Sunday, September 4, 2011

Corporate Bullies and their Political Hacks

Wealthy CEOs, hedge fund mangers, bankers, and other "investors" can hold billions of dollars in stocks for 5 years and only pay a 5% long-term capital gains tax (or 15% if sold between 1 and 5 years). The Republicans want to eliminate this tax ZERO...saying it will create more jobs. Ha-ha-ha-ha-ha!

How many jobs have they created with the extension of their current Bush tax cuts? Last month: ZERO. To Date: 10 million jobs lost.

So then, why are the Republicans complaining about the national debt? Do they expect everyone who earns $33,000 a year or less to pay off a $14 trillion national debt all by themselves? How about a little more help from those who don't have to worry every night about how they're going to pay for food and shelter?

Let's first begin with how the Republicans want to "reform" Social Security: The Republicans want us to divest trillions of a dollars in the Social Security Trust Fund, assets that are backed by U.S. Government bonds, into a huge slush fund (corporate stocks and other risky securities) so that the hedge fund mangers and investment backers can use our money to enrich themselves with billions of dollars in low-tax commissions while gambling with the future of our retirement benefits. Haven't we already been screwed enough?

Since the Great Recession America finally woke up and realized that for the past 40 years, not only were American jobs going overseas, but the wealthy and corporations have been paying an ever decreasing portion of their earnings as tax revenues to our treasury. We've realized this after 10 million Americans suddenly lost their jobs at the end of the Bush era in 2008 and 2009 when we were being told by the CEOs that we "lacked the necessary jobs skills to compete in the marketplace". Just like that, almost overnight, millions of intelligent and hard-working American people had suddenly become obsolete in the labor force, were laid off, and were no longer paying what they once were in taxes to the federal, state, and local treasuries.

Another point: The CEOs lay workers off and force others to pick up the slack. The CEOs learned how to do more with less. Essentially they're giving their kept workers a cut in pay. Some pundits spin this as "increased worker productivity". But if you have a job, and the boss dumps more in your lap, are you going to complain after seeing your co-workers being given pink slips? People are even afraid to take legitimate paid time off for sick days and vacation days, for fear of being seen as a slacker, or having their boss learn that they can get by without you by having someone else do your work while you're off. The bosses drive their workers with fear. Once workers were expected to be loyal to the company, but the company was never loyal to their employees. You're just a number like the widgets they produce, and they don't personally give one damn iota about you or your family or your life.

And in a weak job market, they bully you, knowing that it would be very hard for you to find another job. Just like during the earlier union-busting days when work was scarce and "scabs" were lined up to fill your place for half your wages, the corporations would do ANYTHING to save a dollar to fill their pockets. Their was violence and murder attributed to the earlier union-busting days.

Besides "lacking job skills" and working you to death, the CEOs have another excuse for sending jobs overseas. They say they have to provide "value" to their stockholders / shareholders / investors. They say that that's what they're being paid for. But the CEOs get paid stock options as "incentives" for cutting costs by outsourcing jobs...they're providing "value" for themselves. The board of directors of these big corporations (GE, Boeing, Apple, Exxon-Mobile, etc, etc, etc) votes themselves these stock options to pay themselves for screwing you.

But as a limited liability corporation (a non-entity), they convince themselves otherwise. And the ones that don't even bother trying to morally justify themselves are just plain evil (like in the movie Wall Street, when greed is "good"). Because the CEOs don't have to answer personally for defective products that they knowingly sell to the general public, their accountants tabulate a risk-to-cost analysis to determine what is less expensive...faulty products that can kill people or the cost to litigate damages in court if they were ever to be sued in court. Payoffs Settlements are cheap, and average folks can't find proper legal counsel...and corporations can drag a lawsuit on for several years before any damages are ever awarded. (There is rarely any "personal responsibility" for a higher-up executive in a large corporation, just a general consensus among the board members.)

