President Donald Trump has signed an executive order that ends family separations at the border by indefinitely detaining parents and children together. Such a policy is illegal. It violates a 20-year-old court settlement called the Flores Agreement, which limits how long and under what conditions children can be kept in immigration-detention facilities. Choosing to ignore Flores allows Trump to put children in the same cages as their parents, indefinitely, for those accused of the misdemeanor of unauthorized border crossing. It will create a Guantánamo in the Southwest United States.

It would also directly benefit the two largest private-prison companies in America, Geo Group and CoreCivic, who run massive family-detention facilities in southern Texas that previously could only hold children with their families for up to 20 days. Authorizing Trump hotels with open-ended stays would be great for business.

Attempts to deter a 2014 migrant influx led to the construction of two giant family-detention centers for women and children in Texas, one for each major private-prison company: the South Texas Family Residential Center in Dilley, which is run by CCA, and the Karnes Residential Center, run by Geo Group. A federal case-management system for family detention went to Geo Care, a subsidiary of Geo Group, until it was shuttered last year. Geo Group also ran an electronic monitoring system for families sent off to await court appearances or asylum hearings.

According to a 2015 Grassroots Leadership report, CCA, Geo Group, and their counterparts operate 62 percent of all immigration-detention centers. Their business model was bolstered by a congressional quota mandating that ICE maintain 34,000 detention beds every day, whether filled or not.

This was a smart diversification strategy for private-prison companies that, during the Obama administration, witnessed declines in violent crime and bipartisan agreements on alternatives to harsh over-sentencing. The stalemate on immigration and the arms race to prove toughness on border security represented a growth opportunity.

But the family-detention centers proved disastrous. Incredibly, Texas unsuccessfully attempted to get Dilley and Karnes labeled as childcare centers—with the Obama administration’s help—so they could house children. But the facilities were nicknamed “baby jails” and compared to Japanese internment camps. Dilley was cited for dozens of violations of state regulations, including recurrent child illnesses. At Karnes, Geo Group was accused of locking mothers in dark rooms as punishment for protesting conditions.

The Trump administration’s policy just takes this effort to deter migration to its logical extreme. As parents go to (mostly privately run) jails for illegal crossing, children move to temporary holding centers until the Office of Refugee Resettlement can place them in foster care or some other stopgap solution. Private companies maintain these facilities too.

Yahoo News identified several of them. Comprehensive Health Services Inc. received $65 million in contracts for emergency shelter operations, and Dynamic Service Solutions got $8.7 million more. Dynamic Educational Systems is providing some of the educational services, with a contract worth up to $5.6 million. Nonprofit organization Southwest Key is running the notorious “Casa Padre” facility, housed in a former Walmart near Brownsville, Texas, as well as 26 facilities nationwide. They’re on track to earn $458 million this fiscal year.

Defense contractors have descended on the tent cities being set up in Tornillo, Texas, and elsewhere. MVM, a Virginia-based defense contractor, has put up recruiting notices seeking personnel to set up the Tornillo shelters; MVM claims they’re only transporting migrants to facilities and since took down the links. Weapons manufacturer General Dynamics assists the Office of Refugee Resettlement in processing immigrant-children cases, and has issued new job postings. “Tender age” migrant facilities offer another chance to profit.

Practically all these companies have disclaimed responsibility for the crisis, but they’re clearly implicated in it. So is Microsoft, which has a cloud-computing contract with ICE. So is American Airlines, which has federal travel contracts with the government but has asked to stop having its flights transport separated children. Other airlines have similar contracts, and workers are vowing to boycott the flights.

ICE spends roughly $159 per day per person on detention, paying some middleman to manage, feed, educate, and, in a particularly gruesome development, medicate the children into listlessness. There are far cheaper alternatives, but sinking all that money into a carceral framework makes it difficult to tear it down. Even cities that want to eject private prisons for immigrants are subject to legal pushback from the deep-pocketed contractors.

Meanwhile, companies overwhelmed by the expanding caseload, fueled by Trump, have reverted to reducing labor to maintain costs, as a whistle-blower who worked in a Southwest Key facility admitted.

Before ramping this up, the administration sought out more privately run immigration jails across the country, increasing detention capacity to 48,000 per day—-surely to the delight of Geo Group and CoreCivic. The executive order would extend this and make the detention indefinite, bringing the facilities at Karnes and Dilley back into play. And scenes of children sleeping on foil blankets would be replaced by scenes of private-prison companies putting immigrants into solitary, and torturing, even killing those in their custody through neglect.

This is an example of how we’ve transformed border policy into a cash cow for private contractors. America cannot capture, detain, transport, and deport people without enlisting a network of outside companies to carry out these tasks. It’s a darkly ironic consequence of decades of anti-government rhetoric. Conservatives complain that government cannot do anything right and must be drowned in the bathtub. Then they devise a zero-tolerance border policy that requires one of the largest and most fearsome government presences in recent memory. But they don’t have the staff to execute it, so they farm it out.

An added benefit here is that subcontractors don’t need to abide by as many transparency rules or Freedom of Information Act requests, so they can hide what really goes on inside the facilities and stage-manage what information to disclose. If somehow misconduct or abuse is discovered, the government has a layer of plausible deniability: It will just claim it was the private contractor’s fault.

The horrific sounds and images led to Trump’s alleged backing down on his family-separation policy, but he just substituted one private contractor for another. That’s who we get to do our dirty work in America, whether it’s raids and murder in Iraq or warehousing immigrants. The only bill that would not only end separation of families but collapse the entire apparatus of caging human beings escaping violence and horror would contain 14 words: “All immigration-related activities must be performed by government employees and cannot be subcontracted out.” ICE should be abolished, but you abolish the contracts and the whole rickety structure will fall on itself.

In an appalling development for the future of media, telecommunications, and America, Judge Richard Leon approved the $85.4 billion merger between AT&T and Time Warner in full, without conditions, completely rebuking the Justice Department’s effort to overturn it. In a stark display of judicial activism, Judge Leon even told DoJ not to appeal the case, thus allowing the deal to close by a self-imposed June 21 deadline, which otherwise would trigger a $500 million “break-up” fee. I guess the judge wouldn’t want any executives to lose money.

It’s hard to over-emphasize the impact of this ruling. First, the deal itself brings together one of America’s largest telecom and cable companies with a suite of valuable programming to distribute on those networks. HBO, TNT, CNN, Cartoon Network, Warner Brothers Studios, a stake in Hulu and much more will now be held by the owners of DirecTV, U-verse, AT&T mobile and broadband, Cricket wireless, and more. AT&T has already started bundling HBO for free for wireless users; the entire idea is to leverage things people want to watch by forcing them to watch it on AT&T services.

The Justice Department argued this would allow AT&T to raise the cost of Time Warner programming, whether for rival cable companies, online pay-TV services, or consumers. The trial mostly didn’t address other concerns, like narrowing the channels for artists to get their work out, concentrating the power to distribute news and information in too few self-interested hands, or stunting innovation by creating a barrier to competition. That’s because modern antitrust jurisprudence operates under the consumer welfare standard, a constrained method that only looks at costs to consumers to determine whether a merger should be granted.

In other words, the Justice Department needed to make its case while bound in a straitjacket. Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration. UC Berkeley economics professor and Obama administration veteran Carl Shapiro put together a model for the government to prove consumer harm; it ended up showing less than a dollar a month for the average customer, and AT&T’s attorneys poked numerous holes in it (predictably so, as it was an inherently complex rendering of an uncertain future).

But we know that monopoly is the entire point of this merger. During the trial, the Justice Department revealed an internal document where an executive from Turner Broadcasting, now part of AT&T, stated outright that “Time Warner would be a weapon for AT&T because AT&T’s competitors need Time Warner programming.” But instead of recognizing that this desire to screw rivals obviously may “substantially lessen competition,” as the antitrust statute states, judges require economists to act as wizards and predict precise percentages of the market and markups in price.

So the courts can overlook very clear statements from executives running these companies that they need this merger to secure market power. The desire to monopolize is crystal clear, but as long as you can spin a theoretical model showing a pretense of consumer benefits, then market power is no hurdle.

I wish the only outcome of this were a much bigger and more dominant AT&T. But the roar you heard after the verdict was announced came from high-rises across Manhattan, filled with merger and acquisition lawyers counting their money from all the dealmaking to come. Just as the AT&T deal was a reaction to Comcast combining with NBCUniversal to marry content and distribution, practically every media and telecom company out there is poised to play their cards to catch up.

Comcast will announce a bidding war for coveted Fox TV and movie assets, already pledged to Disney, as early as Wednesday. That’s just the first domino in a likely rush to close deals. Amazon could buy a movie studio like Lion’s Gate. Apple, Facebook and Google are dipping into producing video and can acquire more assets for that endeavor. Sprint has already announced a deal with T-Mobile, which has a partnership with Netflix. Sinclair Broadcasting, with an assist from the FCC, is morphing into an indomitable giant at the local news level. Verizon, the other big distribution network, waits in the wings. The media business is already deeply consolidated, and this merger will ramp that up.

The entire point of these mergers—indeed, a stated goal of AT&T’s deal—is to compete with the tech platforms in a war for your attention, enabling the sale of targeted ads using your personal data. Time Warner wants more of your information so they can keep your eyeballs glued to your screen as they serve up more ads. This is nothing less than a surveillance tax on every man, woman, and child: an endless sea of using your every waking thought to bombard you with corporate pitches. Targeted advertising serves no useful purpose, facilitates monopoly and magnifies the potential for abuse of consumers and our democracy. It ought to be banned; instead it will further entrench itself.

The ruling will also give a green light for more vertical deals—those between companies that don’t technically compete with one another. That was never actually true in this case; HBO had a distribution network for its programming that will now almost certainly be folded into AT&T’s offerings. But modern antitrust law has taken a hands-off approach to vertical mergers, despite the ability to use leverage in one market to stifle competition further down the supply chain (like using Time Warner content as a weapon against AT&T’s rival distributors, you know, like Time Warner executives said explicitly that AT&T would do). Judge Leon so thoroughly smacked down the government in this case, that vertical deals will likely be too hot to handle for a few years.

That means that vertical deals that have nothing to do with media—like health insurer Aetna’s bid to join with CVS, or Cigna’s proposed deal with pharmacy benefit manager Express Scripts—face brighter prospects ahead. In fact, DoJ’s defeat was so humiliating, this could prove to be the last big antitrust case of Trump’s first term. While Judge Leon took pains to say in his ruling that “the temptation by some to view this decision as being something more than a resolution of this specific case should be resisted by one and all,” it’s hard to disassociate this smackdown from the cases to come. Any companies looking to merge can likely be confident that, even if they don’t intimidate the antitrust agencies out of challenging them, the courts will have their back. The champagne must be flowing in boardrooms tonight.

This is why top lobbyists in Washington paid the equivalent of floor seats at an NBA playoff game to see Judge Leon read his verdict live. This is a lightning bolt on behalf of corporate America, announcing that it can rule over the world without constraint from piddling laws or citizens. Big business has encouraged the courts to so distort the century-old law preventing corporate power that it cannot be recognized. The Second Gilded Age just got a another layer of gold today.

Workers from Toys “R” Us stores across America set up a mock graveyard in the New York City lobby of private-equity giant Bain Capital on Monday. The gravestones read “Toys R Us: 1957-2018” and “Here Lies Geoffrey [the Toys “R” Us mascot], Killed by Wall Street Greed.” Alicia Henson of Lexington, Kentucky, a pregnant woman holding a child in her arms, began to speak about her time with the company. She was jostled by a security guard attempting to shut down the protest. After other workers separated them, Cheryl Claude of South River, New Jersey, took the megaphone.

“Thirty-three years of giving my life for this company, and you guys are taking everything away from every one of us. You guys ought to be ashamed of yourselves.”

The Bain Capital protest was part of a series of actions demanding a modicum of dignity from financiers who drove Toys “R” Us into the ground. All 735 Toys “R” Us stores in America will be closing by the end of June, and 33,000 workers will not only lose their jobs; they won’t be receiving severance pay, even if they worked for the company for decades.

Previously the company paid severance after any downsizing; those days are over. In many states workers will also lose unused vacation and sick-leave pay. Yet executive bonuses, including for disgraced CEO Dave Brandon, were paid out before the company filed for bankruptcy; only the workers were left high and dry.

“The big dogs are getting away with murder,” said Romerick Anderson, an assistant store manager from Ontario, California, who helped organize 11 workers in his area to come east to protest. “When does it stop?”

The story is another chapter in our financialized economy, where benefits flow to the C-suites instead of those doing the work. Toys “R” Us succumbed to a private-equity bust-out, where financial firms load companies up with debt, strip out the profits, and leave destruction in their wake. “I compare private equity to an otter,” said Congressman Bill Pascrell (D-NJ), whose state houses the corporate headquarters of Toys “R” Us. “It tears open a clam, takes the meat, and throws away the shell. It’s people being tossed away.”

Bain and two partners, KKR and Vornado Realty Trust, bought Toys “R” Us in 2005 in a leveraged buyout, using $1.3 billion of their own cash and $5.3 billion in debt. The debt weighed heavily on Toys “R” Us, as it made between $450 and $500 million in annual debt-service payments, along with advisory and management fees to the private-equity overlords. Over the lifetime of the arrangement, Bain, KKR, and Vornado managers took in $470 million, money workers helped the company earn. “It was a business that turned into an ATM machine for Wall Street,” said Carrie Gleason of the Center for Popular Democracy, which is assisting the worker’s campaign with Rise Up Retail, a partnership with Organization United for Respect.

The debt payments, not anything fundamental with the company, brought Toys “R” Us low. The stores grew operating income over the past three years, with over $11 billion in annual revenue. Last year it sold one out of every five toys in America, despite competition from Amazon and others. Its net losses the past few years were less than its debt payments. “The company makes $11 billion a year, you kind of wonder,” said Debbie Beard, an assistant manager from Chandler, Arizona, who has 29 years with Toys “R” Us. “It must be an awful big debt if we can’t bring ourselves out of it.”

Toys “R” Us Executive Vice President Amy von Walter told The Nation in a statement that “ultimately our creditors determined that a liquidation of our U.S. business provided more value for them.” Asked why the workers would receive no severance as they scrambled to find another job, von Walter said, “Because we were forced to liquidate, we were not able to follow the normal severance process… in lieu of this payment we were able to provide a minimum of 60 days notice to help employees begin their transitions.”

Of course, that’s not a benefit, that’s the law for mass closings and liquidations, under the WARN Act.

The lack of severance stings because the private-equity gang prospered from the Toys “R” Us debacle. Yes, the owners lost the original investment of $1.3 billion. But the $470 million in management fees softened the blow. And when you add in deductions for interest payments and tax write-offs of the principal, and the fact that the losses were borne on private equity investors rather than the firms themselves, you discover what Marketplace found: that Bain and KKR took home at least $15 million from a company they hollowed out and sunk.

Bankruptcy or liquidation doesn’t hurt them, only the tens of thousands of families who depend on Toys “R” Us for their livelihoods. “I always felt retail and food service have been considered second-class citizens,” Beard said. “We become numbers to them.”

The workers got fed up with being taken for granted. Last Friday, they appeared with Congressman Pascrell and New Jersey Senators Robert Menendez and Cory Booker (who famously defended Bain Capital during Mitt Romney’s run for president) to ask for severance, issuing a companion letter to the private-equity owners. Then, on Sunday, they occupied a store in Union, New Jersey, near company headquarters, sharing stories of how they’ve been treated since Toys “R” Us declared bankruptcy. On Monday, they went directly to the private-equity owners to amplify their voices.

Workers came from all corners of America to represent thousands of colleagues. One was Maryjane Williams, a mother of five from Waco, Texas. She spent 20 years at Toys “R” Us stores in New York and Texas. “I enjoyed the job, the people I worked with, we became family,” Williams said. She learned about the liquidation on a conference call. “It was a real slap in the face. I carry the medical benefits for my family. I have life insurance to take care of. I just turned 50, I don’t have a job.”

Williams was among an original group of six who traveled to Washington to brief lawmakers on the situation. Nearly 100 made it out to New York, many bringing spouses and children. The workers did most of the organizing, connecting online to encourage each other to turn out. “We’re one big family,” Williams said. “We might not be in the same store, but we’re like the cousins. You feel the pain of what the next person is going through.”

Gleason, of the Center for Popular Democracy, noted that none of these workers had ever been involved in a protest action before. “They just want people to know what they’re going through,” she said. “There’s so much energy, I’ve kind of never seen anything like it.”

Worker uprisings have reverberated across the country in the past several years, from fast-food clerks to teachers in red states savaged by disinvestment. Retail workers at Toys “R” Us, just one of the numerous bankruptcies caused by private-equity rapaciousness, represent a new front in this war: calling out Wall Street’s relentless pursuit of profits, and the yawning social divide financial engineering can create.

Congressman Pascrell wants federal legislation to prevent private-equity firms from taking on too much risk. In 2013, bank regulators issued guidance warning against leveraging companies with debt more than six times earnings; Toys “R” Us was at 7.5. “More of this is going to happen when you have leveraged buyouts,” Pascrell said. “All signals come from the White House, and the signal is deregulation.”

Fighting for better legislation, or through the bankruptcy court, as the Center for Popular Democracy plans to do soon, is all well and good. But workers are trying to make private-equity executives uncomfortable in their own offices, forcing a reckoning with the disaster they wrought on families. The past several years have taught workers to quit being reasonable, and get onto the streets.

Maryjane Williams comes from a bipartisan family: Her husband votes Republican. She told her daughter, a public-school teacher, that after this she would have to join up with the teacher strikes. “Absolutely, I would support them, they’re supporting me,” she said. “We were walking down the street in New York and there were people saying go Toys ‘R’ Us, you deserve it.”

Democrats are debating how to best approach the 2018 midterms. Some argue that they must laser-focus on Donald Trump and the unique threat to the country he represents. Others say attacking Trump is not enough, that candidates must highlight a tangible economic agenda to rally voters.

But there’s a way to unite these themes, and it runs through Michael Cohen’s bank account.

Cohen, you recall, reeled in millions of dollars from the likes of AT&T, Novartis, and Korea Aerospace Industries, allegedly providing them with “insight” into his client, President Donald Trump. The money went into the same account out of which Cohen paid off Stormy Daniels to keep quiet about her affair with Trump. Cohen, who has no special policy insights that anyone can discern, wasn’t a registered lobbyist, so the payoffs were conducted in secret until Daniels’s lawyer found out about them. The scandal amplified the worst of Washington’s pay-to-play, off-the-books influence industry, so nobody could deny its sleaziness.

This is the fundamental story of the Trump era. As The Atlantic’s Adam Serwer puts it, there is only one Trump scandal, and that is corruption. Democrats are faced with hard choices every day on whether to highlight Trump’s colluding with Russian interests, Saudi and Emirati interests, or Chinese interests. They have to think about whether to lead with China’s $500 million loan to the Trump Organization’s hotel business, Paul Ryan’s $24.6 million check from an anonymous Super PAC donor, or Mick Mulvaney’s open solicitation of campaign donations for access.

It’s genuinely hard, but there is an approach that synthesizes the anti-Trump strategy and the economic strategy. It can be summarized thusly: The personal venality of Trump and his cadres has allowed wealthy and powerful interests to rewrite the rules of the country in their favor. The result is rampant deregulation, tax cuts for the rich, and a government that listens to you only if you have your checkbook out.

Today the Democrats unveiled a new plank in their Better Deal agenda, an anti-corruption platform that both depicts the broken nature of the political system and puts reform at the forefront of any campaign to give regular people a voice in our democracy. It brings together the anti-Trump and populist-economics messages in a way that makes them inextricable. “Creating jobs, raising wages, contributing to people’s quality of life, is an important and powerful message,” said Representative John Sarbanes (D-MD), who chairs the party’s Democracy Reform Task Force and has been highlighting anti-corruption policies since entering office in 2007. “But people are right to say, how can we get an economic agenda that’s good for the country enacted if we don’t fix the institutions?”

Democrats have used ethics and corruption to great effect in the recent past. The term “drain the swamp” came from Nancy Pelosi in the 2006 midterm elections, after lobbying scandals from Jack Abramoff and Tom Delay laid bare a culture of corruption.

But Donald Trump could credibly run on the same themes a decade later because the swamp is entrenched in Washington, with both parties feeding at its trough. Getting rid of it won’t be as easy as flipping a switch by changing parties, and Sarbanes understands you have to be candid with the public. “The cynicism is so deep that if you don’t follow through you make it worse,” he said. “I concede that everybody in some way is part of the broken system. What differentiates us is that we’re not content with current system. We want to change it and reform it.”

The agenda has three main components: voting rights, campaign-finance reform, and ethics laws. Democrats have been focused on the first two for a long time; both are critical to restoring a democracy where everyone counts. On voting rights, the agenda calls for hardening local election systems to prevent hacking, with federal resources and support from then Election Assistance Commission; restoring the Voting Rights Act after the Supreme Court’s decision in Shelby County; establishing independent redistricting commissions nationwide to end gerrymnadering; and pursuing automatic voter registration to maximize participation.

Sarbanes has for years championed the Government By the People Act, which would give all Americans 25 “democracy dollars” for campaign contributions and use federal matching funds to amplify the overall impact. “We should be creating a system that allows the public to be power players, so the $50 and $100 donor is most important in the campaign.” That combines in the campaign finance plank with the DISCLOSE Act to end dark money, a constitutional amendment to overturn Citizens United, and reform of the Federal Election Commission, which has been a gridlocked and paralyzed joke for years.

With ethics reform, the Democrats’ focus is unusually prominent, most directly attacking the era of outsize Trump corruption. Much of the agenda codifies into law concepts that had been unwritten rules, and it strengthens the Office of Government Ethics, whose only weapon currently is a kind of moral opprobrium, with stepped-up policing authority. It includes requiring that any lobbying conduct be publicly reported—what Senator Chuck Schumer calls closing the “Cohen loophole”—rewriting the bribery statutes to more broadly encompass corrupt self-dealing, and cementing that the president is not exempt from conflict-of-interest laws. These match up well with FTC Commissioner Rohit Chopra’s recent paper on political corruption, which increased enforcement and outright banned participation of influence peddlers inside government.

The spectacle of Trump’s business launching projects around the world, trade associations and foreign governments holding events at Trump properties, lobbyists with ties to the administration in a feeding frenzy, corporate executives rotating in to regulate the industries they worked for, and cabinet members like Scott Pruitt and Ryan Zinke wasting taxpayer money for their own benefit provides a powerful backdrop to the dire need for reform. “In other administrations it would be enough to place a call to the White House, say you’ve got an ethical issue you need to clean up, and within a day the problem would be fixed,” Sarbanes said. “With this crowd they’re shameless, they don’t care.”

As we’ve seen throughout American history, corruption gets no recognition until scandal breaks, forcing politicians to catch up. Many will sniff at this agenda because it comes from politicians who not so long ago were in control of a government that was still wired for the powerful, that was not corruption-free. But Sarbanes, at least, recognizes that any party that wants government to act in the public interest must prevent institutional rot as a threshold credibility issue. “People are not stupid,” Sarbanes said. “You look at these ‘non-coordination’ gymnastics that Super PACs go through, where the office is Suite 1A, the candidate’s in Suite 1B and they share a conference room. People say if you can’t clean that stuff up, don’t say you can do anything else for me.”

In short, Democrats cannot pledge to solve pressing problems unless they carve a path for those solutions to survive contact with Washington. Running against corruption doesn’t just combine disparate ways of playing politics in the Trump era; it’s a prerequisite to recapturing the public trust. The Trump kleptocracy offers an opportunity, but that can be squandered.

The notice in Politico’s “Playbook” a couple weeks ago didn’t draw much attention. “TRANSITIONS — MARK PATTERSON is returning to Capitol Hill to work as Senate Minority Leader Chuck Schumer’s general counsel overseeing investigations and approps. The former Daschle policy director was at Perkins Coie. He is replacing Rebecca Kelly Slaughter, who the Senate confirmed to the Federal Trade Commission.”

The blurb conveniently left out Patterson’s résumé in between working for then–Senate Democratic leader Tom Daschle and white-shoe law firm Perkins Coie. From 2005 to 2008 Patterson was a lobbyist for Goldman Sachs, which at the time was shaking the very foundations of the global economy. In 2007, Patterson worked to block the Democratic Congress from advancing “say on pay” rules, which would enable shareholders to have a voice in approving or disapproving executive-compensation decisions. It was a half-measure, but one Goldman Sachs vigorously opposed. Patterson also lobbied for Goldman on credit-default swaps, one of the financial innovations that contributed to the financial meltdown. Goldman eventually got paid out on its credit-default swaps with failed insurance-giant AIG at 100 percent; while at the New York Federal Reserve, Timothy Geithner brokered the bailout.

After that, Patterson got hired by Geithner as his chief of staff, serving in that position throughout Geithner’s tenure. An Obama-administration order restricted lobbyists from getting jobs within the government, but Patterson was waved in with some recusals to avoid working on matters on which he had directly lobbied. This prompted early criticism of Obama’s team for saying one thing and doing another on the revolving door between industry and government. This led to a classic moment at a House hearing between Geithner and Representative Marcy Kaptur (D-OH), who was critical of the AIG bailout and Goldman Sachs’s counter-party payoff.

“Who is your chief of staff?” [Kaptur] demanded.

“Mark Patterson,” Mr. Geithner responded.

“Who did he work for before?” she asked.

“The president’s transition team,” said Mr. Geithner, eliciting laughter because virtually everyone in the room seemed to know that Mr. Patterson’s primary employer before he joined the government was Goldman Sachs.

Patterson was a high-level member of the Treasury economic team that dominated the response to the financial crisis and prevented more aggressive interventions. He was present for the disaster Geithner’s Treasury made of foreclosure mitigation, as his team was concerned more with protecting bank balance sheets than homeowners. Famously, Geithner told Senator Elizabeth Warren (D-MA) that his foreclosure program was merely intended to “foam the runway” for the banks, with the homeowners, in that analogy, representing the foam crushed by a jumbo jet. The Treasury Department lobbied against Congress changing bankruptcy laws to give borrowers more leverage to work out resolutions on their mortgages. And the Treasury stepped in to prevent size caps on the largest banks, via what was known as the Brown-Kaufman amendment. As a senior Treasury official told New York magazine at the time, “If enacted, Brown-Kaufman would have broken up the six biggest banks in America. If we’d been for it, it probably would have happened. But we weren’t, so it didn’t.”

After Geithner left, Patterson stayed on with his successor, Jack Lew, for a time, before joining his mentor Pete Rouse at Perkins Coie, in a classic Washington role of lobbyist-who-isn’t-a-lobbyist. The duo boasted they would “provide advice to the firm’s clients on how to navigate complex problems involving the government, public relations and the legal process.” So instead of getting marching orders from industry and talking to friends in the government, they talk to friends in the government and then advise the industry.

Now Patterson has landed in Schumer’s office. It’s not entirely clear what he’s there to do. When I asked Schumer’s communications director Matt House what Patterson would be doing, he e-mailed the “Playbook” blurb. When I asked him to elaborate on what “overseeing investigations and approps” actually means, he said, “No, not going to be more specific.”

It’s not like Schumer hasn’t faced criticism for closeness to Wall Street in his career; hiring a Goldman Sachs lobbyist doesn’t ameliorate that. Plus, Schumer is in a different role from a backbench senator welcoming someone back to Capitol Hill. He represents the caucus and makes decisions with wide-ranging effects on policy.

For example, the Senate minority leader recommends nominees for open seats on federal regulatory commissions that have multi-member panels and require some minority-party representation. If you think these minority-party seats don’t matter because they get outvoted by the president’s party, I have two words for you: Ajit Pai. While a minority-party commissioner on the Federal Communications Commission, Pai created a record of opposition and carried the banner for conservative ideas and principles. And when the presidency shifted, Pai was primed to take over the FCC as chairman and quickly enact hard-line policies.

Schumer faced criticism for considering his former chief of staff David Hantman, a lobbyist for Yahoo and Airbnb, to a post at the Federal Trade Commission, before responding to pressure and selecting consumer advocate Rohit Chopra. His former counsel Becca Slaughter, whom Patterson is replacing, got the other FTC slot.

Now there are three important bank regulatory seats for which Schumer can recommend nominees: two at the Federal Deposit Insurance Corporation; and one at the Securities and Exchange Commission, replacing Kara Stein, a stalwart reform figure throughout the financial crisis and its aftermath, whose presence on the panel expires at the end of the year. “She is somebody who was fighting for needed reforms, who understood those reforms, and was making the case for why they are needed,” said Marcus Stanley, policy director at Americans for Financial Reform. “You need someone who’s demonstrated and shown commitments to protecting ordinary investors and the public.” Between the FDIC, which handles unwinding failed banks, and the SEC, which governs the capital and trading markets, you’re talking about practically everything at the heart of the meltdown. Strong voices there who can become future leaders are absolutely crucial.

Slaughter, Patterson’s predecessor, was involved in interviewing and vetting for positions on federal commissions. Schumer’s office insists that Patterson will play no role in the process. But the longest-serving chief of staff in Treasury Department history didn’t return to Congress to be a potted plant. Even if he’s thoroughly uninvolved in choosing the next SEC and FDIC commissioners, he will have an imprint on Schumer’s actions at some level.

This is a time of transition within the Democratic Party. The establishment has shifted its pitch to the left to catch up to the desires of the rank and file. The 2016 party platform was among the most progressive in decades on a range of issues. The midterm campaign message, when not distracted by Trump corruption, hits kitchen-table issues like wages, investment in infrastructure and public housing, protecting pensions, and reining in corporate power. But these are rhetorical pledges. When the most important Democrat in the Senate hires an ex–bank lobbyist from the corporate wing of the party to fill a high-level counselor position, it undercuts that rhetoric. When you hire someone who lobbied against reining in executive pay at a time when part of your main message is based on challenging oversize salaries while the average worker struggles, it damages it. This isn’t giving a speech at Goldman Sachs; it’s hiring someone from Goldman Sachs to join you in the halls of power. 

UPDATE: After publication, Schumer communications director Matt House offered further comment: “Not to let the facts get in the way of a nonsense story based on conjecture, but Mark Patterson doesn’t work on financial services issues for our office.”

This week, the EPA granted a hardship waiver to CVR Energy, a profitable refinery company owned by billionaire Carl Icahn, which will allow it to avoid purchasing roughly $23 million in renewable fuel credits. Icahn was a special regulatory advisor to the Trump administration who immediately lobbied for changes to the renewable fuel program that would have benefited CVR. He didn’t get the regulatory changes, but he did get the waiver—which we only know about through media reports, because the EPA keeps the recipients secret.

Also this week, George Mason University’s president called for an investigation into new evidence that the Charles Koch Foundation had been given unusual input into the hiring and firing of professors. A Freedom of Information Act request filed by a George Mason student found agreements between the Koch Foundation and the Mercatus Center, an in-house university think tank, giving “donors some participation in faculty selection and evaluation.” The Koch Brothers gave George Mason $48 million between 2011 and 2014, and academic research from the university routinely favors the Kochs’ libertarian worldview. In a statement, the Koch Brothers said that receiving input from donors on hiring “is still something that many universities do today.”

On Thursday, the watchdog group Campaign for Accountability asked two congressional ethics committees to investigate 14 members of Congress for taking official actions in support of the payday-lending industry while at the same time accepting campaign contributions from that industry. Their actions included voting for legislation to weaken the Consumer Financial Protection Bureau, payday lending’s chief federal regulator, writing op-eds in support of payday lenders, and sending letters defending the industry to the CFPB and Justice Department. A report from progressive organization Allied Progress details the $137,450 received in contributions before and after those actions.

There are different stories, but they’re all fundamentally the same. They’re about corruption, and the ways in which big money influences policymakers: through direct means, like campaign contributions, and indirect ones, like funding “independent” academic research into policy matters and lobbying federal agencies to take desired actions. Corruption is at the heart of much of the political and economic strife we see today. Concentrated economic power begets concentrated political power, with big business rigging the game in its favor. And self-dealing and corruption have become a new normal, both for personal gain and as favors to some corporate interest, which may turn out to be a federal employee’s next employer. This saps trust in government institutions and paves the way for demagogues.

These insights have been assembled into an excellent report from the Roosevelt Institute called “Unstacking the Deck.” Authors Julie Morgan and Rohit Chopra write that post-Watergate reforms designed to rein in public corruption have utterly failed, particularly in the area of “soft corruption,” which is best understood as a common cultural framework: it’s the symmetry of public officials and the corporate executives they regulate as members of the same class, chasing the same jobs, and saddled with the same belief systems. It may be perfectly legal for a government official to give a corporation whose views they hear the most and recognize as reasonable a break, or for a think tank to not give an opinion on something out of fear of upsetting donors. But it serves to undermine confidence and has a dramatic effect on who wins and who loses in our economy. “When government actions are not in the public interest, the net result is a wealth transfer from the entire citizenry to the purchasers of political influence,” Morgan and Chopra write.

The context of the report is just as remarkable as its findings: Rohit Chopra isn’t just a researcher on government corruption. He’s about to go into the government. Chopra was sworn in as a Democratic member of the Federal Trade Commission this week. He now sits on the very kind of federal-agency board that’s at the heart of the problems he identifies with corruption and corporate capture.

“A lot of the research was in some ways a reflection of my previous agency experience,” said Chopra in an interview. He served in the CFPB as a student-loan ombudsman, and then in the Education Department, where he saw how big companies can snap up federal contracts and write the rules to their benefit. “Small players and new market entrants don’t have the lobbying firepower that helps them get in all the right rooms,” Chopra said.

The report is studiously nonpartisan, finding fault with actions taken on the left and right sides of the aisle. Chopra cites Republican Meredith Atwell Baker, who took a job with Comcast after approving its merger while on the Federal Communications Commission, and Democrat Marilyn Tavenner, who ran Healthcare.gov and now is the chief lobbyist for the health insurance industry. “Just because someone goes from industry to government or government to industry, any individual case might be perfectly OK,” Chopra said. “But it collectively provides a perception to [the] marketplace that if I don’t play in that game I’m disadvantaged.”

This produces a kind of arms race of political influence, which leaves those without the resources to compete less well. As the report shows, political corruption increases market concentration, as those with power have better opportunities to win favorable terms. Money that has been poured into influencing government to build fortresses around established businesses then doesn’t go toward the real economy, areas like hiring and investment in equipment. It actually reduces the economic growth we need to move forward, bogging it down in lobbying sleaze that benefits only a small sliver of society at everyone else’s expense. Walk through the more posh parts of Washington and its suburbs and you’ll see this in action.

Morgan and Chopra smartly focus on money in government rather than money in politics. “Some experts I talked to said the influencing of industry used to be focused on Congress, but as Congress reduced its level of activity, that has shifted much of the energy to executive and regulatory agencies,” Chopra said. These agencies now have outsize power to grant contracts and licenses, and issue rules affecting virtually every participant in the economy. And that creates a situation that’s ripe for corruption, based on who gets those key positions, who has the ear of those policymakers, what “independent” research they see that’s actually funded by industry, and whether they just share the same cultural worldview as the people they’re supposed to regulate.

This is going to take a long time to fix. But Morgan and Chopra take a big swing, proposing a Public Integrity Protection Agency to consolidate all the disparate anti-corruption forces in government (the Office of Government Ethics, agency inspectors-general, and ethics officials) and be empowered to investigate and penalize government officials and those seeking influence, while being able to write rules to further crack down on corruption. Chopra doesn’t see it as a total analogue to the CFPB, his former agency, because agencies currently have ethics as a top priority. But they don’t have enough authority or enforcement powers to do much about it, and a new agency might.

In addition, the authors want to give the public tools to identify conflicts of interest, allowing them to file complaints and make their views more easily heard by government agencies. They propose banning stock trading by legislative- or executive-branch officials, who can profit from inside knowledge. They favor restricting lobbyists and federal contractors from entering certain government positions, and barring members of Congress from becoming lobbyists, slowing down the revolving door. And they have a number of proposals on transparency, making more information from government, like recusals and waivers and completed Freedom of Information Act requests, presumptively public.

Government corruption only becomes a priority after major scandals, and as a result we have an ad hoc, disconnected set of rules to fight it. Change usually doesn’t come in a time of perfunctory, low-level, almost accepted corruption. But conditions may be ripe for something different, Chopra says. “Given the huge decline in confidence that Americans have in government, this feels like the admission fee to restore trust.”

Chopra has a role to play in that restoration right now. The Federal Trade Commission polices marketing and advertising, which every consumer-facing company engages in. It controls merger policy for huge sectors of the economy, like health care. It enforces the nation’s privacy laws, which we know have become a major economic engine. And it has jurisdiction over the tech industry, which has become an overwhelming feature of American life. All of the big companies with interests before the FTC will be attempting to influence results. What can federal officials do, in the absence of a regulatory overhaul, to insulate themselves from soft corruption and restore trust?

“One of the things that agency officials can do now is take small steps that demonstrate that they are actually serving the public interest,” Chopra said. He cited meeting more in public and taking input on its actions from a wide variety of sources, not just industry or people in Washington. He noted that when he conducted a CFPB hearing on credit-card offers on college campuses, he took testimony via YouTube from students across the country. “That’s a small step, but it does a lot,” he said. “It shows that agencies are not just listening to one point of view.”

In January, Wells Fargo announced a one-time benefit from the Tax Cuts and Jobs Act of $3.89 billion. With the 40 percent cut in the corporate-income tax, Wells could write down the cost of its deferred tax liabilities—money it owed down the road to the government. So with the stroke of a pen, Donald Trump made Wells Fargo $3.89 billion richer.

The benefits didn’t end there. In the first quarter of this year, Wells Fargo enjoyed a drastically reduced effective income-tax rate of 18.8 percent, down from 27.5 percent a year earlier. That produced a $636 million savings, on top of the $3.89 billion. Wells Fargo’s Q1 income would have declined year-over-year were it not for the tax law.

When you put Wells Fargo’s ongoing tax bounty against Friday’s $1 billion fine from the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency for scamming customers on mortgage and auto loans, the penalty looks more like a kickback, worth 22 percent of what Wells Fargo has been gifted in tax savings so far. Over time that $1 billion will constitute a smaller and smaller percentage of the tax perk, more like a tip to the Trump administration—a thank-you for its generous support.

The Trump administration gets something out of it too. The Consumer Financial Protection Bureau, under the misdirection of anti-regulatory zealot Mick Mulvaney, had been criticized for not recording a single enforcement action in the 135 days since Mulvaney took over. The Wells Fargo fine, an outgrowth of a defensive tweet from the president in response to media reports that the case would be tossed out altogether, is intended to be the exception that disproves the rule. “We have said all along that we will enforce the law,” Mulvaney got to say in a statement. “That is what we did here.”

Except that doesn’t seem to be what Mulvaney did, because “enforcing the law” would have meant sending a criminal referral to the Justice Department for sanction against individual Wells Fargo executives. Instead, the bureau, along with the bank regulators at the OCC, settled for another fine, paid by shareholders instead of executives, ensuring that nobody in charge at Wells Fargo will see the inside of a jail cell for crimes that include what amounts to grand theft auto. Critics of the Obama administration’s approach to corporate crime fumed at a series of weak fines that created no accountability in the banking sector. The Trump administration’s alternative of one marginally bigger fine does not represent an advance.

It’s important to understand just what Wells Fargo did in this case, as described in the consent order. Regulators identified two violations: Wells Fargo charged “rate lock” extension fees to borrowers who wanted to keep their initial interest-rate quote for a mortgage, when the delays were of Wells Fargo’s own making; and the bank “force-placed” auto insurance on borrowers’ loans without telling them, in many cases causing loan defaults and repossessing the vehicles.

We’ve known about the auto-insurance abuses since at least last July, and the rate-lock extension fees since Wells Fargo self-reported last October. The CFPB had already been investigating this before Mulvaney entered the office. “Investigations that take many months or even years, and that are just now being finalized, are due to the aggressive work my team did to bring predatory behavior to light,” said his predecessor, Richard Cordray, who’s now running for governor of Ohio. “To suggest this is the work of Mulvaney, who has done nothing but throw sticks in the spokes of a talented, hardworking CFPB team of devoted public servants, is preposterous.”

The consent order unveils a significant amount of information about how Wells Fargo went about overcharging customers. On the mortgage issue, Wells Fargo brokers sold a policy that would lock in interest rates when delays were caused by borrowers. But the CFPB found internal communications showing that they were not training loan officers correctly on what to tell borrowers about the rate-lock policy. And indeed, the policy was inconsistently applied, with borrowers paying in cases where Wells Fargo was to blame for delays in mortgage processing. An extra quarter-percent in an interest rate can translate into paying thousands of dollars more over the life of a loan, giving borrowers incentives to lock in rates. Charging borrowers these rate-lock fees when Wells Fargo was responsible for the delay amounts to theft.

The auto-insurance scam was even worse. All car owners must have insurance attached to the vehicle. Wells Fargo worked out a plan with auto-loan customers whereby, if the borrower did not obtain insurance, the bank could automatically place it and charge the premiums through the loan payment. It turned out that Wells Fargo executed this force-placed auto insurance 2 million times since 2005, including hundreds of thousands of instances where the borrower already had auto insurance. Numerous other times, the borrower obtained the required insurance but Wells Fargo never canceled the force-placed policy. Even if Wells Fargo eventually canceled the policies, it failed to refund borrowers for unnecessary or duplicative insurance.

