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| Welcome to Wonkbook, Wonkblog's morning policy news primer byMax Ehrenfreund (@MaxEhrenfreud). Send comments, criticism or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here. Follow us on Twitter and Facebook. |
| Wonkbook: The man who helped Burger King ditch its U.S. citizenship |
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Burger King completed its merger with Tim Horton's on Friday, giving up its U.S. citizenship and becoming a Canadian company. The transaction could save Burger King anywhere from $10 million to over $1 billion, depending on how you count. Dozens of companies have relocated the headquarters abroad in recent years in moves that many analysts say are intended to avoid paying U.S. taxes, but Burger King is unique for two reasons.
First, everyone knows Burger King, unlike some of the more obscure pharmaceutical brands that have reincorporated abroad in what are known as corporate inversions. Second, Antonio Weiss, nominated by President Obama for a post in the Treasury Department, advised Burger King on the merger as a banker at Lazard.
Burger King has said the merger was not motivated by tax savings, but the company could hardly be faulted for seeking them in any case: Modern corporations owe loyalty to their shareholders, not to their country, and an inversion just reveals a firm's true colors. Inversions reduce the taxes available to the U.S. government for years to come, which is "not right," White House counselor John Podesta has said. He promised that Weiss would support the administration's efforts to discourage them.
Weiss's connections with Lazard and Wall Street have made him surprisingly controversial for a nominee whose soporific title would be under secretary for domestic finance. A group of Democratic senators opposes Weiss on the grounds that he is too close to the industry.
In a speech last week, Sen. Elizabeth Warren (D-Mass.) railed against the practice of appointing former bankers to regulate the financial sector, and suggested that appointing Weiss to the Treasury would just be to add one more official who shares Wall Street's point of view. Weiss will receive a reported $21 million from Lazard on his departure.
Weiss has become a symbol of the Democratic Party's relationship with finance, writes Matthew Yglesias. And his association with Burger King makes him a powerful symbol.
What's in Wonkbook: 1) Climate talks 2) Opinions, including Levine, Krugman and Luce on derivatives 3) Senate advances nominees 4) Sony threatens to sue media 5) A federal database of police shootings, and more
Number of the day: $1,234,567,890. That'
Chart of the day:
JPMorgan's derivatives are notionally worth nearly $70 trillion. Citigroup and Goldman Sachs are not far behind. Mark Whitehouse in Bloomberg.
1. Climate talks conclude in LimaAll countries have agreed to offer plans for reducing their carbon dioxide pollution. Those pledges will be the basis for a conference in Paris next fall, when diplomats hope to reach a final agreement on how to mitigate global warming. Yet diplomats haven't yet agreed whether the plans will be subject to any kind of independent review or audit, or whether a final agreement will be legally binding or not. The bilateral deal between the United States and China has made negotiators optimistic, but G.O.P. opposition in the United States could undermine the global willingness to act. Ben Geman and Clare Foran in National Journal.
For the first time, developing nations have agreed to help. Although there are plenty of questions left unanswered by the agreement in Lima, it's significant that developing countries are part of the deal. In 1997, the Kyoto Protocol only required rich countries to reduce their emissions, but developing countries now emit more than half of the world's carbon dioxide pollution, so any meaningful accord depends on their participation. Brad Plumer at Vox.
But to get them to go along, negotiators had to water down crucial language. In the final hours of talks, they eliminated a requirement that each country's plan for reducing carbon dioxide include the same set of statistics, which would make it possible to see just how much each country is willing to do. Rebecca Leber in The New Republic.
The deal essentially relies on shame and condemnation to give it force. There are no fines, sanctions or other coercive elements to the deal. Negotiators are basically hoping that each country's desire to avoid embarrassment will result in all of them submitting substantive plans. Coral Davenport in The New York Times.
