Joan Baxter: How corporate tax breaks hurt humanity

How corporate tax breaks hurt humanity. Truth be told: taxation is only certain for the ordinary law-abiding citizen, the non-rich
By Joan Baxter
Rabble (Canada)



Benjamin Franklin once wrote that nothing is certain in this world except death and taxes. That was in 1789. Mr. Franklin might be surprised to learn that today his axiom no longer holds, at least not for the rich and powerful among us. Truth be told -- as it is in British investigative journalist and author Nicholas Shaxson's meticulously researched and riveting book, Treasure Islands: Tax Havens and the Men Who Stole the World -- taxation is only certain for the ordinary law-abiding citizen, the non-rich. The wealthy and the ultra-wealthy can quite easily get by paying little or even no tax, thanks to the shadowy spider webs of tax havens and secrecy jurisdictions that span the globe.

Shaxson's aims in the book, he says, are to challenge the common idea that it is acceptable for a place to get rich by undermining the laws of other places and to offer a lens through which to view the history of the modern world. "Offshore business," he writes, "is, at heart, about artificially manipulating paper trails of money across borders." It is not a "colourful outgrowth of the global economy, but instead lies right at its centre." It's not about efficiency or any genuine production or real economic growth -- it's about people and corporations making vast amounts of money through tax evasion.

Hiding the world's wealth

This book is a jaw-dropper of an exposé of how the moneyed elites use offshore to hide and grow their wealth and of how this affects the rest of humanity. Shaxson travels the world and delves into archives and financial reports to offer up some mind-boggling facts and figures. More than half of world trade passes, at least on paper, through tax havens. The balance sheets of small island finance centres alone add up to 18 trillion dollars, about a third of the world's GDP -- and that is probably an underestimate. Wealthy individuals hold over 11.5 trillion dollars offshore. That's about one quarter of the world's wealth.

It seems that just about everyone who is anybody is in on the act. Media baron Rupert Murdoch's News Corporation (which owns Fox News, HarperCollins, MySpace and Sun newspapers), for example, uses 152 offshore subsidiaries and so pays an estimated rock bottom six per cent tax rate. Even Bono, writes Shaxson, who "browbeats western taxpayers to boost aid to Africa, shifted his band's financial empire to the Netherlands [an important European tax haven] in 2006 to cut its tax bill." Eighty-three of the U.S.'s 100 biggest corporations have subsidiaries in tax havens. The Tax Justice Network, an organization that works to research and raise awareness of the secretive world of offshore finance, discovered that 99 per cent of Europe's hundred largest companies used offshore subsidiaries, and the largest users of those were banks.

Shaxson takes an extremely complex issue, how vast amounts of money are shifted into tax havens or secrecy jurisdictions where no one can tell who really owns the shell banks and corporations, and renders it all comprehensible, with lively, precise and sometimes very witty prose. It can be agitating reading about how multinationals, banks and the global oligarchy (including not just despots who have robbed their own countries but also some of the world's most respected and prominent citizens) use the offshore system to hide their wealth to avoid paying their share of taxes, which our governments, our schools, our universities, our healthcare systems, our institutions and ordinary people, so sorely need. It can be an especially disturbing read for those of us struggling right now to fill out our tax forms.

To Read the Rest of the Review Essay

Hervé Kempf: Salary Ceiling, a Lever for Change

Salary Ceiling, a Lever for Change
by Hervé Kempf
Truthout

Over the last 30 years, disparities in income have exploded. While a big company CEO earned about 35 times the average salary of one of his employees during the Trentes glorieuses [the French appellation for the period of glowing economic prosperity from 1945 to 1975], today, he earns 300 times as much. Faced with this reality, the idea of a maximum salary is making its way in public debate. Let us review the arguments in favor of such a measure:

The idea is developing slowly - too slowly, undoubtedly, but surely - in sync with the awakening of the collective consciousness: a maximum acceptable income (MAI) is a necessity to repair societal connections and to institute environmental and social policy. Should it be called "allowable," "admissible," "acceptable?" That's not important. The principle is clear: too great inequality is not acceptable. Earning ten or thirty times more than others is perhaps admissible, earning three hundred times or a thousand times more is simply senseless. And in the period since Patrick Viveret and his research group relaunched the idea of a MAI at the beginning of the 2000s, it has become an essential element in policies of change.

I shall first show why the MAI is necessary from an environmental perspective. As we know, the increase in inequality over the last 30 years constitutes the central characteristic of capitalism's recent evolution. Numerous studies document this upsurge in inequalities. One of them, conducted by two economists from Harvard and the Federal Reserve Board, is among the most telling. Carola Frydman et Raven E. Saks [1] have compared the relationship between the salaries earned by the three top executives of the 500 biggest American companies and the average salary of their employees. This indicator of the progression of inequality remained stable from the 1940s, when the study's observations begin, up to the 1970s: the bosses at the companies included earned roughly 35 times the average salary of their employees. Then, starting in the 1980s, there's a discontinuity and the ratio increases constantly until it reaches over 300 in the 2000s.

Thus did capitalism experience a major turning point after the period known as the "Trente Glorieuses" in France [1945-75]. During that period, the collective growth in wealth allowed by the continuous rise in productivity was rather equitably distributed between capital and labor, such that the ratios of inequality remained stable. After the 1980s, a complex of circumstances, which are not appropriate to analyze here, led to an ever more pronounced discontinuity between the holders of capital and the mass of citizens[2]. The share of salaries (earned income) in Gross Domestic Product (GDP) sharply declined in favor of returns to capital. The European Commission's economic database, Ameco, elucidates the phenomenon [3]: in France, for example, salaries' share of GDP went from an average of 63 percent during the 1960s and 1970s to 57 percent during the 2000s, a drop of six points.

Consequently, the oligarchy is accumulating income and wealth to an extent not seen for a century. It spends its wealth in a frenzied consumption of yachts, private planes, immense residences, jewels, exotic trips: a flashy jumble of sumptuary squandering.

