Tuesday, October 11, 2011

Here's What The Occupy Wall Street Protesters Are So Angry About...

Unemployment. Three years after the financial crisis, the unemployment rate is still at the highest level since the Great Depression (except for a brief blip in the early 1980s)(of course, when you factor in the real unemployment rate, the U6, it's higher than all but 3 or 4 years in the Great Depression.--jef)

Jobs are scarce, so many adults have given up looking for them. Thus, a sharp decline in the "participation ratio."

And it's not like unemployment is some quick, painful jolt: A record percentage of unemployed people have been unemployed for longer than 6 months.

And it's not just construction workers. The average duration of all unemployment is also near an all-time high.

That 9% rate, by the way, equates to 14 million Americans—people who want to work but can't find a job.

And that's just people who meet the criteria for "unemployed." Include people working part-time who want to work full-time, plus some people who haven't looked for a job in a while, and unemployment's at 17% (that's more accurate--and that 17% is higher than unemployment was in all but 3 or 4 years of the Great Depression--jef).

Put differently, this is the lowest percentage of Americans with jobs since the early 1980s (and, again, the boom prior to that was from women entering the workforce).

So that's the jobs picture. Not pretty.


And now we turn to the other side of this issue... the Americans for whom life has never been better. The OWNERS.

Corporate profits just hit another all-time high.

Corporate profits as a percent of the economy are near a record all-time high. With the exception of a brief happy period in 2007 (just before the crash), profits are higher than they've been since the 1950s. And they are VASTLY higher than they've been for most of the intervening half-century.

CEO pay is now 350X the average worker's, up from 50X from 1960-1985.

CEO pay has skyrocketed 300% since 1990. Corporate profits have doubled. Average "production worker" pay has increased 4%. The minimum wage has dropped. (All numbers adjusted for inflation).

Looked at differently, after adjusting for inflation, average hourly earnings haven't increased in 50 years.

And here it is... the chart that says it all: While CEOs and shareholders have been cashing in, wages as a percent of the economy have dropped to an all-time low.

In other words, in the struggle between "labor" and "capital," capital has basically won. 

Of course, life is fantastic if you're in the top 1% of American wage earners. You're hauling in a bigger percentage of the country's total pre-tax income than you have at any time since the late 1920s (Just before the Great Depression). Your share of the national income, in fact, is almost 2X the long-term average!

And the top 1% in America are doing way better than the top 1% in other first-world countries.

In fact, income inequality has gotten so extreme here that the US now ranks 91st in the world in "income equality." China's ahead of us. So is India. So is Iran.

And, by the way—few people would have a problem with inequality if the American Dream were still fully intact—if the "top 1%" changed continuously, as everyone in the bottom sectors kept working their way up. But, unfortunately, social mobility in this country is also near an all-time low.

So what does all this mean in terms of net worth? Well, for starters, it means that the top 1% of Americans own 42% of the financial wealth in this country. The top 5%, meanwhile, own nearly 70%.

That's about 60% of the net worth of the country held by the top 5% (left chart).

And remember that huge debt problem we have—with hundreds of millions of Americans indebted up to their eyeballs? Well, the top 1% doesn't have that problem. They only own 5% of the country's debt.

And then there are taxes... It's a great time to make a boatload of money, because taxes on the nation's highest-earners are close to the lowest they've ever been.

The aggregate tax rate for the top 1% is lower than for the next 9%—and not much higher than it is for pretty much everyone else.

As the nation's richest people often point out, they do pay the lion's share of taxes in the country: The richest 20% pay 64% of the total taxes. (Lower bar). Of course, that's because they also make most of the money. (Top bar).

And now we come to the type of American corporation that gets—and deserves—a big share of the blame: The banks. Willie Sutton once explained that the reason he robbed banks was because "that's where the money is." The man knew what he was talking about.

Remember back in the financial crisis, when we bailed out the banks? Yes, and remember the REASON we bailed out the banks? The REASON we had to bail out the banks was so that they could keep lending to American businesses. Without that lending, we were told, society would collapse. So, did the banks keep lending?
Um, no. Bank lending dropped sharply, and it has yet to recover.

So, what have banks been doing since 2007 if not lending money to American companies? Lending money to America's government! By buying risk-free Treasury bonds and other government-guaranteed securities.

And, remarkably, they've also been collecting interest on money they are NOT lending—the "excess reserves" they have at the Fed. Back in the financial crisis, the Fed decided to help bail out the banks by paying them interest on this money that they're not lending. And they're happily still collecting it. (It's AWESOME to be a bank.)

Meanwhile, of course, the banks are able to borrow money FOR FREE. Because the Fed has slashed rates to basically zero. And the banks have slashed the rates they pay on deposits to basically zero. So they can have all the money they want—for nearly free!

When you can borrow money for nothing, and lend it back to the government risk-free for a few percentage points, you can COIN MONEY. And the banks are doing that. According to IRA, the "net interest margin" made by US banks in the first six months of this year is $211 Billion. Nice!

And that has helped produce $58 billion of profit in the first six months of the year.

And it has helped generate near-record financial sector profits—while the rest of the country struggles with its (U3 9%; U6 17%) unemployment rate.

And these profits are getting back toward a record as a percentage of all corporate profits.

And those profits, of course, are AFTER the banks have paid their bankers. And it's still great to be a banker. The average banker in New York City made $361,330 in 2010. Not bad!

This average Wall Street salary was 6X the average private-sector salary (which, in turn, is actually lower than the average government salary, but that's a different issue).

So it REALLY doesn't suck to be a banker.

And so, in conclusion, we'll end with another look at the "money shot"—the one overarching reason the Wall Street protesters are so upset: Wages as a percent of the economy. Again, it's basically the lowest it has ever been. 

So now you know!

