April 18, 2010
American Idiot Week!
-- by Dave Johnson
It's American Idiot Week! over at Brilliant at Breakfast. First up is Bobby Jindal:
Our first Idiot, as Blue Girl reminds us, is Louisiana Governor Bobby Jindal, who just over a year ago, scoffed at the idea of volcano monitoring: Still think volcano monitoring is something to be mocked, there, Bobby? Here's something around which your greedy little Republican mind can perhaps wrap itself.
-- Posted by Dave Johnson at 6:28 PM PST on April 18, 2010.
Concentration Of Wealth
-- by Dave Johnson
Mind Blowing American Wealth Disparity: The Bottom 50% Have Comparatively Nothing
The figures below show the top 10% controlling nearly 70% of wealth. The bottom 50% of US citizens control just a little over 2% of the wealth.Then click through from there to this slide show of 16 slides about how much of our country's wealth has concentrated into just a few hands since Reagan.
50% of us together control just over 2% of all of the wealth in this country. A few at the very top control almost all of the country's wealth. They are at the top of the food chain and we are the food.
-- Posted by Dave Johnson at 4:20 PM PST on April 18, 2010.
April 17, 2010
Can This Case Be Next, Please?
-- by Dave Johnson
Now that the government has taken action against Goldman Sachs, maybe this case can be next? Stephen Friedman was Chair of the Federal Reserve Bank of New York and made a killing on stock in Goldman Sachs, while the NY Fed was involved in regulating the company, including the infamous AIG pass-through. And everyone knew it. Fed Had ‘Misgivings’ About Friedman’s Goldman Stock, Towns Says
The Oversight Committee will schedule a hearing “to learn more from Mr. Friedman and senior Fed officials about how he was permitted to make windfall profits by trading stock in a company he had a role in regulating,” the lawmakers said.
Background: New York Fed Chairman's Ties to Goldman Raise Questions,
The Federal Reserve Bank of New York shaped Washington's response to the financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall Street firms. Goldman received speedy approval to become a bank holding company in September and a $10 billion capital injection soon after.During that time, the New York Fed's chairman, Stephen Friedman, sat on Goldman's board and had a large holding in Goldman stock, which because of Goldman's new status as a bank holding company was a violation of Federal Reserve policy.
. . . Mr. Friedman also was overseeing the search for a new president of the New York Fed, an officer who has a critical role in setting monetary policy at the Federal Reserve. The choice was a former Goldman executive.
. . . Mr. Friedman, who once ran Goldman, says none of these events involved any conflicts. He says his job as chairman of the New York Fed isn't a policy-making one, that he didn't consider his purchases of more Goldman shares to conflict with Fed policy, and bought shares because they were very cheap.
He says he bought the shares because they were "very cheap." I guess everyone involved with the entire stock market was wrong because that is how shares are priced. It's called the "market price" which is the price, period, not too cheap, not too expensive. But this guy, who knew what moves the Fed was be making, knew something that no one else knew, and that is that they were too cheap. That is the very definition of insider trading and the very reason such things are considered a conflict of interest. And a crime.
See this, Friedmanism at the Fed,
... Stephen Friedman, the former chairman of the board of the New York Federal Reserve Bank and a member of the board of directors of Goldman Sachs. Through those two posts, Friedman may have had access to privileged information about the extent of Goldman's exposure to AIG and the opportunity to profit from the Fed's bailout of the beleaguered insurance giant. While he was serving on both boards, Friedman purchased 52,600 shares of Goldman stock, more than doubling the number of shares he owned. These purchases have since risen millions of dollars in value--and raised allegations of insider trading.. . . Despite demands from Congress and the media, neither the Fed nor AIG disclosed the names of the banks or the amount of money each had received through the bailout until March 15, 2009, when AIG finally did so. While the public was left in the dark, Friedman nearly doubled his Goldman holdings by purchasing 37,300 shares for about $3 million. Friedman made that purchase on December 17, 2008, just over a month after the Fed decided to pay Goldman and the other banks full value for the insurance on mortgage-backed securities.
Insider trading is a criminal offense. The public deserves to know if that is what was going on here, and Mr. Friedman should be prosecuted if it was.
-- Posted by Dave Johnson at 1:58 PM PST on April 17, 2010.
Tax Tricks - Do Corporations Pass Taxes On To Customers?
