TGIFriday Reads
Posted: March 25, 2011 Filed under: commercial banking, Corporate Crime, Economy, Egypt, financial institutions, Foreign Affairs, morning reads, U.S. Politics, unemployment, Women's Rights | Tags: austerity, budget, Federal deficits, Michelle Bachmann is nuts, Paul Krugman 16 Comments
Good Morning!
There’s been quite a few economists weighing in on the debate going on in congress about the budget. Paul Krugman’s op-ed is on “The Austerity Delusion”. Krugman’s appalled that more policymakers aren’t concerned with the high rate of unemployment which is contributing to the deficit in several ways. First, it decreases tax revenues. Second, it increases state and federal expenditures. Solve the jobs problem and the deficit will decrease. He’s worried that all this austerity will just bring on another economic slowdown.
Why not slash deficits immediately? Because tax increases and cuts in government spending would depress economies further, worsening unemployment. And cutting spending in a deeply depressed economy is largely self-defeating even in purely fiscal terms: any savings achieved at the front end are partly offset by lower revenue, as the economy shrinks.
So jobs now, deficits later was and is the right strategy. Unfortunately, it’s a strategy that has been abandoned in the face of phantom risks and delusional hopes. On one side, we’re constantly told that if we don’t slash spending immediately we’ll end up just like Greece, unable to borrow except at exorbitant interest rates. On the other, we’re told not to worry about the impact of spending cuts on jobs because fiscal austerity will actually create jobs by raising confidence.
Politico features a series of Former CEA members who signed a letter of concern on the deficit and unsustainable US Budgets. Too bad that people like Greg Mankiw–advisor to Dubya–didn’t speak up when the spending problems were originated. They mostly trace to Reagan and Bush administrations. They all suggest using the Cat food commission report as the focus of discussions. Hang on to your social security, folks! It’s going to be a bumpy ride.
As former chairmen and chairwomen of the Council of Economic Advisers, who have served in Republican and Democratic administrations, we urge that the Bowles-Simpson report, “The Moment of Truth,” be the starting point of an active legislative process that involves intense negotiations between both parties.
There are many issues on which we don’t agree. Yet we find ourselves in remarkable unanimity about the long-run federal budget deficit: It is a severe threat that calls for serious and prompt attention.
While the actual deficit is likely to shrink over the next few years as the economy continues to recover, the aging of the baby-boom generation and rapidly rising health care costs are likely to create a large and growing gap between spending and revenues. These deficits will take a toll on private investment and economic growth. At some point, bond markets are likely to turn on the United States — leading to a crisis that could dwarf 2008.
“The Moment of Truth” documents that “the problem is real, and the solution will be painful.” It is tempting to act as if the long-run budget imbalance could be fixed by just cutting wasteful government spending or raising taxes on the wealthy. But the facts belie such easy answers.
I suppose you know the professional insane Republican Michelle Bachmann is forming an exploratory committee for a possible presidential run. I’d vote for any one’s dog before I’d consider Bachmann who doesn’t appear to have paid attention to any course she ever attended in school. I’ve never in my life heard any one outside of maybe a grade school that has such a bad grasp of American History, law, and politics. I think she should’ve just gotten a mail order degree. Education appears to have been wasted on her.
CNN has exclusively learned that Rep. Michele Bachmann will form a presidential exploratory committee. The Minnesota Republican plans to file papers for the committee in early June, with an announcement likely around that same time.
But a source close to the congresswoman said that Bachmann could form the exploratory committee even earlier than June so that she could participate in early Republican presidential debates.
“She’s been telling everyone early summer,” the source told CNN regarding Bachmann’s planned June filing and announcement. But the source said that nothing is static.
“If you [debate sponsors] come to us and say, ‘To be in our debates, you have to have an exploratory committee,’ then we’ll say, ‘Okay, fine…I’ll go file the forms.'”
Speaking of Republicans, a former aide to Sen. John Ensign has just been indicted for violating conflict of interest laws.