2. Top opinionsLEVINE: The rule on derivatives was never a big deal. The language on financial regulation that nearly shut down the government last week always would have had a small effect on how banks do business. And the institutions that failed in 2008 -- AIG and Lehman Brothers -- would not have been saved by stricter regulation, since they didn't trade with government-insured money to begin with. Bloomberg.
KRUGMAN: All the same, changing the rule was "utterly indefensible." There's no reason at all why banks should be able to gamble with money guaranteed by the government. The provision shows how easily and how cheaply the banks have been able to buy off Congress. The New York Times.
LUCE: We can't prevent financial crises, but we can be ready for them when they come. That means breaking up the largest banks and changing the culture on Wall Street -- but if Congress can't even maintain minor bans on risky activity, then the chances for real reform are slim. The Financial Times.
CORN: The torture report presents a constitutional crisis. Without effective civilian control, constitutional government is impossible. And the CIA nearly succeeded in blocking effective congressional oversight. The secrecy on which the agency depends might just be irreconcilable with democratic values. Mother Jones.
ORNSTEIN: Obama could not resolve America's racial conflicts. Six years after Obama's election, relations between whites and minorities remain tense, and racial antipathy toward the president himself has been not just widespread, but surprisingly mainstream in the opposition party. What's especially concerning is that the parties are increasingly parties of race, with the Republicans representing whites and Democrats minorities. The Atlantic.
Drug-resistant disease is a looming disaster for the global economy. Infectious microbes that have evolved to resist medication could cost $100 trillion over the next 35 years. The figure equates to the loss of 3 percent of global income by 2050. Jim O'Neill at Project Syndicate.
3. Republicans leave an opening for nominees to slip throughTwo G.O.P. senators accidentally added extra time to the legislative calendar. Sens. Ted Cruz (R-Tex.) and Sen. Mike Lee (R-Utah) objected to the spending bill over immigration, forcing the Senate to stay in session. Sen. Harry Reid (D-Nev.), the majority leader, took advantage of the time to take procedural votes on several presidential nominees, whom the Democratic majority will now have a chance to confirm before Republicans take control of the chamber at the beginning of the new year. Ashley Parker and Robert Pear in The New York Times.
Several of the nominees were controversial. They include:--Antony Blinken for deputy secretary of state;--Sarah Saldaña for assistant secretary of homeland security, overseeing enforcement of immigration laws;--Vivek Murthy for surgeon general.
The National Rifle Association objects to Murthy, who has said gun violence is a public health matter. Republicans object to Blinken because of his association with Obama's foreign policies, and to Saldaña because they oppose the president's immigration policies. Paul Kane in The Washington Post.
Republicans might still stop the nominees from being approved. Republicans would have to allow Reid to accelerate the process in order to fit everyone in, and he is still planning to pass extensions of the terrorism insurance program and a list of tax breaks. Sean Sullivan in The Washington Post.
The tax breaks that still need to be extended include a few sensible ones. For example, teachers are able to deduct what they spend on school supplies and families are able to deduct tuition. Another provision helps homeowners who are underwater stay in their homes. Matt O'Brien in The Washington Post.
Meanwhile, Republicans are furious with Cruz. "I don't see what we're achieving here. I just don't," said Sen. Jeff Flake (R-Ariz.). The Senate eventually passed the spending bill late Saturday. The inability of the Republican caucus in the Senate to unite on parliamentary strategy raises questions about how effective the G.O.P. majority will be next year. Frank Thorp V for NBC.
DRUM: What Cruz was trying to achieve was completely symbolic. His resolution never would have passed, and wouldn't have changed anything even if it had. But it had the effect of helping Obama. Mother Jones.
4. Sony threatens to sue mediaThe studio sent a letter to newspapers Sunday asking them not to published hacked information. Sony Pictures Entertainment hired David Boies, a well-known lawyer, warning media organizations that the studio would try to hold them responsible for damages. Public relations experts said the studio was probably trying to distract public attention away from the embarrassing information that the hackers released. Saba Hamedy in the Los Angeles Times.