The CFPB has documentation that Wells Fargo knew about high cancellations of auto insurance placed on borrowers in error. It knew that the system for force-placing insurance was inadequate and led to hundreds of thousands of unnecessary insurance policies. Furthermore, borrowers who were unaware of the extra insurance premium got behind on payments as a result. Between 2011 and 2016, at least 27,000 car owners went into default and lost their vehicles because of a scam operation Wells Fargo ran. It’s really just stealing cars.

So the CFPB knows who received the briefings that Wells Fargo was stealing cars and ripping off mortgage borrowers. It has names on internal documents of executives who were discussing these issues. It is aware of who turned a blind eye to this scheme that impoverished people and took their cars away. Isn’t that enough to refer to the Justice Department to investigate violations of criminal laws involving theft and fraud? The CFPB cannot make its own criminal cases, but it has every authority to make a criminal referral. The bureau declined to comment on whether it did refer the case to the Justice Department.

Critics of the culture of no accountability on Wall Street have clamored for this level of justice since the financial crisis. Nobody was demanding a relatively higher fine, even one that could be termed as the largest fine in the CFPB’s history. The belief is that the only way to truly hold top bankers accountable would be to make them feel the consequences of their actions. That’s what happened to a small degree earlier this year, when the Federal Reserve relieved Wells Fargo board members of their jobs. And the OCC’s consent order with Wells Fargo gives that agency the power to fire executives or board members in the future, a direct consequences of the Fed’s bold action.

But the real sanction for criminal activity should be a criminal sentence. Wells Fargo merely had to pay back some of its tax benefits. It even booked this charge in the first quarter, retaining a net profit of $4.7 billion. And the CFPB may not be able to bring a case like this in the future, as a bipartisan bill in Congress would strip it of oversight of certain insurance products, like car insurance sold by a financial company.

If this is what’s considered “enforcing the law,” then the law only technically still exists.

Mick Mulvaney, the director of the Office and Management and Budget, who is also moonlighting as a financial regulator, has literally decided to demote the “Consumer” in the Consumer Financial Protection Bureau. In public communications he now calls it the Bureau of Consumer Financial Protection, formalizing it in the new cookie-cutter seal. And failing to put consumers first has been a trend for Mulvaney.

The Associated Press reported this week that the CFPB, or BCFP (actually, there’s no way I’m calling it that), has not recorded one enforcement action in the 135 days since Mulvaney took over last November. As Sherrod Brown, ranking Democrat on the Senate Banking Committee, said in Mulvaney’s semi-annual report to Congress Thursday, the number of enforcement actions on his watch are actually negative four, because the agency “has withdrawn lawsuits against four payday lenders that charge consumers triple-digit interest rates.”

Under previous director Richard Cordray, the CFPB would send reporters a press release practically every week announcing some enforcement action against a bank or credit-card company or debt collector. It returned $12 billion to consumers who were wronged in their financial transactions. Today, Mulvaney has frosted the glass of his office windows so nobody can see that he’s doing nothing inside.

In testimony to Congress this week, Mulvaney absurdly tried to take credit for returning $92 million to consumers, even though this involved only cases that existed before he got there. He also tried to claim that Cordray didn’t start any enforcement actions in his first six months as director, which is a flat-out lie.

What we have here is repeal by neglect. It matters little that CFPB has regulations on the books if they’re not enforced. Mulvaney is surely working to remove those regulations—starting with rules just finalized on payday lenders—but that takes time. Chilling enforcement can happen right away, and it has. There are suddenly rumors that Mulvaney will issue a “record fine” for Wells Fargo’s crime spree against mortgage and auto-insurance holders, but that’s all they are at this point—-rumors that appear cynically timed to blunt this growing abandonment of people ripped off by their lenders. “Regulation by enforcement is done, we’re not doing it anymore,” Mulvaney said, going to bat for banks who apparently should be held innocent if they break the law but pretend not to know about it after the fact.

Mulvaney’s semi-annual report to Congress restated his belief that CFPB “will continue to execute the law, but will no longer go beyond its statutory mandate.” It never did before, of course, unless you equate “pushing the envelope” with protecting consumers in whatever way possible. He also warned of the dark dangers of consumer-data breaches from CFPB’s collection, playing upon fears of Facebook and Equifax. But CFPB data is anonymized; no personalized indicator is attached to CFPB’s data. And the macro collection is vital to spot problems in financial markets. The entire warning about data is a lie, a ploy to keep regulators in the dark.

The semi-annual report was also a sophisticated form of lobbying. Mulvaney took the obligation to testify as an opportunity to pitch Congress on removing authority from the agency he leads. He endorsed funding the bureau, unlike fellow banking regulators, through congressional appropriations, a transparent way to strangle it through defunding; requiring legislative approval of major rules, which Congress already has (and has already used) through the Congressional Review Act; changing the structure of the agency to have it report to the president; and creating an independent inspector general for the bureau, which it already has through the Federal Reserve. He threw in a bid for making CFPB leadership a bipartisan commission, a divide-and-conquer strategy to give industry lobbyists several opportunities to water down the mission.

Senator Elizabeth Warren put into relief what this all means in actual practice. She listed numerous actions that returned hundreds of millions of dollars to credit-card customers cheated by banks, students scammed by predatory loans, military members put into shady car-loan agreements, and even 9/11 first responders scammed out of tax money. None of these victims would have seen any restitution without CFPB, and when Mulvaney tried to protest that other agencies would have had jurisdiction, Warren made the obvious point that they didn’t use their authority. “You’ve taken obvious joy in how upset [dismantling the CFPB] must make me,” Warren said. “But this isn’t about me, this is about first responders and seniors and families who need someone one their side. You are hurting real people to score cheap political points.”

To emphasize the alleged unaccountable power of the agency, Mulvaney boasted that he could “sit here and twiddle my thumbs while you all ask questions.” It’s a bit strange to say this during a statutorily mandated semi-annual report to Congress. Mulvaney’s point is that there’s no mechanism for removing him from his position, although the dereliction he claimed as his right represents exactly the sort of for-cause action that could trigger such a removal by the president.

It’s also funny to hear Mulvaney talk about the power of the director seat, since there’s a hearing today about whether he was put into it illegally. A three-judge panel in the US Court of Appeals for the DC Circuit is hearing arguments on whether Donald Trump violated the law by installing Mulvaney in the position on a “temporary” basis (now going on five months with no end in sight, and no nominee to replace him even named), when the statute says specifically that the deputy director should serve on an acting basis in the absence of the director. That original provision, which Trump ignored, was designed to maintain the check and balance in a president’s only being able to choose a director who gets confirmed by the Senate. As Brianne Gorod added an op-ed this week, while the statute calls for an independent director, “Mulvaney could not be farther from independent: he currently serves as director of an agency located within the Executive Office of the President.”

All that being said, I kind of hope Mulvaney stays put. This may sound ludicrous given everything I’ve written. But nobody Donald Trump picks to lead a consumer-protection agency is going to do anything to protect consumers. His handpicked chair of the Office of the Comptroller of the Currency, the top national banking regulator, literally opened remarks with “I like bankers” at an industry conference, and his other appointees are busily knocking down regulations on the biggest banks. There’s a theory that Republicans couldn’t actually confirm anyone as hard-line as Mulvaney, but the Senate Republican caucus is pretty united against CFPB, so I’m not sure that’s true. If Leandra English, Cordray’s deputy, is restored as the rightful acting director by the courts, you can bet Trump will nominate someone and Republicans will confirm them right quick, as long as they control the Senate.

The timing here is important. A confirmed CFPB director serves a five-year term, regardless of who’s in the White House. This isn’t abnormal; Republican Sheila Bair served as FDIC chair under Obama, and Cordray for a time under Trump. But if there’s no confirmed director, and Mulvaney just stays in a caretaker role, he would have to go should Trump lose in 2020. A confirmed director could serve until April 2023 if they were confirmed today. That was in many ways the point of installing Mulvaney, to extend the process and ensure that an an anti-regulatory zealot is in charge for as long as possible, with or without Trump as president. So a longer tenure for Mulvaney could paradoxically lead to a shorter tenure for an internal saboteur at CFPB. Or BCFP. Or whatever.

President Donald Trump was unhappy about signing a $1.3 trillion omnibus spending bill last month, because Democrats wouldn’t agree to his demands for an astonishingly high level of military spending without also reversing the historically low public investment in the domestic budget. So he had a temper tantrum on national television. He unleashed a stream-of-consciousness rant (with Trump, is there any other kind?) about the “ridiculous situation” he was in. He called on Congress to give him a line-item veto, which the Supreme Court has already ruled unconstitutional. And while he fumed about the horrible omnibus that nobody read, he mentioned in passing that he signed it, reversing an empty veto threat. And we all had a good laugh.

It was an oddly calming moment, restoring temporary faith in the idea that coequal branches of government exist and sometimes a president can do nothing but bluster. It even demonstrated that Democrats can use their limited power in Washington and secure what looked like a victory for the public. But that wasn’t the end of the story.

Trump and House Republicans, furious about having to work with Democrats, have concocted a scheme to renege on the deal they made, according to Roll Call. It would involve using an obscure post-Watergate law to pass legislation cutting an unspecified amount of domestic spending out of the omnibus bill. And they can do it without needing a single Democratic vote.

This cruel, direct cut to vital domestic programs that have been underfunded since the deficit craze kicked up in 2010 could be very damaging to Republicans politically, particularly in swing districts. But that’s only if they go the legal route to accomplish it, putting Congress on the spot to deliver a vote. And Donald Trump’s not someone likely to let the law get in the way of an idea.

The Beltway name for this procedure is “impoundment,” and it was first used by President Thomas Jefferson, who in 1801 refused to spend $50,000 appropriated by Congress to buy Navy gunboats. Presidents throughout history have left appropriated funds unspent, using various rationales. But Richard Nixon, who we can safely assume is Donald Trump’s role model in this gambit, took it a step further, routinely impounding funds for projects he simply didn’t like.

The Supreme Court ruled some of Nixon’s actions illegal, and Congress responded in 1974 with the Impoundment Control Act. If a president wants to rescind spending on a certain program, they have to notify Congress specifically, with an estimate of the fiscal impact and a reason for the impoundment, and then get legislative approval. Congress would have to assent to the rescission request within 45 legislative days. Importantly, rescissions cannot be filibustered, which means that Congress could approve such a request with a simple majority vote in both chambers.

The prospect of passing budget cuts without Democratic support—the omnibus needed 60 Senate votes—has led House majority leader Kevin McCarthy and the Trump administration to collaborate on working through the contours of a rescission scheme, according to Roll Call.

No details have been released on what might actually be cut. But just comparing the omnibus to Trump’s budget requests shows that the programs on the chopping block would be ones that assist the most vulnerable people in society. Trump’s budget proposal would have slashed Head Start for needy elementary-school students and Pell grants for needy college students. It wouldn’t have increased a low-income housing tax credit that Democrats earned in exchange for fixing a glitch in the tax law. It would have suppressed the budgets of the Environmental Protection Agency and the National Institutes of Health and would have transformed food stamps into a box of food delivered to homes.

This would result in a bait-and-switch: dealing with Democrats to secure insane amounts of funding for the military, and then turning around and reversing the domestic spending that Democrats got in the deal. It’s something no president has really done since the Impoundment Control Act was enacted, and for good reason.

First of all, the Senate is closely divided at 51-49, and with John McCain not expected back anytime soon, Republicans would have no margin for error if they wanted to pass this. It would also be one of the more unpopular bills you can imagine—a direct assault on needy families and important protections, just months before the midterm elections. It verges on political suicide.

There’s also the point that Democrats would have to be crazy to ever work on a single bipartisan bill ever again during the Trump administration if it pulls this trick. No deal would be safe from a behind-the-back reversal. What’s more, it would offer a road map to Democrats to engage in countless rescissions of spending they don’t like, if and when they returned to control Congress and the White House. This would be the legislative equivalent of hemlock.

But implicit in this analysis is the assumption that Trump would go through the proper procedures to impound omnibus spending. As budget guru Stan Collender explains, “The key question won’t be whether Trump will obey the law, it will be whether he just decides not to spend what he doesn’t want to spend.”

Trump has already created a precedent for this. The State Department was supposed to spend $120 million to counter foreign meddling in US elections. It didn’t. The administration had authority under a near-unanimous congressional law to sanction Russia for election-related conduct. It didn’t, Defying congressionally mandated appropriations and laws would be sadly routine for this president. And if Republican leaders in Congress didn’t say anything about Trump’s not spending what they appropriated, there would be no recourse to stop this Nixonian gambit.

I think the idea of Trump being a dictatorial president gets thrown around in a cavalier manner sometimes, but defying congressional spending authority by nullifying programs of national importance would certainly take us down that road. It would centralize practically all governing power in the hands of one rather unstable man. Democrats need to make this toxic scheme widely known, and fast.

The massive omnibus spending bill released Wednesday included a surprise gift to the private-equity industry, which is one of the most powerful players in the financial sector. When this bill passes, it will add another layer of risk to a system already poised to become less stable after the Senate passed its bipartisan bank-deregulation bill earlier this month.

Defenders of that Senate bill at times argued the deregulation was a one-off needed to satisfy a hungry industry. But here we are, just days later, dismantling rules designed to prevent another financial crisis.

The rider in the omnibus, called the “Small Business Credit Availability Act,” has really nothing to do with small business. It loosens restrictions on a class of investment firms known as Business Development Companies (BDCs). These are mostly just accounting fictions; BDCs are tax-exempt vehicles largely created, owned, and operated by private-equity firms. These entities raise money through stock exchanges and are supposed to provide capital for small- and medium-sized businesses. In reality, many of their holdings are in financial companies and exotic derivatives.

With this provision, BDCs could borrow twice as much money as they hold in equity, compared to a 1:1 relationship under current rules. This increase in leverage increases returns and risk—if you gamble with someone else’s money and win, you make more for yourself, but if you lose, you have nothing to pay back the lenders. Americans for Financial Reform adds that the leverage in the corporate holdings of BDCs is already 5:1 or greater. So this would enable BDCs to borrow at least $10 for every $1 in equity.

While this is bad news for ordinary investors in BDC stock, who will be more at risk of losing their investments, it’s great for the private equity players who own BDCs and charge fees to those investors. Ares Capital, one of the largest BDC parent companies, spent $1.44 million between 2012 and 2015 lobbying for this change, according to the labor union UniteHere. Apollo and Carlyle Group, two private-equity giants, would also benefit. Bloomberg puts the potential profit increase at 20 percent.

That’s a windfall for investment firms that have a knack for destroying companies. Toys “R” Us, liquidating its stores despite a significant market share in toy sales, is owned by private equity. So is Claire’s, which just filed for bankruptcy, and other recent bankruptcy victims like Payless, The Limited, Wet Seal, Gymboree, Tops Markets, and Southeastern Grocers, parent company of Winn-Dixie. The common thread here is that these companies are loaded with debt and starved of the resources to maneuver and adapt to a changing retail environment. Why would we want to enrich the private-equity predators who burdened them with that debt, sucked out their profits with management and advisory fees, and left their carcasses by the side of the road?

But the real-world impact of this omnibus provision is a side effect to the consequences of business-friendly Senate Democrats’ pushing financial deregulation, despite record industry profits and the fact that no constituency outside of executive boardrooms and K Street lobby shops is calling for it. Sixteen Democrats and one Democratic-leaning independent joined Republicans to pass that bill, which critics call the Bank Lobbyist Act, last week.

There’s this odd theory that those Senate Democrats just needed to “satisfy a powerful industry’s pent-up demand for deregulation,” to let off some stream, and afterward that demand would subside. The BDC provision in the very next must-pass bill after the Bank Lobbyist Act makes that theory look completely foolish. What Congress actually did was signal to the industry that it was open for business on deregulation. And Wall Street took that signal to ask for more, and more, and more.

This may also facilitate final passage of the Bank Lobbyist Act. House Financial Services Committee chairman Jeb Hensarling has been very angry that his imprint wasn’t stamped enough onto the bill, and has said he wouldn’t agree to it without more deregulation written into the legislation. Senate bill authors told him that they can go no further, suggesting a potential impasse. But throwing the BDC rider, a top priority for Hensarling, into the omnibus gives the House Republican more confidence that he’ll get the deregulation he seeks, smoothing the way for the bill’s passage.

In other words, you cannot look at the Senate’s deregulation bill in a vacuum. On its own it’s an unnecessary and potentially quite dangerous piece of legislation, with a host of bad ideas to increase financial risk, reduce monitoring on some of the biggest banks in the country, and make it harder for regulators to enforce the law. But its also a signal the government is swinging the pendulum of regulation backward. And that has a series of consequences, like a snowball rolling down Mount Everest, picking up speed as it goes.

It means you’ll see more little riders like this to help out the financial industry. It means Trump’s deregulatory army at federal agencies, who get to interpret these laws, can pursue their own hatchet jobs on financial rules. As a Republican congressional source told Politico, “Our ‘riders’ are named Mick Mulvaney, Steven Mnuchin, Jay Clayton, and Randy Quarles,” referring to four generals in that deregulatory army.

Quarles, the Federal Reserve’s head of financial supervision, is already taking aim at leverage rules for big banks; messing with leverage further in the Bank Lobbyist Act and the omnibus makes things worse. Mulvaney has already sidelined the office at the Consumer Financial Protection Bureau that investigates lending discrimination; rolling back lender-data disclosures in the Bank Lobbyist Act that would detect such lending discrimination makes things worse. SEC chair Clayton has already pulled back his agency from enforcement; giving regulators like these more discretion to determine enforcement, as the Bank Lobbyist Act does, makes things worse.

Combine that war on the rules at the agency level with Congress’s slow chipping away, and pretty soon you have a riskier, more destabilized system. That’s how it has always worked with Wall Street. It chipped away at the firewall between investment and commercial banks long before repealing Glass-Steagall. It spent twenty years building the mortgage-backed securities market through one small rules change after another, until the product that caused the Great Recession could be sold. Anyone who makes an argument that one bill or one measure on its own doesn’t do a whole lot to the overall structure of financial regulation doesn’t know history or is actively trying to fool you.

The myopia with which Senate Democrats and their defenders have approached this situation, as if they could just give an inch to Wall Street and they’d be satisfied, either reflects incompetence or a public-relations maneuver, to make it look like their incredibly damaging actions aren’t that bad. I’d bet on the latter.

Brad Miller’s been tracking his particular white whale for over a decade. But he hadn’t found the right harpoon with which to slay it. Until last week.

Miller is a former congressman from North Carolina, who co-authored the legislation creating the Consumer Financial Protection Bureau. Since leaving Congress, he’s been working on litigation to finally bring to justice the mortgage companies that damaged millions of lives during the foreclosure crisis. And last week, he filed an innovative lawsuit against Ocwen, one of the nation’s largest mortgage-servicing companies. (A servicer operates as an accounts-receivable department for home loans. This is the company you make your check out to.)

We know about Ocwen from a series of state and federal enforcement actions. It has paid billions in fines for repeated, routine violations of consumer financial laws. Its computer system “lacks the basic system architecture and design necessary to properly service loans,” which is a bad look for a company that primarily services loans. This led to inaccurate monthly statements, an inability to correct simple errors, and illegal foreclosures over payments short as little as a few cents.

To Ocwen, the fines were minimal enough to be a cost of doing business. The company was threatened with expulsion from multiple states but reached settlements that enabled it to keep its business license. And, as we’ve learned over the past decade, it’s very, very difficult for any homeowner to fight one of these mortgage behemoths in court.

But there’s another side of the equation. Ocwen doesn’t own the loans it services; investors in mortgage-backed securities do. During the housing bubble, investment banks bundled thousands of mortgages together and created bonds that were sold all over the world to sovereign-wealth funds and pension funds and institutional investors. Servicers were then hired to handle day-to-day operations. Whenever a homeowner was pushed into an unnecessary foreclosure, that hurt investors as well, because they paid all legal costs and the value of the foreclosed home dropped. Servicers actually got paid in full, so they had incentives to foreclose. But investors got as abused as the families being put out on the street, losing most of their investments.

Unfortunately, there was little they could do about this. “The governing documents say that as a matter of contract law, the investors can’t sue,” said Miller. Instead, they had to rely on a trustee, which had legal custody of the mortgages, to represent their interests. The trustees hired the servicers and were supposed to monitor them. Investors were the beneficial owners of these mortgages, but the trustees were the legal owners. Technically, the investors could sue if enough of them banded together to hold 25 percent of the value of the bonds, but no investor knew who the others were, and no lists of investors were ever created or disseminated. So it was up to the trustee to be the representative if the servicer did anything shady.

Who were these trustees? Usually large banks, like Wells Fargo, or Deutsche Bank, or Bank of New York Mellon. In several cases, trustees owned servicers in another line of their business. They were never going to mess up the very good gig of standing mute as servicers made off with investor money. How else would they ever get another opportunity to be a trustee?

Investors sought a way out of this box. A few sued trustees, but those cases haven’t been going very well. But Miller figured out a solution for a subset of investors: He helped craft a lawsuit filed last week on behalf of the United Food and Commercial Workers Midwest Pension Fund.

UFCW Midwest bought mortgage-backed securities through its pension plan, which is subject to a law called the Employee Retirement Income Security Act (ERISA). It gets a little technical, but because UFCW is the beneficial owner of the mortgages, the mortgages were assets of the pension plan. And under ERISA, anyone exercising control over plan assets—like the servicer of the mortgages—is a fiduciary to the plan. The lawsuit cites a 1996 opinion from the Department of Labor, which oversees ERISA, confirming this.

What does that mean? Simply put, it means that the servicer is required by law to operate in the best interests of the plan. Obviously, Ocwen did not operate in the best interest of investors, instead engaging in self-enrichment at investor expense. So the lawsuit says that Ocwen violated its fiduciary role, and caused losses for the pension plan. “Plaintiffs seek to recover losses from Ocwen’s breach of fiduciary duties, to disgorge Ocwen’s profits from prohibited self-dealing, and to disgorge the profits from other defendants that knowingly participated in these prohibited transactions,” the lawsuit states.

The UFCW Midwest pension has about $1 million in mortgage securities at issue in this case. But they are the tip of the iceberg. Miller estimates that between 10 to 20 percent of all mortgage-backed securities were purchased by pension plans, as they were pitched as a rock-solid investment. In addition, pension plans bought funds through big asset-management companies like BlackRock and Pimco that contained mortgage-backed securities. The total amount of plans eligible for litigation like this could reach hundreds of billions of dollars.

In a statement to The Nation, Ocwen spokesperson John Lovallo said, “Ocwen is reviewing this matter, and intends to defend itself vigorously.”

Why is it important to cheer one set of investors fighting another set of wealthy companies? First of all, you’re talking about theft from the pension plans of grocery clerks, firefighters, teachers, and police officers. Previously, they were unable to do anything about it. So this lawsuit, if successful, will provide a way for pension funds to reestablish their legal rights.

But it’s bigger than that. In mortgage securitization, investors and homeowners were actually aligned. A foreclosed house isn’t as valuable as one where homeowners are making payments, even reduced payments. Fixing mortgage securitization by giving some investors the right to sue will make it less likely for companies like Ocwen to push unnecessary foreclosures. “If you reform the system to benefit investors, it also benefits debtors,” said Miller. “People on either side of the intermediation are getting screwed.” At a time when the Trump administration is busily deregulating financial markets and even some Democrats in the Senate are helping them, new protections for mortgage borrowers are sorely needed.

Plus, securitization isn’t only used in mortgages: Auto loans, student loans, and a host of other products are sliced and diced and sold to get investor capital involved. As Miller explains, there aren’t enough bank assets to meet the demand for loans; inevitably, the most credit-risky get left out. Investors won’t touch these securities if they think their rights won’t be protected. “Bringing accountablity to entire securitization model would be ideal,” he said. “It has the potential to reform servicing of securitized assets, which has been an enormous problem, with a financial model that we need to make work.”

Nobody has really connected the rights of investors and borrowers in this fashion; each side sat in their silos without working together. Ocwen will clearly fight this lawsuit hard. But if successful, it could bring together different parties to finally hold the real bad actors in the financial system accountable.

For Miller, this is the culmination of years of work. He fought in Congress to rein in predatory lending. He proposed steps to mitigate foreclosures through aggressive government action. He demanded arrests for fraud and misconduct. On all of this he was unsuccessful. But this lawsuit offers an opportunity, in a small way, to get his revenge. As he told me, referencing the Mandy Pantinkin character in The Princess Bride, “There is an Inigo Montoya quality to this, I admit.”

Big Law is a scourge of modern politics we don’t often hear about—-the collection of 200 or so giant law firms, populated with hundreds of partners, that jostle for prominence in Washington and the nation. Firms like Kirkland & Ellis and Jones Day have become a way station between government and business where partners can advocate for corporate clients while awaiting appointment to Executive Branch offices. Once inside government, they push to collaborate with corporate power rather than offer resistance. In many cases they oversee the same industries they once worked for. We elect politicians and then we get corporate-approved policies churned out by Big Law; it’s a kind of policy deep state. Big Law provides the oil that makes the revolving door spin.

This cozy relationship knows no one party; Covington & Burling famously held open a corner office for Eric Holder while he negotiated settlements with many of their banking clients. But the Trump administration has taken merging with Big Law to new heights. A new report from Public Citizen, provided first to The Nation, “Big Law, Big Conflicts,” identifies 76 different lawyers working or nominated to work at cabinet agencies or inside the White House who either worked for Big Law firms or directly in the legal departments of corporations. These lawyers, seeded across the government, “either previously represented companies with business before the government, or worked in the same field they now oversee,” writes report author Alan Zibel.

The big winners are two of the largest Big Law firms: Jones Day has 12 alumni in the Trump administration, and Kirkland & Ellis has 11. The nominated leader and top deputy of the Justice Department’s Civil Rights Division come from Jones Day, as do Solicitor General Noel Francisco and White House Counsel Don McGahn. Kirkland & Ellis alums include Justice Department criminal-division nominee Brian Benczkowski, DOJ environment and natural-resources nominee Jeffrey Clark, Labor Department counsel Kate O’Scannlain, and Transportation Department Deputy Secretary Jeffrey Rosen.

It’s one thing that these figures worked in Big Law before joining the Trump administration. But in many cases we know what they did for corporate clients prior to government work. Solicitor General Noel Francisco, for example, worked for the tobacco industry, arguing against government advocacy against smoking on public-health grounds. The civil-rights-division attorney, Eric Dreiband, represented companies accused of discrimination, from CVS Pharmacy to Abercrombie and Fitch.

Brian Benczkowski will shift from defending companies accused of white-collar crime to running the criminal division at the DOJ. John Demers, assistant attorney general for the national-security division, was general counsel at Boeing. Even the head of the FBI, Christopher Wray, came out of Big Law stalwart King & Spalding. That firm counts as a client medical company MiMedx; the FBI recently raided a short seller’s house for sending a threatening tweet about MiMedx’s CEO.

Rachel Brand, formerly of Cooper & Kirk, famously left her role as number three at the Justice Department a couple weeks ago. No matter; her replacement, Jesse Panuccio, came from Foley & Lardner, and before that, Cooper & Kirk.

The Big Law stranglehold on the Justice Department is perhaps to be expected. But this infestation of corporate lawyers goes well beyond the DOJ. According to the report, 10 lawyers at Trump’s Environmental Protection Agency raise revolving-door concerns, having worked for coal-mining companies, Koch Industries, petroleum firms, and more. One lawyer, William Wehrum, sued the government 31 different times while at Hunton & Williams to revoke clean-air protections before being confirmed to lead the EPA’s Office of Air and Radiation.

Ryan Zinke’s top deputy at the Interior Department has a history of lobbying and legal work for oil, mining, and Big Ag interests. A special assistant to Education Secretary Betsy DeVos worked as chief compliance officer for a for-profit college. The general counsel for the Commerce Department ran government relations (i.e., lobbied) for Verizon. And on and on.

The report actually gives Trump a break by not including members of independent agencies like the Securities and Exchange Commission, which is crawling with Big Law expats. “While the names of government lawyers are rarely in the headlines, they are crucial to the functions of government,” Zibel writes. “They decide whether the government will give polluters, scam artists, predatory lenders and other wrongdoers a harsh penalty or an easy pass. They determine whether the federal government for will go soft on corporate wrongdoers or allow them to prosper.”

The report also offers a comparison of 23 key legal hires in the Obama and Trump administrations, comparing the number of corporate lawyers under each president. Obama hired nine lawyers with revolving-door issues; Trump has hired 17. After winning the election, Trump promised to ban lobbyists from his team, as well as individuals working to oversee the same industries they worked for. But constant ethics waivers have turned the lobbying ban into a joke. By June of last year, over 100 lobbyists were working in the administration, many of them tied to Big Law firms.

The Trump administration claims that recusals prevent any conflict of interest. But one Big Law operation on behalf of a client has already been caught and overturned. National Labor Relations Board member William Emanuel, a veteran of Jones Day and other Big Law firms, most recently worked for Littler Mendelson PC, who represented Browning-Ferris in an NLRB case concerning the “joint employer” standard. Under Obama, the NLRB ruled in that case that workers could seek union rights or claims with the parent company of a franchise they work for. When the NLRB shifted under Trump, Hy-Brands brought forward an attempt to reverse Browning-Ferris. Even though Emanuel worked for Browning-Ferris’s law firm, he didn’t recuse himself from the vote, and the joint-employer standard was overturned. After the NLRB’s inspector general questioned Emanuel’s vote, the NLRB actually overturned its Hy-Brands ruling, in a rare moment of ethical probity.

But the emphasis should be on the word “rare.” Most of the time, these lawyers do the bidding of corporate America without resistance. And the advocacy goes beyond any one company and cannot be solved by recusal, Zibel writes. “Having spent years defending corporate clients and absorbing their worldview, it defies common sense that such lawyers would readily pivot from representing BP to cracking down on Shell or ExxonMobil.”

The Big-Law-to-government transfer doesn’t just ensure that corporations get favorable treatment in Washington. It gives Big Law’s finest a window into the inner workings of the halls of power, which they can use to earn higher billable hours from corporate clients. In this sense, government service acts like an internship before the big bucks get made. “This report fleshes out with new detail one of the biggest stories in Trump’s ever more fetid swamp: DC elites dipping briefly into the government in order to improve their résumés and broaden their contacts,” said Jeff Hauser of the Revolving Door Project at the Center for Economic and Policy Research. “Trump’s lawyers are getting a detailed understanding of the government’s law-enforcement strengths and weaknesses that they can bring back to corporate America when they return to Big Law or go in-house. Public service should be an act of patriotism, not an act of greed.”

One of the defining features of my work has been the loss of integrity in the justice system, not just because of separate tiers of accountability for the rich and powerful, but also because of the active collusion of the system in corrupt practices. An ACLU report on modern-day debtor’s prisons caught my eye because of its deep examination of the judiciary’s active collaboration.

Debtor’s prisons have been illegal in America since 1833. But that doesn’t matter. We know about some ways people can languish in jail for being poor—if they cannot pay bail, for example, or if they rack up fines related to imprisonment that must be paid upon release. The ACLU report scrutinizes an additional phenomenon: private debt collectors using courts and district attorneys to threaten incarceration as a means of profit.

A staggering one in three Americans have a delinquent debt in the hands of a private collection agency, according to Consumer Financial Protection Bureau data. These debts are not large—around $1,300 on average. But debt collectors often hit up small-claims courts to obtain a judgment, filing hundreds of suits per day in some cases. Over 90 percent of these cases are decided for the collection agencies, mostly because they go uncontested. After winning, companies can garnish wages or seize property. They can also ask for “judgment debtor examinations,” a process where debtors are grilled about their financial histories to determine the final payment method. If the debtor doesn’t show to the exam, companies can petition judges to issue arrest warrants. Judges can also issue arrest warrants to individuals who fail to comply with a court-ordered payment plan. The fact that the debtor never receives a notice of the lawsuit or of when to show up to court, or whether the debt is even real, is of little consequence.

The ACLU examined over 1,000 cases in 26 states where judges dutifully issued the arrest warrants for failure to appear. In four states where they could receive full data (Maryland, Massachusetts, Nebraska, and Utah), the ACLU found 8,500 arrest warrants in debt-collection cases. The warrants cover every kind of debt: medical bills, student loans, rent payments, homeowners’ association fees, utility bills, repairs, payday loans, gym fees, you name it. The amounts involved in the warrants were as low as $28.

Debtors typically don’t know about the warrant until they’re pulled over for a traffic violation or officers enter their home or workplace. Debtors can sit in jail for weeks, all for not paying a bill. If they arrange bail, that money often goes directly to the debt-collection agency.

Among dozens of stories is the case of Gordon Wheeler, a Texan whom US Marshals arrested at his home for failure to appear at a debtor’ exam in 2015. He was recovering from open-heart surgery and couldn’t physically get to the hearing. The judgment concerned a $2,500 student loan debt from 1983, which with interest and fees was now $12,000. Wheeler didn’t have the money, so he went to jail. Other debtors were arrested in front of their children; those hit with warrants included those with disabilities and a woman stricken with Alzheimer’s who died before she could be jailed. The report even found examples of people jailed for debts extinguished in bankruptcy, debts they didn’t owe, or debts they’d already paid off.

Specific debt collectors and specific judges specialize in issuing arrest warrants. A medical-debt collector in Idaho obtained 345 arrest warrants and jailed 222 debtors over a six-year period. Jared Kushner’s real-estate business obtained arrest warrants for 105 former tenants since 2013, resulting in 22 debtors’ going to jail. Hundreds of these arrest warrants can be rubber-stamped by judges in a single day.

The value of the arrest warrant lies in the threat itself, providing a powerful spur to get people to pay, regardless of the validity of the debt. The ACLU documented scores of cases where individuals were specifically warned that they would go to jail if they didn’t pay the debt, sometimes in written letters from the court. So the court system is actively participating in a kind of blackmail, dangling the prospect of an unconstitutional loss of freedom to extract cash. And of course these are traditionally the most vulnerable members of society, disproportionately black and brown, bearing the brunt of this perversion of the law. The impact doesn’t just include a couple weeks in jail but lost wages, potential lost employment, scrambles for childcare, the burden of a criminal record, and the psychological stress and humiliation of being locked up for being poor.

Sometimes local prosecutors are enlisted in this game. District attorneys have jurisdiction over bounced checks, which they are supposed to review for violations of state law. Over 200 DA offices contract with private companies specializing in bad checks like Bounceback or National Corrective Group to handle the cases. The debt collectors, using the prosecutor’s seal and signature, send “repayment demand letters,” threatening criminal charges and prison time if the bad-check writers don’t pay up. The ACLU estimates that over 1 million such letters go out every year. Some of these bounced checks are for as low as $2, which would never trigger a criminal prosecution, and the DA has usually not reviewed the cases for criminal implications. So these companies are just using an official-looking letter and an empty threat to coerce payment.

That doesn’t mean just payment for the unpaid check but a series of fees, as well as mandatory attendance in a diversion program run by the same debt collectors, which costs upward of $200, often more than the bad check itself. Per the contracts, the DA offices get a kickback on those fees, which enables the cycle. One documented case in California showed that someone who inadvertently bounced a check for $3.87 for groceries ultimately paid $444.87 in fees and restitution.

The ACLU argues that these practices violate human-rights conventions prohibiting arbitrary detention. It recommends a ban on arrest warrants in debt-collection cases, protections for debtors in post-judgment hearings, and the termination of contracts between DA offices and private debt collectors.

But what really infuriates me is the role of judges and prosecutors, without whom this entire game would fall apart. Chosen to uphold the law, they have decided to destroy it, joining with some of the sketchiest operators in the country to facilitate the use of their courts and jails for blackmail. In the case of the bad-check letters, prosecutors have effectively sold their office for a few bucks, an unconscionable breach of ethics.

Observers of horrible debt-collection tactics famously talk about Unicredit, a Pennsylvania company that decorated its office to look like a courtroom and held fake court proceedings to intimidate debtors into payment. But why go through that trouble when you can get the real courts to do you a solid? We banned debtor’s prisons because we considered it immoral to punish someone for a lack of money. But now immorality is reserved for the judges and prosecutors facilitating the reemergence of the criminalization of the poor.

After the worst financial collapse since the Great Depression, three officials from the Financial Crisis Inquiry Commission visited Warren Buffett at his office in Omaha, Nebraska. They wanted to ask America’s most successful investor about his 24 million shares in the credit-rating agency Moody’s. The commission would later identify Moody’s and other rating agencies as “key enablers of the financial meltdown,” for granting super-safe triple-A ratings to securities that were backed by junk mortgages. Trillions of dollars’ worth of rotten financial instruments—the fuel of the crisis—“could not have been marketed and sold without [the rating agencies’] seal of approval,” the commission concluded.

During that May 26, 2010, meeting, Buffett deflected responsibility for Moody’s actions. “I knew nothing about the management of Moody’s,” he told the federal investigators, explaining candidly why he owned so much stock: Moody’s faced practically no market competition.

“The single most important decision in evaluating a business is pricing power,” Buffett said. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.” The “big three” rating agencies—Moody’s, Standard & Poor’s, and Fitch—controlled 95 percent of the rating-agency market, an insurmountable advantage over would-be competitors. “If you’ve got a good enough business, if you have a monopoly newspaper or if you have a network television station,” Buffett concluded, “your idiot nephew could run it.”

Warren Buffett is America’s favorite tycoon. The business community hangs on his every word. The annual meetings at Berkshire Hathaway, Buffett’s conglomerate, have been dubbed “Woodstock for capitalists.” Barack Obama and Hillary Clinton hailed his endorsements in their campaigns for president; even Bernie Sanders has supported Buffett’s position on taxes. The press treats him like a Kardashian, publishing quirky features about his bad eating habits, frugal spending, and hobnobbing with celebrities (an actual headline last November: “Katy Perry Wants to Know What Warren Buffett Thinks of Bitcoin”). An old cartoon show called Warren Buffett’s Secret Millionaires Club featured the so-called “Oracle of Omaha” teaching children how to get rich.

This Nation investigation documents how Buffett’s massive wealth has actually been built: on monopoly power and the unfair advantages it provides. Companies in Buffett’s portfolio have extorted windfall profits, evaded US taxes, and abused customers. In the two specific cases discussed below, in the banking and high-tech industries, Buffett’s investments have prompted federal investigations for anticompetitive or other illegal practices.

Buffett did not respond to repeated interview requests for this article, nor did he reply to questions submitted to his office at Berkshire Hathaway.

Buffett makes no secret of his fondness for monopoly. He repeatedly highlights the key to his personal fortune: finding businesses surrounded by a monopoly moat, keeping competitors at bay. “[W]e think in terms of that moat and the ability to keep its width and its impossibility of being crossed,” Buffett told the annual Berkshire Hathaway meeting in 2000. “We tell our managers we want the moat widened every year.”

America isn’t supposed to allow moats, much less reward them. Our economic system, we claim, is founded on free and fair competition. We have laws over a century old designed to break up concentrated industries, encouraging innovation and risk-taking. In other words, Buffett’s investment strategy should not legally be available, to him or anyone else.

Over the past 40 years, however, the United States has not only failed to build bridges across monopoly moats; it has stocked those moats with alligators. Two-thirds of all US industries were more concentrated in 2012 than in 1997, The Economist has documented. Since the Reagan era, the federal government has abandoned antitrust enforcement, with markets for products like eyeglasses, toothpaste, beef, and beer whittled down to a few suppliers. This consolidation has vastly inflated corporate profits, damaged workers and consumers, stunted economic growth, and supercharged economic inequality.

Buffett professes to be an innocent witness to this perversity, a passive investor observing markets from afar. He is feted as the conscience of American capitalism, a multibillionaire who speaks out about taxing the rich (Democrats even named their tax-fairness plan the “Buffett rule”) and donates his fortune to charity. But Buffett’s example has helped intensify US monopolization, as other investors mimic his approach of finding companies surrounded by moats. The ownership class has subsequently built up unwarrantedly large holdings, concentrating its investment in companies that further increase market power. In other words, Buffett isn’t following America on the road to oligarchy; he’s leading it.

Americans falsely look to these oligarchs to solve our problems, allowing them to amass more power. For example, the recent joint effort by Buffett’s Berkshire Hathaway, Amazon, and JPMorgan Chase to transform the US health-care system is vague and rather mundane—most large companies try to drive down health-care costs by leveraging their size. But when three of the age’s biggest monopolists follow the trend, it’s uncritically treated as front-page news, sending health-care stocks plummeting. A stray press release from Buffett can move billions of dollars in his favor.

Bill Gates of Microsoft, Jeff Bezos of Amazon, and Warren Buffett control more wealth than the 160 million poorest Americans combined. And Buffett doesn’t mind working the system to keep it that way. His net worth as of January is $87 billion, but Buffett says he paid only $1.8 million in taxes in 2015—a mere 0.002 percent of his wealth. According to Barclays, the new Republican tax law is projected to net his business a staggering $37 billion.