"Wealth is like sea-water; the more we drink, the thirstier we become." - Arthur Schopenhauer

And after these loyal and hard-working ex-employees jobs were outsourced overseas, and after losing their self-esteem and self-respect, a great many lost their homes, life's savings, children, cars, and their very lives. All for "value" (the greater value of corporate stocks for CEOs who outsourced the jobs).

We had the housing crash because of the deregulation of the banks. Then came the state and local budget shortfalls. Then came the cuts in government workers and government services such as schools. Then came the threats to cuts in Medicare and Social Security. Then after all that, we were told by our Republican leaders that we had to make a "shared sacrifice" while hedge fund managers and CEOs were laughing all the way to the bank.

The Republicans blamed fair wages and benefits on union workers. The Republicans blamed lazy jobless Americans for failing to take low-paying jobs (even though there weren't enough of those jobs either, and the Republicans knew this). The Republicans blamed President Obama and poor laid off Americans (who had their jobs sent China) for the increase in food stamps and Medicaid. The Republicans blamed old and sick people for Medicare and Social Security benefits, even though the Social Security Trust Fund had been raided for other spending.

The Republicans never blamed deregulation of the banks, for which they sponsored. The Republicans never blamed trillions of spending under Bush and two un-funded wars. The Republicans never blamed the Bush tax cuts for the wealthy and large corporations. They blamed us, the middle-class, the working-class, and the poor.

And of course, they blamed Obama and the Democrats too. In my entire life I don't recall one instant when a Republican ever admitting any wrong-doing, or ever being sorry for anything they've done. Even when they were caught "red-handed" cheating on their wives. Nixon erased the tapes. Perfection was always lost on me.

The Bush tax cuts, including those given to middle and lower income households, failed to spur growth as the Republicans claimed it world. It was just the exact opposite as we've seen with both the stock market crash before Obama took office, and the 10 million jobs that were lost since and during the Bush cuts. Those cuts also increased the budget deficit, shifted the tax burden from the rich to the middle and working classes, and further increased already high levels of income inequality.

As the rich got ever more wealthy, the Republicans continued to blame everything that went wrong FOR us ON us (and on the Democrats as well). We've since learned that the Republicans had been doing most of their work for the hedge fund managers, bankers, and corporate CEOs, those who get most of their personal income from stock options, commissions, dividends, etc. and were the ones who mostly benefited from the Bush tax cuts.

In 2001 Capital gains taxes for stocks and other investments held over 5 years was reduced from 10% to 8%.

In 2003

  • Capital gains taxes for stocks and other investments held over 5 years was further reduced from 8% to 5%.
  • Capital gains taxes for stocks and other investments held over 1 year was reduced from 20% to 15%.
  • Capital gains taxes for stocks and other investments held under 1 year was taxed as "regular" income*
* Depending on what their "effective" tax bracket is and what they can write off with loopholes. And they only pay a progressive tax for Social Security and Medicare up to their first $106,000 earned. No matter how many millions of dollars they are paid, they never have to contribute more in proportion to their earnings. (After all, in this tax bracket, who among them will really need to depend on Social Security, even though after the age of 62 or 65, they always draw from it.)

Hedge fund managers, bankers, and corporate CEOs can hold deferred stock options worth millions of dollars for their tenure of employment and pay less in taxes (5% after 5 years) than you would with stocks held in a ROTH 401k account. You would be taxed at "regular income" based on what you withdrawal annually from your IRA account.

And hedge fund managers, bankers, and corporate CEOs can claim capital losses when stock values decline; you can't with stocks that are represented in a 401k or union pension plan. You are SOL.

Economist Simon Johnson wrote in 2010: "The U.S. government doesn’t take in much tax revenue—at least 10 percentage points of GDP less than comparable developed economies—and it also doesn’t spend much except on the military, Social Security and Medicare. Other parts of government spending can be frozen or even slashed, but it just won’t make that much difference. That means older Americans are going to get squeezed, while our ability to defend ourselves goes into decline. Just because there’s a bipartisan consensus on an idea, such as tax cuts, doesn’t mean it makes sense. Today’s tax cutters have set us up for tomorrow’s fiscal crisis and real damage to U.S. national security."