For more than a week, employees at the studio were working with pens, paper and fax machines. The FBI is investigating the devastating hack, which came after North Korean state media threatened retaliation if the studio released a movie critical of Kim Jong Un. Ryan Faughnder in the Los Angeles Times.
VOLOKH: A lawsuit would almost certainly fail. Precedent gives the media the freedom to publish information that was obtained illegally by a third party. The Washington Post.
AARON SORKIN: A "yellow press" did the hackers' work for them. More ethical journalists would have refrained from publishing information about the studio's executives, who joked about Obama's race in emails, among other things. The New York Times.
5. In case you missed itGovernment surveillance gets a congressional imprimatur.Congress passed a bill last week that would place some restrictions on surveillance of U.S. phone and Internet data under Executive Order 12333. In doing so, Congress appeared to give the the old executive order a statutory basis that it completely lacked until now. Dustin Volz in National Journal.
Stanley Fischer talks about the banks' political influence. "I thought that when Dodd-Frank started, that the banks would not succeed in influencing it, having lost all the prestige they lost," the Federal Reserve's vice chairman said after the House passed a bill to allow banks to trade derivatives with federally insured deposits. "Boy, was I wrong." Ryan Tracy in The Wall Street Journal.
The National Labor Relations Board tries to make it easier to unionize. Anew rule eliminates a 25-day waiting period for holding union elections, requires companies to provide organizers with employees' contact information and aims to reduce litigation. Tom Raum for the Associated Press.
Businesses' goal of deregulation and tort reform ends up hurting criminal defendants. Business lobbies spending money on judicial campaigns stay away from the boring issues they really care about and instead exploit voters' fears of paroled criminals to win elections. The result is judges who have to treat convicts and defendants more harshly to stay in office. Christie Thompson in The Atlantic.
Congress has allocated money to track police shootings. The federal government does not keep track of the number of people who die during arrests or in police custody, despite maintaining all kinds of other data on crime and law enforcement. New legislation will change that by reauthorizing a law that expired in 2006. Hunter Schwarz in The Washington Post.
Abenomics wins another election in Japan. Prime Minister Shinzo Abe received a renewed mandate from voters on Sunday. But real reform of the Japanese economy is still a major challenge. Bloomberg.
First, everyone knows Burger King, unlike some of the more obscure pharmaceutical brands that have reincorporated abroad in what are known as corporate inversions. Second, Antonio Weiss, nominated by President Obama for a post in the Treasury Department, advised Burger King on the merger as a banker at Lazard.
Burger King has said the merger was not motivated by tax savings, but the company could hardly be faulted for seeking them in any case: Modern corporations owe loyalty to their shareholders, not to their country, and an inversion just reveals a firm's true colors. Inversions reduce the taxes available to the U.S. government for years to come, which is "not right," White House counselor John Podesta has said. He promised that Weiss would support the administration's efforts to discourage them.
Weiss's connections with Lazard and Wall Street have made him surprisingly controversial for a nominee whose soporific title would be under secretary for domestic finance. A group of Democratic senators opposes Weiss on the grounds that he is too close to the industry.
In a speech last week, Sen. Elizabeth Warren (D-Mass.) railed against the practice of appointing former bankers to regulate the financial sector, and suggested that appointing Weiss to the Treasury would just be to add one more official who shares Wall Street's point of view. Weiss will receive a reported $21 million from Lazard on his departure.
Weiss has become a symbol of the Democratic Party's relationship with finance, writes Matthew Yglesias. And his association with Burger King makes him a powerful symbol.
What's in Wonkbook: 1) Climate talks 2) Opinions, including Levine, Krugman and Luce on derivatives 3) Senate advances nominees 4) Sony threatens to sue media 5) A federal database of police shootings, and more
Number of the day: $1,234,567,890. That'
Chart of the day:
JPMorgan's derivatives are notionally worth nearly $70 trillion. Citigroup and Goldman Sachs are not far behind. Mark Whitehouse in Bloomberg.
