08/10/2011 archive

While the proposed corporate tax holiday was dumped out of the debt ceiling agreement doesn’t mean it’s dead. What’s a corporate tax holiday you ask? Here’s a little history from Matt Taibbi of Rolling Stone:

For those who don’t know about it, tax repatriation is one of the all-time long cons and also one of the most supremely evil achievements of the Washington lobbying community, which has perhaps told more shameless lies about this one topic than about any other in modern history – which is saying a lot, considering the many absurd things that are said and done by lobbyists in our nation’s capital.

Here’s how it works: the tax laws say that companies can avoid paying taxes as long as they keep their profits overseas. Whenever that money comes back to the U.S., the companies have to pay taxes on it.

Think of it as a gigantic global IRA. Companies that put their profits in the offshore IRA can leave them there indefinitely with no tax consequence. Then, when they cash out, they pay the tax.

Only there’s a catch. In 2004, the corporate lobby got together and major employers like Cisco and Apple and GE begged congress to give them a “one-time” tax holiday, arguing that they would use the savings to create jobs. Congress, shamefully, relented, and a tax holiday was declared. Now companies paid about 5 percent in taxes, instead of 35-40 percent.

Money streamed back into America. But the companies did not use the savings to create jobs. Instead, they mostly just turned it into executive bonuses and ate the extra cash. Some of those companies promising waves of new hires have already committed to massive layoffs..

Now, there is a proposed bill that would lower the corporate tax rate to 5.25% for all profits that are brought back to the US. Needless to say it didn’t create one job in 2004 and it won’t this time either.

More from Taibbi:

For people interested in this story, I definitely recommend reading this Bloomberg article focusing on Cisco, one of the biggest lobbyers in favor of the tax holiday. This is a company whose CEO, John Chambers, wrote an editorial last October in the Wall Street Journal predicting that the tax holiday would generate a trillion dollars in repatriated earnings, money that Chambers insisted would outdo even Barack Obama’s stimulus as a job-creation engine:

   The amount of corporate cash that would come flooding into the country could be larger than the entire federal stimulus package, and it could be used for creating jobs, investing in research, building plants, purchasing equipment, and other uses.

And yet: Chambers’s company, Cisco, would not commit to creating so much as a single job if the tax holiday is passed. As it is, the company has already committed to a wave of layoffs. When asked a question about Cisco’s plans w/regard to a potential tax holiday, the company’s spokesman, John Earhardt, declined to answer. From the Bloomberg piece:

   It’s unclear whether any jobs would come from Cisco, which announced plans in May to shed an unspecified number of workers. Earnhardt, the spokesman, declined to comment on hiring plans for the company, whose customers include Verizon Communications Inc. (VZ) and AT&T Inc. (T)

There is little doubt that if this bill passes, Obama will sign it.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day.

Katrina vanden Heuval: We need a jobs bill, Mr. President

The White House, once again, is pivoting to jobs. And once again, it is doing so in a way that’s unlikely to create any. Several weeks ago President Obama embarked on a manufacturing tour, highlighting its role in job creation. Few paid attention. Nothing changed.

Next week, the president will try again. In the wake of a debt-ceiling deal that is certain to harm an already fragile economy, the president is embarking on a bus tour through the Midwest to talk about jobs. It’s not clear what the administration expects will come from such a tour, save for a few local news stories in a few midsized media markets. For an economy desperate for bold action, for a people desperate for some genuine relief, this surely won’t cut it.

Obama used to say on the campaign trail that we can’t keep doing the same thing over and over again and expect a different outcome. He was right. Isn’t it high time he take his own words to heart?

Barbara Ehrenreich: Nickel and Dimed (2011 Version): On Turning Poverty into an American Crime

When you read about the hardships I found people enduring while I was researching my book — the skipped meals, the lack of medical care, the occasional need to sleep in cars or vans — you should bear in mind that those occurred in the best of times. The economy was growing, and jobs, if poorly paid, were at least plentiful.

In 2000, I had been able to walk into a number of jobs pretty much off the street. Less than a decade later, many of these jobs had disappeared and there was stiff competition for those that remained. It would have been impossible to repeat my Nickel and Dimed “experiment,” had I had been so inclined, because I would probably never have found a job.