The Justice Department announced the indictment late Thursday, which charges Doug Hampton with seven counts of violating criminal conflict of interest laws for allegedly engaging in unlawful communication with Ensign’s office, violating the Senate’s “revolving door” policy.
According to the indictment, after Hampton left Ensign’s office in 2008 he “knowingly and willfully made, with the intent to influence, communications to staff members of the U.S. senator” on behalf of an energy company he was employed by at the time.
Hampton is alleged to have sought the assistance of Ensign and other staff members for help in moving forward a proposal to build a power plant in eastern Nevada.
Hampton, if convicted, could face up to five years in prison for each of the seven counts in the indictment. He is set to be arraigned in U.S. District Court in Washington, D.C. on March 31.
Ensign is retiring. Probably because of all the scuttlebutt around his affairs and possibly what may come out of this prosecution. Maybe Tom Delay will have a new cell mate on the way.
Glenn Greenwald has written an excellent piece in Salon on withering Miranda rights under the Obama administration. You may want to check it out.
The number of instances in which Obama has violently breached his own alleged principles when it comes to the War on Terror and the rule of law are too numerous to chronicle in one place. Suffice to say, it is no longer provocative or controversial when someone like Yale Law Professor Jack Balkin writes, as he did the other day, that Obama “has more or less systematically adopted policies consistent with the second term of the George W. Bush Administration.” No rational person can argue that or even tries to any longer. It’s just a banal expression of indisputable fact.
Today, the Obama DOJ unveiled the latest — and one of the most significant — examples of its eagerness to assault the very legal values Obama vowed to protect. The Wall Street Journal reports that “new rules allow investigators to hold domestic-terror suspects longer than others without giving them a Miranda warning, significantly expanding exceptions to the instructions that have governed the handling of criminal suspects for more than four decades.” The only previous exception to the 45-year-old Miranda requirement that someone in custody be apprised of their rights occurred in 1984, when the Rehnquist-led right-wing faction of the Supreme Court allowed delay “only in cases of an imminent safety threat,” but these new rules promulgated by the Obama DOJ “give interrogators more latitude and flexibility to define what counts as an appropriate circumstance to waive Miranda rights.”
Just hope you never get classified as a terrorist or you’ll disappear down some rabbit hole. You should also read William Grieder over at The Nation on How Wall Street Crooks Get Out of Jail.
Instead of “Old Testament justice,” federal prosecutors seek “authentic cooperation” from corporations in trouble, urging them to come forward voluntarily and reveal their illegalities. In exchange, prosecutors will offer a deal. If companies pay the fine set by the prosecutor and submit to probationary terms for good behavior, perhaps an outside monitor, then government will defer prosecution indefinitely or even drop it entirely. The corporation thus avoids the stigma of a criminal trial and the bad headlines that depress stock prices. More to the point, the “deferred prosecution agreement,” as it’s called, allows the company to escape the more severe consequences of criminal conviction—the loss of banking and professional licenses, charters, deposit insurance or other government benefits, including eligibility for federal contracts and healthcare programs. In other words, the punishment prescribed in numerous laws.
“With cooperation by the corporation, the government may be able to reduce tangible losses, limit damage to reputation, and preserve assets for restitution,” the Justice Department’s authorizing memorandum explained in 2003. “A deferred prosecution or non-prosecution agreement can help restore the integrity of a company’s operations and preserve the financial viability of a corporation that has engaged in criminal conduct.”
The favored argument for the more conciliatory approach was that criminal indictment may amount to a death sentence for a corporation. The fallout will destroy it, and the economy will lose valuable productive capacity. The collateral consequences are unfair to employees who lose jobs and stockholders who lose wealth. Corporate defenders cited Arthur Andersen, the giant accounting firm that imploded after it was convicted in 2002 of multiple offenses in Enron’s collapse. But was it the firm’s indictment or its criminal behavior that caused clients, accountants and investors to abandon it?
A better name for the Justice Department’s softened policy might be “too big to prosecute.”
