Thursday, May 30, 2013

Unemployment: "The Conveyor Belt Theory"

Today I received an email asking: "Here is what confuses me, perhaps someone can better explain. Every Friday the Labor Department comes out with the numbers for NEW claims for unemployment insurance. So if for example, if we are averaging 350,000 claims a week, every week, for NEW applicants, does that not also mean that over 1 million jobs are lost every month?"

My reply was:

I once likened the unemployment rate (the number of people unemployed) to a conveyor belt, and why the unemployment rate has remained near-unchanged for so long.

The conveyor belt represented the unemployed, and as people were losing jobs, they were put on the beginning of conveyor belt (for a certain length of time), until such time, they came to the end of the conveyor belt (when they exhausted all UI benefits and eventually were no longer counted.)

As people were first getting on the conveyor belt (the unemployment rate) people were also falling off the conveyor belt...and the number of people who were still on the conveyor belt remained relatively the same throughout the last several years.

That would also help to explain why, as more and more people become unemployed (without every finding work again) the labor participation rate also declines (and partly because people are taking early Social Security retirement, going on SSDI, or dying).

The number of jobs created verses new high school graduates bears this out, as job creation isn't keeping up with natural population growth. But yet, we continue to outsource jobs and approve new "guestworker" programs. See my post: Exporting America's most Vital Resource, Jobs (This post continues below)

Many of the jobs that ARE being created, are part-time and/or low-paying jobs and/or temp jobs. That's why there are now 8 million Americans working multiple jobs.

That's also why we have such as HUGE problem with long-term unemployment. Times are so bad that, recently, a tent city sprang up in New York City as people were camped out in line waiting for a job application. There were at least 750 applicants for only 75 job openings.

THE DAILY BEAST: "Under the Rubio-Schumer immigration reform bill, millions of non-Americans will suddenly gain access to vast new reaches of the U.S. labor market. Immigration flows will accelerate, including guest worker flows. The bill guarantees—is intended to guarantee—ultra-slack labor markets across a wide variety of specializations for years and decades to come. If you're a 55-year-old laid-off worker who holds any reserve expectation of ever again enjoying the standard of living you had before 2008—a.k.a. "attitude"—this bill ensures that you will never, ever work again."

BLOOMBERG: Long-Term Unemployment Is Turning Jobless Into Pariahs - Recently economists in both camps have come to agree that the stigma of long-term joblessness is, by itself, causing persistent joblessness -- from college educated white collar workers to unskilled blue collar workers. The U.S. is in dire danger of having a permanent class of long-term unemployed.

THE ATLANTIC: Why Washington Saved the Economy, Then Permanently Destroyed the Labor Market - "Comparing Washington's reaction to the banking crisis and the unemployment crisis shows how and why government focuses on the rich and ignores the rest."

My Related Posts:

Congress Still Ignores Long-Term Unemployed

America's Bleak Jobs Outlook

Long-Term Unemployed: "Tainted Goods"

Warren Buffett Strikes Again, in Sin City

A holding company is a company or firm that owns other companies' outstanding stock. The term usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies.

Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies. In the United States, 80% or more of stock, in voting and value, must be owned before tax consolidation benefits such as tax-free dividends can be claimed.

In the United States, Berkshire Hathaway (Warren Buffett) is the largest publicly-traded holding company and owns numerous insurance companies, manufacturing businesses, retailers, and other companies.

NV Energy is a also holding company based in Las Vegas, Nevada. The company is a utility which generates, transmits and distributes electric service in northern and southern Nevada, including the Las Vegas Valley. The company obtains the majority of its electricity from natural gas-fired sources.

NV Energy also provides natural gas service in the Reno–Sparks metropolitan area of northern Nevada. NV Energy serves about 1.5 million customers and over 40 million tourists annually.

MidAmerican Energy is also a holding company, and it is controlled by Berkshire Hathaway, which is controlled by Warren Buffett, who is buying NV Energy for about $5.6 billion in cash.

The 400 richest Americans can buy and sell anything they want to...such as holding companies that own other holding companies. (I hope our electric bill doesn't go up again!)

*A list of major shareholders and investment funds of Berkshire Hathaway Inc (Class A BRK.A stock) at Morning Star. (Berkshire Hathaway's market cap: $279.05 billion - Warren Buffet's net worth: $46 billion)

Wednesday, May 29, 2013

Sen. Harry Reid & Friend are Corrupt, One was Convicted


A Nevada powerbroker who headed a billion-dollar real estate company and pulled the strings of state politics as a prominent lobbyist for more than a decade was convicted Wednesday of making illegal campaign contributions to U.S. Sen. Harry Reid.

Harvey Whittemore, 59, could face up to 15 years in prison and hundreds of thousands of dollars in fines after a federal jury returned guilty verdicts on three counts tied to nearly $150,000 illegally funneled to Reid's re-election campaign in 2007.

Reid said he was unaware of any potential problems with the money he received. "I received $25 million. He raised $150,000," Reid previously told the Las Vegas Sun.

Whittemore is reportedly one the closest friends of Senator Harry Reid, who became Senate majority leader after the fall 2008 elections, and both men have characterized their relationship as close and decades long.

Whittemore, his wife, and company have contributed tens of thousands of dollars to Reid's election campaigns and to Reid's leadership fund, which has been used to aid Reid's allies and is said to have helped Reid attain his leadership position.

Whittemore has also funded political campaigns of two of Reid's sons. All four Reid sons have at one time been employed by Whittemore's law firm. According to the Los Angeles Times, Whittemore helped advance the careers of two sons, including Leif Reid, Whittemore's personal attorney. Responding to allegations of favoritism, Reid's office stated that the Senator's behavior had been "legal, proper and appropriate".

In 1998, Harry Reid and John Ensign, Nevada's past Republican Senator, co-sponsored legislation removing restrictions to the sale of federal wilderness lands in Nevada. In 2002, Reid introduced "The Clark County Conservation of Public Land and Natural Resources Act of 2002", reclassifying land on or abutting Coyote Springs, moving a federal easement off Coyote Springs land and allowing Whittemore to make a land swap at no cost.

Defense lawyer Dominic Gentile said Whittemore's motive was to help re-elect Reid and other Congress members who helped secure federal funding for a university medical research center that he and his wife helped found in 2010. Whittemore, whose daughter, Andrea Whittemore-Goad, is a chronic fatigue syndrome patient, founded the research center known as the Whittemore Peterson Institute to investigate the condition.

The prosecutor wouldn't comment on why Harry Reid wasn't called as a witness, or whether the case involving Whittemore has been completely closed.

Rand Paul Protects American Tax Dodgers

The Swiss want their banks to reveal U.S. tax evaders, but one U.S. Senator doesn't --- says it violates the U.S. Constitution.

Switzerland’s strong laws protecting the secrecy of bank clients helped make it a famous name in world finance. But that secrecy is crumbling under the pressure of the U.S. government. Swiss finance minister Eveline Widmer-Schlumpf announced plans today to give limited immunity to banks who negotiate with prosecutors who say they are hiding American income in the Alps.

There are $2.1 trillion in foreign assets in Switzerland, with the American share estimated at hundreds of billions of dollars (though not all of it is tax-evading). Settling U.S. charges could cost the Swiss banks currently under investigation, including Credit Suisse, Pictet, Julius Baer and HSBC’s Swiss subsidiary, fines in the billions of dollars for abetting tax evasion.

Since 2008, the Swiss financial system has faced escalating pressure on tax evaders from U.S. authorities. In January, Wegelin & Co., the country’s oldest bank, pled guilty to hiding $1.2 billion from American tax collectors on behalf of 100 Americans. The bank paid $57.8 million in fines and announced it would close, selling its assets. The prosecution came about after Wegelin tried to pick up more offshore money business from UBS in 2008 and 2009, just before the top Swiss bank entered a deferred prosecution agreement (pdf) that included $780 million in penalties for helping U.S. citizens shift their incomes abroad.

After the biggest and the oldest banks in the country got rapped by U.S. authorities, the Swiss got pragmatic and decided it would be better for the financial sector to settle up, rather than engage in an expensive and embarrassing battle with the U.S., but negotiations for an umbrella settlement with the whole financial sector stalled. So the Swiss themselves decided to create a year-long window of opportunity to let banks share client information—though not names—that would allow the U.S. to identify citizens illegally sheltering income abroad.

