Tag: Economy

At a recent hearing before the Senate Permanent Subcommittee on Investigations, Apple CEO Tim Cooke testified how the company managed to evade paying billions in taxes using tax loopholes particularly and overseas subsidiaries, like Apple’s subsidiary in Ireland.

Apple’s massive cash hoard, and the danger of soaring corporate profits

by Steve Gentile, Up with Steve Kornacki

The major flaw of our recovery has not been the pace, although certainly it could have been much faster. Instead, the major flaw is distribution. The economy is growing, but corporations and the richest Americans are capturing the lion’s share of the proceeds from that growth. You’ve likely heard a lot about the one percent-in the first year of the recovery, they captured 93% of the income gains – but the story of America’s corporations is even more troubling.

We’ve seen systemic inequality in our country growing for decades, even before the latest financial crisis. Between 1979 and 2007, income for the top 1% grew by nearly 300%, while it grew by just 18% for the bottom quintile of earners. [..]

Apple argues that its off-shore profits should only be subject to off-shore taxes. As if those off-shore profits had nothing to do with America. Of course, they do. Apple may sell products across the world, but the company is based in America for a reason. Apple enjoys, indeed exploits, countless legal and economic benefits by operating in America, benefits Apple wouldn’t enjoy anywhere else: basic legal protections, a judiciary that safeguards and enforces the rule of law, an intellectual property regime that affords generous-in fact, overly broad-protections for new ideas and innovations, a world-class system of higher education, a (somewhat) open immigration policy, reliable security, an advanced infrastructure for business development, and countless other benefits  from operating in a functional, developed society with a genuine social contract.

As Elizabeth Warren famously put it, “There is nobody in this country who got rich on his own.” In the same way, there is no company in this country that got rich on its own. Corporations like Apple are hampering the economy and corroding our political system by hoarding hundreds of billions of dollars in cash. They owe the American people back payments.

On her May 25 MSNBC show, Melissa Harris-Perry exams corporate money tactics and tax codes with guests Lawrence J. Korb, Senior Fellow at the Center for American Progress; Stephen Lerner, organizer of the Wall Street Accountability campaign; Pulitzer Prize-winning investigative journalist David Cay Johnston, author of The Fine Print: How Big Companies Use “Plain English” To Rob You Blind; and Yves Smith, the founder and creator of the blog Naked Capitalism.

Journalist David Cay Johnston, Sen. Sherrod Brown (D-OH) and MSNBC host Ed Schultz all agree that now is the time, and in some cases past time, to invest in the collapsing and crumbling bridges, road, rails and public buildings.

Pay to Fix America’s Crumbling Infrastructure Now, or Pay More Later

by David Cay Johnston

The I-5 disaster in Seattle reflects the dire state of our bridges and highways. But it may never be cheaper to replace these aging arteries than it is now.

“We cannot hope to have an A+ economy with a C-level infrastructure,” said James Chae, president of the (American Society of Civil) engineering society’s Seattle section. [..]

State and local governments spent $156 billion on highways in 2010, roughly a penny out of each dollar of America’s gross domestic product.

Right now, governments can borrow at the lowest interest rates in 700 years. Roughly 25 million people are involuntarily forced into part-time work, are looking for work, or have given up because they cannot find a job.

We must either update our infrastructure or face a future that is both more dangerous and poorer, as more bridges collapse, pipelines leak and explode, and the movement of goods and people becomes less efficient. We could increase our spending and reap big dividends in jobs and the taxes they generate, improved safety, and a more efficient economy.

Why put off until tomorrow what is cheaper to do today?

MSNBC’s Ed Schultz, host of “The Ed Show,” discussed the problem of cutting spending on rebuilding the nation’s infrastructure with Sen. Brown.

In the real world and the reality based community, there is talk about austerity from people who understand the nuances of it and macroeconomic accounting identities. They point out the undeniable fact that there is austerity in the UK, the Eurozone, and yes, the United States. This interactive chart will show this, though I can’t embed it here. So instead, I will add a small snapshot of some of the data.

Net spending in the United States has steadily declined since it rose from 2008 to 2009 when the inadequate stimulus(only $500 billion of direct spending at about 1.5 percent of GDP) was passed. Stimulus packages don’t exist in a vacuum, and you have to count all government spending, which basically shows how exactly the numbers, including the stimulus as this does, didn’t close the output gap. And since the numbers didn’t, that is actually austerity. After all, spending went up in the UK and Eurozone from 2008 to 2009 as well, and since then, their spending has declined. Even though it is on a higher level, it is being cut at an even more alarming rate with its fate set to go below our miserable level by 2017.

