Tag Archives: economy

After The Fairy Tale Dies

Stephen Marche writes in this month’s Esquire about the death of America’s most cherished fairy tale: that we are a land of opportunity, where “anyone can make it” if they just work hard enough.

That fairy tale hasn’t been true in a long, long time — such as it was ever true, which was barely. We all know this. But it’s gotten even worse in the past 10 years.

I remember telling My Conservative Friend™ that if you have money, it’s really hard to get rid of it, short of placing it all on the ponies, because the system is stacked in favor of the wealthy (and for a taste of what I’m talking about, go over to WhatMittPays.com and calculate your family’s tax rate at Mitt Romney’s special Vulture Capitalists’ rate.)

But I’ve come to realize that even this simplistic assessment is no longer true. If you have a little money, saved it up and bought a home or put it in an IRA or 401(k), these days it is easily wiped out by Wall Street shenanigans, like traders betting on Twitter trends and crooked brokers playing with supposedly secure customer funds. Your home can be taken away by a robo-signed foreclosure letter, then bulldozed by the bank.

No, the only people who are truly secure are the super-rich. Simple savings is no longer enough to prepare for the future and fund your kids’ college education, not in this modern era of the Wall Street roller coaster ride. If you want to feel a sense of security, you need to have the cushion enjoyed by the uber-wealthy, the kind of people who are so insulated and tone-deaf they can make a cavalier $10,000 bet on national television while their campaign staff cringes in the green room.

It’s nearly impossible to achieve this kind of wealth with old-fashioned bootstrap-pulling, the fairy tale of hard work and a good education. It’s the kind of money that is inherited. No one wants to admit it, but it’s the truth.

Because the truth of the matter is, while evidence to the contrary is all around us, we are so firmly attached to this “land of opportunity” fairy tale that people remain in deep denial about how truly fucked we are. Which is why, as Marche notes, we seek refuge in cultural indulgences like “Mad Men,” feel-good pleasures that remind us of the “good ol’ days” when the middle class really was expanding at a rate that made the fairy tale closer to reality.

Nostalgia: the last refuge of a dying empire.

Marche writes:

The Great Outcry that has filled the country with inchoate rage is the bloody mess of this fundamental belief in the justice of American outcomes crashing headfirst into the new reality. The majority of new college grads in the United States today are either unemployed or working jobs that don’t require a degree. Roughly 85 percent of them moved back home in 2011, where they sit on an average debt of $27,200. The youth unemployment rate in general is 18.1 percent. Are these all bad people? None of us — not Generation Y, not Generation X, and certainly not the Boomers — have ever faced anything like it. The Tea Partiers blame the government. The Occupiers blame the financial industry. Both are really mourning the arrival of a new social order, one not defined by opportunity but by preexisting structures of wealth. At least the ranters are mourning. Those who are not screaming or in drum circles mostly pretend that the change isn’t happening.

Post-hope, it is hard to imagine even any temporary regression back to the days of the swelling American middle class. The forces of inequality are simply too powerful and the forces against inequality too weak. But at least we can end the hypocrisy. In ten years, the next generation will no longer have the faintest illusion that the United States is a country with equality of opportunity. The least they’re entitled to is some honesty about why.

For a sense of how entrenched this new social order has become, I offer you this piece of feel-good “career advice” I spied on Yahoo News:

Earn more, work less: 8 great jobs that escape the rat race

You know what those eight jobs are? Yoga instructor. Massage therapist. Make-up Artist. Private chef. Personal trainer. Internet tutor. etc. etc. etc. I read that and thought, WTF? Who is buying these services? Oh, right. Silly me. It seems the Ownership Class is telling us to just suck it up and accept the new social order: you will be happy helping Calista Gingrich get her makeup just right. Your best hope for being a success in modern America is to help Judith Kent Dimon stay young and beautiful looking.

Wake up and smell the coffee, America. We’re now a two-class society and it doesn’t appear things will be changing any time soon.

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Filed under economy

Those Compassionate Conservatives!

By now you’ve undoubtedly heard of the wretched Gene Marks’ disastrous Forbes.com column, “If I Were A Poor Black Kid.” Far greater minds than mine have already torn it to shreds; Forbes.com’s staff writers already appear to be distancing themselves from the paternalistic “white man’s burden” diatribe. If you want to read it you’ll have to Google it, I won’t add to the article’s hit count (and indeed that appears to Marks’ intent all along, anyway. Nothing generates hits like race-baiting.)