-- by Dave Johnson
Here is a tax trick you hear all the time: we shouldn't tax corporations because they just "pass the taxes along to customers." Go to any of the usual anti-tax, anti-government sites and you'll see them trying to trick people with this.
First of all, if companies really did "pass taxes along to consumers," so what? Is that a reason not to pay for the roads, bridges, schools, courts etc., that enable the company to be profitable enough to pay taxes? But actually they don't -- because they can't.
This tax trick is based on a popular assumption that businesses can just raise prices whenever they want to. But a well-run business is already charging what they should charge for their product or service. If they have room to raise prices they should already have done so. But of course doing so this will cause them to lose sales to competitors.
Taxes are on profits, and profits are calculated at the end of a tax year by adding up all the revenue and subtracting all the costs. When a product or service is sold the company doesn't really know yet how much profit, if any, it will have at the end of the year, so it doesn't know what the tax will be, so how can it adjust prices? But if a company was able to just raise prices based on anticipation of profits, then the result would be that profits would be higher because of the higher price charged, which means taxes would be even higher, so the company should have raised prices even more, but that means the profit would be even higher, so they have to go back and charge more, but then ... I think you are starting to see how silly this idea of raising prices to cover taxes can get.
About those competitors - if one company is doing well and therefore making a profit, and another company is not doing so well, and therefore not making as much profit, and the first company raises prices to cover the taxes on the profit, then the second company has a price advantage so the first company loses sales and isn't going to have a profit after all so they really should put the prices back down, but then the other company's price advantage goes away and they are making a profit again so they should raise prices but ... Hey, this just gets silly, too!
Companies do not pass on taxes to their customers. So don't fall for this tax trick, it's just silly.
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF. Sign up here for the CAF daily summary.
-- Posted by Dave Johnson at 1:05 PM PST on April 17, 2010.
What We're Up Against
-- by Dave Johnson
A look at conservative media, from Media Matters:
-- Posted by Dave Johnson at 1:03 PM PST on April 17, 2010.
Zombie Lies Never Die
-- by Dave Johnson
Note that the date on this is Saturday, April 17, one or two days after the New Orleans police said that much of what is in this never happened: Republican Officials Attacked and Injured in New Orleans - Townhall.com,
On the night of Friday April 9th, a petite female political operative and her boyfriend were attacked and seriously injured in New Orleans by a vicious group of crazed cowards who shrieked political insults while pouncing. After the pummeling, the petite female and her boyfriend were left, collectively, with a compound leg fracture, a concussion, a broken nose and broken jaw. No robbery occurred.But wait!....Don’t waste your time--if you’re Googling for this item on CNN, New York Times, Wa-Po, MSNBC, Huff-Po, ABC, Salon, CBS, etc. --that is.
This story builds on the conservative resentment narrative - all those elites pick on people like me. It is very important for conservatives to feel they are victimized. The problem is that this is starting to incite actual violence.
-- Posted by Dave Johnson at 9:17 AM PST on April 17, 2010.
No Matter What They Propose
-- by Dave Johnson
Matthew Yglesias - The Battle Lines
Back in January, Frank Luntz wrote a memo saying that the best way to defend Wall Street from any new regulation was to spuriously characterize efforts at regulatory reform as leading to “endless bailouts.”[. . .] [now] They claim that the bill “allows for endless taxpayer bailouts of Wall Street and establishes new and unlimited regulatory powers that will stifle small businesses and community banks.”
This doesn't quite capture the sense of that is happening.
Luntz said the way to kill financial reform was to characterize it as "endless bailouts" no matter what they propose.
This is how it works. You do a series of focus groups. You ask "if I told you so-and-so would that make you be against it?" If they say that if they were told that Democrats were stealing green cheese from the moon and forcing ducks to swim in it they would be against it - whatever "it" it - then you would start hearing from everywhere that Democrats were stealing green cheese from the moon and forcing ducks to swim in it. No. Matter. What. The. Truth. Was.
So yes, Republicans are going to say that the financial reform bill will lead to endless bailouts. It is what they were going to say -- all of them -- no matter what the bill has in it.
-- Posted by Dave Johnson at 12:13 AM PST on April 17, 2010.
April 16, 2010
What Conservatives Mean By "Freedom" and "Big Government"
-- by Dave Johnson
This post originally appeared at Speak Out California.