And don't we see this happening today with the Republicans and Tea Party?

For the last 40 years government revenues, while higher, have been slowly eroding in proportion to our population growth (200m to 308m in the last 40 years), the cost of living, and the value of the dollar....thus, we incurred huge debt. (And because, as a percentage, we also have a much lower participation rate in the labor force due to outsourcing). It costs more to govern more people, but the wealthy and corporations have been paying less and less of their share (their profits are way up, but the their taxes are way down). The pendulum has swung too far to the corporate side - there's no balance; and for 40 years all the laws have been more favorable to BIG business, not to "the people".

And why? Simple. Politicians are beholden to BIG business. Politicians, who are supposed to represent the interests of the people, have been representing the interests of BIG business. And basically, our Supreme Court is in bed with BIG business as well, calling corporations "real" people and allowing them to funnel unlimited money directly and anonymously into political PAC funds. (Much like a drug dealer uses a dummy corporation to launder their drug money. See Citizens United v. Federal Election Commission). This is the first step to political corruption; but with a corrupt Supreme Court, whose members are appointed to life by the president and aren't legally beholden to any ethics laws, there's very little the average citizen can do or hope for when it comes to political justice. So our whole system of government (political system, legal system, and economic system) begins breaking down almost immediately, starting from the very top, before it works it's way down to us. But it's those who are nearest to the bottom of our system who will ever see any jail time for breaking laws. (I should be very careful, as I'm very near the bottom myself).

Labor unions were busted, wages depressed, unfair trade agreements were ratified, workers rights were eroded, the cost for everything rose because BIG business was allowed to engage in monopolies, narrowing the competition and manipulating the prices for goods and services. The oil, coal, and gas industries were allowed to monopolize America's natural resources; and the investment bankers were allowed to manipulate the prices further in the commodities markets. As jobs were going overseas for cheaper labor, wages were kept in check domestically, not keeping up with the cost of living. ARM loans were invented and auto loans were stretched from 3 to 6 years to put us further in debt. Housing, energy, and food prices skyrocketed for huge corporate profits and obscene executive pay packages were awarded like candy to CEOs. Political donations were allowed to pour in to the politician's pockets to back the corporate agenda, rather than representing the best interests of "the people". For 40 years our infrastructure and schools were allowed to fall into decline, so ever more jobs could leave our shores as corporate tax rates went even lower.

Over the last 20 years since I've lived in Las Vegas, I've seen all the smaller casino-hotels swallowed up by the bigger ones until now we have 4 corporations who control about 90% of the business. It used to be if you got fired from one place you could just walk across the street and get hired somewhere else. Now you're screwed. After all the "mergers" we've seen in the last 40 years, how long will it be before one massive corporation controls every aspect of our lives and livelihoods? 40 years from now? Less? How long will it be before all our elected officials are all beholden to one corporate entity?

Look at us now...look at America; and our class and political divisions. Look at the state of our economy and disparity in the national wealth. Look around and wonder why 14 million Americans remain unemployed, while 14 million more are "under" employed, struggling to survive on part-time low-paying jobs as millions more are no longer counted as they were swept under the carpet by their government (the Bureau of Labor Statistics) because their unemployment benefits expired and they have no income at all - - - and very few voices speak out for them in congress or in the media. Just as during the Great Depression, these are "the forgotten ones".

And why is America now in decline and why do we have budget shortfalls? Because corporate America has been killing the goose that's been laying the golden, the ones that originally made them rich. Now corporate America has abandoned us and this country to fend for ourselves. They went "global" to do their damage elsewhere. These are the corporate "entities" that the Republicans support. This is what Republican policy has done to this country. This is what the Republicans want more of today...just more of the same.

The last 40 years

1969 - 1974 Nixon (R)
1974 - 1977 Ford (R)
1977 - 1981 Carter (D)
1981 - 1989 Reagan (R)
1989 - 1993 G H Bush (R)
1993 - 2001 Clinton (D)
2001 - 2009 G W Bush (R)
2009 - 2011 Obama (D)

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