1. Climate talks conclude in LimaAll countries have agreed to offer plans for reducing their carbon dioxide pollution. Those pledges will be the basis for a conference in Paris next fall, when diplomats hope to reach a final agreement on how to mitigate global warming. Yet diplomats haven't yet agreed whether the plans will be subject to any kind of independent review or audit, or whether a final agreement will be legally binding or not. The bilateral deal between the United States and China has made negotiators optimistic, but G.O.P. opposition in the United States could undermine the global willingness to act. Ben Geman and Clare Foran in National Journal.
For the first time, developing nations have agreed to help. Although there are plenty of questions left unanswered by the agreement in Lima, it's significant that developing countries are part of the deal. In 1997, the Kyoto Protocol only required rich countries to reduce their emissions, but developing countries now emit more than half of the world's carbon dioxide pollution, so any meaningful accord depends on their participation. Brad Plumer at Vox.
But to get them to go along, negotiators had to water down crucial language. In the final hours of talks, they eliminated a requirement that each country's plan for reducing carbon dioxide include the same set of statistics, which would make it possible to see just how much each country is willing to do. Rebecca Leber in The New Republic.
The deal essentially relies on shame and condemnation to give it force. There are no fines, sanctions or other coercive elements to the deal. Negotiators are basically hoping that each country's desire to avoid embarrassment will result in all of them submitting substantive plans. Coral Davenport in The New York Times.
2. Top opinionsLEVINE: The rule on derivatives was never a big deal. The language on financial regulation that nearly shut down the government last week always would have had a small effect on how banks do business. And the institutions that failed in 2008 -- AIG and Lehman Brothers -- would not have been saved by stricter regulation, since they didn't trade with government-insured money to begin with. Bloomberg.
KRUGMAN: All the same, changing the rule was "utterly indefensible." There's no reason at all why banks should be able to gamble with money guaranteed by the government. The provision shows how easily and how cheaply the banks have been able to buy off Congress. The New York Times.
LUCE: We can't prevent financial crises, but we can be ready for them when they come. That means breaking up the largest banks and changing the culture on Wall Street -- but if Congress can't even maintain minor bans on risky activity, then the chances for real reform are slim. The Financial Times.
CORN: The torture report presents a constitutional crisis. Without effective civilian control, constitutional government is impossible. And the CIA nearly succeeded in blocking effective congressional oversight. The secrecy on which the agency depends might just be irreconcilable with democratic values. Mother Jones.
ORNSTEIN: Obama could not resolve America's racial conflicts. Six years after Obama's election, relations between whites and minorities remain tense, and racial antipathy toward the president himself has been not just widespread, but surprisingly mainstream in the opposition party. What's especially concerning is that the parties are increasingly parties of race, with the Republicans representing whites and Democrats minorities. The Atlantic.
Drug-resistant disease is a looming disaster for the global economy. Infectious microbes that have evolved to resist medication could cost $100 trillion over the next 35 years. The figure equates to the loss of 3 percent of global income by 2050. Jim O'Neill at Project Syndicate.
3. Republicans leave an opening for nominees to slip throughTwo G.O.P. senators accidentally added extra time to the legislative calendar. Sens. Ted Cruz (R-Tex.) and Sen. Mike Lee (R-Utah) objected to the spending bill over immigration, forcing the Senate to stay in session. Sen. Harry Reid (D-Nev.), the majority leader, took advantage of the time to take procedural votes on several presidential nominees, whom the Democratic majority will now have a chance to confirm before Republicans take control of the chamber at the beginning of the new year. Ashley Parker and Robert Pear in The New York Times.
Several of the nominees were controversial. They include:--Antony Blinken for deputy secretary of state;--Sarah Saldaña for assistant secretary of homeland security, overseeing enforcement of immigration laws;--Vivek Murthy for surgeon general.
