The Growing Wealth Gap Is Unsustainable

The ever-increasing many who are struggling cannot support a structure that favours a tiny number of the very rich 
Sunday, February 3, 2013 by The Observer/UK
Observer Editorial

Antony Jenkins, chief executive of Barclays, who appears before MPs and peers on the banking standards commission this week, has removed one issue from the agenda, namely his right to a bonus of more £1m. The bank has been fined £290m for rigging the benchmark Libor rate, has set aside £2bn to pay claims for mis-selling payment protection insurance and faces an official investigation by the Serious Fraud Office and the Financial Services Authority into its dealings with Qatar at the height of the 2008 financial crisis. So this is the least Jenkins could do. The announcement of his monetary self-denial on Friday signals a belated sensitivity on the part of those who have benefited most from one of the least attractive sides of capitalism.

Jenkins acknowledges that Barclays has "…multiple issues of our own making". And, he added: "I think it only right that I bear an appropriate degree of accountability and I have concluded that it would be wrong for me to receive a bonus for 2012 given those circumstances." His references to "right", "wrong and "accountability" are presumably what David Cameron was seeking when he said four years ago: "We must shape capitalism to suit the needs of society; not shape society to suit the needs of capitalism." Then in opposition, he advocated "capitalism with a conscience". More recently, Ed Miliband has – so far hazily – tried to define "responsible capitalism".

What's missing is how both concepts translate into practical governance, for instance in regulation, taxation and the allocation of sparse resources. As a result, many bankers, among the notorious "1%" of the richest and most powerful, continue to rule very much OK – for now. But an awareness is growing across the political spectrum, and on both sides of the Atlantic, that a radical recalibration of capitalism is essential, not least because the wealthiest and least productive are in danger of allowing their own avarice to sabotage the very system on which they have become so hideously bloated.

Last month, Barack Obama, on his re-election to a country with 42 million living in poverty, warned: "America cannot succeed when a shrinking few do very well and a growing many barely make it." At the World Economic Forum in Davos, its founder, Klaus Schwab, said: "Capitalism in its current form no longer fits the world around us." How badly it "fits" is powerfully demonstrated in Inequality for All, a documentary made by Jacob Kornbluth, that recently won the special jury prize at the Sundance festival. As discussed in today's New Review, the film "stars" Robert Reich, professor of public policy at Harvard, prolific author, campaigner, former labour secretary under Bill Clinton, a charismatic man whose lectures are renowned for the way he surgically dismembers the mutant capitalism that has taken hold in the US over the past 40 years.

While the debate in the UK is mostly focused on growth and how best to engender it, Reich explains in chilling detail why growth alone may not be enough. For too many, he explains, social mobility has begun to slide backwards. A small but growing band of global pirates – billionaires all, without allegiance to community or country, devoid of civic responsibility – accrue wealth from the continued immiseration of the squeezed majority. These hugely rich are fawned over and subsidised by governments even as inequality widens to a chasm that may yet produce social unrest.

Reich's analysis is similar to that of the UK thinktank, the Resolution Foundation. It launches its definitive study of low- to middle-income families, Squeezed Britain, this week. Britain has more than 10 million adults living on between £12,000 and £30,000 gross, the majority in work. However, this squeezed middle is fast becoming the squeezed majority, with even those on £50,000 seeing their children's prospects decline. The cause, Reich points out, is that while wages have flattened for years, the cost of living has spiralled and the richest have accelerated away. In the US, in 2008, 400 billionaires were "worth" more than 150 million of the US population. British housing statistics published last week indicated a similar contemptible polarisation under way here. The 10 most expensive boroughs in London, packed with Russian oligarchs, have a combined property "value" of £552bn, identical to that of Wales, Scotland and Northern Ireland combined.

Over the past few decades, average families have coped by more women going into employment, by working longer hours and by credit. But since 70% of the US economy is based on consumer spending, a lack of surplus cash means the engine is running out of fuel. The rich are small in number and don't spend nearly as much as the majority. "Free" markets with the rules written by the richest result in a shrinking public sector, deregulation, unemployment, low taxes for the most affluent and the threat of globalisation, depressing wages still further. The sum impact isn't "bad" capitalism, it is modern-day capitalism. How it changes, and how rapidly, is a challenge to its own survival. Once, the advancement of the employee was a part of the social contract. Under Thatcher, the aspiration of the average citizen was central via shareholding and home ownership. Now, a more brutal set of priorities pushes the requirements of "the little man" aside, while those who have money buy the influence that unjustly shapes the world in which we live. So how do we forge again the link between morality and the markets?

Iceland, post 2008, forced the resignation of the government, refused to bail out the banks and placed 200 "banksters' under investigation. In 2011, its economy grew by 2.9%. Would a similarly tough approach persuade some of today's pirates that the much mocked habits of the bourgeoisie do have a value that also matters: moderation; giving something back; a sense of civic duty. In that context, Apple would desist from legitimately funnelling more than a billion dollars' worth of iTunes sales through the tax haven of Luxembourg, while the British Virgin Islands would no longer be home to 30,000 people but a staggering 457,000 companies legally siphoning money that could build sustainable communities.

Reich's agenda for positive change includes more jobs; greater investment in skills and higher education; a just taxation regime; strong unions; investment in public infrastructure; a living wage and a narrowing of the earnings gap. Reich ends with a warning: "We are losing the moral foundation stones on which our democracy is built," he says. How much more evidence do we need?

The 1 Percent's Cry for Justice

Wednesday, October 10, 2012 by Creators.com

by Jim Hightower

Just twelve of the "Forbes 400" filthy rich for 2012. (AP Photo/Forbes, Michael Prince)

It's out! This year's list of American success stories has just been published, and according to its compiler, it "instills confidence that the American dream is still very much alive."

Maybe you are one of these success stories. You might be a great public school teacher, for example, who motivated students to achieve new heights or an inventor who came up with an energy-saving device and got it to market at a fair price, generating a profit for yourself, the environment and society generally.

No, no, no. Not that kind of success. We're talking money — the flow of mammon beyond regular people's wildest dreams. That's how Forbes magazine measures not only "success," but also a person's value: You are what's in your Swiss bank account. And, just to rank last on this year's "Forbes 400" listing of America's wealthiest people, you need more than a billion dollars in financial wealth. To get into the top 10 requires at least $25 billion. And to be numero uno means you've got $66 billion socked away. Who says America is broke?

As Ray Charles sang, "Them that's got is them that gets." And sure enough, these richest of the riches got a lot richer in 2011 — the magazine gloated that these 400 swells jacked up their cumulative haul last year by $200 billion over the previous year — an average of half-a-billion each!

Now that's success, baby, especially when the typical American family's income dropped by 4 percent.

These ultra-wealthy, goes the Forbes narrative, are the "deserving rich," for they are our economy's makers and producers — as opposed to being takers and moochers, like those commoners who get Social Security, Medicare and other government help.

Before swallowing that, however, note that roughly 40 percent of these "achievers" on the list "achieved" their wealth by being well-born — they inherited the money from Dad and Mom. And all of them have indeed been takers, not only enjoying government programs, but also subsidies and tax advantages available only to the rich.

The Forbes list really says that you got special treatment — not that you are special.