Why is this behavior a powerful motor of the environmental crisis? To understand that, we must turn to the great economist Thorstein Veblen. What did Veblen say? That the tendency to compete is inherent to human nature. We all have a propensity to compare ourselves to one another and we seek to demonstrate a little superiority, a symbolic difference compared to the people among whom we live, by such and such an external trait.

Veblen subsequently observed that several classes ordinarily exist within any given society. Each class is governed by the principle of competitive ostentation. And within each class, individuals take as their model the behavior pertaining in the class above, the conduct of which indicates what is good, what is chic, to do. The imitated social class itself takes its example from the class immediately above it on the scale of fortune and so on from the bottom to the top, such that the class located at the summit defines the cultural model of what is prestigious, of what extends to others.

What happens in a highly unequal society? It generates enormous waste because the material squandering that characterizes the oligarchy - itself prey to competition in conspicuous consumption - serves as an example to the whole society. Each at his own level, to the limit of his income, seeks to acquire the most attractive goods and symbols. Media, advertising, films, soap operas, magazines, celebrities are tools for the diffusion of the dominant cultural model.

Consume Less to Share Better

So then, how does the oligarchy block the developments necessary to prevent aggravation of the environmental crisis? Directly, of course, through the powerful - political, economic and media - levers it enjoys and which it exploits to maintain its privileges. Indirectly - and just as importantly - by this cultural model of consumption that impregnates the entire society and defines normality for it.

Now, preventing the aggravation of the environmental crisis and even beginning to restore the environment resides in the rather simple principle: humanity must reduce its impact on the biosphere. Achieving that goal is also simple in principle: it means reducing our extractions of minerals, wood, water, gold, oil etc. and reducing our green house gas emissions, as well as chemical, radioactive, packaging, and other wastes. In other words, reduce our societies' overall material consumption.
Who is going to reduce their material consumption? The 20 to 30 percent of the world's population that consume close to 70 percent of the resources extracted annually from the biosphere. Therefore, it's from these 20 to 30 percent that the change must come, which essentially means from the peoples of North America, Europe and Japan, as well as from the rich classes of emerging countries.

However, within these overdeveloped societies, we are not going to suggest that the poor, that those with modest income, reduce their material and energy consumption. Nor is it the hyper-rich only who must effect this reduction: there are not enough of them for that to sufficiently change the collective environmental impact. In fact, a reduction in material consumption must be suggested to the aggregate of Western middle classes.

To Read the Rest

Michael Hudson and Jeffrey Sommers: Wisconsin Death Trip

Wisconsin Death Trip
By MICHAEL HUDSON and JEFFREY SOMMERS
Counterpunch

...

Economics textbooks, along with Fox News and shout radio commentators, spread the myth that fortunes are gained productively by investing in capital equipment and employing labor to produce goods and services that people want to buy. This may be how economies prosper, but it is not how fortunes are most easily made. One need only to turn to the 19th-century novelists such as Balzac to be reminded that behind every family fortune lies a great theft, often long-forgotten or even undiscovered.

But who is one to steal from? Most wealth in history has been acquired either by armed conquest of the land, or by political insider dealing, such as the great US railroad land giveaways of the mid 19th century. The great American fortunes have been founded by prying land, public enterprises and monopoly rights from the public domain, because that's where the assets are to take.

Throughout history the world's most successful economies have been those that have kept this kind of primitive accumulation in check. The US economy today is faltering largely because its past barriers against rent-seeking are being breached.

Nowhere is this more disturbingly on display than in Wisconsin. Today, Milwaukee – Wisconsin's largest city, and once the richest in America – is ranked among the four poorest large cities in the United States. Wisconsin is just the most recent case in this great heist. The US government itself and its regulatory agencies effectively are being privatized as the "final stage" of neoliberal economic doctrine.

A peek into Governor Walker's so-called "budget repair bill" reveals a shop of horrors that is just the opposite of actually repairing the budget. Among the items listed in the bill until Wednesday night were selloffs of state power generation facilities – in no-bid contracts notoriously prone to insider dealing.

The 37 facilities he wants to sell off that produce heating and cooling at low cost to the state's universities and prisons. Walker's budget repair bill would have unloaded them at a low price, presumably to campaign contributors such as Koch Industries – and then stick the bill for producing this power at higher rates to Wisconsin taxpayers in perpetuity. (And this is all being sold as a "taxpayer relief" plan!) Invariably, this will make its way into new legislation once attention is diverted from the current controversy.

The budget bill also plans to tear down the Wisconsin Retirement System (WRS). This is not New Jersey, where a succession of corrupt governments have underfunded (read: stolen) the state pension system in order to shift resources to pay for budget shortfalls in general revenues caused by tax breaks for the rich. The WRS is one of the nation's most stable, well-funded and best-managed pension systems. Although Wisconsin is not a big state, the WRS has amassed $75bn in reserves, and pays out handsome pensions to its public retirees, without needing new public subsidy. The Walker bill has language providing for tearing down this system, raiding its assets to pay for further tax cuts for the rich (especially property owners), and then throwing Wall Street a meaty bone as public employees would be shifted to 401k plans handled by money managers on commission.

In a separate proposal, Governor Walker would start privatizing the University of Wisconsin's two flagship doctorate-granting campuses. Ironically, the land grant universities – of which Wisconsin has long been among the best – were created by protectionist 19th-century Republicans as an alternative approach to British free-market doctrine, which dominated the prestigious and largely anglophile Ivy League universities. These universities, like their German counterparts, taught a new economic policy of state management and public enterprise that formed the basis for subsequent US and German development.

Walker would kill off this tradition, and return intellectual production to the highest bidder.

Other proposals suggest selling off Wisconsin's public northwoods lands with their cornucopia of mineral and timber wealth. And much more is said to be in the works.

So Walker's war is not only against the Democrats and labour, it is against Wisconsin's Progressive Era institutions. His policy threatens to pauperize the state and deal a coup de grace to Progressive Era institutions and impoverish the state's middle class. Contra John Maynard Keynes's gentle suggestion of "euthanasia of the rentier", it is the middle class that is being euthanized – throughout North America and Europe.