I have a general rule of thumb that if a column is based on the “if” premise, it’s probably not worth reading. Gene Marks wrote about if he were a poor black kid, then went on to list all the awesome things he’d do to make his life better. He’d study really hard and use the free internet at the local library and he’d work his ass off, yada yada. If he were a poor black kid, that’s what Gene Marks would do.

But Gene Marks is not a poor black kid. He’s a balding, middle-aged white guy, a CPA and contributor to Fox News and CNBC who lives in the Philly suburbs. So I have a steaming cup of STFU that has Gene Marks’ name on it. If you were a poor black kid? Right, but you’re not. So you don’t know. So shut the fuck up. Tootles.

Here’s a news flash: I’m not a poor black kid, either. But I know enough about what I don’t know about being a poor black kid never to assume that everyone had the same opportunities as me. I never thought I hit a triple; I always knew I was born on third base. I remember being around seven years old and feeling incredibly amazed and thankful that I wasn’t born a poor black kid in Africa. (I was a weird child. Also, we got National Geographic. Some of those pictures were forever seared on my unconscious.)

So I really don’t get where Gene Marks, Herman Cain, Newt Gingrich and the rest get their “if only these people would work harder and not steal” crap from. You have to have been drinking some serious American Dream-flavored Kool-Aid to think that hard work and a good education are enough in this world. That’s the bill of goods we’re all sold of course: the fairy tale of the American Dream is as much a part of our psyche as apple pie and baseball. And sure, every now and then someone breaks through to provide a heart-stirring example of what’s possible. It’s not impossible. But lately it’s become really clear to a huge chunk of the populace that the American Dream is growing increasingly out of reach. Such as it ever existed, it’s increasingly unattainable.

This is that awful disconnect that Newt and Gene Marks and the rest don’t get. Those people pooh-poohing Occupy Wall Street until Frank Luntz’s band of merry pollsters told them to cut it out? They don’t get it either. America in 2011 is a hard place. Doors have been closed, ladders have been pulled up. Opportunities that once existed so a poor kid could move up a rung or two on the economic ladder are vanishing. Thirty years of trickle-down economics has only trickled misery and hopelessness down on the masses, while the fat cats at the top gorge on ever bigger shares of the pie.

This is why people are protesting. And this is why chastising poor people for not working hard enough or being lazy is just so offensive. These people who got everything handed to them as part of their birthright don’t need to be lecturing anyone on how to be an American success story. They don’t know. They think our system is so awesome and wonderful but really it’s just been awesome and wonderful for them. Too much depends on the luck of the draw. Just admit it. Horatio Alger wrote fiction for a reason.

What’s so frustrating to me is that it feels like we’ve taken a giant step backwards. Just as we’d gotten to a place where the playing field was getting leveled, a few more doors were cracking open and a few more people were being invited to the table, all of a sudden the powers that be have decided no more. Party’s over, out of time. Back to the end of the line. Suddenly equality is a bad word. Now we’re all about “freedom,” by which we mean, freedom to keep slaving away with nothing to show for it, freedom to be a bigot and an asshole and not get called a racist. Freedom to tell people how they ought to live without having the slightest understanding of how fucking hard it is for a poor black kid to get up and get to school in the mornings.

I mean, I guess this is how empires die. I really don’t get it.

14 Comments

Filed under conservatives, poverty

Alabama Immigration FAIL

I’d say any state trying to lure foreign manufacturing to its borders might want to avoid these kinds of headlines:

Mercedes manager from Germany arrested in Alabama

TUSCALOOSA, Ala. (AP) — A German manager with Mercedes-Benz is free after being arrested for not having a driver’s license with him under Alabama’s new law targeting illegal immigrants, authorities said Friday, in an otherwise routine case that drew the attention of Gov. Robert Bentley.

Tuscaloosa Police Chief Steven Anderson told The Associated Press an officer stopped a rental vehicle for not having a tag Wednesday night and asked the driver for his license. The man only had a German identification card, so he was arrested and taken to police headquarters, Anderson said.

The 46-year-old executive was charged with violating the immigration law for not having proper identification, but he was released after an associate retrieved his passport, visa and German driver’s license from the hotel where he was staying, Anderson said.

