12/02/2012 archive

Lawrence O’Donnell spoke on his Thursday show about the recent killing of Jordan Davis, a 17-year-old black student who was shot dead by an older white man in Florida last Friday.

Michael Dunn, 45, allegedly shot and killed Davis after arguing with him about the loud music he was playing in his car. He is now invoking Florida’s notorious “Stand Your Ground” law, claiming that he thought he saw a shotgun in Davis’ car. Police found no gun in the car, and Dunn was charged with second-degree murder. The case drew immediate comparisons to the killing of Trayvon Martin, the unarmed black teenager who was shot dead by George Zimmerman in 2012.

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.

December 2 is the 336th day of the year (337th in leap years) in the Gregorian calendar. There are 29 days remaining until the end of the year.

On this day in 2001, Enron filed for Chapter 11 bankruptcy protection in a New York court, sparking one of the largest corporate scandals in U.S. history.

An energy-trading company based in Houston, Texas, Enron was formed in 1985 as the merger of two gas companies, Houston Natural Gas and Internorth. Under chairman and CEO Kenneth Lay, Enron rose as high as number seven on Fortune magazine’s list of the top 500 U.S. companies. In 2000, the company employed 21,000 people and posted revenue of $111 billion. Over the next year, however, Enron’s stock price began a dramatic slide, dropping from $90.75 in August 2000 to $0.26 by closing on November 30, 2001.

As prices fell, Lay sold large amounts of his Enron stock, while simultaneously encouraging Enron employees to buy more shares and assuring them that the company was on the rebound. Employees saw their retirement savings accounts wiped out as Enron’s stock price continued to plummet. After another energy company, Dynegy, canceled a planned $8.4 billion buy-out in late November, Enron filed for bankruptcy. By the end of the year, Enron’s collapse had cost investors billions of dollars, wiped out some 5,600 jobs and liquidated almost $2.1 billion in pension plans.

Accounting practices

Enron had created offshore entities, units which may be used for planning and avoidance of taxes, raising the profitability of a business. This provided ownership and management with full freedom of currency movement and the anonymity that allowed the company to hide losses. These entities made Enron look more profitable than it actually was, and created a dangerous spiral, in which each quarter, corporate officers would have to perform more and more contorted financial deception to create the illusion of billions in profits while the company was actually losing money. This practice drove up their stock price to new levels, at which point the executives began to work on insider information and trade millions of dollars worth of Enron stock. The executives and insiders at Enron knew about the offshore accounts that were hiding losses for the company; however, the investors knew nothing of this. Chief Financial Officer Andrew Fastow led the team which created the off-books companies, and manipulated the deals to provide himself, his family, and his friends with hundreds of millions of dollars in guaranteed revenue, at the expense of the corporation for which he worked and its stockholders.

In 1999, Enron launched EnronOnline, an Internet-based trading operation, which was used by virtually every energy company in the United States. Enron president and chief operating officer Jeffrey Skilling began advocating a novel idea: the company didn’t really need any “assets.” By pushing the company’s aggressive investment strategy, he helped make Enron the biggest wholesaler of gas and electricity, trading over $27 billion per quarter. The firm’s figures, however, had to be accepted at face value. Under Skilling, Enron adopted mark to market accounting, in which anticipated future profits from any deal were tabulated as if real today. Thus, Enron could record gains from what over time might turn out to be losses, as the company’s fiscal health became secondary to manipulating its stock price on Wall Street during the Tech boom. But when a company’s success is measured by agreeable financial statements emerging from a black box, a term Skilling himself admitted, actual balance sheets prove inconvenient. Indeed, Enron’s unscrupulous actions were often gambles to keep the deception going and so push up the stock price, which was posted daily in the company elevator. An advancing number meant a continued infusion of investor capital on which debt-ridden Enron in large part subsisted. Its fall would collapse the house of cards. Under pressure to maintain the illusion, Skilling verbally attacked Wall Street Analyst Richard Grubman, who questioned Enron’s unusual accounting practice during a recorded conference call. When Grubman complained that Enron was the only company that could not release a balance sheet along with its earnings statements, Skilling replied “Well, thank you very much, we appreciate that . . . asshole.” Though the comment was met with dismay and astonishment by press and public, it became an inside joke among many Enron employees, mocking Grubman for his perceived meddling rather than Skilling’s lack of tact. When asked during his trial, Skilling wholeheartedly admitted that industrial dominance and abuse was a global problem: “Oh yes, yes sure, it is.”