To Read the Entire Essay

NPR: Coal Reignites A Mighty Battle Of Labor History

Coal Reignites A Mighty Battle Of Labor History
NPR

A Coal-Fired Country

West Virginia's been called the Saudi Arabia of coal. It produces more than a third of all the coal mined in the U.S. More than half the energy Americans use is powered by burning those black rocks. The lights in your house, your TV, maybe the computer you're reading this story on — they all work thanks to coal.

The other thing about West Virginia is its poverty rate, one of the highest in America, even though coal prices just hit a 15-year high.

Almost a quarter of the people in Logan County live below the poverty level. They're people left behind by the changes in technology and technique that have allowed coal companies to earn more money and hire fewer miners.

This story, though, is only partially about jobs. It's really about history — the battle over what to remember and whether to remember it at all.

A Firefight To Organize

No one has the exact details of what happened here in late August/early September 1921, but the basic story says around 10,000 coal miners took up arms against the private militias employed by West Virginia's Stone Mountain Mining Co. For five days they fought for the right to organize — to join unions.

The Baldwin-Felts detectives hired by the coal companies in West Virginia were referred to as the "Death Special" by miners.

"From all the artifacts found here, there had to be hundreds of men up here," King says. "I mean, there's probably thousands of shell cases scattered around here."

As many as 100 men died in the fighting. It got so bad that President Harding sent a detachment of federal troops to crush the rebellion.

None of this happened in a vacuum. Tension had been building for years. Just a year before, union-busting mercenaries, who worked for a private agency called Baldwin-Felts, shot and killed the pro-union mayor of the nearby town of Matewan.

At the time, most states had laws against organizing. It didn't help that Harding's administration was decidedly anti-labor.

The worry was the unions would bog down industry and put the brakes on America's rapid economic growth.

The problem for the wage earners, at least in Logan County, was that they didn't have a whole lot of options.

A Company Town

"They had the yellow-dog contract which said that, basically, if you took a job at this mine, you could not associate with anyone in the union, you couldn't join," says Doug Estepp, a local historian who runs tours of the area. "You were basically fired, blacklisted and evicted — and probably beaten on the way out by the guards just for good measure."

The coal companies owned your house, they paid you in credits that could only be spent on highly inflated food at the company-owned store, and if you complained about safety, you were fired.

The private security men from Baldwin-Felts would threaten, beat and sometimes murder agitators — all with impunity.

And so it all came to a head in late August 1921. The miners of Logan and Mingo counties had had enough.

To Listent to the Episode

The Daily Show with Jon Stewart: For Richer and Poorer -- Teachers and Wall Street

The Daily Show
Tags: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

Trip Gabriel: Teachers Wonder, Why the Scorn?

Teachers Wonder, Why the Scorn
by Trip Gabriel
The New York Times

The jabs Erin Parker has heard about her job have stunned her. Oh you pathetic teachers, read the online comments and placards of counterdemonstrators. You are glorified baby sitters who leave work at 3 p.m. You deserve minimum wage.

“You feel punched in the stomach,” said Ms. Parker, a high school science teacher in Madison, Wis., where public employees’ two-week occupation of the State Capitol has stalled but not deterred the governor’s plan to try to strip them of bargaining rights.

Ms. Parker, a second-year teacher making $36,000, fears that under the proposed legislation class sizes would rise and higher contributions to her benefits would knock her out of the middle class.

“I love teaching, but I have $26,000 of student debt,” she said. “I’m 30 years old, and I can’t save up enough for a down payment” for a house. Nor does she own a car. She is making plans to move to Colorado, where she could afford to keep teaching by living with her parents.

Around the country, many teachers see demands to cut their income, benefits and say in how schools are run through collective bargaining as attacks not just on their livelihoods, but on their value to society.

Even in a country that is of two minds about teachers — Americans glowingly recall the ones who changed their lives, but think the job with its summers off is cushy — education experts say teachers have rarely been the targets of such scorn from politicians and voters.

Republican lawmakers in half a dozen states are pressing to unwind tenure and seniority protections in place for more than 50 years. Gov. Chris Christie’s dressing down of New Jersey teachers in town-hall-style meetings, accusing them of greed, has touched a populist vein and made him a national star.

Mayors are threatening mass layoffs, including in New York City and in Providence, R.I., where all 1,926 teachers were told last week they would lose their jobs — a largely symbolic gesture since most will be hired back.

Some experts question whether teaching, with its already high attrition rate — more than 25 percent leave in the first three years — will attract high-quality recruits in the future.

“It’s hard to feel good about yourself when your governor and other people are telling you you’re doing a lousy job,” said Steve Derion, 32, who teaches American history in Manahawkin, N.J. “I’m sure there were worse times to be a teacher in our history — I know they had very little rights — but it feels like we’re going back toward that direction.”

To Read the Rest of the Article

Juan Cole: Libya Standoff as Saudi Quivers and Iran, Iraq under Pressure

Libya Standoff as Saudi Quivers and Iran, Iraq under Pressure
by Juan Cole
Informed Consent

...

Saudi Arabia, the world’s major swing producer, is afraid of unrest itself and attempting to buy off its own population, so needs the extra money for this purpose. Saudi Arabia had traditionally attempted to hold prices down, because its vast reserves meant it could always make its money in the future, and its relatively small population (22 mn. citizens) left it with limitations on its economic absorptive capacity, i.e., it couldn’t put a lot of oil profits to work in its own domestic economy.

So the Saudi government is handing out $37 billion, all of a sudden, to its people for housing and unemployment relief.

Saudi authorities on Tuesday detained a Shiite clergyman in the Eastern Province who preached a sermon calling for a constitutional monarchy. Shiites are probably about 12 percent of Saudis and are culturally and politically repressed by the Wahhabi establishment, which typically views them as idolaters. Had the call for constitutional monarchy come from other quarters, it would be more significant, since it is hard to imagine Wahhabi-Shiite political unity. Unrest among Saudi Shiites might affect the oil-rich Eastern Province where they mostly reside, but the Saudi state has significant repressive capacities in that area.

