Monthly Archives: April 2015

The Late Robert Fitch on Obama: “The Change They Believe In”

by Yves Smith, May 4, 2012

Barack Obama remains an icon to many on what passes for the left in America despite incontrovertible evidence that he does not represent their interests. There are many contributing factors, including his considerable skills as a speaker and his programmatic effort to neuter liberal critics by getting their funding cut.

A central component of the seemingly impenetrable Obama mythology is his personal history: a black man, son of a broken home, who nevertheless got on the fast track to financial success by becoming editor of the Harvard Law Review, but turned instead to working with and later representing a particularly disadvantaged community, the South Side of Chicago.

Even so, this story does not quite add up. Why did Obama not follow the usual, well greased path of becoming a Supreme Court clerk, and seeking to exert influence through the Washington doors that would have opened up to him after that stint?

A remarkable speech by Robert Fitch puts Obama’s early career in a new perspective that explains the man we see now in the Oval Office: one who pretends to befriend ordinary people but sells them out again and again to wealthy, powerful interests – the banks, big Pharma and health insurers, and lately, the fracking-industrial complex.

Fitch, who died last year, was an academic and journalist, well regarded for his forensic and archival work, as described by Doug Henwood in an obituary in the Nation. He is best known for his book Solidarity for Sale, which chronicled corruption in American unions, but his work that is germane to his analysis of Obama is Assassination of New York. In that, he documented the concerted efforts by powerful real estate and financial interests to drive manufacturing and low-income renters out of Manhattan so they could turn it over to office and residential space for high income professionals.

Continue reading The Late Robert Fitch on Obama: “The Change They Believe In”

Why America’s Billionaires Owe You a Thank You Note

by Chuck Collins, published April , mirrored from Common Dreams

America’s billionaires minimize their tax burdens, making the rest of us pick up their tab.

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‘You can’t hitch a U-Haul of money to your hearse,’ writes Collins, ‘though some billionaires have found ways for their fortunes to live forever.’ (Photo: sarowen/Flickr)

This tax season, America’s billionaires are toasting you, the ordinary taxpayer.

That’s because you’re the one picking up the tab for our nation’s ailing infrastructure of roads, bridges, and rail transport. You’re also footing the bill for military forces, disaster relief, veterans’ health services, and national park protection.

The share of taxes paid by the 1 percent is declining, even as wealth flows upward to them at dizzying pace.

Maybe you’re not shocked to hear that the wealthy shift their tax obligations onto ordinary Americans. But perhaps you don’t know all their tricks. Here are five tax secrets billionaires deploy to keep you paying more than your fair share.

1. Tax Work More Than Wealth

The United States taxes income from investments more lightly than the money you earn by working.

For example, a teacher who earns $40,000 from her job owes Uncle Sam 25 percent of her income. But a hedge fund billionaire raking in $400 million from investments will only pay between 15 and 20 percent of that haul in taxes.

2. Hide Money Offshore

Senator Elizabeth Warren quipped that Boston’s winter had been so harsh that Mitt Romney “left his money here and he went to the Cayman Islands.”

Continue reading Why America’s Billionaires Owe You a Thank You Note

How Corporate Tax Dodgers Avoid Paying Their Fair Share—or Any Share At All

by Deidre Fuller, published April 10, 2015, mirrored from Common Dreams

Bernie Sanders declares: ‘At a time when we have massive wealth and income inequality, and when corporate profits are soaring, it is an outrage that many large, profitable corporations paid nothing in federal income taxes last year.’

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Among its findings, Citizens for Tax Justice reveals that not only did media giant Time Warner pay nothing in federal income taxes last year, it received a rebate of $26 million from the IRS even though it made $4.3 billion in U.S. profits. (Photo: Zhu/flickr/cc)

Pointing to egregious examples of Fortune 500 corporations “manipulating the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits,” a new report from Citizens for Tax Justice makes a sharp case for corporate tax reform.

The 15 companies cited in the CTJ analysis represent a range of sectors within the U.S. economy, from toy maker Mattel to financial services corporation Prudential to broadcaster CBS to media giant Time Warner.