Of 400 Richest Americans, Only 8 Say They're Willing to Pay More Taxes

The 400 wealthiest people in America were asked if they'd be willing to pay more taxes. How many said they would pay more taxes? 8 of them. That's right: 2%
By Peter Finocchiaro, Salon
Posted on October 10, 2011

When Warren Buffett called on the U.S. government in August to “stop coddling the super-rich,” he pointed out that he pays less of of his income in taxes than his secretary does. He said the rich should pay higher taxes for the sake of “shared sacrifice,” and suggested that most of his wealthy friends “wouldn’t mind being told to pay more.”

To test that notion, Salon launched the  Patriotic Billionaire Challenge. We put the question to every member of the Forbes 400″ list, all of them with a net worth of at least $1 billion: “Are you, like Warren Buffet, willing to pay higher taxes?”

The results are in. Of 400 billionaires, only eight (including Buffet) say they are willing to pay more.  Three others indicated opposition; one said maybe.

But most declined to comment at all. Oprah Winfrey, who endorsed Obama in 2008, did not respond. Nor did liberal media mogul Ted Turner. Prominent Democratic Party donors from Hollywood such as Steven Spielberg, David Geffen and Barry Diller did not express a view. Philanthropists Bill Gates and Michael Bloomberg — whom we queried repeatedly — refused to comment on Buffett’s argument, even as it became a central part of Washington’s political conversation.

On Sept. 19, President Obama rolled out his jobs plan, calling for individuals making more than $250,000 to pay higher taxes for the sake of paying down the deficit and funding the president’s jobs plan. As the president has pitched the plan to the country, he has repeatedly invoked the name of the Omaha Oracle as a selling point — dubbing his proposal as “The Buffett Rule.” Senate Democrats proposed an alternative solution: A 5% surtax on any income a person earns beyond $1 million a year — including capital gains. The president threw his support behind the measure.

Most of those who did respond to Salon’s question seemed to have strong opinions. Liberal philanthropist, George Soros (Net worth: $22B), expressed approval.
Warren Buffett is living up to his reputation as an astute investor. The rich hurt their own long term interests by their opposition to paying more taxes.
James Simsons, chairman of Renaissance Technologies ($10.6B), and Herbert Simon, co-founder of the Simon Property Group ($1.6B), both responded with a simple “Yes.”

John Arnold,  manager of the Centaurus Advisors hedge fund ($3.5B), had one condition: “I support incrementally raising tax rates on the wealthiest if part of a comprehensive package to address the federal deficit. ”

Leon Cooperman, manager of the Omega Advisors hedge fund  ($1.8B), offered his own plan, saying he supports “a 10-percent income tax surcharge for three years on those earning more than $500,000 per year.” He said that he believes in the progressive income tax and that he’s “very fond of Warren.” But  also expressed wariness about President Obama’s plan, saying he “wants to give away money to the public.”

Others supported Buffet’s sentiment with some qualifications. Todd Wagner, co-owner and CEO of 2929 Entertainment ($1.2B), said, “I’m a lucky guy. I have no issue paying more.” But he added that the revenue raised would only amount to “maybe 8 to 12 percent of what’s needed, based on what everyone thinks we need to get the debt under control.”
 Where’s the rest come from? Military cuts? Raising the age on social security or medicare? I don’t have that answer. But I know that that’s the difficult part of it.
The problem is nobody trusts how the government spends it. We all feel a little concerned that it’s just dropping into a black hole. The wealthiest absolutely should pay more, but I also want to feel that it’s going to something that matters.
Wagner’s business partner, Mark Cuban, owner of the Dallas Mavericks basketball team and chairman of HDNet ($2.3B), said, “I have absolutely no problem paying more taxes. None.”

But he went on:
What I have a problem with is how the money is spent.  If the incremental money could be directed to defined and deserved recipients.  I would be thrilled to write the check.
The problem I have is not on the revenue side, its on the expenditure side. Too much money is wasted on bureaucracy, adminis-trivia,  pensions and over-expansive federal employment.
So I’m a resounding yes on more taxes, but an attachment to the funding to be directly spent on approved programs. If a program doesn’t deliver 95 percent  or better to its intended recipients, it should be put on hold until it does.
Stanley Hubbard, founder, Hubbard Broadcasting ($1.9B), said maybe: “There is more to it than a simple yes or no.  It depends upon a lot of things.”

John Catsimatidis, CEO of the Gristedes supermarket chain ($2B), offered a different version of “shared sacrifice.”
All Americans should feel the pain equally; not be prejudiced only against a certain group. If that is allowed, it opens doors to other prejudices to other groups.
Bernie Marcus, co-founder of Home Depot (Net worth: $1.8B), didn’t say “no,” but expressed worry that Buffett and Obama are “penalizing success.”
I have no problem paying my fair share of taxes. What I do have a problem with is the idea that by raising taxes on a select few, we can get our economy growing again and close our national debt. That is false. Getting people back to work with good-paying, sustainable jobs is the only thing that will get our nation out of this recession because it will bring in more tax dollars. That’s what our government should be focused on rather than penalizing success.
He later clarified his position, saying:
I’m not against anybody paying additional taxes as long as there is a comprehensive tax program which involves spending cuts. We have to cut spending, which is the biggest evil we have in this government.
And Charles Koch, the CEO of Koch Industries and funder of conservative causes ($25B), categorically rejected the idea.
Much of what the government spends money on does more harm than good; this is particularly true over the past several years with the massive uncontrolled increase in government spending. I believe my business and non-profit investments are much more beneficial to societal well-being than sending more money to Washington.
What about all the others who ducked the question entirely? Peruse the Forbes list, and if you run into any of them, be sure to ask them yourself. We’ll be curious to learn what they say.

Bank Warns Employees About Occupy Wall Street

OWS has bloomed in more than a dozen major cities all across the country. It stopped being a protest a while ago. It's a movement now. And they're scared. 
By William Rivers Pitt, TruthOut.org
Posted on October 10, 2011,

Far be it from me to accuse Gandhi of missing a note, but in the case of the 'Occupy Wall Street' protests, the Mahatma's famous quote appears to be lacking a few essential words. "First they ignore you," he said, "then they ridicule you, then they fight you, then you win."

That's not quite correct.

