I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Monday, September 23, 2013

The Continuing Problem Of the Wealthy, Reformy "Liberal"

Let's get back to America's Worst Congressman™, Jared Polis of Colorado:

Don't bother trying to find this tweet: it's long gone. Funny how these things happen...

But intemperate behavior seems to be Polis's m.o.; here's Diane Ravitch herself:

In a series of Twitter posts last night, Congressman Jared Polis of Colorado called me “an evil woman.” He said that my ideas were harming public education.
This is puzzling. What do I do that makes the rich and powerful fume and blow their cool?
I have met him twice in DC. The first time, I met with members of the House Education Committee and described my last book, The Death and Life of the Great American School System. He listened impatiently and at the end of my 15 minutes of talk, he threw my talk across the table at me and demanded his money back. Another Congressman paid him, not me. [sic] I was stunned. [emphasis mine]
All class, Congressman. Jon Pelto, who has been working closely with Ravitch in promoting her new book, Reign of Error, took a closer look at Polis:
Last week, Democratic Congressman Jared Polis of Colorado, who purports to be a “a progressive,” called Diane Ravitch an “evil woman” and compared her to the Koch Brothers tweeting ,“Can’t think of anybody else who has caused more harm to public schools, except maybe Koch brothers.”
As we are learning, Polis failed to reveal that not only is he a charter school advocate but his foundation, with the help of his company, actually formed a charter school or two in his home state of Colorado.
As we know, charter schools like to brag about their higher test scores, but traditionally use their recruitment process and “out migration” policies to push out less academically proficient students and, almost across the board, fail to take their fair share of non-English speaking students and students who require special education services.
Click through and read the rest of Jon's post. But let's also take a step back and view this from a larger angle:

Jared Polis is the seventh wealthiest person in Congress. And while I am sure he is a talented businessman, the truth is that he made his money by taking his parents' greeting card business on-line in a transaction that was way, way overvalued:

As an 18-year-old, he traveled to Russia and made money trading privatization vouchers — you know, the botched, scandal-ridden privatization which wrecked Russa's economy and led to the domination of the economy by ex-KGB oligarchs. Next stop: Silicon Valley!
In October 1999, right before the first dotcom crash, Polis, then known as Jared Polis Schutz, sold Bluemountain.com, his family's online greeting-cards website, to Excite@Home for $780 million, including $350 million in cash that Excite couldn't really spare. Excite sold it for $35 million in September 2001, and filed for bankruptcy a month later. People still talk about it as one of the most spectacular cashouts of the dotcom boom.
He later sold ProFlowers, an online florist, to John Malone's Liberty Media. (All told, he's started a dozen companies.)
(Personal note: I've used ProFlowers once. Let's just say, given the lack of service I experienced, I will not use them ever again.)

After making all this money, Polis entered into politics: he ran for an open seat in Colorado's 2nd House district in 2008, which forced him to disclose some of his finances:

Polis' returns show five years -- from 2001 to 2005 -- during which the Internet entrepreneur paid no taxes. He showed a net loss of income for four of those five years.
The returns also show a couple of years when he posted a total of more than $120 million in adjusted gross income and more than $18.4 million in taxes paid.
Polis, 32, said the discrepancy in tax and income data over the seven years is primarily based on whether he was developing companies -- which would often operate at a loss in their initial years -- or selling a company.
"In my business career, I only make significant money when I sell a company," Polis said Thursday.
Two years ago, Liberty Media Inc. bought Provide Commerce Inc., which operated Polis-founded ProFlowers.com. The sale was valued at $477 million, $116 million of which went to Polis.
Polis said in many of the years he didn't owe taxes, he was reporting income losses -- in 2005 his losses reached $2.6 million -- as he tried to bring companies he helped found into the black.
"I founded several high-growth companies, and we would manage those for growth rather than for profit," he said. "When I make money, I pay taxes. When I don't make money, I don't."
Polis' most lucrative year was 2006, when he reported $96.5 million in adjusted gross income and paid nearly $13.6 million in taxes. [emphasis mine]
For 2006, that's an effective tax rate of 14%. Keep in mind the marginal tax rate that year was "35% on the income over $336,550," which means Polis made out like a bandit, most likely because he was largely paying capital gains tax rates instead of the rates on ordinary income (caveat lector: I'm not an accountant. If anyone can shed some more light on this, please comment below).

So what we've got here is a guy who -- much like George W. Bush -- took advantage of his family's existing businesses and connections and made a lot of money, then parlayed that into a political career. According to opensecrets.org, Polis out-spent his opponent in the 2008 election about 80-to-1.