Oh, wow. Heads are gonna roll, just you wait!

Mercendes-Benz has built SUVs outside of Tuscaloosa since 1993. Alabama, like Tennessee and the rest of the South, has become an auto manufacturing center for various foreign automakers, but as this story reveals, the marriage isn’t always a happy one.

For instance:

Bentley, a Republican who signed the illegal immigration law earlier this year, called the state’s homeland security director, Spencer Collier, after hearing of the arrest to get details about had happened, Collier said in an interview.

“Initially I didn’t have them, so I called Chief Anderson to find out what happened,” Collier said. “It sounds like the officer followed the statute correctly.”

Collier said he didn’t know how Bentley found out about the arrest, and Bentley press secretary Jennifer Ardis referred all questions to Collier.

Oh, the irony that a German was asked to show his papers … and didn’t have them!

Gee, I wonder how the governor of Alabama got wind of this plant manager’s arrest? Anyone want to hazard a guess? One of the state’s major employers has a manager arrested under a controversial new immigration law and “somehow” the governor who signed the bill finds out about it? Hmmm…. (For the record, the governor’s spokesperson denies this, but I’m smelling bullshit all over his “we’ve made dozens of these calls” denials. Prove it.)

I’m sure once the Governor explained this law was just for brown people, all was fine.

I’ve said it before a thousand times, and I’ll say it again: the South’s knuckle-dragging Neanderthal politics has economic repercussions, peoole. You can’t have one foot in the modern global economy and one foot in the racist past and not expect to get torn apart eventually. Some fences just won’t be straddled.

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Filed under immigration

Diseased Capitalism

I realize I’m not walking any new intellectual ground here, but I couldn’t read today’s cover story on Bain Capital’s pillage of Dade International and not reflect that capitalism, unrestrained by some type of social conscience, is a disease on human society. It is, in fact, the exact opposite of what Ayn Rand spent her life claiming it to be.

Bain’s takeover of Dade International, a medical supply company, ended up costing 1,700 people their jobs, saddled the company with debt and bankruptcy, and earned Bain $242 million — eight times more than its $30 million original investment:

Bain and a small group of investors bought Dade in 1994 with mostly borrowed money, limiting their risk. They extracted cash from the company at almost every turn — paying themselves nearly $100 million in fees, first for buying the company and then for helping to run it. Later, just after Mr. Romney stepped down from his role, Bain took $242 million out of the business in a transaction that, according to bankruptcy documents and several former Dade officials, weakened the company.

[…]

Cost-cutting became a mantra inside the company. After his employer, DuPont, was bought by Dade, William T. Mowrey, a field engineer, said his generous pension plan was replaced by a 401(k); his salary was cut by $1 an hour, costing him $2,000 a year in income. When he filed for overtime, he said, his new bosses refused to pay it. “They were just trying to milk as much out of us as they could,” he said.

Mr. Mowrey, now 54, quit. Many workers, like Mr. Shoemaker, the Dade employee in Westwood, and his wife, a temporary employee at the same plant, did not leave on their own terms. When they lost their jobs in 1997, they had to abandon plans to buy their first home together. “It created a lot of stress,” said Mr. Shoemaker, 59, who had earned more than $80,000 a year.

They were the lucky ones:

For some, the emotional effects of the layoffs outweighed the financial repercussions. Soon after Dade bought the DuPont unit, it closed a plant in Puerto Rico; all but a few of its nearly 300 workers were laid off.

Arsenio Muñiz Rosado, a 51-year-old father who had spent 23 years at the plant, starting out as a groundskeeper, sank into a debilitating depression. Still jobless six months after he was let go, he tried to commit suicide with a bottle full of Xanax pills. It was the first of several attempts.

For all intents and purposes, he said of the plant, “I died in there.”

Cindy Hewitt, a human resources manager, had been instructed to persuade about a dozen of Mr. Rosado’s co-workers to move to Miami, where Dade had another plant.

Not long after the workers arrived, the company said it would close that factory, too. Ms. Hewitt tried to help several workers return to Puerto Rico, but she said Dade insisted that they first repay thousands of dollars of moving costs. “They were treated horribly,” she said. “There was absolutely no concern for the employees. It was truly and completely profit-focused.”