Sharing that information will be up to the banks themselves if the Swiss parliament passes some form of the law when it comes up in June. But if it fails—or when it expires—the United States will face the same problem of secrecy.

In February, however, Switzerland and the U.S. had agreed on a plan to share tax information that will resolve many of these problems. The deal, part of a landmark U.S. law that requires foreign financial institutions to share tax information, depends on the U.S. senate ratifying a treaty amendment that would essentially make the relaxation of Swiss secrecy laws permanent.

But that amendment is in jeopardy in the U.S. because a single senator, Rand Paul of Kentucky, has exercised his individual right to block it (along with tax transparency agreements with Luxembourg and Hungary) from being ratified by U.S. lawmakers. Paul argues that the treaty, and the new tax transparency law, threaten constitutional protections against unreasonable searches, although U.S. courts have approved similar measures. Tax attorneys and foreign trade groups worry that holding up the amendment is creating uncertainty for financial institutions and hurting U.S. credibility, and anti-tax evasion advocates say the move simply makes it easier for people to break the law.

However, it’s not clear what the Obama administration or Democrats in the Senate can do to force Paul to relinquish his hold on the amendment. And thanks to recent scandals, it’s a tough political environment to argue for more IRS scrutiny, even if it’s for offshore banks. If the stalemate continues, and the Swiss government’s year-long window closes, it could signal a return to opacity as usual for Americans banking in Geneva, Zurich and Bern.

* Originally post ed by Tim Fernholz @timfernholz (Original Source)

Michele Bachmann: "Ding-Dong! The Witch Is Dead"


Rep. Michele Bachmann (R-Minn.), the tea-party wacko and former presidential candidate, announced that she will not seek reelection to a fifth term. The Federal Election Commission and the Office of Congressional Ethics are investigating her finances of last year's Republican primary bid.

Bachmann says, "Rest assured, this decision was not impacted in any way by the recent inquiries into the activities of my former presidential campaign." Bachmann is also refusing to pay $5,000 to five staffers from her failed presidential bid, even though she has more than $2 million in her campaign account.

Michele Bachmann criticized President Obama’s so-called "life of excess" at the White House, arguing that the first family was "living rich on the taxpayer’s dime" as the nation faces sequestration and large deficits. But Obama has actually one of the lowest net worths of any American president. It is Bachmann and her husband Marcus who have done well for themselves, and have an estimated net worth of between $1.3 million and $2.8 million.

The Bachmann's assets include her husband's Christian psychotherapy clinic (which is used to "pray the gay away"). Her husband had said, "We have to understand: Barbarians need to be educated." The clinic was worth at least $600,000 and generated as much as $100,000 in gross income in 2010. The clinic also gets more than $137,000 in Medicaid each year, even though neither have a license.

And then there's the Bachmann Family Farm in Waumandee, Wisconsin which was valued between $500,000 and $1 million. Bachmann has said that she and her husband "have never received a dime from the farm," although it received nearly $260,000 in federal agriculture subsidies between 1995 and 2008. Michele Bachmann's financial disclosure forms show that she received between $32,503 and $105,000 in income from the farm between 2006 and 2009.

Because of Dr. Bachmann's clinical background, the Bachmann home was legally defined as a treatment home, which qualified the family for a higher reimbursement rate from the state for their adopted children (the current rate is about $47 per child per day).

ALSO: Michelle Bachmann was challenged to a debate with a 16-year old girl. (but turned her down). And Bachmann lied about taxes being too high, when they were historically low. And someone needs to tell Michele Bachmann that the Earth is not Flat. She was also fond of saying, "Take our country back!", but never saying from who. But we need to take our country back from wackos like her. And we soon will. "Hooray! Ding-dong! The witch is dead!"

Tuesday, May 28, 2013

Exporting America's #1 Resource, Jobs

In a capitalist society such as the United States, the economic principle of "free markets" and "supply-and demand" compliments the theory that consumers are "job creators", just as jobs that pay a fair and living wage (which allows for discretionary spending), creates consumer demand. Jobs that pay better wages will create greater demand --- as would be the case if we were ever to raise the minimum wage. (The Black Hole Theory of the Minimum Wage).

Consumer demand drives an economy. Outsourcing jobs to other countries creates consumer demand in those countries, which in turn, also creates a tax revenue stream for their governments, allowing them to create and improve their infrastructure, build and train a military, and to provide the most basic and more advanced services for their people.

Jobs provide the means by which men and women can earn a livelihood. Without full-time jobs (paying a living wage), there is no consumer demand, no discretionary spending, and a drastically reduced tax revenue stream for which the government can operate. So why do governments allow for the outsourcing of their jobs?

Robert Reich recently wrote a piece about how global corporations use their inordinate power to dictate the government's laws by threatening to take their jobs and investments elsewhere; and how they wield their power to manipulate laws by playing one nation against another --- determining how much they pay in taxes, how much they get in corporate welfare subsidies and how much regulation they're subjected to. "Global corporations are using every strategy imaginable to maximize their profits; and powerful governments are strategically employing market access to develop their economies."

Many of our most notable economists are now saying that long-term unemployment is one of America's biggest crisis. But the Democrats have done little to correct this, and the Republicans have blocked all their futile efforts to so. Instead, the GOP's leaders have been more concerned about abortion issues and repealing ObamaCare (37 times thus far), primarily because the GOP wants to repeal the 3.8% surtax that ObamaCare imposes on investment income (capital gains) for the richest 400 Americans --- the people the GOP calls our "job creators".

The Cayman Islands has over 92,000 registered corporations that control well over $1 trillion in assets, but rather than focusing on offshore tax evasion, (depriving our government of much needed tax revenues for such things as disaster relief, both God and man-made), our politicians are spending most of their time on feuding over political "scandals" and engaging in meaningless and wasteful (and sometimes, very immature) political sparring, rather than attempting to fix our job crisis.

Rather than focusing on creating (or saving) jobs, or denying the outsourcing of jobs by our "job creators", the politicians have been in a grid lock on issues such as immigration reform, which allows for more guest-worker programs and H-1B visas --- which allows for the importation of more foreign workers to displace more American citizens for cheaper labor. Big business always uses the excuse that Americans lack the necessary jobs skills, but this lame argument has been thoroughly debunked --- many times, and by many sources.

As a matter of fact, in a recent study just last month by the Economic Policy Institute, they found that "the United States has more than a sufficient supply of workers available to work in STEM occupations." And the same is even more true for non-skilled occupations, especially in an economy with only 3.8 million job openings for 11.8 million unemployed Americans. But there are nearly 18 million Americans who want a job but don’t have one --- those who are officially classified as unemployed, and are actively looking for work --- and about 6 million more who are no longer counted in the labor force, but who say they’d like a job (preferably a full-time job that pays a "living wage".)

Robert Mundell, a Nobel Economics Laureate, and one of the chief architects of Reaganomics and a lifelong advocate of trade liberalization, now raises a large question mark over the continued viability of "free trade". Mundell now believes that outsourcing has gone too far and that America’s formerly world-beating industrial corporations are in danger of losing their ability to manufacture (such as when America once had the capability to quickly and efficiently mobilize in preparation for World War II).

Forbes reports that in an interview last week, Mundell had made a startling admission, "It has been a mistake to let U.S. manufacturing run down so low. While other nations have industrial policies to maximize their trade benefits, the United States leaves itself open like a naked woman. A big problem is with nations that may prove to be future enemies.” (Do you think he might have been referring to China?)

One example might be Boeing: Ten years ago, Boeing had a unit of 1,200 engineers in their home State of Washington designing electronic controls for all its airplanes, and a plant in Texas where another 1,200 people built the hardware. When Boeing launched the 787 Dreamliner program in 2003, management dispersed all those engineers, outsourced their work, then sold off the Texas plant. Now Boeing is having major problems with its systems and suppliers, and might have for many years to come.