But if the rich need to feel special, they can always count on the editors of Fortune. We should not be surprised that a magazine named Fortune would be empathetic to the feelings of the 1 percent, but — good grief — how embarrassingly sycophantish of the editors to hustle out a piece just before the presidential election titled, "Stop Beating up the Rich."

Written by Nina Easton, the timing of the article was less than fortunate, for it came out just as the infamous video surfaced showing Mitt Romney "beating up" the poor and the middle class, while his audience of fellow multimillionaires laughed, cheered and shouted encouragement.

Despite the timing, Mitt and company undoubtedly appreciated the writer's disdain for those who so insolently dare to criticize and even demonize those worthy ones at the top who, as she explained, "gained their wealth through their own efforts."

Also, you can almost hear the privileged ones applauding appreciatively as she scorns the divide between the 1 percent and the rest of us as a "flawed prism, marred by hyperbole, half-truths and unnecessary pessimism about what it means to succeed in America."

Passionately deploring "diatribes against the 1 percent," Easton assails critics of America's widening wealth inequality as being people who want "to raid the gold pot." On behalf of the pampered rich, she issues her own emotional "grito," wailing that critics must "stop the name-calling."

Does Easton propose any specific remedies for narrowing the wealth gap? You betcha, and it just happens to be one that's a favorite of Mitt and the multimillionaire's club — one that they prescribe for any and all of our nation's economic woes: "corporate tax reform," by which they mean lowering the corporate tax rate. Yeah, three decades of that trickle-down idea has worked so well for the middle-class and the poor, let's give 'em another jolt of it.

It's unclear why Fortune felt the need to print this piece of fluff or why Easton got the assignment, but her credit line does mention that her husband "is senior strategist for the Romney campaign." Curious, huh?

26 Billionaires who are Buying the 2012 Election

By: Jason Easley - PoliticusUSA

In his new report, America For Sale: A Report on Billionaires Buying the 2012 Election, Sen. Bernie Sanders named names and called out the billionaires who using Citizens United to buy our democracy.

In front of a Senate panel last month, Sen. Bernie Sanders outed the 26 billionaires who are members of 23 billionaire families that are using Citizens United to buy elections. Sen. Sanders estimated that these 26 billionaires are the tip of the iceberg. “My guess is that number is really much greater because many of these contributions are made in secret. In other words, not content to own our economy, the 1 percent want to own our government as well.”

Sanders explained how the Supreme Court’s Citizens United decision put the government up for sale, “What the Supreme Court did in Citizens United is to say to these same billionaires and the corporations they control: ‘You own and control the economy, you own Wall Street, you own the coal companies, you own the oil companies. Now, for a very small percentage of your wealth, we’re going to give you the opportunity to own the United States government.’”
Sen. Sanders also did the last thing the billionaires wanted. He called them out by name.

According to the report, America for Sale: A Report on Billionaires Buying the 2012 Election, here are the 26 billionaires who are trying to buy your government:

1. Sheldon Adelson, owner of the Las Vegas Sands Casino, is worth nearly $25 billion, making him the 14th wealthiest person in the world and the 7th richest person in America. While median family income plummeted by nearly 40% from 2007-2010, Mr. Adelson has experienced a nearly eightfold increase in his wealth over the past three years (from $3.4 billion to $24.9 billion). Forbes recently reported that Adelson is willing to spend a “limitless” amount of money or more than $100 million to help defeat President Obama in November.
2. The Kochs (David, Charles, and William) are worth a combined $103 billion, according to Forbes. They have pledged to spend about $400 million during the 2012 election season. The Kochs own more wealth than the bottom 41.7 percent of American households or more than 49 million Americans.
3. Jim Walton is worth $23.7 billion. He has donated $300,000 to super PACs in 2012.
4. Harold Simmons is worth $9 billion. He has donated $15.2 million to super PACs this year.
5. Peter Thiel is worth $1.5 billion. He has donated $6.7 million to Super PACs this year.
6. Jerrold Perenchio is worth $2.3 billion. He has donated $2.6 million to super PACs this year.
7. Kenneth Griffin is worth $3 billion and he has given $2.08 million to super PACs in 2012.
8. James Simons is worth $10.7 billion and he has given $1.5 million to super Pacs this year.
9. Julian Robertson is worth $2.5 billion and he has given $1.25 million to super PACs this year.
10. Robert Rowling is worth $4.8 billion and he has given $1.1 million to super PACs.
11. John Paulson, the hedge fund manager who made his fortune betting that the sub-prime mortgage market would collapse, is worth $12.5 billion. He has donated $1 million to super PACs.
12. Richard and J.W. Marriott are worth a combined $3.1 billion and they have donated $2 million to super PACs this year.
13. James Davis is worth $1.9 billion and he has given $1 million to super PACs this year.
    
14. Harold Hamm is worth $11 billion and he has given $985,000 to super PACs this year.
15. Kenny Trout is worth more than $1.2 billion and he has given $900,000 to super PACs this year.
16. Louis Bacon is worth $1.4 billion and he has given $500,000 to super PACs this year.
17. Bruce Kovner is worth $4.5 billion and he has given $500,000 to super PACs this year.
18. Warren Stephens is worth $2.7 billion and he has given $500,000 to super PACs this year.
19. David Tepper is worth $5.1 billion and he has given $375,000 to super PACs this year.
20. Samuel Zell is worth $4.9 billion and he has given $270,000 to super PACs this year.
21. Leslie Wexner is worth $4.3 billion and he has given $250,000 to super PACs this year.
22. Charles Schwab is worth $3.5 billion and he has given $250,000 to super PACs this year.
23. Kelcy Warren is worth $2.3 billion and he has given $250,000 to super PACs this year.

The thing that these billionaires love most about Citizens United it is that it allows them to operate in total darkness. The American people couldn’t fight back because the billionaires were giving their money anonymously. This same cloak of invisibility is what made ALEC so effective for years. The conservative billionaire cabal works best in private, behind closed doors, far away from curious eyes.

+++

They hate Obama SO much they'll elect a Mormon whom they all hated this time last year. It would be funny if it weren't so fucked up. How many rigged voting boxes do those billionaires get for their money?

Another Hidden Bailout: Helping Wall Street Collect Your Rent

Tuesday, March 20, 2012 by Rolling Stoneby Matt Taibbi
Here's yet another form of hidden bailout the federal government doles out to our big banks, without the public having much of a clue.

This is from the WSJ on Monday:

Some of the biggest names on Wall Street are lining up to become landlords to cash-strapped Americans by bidding on pools of foreclosed properties being sold by Fannie Mae... 

While the current approach of selling homes one-by-one has its own high costs and is sometimes inefficient, selling properties in bulk to large investors could require Fannie Mae to sell at a big discount, leading to larger initial costs.

In con artistry parlance, they call this the "reload." That's when you hit the same mark twice – typically with a second scam designed to "fix" the damage caused by the first scam. Someone robs your house, then comes by the next day and sells you a fancy alarm system, that's the reload.

In this case, banks pumped up the real estate market by creating huge volumes of subprime loans, then dumped a lot of them on, among others, Fannie and Freddie, the ever-ready enthusiastic state customer. Now the loans have crashed in value, yet the GSEs (Government Sponsored Enterprises) are still out there feeding the banks money through two continuous bailouts.