Certainly, the OWS protests began with a great whistling silence from the "mainstream" news media. It is only because of the resources available to the average person in this marvelous technological age we live in that word of the protest ever reached beyond its original location.

Thanks to cell phones, video cameras, digital recorders, and of course, the internet - all wielded by patriot citizens - reports, images and video of the protest began to dribble out via Twitter, Facebook and a variety of blogs and alternative news media sites like Truthout. But from the "mainstream" news, there was nothing, and nothing, and nothing.

Eventually, however, the OWS protest broke through the "mainstream" news blackout, thanks in no small part to commentators like Lawrence O'Donnell, Rachel Maddow and Keith Olbermann. Once the "mainstream" news outlets finally deigned to lower themselves to report on the rabble down on Wall Street, their tone and tenor fairly oozed contempt. The New York Times, bastion of the status quo, published an article describing each and every participant of the OWS protest as a moonbeam-riding fuzzbrain, someone reeking of patchouli who couldn't string a coherent thought together if their life depended on it...which was followed up immediately by a barrage of reports defending cops who hosed down defenseless women penned in behind nylon barriers with pepper spray, because those cops were doing exactly, precisely the right thing. Or something.

This, as usual, from the same "mainstream" news media that didn't have any problem with the gun-toting "patriots" of the Tea Party and their catastrophically-spelled signs. Well, then again, the Tea Party has corporate sponsorship, while the OWS protesters are doing this on their own. It pays - literally - to have friends in high places.

Similar disdain was heaped upon the OWS protest from every corner of the "mainstream" news realm, most especially from Fox News and the long reach of conservative talk radio. These protesters are bums, hippies, losers, anarchists, idiots, communists and fools, a drumbeat which has continued to this very day.


First they ignore you: check.

Then they ridicule you: check.

According to Gandhi, the next step comes when they fight you, but here is the spot where his marvelous wisdom could use a bit of enhancement.

First they ignore you, then they ridicule you...

Then they get scared.

And they are scared, now. You can smell it. The criticism being leveled at the OWS movement has gotten far harsher in the last several days. Presidential candidate Mitt Romney recently deployed the old chestnut about "class warfare" to describe the protest. Rep. Eric Cantor doubled down on Romney's rhetoric with some of his own: "If you read the newspapers today, I for one am increasingly concerned about the growing mobs occupying Wall Street and the other cities across the country. Believe it or not, some in this town have actually condoned the pitting of Americans against Americans."

That's pretty rich right there, don't you think? Fellows like Cantor have made turning American against American their bread and butter for the last ten years..."You're with us or against us"...but I digress.

Fact: OWS has bloomed in more than a dozen major cities all across the country. It stopped being a protest a while ago. It's a movement now.

And they're scared.

Know how I know? I know because a friend in San Francisco took the time to transcribe a document he was given by the major bank he works for. The document, titled "Protest Safety Handbook," explains what a bank employee should do when confronted with the horror and terror of an OWS protest.

I am leaving the name of the bank out of this to protect my friend. Some tidbits:
The movement in New York has begun to publish a four page news paper titled The Occupied Wall Street Journal. The current edition of the published document loosely outlines the group's manifesto and intentions. The group has indicated that they have been inspired by the results from similar groups involved in the "Arab Spring" in the Middle East. The group's publication cites an intention to first to protest and then to march, escalating to civil disobedience when necessary.
These types of groups are reaching out to the disengaged and disenfranchised population of the United States for members, often encouraging the unemployed and homeless to join the movement. Often these marches and protests are unplanned and result from instant notification on "Social Networks" that produce "Flash Protest Mobs" in a matter of minutes. While this group has not yet resorted to violence the possibility exists that they can.
Safety Tips:
- Avoid poorly lit areas and isolated locations that may make you vulnerable to an attack.
- Keep the cars doors locked while driving in the area of a mob or protest march.
- Project an image of confidence and strength. Walk with a purpose and avoid hesitation, keep your head up, shoulders back and make eye contact with people you pass.
Avoid confrontation and unnecessary contact with protesters.
Avoid walking or driving alone. There is safety in numbers.
Carry purses close to the body.
Wallets and cash are best kept in a front pocket.
- Avoid wearing Bank ID or logo items outside the bank if possible.
- Keep your cell phone charged and close at hand.
Have emergency contact information pre-programmed into your phone.
- Have your keys out and ready before you need them.
- If you feel that you're in danger or if you observe suspicious or illegal activities, call the police or dial 911.
- If confronted or attacked, try to remain calm and cooperate by following the attacker's instructions.
Do not attempt to reason or argue with the protesters.
- Cooperate and do not risk your personal safety.
Be a good witness and try to remember as many details of what occurred as you can.
(Emphasis added)
Makes it sound like you're walking through a war zone, right? Not a peaceful protest, but some actively dangerous Thunderdome where instant and horrible death might reach out at any time to cut you down.

The financial powers-that-be are desperate to paint this peaceful, meaningful movement as some kind of civilization-annihilating upheaval, populated by rogues, pickpockets, mobs and murderers. They need the OWS protest to be seen this way by the general public, so they can discredit it and destroy it. Fear-mongering is an old, old tactic, and they are deploying it once again.

Note well: the bank that distributed this hyper-paranoid ball of gibberish is an entire continent away from the nexus of the OWS movement in New York City.

I guess San Francisco's OWS chapter has been making some noise. Same with Boston, Dallas, and DC, and a dozen other cities.

First they ignore you.

Then they ridicule you.

Then they get scared.

Then they fight you.

Then you win.

I don't think the Mahatma would mind this small addition to his statement. It fits.
And it's true. They are scared.

You can smell it.

Bank of America, Citigroup, Morgan Stanley Could Be Headed Toward Collapse

If events turn critical again and we face a repeat risk of the seizing up of financial markets as in the fall of 2008, the president will need to make a fateful decision. 
By Robert Kuttner, AlterNet
Posted on October 10, 2011

Over the past few weeks, President Obama has at last "pivoted," in the widely used term, from emphasizing deficit reduction to focusing on jobs and taxation of millionaires. Spontaneous protest has done what the organized left failed to do; it has made Wall Street the appropriate target of diffuse economic frustrations. The labor movement has added its weight and institutional skills to these protests, and even President Obama has had some kind words for them.