Some countries, such as Germany, has an actual industrial policy that has thoughtfully determined how they can be competitive and how the national government can help companies. And Germany has a tax system that creates significant incentives to export their products. In the U.S. we have a tax system that has no incentives to export...but has incentives to outsource good-paying jobs and to import cheap products, driving up our trade deficit --- all which lowers consumer demand, decreases discretionary spending and cuts government's tax revenues.

Forbes: “The salient difference is that, in Germany, [they] operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.” And a recent series of wage agreements show that German employers are acceding to worker demands for higher pay after more than a decade of only modest increases.

New York Times: "The recovery from the Great Recession has been slow, or even nonexistent, in most of the developed world. But not in Germany. In Germany, alone among the 27 members of the European Union, unemployment rates for both older and younger workers are now lower than they were when the United States slipped into a recession at the end of 2007.

Most U.S. publicly-traded companies are incorporated in Delaware, and are governed by the "Revlon Rule", which states that the management and the board must view business decisions exclusively on creating long term value for shareholders (such as Bain Capital: bankrupting companies with debt, confiscating their worker's pensions, and then outsourcing their jobs to Asia). Although, the rule doesn't explicitly say, "and may the host country and their labor force be damned."

This might be a moral dilemma for legal entities known as multi-national corporations, because there is no "multi-national patriotism". They have no duty to non-existent borders, but only to the company officers and to their large institutional shareholders --- such as the big banks, the private equity firms and the hedge funds...who themselves have no duty to any given country or their indigenous people.

"The link between the profitability of American companies and the well-being of America is broken." - Economist Jared Bernstein, regarding the Senate hearing on Apple and tax avoidance.

Just last year alone, 25 of America’s top hedge fund managers grabbed at least $200 million each. The hedge fund universe, one Harvard Business Review commentary observed, has become a “crimogenic” environment that encourages those enmeshed in it to ignore legal and ethical rules. "We’re no longer talking simply about the occasional corrupt individual,” adds Preet Bharara, the hard-charging federal prosecutor going after Steven Cohen at SAC Capital. "We’re talking about something verging on a corrupt business model.”

Les Leopold, author of The Looting of America, argues that hedge funds have played a much larger role in our ongoing economic woes than analysts have generally acknowledged. The Securities and Exchange Commission has done nothing to curb their nefarious trades, and the GOP (along with a few Democrats) is doing everything possible to water-down the Dodd-Frank bill. And neither political party seems genuinely interested in reforming the tax code --- or making these hedge-fund managers and CEOs pay the progressive tax rate on 100% of their personal incomes (instead of paying the much lower capital gains tax rate).

America’s Nobel Laureates had already been becoming increasingly uneasy with the practical effects of America’s trade policies, which these banks, private equity firms, and hedge funds have also greatly benefit from. In the past decade, economics laureates in particular have issued statements on everything from the Balanced Budget Amendment (they were against it) to free trade with China (they were for it). But many others believe that it was a economic disaster for America when Bill Clinton sighed the free trade agreement with China --- not to mention, the others that followed.

Daniel McFadden, who is a professor at the University of California at Berkeley, was less worried about the short term than about the long term. “As long as foreign investors are prepared to buy American securities, there is no problem. It seems likely, however, at some point, that foreign investors will repatriate their funds.” Translation: The dollar would collapse and U.S. interest rates would soar. “The whole financial system is based on trust,” McFadden added. “As long as we have trust, the elaborate house of cards will hold up.” Translation: Our economy is an elaborate house of cards.

Ohio Democrat Betty Sutton (on October 25th, 2011) in a speech to the House of Representatives, had said, "Every day in the United States, we are losing 15 factories. Many big companies have not created jobs in the U.S. Instead, they’ve taken many of their jobs to countries with the cheapest labor, the least regulations and few employee rights."

Politifact rated her statements as TRUE, and says the data shows there were 398,887 private manufacturing establishments of all sizes in the United States during the first quarter of 2001. By the end of 2010, the number declined to 342,647, a loss of 56,190 facilities. Over 10 years, that works out to an average yearly loss of 5,619 factories. Dividing that by the 365 days in a year produces a 15.39 average daily number of factories lost. One website says that just in 2011 alone, 2.4 million jobs were outsourced. With 3 million high school graduates every year, why would our government allow for the outsourcing (or insourcing) of even ONE JOB?

The National Association of Manufacturers, the corporate lobbying group, has a new chair. NAM’s choice is the "latest hero" in executive circles, Doug Oberhelman, the CEO of Caterpillar. Oberhelman uses tough-guy labor tactics --- he shut down one plant when workers refused to swallow a 50 percent pay cut, which have sent Caterpillar profits soaring. But Oberhelman’s own pay has jumped to $22 million. Last year, a Caterpillar worker in Illinois (who hadn’t received a wage hike in 10 years) asked Oberhelman when he could expect a raise. The CEO told him that all paychecks at Caterpillar have to stay "globally competitive". Oberhelman’s chief CEO rival is Kunio Noji of Japan’s Komatsu, who only took home $2.1 million in 2012.

For years, if not decades, (or an entire century since the Triangle Shirtwaist factory fire), when American corporations haven't been busting labor unions, depressing wages, gutting benefits, laying off and forcing employees to do more, replacing regular workers with "independent contractors", using "bona fide occupational qualifications" to discriminate, imposing "term-limits" on frontline employees and cutting hours to escape paying full-time benefits, they have been outsourcing American jobs all over the planet in their constant search for the cheapest labor, lowest tax rates, and least governmental regulations (such as environmental and worker safety laws).

Sending jobs to China has greatly expanded the Chinese economy (at the expense of the American economy), and one factory who manufactures for Apple has grown into another huge multinational (Taiwanese) corporation. Hon Hai Precision Industry Co. is a company in the Republic of China (Taiwan), and is also known as Foxconn Technology Group.

Hon Hai has 1.3 million employees, and exponentially, with their employees' purchasing power, could have created an additional 2 million jobs. Hon Hai has made a fortune over the years assembling iPhones and iPads for Apple Inc. According to the Wall Street Journal: Hon Hai (Foxconn) mostly operates factories in mainland China. It doesn't break down revenue from each client but analysts estimate Apple accounts for 50% of its revenue, which totaled about $130 billion last year. The company's growth was up 53% in 2010 when the iPad was first launched. Hon Hai also assembles PCs for Hewlett-Packard, PlayStations for Sony, and mobile handsets for Nokia.

Since 2010, Hon Hai's (Foxconn's) earnings growth has slowed as it battled rising wage costs in China and discontent among employees. It moved some of it's factories further inland, to more economically disadvantaged areas, to cut costs --- just the way Boeing was making a move from a unionized plant in Washington State (where they were headquartered for years) to a non-union plant in rural South Carolina --- to avoid strikes for fairer wages. Hon Hai says they have also launched efforts to improve working conditions after a spate of much publicized suicides and workplace accidents over the last few years.

Hon Hai is moving aggressively to add new clients and is looking at ways to diversify beyond "contract manufacturing" (such as with Apple). Perhaps the biggest sign of the Taiwan-based company's larger ambitions is its planned investments in media content and software. It is also reviewing plans to sell its own Foxconn brand of electronics accessories to improve their profit margins.

"As our production capacity has grown to such a large scale and existing major brand customers (such as Apple) offer limited order growth, we need to actively expand our client base to help increase our manufacturing volume," said one Hon Hai executive. (An American manufacturing executive in the United States should have been saying this.)

Hon Hai has already made some headway with clients in China, such as assembling smartphones and TVs for U.S. TV maker Vizio. The company is also expanding its retail distribution partners to include RadioShack, which sells large TVs under the RadioShack brand that Hon Hai assembles in China.

Hon Hai's ultimate aim is to be able to supply content for all of the devices it assembles. The company is hiring software engineers for its research and development center in southern Taiwan, who will focus on developing mobile applications, cloud computing technology for servers, and applications for smart watch devices. Hon Hai is also reviewing plans to make accessories such as data transmission cables, headphones and keyboards under the Foxconn brand.

Maybe companies such as Foxconn wouldn't even exist today, if it were not for these American business attitudes (From the Atlantic): "The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. The CEO recalled, 'His point was, that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade.'”