One, they continue to buy mortgages from the big banks (until recently, even from Bank of America, whom the GSEs were already suing for sales of toxic MBS), giving the banks a permanent market for home loans.

And secondly, they conduct these quiet bulk sales of mortgages, in which huge packets of home loans are sold to banks at a "big discount."

By now we've come full circle. Banks create the loans, make money selling them off on the market at high prices, then come back and buy them again when they're low. When the GSEs are in the middle of this transaction, it makes mortgage lending a basically risk-free proposition: Banks get paid for creating home loans and they end up owning valuable property on the cheap, but in between, they offshore the market risk to a government entity and/or to the idiot individual who bought the home mortgage in the first place.

Even better, many of the banks/investors who buy these home loans back from Fannie/Freddie will rent out their properties instead of reselling them, which can vastly increase their revenue streams. From the WSJ:

Economists at Goldman Sachs estimate the annual yield on an investment on rental property nationwide averages about 6.3%, but can exceed 8% in cities that were hit hard during the housing bust, including Las Vegas, Detroit and Tampa. By contrast, mortgage bonds have average yields of just over 3%, and investment-grade corporate bonds are yielding about 3.5%, according the Barclays Capital U.S. Investment-Grade Index.

It gets better:

Warren Buffett, considered a sage investor and chief executive of Berkshire Hathaway Inc., said in an interview with CNBC-TV last month that he would buy up "a couple hundred thousand" single-family homes if he could do so easily, given the high yields on rental investments.

Another potential buyer, according to the article, is John Paulson, the pillaging hedge-fund billionaire who was behind Goldman's notorious "Abacus" deal (in which Goldman allowed Paulson to pack a portfolio full of loser mortgages he was shorting before those same mortgages were dumped on a pair of Euro banks).

So congratulations, America, your quasi-governmental housing entity is about to subcontract out mass-landlording/slumlording jobs to the likes of John Paulson and Warren Buffett, so that they can add to their bottom lines collecting rent payments in the middle of a nationwide housing slump.
As one hedge fund analyst put it to me: "Help inflate the bubble, create a foreclosure crisis, buy homes in bulk, and rent them out to the same average homeowner."

Is this what we had in mind when we created the "ownership society" – helping billionaires collect your rent?

Koch Brothers Convene Super-Secret Billionaires' Meeting for 2012 Elections

Some of America's wealthiest Republicans flew into Palm Springs last weekend to update their stealthy political strategy for 2012.
By Lee Fang, Republic Report
Posted on February 4, 2012


At a retreat last weekend, dozens of wealthy donors convened in a large golf resort in Indian Wells, Calif. for a four day conference to raise money and plot out election year strategy, the Republic Report has confirmed. We traveled to the conference, and spoke to a few of the attendees.


The summit, organized by the billionaire brothers Charles and David Koch, was cloaked in secrecy. Helicopters, private security and police officers from neighboring cities patrolled the area constantly. In previous years, Supreme Court justices, some of the wealthiest businessmen in the country and Republican politicians like Congressman Paul Ryan have all gathered at these twice-annual events. The Esmerelda Renaissance, the conference venue this year, was guarded carefully with every entrance blocked and the entire 560-room resort rented out. I arrived at the hotel the night before the event, but was followed closely by security and asked to leave the next morning before the Koch meeting guests arrived.


Though the donors will funnel tens of millions of dollars into the election this year, they will not have to disclose a single cent. Using an elaborate array of foundations, nonprofits and other legal entities, the Koch network sponsored bus tours, attack ads, think tanks, and hired Tea Party organizers to shape the midterm elections two years ago. Now, they appear to be expanding their effort.


The most the public knows about these meetings has been culled from leaked audio tapes,reporting from journalists like Ken Vogel, and from an invitation I exclusively reported back in October 2010. The document I posted over a year ago explained that during the meetings, strategy is discussed, from legislative campaigns to judicial elections, and money is raised from an assortment of executives from the oil, banking, manufacturing, and real estate industries.


At the Palm Springs Airport last weekend, I ran into Phil Kerpen, the vice president of Americans for Prosperity, the Tea Party group founded by David Koch. Kerpen, who was in a rush to make it to the event, didn’t say much about the agenda. Kerpen’s group recently purchased $6 million in undisclosed attack ads against President Obama, the largest such buy of the entire campaign cycle so far.


Kerpen asked how I knew about the conference. “I thought they had stopped all leaks,” he muttered, as I walked with him through the baggage claim. Eventually he relented a bit and told me that he hopes to help achieve “aggressive cuts to government spending and to regulation to allow robust economic growth” in January 2013.


At the last Koch meeting, in Vail, Colo., Charles Koch raised several million dollars from his cohorts, while reffering to President Obama as “Saddam Hussein” and this year’s election as the “mother of all wars.” Kerpen disputed the reporting of Charles Koch’s comments, but did not elaborate on what the Koch Industries CEO really meant.


“Ask your leaker to post my speech, because it’s very good,” he added, before getting in a car with two associates.


The added secrecy was apparent even to local reporters, who were confused about why the multi-golf course Esmerelda Renaissance was locked down and why the hotel staff couldn’t talk to anyone about what was going on.


The jets provided many clues into who was attending the event. A private plane owned by wealthy mutual fund manager Foster Friess flew to the area the morning of the conference, and left the day it ended. Friess is a social conservative who has gained headlines recently for his massive backing of a super-PAC supporting Rick Santorum. He has also attended the Koch meeting in the past.


A plane belonging to billionaire investor Phil Anschutz, another regular Koch attendee and major conservative financier, arrived at a nearby airport during the event. We identified over half a dozen private planes owned by major Republican donors that also arrived in the Indian Wells area during the event, but none of their owners would respond to requests for comment. Some, like Kenny Troutt, a financier of a super-PAC that supported Rick Perry’s bid for the presidency, seem to suggest new participants to the Koch meetings.


A jet owned by Continental Resources, a large fracking company that dominates the Bakken shale formation in North Dakota, arrived at the event. The company, headed by Obama critic Harold Hamm, refused to answer any questions about the Koch meeting.


About a day after our call, a Web site that tracks private jet flights posted a note about Continental Resources: “This aircraft is not available for tracking per request from the owner/operator.”

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.

Reagan--No Loopholes For Millionaires

(Why don't Republicans understand that if Reagan were politically active today, he'd be a centrist Democrat--like Obama? Even before this direct video comparison, the way Reagan ruled the land was more similar to Obama than either of the Bushes who followed him. And Republicans LOVE Reagan. He raised taxes on them, and they spread their buttcheeks for him.--jef)

NYC Mayor Bloomberg Threatens to Shut Down Occupy Wall Street

Bloomberg, 4th Richest Person in US Due to Wall Street, Is About to Snap the Mouse Trap Shut on Those Who Threaten His Fortune

by mark karlin on Wed, 10/05/2011


Mayor Michael Bloomberg is threatening to shut down democracy on Wall Street.

You might expect that from a man who is the fourth-wealthiest person in America, with $19.5 billion dollars in his pocket. Moreover, Bloomberg made a lot of money as a Wall Street financier, but he catapulted into the multibillionaire category by revolutionizing financial market information and selling a specialized terminal and access services to the financial industry (followed by Bloomberg media services).