For the last couple of years, I have attempted to find out what was happening to the working poor in a declining economy — this time using conventional reporting techniques like interviewing. I started with my own extended family, which includes plenty of people without jobs or health insurance, and moved on to trying to track down a couple of the people I had met while working on Nickel and Dimed.

Wisconsin and the Case of the Dogs That Didn’t Bark

By: Scarecrow, Firedog Lake

Tuesday August 9, 2011 11:12 pm

With such a profoundly misguided and destructive message coming from the President and national leaders, it must have been particularly difficult for Wisconsin citizens to explain why voters should recall Republican State Senators for taking positions their President and party were embracing in Washington. To be sure, Wisconsin’s Tea-Party Governor is a fraud, and his party’s actions have been abusive and excessive in slashing state programs and benefits. But Walker’s budget goals and methods are consistent with those of his national counterparts whom Mr. Obama and Democratic leaders have now promised to meet half way in slashing federal programs and benefits. There are few at the national level, and none at the top, making the counter argument about how offensive and obscene this is.

…

Our national leaders should have been reminding those fighting in the states that they were not to blame for the budget crises in their state capitals. Instead, men like Greenspan and Bernanke and Geithner and dozens of other federal regulators who were supposed to be watching the financial/banking sector either fell asleep on their jobs or willfully looked away, while Congress passed laws pretending that fraud and looting were okay if it was called “financial innovation” and “market making.” The regulators failed the country and the looters plundered, but thanks to this President, they’re still in power or presuming to lecture us on television. And now men like Boehner and Cantor and McConnell – and yes, Warner and Durbin and Lieberman are preventing desperately needed federal money from helping the states deal with the damage.

The truth is that President Obama and the national Democratic Party undercut the Wisconsin fighters by adopting harmful Tea-GOP talking points and repeating them night after night on national television. While the national Tea-GOP reinforced their state counterparts’ message at every turn, the national Democrats sabotaged the Wisconsin Democrats’ message.

Wisconsin Democrats didn’t need the President or Senate Democratic leaders to come to Wisconsin. What they needed were national leaders fighting for their cause, for their pro-government principles, for recognition of their rights – in Washington. They needed a President making that fight in Washington and carrying that message to the nation.

But the President and his party have abandoned that fight in D.C., and so abandoned those fighting in Wisconsin. And that’s why, despite heroic Wisconsin efforts, the good guys fell short. No one should count on or follow these corrupt leaders again, ever.

If you’re looking for new leaders, look to Wisconsin and other states under siege, where working people understand what’s going down and aren’t afraid to fight back.

Randians make a great big whiny ass hypocritical deal about “not having the government pick winners and losers in the marketplace.”

Well, that’s what Net Neutrality is about.

Pay-TV Providers Face ‘Toxic Mix’ as Subscribers Cancel in Record Numbers

By Alex Sherman, Bloomberg News

Aug 10, 2011 12:01 AM ET

The six largest publicly traded U.S. cable and satellite-TV providers combined to lose about 580,000 customers in the second quarter, the biggest such decline in history, according to company and Bloomberg data.

The economy is forcing the industry to face the reality of cord-cutting — pay-TV customers canceling their subscriptions in favor of online options such as Netflix Inc. (NFLX) and Hulu LLC. While cable executives dismiss the idea that subscribers are switching to “over the top” Internet competitors, the reason isn’t as important as the decision to stop paying for TV, said Craig Moffett, an analyst at Sanford C. Bernstein in New York.

“Rising prices for pay TV, coupled with growing availability of lower-cost alternatives, add to a toxic mix at a time when disposable income isn’t growing,” Moffett said. “For younger demographics, where in many cohorts unemployment is north of 30 percent, and especially for those with limited or no interest in sports, the pay-TV equation is almost inarguably getting less attractive.”

As a matter of fact, I’m working for clients just like this.  What you need is a computer, an internet connection, and (depending on your TV) an adapter.  Look at the video inputs on the back of your TV to decide what type of VGA to ??? you need.  Laptops are particularly good platforms since they almost always include an auxiliary VGA port for an external monitor.  Good sources for the adapters are NewEgg and Tiger Direct.