Ms. Hewitt said she was so disillusioned by the experience that she left the corporate world.

This is the raw, unfettered capitalism of the sort Mitt Romney and America’s ownership class not only practices but heralds as the standard by which we should measure all else. It’s the brand of capitalism that Gov. Bill Haslam espouses. It’s what people mean (intentionally or not) when they say “government should be run like a business.”

It’s a betrayal of the very people who are the backbone of our economy and our society: the middle class. Bain Capital and companies like them — the “fighter pilots of capitalism” — are vampires. They seek out the treasure in the business landscape, extract the wealth, and leave the corpse of whatever company they sucked dry to rot in the gutter of the American economy. Bain octupled its investment but left 1,700 people out of work, and even more with slashed salaries and pensions. These are people who can’t pay their mortgage or their kids’ college education, or can’t take that family vacation or buy their first home. Think of all that implies for the economy at large and you begin to understand why we find ourselves in our current mess today. But what does Bain Capital care? They sucked the meat from Dade’s bones, deposited it in their bank account, and moved on.

This is capitalism devoid of morality. And this is what Republicans and far too many Democrats have been selling us for far too long. And, if anyone wants to know, this is why the 99% movement has resonated with the average American. When profits are valued over people, over and over again, this is the result.

How ironic that Cindy Hewitt, Dade’s human resources manager, got so disillusioned by her whole experience that she left the corporate world completely. Ms. Hewitt just got a look at what value the corporate world places on this “resource” called the work force. And that would be: nil. I’ve said it here a thousand times before but it bears repeating: if our society truly valued people, if we really thought of humans as a “resource,” we wouldn’t treat people like trash. We wouldn’t devalue them at every turn.

I was musing about the need for a more realistic counterpart to Atlas Shrugged — call it Atlas Stumbled, if you will. An engaging piece of fiction where the human collateral damage of the rapacious Galts and Dagnies is revealed. But of course we don’t need this fictionalized work, the real thing is in the news every day. Or, if you must have fiction, try Harriet Arnow’s The Dollmaker or John Steinbeck’s The Grapes Of Wrath.

I’m not an anti-capitalist in toto, I’ve benefitted tremendously from capitalism in my life, and still do. But for capitalism to fully work for the benefit of the maximum number of people it needs to be tempered by some kind of social conscience, some moral rudder. And the best way to do that is by government regulation.

9 Comments

Filed under 2012 presidential election, economy, Mitt Romney

For The Birds

A couple weeks ago a friend forwarded along this hilarious video sent him by a wingnut buddy. You can now see it over at FunnyOrDie.com.

It’s one of those tortured analogies people often devise to justify being assholes. Here’s this guy comparing his bird feeder to unemployment benefits. He put up “da boid feedah” and ach! Da boids, dey made a mess! On da patio! And next to da bahbecue! And da poop! Everywhere! And da boids, some of ’em, dey turned mean! Dive bombin’ and everythin’, dese ungrateful asshole boids! Ach! After all I’d done for ’em, too! Offa my lawn! I took down de boid feedah and problem solved! No more poop! Yay!

And this, my friends, is how we solve the unemployment problem! Just stop giving people unemployment benefits and they magically go away. Amiright?

Hilarious. Funnily enough, I happened to watch this video on the same day that I had gone down to my local retailer and picked up about 50 pounds of bird seed for my own feeders. So as I’m filling my feeders and hearing my avian friends chirp excitedly in the trees I thought to myself: you know what? I’ve been feeding birds in my backyard for years and I’ve just never had these problems. I don’t have bird nests in inappropriate places, nor is my patio covered in bird poop. And none of my birds have ever dive-bombed us when the feeders are low. Funnily enough, I just have never had this man’s experience with the local wildlife. I wonder why. Maybe, just maybe, this tortured analogy was pulled out of somewhere other than reality.

It’s a popular wingnut myth that, during the Second Great Depression when unemployment has been stuck at a stubborn 10% or so (and is most certainly higher than that, because people who have given up looking are no longer counted), somehow people have no jobs because they’re lazy. Somehow, people who have never had to take unemployment are just convinced that the benefits are so generous that people would rather sit back in the La-Z-Boy and just wait for those checks to roll in than get off their asses and work for a living.