In short, his fortune is directly integrated into the Wall Street status quo.

That may be why he told a New York City radio show host last week that "New Yorkers need 'to help the banks.'" The Village Voice headlined its story on the plutocratic pronouncements of Bloomberg, "Mayor Bloomberg: 'We'll See' If The City Will Let Occupy Wall Street Continue." 

Bloomberg seemed in a baronial haze, claiming, "The protesters are protesting against people who make $40-50,000 a year and are struggling to make ends meet. That's the bottom line." Is the mayor mainlining Fox "news" as his source of information? He royally added, "so anything we can do that's responsible to help the banks ... that is what we need."

Yesterday, BuzzFlash at Truthout wrote that there is little doubt that law enforcement officials - at the behest of corporate-backed politicians - are infiltrating and planning ways to discredit the Wall Street autumn of democracy.

In his plutocratic cloud of personal financial interest and self-serving disdain for the right of assembly, Bloomberg resembles a monarchist, not a mayor.

If the Occupy Wall Street movement spreads and grows, you can count on Mayor Bloomberg to pull the curtains down on this exercise in America's basic right of redress.

As Thom Hartmann noted in a book excerpted on Truthout, Thomas Jefferson warned that "the artificial aristocracy is a mischievous ingredient in government, and provision should be made to prevent its ascendancy."

Bloomberg is just waiting to snap the mouse trap shut on democracy.

Real Class War Is Working to Keep Those Below You Down

Contrary to popular belief, the United States is not a meritocracy, and amid cries of class warfare, Americans are getting the worst of both worlds.

By Joshua Holland, AlterNet
Posted on September 19, 2011

That conservatives are greeting the deficit reduction package Barack Obama presented on Monday – one that includes a new minimum tax on millionaires – with howls of 'class warfare' is as predictable as the sun rising in the east. It's a poll-tested talking point, after all.

But it obscures a far more pernicious form of “class warfare” being waged from above – a war of attrition against the upward economic mobility of ordinary working people. We live in a country where most people believe their opportunities are limited only by their innate talents and appetite for hard work, but over the last four decades, while decrying a wholly imaginary class war from below, conservative policies have undermined many of the ladders by which working people once achieved a middle-class lifestyle. Taking pot-shots at another class isn't war, nor is imposing a modest tax increase on those who have been showered with tax cuts for the last decade. Genuine class warfare is those at the very top working to keep everyone else far beneath them.

That's a story that doesn't fit neatly onto a bumpersticker. The standard reply to right-wing bloviating about “class warfare” is essentially an appeal to the authority of billionaire investor Warren Buffet, who famously said, "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."

It's an undeniably true statement: in 1979, those in the top 10th of 1 percent of the American economic ladder took in 1.11 percent of the nation's income, but by 2008, they were grabbing 5 percent. Those extremely wealthy few didn't become five times smarter and aren't working five times harder than they were in the late '70s, and the seismic shift in our economic structures wasn't an accident: the upward redistribution of wealth in this country has been a direct result of policies for which those at the top have lobbied hard – labor policies, trade deals, cuts to the social services that lifted some of those at the bottom out of poverty and a tax structure that shifted a big chunk of the burden from corporations and the wealthiest to ordinary working families.

Yet that retort only scratches the surface. Conservatives wage a far more damaging form of warfare when they attack the means by which people were once able to move up the economic ladder. They've done so with gusto, and as a result, the upward mobility that once defined America's great economic experiment is now little more than a fond memory, undermined by the Right's knee-jerk anti-governmentalism and an almost fascistic hostility to organized labor.

Most people aren't even aware of that reality. The belief that we live in a perfect meritocracy remains widespread. Around 3 percent of Americans are actually millionaires (or were before the crash of 2008), but in 2003, almost one in three told Gallup that they expected to be millionaires at some point in their lives. A 2006 poll found that more than half of those surveyed believed “Almost anyone can get rich if they put their mind to it.”

Conservative discourse about the “undeserving” poor being where they are because of some inherent personal faults might make some sense if we were all born with the same opportunities to get ahead. Tragically, however, in today’s economy, the single greatest predictor of how much an American child will earn in the future is how much his or her parents take home.

But, according to a study of public opinion in 25 wealthy countries, Americans are almost twice as likely as those in other advanced economies to believe that “people get rewarded for intelligence and skill.” At the same time, fewer than one in five say that coming from a wealthy family is “essential” or “very important” to getting ahead—significantly lower than the 25-country average. It’s impossible to overstate the impact these beliefs have on our policy debates. Americans are less than half as likely as people in other wealthy nations to believe that it’s “the responsibility of government to reduce differences in income.”

Working Americans have essentially bought into a unique social contract: they forgo much of the economic security that citizens of other wealthy countries take for granted in exchange for a more “dynamic,” meritorious economy that supposedly offers them plenty of opportunities to succeed. Of course, this is never explicitly stated, and most of us don’t know about the deal, but it’s reinforced all the time in our public discourse.

But, contrary to that popular notion, the United States is not a meritocracy, and Americans are getting the worst of both worlds—not only is a significant portion of the middle class hanging on by the narrowest of threads, not only do fewer working people have secure retirements to look forward to, not only are nearly one in seven Americans uninsured, but working people also enjoy fewer opportunities to pull themselves up by their bootstraps than do the citizens of other advanced countries.

In reality, the United States’ much-ballyhooed upward mobility is a myth, and it appears to be getting worse with each new generation. Several studies released in recent years suggest that Americans enjoy significantly less upward mobility than do the citizens of a number of other industrialized nations. German workers have 1.5 times the upward movement of Americans, Canada’s economy is nearly 2.5 times as mobile, and Denmark is three times as mobile. Norway, Finland, Sweden, and France (France!) are all more upwardly mobile societies than the United States. Of the countries included in the studies, the United States ranked near the bottom; only in the United Kingdom was it tougher to shake off a low social status one had been born with.

What's more, an American in today’s workforce is just as likely to experience downward mobility as he or she is to move up in the world. A study conducted by Julia Isaacs, a fellow with the Economic Mobility Project, used a unique set of data that allowed her to directly compare the incomes of Americans in the late 1990s and the early 2000s with the incomes of their parents’ generation in the late 1960s. She categorized families as belonging to one of four groups: the “upwardly mobile,” who do better relative to their parents; those “riding the tide,” families that earn more than their parents did but remain in the same relative position on the economic ladder; those “falling despite the tide,” a small group who are earning more than their parents did but who nonetheless fell into a lower position on the ladder; and those who are “downwardly mobile.” The key take-away was that American families are just as likely to be downwardly mobile—33 percent fall into this group—as they are to join the 34 percent who move up.

It should come as no surprise that roughly speaking, the decrease in relative mobility from generation to generation correlates with the rise of “backlash” conservatism, the advent of Reaganomics, and the series of massive changes in industrial policies that people loosely refer to as the “era of globalization.”

The United States is the only advanced country in which the federal government is not directly involved in higher education. That has helped drive dramatic increases in the average cost of a college education since the post–World War II era. At more than $7,000 in average yearly costs (in 2009), a public university education in the United States is a lot more difficult to finance than it was a generation ago. That negatively affects mobility; a college degree remains a valuable “bootstrap” with which one can raise oneself up the economic ladder.