Fox News and the Republicans have been usefully flummoxed, since it is awfully hard to rise to the defense of the Wall Street banks that caused the financial collapse and to retain credibility with anyone, even the Tea Party base.

But here comes the next phase of the financial crisis, and it will test President Obama's leadership like nothing else. It will also make or break the faltering credibility of Treasury Secretary Tim Geithner.

In recent days, it has become clear that several large banks, most notably Bank of America, are teetering. Though the backlash against the giant bank's proposed five-dollar-a-month charge for debit cards has gotten the headlines, this is the least of its problems. The profits from this new charge would be chump change measured against the bank's chasms of losses, the legacy of its ill-advised purchases of Countrywide Financial and Merrill Lynch in 2008.

Worried investors have driven Bank of America stock down to the range of 5 to 6 dollars a share. Bank of America's books are still glutted with non-performing mortgage loans, and a grand solution to the mortgage crisis seems further away than ever.

Meanwhile, Citigroup and Morgan Stanley with their large holdings of Greek government bonds are also in some jeopardy, which adds to the general crisis of confidence. The Federal Reserve has been throwing "liquidity," otherwise known as nearly interest-free money, at the banks as necessary, to keep inter-bank markets from freezing up as they nearly did in 2008.

As recently as three weeks ago, at a "Delivering Alpha" financial conference, Geithner assured his audience that despite the European crisis American banks were in great shape:
Our financial system -- because of the actions we took early in the crisis -- is in a much stronger position to deal with these new risks than it was before this crisis. Much, much stronger position. Way ahead of the rest of the world in terms of making sure they have a stronger financial foundation to handle any type of shock.
This has been Geithner's strategy since the earliest days of the crisis: work with the Federal Reserve to throw money at the big banks, resist fundamental changes in their business model, and talk up their solvency even in the face of contrary evidence.

Given the proprietary data that Geithner surely sees as Treasury Secretary, he must know that these words are wishful at best and downright deceptive at worst. If his assurances turn out to be so much baloney, then Geithner, President Obama's re-election chances, and the economy could all be in big trouble.

The fact is that European banks are functioning only because the European Central Bank in spite of its reluctance has been flooding the system with liquidity, and at least one U.S bank -- Bank of America -- is barely solvent and heavily reliant on the Fed.

If events turn critical again and we face a repeat risk of the seizing up of financial markets as in the fall of 2008, the Obama administration's rhetorical populist turn will be of no use. The president will need to make a fateful decision.

Worst of all would be to let a large institution like Bank of America just fail. Outside of the hard-core Tea Party right, nobody supports this.

The second worst policy would be to just keep throwing money at a zombie institution to keep up the pretense that it is solvent. We tried that policy in 2008 and 2009. It helped entrenched bankers keep their jobs and their outsized profits, but a wounded banking system continued to be a lead weight on the rest of the economy.

So now President Obama, if faced with a repeat crisis of large banks, may get a do-over.

In the spring of 2009, when the leading zombie bank was Citigroup, then chief economic adviser Larry Summers and Treasury Secretary Geithner took the position that they could not seize, clean out, and break up Citi because they lacked the legal authority or the tools to do it.

It's also clear from several accounts, including my own A Presidency in Peril and most recently Ron Suskind's new book Confidence Men that Summers and Geithner did not want to do it. According to Suskind, Obama himself wanted to break-up of Citi as his preferred option, and Geithner slow-walked the president until the issue was moot.

But the Dodd-Frank Act now gives the treasury secretary explicit authority to find that a large, systemically significant financial company is "in danger of default"; to designate the FDIC as receiver; and to seize, break up, and reorganize failing large banks. Though there is surely contingency planning for the collapse of a large bank, Geithner seems loathe to use his new authority.

So, consider three possible scenarios in coming days or weeks.

First scenario: the big banks, thanks to advances from the Federal Reserve, keep barely afloat. Geithner's credibility survives, but the real economy continues to be a shambles. This is not exactly auspicious, either for economically frustrated Americans or for an incumbent president facing re-election.

Second scenario: Investors keep fleeing Bank of America, the giant bank finds itself frozen out of short term lending markets as Lehman Brothers was, and the bank finally turns to the government for emergency aid. There is a new financial crisis in the headlines, and it falls in on President Obama and his Treasury Secretary, who was been reassuring everyone that all is well with the large banks.

Third scenario: President Obama decides to get other opinions besides Geithner's and to get out ahead of the crisis. If things turn critical, he directs his Treasury Secretary to seize the bank, as authorized by the Dodd-Frank Act. Obama tells the citizenry that the alternative was endless bailouts or a Lehman-style collapse (just imagine the right trying to defend either), and that this way those who caused the crisis will be appropriately removed from their suites and bonuses while the bank is returned to health so that the broad economy can prosper.

Serious consideration of this last approach would take much more of a "pivot" on Obama's part than we have seen to date. I recall, in reading biographies of Presidents Kennedy and Roosevelt, how both leaders sought multiple sources of advice. Kennedy would pick up the phone and speak to a relatively junior desk officer at the State Department to get his own information unfiltered by his gatekeepers. Roosevelt made sure he had direct access to multiple advisers who disagreed with each other. But Geithner has been astute at blocking access to the president for others who have different views, and Obama has been startlingly incurious and compliant. The man needs to get on the phone.

It also happens that Bank of America is headquartered in Charlotte, North Caroline, site of the 2012 Democratic National Convention, and the bank is expected to be one of the convention's top-tier corporate sponsors. Oh, my. Moving to resolve and break up the bank under Dodd-Frank, should it prove to be insolvent, would take uncharacteristic nerve.

In September 2008, the financial collapse fell in on George W. Bush and won the election for Barack Obama. A repeat collapse, if handled badly, would fall in squarely on Obama.