Indeed, this week we heard that same idea from Tennessee’s own smug, self-righteous Lt. Gov. Ron Ramsey, aka the “Shadow Governor,” referring to unemployment benefits as “a lifestyle” because someone told him there are jobs but no applicants out there.

Hey, Ron Ramsey: I’m going to call bullshit on that little anecdote. Mr. Ramsey needs to pony up here. You know of someone with job openings? Give us their name and phone number. Put it in the paper. Betcha anything they will be overwhelmed with applicants, just like the 5,000 people who showed up for 1,600 jobs at Nissan this week.

I dare you. No, I double dare you.

You know what else I’m calling bullshit on? This:

Ramsey’s event also spotlighted his http://www.TNRedtape.com Web site documenting anti-business state government decisions.

[…]

“The ironic part about this is we will have some people get on the Web site and call us and then we will ask ‘Can we use this publicly?’” Ramsey said of the information collected by the Web site. “Most people don’t want to be cited publicly. … They are dealing with the Department of Revenue, the Department of Environment and Conservation, and think there will be repercussions.”

Really? Well, I guess if you say so, then! Clearly government is the problem, not the solution, says the man who has devoted months to gun nuts and blocking peoples’ voting rights, but didn’t do one thing to actually help the state’s employment situation. We’ll just take your word for it! Unless, like our friend with “da boid feedah,” you’re just making shit up. Wouldn’t put it past you one bit, either. But we’ll never know!

Hey guess what: I have this super-secret story too, about how all of the knuckle-dragging homophobic Muslim-hating Neanderthals in our state legislature have kept businesses away from the state of Tennessee. Someone whose name rhymes with “Pierrot Brevada.” But when I asked them if I could go public with it, they all said they didn’t want to be cited publicly, either.

What a coinky-dinky.

Here’s a thought: let’s stop blaming people in desperate straights straits for the economic situation. Let’s recognize that we are in the middle of the Second Great Depression right now. Taking away people’s unemployment benefits is not going to solve the unemployment problem. It’s just going to inhibit people’s ability to buy food, medicine and pay their rent. How that’s supposed to solve anything, I have no clue.

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Filed under right wing, Ron Ramsey, unemployment

Here We Go Again

What could possibly go wrong?

Investors place big bets on Buy Here Pay Here used-car dealers

Private equity firms are investing in chains of used-car lots, and auto loans are being packaged into securities much like subprime mortgages. They’re attracted by the industry’s average profit of 38% for each car sold

[…]

Loans on decade-old clunkers are being bundled into securities, just as subprime mortgages were a few years ago. In the last two years, investors have bought more than $15 billion in subprime auto securities.

Although they’re backed mainly by installment contracts signed by people who can’t even qualify for a credit card, most of these bonds have been rated investment grade. Many have received the highest rating: AAA.

That’s because rating firms believe that with tens of thousands of loans lumped together, the securities are safe even if some of the loans prove worthless.

Some analysts worry that the rush to securitization could lead to careless lending by dealers eager to sell more loans, as happened with many mortgage-backed bonds.

No. Just, no.

Just, fucking stop it, already. Stop the greed, stop the endless need for more more MORE. I am about to lose my shit here, people. Stop coming up with these irresponsible, crazy mechanisms that profit off the misery of financially strapped people because some idiot thinks there’s a pony in that pile of horseshit. Stop the greed machine. If you want to gamble, take it to Vegas, where the only person who gets hurt is you.

And while we’re at it, stop calling those of us who see the inevitable trainwreck up the bend “socialists” already. You assholes are the “socialists” because every time you decide to fiddle around with these complicated toxic assets you privatize the gains and socialize the losses. This time it’s not just no, it’s HELL no.

This:

“It might be an attractive model to investors, but when it’s designed to ruthlessly maximize profit, there’s no way it can’t hurt the consumer,” Keest said.

Have you people learned nothing over the past few years? Nothing at all?

Credit Acceptance combines some of the loans into securities and sells them to investors. The buyers are usually insurance companies, banks, mutual funds and other institutional investors.

What they’re buying, essentially, is the right to collect borrowers’ loan payments, which are passed on by dealers and assorted intermediaries. If borrowers default, investors are stuck with the loss.