Would it be fair to say that employers deliberately limit employee pay to the minimum amount that allows them to consume just enough to minimally sustain their lives, so that the employers can maximize their profits and CEO compensation packages? How do corporations justify the millions they stuff into CEO pockets?

"We’re just paying for performance", their standard refrain goes. Absolute nonsense, counters Michael Dorff of Southwestern Law School, the author of the upcoming University of California Press book, Indispensable and Other Myths: The True Story of CEO Pay. Dorff has a simple fix for escalating CEO compensation: abolish “performance pay.” At best, he told Dow Jones Newswires last week, stock options and other performance-pay incentives have CEOs thinking more about their own personal rewards than long-term enterprise sustainability. At their worst, “pay for performance” deals encourage criminal behavior.

With 50% of the U.S. labor force netting only $27,000 a year or less, we already have a situation where ordinary Americans can barely afford cheaper Chinese goods. What happens when they can't even afford that? We should be setting policies that help Americans buy OUR goods. It used to be that "Made in America" was a matter of pride. Now almost nothing is made here if it can be made elsewhere cheaper.

An important message for those who think that these large corporations are our "job creators." A multi-millionaire venture capitalist, Nick Hanauer from Seattle Washington, tells an audience at a TED University conference, "I can say with confidence that rich people don't create jobs, nor do businesses, large or small. Jobs are a consequence of a circle of life-like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. In this sense, an ordinary consumer is more of a job creator than a capitalist like me." (The full text of his very interesting speech is here and the video is at YouTube)

The Race to the Bottom (video at YouTube) - "Corporate America is guilty as sin for human rights violations all across the globe. In that they are complicit, they are no less guilty than if the CEO took a whip to beat the back of a 12-year-old girl himself; or if he had picked up a gun and shot and killed a foreign labor organizer. Just like the kingpins of international drug cartels, American CEOs know EXACTLY how all their blood money is being made." And right now they are looking to expand their operations in other places such as in Columbia and Panama.

Ever since the factory fire and building collapse, Bangladesh’s cabinet approved changes in their labor laws, so the relentless search by multinationals for new locations has taken on more urgency --- from Cambodia to Vietnam to Indonesia. In Indonesian garment executives say they have seen a steady procession of arrivals in recent weeks and months, always asking the same questions about political stability, labor laws, safety compliance and wages.

Some newly opened apparel factories have started competing for scarce seamstresses by offering free meals and free health insurance. Construction companies are struggling to find enough workers to build all the garment factories that are now being carved out of the forests of coconut palms, banana trees and conifers that carpet central Java.

These are the same American CEOs that register their businesses in Delaware. The Corporation Trust Center, located on 1209 North Orange Street, is a single-story building located in the Brandywine neighborhood of Wilmington, Delaware. This is CT Corporation's location for providing "registered agent services". It is home to over 6,500 corporations and more than 200,000 businesses who hold addresses at this location as their registered agents.

The New York Times notes that big corporations, small-time businesses, rogues, scoundrels and worse — all have used this Delaware address in hopes of minimizing taxes, skirting regulations, plying friendly courts or, when needed, covering their tracks. Federal authorities worry that, in addition to the legitimate businesses flocking here, drug traffickers, embezzlers and money launderers are increasingly heading to Delaware, too. It’s easy to set up shell companies here, no questions asked.

Its occupants, on paper, include giants like American Airlines, Apple, Bank of America, Berkshire Hathaway, Cargill, Coca-Cola, Ford, General Electric, Google, JPMorgan Chase, and Wal-Mart. These companies do business across the nation and around the world. Many of these same U.S. corporations also hold several offshore bank accounts. But here, at 1209 North Orange, they simply have a dropbox.

Besides domestic jobs, America's other precious and vital natural resources (such as oil and natural gas) are also being exported to profit a small handful of individuals at the very top of the economic food chain. What's next, the drinking water from our lakes and rivers --- or the very air we breath?

From South Korea to inner China, to Guatemala to Vietnam, multinationals are continually looking for low-cost (but politically stable) "emerging markets" to outsource their production, service and tech jobs. But outsourcing is not just a problem for American workers, it's a global problem. Jordanian farmers in Saudi Arabia are also being displaced by Filipinos and Pakistani workers for cheaper wages.

Commentary: When their jobs (pictured below) are outsourced to other countries, it's not just their lives that are affected, but all the lives they touch...their spouses, their children, their parents, and all their loved ones. Either pass laws to prevent corporations from outsourcing jobs (and make them pay a living wage) --- or impose a cap on CEO pay and tax their corporations the absolute "statutory" rate of 35% --- and do away with all their tax loopholes and corporate welfare subsidies.

Working less than 30 hours a week for $7.25 an hour can barely pay the rent on a one-bedroom apartment, and nothing else. Among other things, full-time jobs that pay a REAL living wage are needed for...

A trip to the movies, a six-pack of cold beer, and a large pepperoni pizza would be "extra". Does any CEO really need two or three 14-room beachfront mansions, a private Learjet and a 100-foot yacht...especially if most of their employees are living in poverty and need food stamps to eat? Is that what our Founding Fathers (who owned slaves) had once envisioned for 50% of the American work force? That college graduates (with $40,000 of debt) would be working at the general store (Wal-Mart) or at the local restaurant (McDonald's) to pay off that debt, while the college president was raking in a million dollars a year? Is this the result of the economic principle of "free markets" and "supply-and demand"? If so, then maybe we should forgo some capitalism for a while and give Socialism a chance.

Sunday, May 26, 2013

Should we export our drinking water too?

According to the New York Times, very soon United States crude oil production will surpass imports for the first time since 1995.

But to hear Republicans tell it, domestic oil production has fallen off a cliff, when in fact, it is at a 21-year high (despite cutbacks in the Gulf of Mexico following the BP oil spill). But it does not mean that America has reached energy independence --- not for a country that uses one-fifth of the world’s oil, while possessing little more than one-fiftieth of its reserves.

The Republicans have frantically tried to open up huge swaths of America’s public land (both onshore and offshore) to drilling. One of their bills would essentially establish energy development as "the primary use" of the public lands.

Recently the full House approved a bill giving Congress the power to approve the Keystone XL oil pipeline from Canada. It was an essentially meaningless vote, but it advanced the argument for the pipeline, saying that it's essential to America’s energy independence --- and thus its security. It is the very same argument that the Republicans have made to justify their proposed pillage of federal lands.

American oil is exported to China to fuel Chinese cars and for American factories that are used to displace American workers. American taxpayers pay for the military used to defend these trade routes and oil facilities for exported American oil...while the cost of energy skyrockets for low-paid and unemployed American consumers, all while American oil executives are making record profits and record salaries.

We need to nationalize the entire energy industry, and put an end all exports of oil and natural gas (America's natural resources). 

Or should we also export all our drinking water too...just to profit a few? 

DOJ's First Arrests in Wall Street Housing Collapse

Recently "occupiers", allies and community members from across the country came together in front of the Department of Justice to demand that Attorney General Eric Holder arrest the bankers responsible for upending the international economy through the housing crisis.

Five years after the greed and recklessness of Wall Street criminals crashed our economy, Eric Holder’s Department of Justice is finally making some arrests. But it’s not Wall Street bankers sitting in jail. Nope, it’s 27 struggling homeowners and foreclosure victims who went to DC to demand the end of Too Big to Jail.

President Obama’s Attorney General and his Justice Department have failed to file a single criminal charge against a banker, letting the banks have a free pass on money laundering for drug cartels, violating Securities Laws, the nationwide AG settlement on foreclosure fraud, and so much more.

2 million underwater homeowners can't wait any longer, and neither can the 7 million families going through some part of the foreclosure process since the housing crisis started.

We put 1,200 bankers in jail after the Savings and Loan crisis during the Reagan Administration, but not a single bank or banker has had to answer for their crimes under Obama. Demand that Attorney General Eric Holder #EndTooBigToJail and arrest the bankers responsible.

(I'd love to have Eliot Spitzer head our Department of Justice to prosecute the big banks and the federal regulators overseeing them.)