Populist rhetoric when angry people are in the streets demanding accountability for bankers is a start, but talk is cheap. If the banking mess turns critical again, we will see what this president has learned, and what he is made of.

But what do they want?

Job Destroyers Don't Deserve a Tax Holiday

Monday, October 10, 2011 by OtherWords
When thinks tanks from the left and the right agree on something, Congress should pay attention.
by Sarah Anderson and Chuck Collins
A coalition of big businesses is waging a campaign for a massive tax holiday on corporate profits stashed overseas. Its lobbyists claim that this windfall would create millions of jobs. If our lawmakers buy that, they've got very short memories.

Just seven years ago, big American corporations made the exact same promises. And Congress gave them a tax holiday that allowed 843 companies to reduce their tax rate from 35 percent to 5.25 percent on $312 billion in offshore profits. 

What did Americans get in return? This week, our organization, the progressive Institute for Policy Studies, released a report showing that 58 companies that received 70 percent of the tax windfalls didn't boost employment. In fact, they actually destroyed a total of nearly 600,000 jobs.

Almost simultaneously, the conservative Heritage Foundation released a paper with the same conclusion: Tax holidays don't create jobs. When thinks tanks from the left and the right agree on something, Congress should pay attention.

But we're up against powerful forces.

A coalition called Working to Invest Now in America, which goes by the slick name WIN America, has deployed more than 160 lobbyists and spent at least $50 million to win a tax holiday on more than $1 trillion in offshore funds that might get repatriated if Uncle Sam grants this tax break. Lawmakers in both the House and the Senate have introduced bills that would do just that.

The Senate version, unveiled in early October, would give the deepest tax discounts to firms that create jobs, but that requirement only applies for one year. We need jobs that last, not positions that could vanish after the nation's supposed job creators get their huge tax windfall.
Some executives argue that without the tax holiday, these global firms would keep their cash offshore permanently, and it's better for Uncle Sam to get something rather than nothing. Nevertheless, offering such drastic tax discounts sets a dangerous precedent.

Back in 2004, the corporate lobbyists argued that the holiday would be a "one-time" deal. But after they won that round, they turned around and began amassing their offshore stashes once again. They must have counted on getting more tax holidays.

A tax holiday for job destroyers isn't only a waste of taxpayer money at a time of urgent needs. It hurts small businesses and other firms that operate only domestically. What sense does it make to give global companies deep discounts on their IRS obligations while these small, yet strong, engines of job creation face standard tax rates?

There are many things that we can do to strengthen the U.S. economy and spur job growth. But providing subsidies to companies whose business model is based on minimizing labor costs, sending profits offshore, and dodging taxes isn't a good strategy. These companies may compensate their CEOs lavishly and deliver value to shareholders, but they aren't in the business of creating jobs.

The WIN America campaign leader that stands to gain the most is Pfizer. The pharmaceutical giant was the leading beneficiary of the 2004 tax holiday when it toted $40 billion in foreign funds back to the United States.

And what did Americans get for Pfizer's subsidy? Instead of creating jobs, the firm proceeded to scrap more than 58,000 jobs in the years since that holiday.

Today, Pfizer is holding more than $48 billion in profits offshore. Will Congress be fooled again?

The Class Warfare the Rich Don't Understand

Monday, October 10, 2011 by Al-Jazeera-English

The Masters of the Universe evaded responsibility and defiantly demanded more sacrifice from their victims, says author.
by Heather Digby Parton

"Those who own the country ought to govern it."
- Founding father, John Jay

There have been rumblings in the corners of the Tea party movement for some time, but the minute president Obama announced that he was going to ask wealthy Americans to kick in a small bit more in taxes to help pay for some infrastructure improvements in his jobs proposal, the Republicans have been clutching their pearls and gasping for breath like Aunt Pittypat awaiting the arrival of the marauding Yankees.
GOP leader Rush Limbaugh called for the smelling salts, saying "If [Obama] would get all of this actually passed, it would represent perhaps a fatal blow to the US private sector ... I don't know how anyone could even argue about the fact that this is on purpose anymore. To boldly lie that it's not class warfare? It is class warfare. Specifically and purposefully class warfare."
Republican economic guru Paul Ryan dolefully declared, "Class warfare may make for good politics, but it makes for rotten economics. We don't need a system that seeks to divide people.

We don't need a system that seeks to prey on people's fear, envy, and anxiety." Indeed. What could be more destructive to the average American than to ask the upper one per cent to kick in what amounts to tip money? The guilt they will feel at such unfairness is bound to create a profound spiritual crisis throughout the land.

A false hope
One would have thought that in 2011, the term "class warfare" would be as out of fashion as Nehru jackets, but after watching the Republicans spend the first two years of Obama's presidency apoplectic over what they defined as hard core socialism put in practice, it stands to reason the old standard would make a comeback. No matter what you call it, rich people complaining about taxes is evergreen. It is also completely ridiculous.

The fact is that the mega-rich have been gobbling up a greater and greater share of the national wealth for several decades now: in 1976 the top 1 per cent of households received 8.9 per cent of all pre-tax income - by 2008, its share had more than doubled to 21.0 per cent. Between 1979 and 2009, the top 5 per cent of American families saw their real incomes increase 72.7 per cent, according to Census data. Over the same period, the lowest-income fifth saw a decrease in real income of 7.4 per cent (by contrast, the 1947-79 period all income groups saw similar income gains, with the lowest income group actually seeing the largest gains). And perhaps most astonishingly, the tax rate for the highest earners was 91 per cent in 1960, 70 per cent in 1980 and only 35 per cent today, the lowest ever with the exception of a couple of years in the late 80s and early 90s.

And it's not as if these people have been suffering during this recession. Unlike the bottom 99 per cent, they've quite smartly recovered from the 2008 unpleasantness. For instance, according to a recent New York Times report, executive pay at 200 big US companies last year went up by an average 23 per cent over 2009 - the median executive salary was 10.8m USD. Meanwhile, the average American family's household net worth declined 23 per cent between 2007 and 2009.