Really? You promise, this time? Taxpayers won’t be bailing out some insurance company or bank or mutual fund that decided this was the next big Ponzi scheme profit center job creator because God forbid we should keep our greed in check during the Second Great Depression? Honest?

No tightening our belts, no siree, there’s always money to be made somewhere and none of these assholes ever has to suffer the consequences of their bad decision making.

There is no way this isn’t going to blow up in y’all’s faces and when it does, do not — I repeat do not — come crying to me.

[UPDATE]:

Apparently they’re also gambling on European debt:

U.S. banks increased sales of insurance against credit losses to holders of Greek, Portuguese, Irish, Spanish and Italian debt in the first half of 2011, boosting the risk of payouts in the event of defaults.

Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose by $80.7 billion to $518 billion, according to the Bank for International Settlements. Almost all of those are credit-default swaps, said two people familiar with the numbers, accounting for two-thirds of the total related to the five nations, BIS data show.

Wonderful.

22 Comments

Filed under banks, economy, rants, Wall Street

World Bank: Republicans Are Wrong On US Economy

Woopsies. It’s the death of yet another cherished Republican talking point:

With the economies of the U.S. and Europe sputtering along on fumes, politicians are quick to blame regulation and taxation as the main cause of a lackluster business environment. Yet, according to the World Bank’s 212 page “Doing Business 2012″ report, released on Wednesday, there is less red tape for setting up shop in the U.S. than there is in all of Europe, Latin America, Africa and most of Asia.

The World Bank uses indicators such as time spent to set up a business to getting credit, among other things, in benchmarking the 183 countries it ranks in “Doing Business”. The report measures and tracks changes in the regulations applied to domestic companies in 11 areas in their life cycle–such as investors rights, taxation, cross border transactions, legality and enforcement of contracts and bankruptcy law. A fundamental premise of doing business is that economic activity requires good rules that are transparent and accessible to all, not just big business. Such regulations should be efficient, the World Bank states, striking a balance between safeguarding some important aspects of the business environment and avoiding distortions that impose unreasonable costs on businesses. “Where business regulation is burdensome and competition limited, success depends more on whom you know than on what you can do. But where regulations are relatively easy to comply with and accessible to all who need to use them, anyone with talent and a good idea should be able to start and grow a business (legally),” the World Bank said.

Where does the supposed regulation and taxation crippled U.S. stand in the rankings? It is number four, trailing behind New Zealand (3), Hong Kong (2) and Singapore (1).

That’s the uber-liberal Socialisticky World Bank, you know, the one that used to be run by Iraq War hawk/creepy neocon Paul Wolfowitz and is now run by Iraq War hawk/creepy neocon Robert Zoellick.

Oh, dear. So American businesses aren’t strangled by burdensome regulations and taxes? It’s not the fault of the EPA and OSHA and Obamacare? But that’s the exact opposite of what we hear from every single Republican in Washington — including every member of the insane clown posse that is the GOP presidential field (except maybe Rick Santorum, who seems to be blaming everything on gays and vaginas).

So in other words: once again Republicans are wrong about the economy. I know, y’all are shocked. Shocked!

Forbes concludes:

The U.S. economy is suffering because of a combination of historic deleveraging, lackluster support from fiscal policy makers in Washington, and a general, yet pervasive, lack of business confidence. The U.S. economy is not suffering because of taxes, energy policy, or Obamacare as data and polls have shown consistently.

I would add, the number one reason the U.S. economy is suffering is because of decreased demand: plain and simple. Or, as Paul Krugman famously wrote last year: “It’s demand, stupid”:

I’ve said this before, but Catherine Rampell has a very nice chart making the point: if you ask businesses — as opposed to their lobbyists — what their problem is, you find no hint of the stories the usual suspects are telling you about government interference, political uncertainty, etc.. Businesses aren’t hiring because of poor sales, period, end of story….

Yes. We keep hearing this over and over. And yet, Republicans remain strangely attached to their false notions of the world, all evidence to the contrary. I really don’t get it. This is a political party completely divorced from reality.

Or, to give you a visual:

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Filed under economy, Republican Party, World Bank

Holding Workers Hostage

[UPDATE]:

Several folks have wondered what Melissa Brookstone’s small business might be, and if she’s planning on not hiring now. I can’t be sure (she worships at the altar of Ayn Rand and is promoting this “planetary bill of rights” project according to her Facebook page…)

I’m not certain but it appears she works as a process server in Denver. Hope none of her law firm clients are planning to Go Galt.