Wanna rob a bank? Don’t do it with a gun. Just become its President and do what you want to do.
Here’s a disturbing headline from Egypt (h/t to Minx):Secret shame of Egypt’s army: Women protesters were forced to have ‘virginity checks’ after being arrested in Tahrir Square,
Women arrested by the Egyptian police during protests in Cairo’s Tahrir Square were subjected to forced ‘virginity tests’, according to Amnesty International.
Eighteen demonstrators were detained after army officers cleared the square on March 9 at the end of weeks of protest.
Amnesty today said that the women had been beaten, given electric shocks and then subjected to strip searches while being photographed by male soldiers.
They were then given ‘virginity checks’ and threatened with prostitution charges if medics ruled they had had sex, according to the charity.
Just when you think things will get better, something comes along that just makes things look worse.
So, what’s on your reading and blogging list today?
Misreading Elections
Posted: March 3, 2011 Filed under: Civil Liberties, Civil Rights, collective bargaining, Corporate Crime | Tags: Jack Abrahamoff, Marianas Islands, Saipan, Tan Holdings, Tom DeLay, US suppression of Collective bargainning rights 26 Comments
Politicians these days represent narrow interests and are deliberately misrepresenting recent election results as support for policies not presented to the general electorate during their campaigns. Some of this agenda may have been possibly inkled to their extremists supporters through code words but from the looks of polls, most of it appears to have come as a complete surprise to their electorate. This is probably because people generally don’t pay attention to primaries and the types of candidates supported by the most vocal and most extreme partisans.
No where is this disconnect more clear than in Wisconsin where poll-after-poll shows buyer’s remorse for their right wing extremist governor, Scott Walker. The latest Rasmussen Poll shows support for Budget Cuts but not state usurpation of collective bargaining rights for state workers.
Most Wisconsin voters oppose efforts to weaken collective bargaining rights for union workers but a plurality are supportive of significant pay cuts for state workers. Governor Scott Walker is struggling in the court of public opinion, but how badly he is struggling depends upon how the issue is presented. There is also an interesting gap between the views of private and public sector union families.
A new Rasmussen Reports telephone survey of Wisconsin voters shows that just 39% favor weakening collective bargaining rights and 52% are opposed. At the same time, 44% support a 10% pay cut for all state workers. Thirty-eight percent (38%) are opposed. That’s partly because 27% of Wisconsin voters believe state workers are paid too much and 16% believe they are paid too little. Forty-nine percent (49%) believe the pay of state workers is about right. (To see survey question wording, click here.)
Strong support for collective bargaining rights showed up in a WSJ/NBC Poll yesterday where only 33% supported limited collective bargaining rights. This result supported an early poll done by US Today who found the same 33% level of support. Yet, we continue to see bills advance that would erode these rights. Ohio state senators barely advanced a bill with drastic limitations. I’m getting qualified in a few months as a professor in one of the few high demand, high paying areas. That would be finance. I’m one of very few white, American women to do so also. This implies I have two additional job skills that are very difficult to find these days in people with technical doctorates. I speak and write in coherent American English. Many of my peers struggle to do their lectures and research in cogent English. You can only imagine what this does to students. I don’t have to imagine. I hear the complaints all the time. This is a problem for candidates coming from top tier schools. Ask me if I’m interested in any place in Wisconsin or Ohio at the moment. The answer is a big fat no. I’m looking outside Louisiana for similar reasons. I’m not going to be drastically underpaid in cash without some compensating benefits. I can’t imagine that similarly qualified folks in engineering, accounting, medical fields, and computer sciences aren’t having the same thoughts. I pity the poor administration that’s going to try to find qualified people in those areas under these circumstances.
Why do politicians find people like me so terrible and unprofessional that they seek to deny us a place in determining our working conditions and remuneration?
