I wanted to highlight two stories today that, although dissimilar at first, share a common thread: government a la carte, or a pick & choose approach to government. On one hand, we have the continued piecemeal budgeting stunt of the House GOP (and their willing Conservadem allies). On the other hand, we have a pension-looting plutocrat loaning money to Head Start and receiving glowing reviews from the press for it. Both show a collapse of democratic and deliberative budgeting and do not augur well for the future.
The House GOP continued with its stunt of piecemeal budgeting, or government a la carte, in which they pick and choose which department or program they feel like funding each day--often to align with media coverage. I've written diaries on this ongoing stunt here and here.
Today, the House Republicans decided that they felt like continuing to fund the FDA. Their bill passed 235 to 162, with 20 Democrats joining the Republican caucus. Jimmy Duncan (TN-02) was the only Republican to vote no. Why? I'm not sure.
Which 20 Democrats took the unprincipled stand in favor of government a la carte, enabling the GOP extremists in their latest stunt?
Ron Barber (AZ-02)
John Barrow (GA-12)
Ami Bera (CA-07)
Bruce Braley (IA-01)
Cheri Bustos (IL-17)
Suzan DelBene (WA-01)
Bill Foster (IL-11)
Joe Garcia (FL-26)
Dave Loebsack (IA-02)
Stephen Lynch (MA-08)
Sean Maloney (NY-18)
Jim Matheson (UT-04)
Betty McCollum (MN-04)
Mike McIntyre (NC-07)
Patrick Murphy (FL-18)
Scott Peters (CA-52)
Gary Peters (MI-09)
Raul Ruiz (CA-36)
Bradley Schneider (IL-10)
Kyrsten Sinema (AZ-09)
These efforts at government a la carte, no matter how disturbing a precedent and barren a principle, are still just stunts. They are DOA in the Senate. What is more disturbing in terms of precedent-setting is the other story:
First, we need to take a look at the "what" here and then, more importantly, the "who."
Private donors offer $10 million to reopen Head Start programs in six states
Seven Head Start programs were closed last week after the federal government shutdown Oct. 1. Those closings left 7,195 low-income children without access to the program, according to the nonprofit National Head Start Association.
But philanthropists Laura and John Arnold offered up to $10 million in emergency funding to reopen those programs — some as soon as Tuesday morning — and to prevent others from closing. The money will be paid back without interest if the Head Start programs receive funding for a full year once the government reopens. The closed programs are in Alabama, Connecticut, Florida, Georgia, South Carolina and Mississippi.
What's going on? A billionaire couple is getting to decide which programs stay open. Although the funding might appear to be a pleasant act of generosity here, it sets a dangerous precedent. Why bother to have the democratic (at least in theory) deliberations over society's priorities in Congress when we can just let the billionaires decide which programs they want to keep open? Why not just turn over the whole school system over to the "benevolent" billionaires, as so many of them would love?
However, the larger problem is not so much the what in this case but the who.
Although the name John Arnold might seem common, hopefully it rings a bell. You may remember the name from an expose by Rolling Stone's Matt Taibbi from two weeks ago, "Looting the Pension Funds," in which he chronicled the organized effort by hedge fund managers like Arnold to raid public pensions across the country:
In 2011, Pew began to align itself with a figure who was decidedly neither centrist nor nonpartisan: 39-year-old John Arnold, whom CNN/Money described (erroneously) as the "second-youngest self-made billionaire in America," after Mark Zuckerberg. Though similar in wealth and youth, Arnold presented the stylistic opposite of Zuckerberg's signature nerd chic: He's a lipless, eager little jerk with the jug-eared face of a Division III women's basketball coach, exactly what you'd expect a former Enron commodities trader to look like. Anyone who has seen the Oscar-winning documentary The Smartest Guys in the Room and remembers those tapes of Enron traders cackling about rigging energy prices on "Grandma Millie" and jamming electricity rates "right up her ass for f*cking $250 a megawatt hour" will have a sense of exactly what Arnold's work environment was like.Read the full article. It's worth your time.