All told, the report reveals that the 15 companies paid no federal income tax on $23 billion in profits in 2014, and they paid almost no federal income tax on $107 billion in profits over the past five years. All but two received federal tax rebates in 2014, and almost all paid “exceedingly low” rates over five years.

“These 15 corporations’ tax situations shed light on the widespread nature of corporate tax avoidance,” Citizens for Tax Justice declared.

Continue reading How Corporate Tax Dodgers Avoid Paying Their Fair Share—or Any Share At All

Progressivism may be “The New Center”

by Bud Meyers, published April 13, 2015

The Hill has a short article titled: “Reid, left push for liberal 2016 candidate” — reporting that Senate Minority Leader Harry Reid (D-Nev.) has joined a progressive group’s call for Hillary Clinton (or any other Democratic White House candidate) to run from the “left” in 2016. (We need a Democratic debate! — because not all Democrats want Hillary, and not because they’re misogynist.)

Personally, I think of myself more as a “progressive” person rather than a “liberal” or a “leftie” or a “socialist”. I don’t think the descriptions should all be lumped together as one and the same. People on the Right might confuse progressivism with staunch socialism, communism, eco-terrorism or Code Pink — because some extreme groups tend to side with progressive causes — with progressive like-mined people such as myself. Meaning, those that hold political office who caucuses with the Democrats, who also (more-or-less) better favor the working-class, minorities, the elderly and the poor — as opposed the GOP, who mostly favor the very wealthy and the biggest businesses, but who also have their own radical (and sometimes, violent) political supporters.

I oppose the liberal use of the word “liberal” by the media (even by the “liberal media”) when reporting on political issues, because “liberal” might sound soft on crime (like allowing pedophiles in the suburbs to freely roam elementary schoolyards at will) — or “liberal” might imply an “anything goes” attitude (such as the hippie culture of “love-ins” and communes in the 1960s), as if we were all from the great “liberal” State of California (where I was raised for several years). Is Charles Manson a “liberal”, or just a psychopath?

Bernie Sanders calls himself a “socialist”, but many people (who remember or study history) equates socialism to Joseph Stalin and genocide. While at Fox News Glenn Beck called the 99ers “socialists” and said “I bet you’d be ashamed to call them Americans”, just because they protested for extending UI benefits until there were enough jobs available. How can one compare the long-term unemployed in America to a mass killer’s ideology? People weren’t even allowed to protest in Stalin’s Russia. On Fox News, according to Bill O’Reilly, all progressives, liberals, socialists, environmentalists, tree-huggers, climate change advocates, civil rights leader, minorities, union members (and anybody else who votes for Democrats — including Veterans, musicians, movie stars, professional athletes, etc.) are “left-wing loons” if they don’t agree with him and other multi-millionaires like Sean Hannity or Rush Limbaugh.

FDR and Theodore Roosevelt — and even Dwight D. Eisenhower — weren’t “left-wing loons”; just as Elizabeth Warren and Bernie Sanders aren’t socialist despots. But the GOP and the media have depicted them as “left of center” (“center” being in the middle of being what most people believe and agree with), when the “progressive” platform seems to be more “center” than whatever a “moderate” (Third Way) Democrat like Hillary Clinton advocates — which is really more to the right of center, and closer to what a “moderate Republican” might be today.

The political “Left” advocates for average working people (and those who can’t survive without help), while the political “Right” advocates for very wealthy oligarchs and plutocrats, and that everyone else (the working-class and poor) should all be left alone to fend for ourselves — even while the GOP consistently promotes policies that makes it ever more difficult for everyone else to fend for ourselves (like raising the minimum wage). Aside from the “wedge issues” — such as birth control and abortion (which are religious and moral differences), that’s really the biggest difference between right-wing radicals and left-wing loons. It’s really that simple.

For example: Sane gun laws (aka “gun control”) isn’t about disarming American citizens so that the “government” (our elected officials and our military) can take control of our daily lives, or lock us up in FEMA camps. It’s really about the NRA (gun lobbyists) who are advocating for big businesses and selling more guns to us (besides just to the rest of the world for war profits). It has nothing at all to do with constitutional rights, the 2nd amendment, and our right to bear arms. It’s all about corporate profits. Period.