Ohio state senators narrowly approved a bill that would prohibit public-employee unions representing 400,000 state and local workers from bargaining over health benefits and pensions, while also eliminating the right to strike. I’ve never particularly felt the need to strike except in the private sector where I basically just have voted with my feet after finding another job. The private sector is filled with capricious and overtly-political bad managers. It’s why most corporations can’t compete unless they scramble to find extreme cost cutting measures. They don’t want to be bothered with the higher callings of research and development, customer service, or any other type of innovation that would actually benefit employees and customers. This now appears to be the model that many of these folks want transferred to the public sector where you still had a chance of being paid and promoted on how well you do your job instead of whose ass you’re willing to frequently kiss. The problem now is that there is so much market in the hands of so few businesses and some jobs are only available through the public sector. The power to abuse is very much in their favor. This brings me back to the 2/3rds of the electorate that appreciate checks and balances. Union power checks the power of huge oligopoly and monopoly employers.
This brings me to a story of excess and the Northern Mariana Islands and Jack Abramoff. This also includes notorious B I G Felon, The Hammer, Republican Tom Delay (H/T to Bostonboomer for reminding me about this.). It’s a story of sex trade, Republicans, a deregulation haven, and the type of things that Republicans would like to see hoisted on the US and American workers. I have to admit to having to do some reading up on this since most of the story broke in 2006 and I was busy recovering from a little thing called Katrina at the time. You may recall we were a ‘petri dish’ of privatization and no bid contracts at the time and still are the guinea pigs of US privatization scams. What they did to us pales in comparison to the treatment of people in the US Territories of the Marianas Islands.
The Marianas Islands situation serves as a cautionary tale that would be worth remembering today because the same people who took jaunts to this paradise of no regulation and slavery are the same people stripping US citizens of rights our grandparents fought for during the gilded age. Here’s NPR describing work compounds that delighted and tingled the legs of visiting Republican politicians. JOHN YDSTIE is the NPR host. He introduced his guest as “Wendy Doromol was a schoolteacher there in the 1980s and ’90s, but became a human rights activist fighting sweatshops after guest workers on the islands came to her with tales of abuse“. Now remember, this is the work environment that Republican politicians like Scott Walker and John Kasich admire.
Ms. DOROMOL: The barbed wire around the factories face inward so that the mostly women couldn’t get out. They had quotas that were impossible for these people to reach and if they didn’t reach them, they’d have to stay until they finished the quota and they wouldn’t be paid for that work. They were hot, the barracks were horrible. A lot of the females were told you work during the day in the garment factory and then at night you can go and work in a club and they’d force them into prostitution at night.
YDSTIE: And they also experienced things like coerced abortion?
Ms. DOROMOL: Yes, if some female got pregnant, they either had to go back to China to give birth or have a forced abortion.
YDSTIE: Guest workers were lured to the Marianas by recruiters in countries like China, the Philippines and Bangladesh, who told them they were going to the United States. The recruiters charged workers around $5,000 for the trip. Nashir Jahidi(ph) is one of the workers Wendy Doromol befriended. He came to Saipan, one of the Northern Mariana Islands from Bangladesh by way of the Philippines. He says when he got on the plane, he thought he was going to America.
Mr. NASHIR JAHIDI (Ex-Worker): And not only me, there was some people that recruiter exactly told him that he can be going to Los Angeles by train from Saipan. So when I hear that the plane, you know, the host or somebody’s saying they were about to land in Saipan and I when I looked out the window and I saw it’s like blue water everywhere and small island and I was like, how?
YDSTIE: So you thought that you were going to be going to California or somewhere on the U.S. mainland?
Mr. JAHIDI: Not only me, most of the worker. They were surprised when they see the United States flag and the local island flag and we used the U.S. dollar, we used the U.S. stamp and everything, then people understand that this is only a small island. There is no way that you have the opportunity like what’s in the United States.