Why is the White House’s Council of Economic Advisers Helping the Republicans?

Robert Reich

Monday, November 26, 2012

Why is the White House trying to scare average people about the consequences of the “fiscal cliff?”

If the President’s strategy is to hold his ground and demand from Republicans tax increases on the wealthy, presumably his strongest bargaining position would be to allow the Bush tax cuts to expire on schedule come January – causing taxes to rise automatically, especially on the wealthy.

So you’d think part of that strategy would be reassure the rest of the public that the fiscal cliff isn’t so bad or so steep, and that at the start of January Democrats will introduce in Congress a middle-class tax cut whose effect is to prevent taxes from rising for most people (thereby forcing Republicans to vote for a tax cut for the middle class or hold it hostage to a tax cut for the wealthy as well).

I dunno, what’s not to get?

“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”.

Follow us on Twitter @StarsHollowGzt

The Sunday Talking Heads:

Up with Chris Hayes: Joining Chris will be: Gov. Dannel Malloy (@GovMalloyOffice), Democrat of Connecticut; Elizabeth Pearson, fellow at The Roosevelt Institute; Bruce Bartlett (@BruceBartlett), contributor to The New York Times‘ blog Economix , columnist for The Fiscal Times and Tax Note,  author of “The Benefit and the Burden;” Maya Wiley (@mayawiley), founder and president of the Center for Social Inclusion; Tony Dokoupil, senior writer at Newsweek and The Daily Beast; Kevin Sabet (@KevinSabet), assistant professor at The University of Florida’s Drug Policy Institute and former senior advisor in the Office of National Drug Control Policy in the Obama administration; Veronique de Rugy (@veroderugy), senior research fellow at the Mercatus Center at George Mason University; and Dedrick Muhammad, senior economic director at the NAACP.

This Week with George Stephanopolis: The guest on This Week is Treasury Secretary Timothy Geithner (and just about everywhere else).

The roundtable panel guests are  House Deputy Whip Rep. Tom Cole, R-Okla.; Rep. Keith Ellison, D-Minn., co-chair of the Congressional Progressive Caucus; former Romney campaign senior adviser Dan Senor; former Counselor to the Treasury Secretary and Lead Auto Adviser Steven Rattner; and ABC News’ Cokie Roberts.

Face the Nation with Bob Schieffer: Mr Schieffer’s guests are Treasury Secretary Timothy Geithner; Sen. Lindsey Graham, R-S.C. Sen.; Senate Intelligence Chair Dianne Feinstein, D-Calif.; and Chairman of the House Intelligence Committee Mike Rogers, R-Mich.

Joining a panel discussion of the “fiscal cliff” are Moody’s Analytics Mark Zandi, Campaign to Fix the Debt’s Maya MacGuineas, TIME Magazine’s Rana Foroohar and CBS News Political Director John Dickerson.

The Chris Matthews Show: Joining Chris Matthews are Annette Gordon-Reed, Author; Jodi Kantor, New York Times; Jon Meacham, Random House Author & Executive Editor and Michael Beschloss, Author.

Meet the Press with David Gregory: The guests on MTP are Treasury Secretary Timothy Geithner; Sen. Claire McCaskill (D-MO) and Sen. Bob Corker (R-TN).

The roundtable guests are  anti-tax advocate Grover Norquist; the top Democrat on the House Budget Committee, Rep. Chris Van Hollen (D-MD); and insights and analysis from CNBC’s Jim Cramer and Maria Bartiromo.

State of the Union with Candy Crowley: Ms. Crowley’s guests are Treasury Secretary Timothy Geithner; “Gang of 8” member Mark Warner (D-VA) and Sen. Kelly Ayotte (R- NH).

Joining her at the roundtable are former Chairman and CEO of Hewlett-Packard, Carly Fiorina, Governor Brian Schweitzer (D-Montana), USA Today‘s Susan Page, and A.B. Stoddard of The Hill.