I have pointed this out before. Sometimes I get frustrated, and point this out harshly, because some pride themselves on denying this established data to support whatever a politician in their party says or does. I don’t know why. Denying reality is not going to give resources to people who need them. There is a reason my last diary has been cited by the reality based Post Keynesian MMT community, in which I am truly grateful for and humbled by; it is the truth.

The real economy of jobs and wages continues to go nowhere thanks to the lack of deficit spending and an illogical debate in DC about how much austerity we need to appease the invisible bond vigilantes and confidence fairies. It is neoliberal deficit terrorist economic insanity based on lies. And on that note, it is my pleasure to republish a piece by someone in the reality based economic community whom I can now proudly say is a friend of mine, Post Keynesian MMT economist John T. Harvey. He, once again, brings clarity to these matters in a way that only he can.  

We learn in this week segment of Up‘s “What We Know Now” with host Steve Kornacki that Minnesota Gov. Mark Dayton signed marriage equality passed by the Demcratic held state legislature. Also, Jason Richwine resigned from the Heritage Foundation after revelations about his doctoral dissertation. In the aftermath, Pablo Pantoja, the director of the RNC Florida Hispanic Outreach, resigned and became a Democrat.

Democratic nominee for the vacant Senate seat in Massachusetts, Ed Markey dis-invited  former Georgia Democratic congressman Ben Jones from a fundraising event over Jones’ support of the displaying the Confederate flag public events.

According to Public Policy Polling, hipsters are no longer “in.”

Telling us what they have learned this week are Steve’s guests: Patricia Ireland, former President of the National Organization for Women; Anu Bhagwati, executive director and co-founder, Service Women’s Action Network; Goldie Taylor, MSNBC contributor, managing editor, The Goldie Taylor Project; and Jessica Hinves, former U.S. Air Force member, board member of Protect Our Defenders (a group that works to being attention to military sexual assault).

Minnesota Legalizes Gay Marriage: Gov. Mark Dayton Signs Bill Into Law

from Huffington Post

Minnesota officially became the 12th U.S. state to approve same-sex marriage May 14 when Gov. Mark Dayton appeared before a jubilant crowd to sign a marriage equality bill into law.  [..]

Dayton’s signature came just a day after the state Senate approved it with a 37-30 vote, the Associated Press reported.

“Life, liberty and the pursuit of happiness should certainly include the right to marry the person you love,” he noted.

Echoing those sentiments was State Rep. Karen Clark and Sen. Scott Dibble, who are both openly gay.

Jason Richwine Resigns From Heritage Foundation After Dissertation Controversy

by Luke Johnson, Huffington Post

Jason Richwine, the co-author of a Heritage Foundation report on immigration who came under fire this week for arguing in his Harvard dissertation that Hispanic immigrants to the U.S. have substantially lower IQs than whites, resigned Friday. [..]

The report put the cost of immigration reform at a whopping $6.3 trillion. Though Heritage’s 2007 report was one of the reasons an earlier immigration bill failed, the 2013 report was widely mocked, even by Republicans the foundation hoped would support it.

Harvard accepted Richwine’s 2009 dissertation for a doctorate in public policy. In it, he spoke of the “growing Hispanic underclass.”[

Pablo Pantoja Turns Democrat: RNC Florida Hispanic Director Cites GOP ‘Intolerance’ In Making Party Switch

by Chris Gentilviso, Huffington Post

Less than two months after the Republican National Committee announced a multi-million dollar campaign to improve minority outreach, one of its state Hispanic directors is leaving the Republican Party altogether.

In a letter released by The Florida Nation on Monday, RNC State Director Of Florida Outreach Pablo Pantoja announced that he is changing his political affiliation to the Democratic Party.

“It doesn’t take much to see the culture of intolerance surrounding the Republican Party today,” he wrote. “I have wondered before about the seemingly harsh undertones about immigrants and others. Look no further; a well-known organization recently confirms the intolerance of that which seems different or strange to them.”

Ed Markey Disinvites Ben Jones From Campaign Appearance Over Confederate Flag Beliefs

by Pam Lavender, Huffington Post

Rep. Ed Markey (D-Mass.) disinvited former Georgia Democratic congressman Ben Jones from a fundraising event after learning of Jones’ support for the Confederate flag. [..]