To Read the Entire Report

Move On: Top 10 Shocking Attacks from the GOP's War on Women

(From Move On -- sources are at the end of the list.)

Top 10 Shocking Attacks from the GOP's War on Women

1) Republicans not only want to reduce women's access to abortion care, they're actually trying to redefine rape. After a major backlash, they promised to stop. But they haven't yet. Shocker.

2) A state legislator in Georgia wants to change the legal term for victims of rape, stalking, and domestic violence to "accuser." But victims of other less gendered crimes, like burglary, would remain "victims."

3) In South Dakota, Republicans proposed a bill that could make it legal to murder a doctor who provides abortion care. (Yep, for real.)

4) Republicans want to cut nearly a billion dollars of food and other aid to low-income pregnant women, mothers, babies, and kids.

5) In Congress, Republicans have a bill that would let hospitals allow a woman to die rather than perform an abortion necessary to save her life.

6) Maryland Republicans ended all county money for a low-income kids' preschool program. Why? No need, they said. Women should really be home with the kids, not out working.

7) And at the federal level, Republicans want to cut that same program, Head Start, by $1 billion. That means over 200,000 kids could lose their spots in preschool.

8) Two-thirds of the elderly poor are women, and Republicans are taking aim at them too. A spending bill would cut funding for employment services, meals, and housing for senior citizens.

9) Congress just voted for a Republican amendment to cut all federal funding from Planned Parenthood health centers, one of the most trusted providers of basic health care and family planning in our country.

10) And if that wasn't enough, Republicans are pushing to eliminate all funds for the only federal family planning program. (For humans. But Republican Dan Burton has a bill to provide contraception for wild horses. You can't make this stuff up).

Sources:

1. "'Forcible Rape' Language Remains In Bill To Restrict Abortion Funding," The Huffington Post, February 9, 2011

"Extreme Abortion Coverage Ban Introduced," Center for American Progress, January 20, 2011

2. "Georgia State Lawmaker Seeks To Redefine Rape Victims As 'Accusers,'" The Huffington Post, February 4, 2011

3. "South Dakota bill would legalize killing abortion doctors," Salon, February 15, 2011

4. "House GOP Proposes Cuts to Scores of Sacred Cows," National Journal, February 9, 2011

5. "New GOP Bill Would Allow Hospitals To Let Women Die Instead Of Having An Abortion," Talking Points Memo, February 4, 2011

6. "Republican Officials Cut Head Start Funding, Saying Women Should be Married and Home with Kids," Think Progress, February 16, 2011

7. "Bye Bye, Big Bird. Hello, E. Coli," The New Republic, Feburary 12, 2011

8. "House GOP spending cuts will devastate women, families and economy," The Hill, February 16, 2011

9. "House passes measure stripping Planned Parenthood funding," MSNBC, February 18,2011

"GOP Spending Plan: X-ing Out Title X Family Planning Funds," Wall Street Journal, February 9, 2011

10. Ibid.

"Birth Control for Horses, Not for Women," Blog for Choice, February 17, 2011

Matt Taibbi: Why Isn't Wall Street in Jail?

[Courtesy of Democracy Now's interview with Taibbi]

Why Isn't Wall Street in Jail? Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them
by Matt Taibbi
Rolling Stone

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."

I put down my notebook. "Just that?"

"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

...

Here's how regulation of Wall Street is supposed to work. To begin with, there's a semigigantic list of public and quasi-public agencies ostensibly keeping their eyes on the economy, a dense alphabet soup of banking, insurance, S&L, securities and commodities regulators like the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as supposedly "self-regulating organizations" like the New York Stock Exchange. All of these outfits, by law, can at least begin the process of catching and investigating financial criminals, though none of them has prosecutorial power.

The major federal agency on the Wall Street beat is the Securities and Exchange Commission. The SEC watches for violations like insider trading, and also deals with so-called "disclosure violations" — i.e., making sure that all the financial information that publicly traded companies are required to make public actually jibes with reality. But the SEC doesn't have prosecutorial power either, so in practice, when it looks like someone needs to go to jail, they refer the case to the Justice Department. And since the vast majority of crimes in the financial services industry take place in Lower Manhattan, cases referred by the SEC often end up in the U.S. Attorney's Office for the Southern District of New York. Thus, the two top cops on Wall Street are generally considered to be that U.S. attorney — a job that has been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy Giuliani — and the SEC's director of enforcement.

The relationship between the SEC and the DOJ is necessarily close, even symbiotic. Since financial crime-fighting requires a high degree of financial expertise — and since the typical drug-and-terrorism-obsessed FBI agent can't balance his own checkbook, let alone tell a synthetic CDO from a credit default swap — the Justice Department ends up leaning heavily on the SEC's army of 1,100 number-crunching investigators to make their cases. In theory, it's a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.

That's the way it's supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who's in office or which party's in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.

The systematic lack of regulation has left even the country's top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. "I think you've got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street," he says.

To Read the Entire Essay

Danny Schecter: US Economics -- One Big Ponzi Scheme

US economics: One big Ponzi scheme: While Bernie Madoff languishes in jail, bankers continue to profit as the poor lose their homes and hope.
by Danny Schecter
Al Jazeera

Thank you, Bernie, for breaking your silence - even if you are still clinging to that cover-up mode you adopted since you took the entirety of the blame for your crimes.

What is clear is that ripping off the rich is punished far more severely than ripping off the poor. The lengthy sentence you were given spared countless other greedsters and goniffs from facing the music - what music there is.

In an interview - with a reporter from The New York Times who is writing a book to cash in on a man who has already cashed out - we learn, in the vaguest terms, that Mr M believes the banks he did his crooked business with "should have known" his figures did not figure. Keeping with the deceit that has served him well over the years, he names no names.

