Thursday ReadsPosted: January 19, 2012
There’s another Republican Debate in South Carolina tonight. Can you believe it? This one is hosted by CNN. How much more of this torture can American stand? These debates just keep on coming! We’ll live blog this one later on, perhaps with some interesting variations on the theme.
Speaking of horrible things that never end, can you believe Obama is considering appointing Larry Summers to head the World Bank? Here I thought we were finally free of Summers, but the guy just won’t go away. He keeps coming back, no matter how ghastly of job he does. From Bloomberg:
President Barack Obama is considering nominating Lawrence Summers, his former National Economic Council director, to lead the World Bank when Robert Zoellick’s term expires later this year, according to two people familiar with the matter.
Summers has expressed interest in the job to White House officials and has backers inside the administration, including Treasury Secretary Timothy Geithner and current NEC Director Gene Sperling, said one of the people. Secretary of State Hillary Clinton is also being considered, along with other candidates, said the other person. Both spoke on condition of anonymity to discuss internal White House deliberations….
A nomination of Summers would bring scrutiny of his previous stints in government, both as former President Bill Clinton’s Treasury secretary and Obama’s NEC director, as well as his tenure as president of Harvard University.
“Larry is controversial,” said Erskine Bowles, who served as Clinton’s chief of staff. “Anything you appoint Larry to, you know there are going to be some people who are going to take shots at him. But you know he’s a brilliant economist, which I think everybody recognizes.”
Oh really? If he’s so brilliant, then why is teaching college freshman? Why doesn’t he publish in academic journals? Why did he get fired by Harvard and the Obama administration? Enough with the retreads, Mr. President.
I’m sure you’ve heard by now that Mitt Romney has admitted he pays somewhere close to 15% of his income in Federal taxes. NPR’s Here and Now had an interesting discussion yesterday about how he and other richie-rich folks get away with this. I recommend listening to the show if you have time. Here’s a bit from the write-up:
“Carried interest is the way that hedge fund managers and private equity firm managers get paid when they do a deal,” Howard Gleckman of the Tax Policy Institute told Here & Now‘s Robin Young.
Gleckman says private equity firms bring in outside investors. To get in on the deals, investors pay the firms in two ways– an initial fee, and a 20 percent cut of future profits.
When the owners of private equity firms pay taxes on that compensation from the investors, they pay as if it were capital gains– so that means they are paying a top rate of no more than 15 percent.
“Ordinarily if they were paid like the rest of us in wages and salaries, they’d be paying a top rate of up to 35 percent,” he said.
Gleckman said the carried interest tax arrangement is completely legal and not uncommon.
Bob McIntyre of Citizens for Tax Justice said that this kind of income comes from work and should be taxed as such. And Gleckman agreed, saying that capital gains taxes are lower because the goal is to encourage people to risk their own money. Romney isn’t doing that.
Romney, one of the richest men to seek the presidency, probably benefits from a controversial tax break that allows him to pay a lower overall rate than do millions of American wage-earners whose votes he’ll need to capture the White House.
That’s because private equity executives, as Romney was for 15 years when he ran Boston-based Bain Capital LLC, receive much of their compensation as “carried interest.” That enables them to treat what would be ordinary income for other service providers, taxed at rates as high as 35 percent, as capital gains taxed at 15 percent….
Yet those investments were largely made by Romney’s former partners with other investors’ money, not his personal funds. The vast majority of the resulting gains represent compensation for Bain’s work acquiring, sprucing up and selling individual companies, critics say.
“This is labor income for them, not a return on capital invested,” said Victor Fleischer, an associate law professor at the University of Colorado whose 2007 paper on the topic helped spark a move in Congress to try to change the law. “It’s a method of converting one’s labor into capital gains in a way that’s unusual outside the investment management industry. Ordinary people wouldn’t be able to do this.”
If Romney just paid his taxes like the rest of us, he’d probably be doing a much greater service to the country than if he becomes president. BTW, the articles says that Obama has paid 31% of his income in taxes for the last three years.
But that’s not all. Romney keeps millions of dollars of his vast wealth in the Cayman Islands, a well-know tax shelter.
Official documents reviewed by ABC News show that Bain Capital, the private equity partnership Romney once ran, has set up some 138 secretive offshore funds in the Caymans.
Romney campaign officials and those at Bain Capital tell ABC News that the purpose of setting up those accounts in the Cayman Islands is to help attract money from foreign investors, and that the accounts provide no tax advantage to American investors like Romney. Romney, the campaign said, has paid all U.S. taxes on income derived from those investments.
“The tax consequences to the Romneys are the very same whether the fund is domiciled here or another country,” a campaign official said in response to questions. “Gov. and Mrs. Romney have money invested in funds that the trustee has determined to be attractive investment opportunities, and those funds are domiciled wherever the fund sponsors happen to organize the funds.”
Bain officials called the decision to locate some funds offshore routine, and a benefit only to foreign investors who do not want to be subjected to U.S. taxes.
Whatever. The guy is filthy rich, pays very little of his income in taxes, and has no clue how most Americans live. His attitude is that capitalism is sacred and if millions of “little people” are hurt by the machinations of people like him, that’s just the way the cookie crumbles. And we shouldn’t have any safety nets for when things go wrong either. This man should never be POTUS.
A few more Romney items …
While he was at Bain Mitt used large donations of stock to the Mormon church to avoid paying taxes.