And even though Polis is a Democrat, his career -- much like George W. Bush -- has largely been about cutting taxes on wealthy folks like himself:
Momentum is growing in Congress behind legislation to enact another “repatriation tax holiday” that allows multinational corporations to bring profits held overseas back to the United States and pay tax on them at a rate of only about 5 percent (rather than the normal tax rate on corporate profits). But the economic or fiscal case for doing so remains poor. 
In recent days, several congressional Democrats have expressed support for some version of the legislation.1 The momentum comes in the midst of a major lobbying campaign for it by a coalition of large and powerful U.S.-based multinational corporations.2 Proponents argue that a second temporary repatriation holiday would boost domestic investment and jobs, which is the same pitch that proponents used to sell policymakers on a similar repatriation holiday in 2004 – and one with obvious resonance as the economy struggles to recover from recession and unemployment remains very high. 
Nevertheless, the evidence shows that the first holiday failed to produce the promised results. Its primary effect was to provide a huge windfall to the shareholders of a small number of very large corporations.  
1 At a Third Way event last week, Reps. Jared Polis (CO) and Loretta Sanchez (D-CA) as well as Sen. Kay Hagan (D- NC) expressed support for the idea, while another group, NDN, hosted a working lunch on the idea earlier this month. See Tim Fernholz, “Democrats Warming to Tax Repatriation,” NJ Daily AM, Tuesday, June 21, 2011. [emphasis mine]
Yes, folks -- "liberal" Jared Polis has never seen a corporate tax he wouldn't love to cut:

Polis, a Democrat who represents Colorado's 2nd District, said he is working with the chairman of the House Ways and Means Committee, Republican Dave Camp, on a proposal to lower tax rates by reducing or eliminating deductions and loopholes.
"We can, on a revenue-neutral basis, bring down the corporate tax rate to about 25 percent," he said.
Such a proposal likely would come as part of a package to fund the government and raise the debt ceiling by the end of the year, he said.
Polis acknowledged that the businesspeople in the room all represent small businesses, so they are paying taxes on their business profits at the individual rate, which is as high as 39.6 percent.
He said efforts also are underway to lower that top individual rate to 28 percent.
"If we could do it on the corporate side, that would build momentum to do it on the individual side," he said.
To get there, though, Polis said Congress would have to start taking away from some very popular tax deductions, including "the big three" - charitable donations, home mortgage interest and state and local income tax.
"If we can find a way to reduce rates, there's no question that people would have more disposable income for charity or buying a home, for whatever they want to do," he said. [emphasis mine]
We'll get to that "charity" in just a bit. But let's take a second to appreciate how adamant Polis is about cutting taxes on the wealthy; so much so that's he's will to buck the liberal caucus his own party:
Last night’s House Democratic caucus meeting was explosive, with many members refusing to vote for the Obama-McConnell tax cut deal. However, for all the sturm and drang, if Boehner can deliver all of the Republicans they only need 39 Democratic votes. 
Leading the charge for the tax cuts on the Democratic side? Jared Polis, whose net worth is somewhere between $97.4 million and $254.4 million. Polis was quite impassioned as he fought back against the tide of opposition in the caucus,  arguing that this deal is “the best we can do.” 
But as Joan McCarter notes, and as Keith Olbermann said so eloquently last night, it is immoral that this deal does nothing for the “99ers,” the 2 million people who are due to have their unemployment benefits cut off by the end of the year. 
The fact that it’s Polis pushing this deal in the House makes it brutally and transparently clear who this benefits: millionaires.  Kevin Drum does the math, and finds that “most of most of us get a few hundred dollars while the rich get hundreds of thousands or even millions each.” 
“The rich are willing to make that deal every day,” he says.  “Wouldn’t you?” [emphasis mine]
Now, Polis does try to put on airs of fiscal responsibility. But his plans to raise revenue almost always include regressive tax schemes. Here he explains how to further screw the poor and middle class in that favorite soapbox of the wealthy, The Wall Street Journal op-ed pages [all emphases mine]:

