Propping Up Mexico’s Insolvent, Government-Owned Oil Company?

“Reauthorized by Congress in December 2019 with the promise that it would suddenly change its ways and focus its firepower on fighting China, this export credit agency quickly returned to its tired routine of propping up its old and favorite customers, including—very prominently—Petroleos Mexicanos, or Pemex.”

“Ex-Im Bank approved $400 million in financing to this Mexican government-owned oil company.”

“Pemex is in serious financial trouble. It could very well collapse, despite its privileged position in Mexico. A pandemic-induced drop in oil prices combined with years of mismanagement have left Pemex technically insolvent. It’s already the world’s most-indebted oil company and one of the largest issuers of debt in Latin America.”

“Pemex has been corrupt for years. In July 2020, its former chief executive was arrested in Spain (where he had been hiding to evade a Mexican arrest warrant) and extradited. He’s now a protected witness in an expansive bribery scandal involving three of Mexico’s former presidents, four former finance ministers, two presidential challengers, two state governors and a number of legislators.”

“Now Ex-Im is justifying its financing to Pemex with the go-to excuse that it “would help counter financing competition from foreign export credit agencies, including from China.” This claim is dubious. In the bill to reauthorize Ex-Im last December, Congress did include what it calls the Program on China and Transformational Exports. It specified 10 sectors for the program, such as artificial intelligence, renewable energy, water treatment and sanitation. However, the list doesn’t include oil and gas. Nearly a quarter of Ex-Im’s overall exposure is in that sector, so Ex-Im’s long-standing connections to the industry—rather than a desire to counter China—are probably why the bank continues to deepen ties with Pemex.
This brings us to another question: How can some members of Congress reconcile subsidizing so many foreign oil and gas companies in light of their stated concerns about climate-related issues? Pemex’s record on that front should particularly disturb those who so loudly proclaim their environmental interests.”

“The overarching lesson from this mess is that Congress was unrealistic to expect Ex-Im to change its ways. The bank can assert that things will be different, or that it will now focus on fighting China, but at the end of the day, its relationship with Pemex stretches back more than 70 years—a fact about which the agency boasts in its press release.
As long as Ex-Im holds tight to its favored companies, nobody should expect major results in any so-called transformational sectors. Old dogs won’t learn new tricks.”

Who Watches the Government’s Watchdogs?

“Inspectors general are the watchdogs of government, tasked with keeping government officials and their agencies honest and with detecting fraud and abuse. It’s an important position given the money and power that flows through the organs of the state and the resulting opportunities for shenanigans, great and small. So, it’s more than a little worrying when one of the watchdogs is charged with criminal abuse of his position of trust in an effort to enrich himself.”

“The indictment of Charles K. Edwards, a former acting inspector general for the U.S. Department of Homeland Security (DHS), came down as most of the country was distracted by the prospect of viral doom.”

“The indictment charges Charles K. Edwards, 59, of Sandy Spring, Maryland, and Murali Yamazula Venkata, 54, of Aldie, Virginia, with conspiracy to commit theft of government property and to defraud the United States, theft of government property, wire fraud, and aggravated identity theft. The indictment also charges Venkata with destruction of records.”

“Edwards, who resigned from his post at DHS in 2013, had his associates copy proprietary software as well as information about internal investigations and personal identifying information on DHS and Postal Service employees. His intent, says the Justice department, was to sell an improved version of the software back to the government.

According to an internal privacy notice at DHS, the stolen data included “names, Social Security numbers, dates of birth, positions, grades, and duty stations” on 246,167 employees. The affected workers were offered 18 months of paid identity-protection services and urged to take other defensive steps, including freezing their credit.”

“Edwards also socialized with senior DHS officials—the people he was supposed to be watching—in an apparent effort to gather support for a permanent appointment to his position. He “would boast about his close relationship with members of DHS management, how frequently he met or dined with DHS management, and that his nomination was all but assured.””

To achieve racial justice, America’s broken democracy must be fixed

“The Senate and Electoral College systematically underweight the votes of people of color — and the judiciary operates directly downstream of those biases. Washington, DC, home to the largest plurality of Black Americans in the country, is excluded entirely from federal representation. The filibuster has historically been used to block or delay anti-lynching laws and civil rights legislation”

“Since 2000, 40 percent of presidential elections have been won by the loser of the popular vote. A 2019 study found that Republicans should be expected to win 65 percent of presidential contests in which they narrowly lose the popular vote, and could potentially win while losing the popular vote by as much as 6 percentage points. And this November, FiveThirtyEight’s Nate Silver calculates that Democratic nominee Joe Biden only has a 6 percent chance of winning the Electoral College if he wins the popular vote by 0 to 1 points, a 22 percent chance if he wins by 1 to 2 points, and less than a 50 percent chance if he wins by 2-3 points.”