Dwight “I like Ike” Eisenhower articulated his position as a moderate progressive Republican: “I have just one purpose … and that is to build up a strong progressive Republican Party in this country. If the right wing wants a fight, they are going to get it … before I end up, either this Republican Party will reflect progressivism or I won’t be with them anymore.”

Continue reading Progressivism may be “The New Center”

A Nation’s Shame: Trillions in New Wealth, Millions of Children in Poverty

by Paul Buchheit, published April 13, 2015, mirrored from Common Dreams

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A three-year-old girl waits with her mother after receiving shoes and school supplies during a charity event in October to help more than 4,000 underprivileged children at the Fred Jordan Mission in the Skid Row area of Los Angeles. Children from low-income families now make up a majority of public school students in the nation, according to a report published earlier this year. (Photo: Mark Ralston/AFP/Getty Images)

America’s wealth grew by 60 percent in the past six years, by over $30 trillion. In approximately the same time, the number of homeless children has also grown by 60 percent.

Financier and CEO Peter Schiff said, “People don’t go hungry in a capitalist economy.” The 16 million kids on food stamps know what it’s like to go hungry. Perhaps, some in Congress would say, those children should be working. “There is no such thing as a free lunch,” insisted Georgia Representative Jack Kingston, even for schoolkids, who should be required to “sweep the floor of the cafeteria” (as they actually do at a charter school in Texas).

The callousness of U.S. political and business leaders is disturbing, shocking. Hunger is just one of the problems of our children. Teacher Sonya Romero-Smith told about the two little homeless girls she adopted: “Getting rid of bedbugs, that took us a while. Night terrors, that took a little while. Hoarding food..”

America is a ‘Leader’ in Child Poverty

The U.S. has one of the highest relative child poverty rates in the developed world. As UNICEF reports, “[Children’s] material well-being is highest in the Netherlands and in the four Nordic countries and lowest in Latvia, Lithuania, Romania and the United States.”

Continue reading A Nation’s Shame: Trillions in New Wealth, Millions of Children in Poverty

Despite spending freezes elsewhere, Rauner OKs corporate tax breaks

by Greg Hinz, published April 09, 2015

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Parks and social services are taking a hit, but Gov. Bruce Rauner is waving through $100 million in “commitments” made by his predecessor.

After months of indecision, the Rauner administration is lifting a freeze it put on $100 million in business tax-incentive deals that had been approved in principle by outgoing Gov. Pat Quinn but not yet executed.

The Rauner administration and business sources confirm that an internal review of such spending was conducted and a decision reached to fulfill “commitments made by the Quinn administration” to companies including eBay, Capital One, CDW and SAC Wireless. Some deals reportedly were finalized in the past 10 days or so; others are still in process. (Take a look for yourself here.)

But the decision to go ahead with deals under the state’s Economic Development for a Growing Economy program may be controversial—both because Rauner and others have criticized the Edge program and because he has suspended $26 million in social services grants and $180 million in park grants that had been approved by Quinn but not yet disbursed.

Rauner has cited the state’s financial woes in freezing those monies. A spokeswoman said the Edge credits will proceed “because they have no impact on the current fiscal year.”

Continue reading Despite spending freezes elsewhere, Rauner OKs corporate tax breaks

Can Evil Be Defeated?

by Paul Craig Roberts, published April 3, 2015

John W. Whitehead is a constitutional attorney. As head of the Rutherford Institute he is actively involved in defending our civil liberties. Being actively involved in legal cases, he experiences first hand the transformation of law from a shield of the American people into a weapon in the hands of the government.

American civil liberty was seriously eroded prior to 9/11 and the rise of the police/warfare state, a story I tell in How America Was Lost. Lawrence Stratton and I documented the loss of law as a shield of the American people in our book, The Tyranny of Good Intentions (2000, 2008). Whitehead in his book, A Government of Wolves (2013) and in his just released Battlefield America (2015) shows how quickly and thoroughly the police state has taken root.

We live in an electronic concentration camp. We are addicted to images on screens that disinform and propagandize us to accept and even welcome the police state activities that have destroyed our autonomy, privacy, and independence.

I write many columns on this subject. The advantage of a book is that it all comes together under one cover, and that is what Whitehead has done in Battlefield America.

