Daily Archive: 07/28/2014

Jul 28 2014

Punting the Pundits

“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”.

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Paul Krogman: Corporate Artful Dodgers

Tax Avoidance du Jour: Inversion

In recent decisions, the conservative majority on the Supreme Court has made clear its view that corporations are people, with all the attendant rights. They are entitled to free speech, which in their case means spending lots of money to bend the political process to their ends. They are entitled to religious beliefs, including those that mean denying benefits to their workers. Up next, the right to bear arms?

There is, however, one big difference between corporate persons and the likes of you and me: On current trends, we’re heading toward a world in which only the human people pay taxes.

We’re not quite there yet: The federal government still gets a tenth of its revenue from corporate profits taxation. But it used to get a lot more – a third of revenue came from profits taxes in the early 1950s, a quarter or more well into the 1960s. Part of the decline since then reflects a fall in the tax rate, but mainly it reflects ever-more-aggressive corporate tax avoidance – avoidance that politicians have done little to prevent.

New York Times Editorial Board: A Stronger Bill to Limit Surveillance

The Senate is about to begin debate on a bill that could, at long last, put an end to the indiscriminate bulk collection of Americans’ telephone records and bring needed transparency to the abusive spying programs that have tarnished the nation’s reputation.

The bill, to be introduced on Tuesday by Senator Patrick Leahy of Vermont, chairman of the Judiciary Committee, is a significant improvement over the halfhearted measure passed by the House in May. That legislation was notable for putting even Republicans on the record in opposition to the broad domestic spying efforts of the intelligence agencies, but its final version was watered down at the insistence of the White House.

Mr. Leahy said at the time that he wanted to write a stronger bill, and, after negotiating with the White House, he has. Both bills would stop the flow of telephone data into the computers of the National Security Agency, keeping the information with the phone companies, where it belongs. But the Senate bill takes a major step in limiting how much of that data the N.S.A. can request.

David Cay Johnston: Federal regulators let utilities gouge customers

Despite obscene profits from monopoly power, government officials ignore evidence and squash challenges

The profit margins that federal regulators set for utilities should be decreasing, given the long downward drift of interest rates and the shrinking cost of capital.

Bizarrely, the opposite is happening: Utilities are raking in stunning profits at the expense of consumers.

Now the first in a raft of cases asserting that the Federal Energy Regulatory Commission (FERC) is letting utilities gouge customers by setting egregiously high rates of return may finally get a hearing.

Since utilities are legal monopolies with no market to discipline their pricing, only the vigilance of regulators stops them from causing irreparable economic harm by stifling growth, draining wealth from customers and distorting investment. Court rulings say FERC commissioners must “guard the consumer against excessive rates.”

The legal standard for setting utility rates is known as “just and reasonable.” Profits and prices are supposed to be balanced so both investors and customers get fair treatment.

FERC commissioners, however, disregard the just and reasonable standard, routinely ignore evidence and act more as agents of utilities than fair-minded regulators.

Robert Reich: The Increasing Irrelevance of Corporate Nationality

“You shouldn’t get to call yourself an American company only when you want a handout from the American taxpayers,” President Obama said Thursday.

He was referring to American corporations now busily acquiring foreign companies in order to become non-American, thereby reducing their U.S. tax bill.

But the president might as well have been talking about all large American multinationals.

Only about a fifth of IBM’s worldwide employees are American, for example, and only 40 percent of GE’s. Most of Caterpillar’s recent hires and investments have been made outside the U.S.

In fact, since 2000, almost every big American multinational corporation has created more jobs outside the United States than inside. If you add in their foreign sub-contractors, the foreign total is even higher.

Philip Pilkington: Fed’s targeting of asset bubbles leads to contradictions

Yellen’s comments on overvalued markets welcome, but finding the right solution is tricky

On July 15 the head of the U.S. Federal Reserve, Janet Yellen, announced during a Senate hearing about the current economic outlook that certain asset markets were overvalued. The charges mark a potential revolution in how central banks across the world will conduct their affairs. In her testimony, Yellen noted that valuations for low-rated “junk bonds” or corporate debt “appear stretched,” while “issuance has been brisk.” Similarly, in its full monetary policy report released the same day, the Fed said stocks for some social media and biotech industries appear significantly overvalued.