Political Hypocrites*

As my former Senator, John Ensign (R-Nev.) was a proponent of the Federal Marriage Amendment, which would have banned states from recognizing same-sex marriage. "Marriage is the cornerstone on which our society was founded," he argued on the Senate floor in 2004. He also called on President Bill Clinton to resign over the Monica Lewinsky scandal, saying it had destroyed the president's credibility. Yet in 2009, Ensign admitted that he had had an extramarital affair with a former campaign staffer who was also the wife of one of his top aides. An ethics investigation by the Senate Ethics Committee and the FBI followed, and Ensign resigned in 2011.

Former House Speaker Newt Gingrich (R-Ga.) has a long and rich history of hypocrisy, including receiving a reported $1.6 million in consulting fees from Fannie Mae and Freddie Mac before blaming the mortgage giants for the country's housing crisis and endorsing President Barack Obama's health care plan before the 2012 presidential primary campaign, during which he hammered Mitt Romney's Massachusetts plan for being similar to Obamacare. But his crowning hypocrisy was probably leading impeachment proceedings against President Bill Clinton in the 1990s over the Monica Lewinsky scandal while Gingrich himself was having an extramarital affair. His ex-wife Marianne recently claimed that while they were married, Newt requested an "open marriage" so that he could continue the affair with his now-wife, Callista.

Rep. Charlie Rangel (D-N.Y.) stepped down as chairman of the House Ways and Means Committee after he was congressionally censured for failing to pay income taxes and filing misleading financial statements, among other misdeeds. But that didn't stop him from hammering Mitt Romney for his lack of transparency on tax returns. "Before he judges other people about paying federal income taxes, Governor Romney should come clean about the tax returns he's hiding from voters," Rangel said.

The failed vice presidential candidate has been an outspoken opponent of earmark spending, but that didn't stop Rep. Paul Ryan (R-Wis.) from arranging a $735,000 earmark to construct a transit center in his hometown of Janesville, Wis. Likewise, after slamming President Barack Obama's stimulus package, Ryan sought stimulus funds for several projects in his district.

Rep. Michele Bachmann (R-Minn.) was the original sponsor of legislation to repeal the Affordable Care Act, but her war against "socialized medicine" hasn't stopped husband Marcus from applying for public funds for his "pray away the gay" counseling practice. Bachmann, an outspoken opponent of big government, has also personally benefited from federal farm subsidies. She recently described the Internal Revenue Service, which earlier in her career employed her to sue people in tax collection cases, as the most heartless organization anyone knows of."

House Speaker John Boehner (R-Ohio) has loudly congratulated himself for the GOP House jobs package -- even though economists say the package's 32 bills will do little to create jobs -- while working hard to block President Barack Obama’s $447 billion jobs plan. A longtime critic of wasteful government spending, Boehner (along with other House Republican leaders) spent $1.5 million defending the Defense of Marriage Act.

He won an Oscar for "An Inconvenient Truth" and a Nobel Peace Prize for his work on climate change, but Al Gore's own carbon footprint was once an inconvenient issue. His 20-room Nashville mansion and pool house in 2006 racked up $30,000 in utility bills, consuming more than 20 times the national home average, according to a report by the Tennessee Center for Policy Research. A Gore spokesperson disputed the conservative think tank's report and said that renovations on the home will cut its electricity and natural gas consumption about 40 percent by the next year.

Sen. Strom Thurmond (R-S.C.), a famed segregationist, spent many of his 48 years in the U.S. Senate fighting racial integration and equality, punctuated by his 24-hour filibuster in a failed attempt to kill the Civil Rights Act of 1957. Six months after Thurmond's death in 2003, a bi-racial woman named Essie Mae Washington-Williams revealed that the late senator was her father. Her mother was 16 and working for Thurmond’s parents when she became pregnant.

From his opposition to President Barack Obama's health care reform, which was patterned after his own plan in Massachusetts, to his politically expedient shifts in positions on immigration, climate change and abortion, Mitt Romney has a record of hypocrisy too expansive and well documented for any Etch A Sketch to erase.

During his time in office, former Rep. Mark Foley (R-Fla.) introduced a bill against child pornography, fought to expand federal sex offender laws, supported anti-gay legislation and chaired the House Caucus on Missing and Exploited Children. Then he was caught sending graphic sex messages to underage males working as congressional pages. He quickly resigned in 2006.

When Sen. David Vitter (R-La.) admitted his involvement in the "D.C. Madam" scandal in 2007, it didn’t end his career or lead to any criminal charges. It also didn't end his attempts to narrow prosecutorial discretion for others in vulnerable positions. At a hearing last year on the HALT Act which would have suspended discretionary immigration protections, Rep. Zoe Lofgren (D-Calif.) accused Vitter of "hypocrisy to seek to limit the use of discretion when one has enjoyed the benefit himself." Vitter has also advocated for abstinence-only sex education and in 2004 ran on a "family values" platform that included opposition to same-sex marriage.

Sarah Palin has been an outspoken opponent of President Barack Obama's health care plan, but a more socialized system wasn't always so problematic for her. In 2010, she admitted to having taken trips across the Canadian border to receive single-payer health care long before she brought "death panels" into the war against the Affordable Care Act.

Former Sen. Larry Craig (R-Idaho) is best known for his 2007 airport bathroom trip that ended in a same-sex-sting arrest for lewd conduct after he allegedly solicited sex from an undercover officer. Craig blamed his wandering foot on his "wide stance" but soon announced his resignation, then decided to serve out the rest of his term. While in office, he had supported the anti-gay marriage Federal Marriage Amendment and voted against a measure to include anti-gay bias in hate crimes legislation. He received a rating of zero from the Human Rights Campaign for his votes on LGBT issues.

Rep. Scott DesJarlais (R-Tenn.) just won a second term despite recent revelations that he had sex with a patient while working as a physician and later urged her to get an abortion. Yet DesJarlais' campaign platform opposed abortion. "All life should be cherished and protected. We are pro-life," his website stated. There’s more. According to transcripts from his 2001 divorce proceedings, released after the election, the congressman and his then-wife made a "mutual" decision for her to have two abortions while they were married.

While serving as the Democratic governor of New York, Eliot Spitzer was brought down by a federal wiretap that revealed he patronized a $1,000-an-hour prostitute named Ashley Dupre at a Washington, D.C., hotel. Further investigation uncovered the prostitution ring Emperors Club VIP, and numerous money transfers to the club were traced back to Client 9 -- the governor. As New York state attorney general, Spitzer prosecuted at least two prostitution rings, and as governor he forced state comptroller Alan Hevesi out of office for the comparatively minor offense of using a state car and chauffeur for his sick wife. But if I love to have Eliot Spitzer head our Department of Justice to prosecute the big banks and the federal regulators overseeing them.

* This very short and very incomplete list of political hypocrites (both Republican and Democrat) is the courtesy of the Huffington Post, from an article about the hypocrisy of Senators who voted to cut food stamps in the farm bill, but who themselves received taxpayer farm subsidies.

Friday, May 24, 2013

Apple CEO, Just doing his Job?

"The link between the profitability of American companies and the well-being of America is broken." - Jared Bernstein, regarding the Senate hearing on Apple and tax avoidance.

When people like Jared Bernstein (former economic advisor to Joe Biden) and others say that the corporate executives of Apple are only doing their jobs, increasing share value for their stockholders, it should be noted that their largest stockholders are mostly huge institutional investors (banks, private equity firms, and hedge funds) who buy and sell huge blocks of stocks (in the millions of shares).

And the senior execs (with their stock options) are usually the next largest shareholders, so they are working for themselves (incentive pay). Also, these same corporate executives often sit on each others board of directors in other companies. So again, they are working to increase share value for themselves (e.g. stock buy backs, etc.)

The third largest group of shareholders are the private traders who are generally wealthy to begin with. Most people in the lower income brackets don't own stock, and if they do, it's through a pension, 401k, or an IRA retirement account --- who pay tax at ordinary tax rates according to their income bracket --- and pays a penalty for early withdrawal --- they don't get the preferential capital gains rate that the execs get, nor do they have all the loopholes that these huge corporations enjoy.

