Archive for April 13th, 2012
Moyers: Wall Street’s Massive Freak Out When Asked to Pay Their Fair Share
Former allies are turning on the president now that he wants to close gaping tax loopholes for the 1 percent.
Benjamin Franklin, who used his many talents to become a wealthy man, famously said that the only things certain in life are death and taxes. But if you’re a corporate CEO in America today, even they can be put on the back burner – death held at bay by the best medical care money can buy and the latest in surgical and life extension techniques, taxes conveniently shunted aside courtesy of loopholes, overseas investment and governments that conveniently look the other way.
In a story headlined, “For Big Companies, Life Is Good,” The Wall Street Journal reports that big American companies have emerged from the deepest recession since World War II more profitable than ever: flush with cash, less burdened by debt, and with a greater share of the country’s income. But, the paper notes, “Many of the 1.1 million jobs the big companies added since 2007 were outside the U.S. So, too, was much of the $1.2 trillion added to corporate treasuries.”
To add to this embarrassment of riches, the consumer group Citizens for Tax Justice reports that more than two dozen major corporations — including GE, Boeing, Mattel and Verizon — paid no federal taxes between 2008 and 2011. They got a corporate tax break that was broadly supported by Republicans and Democrats alike.
Corporate taxes today are at a 40-year-low — even as the executive suites at big corporations have become throne rooms where the crown jewels wind up in the personal vault of the CEO.
Then look at this report in The New York Times: Last year, among the 100 best-paid CEOs, the median income was more than 14 million, compared with the average annual American salary of $45,230. Combined, this happy hundred executives pulled down more than two billion dollars.
What’s more, according to the Times “… these CEO’s might seem like pikers. Top hedge fund managers collectively earned $14.4 billion last year.” No wonder some of them are fighting to kill a provision in the recent Dodd-Frank reform law that would require disclosing the ratio of CEO pay to the median pay of their employees. One never wishes to upset the help, you know. It can lead to unrest.
That’s Wall Street — the metaphorical bestiary of the financial universe. But there’s nothing metaphorical about the earnings of hedge fund tigers, private equity lions, and the top dogs at those big banks that were bailed out by tax dollars after they helped chase our economy off a cliff.
So what do these big moneyed nabobs have to complain about? Why are they whining about reform? And why are they funneling cash to super PACs aimed at bringing down Barack Obama, who many of them supported four years ago?
Because, writes Alec MacGillis in The New Republic — the President wants to raise their taxes. That’s right — while ordinary Americans are taxed at a top rate of 35% on their income, Congress allows hedge fund and private equity tycoons to pay only pay 15% of their compensation. The President wants them to pay more; still at a rate below what you might pay, and for that he’s being accused of – hold onto your combat helmets – “class warfare.” One Wall Street Midas, once an Obama fan, now his foe, told MacGillis that by making the rich a primary target, Obama is “[expletive deleted] on people who are successful.”
And can you believe this? Two years ago, when President Obama first tried to close that gaping loophole in our tax code, Stephen Schwarzman, who runs the Blackstone Group, the world’s largest private equity fund, compared the President’s action to Hitler’s invasion of Poland.
That’s the same Stephen Schwarzman whose agents in 2006 launched a predatory raid on a travel company in Colorado. His fund bought it, laid off 841 employees, and recouped its entire investment in just seven months – one of the quickest returns on capital ever for such a deal.
To celebrate his 60th birthday Mr. Schwarzman rented the Park Avenue Armory here in New York at a cost of $3 million, including a gospel choir led by Patti LaBelle that serenaded him with “He’s Got the Whole World in His Hands.” Does he ever — his net worth is estimated at nearly $5 billion. Last year alone Schwarzman took home over $213 million in pay and dividends, a third more than 2010. Now he’s fundraising for Mitt Romney, who, like him, made his bundle on leveraged buyouts that left many American workers up the creek.
To add insult to injury, average taxpayers even help subsidize the private jet travel of the rich. On the Times’ DealBook blog, mergers and acquisitions expert Steven Davidoff writes, “If an outside security consultant determines that executives need a private jet and other services for their safety, the Internal Revenue Service cuts corporate chieftains a break. In such cases, the chief executive will pay a reduced tax bill or sometimes no tax at all.”
Are the CEOs really in danger? No, says Davidoff, “It’s a common corporate tax trick.”
Talk about your friendly skies. No wonder the people with money and influence don’t feel connected to the rest of the population. It’s as if they live in a foreign country at the top of the world, like their own private Switzerland, at heights so rarefied they can’t imagine life down below.
© 2012, agentleman.
Cannibalize the FutureBy PAUL KRUGMAN
One general rule of modern politics is that the people who talk most about future generations — who go around solemnly declaring that we’re burdening our children with debt — are, in practice, the people most eager to sacrifice our future for short-term political gain. You can see that principle at work in the House Republican budget, which starts with dire warnings about the evils of deficits, then calls for tax cuts that would make the deficit even bigger, offset only by the claim to have a secret plan to make up for the revenue losses somehow or other.
And you can see it in the actions of Chris Christie, the governor of New Jersey, who talks loudly about acting responsibly but may actually be the least responsible governor the state has ever had.
Mr. Christie’s big move — the one that will define his record — was his unilateral decision back in 2010 to cancel work that was already under way on a new rail tunnel linking New Jersey with New York. At the time, Mr. Christie claimed that he was just being fiscally responsible, while critics said that he had canceled the project just so he could raid it for funds.
Now the independent Government Accountability Office has weighed in with a report on the controversy, and it confirms everything the critics were saying.