On the issue of increasing revenue, the famous Grover Norquist antitax pledge that many Republicans have signed does not preclude provisions that will increase revenue without actually increasing taxes on Americans. One way would be to require the 10 million immigrants living in America illegally to get right with the law and pay back-taxes and fees, which would generate as much as $5.4 billion in new revenue, according to the Center for American Progress.
Yeah, balance the budget on the backs of immigrants, because they are all making so much money -- sure, that'll work...
New revenues can also be found by changing the way we treat Internet gaming, which is currently both underground and offshore. U.S. Immigration and Customs Enforcement currently spends millions of dollars trying to shut down and prosecute Internet gaming sites, but they remain a casual click away for any interested gambler. Legalizing and regulating online gaming, as Reps. John Campbell (R., Calif.) and Jim McDermott (D., Wash.) have proposed, would generate $42 billion in additional revenue over the next decade, according to the Joint Committee on Taxation.
Unless you're talking about taxing Bill Bennett, internet gaming taxes will inevitably be regressive.
In my home state of Colorado, and in 15 other states and the District of Columbia, local revenues have increased by millions of dollars since lawmakers decided to legalize and regulate medical marijuana. By reducing the current 100% confiscatory tax on marijuana to more reasonable levels, we can make revenues increase. If we were to nationally legalize, regulate and reduce federal taxes on marijuana, we could receive as much as $2.4 billion in additional revenue annually, according to a 2005 study conducted by Harvard economist Jeffrey Miron.
Another regressive consumption tax. But any mention of raising the capital gains tax? Of removing the cap on payroll taxes? Of closing the loopholes accessible only to the wealthy?

Perish the thought...

So we know Jared Polis is soaked in the avarice of your typical Republican supply-sider. But here's the thing: in spite of his greed, Polis wears a thin veneer of liberalism. He has taken up the cause of regulating fracking -- OK, he did so because his own property was affected, but still...

He's also an opponent of the PATRIOT Act and is pro-choice. He's one of only seven openly gay members of Congress. He voted to repeal "Don't Ask, Don't Tell." He has a 100% rating from NARAL and the ACLU, and a 0% from the NRA and the Christian Coalition. He even gets high marks from the NEA and the AFL-CIO.

And yet Polis says of Diane Ravitch -- whose agenda includes the expansion of social services, desegregation, and a cessation of attacks on teachers unions -- “Can’t think of anybody else who has caused more harm to public schools, except maybe Koch brothers.

Ravitch also specifically calls for charter schools to open their admissions procedures to allow more children with special needs -- children who may not be well-served by traditional public schools. According to the Jared Polis Foundation's website, the two charters that Polis supports are designed to do exactly this:
The New America School seeks to extend the benefits of English literacy and a high school liberal arts education to immigrant young adults and families in Colorado. The educational needs of linguistically diverse youth (ages 16-21) in Colorado often are not met by mainstream public schools.
The Jared Polis Foundation’s ongoing collaboration with Urban Peak successfully opened the first Colorado high school for students who are experiencing the challenges of homelessness or unstable living situations. The Academy of Urban Learning opened its doors in August 2005 as a Denver Public School Charter High School.
You'd think Jared Polis would be praising Ravitch's stance on charter schools. You'd think he'd be saying: "Look at the charters I support; they are doing just what Ravitch wants!" You'd think a "liberal" like Polis would be pleased to see Ravitch fighting back against a school privatization movement that is being funded in large part by the Koch brothers.

What is it about Diane Ravitch that causes Jared Polis to lose his mind? I can only conjecture, but here's my best guess, based on Polis's own words:

Like [the Fordham Foundation's reformy Checker] Finn and [Michael] Petrilli, I am a strong proponent of successful education reform efforts at the state and local level. I’m proud that my home state of Colorado is a leader on this score, and passed SB 191, a bipartisan tenure reform and teacher evaluation bill, in 2010. But not all states are like Colorado, and even in Colorado, the federal dynamic of the Race for the Top competition was critical to passing our reforms. As we compete in an increasingly global economy, elected officials at all levels of government must focus on improving student achievement nationwide, not just in our own backyards.

Chairman Kline’s H.R. 5, the Student Success Act, would effectively remove the federal responsibility for ensuring that states and districts take an active role in turning around the lowest performing schools. This legislation would give states the ability to define down success, and therefore disguise learning gaps and persistently failing schools. While we should provide flexibility for turning around failing schools, we cannot allow districts and states the flexibility to do nothing year after year and consign an even larger segment of an entire generation of kids to poverty. And I fear that under the “Student Success Act,” we would be doing exactly that. [emphasis mine]
I'll leave the many, many problems with the Colorado teacher evaluation system aside for now, and simply point out that Polis is yet another wealthy "reformer" who is trying to make the case that education outcomes lead to poverty, rather than the other way around.

Chapter 10 of Ravitch's new book is all about the ironclad correlation between poverty and educational outcomes. The response of reformy types to this indisputable fact is to blame "bad" schools for creating poverty; they point to the outliers as proof that "all children can learn," and that if we just "stop putting the needs of adults before the needs of children," poverty will magically be swept away.

It's a foolish argument on its face. Outliers don't prove anything about causation, let alone correlation: that's why they're outliers. And the mechanics of how poverty affects student performance are very well known: overwhelmingly, studies show what happens outside the school has the largest influence on student achievement outcomes.