YDSTIE: Garment manufacturers were attracted to the Marianas, which had become a U.S. commonwealth in 1976, because clothes made there could be labeled made in the U.S.A. and didn’t face import quotas or duties. But despite flying the U.S. flag, the islands were exempt from many U.S. labor and immigration standards. As the abuses that Wendy Doromol helped uncover came to light, garment manufacturers there were sanctioned by the U.S. Labor Department. Then in the mid-1990s when it looked like Congress might force the Marianas to adopt U.S. Labor and Immigration laws, the island’s government took action. It hired lobbyist Jack Abramoff to protect its special status. Abramoff was paid millions for his work.
Right off a Cliff
Posted: February 26, 2011 Filed under: abortion rights, Barack Obama, Civil Liberties, Civil Rights, collective bargaining, Corporate Crime, Democratic Politics, education, Environmental Protection, Federal Budget, Feminists, fundamentalist Christians, GLBT Rights, Human Rights, John Birch Society in Charge, Populism, Psychopaths in charge, Republican presidential politics, right wing hate grouups, Surreality, Team Obama, The Media SUCKS, the villagers, U.S. Politics, Voter Ignorance, We are so F'd | Tags: extremists, Republicans, Ron Brownstein, Scott Walker, States Rights 11 Comments
Where are mainstream Republicans these days? What has happened to the party of Lincoln, Teddy Roosevelt and Eisenhower? Prior to the Reagan years, Republican women were front and center in volunteering for planned parenthood, supporting the ERA, and working for abortion rights. First Lady Betty Ford was a proud feminist and one of the first women to put women’s health issues–including women with drinking problems and breast cancer–on the map. President Richard Nixon was responsible for many of the agencies that protect the environment. The current party is chock-full of science denying Theocrats and economics-denying Corporate Fascists. It’s making a sham out of the two party system. We may now have a window open wide enough to stop some of this. We should ready ourselves with the facts and act now.
An online conversation has been initiated with the publication of Ron Brownstein’s article in the National Journal on Thursday called ‘State’s Rights’. It is front and center in starting a discussion among Democratic bloggers, journalists, and other liberal/progressive sympathizers. States rights was code for the right to own slaves during the first 100 years of this country’s existence. It is now code for the right to discriminate against the GLBT community, insert the government into an individual woman’s gynecological care, and bust unions. The racial overtones have not gone away since the worst of the hateful verbiage is aimed at stopping any policy goal attempted by President Obama.
Any one who has read me over the last few years knows that I am not a big fan of this President and I’m even less of a fan of his zealous followers. However, it would take a fairly dim bulb to not see the racism implicit in many of the Republican attacks against him. Attacks range from the extremely bizarre personal assertions that he is a secret Muslim, foreign born, and a devout socialist/communist to a complete rewrite of any policy initiative.
Obama is about as conservative of a Democrat as one can find these days which has been one of my issues with him all along. His actions and words have not stopped the endless attacks on absolutely everything he attempts by Republicans and their monied interests. These tactics were first used against former Democratic President Bill Clinton but have reached some kind of hyper-extortionate apex today. It’s to the point that I firmly believe some of these Republican extremists would rather take the country down with them than negotiate something other than an ideologically pure outcome. Brown’s article and examples focus on the current bloc of extremist Republican governors with their take no prisoners policies. While his focus is mostly on the impact on Obama, I believe his larger point should entice us to think bigger.
But one senior Obama administration official, who also had a close view of Clinton’s interaction with Republican governors, contends that ideology is trumping interest for the governors in many of these new disputes. Health care reform, for instance, asks states for no new financial contribution to expand coverage through 2016 and only relatively small participation thereafter; because 60 percent of the uninsured live in the states where a Republican holds the governorship, their residents would receive the most new federal aid if the law survives. “One had the sense in the mid-1990s that conservative governors were doing whatever was in the best interest of their state,” the senior official said. “This time, the Republican governors appear determined to make an ideological point, even if it costs their state a great deal.”
Whatever the governors’ motivations (one man’s posturing, after all, is another man’s principle), their unreserved enlistment into Washington’s wars marks a milestone. It creates a second line of defense for conservatives to contest Obama even after he wins battles in Congress. It tears another hole in the fraying conviction that state capitals are less partisan than Washington. And it creates a precedent that is likely to encourage more guerrilla warfare between Democratic governors and a future Republican president.