Warren Buffett should not be celebrated as an avatar of American capitalism; he should be decried as a prime example of its failure, a false prophet leading the nation toward more monopoly and inequality.

ou probably didn’t realize that the same avuncular billionaire controls such diverse companies and products as See’s Candies, Duracell batteries, Justin Boots, Benjamin Moore Paints, and World Book encyclopedias. But Buffett has transformed Berkshire Hathaway, initially a relatively small textile manufacturer, into the world’s largest non-technology company by market value. Berkshire Hathaway owns over 60 different brands outright. And through Berkshire, Buffett also invests in scores of public corporations. The conglomerate closed 2016 with over $620 billion in assets.

The money mainly comes from Berkshire’s massive insurance business, composed of the auto insurer GEICO, the global underwriter General Reinsurance Corporation, and 10 other subsidiaries. Insurance premiums don’t get immediately paid out in claims; while the cash sits, Buffett can invest it. This is known as “float,” and Berkshire Hathaway’s float has ballooned from $39 million in 1970 to approximately $113 billion as of last September. It’s a huge advantage over rival investors—effectively the world’s largest interest-free loan, helping to finance Buffett’s pursuit of monopoly. “[W]e enjoy the use of free money—and, better yet, get paid for holding it,” Buffett said in his most recent investor letter. Indeed, as a 2017 Fortune article noted, with almost $100 billion in cash at the end of that year’s second fiscal quarter, Buffett’s Berkshire Hathaway literally has more money than it knows what to do with.

The dominant narrative around Buffett is that he invests in big, blue-chip companies whose products he enjoys, like Coca-Cola or Heinz ketchup. But Buffett’s taste for junk food cannot match his hunger for monopoly, and he scours the investment landscape to satisfy it. For example, he’s a major investor in the most profitable company you’ve never heard of—one used by hundreds of millions of people worldwide, mostly without their knowledge.

The company is called Verisign, and it operates an essential backbone of the Internet: registries for the domain names .com and .net, among others. If you want to create, for example, MyWebsite.com, you buy the name from a retailer like GoDaddy. But Verisign controls the global registry for .com, so GoDaddy relies on Verisign to connect users to MyWebsite.com. Verisign collects a small fee for this service, usually less than $10 a year. But drawing that fee from an enormous pool of websites results in a massive revenue stream.

As of September 2017, two of Verisign’s domain-name registries, the aforementioned .com and .net, accounted for 145.8 million of the 330.7 million websites in existence, or nearly one in two. Take away the 144.7 million sites tied to a specific country (like .us, or .cn for China), and it’s more like four out of five. Any company controlling 80 percent of a given market can safely be termed a monopoly, though a spokesperson for Verisign said in a statement that “we believe competition is thriving in the market.”

The nonprofit Internet Corporation for Assigned Names and Numbers (ICANN), the registry industry’s main regulator, granted Verisign exclusive contracts to operate .com and .net. Verisign can automatically renew the contracts as long as it meets certain performance metrics. The company was also initially permitted to raise prices gradually, despite the fact that the costs of managing a registry decline over time because the necessary infrastructure is already established.

“If you’re giving a near monopoly in an industry where prices are falling, you would think that you would have terms in the contract to lower the price,” said economist Dean Baker, a critic of government-granted monopolies. Instead, prices for .net domain names can rise 10 percent per year; they’ve more than doubled since 2005, from $3.50 to $9.02 (Verisign’s statement called this price “lower than most competing legacy [top-level domains]”). Prices for .com domain names have also risen, though they are now frozen at $7.85 per year, due to an amended contract executed in 2012. Competitors have offered to run registries at significantly cheaper rates, yet ICANN hasn’t altered Verisign’s contract terms.

Normally, companies with regulated prices aren’t profit-making juggernauts. But in the third quarter of 2017, Verisign’s operating income as a percentage of revenue hit 61.9 percent, putting it near the top of all companies in the S&P 500. This number has climbed steadily since 2006. If the trend continues, sometime in the next decade Verisign will post the highest rate of profitability of any public company on earth.

That may explain why Buffett owns nearly 13 million shares of Verisign stock, worth $1.47 billion as of mid-January 2018. Buffett is famously averse to Internet stocks, but he does like a sure thing. So does the rest of the market: Verisign stock jumped nearly 44 percent in 2017. Buffett’s seal of approval tends to boost fortunes on Wall Street, so more money flows into monopolies.

In 2016, ICANN arranged a blind auction to sell the rights to the .web domain name, seen as a promising competitor to .com. To the surprise of industry observers, an obscure company named Nu Dot Co outbid six rivals for .web, offering a record-shattering $135 million. The mystery was clarified four days later, when Verisign issued a brief press release announcing that it had provided all $135 million for Nu Dot Co’s bid. Already in control of .com and .net, Verisign had wrested control of one of the only plausible alternatives. In its statement, Verisign said that “We intend to launch .web to bring choice and reliability to consumers world-wide.”

Though there were signs of Nu Dot Co operating as a straw purchaser before the auction, ICANN refused to delay the proceedings. Competitors cried foul, arguing that they would have bid higher if they’d known a deep-pocketed foe like Verisign was involved. “ICANN has a history of sweetheart deals with Verisign,” said Jon Nevett, co-founder of Donuts, a competing registry that unsuccessfully sued ICANN to block the .web auction. (The case is now under appeal.)

The Justice Department opened a yearlong investigation into the potential rigging of the .web auction, but in January, the department closed the case. In a research note, JPMorgan Chase called Verisign’s acquisition of the domain name “a very good defensive strategic move, keeping .web out of the hands of the potential competitor.” Verisign’s monopolies remain well guarded—and a continuing source of profits for Warren Buffett.

n 2007, Buffett joked in an investor letter: “If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville [Wright] down…. I have an 800 number that I can call if I get the urge to buy an airline stock,” he added. ” ‘My name is Warren and I’m an air-acholic,’ and then they talk me down.”

Nine years later, Buffett shook off his aversion to airlines. A 2016 stock-buying binge led to Buffett holding approximately 47 million shares in American Airlines, 53 million in Delta, 48 million in Southwest, and 28 million in United, for a total investment of over $9 billion. One day in April 2017, Buffett made $104 million on his airline holdings in a single trading session. The bet is not predicated on any one airline prospering: Buffett holds close to a 10 percent stake in all four major US carriers. (Investments controlling over 10 percent of company stock trigger various paperwork burdens and disclosures, and Buffett has said he likes to stay beneath that threshold.)

What changed between 2007 and 2016? With the blessing of federal regulators, the airline industry became an oligopoly. Four mega-mergers—combining Delta and Northwest, United and Continental, Southwest and AirTran, and American and US Airways—solidified major-carrier dominance in the United States. Today, four airlines control 80 percent of domestic-seat capacity. In 93 of the top 100 airports, either one or two manage a majority of all seats sold.

Market concentration has resulted in higher profits for the airlines and for Buffett, but misery for the passengers: crowded planes, more connections, and a cascade of nickel-and-dime fees. Perversely, by making flying worse, airlines further loosen passengers’ wallets, enticing those who can afford it to buy more legroom, or priority boarding to ensure that their bag gets in the overhead bin. Ancillary fees represented a little over 10 percent of the airlines’ total revenue in 1995; today, it’s more than 25 percent. The public wouldn’t stand for such fleecing if they had a choice, but market consolidation forces customer acceptance.

And it’s not just Buffett: Large index-fund providers like Vanguard and BlackRock have significant industry-wide airline holdings, a factor that may distort competition. “It’s not crazy to think that the CEO of Delta has figured out that Buffett doesn’t like it all that much for him to compete with United,” says Martin Schmalz, an assistant professor at the University of Michigan’s Ross School of Business. Schmalz, José Azar, and Isabel Tecu revised a research paper last year showing that airfares on the average route are 3 to 7 percent higher under common ownership by large investors than they would be under separate ownership. “This is not collusion; it’s not a crime,” Schmalz adds. “But it’s an antitrust problem that increases prices.”

David Dao learned the harsh realities of monopoly air travel last April, after refusing to relinquish his seat to solve an overbooking problem on a United flight. Security agents violently dragged Dao, a 69-year-old physician, down the aisle and out of the aircraft, breaking his nose and knocking out two teeth. The incident gave United a public-relations black eye—video of Dao’s ordeal was viewed over 9 million times, and United’s CEO was hauled before Congress—but it didn’t damage the company’s bottom line. The Department of Transportation declined to prosecute, United’s stock price recovered after an initial dip, and seats remained filled to near capacity.

Throughout the controversy, Buffett stood by United. Assaulting Dao was a “terrible mistake,” he said to CNBC, but “it wouldn’t change the investment strategy.”

uffett has similarly defended Wells Fargo, his largest single investment, through one damaging scandal after another. In 2016, the bank was caught signing up customers for around 3.5 million fake accounts. Since then, Wells Fargo has also been dinged for issuing clients unwanted insurance and home-warranty products, falsifying records to increase fees on mortgage applicants, overcharging foreign-exchange clients to ring up bonuses, initiating secret changes to mortgage terms for homeowners in bankruptcy, and repossessing the cars of service members while they were on active duty. The federal investigations and fines over this misconduct continue to roll in.

Millions have been harmed by this mix of rank incompetence and outright fraud. But with the five biggest commercial banks—Wells Fargo, Bank of America, Citigroup, JPMorgan Chase, and US Bancorp—controlling nearly half of all assets, as well as robust branch and ATM networks, it can be inconvenient or even impossible not to use their services.

Last August, Buffett called Wells Fargo “a terrific bank…. There were some things that were done very wrong there, but they are being corrected.” In October, he got tougher, blaming Wells Fargo’s board of directors for failing to “remove the stain” on the business and musing about clawing back five years of compensation. But Buffett had supported the same board members for reelection just months earlier. It resembled his decision in 2014 to criticize the board of Coca-Cola for excessive executive compensation, but to abstain from voting on the pay package. At the time, Buffett’s son Howard sat on Coke’s board.

In other words, while Buffett’s wealth and the media attention he attracts enable him to create change inside the boardroom, he takes virtually no responsibility as a major shareholder for the companies he invests in. “He’s following his wallet, not his conscience,” says David Nelson, chief strategist at Belpointe Asset Management.

In fact, Buffett is completely enamored with the big banks whose actions sparked the Great Recession, despite a rap sheet as large as Wells Fargo’s. Asked to name his favorite bank in a CNBC interview last October, Buffett replied: “What’s your favorite child?”

As of last September, Buffett’s financial-industry holdings approximate an astonishing $66.9 billion—more than 37 percent of his portfolio. He is Wells Fargo’s largest shareholder, and he recently became the largest shareholder in Bank of America as well, the result of a post-financial-crisis deal allowing Buffett to convert an injection of capital into common stock. That conversion earned him $12 billion overnight. A similar crisis-era investment in Goldman Sachs spawned a $3 billion payday.

Buffett also holds major stakes in Bank of New York Mellon, US Bancorp, and M&T Bank. He has a hand in every major credit-card issuer: American Express, Visa, MasterCard, and Synchrony Financial, which provides private-label credit cards to retailers. While Buffett doesn’t own stock in JPMorgan Chase, his top deputy Todd Combs sits on the board, obviously aware of the activities of the leading competitor to his boss’s banking investments.

You may think you have a choice of financial institutions, but when you pull out a piece of plastic to pay for anything, chances are you’re enriching Warren Buffett.

t would be one thing if Buffett were passive about investments he doesn’t totally control but scrupulous regarding the businesses owned within Berkshire Hathaway’s portfolio. But only 25 people work at Berkshire’s headquarters, overseeing 63 companies and more than half a trillion dollars in assets. It’s impossible for Buffett to be anything but an absentee owner, instructing portfolio managers to gain market share but ignorant of how they do it. And anyone who has watched Buffett operate over the past 40 years knows his preferred path to wealth: through monopoly.

Among his first investments were newspapers, including the 1977 purchase of the Buffalo Evening News. Buffett immediately targeted the News’s rival, the Courier-Express, by launching a Sunday edition. By 1982, the Courier-Express was out of business, and Buffett’s local monopoly became his largest single investment. Even today, despite the Internet, Buffett owns 31 daily newspapers, most of them local monopolies.

A more brutal example involves Berkshire Hathaway subsidiaries Clayton Homes, the nation’s largest mobile-home builder, and Vanderbilt Mortgage, its companion lender. A series of journalistic investigations in 2015 found that the companies targeted minorities with high-pressure sales tactics, issuing loans swollen with hidden fees. African-American, Native American, and Latino borrowers received higher interest rates, even if their fellow white borrowers earned less. When the loans failed, Clayton repossessed and resold the homes, earning more fees each time. The Consumer Financial Protection Bureau’s complaint databases are littered with hundreds of comments about Clayton and Vanderbilt. “This type of behavior by any lender is despicable and absolutely intolerable,” wrote one complainant.

Buffett has publicly defended the businesses, which earned $744 million in 2016. He even tried to attack the credibility of a critical reporter, because the reporter’s sister worked at a law firm that sued Clayton. In 2017, Buffett vowed that Clayton Homes would grow, despite admitting that it foreclosed on one out of every 40 properties the previous year—over three times the national average.

Last December, the House of Representatives passed a bill to further deregulate the manufactured-home industry, eliminating consumer protections and disclosure requirements under statutes like the Truth in Lending Act. If the bill becomes law, Clayton Homes salespeople could legally steer borrowers to high-cost loans, which traditional mortgage brokers are barred from doing. As Maxine Waters, ranking Democrat on the House Financial Services Committee, said on the House floor, “This bill makes it easier for financial titans like billionaire Warren Buffett to earn even more profits, at the expense of some of the most vulnerable consumers in this country.”

The disparity between Buffett’s words and actions is an enduring feature. His main entry into the political arena involves a plea for tax fairness, to “stop coddling the super-rich.” But Buffett’s third most valuable stock holding (after Wells Fargo and Kraft Heinz) is a $22.8 billion investment in Apple, perhaps America’s most notorious corporate-tax evader, famous for stashing profits in offshore tax havens.

Buffett takes full advantage of tax loopholes. He uses Berkshire Hathaway, a valuable tax shelter, for his investments. The Republican tax bill will save Berkshire an estimated $37 billion, because the firm habitually defers its tax liabilities, which will now be paid off at a much lower rate. Even the infamous ”private-jet tax break” in the bill is really an extrajudicial attempt to settle a dispute between the IRS and NetJets, a private-plane company wholly owned by Berkshire Hathaway.

think idolizing Buffett is unhealthy,” says Robin Harding, Tokyo bureau chief for the Financial Times, who offered a rare note of criticism of the billionaire investor in the business press last September. “We should lionize entrepreneurs…who take bold risks by investing to make our lives better,” Harding adds. “Buffett’s whole method…is to minimize risk by building moats while investing to buy a greater share of what already exists.”

Former Supreme Court Justice Louis Brandeis called businesses like Buffett’s, which use other people’s money to create personal fortunes, the “Money Trust.” These financier middlemen “bestride as masters of America’s business world, so that practically no large enterprise can be undertaken successfully without their participation or approval,” Brandeis wrote. Buffett routinely takes advantage of opportunities unavailable to ordinary investors: The mega-bank Goldman Sachs created an internal “brain trust” solely to pitch deals to people like Buffett. “The kind of trades he does today no one else can do—you gotta be that big,” explains David Nelson of Belpointe Asset Management.

Buffett’s fortune reflects a change in whom modern capitalism serves. Former labor secretary Robert Reich, whose latest book, Saving Capitalism, was recently adapted into a Netflix documentary, explained that the wealth generated through corporations used to be shared somewhat more with workers, communities, and the broader economy in what he termed “stakeholder capitalism.” “That changed in the 1980s, when the corporate raiders insisted that CEOs only focus on maximizing shareholder returns,” Reich says. “Even if companies wanted to be sustainable, they’re not able to under the current system.”

Amazingly, Buffett has spearheaded an effort to promote “commonsense corporate governance principles,” joining the CEOs of America’s largest corporations, from General Motors to JPMorgan Chase. The group’s manifesto states that “[o]ur financial markets have become too obsessed with quarterly earnings forecasts,” recommending that institutional investors make informed decisions about the direction of the companies they hold. But this is precisely what Buffett never does; he openly ignores management performance in favor of finding businesses with moats. This has become his perfect excuse: Buffett evades responsibility for abuses of market power, preserving his pristine reputation by passing the buck.

Nor does Buffett acknowledge his role in driving further monopolization. The investment-research firm Morningstar has created the “economic moat” index to track the 20 companies with the highest walls around their businesses. The money-management firm VanEck sells an exchange-traded fund based on that index called “MOAT.” Companies like Valeant Pharmaceuticals scoop up lifesaving drugs that nobody else makes and jack up the prices; it’s the moat strategy taken to its logical extreme. “We’re seeing this almost spontaneous decision across whole industries that they’re going to milk existing market positions rather than compete aggressively,” Harding says.

What’s the answer? First off, aggressive antitrust enforcement. “What the framers of the antitrust laws…were concerned about is unreasonable market power that gives companies the chance to engage in predatory behavior of consumers and political power,” Reich says. Companies like Verisign, which exploit their monopolies, should face greater scrutiny. Dominant players in industries like airlines and banks should be downsized. Sprawling investors like Buffett also present concerns. “If we didn’t allow Buffett to own substantial stakes in all air carriers, the problem would be significantly reduced,” says the University of Michigan’s Martin Schmalz.

We must also consider disproportionate capital concentration. The top 1 percent owns a significant portion of all wealth, and it increasingly makes money just from having money. Globally, 82 percent of the wealth generated in 2017 flowed to that top 1 percent, according to Oxfam. Through dividends, interest payments, and rising investments—Buffett-style passive ownership—the holders of capital capture about 30 percent of national income,according to research by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman. “If you’re well diversified and you just chill out, you will make a lot of money without doing much for it,” says Matt Bruenig, founder of the People’s Policy Project.

Bruenig has proposed a wealth tax, with the revenue directed into a stock-accumulating sovereign-wealth fund. Citizens could receive a direct dividend from the gains, the way Alaskans receive a check from the state’s Permanent Fund. Instead of someone like Buffett hoarding wealth to extract income, we would all benefit in service to a fairer society. And as with Norway’s wealth fund, the government could involve itself more directly in corporate governance, as a countervailing force to shareholder tyranny.

Getting serious about taming monopolies also means ceasing the endless praise of Warren Buffett. Leading Democrats and the press have given him a pass for decades. But the path to solving America’s inequality crisis goes through Omaha and the cuddly billionaire whose love of monopoly is contributing to national desperation. “He’s a really good investor,” David Nelson says of Buffett. “I’m not sure he’s much of an example on anything else.”

Correction: An earlier version of this article claimed that Warren Buffett’s Berkshire Hathaway is invested in the aerospace company TransDigm and cited that company’s alleged price gouging as an example of how Buffett benefits from monopolistic practices. Regrettably, we confused Berkshire Hathaway with Berkshire Partners, a firm unrelated to Mr. Buffett, which is invested in TransDigm. Accordingly, those passages have been removed from the article, and other sentences have been edited to reflect this fact. We apologize to our readers and to Mr. Buffett for the error.

The article also inaccurately stated that the Republican tax bill is projected to benefit Buffett’s business $37 billion per year. It is a one-time $37 billion benefit.

When he finally unveiled his infrastructure plan on Monday, President Donald Trump offered cities and states negative $40 billion. Most media accounts have described it as a $1.5 trillion deal, but the plan’s proposed $200 billion spending must be weighed against the $240 billion in cuts to infrastructure laid out in Trump’s proposed budget, which was also released Monday, including $178 billion in cuts to transportation spending alone.

President Trump tried to sell this “deal” of taking away federal money for infrastructure by stressing how unimportant the issue is to him. “What was very important to me was the military,” Trump said during the announcement Monday. “What was very important to me was the tax cuts. And what was very important to me was regulation. This is of great importance, but it’s not nearly in that category.”

The halfhearted approach to infrastructure definitely shows. In fact, this is one area Democrats feared Trump would force them to make a hard choice between good policy and partisanship. But that dilemma never materialized, because it turns out that the Trump administration and Republicans in Congress don’t care enough about it to construct anything but a shell game.

Let’s explain what a good infrastructure policy might look like—something that Democrats would have to seriously consider. While interest rates have risen, they still remain low enough over the long term to make borrowing to rebuild our woefully outdated highways, mass transit, airports, energy grid, and broadband lines more than worthwhile. The long-term gains from such investments are incredibly strong, with a high “bang for the buck.” We blew the opportunity to get started on this while unemployment was relatively high, combining job creation with long-term improvements. But it’s still a good idea. And I’m told that the president likes to put his name on construction projects, so it would even appeal to his vanity.

Yet these initiatives cost money. And while Republicans clearly have no problem spending money when there isn’t a Democrat in the White House, they prefer to spend it on the right kind of people, like the obscenely rich or corporate donors. Creating tangible benefits for the country doesn’t help out any of those people, unless you cut private investors in on the deal.

No investor would put money into infrastructure without expecting a return. They get that now through the municipal-bond market, by earning interest on government borrowing. And investors already seem pretty happy with it—the bond market has grown tenfold since 1981. Trump wants to increase that investment through tax cuts, but private investors enjoy large tax breaks from municipal bonds. It’s unclear why they would move off something already working for them. Indeed, bankers have been thoroughly uninterested in the concept thus far.

Trump thinks he’ll lure in more infrastructure investment by encouraging public-private partnerships, giving investors more control over what gets built and how much revenue they can enjoy from it after the fact. As I’ve written at The Nation, this amounts to a private tax, giving the illusion of budget savings but leaked out over time in the form of tolls and fees. Either users are gouged to use the service, or all taxpayers will be when cities are forced to pay off companies after returns don’t pan out. The plan even wants to give states “flexibility to toll existing Interstates” that have already been built with public dollars, essentially selling off our common assets for pennies.

Public-private partnerships lead to infrastructure getting built only where it can earn a return. Rebuilding schools or removing lead from homes don’t have a revenue piece, so they just won’t happen, and the inability for poor communities to pay tolls contributes to leaving entire regions behind. Public-private partnership companies that want to drive profits can skimp on labor and materials costs, making the projects less robust and functional. And every dollar that goes to investors in windfall profit could have been used to build more infrastructure if the public retained control. “This scheme is an affront to the human right to water, a disaster for vulnerable communities, and a boondoggle for taxpayers,” said Wenonah Hauter of Food & Water Watch in an e-mail.

Even this guy named Donald Trump has criticized these partnerships privately to lawmakers, but that didn’t stop whoever wrote the infrastructure plan from sneaking incentives for this into the final product.

In addition to public-private partnerships, the administration supports fully privatizing Reagan and Dulles airports in Washington, the Tennessee Valley Authority, the Bonneville Power Administration, the Baltimore Washington parkways, the Washington Aqueduct, and the air-traffic-control system, among other public assets. The theory is that the private sector can “better manage” these projects, but history screams otherwise, particularly with the recent collapse of one of the largest privatization firms in the world, Carillion. Such bankruptcies are startlingly common, and they stick local government with the bill.

Trump’s infrastructure plan devotes $20 billion to a loan program that would underwrite these private financings. A larger portion, $100 billion, goes to broad-based funding that cities can access only if they put up four times as much themselves. Currently infrastructure spending is done in the opposite fashion, with the feds typically putting in 80 percent of the costs, down to a 50-50 split for mass transit. The result of such a high burden on states that cannot deficit spend and have trouble raising money for infrastructure would likely be fewer projects, which isn’t really the idea.

There’s also $50 billion in block grants for rural infrastructure, $20 billion for the vague-sounding “projects of national significance,” and $10 billion for capital financing for government buildings. But again, the offsets make this virtually meaningless. “Robbing other federal priorities—including important transportation programs—to pay for infrastructure will only add to our growing problems,” said Larry Willis, president of the Transportation Trades Department of the AFL-CIO in a statement.

None of this is actually going to happen because Republicans aren’t moved by making government work for citizens. Democrats managed to wrangle $20 billion for infrastructure out of last week’s bipartisan budget agreement, which again is at least $20 billion more than this plan devotes.

But the real agenda for this plan has nothing to do with spending money and everything to do with removing protections on labor and the environment. Trump’s only real excitement on infrastructure comes when he talks about getting permitting and approval down to one or two years. The plan would not take into account the effects of climate change, potentially building in areas that won’t be habitable. It quietly exempts numerous projects from Buy American laws and the Davis-Bacon prevailing-wage law, ensuring cheaper labor and materials.

Much of this deregulation is already in the works at the agency level. Trump can talk of plans going nowhere, while behind the scenes enriching the developers doing the construction. That’s far more important than the proposed negative investment in rebuilding America.

If you owned a home in Detroit over the past decade, you had more than a one in three chance of being pulled into foreclosure. It might not be because you failed to pay your mortgage, and it could happen even if you owned your home outright. Over-inflated property taxes and inflexible state laws have created a cycle of foreclosures and blight in the heart of a once-great city.

Michigan’s housing politics, where unseen forces from on high can cripple residents’ ability to survive and prosper, mirror the hardened geographic and racial divisions that have tugged at the fabric of democracy in the state. We all know the stories: the Flint lead crisis, “right-to-work” laws undermining collective bargaining, unconscionable water shut-offs in Detroit, armies of unelected emergency managers taking control of majority-black cities and school districts.

Abdul El-Sayed, running to become the first Muslim-American governor in US history, may initially seem an unlikely figure to bridge Michigan’s divides—until you hear his story. His father immigrated from Egypt in the 1970s. His white Christian stepmother hails from rural, thinly populated Gratiot County, right in the center of the state. Members of his family voted for Trump, while others fear the impact of his policies on Muslims like them.

On Monday, El-Sayed, a medical doctor and the former director of Detroit’s health department, released an urban agenda that highlights affordable housing as the key to getting Michigan’s cities back on track. El-Sayed is certainly running to the left of the current Democratic gubernatorial front-runner, former state Senate minority leader Gretchen Whitmer. But it’s his bid to revive Michigan’s historic democracy deficit that should draw real interest.

El-Sayed stresses the commonality of the working class’ shared challenges—whether urban or rural—while endorsing a progressive agenda to end the moral tragedies of suppression and predation. “All of us define ourselves by where we live,” El-Sayed told me in an interview. “It’s our safe space to retreat to. When you think of the rate of foreclosure in Detroit in owned housing, and rate of eviction in rental housing, you’re asking people to grow without roots.”

While the housing crisis in many big American cities focuses on more building to meet demand, in Detroit and throughout Michigan that’s not the problem. “Our challenges involve keeping people in homes in the first place,” said El-Sayed. The solutions lie in reversing a top-down process littered with inequities.

While the state’s tax-foreclosure system is not the only policy producing bad outcomes for Michigan, it’s worth explaining the insanity of how it works. Under Michigan law, counties must foreclose on homes if property tax debts aren’t paid within three years. Counties must impose interest rates as high as 18 percent per year, which adds to the cost. This cycle of debt becomes impossible to climb out from, especially if the homeowner suffers from intergenerational poverty. It has led to an epidemic of tax foreclosures, even over underpayments as little as $8.41.

Detroit property tax rates are among the highest in the country, in part because of collapsing property values after the housing bubble burst. And for many years, Wayne County, home to Detroit, didn’t reassess properties to their current, depressed value, which would have decimated county revenues. As a result, according to one study from Wayne State Law School, from 2009 to 2015, 55 to 85 percent of all properties in Detroit were being assessed at more than half of the market value of the home, which violates the state Constitution. “Some people in Detroit are paying more than the value of their home every year in taxes,” El-Sayed said. “If that happened in the suburbs, people would be up in arms.”

Speculators often squat on properties by paying a minimal amount at auction and waiting to see if property values recover and make the land more profitable for building. If things don’t change, the county takes the property back in a tax foreclosure and the speculators buy it again. This churn creates endless blight, as developers hoard available land. Persistent vacancies devastate communities and hold them back from revitalization. The state’s attempt to prevent this abuse have failed miserably.

A long-awaited 2017 reassessment project lowered taxes for 94 percent of Detroit homeowners. Still, properties valued at $20,000 or less may still be paying more than twice the legal limit for their property taxes. In addition, three programs designed to protect homeowners—a now-defunct state repayment plan, a poverty exemption for tax foreclosures, and an appeals process for homeowners who believe their taxes were over-assessed—involve cumbersome applications and mountains of red tape. Since Michigan counties have enjoyed surpluses from the wave of tax foreclosures, it stands to reason that they would throw up barriers to ending the gravy train. Wayne County, which has foreclosed on over 160,000 properties since 2002, practically relies on evicting homeowners to prop up its budget.

This combination of high poverty and displacement proliferates amid what looks seriously like corruption. It affects everything in Detroit, from schools to infrastructure to social cohesion. It’s a signature symptom of pervasive oppression, where white politicians in Lansing dictate how black lives will be addressed.

El-Sayed’s plan builds in a review of every tax foreclosure for over-assessment. Any finding of over-assessment at any point would lead to automatic enrollment in a revived, discounted state repayment plan. Money from the state’s Hardest Hit Fund could assist county governments with the review. El-Sayed would also streamline the process for a poverty exemption, which would no longer have to be handled in person. The exemption would also be retroactive, so those with chronic struggles with poverty could get relief on their entire debt. And El-Sayed would protect renters living in properties at risk of tax foreclosure; among other things, tenants not notified of the foreclosure would be returned all their rent since the beginning of the default.

Just as important, El-Sayed would screen out speculators with a history of non-payment of taxes and ordinance violations, which would prevent the squatting strategy. Instead, counties would have to give preference to locally owned nonprofits or community land trusts in purchasing foreclosures. Those nonprofits could sell or rent back the property to the original owners. “There’s a difference between a house and a home,” El-Sayed said. “A house is a commodity, a home is a place where people live. You and I want to know who our neighbors are. If they lose that home to foreclosure, we want to think about how to keep that person in the home to keep the fabric of the community together.”

That spirit of restoring local democracy informs other elements of El-Sayed’s housing policy. He wants to reverse a state law that prohibits communities from establishing rent control. That restriction alone makes protecting affordable units extremely challenging. El-Sayed supports the establishment and active publication of a renter’s bill of rights, so tenants know how to protect themselves from unjust rent increases or evictions. He would petition the Department of Housing and Urban Development to localize its definition of “affordable,” so Detroit isn’t affected by having wealthier neighboring cities, and its “affordable” units are too pricey for city residents.

Finally, El-Sayed wants to build on his actions as health commissioner, when he tested all schools and childcare centers in Detroit for lead. Housing stock built before 1978 contains enough lead to elevate blood levels in children. “The baseline prevalence of lead poisoning in Detroit is 10 percent, above the peak levels in Flint,” El-Sayed said. “That’s not because of water but paint in the walls.” Too many landlords who discover lead problems move immediately to evict tenants to limit legal exposure. El-Sayed would prevent that, while using lead-abatement funds for legal defense for renters and full inspection and mitigation of the housing stock. Real penalties would fall on landlords not complying with lead abatement policies.

El-Sayed’s overall urban agenda breaks with the mindset that leads cities to effectively bribe Amazon to attract its headquarters. Destroying the tax base for the sake of a few in Detroit, where 40 percent of residents lack regular access to a car and public transit doesn’t fill in the gaps, amounts to eating your own seed corn. “We’ve become beholden to one vision of economic development, that says we have organically very little to offer, and the only way to get you here is to give you a lot of tax money,” he said. “Our way is, let’s invest in people and infrastructure, so they can produce the kind of businesses that can grow the economy. We have an opportunity in Michigan to rethink what’s possible when you empower people.”

With his youth and mixed background, El-Sayed has drawn too many comparisons to Barack Obama. His agenda of a $15 minimum wage, free college, and single-payer health care tilts more toward Bernie Sanders. But his interest in community empowerment, on breaking bonds that doom minorities to subjugation, steps well outside any politician’s framework. It’s exactly what Michigan needs.

After a very brief government shutdown, the people who have defended Senate Democrats’s decision to relent so quickly have argued that at least Democrats secured six years of funding for the Children’s Health Insurance Program, while funding the government for only three more weeks—thus creating another leverage point to secure a solution for 700,000 Americans brought here as children. That last part is debatable, as my colleague Joan Walsh explained. But on the health-care side of this equation, Democrats still, unforgivably, left too many people behind.

Community health centers were first funded in the Affordable Care Act in 2009. One in every 12 Americans depends on these publicly funded clinics for their access to health care, including the most vulnerable people in our society. If you support CHIP, then recognize that 40 percent of CHIP-eligible children get their care at a community health center. If you support immigration, recognize that community health centers don’t turn away patients over their immigration status, making them one of the few health networks that undocumented people can access. If you support eradicating poverty, practically no other program does as much. Community health centers serve all comers, regardless of ability to pay, and are often located in medical deserts, both rural and urban, that have no other options of health-care providers within 50 miles or more. Three-quarters of all community health center patients are below the poverty line.

In September, 70 percent of federal funding for community health centers expired, despite broad bipartisan support. A funding bill last December provided stopgap spending only until March. That means that in six weeks 2,800 facilities, with 50,000 provider and staff jobs, are at risk. So are the 9 million Americans who rely on these centers for health care. Communities throughout the country, from rural Nevada to Worcester, Massachusetts, to Montana have been screaming for help to prevent the looming crisis.

Congress didn’t listen. And by reauthorizing CHIP without concurrently doing so for community health centers, the flagship policy that could have pulled along community health centers is gone. Like it or not, that’s often how Congress works, with one higher-profile policy allowing less-heralded but equally critical measures to advance.

I’ll give you an example: a formerly perennial bill known in Washington as “tax extenders.” About 50 tax credits, for everything from Puerto Rican rum to thoroughbred horses, were habitually approved one year at a time, forcing an end-of-year scramble to re-up the tax extenders. The main reason that approach succeeded was because the research-and-development tax credit, easily the biggest of the tax extenders, was mixed in with the group. That created the needed energy to move the whole package along.

When Congress made the R&D tax credit permanent in 2015, suddenly the impetus to keep waving through small tax extenders with tiny constituencies, like those for NASCAR drivers and the like, vanished. The days of the annual tax-extender bill are over.

In that instance, ending what was a lobbyist-fueled onslaught of mostly corporate giveaways doesn’t move me to tears. But the same dynamic was at work with CHIP. In addition to community-health-center funding, a host of other lower-profile health programs that expired last year could have moved along with CHIP. This includes the Special Diabetes Program, which provides research for treatment of juvenile and other diabetes illnesses; the Maternal, Infant, and Early Childhood Home Visiting program, which serves 160,000 low-income families with guidance and assistance on postpartum depression, substance abuse, and domestic violence; and the National Health Service Corps and Teaching Health Centers, which assist mainly rural hospitals.

All of these programs had a shot at getting their funding renewed when CHIP was in the mix. Without that anchor, they have been orphaned and robbed of the high-profile support needed to get approval. Perhaps the saddest part is that extending CHIP for longer than its six-year term would have provided much of the funding needed for these programs. Because of changes to the individual mandate in the tax bill and other factors, CHIP would get significantly cheaper for budgetary purposes the more years it was renewed. The Congressional Budget Office estimated that renewing CHIP for six years, as the deal to end the shutdown did, cost no money. But renewing it for 10 years would have saved $6 billion. That could have covered at least a year or two of all these programs, including community health centers. Instead, they’ve been left to rot.

This doesn’t appear to have been part of the Senate Democratic leadership’s calculations on the funding bill. They were so busy extracting empty promises from Mitch McConnell about an unspecified DACA vote that they never bothered to concern themselves with these other critical health programs. Republicans’ initial offer was six years of CHIP and four weeks of government funding. Democrats, despite their votes being needed in the Senate, ratified essentially the same deal three days after rejecting it, without the inclusion of funding for community health centers, diabetes, family-home visiting, or teaching hospitals.

That’s truly unconscionable. Roughly the same number of people affected by CHIP are at risk with the loss of community-health-center money. The other programs are too small to get through on a standalone bill, and the populations served are typically too vulnerable to matter. They needed a champion like CHIP. There is significant overlap between the children and immigrants Democrats claimed to be their main concern in this fight, and the population served by community health centers, and the Democrats’ strategic failures mean those people lost twice.

Meanwhile, Republicans were concerned enough about bundling other health policy with CHIP in the funding bill to delay Obamacare-era taxes on medical-device and health-insurance companies. While poor people on the edge of society were abandoned, lobbyists for those giant industries made out just fine, safely tucked under the wing of the CHIP passage.

Where were the policy people in Senate minority leader Chuck Schumer’s office over the past few days? How could they so callously abandon such an enormous priority as health access, knowing what was on the line? Democratic politicians sometimes get so wrapped up with tactical nuances that they forget whom they’re supposed to be fighting for. Millions of voiceless people got screwed on Monday, and it’s not clear whether anyone will be able to make it up to them in the future.

Richard Dien Winfield is quick to point out that he was born in Queens, the same borough of New York City as Donald Trump. Now he wants to represent Athens, Georgia, and its rural, heavily conservative environs in Congress. “Republicans in this district were willing to support someone with no Georgia roots, a guy from Queens, talking about bringing jobs back to America,” he reasoned, so why not him?

Winfield’s slogan for his campaign is “Guaranteed Jobs, Fair Wages.” He appears to be the first candidate in the 2018 cycle to run on a federal guarantee of a job for every able-bodied American adult who wants one. Winfield, a philosophy professor at the University of Georgia for 35 years and the author of The Just Economy, will kick off his campaign the weekend before the Martin Luther King holiday, and that’s no accidental timing. King endorsed “employment for everyone in need of a job” during the civil-rights era, and his widow, Coretta Scott King, co-founded the National Campaign for Full Employment in 1974.

“After winning back political and civil equality, King realized a new chapter had to be opened, the struggle for economic rights,” Winfield said in an interview. “King wanted to transform the entire society so everyone could benefit. That struggle has fallen into oblivion.”

The district, Georgia’s 10th, is currently represented by Republican Jody Hice. He didn’t have an opponent in 2016, which was true for a shocking number of Republican officeholders in the state. And Trump easily carried the district. But this era of resistance has brought out a new crop of Democrats. Most foreground the need to reverse the president’s destructive policies. Few speak about comprehensive policy frameworks that would truly change America. For this reason, Richard Dien Winfield’s long-shot bid is drawing attention from academics and activists who have longed for big ideas.

“A new social bill of rights could help transform the political and economic discussions we’re having in this country,” said Mark Paul, a visiting fellow with the Roosevelt Institute who has co-authored some of the major job-guarantee studies. “Richard Dein Winfield could deliver model legislation, setting a viable path towards achieving full employment and economic security for all.”

Progressive economists have latched on to the idea of a federal jobs guarantee, a Depression-era chestnut associated with programs like the Civilian Conservation Corps and the Works Progress Administration. Under this concept, the government would provide jobs with a decent wage and benefits similar to those enjoyed by public-sector workers. The open-ended program would be funded as needed, expandable in recession, and contractable when the economy recovers. Government would effectively become the employer of last resort.

It’s become a hot topic among those looking to solve persistent underemployment, rampant inequality, and stagnant median wages. Even the mainstream Democratic Center for American Progress proposed a small-scale version of a jobs guarantee recently. But Winfield takes this to another level, seeking a national jobs program with a $20-an-hour “fair wage” that would be indexed to the productivity workers contribute.

Winfield, whose white shock of hair leaves you wondering if he’s Bernie Sanders’s long-lost cousin, believes a jobs guarantee would solve a host of the country’s problems at once. “It’s really the anchor of economic independence and security, which we all need to exercise other rights,” Winfield said. First, he explained, the program would be a lifeline to minorities and youths, who typically see far higher unemployment rates than the general population. Second, it would emphasize fulfilling community needs that the private sector has neglected. Winfield cited as examples increasing clean-energy infrastructure; bringing broadband Internet service to all (an issue in his rural region akin to electrification through the Tennessee Valley Authority in the 1930s); renovating and replacing affordable housing; increasing public transportation in rural and urban areas; building and staffing public health, childcare, eldercare, and recreational facilities; and even creating public art.

The resulting economic security and the dignity that comes with being productive would revolutionize how Americans live, Winfield believes. “People suffering from intergenerational poverty will know they have a job waiting for them,” he said. “It could help end recidivism by giving ex-convicts opportunities. And it could play a tremendous role in eliminating fear of immigrants inflamed by fear of joblessness. The only way for comprehensive immigration reform is to have this.”

Workers with private-sector jobs could benefit from tight labor markets and more bargaining power. Eliminating the fear of losing a job could create more courage in the workplace, more willingness to stand against discrimination or sexual harassment, or join a union. Even businesses could prosper from a nation full of people with money in their pockets, willing to spend.

The idea grew out of Winfield’s long-standing commitment to social justice. He helped organize janitors in college at Yale, and sugar-cane plantation workers with the Southern Tenant Farmers Union in Louisiana. His philosophical work has always had a socio-political cast, seeking to model a society that offers real freedom and justice. He casts his jobs-guarantee platform as “the unfinished business of the civil-rights movement.”

“I am thrilled to see someone like Richard Winfield run on a bold progressive platform in this county,” said Mehrsa Baradaran, an associate professor at the University of Georgia and author of The Color of Money, a history of black banking. Baradaran, who has consulted with Winfield on drafting his agenda, noted that Clarke County, Georgia, where Athens sits, has one of the nation’s highest wealth disparities. “These are serious issues that need to be addressed.”