“The Senate is even more extreme. In a 2019 Data for Progress analysis, Colin McAuliffe found that the Senate has a 3 percentage point tilt toward Republicans (double the 1.5 percent skew in the Electoral College). And that is probably an understatement — Silver recently calculated that the Senate is “effectively 6 to 7 percentage points redder than the country as a whole.” As my colleague Matt Yglesias points out, in 2014, Republican candidates won 52 percent of the popular Senate vote and gained nine Senate seats; in 2016, Democrats won 54 percent of the vote and gained only two seats; and in 2018, Democrats won 54 percent of the vote and lost two seats.

“Because the president appoints federal judges and the Senate confirms them, these biases are also reflected in the judiciary, where the Trump administration has already filled federal court benches with an unprecedented number of young, highly ideological conservative judges, including two Supreme Court justices.
It’s important to underscore the mechanism that generates and sustains this partisan bias: US political institutions systematically underweight the interests of nonwhite Americans.”

“Analyzing the results of the 2016 presidential election, statisticians Andrew Gelman and Pierre-Antoine Kremp found that “per voter, whites have 16 percent more power than blacks once the Electoral College is taken into consideration, 28 percent more power than Latinos, and 57 percent more power than those who fall into the other category.”

Behind the Senate’s partisan tilt is that it overrepresents people living in small states who tend to be whiter, on average, than people living in larger states. California, which has large Black and brown populations, and Wyoming, a predominantly white state, have equal representation in the Senate, despite the former having over 60 times more people than the latter.”

“this racial skew distorts policy preferences on issues ranging from gun control to the minimum wage to environmental policy. For instance, 48 percent of Americans believe controlling gun ownership is more important than protecting gun rights; however, when you weigh voter preferences as the Senate does — giving equal representation to each state — support for gun control drops a whopping 5 points, to 43 percent.
Why? Because the Senate overweights the preferences of white Americans, who tend to favor gun rights, and underweights the preferences of Black and brown Americans, who tend to favor gun control. By that same mechanism, McAuliffe finds that support for a $15 minimum wage also drops 5 points (from 58 to 53 percent), and a $100 billion yearly investment in green social housing drops 3 points (63 to 60 percent).”

“This is the status quo that Just Democracy’s coalition members aim to change — and they have a few proposals to do so.”

We can end America’s unemployment nightmare

“Erin Suggs applied for unemployment in March as soon as the California salon she works at shut down. She figured her case would be pretty straightforward — she works on commission, meaning she’s counted as a regular employee, not self-employed.

But it took the 50-year-old mother of two more than two months to get her benefits, during which time she estimates she and her husband called California’s Employment Development Department, which administers the state’s unemployment system, upward of 3,000 times. It turned out that in filling out the forms, she checked one box wrong. “It just put me in pending hell for 10 weeks,” she says. “There was no way of fixing it.”

Her experience is hardly unique. In California alone, more than 6 million people, or one-third of the state’s workers, have filed for unemployment benefits, and hundreds of thousands of them have been stuck in a weeks- or even months-long backlog. Meanwhile, nearly 1 million people across the United States continue to file new unemployment claims each week, and some 29 million people are receiving some sort of unemployment assistance. And for many of them, navigating the system has been a nightmare.

The coronavirus has brought home the many shortcomings of the American unemployment insurance system and revealed it to be fundamentally — and often intentionally — broken, chipped away over time to ensure that the jobless don’t use it too much, lest anyone get used to it. Unemployment insurance operates under a hybrid state-federal setup that has resulted in an awkward push-and-pull between the federal government, state governments, and employers. No one quite wants to take full responsibility of it, but everyone wants a say.”

” A reimagined unemployment system would treat the jobless like customers, not criminals, while helping them stay afloat as they find their next gig. It would be easier to navigate, pay people more consistently, regardless of where they live, and take into account the wage stagnation of decades past. It would be easier to ramp up in times of crisis and better serve the modern workforce — groups such as gig workers, short-term employees, and people looking for jobs.”

“unemployment insurance has never worked super smoothly in the US. The first state in the country to put an unemployment insurance program in place was Wisconsin in 1932, and the federal program became law under the Social Security Act of 1935. It was set up as a mixed federal-state endeavor for reasons that wouldn’t surprise the average political observer today: There was disagreement over what level of government should be in charge of running the program, and proponents of unemployment insurance were nervous it might be undone by the Supreme Court, which had struck down multiple pieces of legislation. The hope was that this model would give it a better chance with the court, and even if the federal component were struck down, the state components could live on.

“It was designed to have this very broken and fractured structure,” Konczal said.”

” In the US, unemployment insurance is meant to work by replacing about half of a worker’s wages (up to a certain cap) for about 26 weeks. It is intended for those who involuntarily lost their jobs, meaning they were laid off or fired, and not people who quit. Those who quit their jobs can wind up collecting benefits, namely if they can explain that they did so for good cause, such as experiencing sexual harassment, but it often winds up being a battle adjudicated by the state.