The National Rifle Association objects to Murthy, who has said gun violence is a public health matter. Republicans object to Blinken because of his association with Obama's foreign policies, and to Saldaña because they oppose the president's immigration policies. Paul Kane in The Washington Post.
Republicans might still stop the nominees from being approved. Republicans would have to allow Reid to accelerate the process in order to fit everyone in, and he is still planning to pass extensions of the terrorism insurance program and a list of tax breaks. Sean Sullivan in The Washington Post.
The tax breaks that still need to be extended include a few sensible ones. For example, teachers are able to deduct what they spend on school supplies and families are able to deduct tuition. Another provision helps homeowners who are underwater stay in their homes. Matt O'Brien in The Washington Post.
Meanwhile, Republicans are furious with Cruz. "I don't see what we're achieving here. I just don't," said Sen. Jeff Flake (R-Ariz.). The Senate eventually passed the spending bill late Saturday. The inability of the Republican caucus in the Senate to unite on parliamentary strategy raises questions about how effective the G.O.P. majority will be next year. Frank Thorp V for NBC.
DRUM: What Cruz was trying to achieve was completely symbolic. His resolution never would have passed, and wouldn't have changed anything even if it had. But it had the effect of helping Obama. Mother Jones.
4. Sony threatens to sue mediaThe studio sent a letter to newspapers Sunday asking them not to published hacked information. Sony Pictures Entertainment hired David Boies, a well-known lawyer, warning media organizations that the studio would try to hold them responsible for damages. Public relations experts said the studio was probably trying to distract public attention away from the embarrassing information that the hackers released. Saba Hamedy in the Los Angeles Times.
For more than a week, employees at the studio were working with pens, paper and fax machines. The FBI is investigating the devastating hack, which came after North Korean state media threatened retaliation if the studio released a movie critical of Kim Jong Un. Ryan Faughnder in the Los Angeles Times.
VOLOKH: A lawsuit would almost certainly fail. Precedent gives the media the freedom to publish information that was obtained illegally by a third party. The Washington Post.
AARON SORKIN: A "yellow press" did the hackers' work for them. More ethical journalists would have refrained from publishing information about the studio's executives, who joked about Obama's race in emails, among other things. The New York Times.
5. In case you missed itGovernment surveillance gets a congressional imprimatur.Congress passed a bill last week that would place some restrictions on surveillance of U.S. phone and Internet data under Executive Order 12333. In doing so, Congress appeared to give the the old executive order a statutory basis that it completely lacked until now. Dustin Volz in National Journal.
Stanley Fischer talks about the banks' political influence. "I thought that when Dodd-Frank started, that the banks would not succeed in influencing it, having lost all the prestige they lost," the Federal Reserve's vice chairman said after the House passed a bill to allow banks to trade derivatives with federally insured deposits. "Boy, was I wrong." Ryan Tracy in The Wall Street Journal.
The National Labor Relations Board tries to make it easier to unionize. Anew rule eliminates a 25-day waiting period for holding union elections, requires companies to provide organizers with employees' contact information and aims to reduce litigation. Tom Raum for the Associated Press.
Businesses' goal of deregulation and tort reform ends up hurting criminal defendants. Business lobbies spending money on judicial campaigns stay away from the boring issues they really care about and instead exploit voters' fears of paroled criminals to win elections. The result is judges who have to treat convicts and defendants more harshly to stay in office. Christie Thompson in The Atlantic.
Congress has allocated money to track police shootings. The federal government does not keep track of the number of people who die during arrests or in police custody, despite maintaining all kinds of other data on crime and law enforcement. New legislation will change that by reauthorizing a law that expired in 2006. Hunter Schwarz in The Washington Post.
Abenomics wins another election in Japan. Prime Minister Shinzo Abe received a renewed mandate from voters on Sunday. But real reform of the Japanese economy is still a major challenge. Bloomberg.
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