Others in the job-guarantee movement have taken note. “A true jobs-guarantee bill hasn’t been introduced in Congress yet,” said Mark Paul. “Winfield is offering a positive alternative, embracing an economic populist vision which would ensure everybody in the US a decent standard of living.”

Whenever you call for a large-scale government program in a district fed a steady diet of Fox News demonization about how the government can’t do anything right, it’s an challenge. “My main strategy is really to push the idea of jobs, and how the solution requires government intervention,” Winfield said. He believes that conservatives’ strategy of segmenting society to pit lower-class whites against minorities allegedly getting “free” handouts goes away when everyone can access a job. “I’m not talking about putting people on welfare, I want people to realize the American dream of supporting themselves through their own hard work,” he explained.

The question becomes how you convince those skeptical of government before seeing the tangible results. But Winfield thinks rural communities, where capital flight has led to lack of business formation and job growth, could brighten to his message. “There’s an advancing situation of growing economic insecurity,” said Winfield. “People want some kind of relief, even by turning to scapegoats. If a candidate puts out a real alternative, I think it can have an impact.”

That alternative, some hope, could prove a spark to other candidates to be unafraid of transformational change. “We should put our best foot forward by running authentic candidates who run on truly big ideas that would be game changers in people’s daily lives,” said Adam Green, co-founder of the Progressive Change Campaign Committee, whose training for new candidates Winfield attended last July along with 300 other hopefuls.

Reality does need to intrude here. Trump beat Clinton in this district 61-36. It would be a stunning upset for Winfield to win, should he get through the Democratic primary. But 2018 is shaping up as a wave election. And last November, Democrats Deborah Gonzales and Jonathan Wallace picked up two legislative seats in the district where Republicans were heavily favored.

As important as it is to run candidates everywhere, what they actually propose matters. The Winfield campaign is a kind of experiment in whether offering a way out of the constraints of modern capitalism can lead to electoral success. “The Constitution has civil and political rights, but doesn’t have social and economic rights,” Winfield said. “No Democratic pres since the 1960s has done much of anything to pursue that struggle. We will be the future of the party.”

This article has been updated to reflect evolving developments in the case; see below.

Late last year, Congress scrapped Obama-era rules from the Consumer Financial Protection Bureau that would have banned forced-arbitration clauses in financial contracts. This bill, which President Trump quickly signed, was self-evidently bad for consumers at the time—and if anyone needs further proof of how ridiculous and harmful these clauses are, just look at what Wells Fargo has been up to over the past several months. The mega-bank famously issued at least 3.5 million fake accounts without consumer consent, triggering a $185 million fine to state and federal regulators. The bank aimed to demonstrate sales growth to investors and boost the stock price with bogus numbers, but millions of customers got caught up in the exchange, paying unnecessary fees and taking hits to their credit scores. Scores of defrauded customers sued Wells Fargo in a series of class-action lawsuits.

Wells Fargo then tried to defy metaphysical reality: It moved to block one class-action case in Utah by claiming that the arbitration clause in customer contracts on the real accounts they held at the bank also applied to the fake accounts. By this theory, Wells Fargo customers signed away their legal rights when it came to accounts they didn’t even sign.

The Utah plaintiffs fought Wells’s motion to compel arbitration, and rejected a $142 million settlement offer from the bank. While the two sides tangled in court, Wells Fargo CEO Tim Sloan appeared before the Senate Banking Committee on October 3. And when Senator Jon Tester (D-MT) asked Sloan point-blank if Wells Fargo was using arbitration clauses from real accounts and applying them to fake accounts, Sloan said, “There were instances [of that] historically. We’re not doing that today.” He also committed to not forcing arbitration in fake-accounts cases moving forward. When Senator Chris Van Hollen (D-MD) brought up the Utah case, where Wells Fargo had made motions to compel arbitration just two weeks earlier, Sloan said he wasn’t familiar with it.

But lawyers in Utah get C-SPAN. The plaintiffs in the case immediately appealed to the judge and argued that, with his remarks before Congress, Sloan had effectively waived Wells Fargo’s right to compel arbitration. Judge Clark Waddoups promptly scheduled a two-day trial for January 22 on the question. He also allowed the plaintiffs to depose Sloan in conjunction with the trial; that deposition is scheduled for Friday.

This put Sloan in a tight spot. Steven Christensen, attorney for the plaintiffs, told me he had only one question for Sloan: Did he state to Congress that Wells Fargo would waive arbitration claims on fake accounts? If Sloan said yes, the Utah case would go forward; if he said no, Christensen would appeal to Congress to hold him in contempt for lying to the Senate Banking Committee.

Wells Fargo found a way out. It filed a one-sentence motion the day after Christmas, which read: “Please take notice that Defendants Wells Fargo Bank, N.A. and Wells Fargo & Company hereby withdraw their Renewed Motion to Compel Arbitration.” They gave no explanation for the withdrawal, and so far Judge Waddoups hasn’t ruled on the motion.

Jim Seitz, a spokesman for Wells Fargo, said that Wells Fargo still believes “the facts of the case support Wells Fargo’s motion to compel arbitration,” but considered it “in the best interest of all our stakeholders to withdraw the motion at this time. We are pursuing this action to reach a resolution without further delay.” He added that the proposed $142 million settlement would resolve all the claims in the Utah lawsuit.

The withdrawal—even while insisting that real arbitration clauses apply to fake accounts—is a fun twist to Wells Fargo’s consistent strategy of saying different things to please different audiences. “The timing of this new stance on forced arbitration—coming just days before Sloan was scheduled to be deposed—suggests the bank may have been concerned Sloan was about to confirm that he did indeed lie [to Congress],” said Peter Knudsen, a spokesman for the American Association for Justice, a trial-lawyers’ group.

But Christensen was not satisfied. “Our position is the motion to withdraw doesn’t resolve anything because they could potentially renew their motion later,” he said. His team plans to show up in San Francisco on Friday to question Sloan, as the judge allowed. If Sloan doesn’t make it, Christensen said he would move to find the Wells Fargo CEO in contempt of court.

Since Wells Fargo has admitted to issuing fake accounts, the only mystery left in the case going forward is how many customers were actually affected. Wells initially claimed 2 million fake accounts, and then raised that estimate to 3.5 million last August. “I’m not confident that we’ve seen a true number,” Christensen said. If we ever get that number, which the court could demand, damages could rise well beyond the $10.7 million in refunds Wells has already paid out, or even the proposed $142 million settlement.

But Wells is taking the same approach to this case as it has with virtually every attempt to hold the company accountable: delay. Lawyers for the bank proposed eight weeks of depositions of the 80 customers in the Utah case. Every day they push off a judgment is a day they can drain the plaintiffs’ resources and prevent having to pay any price. “When you’ve got a $22 billion annual profit, and a $185 million fine, it’s cheaper for them to screw people over,” said Christensen.

Wells Fargo’s arbitration game-playing didn’t stop Republicans from nullifying the CFPB’s arbitration rules last year. Nevertheless, negative publicity from that ugly political dispute has played a role in companies’ changing their tune on arbitration. In one high-profile announcement, Microsoft ended the use of arbitration clauses against employees in cases of sexual harassment in the workplace.

Van Hollen, who caught Sloan’s dissembling in the Senate, thinks Wells Fargo should follow suit. “I urge Wells Fargo to allow all aggrieved consumers to have their day in court,” he said in a statement, “because it is the right thing to do and in the best interest of the families impacted by their wrongdoing—not just to protect their high ranking executives.”

UPDATE, 1/4/17: Late Wednesday afternoon, Judge Waddoups agreed to Wells Fargo’s motion to withdraw and cancelled both the trial and the deposition of Tim Sloan. While this insulates the Wells Fargo CEO, it means the case will not get dissolved, arbitration will not get triggered, and defrauded consumers will get their day in court, all because Sloan made a too-confident statement before the Senate.

Republicans have passed one of the most unpopular pieces of major legislation since the invention of modern polling. But GOP leaders appear thoroughly unconcerned, and they’re all pointing to a particular date on the calendar for when things will turn around.

“Americans will see lower taxes beginning in February,” President Trump tweeted shortly before final passage. The plan’s popularity will change in February, concurred White House Economic Director Gary Cohn. “On February 1, [Americans] are going to see bigger paychecks,” said House Speaker Paul Ryan.

February is when tax-withholding tables would change to reflect the new code. Once that formula for estimating what comes out of paychecks gets tweaked, Americans will feel richer, spend their windfall, rocket-launch the economy, and fall to their knees thanking Republicans for the good times ahead. And GOP leaders are weirdly confident about this. Why?

Maybe it’s because the person ultimately responsible for those withholding tables is a Trump political appointee serving as the “acting” commissioner of the Internal Revenue Service. And while this official, former Ernst & Young executive David Kautter, isn’t sitting in a room alone working on the withholding tables, critics fear the possibility for abuse exists—that Trump’s team could artificially goose US paychecks in 2018 to make the tax cut look bigger for the working class in advance of midterm elections.

The tax plan represents a serious implementation challenge even without politicization. Applying the once-in-a-generation overhaul to withholding, along with all the other guidelines and regulations the IRS needs to write, will prove so complicated that Congress, on page 540 of the bill, gave the Treasury Department the option to make withholding rules the same for 2018, which would mean no change to paychecks whatsoever. However, last week the IRS said in a statement that it is “taking the initial steps to prepare guidance on withholding for 2018,” which would be completed by February.

The secret sauce tax officials use to estimate withholding is “part formulaic and part art,” said Mark Mazur, a former assistant secretary for tax policy at the Treasury Department and is now director of the Tax Policy Center. Attorneys and processors of individual returns work with payment processing companies and large employers to arrive at the formula, and usually they err on the side of over-assessing, as most people end up getting a refund.

Adding to the uncertainty, Congress took away the main withholding tool that distinguished employee households. When you sign your W-4, you used to tally up allowances by the number of people in your household; the more in the house, the more personal exemptions and the less money withheld. But Congress doubled the standard deduction and eliminated the personal exemption, which tracked the allowances. “The art part is going to be to figure out how, given the structure of the bill, to make the withholding system work.” Mazur said. Workers might have to change their status to comply with the new formula, meaning hundreds of millions of W-4 forms filled out in January.

In addition, IRS staff has been decimated by budget cuts. Staff has fallen by 23 percent since 2010, and the agency was given no money to implement the new tax code. “Nobody in Congress gets elected by giving more money to the IRS,” said Mazur. The IRS must integrate all these new rules and complete withholding tables in the middle of filing season, its busiest time.

The man in charge of this mess is Kautter, who’s working two jobs. He was confirmed as the assistant secretary for tax policy, in an unusual committee vote in a private room off the Senate floor. In October, Trump named Kautter acting IRS commissioner. His experience for the job? He oversaw national tax practices at Ernst & Young while the company assisted firms in avoiding federal taxes. Ernst & Young ended up paying $123 million in fines for the tax-evasion scheme, known as Viper, and four employees went to jail. (Two sentences later were overturned.)

So a Trump loyalist with a history of at least turning a blind eye to tax avoidance is running the IRS. The assistant secretary for tax policy, Kautter’s day job, historically works with Congress on passing tax legislation. So he’s likely invested in the bill’s success. And now, at his moonlighting job, Kautter has to decide how to implement that policy. “That means rather than focusing on serving the IRS’s mission on behalf of all taxpayers, the IRS is likely going to be implementing this deeply unpopular bill with an eye toward preventing a total Republican bloodbath in the 2018 midterms,” alleged Jeff Hauser, executive director of the Revolving Door Project.

To be clear, this is the only way most Americans will experience the tax legislation between now and the midterms. The law only becomes effective for the 2018 tax year; tax returns this spring will be based on the 2017 code. There are big incentives in the bill to pull business investment forward, such that the expected effective corporate tax rate in 2018 is a skinny 9 percent. But the impact of that is highly debatable: Will the capital equipment be manufactured in the United States? Will companies give workers real wage increases or leak out benefits to shareholders through dividends and stock buybacks? The Tax Policy Center estimates an 0.8 percent boost to GDP in 2018 from the tax bill, but the distribution isn’t clear. For working Americans, withholding will be the most direct effect.

Individual tax cuts are very skewed to the top 5 percent. But if the withholding tables are tweaked to give the middle class more in their paycheck, it can look more like a broad-based cut. Sure, workers may have to give a lot of that back to the government the next tax year, but that won’t be until April 2019, well after the midterms.

Mazur stressed that estimating withholding is a professional process carried out by career staff, without direct involvement from Kautter. But Kautter does allocate resources to IRS tasks. Given the extreme confusion expected from the high-speed implementation, Mazur did acknowledge that “anything’s possible.”

That’s particularly true in the Trump administration, which has shown a dismissive attitude toward traditional norms of conduct. “For generations the IRS has actually been shielded from politicization,” said Jeff Hauser. “Sadly, that has changed under Trump.” Just yesterday, Senator Ron Wyden (D-OR), ranking member of the Senate Finance Committee, wrote to Kautter that his dual role raises conflict-of-interest concerns. “I believe it is inappropriate for the acting commissioner of the IRS to also serve as one of the highest political appointees in the Treasury Department,” Wyden wrote, stressing that this is the agency auditing President Trump’s tax return.

It’s an open question that, even if successful, a gaming of the withholding tables would even matter. Famously, in 2009, President Obama ran a stimulus tax break called Making Work Pay through the withholding system, and polling later showed that almost nobody knew they got a tax cut. Plus, given that employers withhold state taxes and health-insurance payments too, the net effect in paychecks could be negligible or even negative.

But the Trump team may see an opportunity that others dismiss. At the very least, the political appointee in a traditionally nonpartisan position presiding over the major legislative achievement of the Trump era should raise questions. Trump could alleviate those simply by nominating a permanent IRS commissioner and allowing the Senate to vet the nominee. But I suspect that won’t happen, and we won’t know the full meaning of that choice until paychecks come out in February.

Doug Jones’s improbable victory Tuesday night has set Republicans at each other’s throats, amid the growing impression that their reign in Washington will soon collapse. But it’s worth remembering the dubious narrative that Democrats would be the ones at loggerheads under Trump. The 10 Senate Democrats up for reelection in 2018 in states Trump won would break with the party and infuriate the resistance, while Trump rung up populist victories on bipartisan priorities like infrastructure. That was really a theory out there.

Of course, the populist rhetoric was revealed as a sham, the infrastructure bill still doesn’t exist, and Trump has so relentlessly poisoned the well that Democrats have held together, almost unilaterally, on every major issue. But far from the spotlight, one Trump appointee didn’t get the memo that he was supposed to sell out entirely to business interests. The situation hasn’t resolved itself enough to get Democrats to collaborate with Trump. But the corporate lobbyists are the ones getting nervous.

That’s the fascinating backdrop to negotiations over NAFTA, the decades-old trade agreement with Canada and Mexico. Talks are being held this week in Washington. Trump rode criticism of NAFTA as a job-killing machine to victory in the industrial Midwest. He then watched as companies like Carrier went ahead and outsourced jobs anyway. But Trump’s trade representative, Robert Lighthizer, is breaking with decades of orthodoxy in challenging the trade status quo, hewing as much toward labor’s vision of a good agreement as toward what business prefers.

Just before yesterday’s national day of action on NAFTA, Lori Wallach of Public Citizen’s Global Trade Watch put the negotiations into three buckets. In the first were Lighthizer proposals that mirrored long-standing demands of NAFTA critics.

This includes a way for countries to opt out of the destructive investor-state dispute settlement (ISDS) scheme, where companies can sue governments for lost expected profits from changed regulations. The US proposal wouldn’t eliminate ISDS, but would let countries leave the system, and would throw out the worst aspects of the process. Lighthizer also wants to strengthen “Buy America” procurement mandates; increase the “rule of origin” for automobiles, so 85 percent of a car is made in NAFTA countries and half in the United States; and initiate a mandatory sunset and review of NAFTA every five years.

The second bucket includes things where Lighthizer has made promises without actual substance, like on stronger labor and environmental standards. Now, the Trump administration doesn’t support stronger labor and environmental standards in the United States, let alone in a trade agreement. So far, Lighthizer has only proposed the language from the Trans-Pacific Partnership, which is wholly inadequate. But he has reportedly listened to the AFL-CIO’s concepts for how to improve those rules. Lighthizer does seem to recognize that US manufacturers cannot compete with Mexico if fake unions conspire with business to hold down wages. After NAFTA, real wages in Mexico actually fell, and they are today as low as one-twentieth of their US counterparts.

The third bucket features a series of corporate sellouts, where industries have won concessions from Lighthizer. The damaging TPP chapter on intellectual property has been introduced, which would increase prices on medications by lengthening patent exclusivity, and aggressively enforce copyright of music and movie content. (If this is enacted, borrowing a friend’s CD could be a trade violation.) The tech industry is trying to maintain its dominance by writing into NAFTA that virtually no limits can be placed on data, whether for privacy or security reasons. And the financial-services industry wants to force deregulation by setting limits on rules through the agreement.

So it’s a mixed bag. But the interesting part of this is how the outside actors are responding. In the day of action, NAFTA opponents pressured the Trump administration to get the best possible deal. “The renegotiation of NAFTA must stop providing incentives for corporations to outsource American jobs to Mexico,” said Senator Bernie Sanders at a rally Wednesday. The key point is that opponents are assuming a negotiation and trying to get the best possible deal.

The corporate lobby, on the other hand, is trying to shut down the process, imploring Canada and Mexico to refuse to engage. “Their theory is that ultimately the administration will back off on what they’re revising, and they will get what they want: adding TPP to NAFTA,” said Lori Wallach. Indeed, Canada and Mexico have dismissed the five-year sunset clause and treated other US proposals as too stupid to even address. Mexico offered a couple counter-proposals last month, suggesting that the stone wall is starting to crack. But Lighthizer said after that round of talks that “we have seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement. Absent rebalancing, we will not reach a satisfactory result.”

That’s code for pulling out of NAFTA. The corporate types seem to think that’s impossible, and certainly there would be legal challenges to a unilateral pullout. But Wallach cited the NAFTA text, which says that, “during any period in which a country ceases to be a NAFTA country,” the implementing provisions “shall cease to have effect.” Indeed, Trump would likely get credit from his base by terminating NAFTA, and hasn’t shown much interest in the law hindering his decisions. “He has the cards,” Wallach said.

So what’s stopping Trump? Lighthizer knows that, while ending NAFTA would remove some incentives to outsource, the only way to revitalize US manufacturing is by negotiating a superior deal. “If Trump really wants to deliver on his promises, he needs to do a new agreement that gets the benefits of trade without outsourcing,” Wallach said.

That’s what makes the positions of the major players so odd. The allegedly “protectionist” Trump administration and NAFTA critics want a new trade agreement. The corporate types, by giving NAFTA partners bad advice, are effectively pushing to eliminate the deal. The tipping point probably comes with the next high-level round of talks in Canada in January. If the stonewalling continues, Trump will likely give the six months’ notice required prior to withdrawal. So the corporate paragons of free trade are the ones paving the way to a NAFTA exit.

Among other things, that would really damage Canada and Mexico, given their trade surpluses and reliance on the United States as a trade partner. Mexico is scrambling, looking to sign an EU trade agreement to soften the blow. But the US market is critical to their future. Will they let auto executives drag them into a disastrous outcome?

The situation is fluid, and there are still enough corporate goodies in the deal for liberal trade reformers to fight for improvements. But it’s the corporate lobby, which loves the status quo of paying two bucks an hour for Mexican labor and spilling toxics wherever it pleases, that is threatening the agreement. Let’s never hear again about who the real “obstructionists” are to free trade.

The negotiations over the Trump tax overhaul have moved from tragedy to farce. You could let monkeys bang on typewriters for several millennia and not come up with an idea as profoundly stupid as what Senate Republicans added Tuesday to appease one of their own members.

Before we get to that, let’s be clear that this astonishingly dumb notion is being scooped on top of a bill that is already economically illiterate. It’s painstakingly designed to punish people making under $75,000 a year and those who happen to live in states that didn’t vote for Donald Trump. It benefits wealthy investors and wealthy people who incorporate; basically being wealthy or being a member of the Trump family is the prerequisite. CEOs (“the most excited group out there,” according to the bill’s architect, Gary Cohn) have given away the game in earnings calls by admitting that the corporate tax cuts, easily the largest chunk of the bill, would flow out to shareholders in dividends and stock buybacks, rather than used to create jobs or raise wages. The bill is a gift to capital owners at workers’ expense.

But Senator Bob Corker and some of his colleagues, like Oklahoma’s James Lankford, are showing some residual concern about deficits. In response, GOP leaders initially limited the total cost of the tax cuts to $1.5 trillion over 10 years, and under Senate rules the bill could not raise the deficit at all after that. Republican leaders reached that number with a variety of gimmicks, like having the individual tax cuts expire after 2025 (while the corporate bounty lives on), and by assuming absurdly high economic gains from the cuts.

Corker called their bluff. He said that as long as everyone believes the tax cuts will super-charge economic growth, he wants a trigger that would automatically raise taxes if those rosy assumptions don’t come to pass. And because the bill can’t pass without the Corker bloc, Mitch McConnell gave it to him. This was enough to pass the package out of the Senate Budget Committee; Corker voted yes and was the margin of victory. Combined with some concessions to Susan Collins, the prospects for Senate passage look pretty decent.

We don’t have the specific details yet, and probably won’t until tomorrow. But just based on the concept, I can unreservedly say that this provision would make the name “Cut Cut Cut Act” seem like the work of Albert Einstein.

Creating automatic tax increases in the event of slow economic growth defies every macroeconomic impulse of the past century. It’s the kind of thinking that got us into the Great Depression, and more recently got places like Greece into a decade of suffering. When the economy slows down, government needs to serve as the spender of last resort by providing stimulus, either in the form of laying out funds or cutting taxes, or both. Either way, it would increase the deficit during a downturn, cycling that money through the economy to influence a recovery. Corker’s trigger would do the opposite. It would decrease the deficit if the economy didn’t reach certain performance targets. It would institute austerity during a time of slow growth. It would result in a tax cut bill almost certain to raise taxes at the worst possible moment.

And by the way, there are already triggers in the bill: The individual changes expire in 2025, which will raise taxes for much of the population. It’s impossible to forecast where the economy will be when that kicks in, but it’s at least plausible that the 2025 trigger and the Corker trigger will hit at the same time, when the economy is struggling, creating an almost guaranteed recession. The concept is, as Matt Yglesias calls it, an “automatic destabilizer.”

Now, none of this should matter to conservatives, not just because they don’t believe in Keynesian fiscal policy. They think it’s axiomatic that tax cuts pay for themselves with economic growth, so the triggers would never come into play. And that’s where the reaction to the triggers gets interesting. All the major conservative groups—the Koch-funded Americans for Prosperity, Grover Norquist’s Americans for Tax Reform, the US Chamber of Commerce—have come out sharply against the triggers. If anything has let the slip show about the intellectual bankruptcy of conservative ideas, this is it. They don’t actually believe their own bullshit about tax cuts and economic growth, at least not enough to gamble on it.

The bigger problem for Republicans is that members of the Senate seem as opposed to the triggers as the conservative K Street establishment. Chuck Grassley was sharply negative about the idea yesterday; so was Pennsylvania’s Pat Toomey and John Kennedy of Louisiana, until adding later that he was “keeping an open mind.” The banging from the Norquists and Kochs of the world is bound to flip some more votes.

There’s perhaps a solution of a pretend, convoluted trigger designed to never fire, which would somehow satisfy the Corker bloc while reassuring conservative anti-taxers. And to be sure, there’s a ton of momentum to get to yes here. Republicans have organized themselves, almost unilaterally, around tax cuts for the past several decades, and they appear determined not to let details or unpopularity get in the way. And if the deficit is a problem, that’s when they implement phase two: cut social spending to the bone, balancing the budget on the backs of the vulnerable while the rich get a windfall.

So maybe that’s the way out, and the Corker bloc folds with a fake trigger and a promise to eat the poor. But if anything close to the original concept makes it into law, Republicans will have accomplished a signature feat: They’ll have created a kind of economic Hamburger Helper that makes recessions into depressions, instantly.

A Hearty Issue

Wow! I’m a longtime small-market gardener who sells at our local farmers’ market. I struggle in the summer to get through all of The Nation’s magazines; I barely have the time to keep up with them. But the special issue “The Future of Food” [Oct. 30] was like reading a copy of Acres U.S.A. (This is an eco-agriculture magazine that keeps us up to date on what’s going on in the organic- and sustainable-farming communities.) The writing was as thorough as any Acres article on the Monsanto and GMO issues. All of the short articles in the forum “The Future of Food” were on target. The Kernza article [“Hacking the Grain”] was superb and, though we don’t grow grains, had me wanting to try it! “What Is the Recipe for Home?” was sad and yet heartwarming, and I’ll be trying the fatteh recipe. It was an amazing issue of well-researched and well-documented articles. Many, many thanks for getting this information out to an audience that might not have been as aware!
Jan Dawson
bellefontaine, ohio

Shell Games

David Dayen’s special investigation “Jamie Dimon and Other People’s Money” [Oct. 23] is fundamentally flawed in its premise.

Dayen sings the praises of Larry Schneider, a vulture debt buyer who has filed a whistle-blower suit and separate racketeering case against JPMorgan Chase. My own report shows that Schneider repeatedly foreclosed on family after family. He threw families from their homes at Christmas, abandoned homes to municipalities, and appealed one foreclosure all the way to the Minnesota Supreme Court, where he lost.

Unmentioned in Dayen’s article is that Schneider already lost the whistle-blower case. Judge Rosemary Collyer ruled that the loans in question were written off years before the 2012 fine. Therefore, it was impossible for Chase to claim credits for the write-offs.

In an ongoing appeal, the Department of Justice adds, “The United States declined to intervene in this suit and does not take the position that Chase failed to comply with the terms agreed to in the National Mortgage Settlement.” The DOJ’s disagreement with the core assertion, which is crystal clear, is also conspicuously absent in Dayen’s piece.

There were a small number of cases where Chase did write off loans it sold. Missing from The Nation’s piece is that Chase offered to buy back every erroneously forgiven loan at a 50 percent premium. Also missing is that Schneider, the vulture debt buyer, refused to sell.

Dayen interviewed one family, the Warwicks. He omits that Schneider purchased their $160,413 loan for only $10,500. Chase mistakenly forgave it and told the Warwicks. When alerted, Chase promptly offered to buy the loan back from Schneider at a premium so the bank could properly forgive it. Schneider refused, and Chase eventually repurchased the loan at full face value, after the Warwicks had been paying Schneider for three years.

Michael Olenick
paris, france

David Dayen Replies

I don’t think of Larry Schneider as a saint. I do not endorse how he chooses to run his business, nor did I “sing his praises” in the article. But his case illuminates the actions of a far more powerful institution, which I found newsworthy regardless of the messenger. Whoever Larry Schneider is, he purchased a bundle of loans from JPMorgan Chase, which proceeded to continue to pursue collection on those loans and keep payments intended for Schneider for itself. Then Chase forgave a number of the loans as part of an attempt to obtain credit for federal mortgage settlements. I don’t think it’s worth dismissing that conduct because of the business practices of the investor who was subjected to it.

This pattern of facts was not limited to Schneider; Chase’s own internal documents identify 108 loans from 21 different third-party investors, out of a sample of 500 (over one in five). Contrary to Mr. Olenick’s assertion, Chase did not offer to buy back nearly half of the 108 erroneously forgiven loans. Furthermore, the scale of JPMorgan Chase’s erroneous loan forgiveness exceeds that initial population, as Schneider identifies hundreds more of his loans that Chase subsequently forgave. Chase has only admitted to the first 108.

Mr. Olenick’s allegation about Schneider’s whistle-blower case is a complete misreading of Judge Collyer’s ruling. He’s referencing a part of the ruling that involves the Home Affordable Modification Program, which I never referred to in my story. In fact, we know the date on which the forgiveness letters I reported on began: September 13, 2012, several months after the signing of the National Mortgage Settlement. The letters all reference “a recent mortgage servicing settlement reached with the states and federal government,” i.e., the National Mortgage Settlement.

Judge Collyer’s rationale for dismissing Schneider’s National Mortgage Settlement claim is entirely a technical matter about failing to follow certain dispute-resolution steps. The Justice Department found that reasoning so shoddy that it submitted an amicus brief in the appeal asking to throw out the ruling, and sought time in oral arguments to make its case. So one of the most deregulatory Justice Departments in history found the ruling to be dangerous and overly generous to JPMorgan Chase. Given Judge Collyer’s history of accepting arguments from financial institutions (see MetLife v. Financial Stability Oversight Council, among others), this is not surprising.

Finally, the idea that Chase offered restitution for a portion of its conduct and should therefore be absolved of all blame is in fact Chase’s own argument in legal pleadings. I believe Chase’s actions here were egregious: selling loans and continuing to collect on them, and then forgiving loans it had no interest in whatsoever. I think these actions should be scrutinized, up to and including Jamie Dimon’s involvement. I have little expectation that this will occur, but I thought it important to reveal.

David Dayen
los angeles

Stars and Semiautomatics

Stephen Kroninger’s “OppArt” version of the US flag on page 8 of the October 23 issue hit me right in the gut and our dominant culture right on the nose. “OppArt” isn’t quite appropriate, however: Kroninger’s “flag” is Op-Op-Pop-Pop-Bang-Bang Art.
Steve Coffman
dundee, n.y.

Correction

A graphic on page 39 of the “Future of Food” issue [Oct. 30] misrepresented the percentage of beef in the United States that is packed by National Beef. The actual number is 13, not 15, percent.

The regulatory mole inside the deregulatory Trump administration has decided to exit. Richard Cordray, director of the Consumer Financial Protection Bureau, announced today that he would resign by the end of the month. It’s a great blow to consumers facing the usual array of financial deceptions.

Cordray was among the last Obama-era officials still leading a federal agency. His five-year term wasn’t to end until July 2018, and, though Republicans constantly pressured President Trump to fire him, Trump could do so only for a specific cause, which could have led to a major lawsuit and a non-trivial likelihood of Trump’s businesses’ and even his tax returns’ being implicated, because a potential legal issue would be whether Trump fired Cordray because of personal liability.

In other words, Cordray was somewhat protected from being canned. Trump himself reportedly said he didn’t want to make Cordray a martyr by firing him. So why wouldn’t Cordray stick it out until next July, maximizing the difference he could make in the lives of consumers before Trump chose some corporate lawyer or bank CEO to replace him?

Part of the answer lies in the vote last month to overturn the CFPB’s arbitration rule, which would have protected a consumer’s right to join a class-action lawsuit over a financial dispute. Congress brushed aside the bad publicity of the Equifax and Wells Fargo scandals to nullify the CFPB rule; Vice President Pence supplied the tie-breaking vote in the Senate, and President Trump eagerly signed the legislation (albeit behind closed doors).

So Congress and the president made very clear that any advance through CFPB rulemaking to assist consumers would be summarily slapped down, effectively curtailing the agency’s authority. CFPB has one big rule outstanding, an initiative to add an ability-to-pay requirement to payday loans. But that rule isn’t set to take effect until July 2019, a year after Cordray’s term would have expired. Whether that rule ever saw the light of day was always going to be up to Cordray’s replacement. Any subsequent rulemaking would likely have the same problem.

If rulemaking is as a practical matter nullified, all Cordray would have left to dictate is enforcement. This is obviously important—CFPB has recovered $12 billion for almost 30 million consumers in its six years of existence. But there are two additional considerations.

First, everyone suspects that Cordray resigned early so he could run for governor of Ohio. An appearance at the AFL-CIO’s annual Labor Day Picnic in Cincinnati September didn’t quiet those rumors. Cordray, a former state attorney general, state treasurer and state House member, faces a February 7 deadline to file for the governor’s race. And he would become the likely favorite, as the rest of the Democratic field hasn’t been able to win statewide in Ohio. Maybe he’s resigning a couple months months early, but you need some time before the May primary to assemble a campaign. And I would argue that you can do more good with the governorship in Ohio for four to eight years than the directorship of a neutered CFPB for another eight months.

By the way, I find the chatter that Cordray’s leaving a federal agency to run for office thus makes CFPB overly “political” to be absurd. Cordray was an Ohio politician; returning to politics is perfectly acceptable. Most of his counterparts flip out of federal agencies to go work for the entities they regulated, or as lawyers for those entities, or as lobbyists for the same. Ben Bernanke advised a hedge fund after stepping down as Federal Reserve chair. That undermines the credibility of the government far more than someone’s trying to transition from upholding consumer protection laws to representing the people of Ohio.

There’s one additional factor. The CFPB director gets a five-year term, regardless of who sits in the White House. As noted, there are barriers to firing the director. Quitting early means that President Trump gets to name a successor early. But it also means that individual’s five-year term will expire in 2022 rather than 2023. If Trump loses reelection, it means that a Democratic successor would get to name a replacement earlier in her term.

Obviously, the political calculations of this don’t matter all that much to consumers, who will now lose the cop on the beat watching over predatory lenders and unscrupulous financiers. They were going to lose that watchdog anyway, of course. But that doesn’t soften the blow. Over the years, Cordray’s CFPB sanctioned credit-card firms for selling phony add-on products, mortgage companies for deceiving borrowers, and Wells Fargo for issuing fake accounts. It has sued companies that defraud student-loan borrowers and sneaky debt-relief companies that pose as government agents. All of that enforcement will evaporate, just as total Securities and Exchange Commission penalties for wrongdoing fell sharply in the first year with a Trump-appointed leader.

There’s really no chance that anyone but a bank-supporting hack will soon run this agency, even on a temporary basis. The White House quickly announced that it would soon “announce an acting director” in addition to the nominee to supplant Cordray. This has become a real scandal under Trump. Usually, when an agency head steps down, the first deputy gets elevated to the top slot until confirmation of a replacement. But the Trump administration has installed loyalists over that line of succession.

At the Office of the Comptroller of the Currency, Trump took a bank-defense lawyer off the street and put him in charge of one of the most important bank regulators. More recently, David Kautter, a former Ernst & Young executive who snuck through confirmation to a lower-level Treasury position this August after a hearing held in a secret room off the Senate floor, just became acting IRS commissioner this week. So immediately, someone in line with Trump’s deregulatory impulses will take over CFPB and call off the dogs. The identity of that person, or the eventual confirmed director, is almost irrelevant.

That’s a serious problem for anyone with a loan. It was also inevitable after Trump’s election. Cordray probably did the right thing by leaving early, seeking a position where he can better serve the public. But, for bank customers, this is certainly a sad day.

It’s natural to believe that Donald Trump runs the government as a personal self-aggrandizement machine with an eye toward rewarding friends and punishing enemies. We have enough case studies reinforcing that belief. But this perception can also be a curse, with the appearance of impropriety overwhelming all policy decisions, even ones that miraculously appear to be half-decent.

That’s what’s going on with the breathless news stories around the proposed $85.4 billion merger between AT&T and Time Warner, creating an integrated conglomerate in telecommunications and entertainment. The Financial Times reported yesterday that Trump’s Justice Department demanded that AT&T sell off CNN, a network Trump has targeted as “fake news,” as a condition of the merger. “It’s all about CNN,” said the anonymous leaker. And pundits jumped on this narrative—almost certainly introduced by AT&T and its allies—to lament the rise of government-by-vendetta and the end of the free press as we know it. Even lawmakers got into the act, expressing concern.

Later reports showed this to be untrue. The Justice Department offered AT&T two choices: Sell Turner Broadcasting, a collection of over a dozen stations of which CNN is only a part, or sell off DirecTV, AT&T’s satellite-television distributor. If one of the options for AT&T involves keeping CNN, I don’t know how “it’s all about CNN” could be true. AT&T’s CEO Randall Stephenson further muddied the waters by saying today, “I have never been told that the price of getting deal done was selling CNN.”

Why would the Justice Department require this divestment? The answer goes back to why this merger is terrible for consumers and the media industry as a whole.

You may be aware that we have a terribly consolidated telecommunications landscape. Cable, broadband, and wireless services have fallen into fewer and fewer hands. In most of the country, people have just one choice for their cable or broadband provider. And these distribution monopolies want to control the monopolies that produce the content.

Back in 2009, the cable company Comcast announced the purchase of NBC Universal. And the fear there was all about vertical integration. If a cable provider owned a bunch of networks and movie studios, it could use its dominance in distribution to favor its own content and blocking competitors on its network. Or it could increase the cost of licensing its own channels to rival cable companies, or simply prevent those channels from appearing on streaming services. If you control a chunk of programming and the method of distributing that programming, it opens up opportunities for mischief.

The Obama Justice Department and Federal Communications Commission dealt with this concern by approving the merger with conditions, sometimes referred to as “behavioral remedies.” It said that Comcast had to negotiate prices with competitors who want to carry NBC programming, rather than set them unilaterally. It required Comcast to make “comparable programming” available to all. And it sought to prevent bundling and other exercises of market power.

These remedies didn’t work, as Senator Al Franken explained. Comcast violated the conditions, for example by putting NBC channels in prime positions on Comcast cable and moving competitors like Bloomberg to the nether regions, or favoring NBC channels in a live-streaming service called StreamTV. Comcast has faced numerous lawsuits and complaints over these violations, but profited handsomely from the merger.

Makan Delrahim, the new head of the Justice Department’s antitrust division, has said publicly that he doesn’t like behavioral remedies, finding them ineffective. Yet the AT&T/Time Warner deal raises the exact same concerns as Comcast/NBC. And the evidence suggests the concerns about Comcast were valid. So what’s DoJ to do?

If you believe (correctly, I’d say) that behavioral remedies are too convoluted and hard to enforce, the options available are to reject the deal or force a divestiture. If you don’t want the same company owning the pipes of distribution and the content flowing through those pipes, they have to either sell off the content or the pipes. And that’s precisely what the Justice Department asked of AT&T.

I don’t know how that plays into the narrative of Donald Trump’s assault on CNN. It’s not even clear to me that CNN would be worse off if Turner Broadcasting, a diverse bundle of sought-out programming, were sold to a willing purchaser. The Justice Department simply appears to want to prevent the potential hazards of vertical combination.

Antitrust lawyers have been conditioned over the past 40 years into thinking that vertical combination is fine and should never be questioned. Witness the incredulous takes from the antitrust bar at the Justice Department’s objections. But this is well within legal precedent. In fact, one application came when Time Warner bought Turner Broadcasting in the first place. In 1996, the government forced John Malone, a part-owner in both Turner and a major cable operator called TCI, to divest of most of his holding. They specifically didn’t want TCI to have a stake in a large chunk of cable programming while being a major cable operator.

Also, this deal isn’t entirely vertical. DirecTV offers a streaming service called DirecTV Now, a direct competitor to Time Warner’s HBO Now offering. If the two companies merge, you could expect AT&T to yank HBO Now and bundle it with their other channels in the DirecTV Now package. That’s why divesting of DirecTV would open more consumer choice in the online video market. AT&T executives have said explicitly that DirecTV Now is critical to the deal, suggesting that foreclosing competition is the whole point.

I don’t even think the Justice Department request goes far enough. Even with the divestiture, AT&T could still pair HBO and Warner Brothers with DirecTV, or its U-verse cable service with the Turner channels. But some divestiture would enable rival services to compete, and maintaining neutrality between carriers and content creators would force that competition on price and quality instead of how many channels one conglomerate controls. In other words, it’s far more thought-out than “Trump hates CNN,” though that’s how it’s being played in the media.

But AT&T clearly doesn’t want to abide by this divestiture request, and it is planning to fight it in court. And that fight started yesterday when the corporation leaked the news that DoJ wanted it to sell CNN. It knew exactly what reaction that would provoke: that Trump was meddling in antitrust law to attack an enemy. This will likely also be AT&T’s strategy in court. The company will claim that Trump has always had it in for CNN, said during the campaign that his administration would never agree to the proposed merger, and interfered illegally in the process for vindictive ends.

All of those facts are basically true. The tragic part of this situation is that Trump is, in fact, a vindictive bully. So even if his Justice Department merely sought to handle a real threat of media and telecom consolidation with a structural remedy that’s well within prior practice, the appearance of a conflict of interest might be enough for a judge to side with AT&T. So this story is about AT&T’s playing the negative public sentiment toward Trump to its advantage, to win in the court of public opinion for its really damaging merger with Time Warner.

As Zach Carter noted, Trump is the worst possible messenger for an anti-monopoly message. Unfortunately, we cannot trust him to follow established norms and stay out of law-enforcement matters. His big mouth might turn what would have been a rare bright spot, a long-overdue crackdown on media concentration, into another failure.

The House Republican tax bill unveiled today is like a just-completed airplane rolling out of its hangar. Soon lobbyists and lawyers will pick over its provisions and try to salvage parts seen as critical to its clients. For now, all we have is the current blueprint, which will likely grow more forgiving to powerful interests. And it’s already extremely generous on that front.

Here are some of the main features of the bill, known as the “Tax Cuts and Jobs Act,” which really isn’t that much better than the “Cut Cut Cut Act,” Donald Trump’s favored title. It reduces the number of income brackets from seven to four, keeping the top marginal tax rate at 39.6 percent but increasing the threshold for that to $500,000 for individuals and $1 million for couples. It cuts the corporate tax rate from 35 to 20 percent and, while some business deductions are eliminated to make up for that, others are expanded. It does away with the estate tax, doubling the threshold to start and then phasing it out over six years. And it repeals the Alternative Minimum Tax, which affects high-income households.