Considering this somewhat ostentatious disparity, one would think that those who are doing well would decide to lay low and quietly count their money so as not to draw undue attention to their good fortune. One might even have expected them to take up good works and be especially generous in order to deflect the anger and resentment that any sentient being could see might result from such blatant unfairness. But no. They have instead waged a public campaign of extravagant whining, complaining incessantly that they are being scapegoated for the nation's economic ills and throwing tantrums at the mere suggestion that they might need to contribute a little bit more in taxes to make up for the carnage their bad bets left in their wake.

Panic of the Plutocrats

It remains to be seen whether the Occupy Wall Street protests will change America’s direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent.

And this reaction tells you something important — namely, that the extremists threatening American values are what F.D.R. called “economic royalists,” not the people camping in Zuccotti Park.

Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.

Nonetheless, Eric Cantor, the House majority leader, has denounced “mobs” and “the pitting of Americans against Americans.” The GOP presidential candidates have weighed in, with Mitt Romney accusing the protesters of waging “class warfare,” while Herman Cain calls them “anti-American.” My favorite, however, is Senator Rand Paul, who for some reason worries that the protesters will start seizing iPads, because they believe rich people don’t deserve to have them.

Michael Bloomberg, New York’s mayor and a financial-industry titan in his own right, was a bit more moderate, but still accused the protesters of trying to “take the jobs away from people working in this city,” a statement that bears no resemblance to the movement’s actual goals.
And if you were listening to talking heads on CNBC, you learned that the protesters “let their freak flags fly,” and are “aligned with Lenin.”

The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.

Last year, you may recall, a number of financial-industry barons went wild over very mild criticism from President Obama. They denounced Mr. Obama as being almost a socialist for endorsing the so-called Volcker rule, which would simply prohibit banks backed by federal guarantees from engaging in risky speculation. And as for their reaction to proposals to close a loophole that lets some of them pay remarkably low taxes — well, Stephen Schwarzman, chairman of the Blackstone Group, compared it to Hitler’s invasion of Poland.

And then there’s the campaign of character assassination against Elizabeth Warren, the financial reformer now running for the Senate in Massachusetts. Not long ago a YouTube video of Ms. Warren making an eloquent, down-to-earth case for taxes on the rich went viral. Nothing about what she said was radical — it was no more than a modern riff on Oliver Wendell Holmes’s famous dictum that “Taxes are what we pay for civilized society.”

But listening to the reliable defenders of the wealthy, you’d think that Ms. Warren was the second coming of Leon Trotsky. George Will declared that she has a “collectivist agenda,” that she believes that “individualism is a chimera.” And Rush Limbaugh called her “a parasite who hates her host. Willing to destroy the host while she sucks the life out of it.”

What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.

Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.

This special treatment can’t bear close scrutiny — and therefore, as they see it, there must be no close scrutiny. Anyone who points out the obvious, no matter how calmly and moderately, must be demonized and driven from the stage. In fact, the more reasonable and moderate a critic sounds, the more urgently he or she must be demonized, hence the frantic sliming of Elizabeth Warren.

So who’s really being un-American here? Not the protesters, who are simply trying to get their voices heard. No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.

‘Bank Transfer Day’ Causes Credit Union Buzz

by Jim Rubenstein 
Even with most credit unions closed for Columbus Day there was plenty of online buzz, and uncertainty, about what the credit union industry role might be on “Bank Transfer Day,” the latest event surfacing from the “Occupy Wall Street” protests.

Industry sources, speaking off the record, suggested any wholesale switch from large banks to CUs on Nov. 5, the day designated by one Californian and carried atwitter Monday, could conceivably put net worth ratios out of whack.

The balance sheet problem was raised by several industry officials as a potential hazard as online articles focused on what “Occupy” supporters are calling now for a specific action to underscore their complaints against big banks and corporate “greed.”

For the record, Mark Wolff, CUNA senior vice president-communications, said only that the trade group welcomes the idea of “a viral 'Bank Transfer Day'” since it shows “just how angry consumers are becoming with their treatment by big banks” and will now look at CUs.

CUNA said its Facebook posts have already witnessed big jumps in traffic on www.asmarterhoice.org. There also have been big gains on www.findacreditunion.org.

Many consumers, said CUNA, are already “discovering” credit unions online and “many more no doubt will as a result of this Bank Transfer Day initiative.”

Wire service reports Monday identified the ringleader of “Bank Transfer Day” as Kristen Christian, a 27-year-old Los Angeles art gallery owner who said she is not affiliated with the Occupy Wall Street protest, but that demonstration organizers had reached out to her to express support.

Christian reportedly chose Nov. 5 because of its association with 17th century British folk hero Guy Fawkes, who tried to blow up the British House of Lords but was captured on that day.

A Facebook page for the event states that “”together we can ensure that these banking institutions will ALWAYS remember the 5th of November!! If the 99% removes our funds from the major banking institutions on or by this date, we will send a clear message and give the 1% a taste of the fear that we experience every day when we aren't able to pay for our rent, food, medication, utilities, student loans, etc."

The protests began in New York and have popped up around the country. A few hundred protesters gathered in Las Vegas, for instance, on Thursday night and were escorted by police for a march down the Strip. Among the calls for action on the flyers being distributed was to move banking accounts to credit unions.

Obama Drug Policy Worse Than Bush's--War on Medical Marijuana Escalates

U.S. Attorneys in California have announced a campaign to target medical marijuana, suggesting the beginning of the end for the medical marijuana industry. 
By Phillip Smith, Drug War Chronicle
Posted on October 8, 2011

 Signaling an intensification of federal government targeting of medical marijuana providers, the four US Attorneys in California Friday announced a campaign of "coordinated enforcement actions targeting the illegal operations of the commercial marijuana industry in California." The announcement came at a Sacramento news conference.

The federal prosecutors said their enforcement actions would rely on pursuing civil forfeiture lawsuits against properties where dispensaries are located, threatening letters to dispensary landlords, and criminal prosecutions. The prosecutors said recent dispensary busts in Fresno, Los Angeles, Sacramento and San Diego were part of the enforcement campaign.