Much of this was not surprising. For months, commentators had said these trends of high valuation in risky and overvalued markets are unsustainable. But such confirmation from the most powerful banker in the world dramatically alters how central banks see themselves. Following the 2008 financial crisis, many central banks turned their focus to managing the financial market in a far more concerted manner than they did previously. For example, the banks intervened in the market to prop up asset prices by increasing the monetary base in the banking system and thus lowering interest rates, but it seems that they will now try to stop these prices from rising to levels they consider dangerous.

Peter Shrag: Unscrambling the California omelet

Why breaking the state into six is a terrible idea

There are many arguments in support of Silicon Valley venture capitalist Tim Draper’s view that California is too big, too diverse and too unwieldy to work efficiently as a state. With 38 million residents and growing; 13 TV markets; some 7,000 government entities, including cities, counties, water and mosquito abatement districts, school districts; and an ethnically and economically polyglot population, most residents feel closer to their local governments than to the distant politicians in Sacramento.

Draper’s remedy: an initiative for the 2016 ballot to divide California into six states to bring government closer to the people. One, the proposed new coastal state of Silicon Valley, which would include San Francisco and the high-tech suburbs to the south (where Draper lives), would have the highest per capita income in the nation, above Connecticut. Its neighbor to the east, the state of Central California (a region sometimes called California’s Appalachia), would be the poorest, poorer than Mississippi. That might be welcome to the rich taxpayers along the coast, but it would create monstrous problems for the have-nots. [..]

But this is a nutty idea, nuttier even than Draper’s costly school voucher initiative in 2000, which got trounced by a vote of 70-30. So perhaps this move is a very costly provocation to bring out some great new wave of disaffected rednecks with pitchforks, or to generate yet another great anti-establishment political upheaval like the tax revolt of 1978 or the recall of Gov. Gray Davis in 2003.

Jul 28 2014

On This Day In History July 28

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.

July 28 is the 209th day of the year (210th in leap years) in the Gregorian calendar. There are 156 days remaining until the end of the year.

On this day in 1868, following its ratification by the necessary three-quarters of U.S. states, the 14th Amendment, guaranteeing to African Americans citizenship and all its privileges, is officially adopted into the U.S. Constitution.

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In the decades after its adoption, the equal protection clause was cited by a number of African American activists who argued that racial segregation denied them the equal protection of law. However, in 1896, the U.S. Supreme Court ruled in Plessy v. Ferguson that states could constitutionally provide segregated facilities for African Americans, so long as they were equal to those afforded white persons. The Plessy v. Ferguson decision, which announced federal toleration of the so-called “separate but equal” doctrine, was eventually used to justify segregating all public facilities, including railroad cars, restaurants, hospitals, and schools. However, “colored” facilities were never equal to their white counterparts, and African Americans suffered through decades of debilitating discrimination in the South and elsewhere. In 1954, Plessy v. Ferguson was finally struck down by the Supreme Court in its ruling in Brown v. Board of Education of Topeka.

The Fourteenth Amendment (Amendment XIV) to the United States Constitution was adopted on July 29, 1868 as one of the Reconstruction Amendments.

Its Citizenship Clause provides a broad definition of citizenship that overruled the decision in Dred Scott v. Sandford (1857), which held that blacks could not be citizens of the United States.

Its Due Process Clause prohibits state and local governments from depriving people (individual and corporate) of life, liberty, or property without certain steps being taken. This clause has been used to make most of the Bill of Rights applicable to the states, as well as to recognize substantive rights and procedural rights.

Its Equal Protection Clause requires each state to provide equal protection under the law to all people within its jurisdiction. This clause later became the basis for Brown v. Board of Education (1954), the Supreme Court decision which precipitated the dismantling of racial segregation in the United States.