These are raw giveaways to the richest people in America, who see more favorable rates on much of their income, no restrictions on passing their money to heirs, and significant drops in the rates for the corporations they own and invest in. On the flip side, there’s almost nothing here for anyone in the lower tiers of income. Sure, the doubling of the standard deduction will shield up to $24,000 for a couple from taxation; but rates actually go up on the first $18,000 of income. Those who already don’t pay anything in federal tax still won’t, but there are no new refundable tax credits to increase their benefits. A $300-per-person family credit phases out after five years. The Child Tax Credit is enhanced, but new indexing for tax brackets that will make taxes marginally more expensive over time will offset that. Overall, the help the middle class will see in this bill pales in comparison to the gifts for the rich.

There are also two important pieces of the bill that could open up huge loopholes for the wealthy and corporations to shelter even more of their money. The bill reduces the tax rate for “pass-through” income, earned from businesses like partnerships, to 25 percent. This creates incentives for the rich to set up corporations and take advantage of that far lower rate. The bill also converts to a territorial tax system, which doesn’t tax corporations on income earned overseas. Presently the United States does tax foreign income, but only when it’s brought back to the United States, which many corporations fail to do. The incentives here run in the direction of claiming as much income as possible was earned overseas—for example, through patents or other intellectual property registered in a low-tax foreign country. Tech firms and pharmaceutical companies practice this consistently, and others will surely follow their lead if the law changes.

So the baseline of this bill is a slew of money going to the wealthy and corporate treasuries. But Republicans have a problem. Because they don’t want any Democratic input to this bill at all, they must use the budget-reconciliation process, which prevents any deficits from the bill outside the first 10 years of its effect. In addition, the budget resolution limits deficits in those first 10 years to $1.5 trillion. So, somehow, Republicans had to pay for these tax cuts, because what I just described would result in over $5 trillion in deficits in that budget window.

The associated problem here is that Republicans are fond of promising tax cuts for everyone, without anyone ever having to feel the pain. But when you actually put words to paper, that pain becomes apparent.

For instance, Republicans scaled back the state and local tax (SALT) deduction, which particularly affects the upper middle class in high-tax states like California, New York, and New Jersey (and some red states too). It happens that Republicans represent many of those districts; in particular, this bill is a killer for the seven House Republicans fighting to keep their jobs in California. While property taxes can still be deducted up to $10,000, state income or local sales taxes cannot. Because of Proposition 13, California’s property taxes are rather mild compared to state income tax. So Californians lose the biggest tax deduction of the bunch, while keeping a less lucrative one.

The bill also caps the mortgage-interest deduction at $500,000 instead of the current cap of $1 million. This theoretically hurts upper-middle-class folks in high-priced real-estate areas; in other words, the same Republican-led districts as the SALT repeal. If it reduces home prices, the effect is salutary, but I’m not sure it will. One work-around is to have people seeking mortgages for between $500,000 and $1 million in property get two loans, one for $500,000 and one for the rest, and take the interest deduction on each. I saw this kind of split mortgage repeatedly during the housing bubble, usually to get around down-payment requirements. This enriches real-estate brokers (and nickel-and-dimes those GOP districts) but does nothing much for the US Treasury.

Where the money scramble really hits home is in things like the elimination of the deductions for student-loan interest, or moving expenses, or medical expenses. Elderly people in nursing homes and struggling students lose benefits so the rich can get a tax cut. This could be really consequential for people with 24-hour care or in nursing homes, who spend the majority of their income on medical expenses.

Other nips and tucks actually sound good in isolation. Businesses lose some deductions for interest payments. (Real-estate companies—like the one of a certain 45th president of the United States—are exempt from that restriction). There’s a 10 percent tax on high-profit foreign subsidiaries, a stab at preventing the shifting of business income abroad. Businesses would no longer be able to deduct “performance-based” executive compensation over $1 million, a loophole which has led to runaway stock options and short-term CEO thinking. Big banks lose a tax perk on FDIC payments. The tax-exempt status of bonds that build sports arenas would be repealed. Large university endowments would pay an assessment on investment income.

These sound great, until you realize that the savings will just be shoveled to the tax cut for the rich and corporations. We’ll have to wait for detailed assessments, but if the end result is that one way the wealthy benefit is just replaced by another, I wouldn’t exactly call that progress.

Another loophole, designed to bring aboard religious conservatives, would repeal the Johnson Amendment, which prevents churches from engaging in political activity. But because this also affects all “C3” organizations, it could provide another dark-money funnel, giving donors not only a secret channel to donate but a tax-deduction present.

Will this pass? Republicans are obviously unified in wanting to help out wealthy contributors. Where it might fall down is on a maddeningly complicated issue: pass-through income. Sensitive to the charge that accountants will game the rules to make anyone with high earnings a pass-through corporation, reducing their marginal rate from 39.6 percent to 25 percent, the bill put in “guardrails” that raise the final amount of tax paid. Expect a huge fight over that, as partnership corporations argue they’re losing out. With all the talk of jobs and perks for the middle class, the fate of the tax bill might come down to whether Republicans made a loophole too tight.

Back in August I profiled Family Farm Action, a new economic-justice organization formed to take on Big Ag monopolies and fight for independent farmers. One of its biggest priorities was to pressure the Trump administration to complete rules proposed by Obama’s Department of Agriculture a month before Inauguration Day, under the Grain Inspection, Packards, and Stockyards Act (GIPSA). One of the regulations would have clearly defined the scope of certain predatory and retaliatory practices, and allowed farmers to charge producers with violations of the rules without a specific finding of harm to the entire market for their produce or livestock.

On Tuesday, the USDA withdrew the rule, a betrayal of exactly the kind of voters who turned out for Trump in large numbers in last year’s election. The decision further immiserates family farmers who have no choice but to submit to the machinations of Big Ag processors. And even some Republicans in Congress are irate.

Under GIPSA, it’s already illegal for companies that contract with farmers for their produce or livestock to engage in unfair or deceptive practices. But farmers needed to establish definitive proof of competitive injury across the entire market before USDA would step in. This created an uneven playing field; farmers would be burdened with suffering for perhaps years before any action would be taken. They might not be in business by the time USDA got around to helping. Also, it created a loophole where producers could single out individual farmers for harm, leaving them with no recourse as long as they didn’t treat the entire market the same way.

That restriction locked in a perilous reality, particularly for livestock operations in America. Most hogs and chickens are raised by farmers but owned by big corporations like Tyson or Smithfield. The farmers’ contracts force them deeply into debt to keep up with dictated standards from the companies, and pit them against other farmers in the community vying to generate the fattest animals. This “tournament system,” a Darwin-style survival of the fittest, has devastated farm communities with cutthroat practices that squeeze earnings for their labor. Shocking numbers of poultry farmers live in poverty, while corporations prosper from their efforts. And if farmers speak up about this injustice, they get less pay or lower-quality chickens, a direct form of retaliation to shut them up. In other words, corporations have all the control, and the rules would at least give farmers a chance to battle back.

The rules themselves, originally called for in the 2008 Farm Bill, took way too long to get finalized. President Obama dragged his feet for a couple years, after promising farm communities he would protect them. After Republicans won Congress in 2011, they instituted a block on the rules in successive appropriations bills. A public shaming from John Oliver led the GOP to finally lift the restriction, but this virtually ran out the string on Obama’s tenure, giving Trump’s USDA the chance to roll them back quickly. Because the rules were never implemented, the new regime could delay the effective date from February to October, and then withdraw the rule entirely.

In public comments, industry groups largely whined about increased litigation as a result of the rule. They warned of billions of dollars in unanticipated costs that they would have to pass on to consumers. Hilariously, the industry added that it would just have to consolidate even more by buying out suppliers, threatening to solve a problem of concentration with more concentration. Of course, we have actual antitrust laws designed to prevent such dominance, but at this point they’re more of a theory than reality. Finally, they said that the rules would stifle “innovation,” and by innovation they mean the desperation that comes from having to raise bigger chickens on less feed than your neighbor in a war for the tiny pile of money Big Ag doesn’t keep for themselves.

Randall Jones, the acting administrator of GIPSA, bought the industry arguments. The public justification for withdrawal talked mainly of problems with legal analysis and administrative procedure. But, amazingly, GIPSA recognized that the rule would provide “broader protection and fair treatment” for meat and poultry farmers, “which may lead to more equitable contracts.” Still, after a cost-benefit analysis, Jones wrote that the savings to the agency from not having to enforce the rule outweighed any benefit for farmers.

Supporters of the rule immediately pounced. Public Citizen described the action as “fully centered on handouts to big business” and the result of lobbying muscle in Washington. Mike Weaver, a chicken farmer and leader of the Organization for Competitive Markets, a group affiliated with Family Farm Action, called it “a slap in the face to rural America and America’s farmers and ranchers.”

Weaver demanded that Trump pass an executive order to reinstate the rule, which is unlikely, since he hired the people who withdrew it. Indeed, Trump’s agriculture secretary, Sonny Perdue, was governor of Georgia, one of the biggest poultry-producing states, and is tied deeply to Big Ag interests.

Interestingly, Weaver is actually a Trump-supporting Republican. The degree to which conservative rural interests have been stung by this is striking. Senator Chuck Grassley (R-IA), upon learning of the withdrawal, expressed “violent opposition” to GIPSA on the issue. “They’re just pandering to big corporations,” Grassley said. “They aren’t interested in the family farmer…. Everybody thinks draining the swamp is firing a whole bunch of congressmen and a whole bunch of bureaucrats; this is a perfect example of a swamp that’s being refilled by withdrawing these rules.”

Will this backlash result in a rural-state turn away from Trump? Only if there’s an actual alternative in these regions. Farm-state residents over the past decade have seen the Democratic Party ignore their calls for help and the Republican Party side with their tormentors. No wonder they feel so powerless, and angry.

When dealing with President Donald Trump, it is always important to separate what actually matters from what doesn’t. Yesterday, a high-profile executive order to undermine the individual-health-insurance-market framework of the Affordable Care Act was more of a statement of aspirations than an immediate threat. Meanwhile, Trump put into motion a much more direct, unilateral act of sabotage

First, let’s look at that executive order. We’ve become so dazzled by the Trump Show theory of politics, where every statement or tweet can move mountains, that we assume everything he does has world-historical importance. But, in general, Congress makes laws, not the president with one stroke of a pen. The executive order states that it’s the policy of the Trump administration to create a high-quality, affordable health-care system, which Republicans have been trying to come up with for seven years. But Trump has a few actual ideas.

He wants to expand “association health plans,” where small businesses band together to obtain better deals on health insurance, and short-term insurance, a catastrophic-style policy that people in job transition can currently access for up to three months. Both of these alternatives are not subject to many of the ACA’s minimum-benefit requirements.

Association health plans, under the Trump order, would be considered large employers, subject mostly to state regulations—and if the association included multiple states, it could pick which state’s laws to follow (i.e., the one with the least regulations). This would certainly create a race to the bottom, like we have in the credit-card industry, where association health plans that offer benefits from the most deregulated state fan out across the country.

Short-term insurance is not subject to ACA benefit-mandates at all. Trump wants to increase the duration of that insurance from three to 12 months and make it renewable, so that it becomes more of an everyday option than a stopgap. There’s also a nod to health-reimbursement arrangements, flexible-spending accounts employers can offer so people can use pretax dollars to pay medical expenses. Trump wants to open those up to anyone.

The expected effect would be for healthier people to jump out of ACA markets, making risk pools sicker. Insurers would react by accelerating cost increases in those plans, or possibly bugging out, crushing the insurance exchanges.

But the operative word is “wants.” What the executive order actually says is that cabinet officials “shall consider proposing regulations” on these options, “consistent with law.” It doesn’t even specify what should be done with those regulations, just that they should be expanded in some way. There’s not even a guarantee that individuals would be able to buy into the association health plans, which would be the most direct way to attack the exchanges.

Any proposed regulations would have to go through public comment and all the hoops of the Administrative Procedures Act—studies of the policy’s effect, Office of Management and Budget review, etc.—a process that takes months, if not years. Finally, Trump asks for the secretary of health and human services (a vacant position at the moment) to write twice-annual reports about what steps can be taken to make this a reality—maybe you can call this brainstorming.

So that’s not an immediate evisceration of the law. It creates a potential for mischief, but only if it gets through the thicket of administrative requirements and also the judiciary branch. There’s no question Democrats will sue to block changing the ACA by executive fiat. Health-care analyst Tim Jost is skeptical that the association-health-plan expansion would pass legal muster, for example. It’s also unclear whether these plans could actually sell insurance “across state lines,” Trump’s familiar talking point; networks would have to be rented in each state, and the associations may not be able logistically to pull it off.

This executive order will also make the choice of a health-and-human-services secretary to replace Tom Price a giant political football. There aren’t 50 votes in the Senate for radically transforming Obamacare, and there may not be 50 votes for a cabinet official who wants to do it without consultation from Congress.

But while wonks debated the import of the executive order, Politico leaked a far more consequential shot at the ACA. The Trump administration has apparently decided to end cost-sharing-reduction subsidies to insurers, which had been the subject of considerable uncertainty for months. These $7 billion annual payments, designed to help insurers reduce out-of-pocket costs for their lowest-income customers, is entirely within the administration’s capacity to nullify, at least at this point. Congress never formally funded the payments before the Obama administration started paying insurers, leading to a lawsuit between the two branches. (The Obama administration contended that Congress permanently enabled funding.)

Trump has threatened to cancel the subsidies for months; that very fact has caused insurance premiums to skyrocket because of the uncertainty. At some level this threat has been priced in, and may not even be a big deal for 2018. But getting rid of the subsidies would eventually cause problems. Insurers still have to reduce cost-sharing for low-income patients, and have said they’ll raise premiums as a result. Because most Obamacare-exchange consumers get federal subsidies that cap their portion of premiums, the major (but not entire) impact of this would be a spike in government spending. Either the insurer gets the money, or individuals do. However, if insurers find the markets too unbearable without cost-sharing payments, they could leave, which would certainly worsen things.

Even here, there are options. California Attorney General Xavier Becerra has already threatened to sue, and health insurers could join that lawsuit. Plus, Congress could appropriate the funds itself, which was the subject of the bipartisan “market stabilization” talks. That would make the lawsuit irrelevant and take the threat out of Trump’s hands.

Thursday’s moves are just part of Trump’s attempted sabotage of the Obamacare exchanges. He has massively reduced the length, advertising, and assistance for open enrollment, and plans to shut down healthcare.gov for large portions of practically every Sunday during that period. But it’s important to note that Trump’s going after a very narrow slice of the population. Medicare and Medicaid aren’t being targeted here, nor the Veterans Affairs system. Only the private market-reliant, Rube Goldberg system of covering people who don’t get insurance at work is on the chopping block. And the very fact that this market has very little competition and has seen premium spikes contributes to its vulnerability. People like Obamacare more now that it’s been under threat, but this danger for a market that’s hasn’t really worked as promised and is limping along won’t go away, until we get a more coherent health-care system that guarantees quality and affordable coverage for everyone.

Today we published a story about how JPMorgan Chase used other people’s money to pay off penalties assessed for the mortgage-related fraud that contributed to the 2008 financial crisis. The bank forgave numerous loans that it had sold years earlier, and then used those cancellations to receive credit under a pair of settlements with state and federal prosecutors. (JPMorgan declined to comment on this story.)

The revelation comes out of two lawsuits filed by one of the purchasers of JPMorgan Chase’s loans, Larry Schneider, an investor from Boca Raton, Florida. And the narrative Schneider offers for how he wound up in this fight, if accurate, provides a new window into how Chase treats the people it does business with. The first-person account calls to mind Bernie Sanders’s famous assertion that “the business model of Wall Street is fraud.”

Initially, Schneider had a decent relationship with JPMorgan Chase. From 2003 to 2008, S&A Capital Partners, one of Schneider’s three companies, bought 531 mortgages from Chase for less than face value. Schneider then worked out new repayment terms, allowing borrowers to stay in their homes. By being flexible and dealing with homeowners directly, Schneider was able to create a business that worked for him—and his clients. “We ask borrowers what day of the month they’re able to make a payment,” he said in an interview. “We’re able to create stability for the borrower and help their credit.”

Schneider reports no significant problems in working with Chase during this period. But near the end of 2008, as the financial crisis raged, Schneider’s Chase contact, Eddie Guerrero, showed him a bulk spreadsheet of over 6,000 mortgages. Guerrero said these were primary mortgages (known as “first liens”) that had been delinquent for over 180 days, located in the hardest-hit areas of the country. He told Schneider that the bank no longer found it viable to hold onto these properties. Instead, the “highest levels of management” simply wanted to get rid of the mortgages.

Guerrero sent a data tape for Schneider to scrutinize. Schneider’s first hint that something was off was when he found properties on the list that JPMorgan had already sold him. Guerrero apologized, claiming his team had made a mistake.

Overall, the tape was a mess, lacking borrower names, property addresses, even the payment history or amounts due. That’s because these were loans Chase had stuffed into the Recovery One (RCV1) database, a toxic-waste dump for defaulted mortgages Chase had no hope of resurrecting.

On RCV1 loans, Chase ostensibly didn’t follow any federal requirements for servicing mortgages, like giving borrowers the chance to pay off past-due amounts. The RCV1 loans were “charged-off,” a legal term allowing Chase to collect default insurance, and sent out to third-party collection agencies, which then attempted to squeeze whatever cash they could out of the borrowers. Specific information about the loans was not retained.

Guerrero promised Schneider several times that he would deliver the full data on the mortgages. Behind the scenes, employees at Chase were scrambling to patch up the information. According to an internal e-mail quoted in one of the lawsuits, Guerrero asked JPMorgan Chase colleagues, “Do we have a list that contains the entire collateral address or can we bump this list up against something to fill in the street address?”

Guerrero enticed Schneider by highlighting valuable, erroneously charged-off loans—“cherries,” he called them—hidden in the database. A few cherries could recoup whatever Schneider paid for the loans all by themselves. Guerrero also promised future benefits if Schneider helped Chase out. “This is an important issue for the way higher ups, so it makes me look like a hero and should help you get some good deals too,” Guerrero wrote Schneider on November 6, 2008. He was pushing for a sale by the end of the year to keep the RCV1 loans off Chase’s 2009 books.

Schneider considered Guerrero a friend. “I never had a problem with him in 1,000 transactions,” he said. And he was able to confirm that there were some “cherries,” mortgages with balances of $500,000 or more located in good neighborhoods. But Schneider was busy with another major loan purchase with HSBC, so he turned down the offer.

Guerrero then pitched Schneider a bargain-basement deal: $200,000 for approximately $100 million in mortgages. It was so trifling—two-tenths of a penny on the dollar—that Schneider couldn’t help but bite. Oddly enough, by the time Schneider made the deal (through a separate company, Mortgage Resolution Services), the Mortgage Loan Purchase Agreement included 3,529 loans initially worth $156 million, a 56 percent upsell for no additional cost.

But Schneider wasn’t getting what he asked for. Chase stated the loans were primary mortgages; but Schneider claims that significant numbers of them were home-equity loans or “deficiency judgments,” overdue balances on loans already put into foreclosure. Deficiency judgments are not even mortgages; there’s no property to secure as collateral if the debt isn’t repaid. Numerous properties, in fact, were occupied by whoever bought them after Chase foreclosed.

Chase also said it owned all the loans and had the right to transfer them to Schneider. But many of them, according to an internal October 2008 spreadsheet cited in one of the lawsuits, were owned by other investors. Chase was selling loans it didn’t own to a third party. Plus, Chase promised in the purchase agreement that “each Mortgage Loan complies…with all applicable federal, state, or local laws.” But the RCV1 loans were not being serviced according to Schneider, and therefore weren’t compliant. “They took everything that was a liability or a fraud and just threw it in there,” he said.

After the sale, Schneider never got the complete loan data, including the key documents required to prove ownership. His company painstakingly recreated loan information through cold calls and public-records searches. But it were severely hampered in doing anything with the properties without the documents.

As a final insult, Chase told Schneider in March 2009 that it was recalling $6 million in loans that were included by mistake. These were the cherries. Schneider saw it as a bait-and-switch: Chase hooked him with some valuable loans intermingled with the dreck, and then took the good stuff away. The purchase agreement prohibited pulling back any loans after the sale, but since Schneider hadn’t yet received the full loan information, there was no way for him to claim possession. “I really didn’t have any recourse,” he said.

Chase never stopped trying to collect on these loans. Both Chase and third-party debt collectors acting on its behalf deluged borrowers of Schneider’s loans with letters asking for payments.

A series of letters to a Mr. Fred Allen Frederick of San Antonio, Texas, on a loan Schneider purportedly bought, serves as a good example. “We know you struggled to make your mortgage payments,” Chase wrote Frederick on January 21, 2015. “Together, we can find a solution.” By July 2015, Chase was advising Frederick about “new options when it comes to your mortgage debt,” including a repayment plan to “pay off the amount over time.” His account balance had somehow shrunk. But in a September 2016 letter, Chase was still hoping to work out a solution with “a new team” assigned to the debt. Even by May of this year, Chase was soliciting Frederick, stating that “we may be able to settle for less than you owe.”

These letters look somewhat suspicious even before you learn that Chase didn’t even seem to own Frederick’s loan anymore. Think of all the different revenue streams JPMorgan Chase managed from these same toxic loans. It took the $200,000 from Schneider, borrower payments intended for the owner but routed to and held by Chase, payments from insurance carriers on the defaulted properties, and whatever money eked out from debt collection. And then, as we detail, when mortgage settlements required Chase to provide consumer relief for homeowners, it likely used many of these same loans sold to Schneider and other investors, forgiving them and taking credit toward its penalty.

We can’t say whether Chase treats all of its clients the way it appears to have treated Larry Schneider. But in 2012, former Goldman Sachs manager Greg Smith explained how modern bank culture mostly involves determining new and exciting ways to rip off clients. That’s certainly how these allegations feel. Chase reportedly used Schneider to dump off its legal exposures, then changed the terms of the deal after the fact to maximize profits. Schneider managed to be one of the few investors with the means and determination to fight back; he’s four years into these cases. But what about all the Chase customers who don’t have that ability?

“I’ve dedicated the last six or so years of my life, in pursuit of justice,” Schneider said to me. “I have a moral obligation to never give up and never give in.”

You know the old joke: How do you make a killing on Wall Street and never risk a loss? Easy—use other people’s money. Jamie Dimon and his underlings at JPMorgan Chase have perfected this dark art at America’s largest bank, which boasts a balance sheet one-eighth the size of the entire US economy.1

After JPMorgan’s deceitful activities in the housing market helped trigger the 2008 financial crash that cost millions of Americans their jobs, homes, and life savings, punishment was in order. Among a vast array of misconduct, JPMorgan engaged in the routine use of “robo-signing,” which allowed bank employees to automatically sign hundreds, even thousands, of foreclosure documents per day without verifying their contents. But in the United States, white-collar criminals rarely go to prison; instead, they negotiate settlements. Thus, on February 9, 2012, US Attorney General Eric Holder announced the National Mortgage Settlement, which fined JPMorgan Chase and four other mega-banks a total of $25 billion.2

JPMorgan’s share of the settlement was $5.3 billion, but only $1.1 billion had to be paid in cash; the other $4.2 billion was to come in the form of financial relief for homeowners in danger of losing their homes to foreclosure. The settlement called for JPMorgan to reduce the amounts owed, modify the loan terms, and take other steps to help distressed Americans keep their homes. A separate 2013 settlement against the bank for deceiving mortgage investors included another $4 billion in consumer relief.3

A Nation investigation can now reveal how JPMorgan met part of its $8.2 billion settlement burden: by using other people’s money.4

Here’s how the alleged scam worked. JPMorgan moved to forgive the mortgages of tens of thousands of homeowners; the feds, in turn, credited these canceled loans against the penalties due under the 2012 and 2013 settlements. But here’s the rub: In many instances, JPMorgan was forgiving loans it no longer owned.5

The alleged fraud is described in internal JPMorgan documents, public records, testimony from homeowners and investors burned in the scam, and other evidence presented in a blockbuster lawsuit against JPMorgan, now being heard in US District Court in New York City.6

JPMorgan no longer owned the loans because it had sold the mortgages years earlier to 21 third-party investors, including three companies owned by Larry Schneider. Those companies are the plaintiffs in the lawsuit; Schneider is also aiding the federal government in a related case against the bank. In a bizarre twist, a company associated with the Church of Scientology facilitated the apparent scheme. Nationwide Title Clearing, a document-processing company with close ties to the church, produced and filed the documents that JPMorgan needed to claim ownership and cancel the loans.7

JPMorgan, it appears, was running an elaborate shell game. In the depths of the financial collapse, the bank had unloaded tens of thousands of toxic loans when they were worth next to nothing. Then, when it needed to provide customer relief under the settlements, the bank had paperwork created asserting that it still owned the loans. In the process, homeowners were exploited, investors were defrauded, and communities were left to battle the blight caused by abandoned properties. JPMorgan, however, came out hundreds of millions of dollars ahead, thanks to using other people’s money.8

“If the allegations are true, JPMorgan screwed everybody,” says Brad Miller, a former Democratic congressman from North Carolina who was among the strongest advocates of financial reform on Capitol Hill until his retirement in 2013.9

In an unusual departure from most allegations of financial bad behavior, there is strong evidence that Jamie Dimon, JPMorgan’s CEO and chairman, knew about and helped to implement the mass loan-forgiveness project. In two separate meetings in 2013 and 2014, JPMorgan employees working on the project were specifically instructed not to release mortgages in Detroit under orders from Dimon himself, according to internal bank communications. In an apparent public-relations ploy, JPMorgan was about to invest $100 million in Detroit’s revival. Dimon’s order to delay forgiving the mortgages in Detroit appears to have been motivated by a fear of reputational risk. An internal JPMorgan report warned that hard-hit cities might take issue with bulk loan forgiveness, which would deprive municipal governments of property taxes on abandoned properties while further destabilizing the housing market.10

Did Dimon also know that JPMorgan, as part of its mass loan-forgiveness project, was forgiving loans it no longer owned? No internal bank documents confirming that knowledge have yet surfaced, but Dimon routinely takes legal responsibility for knowing about his bank’s actions. Like every financial CEO in the country, Dimon is obligated by law to sign a document every year attesting to his knowledge of and responsibility for his bank’s operations. The law establishes punishments of $1 million in fines and imprisonment of up to 10 years for knowingly making false certifications.11

Dimon signed the required document for each of the years that the mass loan-forgiveness project was in operation, from 2012 through 2016. Whether or not he knew that his employees were forgiving loans the bank no longer owned, his signatures on those documents make him potentially legally responsible.12

The JPMorgan press office declined to make Dimon available for an interview or to comment for this article. Nationwide Title Clearing declined to comment on the specifics of the case but said that it is “methodical in the validity and legality of the documents” it produces.13

Federal appointees have been complicit in this as well. E-mails show that the Office of Mortgage Settlement Oversight, charged by the government with ensuring the banks’ compliance with the two federal settlements, gave JPMorgan the green light to mass-forgive its loans. This served two purposes for the bank: It could take settlement credit for forgiving the loans, and it could also hide these loans—which JPMorgan had allegedly been handling improperly—from the settlements’ testing regimes.14

“No one in Washington seems to understand why Americans think that different rules apply to Wall Street, and why they’re so mad about that,” said former congressman Miller. “This is why.”15

auren and Robert Warwick were two of the shell game’s many victims. The Warwicks live in Odenton, Maryland, a bedroom community halfway between Baltimore and Washington, DC, and had taken out a second mortgage on their home with JPMorgan’s Chase Home Finance division. In 2008, after the housing bubble burst and the Great Recession started, 3.6 million Americans lost their jobs; Lauren Warwick was one of them.16

Before long, the Warwicks had virtually no income. While Lauren looked for work, Robert was in the early stages of starting a landscaping business. But the going was slow, and the Warwicks fell behind on their mortgage payments. They tried to set up a modified payment plan, to no avail: Chase demanded payment in full and warned that foreclosure loomed. “They were horrible,” Lauren Warwick told The Nation. “I had one [Chase representative] say, ‘Sell the damn house—that’s all you can do.’”17

Then, one day, the hounding stopped. In October 2009, the Warwicks received a letter from 1st Fidelity Loan Services, welcoming them as new customers. The letter explained that 1st Fidelity had purchased the Warwicks’ mortgage from Chase, and that they should henceforth be making an adjusted mortgage payment to this new owner.18

Lauren Warwick had never heard of 1st Fidelity, but the letter made her more relieved than suspicious. “I’m thinking, ‘They’re not taking my house, and they’re not hounding me,’” she said.19

Larry Schneider, 49, is the founder and president of 1st Fidelity and two other mortgage companies. He has worked in Florida’s real-estate business for 25 years, getting his start in Miami. In 2003, Schneider hit upon a business model: If he bought distressed mortgages at a significant discount, he could afford to offer the borrowers reduced mortgage payments. It was a win-win-win: Borrowers remained in their homes, communities were stabilized, and Schneider still made money.20

“I was in a position where I could do what banks didn’t want to,” Schneider says. In fact, his business model resembled what President Franklin Roosevelt did in the 1930s with the Home Owners’ Loan Corporation, which prevented nearly 1 million foreclosures while turning a small profit. More to the point, Schneider’s model exemplified how the administrations of George W. Bush and Barack Obama could have handled the foreclosure crisis if they’d been more committed to helping Main Street rather than Wall Street.21

The Warwicks’ loan was one of more than 1,000 that Schneider purchased without incident from JPMorgan’s Chase Home Finance division starting in 2003. In 2009, the bank offered Schneider a package deal: 3,529 primary mortgages (known as “first liens”) on which payments had been delinquent for over 180 days. Most of the properties were located in areas where the crisis hit hardest, such as Baltimore.22

Selling distressed properties to companies like Schneider’s was part of JPMorgan’s strategy for limiting its losses after the housing bubble collapsed. The bank owned hundreds of thousands of mortgages that had little likelihood of being repaid. These mortgages likely carried ongoing costs: paying property taxes, addressing municipal-code violations, even mowing the lawn. Many also had legal defects and improper terms; if federal regulators ever scrutinized these loans, the bank would be in jeopardy.23

In short, the troubled mortgages were the financial equivalent of toxic waste. To deal with them, Chase Home Finance created a financial toxic-waste dump: The mortgages were listed in an internal database called RCV1, where RCV stood for “Recovery.”24

Unbeknownst to Schneider, the package deal that Chase offered him came entirely from this toxic-waste dump. Because he’d had a good relationship with Chase up to that point, Schneider took the deal. On February 25, 2009, he signed an agreement to buy the loans, valued at $156 million, for only $200,000—slightly more than one-tenth of a penny on the dollar. But the agreement turned sour fast, Schneider says.25

Among a range of irregularities, perhaps the most egregious was that Chase never provided him with all the documentation proving ownership of the loans in question. The data that Schneider did receive lacked critical information, such as borrower names, addresses of the properties, even the payment histories or amounts due. This made it impossible for him to work with the borrowers to modify their terms and help them stay in their homes. Every time Schneider asked Chase about the full documentation, he was told it was coming. It never arrived.26

Here’s the kicker: JPMorgan was still collecting payments on some of these loans and even admitted this fact to Schneider. In December 2009, a Chase Home Finance employee named Launi Solomon sent Schneider a list of at least $47,695.53 in payments on his loans that the borrowers had paid to Chase. But 10 days later, Solomon wrote that these payments would not be transferred to Schneider because of an internal accounting practice that was “not reversible.” On another loan sold to Schneider, Chase had taken out insurance against default; when the homeowner did in fact default, Chase pocketed the $250,000 payout rather than forward it to Schneider, according to internal documents.27

Chase even had a third-party debt collector named Real Time Resolutions solicit Schneider’s homeowners, seeking payments on behalf of Chase. In one such letter from 2013, Real Time informed homeowner Maureen Preis, of Newtown Square, Pennsylvania, that “our records indicate Chase continues to hold a lien on the above referenced property,” even though Chase explicitly confirmed to Schneider that it had sold him the loan in 2010.28

JPMorgan jumped in and out of claiming mortgage ownership, Schneider asserts, based on whatever was best for the bank. “If a payment comes in, it’s theirs,” he says; “if there’s a code-enforcement issue, it’s mine.”29

he shell game entered a new, more far-reaching phase after JPMorgan agreed to its federal settlements. Now the bank was obligated to provide consumer relief worth $8.2 billion—serious money even for JPMorgan. The solution? Return to the toxic-waste dump.30

Because JPMorgan had stalled Schneider on turning over the complete paperwork proving ownership, it took the chance that it could still claim credit for forgiving the loans that he now owned. Plus the settlements required JPMorgan to show the government that it was complying with all federal regulations for mortgages. The RCV1 loans didn’t seem to meet those standards, but forgiving them would enable the bank to hide this fact.31

The Office of Mortgage Settlement Oversight gave Chase Home Finance explicit permission to implement this strategy. “Your business people can be relieved from pushing forward” on presenting RCV1 loans for review, lawyer Martha Svoboda wrote in an e-mail to Chase, as long as the loans were canceled.32

Chase dubbed this the “pre DOJ Lien Release Project.” (To release a lien means to forgive the loan and relinquish any ownership right to the property in question.) The title page of an internal report on the project lists Lisa Shepherd, vice president of property preservation, and Steve Hemperly, head of mortgage originations, as the executives in charge. The bank hired Nationwide Title Clearing, the company associated with the Church of Scientology, to file the lien releases with county offices. Erika Lance, an employee of Nationwide, is listed as the preparer on 25 of these lien releases seen by The Nation. Ironically, Schneider alleges, the releases were in effect “robo-signed,” since the employees failed to verify that JPMorgan Chase owned the loans. If Schneider is right, it means that JPMorgan relied on the same fraudulent “robo-signing” process that had previously gotten the bank fined by the government to help it evade that penalty.33

On September 13, 2012, Chase Home Finance mailed 33,456 forgiveness letters informing borrowers of the debt cancellation. Schneider immediately started hearing from people who said that they wouldn’t be making further payments to him because Chase had forgiven the loan. Some even sued Schneider for illegally charging them for mortgages that he (supposedly) didn’t own.34

When Lauren and Robert Warwick got their forgiveness letter from Chase, Lauren almost passed out. “You will owe nothing more on the loan and your debt with be cancelled,” the letter stated, calling this “a result of a recent mortgage servicing settlement reached with the states and federal government.” But for the past three years, the Warwicks had been paying 1st Fidelity Loan Servicing—not Chase. Lauren said she called 1st Fidelity, only to be told: “Sorry, no, I don’t care what they said to you—you owe us the money.”35

JPMorgan’s shell game unraveled because Lauren Warwick’s neighbor worked for Michael Busch, the speaker of the Maryland House of Delegates. After reviewing the Warwicks’ documents, Kristin Jones, Busch’s chief of staff, outlined her suspicions to the Maryland Department of Labor, Licensing and Regulation. “I’m afraid based on the notification of loan transfer that Chase sold [the Warwicks’] loan some years ago,” Jones wrote. “I question whether Chase is somehow getting credit for a write-off they never actually have to honor.”36

After Schneider and various borrowers demanded answers, Chase checked a sample of over 500 forgiveness letters. It found that 108 of the 500 loans—more than one out of five—no longer belonged to the bank. Chase told the Warwicks that their forgiveness letter had been sent in error. Eventually, Chase bought back the Warwicks’ loan from Schneider, along with 12 others, and honored the promised loan forgiveness.37

ot everyone was as lucky as the Warwicks. In letters signed by vice president Patrick Boyle, JPMorgan Chase forgave at least 49,355 mortgages in three separate increments. The bank also forgave additional mortgages, but the exact number is unknown because the bank stopped sending homeowners notification letters. Nor is it known how many of these forgiven mortgages didn’t actually belong to JPMorgan; the bank refused The Nation’s request for clarification. Through title searches and the discovery process, Schneider ascertained that the bank forgave 607 loans that belonged to one of his three companies. The lien-release project overall allowed JPMorgan to take hundreds of millions of dollars in settlement credit.38

Most of the loans that JPMorgan released—and received settlement credit for—were all but worthless. Homeowners had abandoned the homes years earlier, expecting JPMorgan to foreclose, only to have the bank forgive the loan after the fact. That forgiveness transferred responsibility for paying back taxes and making repairs back to the homeowner. It was like a recurring horror story in which “zombie foreclosures” were resurrected from the dead to wreak havoc on people’s financial lives.39

Federal officials knew about the problems and did nothing. In July 2014, the City of Milwaukee wrote to Joseph Smith, the federal oversight monitor, alerting him that “thousands of homeowners” were engulfed in legal nightmares because of the confusion that banks had sown about who really owned their mortgages. In a deposition for the lawsuit against JPMorgan Chase, Smith admitted that he did not recall responding to the City of Milwaukee’s letter.40

If you pay taxes in a municipality where JPMorgan spun its trickery, you helped pick up the tab. The bank’s shell game prevented municipalities from knowing who actually owned distressed properties and could be held legally liable for maintaining them and paying property taxes. As a result, abandoned properties deteriorated further, spreading urban blight and impeding economic recovery. “Who’s going to pay for the demolition [of abandoned buildings] or [the necessary extra] police presence?” asks Brent Tantillo, Schneider’s lawyer. “As a taxpayer, it’s you.”41

Such economic fallout may help explain why Jamie Dimon directed that JPMorgan’s mass forgiveness of loans exempt Detroit, a city where JPMorgan has a long history. The bank’s predecessor, the National Bank of Detroit, has been a fixture in the city for over 80 years; its relationships with General Motors and Ford go back to the 1930s. And JPMorgan employees knew perfectly well that mass loan forgiveness might create difficulties. The 2012 internal report warned that cities might react negatively to the sheer number of forgiven loans, which would lower tax revenues while adding costs. Noting that some of the cities in question were clients of JPMorgan Chase, the report warned that the project posed a risk to the bank’s reputation.42

Reputational risk was the exact opposite of what JPMorgan hoped to achieve in Detroit. So the bank decided to delay the mass forgiveness of loans in Detroit and surrounding Wayne County until after the $100 million investment was announced. Dimon himself ordered the delay, according to the minutes of JPMorgan Chase meetings that cite the bank’s chairman and CEO by name. Dimon then went to Detroit to announce the investment on May 21, 2014, reaping positive coverage from The New York Times, USA Today, and other local and national news outlets. Since June 1, 2014, JPMorgan has released 10,229 liens in Wayne County, according to public records; the bank declined to state how many of these were part of the lien-release project.43

Both of Larry Schneider’s lawsuits alleging fraud on JPMorgan Chase’s part remain active in federal courts. The Justice Department could also still file charges against JPMorgan, Jamie Dimon, or both, because Schneider’s case was excluded from the federal settlement agreements.44

Few would expect Jeff Sessions’s Justice Department to pursue such a case, but what this sorry episode most highlights is the pathetic disciplining of Wall Street during the Obama administration.

JPMorgan’s litany of acknowledged criminal abuses over the past decade reads like a rap sheet, extending well beyond mortgage fraud to encompass practically every part of the bank’s business. But instead of holding JPMorgan’s executives responsible for what looks like a criminal racket, Obama’s Justice Department negotiated weak settlement after weak settlement. Adding insult to injury, JPMorgan then wriggled out of paying its full penalties by using other people’s money.45

The larger lessons here command special attention in the Trump era. Negotiating weak settlements that don’t force mega-banks to even pay their fines, much less put executives in prison, turns the concept of accountability into a mirthless farce. Telegraphing to executives that they will emerge unscathed after committing crimes not only invites further crimes; it makes another financial crisis more likely. The widespread belief that the United States has a two-tiered system of justice—that the game is rigged for the rich and the powerful—also enabled the rise of Trump. We cannot expect Americans to trust a system that lets Wall Street fraudsters roam free while millions of hard-working taxpayers get the shaft.46

The worst thing about the Cassidy-Graham amendment, Republicans’ 11th-hour attempt to repeal Obamacare, is that many millions of Americans would lose their coverage and see their premiums shoot up if they get sick. But only slightly less horrible is the incomparably dishonest way Senators Bill Cassidy and Lindsey Graham have been selling the proposal, which conflicts with a fundamental conservative tenet: that egalitarian policies “punish success.”

This is what you always hear from the right whenever anyone suggests taxing the wealthy even a little bit more. They respond that all Americans have the same opportunities to obtain wealth (they don’t) and we shouldn’t punish those who managed to thrive. It’s simply un-American to penalize those who put in hard work and play by the rules.

But the down-home pitch from Cassidy and Graham breaks with this entirely. They claim their plan instead strikes a blow for equality. “These funds are quite unequally distributed,” Cassidy told health-care reporters, referring to federal health-care spending issued to the states under the Affordable Care Act. “Where you live should not determine how healthy you are.” And here’s Graham on the Senate floor: “I like Massachusetts, Maryland, New York, and California, but I don’t like them that much to give them the money that the rest of us should get!”