Oh, the Net Neutrality aspect.  Well, without it ISP companies are free to discriminate against users who choose to get their TV online based on ‘Bandwidth’, thus subsidizing the Cable TV industry in which many of them have a conflicted interest.

Randian hypocrisy?  Companies should be free to discriminate against black people because you can always patronize lunch counters that don’t have “We Don’t Serve Negros” signs on the door.

(h/t Atrios)

Slouching Toward a Double Dip, For No Good Reason

Robert Reich

Monday, August 8, 2011

The American economy is on the verge of another recession. Most Americans haven’t even emerged from the last one. Consumers (70 percent of the economy) won’t or can’t spend because their major asset is worth a third less than it was five years ago, they can’t borrow as before, and they’re justifiably worried about their jobs and wages. And without customers, businesses won’t expand and hire. So we’re trapped in a vicious cycle that’s getting worse.

But the government won’t come to the rescue by spending more and cutting most peoples’ taxes because it’s obsessed by a so-called “debt crisis” based on budget projections over the next ten years.

…

Every time you hear an American politician analogize the nation’s budget to a family budget (as, sadly, even President Obama has done), you should know the politician is not telling the truth. The truth is just the opposite. Our national budget can and should counteract the shrinkage of family budgets by running larger deficits when families cannot.

Americans are more frightened, economically insecure, and angrier than at any time since the Great Depression. If our lawmakers continue to obsess about the wrong thing and fail to do what must be done – and they don’t explain it to the nation – Americans will only become more fearful, insecure, and angry.

Well now wait Bob.  There’s a perfectly good reason (if you happen to be an ignorant Washington neolib like Obama and his advisers) and you know it.

Why the President Doesn’t Present a Bold Plan to Create Jobs and Jumpstart the Economy

Robert Reich

Tuesday, August 9, 2011

The lousy economy is due to insufficient demand. Consumers – who are 70 percent of the economy – can’t and won’t buy because they’re running out of cash. They can’t borrow against homes that are worth a third less than they were five years ago, and most consumers are bad credit risks anyway because they’re losing their jobs and their wages are dropping.  They also have to start saving for the kids’ college or for retirement, which will cut their spending even more.

Without enough consumers, businesses won’t hire enough people and pay them enough to reverse the vicious cycle. So we’re dead in the water. Even the stock market has caught on to the truth.

Which means government has to step in to boost the economy – as it has every time the economy has fallen into recession over the last eight downturns. Include the massive spending on World War II that lifted us out of the Great (Depression), and it’s nine.

…

I’m told White House political operatives are against a bold jobs plan. They believe the only jobs plan that could get through Congress would be so watered down as to have almost no impact by Election Day. They also worry the public wouldn’t understand how more government spending in the near term can be consistent with long-term deficit reduction. And they fear Republicans would use any such initiative to further bash Obama as a big spender.

So rather than fight for a bold jobs plan, the White House has apparently decided it’s politically wiser to continue fighting about the deficit. The idea is to keep the public focused on the deficit drama – to convince them their current economic woes have something to do with it, decry Washington’s paralysis over fixing it, and then claim victory over whatever outcome emerges from the process recently negotiated to fix it. They hope all this will distract the public’s attention from the President’s failure to do anything about continuing high unemployment and economic anemia.

When I first heard this I didn’t want to believe it.

…

There’s still time for political operatives in the White House – and the person they work for – to change their minds. If economic stresses increase, Americans may insist on government doing more. A CNN poll released Monday found 60% believe the nation remains in an economic downturn and conditions are worsening. Only 36% believed that in April.

But for now the President is being badly advised. The magnitude of the current jobs and growth crisis demands a boldness and urgency that’s utterly lacking. As the President continues to wallow in the quagmire of long-term debt reduction, Congress is on summer recess and the rest of Washington is asleep.

Well, now you’re getting closer to it Bob, but the reason the Tsar has bad councilors is he picks bad councilors and chooses to listen to their advice because it’s what he himself believes.

The buck stops with Obama and if polls and history are any indicator he’s going to lose, lose, lose and drag his Democratic Party enablers with him.