Under "investor relations" on their corporate websites, these big corporations boast of low "effective tax rates" as a selling point to enlist new investors. Beating the government (aka "the tax man" aka the American people) is seen as a "positive", not creating jobs, improving our infrastructure, or funding public schools. These multinationals have no borders or any particular patriotic loyally, except they rely on our laws, courts, police and military to protect them and their business interests, both here and abroad. They would have men and women in our Armed Forces die for them, but won't give the survivors jobs paying a living wage when they return home.

And it's not just companies in the technology industry that are avoiding taxes and treating the American people and government like this, other companies, such as those in the apparel industry (like Nike) also does; and they all use exploited labor in Asian countries to displace American workers --- to also avoid safety and other regulatory laws.

It's our government leaders that, for years, has allowed this happen. We have over 74,000 pages in the IRS tax code that are mostly corporate tax loopholes. For ordinary Americans, 50% of the work force nets less that $27,000 a year, and uses a one-page 1040EZ form to file their tax returns; whereas people like Mitt Romney files a 500-page tax return and deducts $25,000 a year for the maintenance of a horse as a medical expense, because it "makes his wife feel better".

The entire system is rigged for the big businesses, big banks and the most wealthy; because with their financial influence, they have rigged our politicians to write the laws that are most favorable to them.

And then when we become unemployed (or are forced into low-paying jobs without healthcare or retirement benefits) and need to rely on government assistance, they claim that they owe us NOTHING, but yet they seem to think that we owe them EVERYTHING.

The 400 richest people in America are wealthier than the combined total of the bottom 189,000,000 Americans. These 400 individuals are the 1% of the 1% of the 1% — and you can fit them all on one Boeing 747 commercial jet (see the video below).

Just 20 of those people have a net worth of over ½ trillion dollars. Imagine the dimensions of a football field stacked 5 feet high with $100 dollar-bills. That's $500 billion dollars. 20 people could buy 2,000 Boeing 747s.

These are the people who most influence our politics and government leaders. Then our politicians write the tax, labor, consumer and regulatory laws that are most favorable to them. The whole system is rigged from the top down.

Companies such as Apple are rotten to the core.

Wednesday, May 22, 2013

Apple is Still Rotten to the Core

Apple's CEO Tim Cook testified yesterday before a U.S. Senate panel probing corporate tax avoidance. Apple is now parking $102.3 billion in cash overseas, deftly using tax havens to sidestep billions in state and federal corporate taxes.

Last week, in advance of his Senate appearance, Cook made the media rounds for a pre-emptive strike against his accusers, saying “Apple has a very strong moral compass.” In fact, the unapologetic CEO added, “Apple is paying approximately $1 million an hour in just domestic income taxes.” That sounds fairly impressive — until you realize that Tim Cook alone, in his first year as Apple’s CEO, grabbed a personal pay package worth $378 million, more than $1 million per day. 

Mr. Cook appeared before the same Senate Permanent Subcommittee on Investigations which had taken Hewlett-Packard and Microsoft to task over their tax policies at earlier hearings. 

From the Wall Street Journal: Senator Carl Levin (D., Mich), who chaired the committee, has taken issue with the tax loopholes that he asserts allow companies to "avoid paying taxes they rightfully owe." Apple has urged Congress to lower corporate-tax rates, reduce the tax on bringing back cash earned overseas, and expand H-1B visas.

Outsourcing jobs, low wages, unsafe working conditions, child labor, worker's suicides, H-1B visas and labor camps weren't mentioned by the Wall Street Journal.

The New York Times recently reported that Apple Inc avoided billions in taxes in the United States and around the world through a web of subsidiaries so complex it spanned continents and went beyond anything most experts had ever seen.

Some of Apple’s subsidiary companies had no employees, and were run by top executives from Apple's headquarters in California; but by "officially" locating them in places like Ireland, Apple was able to make these shell companies stateless — exempt from all taxes, record-keeping laws and the need for the subsidiaries to even file tax returns anywhere in the world.

Apple was able to largely sidestep taxes on tens of billions of dollars it earned outside the United States in recent years. Last year, international operations accounted for 61 percent of Apple’s total revenue. Apple’s tax avoidance efforts shifted at least $74 billion from the reach of the Internal Revenue Service between 2009 and 2012.

  • A law professor at UCLA: “There is a technical term economists like to use for behavior like this, 'Unbelievable chutzpah.'"
  • Senator Carl Levin: “Apple successfully sought the holy grail of tax avoidance.”
  • Senator John McCain: “Apple claims to be the largest U.S. corporate taxpayer, it is also among America’s largest tax avoiders.”
Because of these tax strategies, Washington is forced to rely more heavily on payroll taxes and individual income taxes to finance the government’s operations. In 2011, individual income taxes contributed $1.1 trillion to federal coffers, while corporate taxes only added up to $181 billion.

And Apple wants lower tax rates for repatriated foreign income, but a study by the National Bureau of Economic Research found that 92 percent of the repatriated cash is used to pay for dividends, share buybacks or executive bonuses.) 

In another New York Times article: Edward D. Kleinbard, the former chief of staff at the Congressional Joint Committee on Taxation, and now a law professor at the University of Southern California, says Apple's CEO Tim Cook is "asking for is a reward for having gamed the system". Last year, the 71 technology companies in the Standard & Poor’s 500-stock index — including Apple, Google, Yahoo and Dell — reported paying worldwide cash taxes at a rate that, on average, was a third less than other S& P companies.

The Wall Street Journal: Senator Carl Levin accused Apple of employing "alchemy" and "ghost companies" to escape tax collectors in the U.S. and Ireland. Aides to his subcommittee have said they have never seen a company use a subsidiary that didn't owe corporate income taxes to any country.

  • Apple Operations International hasn't filed a corporate tax return anywhere in the past five years, the Senate panel found. The unit is the main holding company for Apple's business outside of the Americas.
  • Another Ireland-based Apple unit, Apple Sales International, recorded $22 billion in pretax earnings but paid just $10 million in taxes --- a rate of about .05%.
  • A third Apple subsidiary, Apple Operations Europe, also maintains its corporate profits aren't taxable by any country, according to the investigation.
Some senators on the Senate investigative panel went out of their way to note how much they enjoy using Apple's products. When Apple's CEO introduced himself to Senator Kelly Ayotte (R-N.H.), the one who voted against gun background checks, she kissed his ass and responded, "Nice to meet you. I have an iPad!"

My related Apple posts:

How Apple Screwed the U.S. Middle-Class

iLove Apple but iHate Tax Cheats

Apple Inc. is Rotten to the Core

Steve Jobs, the 'Boss', and the Wrecking Ball

Tuesday, May 21, 2013

Never Take Away Someone's Hope (Social Security Disability)

Since being laid off in 2008, for the first 2 years while looking work, I've gone through an escalated bout of depression and anxiety. After exhausting all my unemployment benefits and my life's savings, and after receiving a 5-day notice to vacate my apartment, and after losing my half-paid-off car --- my depression and anxiety has only become worse.

Little by little, my previous co-workers and friends eventually drifted away, and emails began going unanswered. I no longer had anything in common with those people, and I can no longer join them in previous activities because I no longer had an income. I began to think that "unemployment" was like a contagious disease, and that people were avoiding me for fear of catching my awful bad luck. When I would cross paths with someone from my past, I saw pity in their eyes and felt ashamed. My previous life and I had drifted into oblivion, like an unknown stranger.

During this whole time my physical health had also deteriorated --- a pre-existing condition of arthritis in my neck and back became much worse --- while I was also experiencing severe atrophy after being on my feet 8 hours a day and working laborious jobs for the previous 35 years, but then, suddenly, being totally idle. Now after being unemployed for almost 5 years, a short walk tires me out, as does sitting upright for long durations of time. So I now spend most of my time just lying in bed these days, wasting away.

As of early 2011, if it were not for someone who took me in to pursue a Social Security disability claim while applying for food stamps, I would not be here today. Since then, my bout of depression and anxiety has become worse; not just because of the isolation, but because of dealing with my SSDI claim while waiting for answers between numerous appeals after already having been denied three times on my Social Security disability claim --- two written appeals and one hearing before a judge. It's always the constant waiting and not knowing that continues to wear me down.