Behind this touching concern for American welfare is a simple red-state-vs.-blue-state divide, perfectly timed for an age of polarization. Those Yankees are taking all our money, and we have to get it back. To get to this point, you have to ignore the fact that red states receive a disproportionate share of federal aid overall, and rank higher in terms of how much federal aid they take out relative to federal taxes they pay in.

But dig a hair deeper and you discover a simple fact: The states listed above obtained a disproportionate share of federal health-care dollars because they tried. Operating under the same terms available to every other state, they expanded the Medicaid program and did their best to sign up the uninsured for both Medicaid and the Obamacare exchanges. Instead of denying the poor coverage, they took the bargain offered under the ACA to cover all the costs of Medicaid expansion initially and around 90 percent over time. Instead of making it more difficult to navigate the individual market, or consign people to the federal exchange, these states built their own websites and worked to promote and assist with getting covered.

This was difficult work, finding the uninsured and encouraging them to sign up, spending on outreach in multiple languages, getting people covered. None of it was unavailable to Texas or Alabama or South Dakota. To the extent there are inequities, it’s the fault of those states that chose not to expand Medicaid or put in the time to cover the uninsured. Yet, instead of leveling up every state to bring them to the same level, Cassidy and Graham whine about fairness to level down. And when called on this, Cassidy told reporters that some states don’t want to pony up 10 percent of the cost of making sure poor people have a health-insurance option beyond “rub some dirt on it,” so every state has to suffer.

In other words, the problem with New York and Maryland and California and Massachusetts is that their public officials are too good at covering the uninsured.

Cassidy and Graham have tried to elide the red state/blue state nature of their proposal by pointing to Democratic senators in Florida, Missouri, and Virginia, whose states would “do better” under their plan. But none of those states expanded Medicaid; they’d “do better” with Cassidy-Graham because they did worse by their people previously.

This is all, of course, just a rhetorical framework for Cassidy-Graham’s actual goal of ratcheting down federal support for health care, not just transferring wealth to non–Medicaid expansion states. The plan turns both Medicaid expansion and ACA subsidies in the individual market into a block grant for the states, reduces the block grant gradually over a decade, and then eliminates the funding entirely in 2027, the equivalent of repeal without replace. Cassidy and Graham claim that it could be renewed in 2027, but it would have to be an affirmative appropriation, offset in the budget, with no guarantee of success. In addition, the Medicaid program, separate from expansion, would have a “per capita cap,” which would set an upper bound on per-patient Medicaid funding.

According to the Center on Budget and Policy Priorities, every state loses from this scheme: There are no winners. Federal health-care spending would drop by $120 billion by 2026, with only eight states seeing any increase, and 20 states facing declines of between 35 and 60 percent. In 2027, when the bottom drops out on the block grant, all states would be in the red.

Cassidy and Graham’s numbers, which they like to read from to tell fellow senators how much each state will be getting, are as dishonest as their pitch. CBPP points out, that under current law, the government would spend $241 billion on ACA subsidies and Medicaid expansion in 2026; under Cassidy-Graham it would be $200 billion. That’s the meaningful change, not Cassidy and Graham’s tout that spending would rise over time, as it does ordinarily because of inflation. The incorrect comparison minimizes the true damage and inflates the gains.

But it’s this appeal to equality that really gets me. Conservatives have spent decades proclaiming loudly that we shouldn’t equalize outcomes, only the opportunity to achieve. Now, in one bill rearranging one-sixth of the economy, they claim they’re doing it in the name of equalizing outcomes. It’s so profoundly cynical that I’m almost certain Cassidy and Graham don’t believe it themselves. They stand in the Senate well like country lawyers preaching about fairness in the most transparently insincere way possible. There was nothing unfair about California’s or New York’s taking what was offered in the ACA. Cassidy and Graham want simply to punish success, to take out their partisan anger on vulnerable people whose elected representatives happened to do their job of providing for the general welfare.

When Education Secretary Betsy DeVos was confirmed, the major fear was that she would radically overhaul the public-education system and institute a broad school-voucher program. It turns out that requires congressional action that hasn’t been forthcoming, at least yet. But DeVos has been able to use administrative powers to reward wealthy friends and facilitate fraud against students.

DeVos’s latest move has been to end a partnership with the Consumer Financial Protection Bureau. The Education Department had been sharing information with the CFPB on companies that collect payments on federal student loans (also known “servicers”), under a memorandum of understanding between the two agencies. Those reports will stop at the end of September, according to a letter from two DeVos underlings. In the letter, the Education Department complained that the CFPB’s “intervention” in the student-loan market “expand[s] its jurisdiction into areas that Congress never envisioned…. to include the Department’s federally contracted loan servicers.”

Let’s first stipulate that private student-loan servicers shouldn’t exist. The government issues these loans directly, then contracts with an outside business to take the payments. The government runs the largest collector of payments in the world, also known as the IRS. Do we really think the government doesn’t know how to process a check?

That’s compounded by the fact that these private servicers are bad at their job. They have faced hundreds of millions of dollars in fines for pushing borrowers into costlier repayment plans, hiding information about cheaper options, overcharging active-duty military, and harassing borrowers after co-signers die, to name just a few examples. So the CFPB correctly sought to supervise these entities, as they have the authority to do. Student loan servicing is a consumer financial transaction, and the CFPB has jurisdiction over debt collection and credit reporting, along with Dodd-Frank’s prohibition on unfair, deceptive, or abusive acts and practices. Dodd-Frank even charges the CFPB to supervise companies “servicing loans” and “collecting debt related to any financial product or service.”

The CFPB is suing Navient, one of the largest servicers contracted by the Education Department, for “failing borrowers at every stage of repayment” and cheating hundreds of thousands of student loan debtors. (Navient has rejected these allegations, while also admitting in court that “there is no expectation that the servicer will act in the interest of the consumer.”) And the CFPB’s work has filled a role traditionally vacated by the Education Department, whose own inspector general found in 2014 that the department didn’t even track borrower complaints, let alone engage in actual oversight.

In other words, there’s no basis for the Education Department to block the CFPB from doing its job. As CFPB Director Richard Cordray explained in a letter back to DeVos, “The HEA [Higher Education Act] does not supersede” the CFPB’s ability to protect borrowers. Cutting off the CFPB only relieves servicers from the hassle of following the law.

Thirty-nine Democratic members of Congress, led by Senator Sherrod Brown and Congresswoman Maxine Waters, wrote to DeVos yesterday, rejecting DeVos’s claim that the Education Department has exclusive authority to oversee student-loan servicing. Their objection is based on a plain reading of the Dodd-Frank legislation they themselves wrote. “Without CFPB oversight, we are deeply concerned this backwards step will allow student loan servicers to more easily take advantage of borrowers,” the lawmakers wrote. They asked DeVos to reinstate the memoranda of understanding and begin to work again with the CFPB.

DeVos claimed in a recent hiring announcement that her office has instituted stronger protections for students against “bad actors.” But look at whom she hired to perform the task. The new head of the Office of Federal Student Aid is a financial-services executive named A. Wayne Johnson. To run the office’s fraud-enforcement unit, which was conceived under President Obama’s watch, DeVos chose Julian Schmoke, a former dean at the for-profit DeVry University, which has been fined repeatedly by state and federal regulators for misleading students through deceptive marketing and false statistics.

Schmoke is at least the third for-profit college expat to join the Education Department under DeVos’s tenure. Senior adviser Robert Eitel did compliance and legal services for Bridgepoint Education, an operator of several for-profits, also under government investigation during his tenure. And Carlos Muñiz, DeVos’s general counsel, provided “consulting services” while at his corporate law firm to for-profit Career Education Corp.

DeVos has moved to protect for-profit colleges with the same vigor employed to protect student-loan servicers. She’s put on hold new rules to shut down deceptive programs that fail to provide students with a useful education, and to ensure that students defrauded by their colleges wouldn’t have to pay back their loans. The changes also rolled back a ban on mandatory arbitration rules in student agreements with for-profit colleges. Eighteen states have sued DeVos over this delay. The Trump administration has also shut down an interagency task force overseeing for-profit colleges. DeVos even tried to reinstate federal aid for the Charlotte School of Law, a corrupt for-profit that hired her former adviser, before state regulators in North Carolina shut the school down.

The department has also stopped accepting relief applications from defrauded for-profit students, and put over 65,000 existing applications from students into limbo. It haven’t approved a single request for borrower relief, and it told a federal court August 28 that any decisions would take another six months. Thousands of students tricked into meaningless degrees cannot get on with their lives because of this holdup.

Lobbyists for the industry, including Newt Gingrich, have gotten nearly everything on their wish list since DeVos entered power. Three industries left for dead before the Trump era have been resurrected by friendly policies: private prisons, coal-mining operations, and for-profit colleges.

This is all, aside from the rollback on guidance about campus sexual assault, and an acting assistant secretary for civil rights who assured college administrators that oversight would be far friendlier in the future.

So while legislative action has been stymied, DeVos has had no problem pushing her agenda in Washington—one primarily concerned with helping private-sector pals abuse students for profit. And she’s not even really trying to hide it.

The political world has latched onto the deal reached between President Trump and Democratic congressional leaders, which combines initial relief for victims of Hurricane Harvey with a three-month extension of government funding and the debt limit. Republican leaders, who had their own plan for a long-term debt-limit extension and were cut out of the deal entirely, are “livid” and have gone screaming to the press about it. “The Pelosi-Schumer-Trump deal is bad,” read the one-line statement from Senator Ben Sasse of Nebraska. Republicans claim Trump gave away the leverage they would have had over the Democrats in December, ruining their political strategy. They also lament that they had no foreknowledge of Trump’s overture to “Chuck and Nancy,” as he called them. Even Treasury Secretary Steven Mnuchin was blindsided.

At first glance, Mitch McConnell and Paul Ryan certainly appear to have been screwed over by Trump. But let’s work through whether that’s really the case.

Democrats have an unusual amount of leverage in this Congress when it comes to things like the budget and the debt limit. Senate Democrats have 48 votes, enough to filibuster any bill. Meanwhile, with the House Freedom Caucus implacably opposed to any spending initiatives that don’t produce a balanced budget, House Democrats will inevitably be the deciding votes on these matters.

Add to that a must-pass commitment to rebuild East Texas after flood damage, and there isn’t really much of a choice for Republicans but to work with Democrats on a solution. So what did this deal really achieve? It just freezes the status quo until December, when the two sides will have to work on this all over again.

That alone is a win for Democrats: It’s three more months without the Trump/Republican budget cuts. (Though that’s a pretty small victory.) Republican leaders also saw their attempt to use the Harvey relief bill to pass an 18-month debt-limit extension foiled—that would have kicked the issue past the midterm elections, shielded members from multiple debt-limit votes, and neutralized the far-right hostage-taking. Plus, Republicans really didn’t want to align government funding with the debt limit to create a kind of “fiscal cliff.” This adds more urgency to getting something done and hands more leverage to the holdouts.

All that said, Republican leaders might see this turn of events as positive, regardless of what they are saying in public. They had a packed schedule to deal with in September, and this allows them to put off some major decisions. Plus, they can place the blame with President Trump instead of themselves. It takes some pressure off leadership from the rank and file.

To see this as truly good for Democrats, you have to believe that there’s some endgame for which Chuck and Nancy are willing to hold out. Do people really think that Democrats would play games with the full faith and credit of the US government? I simply don’t see them being that ruthless; this is a difference between the parties. Democrats generally aren’t interested in crippling the government, but that’s what they’d have to be willing to risk in order to succeed in the negotiations.

The obvious policy that Democrats might win by playing hardball is relief for the DREAMers. The president seems to already have a legislative compromise in mind, one that, surprisingly, doesn’t include border-wall funding, over which he was not so long ago willing to shut down the government. The emerging compromise would be a path to citizenship for immigrants brought to this country as children, or perhaps just protection from deportation and a long-term work permit, in exchange for tightened border security—perhaps more funding for Border Patrol agents or additional technology. It should be pointed out that border crossings are extremely low at the moment, so this feels like throwing money down a well. But if it buys freedom from deportation for kids who have never known another country, it could be a deal Democrats are willing to take.

But that deal doesn’t really have to wait until December. There are other must-pass bills coming down the pike. More supplemental funding for Harvey will almost certainly be needed, and you may have heard about another massive hurricane headed straight for America. Reauthorizing flood insurance, which will be doubly needed now, has to get passed as well. Republicans don’t want the bad optics of voting against relief for needy hurricane victims, especially ones that come from red states like Texas. Pelosi and Schumer have said that they will attach a DREAM Act deal to every bill throughout the fall until they succeed. So what if that happens before December? What’s the ask, then, on the government funding and debt-limit bill?

It could be the elimination of the debt limit altogether. Trump apparently floated that in his meeting with congressional leaders Wednesday. I don’t know that removing a procedural barrier will be seen as enough of a political win for Democrats to bite. But, substantively, this would be an incredibly important move. The debt limit is a weird, artificial construct that forces Congress to approve paying the bills they’ve already racked up by agreeing to the spending. It enables both parties to play an incredibly dangerous game with the country’s finances for no real reason; and, since Republicans are simply more reactionary, it enables them far more. And nobody in Congress is relishing taking the vote; they should be thrilled to consign it to history.

The problem is that hostage takers like the power the debt limit gives them to make unrelated changes to public policy. Paul Ryan rejected the idea of killing debt-limit votes at a news conference Thursday, saying, “There’s a legitimate rule for the power of the purse in Article 1 powers.” There’s nothing legitimate about having to authorize spending twice—once by allowing it and the second time by agreeing to pay for it. Pelosi and Schumer do seem interested in ending debt-limit brinkmanship. But that also calls into question their commitment to employing the debt limit to strike a hard bargain in December.

In other words, leverage exists only if you’re willing to use it. And, furthermore, Democrats might exhaust their leverage by winning their top priority before the final deal.

But one last point: Republican congressional leaders are worried about playing a bad hand in negotiations because they, in fact, have a bad hand. They haven’t earned a major legislative victory, have numerous pile-ups of must-pass bills, and have a right flank that wants to destroy the government to get its aims. They are not functionally in control of Congress. And they’re whining that Trump, like a broken clock twice a day, got that right.

President Trump, after a summer of neglecting his top legislative priority, will make a full-throated pitch for tax reform today in Missouri. The still-fuzzy plan will have a lot of moving parts: lower top marginal rates, simplification of deductions, and elimination of the estate tax, which “only morons pay,” according to Trump’s economic adviser, Gary Cohn. But one centerpiece will be a significant reduction in the corporate tax rate, from the current 35 percent rate to as low as 20 percent.

This is necessary for three reasons, according to Republicans: “Jobs, jobs, jobs,” to quote House Speaker Paul Ryan this June. Though congressional Republicans and the White House rarely see eye-to-eye these days, they are united on the idea that cutting corporate taxes will spur an hiring boom that will reach down to the ordinary worker.

A new report from the Institute for Policy Studies shows this isn’t true. US companies are already paying minimal amounts in corporate taxes, and the ones most likely under Republican theory to pour tax savings into job creation have instead been more likely to cut their workforce over the past nine years. The data shows that low corporate tax rates more often lead to increases in CEO pay and boosts for shareholders.

Before breaking down the report, it’s important to recognize that the 35 percent US corporate tax rate doesn’t reflect what corporations actually pay. The average effective corporate tax rate in the United States, once deductions are factored in, is around 27 percent, putting it below the global average. If you limit the review to profitable corporations, the number drops to 19.4 percent. Corporate taxes as a share of GDP have fallen threefold since 1952, from 6 percent to 2 percent. Far from being overtaxed, corporations have carried an increasingly lighter burden.

Corporations avoid the full rate because of loopholes. There are deductions for domestic manufacturing and “bonus depreciation,” which allows immediate write-offs for half the cost of long-term investments. And corporations benefit tremendously from stashing profits overseas, thereby avoiding taxation entirely. These trillions of dollars in “offshore” profits aren’t sitting in a locker in Zurich; they’re invested in instruments like US Treasury bonds. In other words, the government pays corporations for their own tax avoidance.

The IPS report identifies 92 corporations that reported a profit every year from 2008 to 2015, and that also paid less than 20 percent in corporate income tax. These corporate winners include the usual suspects—banks, defense contractors, telecom firms, and energy companies. Because they were profitable, and paid taxes at or below the Republicans’ optimal rate, they offer an excellent test case. “If claims about the job creation benefits of lower tax rates had any validity,” report author Sarah Anderson writes, “the 92 consistently profitable tax-dodging firms we identified would be among the nation’s strongest job creators.”

But the lower rates didn’t correspond to job creation. Collectively, the 92 profitable corporations cut jobs by 0.74 percent over the period studied, from 2008–16. During that same time, the private sector added jobs at a 6 percent clip. So low-tax corporations did far worse on hiring than their counterparts.

More than half of the firms in the study, 48 in all, cut jobs, affecting 483,000 workers. AT&T shed 79,450 positions, the most in the study, and Verizon cut 78,450, despite having 8.1 percent and 9.1 percent corporate tax rates, respectively. 21st Century Fox, with a low 15.6 percent tax burden, eliminated almost half of its workforce over the 2008–16 period. Incredibly, the main tax credit it took was for “domestic production activities,” which was intended to keep jobs in the United States.

General Electric represents perhaps the most devastating example in the study. Its corporate tax rate over the sample was -3.4 percent—thanks to multiple deductions, the government was paying GE money to exist—but it still cut 14,700 jobs.

Where did the money go? Into the CEOs’ pockets, for starters. Fox’s Rupert Murdoch’s compensation increased by 74 percent at the same time that he was drastically cutting jobs. CEO compensation at AT&T rose 146 percent. Rex Tillerson, the current secretary of state, enjoyed $27 million as CEO of ExxonMobil in 2016 and a $180 million stock payout for entering government service. By contrast, ExxonMobil, which paid a 13.6 percent US tax rate, got rid of over one-third of its total jobs worldwide. (The company only releases global jobs figures.) Overall, the 92 low-tax firms surveyed raised CEO pay at a faster clip than the US average.

The 10 biggest job cutters in the study also spent an average of $45.5 billion in stock buybacks, more than six times the amount of companies in the S&P 500 over this time frame. With buybacks, corporations use profits to repurchase stock, artificially increasing demand and inflating the market price. This benefits not only shareholders with a short-term price boost but also top executives, who typically have large amounts of their compensation tied up in corporate stock. But the trade-off between buybacks and jobs is pretty clear: Profits used to goose the stock price aren’t put to work to invest in facilities or research, or to raise wages or hiring levels.

IPS’ findings are consistent with academic research on corporate taxes and jobs. The Federal Reserve Board of Governors saw “little evidence that corporate tax cuts boost economic activity, unless implemented during recessions.” The Economic Policy Institute could summon no data showing corporate tax cuts moving the needle; instead, they said, it would “primarily benefit a small number of high-income capital owners.”

The one time in recent history that we gave corporations a big tax cut, the results were disastrous. In 2004, George W. Bush allowed companies with stashed offshore profits to “repatriate” them at 5.75 percent—nearly 1/6th of the normal tax rate—with the belief that the companies would subsequently use the money on business investment. In reality, a study from the National Bureau of Economic Research showed that “a $1 increase in repatriations was associated with an increase of almost $1 in payouts to shareholders.” Other independent analyses showed the same thing. Bush reportedly felt betrayed by corporate executives, who promised him they would create jobs with the cash.

Those same CEOs are positively giddy about getting more free money to play with. AT&T CEO Randall Stephenson and Boeing’s Dennis Muilenburg hosted town-hall meetings for House Republican leaders in the last week, touting their plan for corporate tax cuts. AT&T and Boeing are both on the IPS list of corporate tax dodgers who used the savings on executive pay and buybacks while cutting jobs.

When Paul Ryan visited Boeing and again insisted that lowering corporate taxes would bring more jobs and better wages to America, Muilenberg backed him up, saying, “You got it!” Republicans and their corporate friends are simply trying to play the country for suckers again, when the facts are clear.

President Donald Trump has been shouting about Jeff Bezos and Amazon for months, mostly out of pique at press coverage in The Washington Post. This raised the prospect of government action against Amazon simply because Trump didn’t like his media clips. But like almost everything with Trump, he was just blowing hot air: Yesterday, his Federal Trade Commission handed Amazon its biggest victory yet. The First Amendment has been spared, but consumers, workers, and small businesses have not. The decision will have dreadful long-term effects, and the FTC did it with all the seriousness of an intern scheduling a lunch meeting.

Here is the FTC statement on the merger of Amazon with grocery chain Whole Foods, from acting Bureau of Competition director Bruce Hoffman. It’s 67 words long: “The FTC conducted an investigation of this proposed acquisition to determine whether it substantially lessened competition under Section 7 of the Clayton Act, or constituted an unfair method of competition under Section 5 of the FTC Act. Based on our investigation we have decided not to pursue this matter further. Of course, the FTC always has the ability to investigate anticompetitive conduct should such action be warranted.”

Amazon and Whole Foods announced the deal in June. The typical timeline for an antitrust investigation is measured in years, not months, especially for ones this controversial. The grocery industry spun into upheaval on the news, losing tens of billions of dollars in value. Many members of Congress expressed concern and called for hearings. Academic researchers warned about Amazon’s size, and questioned whether the shift into another business line, giving them a physical space in hundreds of communities, would further pressure competitors.

The FTC waved this away in three sentences. To come back in two months after an “investigation” with this perfunctory statement is to admit that no investigation was done at all. So, starting Monday, Amazon and Whole Foods will merge.

Why did this happen? The FTC’s evaluation of the deal was based on outdated tools for understanding competition. Therefore, it was predetermined to find nothing. It was a classic “looking under the streetlight” problem.

Under the traditional “consumer welfare” standard, as long as a proposed merger doesn’t increase consumer prices, antitrust authorities will allow it. The Amazon–Whole Foods tie-up would control only 3.5 percent of the overall grocery industry, seemingly not enough to impose market power. Amazon barely had a presence in grocery sales prior to this, making it more of a “vertical” integration, which consumer-welfare adherents believe increases efficiency and reduces prices. And Amazon is famous for undercutting competitors, not forcing prices up. Therefore, under that standard, the FTC had no grounds on which to block the deal.

It’s an airtight case. It’s also the absolutely wrong way to look at this merger.

Think of a store as a meeting point, where hundreds of producers congregate to get their products in front of willing customers. The store owner decides where the products sit on the shelf and what gets the most support, and tracks sales. Now imagine that the store owner also makes products, and then puts out replica versions of everything that does well. The combination of marketing and a sort of corporate espionage inevitably leads to a situation where everything in the store is furnished by the store’s owner.

That’s what Amazon does, and it now has bought more data on the tastes and preferences of high-end shoppers at 450 desirable locations. This isn’t about groceries per se; it’s about dominating commerce in online and offline locales.

Whole Foods suppliers, frequently small businesses dependent on access to these markets, are sitting ducks. If they’re not being told to cut costs to the bone to retain access—to both Whole Foods’ and Amazon’s online markets, a key source of leverage—they’ll find an Amazon version of whatever they sell, in a better location in the store, at a discount (at least to start; Amazon has shown a willingness to lose money for years in a market to eliminate competition). Controlling distribution and manufacturing products is a deadly combination, and clearly anticompetitive.

Whole Foods uses local farms for meat and produce, and the potential for Amazon to squeeze their businesses prompted Food and Water Watch to call for an extended review. “Amazon’s proposed takeover of Whole Foods could destroy long-standing arrangements with local farmers as the e-commerce giant pushes for larger scale suppliers and unreasonably low prices,” said Food & Water Watch Executive Director Wenonah Hauter in a statement.

That phrase “unreasonably low prices” may sound fatuous to FTC officials. But they ought to think long-term. Edging out competing producers leads to inevitable consumer price gouging once market power is established. And there are implications for quality if local food economies are disrupted in favor of Big Ag. Wages at small food-manufacturing businesses and family farms would suffer as well.

This has already begun. Today, Amazon announced that it will immediately lower prices on “a selection of best-selling staples,” including organic avocados, bananas, brown eggs, kale, apples, and more. That’s a direct cut to the suppliers who sell these items, and deliberate predatory pricing to attract customers away from other grocery stores. They’ve also announced that Whole Foods’ 365 in-store brands will be available at Amazon’s suite of online outlets. Expect them to get prime digital space and weaken competitor market share.

Amazon also announced that Amazon Prime, the $99-per-year subscription service that offers free delivery and movie and music programs, will become the customer-rewards program for Whole Foods. Prime shoppers will get “special savings and other in-store benefits” and non-Prime shoppers won’t. So you have to pay $99 to save money at Whole Foods. This is another way to make Prime a must-have for households.

With 450 stores, Amazon now has a physical base in its most important cities for distribution and pickup. It has just announced that Amazon Lockers will be available in Whole Foods stores, meaning a customer can buy a product on Amazon and have it sent to their personal locker at their grocery store. Attach that to the Amazon Echo, the smart speaker that makes purchases as simple as saying “get me tomatoes,” and competitors, not just from groceries but other retailers, online delivery companies, and so on, appear doomed. Amazon isn’t building a grocery store but a company store.

There’s also the likelihood of dynamic, personalized pricing. Amazon has been accused of touting “discounts” online that aren’t discounts; the FTC actually has an existing investigation about this. Price discrimination in store based on who is purchasing the product and the data collected on them is very possible.

And you cannot ignore the impact on workers. Whole Foods is non-union in a mostly unionized industry, mainly because the company gave workers good wages and benefits. Just look at the way Amazon treats warehouse workers, and you know that may not continue. Plus, other groceries now needing to compete with Amazon could seek safety in consolidation, eliminating redundant or low-profit locations. That could further the retail apocalypse, which has cost nearly 100,000 jobs this year, and affects communities well beyond upscale Whole Foods locations.

Just the idea that a big company can buy its way into new markets is dangerous, which everyone gets except for the FTC. Whenever Amazon announces a move into a new market, stocks in its new competitors plummet. Investors recognize the hazards of leveraging power.

The government used to discourage this. The Microsoft antitrust case was about a company’s using its dominance in operating systems to try to control browsers and other software. In the 1940s the Supreme Court ruled that the A&P grocery chain used its dominant economic position to demand discounts from suppliers; in the 1960s the Court blocked a grocery merger that would have created only 7.5 percent market concentration in the Los Angeles region.

That skepticism of monopolies has been wrung out of government’s thinking by 40 years of corporate propaganda. The FTC is now woefully unequipped to deal with emerging concentration from 21st-century monopolies like Amazon. And the consequences will be felt in the future by everyone who needs to stock their refrigerators.

There’s a misconception that Democrats have to abandon their principles to win in rural America, Joe Maxwell believes. He’s a fourth-generation hog farmer and former lieutenant governor of Missouri, and he thinks the key to success in farm communities lies in speaking to their specific circumstances. “People know they’re getting screwed, that the system is rigged, that wealth is being extracted from rural communities,” Maxwell said in an interview. “We can bring about economic justice for all.”

Maxwell is one of the driving forces behind Family Farm Action, a new organization dedicated to taking on Big Agriculture, which it says has threatened the viability of the family farmer and the sustainability of rural America. They plan to advocate for increased antitrust enforcement and new farmer protections not yet implemented by the Trump administration, and for candidates in rural districts who agree. “There is no progressive organization on the political offensive fighting for rural America,” Family Farm Action writes in its mission statement. “We’re going to change that.”

The rise of monopoly power in the agriculture sector has implications for anyone who eats food or breathes air. But it keenly affects those in rural areas, from the Latino farmhand or slaughterhouse worker to the black farmer struggling to finance a year’s crops to white owners of the country store or local diner who thrive in a vibrant community.

Maxwell and his colleagues have already shown they can reach rural voters. Last year, while Donald Trump was romping in Oklahoma, Maxwell ran a statewide campaign to beat a corporate-backed “right to farm” initiative that would have gutted regulations on agribusiness. He brought together animal-welfare groups, environmentalists, and farmers, and crushed the initiative by over 20 points. Even this year, Democrats have picked up two state legislative seats in rural Oklahoma, an small reversal of the carnage of the past eight years.

“This country is not founded upon common faith, color of skin, or where your ancestors come from,” Maxwell said. “We share one thing in America, that’s the hope of opportunity. Because we lack the economic justice that fair and open markets provide, we destroy that hope. We believe that issue resonates with everybody.”

Maxwell defines the problem very specifically. Multinational corporations have monopolized the entire agricultural sector, from seeds to livestock, produce to dairy, and everything in between. Even a farmer’s financial institutions have consolidated.

The effects go beyond the ability to raise prices when you’re the only game in town. For example, a proposed deal between Bayer and Monsanto, in the wake of completed mergers between Dow/DuPont and ChemChina/Syngenta, would lead to three firms’ controlling 80 percent of the US seed supply and 70 percent of pesticides, according to an issue brief from the Organization for Competitive Markets. “They’re controlling the seed, the genetics, and they sell chemicals,” Maxwell said. “Do you think they’ll create seeds that need less chemicals?” This inhibits the ability for the independent farmer to differentiate and plant what they want, a major driver of success.

On the livestock side, a handful of companies process meat and poultry, including Chinese-owned Smithfield (the largest US pork producer) and Brazilian-owned JBS (tops in all meat). And similar to the telecom monopolies’ splitting up access to Internet and cable TV service, livestock producers break up the country by region, with slaughterhouses placed far from one another. “You have to look at the regional market, because the farmer can only ship livestock so far,” Maxwell said. “So the farmer ends up with only one buyer.” Suppliers to large livestock producers have seen prices for their animals plummet, even as consumer prices for processed meat rise. And that’s in cases where the family farmer hasn’t been squeezed out of business by concentrated animal-feeding operations.

In the chicken market, the situation is dire. Farmer suppliers, under contract with agribusinesses, have not seen an increase in pay for 20 years. A 2013 report from the Pew Charitable Trusts shows that 71 percent of poultry farmers live below the poverty line. Companies pit farmers against one another in what is called the “tournament system,” where Big Ag ranks suppliers on performance and only pays those that rate highest. “You’ve spent a million dollars to raise chickens, have hopes and dreams, and you’re stuck,” said Maxwell. “It breaks the fabric of communities. It should be criminal, but in America it’s called good business.”

When farmers are paid less and consumers pay more, middlemen producers enjoy massive profits. But industrial agriculture also destroys soils and pollutes streams. Giant feedlots are environmental nightmares that drive down local property values and destroy the tax base. Routine animal cruelty flowers from concentrated ownership. When wealth leaks out to corporations instead of staying locally, communities suffer and despair leads to drug and alcohol abuse. And consumers lack the diversity of different foods.

Family Farm Action wants safeguards returned to farm communities, laid out in a farmer’s bill of rights on its website. These include subjecting agribusinesses to the same environmental standards as family farms, transparent labeling laws, increased access to financing for a capital-intensive business, and caps on foreign ownership.

But the biggest demand from Family Farm Action is for the government to reinvigorate the antitrust laws that ensure open competition and prevent collusion. A major case involved the rigging of a key benchmark price grocery stores use to buy poultry, which cost consumers hundreds of millions of dollars. “If the legal definition of collusion doesn’t give the Department of Justice the ability to prosecute, then we need to change the laws,” Maxwell said. The organization also supports using the Sherman and Clayton Acts to break up concentrated agricultural markets.

Next, they want the Trump administration or Congress to finalize three rules proposed near the end of the Obama administration, authorized under the Packers and Stockyards Act. The rules would ban the tournament system for chicken farmers, codify certain predatory and retaliatory practices, and allow farmers to sue for mistreatment even if the entire market for his produce or livestock wasn’t harmed.

The rules came out of a promise then-candidate Obama made to protect farm communities, and five field hearings done early in his tenure. Sadly, Obama’s USDA never followed through, and after 2011 was prevented by Republicans in Congress from moving forward until the final days. “I thought [the Obama rules] were watered down, but this administration has done nothing on them,” Maxwell said. The rules have been delayed until at least October, much to the industry’s delight, Maxwell added. “You can’t even find them on the USDA web page.”

Rural communities have been perturbed about Trump’s broken promises and a proposed 21 percent cut to the Agriculture Department budget. But too often, political observers take the announcements of Big Ag and its corporate trade associations as a substitute for what local farmers want.

For example, media reports have lamented the pullout of the Trans-Pacific Partnership as a loss for rural communities, when the impact on agriculture is actually tiny, as economist Dean Baker demonstrates. But the real beneficiaries of the TPP and Nafta are Big-Ag giants like Cargill, who have agricultural operations overseas.

Identifying the corporate power that holds back farm communities could revive Democratic fortunes. Obviously, there are huge cultural barriers dividing Democrats from these areas, dominated by a media that paints them in the worst possible light. But the answer to that isn’t to walk away from the region, or present Republican-lite “moderates” who line up with corporate interests; it lies in showing farmers you stand with them, not the monopolists.

“The current system is just not sustainable,” Maxwell said. “Hope for your piece of the prosperity pie is the fabric of our society.”

The Democrats continue to roll out their agenda, and I’m noticing a pattern. Want to lower the cost of prescription drugs? They’ve got a “price gouging” enforcer, the director of a new agency dedicated to investigating drug manufacturers that jack up the cost on their products. How about breaking concentrated corporate power across all fields? They’ve got a consumer-competition advocate who would recommend investigation of monopolistic industries to the Justice Department and the Federal Trade Commission. How about trade, a policy ripped away from liberals by Donald Trump? Democrats have you covered there too, with a new “American Jobs Security Council” that can veto foreign purchases of stateside companies on economic grounds, and an independent trade prosecutor that would challenge unfair trade practices outside of the World Trade Organization framework.

Now, these aren’t the only proposals in the Better Deal. But they stand out, particularly because the new suggested positions duplicate existing structures within the federal government. The FTC (and, to a lesser extent, the Food and Drug Administration) is supposed to monitor drug prices, as well as other monopolies. The Committee on Foreign Investment in the United States (CFIUS) votes on foreign mergers. And the US trade representative handles trade disputes.

Of course, building new agencies with targeted missions was a hallmark of the New Deal. And like under FDR, these Better Deal agencies are an admission that the current framework is fatally corrupted, unresponsive to public needs. The FTC has stood relatively mute amid massive consolidation in virtually every industry. There hasn’t been a major case to break up a monopoly since the Microsoft suit in the late 1990s. Drug-price spikes are also occurring without much resistance, at least not from policymakers. CFIUS is a coalition of cabinet members that only screens foreign investment for national-security implications; though the secretaries of Commerce and Labor sit on the committee and the White House’s chief economists participate, there’s no economic screen.

What’s really going on is that Democrats are trying to recapture the magic of the Consumer Financial Protection Bureau, the popular brainchild of Elizabeth Warren. That, too, was an agency that took over mostly existing capabilities; the FTC and the Federal Reserve had consumer-protection responsibility in financial dealings. But they were indifferent to the job because it wasn’t their sole mission. CFPB reordered these priorities under one roof with a singular mission—protect consumers. And it’s worked.

In fact, CFPB was really the only major new agency of the Obama era. And its history serves as an example that the culture of an agency matters in its effectiveness. Early stories about CFPB always highlighted this—how the examiners often came from outside agencies and the feel was more akin to a startup. Eventually the revolving door came spinning there as well, but for the most part the agency has maintained its mission.

The question is whether this is endlessly replicable, and whether it’s good practice to pile on new agencies on top of the old. And there’s another problem here: Changing the structure of the federal government is the kind of policy rollout best associated with a presidential campaign, not a midterm election. Even if Democrats were able to get these new agencies authorized, Donald Trump would be filling the seats until at least 2021. Democrats are asking for the reins of power, but making promises that at least in part would be restrained by the limits of that power in the near term.

Some might see cynicism in this approach. Democrats call for support in 2018 with an agenda that would require support in 2020. With the fragmented nature of our system, that’s somewhat inevitable, but it sure makes it easier to live up to your midterm campaign promises when they can’t be lived up to.

It’s worth noting that several Better Deal policies break with that trend. Democrats want Medicare to be able to negotiate drug prices (something they’ve promised before, then gave up on during the Affordable Care Act debate). They have a $1 trillion infrastructure bill and a plan to raise the minimum wage to $15 per hour by 2024. The competition policy proposal would change federal merger guidelines to reflect the broad range of harms caused by monopolies. On trade, Democrats want to penalize federal contractors who outsource jobs, add Buy America provisions to every project funded by taxpayers, and punish currency manipulation.

But as much as it’s a cop-out in the short term, the call for new Better Deal agencies recognizes a problem. New laws have to be carried out by an old bureaucracy. And the current one doesn’t work for the people anymore. It serves special interests, and its top officers think more about career advancement than the public good. On trade and competition and drug prices, regardless of which party has done the appointing lately, the public has gotten shafted. Is that a result of who was doing the picking, or agency culture that is rigid to change?

Admitting we need to start over reflects a reformist tendency that gave us the alphabet-soup agencies after the Depression. It’s an indictment of the predecessors, even on the Democratic side, who were unable and unwilling to alter the system. And it’s a warning shot to the expected bevy of 2020 candidates that they cannot think small about the task at hand: that they must reengineer instead of tinker.

The Better Deal isn’t entirely about building a new government atop the old one. But that tendency stands out, and, while it’s something of a dodge, it’s also as quietly radical as anything we’ve seen recently from a major political party.

Steve Mnuchin and Joseph Otting, the only two CEOs in the short and ignominious history of OneWest Bank, both testified before Congress on Thursday. Mnuchin, already installed as Treasury secretary, answered questions at the House Financial Services Committee. Otting, who is seeking to become head of the Office of the Comptroller of the Currency, one of the most important banking regulators, testified at the Senate Banking Committee.

Both of them lied under oath.

We shouldn’t get numb to that. We shouldn’t become bored with displays of perjury and false statements to Congress, offenses punishable with prison time, according to the United States code. If nobody in the Trump administration bothers to enforce the law, we should do our best to enforce it ourselves in the court of public opinion. For whatever reason, Mnuchin and Otting are comfortable with officially being liars in public settings. And we should ask why that’s so.

In both cases, the lies in question concern OneWest, the properly labeled “foreclosure machine” that caused unnecessary ruin for an untold number of families after the great crash of 2008. I say “untold” because Otting and Mnuchin still refuse to supply basic records of how many families suffered foreclosure at their hands. Several senators asked for this information today without success. Senator Sherrod Brown said that he appealed to Mnuchin six separate times for these records and got no satisfactory response. Brown asked Otting the same question Thursday, and Otting said that the records were in the hands of CIT, which purchased OneWest in 2015, and added that he would “support” release of the data, but “I don’t feel it’s my position to request that information.”

As a mortgage servicer (handling day-to-day operations on loans), OneWest pushed borrowers into foreclosure with bait-and-switch tactics. It presented phony documents to courts as evidence for those evictions. It violated numerous foreclosure laws in California, to the extent that the office of the state attorney general’s consumer-law section wanted to prosecute the bank. In an industry of rogues, OneWest stood out.

But Otting, like Mnuchin before him, maintained that OneWest actually was a white knight, routinely coming to the rescue of homeowners. He touted the low error rate of an after-the-fact review of OneWest’s practices, conducted by reviewers handpicked by the bank under the bank’s own guidelines, and concluded “there’s a false narrative about the OneWest servicing operation.” Senator Brown replied, “It’s a false narrative to you, not to those that lost their homes.”

Brown referred to a 2011 consent order between OneWest and the agency Otting wants to lead, which stated OneWest “filed in state and federal courts numerous affidavits…in which the affiant represented that the assertions in the affidavit were made based on personal knowledge or based on a review…when, in many cases, they were not based on such personal knowledge or review of the relevant books and records.” They also, according to the order, filed documents with courts that were improperly notarized, and not correctly assigned or endorsed to prove ownership.

This is the textbook definition of robosigning. At first Otting dodged the issue, saying that, although he signed the consent order, “we did not confirm or deny the accusations.” But Senator Jon Tester wondered why Otting would sign off on an inaccurate agreement: “I don’t know why you would do that being in business.” So Otting opened up. He said that OneWest had “processes and controls” to review affidavits, though there were “errors from time to time.” He said everything was handled at one location so there could not possibly be problems with notarization because “everybody knew each other.” And he said the affidavit signer “validated principal, past due and amount due” with no errors in every case.

None of this is true. Erica Johnson-Seck, OneWest vice president, testifed on all of this in a deposition in 2009. Among eight people in their office, they signed 6,000 documents a week, mostly affidavits. She proudly boasted, “I have changed my signature considerably.… it’s just an E now,” enabling her to spend “not more than 30 seconds” on each affidavit. It is physically impossible to validate much of anything in 30 seconds of review. In fact, she said outright, “The figures I don’t, I do not check.” She stated she didn’t know who put the figures in the affidavit. She also said that notaries were not in the office when she signed documents, nor are the witnesses.

So Otting just out-and-out lied to Congress, as revealed by what a vice president of the bank he ran said eight years ago.

Mnuchin did the same thing. Representative Keith Ellison asked him about robosigning and Johnson-Seck’s testimony specifically. Mnuchin began by getting huffy about being called a “foreclosure king.” (It’s terrible for folks to remind wealthy financiers of the consequences of their actions.) Ellison asked if Johnson-Seck was under Mnuchin’s supervision. “Not directly,” Mnuchin replied.

“Was she employed under you?”

“She was employed at the bank.”