Isabel Sawhill of the Brookings institution looked at the relationship between education and mobility (PDF) and concluded, “At virtually every level, education in America tends to perpetuate rather than compensate for existing inequalities.” A society with a weak education system will, by definition, be one in which the advantages of class and family background loom large. The U.S. education system is largely funded through state and local property taxes, which means that the quality of a kid’s education depends on the wealth of the community in which he or she grows up. This, too, helps replicate parents’ economic status in their kids. Finally, Sawhill noted, in the United States, unlike other advanced economies, “access both to a quality preschool experience and to higher education continues to depend quite directly on family resources.”

Another major factor is the decline in organized labor and solid, good-paying manufacturing jobs. Those jobs once represented another bootstrap that is now disappearing.

There’s also an inverse relationship between how robust a country’s social safety net is and the degree to which working families face the prospect of downward mobility. For example, countries that have generous unemployment benefits show a clear trend: offering displaced workers more assistance (a) extends the period of unemployment (which tends to be the focus of most conservatives) and (b) also means that when working people do reenter the workforce, they do so at a higher average wage.

There’s a similar dynamic in terms of health care: people with access to paid sick leave and other health benefits switch jobs less frequently than those who don’t enjoy those bennies, and as a result, they have longer average tenure and higher earnings.

In these areas, the United States has felt Jacob Hacker’s “great risk shift.” Hacker described how the U.S. “framework of security has unraveled, leaving Americans newly exposed to the harshest risks of our turbulent economy: losing a good job, losing health care, losing retirement savings, losing a home—in short, losing a stable, financial footing.” All of those hardships offer unique opportunities to fall out of the middle class—opportunities for downward mobility that simply don’t exist for the Canadian or French worker, people who can rely on a more progressive state to help preserve their income levels when disaster strikes.

Ultimately, the take-away from the decline in American upward mobility is that the existence of a middle class is not a natural phenomenon. It was created by providing good quality public education, mandating minimum wages, and guaranteeing working people the right to organize.

Conservatives have spent the last three decades unraveling those kinds of protections—all have been subjected to death “by a thousand small cuts” since Reaganomics hit the United States. As a result, it has once again become true that the accident of one’s birth dictates one’s life chances to a very large degree, and that is a wholly predictable result of the rise of the conservative backlash.

Congressional Millionaires To Weigh Obama's Proposed 'Buffett Rule'

Tuesday, September 20, 2011 by OpenSecrets Blog

by Michael Beckel

President Barack Obama's plan for a new minimum tax rate for people who earn more than $1 million a year will likely affect some of the people who will have a say on whether the rule becomes law.

Namely: Congress.

Obama's new tax proposal, which has been dubbed the "Buffett rule" after billionaire investor Warren Buffett, may include a change in how capital gains are taxed.

According to research by the Center for Responsive Politics, about 40% of members of the U.S. House of Representatives and nearly half of all U.S. senators reported capital gains in 2009.

Among the 176 current members of the House and 48 sitting senators to do so? Reps. Darrell Issa (R-Calif.), Michael McCaul (R-Texas), Nancy Pelosi (D-Calif) and Tom Petri (R-Wis.) and Sens. Mark Warner (D-Va.), Dianne Feinstein (D-Calif.), John Kerry (D-Mass.) and Richard Blumenthal (D-Conn.).

In contrast to Obama, many of the Republicans running for the GOP presidential nomination have proposed eliminating the capital gains tax.

Currently, according to the Tax Policy Center, the richest 0.1 percent of Americans pay 44 percent of all capital gains taxes, and 68 percent of the tax is paid by the richest 1 percent. The bottom 80 percent of Americans account for less than 3 percent of all capitals gains taxes paid.

Furthermore, according to the Center's research, 244 current members of Congress were millionaires in 2009, the most recent year for which data is available. That figure includes 138 Republicans and 106 Democrats.

That lofty financial status is claimed by only about 1 percent of Americans. The median American family had a net worth of $96,000 in 2009, according to the Federal  Reserve Board.

Of course, not all millionaires make more than $1 million in income annually -- that's an even loftier financial status enjoyed by an even more elite slice of Americans.

No matter how you look at it, though, members of Congress as a whole are a wealthy bunch -- typically several times wealthier than most of their constituents.

The median net worth for a current member of the U.S. House of Representatives was $725,000 in 2009, according to the Center's research, and the media net worth of a U.S. Senator was $2.4 million.

The richest member of Congress is Issa, whose net worth was valued between $156 million and $451 million. (When members of Congress disclose information about their financial assets and liabilities, they are allowed to do so by giving broad ranges.)

Here is a list of the 20 wealthiest current members of Congress, according to the Center's research, based on their financial reports covering calendar year 2009. (The Center plans to unveil its analysis of lawmakers' 2010 financial disclosures later this fall.).

Rank	Name	Party	Min. Net Worth	Average Net Worth	Max. Net Worth
1	Rep. Darrell Issa (R-Calif.)	R	$156,050,022	$303,575,011	$451,100,000
2	Sen. John Kerry (D-Mass.)	D	$182,755,534	$238,812,296	$294,869,059
3	Sen. Mark Warner (D-Va.)	D	$65,692,210	$174,385,102	$283,077,995
4	Rep. Jared Polis (D-Colo.)	D	$36,694,140	$160,909,068	$285,123,996
5	Sen. Herb Kohl (D-Wis.)	D	$89,358,027	$160,302,011	$231,245,995
6	Rep. Vernon Buchanan (R-Fla.)	R	-$69,434,661	$148,373,160	$366,180,982
7	Rep. Michael McCaul (R-Texas)	R	$73,685,086	$137,611,043	$201,537,000
8	Sen. James Risch (R-Idaho)	R	$38,936,114	$109,034,052	$179,131,990
9	Sen. Jay Rockefeller (D-W.Va.)	D	$61,446,018	$98,832,010	$136,218,002
10	Sen. Richard Blumenthal (D-Conn.)	D	$64,210,256	$94,870,116	$125,529,976
11	Sen. Dianne Feinstein (D-Calif.)	D	$46,055,250	$77,082,134	$108,109,018
12	Sen. Frank Lautenberg (D-N.J.)	D	$49,083,204	$76,886,611	$104,690,018
13	Rep. Nancy Pelosi (D-Calif.)	D	-$7,356,915	$58,436,537	$124,229,990
14	Rep. Gary Miller (R-Calif.)	R	$19,365,053	$51,833,526	$84,302,000
15	Sen. Bob Corker (R-Tenn.)	R	$9,778,047	$50,717,522	$91,656,998
16	Rep. Diane Lynn Black (R-Tenn.)	R	$14,673,049	$49,409,519	$84,145,990
17	Rep. Rodney Frelinghuysen (R-N.J.)	R	$19,898,179	$43,797,589	$67,697,000
18	Rep. Richard Berg (R-N.D.)	R	$19,347,579	$39,164,515	$58,981,451
19	Rep. Nita Lowey (D-N.Y.)	D	$14,900,036	$39,012,518	$63,125,000
20	Rep. Kenny Marchant (R-Texas)	R	$13,303,385	$38,204,868	$63,106,351

A Good Fight

Tuesday, September 20, 2011 by RobertReich.org

by Robert Reich

 

So the really big fight — perhaps the defining battle of 2012 — won’t be over Medicare. It won’t even be over Obama’s jobs program.