My quality of life is near rock bottom. For the most part, for almost 5 years, I've been both physically and mentally confined for a lack of an income, and especially since losing my car. For the past 3 years I've spent almost 24 hours a day in a bedroom watching TV, reading and surfing the internet, blogging, creating videos, publishing a book, and designing websites --- trying everything I can to keep my mind occupied --- and to keep from going totally bat-crazy from cabin fever. An occasional trip to the doctor's office every 3 months is like a high school field trip for me. (Lately I've been running out of ideas for things to do, and losing my desire to do anything at all.)

Every day I see the Binder & Binder commercials on TV, a daily reminder of my current predicament. I can't escape the daily worry of where (or how) my life might end up if my last appeal with the Social Security Administration is ruled unfavorably against me. At this stage in my life, it would be one of the most devastating things that's ever happened to me.

Sometimes, while laying in bed (which is most of the time, with no car to go anywhere and no money to do anything), I find myself quietly sobbing like a scared little boy, terrified of what awaits me in the future.

I realize that many others (both here in America and elsewhere in the world) have much more difficult lives than I do, but it's only my life that most concerns me these days. I look for relief anyway I can, which is usually when I sleep; but even then, I'm constantly haunted with nightmares that I can never remember after waking up.

All too often I dwell on my past, of better memories; but then I become even more depressed, missing the days when I once had happiness and joy in my life. I can't remember the last time I laughed out loud. Then I sob again. I can't help but feel sorry for myself, and when I do, then I also feel ashamed for feeling sad. It's a vicious cycle.

Through the county's social services office, I had obtained a medical card for my general doctor, so I also visited a mental health clinic for my depression and anxiety. I went for over year, getting two prescriptions, but they didn't help me at all --- even after I told the doctor so, and after he doubled my dose to the maximum; but that never helped me either, so I just stopped going altogether. Besides, getting my benefactor to drive me to these extra visits and picking up the prescriptions only became an additional burden for them as they usually work 7 days a week (and I always try not to impose anymore than I absolutely need to.)

All throughout my life I've worked very hard and tried to do everything I could to avoid being fired or laid off from jobs, as I have always feared being homeless. I once chose suicide over homelessness before, until at the last minute, a stranger took me in to pursue a disability claim. If I lose my final SSDI appeal, I will not have only failed to save my own life, but failed in my promise to my benefactor to pay back rent, if (or when) I was ever to be approved on my SSDI claim.

For years I've been living on pins and needles, living with the constant worry that's so deep, that sometimes I become totally immobilized. Yes, I'm that afraid. Simple tasks like phoning to renew a medication or to make a doctor's appointment sometimes seems so daunting, that I often procrastinate until the last possible minute to avoid going through an automated phone menu, just to be put on hold. I can't explain these feelings of terror, or why I feel so beaten down --- or why I've grown so hopeless.

Just 6 years ago I was financially independent. I was lucky in that I worked at a job that I enjoyed with people that I liked. I drove a nice car and had money in the bank. I felt confident and strong; and I was hopeful for my future. Today, it's the exact opposite for me. Since 2007 I've lost my father, my job, my home, my car, my health, my self-esteem and my hope for a future.

For over the past two and a half years as I've blogged, I've realized that I've been barking at the moon like a mad man, knowing full well that very little of what I write will ever make a difference to me or to the world. More than anything else, I do it as therapy for myself, and to help occupy all my worrisome and idle time.

I've exhausted any and all possibilities for my survival, and my SSDI claim just happens to be my very last chance. I'm 57 years old now, but I can't live like this much longer --- and not until I'm 62 years old, when I can eventually apply for a reduced Social Security retirement. Not just because of my own mental demise, but because of the burden it would impose on my benefactor (whether they allowed me to stay or not).

I miss the simple things in life, like getting in my car and driving to 7-11 to buy fresh donuts in the morning; or going to a local tavern on a Sunday afternoon to enjoy a burger and cold beer while watching a football game with friends. Or having the means and transportation to go to the store to buy socks whenever I need them. Or being able to afford to go out to a restaurant for a good steak dinner. I miss not having, or being able, to go to a job that I once enjoyed.

Now I feel (once again) like I'm nearing another fork in the road of my life, and that soon, events that are out of my control (like when I was laid off in 2008) will put me down another unknown path. I have no way of knowing where that path might lead me. One path would be an approval of my SSDI claim, which would allow me some new found hope, and a possible future for what remains of my life. The other path would be unspeakable.

Someone once said, "Never take away someone's hope, because hope might be all they have." I know from personal experience, that this is very true. I pray that I might soon be able exit my self-pity party, otherwise, I can not go on much longer without any hope at all.

Monday, May 20, 2013

Oklahoma's "Big Government" Critics Denies Disaster Relief?

Will Republican Senators Tom Coburn and James Inhofe (both of Oklahoma) want federal disaster relief for help in dealing with the horrendous devastation that a recent tornado has caused their great state?

When the Senate passed the long-delayed Hurricane Sandy relief package, 36 Republicans voted against the bill --- and 2 of those Republicans had been from the good state of Oklahoma. Both Tom Coburn and James Inhofe had previously supported emergency aid efforts following other disasters in their own states --- such as after severe storms and drought (Senator Inhofe had actually boasted.) But in the past, both have shaky records for disaster relief.

On April 29, 2009 Inhofe wrote on his website, "I believe the first 100 days of President Obama’s Administration will be remembered for the unprecedented level of new federal spending and the return of big government."

In another post he wrote of Speaker Nancy Pelosi as being gleeful and said, "The San Francisco liberal [was] running free on a spending bender." And Inhofe had also sacredly referred to the Heritage Foundation, who had said that, while under Obama, was the "largest peacetime debt buildup in history."

But over the last four years, under Obama, we've had the largest deficit reduction — and the fastest — since the demobilization after World War II.

James Inhofe has always advocated for more tax cuts, a freeze on discretionary spending and "entitlement reforms" (food stamps for the working poor, unemployment benefits for laid-off workers, Social Security benefits for disabled and retired workers, and Medicare for the elderly.)

He says the sequestration cuts were the fault of Obama, but he also says, "What America needs from Congress is to balance the federal budget. Senator Inhofe complained of "a trillion dollars in tax hikes and increased big-government spending" and says "we must put an end to this tax-and-spend mentality."

Senator James Inhofe had voted YES on a balanced-budget constitutional amendment (Mar 1997), YES on prioritizing national debt reduction (Apr 2000), YES on reduced overall federal spending (Dec 2005), YES on paying down the federal debt (Mar 2007), and he had also disapproved of increasing the debt limit (Jan 2012).

But Senator James Inhofe also voted NO on repealing tax subsidies for profitable corporations that outsource U.S. jobs (Mar 2005), NO on extending unemployment benefits from 39 weeks to 59 weeks (Nov 2008), and NO on restricting employer interference in union organizing. (Jun 2007).

Senator James Inhofe was rated 0% by the AFL-CIO, indicating an anti-union (anti-worker) voting record (Dec 2003) but was rated 100% by the US COC, indicating a pro-business voting record. (Dec 2003).

So in keeping with his steadfast ideological principles of helping big business, but not their employees; and cutting benefits for working Americans while cutting taxes for the rich; and reducing the federal debt at any cost to the poor; I will assume that this time Senator James Inhofe will vote NO on disaster relief for the good people of Oklahoma...

...because "big government" (lots of people) and spending (on those people) is "out of control", and no matter what harm may come (to those people) federal spending must be cut, just as in the aftermath of Hurricane Sandy. According to Inhofe (an maybe rightly so), the "earmark debate" was phony, so maybe he won't be requesting any.

Friday, May 17, 2013

IRS Scandal is a Tea Party Bonanza!

While growing up during the Vietnam War and Nixon era, as a much younger man, I used to be very anti-government. I was an ignorant, naive and rebellious "anti-establishment" radical. At the time, I didn't understand that the vast majority of Americans (except for "survivalists" and a few who are living in rural areas) actually relies very much on our government in their daily lives --- from their homes to their jobs, including their commutes in between.

But then, years later, I eventually discovered that, it's not until someone actively pursues assistance from our government, do we come to realize just  how much we really do need our government. And since the Vietnam War, because we now have 100 million more people, I will assume that our government has also grown somewhat proportionally to accommodate our growing population.