In fact, in the book that the movie was based on, the authors portray Arnold bragging about his minions manipulating energy prices, praising them for "learning how to use the Enron bat to push around the market." Those comments later earned Arnold visits from federal investigators, who let him get away with claiming he didn't mean what he said.
As Enron was imploding, Arnold played a footnote role, helping himself to an $8 million bonus while the company's pension fund was vaporizing. He and other executives were later rebuked by a bankruptcy judge for looting their own company along with other executives. Public pension funds nationwide, reportedly, lost more than $1.5 billion thanks to their investments in Enron.
In 2002, Arnold started a hedge fund and over the course of the next few years made roughly a $3 billion fortune as the world's most successful natural-gas trader. But after suffering losses in 2010, Arnold bowed out of hedge-funding to pursue "other interests." He had created the Arnold Foundation, an organization dedicated, among other things, to reforming the pension system, hiring a Republican lobbyist and former chief of staff to Dick Armey named Denis Calabrese, as well as Dan Liljenquist, a Utah state senator and future Tea Party challenger to Orrin Hatch.
Soon enough, the Arnold Foundation released a curious study on pensions. On the one hand, it admitted that many states had been undercontributing to their pension funds for years. But instead of proposing that states correct the practice, the report concluded that "the way to create a sound, sustainable and fair retirement-savings program is to stop promising a [defined] benefit."
In 2011, Arnold and Pew found each other. As detailed in a new study by progressive think tank Institute for America's Future, Arnold and Pew struck up a relationship – and both have since been proselytizing pension reform all over America, including California, Florida, Kansas, Arizona, Kentucky and Montana. Few knew that Pew had a relationship with a right-wing, anti-pension zealot like Arnold. "The centrist reputation of Pew was a key in selling a lot of these ideas," says Jordan Marks of the National Public Pension Coalition. Later, a Pew report claimed that the national "gap" between pension assets and future liabilities added up to some $757 billion and dryly insisted the shortfall was unbridgeable, minus some combination of "higher contributions from taxpayers and employees, deep benefit cuts and, in some cases, changes in how retirement plans are structured and benefits are distributed."
That's right. The "philanthropist" praised by WaPo and other outlets today for his generosity has been making that money by jacking up energy prices and raiding pension funds. And that same Foundation is waging a war against public workers across the country. I wish there was a word for the charity-related equivalent to words like greenwashing, bluewashing, and pinkwashing. If you know it, please do let me know.
To learn more about John Arnold and his eponymous foundation, read David Sirota's article for Salon and his full report for the Campaign for America's Future.
WaPo, in the article quoted above, does not mention Arnold's past work at Enron, his current work in hedge funds, or the other work of his foundation. He is portrayed as a philanthropist who just cares about the children oh so much.
POLITICO, in reporting on Arnold's loan to Head Start, provides more background on who Arnold is, but not on the Foundation, and (again, unsurprisingly) completely ignores the expose on him that came out just two weeks ago.
POLITICO also featured this risible quote from John and Laura Arnold:
“Our representatives’ inability to resolve their differences has caused severe disruptions in the lives of many low-income Americans."If John cared about low-income Americans, then he wouldn't be trying to prevent them from retiring with dignity, and he wouldn't have jacked up energy prices to profit off the economic suffering of low-income Americans.
Similarly, there was no mention of Arnold's effort at exacerbating inequality and hurting the parents of those children in the reporting in the Huffington Post or The Atlantic. The Atlantic, at least, noted the unease that some might feel about the role of big money in influencing education in this country but has an overall theme of "Our government is so incompetent--save us, billionaires!"
When it comes to philanthropy, I believe that four simple standards must be met before an individual or corporation merits praise:
(1) You pay your taxes--in full. Your basic civic duty comes first.
(2) You pay your workers well (a living wage, at the least, with benefits). Charity begins at home.
(3) You did not make (or are not making) your fortune off the suffering and misfortune of others.
(4) You are not using that fortune to advance reactionary candidates or causes.
John Arnold, as is clear, fails to live up to such standards.