American politics increasingly resembles a kind of total war in which each party mobilizes every conceivable asset at its disposal against the other. Most governors were once conscientious objectors in that struggle. No more.
I can remember attending Republican conventions in the early 1980s during the first hint of the unholy alliance between religious fanatics along the line of a Christian Taliban with the John Birch Society version of libertarians. It was a terrifying spectacle. At the time, the more pro-business and hoity-toity conservative elements in the party were willing to use them like pet pit bulls because they were incredibly organized at the grass roots level and they voted. Republicans traditionally had a much more difficult time turning out voters and their GOTV machines were dwarfed by the Democrats who could rely on well organized and managed union membership. This is one of the reasons why there is also the huge attack on the last standing unions now. They’re worth a fortune come election time and no Republican campaign strategist worth anything underestimates them. We can clearly no longer underestimate the religious zealots or those gullible to the rants of Glenn Beck. They’ve become a contagion.
Back in the day, the young me argued that this form of big daddy government intervention put forth by religionists and Birchers was basically enabling powerful business monopolies and drop kicking the constitutional mandate to deny the establishing of a state religion. It was against the very core ideology of historical Republicanism. I got no where. This was especially true as Nixon’s southern strategy began to work its evil influence on bringing in the remaining racist elements of the old Dixiecrats who frankly were all for the government taking care of any one that wasn’t like them. This added the last nail in the traditional coffin of the party of Lincoln. That sin is now manifesting in the xenophobia against Muslims and Hispanics in addition to African Americans topped by the anti-science bias from the religionists and the pro-monopoly market creation from the corporatists.
It appears that many old school Republicans now see the results of opening this Pandora’s box. They are horrified and have been trying to stuff the demons back into the chest. Now, you see those same folks that opened their kennels filled with poodles to the pit bulls are now acting absolutely appalled by the rising influence of absolutely whacked extremists like Glenn Beck. Scarborough, Rove, and Kristol are currently trying to put the Beckheads back into the box. Those of us that don’t vote Republican could afford to ignore this if it were just some intraparty feud. It’s gone beyond that with the rise of tea party hysterics and billionaire libertarian Daddy Warbucks’ propaganda machines. In many states, the Republican party infrastructure has been commandeered by the pit bulls. The poodles–like Arianna Huffington and Markos–have long left their confines. They are morphing traditional Democratic Party concerns. The same divisive issues that used to motivate the base to do the GOTV and show up at the polls has managed to bring this new crop of Republican governors and congressional members to a critical mass. They refuse any middle or even right of middle ground. They won’t negotiate on the usual country club Republican issues. It’s no longer a GOTV ploy for them because they are true believers.
Steven Benen explores this quandry in his blog at WAPO today.
Keep in mind, it’s ideology, not practical concerns, that lie at the heart of these governors’ reactionary moves. The states turning down investments for high-speed rail, for example, were effectively handed a gift — jobs, economic development, improved infrastructure — but Republicans like Rick Scott and Scott Walker turned down the benefits because of a philosophical opposition, deliberately hurting their state in the process. The administration was effectively throwing a life-preserver to a Republican who’s drowning, only to be told, “We don’t like government life-preservers.”
The same is true of health care, which would be a boon to states, but which far-right governors resist for reasons that have nothing to do with public policy.
Bill Clinton faced a watered-down version of these Republican pit bulls over a decade ago. Dealing with them is how he got his reputation for triangulation. He seemed uniquely placed to make some small progress then–that now seems impossible now–because of his past position as a southern governor with a decidedly homespun and folksy manner. President Obama has none of this going for him. He is surrounded by Businesscrats that are unlikely to fill the void. The only thing he’s managed to do is to gain the ear of the Chamber of Commerce types. These folks are hardly going to be sympathetic to social justice or middle class bread-and-butter issues. Additionally, right wing media sources and timid main stream media sources are playing into the hands of the outrageous. We have media enablers instead of investigative journalists.