—————————————

Those Tea Party people, they’re such awesome patriots:

Tea Party Nation sent to their members today a message from activist Melissa Brookstone urging businesspeople to “not hire a single person” to protest the Obama administration’s supposed “war against business and my country.” Brookstone writes that business owners should stop hiring new employees in order to stand up to “this new dictator,” the “global Progressive socialist movement,” Hollywood, the media and Occupy Wall Street.

Click on the link and read the insane wackadoodle this Melissa Brookstone person has cooked up in her “manifesto”: Obama has seized “dictatorial powers” to “bypass Congress,” congress is ” controlled by a Progressive socialist Senate,” and best of all, those all-powerful Democrats and their minions in Hollywood and the liberal news media are promoting an “anti-business, an anti-free market, and an anti-capitalist (anti-individual rights and property ownership) agenda.”

Okie dokie. Sounds like someone forgot to take her medication this month. So yeah, she wants all small business owners to stop hiring because if things get even worse in this country, that’ll show ’em! Or something.

Let’s just imagine what kind of backlash such America-hating rhetoric would generate if it came from the left. But it’s perfectly fine for the Tea Party to call for businesses to hold American workers hostage until there’s a Republican in the White House. Isn’t that what we call economic terrorism? IOKIYAR.

Honestly, this isn’t much different from Mitch McConnell’s grand plan to make Obama a one-term president by obstructing any legislative effort to fix the economy.

I wonder how many small businesses would be interested in taking Brookstone up on her offer? Can you imagine? “I really need to expand my business right now so I can increase my profits but I can’t because making sure Obama fails is just too important.”

Hilarious. What a bunch of morans!

14 Comments

Filed under economy, employment, Tea Party

Tone Deaf

With the protests against corporate greed spreading not just nationally but internationally, the Republicans in Congress have decided now is the perfect time to revamp our corporate taxes and move toward a territorial system:

The idea behind the system is to encourage multinational companies to bring back their money to the U.S., where supporters of the change say the money could be invested. Proponents also argue the move would make U.S. companies more globally competitive, particularly since most industrialized countries have tax systems in which companies are only taxed in the country where it is earned.

The Ways and Means proposal would not be a fully drafted bill, but instead a proposal that would allow business groups and other stakeholders to offer suggestions. As of now, it’s unclear when the panel might release the proposal.

Well, that’s nice of them to let the corporations write their own laws. Why even bother with an expensive, unwieldy institution like Congress? Just let the corporations do what they want, right? Dispense with the middle men/women!

Now, would someone please explain to me how taxing American corporations only on profits made within U.S. borders encourages them to bring their money back to the U.S.? Near as I can tell, the territorial idea simply encourages multinationals to move more of their operations offshore (and Citizens For Tax Justice seems to agree with me). It’s basically the same as our present “deferral” system. In theory, under “deferral” corporate profits generated overseas are not taxed but “deferred” until they’re brought back to the U.S., but in practice that never happens because multinational corporations have all sorts of overseas subsidiaries and tax havens where they park these funds. That’s the whole point of “repatriation” — letting corporations bring that money home at temporarily reduced tax rates.

Shouldn’t we do away with the “deferral” loophole, not cement it in place? I guess Republicans are trying to pretend that overseas profits will flood back to the U.S. like a mighty river of tax-free revenue — kind of like the “repatriation” scheme, but set in stone in the corporate tax code. It’s that same Republican fairy tale: lower taxes create jobs! That’s what they keep telling us, isn’t it?

Well let’s see how that worked last time we offered multinationals a chance to repatriate their offshore funds at low, low tax rates. We did that under Bush The Lesser in 2004. So, guess what the participating companies did with their tax savings?

…in fact, the corporations who took most advantage of the holiday enacted in 2004 shed jobs in the ensuing years and did not increase their rate of spending on research and development.

On the flip side, the study found those corporations also appear to have used the holiday for stock buybacks and to boost executive pay, which was not allowed under the legislation authorizing the holiday.

Oh noes! And Republicans want to make this permanent? Egads.