Much press coverage of the new report focuses, understandably, on the evidence that Mr. Christie made false statements about the tunnel’s financing and cost. The governor asserted that the projected costs were rising sharply; the report tells us that this simply wasn’t true. The governor claimed that New Jersey was being asked to pay for 70 percent of a project that would shower benefits on residents of New York; in fact, the bulk of the financing would have come either from the federal government or from the Port Authority of New York and New Jersey, which collects revenue from residents of both states.
But while it’s important to document Mr. Christie’s mendacity, it’s even more important to understand the utter folly of his decision. The new report drives home just how necessary, and very much overdue, the tunnel project was and is. Demand for public transit is rising across America, reflecting both population growth and shifting preferences in an era of high gas prices. Yet New Jersey is linked to New York by just two single-track tunnels built a century ago — tunnels that run at 100 percent of capacity during peak hours. How could this situation not call for new investment?
Well, Mr. Christie insisted that his state couldn’t afford the cost. As we’ve already seen, however, he apparently couldn’t make that case without being dishonest about the numbers. So what was his real motive?
One answer is that the governor is widely assumed to have national ambitions, and the Republican base hates government spending in general (unless it’s on weapons). And it hates public transportation in particular. Indeed, three other Republican governors — in Florida, Ohio and Wisconsin — have also canceled public transportation projects supported by federal funds. The difference, of course, is that New Jersey is a densely populated state, most of whose residents live either in Greater New York or Greater Philadelphia; given that position, public transit is the state’s lifeblood, and refusing to invest in such transportation will strangle the state’s economy.
Another answer is that canceling the tunnel allowed Mr. Christie to divert funds from that project — as his critics have said, to cannibalize the investment — and put them into the state highway fund, thereby avoiding the need to raise the state’s tax on gasoline. New Jersey gas taxes, by the way, are lower in real terms than at any point in the state’s history. But, as a candidate, Mr. Christie said that he wouldn’t raise those taxes, so cannibalizing the tunnel helped him avoid embarrassment.
The crucial point about both of these explanations is that they stand Mr. Christie’s narrative about himself on its head. The governor poses as a man willing to make hard choices for the future, but what he actually did was sacrifice the future for the sake of personal political advantage. He catered to national Republican prejudices that are completely at odds with New Jersey’s needs; he cared more about avoiding embarrassment over a misguided campaign pledge than about serving an urgent public need.
Unfortunately, Mr. Christie’s behavior is all too typical these days.
America used to be a country that thought big about the future. Major public projects, from the Erie Canal to the interstate highway system, used to be a well-understood component of our national greatness. Nowadays, however, the only big projects politicians are willing to undertake — with expense no object — seem to be wars. Funny how that works.
© 2012, agentleman.
War…This is for REAL. The Democrats versus the Republicans. If the Republicans win we’re back to SLAVERY esp for WOMEN ” PREPARE TO FIGHT FOR YOUR LIFE “………Harvey Edwards
REPORTING THE FACTS……
It took Bush, Cheney and the Republicans eight years to destroy our country let alone the world and you expect President Obama to correct years of destruction they have caused to be reversed in three years. That is simply and truly IMPOSSIBLE.
I am living in the realistic present. If you ride a horse to work today I will listen to you otherwise these are the facts: The Republican party has changed and has moved to the far right and has become a party for the rich and powerful leaving the poor hopeless with no chance to succeed in life. Their only option, which I stand behind, is to fight whenever wherever the Republicans and the conservative right wing are.
We have lost hope in America because of the REPUBLICANS. AMERICA IS NOT GOD BUT THE REPUBLICANS THINK THEY ARE. I am 64 years old and all that I invested in is gone, and I AM POOR so is my country. What happened, well you can start by blaming Bush and Cheney and the REPUBLICANS for an illegal war that KILLED many of our great Americans and hundreds of thousands of innocent women, children and men. It also drained trillions of dollars and nobody has ever brought them to justice and nobody will.
The death of THE AMERICAN DREAM due to the banks, the war, deregulation, the rich, big business, basic healthcare for all and the list goes on and on all under the watch of BUSH, CHENEY and the REPUBLICANS. The rich control the country and somehow we must revolt and give every WOMAN, MAN and CHILD the opportunity to have a life. Remember you must take charge of your own fate for if you don’t it then is taken out of your hands and you will certainly regret that. Women in this country must have the right to make decisions about their own lives and the government esp the REPUBLICANS, WHO DO NOT CARE IF YOU LIVE OR DIE must stay out. This is a must…..
We only go around once in life, don’t make your life theirs to control. Write, call, protest in front of their office, home or when you see them but to do nothing will only bring injustice in your life. We must bring back hope for at this point in time we have lost it..When President Clinton left office we had money in the bank , now are broke with no hope in sight. I can’t believe the Republicans on so many levels. Now the REPUBLICANS want to control WOMEN’S RIGHTS and KILL HEALTHCARE and THE LIST GOES ON….
Now is the time to go after them in any way you feel justified. The Democrats say yes and, without even reading a plan, the Republicans will say no. I believe if this does not stop we will have a revolution and maybe we need one to change. I know some of those who read this will say ridiculous but please look around and tell me things are good. There is so much fake spin out there you get dizzy. How can anyone be proud of this country right now? If you are well off you want it to stay the same. Forget about the children going to bed hungry, those homeless, no jobs, can’t meet your basic needs, those that are dying since they have no health insurance and can’t afford it, taking care of our brave vets, making sure our existence in our country is taken care of first. I see no hope for the future. We were once a great nation and now we are becoming a third world nation. And then you see a Hummer drive by, do they care? I don’t think so. We must take care of our family first and this country is our family. Who is Harvey Edwards ?
© 2012, agentleman.