That is why it is absolutely essential that whatever is left of the Democratic grassroots need to make one extremely loud noise right now. It is unconscionable that a rewrite of history, science, and economic is taking place while many of us are simply standing around with gaping mouths. I’ve spoken many times about the absolute lack of economics that is driving austerity programs. It’s already showing signs of slowing economic growth down at a time when unemployment is unacceptably high. This is only going to multiply as the days and months unfold. Ask yourself if we can really afford another recession?
I was also disheartened to read that science is not fairing well either. Scientific American has a thought provoking piece up on the overwhelming science behind global warming and climate change.Their title should be rhetorical but it is not: ‘Why Are Americans So Ill-Informed about Climate Change?’
Near the forum’s conclusion, Massachusetts Institute of Technology climate scientist Kerry Emanuel asked a panel of journalists why the media continues to cover anthropogenic climate change as a controversy or debate, when in fact it is a consensus among such organizations as the American Geophysical Union, American Institute of Physics, American Chemical Society, American Meteorological Association and the National Research Council, along with the national academies of more than two dozen countries.
“You haven’t persuaded the public,” replied Elizabeth Shogren of National Public Radio. Emanuel immediately countered, smiling and pointing at Shogren, “No, you haven’t.” Scattered applause followed in the audience of mostly scientists, with one heckler saying, “That’s right. Kerry said it.”
Such a tone of searching bewilderment typified a handful of sessions that dealt with the struggle to motivate Americans on the topic of climate change. Only 35 percent of Americans see climate change as a serious problem, according to a 2009 poll by the Pew Research Center for the People & the Press.
It’s a given that an organized and well-funded campaign has led efforts to confuse the public regarding the consensus around anthropogenic climate change.
These extremists are even rewriting the already right wing Ronald Reagan’s legacy to make it seem more extreme to support the legitimacy of their radical agendas. Here’s an example I found this morning on ThinkProgress on Reagan’s views on unions. Scott Walker’s fantasy world includes his vision of being Reagan’s heir. Yet, here is Reagan himself on the union movement in Poland during one of his radio addresses to the nation.
REAGAN: Ever since martial law was brutally imposed last December, Polish authorities have been assuring the world that they’re interested in a genuine reconciliation with the Polish people. But the Polish regime’s action yesterday reveals the hollowness of its promises. By outlawing Solidarity, a free trade organization to which an overwhelming majority of Polish workers and farmers belong, they have made it clear that they never had any intention of restoring one of the most elemental human rights—the right to belong to a free trade union.
The one thing that I learned early on when dealing with these people from within the Republican party itself in the pre-Reagan and early Reagan days is that they believe their courses are so righteous that they will lie and do anything to support them. If we do not hold their actions and lies to the light of day, our country will be completely overrun by by folks that are anti-science, anti-economics, anti-rational thought, and anti-democracy. We’ll have a theocratic plutocracy in fairly short order.
It is absolutely imperative that we put pressure on the media and Democratic politicians to fact check these people, stand up to them, and expose their lies to the public. It is possible that we’ve caught a tipping point in their overreach process. If this is the case, it means we have to work with the momentum now. Nothing short of our democracy and our children’s future is at stake here. We cannot be complacent and we cannot be left with mouths wide opened. We also cannot rely on leadership from the very top. If you’re in one of those states that is acting up, act now!!! Find and support your version of the Wisconsin 14.
Dirty Little Secrets
Posted: February 2, 2011 Filed under: Corporate Crime, Team Obama, The Bonus Class, U.S. Politics, Voter Ignorance, We are so F'd | Tags: corporate tax rates, effective tax rates, self dealing 12 Comments
The overall corporate income tax was featured during the President’s SOTU address and by Republican circles. I have mentioned that this particular rate isn’t even relevant anymore in posts and down thread comments because corporations here really don’t pay any where near the effective rate.