Mnuchin then said to Ellison, “I don’t think you know what robosigning is,” insisting there is no legal definition, and denied that there was any robosigning at OneWest, “for the record.” Ellison responded that “a person under your direct supervision admitted to it,” and then gave a credible explanation of the practice: signing affidavits that attest to reviewing the underlying material without reviewing them. Maxine Waters asked Mnuchin to apologize to Ellison for presuming that he was too stupid to understand robosigning. (Mnuchin said, “I’m not apologizing to anybody because robosigning is not a legal term and I was being harassed.”)

This is the third time Mnuchin has lied about robosigning to Congress, twice in written statements for the record and now in live testimony. These banking guys think they can get away with this by smugly denying criticisms of their conduct. And they’re probably right. Certainly nobody in the Sessions Justice Department is leaping at the chance to indict.

But when the leading regulators of the major banks in this country are habitual liars, people ought to know. Because if their knee-jerk response to fatal flaws at financial institutions that hurt people is to cover it up, anyone with a mortgage or a bank account should watch their wallet. “You permitted your bank to break the rules while in the process making life harder for homeowners,” Sherrod Brown said. “How do we trust that you won’t allow banks to skirt the rules and harm their customers as their regulator?”

Later in the Senate hearing, Senator Robert Menendez asked Otting if OneWest engaged in “dual tracking,” where banks worked on loan modifications and pursued foreclosure simultaneously, a bait-and-switch that severely harmed borrowers. Otting said it was “an industry practice,” as if breaking the law and crushing homeowners is permissible if everyone else did it too. This is the mentality of a protected class of bank executives who run roughshod over the country with impunity.

The toxic result of the failure to make examples of individual wrongdoing in the banking system that caused millions of foreclosures was never more on display than today. Mnuchin and Otting lie because nobody has ever held them accountable to the truth. We have a “Wall Street executive retreat in the president’s cabinet,” as Brown put it Thursday, because the last president’s cabinet didn’t see justice as a concept worth defending.

On the same day the Republican bid to overturn Obamacare began to fade into oblivion, the Trump administration embarked on a bigger quest: resetting a global trade consensus that has persevered for over four decades. US Trade Representative Robert Lighthizer released a set of negotiating objectives for the North American Free Trade Agreement, or NAFTA. Under fast-track rules adopted in 2015, the administration must present these non-binding objectives to Congress before it can enter into negotiations, and the talks with Mexico and Canada to refashion NAFTA will preview how the White House wants to handle trade around the world.

This was one of Trump’s major campaign promises, to write better rules for trade. And it’s a promise lots of Democrats might support. “People I represent were glad to hear that President Trump would renegotiate NAFTA,” said Representative Debbie Dingell (D-MI) on a conference call previewing yesterday’s NAFTA release. “He’s got to deliver on those promises he made to my constituents.”

At first glance, it’s a very mixed bag. The negotiating objectives for NAFTA are mostly vague, and in parts revisit the well-worn tactic of using trade rules to guarantee corporate profits. In fact, several provisions are ripped directly from the Trans-Pacific Partnership, the corporate-friendly deal Trump loudly rejected in January. “This document does not describe the promised transformation of NAFTA to prioritize working people,” said Public Citizen trade expert Lori Wallach in a statement. It looks like another case of Trump’s rhetoric’s being submerged in the swamp.

There are a few advances in the document, but even those suffer from lack of specifics. The administration wants to add assurances that NAFTA countries “avoid manipulating exchange rates” to make their goods cheaper and gain unfair advantage. While Canada and Mexico are not seen as currency manipulators, this inclusion of a currency chapter in NAFTA would be a first for a trade deal, setting a standard for future talks with potential currency cheaters like South Korea. However, enforcement would come only through “an appropriate mechanism,” with no explanation of what that mechanism would be. We already have a mechanism to fight currency manipulation: sanctions through the Treasury Department. Unless currency chapters are enforceable in trade agreements with tariffs or monetary awards they don’t advance anything.

The White House wants to put labor and environmental standards within NAFTA rather than in a side agreement, and it subjects violations to the same dispute-resolution process as violations of trade and investment standards. But while labor and environmental groups would have more ability to raise concerns, ultimately it would still be up to a government to dispute labor violations from another party to the agreement. The administration only promises “increased monitoring” to combat illegal activities.

Governments always claim that they’ll enforce labor and environmental standards: In 1993, Ron Wyden called a vote for NAFTA “a vote for less pollution.” But in this case workers or green groups would have to rely on a notoriously anti-labor, anti-environment regime in Washington to police violations by foreign exporters. They could not sue over NAFTA breaches directly.

Investors, however, would still have that ability under the controversial investor-state dispute settlement (ISDS) system, a secret extra-judicial court that gives corporations monetary awards for lost profits due to changes in law that run counter to trade agreements. While the document states that ISDS would have to be more transparent (hearings and judgments would be public) and “consistent with U.S. legal principles and practice,” it still exists, meaning corporations could still functionally overturn sovereign laws outside of the court system, and win billions of damages when governments try to write rules in the public interest.

In fact, much of the document seeks to achieve regulatory harmony between the participating countries. There are lines about “greater regulatory compatibility” and removing “unnecessary differences in regulation” in industrial and agricultural goods and “promot[ing] greater compatibility among US, Canadian, and Mexican regulations.” This is much like how the TPP would enable the blockage of regulatory improvements by tying them to a ceiling or international prohibition. I don’t think most Americans want our regulatory structure to be perfectly compatible with Mexico’s, particularly if “harmonization” means a race to the bottom to get industry-friendly regulatory ceilings imposed. This subordinates US law to another country’s standards.

The trade-in-services section is even worse. The administration aims to “prohibit discrimination” against foreign-services suppliers, including financial-services and telecom companies, while encouraging “fairer and more open conditions.” The goal is to force open state-owned enterprises (there’s a phrase about supporting state-owned enterprises “providing domestic public services,” but it doesn’t define what those are) and assume corporate control. And remember, this NAFTA renegotiation will serve as a template document, so it’s not necessarily about the impacts on just Canada and Mexico but also on the entire world.

This mirrors the entirely scary Trade in Services Agreement, a 51-nation pact currently being negotiated, as well as the TPP. One section serves as a good example. On a few occasions, the administration highlights a negotiating objective of rejecting measures that “restrict cross-border data flows.” This means that financial services or other countries could transfer personal data outside a host country, with no “localization” requirement that computer servers holding the data must stay within national borders. This breaks with thousands of years of precedent on locally kept business records, and has privacy advocates alarmed.

Back in 2013, an IBM lobbyist planted questions from an Obama USTR official in a public hearing about this very issue—preventing cross-border data restrictions. Trump is continuing a tradition of giving high-tech and Wall Street firms what they want, the ability to profit off acquiring and manipulating personal data from anywhere in the world.

Surprisingly, these issues of regulatory ceilings and data liberalization and enforcing intellectual-property rules (in other words, backing Hollywood and the pharmaceutical industry) are far more prevalent in the document than any strong benefits for workers. The administration does want to update “rule of origin” requirements in NAFTA so only products made in North America obtain duty-free benefits. And the document lays out the desire to “reduce the trade deficit” with Canada and Mexico, creating jobs and opportunity in the United States (I wonder what negotiating partners Canada and Mexico think of that!). But actually helping US workers is far more in the background than the rhetoric would suggest. On the job=offshoring incentives currently in NAFTA, or the ban on Buy American procurement policies, the document is mostly silent. “Much of the text repeats the negotiating objectives of the 2015 Fast Track bill, which GOP leaders and the corporate lobby loved,” said Public Citizen’s Lori Wallach.

It does appear that the globalists in the administration won this round before NAFTA negotiations even had a chance to begin. Some of the most ardent free-traders in the Republican caucus praised the contents of the draft. As Richard Neal, top Democrat on the House Ways and Means Committee, put it, “the ‘new’ NAFTA might not be new at all.”

NAFTA negotiations can now begin within 30 days. The biggest thing needed to truly assess whether the administration actually wants to fix NAFTA’s problems or further entrench corporate control is transparency. The European Union posts its formal proposals on the Internet for all to see before entering negotiations. Trump needs to do the same; otherwise we can assume he has something to hide from the working-class supporters who were promised a revitalization of US manufacturing. Workers have already seen those promises broken: Just look at Carrier, whose parent company received 15 government contracts after the company moved jobs to Mexico it said it would keep in the United States. They shouldn’t have to brace for being deceived again.

Today is Prime Day: Amazon’s bid to transform paying them $99 for an annual membership into a national holiday. The Internet oligarch is blanketing the Web with deals and enticements to encourage sign-ups. It even pitches this as a way to get a jump on holiday shopping—Amazon is literally selling Christmas in July.

The real intent here is behavioral: to make US consumers feel like they should shop only at Amazon. As Amazon CEO Jeff Bezos said last year, “Our goal…is to make sure that if you are not a Prime member, you are being irresponsible.” According to estimates from Consumer Intelligence Research Partners, 80 million households have Prime memberships. Because the primary benefit of Prime is free two-day shipping, shopping more at Amazon increases the perceived value of the membership, keeping users stuck inside the Amazon box. CIRP reports that the average Prime user spends $1,300 a year with Amazon, compared to $700 a year for the non-Prime Amazon shopper.

To get people to take that plunge, Amazon promotes big deals, which is consistent with its strategy of accepting major up-front losses in a relentless quest to dominate commerce and become America’s company store. (Type relentless.com into your browser and it goes to Amazon.) Armed with incredible amounts of shareholder capital, Amazon can simply pummel competitors into submission. So Prime Day is not just a sale, it’s a threat to any company selling anything in America.

This year on Prime Day, Amazon is offering four months of unlimited streaming music for 99 cents, a clear challenge to Apple’s iTunes and other streaming services like Spotify (which costs 10 times as much). The goal is to move people off alternative networks and into the Amazon universe, where everything is cross-sold and cross-promoted. Amazon also has major Prime Day sales on technology like its Alexa devices (one of which is designed for listening to music; all the better to pull people from streaming competitors). These devices make ordering on Amazon as simple as saying “buy paper towels” out loud. Again, the sale serves as behavioral marketing to make competition to Amazon unlikely.

Diapers.com is a good example. Their parent company, Quidsi, initially resisted Amazon’s buyout bid. Amazon responded by slashing prices so deeply on diapers, Quidsi executives estimated that Amazon was willing to lose $100 million on the product in three months to rip away market share. Diapers.com realized they couldn’t compete, and Amazon bought them out.

This market power enables Amazon to bully counterparts. The mere suggestion that Amazon would launch a consumer-electronics help service to rival Best Buy’s “Geek Squad” sent Best Buy stock plummeting. There hasn’t been a seriously successful Internet startup in over a decade, because Amazon and its fellow platform monopolists, Google and Facebook, can so easily buy up challengers or underprice them into oblivion. Startups need the oxygen only giant platforms can provide, and you can’t exist on Amazon’s ecosystem and thrive without becoming a target sooner or later.

This damages entrepreneurship, the lifeblood of a strong economy. It can explain not only soaring inequality but also the inescapable feeling that the economy is stuck in the mud. When so much consumer spending goes to Amazon instead of small businesses across the country, the retail base gets hollowed out and opportunity wanes. You may have the next great idea for something people will love, but your ability to get that into their hands rests on dealing with one giant company in Seattle, which is intent on either co-opting you or crushing you. In this sense, America’s monopoly problem is a problem of restraining liberty, preventing people from displaying their talents in the marketplace.

Incredibly, intermingled with this predatory pricing scheme is a trend of deception. According to a new report from Consumer Watchdog, Amazon routinely uses misleading pricing practices. Regulators have scrutinized Amazon’s use of “list prices” for years, which appeared next to its own price to show the value of the discount. Those list prices were higher than the prevailing market price, tricking customers into thinking they were getting a better deal.

Amazon changed this practice, introducing the “Was” price to show a historical reference for shoppers to compare with the price they pay. But Consumer Watchdog found that these reference prices often didn’t exist. In nearly 40 percent of the cases, the “Was” price was higher than any price Amazon ever charged. And these reference prices were on average 70 percent higher than the maximum price the company ever charged. If this is true, it violates Federal Trade Commission statutes on deceptive pricing and several state consumer-protection laws.

This fits with the behavioral marketing of Prime Day. Even the price of a Prime membership is a bit deceptive. Last year, Amazon introduced a monthly charge for Prime of $10.99 a month, rather than asking $99 a year in one shot. But the annual fee from the monthly payments translates to $133.88, over 30 percent more for the same service. Nonetheless, over one-quarter of Prime customers pay the monthly rate.

And keep in mind that Amazon is trying to enter the physical retail world with its purchase of Whole Foods. It’s unclear what that means for pricing—whether discounts will be again tied to Prime memberships, whether additional deceptions will follow into meatspace. But the Amazon-Whole Foods acquisition offers an opportunity to actually review Amazon’s pricing strategies, its leveraging of Prime, and its threats of market concentration.

Prime Day isn’t so much a holiday as it is Exhibit A in a grand scheme for control of the economy, one that hurts producers, economic vitality, and eventually consumers if monopoly becomes so calcified that prices can rise with impunity. I know everyone loves a sale, but we shouldn’t be buying what Amazon is selling.

Ed Navarro, a North Miami Beach architect, couldn’t hold back his anger at an April 3 city commission meeting. “The Romans invented plumbing over 2,000 years ago,” he thundered. “You guys are trying to make it seem that purifying water and pumping water is some amazing new invention, and we need an amazing new corporation to do it.”

“This is not a political rally,” Mayor George Vallejo interrupted.

“How can we have respect for you when you show no respect for us?” Navarro shot back. Vallejo then instructed police to usher Navarro out of the room.

By the end of the evening, the City of North Miami Beach, population 43,000, had voted 4-2 to begin negotiations with CH2M Hill, a private supplier, to transfer to it the operation of the water plant that serves nearly 200,000 residents of several South Florida cities. By May, the City finalized the deal, granting CH2M $190 million in contracts over the next 10 years. The transfer of management will force 80 union workers to reapply for their jobs. Despite vociferous opposition from residents and a brief FBI investigation into the deal, the City has plowed forward, with City Manager Ana Garcia praising the commissioners for “the courage it takes to challenge the status quo.”

Critics argue that privatization of public assets like water systems leads to job loss, a decline in service quality, and an increase in waste. Whether through acquiring ownership, assuming management duties, or financing deals with an equity stake, private companies extract a layer of profit that would otherwise be plowed into providing services. “Why would we…hand some dollars away to Wall Street or a private company?” asked Donald Cohen, executive director of In The Public Interest, an anti-privatization watchdog. “And give them control over the asset for 30, 40, 50 years?”

Privatization backers, who use the more politically palatable phrase “public-private partnerships” (or P3s), counter that these arrangements operate more efficiently, saving taxpayers money. But even if that were true, privatization contracts can lock cities and states into inflexible long-term deals, straining local budgets and eating away at democratic control.

The Trump administration has offered a lifeline to P3 enthusiasts, from family consigliere Jared Kushner’s privatization-friendly White House Office of American Innovation to a proposed infrastructure program that would facilitate toll roads and P3 deals nationwide. He branded the first week of June “Infrastructure Week,” both an attempt to deflect from cascading White House crises and a signal to financiers that the barn doors were flinging open. If Trump is successful, more cities like North Miami Beach will put public assets up for sale.

nyone with access to the American Society of Civil Engineers’ latest report card knows that the United States desperately needs to upgrade its roads, bridges, dams, electric grids, mass transit, airports, inland waterways, and more. The ASCE estimates a whopping $5.2 trillion infrastructure funding gap between now and 2040, the consequence of decades of deferred maintenance and a general antipathy to filling that hole through progressive taxation. But tragedies like the recent bridge collapse in Atlanta highlight the exponentially greater costs of emergency repairs, compared to routine upkeep.

Private corporations are almost always involved in public infrastructure. “Local cities have crews for basic repaving, but that’s 1 percent of what gets done,” said Kevin DeGood, director of infrastructure policy at the Center for American Progress. Everything else involves the private sector, including much of the design and all of the construction. While there are some dedicated funds, for the most part, federal, state, and local governments issue tax-exempt municipal bonds to pay for infrastructure projects. If you have a state or local pension, or are invested in a mutual fund, you’re probably financing a piece of the nation’s infrastructure.

Incidentally, this makes the Trump administration’s theory—that it must use tax incentives to lure investors into infrastructure deals—downright strange. Municipal debt, already laced with tax benefits, is a $3.7 trillion market, up over tenfold since 1981, according to the Securities and Exchange Commission. Investors enthusiastically purchase muni bonds. In general, infrastructure suffers from a gap in public resources, not an unwillingness for private actors to get into the game.

But some investors want more than just plain-vanilla bonds; they want ownership stakes in public works projects. Private-equity firm Blackstone has built a $40 billion war chest, with half of the money coming from the sovereign-wealth fund of Saudi Arabia, for infrastructure investment. Larry Fink, CEO of BlackRock, the world’s largest asset manager, wrote in his annual letter to shareholders that federal spending alone cannot meet US infrastructure needs. “Substantial expertise must be dedicated to bring projects to market in a format appropriate for institutional investment.… These projects must deliver competitive returns and that will often require efficiencies that can only be achieved through private ownership.”

Fink hints at what private investors see in infrastructure: the chance to control a natural monopoly. Most Americans don’t have the choice of two pipelines feeding water to their house, or two expressways to commute to work. With little competition for services, investors can target users for increased costs without public recourse. And that price gouging is what creates the competitive returns that private-equity holders expect to extract from infrastructure-related investments. The Federal Highway Administration cites annual returns on P3 equity of between 8 and 14 percent, far more than can be made from a municipal bond.

But while investors turn a tidy profit, cities and states pay dearly. For example, Food & Water Watch estimates water privatization costs governments between 50 to 150 percent more than municipal-bond financing. Often that gets passed onto ratepayers in their monthly bill.

Given this, why would any locality sign up for privatization? First, privatizers promise efficiencies in exchange for these returns. That could mean innovation and new technology, or it could mean job cuts, shoddier materials, and inattention to upkeep, none of which necessarily reflect the public interest. A study of water systems by Cornell University’s Mildred Warner found no cost savings whatsoever from privatization.

More important, privatization matches a political tendency for short-term thinking. “When you look at Rialto,” said Kevin DeGood, referring to a Southern California city that sold off its water system to a private company, “the driving factor was not water. The mayor wanted to rehab the Rialto airport.” That P3 deal brought $76 million in up-front money to the city for economic development and water-system improvements. It was effectively an off-balance sheet loan, a way to fulfill campaign promises without asking voters to pay higher taxes or shoulder more debt. Roughly one in every six dollars of federal, state, and local spending goes to private companies, according to a 2014 estimate by Donald Cohen of In the Public Interest.

But that cash infusion can come at the cost of relinquishing control to private interests that pull out profits over decades, whether the project remains worthwhile or obsolete. Of course, by that time, the politician who made the deal has long since ran his last election, and cannot be held accountable for the consequences. For example, Chicago’s now-legendary 75-year contract to lease parking meters to a private consortium includes “make whole” payments, regardless of usage. This makes it financially impractical to institute carbon-reduction programs like bike or rapid-transit bus lanes, or even shut down streets for local parades or festivals.

Similarly, state leaders waived fees on the Indiana Toll Road to evacuate flood victims in 2008, but then had to pay private investors $447,000 in lost revenue. Other “non-compete” clauses ban roadway improvements within the vicinity of P3s, protecting private profits at the expense of local benefits.

P3s take equity stakes, but don’t account for citizen equity. Denver’s proposed P3 to expand Interstate 70 widens a section of road that cuts through low-income Latino communities, spewing contaminated exhaust fumes and stirring up contaminated soil in neighborhoods. The city now faces a civil-rights investigation that could derail the $1.17 billion project.

In 2006, the Texas Department of Transportation hired Spanish firm Cintra to build, operate, and maintain a section of state highway 130 between northern Austin and San Antonio for 50 years. The P3 suffered from inflated ridership projections and severe maintenance problems. Bad pavement generated rough terrain on the 85 mile-per-hour road, and precipitation runoff from the impervious road exacerbated residential flooding in the city of Lockhart.

By 2016, lacking toll revenue to cover debt, Cintra filed for bankruptcy, the latest in a slew of P3s to go broke. The Pocahontas Parkway in Virginia, the Indiana Toll Road, and the South Bay Expressway in San Diego county are just a few of the many P3 bankruptcies in the past decade. In early June, Indiana had to take over the I-69 highway after the P3 went belly-up with the project half-finished. Owners usually take most of the losses in these cases, but taxpayers can be left paying off bondholders and undertaking maintenance they thought the private company would handle.

These and other failures have created a privatization backlash, as policy-makers wonder whether the costs are worth it. Missoula, Montana, recently grabbed its water system back from a private-equity firm in a lawsuit, part of a growing trend of remunicipalization; from 2000–13, private water companies lost 169 contracts. Even Republican governors like John Kasich have rejected privatization deals.

ut Donald Trump could put the P3 industry back in business, the way Ronald Reagan did through his President’s Commission on Privatization, or Bill Clinton did with his National Partnership for Reinventing Government initiative (which was largely about capping government head counts, thus forcing outsourcing to private contractors to staff critical functions). Trump announced that his son-in-law would lead the Office of American Innovation, seen as a stalking horse for privatization. “Jared Kushner doesn’t know anything about providing public services,” said Donald Cohen of In the Public Interest. “He’s going to look at metrics, how few employees can we have.” Indeed, the president has already floated privatizing air-traffic control, handing it over to the influence of large airlines, at the expense of smaller carriers and airports.

Trump’s main plan would give tax credits to private investors to take equity stakes in projects nationwide—in other words, P3 deals. What would get built would inevitably be tied to what can reap the highest returns. A bridge connecting a wealthy suburb, where users can afford large tolls, makes more sense than a sewage upgrade in a rural hamlet or inner city. Places needing infrastructure the most would be the least likely to get upgrades. Plus, luring investors with P3s would likely detract from municipal-bond financing, merely shifting money around rather than providing new infrastructure funds.

Worse, the administration has floated “asset recycling,” a concept brought over from Australia that would encourage cities and states to sell off public assets, with the proceeds going toward new infrastructure. “The bigger thing you privatize, the more money we’ll give you,” explained Gary Cohn, head of Trump’s National Economic Council. Asset recycling didn’t even work in Australia, as an In the Public Interest report found; typically, private investors acquired the assets cheaply, starving local governments of lifetime revenue. And the only localities winning new infrastructure are the ones that have assets worth selling; dilapidated communities likely don’t get the help.

Clearly, the White House is ready to privatize. The special assistant to the president for infrastructure policy, DJ Gribbin, was the managing director for major P3 dealmaker Macquarie Capital. And Trump’s budget proposal cut public funding for infrastructure overall, making federal dollars even more reliant on P3s. The fact that some of the biggest investment firms interested in P3s have CEOs serving on Trump’s economic-policy forum suggests that the whole policy is a conduit to sell off the public commons to Trump’s buddies.

If Trump wants to see the pitfalls of a privatization agenda, he could merely travel a couple hours south from Mar-a-Lago on Interstate 95.

orth Miami Beach’s Norwood water-treatment plant is a major source of revenue, serving a region with almost five times as many customers as city residents. The plant has earned awards for water quality; as recently as 2015, Mayor Vallejo praised its efforts.

But that same year, Director of Public Utilities Jeff Thompson found what he called “decades of neglect” at the plant. A subsequent independent review by the Eisenhardt Group recommended outsourcing facility management to the private sector. Critics, including plant employees and members of the local Public Utilities Commission, blamed the city for intentional lack of investment and reduced staffing. “It’s on the city workers somehow that the system has fallen into disrepair,” said a spokesman with AFSCME Florida. “If you’re a journalist, and the newspaper is not making money, is that on you?”

City commissioners voted last year to seek qualifications from private firms. Three major private water companies—French firm Veolia, Wade Trim, and CH2M—had their qualifications approved. But in an unusual twist, North Miami Beach exclusively negotiated with the top-qualified firm, CH2M, rather than seeking multiple bids to compare costs. “That’s atypical, I’ve never seen it anywhere else,” said Mary Grant of Food & Water Watch, an expert on water privatization.

CH2M was already under contract, through a subsidiary, to provide operations and maintenance services at the plant. The company also conducted an assessment of the plant and wrote its master plan. “CH2M was one of the consultants who recommended privatizing,” said Jorge Aguilar of Food and Water Watch, one of the opponents of the deal. Unsurprisingly, CH2M then won the very contract it had recommended the City issue.

As for plant workers, they could lose benefits under CH2M immediately, since the City’s contract with AFSCME expired in 2015. The CH2M contract calls for $2.4 million in annual savings in labor costs starting in year two. And with a fixed fee for operations and maintenance, CH2M can extract profits and deliver long-term cost savings only by cutting corners. In a survey of 10 water-outsourcing deals, Food and Water Watch found that private water companies reduced the workforce by 34 percent on average, often through not hiring replacements when workers leave. (The city is promising no job loss, though an FAQ does admit they’ll transition workers from city pension to a 401(k) plan).

Water rates also typically go up. A study of the 500 largest community water systems saw private companies charging 59 percent more for service. Rates in Bayonne, New Jersey, jumped 28 percent after a private-equity firm took over the system in 2012. Rates in Rialto, California, rose 68 percent since their privatization deal. In Coatesville, Pennsylvania, rates more than doubled in four years.

Even in North Miami Beach’s backyard, troubling lessons of water privatization emerge. CH2M runs the water system in nearby Pembroke Pines, which the Florida Department of Health said carried unsafe levels of trihalomethanes. In a less-than-reassuring response, a CH2M spokeswoman would only tell The Miami Herald that “the facts are different from what’s been reported.” In the city of Cocoa, another CH2M plant was investigated last year after “taste and odor” complaints about its water.

Privatization proponents say rate increases reflect how artificially low costs were previously due to underinvestment. And North Miami Beach leaders insist the city would retain total control over the plant, including rate-setting through the Public Utilities Commission.

But this is a dodge. If the City has to deliver a contractually obligated sum, and current rates won’t cover the cost, the only options are raising rates or backfilling with general fund revenues, an unsightly political prospect. “In practice you’re not going to do that,” said Kevin DeGood. Plus, the scant details thus far suggest that CH2M would be allowed to bill the city on a cost-plus basis for capital improvements, creating an incentive to drive up costs. The favorable terms show how there’s no “free money” in privatization: Somebody will eventually have to pay for the investment.

North Miami Beach privatized its sanitation department a couple years ago. Mayor George Vallejo is himself under criminal investigation in a public corruption case, and a whiff of scandal has hovered over the privatization bid. The Public Utility Commission wouldn’t even sign off on the deal, because it didn’t get the paperwork until days before the final vote.

City residents at the public meetings couldn’t understand how the same city councilors who insisted that there was no alternative to repair the run-down facility but privatization could have allowed it to fall into such disrepair. “I just feel like it’s a sad day when public servants admit that a public utility has been allowed to decay,” said resident Dawn Grayson in April, “but to add insult to injury, you’ve decided to surrender a public resource over to a for-profit enterprise.”

But the council agreed to the negotiations in April, and quickly handed over plant management to CH2M Hill in May, in a raucous meeting featuring ejections from the meeting room and repeated shouting. “Every time you do something bold and significant, you’re always going to have people afraid of change,” Mayor Vallejo said over the crowd. “I’m voting yes because I care about my kids.”

Mubarak Kazan, a local resident, summed up the community’s thoughts about the matter in a direct statement to Vallejo: “You seem to be the godfather for privatization.” Vallejo cut him off.

Before he became president, Donald Trump lent his name to a for-profit fake university that paid $25 million in compensation for abusing its customers. So perhaps we shouldn’t be surprised his administration gives similarly fraudulent operators a pass. That’s exactly what happened on Wednesday, when Betsy DeVos announced a postponement and imminent rewriting of two key rules designed to protect students of predatory for-profit colleges.

The Gainful Employment rule and the Borrower Defense rule both force for-profits to make good on their promises of helping students pursue a viable career path, and provide students a way to cancel their debt if the college actually defrauded them. The Gainful Employment rule has already been working to identify what colleges and universities fall short of delivering a quality, useful education; the Borrower Defense rule was set to go into effect July 1.

DeVos’s announcement postpones the effective date for the Borrower Defense rule, and sets up negotiated rule-making committees to revamp both regulations. As Pauline Abernathy with the Institute for College Access and Success notes, “Today’s action by the Trump Administration will be cheered by for-profit colleges and Wall Street but is terrible news for students, taxpayers, and anyone concerned about rising student debt.”

The concept of the Gainful Employment rule is simple: No school that doesn’t prepare its students to succeed should be able to access federal financial-aid dollars. Finalized in 2014, the rule assesses the after-graduation results of career college programs, either from for-profits or certificate programs at public and private universities. If the typical graduate’s loan payment exceeds 20 percent of discretionary income or 8 percent of total earnings, then they did not receive an education setting them up for “gainful employment” under the rule. It also required institutions to publish accurate information about graduation rates, average debt, and expected earnings. If career programs failed the gainful-employment rule, they would be restricted from having their students use federal student loans.

The first set of data released under this rule in January, before Trump’s inauguration, found that 800 programs serving hundreds of thousands of students were out of compliance. Approximately 98 percent of those failing programs were from for-profit colleges. Because for-profits survive on federal student loans—which make up almost 90 percent of their revenue—the regulation is an extremely effective way to put unsuccessful or even predatory for-profits out of business.

For those cases where fraudulent colleges do abuse students by lying about career-placement rates or earnings and sticking them with useless degrees, the Borrower Defense rule can help these victims get their money back. All student loan contracts have a “defense to repayment” clause allowing students to petition for debt cancellation if their schools close or if they believe themselves to have been defrauded. Before the rise of for-profits, this clause had hardly ever been invoked, but a slew of closures from networks like Corinthian Colleges and ITT Tech led many students to refuse to pay their loans.

A long-negotiated process, incorporating the viewpoints of the public and all stakeholders, led to a streamlined rule that allowed groups of defrauded students to get automatic loan discharges instead of having to petition individually. The new rule also expanded the allowable evidence to prove fraud, including job-placement and earnings records and related lawsuits. And it banned forced-arbitration agreements that prevented students from suing their colleges.

Saying that “my first priority is to protect students,” DeVos froze the impending rule, calling it a “muddled process that’s unfair to students and schools.” The Education Department cited active litigation in California challenging the rule as the reason to postpone it, but The New York Times obtained draft memos showing that officials initially discussed using budgetary impact as the justification. In other words, they looked for whatever pretense could get them to stop the rule on behalf of for-profit operators.

Alexis Goldstein, senior policy analyst at Americans for Financial Reform, called the action “a slap in the face to defrauded Americans,” and accused DeVos’s agency of placing “the interests of wealthy for-profit college executives ahead of students striving for a better life.”

Now stakeholders will have to go through new negotiated rule-making sessions to rewrite the rules, presumably in a manner more favorable to for-profit colleges. The Gainful Employment rule will remain in effect during this time, and DeVos promised to process approximately 16,000 student applications to cancel their loans under the old Borrower Defense rules. “Some borrowers should expect to obtain discharges within the next several weeks,” DeVos said.

However, with the old Borrower Defense rules in place, students are still subject to arbitration clauses that prevent them from taking their colleges to court. And automatic discharges will not go through, forcing students to become private investigators and make highly specific legal formations on the application for individual debt cancellation. This isn’t necessary, as the for-profit colleges involved have already been repeatedly cited, with a mountain of evidence and court rulings, as fraudulent actors.

Plus, current and former Education Department officials have acknowledged that for-profits are getting a light touch under DeVos’s tenure. Debt relief has slowed down, joint investigations with state prosecutors have gone cold, and the department has generally gone into a shell on these matters. Indeed, DeVos has brought in former employees of for-profits as top officials at the agency. Veterans groups have been among the loudest complaining about lack of action on fraud prevention.

It’s not clear if it’s even legal for the Education Department to delay the Borrower Defense rule without doing the negotiated rule-making first. Massachusetts Attorney General Maura Healey has vowed to sue the agency, calling the action “a betrayal of students and families across the country.”

While that gets litigated, public hearings will take place on both rules, on July 10 in Washington and July 12 in Dallas.

It’s difficult to find a less deserving recipient of federal largesse than the predatory actors of the for-profit college industry. They use deceptive marketing to prey on single mothers and veterans looking to better themselves, and hand them nothing but worthless degrees and a pile of debt. The Education Department’s decision is just a giveaway to these cheats, consigning more students to pain and suffering. There’s only one saving grace: At least Trump is too busy with the presidency to restart his fake university and join what will now be a land rush to abuse students.

House Republicans will go into work tomorrow and pass a bill designed to strip away virtually everything of value in the last round of President Obama’s 2010 financial reforms. And then everyone will get on with their lives, because the bill has no chance whatsoever of becoming law.

House Financial Services Committee Chair Jeb Hensarling, aficionado of industry-paid junkets, knows this. House Speaker Paul Ryan knows this. Not a soul in Congress believes that the CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act, the House’s Dodd-Frank overhaul, will see the light of day. But they’re passing it anyway.

And that’s the difference between Republican and Democratic conceptions of legislative power.

Let’s start by pointing out that the Choice Act is a bad bill. The acronym of the title suggests banks would have to make a “choice”: suffer under the allegedly burdensome financial regulations we have today, or maintain a ratio of liquid assets to overall debt—known as a “leverage ratio”—of 10 percent. Higher leverage ratios give banks the ability to absorb losses in case of catastrophe. There’s a germ of an idea here; simple requirements like leverage ratios are easier to enforce than the maddening complexity of much of Dodd-Frank. And if bankers are responsible for their own mistakes with their own money, you could imagine a lighter regulatory touch.

But here’s the problem: There’s no penalty for violators of the leverage rules. Under the act, if leverage ratios fell below the threshold for a regulatory exemption, a bank would get a year to rewrite its capital plan. So you could easily envision banks jumping back and forth, reaching compliance with leverage rules and then falling out, facing no sanction for doing so. A rule without enforcement isn’t a rule, and the only choice for Wall Street in the Choice Act is to do whatever it wants.

Added to this false choice is a dismantling of Dodd-Frank’s biggest features. The Consumer Financial Protection Bureau would be gutted, with its jurisdiction constrained and its budget subject to congressional meddling. Tools to unwind banks in a crisis would be repealed. Enhanced supervision of “systemically important” financial institutions would be eliminated. Securities and Exchange Commission (SEC) registration for hedge funds and private equity firms would be jettisoned. Stress-test methods would be publicly disclosed, allowing banks to prepare for these examinations of their balance-sheet health. The Volcker rule, preventing big banks that take deposits from gambling with customer funds, would be ditched.

House Republicans mainly don’t talk about these features, preferring to focus on regulatory relief for community banks and credit unions; the CHOICE Act exempts these institutions from most Dodd-Frank rules and reporting requirements. That’s literally the only thing you hear about from the House GOP, that Dodd-Frank unfairly caused the premature death of Main Street banks (which have been dying for decades amid the same market concentration afflicting the rest of the economy, with Dodd-Frank neither accelerating or decelerating that trend).

Incredibly, Republicans are selling this community bank relief feature as their version of Glass-Steagall. That famous regulation concerned the separation of commercial and investment banking, but in Republican hands, it just means unburdening smaller banks more than the already unburdened mega-banks. They are using the name of one of the history’s prominent bank regulations to sell deregulation. There was an outside shot than an actual Glass-Steagall restoration, sponsored by Democrat Marcy Kaptur and Republican Walter Jones, would get a vote along with the CHOICE Act. But Republicans on the House Rules Committee quickly shot that down, and so Thursday’s vote will just be on the CHOICE Act.

The Senate has a CHOICE Act too: It’s about education scholarships. That’s how much the CHOICE Act is disrespected on the other side of the Capitol, where they have no interest in or ability to pass such an overhaul. Any legislation of this type would need eight Senate Democrats to overcome a filibuster, which is about eight more than this kind of package could attract. The CHOICE Act is purely a framework in theory, and will never exist in practice.

Even the White House, in its statement of support for the CHOICE Act, concluded by writing “the Administration looks forward to working with the Senate on arriving at a final piece of legislation,” admitting that the bill as it is won’t reach the finish line.

So why bother with the CHOICE Act at all? The answer is that Republicans would rather send a message than send a law to the president. In 2009, Democrats tried to pinpoint legislation that could actually pass, and delivered as much as possible. Given the diversity of the Democratic caucus at that time, the results were incremental, but they did actually exist.

Republicans have no interest in bending on principle. The House has spent half a year making the same kinds of messaging votes they did when they knew Barack Obama would veto the finished product. There’s probably a bill out there that would reduce Dodd-Frank rules for community banks (although there’s plenty of tailoring in bank supervision already) that could pass Congress; in fact, here is that bill. But Republicans don’t want to make the choice of getting that done without freeing the big banks as well. So they pass the CHOICE Act, and it falls into the ether, and they can say to their lobbyist pals that they tried.

This is ultimately why congressional Republicans have full legislative control in Washington but no legislative accomplishments. It’s highly unusual for a dominant political party to do nothing with that power. But Republicans in Congress are more interested in making speeches than in making laws. And that cedes the playing field for governing almost entirely to Donald Trump.

In the case of financial regulation, the administration’s goals align with the intentions of the Choice Act. Trump has continually selected a rogue’s gallery of bank executives and corporate lawyers to oversee the industries where they used to work. Just this week, he picked Joseph Otting, the former CEO of OneWest Bank, to run the Office of the Comptroller of the Currency. So both OneWest CEOs in the bank’s ignominious history, Otting and Steve Mnuchin, command top regulatory positions. SEC chair Jay Clayton, former law partner at Sullivan and Cromwell, just hired Steven Peikin, former law partner at Sullivan and Cromwell, to run the agency’s enforcement division.

These personnel moves are playing out exactly as you’d expect. Enforcement is expected to be light to nonexistent. Rules are expected to exist in name only. Banks are expected to run wild.

But this repeal by neglect is temporary by design. A new administration would carry new priorities. Only statutory law can maintain policy continuity. But Republicans don’t want to do the work. Instead they write the Choice Act and other sparkle-pony wishes for industry that have no chance of success, abdicating their lawmaking role. They might as well not exist. And when the current White House occupant has a scattershot relationship to reality, that’s downright dangerous.

After prodding from independent ethics officials, the Trump administration has released a list of the waiver certifications it granted to White House employees. These waivers allow personnel to participate in matters they were personally involved with as lobbyists, or to interact with colleagues at their former places of employment.

The 17 waivers granted in just the past four months demolish President Trump’s ethics pledges and his vows to drain the swamp. They enable Steve Bannon to talk to his friends at Breitbart and let Kellyanne Conway work with her former polling and consulting clients. They give former corporate lobbyists a prime perch inside the corridors of power.

But one particular pledge stands out, because the recipient appears to be engaged in direct assistance to his former client.

Andrew Olmem was a partner at the white-shoe Washington law firm Venable. Olmem, Republican chief counsel for the Senate Banking Committee during the passage of the Dodd-Frank financial reform, now serves as a special assistant to the president for financial policy, as part of the lobbyist-heavy team led by National Economic Council Director (and former Goldman Sachs president) Gary Cohn.

While at Venable, Olmem lobbied the government for a host of financial-industry clients, but the key one to consider is the insurance giant MetLife. His waiver enables him to participate in meetings and communications with former clients on six separate issues, among them “reforming the Financial Stability Oversight Council’s (FSOC) treatment of insurers.”

FSOC, a panel of banking regulators, must determine which financial institutions, whether they are banks or not, are so big and interconnected that their failure could pose risks to the country’s economic stability. Designated firms are subsequently subject to higher capital requirements and more stringent supervision from the Federal Reserve. So far, FSOC has only designated three non-banks, all insurance companies: AIG, Prudential, and MetLife.

So Olmem, a former MetLife lobbyist, can work directly on the biggest issue affecting MetLife, getting them out from under significant regulatory scrutiny. But it’s worse than that, because we actually know the lengths to which the Trump White House has gone to assist Olmem’s former client.

MetLife is currently fighting FSOC designation in federal court. Last year, Judge Rosemary Collyer, a George W. Bush appointee, overturned the designation on three grounds: that the FSOC never assessed the likelihood of MetLife experiencing financial distress, that it failed to include specific projections of the losses that would arise as a result, and that never considered the costs of the designation on MetLife’s business.

FSOC appealed Judge Collyer’s ruling, and the DC Circuit Court heard arguments last October. They were about to rule in the case, and given the makeup of the three-judge panel and the tenor of the arguments, it looked like Collyer would be overturned, allowing the FSOC to designate MetLife.

But on April 21, President Trump issued a memorandum to Treasury Secretary Steven Mnuchin, asking him to take 180 days to review the FSOC designation process. The memorandum asked the Treasury to analyze the same three points in Judge Collyer’s ruling in the MetLife case: whether the FSOC should assess the likelihood of financial distress, whether it should include specific loss projections, and whether it should incorporate costs to the designated companies in its analysis.

In other words, this was a custom-made presidential decree, written to assist a insurance company’s litigation with the government—-the same insurance company whose former lobbyist is now allowed to work in the White House on the specific issue at hand. There was no real reason to issue the memorandum: under a previous executive order, the Treasury Department was already reviewing all financial regulations. The only way this memorandum makes sense is as a tool to block an adverse ruling against MetLife.