It will be over whether the rich should pay more taxes.

The President has vowed to veto any plan to tame the debt that doesn’t increase taxes on the rich. The Republicans have vowed to oppose any tax increases on the rich.
It’s a good fight to have.

In a Rose Garden ceremony yesterday, Obama proposed new taxes on the wealthy — including a special new tax for millionaires, the closing of loopholes and deductions for people making more than $250,000 a year, and an end to the portion of the Bush tax cut going to higher incomes.

Republicans accuse the President of instigating “class warfare.” But it’s not warfare to demand the rich pay their fair share of taxes to bring down America’s long-term debt.
After all, the richest 1 percent of Americans now takes home more than 20 percent of total income. That’s the highest share going to the top 1 percent in almost 90 years.

And they now pay at the lowest tax rates in half a century — half the rate they paid on ordinary income prior to 1981.

(Unfortunately, the President isn’t proposing to raise the capital-gains tax — which, now at 15 percent, creates a loophole large enough for the super-rich to drive their Ferrari’s through. About 80 percent of the income of America’s richest 400 comes in the form of capital gains. Here’s where billionaire hedge-fund and private-equity fund managers make out like bandits. As I’ve noted, I also wish he aimed higher — for more brackets and higher rates at the very top. But at least he’s drawn a line in the sand. The veto message is clear.)

Anyone who says the American economy suffers when the rich pay more in taxes doesn’t know history. We grew faster the first three decades after World War II than we have since.
Trickle-down economics has been a cruel joke.

On the other hand — given projected budget deficits — if the rich don’t pay their fair share, the rest of us will have to bear more of a burden. And that burden inevitably will come in the form of either higher taxes or fewer public services.

If anyone’s declared class warfare it’s the people who inhabit the top rungs of big corporations and Wall Street (and who comprise a disproportionate number of America’s super rich). They’ve declared it on average workers.

The ratio of corporate profits to wages is higher than it’s been since before the Great Depression. And even as corporate salaries and perks keep rising, the median wage keeping dropping, and jobs continue to be shed.

You’ve got the chairman of Merck taking home $17.9 million last year. This year Merck announces plans to boot 13,000 workers. The CEO of Bank of America takes in $10 million, and the bank announces it’s firing 30,000 workers.

Maybe I’m old-fashioned, but the way I see it we’ve got a huge budget deficit and a giant jobs problem. And under these circumstances it seems to me people at the top who have never had it so good should sacrifice a bit more, so the rest of us don’t have to sacrifice quite as much.

According to the polls, most Americans agree.

The Truth about 'Class War' in America

Tuesday, September 20, 2011 by The Guardian/UK
Republicans claim, in Orwellian fashion, that Obama's millionaire tax is 'class war'. The reality is that the super-rich won the war

by Richard Wolff

 

Republicans and conservatives always fight back against proposals to raise taxes on corporations and rich individuals by making two basic claims:

First, such proposals amount to un-American "class warfare", pitting the working class against corporations and the rich.

Second, such proposals would take money for the government that would otherwise have been invested in production and thus created jobs.Taking his cue from Warren Buffett, President Obama has announced a 'millionaire tax' as part of his budget plan; Republicans have denounced it as 'class war'.

Neither logic nor evidence supports either claim. The charge of class war is particularly obtuse. Consider simply these two facts:

First, at the end of the second world war, for every dollar Washington raised in taxes on individuals, it raised $1.50 in taxes on business profits. Today, that ratio is very different: for every dollar Washington gets in taxes on individuals, it takes 25 cents in taxes on business. In short, the last half century has seen a massive shift of the burden of federal taxation off business and onto individuals.

Second, across those 50 years, the actual shift that occurred was the opposite of the much more modest reversal proposed this week by President Obama; over the same period, the federal income tax rate on the richest individuals fell from 91% to the current 35%. Yet, Republicans and conservatives use the term "class war" for what Obama proposes – and never for what the last five decades have accomplished in shifting the tax burden from the rich and corporations to the working class.

The tax structure imposed by Washington on the US over the last half-century has seen a massive double shift of the burden of taxation: from corporations to individuals and from the richest individuals to everyone else. If the national debate wants seriously to use a term like "class war" to describe Washington's tax policies, then the reality is that the class war's winners have been corporations and the rich. Its losers – the rest of us – now want to reduce our losses modestly by small increases in taxes on the super-rich (but not, or not yet, on corporations).

To refer to this effort as if it had suddenly introduced class war into US politics is either dishonest or based on ignorance of what federal tax policies have actually been. Or perhaps, for conservatives, it is a convenient mixture of both.

Much the same sort of analysis applies to the Republican claims that taxing corporations and rich people takes money that would otherwise be invested in business growth and thus create jobs. Last Friday, the US Federal Reserve reported a record quantity of cash on the books of US businesses (over $2tn). Even with the currently low taxes on businesses and the rich, that money is not being invested and is not creating jobs. It is not being distributed to anyone else and so is not being spent on consumer goods either. Taxing a portion of that money to finance Washington's stimulation of the economy by spending that money – or even better, by using it to hire and pay the unemployed – would be a much more effective way to provide jobs than leaving it as cash hoards in corporations' coffers.

Last month, Warren Buffett upset many of his "mega-rich friends" by what he stated categorically in a New York Times op-ed. He made it clear that he had never encountered any serious investor who decided whether or not to invest based on tax rates. It was always the prospects of profit that made the difference. He then urged Americans to raise taxes on the rich like himself. He also hinted – none too subtly – that it was becoming politically dangerous for the whole economic system's survival to keep having the minority of extremely rich people paying federal tax at lower rates than the middle- and low-income majority.

The final irony of loose talk about class war is this: the Republican and conservative voices opposing all tax increases for corporations and the rich thereby provoke, as Buffett intimated and New York Mayor Michael Bloomberg more explicitly warned last week, a renewal of class consciousness in the US. Then, Washington might learn what class war really is.

US is a two party dictatorship says Ralph Nader

Posted on 09.15.11

By Eric W. Dolan

Ralph Nader appeared Thursday on Fox News to discuss a democratic primary he was organizing against President Barack Obama to “hold his feet to the fire.”

“The important thing here is if he’s not challenged from the progressive-liberal wing of his party, that elected him, it’ll be a very dull campaign, people will not be very enthusiastic, more and more people will stay home, it’s not good for him,” Nader said. “If he’s a good debater, if he knows his facts, he’ll want to be challenged because he’ll come out much sharper.”

When asked about the possibility of a third party candidate succeeding in the 2012 presidential election, Nader said it would be a hurdle for anyone who wasn’t a billionaire.

“It’s a two party dictatorship unless you’re worth billions of dollars.”