“The outlook for civil liberties grows bleaker by the day, from the government’s embrace of indefinite detention for US citizens and armed surveillance drones flying overhead to warrantless surveillance of phone, email and Internet communications, and prosecutions of government whistle-blowers. The homeland is ruled by a police-industrial complex, an extension of the American military empire. Everything that our founding fathers warned against is now the new norm. The government has trained its sights on the American people. We have become the enemy. All the while, the American people remain largely oblivious.”

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Scapegoat Economics 2015

by Richard D. Wolff, published April 11, 2015

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A man feeds pigeons in central Athens, Greece, February 9, 2015. Leading German politicians saw the “bailout of Greece” as an opportunity to serve their big-bank supporters with a second but indirect bailout that was disguised as “for Greece.” (Photo: Angelos Tzortzinis/The New York Times)

As economic crises, declines and dislocations increasingly hurt or threaten people around the globe, they provoke questions. How are we to understand the forces that produced the 2008 crisis, the crisis itself, with its quick bailouts and stimulus programs, and now the debts, austerity policies and deepening economic inequalities that do not go away? Economies this troubled force people to think and react. Some resign themselves to “hard times” as if they were natural events. Some pursue individual strategies trying to escape the troubles. Some mobilize to fight whoever they blame for it all. Many are drawn to scapegoating, usually encouraged by politicians and parties seeking electoral advantages.

Screen Shot 2015-04-12 at 3.24.29 PMFor example, Germany’s recent history has featured reduced wages (especially via increasing part-time jobs), fewer social welfare protections, major bank bailouts in the crisis of 2008, rising inequality of income and wealth, austerity policies and so on. Its leaders around Merkel have responded by carefully rescripting their recent financial maneuvers as “Europe’s bailout of Greece” in a classic exercise in scapegoat economics. Three institutions (the “troika” of the European Central Bank, the European Commission and the International Monetary Fund) lent the Greek government money since 2010. Those loans were used chiefly to pay off the Greek government’s accumulated debts to private European banks (including especially German, French and Greek banks). The “bailout of Greece” was thus really an indirect bailout of those private banks.

Without that indirect bailout, those private banks would have suffered the usual losses that come when banks make loans that cannot be repaid. Those losses would have been costly for shareholders in those banks. The major shareholders among them include some of Germany’s richest and biggest capitalists. With their usual political power, they might have gotten the German government to bail them out directly again (since the German government had already done that directly a few years earlier in the 2008/2009 crisis). But such a second direct bank bailout would have been wildly unpopular with German voters and therefore politically dangerous for Germany’s top politicians.

Leading German politicians saw the “bailout of Greece” as an opportunity to serve their big-bank supporters with a second but indirect bailout that was disguised as “for Greece.” This gambit protected their political careers from voters’ wrath while getting all of Europe to share the cost of loans to Greece. German leaders then took the lead in insisting loudly that Greeks pay dearly for Europe’s loans. Merkel imposed a crushing austerity regime – with the cooperation of Greece’s two mainstream political parties – that shifted massive resources away from Greece’s public services for use instead to secure interest on and repayment of the troika’s loans.

The opportunism of German leaders was also an exercise in scapegoat economics. German bankers and political leaders – supported by many other European leaders – distracted and deflected their own people’s resentments over growing economic problems. Instead of popular anger turning against German, French and other European bankers, capitalists, their political servant and the capitalist system itself, it was redirected against Greece and Greeks. German media dutifully led the way in recasting the European loans to Greece (that ended up mostly in private European big banks) as supports for “lazy, overpaid and over-pensioned” Greeks that were unfair and costly burdens for hardworking German and other European taxpayers.

Screen Shot 2015-04-12 at 3.25.29 PMScapegoat economics this time also serves capitalism’s global relocation. For decades, existing factories, offices and stores have been moving from old capitalist growth centers (western Europe, north America, and Japan) to new centers (China, India, Brazil, etc.). Similarly, enterprises are growing more in the new rather than the old centers. Headquarters sometimes remain in the old centers even as enterprise facilities locate elsewhere. Jet travel, computers and telecommunications make all this manageable. The capitalist competition that impels this relocation also means that the old centers lose many well-paid occupations with ample benefits and job security. Workers in places like Germany and the US are increasingly forced to settle for lower-paid, insecure jobs with fewer benefits. While jobs and wages grow more quickly in the new centers, wages there remain so low that huge profits reinforce capitalism’s global relocation.