That said, how right he may be. There were many who should have known and done something about it. The Securities and Exchange Commission (SEC) and other regulators for one. Perhaps The New York Times for another. Remember, it was Madoff's confession to his sons that started him on his way to his new 12' x 12' home from home - in a federal correctional institute, where he may dream of his seized penthouse, homes and yachts - rather than any press expose.

For years, he went undetected by business journalists, who knew - or should have known - what he was up to. There are even questions about the speed with which he was sentenced, preventing him from being tried - a process which, through diligent cross-examination, would have brought us more information on the details of his dirty deals.

Do not believe all you read

Even The New York Times interview is being disputed, reports the New York Post: "The trustee representing thousands of Bernard Madoff's victims disputed a report that he personally grilled the Ponzi monster in prison."

"There has been no direct communication between them," said David Sheehan, the chief counsel for the court-appointed trustee, Irving Picard, after The New York Times reported that Picard and Madoff had met over the summer.

"The Times later changed a quote from Madoff and altered some text online that had implied Picard personally visited Bernie in the Butner, NC, lockup where he is serving a 150-year sentence. Picard did not dispute that his legal team met with Madoff."

Madoff is also still not coming clean about the web of alliances he had internationally, as well as in New York. We live in a global economy after all. We now know of Swiss and Austrian connections - but what about Israel, where this ingratiating handler was well known for his connections with Jewish philanthropists and institutions? So far, that story has yet to be told.

At the same time, the people investigating Madoff are making a small fortune. According to the Financial Times: "The army of lawyers and consultants helping to recover funds from Bernard Madoff's $19.6bn fraud stand to earn more than $1.3bn in fees, according to new figures that detail the cost of liquidating the huge Ponzi scheme."

The comments of readers to The Times appear to be more insightful than the paper’s own reports. Here is one from Texas: "I actually, sort of, feel sorry for this man. He was just doing what many investment firms were doing at the same time. He has been imprisoned as a scapegoat - yet many people since then - and to this day - are doing the same thing. Where are the indictments against the thousands of other people who did the same thing - and knowingly led this country into financial disaster?"

Banks close ranks

The best reporting on this subject is not in the mainstream press but in a music magazine, Rolling Stone, where Matt Taibbi investigates why the whole of Wall Street is not in jail: "Financial crooks brought down the world’s economy - but the feds are doing more to protect them than to prosecute them," he charges.

Madoff also believes the banks who serviced him did not want to know about his Ponzi scheme which, unfortunately, is probably true - and an attitude coming not just from the banks.

The Times report added: "He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their 'willful blindness' and their failure to examine discrepancies between his regulatory filings and other information available to them.

"'They had to know,' Mr Madoff said. 'But the attitude was sort of: "If you’re doing something wrong, we don’t want to know."'"

Yves Smith of NakedCapitalism.com quips: "This sounds credible - but it also seems more than a tad self-serving."

Andrew Leonard asks in Salon: "Should we trust him? After all, if there is one thing we know about Bernie Madoff, it is that he is one hell of a liar. But as evidence emerges that bank executives were exchanging emails wondering about Madoff’s amazing investment record, the possibility that the banks were purposefully looking the other way is not inconceivable."

The truth is that many of us still do not really want to know - because, if we did, we would have to do something about it.

By their actions, both Democrats and Republicans clearly appear to prefer the most simplistic understandings - or misunderstandings.

To Read the Rest of the Commentary

Yves Smith: Wisconsin Union Battle -- A Convenient Distraction From the Real Culprit in State Budget Woes

Wisconsin Union Battle: A Convenient Distraction From the Real Culprit in State Budget Woes
by Yves Smith
Naked Capitalism

The first is that the collapse in tax receipts was the result of the global financial crisis. That’s the 800 pound gorilla in the room that everyone seems to ignore. But second, as a very good article by Richard Wolff in the Guardian stresses, is that corporations no longer pay their fair share of total taxes:

During the Great Depression, federal income tax receipts from individuals and corporations were roughly equal. During the second world war, income tax receipts from corporations were 50% greater than from individuals. The national crises of depression and war produced successful popular demands for corporations to contribute significant portions of federal tax revenues.

US corporations resented that arrangement, and after the war, they changed it. Corporate profits financed politicians’ campaigns and lobbies to make sure that income tax receipts from individuals rose faster than those from corporations and that tax cuts were larger for corporations than for individuals. By the 1980s, individual income taxes regularly yielded four times more than taxes on corporations’ profits…

Corporations repeated at the state and local levels what they accomplished federally. According to the US Census Bureau, corporations paid taxes on their profits to states and localities totalling $24.7bn in 1988, while individuals then paid income taxes of $90bn. However, by 2009, while corporate tax payments had roughly doubled (to $49.1bn), individual income taxes had more than tripled (to $290bn).

To Read the Rest of the Report

Richard Eskow: We're Better off Than Egypt -- Right? Let's Take a Look; Dave Johnson: Nine Pictures Of The Extreme Income/Wealth Gap

From Richard Eskow: "We're Better off Than Egypt -- Right? Let's Take a Look."

Imagine: A government run by and for the rich and powerful. Leaders who lecture others about "sacrifice" and deficits while cutting taxes for corporations and the wealthy. A system so corrupt that rich executives can break the law without fear of being punished. Increasing poverty and hardship even as the stock market rises. And now, a nation caught between a broken political system and a populist movement that could be hijacked by religious extremists at any moment.

Here's the reality: Income inequality is actually greater in the United States than it is in Egypt. Politicians here have close financial ties to big corporations, both personally and through their campaigns. Corporate lawbreakers often do go unpunished. Poverty and unemployment statistics for US minorities are surprisingly similar to Egypt's.

From Dave Johnson: "Nine Pictures Of The Extreme Income/Wealth Gap"

The top 1% took in 23.5% of all of the country’s income in 2007. In 1979 they only took in 8.9%.