The New York Daily News got ahold of John McCain’s oppo research on Romney from 2008. “Talk about awkward,” the first line reads.
And here’s another awkward moment for the Mittster: Mitt Romney Allegedly Pulls Back Handshake Upon Learning That DREAM Act Advocate Is Undocumented.
Former Massachusetts Gov. Mitt Romney suddenly pulled back his hand after hearing that a young college student who greeted him at a New York fundraiser Tuesday night was undocumented, according to DREAM Act activists.
“He extended his hand to shake mine,” the young woman told The Huffington Post. “But once I said I was undocumented, he pulled his hand away from me.”
The 19-year-old college student, who asked to be identified only as Lucy because of her undocumented status, said she was also booed by Romney supporters as she was escorted out of a New York City fundraiser. One of the supporters told her to “go back to Mexico,” and she responded that she was “actually from Peru,” according to her account of the event.
Oops! There goes the Latino vote….
But we can’t forget that Romney still has at least one viable competitor for South Carolina’s delegates–food stamp obsessive and child labor advocate Newt Gingrich. Guess what Newt’s been up to? He’s using a fund-raising letter to threaten to punch out Barack Obama
Newt Gingrich’s campaign sent out a fundraising request to supporters this afternoon touting that the former speaker said he wants to knock Obama out, because, as the subject line of the email suggests, “A Bloody Nose Just Won’t Cut It.” The comment comes from a recent town hall where a questioner asked Gingrich how he would “bloody Obama’s nose.” “I don’t want to bloody his nose, I want to knock him out!” Gingrich responded. “This is exactly why Newt Gingrich is the candidate who must face Obama,” campaign spokesman RC Hammond says in the email, above a bright red “Donate” button.
You just can’t make this stuff up!
Conor Friedersdorf has an excellent response to Andrew Sullivan’s silly Newsweek article defending Obama’s accomplishments as President. I think Friedersdorf is a liberatarian, but his assessment on Obama is still on point. Check it out. I’ll just reproduce his list of Obama’s “accomplishments” here:
(1) Codify indefinite detention into law; (2) draw up a secret kill list of people, including American citizens, to assassinate without due process; (3) proceed with warrantless spying on American citizens; (4) prosecute Bush-era whistleblowers for violating state secrets; (5) reinterpret the War Powers Resolution such that entering a war of choice without a Congressional declaration is permissible; (6) enter and prosecute such a war; (7) institutionalize naked scanners and intrusive full body pat-downs in major American airports; (8) oversee a planned expansion of TSA so that its agents are already beginning to patrol American highways, train stations, and bus depots; (9) wage an undeclared drone war on numerous Muslim countries that delegates to the CIA the final call about some strikes that put civilians in jeopardy; (10) invoke the state-secrets privilege to dismiss lawsuits brought by civil-liberties organizations on dubious technicalities rather than litigating them on the merits; (11) preside over federal raids on medical marijuana dispensaries; (12) attempt to negotiate an extension of American troops in Iraq beyond 2011 (an effort that thankfully failed); (14) reauthorize the Patriot Act; (13) and select an economic team mostly made up of former and future financial executives from Wall Street firms that played major roles in the financial crisis.
Unfortunately, he didn’t include Obama’s many contributions to the war on women.
Speaking of Obama’s war on the Constitution, Chris Hedges is going to court to sue Obama over the indefinite detention portion of the NDAA.
Attorneys Carl J. Mayer and Bruce I. Afran filed a complaint Friday in the Southern U.S. District Court in New York City on my behalf as a plaintiff against Barack Obama and Secretary of Defense Leon Panetta to challenge the legality of the Authorization for Use of Military Force as embedded in the latest version of the National Defense Authorization Act, signed by the president Dec. 31.
The act authorizes the military in Title X, Subtitle D, entitled “Counter-Terrorism,” for the first time in more than 200 years, to carry out domestic policing. With this bill, which will take effect March 3, the military can indefinitely detain without trial any U.S. citizen deemed to be a terrorist or an accessory to terrorism. And suspects can be shipped by the military to our offshore penal colony in Guantanamo Bay and kept there until “the end of hostilities.” It is a catastrophic blow to civil liberties.
I spent many years in countries where the military had the power to arrest and detain citizens without charge. I have been in some of these jails. I have friends and colleagues who have “disappeared” into military gulags. I know the consequences of granting sweeping and unrestricted policing power to the armed forces of any nation. And while my battle may be quixotic, it is one that has to be fought if we are to have any hope of pulling this country back from corporate fascism.
Thanks to Hedges for putting his money where his mouth is.
I’ll end with this piece from Reuters: Sunk! How Hollywood Lost the PR Battle Over SOPA.
In the space of a couple of days, Hollywood and its content creators lost the public relations war over Internet piracy SOPA legislation — which now appears poised to crumble into a million bits of dust.
The messaging industry never had control of the message.
The tech guys found a simple, shareable idea — the Stop Online Piracy Act is Censorship — made it viral, and made it stick.
Hollywood had Chris Dodd and a press release. Silicon Valley had Facebook.
It shouldacoulda been a fair fight. But it wasn’t.
It seems that Hollywood still does not realize that it is in the information age. Knowledge moves in real time, and events move accordingly. The medium is the message in a fight like this.
I disagree that the fight is over, but it’s nice to see the battle for free speech and privacy getting some corporate media ink.
So … what are you reading and blogging about today?