But Republicans are still drinking the “lower taxes creates jobs” Kool-Aid, despite the continued failure of these ideas. We’ve been cutting taxes on wealthy “job creators” for years, and we still aren’t seeing the magic. And now they want to permanently cut corporate taxes with this “territorial” scheme because hey, if they’re doing it in the UK and Japan, then we have to, right? To be “competitive”?

You know what they have in the UK and Japan that makes them competitive? A functioning healthcare distribution system that doesn’t place the burden of our overpriced, for-profit healthcare system on the backs of employers. But I digress.

Citizens For Tax Justice thinks we need to go in the complete opposite direction, which means keep our worldwide tax system but remove the “deferral” loophole. That removes the incentive corporations have to offshore their operations and move jobs away from the U.S. That makes absolute perfect sense to me, but our debate is so muddied with the fairy tales, I’m sure we’ll keep hearing about how lower taxes creates jobs over and over again. Yet no one can ever point to a time when that was true.

Anyway, this idea was first floated back in the spring but now the GOP is supposedly moving forward with it. I’m just trying to imagine how a corporate tax idea that permanently encourages outsourcing jobs while offering corporations lower tax rates will go over with the masses protesting corporate greed. I’m thinking not too well.

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Filed under corporations, economy, employment, taxes

Death Of Another Right-Wing Meme

Uh-oh:

Regulations, taxes aren’t killing small business, owners say

By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation.

“Government regulations are not ‘choking’ our business, the hospitality business,” Bernard Wolfson, the president of Hospitality Operations in Miami, told The Miami Herald. “In order to do business in today’s environment, government regulations are necessary and we must deal with them. The health and safety of our guests depend on regulations. It is the government regulations that help keep things in order.”

What’s that, you say? Surely this person must be some kind of Dirty Fucking Hippie or a big Democratic Party donor or something. Just an isolated case, right?! Nope:

McClatchy reached out to owners of small businesses, many of them mom-and-pop operations, to find out whether they indeed were being choked by regulation, whether uncertainty over taxes affected their hiring plans and whether the health care overhaul was helping or hurting their business.

Their response was surprising.

None of the business owners complained about regulation in their particular industries, and most seemed to welcome it. Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath.

Wolfson’s firm is readying to open a Hampton Inn this year in Miami on land purchased from a condo developer during the housing downturn. His business could be in line for higher taxes if President Barack Obama allows the current, lower rates on the richest Americans to expire in 2012 and return to previous levels.

That didn’t seem to bother Wolfson, who through his partnership declares profit and loss as a pass-through on his personal income taxes, as many small businesses do.

“Higher taxes are not good for business, but some of the loopholes and deductions should be looked at,” he said.

The answer from Rick Douglas — the owner of Minit Maids, a cleaning service with 17 employees in Charlotte, N.C. — was more blunt.

“I think the rich have to be taxed, sorry,” Douglas said. He added that he isn’t facing a sea of new regulations but that he does struggle with an old issue, workers’ compensation claims.

Douglas told The Charlotte Observer that he’s hired more workers this year, citing pent-up demand from customers.

“My theory is that the people that do have jobs are working harder and they have less time to clean. People were holding back for such a long time, and then they started spending a little more,” he said.

Then there’s Rip Daniels. He owns four businesses in Gulfport, Miss.: real estate ventures, a radio station and a boutique hotel/bistro. He said his problem wasn’t regulation.

“Absolutely, positively not. What is choking my business is insurance. What’s choking all business is insurance. You cannot go into business, any business — small business or large business — unless you can afford insurance,” he told Biloxi’s Sun Herald.

To look at how this “regulations and taxes are choking small businesses” meme has taken off in the national discourse, we need to look at who’s spreading it: the U.S. Chamber of Commerce. And they don’t represent small businesses, they represent large corporations, as does the Republican Party in general.

In fact, McClatchy asked the U.S. Chamber of Commerce which specific regulations are choking small businesses:

When it’s asked what specific regulations harm small businesses – which account for about 65 percent of U.S. jobs — the Chamber of Commerce points to health care, banking and national labor. Yet all these issues weigh much more heavily on big corporations than on small business.

It’s a good story; go read it. Clearly one of the biggest problems this country is facing is the tyranny of multinational corporations, who rule our politics and our discourse. Perhaps we can all get together and tackle that issue together, whaddya think?

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Filed under corporations, economy, taxes, U.S. Chamber of Commerce