It is concentrating at the expense of the rest of us. Between 1979 and 2008, the top 5% of American families saw their real incomes increase 73%, according to Census data. Over the same period, the lowest-income fifth (20% of us) saw a decrease in real income of 4.1%. The rest were just stagnant or saw very little increase. This is why people are borrowing more and more, falling further and further behind. (From the Working Group on Extreme Inequality)

Income VS Wealth

There are a few people who make hundreds of millions of income in a single year. Some people make more than $1 billion in a year But that is in a single year. If you make vast sums every year, after a while it starts to add up. (And then there is the story of inherited wealth, passed down and growing for generation after generation...)

Top 1% owns more than 90% of us combined. "In 2007, the latest year for which figures are available from the Federal Reserve Board, the richest 1% of U.S. households owned 33.8% of the nation’s private wealth. That’s more than the combined wealth of the bottom 90 percent." (Also from the Working Group on Extreme Inequality)

400 people have as much wealth as half of our population. The combined net worth of the Forbes 400 wealthiest Americans in 2007: $1.5 trillion. The combined net worth of the poorest 50% of American households: $1.6 trillion.

A Reply to a Mass Email That All We Need to Do Is Remove the Current Elected Officials and Our Political System Will Be Fixed

[My response to a mass email sent by a relative trying to convince people that what need to do is to get rid of the current elected representatives and that will solve our current social/economic problems]

I would like to encourage you all to reconsider what the problem is here. You can do whatever you want to your elected officials, but they are not really the true problem. I would encourage you to look into the recent Supreme Court decision on "Citizen United vs the US" and consider the implications of unregulated corporate cash influx into our so-called democratic elections. The problem is the unchecked flow of corporate money in our democracy and the dependence of our elected officials on that money to get elected (and re-elected). Get rid of many as you want, the new ones will still be dependent on the same masters.....

Take, for instance, the Tea Party, which is corporate funded and is not about dismantling the current system. What they are about is deregulating the social system in order to continue to benefit our country's elites (this is not to discount the legitimate worries of the Tea Party masses, this is to say they are being misled by their corporate funded leadership). The first thing newly elected Tea Party Senator Rand Paul did here in KY was to seek to continue the tax cuts Bush had temporarily instituted for those that make over 250,000 dollars.

A current report from Democracy Now lets us know how bad it is for working people who have lost their jobs and/or have seen their wages frozen/cut these past few years:

Food banks across the country are serving a record number of people and many agencies are struggling to meet the demand ahead of Thanksgiving. In Texas, the Montgomery County Food Bank served a record 31,000 people last month. The Washington Post reports the demand for meals at the Arlington Food Assistance Center in Virginia
has jumped 50 percent in the past two years. In the Washington DC area, the Capital Area Food Bank is on pace to distribute a record 30 million pounds of food this year, an increase of more than 10 percent since 2009. According to the U.S. Department of Agriculture, the number of families seeking assistance from food pantries jumped from 3.9 million in 2007 to 5.6 million last year. The number of U.S.
households deemed "food insecure" also exceeded 50 million last year, amounting to a record 14.7 percent.

... and then this report comes out in the NY Times about all-time record corporate profits last quarter:

Corporate Profits Were the Highest on Record Last Quarter

Record "profits" for the few through the exploitation of workers. Record "growth" for corporations through systemic economic disparity and extreme poverty for the majority of workers. Currently 1 in 7 families in America are at or below the poverty line ($22,000 for a family of four), in KY it is 1 in 4. This is disturbing to me.

Michael

Camillo Bica: Rich Man's War and a Poor Man's Fight

"Rich Man's War and a Poor Man's Fight."
by Camillo "Mac" Bica
TruthOut

...

Despite the deep recession, not all segments of American society are suffering economically. Banking and corporate executives, for example, continue to enjoy lucrative salaries and bonuses. Under the war economy, Main Street struggles, Wall Street thrives and America suffers the largest income gap between its richest and poorest citizens in recorded history. Consequently, although the draft with its exemption clause may be gone, little has changed since the Civil War. The children of the privileged and the wealthy, uncoerced by economic need, feel no compunction to place their physical and mental well-being in jeopardy by enlisting in the military. As a result of this extreme economic inequity and the AVF's economic incentives, the modern equivalent of the substitution fee, once again the burden of fighting and dying falls upon the poor and working classes. Consequently, the AVF, not unlike the draft-military of 1873, smacks of classism and remains unrepresentative of American society. In fact, it may be even more insidious. During the Civil War, draft dodgers like Carnegie were at least required to pay the commutation or substitution fee out of their own pockets. In the AVF, it is paid for by the taxpayers. Ironically, given the system of taxation in this country that provides lucrative corporate tax loopholes and tax breaks to the wealthiest Americans, these economic incentives to military service (i.e., the pay raises, enlistment bonuses, GI Bill etc.) are paid for, not by those who are spared (i.e., the privileged and the wealthy), but rather by those who are required, by economic need, to make the sacrifice, enlist in the military and risk injury and death in war - the poor and the working class.

...

One final point, given war's extreme profitability for the privileged and the wealthy (the corporatists, bankers, politicians - the military-industrial, Congressional complex) and the fact that with the AVF, they and/or their children will never step onto the battlefield and suffer war's deleterious effects, it is not surprising, therefore, that our nation is embroiled in a quagmire with the longest and most expensive war in American history. As the wars and occupations continue virtually ignored except by the small percentage of Americans who are directly impacted by the killing and dying - members of the military and their families - voices from both ends of the political spectrum are calling for the reinstatement of the draft as a means of sharing the burden of military service, or to "reinvigorate" the peace movement. I have always opposed the draft as immoral and unconstitutional, but as the situation in this country has grown dire, drastic measures are required. Consequently, as much as it pains me to say, I think that the most plausible solution to what can only be described as war profiteering and a violation of the principle of universal obligation and shared sacrifice, is to reinstate the draft, but with a stipulation. Unless and until these gross economic inequities are remedied and educational and employment opportunities are made available to all, only those young men and women whose families earn an annual income exceeding $250,000 will be subject to mandatory military service with few if any exemptions other than REAL, documented and severe medical impairment. This "Fairness Draft," will accomplish three important goals. First, it helps furnish the manpower necessary to sustain the AVF and ensure the national defense. Second, it satisfies both the intent of the social contract and the principle of distributive justice by ensuring that the burden of military service is shared equally by all segments of the population, regardless of economic status. Lastly and. perhaps most importantly, as the cost-benefit analysis changes, that is, should the lives and well-being of the children of the privileged and the wealthy - the progeny of bankers, corporate executives, politicians etc. - be placed at risk, the frequency and number of wars will decrease significantly. By providing a fair distribution of sacrifice, with fewer unnecessary and immoral wars, and the eventual educational and employment opportunity for all, the Fairness Draft is a good first step toward creating a more perfect union and ensuring that the alleged struggle to end terrorism no longer remains a "rich man's war and a poor man's fight."