By the way, the gambit worked. MetLife immediately filed a motion with the appeals court, asking it in light of the memorandum to delay its ruling for 180 days, until the Treasury finished its review. The FSOC’s counsel, the Justice Department—whose leadership was also chosen by Trump!—asked for 60 days to come up with a response to MetLife, effectively consenting to one-third of the delay. With the two sides in agreement, the court allowed the 60-day delay, with no action until July 11.

If nothing else, this gives MetLife a temporary reprieve from Federal Reserve scrutiny and capital rules, which will save the company millions in compliance costs. So the memorandum provided direct material aid to a corporation. Under the ethics waiver, MetLife’s former lobbyist could have written that benefit. It’s almost unquestionable that Olmem at least played a role in drafting it.

Olmem’s waiver says that “the need for your services outweighs the concern that a reasonable person may question the integrity of the White House Office’s programs and operations.” Reasonable people are indeed questioning! “What special attributes does Olmem bring to the job, other than a deep appreciation of the views of the corporations he will now help regulate?” asked Robert Weissman, president of the watchdog group Public Citizen. “For the Trump White House, even its own, highly touted ethics rules are no more than an inconvenience to be waved aside if they interfere with corporate business as usual.”

This sorry display shows the deep entanglement between Trump’s White House and corporate interests. It doesn’t end there: Energy lobbyist Michael Catanzaro is helping to set energy policy. Retirement-account- company lobbyist Shahira Knight is helping to set retirement policy. Olmem himself can work on policy affecting Puerto Rico’s fiscal crisis, despite having as former clients six former hedge funds that hold Puerto Rican debt and are fighting the commonwealth for full payment in court.

The MetLife situation is just the cleanest example of direct aid to an individual corporation, with its former lobbyist as facilitator. If that can get a waiver from ethics rules, the rules as a practical matter don’t exist.

The Center for American Progress has been a White House in waiting for mainstream Democratic candidates for over a decade now. When it places something on the agenda, that becomes part of mainstream discussion on the center left. And at its Ideas Conference this week, it embraced one idea that has been kicking around the left for a long time: guaranteed employment for anyone who wants a job.

In “Toward a Marshall Plan for America,” CAP frames this as an answer to growing despair and acute economic pain bred by stagnant wages and lack of opportunity. But few advocates who have been pushing a federal-job guarantee for so long were consulted or even cited in the proposal. And while they’re generally thrilled that their life’s work has entered a broader conversation, they’re concerned that something is getting lost in translation.

The federal-job-guarantee concept goes back to Huey Long’s Share Our Wealth plan in the 1930s. The Rev. Martin Luther King Jr. endorsed “employment for everyone in need of a job” in the civil-rights era. Under this framework, the government would fund jobs with a living wage and benefits similar to public-sector workers’. The open-ended program would be funded as needed, expandable in recession, and contractable when the economy recovers. Government would become the employer of last resort.

CAP’s version is somewhat targeted. Its focus is on non–college graduates specifically, which it says have been disproportionately left behind economically. Real income fell for workers without a college degree from 2000 to 2016, and mortality rates for this subset have grown. So CAP proposes a commission for a “national Marshall plan” to fund living-wage jobs at $15 an hour. “An expanded public employment program could, for example, have a target of maintaining the employment rate for prime-age workers without a bachelor’s degree at the 2000 level of 79 percent,” according to the policy brief. Right now, that would mean 4.4 million jobs at a cost of about one-quarter of Donald Trump’s tax cut.

What kinds of jobs would be created? CAP suggests that home health care, child care, and teaching aides are all urgently needed. It also cites infrastructure investment for job creation–roads and bridges, but also schools and hospitals. Interestingly, CAP also brings up the concept of public apprenticeships: paying people to engage in full-time training for high-growth occupations, with the idea of spinning out skilled workers to the private sector.

I talked to several supporters of public jobs and the federal-jobs-guarantee concept. All of them welcomed CAP to the discussion. “They’re invoking the language of a job guarantee which is a permanent program, that’s great,” said Pavlina Tcherneva of the Levy Economics Institute at Bard College. But while the adoption shows the momentum for public job creation as a political force, job-guarantee supporters had several concerns about CAP’s formulation.

“Their discussion was heavily focused on the provision of employment for those with a high-school diploma or less,” said Sandy Darity of Duke University, one of the job guarantee’s greatest champions. To him, this leaves behind large segments of the population who might need jobs. For example, Darity points out, the unemployment rate for African Americans with some college education is higher than for whites who have never finished high school. (Racial issues are “really repressed in their analysis,” Darity noted.) The recently incarcerated and recent veterans also have high unemployment rates. “We think anybody who cannot find work in the private sector should have the option,” Darity concluded.

Solely targeting non–college graduates, a measure clearly designed to serve a political goal (much of the CAP paper details the shift of the working-class vote in the Midwest from Barack Obama to Donald Trump), necessarily limits the reach of the program. “How would this plan have helped after the Great Recession, when 800,000 people a month were losing jobs, including skilled workers with college degrees?” asked Stephanie Kelton, economics professor at the University of Missouri–Kansas City and former budget aide to Bernie Sanders. “If we’re genuinely trying to achieve full employment, we shouldn’t be targeting 79 percent labor-force participation. We should eliminate involuntary unemployment.”

Darity estimated that the 4.4 million job target was about two or three times less than what’s needed for a real job guarantee, and Tcherneva put it closer to four or five times less. For their part, Ross Eisenbrey and Larry Mishel of the Economic Policy Institute were more comfortable with CAP’s scope, but questioned the political overlay. “I’m not sure this responds to Trump voters, who are looking for middle-class jobs,” said Eisenbrey. “They’re not desperate for $15/hour.”

One familiar complaint with the job-guarantee concept in general is that making essential services like health care and education reliant on available dislocated workers is dangerous, because the availability of those services would expand and contract based on the state of the labor market. “We think we need universal child care, we don’t want child-care work subject to this accordion,” said Mishel.

But job-guarantee advocates say this misses the crux of the debate. “The goal in and of itself is job creation.  You create the job to fit the person,” said Pavlina Tcherneva, who cited a number of possible avenues for the program. For example, jobs in health care and education and environmental protection have been perpetually underfunded, and could be boosted by a permanent public workforce.

Apprenticeships would be eminently expandable in rougher times (more trainees paid to learn on the job) and could be built into a public-job pipeline with opportunity for promotions and raises, what Darity calls “an occupational ladder.” Plus, a job guarantee can eliminate how we perpetually defer community investments, whether they be in alternative energy or broadband deployment, basic maintenance and upkeep, or “human infrastructure” where there are local deficiencies. The Golden Gate Bridge gets painted once a year and it takes 365 days. Habitat for Humanity has an endless supply of requests to build homes. Lead pipes in Flint could use replacement. Preparing our inadequate roads for self-driving cars, if the promise is real, will literally demand the largest infrastructure project in American history. This doesn’t have to be paying people to dig holes–there’s plenty of ongoing work to be done for all types of job seekers.

Finally, Tcherneva said that a job guarantee would realize the promise of full employment and limit the force of recessions through its “automatic stabilizer” effect. “Right now an unemployed worker’s spending pattern is different if they don’t know what’s going to happen to them,” she said. “With a job guarantee, this is completely transformed.”

The job guarantee is sometimes placed in opposition to a universal basic income for all Americans, but both address the same problem and can coexist. There are “participation income” proposals, for example, that tie a basic payment to making a contribution to society. But a job guarantee combines the baseline benefit to the dignity of work and self-reliance with tangible benefits to productivity and the economy. It also can set labor force benchmarks, on wages and benefits, that a UBI, normally pegged at a sub-poverty level of $10,000–$12,000 a year, just cannot provide. Companies will have to adapt if a federal-job guarantee offers health care, sick leave, and a pension, or else risk losing workers. “One of the purposes is to eliminate low-wage labor,” said Darity.

There are lots of versions of the job guarantee. Eisenbrey has worked on proposals using block grants to high-unemployment areas in times of stress, for example. It’s a good debate to have, and something leaders across the center-left spectrum should engage in. CAP is proposing a commission to tackle this idea. The group should draw on what’s already been done, and invite those who have toiled on this for years to the table.

Sinclair Broadcast Group’s $3.9 billion purchase of Tribune Media, announced Monday, would have been impossible a few short months ago. The Federal Communications Commission’s clear intent to relax media ownership rules have facilitated a bonanza of rumored consolidations and mergers, empowering a small cabal of media tycoons to control the flow of news and information to shockingly large segments of the public. Sinclair/Tribune is only the beginning of a flood of deals we can expect in coming months.

Some might wrongly view the Sinclair purchase with a sigh of relief, because investment firm Blackstone and Rupert Murdoch’s 21st Century Fox assembled a competing bid last week. But Sinclair’s ascendancy is arguably worse for news consumers than even Fox pulling off the merger.

Sinclair, which already owns 173 television stations, mostly affiliates of major broadcast networks in small and mid-sized markets, may be familiar to liberals with a long memory. Back in 2004, Sinclair refused to broadcast on its ABC affiliates an episode of Nightline that read the names of war dead in Iraq. Then, Sinclair planned to pre-empt programming and air an anti–John Kerry documentary on all of its (at the time, 62) stations, without commercial interruption, two weeks before Election Day. After furious pushback from Democrats, and an activist campaign aimed at tanking Sinclair stock, the company compromised by running a portion of the documentary, produced by the Swift Boat Veterans for Truth, on about two-thirds of its stations, as part of a “broader discussion.” The final product, “A POW Story,” devoted over 30 minutes to Kerry’s Vietnam service and just four minutes to George W. Bush’s time in the Texas Air National Guard. Media Matters described the program as containing “factually false statements.”

Some critics are now concerned that Sinclair will use Tribune properties like “superstation” WGN America (which airs nationally in 80 million homes) to christen a new right-wing news network to challenge Fox News, perhaps even scooping up castoffs like Bill O’Reilly. That’s not my main concern; the local news stations Sinclair controls are already more impactful than an upstart cable news competitor will ever be. Sinclair has grown three-fold since 2004; even before the Tribune acquisition they ran stations in well over one-third of the country. Local news broadcasts may not register in Washington, but they remain one of the largest sources of information for Americans. And Sinclair continues to put its thumb on the scale.

The company packages its own news segments that its affiliates, cash-constrained and starved for content, typically run. In 2014, The Washington Post reported that Sinclair habitually aired anti-Obama hit pieces in conjunction with right-wing think tanks. Sinclair executives routinely give to right-wing causes and candidates, and the news programming makes little effort to hide its political preferences.

In December, Politico reported that Jared Kushner struck a deal with Sinclair during the general election campaign for favorable media coverage of Donald Trump. In exchange for more access to campaign officials and the candidate himself, Sinclair ran the interviews without additional commentary, giving Trump an unfiltered pipeline into millions of homes. Sinclair Executive Chairman and former CEO David Smith appeared as a guest of honor in the Trump inaugural parade. Last month, former Trump surrogate and White House spokesman Boris Epshteyn joined Sinclair’s Washington bureau as its “chief political analyst.”

Now Sinclair adds 42 local stations to its roster, including in big cities like New York, Los Angeles, Chicago, and Washington. This makes it the largest single owner of local television stations, reaching over 70 percent of US households. And Sinclair can thank Trump’s FCC for the opportunity, in a deal that looks suspiciously like a quid pro quo for all that slobbering coverage during the campaign.

The FCC has long limited any one owner from broadcasting to more than 39 percent of the national TV audience, or from owning more than two stations in the same market. But in April FCC Chair Ajit Pai restored something called the “UHF discount.” This allows owners to exclude half of its stations broadcasting on the UHF bandwidth from the audience cap. The FCC voted 2-1 to bring back the discount, and Sinclair’s ownership percentage “fell” from 39 to 25 percent overnight. The day after the vote, Sinclair announced the purchase of Bonten Media, which owns 14 stations in eight markets. They couldn’t have done it without the FCC rule.

Everyone assumes that Sinclair will have to divest some stations after the Tribune merger, to keep within the 39 percent cap. But Pai has signaled that he wants to loosen consolidation rules across the board, making the divestiture unlikely.

As a result, the industry is in the midst of a gold rush. CBS, Disney, Univision, and Comcast have all discussed purchasing more local stations. Every major broadcaster is positioning itself for future negotiations about carriage contracts and advertiser deals, with consolidation atop the agenda.

TV stations are far from the only entities in media looking to deal. AT&T and Time Warner already announced their deal, which would put channels like CNN and HBO in the telecom’s grasp; Pai said he wouldn’t even bother to review it. Verizon is sniffing around Dish Network (similar to AT&T’s ownership of DirecTV) and Charter Communications, which would further narrow the cable and satellite distribution for media. Sprint has eyed T-Mobile for a team-up that would reduce national wireless companies from four to three, at a time when more Americans stream video on their phones. T-Mobile, for its part, wants to align with a cable distributor. Comcast and Charter just inked a wireless partnership, which could lead to you paying one company for your Internet, television, landline phone and mobile service.

That’s a tremendous amount of power to put in the hands of a few conglomerates. With Pai’s expected loosening of net-neutrality rules, it sets telecoms up to throttle competing content, close off innovators who can’t afford the tolls, and lock in market dominance.

The local TV roll-up is occurring on a parallel track. Sinclair and its colleagues occupy one of the few media spaces out of the reach of cable and telecom gatekeepers—broadcast TV. But the goal is the same: to control the largest possible audience and muscle out competitors. And this ties in with Sinclair’s political project of providing slanted, subjective news and opinion to an unsuspecting public. When in power, the right-wing beneficiaries of these in-kind donations will relax media ownership rules to grow Sinclair’s empire even further, expanding its reach. Corporate-owned media has more fealty to its shareholders and executives than supplying diversity of opinion—just look at MSNBC’s counterintuitive lurch to the right while its more liberal voices garner the highest ratings.

This looks at first glance like an inexorable march toward a narrow media landscape tilted toward the right, with an eager partner in the White House and the FCC. But there may be one silver lining in the Sinclair deal. Prior to this, they’d been able to propagandize mostly under the radar. There’s simply less attention paid to local news in out-of-the-way markets. But Sinclair will now occupy prime dial space in the nation’s biggest cities. They’ll operate under a far bigger microscope. Activists will have to pay attention and call out the worst abuses that result from monopolizing the news.

Every time some upstanding leftist brings up single-payer health care, the punditocracy dismisses them as deluded fantasists without any understanding of the realities of government or markets. But House Republicans are apparently going to vote tomorrow on an Obamacare replacement framework that accepts the entire logic of single-payer. It just does it in the dumbest way imaginable.

Let’s understand what House Republicans are trying to do. The American Health Care Act is described as a repeal to Obamacare. But the party’s constituents and even the president of the United States don’t favor such a move, or at least don’t want to deal with the consequences of denying someone coverage because of a pre-existing condition. Yet this is precisely what the House Freedom Caucus demands, based on their belief that “Obamacare regulations” (like insurance companies having to accept sick people) are raising prices.

So an amendment negotiated between the Freedom Caucus and a moderate Republican backbencher from New Jersey named Tom McArthur gives states the ability to obtain waivers to several Obamacare requirements, including the “essential benefits” package that defines acceptable insurance, and the “community rating” provision that forces insurers to charge the same rate for all applicants, except for a narrow band based on age and whether or not the patient smokes. This effectively repeals the pre-existing condition exclusion, because in the states that receive the waiver, they can charge an unlimited amount to the sick, pricing them out of the market.

States could only get the waiver if they showed that their new plan would either “reduce average premiums, increase enrollment, stabilize the market, stabilize premiums for individuals with pre-existing conditions or increase the choice of health plans,” according to Politifact. But there’s enough wiggle room in there (after all, if you purge the sick from the health-insurance rolls, average premiums would indeed probably go down) that a state government friendly to the cause of dismantling Obamacare would surely grant the waiver.

Moderate Republicans grew nervous at the idea that health care would only be affordable for the healthy and not the sick. McArthur claimed, in a press release, that no state could get a waiver unless it figured out how to handle those with pre-existing conditions, like by creating a high-risk pool. These are prohibitively expensive and have failed almost wherever they’ve been tried. McArthur also said that only those with a lapse in coverage can be charged more based on health status, but this creates an incentive for health-insurance companies to jack up prices for everyone, to weed out the poor, who correlate with those who require more health care.

The point is, the moderates needed more assurances. So Representative Fred Upton engineered another amendment to alleviate the consequences of the previous amendment. Upton’s provision would use $8 billion in public funds over five years to compensate people with pre-existing conditions who face higher health-insurance prices (possibly through a privately issued high-risk pool, possibly through just subsidizing those who experience cost increases; it’s a bit unclear at this point). After going over this with President Trump, Upton, and Representative Billy Long reversed their position and agreed to support the bill. The vote is likely to be tomorrow.

This is so convoluted it’s going to be hard to work through. And the money involved, a mere $1.6 billion a year, is really pathetic and nearly 90 percent less of what experts say would be necessary to properly fund such a mechanism. But let’s break down what Republicans are doing. By allowing health-insurance companies to discriminate based on a pre-existing condition, the GOP would break the market for this subset of people. And then they would use government funds to fix this market failure. But they would funnel it directly to health-insurance companies, rather than eliminating the middleman.

This is single-payer for dummies. In a single-payer system, the government picks up the health-care costs for the population, paid for through progressive taxation. The market power of having one insurance payer can work to lower overall health care costs, making the system sustainable. In Trumpcare’s single-payer for dummies, the fragmented private-insurance middleman remains intact. But taxpayer dollars still pick up the health-care costs for those who cannot afford it. Instead of acquiring market power, they just give those taxpayer dollars to the private middlemen, which tells the private middlemen they can charge whatever they want and always get paid.

After all, if the paltry $8 billion doesn’t work to prevent massively increased costs for those with pre-existing conditions, the public will cry out for more protection. And since Obamacare created an expectation that the sick would be protected in America, that would lead to more taxpayer dollars put to this use, leading to higher prices, and more money, and so on, in a death spiral. That’s why it’s single-payer for dummies: It has all of the logic of the government stepping in to make sure everyone has health-care coverage, with none of the efficiencies that should create.

Keep in mind that all of this is being done to allow House Republicans to get something, anything, that they can call “‘Obamacare repeal” out of their chamber, regardless of whether the Senate will pass it. (Ron Howard voice: they won’t.) It’s a purely political maneuver. But they’re replacing a twisted Rube Goldberg formation with an even more twisted, even more Rube Goldberg formation that uses public money to plug self-created holes. You’re essentially telling insurers to discriminate and then paying them off for the discrimination. And if you’re using public funds to subsidize insurance and ensure affordability, the next logical step is to have the government pay all health-care costs up to a certain level.

Of course, these are Republicans we’re talking about, so at the same time that they’re subsidizing private coverage, they’re dismantling Medicaid, the government-run system for the poor, cutting it by $800 billion. This will only pull more people into this pre-existing-condition coverage gap nightmare, which the American Health Care Act handles by shoveling more money to insurance companies as a bandage.

House Republicans are so desperate to repeal Obamacare, then, that they’re introducing the stupidest possible version of government-run health insurance. It’s a taxpayer handout to for-profit insurance companies, rather than a centralization of the market in not-for-profit hands, to better negotiate with providers. Republicans can’t bring themselves to admit that the government is the only entity able to ensure quality, affordable health coverage for everyone. But anyone who reads their legislation can see that truth.

In March, following an advertiser revolt over having their commercial messages appearing alongside offensive YouTube videos, Google (YouTube’s parent company) changed its policy of automated ad placement. But Google swung so far in the direction of “brand safety” that it stripped ads from anything that an advertiser could conceivably find controversial—including virtually all news and opinion. Longtime producers suddenly saw their revenue drop to nothing overnight, imperiling the businesses they had built on the basis of hits on YouTube, where millions of viewers congregate daily. One tweak to an algorithm by a massive corporation triggered a wave of existential crises for the purveyors of independent media.1

This extreme dominance by a handful of Web-based platforms, and its effect on entertainment and information, is the subject of Jonathan Taplin’s new book, Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy. Taplin details how the United States has handed over the delivery system for almost everything written, filmed, or recorded to a clique of libertarians who have hoarded the benefits of our cultural output at the creators’ expense.2

Taplin knows his subject well. I’d call the book a “policy memoir”: Starting out as a weekend roadie at the famous 1965 Newport Jazz Festival where Bob Dylan “went electric,” Taplin became a tour manager for the Band and later went on to produce films for Martin Scorsese, Wim Wenders, and Gus Van Sant. In 1996, he co-founded Intertainer, an early streaming video-on-demand company. From his father, an antitrust lawyer, he gained real insight into the shattering cultural impact of online disruptors.3

Though there have been exploited artists throughout US history—particularly among the poor and African Americans—Taplin insists that the music and movie businesses in the 1960s and ’70s were exceptions in that they focused on nurturing talent and sharing the wealth. Through performance royalties and record-label investments in career development, “middle-class musicians” like the Band could make a living even without monster hits. But the emergence of digital monopolies in subsequent decades changed everything, and artists without songwriting credits failed to secure their place in the new distribution model.4

Levon Helm, the Band’s legendary drummer, spent the end of his life holding concerts at his upstate New York barn to pay the medical bills arising from the throat cancer that killed him in 2012. Meanwhile, Spotify pays musicians like Helm just $0.0048 each time someone streams a song from their back catalog. Bands made more money in 2015 from vinyl than from streaming.5

So how did artists get left in the dust? Taplin covers the origins of the Internet (once thought of as a countercultural platform for personal creativity) and its takeover by the fast-movers and thing-breakers of his book’s title. Platform giants capitalized on the teachings of the conservative jurist Robert Bork, who radically altered the way that courts looked at antitrust policy. As long as prices for consumers stayed low, Bork argued, government should not intervene to promote competition. Peter Thiel, an early investor in Facebook, took this to mean that tech companies should seek to defy regulations and centralize control, thus solidifying their grip on our primary communications medium. Their motto: “Who will stop me?”6

These days, Amazon accounts for over 40 percent of all book sales; Facebook attracts hundreds of millions of users every day; and Google dominates online searches and (with Facebook) online advertising. Meanwhile, newspaper ad revenue has cratered, and book and record stores have closed up shop, subsumed into the Internet behemoths.7

By constantly refining and promoting their own services, these platforms can extend their monopolies and, if they don’t force competitors into irrelevance, buy them out instead.8

Then there’s the inescapable fact that economic power increases political power. Taplin details the regulatory capture that has kept Google, Amazon, and Facebook out of political trouble and even unofficially favored over the competition.9

hese privileged corporations extract profits in two major ways. First, they squeeze artists. Amazon can threaten to deny access to publishers unless they reduce prices; in Facebook’s case, the acquisition costs are nonexistent, because its offerings are entirely generated by users. Second, platforms use what Taplin calls “surveillance marketing,” engineering a massive database covering the preferences of billions of users and then selling that data to advertisers. This becomes prime real estate for marketers, who consequently pay a premium. “Like the Kochs, Google and Facebook are in the extraction industry—data is the new oil,” Taplin writes.10

This data extraction inevitably creates “externalities,” consequences that the platforms don’t take into account. For instance, digitization makes it harder for artists to earn a living; they’re left begging for scraps as the platforms thrive on ad revenue (Google earned $74 billion in revenue in 2015). Entire sectors of the Internet economy depend on user addiction rather than human development. Music and video—agglomerated under the pitiful rubric of “content”—become commodified, a way to attract eyeballs so Amazon can sell paper towels. The use of “data analysis” to determine what will keep an audience’s attention homogenizes and thins out the culture, silencing vital voices.11

While all of this is important, Taplin does carve out an exception for the major Hollywood studios. That may not be entirely warranted, since Taplin’s frame of reference—the Woodstock era of music and the American New Wave cinema of the 1970s—is no longer relevant. Studios are now controlled not by family-owned firms, but rather by large conglomerates that primarily sell electronics (Sony) or cable-TV subscriptions (Comcast NBCUniversal). The “Big Six” studios made $51 billion last year from “content,” and they are just as responsible for failing to share that bounty with creators while playing to bland, middlebrow tastes.12

In fact, Taplin well knows the danger that Hollywood giants present to innovators. Intertainer, his early video-streaming company, died because Sony, one of its shareholders, colluded with other major studios to copy the idea for a project called Movielink. The studios stopped licensing films to Intertainer, and the service shut down as a result.13

Taplin touts an eventual antitrust settlement between Intertainer and the studios as a reason he believes the law “can really help the little guy compete against corporate giants.” But why is he so quick to take those same corporate giants’ side? He condemns pirate sites for putting musicians and filmmakers out of business, and criticizes Google for activism that prevented the Stop Online Piracy Act from becoming law. But SOPA, which would have empowered the government to block individual sites based on subjective copyright claims, was a wet kiss to Big Media: Even a user-generated comment could have shut down an entire website.14

For months, not a single major prime-time news station reported on the SOPA fight; their parent companies all supported the bill. The point of the legislation was to lock in the top-down dissemination of media, and the resulting riches wouldn’t necessarily have flowed to artists, but to the conglomerate studios and their shareholders. Grassroots activists put a stop to the bill; the platform giants simply followed rather than led.15

Google and Facebook could surely use content-identification programs—the same tools they use to prevent pornography from appearing on their sites—to stop copyright infringement. But in the era of President Trump, leaving censorship decisions to an alliance of government and large corporations should give anyone who believes in the power of artists’ voices pause. We’re already seeing such partnerships in action: The biggest influencer on what gets seen at the movies is the Chinese government, which has driven the trend toward big-budget action films (explosions have a universal language) that don’t “disrupt the social order,” “jeopardize social morality,” or feature other plot elements banned by the censors.16

But while studios need to better compensate artists and encourage diverse perspectives, the structure of how we distribute media must be revised as well. We can regulate Internet platforms like public utilities, ensuring fair treatment for all. We can give consumers the option to deny permission for the sharing or selling of their personal data. We can borrow the model outlined in the 1956 antitrust consent decree with AT&T, which forced the telecom to license all patents for a nominal fee to entrepreneurs. This created about 10 different useful industries, from cellular phones to solar energy to the personal computer. A new round of patent-sharing could do the same. Municipal broadband and producer-owned co-ops could democratize the distribution of music and movies, and make creators more than an afterthought in the supply chain.17

Some of this is already happening. The comedian Louis C.K. sold a couple of stand-up comedy specials and an entire season of his new series Horace and Pete on his website. Taylor Swift and Adele used their own distribution networks to give previews of their music to fans before licensing them to the bigger channels. I have serious concerns, though, that such a model will only work for established artists, and that all others would have to pass through both the Hollywood giants and the platform monopolies in order to find their audience.18

aplin is dead-on when he says, “We need to break the grip of advertising on our media system.” Art must be able to comment on society, rail against convention, and uncover uncomfortable inner truths. When Google executives run a cost-per-click analysis and determine that such things won’t sell more Pepsi, we all lose. The digital revolution has many downsides, but perhaps the biggest is how it diminishes our very humanity.19

At times, Taplin can read like a baby-boomer father who just doesn’t get kids these days with their YouTube stars and their Instagrams. Despite these moments, he has written a necessary book that shows how the Internet revolution has damaged the way we interact as human beings, along with democracy itself.20

In December 2013, the Consumer Financial Protection Bureau and 49 states issued a $2.1 billion consent order against Ocwen, one of America’s largest mortgage companies, for “violating consumer financial laws at every stage of the mortgage servicing process.” Three and a half years later, the CFPB sued Ocwen in federal court for, well, violating consumer financial laws at every stage of the mortgage servicing process.

Why are we here again? Why did Ocwen continue to harm thousands of borrowers, years after first being caught? Part of the answer lies in the irresponsibly weak 2013 settlement, the vast majority of which Ocwen didn’t even have to pay itself. Thursday’s lawsuit, in fact, is an indictment of the way the government fails to police financial institutions, letting problems linger and allowing companies to devastate customers for years without intervention.

The picture that emerges from the 93-page lawsuit, based on internal audits, company e-mails, third-party reviews by investors and consultants, and employee testimony, is that Ocwen has no ability to execute the basic functions of mortgage servicing. A servicer operates as an accounts-receivable department for home loans. This is the company you make your check out to. At a bare minimum, servicers issue monthly statements noting the amount due and overall loan balance, collect the checks, and apply them to a customer’s account. Ocwen didn’t get any of that right, routinely, for years and years.

To understand this, you need to recognize how Ocwen became such a huge servicer. Prior to the foreclosure crisis, the biggest mortgage servicers were divisions of the big banks. But those institutions were caught committing massive amounts of fraud in the foreclosure process, paying tens of billions in fines. Subsequent legal settlements led to a new set of compliance standards that increased costs. And new global capital rules gave unfavorable treatment to mortgage-servicing rights (or MSRs, as they are commonly known), making the business a balance-sheet liability.

So the big banks sold off MSRs to non-bank servicers like Ocwen, which grew eightfold from 2010 to the beginning of 2014. And they clearly couldn’t handle the increase in scale.

An outside review concluded that Ocwen’s REALServicing computer system “lacks the basic system architecture and design necessary to properly service loans,” which is, you know, the entire job. REALServicing routinely generated inaccurate loan information, spitting out thousands of communications to borrowers with the wrong interest rate or loan terms. Ocwen’s own head of servicing called the system “an absolute train wreck” in an internal e-mail. An Ocwen report last March found that 90 percent of the loans studied “contained errors or incomplete information and required corrections.” REALServicing also couldn’t stay online, burdened by the glut of new loans. In 2014, the system was down for an astonishing 17,000 work hours, according to an internal report. (Note: There are only 8,760 hours in a year.)

Not only did Ocwen not get a new computer system—because Ocwen leased it from a spin-off company that has Ocwen’s CEO on its board—but its employees couldn’t possibly manually fix all the bogus data, or even get new loans into REALServicing in the first place. Fifteen percent of a massive loan transfer from Residential Capital remained unverified three years after the transfer date. And manual corrections inevitably compounded the problems. An internal 2014 audit found improper corrections in 63 percent of all loans reviewed.

Employees didn’t even have a full understanding of REALServicing, which required the use of over 10,000 different comment codes, but which lacked a complete data dictionary defining them. So the workers literally didn’t know what many of the comments in the system actually meant.

You’ll be unsurprised to know these errors almost always resulted in worse outcomes for the borrower. In fact, a cynic would argue that was why the software was so terrible—so it could push borrowers into unauthorized late fees and foreclosures that were more lucrative for Ocwen than its normal course of business.

Ocwen routinely failed to send borrowers accurate monthly statements. It failed to calculate the correct amount due. It failed to apply payments to borrower accounts. It failed to correct these billing errors. For two years, it could not tell borrowers the date it received a physical payment, due to a software malfunction. One complaint the CFPB recorded involves a borrower who had her payment rejected because it was “a few cents different” from the expected payment amount, a problem that triggered default and went unfixed for two years.

The CFPB found the most serious errors with escrow accounts, which borrowers paid into for taxes and insurance. A 2014 report found 3 million “documented CFPB violations” in Ocwen escrow accounts. This led to Ocwen inaccurately claiming escrow shortfalls, illegally forcing borrowers into a new insurance plan when their insurance policy hadn’t actually lapsed, mistakenly paying insurance premiums twice, sending checks to the wrong insurance companies, and even creating escrow accounts when the borrowers were handling taxes and insurance themselves.

Borrowers registered over half a million complaints in the past two years, but the company had no policy to handle them, and wouldn’t escalate complaints unless borrowers called “at least five times in nine days.” And even when Ocwen found systemic problems with loan data, it wouldn’t reimburse harmed borrowers unless receiving a complaint, or forced to by a court or regulator.

Of course, Ocwen’s practices led to thousands of wrongful foreclosures, as inaccurate and misapplied payments tend to do. The company habitually engaged in “dual tracking,” pursuing loan modifications and foreclosures simultaneously. Over and over, it violated timelines designed to give borrowers a chance to fix their default problems.

The galling part of this is that it was all well-known back in 2013. The CFPB settlement at the time alleged most of the same deficiencies: unauthorized fees, forced insurance purchases, wrongful foreclosures. But in that consent order, Ocwen didn’t have to admit wrongdoing. This shielded the company and its executives from legal exposure. Foreclosure victims who lost their homes got a measly $1,200 check for their trouble. The rest of the penalty went to “consumer relief” for distressed borrowers. But Ocwen didn’t own any loans; this burden fell entirely on the loan investors. The total cost to Ocwen of a “$2.1 billion settlement” was $66.9 million, the company admitted in a regulatory filing.

When you fail to hold companies or their executives accountable, they have no reason to mend their ways. Ocwen has repeatedly been hit with sanctions since that 2013 settlement, for everything from sending homeowners small checks that upon cashing automatically enroll them in expensive insurance plans, to backdating borrower letters so they couldn’t challenge loan-modification denials. The monitor of the CFPB settlement once admitted he could not trust information coming from Ocwen about compliance. The conduct was so pervasive that New York’s former head of the Department of Financial Services, Benjamin Lawsky, forced Ocwen’s then CEO, William Erbey, to leave the company in an enforcement action. Yet the noncompliance continues.

What has sadly passed for justice thus far simply hasn’t dinged Ocwen enough to stop its lawlessness; in fact, it invited it. Perhaps that’s changing. Concurrent with the CFPB lawsuit, which could yield billions in hard dollars that Ocwen would actually have to pay, 22 state banking regulators blocked the company from acquiring any more mortgage-servicing rights until it fixed its compliance issues, mirroring a 2014 New York order that Ocwen was just about to wrap up. That’s a big deal, because Ocwen is dependent on purchasing more and more MSRs. Older loans get paid off or refinanced or slip into foreclosure, meaning the business continually shrinks without fresh injections. Ocwen said fixing the myriad problems would cost $1.5 billion, which is “well beyond Ocwen’s financial capacity to fund.”

Shares fell at Ocwen almost 54 percent on the news. So maybe we’ll finally get the corporate death penalty for this serial psychopath that we should have gotten long ago. But it makes the CFPB’s 2013 action almost inexcusable. Three years’ worth of homeowner suffering could have been avoided.

I know some will use this lawsuit as an example of why we need a strong consumer regulator. Heck, Trump’s commerce secretary, Wilbur Ross, once sat on the Ocwen board; clearly the current regime isn’t inclined to do a thing about this menace. But Ocwen had already established either an unwillingness or an inability to do its job. Yet throughout the Obama era, it was allowed to limp along and pulverize customers, ruining the biggest financial purchases any of them will ever make. It‘s inconceivable that we’ve settled for such a pathetic conception of accountability for financial fraud that common thieves can last for years as zombie predators before finally being knocked off.

For years now, pundits have been tantalized by the notion that Donald Trump would make an historic pivot, roll back his most chaotic ideas, and return to the comfortably narrow range of political debate. During the campaign, Trump always frustrated this triumph of hope over experience. But in the last several days, Trump has actually pivoted.

It’s just that he’s pivoted into Jeb Bush.

Coinciding with (and presumably motivated by) the ceremonial throwing-under-the-bus of Steve Bannon, Trump flip-flopped on at least half a dozen campaign promises just on Wednesday, in an embrace of the politics of National Economic Council director and ex–Goldman Sachs president Gary Cohn, who I guess is honorary president now.

Some may breathe a sigh of relief that Trump has ditched his white-supremacist sidekick and thrown in his lot with global cooperation and harmony (though the continued presence of Jeff Sessions and the rise of a national deportation force suggests Bannonism is more alive than Bannon, at least in some areas).

But Cohn-ism is also deeply harmful to any American outside of an executive suite. The new agenda is rooted in aggrandizing the economic power of the 1 percent and keeping the tide of corporate welfare flowing. It turns out Trump doesn’t resent elites; he just wants their approval.

Plenty of reporters noticed the flip-flops, most of them encapsulated in one interview with The Wall Street Journal. Fewer saw the true context. Let’s take the flips one by one.

• Trump told The Wall Street Journal that China was not a currency manipulator, after saying the opposite for years. This is generally true for the moment, though not a guarantee of future results. But everyone can see the real signal here: a less stringent crackdown on Chinese mercantilist policies. The manufacturing workers left in America would like to be able to compete, but multinationals do too much business in China (and across Asia, where currency manipulation is ongoing) to want to disrupt their supply chains. This presages more races to the bottom for the cheapest labor available.

More troubling is Trump’s admission that he offered China a “better deal” on trade if they helped defuse the genuinely frightening North Korea situation. That fits hand in glove with neoliberal strategy on trade for decades, to use market concessions as a bargaining chip to obtain national-security or geopolitical goals. One day it’s cooperation on North Korea, the next it’s extending spheres of influence in Latin America or South Asia. The trade is always the same: geopolitical desires outpoint economic ones. America first, the American middle class second.

• Trump managed to do some currency manipulation of his own in the same interview, musing that the US dollar was “getting too strong.” This sent currency trading markets plunging. While a weaker dollar could help US manufacturing over the long term due to cheaper export prices, the important factor is the reason for the weakness. An artificial drop from a norm-breaking presidential statement on the direction of the currency would do little in the long term, but it does increase volatility—which is great for those who facilitate trades in financial markets. You know, like Goldman Sachs, to use a completely random example coincidentally connected to the head of the National Economic Council.

• Trump reversed himself by suggesting openness to re-nominating Janet Yellen at the Federal Reserve. This would be a triumph for monetary-policy certainty, something big business craves. But Yellen’s Fed has also dedicated itself to keeping inflation low. In fact it’s been below target for her entire Fed tenure. That makes financiers happy, as does the gradual interest-rate rise Yellen is carrying out.

• Trump now supports the Ex-Im bank, following President Obama’s lead. Ex-Im has always accompanied such shifts; parties criticize it when out of power and support it when in power. In back issues of The Nation you can find liberals railing about the distasteful corporate-welfare schemes of the “Bank of Boeing.” And the truth is actually closer to what Trump said in 2015, that Ex-Im’s assistance lavishes subsidies on a few very large companies, and provides support to seriously retrograde policies like building coal plants.

You can make a case for supporting Ex-Im to keep the United States competitive with other countries, though to do so, you have to forget all your impulses about the importance of unfettered free trade. As economist Dean Baker told me a couple years ago, “It is just one more example of how the rich and powerful have no interest in the free market when circumventing how the market works to their benefit.”

• Then at a press conference with NATO Secretary General Jens Stoltenberg, Trump walked back comments that NATO was obsolete, and sang the alliance’s praises in one of those long speeches Trump probably didn’t see until the moment he read it. NATO policy doesn’t have an obvious economic component, but maintaining global geopolitical order, while positive, also entrenches the world’s economic superpowers and enables them to more cooperatively lean on everybody else.

It would not be out of place to see Jeb Bush endorse every single one of these positions. They reflect the stodgy business Republicanism America has come to expect since the 1980s. We’ve already seen an extreme focus on the core Republican ideas of deregulation and tax cuts. Now we can add in Cohn-ism, which reveres globalization, puts the US market into a bidding war to achieve geopolitical outcomes, hands out gifts to financial interests and multinationals, and keeps the global pecking order stable, with the United States firmly in imperial control. Please clap.

You could also cite White House budget director Mick Mulvaney’s interview with CNBC, which revealed that he doesn’t care about deficits if they get in the way of tax cuts, as has been true since at least Reagan. Mulvaney’s more concerned with eliminating wealth-transfer payments from rich to poor. That’s part of Cohn-ism too: centralizing wealth and power at the top. It’s not just about running the country like a business, but for business’ benefit.

We also know Cohn supports the White House infrastructure boondoggle, giving tax breaks to private investors for equity stakes in projects that will generate huge returns through user fees. He wants to strip away financial regulations and allow investment advisers to rip off their clients. And if you think his random kind words for restoring Glass-Steagall firewalls between investment and commercial banks reveal some liberal heart beating inside, consider that the short-term consequence of that would be to block Bank of America, Citigroup, and JPMorgan Chase from competing with Goldman Sachs, his old firm, for investment-banking business.

You don’t have to hate all of these ideas to see that the components of Cohn-ism fit together, and that they suggest a world that’s great for private-jet fliers and gated-mansion denizens, but less so for you and me. What Cohn seeks is nothing less than a restoration of a ruling class that utterly failed the country for the last decade-plus. And Donald Trump is right there with him, desperate to curry favor with people richer than he is. To borrow the characters from Caddyshack, Trump is Al Czervik if he actually wanted Judge Smails to like him.

Let’s learn a little about our new president, Gary Cohn. He was the guy who ran Goldman’s mortgage department, turning it into an enormous trading operation that fueled the housing bubble. He was the guy who then bet against the housing market without disclosing that to investors, illegally ripping their faces off for profit. He was the guy who exported deceptive finance schemes to Greece, facilitating their decade of depression. He’s now putting that disregard for anyone not in an Italian suit to work for you. If you liked Goldman Sachs pulling the strings in Washington, you’re going to love it when they’re actually running the show directly.

He’s also going to be as toxic for Trump’s approval ratings as Bannon before him. Breitbart comment threads now thunder against the rise of the globalists routinely. Cohn-ism, tied to the most hated company in America not named United Airlines, will cost Trump his base without picking up anyone else, plumbing new depths of opposition. Before long Trump will be as popular as Jeb Bush, too.