Now, every time someone like me or Ravitch pushes back on this, the inevitable response is that we are using poverty as an "excuse"; that we're not serious about making schools better. Nothing could be further from the truth -- we just want an agenda for school improvement that actually has evidence to back it up. And that would include getting more necessary resources to public schools, expanding social services, and dealing with the country's crushing income inequity.

But I never seem to hear folks like Jared Polis talk about poverty outside of school "reform." And I'm not alone in sensing this:
I’m not trying to erect another straw man – there are many substantive, meaningful discussions going on, and nobody thinks education is the only solution. Yet even as the recession decimates low-income families, the safety net continues to erode. And I sometimes feel like much of what passes for political rhetoric on strategies to fight this poverty – and justify these huge cuts in programs that do so – consists mostly of “we need to fix bad schools,” with only passing reference to any other type of program (see here, here, here, here, here and here). [emphasis mine]
Amen. Again, neither I nor Ravitch nor anyone on the "real reform" side is saying schools can't and shouldn't get better. But I find it more than a little convenient that very wealthy "liberal reformers," like Jared Polis, spend so much time and energy on unproven education schemes while barely mentioning income inequity.

GLBT rights and reproductive rights and the environment and gun rights and civil liberties are part of Jared Polis's agenda; good for him, these are important issues. But so are regressive taxation, manipulation of the markets, destruction of the social safety net, and the disgusting income inequity that has grown worse than at any time in modern history.

Wealthy "liberals" who do not want to talk about inequality have found a useful issue in education "reform." They can affect concern for the poor by pointing their fingers at teachers and their unions, deflecting the blame away from themselves. They can pretend that "college and career readiness" will lift the poor out of a system they themselves have benefitted from: a system that requires winners and losers.

I don't think Jared Polis wants to see anyone suffer. I don't think Jared Polis likes poverty. But I do think Jared Polis would rather not reflect on the possibility that maybe his wealth was acquired at the expense of the working poor and the shrinking middle class, and that maybe we need to reform our government, our economy, and our markets with far more urgency than we need to reform our public school system.

If wealthy, "liberal" reformers would finally start acknowledging this sate of affairs, maybe we could have a significant, substantive conversation about the future of this country -- and that would include education reform. It appears, however, that Jared Polis would rather just call the people who are trying to talk about education at a level beyond platitudes "evil".

How sad for you, Colorado.

Fighting "evil" for Colorado's 2nd.

ADDING: Jon Pelto has even more:
But back in 2008, Polis’ corporate connections were already an important part of his campaign operation.  But for $418,400 he raised through the national ACTBlue fundraising program, his remaining campaign funds came from a number of corporations that he owns, is connected with or willing to “invest” in his desire to become a congressman.  Leading the list of corporate donors was his own company, Jovian P4 ($55,980), SPS Studios ($14,800), Bow River Capital ($13,500), Jovian Holdings, another of his companies ($13,500), Intensity Ventures ($9,200) and Sandler Family Supporting Foundation ($9,200).
Other corporate donors giving to Jared Polis included Panthenon Resources ($6,900), Genesis Health Care ($6,600), Citigroup ($6,100), Laffer Assoc ($6,100), Citizen’s Energy ($5,200), Baraboo Growth ($4,600), Gillemont Sunset Ranch ($4,600), Gotham Capital Investment Partnership ($4,600), HNTB Corp. ($4,600), Jove Partners ($4,600), KSI Corp. ($4,600), MDC Holdings ($4,600), Najafi Companies ($4,600), Palo Alto Investments ($4,600), Pancil ($4,600), PrimeCap Finance ($4,600), Pritzker Group ($4,600), Provide Comerce Inc. ($4,600), Roche Group, ($4,600), Space X ($4,600), Tantum Investment Management ($4,600), Valor Equity Partners ($4,600) and WKM Group ($4,600).
The more you look at Jared Polis’ campaign finance reports and his approach to politics, the more questions rise to the surface.
Real man of the people, dontcha know...


Giuseppe said...

During the 1950s, the top marginal tax rate was 91% (the effective tax rate was about 51%). During the 1970s, the top marginal tax rate was about 74%. We are in a new gilded age in which the robber barons are squealing and screaming liked crazed hyenas for lower taxes, lower taxes, LOWER TAXES!!!! It's truly disgusting.

Steve Magruder said...

When it comes to fracking and gay rights, Polis' politics are convenient, not progressive. Given many of his other positions, that makes him a fauxgressive.

If one detests unions, one is by definition not a progressive.