To Read the Entire Essay

Students Protest Billionare Caucus

Eric Holt-Gimenez: Food Rebellions -- 7 Steps to Solving the Food Crisis

Food Rebellions: 7 Steps to Solving the Food Crisis: Resistance to the trade and “aid” policies that displace farmers and increase hunger.
by Eric Holt-Gimenez
Yes!

The World Food Program describes the current global food crisis as a silent tsunami, with billions of people going hungry. Hunger is, indeed, coming in waves, but not everyone will drown in famine. The recurrent food crises are making a handful of corporations very rich—even as they put the rest of the planet at risk.

Built over half a century, largely with public grain subsidies and foreign aid, the global food-industrial complex is made up of large corporations that sell grain, seed, chemicals, and fertilizer, along with global supermarket chains and food processors.

When these players first came on the scene, world agriculture was different. Forty years ago, the global South had yearly agricultural trade surpluses of $1 billion. After three “Development Decades,” they were importing $11 billion a year in food. Immediately following de-colonization in the 1960s, Africa exported $1.3 billion in food a year. Today it imports 25 percent of its food.

International trade agreements and pressure from the global North opened up entire continents to cheap, subsidized grain from the North. This put local farmers out of business, devastated local crop diversity, and consolidated control of the world’s food system in the hands of multinational corporations. Today three companies, Archer Daniels Midland (ADM), Cargill, and Bunge control 90 percent of the world’s grain trade.

The official prescriptions for solving the world food crisis call for more subsidies for industrialized nations, more food aid, and more so-called Green (or Gene) Revolutions. Expecting the institutions that built the current flawed food system to solve the food crisis is like asking an arsonist to put out a forest fire. When the world food crisis exploded in early 2008, ADM’s profits increased by 38 percent, Cargill’s by 128 percent, and Mosaic Fertilizer (a Cargill subsidiary) by a whopping 1,615 percent!

For decades, family farmers the world over have resisted this corporate control. They have worked to diversify crops, protect soil and native seeds, and conserve nature. They have established local gardens, businesses, and community-based food systems. These strategies are effective. They need to be given a chance to work.

To Read the Rest of the Report

Rebel Diaz: Which Side Are You On?

Van Jones: The Economic Injustice of Plastic

Yes Magazine

Göran Therborn: The Killing Fields of Inequality

The killing fields of inequality
by Göran Therborn
Eurozine

There are three main ways of distinguishing between difference and inequality. First, a difference may be horizontal, without anything or anybody being higher or lower, better or worse, whereas an inequality is always vertical, or involves ranking. Secondly, differences are matters of taste and/or of categorisation only. An inequality, on the other hand, is not just a categorisation; it is something that violates a moral norm of equality among human beings. (To argue this is not to presuppose any norm of complete equality, but to point to a difference that is too big and/or has an undeserved direction, i.e. the wrong people getting the best rewards.) Thirdly, for a difference to become an inequality it must also be abolishable. The greater physical prowess of the average 20-year-old in comparison with the average 60-year-old is not an inequality. But the different social life-chances of women as compared to men, or of black working-class boys in comparison with white bankers boys, have come to be seen as inequalities. In one sentence: inequalities are avoidable, morally unjustified, hierarchical differences.

There are (at least) three fundamentally different kinds of inequality, and all of them are destructive of human lives and of human societies.

There is inequality of health and death, which we may call vital inequality. True, we are all mortal and physically vulnerable, and in some sense our life-tree is decided by some inscrutable lottery. However, hard evidence is piling up that health and longevity are distributed with clearly visible social patterns. Children in poor countries and poor classes die more often before the age of one, and between the age of one and five, than children in rich countries and rich classes. Low-status people in Britain die more often before retirement age than high-status people, and if they survive have shorter lives in retirement. A retired British male bank or insurance employee, for instance, can look forward to seven to eight more years of retirement life than a retired employee of Whitbread or Tesco (Financial Times, 20/21.10.07). Vital inequality, which we can measure relatively easily through life expectancy and survival rates, is literally destroying millions of human lives in the world every year.

Existential inequality hits you as a person. It restricts the freedom of action of certain categories of persons, for instance of women in public spaces and spheres, as in Victorian and Edwardian Britain, and as in some countries still today. Existential inequality means denial of (equal) recognition and respect, and is a potent generator of humiliations, for black people, (Amer-)Indians, women in patriarchal societies, poor immigrants, low castes and stigmatised ethnic groups. It is important to note here that existential inequality does not only take the form of blatant discrimination; it also operates effectively through more subtle status hierarchies.

Thirdly, there is material or resource inequality, meaning that human actors have very different resources to draw upon. We can distinguish two aspects here. The first is inequality of access – to education, career tracks and social contacts, to what is called "social capital". In conventional mainstream discussions this aspect is often referred to as "inequality of opportunity". The second is inequality of rewards, often referred to as inequality of outcome. This is the most frequently used measure of inequality – the distribution of income, sometimes also of wealth.

These three kinds of inequality interact with and influence each other. But it is useful to distinguish between them because, as well as having different types of effects on people, the different kinds of inequality have different trajectories in different periods – which means that they are governed by different causal mechanisms.