But their are also those who believe that we don't need any government at all, and some groups such as the Tea Party Patriots were formed by extremely wealthy and powerful individuals who, for the most part (with the exception of roads, airports and a standing army), don't rely as much on what our government can provide for the majority of us. (NOTE: I'm not advocating for a reliance or a dependency on government, but stipulating the services that government can provide for us, by us, to make our lives and our society better for everyone.)

These same wealthy individuals are also pushing the idea that, if corporations continue to outsource jobs for cheaper labor, while refusing to raise the minimum for domestic wages, that after people are forced into using government programs such as food stamps, we are becoming a government-dependent society --- and then advocate for cutting food stamps. (I often wonder: Has any member of the Tea Party ever used the SNAP program to help feed their children, or applied for unemployment insurance after losing a job?)

This morning I received a newsletter in my email from the Tea Party Patriots, which is classified by the IRS as "social welfare organization", organized under section 501(c)(4) of the Internal Revenue Code. I subscribe to their newsletter to keep tabs on this radical organization.

In their letter to me they called the employees of the IRS "gangsters", "goons" and "trained thugs" --- and claimed that the IRS threatened all those who are seeking tax-exempt status, and that they would be "thrown in prison if they made even one small mistake!" (Their exclamation point, not mine.)

The Tea Party Patriots also referred to themselves as just "ordinary pro-limited government Americans just exercising their first amendment rights." But what they really are is just a group of ordinary far-right-wing lunatics (bordering on anarchists), who are using Citizens United to squash my own First Amendment Rights. Their corporate money speaks much louder than I do --- their megaphones are huge --- they can buy time on national cable TV channels (while all I can do is post this diary).

In the Tea Party Patriots' newsletter they also said it there was an "all-out government assault on our freedoms. Please make a generous emergency contribution of $10, $15, $25, $50, or whatever you can afford right away."

They were asking me to send them money, while at the same time, politically advocating to deprive me of my Social Security and healthcare. How stupid do they think I am? (Oops! That was a stupid question!)

Regarding one of the latest new "scandals": The IRS said political bias was not the reason the IRS singled out conservative groups. Instead, staffers in the agency's Cincinnati office said they were trying to manage the deluge of applications for tax-exempt status under the 501(c)(4) section of the tax law. Between 2010 and 2012 the number of 501(c)(4) applications leaped from 1,500 to more than 3,400.

Before this scandal broke, 501(c)(4) nonprofit groups were already making headlines for their political spending. Secretive nonprofits like Karl Rove's Crossroads GPS, the Koch-funded Americans for Prosperity, and the American Action Network spent huge sums of money to influence the 2012 elections. Campaign watchdogs say those groups have flouted the law, which says 501(c)(4) groups can't make politics their "primary purpose."

This week on MSNBC Lawrence O’Donnell discussed the report from the Treasury inspector general on the IRS targeting scandal and argued that as far back as 1959, the IRS has used a bad interpretation of the law to target political groups --- such as changing the distinction from “exclusively" to “primarily" promoting social welfare and operating for the common good, rather than being only politically motivated.

But just like everything else that's evil in the world, the Republicans have been very busy trying to find a way to prove that President Obama was personally responsible for the IRS's targeting of radical right-wing political groups who were applying for tax-free status --- because these "Tea Party" groups are anti-government --- meaning, they are anti-Social Security, anti-Medicare, anti-ObamaCare®, anti-unemployment benefits, anti-disability benefits, anti-TANF, anti-Veteran's benefits, anti-food stamps, and yes...anti-IRS and anti-taxes.

It's odd that Senate Minority Leader Mitch McConnell (R-Ky) once believed that all such nonprofit 501c groups (before there was even a "Tea Party") should be subjected to much tougher scrutiny by the IRS.

McConnell, in a 1987 interview, said "'There are restrictions now on the kinds of activities that, for example, 501(c)(3) and (4) organizations, charitable organizations, can engage in that are being abused -- not just people on the right, but most of the so-called charitable organizations who are involved in political activity in this country, who are, in my judgment, involved in arguable violations of their tax-free status and violations of the campaign laws, and happen to be groups on the left. So that is a problem."

Now Mitch McConnell says the actions of the IRS "could be criminal". He sounded very "Tea Party-ish". In the newsletter I mentioned, the Tea Party Patriots also said "we must make sure that every single individual involved in this unconstitutional effort to silence us is either fired or thrown in jail!" (Again, their exclamation point, not mine. And why aren't they as feverishly demanding that some bankers go to jail?)

Mitch McConnell recently released a letter saying, "We are deeply disturbed that agents of the government were directed to give greater scrutiny to groups engaged in conduct questioning the actions of their government. This type of purely political scrutiny being conducted by an Executive Branch Agency is yet another completely inexcusable attempt to chill the speech of political opponents and those who would question their government, consistent with a broader pattern of intimidation by arms of your administration to silence political dissent."

In the past (before this "scandal") watchdog groups have demanded that the IRS and the Federal Election Commission crack down on these nonprofits for spending too much time and money "exclusively" on politics --- rather than "primarily" promoting the social welfare for the common good. But if most Americans don't agree with the opinions of wackos such as Michele Bachmann, how can they be operating for "the common good".

But now this scandal could cause the IRS to shy away from uncovering 501(c)(4) organizations that do in fact abuse their tax-exempt status by focusing primarily on politics. If so, this would be a big win for anti-government groups like the Tea Party Patriots and other "anti-people" groups that are funded by people like Karl Rove and the Koch brothers.

In the Tea Party Patriots newsletter, they said that the government had "declared war on the American people! So now we must treat our wounded and get back on the offensive. Our list of local Tea Party groups [that were] victimized by the IRS is growing by the hour. Please, please donate what you can right away."

They don't want to pay taxes to us (our government), but they want us to contribute to them. I think I 'd rather try to win the Powerball Jackpot, rather than send any money to the Koch brothers (The jackpot is almost up to $600 million, and it could soon pass $1 billion. And the proceeds go to fund government.)

The truth is, the radical and greedy multi-billionaire Koch brothers (and the other like-minded ideologues) don't want the super-wealthy in this country to have to contribute anything at all to this nation, or to it's people. They only want a much wider income gap and a greater disparity in wealth.

If the "grassroots" members of the Tea Party aren't lying hypocrites, they should all publicly post a list of their members who will take a notarized pledge that when they reach retirement age, they will all refuse to apply for Social Security benefits; or if they ever become unemployed, refuse to apply for unemployment benefits; or if they were ever to break their back, refuse to apply for disability; or if they are ever in need of ANY government service at all (such as disaster relief if a hurricane or tornado were to mow down their homes), they should all pledge not to receive one penny of government assistance from our "big" and "out-of-control" evil government --- whose deficit has been steadily dropping for the past four years at a rate faster than since after World War II.

I would advocate for the hiring of many more Americans to work for the IRS, and not just to target ALL 501(c) groups, but to also audit everyone earning over $1 million a year. Tax evasion is rampant, and it's primarily the wealthy who are breaking our tax laws by using shell corporations and offshore banking scams. That's why tax revenues aren't sufficient enough to fund our growing government; it's not because there are millions of dishonest and lazy Americans who are gaming the system (just to become depend on government), but because of the excessive greed and corruption at the very top of the food chain.

Ultra-wealthy individuals who don't need any government services, such as Social Security or Medicare (people like Mitt Romney or the Koch brothers), don't want to pay [taxes] for any government at all. Their political organizations (not social welfare organizations) can quote from our Founding Fathers and the U.S. Constitution all they like; and they can use terms such as "free", "freedom", "free enterprise" and "free markets" all they want to; or they can call themselves "patriots" and say they are for "limited government"; but what they really are is "anti-government", and WE are the government --- government is "people", and our government leaders are "politicians" --- so organizations such as the Tea Party Patriots are really "anti-people".

As the Reverend Al Sharpton said of the Tea Party: "We hate government, so put us in charge of the government."

Send this post to:
Tea Party Patriots, Inc.
1025 Rose Creek Drive #620-322
Woodstock, Georgia, 30189
Attention: Koch Brothers