Screen Shot 2015-04-12 at 3.26.19 PMAs capitalists relocate, populations everywhere must adjust to and accommodate all the usually attendant frictions, sufferings and costs. In the old centers, unemployment and lower-paid jobs undermine governments’ tax revenues. Given resistance to tax increases, governments turn increasingly to expenditure cuts in their accommodation to capitalism’s relocation. This often worsens unemployment and wage rates. More importantly it further depresses mass standards of living. Consumption, household finances and relationships, marriage and career decisions: All are caught up painfully in the adjustment process. The same applies, likely more traumatically, to capitalism’s new centers. There, formerly agricultural and rural people are transformed quickly into industrial and urban populations living in extremely overcrowded and poorly provisioned slums.

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The Coming War on Pensions

by Michael Hudson, published April 12, 2015

On the Senate’s last day in session in December [2014], it approved the government’s $1.1 trillion budget for coming fiscal year.

Few people realize how radical the new U.S. budget law was. Budget laws are supposed to decide simply what to fund and what to cut. A budget is not supposed to make new law, or to rewrite the law. But that is what happened, and it was radical.

Wall Street’s representatives in Congress – the Democratic leadership as well as Republicans – took the opportunity to create an artificial crisis. The press called this “holding the government hostage.” The House – backed by the Senate – said that it would shut the government down at some future date if two basic laws were not changed.

Most of the attention has been paid to Elizabeth Warren’s eloquent attack on the government guaranteeing bank trades in derivatives. Written by Citigroup lobbyists, this puts taxpayer funds behind future bank bailouts if banks make more bad bets on complex financial derivatives, such as packaged junk mortgage loans.

Critics have focused on how there must be a loser for every winner in a derivatives contract. The problem is that if banks lose, the government will bail them out just as it did in 2008.

Less attention has been paid to what happens if banks win. They will win largely in making bets against pension funds. Indeed, pension funds have not been treated well by Wall Street in recent years.

They are in a bind. Pension funds will fall further and further behind what they need to pay retirees if they do not make the impossibly high returns of 8.5%.  The guiding philosophy of pension funds has been that instead of making employers pay enough to cover the pensions they have promised, funds can make money purely financially – by Wall Street sharpies.

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The Long-term Unemployed: Lost, but not Forgotten

by Bud Meyers, published April 11, 2015

According to a new report from the Department of Labor (Trends in Long-term Unemployment), people unemployed in 2014 couldn’t count on a college degree to save them from long-term joblessness. The data also show it doesn’t matter what industry you work in — and confirmed previous studies, that the longer you’re out of work, the less likely you are to get another job. One Princeton University study last year showed that after 15 months, the long-term unemployed were more than twice as likely to have withdrawn from the labor force than the short-term unemployed.

The share of the unemployed who were out of work for 52 weeks or longer reached a record high of 31.9 percent in 2011. The share unemployed for 99 weeks or longer reached a record peak at 15.1 percent in 2011 (99 weeks = 1 year, 10 months and 3 weeks). There were 6.8 million unemployed over 27 weeks in April 2010.

But because so many left the labor force, all of these measures of long-term unemployment have trended down since their respective peaks, but still remain high by historical standards. Five years after the Great Recession officially ended in June 2009, the number of long-term unemployed still made up a larger share of unemployment than during any previous recession.

Below are the numbers of all who were counted as “unemployed” since the onset of the Great Recession to the present.

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From July 2008 to December 2013, we had a whopping 24 million long-term unemployed workers who once qualified for federal extended jobless benefits. These people were once known as the 99ers, because in some States, the maximum one could receive for federal extended unemployment benefits was 99 weeks. One can see from the Bureau of Labor Statistics (chart below) how many jobs were lost and gained during that same time period. So the question becomes: “Where are they now?”

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Continue reading The Long-term Unemployed: Lost, but not Forgotten