Inequality can be produced in four basic ways. First there is distantiation – some people are running ahead and/or others falling behind. Secondly there is the mechanism of exclusion – through which a barrier is erected making it impossible, or at least more difficult, for certain categories of people to access a good life. Thirdly, the institutions of hierarchy mean that societies and organisations are constituted as ladders, with some people perched on top and others below. Finally, there is exploitation, in which the riches of the rich derive from the toil and the subjection of the poor and the disadvantaged.

The historical importance of these mechanisms in generating the configuration of the modern world is hotly disputed. Are current inequalities primarily a product of North Atlantic nations forging ahead, through scientific and industrial innovations? Or are they rather an effect of exclusion, for example the British empire's hindering of Indian industry from developing? Did the "modern world system" after 1500 spawn a world hierarchy of a core, a semi-periphery, and periphery? Or was the rise of the West mainly driven by armed exploitation, by the plunder of American metals, by plantation slavery, and by forced and underpaid commodity production in the South? The debate remains unfinished, both because of the ambiguity of the evidence – there is empirical support for all four mechanisms, but it is difficult to weigh them in relation to each other – and because of the high moral historical stakes involved.

In this article, however, we shall look into the ways in which current inequalities are being produced.

To Read the Rest of the Essay

Seung-hoon Jeong: Gaze, Suture, Interface: The Suicide Scene in Michael Haneke’s Caché

(If you have not seen this excellent film, wait to read this until after watching it because it will ruin the film for you. ENG 282 students, we will be watching this in class.)

Gaze, Suture, Interface: The Suicide Scene in Michael Haneke’s Caché
Seung-hoon Jeong
Cinephile (The University of British Columbia)



Georges (Daniel Auteuil), a host of a high-brow talk show, receives suspicious videotapes that display the peaceful façade of his upper middle class house. Nothing is clear in this CCTV footage in which there is ostensibly ‘nothing happening’: who has been watching his family, and why? Subsequent clips lead him to his childhood home and to an unknown apartment, which turns out to be the dingy place of his adopted, then abandoned, Algerian brother Majid (Maurice Bénichou). This forgotten ‘other’ confronts Georges with an uncomfortable truth from the past: young Georges’s jealousy forced Majid to be sent off to an orphanage, whereafter Majid had to survive without the educational and social benefits given to Georges. The nature of the video thus changes from provocation to evocation, from surveillance to reminiscence. Michael Haneke’s Caché [Hidden] (2005) uncannily uncovers this hidden trauma that resurfaces in the present. But my primary question is simple: why video?

Let me call this video an ‘interface’. Technically meaning the contact surface between image and spectator, the notion can be applied to the camera, the filmstrip, and the screen. That such a cinematic interface appears onscreen might not merit discussion in many cases, but it can play a central role in the narrative, whose unity is often thwarted and destabilized by the interface image. The subjectivity of characters or spectators can also be shaped or shaken through their encounters with the interface-within-the-film. A diegetic interface may then affect the ‘perception’ and ‘memory’ chain along which ‘image’ and ‘subjectivity’ are interconnected. Caché seems ideal for a case study in this regard, not only because of its video insertions, but because of the consequent revelation of perceptual and mnemonic mechanisms. What follows begins with a close analysis of a scene that exposes these mechanisms and thereby inspires us to explore, even expand the theoretical implications of the interface.

Among many significant scenes, I take Georges’s second visit to Majid’s flat as a kernel of the film’s structure. Its impressiveness, of course, bursts out of Majid’s sudden suicide; Majid lets Georges in, talks for a second, takes out a knife as Georges slightly falters, and slits his own throat, leaving no room for anticipation. The abruptness of this action marks the abruption of Majid’s emotion: a remarkable calmness and gentleness, not usually found in revenge suspects. It is rather Georges, the white Parisian intellectual, who has always lost his temper in front of his lower class, dark-skinned brother (and later, in front of Majid’s son, too); this Algerian outcast has reversed the standard image of the brutal invader of the bourgeois family like the De Niro figure in Cape Fear (Martin Scorsese, 1991). By killing himself, Majid releases something repressed beneath his tranquil face and fractures the peace of both his banlieue home and Georges’s bourgeois life. The flash of his blood sprayed onto the wall visualizes this fracture like an unstitched slash; the blood slowly exuding from his head onto the floor insinuates that this trauma will only grow like a nightmare in Georges’s memory.

In view of other scenes, Majid’s bloodstain on the wall triggers a déjà-vu that allows us to retroactively recognize the drawings sent to Georges (of a child vomiting blood) as forewarnings of this suicide. And through the same logic of ‘deferred action’ (Freudian Nachträglichkeit), this bloody event serves to repeat the film’s first instant flashback, prompted by a reverse-action tape, of young Majid coughing tubercular blood by a window, and the childhood trauma staged in Georges’s nightmare: Majid kills a cockerel, which also leaves a sharp blood mark, and he approaches Georges with the bloody hatchet. This killing was in fact orchestrated by Georges, but he told his parents that Majid had wanted to scare him, a joking lie that, along with Majid’s tuberculosis, ultimately resulted in Majid’s expulsion. However, only through recurrent visual traces after the fact does that original scene manifest its latent meaning as Georges’s original sin. The question would be how guilty and responsible the child and/or adult Georges is for that tiny ‘twisted joke’ that had lifelong repercussions/consequences for Majid. One may conclude: “Georges’s refusal as an adult to acknowledge the effects of his earlier actions suggests a parallel with the postcolonial metropolitan who is neither wholly responsible for, nor wholly untainted by, past events from which he or she has benefited” (Ezra and Sillars 219).1 Or, Majid’s suicide might bring a deep, if guilty, pleasure to a deeply ‘twisted’ xenophobe European: “the comforting idea that the colonial native can be made to disappear in an instant through the auto-combustive agency of their own violence” (Gilroy 234).

To See the Video of the Scene and Read the Rest of the Analysis