The program is financed through state and federal payroll taxes that are supposed to fund administrative systems and the benefits themselves.

Many states have kept those taxes pretty low, resulting in a system that is chronically underfunded. And during periods of stress, the impact of that underfunding really shows.”

“Years of disinvestment in technology and administration led to problems like those now affecting Suggs and millions of unemployed workers across the country. You make one mistake, or your case has one little quirk, and you’re sucked into a bureaucratic black box disaster with no clear end in sight. And then, once the economy gets better, everyone moves on and forgets, and the political impetus to fix these problems fades.”

A Payroll Tax Holiday Is No Free Lunch

“An actual payroll tax holiday does mean an increase in take-home wages for some. According to recently published Internal Revenue Service (IRS) guidance on the president’s order, employers can temporarily stop withholding the employee’s 6.2 percent share of Social Security taxes for workers earning under $104,000 per year. That means more money in their paychecks for those eligible workers.

This could be significant. A little-known fact is that, for a majority of American taxpayers, the largest share of their federal tax bill is the payroll tax, not the income tax. In the way it’s designed, the payroll tax is regressive, so it hits lower-income earners harder. But a temporary reprieve is pretty much where the good news ends for the employees.

For one thing, as noted, the benefit may be short-lived. According to the IRS, unless Congress decides to go ahead and forgive the tax, it will eventually need to be collected by employers and sent to Uncle Sam. This is guaranteed to become a massive headache for employers, who will ultimately have to collect the deferred taxes from their employees. As a result, some large companies such as UPS have already announced that they will continue to collect the payroll tax from their employees and send the money to the federal government as usual.”

“as some point out, those tax deferrals will eventually become due, and employers may then have to withhold twice the amount of payroll taxes from employees’ paychecks starting in January.

This will create quite a bit of pressure on Congress to waive the deferred taxes next year. But even if that happens, somebody somewhere at some point will have to pay. There’s no such thing as a free tax holiday.”

The race to the bottom on corporate taxation starves us of the resources we need to solve our biggest problems

https://www.marketwatch.com/story/the-race-to-the-bottom-on-corporate-taxation-starves-us-of-the-resources-we-need-to-solve-our-biggest-problems-2019-10-07

10,000 Gather In Bangkok to Protest Thailand’s Monarchy

“Since Thailand’s absolute monarchy fell in 1932, the country has seen 12 military coups. It was led directly by a military government until 2019, and it continues to have a military-backed regime. Displeasure with the Thai government had been brewing since the 2019 election: Despite winning a majority of parliamentary seats, the opposition Pheu Thai Party was not allowed to form a government after many reported irregularities and electoral rule changes, leading many to call the results rigged. As a result, the incumbent prime minister, Prayuth Chan-Ocha, was allowed to remain in power.

Discontent with the Thai government has been exacerbated by the COVID-19 pandemic. A massive drop in tourism, which drives 10 percent of Thailand’s GDP, contributed to a 12.2 percent contraction of GDP in the second quarter of this year. The outbreak was exploited to legitimize an extensive crackdown against dissent, according to an Amnesty International report.”

What it would take to end child poverty in America

“In 2019, about one in six children in America — 12 million kids nationwide — lived in poverty. That’s a rate about two or three times higher than in peer countries. And that was before the worst economic and public health crisis in modern history.

The scale of child poverty in America is a disgrace, not only because of the suffering it creates and the potential it drains from our society, but also because it’s easily avoidable. Child poverty is not an inevitability; it’s a policy choice. And we’ve been making the wrong choice for far too long.”

Child care is broken. Biden has a plan to fix it.

“Biden is making relief for child care centers part of his larger caregiving plan, which he unveiled on Tuesday in New Castle, Delaware. “As a first step, Biden will immediately provide states, tribal, and local governments with the fiscal relief they need to keep workers employed and keep vital public services running, including direct care and child care services,” states the campaign document outlining the plan. (The campaign did not provide specifics on the among of relief the candidate would make available if elected.)

But the former vice president also promises to go beyond the immediate crisis and invest in child care for the future. His plan would provide free preschool to all 3- and 4-year-olds in the country. And for kids under the age of 3, the plan would create a system of tax credits and subsidies so that families earning less than 1.5 times the median income in their state would pay no more than 7 percent of their income for child care, with “the most-hard pressed working families” paying nothing.

The plan also includes tax credits to encourage employers to construct onsite child care facilities, something companies did during World War II that’s become harder to imagine today, as families (most often mothers) are expected to handle child care on their own.”

All Enforcers Are Cops

“”Every new law requires enforcement; every act of enforcement includes the possibility of violence,” Yale Law School’s Stephen L. Carter wrote in 2014 after New York City cops killed Eric Garner during a confrontation rooted in suspicion that he was illegally selling loose cigarettes.

Every violent enforcement action, I’ll add, involves enforcers acting through a filter of flaws and prejudices.”