Watch video, via MoxNews.com, below:

Chant of 'Tax the Rich' Growing Louder in Nation

Friday, September 2, 2011 by the San Francisco Chronicle

by Carla Marinucci 

 

 

Billionaire Warren Buffett may not seem to have much in common with angry laborers at town hall meetings or armies of California nurses protesting in the streets.
But these days, the executive celebrity in his boardroom and working folks on the front lines have found a common mantra as the economy continues to sputter and the 2012 election approaches: "Tax the rich."

   

"In this country, the working people pay and pay and pay and the wealthy don't - and they get bonuses and bailouts," widening the gap between rich and poor, said Rose Anne DeMoro, executive director of the California Nurses Association. (photo: dignidadrebelde)

They are joining Democratic politicians, such as U.S. Sen. Barbara Boxer of California, who pounded the issue of making "millionaires and billionaires pay their fair share" nearly a dozen times at a recent event in Oakland.

The calls have become louder as President Obama plans to unveil his jobs plan next Thursday in a highly anticipated speech that they hope will provide a counterpoint to conservative grassroots GOP groups pressing lawmakers to slash government programs to stimulate the economy - without raising taxes.

Also driving the debate is the looming work of the bipartisan 12-member congressional "super committee" on deficit reduction set to begin its work this month in Washington.

'Stop Coddling the Rich'
At the same time, the liberal activist group MoveOn.org has launched a "Stop Coddling the Rich" campaign to underscore what it says is a growing disparity between American income classes at a time of growing economic uncertainty.

Today, House Minority Leader Nancy Pelosi, D-San Francisco, and the powerful National Nurses United union will take the message one step further with one of their trademark protests - this time opening a symbolic "soup kitchen."

The nationwide protests are expected to involve about 10,000 participants in street-theater events in more than four dozen cities and other locations around the country.

Millions are suffering
"What's happened is that the unemployed and the uninsured, the underinsured and the homeless have become invisible in our culture," says Rose Ann DeMoro, executive director of the nurses' union, which has 170,000 members nationally and 75,000 in California, where it's also known as California Nurses Association.

DeMoro said she hears daily from her union members upset by the millions of Americans who are suffering while Wall Street financiers are making substantial amounts of money.
"In this country, the working people pay and pay and pay and the wealthy don't - and they get bonuses and bailouts," widening the gap between rich and poor, said DeMoro.

Gulf between parties (Democrats coddle the rich, too--jef)
With the 2012 election approaching and Republicans at state and local levels drawing a line in the sand against new taxes, the "tax the rich" movement underscores a growing gulf between the parties.

"The Republican Tea Party is trying to hold the country hostage," said Rep. Barbara Lee, D-Oakland, who has held job fairs around the country the past few weeks with other members of the Congressional Black Caucus. "The only way you're going to create jobs is a direct investment (from the federal government) in job creation and repealing the Bush tax cuts."

Activists such as DeMoro say that members of the congressional super committee from both political parties appear more interested in cutting social programs "to funnel more resources to Wall Street and foreign banks and investors."

Buffett, in a widely read opinion piece last month in the New York Times, kicked off the latest debate, saying, "My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice."

Executive pay
A survey released Wednesday by the Institute of Policy Studies, a liberal think tank in Washington, appeared to confirm some of his views, finding that 25 of the highest paid CEOs earned more last year than their firms paid in income tax, and that several of those firms paid more to lobbyists than they did in taxes.

Even conservative Rep. Darrell Issa, R-Vista (San Diego County), a self-made millionaire and one of the richest members of Congress, issued a statement on the survey, saying that it's time to examine "the extent to which the problems in CEO compensation that led to the economic crisis continue to exist today."

But some Democrats, including California Gov. Jerry Brown, have acknowledged the political quicksand present in such a discussion. In comments circulated on Twitter, Brown suggested that Republicans view new taxes as something akin to "a sexually transmitted disease."

Liberals such as Lee are warning Obama not to call for more tax cuts in his jobs speech next week.

"You can't keep giving tax cuts because tax cuts do nothing but drain money from our economy," Lee said, arguing that 40 percent of the $787 billion federal stimulus package in 2009 were tax cuts that "didn't do anything."

$500 billion for jobs
She wants at least $500 billion in direct federal investment in job creation and training, to be paid for by closing the Bush tax cuts. She also would like unemployment benefits extended for 14 weeks.

"If there are 14 million people unemployed, we want to see a targeted approach to everyone who is unemployed," Lee said. "This is a national emergency. I want to hear the president say that."

Harold Simmons, the Shady Mega-Billionaire Pouring Money into Rick Perry's Coffers

Most Americans have never heard of Harold Simmons, despite his fantastic wealth, because he wisely keeps his head low. 

By Joe Conason, AlterNet
Posted on August 31, 2011


Like so many Republican officials of the tea party persuasion, Rick Perry despises the Environmental Protection Agency—a feeling he has expressed repeatedly in speeches, lawsuits, legislation and even a book titled “Fed Up!” Perhaps that is only natural for the governor of Texas, a “dirty energy” state where the protection of air, water and human health rank well below the defense of oil company profits for most politicians.

But Perry has at least one other reason for smacking down those bureaucrats so eagerly. When environmental regulators do their job properly, that can mean serious trouble for Perry’s largest political donors.

The outstanding example is Harold Simmons, a Dallas mega-billionaire industrialist who has donated well over a million dollars to Perry’s campaign committees recently. With Perry’s eager assistance—and despite warnings from Texas environmental officials—Simmons has gotten approval to build an enormous radioactive waste dump on top of a crucial underground water supply.

“We first had to change the law to where a private company can own a license, and we did that,” Simmons boasted in 2006, after the Texas Legislature and the governor rubber-stamped initial legislation and approvals for the project. “Then we got another law passed that said (the state) can only issue one license. Of course, we were the only ones that applied.”

Most Americans have never heard of Simmons, despite his fantastic wealth, because he wisely keeps his head low, generally refusing press interviews and avoiding media coverage. Last year, a local monthly in his hometown published the headline “Dallas’ Evil Genius” over a scathing and fascinating investigative profile that examined not only the peculiar history of litigation between Simmons and his children (who no longer speak to him), but his political machinations, corporate raiding and continuing corporate penchant for pollution.

In D magazine, reporter Laray Polk explained how Simmons and a company he owns—innocuously named Waste Control Systems—manipulated state and federal law to allow him to build a nuclear-waste disposal site in West Texas. But construction has been delayed for years in part because the site appears to overlay the Oglalla Aquifer, an underground water supply that serves 1.9 million people in nine states, raising obvious concerns over radioactive contamination. In the Simmons profile and subsequent posts on the Investigative Fund website last year, Polk explored the controversy over the proposed WCS facility, including strong objections by staff analysts at the Texas Commission on Environmental Quality who found evidence that atomic waste might indeed leach into a huge pool of drinking water.

Now reporters for The Los Angeles Times have revived, advanced and updated the WCS story with much additional detail, including interviews with the Texas environmental officials who oversaw the approval process for the facility. For a period last summer, that process appeared to have been slowed down to allow serious consideration of the scientific data collected by the commission’s staff.

In other words, the regulators were trying to do their job, which meant expensive delays and perhaps an eventual ruling against the nuclear waste site. That would have protected the Oglalla Aquifer and cost Simmons hundreds of millions in lost investment and profit. But then Perry’s appointees on the commission voted by two to one to issue licenses for the WCS site.