The feds said that enforcement actions would vary across regions of the state and that they would be working with federal law enforcement and local officials to crack down. The Department of Justice in Washington made clear that this was not an instance of prosecutors going off the reservation.

"The actions taken today in California by our US Attorneys and their law enforcement partners are consistent with the Department's commitment to enforcing existing federal laws, including the Controlled Substances Act (CSA), in all states," said Deputy Attorney General James Cole. "The department has maintained that we will not focus our investigative and prosecutorial resources on individual patients with serious illnesses like cancer or their immediate caregivers. However, US Attorneys continue to have the authority to prosecute significant violations of the CSA, and related federal laws."

Medical marijuana supporters were quick to charge the Obama administration with waging a renewed war on them and reneging on its promises to not interfere in states where medical marijuana is legal.

"Aggressive tactics like these are a completely inappropriate use of prosecutorial discretion by the Obama administration," said Joe Elford, chief counsel with Americans for Safe Access (ASA), the country's largest medical marijuana advocacy group. "President Obama must answer for his contradictory policy on medical marijuana."

On the campaign trail and in the White House, President Obama pledged that he was "not going to be using Justice Department resources to try to circumvent state [medical marijuana] laws."

"It is unconscionable that the federal government would override local and state laws to enforce its will over the will of the people," said ASA spokesperson Kris Hermes. "States must be allowed to enforce their own laws without harmful interference from the Obama administration."

"The Obama administration's latest moves strongly suggest that their medical marijuana policies are now being driven by overzealous prosecutors and the anti-marijuana ideologues who dominated policymaking in past administrations," said Ethan Nadelmann, executive director of the Drug Policy Alliance. "Barack Obama is betraying promises made when he ran for president and turning his back on the sensible policies announced during his first year in office. Instead of encouraging state and local authorities to regulate medical marijuana distribution in the interests of public safety and health, his administration seems determined to recriminalize as much as possible. It all adds up to bad policy, bad politics and bad faith."

Large medical marijuana dispensary operations are not health care providers but criminal organizations hiding behind patients, the prosecutors claimed Friday.

"Large commercial operations cloak their moneymaking activities in the guise of helping sick people when in fact they are helping themselves," said Benjamin Wagner, US Attorney for the Eastern District of California. "Our interest is in enforcing federal criminal law, not prosecuting seriously sick people and those who are caring for them. We are making these announcements together today so that the message is absolutely clear that commercial marijuana operations are illegal under federal law, and that we will enforce federal law."

"The California marijuana industry is not about providing medicine to the sick," claimed Laura Duffy, US Attorney for the Southern District of California. "It's a pervasive for-profit industry that violates federal law. In addition to damaging our environment, this industry is creating significant negative consequences, in California and throughout the nation. As the number one marijuana producing state in the country, California is exporting not just marijuana but all the serious repercussions that come with it, including significant public safety issues and perhaps irreparable harm to our youth."

The prosecutors said they had sent out "dozens" of threat letters to dispensary and grow-op landlords in the past few days. In the Southern and Eastern districts, they targeted building owners, while in the Central district they sent letters to landlords "in selected cities where officials have requested federal assistance." In the Northern district, they targeted their threat letters to landlords of dispensaries within 1,000 feet of schools or parks, but warned "we will almost certainly be taking action against others."

The prosecutors also said they had already filed seven civil forfeiture complaints against properties where landlords allow dispensaries to operate. One complaint alleged that an Orange County strip mall had eight dispensaries and that recalcitrant city officials had spent hundreds of thousands of dollars trying to shut them down.

One letter targeted the landlord for the Marin Alliance for Medical Marijuana (MAMM) in Fairfax, which has been operating with the support of the city and without complaint since 1996. In a letter to MAMM's landlord, the US Attorney for Northern California warned that the dispensary was operating within a "prohibited distance of a park." The letter threatened MAMM's landlord with up to 40 years in federal prison, seizure of his property, and forfeiture of all rental proceeds for the last 15 years if he doesn't evict MAMM.

Similar letters have gone out to other dispensary landlords warning them of pending federal action because their tenants are too close to schools. The dispensaries are operating in accord with California law, which treats them like liquor stores and bars them from operating within 600 feet of a school, but federal law imposes additional penalties for the distribution of controlled substances with 1,000 feet of schools, playgrounds, and public parks. MAMM is situated more than 600 feet but less than 1,000 feet from Bolinas Park in Fairfax.

"This is nuts," said Greg Anton, attorney for the Marin Alliance and its director, Lynnette Shaw. "There's a dispensary near where I live that sells guns, narcotics, alcohol and tobacco and it's full of children.  It's called Walmart, and it's safe. So is Lynnette's place. She's proven that over 15 years."

"This is an outrageous abuse of law enforcement resources for the DOJ to use property forfeiture to enforce meddlesome, nanny-state regulations," said California NORML director Dale Gieringer. "The federal government has no business dictating local zoning decisions. No one has any problems with the Marin Alliance except the bureaucrats in Washington."

The DEA is also along for the ride. "The DEA and our partners are committed to attacking large-scale drug trafficking organizations, including those that attempt to use state or local law to shield their illicit activities from federal law enforcement and prosecution," said DEA Administrator Michele Leonhart. "Congress has determined that marijuana is a dangerous drug and that its distribution and sale is a serious crime. It also provides a significant source of revenue for violent gangs and drug organizations. The DEA will not look the other way while these criminal organizations conduct their illicit schemes under the false pretense of legitimate business."

And so is the IRS. "IRS Criminal Investigation is proud to work with our law enforcement partners and lend its financial expertise to this effort," said IRS chief of criminal enforcement Victor Song. "We will continue to use the federal asset forfeiture laws to take the profits from criminal enterprises."