Many of us have wondered what conservatives mean by terms like "big government" and "freedom." Today the vice chairman of the California Republican Party gives us a hint. In Constitution guarantees freedom, not a cushy life, published in the Rev. Moon's Washington Times (do Christians know he's writing there?), Thomas G. Del Beccaro writes,
Today, politicians literally speak of the "rights" of people as they attempt to guarantee a certain standard of living for their constituent-subjects. Of course, most recently, the federal government took on the role of guaranteeing that Americans had a minimum standard of health care because, to the government, it was a right - however unenumerated.
Now, it would be one thing if a government could actually guarantee such standards of living, but it cannot. After all, before the Great Society was enacted to take on the War on Poverty, the government-measured poverty rate was 14 percent.The pre-Great Society federal budget was less than $130 billion.Since then, we have spent tens of trillions of dollars in good intentions and have a nearly $4 trillion budget, yet the poverty rate remains virtually the same 14 percent.
In the process, of course, we have diminished freedoms immeasurably - whether by forcing people to pay for those trillions or by being forced to be subject to government rules....
So "big government" means more rights for Americans, like the right to health care. And by "freedom" he means not being "forced" to help out other Americans. (Of course, the poverty rate was much lower before conservatives took over the government a few years back...)
-- Posted by Dave Johnson at 1:44 PM PST on April 16, 2010.
AFN Conference Early Bird Discount
-- by Dave Johnson
Campaign for America's Future has a yearly conference in DC. It used to be called Take Back America. Now it is called America's Future Now and will be June 7-9.
Today is the last day that people can register for America's Future Now! and get Early Bird discounts. They are in effect until midnight ET.
Join progressive activists who are ready to turn Washington upside down.Forge the strategy that will:
- Take on the corporate lobbies that stand in the way.
- Drive the movement for jobs NOW.
- Create the reform majority and challenge both obstructionist Republicans and compromised Democrats.Join these speakers:
Van Jones, Phil Angelides, Arianna Huffington, Gov. Howard Dean, Deepak Bhargava, Anna Burger, James Rucker, Peter Lewis, Rep. Donna Edwards, Rep. Alan Grayson.
Click here to go to the registration page.
-- Posted by Dave Johnson at 12:35 PM PST on April 16, 2010.
A Tax Trick That Forces Companies To Close Factories
-- by Dave Johnson
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
Yesterday was April 15, so I wrote about Tax Tricks. Here's a tax trick to talk about: Offshore Tax Havens for corporations.
Here's one way that offshore tax havens work. You make an item in one country, and sell it at cost to a subsidiary that is based (post office box) in a tax haven country with no or low taxes. So there is no profit to report in the country that it was made in. Then, your company or another subsidiary buys it for import in the US, for a price near to the amount the product will be sold for here. So when it sells, there is no profit to be taxed here. All the profit occurs in the low-or-no tax country. We, the People collect no taxes with which to pay for the schools and roads that make our economy competitive.
This tax trick encourages companies to move offshore, closing factories, laying off workers, kill the local suppliers and force costs onto the community. So not only are we losing the tax base and suffering the loss of the jobs and factory, we're picking up many of the costs. When a company like Whirlpool says they have to close a plant and destroy a community for competitive reasons, it's because they can do it, and if they don't their competitors will. If their competitors do and they don't respond they lose out, even to the possible point of going out of business (and closing factories and destroying communities.)
Don't blame the companies. Companies do what we let them do. If you don't take advantage of this your competitors will. If your competitors gain enough advantage and you don't you even face going out of business -- and closing factories, destroying communities, putting the costs on the public etc. So by allowing this, Congress forces companies to do this. The word you hear is "encourages" but really, in a competitive environment, allowing it at all forces not encourages.
It is OUR job to set up the playing field on which these companies compete and to define the rules they will use. Zach Carter writes in 10 Ways to Force the Stinking Rich to Share Their Wealth,
According to the Government Accountability Office, 83 of the 100 largest American corporations (pdf) engage in this kind of tax evasion. All of those companies have lobbyists.These companies do it because we let them, which means we make them do it.
Congress: FIX IT!
Sign up here for the CAF daily summary.
-- Posted by Dave Johnson at 10:06 AM PST on April 16, 2010.