This year, officials on another Texas commission appointed by Perry—who oversee low-level radioactive waste in the state—voted to allow the WCS site to accept nuclear waste from 34 other states in a highly controversial decision later ratified by the state Legislature and signed by Perry himself. Not long after that, according to The Los Angeles Times’ report, Simmons gave $100,000 to Americans for Rick Perry, an “independent” committee supporting his presidential candidacy. (Back in 2004, Simmons was a major contributor to another “independent” political committee, the notorious Swift Boat Veterans group that distorted Democratic presidential nominee John Kerry’s war record in a series of TV ads.)

According to a spokesman for WCS, the Texas governor’s happy and lucrative relationship with Simmons did nothing to help the company except to turn the billionaire into “an easy target. ... It made the state redouble its efforts to be thorough.” But the Texas officials who opposed the approval on principle have since quit their jobs with the state. As one of them told the L.A. Times reporters, “This is a stunningly horrible public policy to grant a license to this company for that site ... . Something had to happen to overcome the quite blatant shortcoming of that application. ... The only thing I know in Texas that has the potential to do that is money in politics.”

As for the Texas official (and Perry appointee) who overruled his own scientists and approved the deal, he left state government, too—to work as a lobbyist for Simmons. He says that no undue influence led to the favorable outcome for his new employer.

Texas must be the only place on earth where anyone would believe that.

There is No Moral Case for Tax Havens

Sunday, August 28, 2011 by the Independent/UK

They are the epitome of unfairness and injustice, leaving ordinary citizens to foot the bill for multinational corporations

by Paul Vallely

 

There is a building in the Cayman Islands that is home to 12,000 corporations. It must be a very big building. Or a very big tax scam. Tax havens are in the spotlight since the Chancellor, George Osborne, did a deal the other day with the Swiss authorities to slap a levy on secret bank accounts held there by British citizens. Opinions are divided on the move, which could net the Treasury £5bn, but which tacitly legitimizes bank accounts kept secret from the Inland Revenue. It is a de facto amnesty for those guilty of tax evasion crimes. And they will pay less than they would if they declared their income to the British taxman.

Are there any legitimate reasons why anyone would want to have a secret bank account – and pay a premium to maintain their anonymity – or move their money to one of the pink dots on the map which are the final remnants of the British empire: the Caymans, Bermuda, the Turks and Caicos and the British Virgin Islands?

The moral case against is clear enough. Tax havens epitomize unfairness, cheating and injustice. They replace the old morality embodied in the Golden Rule of reciprocity – that we should do as we would be done by – with a new version that insists that those who have the gold make the rules.

The old view, the neocon American Christopher Caldwell wrote recently, subscribes to a religious understanding of money that was universal in the Christian world before the rise of Protestantism, which acknowledges that people are alive but money is not, making it wrong for the latter to take precedence over the former – a notion as outdated as usury, he suggested tartly.

But what is the moral case for tax havens? We can dispense with the argument advanced by their administrators that if they didn't take the money it would simply move to more distant locations; that is the self-serving logic of a man who sells torture equipment to an oppressive regime. Apologists insist that tax havens protect individual liberty. They promote the accumulation of capital, fair competition between nations and better tax law elsewhere in the world. They also foster economic growth. So much so, the Institute of Directors has said, that Britain should not curb tax havens but emulate them, promoting the growth of more hedge funds in the UK.

Yet even if all that were true – and it is not – does it outweigh the ethical harm they do? The numbered bank accounts of tax havens are notoriously sanctuaries for the spoils of theft, fraud, bribery, terrorism, drug-dealing, illegal betting, money-laundering and plunder by Arab despots such as Gaddafi, Mubarak and Ben Ali, all of whom had Swiss accounts frozen.

The corruption spreads contagion, as the financial writer Nicholas Shaxson showed in Treasure Islands, his book about offshore finance which exposed secrecy, corruption and intimidation in places as seemingly innocent as that land of milk and money, such as Jersey in the Channel Islands.

But the moral bankruptcy of the tax haven runs deeper. Indeed it is intrinsic to its purpose. The British Virgin Islands is the global capital for the incorporation of offshore companies. Though it has a population of just 22,000, it has 823,502 registered companies which make vast amounts of money through the wonder of transfer pricing. It works like this. Suppose I manufacture a product in Africa and sell it in the UK. If I am a canny businessman I set up an intermediate company in a tax haven. It need do nothing except exist on paper. But through it I can buy all the products I make in Africa, dirt cheap, and then sell them, at a much higher cost, to my UK subsidiary. The African and British companies do not, thus, make much profit, so I have little or no tax to pay. All the money stays offshore, where taxes are low or non-existent. This is perfectly legal. But it distorts the world economy and means I pay no tax. I can also borrow where rates are lowest and keep my costs where they are most tax deductible.

That is why General Electric paid no taxes in 2010, despite $14.2bn profits. It's why Barclays, with 181 subsidiaries registered in the Caymans, paid relatively little UK tax on its worldwide profits. Rupert Murdoch's News Corp, with 152 subsidiaries in tax havens according to the US government, paid no net UK corporation tax between 1988 and 1999.

Half the world's trade flows through tax havens. Every multinational uses them routinely. So do banks. Almost 70 per cent of international trade now happens within, rather than between, multinationals. Christian Aid reckons that tax dodging costs developing countries at least $160bn a year – far more than they receive in aid. The US research center Integrity estimated that more than $1.2trn drained out of poor countries illicitly in 2008 alone.

Tax injustice is systemic to the tax haven. Barack Obama once understood that. During his election campaign he promised to crack down on corporate loopholes and tax havens. But he and other world leaders have not delivered on bursting open the seedy secret underworld of tax havens that nurtured the hedge funds, derivative trading and off-balance sheet lending that fueled the 2008 global financial crash.

Their malign influence continues, with hedge funds accounting for at least 30 per cent, and perhaps as much as 60 per cent, of current trading on the London and New York exchanges. There, they have quintupled short-selling. They have turned credit default swaps, designed as a protective insurance, into a way of betting on the failure of a company. The Caymans (population 50,000) is home to 70 per cent of hedge-fund registrations worldwide.

And, as rich people waive their taxes, poor people wave goodbye to their jobs. "The rich are different from you and me," Scott Fitzgerald famously said. "Yes," wisecracked Ernest Hemingway in response, "they have more money." Today the difference is that they pay less in taxes.

The real shame of Osborne's half-baked deal with Switzerland is that it has undermined the revised EU savings tax directive. That would have required an automatic exchange of information on income in bank accounts throughout the EU and in Switzerland, Lichtenstein and Britain's tax havens. All the EU member states, but two, had approved it. It would have dealt not just with individuals but also with companies, trusts, foundations and other complex structures.

Some say an attack on tax havens is an attack on wealth creation. It is no such thing. It is a demand for the good functioning of capitalism, balancing the demands of efficiency and of justice, and placing a value on social harmony.

The billionaire investor Warren Buffett recognized that in The New York Times when he scathingly asserted the US Congress is in thrall to the super-rich. Thanks to his clever investment managers he pays only 17.4 per cent in tax – half what his office workers pay. That does not just boost inequality. It undermines faith in the fairness and integrity of the international financial system. And that is a political time bomb.