There are several reasons for this. First, many of them now set up real or pseudo headquarters in tax and off shore banking havens like the Bahamas or Qatar and place a lot of their operations out of the reach of the IRS. The second is the efficiency of lobbying efforts in getting them so many loopholes that most corporate revenues become exempt. Despite this, corporations use public services and create social costs. Social costs are those costs that the society gets to foot when corporations create problems they or their consumers can pass to the public. A big example is smoking that creates incredible public health issues or pollution. BP is definitely not taking care of the tab for its destruction down here and will most likely escape prosecution for costs the spill will continue to wreck on the environment, livings, and health of people and wildlife in the area. Meanwhile, as an oil business, they are the beneficiary of many, many tax loopholes and direct subsidies.
I was glad to see some hard data–albeit anecdotal–on this phenomenon today in David Leonhardt’s op ed column in the NYT called ‘The Paradox of Corporate Taxes‘. The narrative begins with the example of Carnival Cruises that has a special, extreme loophole that leaves the majority of its revenues untaxed while it uses a number of public resources like services of the Coast Guard. Corporations are cost minimizing and profit maximizing things. They will employ an army of lobbyists and lawyers to help them. They even produce commercials that tout their environmental friendliness and their patriotism. I always shake my head at the commercials of companies like GE and Boeing for whom competitive markets are imaginary and no bid government grants are major sources of revenues. Yet, they act like they are burdened by taxes.
This is so untrue.
Carnival’s biggest government benefit of all may be the price it pays for many of those services. Over the last five years, the company has paid total corporate taxes — federal, state, local and foreign — equal to only 1.1 percent of its cumulative $11.3 billion in profits. Thanks to an obscure loophole in the tax code, Carnival can legally avoid most taxes.
It is an extreme case, but it’s hardly the only company that pays far less than the much-quoted federal corporate tax rate of 35 percent. Of the 500 big companies in the well-known Standard & Poor’s stock index, 115 paid a total corporate tax rate — both federal and otherwise — of less than 20 percent over the last five years, according to an analysis of company reports done for The New York Times by Capital IQ, a research firm. Thirty-nine of those companies paid a rate less than 10 percent.
President Obama indicated that he was willing to simplify the Corporate Tax Code and lower the overall Tax Rate for corporations. In exchange, he asked Congress to remove all the pork, breaks, and exclusions they’ve granted many businesses–including ones that really don’t need it like the Oil Industry–over the years. I doubt we’ll see any moves on the latter. My fear is that will only see movement on the former thus cementing the de-funding of government by the by the very people who benefit from government largess. Many study shows that far more rich and upper middle class Americans and American Businesses use public services and public assets than the poor and working class. After all, who uses the roads, the airways, the universities, the grants and loans, and the many tax loopholes?
While the official corporate tax rate is among the highest of developing countries, the effective rate is among the lowest of the countries that actually have economies that don’t function as tax havens or off shoring banking centers. Even Republican economists will pony up that data.
“A dirty little secret,” Richard Clarida, a Columbia University economist and former official in the Treasury Department under President George W. Bush, has said, “is that the corporate income tax used to raise a fair amount of revenue.”
Over the last five years, on the other hand, Boeing paid a total tax rate of just 4.5 percent, according to Capital IQ. Southwest Airlines paid 6.3 percent. And the list goes on: Yahoo paid 7 percent; Prudential Financial, 7.6 percent; General Electric, 14.3 percent.
Economists have long pleaded for an overhaul of the corporate tax code, and both President Obama and Republicans now say they favor one, too. But it won’t be easy.
Indeed, it won’t be easy. First, it’s difficult for even neutral academics to get a good look at the workings of loopholes because because tax filings are confidential. Loopholes are everywhere and folks that support simplifying the tax code can’t even get a handle on how widespread or huge the problem. Publicly held corporations provide for public stockholder reports but even these things are of limited use over time when studying corporate tax avoidance. My field specializations for my doctorate is International Finance and Trade and Corporate Finance so I lot of my class work and research work is based in corporate finance as well as economics. I know the literature, models, and theories well.
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