Electoral victory my ass.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

Click on images to enlarge

August 10 is the 222nd day of the year (223rd in leap years) in the Gregorian calendar. There are 143 days remaining until the end of the year.

The term ‘the 10th of August’ is widely used by historians as a shorthand for the Storming of the Tuileries Palace on the 10th of August, 1792, the effective end of the French monarchy until it is restored in 1814.

On this day in  1846, Smithsonian Institution was created. After a decade of debate about how best to spend a bequest left to America from an obscure English scientist, President James K. Polk signs the Smithsonian Institution Act into law.

In 1829, James Smithson died in Italy, leaving behind a will with a peculiar footnote. In the event that his only nephew died without any heirs, Smithson decreed that the whole of his estate would go to “the United States of America, to found at Washington, under the name of the Smithsonian Institution, an Establishment for the increase and diffusion of knowledge.” Smithson’s curious bequest to a country that he had never visited aroused significant attention on both sides of the Atlantic.

After the nephew died without heirs in 1835, President Andrew Jackson informed Congress of the bequest, which amounted to 104,960 gold sovereigns, or US$500,000 ($10,100,997 in 2008 U.S. dollars after inflation). The money, however, was invested in shaky state bonds that quickly defaulted. After heated debate in Congress, former President John Quincy Adams successfully argued to restore the lost funds with interest.  Congress also debated whether the federal government had the authority to accept the gift. Congress ultimately accepted the legacy bequeathed to the nation and pledged the faith of the United States to the charitable trust July 1, 1836.

Eight years later, Congress passed an act establishing the Smithsonian Institution, a hybrid public/private partnership, and the act was signed into law on August 10, 1846 by James Polk. (See 20 U.S.C. § 41 (Ch. 178, Sec. 1, 9 Stat. 102).) The bill was drafted by Indiana Democratic Congressman Robert Dale Owen, a Socialist and son of Robert Owen, the father of the cooperative movement.

If you do not get Current TV you can watch Keith here:

This is dedicated to my friend the Ben Masel.

The polls opened this morning in Wisconsin to determine the recall of six of eight Republicans in the state Senate who voted to end union bargaining rights that sparked mass protests earlier this year. The Democrats need to win at least 3 seats to take back the Senate from the grips of the tea party Republicans. the other two races will be held on August 16th. These are the races that will be determined tonight:

• District 2:

  Robert Cowles R (incumbent) *
  
  Nancy Nusbaum D

• District 8:

  Alberta Darling R (incumbent) *
  
  Sandra Pasch D

• District 10:

  Sheila Harsdorf R (incumbent) *
  
  Shelly Moore D

• District 14:

  Luther Olson R (incumbent) *
  
  Fred Clark D

• District 18:

  Randy Hopper R (incumbent)
  
  Jessica King D *

• District 32:

  Dan Kapanke R (incumbent)
  
  Jennifer Shilling D *

There has been an influx of outside money in these races much of it from two groups with direct ties to the Koch brothers have financed many tea party organizations like Americans for Prosperity and Citizens for a Stronger America.

Amount spent on all state races in 2010: $3.75 million. Amount spent on recall elections targeting eight state senators: $31 million.

It has been nearly impossible to poll these races, as even the polling has been so skewed one way then another. We will just have to wait until the “fat lady” stops singing at 8 PM CDT (9 PM EDT).

Up dates will be posted as the returns are reported.

Up Date 20:17 PM EDT: Reports are coming in that voters turn out reached presidential election proportions of up to 70% in some districts. John Nichols on Countdown with Keith Olbermann believes that they could take back ore that three seats.

Up Date 21:00 EDT: In New Hampshire in a unnoticed special election for a seat in the Republican held Senate, Democrat Bob Perry wins the election

The polls in Wisconsin are now closed.

Up Date 09:30 EDT: Early this morning the race in the 18th District was called for the incumbent, Alberta Darling, leaving the Democrats one member short of taking back control of the WI State Senate. It did create a senate with a narrow margin of one. Democrats, although disappointed, were encouraged and will move on with the effort to recall Gov. Scott Walker in January.

Evening Edition is an Open Thread

1 New violence in Britain after PM vows to restore order

By Alice Ritchie, AFP

1 hr 45 mins ago