Friday's announcement of a federal crackdown is just the latest in a series of moves against medical marijuana providers by the Obama administration. The Department of the Treasury has been busily scaring banks into shutting down the accounts of providers in California and Colorado, the Department of Justice is aggressively prosecuting dispensary operators in Montana and elsewhere, and the IRS is attempting to drive dispensaries out of business by denying them standard business expense deductions -- Oakland's Harborside Health center was just this week hit with a $2.5 million tax bill after the IRS disallowed its standard business deductions.

Meanwhile, the administration has continued to block federal approval of medical marijuana, with the DEA recently rejecting a nine-year-old petition to reschedule pot, saying it would only accept large-scale, controlled FDA trials. But at the same time, the DEA has acted to block such trials by refusing to allow a private production facility to supply marijuana for medical research. The only existing source for marijuana for research purposes is the National Institutes on Drug Abuse, but it recently blocked a request for marijuana to study its effects on Post-Traumatic Stress Disorder, saying it has no intention of allowing studies that would develop marijuana for medicinal purposes.

"How can the Obama administration say that it's fine for sick people to use this proven medicine, and yet tell them they can't have any legal place to get it?" asked Rob Kampia, executive director of the Marijuana Policy Project. "Medical marijuana isn't going away. Over 70% of Americans support making medical marijuana legal, and 16 states allow it."

But not the federal government. Not under George Bush and, it is increasingly clear, not under Barack Obama. With Obama facing no challengers in the Democratic primary and with reform-friendly Republicans unlikely to win the Republican nomination, it appears that medical marijuana is going to be condemned to wander through the political wilderness for the foreseeable future.

The question now becomes whether any sort of response can stem the federal onslaught, and just what that response might be. Or does the dispensary scene just wither away and die?

Infiltrating the Protests

I’m not entirely sure what makes some people tick. This little cretin Patrick Howley, assistant editor of the American Spectator, joins a sizable group of right wing rabid troublemakers who seem more concerned with slinging shit than with any notion of morality, practicality or even common sense.

Howley “infiltrated” the Occupy DC movement last weekend in order to act as a sort of self-styled agent provocateur. In his own words:
“I deserved to get a face full of high-grade pepper, and the guards who sprayed me acted with more courage than I saw from any of the protesters. If you’re looking for something to commend these days in America, start with those guards.”
Howley admits he was the first through the doors of the national Air and Space Museum, leading a charge inside past the security guards. His own actions provoked these same guards into spraying numerous activists and tourists, arguably an overreaction to citizens exercising their protected First Amendment rights to speak publicly.

The museum was hosting an homage to unmanned drones. This worship of push-button murder machines inspired the protest there this weekend.

Howley spent a whole day jotting down snippets to use against the movement. In typical right wing fanatical fashion his agenda is up front and center, the facts assembled around it in mocking fashion, something he prizes.
I like a couple of his twisted admissions, however, which merit some elaboration.
” The fastest-running protesters charged up the steps of Washington’s National Air and Space Museum Saturday afternoon to infiltrate the building and hang banners on the ‘shameful’ exhibits promoting AmeriCan imperialism.”
Note: He takes the time to quote “shameful,” seeming to dispute this assessment. He does not place American imperialism in quotes however, an interesting oversight? Imperialism is now undisputed on the right? That’s good news. Now we can talk about it. It exists. It’s unchallenged. The American empire is a valid concept for us to discuss, as American citizens.

Howley does not do so, of course.
“Socialist indoctrination methods are surprisingly effective. It’s hard not to get swept up in the Movement when you’re among a hundred foot soldiers — most of them attractive 20-year old girls — marching down E Street toward Freedom Plaza chanting, ‘How do we end the deficit? End the war and tax the rich!’”
Translation: The protesters have a point that is pretty indisputable. They have momentum, and even fanatical fascistic pinheads can’t seem to counter the main message in any meaningful way, so they resort to the good old “socialist” smear to mock their opponents, whose logic is otherwiseunassailable.
“Whenever the protesters would pass a group of tourists they’d implore them to join, and when a few smiling college kids would hesitantly jump in everyone would applAud wildly.”
Translation: The protests are popular and growing. The message is not off-putting, and the crowds are made up of regular people who have the guts to stand up and demand a change in governance. Such heroic acts inspire others.
“But just as the lefties couldn’t figure out how to run their assembly meeting (many process points, I’m afraid to report, were left un-twinkled), so too do they lack the nerve to confront authority.”
Translation: Most had enough sense not to bust into the Air and Space Museum like Howley did, and they avoided the pepper spraying, the probable beating and the arrests that awaited the foolhardy. Howley takes this restraint as an opportunity to mock their timidity, ignoring that the entire protest is itself a confrontation with authority, and those in attendance have plenty of “nerve” to do so.
“From estimates within the protest, only ten people were pepper-sprayed, and as far as I could tell I was the only one who got inside the museum.”
Translation and Correction: A peaceful constitutionally protected protest outside the museum garnered no overreaction from guards or police. Those that stormed their way in past the security guards, like Howley, were sprayed. Here, though, Howley tells a deMonstrable lie. He was not the only one inside, as a group of a few dozen went in and hung a banner.
“In the absence of ideological uniformity, these protesters have no political power.”
Translation: There are more issues than “No new taxes!!!” The fascists have made great strides with their strategy of coddling of the super-rich pay daddies at the expense of the rest of us. Their entrenched corruption has created so many dire crises that it is impossible to have a “uniform” response to their blitzkrieg against the working classes and environment. The common people have no one neat response to the thousand affronts and back door abominations currently derailing the world. So their best shot is to band together and shout: “Enough.”
A movement needs to gain power before it gets to decide on specific plans and policies.
“Their only chance, as I saw it, was to push the envelope and go bold. But, if today’s demonstration was any indicator, they don’t have what it takes to even do that.”
Translation: Howley, after a whole day’s immersion in the movement against mega-corruption sees no choice but to lead them into “bold” actions in the service of his column at a right wing magazine and hope for a violent crackdown by authorities. But, as he admits, most people have more common sensE than to follow idiots like himself, or other irrational troublemakers. Because they display such restraint and wisdom Howley finds it fitting to try and mock them for possessing the maturity he clearly lacks.