Other than Chris Hayes this is going to be all right wing, neo-con spin, even Bruce Bartlett gets it. But we are spared John “Jowls” McCain. TMC

To discuss what they know since the week began, Up with Cris Hayes host Chris Hayes is joined by his guests Danielle Brian (@daniellebrian), executive director for the Project On Government Oversight; Eyal Press (@EyalPress), author of “Beautiful Souls: Saying No, Breaking Ranks and Heeding the Voice of Conscience in Dark Times;” Ed Pilkington, chief reporter for guardiannews.com, former national and foreign editor of the paper and author of “Beyond the Mother Country;” and former Marine Zachary Iscol.

Fast Food Workers Walk Off The Job: “We Can’t Survive On $7.25!”

from Gothamist

Low-income workers at giant chains fighting are back for better wages. Last week Wal-Mart workers across the country walked off the job in protest, and yesterday fast food workers here in New York took to the streets to demand for more money-and a union. Specifically, those marching to bring Fast Food Forward are organizing for a living wage-like, say, making $15 an hour. Because the average fast food worker in New York City makes just $11,000 a year.

Plenty of local politicians are supporting the workers. “This is the moment for New York City to turn the corner after a decade of rising income inequality,” mayoral hopeful Bill De Blasio said in a statement on yesterday’s actions, which took place all over the city. “We need to stand united as a city in support of fast food workers so they can win the fair pay and economic security every New Yorker deserves.”

And City Council member Jumaane Williams went even further at an afternoon rally in Times Square. “You deserve an honest days pay for an honest days work,” he told the crowd. “McDonald’s says billions and billions served and they aren’t even offering sick days or able to pay you for an honest days work? That’s some bull… ish!”

Why It’s Time To Raise The Wage Floor On Fast Food ‘McJobs’

by Sarah Jaffe, The Atlantic

The median hourly wage for food service and prep workers is a mere $8.90 an hour in New York City, according to the New York Department of Labor. But Jasska Harris still makes the federal minimum wage — $7.25 — after five months on the job, and struggles to get even 35 hours a week. And that minimum wage buys less than it used to. A recent study from the National Employment Law Project pointed out that the value of the minimum wage is 30 percent lower than it was in 1968. [..]

Wages in the fast-food industry have stayed low for two basic reasons. First, many are low-skill service jobs in an efficient assembly where workers are easily replaced and don’t require much education. Second, there is a large supply of people who are willing to make cheap burgers at a low wage. It is easy to look at this scenario and conclude, “well, economics determines prices and wages, and that’s that.” But the full story is more complicated. Cheap fast food and their cheap workers impose a cost on the country in the form of food stamps, welfare through the tax code, and social safety net programs. This is a place for government to intervene — and for corporations to sacrifice some of their profits — by raising wages to a livable level. [..]

What we’ve seen with Walmart and now with the fast food workers is an independent organization, supported by traditional labor unions (in this case, the Service Employees International Union along with New York Communities for Change, United NY, and the Black Institute), can be more creative in its organizing tactics. Lerner is particularly inspired by the one-day strike that the workers are undertaking today. “The old strike, you used to go out and stay out until you win. But the workers now are so angry and mistreated an the way you express that is short-term walkouts.”

It’s TRUE!  I read it on the… oh, wait.

File under reality outstripping satire.

Facebook charges you to talk to more than 15% of your "friends".

brucedixon, Corrente

Mon, 11/26/2012 – 3:15pm

This might be old news to you, but not to me. In a conversation with Davey D today, really on the new FCC rulings being promulgated, he noted in passing that Facebook is now charging you for the privilage of talking to all your “fans” and “friends.” I spent a few minutes online right after the conversation, and confirmed it. According to Facebook’s own advertising department, on the average, about 15% of the folks you imagine are getting your stuff are getting it. The other 80 or 85%….. not. That’s one in five if you’re lucky, one in seven if you’re not.

Ever wondered what that “promote” button at the bottom of your posts is? That’s the doorway to talking to ALL your followers or friends or fans. It’s the ONLY doorway, and it’s a toll booth.

This is not a bug, it’s a feature. Facebook is not a level playing field, and it’s certainly NOT a meritocratic online universe in which you can “earn” an audience and then once that audience is built get to address them merely by posting on your Facebook page in the certainty that they will see it. What would be the profit in that? If you want to talk to ALL of”your” friends instead of the random percentage FB allows you have to pay Facebook for the privilege, about $1 per click thru item per “friend.”