Fighting poverty, curbing corporate crimes in the US

AT GROUND LEVEL - Satur C. Ocampo - The Philippine Star

Raise the minimum wage, create jobs, cut the perks of the rich. Decisively punish big corporations or their executives for breaking the law. These anti-poverty calls are being raised as vital issues in the United States presidential elections next November. (No, folks, it’s not happening in the Philippines.)

The proposals delve into the widening income-wealth gap and examine the viability of America’s much-vaunted democratic institutions. They are the product of two extensive studies.

If ever, and how, the next US administration will act on them will have deep impacts on the people of America and the rest of the world.

Significantly, the proposals to increase the minimum wage are embodied in a report based on discussions by teams of scholars identifying with the conservative (Republicans) and the liberal or progressive (Democrats) political parties.

Related recommendations are to: require the poor being given state aid to get jobs; increase the earned-income tax credit for childless adults; and make more federal investments in early childhood education and community colleges.  To pay for these, the report urges the cutting of “corporate boondoggles” (frivolous expenses) and individual tax boons that overwhelmingly benefit the wealthy, like farm subsidies; and reducing Social Security benefits for rich Americans.

Given that substantive social legislation remains bogged down in the US Congress due to bitter partisan mistrust and that the proposals are not likely to be considered for legislation any time soon, still the trail-blazing report “raises a tantalizing prospect,” writes Eduardo Porter in the International New York Times.

He asks: “Is it possible that combatting America’s entrenched poverty – the deepest among advanced industrial nations – may have finally become salient enough for the left and right to break through the ideological gridlock?”

The other proposal urging presidential/executive action to adequately punish corporate crimes is contained in a report issued by Sen. Elizabeth Warren (a Democrat), which examines “20 of the worst federal enforcement failures in 2015.”

These failures undermine the foundations of America, Warren writes in an op-ed piece in the INYT.” Justice, she states, “cannot mean a prison sentence for a teenager who steals a car, but nothing more than a sideway glance at a CEO who quietly engineers the theft of billions of dollars.”

“In a single year,” Warren points out, “in case after case across many sectors of the economy, federal agencies caught big companies breaking the law – defrauding taxpayers, covering up deadly safety problems, even precipitating the financial collapse in 2008 – and let them off the hook with barely a slap on the wrist.” Often, she adds, companies paid meager fines, “which some will try to write off as a tax deduction.”

She cites five of the world’s biggest banks, including JP Morgan Chase, which pleaded guilty of criminal acts, that they rigged the price of billions of dollars worth of foreign currencies. Yet no one has been charged in court. She wryly notes, “JP Morgan was so chastened… that it awarded Jamie Dimon, its CEO, a 35 percent raise.”

Warren asks American voters, in considering whom to elect, to remember that presidents can take significant action even without needing new legislation:

“Agency rules, executive actions and decisions about how to vigorously enforce certain laws will have an impact on every American, without a single new bill introduced in Congress.”

She acknowledges that President Obama has a “substantial record on agency rules and presidential actions” (such as using tools to protect retirement savings, expand overtime pay, prohibit discrimination against LGBT employees in government, and rein in carbon pollution). Still, she notes that Obama’s administration falls short on enforcement, and “federal enforcement of laws that already exist has received too little attention on the campaign trail.”

Warren’s sharp reminder can apply as well to the Philippine government, where a lot of good laws enacted by our Congress are either unimplemented, or not well implemented.

More importantly, Warren’s call for harder legal action against corporate wrongdoings poses the big question: Can any of the current presidential candidates, once in power, summon the political will to challenge and defy Wall Street – the giant banks and related commercial-financial corporations which are the biggest donors to presidential campaigns of both the Republican and Democratic parties?

Even under Obama, she observes, the Securities and Exchange Commission suffers from weak leadership and is “far behind on issuing congressionally mandated rules to avoid the next financial crisis.” The SEC has “repeatedly granted waivers so that law-breaking companies can continue to enjoy special privileges.” On the part of the Justice Department, Warren adds, it has “dodged one opportunity after another to impose meaningful accountability on big corporations and their executives.”

Warren enjoins American voters to find out and choose which presidential candidate they can trust “who will fight on the frontlines to enforce the laws.” The next president can rebuild faith in American institutions “by honoring the simple notion that nobody is above the law.” But, she emphasizes: “it will happen only if voters demand it.”

A heartening sign is that many previously unconcerned citizens – especially among the young – seem to be getting more involved in the debates and showing more eagerness to hear new ideas.

There’s still a long way to go before Americans get to choose who their next president will be. The question remains: will he, or she, make things better for the millions who are sinking deeper into poverty?

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Email: [email protected]


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