The there is that pertinent and pesky Article 4:

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Validity of public debt

Section 4 confirmed the legitimacy of all United States public debt appropriated by the Congress. It also confirmed that neither the United States nor any state would pay for the loss of slaves or debts that had been incurred by the Confederacy. For example, several English and French banks had lent money to the South during the war. In Perry v. United States (1935), the Supreme Court ruled that under Section 4 voiding a United States government bond “went beyond the congressional power.” Section 4 has been cited (during the debate in July of 2011 over whether to raise the U.S. debt ceiling) by some legal experts and Democratic members in the U.S. House Democratic caucus, as giving current President Barack Obama the authority to unilaterally raise the debt ceiling if the Congress does not appear to be able to pass an agreement by Tuesday, August 2, 2011. The White House Press Office and President Obama have said that it will not be resorted to, though Democratic members of the House that support the move are formally petitioning him to do so “for the sake of the country’s fiscal stability.” A final resolution to the crisis has not yet been decided upon.

Jul 28 2014

Nigeria, Big Oil, and Boko Haram

Boko Haram kidnaps wife of vice prime minister in Cameroon

Al Jazeera

July 27, 2014 11:29AM ET

Boko Haram fighters on Sunday kidnapped the wife of Cameroon’s vice prime minister in an attack that also killed three people, according to a government spokesman.

The Islamist fighters targeted the home of Vice Prime Minister Amadou Ali in the town of Kolofata, in the Far North Region, according to Communications Minister Issa Tchiroma Bakary. A local religious leader, or lamido, also was kidnapped in a separate attack on his home.

“I can confirm that the home of Vice Prime Minister Amadou Ali in Kolofata came under a savage attack from Boko Haram militants,” Issa Tchiroma told Reuters.

“They unfortunately took away his wife. They also attacked the lamido’s residence and he was also kidnapped,” he said, adding that at least three people were killed in the attack.

The Real News Network

Baba Aye, a trade union educator and Deputy National Secretary of the Labour Party, is the National Convener of United Action for Democracy, the largest rights-based CSOs coalition in Nigeria. He has been very active over the past three decades in the various trenches of struggle for democratic rights and is the author of the book Era of Crises and Revolts: Perspectives for Workers and Youth (2012).

According to Human Rights Watch, in Nigeria, Boko Haram, the groups most people regard as a terrorist group, have killed in the last six months more than 2,053 civilians. Some people suggest that number has also been reached by the government of Goodluck Jonathan, who some say has killed as many people over the same period, but Human Rights Watch mentions only a few abuses in the same report.

How does all this come to be? Nigeria is the largest economy in Africa now, more than–bigger than South Africa. It’s the sixth-largest oil exporting country in the world. Why such chaos?

Now joining us to talk about the historical roots of all of this is Baba Aye. He’s a trade union educator, deputy national secretary of the Labour Party. He’s the national convener of United Action for Democracy, the largest rights-based organization coalition in Nigeria.

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Jul 28 2014

Sunday Train: HSR from Houston to Dallas one step closer to reality

The Texas Department of Transport and Federal Railway Authority announced in June that they were beginning an Environmental Impact Study for the proposed private Texas Central Railways (TCR) High Speed Rail corridor between Houston and Dallas.

This is a private venture that is proposing to using the “Japan Rail Central” N700-I system, an internationalized version of the 186mph HSR train running between Tokyo and Osaka. TCR proposal is not only for the trains to be operated on farebox revenue, but for the corridor to be built with private funds. As the FRA announcement states:

TCR is a Texas-based company formed in 2009 to bring HSR to Texas as a private-sector venture.  Working closely with Central Japan Railway Company (JRC), TCR is proposing the deployment of JRC’s N700-I Bullet System based on the world’s safest, most reliable, lowest emission, electric-powered, HSR systems, the Tokaido Shinkansen System.  Developed and operated by JRC and the former Japan National Railways, the Tokaido Shinkansen has operated safely for almost 50 years and carries over 400,000 daily passengers. The most current generation Shinkansen train, the Series N700, runs at speeds up to 186 miles per hour.

Being a private venture, the EIS process will give us our first public look at corridor alternatives that TRC is considering, as well as the first opportunity for formal public comment.