Jones defended the Confederate flag as a symbol of Southern culture in 2012 when NASCAR canceled plans to have professional golfer Bubba Watson drive the General Lee — the car from “The Dukes of Hazzard” which features a Confederate flag on its roof — at Phoenix International Raceway. Jones called the cancellation of the event “an extraordinary insult to rural Southerners.”

Hipsters trail in the polls but survey’s worth called into question

by Adam Gabbatt, The Guardian

Public Policy Polling claimed 42% of Americans viewed hipsters unfavourably but methodology and purpose of poll questioned

A US polling company claimed on Monday that a shocking 42% of Americans have an unfavourable opinion about hipsters – in a telephone poll conducted among people who only have landlines.

Public Policy Polling was widely mocked for its survey, both for the frivolity of the poll, and for using a methodology that seemed guaranteed to produce the result that emerged.

This is not directed at the reality based The Stars Hollow Gazette community.

And by “we” I don’t mean me or I, because I make a good effort to at least try. I’m talking about blogs like Daily Kos. I had always assumed, because of the many insightful writers on the site and on the front page that was the case. However, we are starting to see some of what we see with corporate control of all airwaves in how site moderation is run.

For instance, whether on Fox News, CNN or MSNBC there is always a fake debate when it comes to climate change which is undeniably happening since we have hit 400 ppm of CO2 in our atmosphere for the first time in 3 million years. When this spectacle that pretends to be a live debate on TV happens, there are always two guys picked by the network to come on TV to debate the issue; one a NASA scientist like say James Hansen and one fringe dwelling Koch funded climate changed denier to debate as if there is something to debate as if both sides have an equal argument to make. WRONG. The science is in.

I always thought we in the progressive blogosphere prided ourselves on not accepting that dynamic, but now I am starting to wonder. On the issues I go to great lengths to cover when it comes to the economy, there are certain undeniable facts that have to be acknowledged whether you are a Post Keynesian MMT proponent like me or not. I mean, if we are any different than debates on red state or the corporate owned media, that is. I have to wonder about that now, because it now appears from what went on in my last diary in the comment section that a moderator here stepped in and made an effort to portray the troll like behavior and continual denial of established facts in every diary of mine as “just an honest disagreement.”

It was inferred that I was “out of line” for accurately describing a commentator while using a term that accurately describes his brand of troll like behavior. That’s not out of line. When people act like trolls in every diary of mine I can only ignore it for so long before calling it out directly. We can’t just ignore this kind of behavior forever in this community. I mean, not if we still consider ourselves part the reality based community. Do we?

Austerity was thoroughly trounced by a couple of university grad students who discovered major omissions in the much touted study by a couple of Pete Peterson’s paid cronies. So why are we still even talking about it? Good question that no one so far has asked our fearless leader in Washington.

Up host Steve Kornacki discussed whether the elite consensus on austerity has started to shift and if there is any effect on the opinions in Washington. His guests Josh Barro, Columnist, Bloomberg View; Jared Bernsein, former economic adviser to V.P. Joe biden; Lori Montgomery, Economic Policy Reporter, The Washington Post; and Heather McGhee, Vice President, Demos; examine the lessons that can be learned from Europe’s austerity experience and what the US economy will look like if it continues on the austerity path. The panel also discussed how conservative have backed away from cuts to Social Security shifting their focus to tax reform, controlling spending through cost efficient measures and the roadblocks to getting it done.

That’s right. Remember my last diary where I did prove without a shadow of a doubt that the austerity that this administration has put forth right now, and in effect right now, does not make this President a Keynesian? I provided a lot of reference material on Keynes proving each point I made, because that’s what we encourage on this site. That’s called backing up one’s assertions with facts and data. I did.

The same facts were put forth by economist Jared Bernstein who used to work for VP Joe Biden and is now a senior fellow at the Center for Budget and Policy Priorities. As a Post Keynesian MMT proponent, I don’t have the same outlook on economics, to say the least, as the CBPP on a number of things, especially on public debt and deficits. However, there’s no reason to doubt the data in this paper from Richard Kogan; it is clearly well sourced from the CBO and the President’s own Office of Management and Budget analyzing the Budget Control Act of 2011 signed into law by the President.

CONGRESS HAS CUT DISCRETIONARY FUNDING BY $1.5 TRILLION OVER TEN YEARS: First Stage of Deficit Reduction Is In Law

This proves without a shadow of a doubt that anyone who shows up in every thread and types that “cuts only happen in the future” must not be very intellectually curious. After all, as most can see with thier own eyes, the 70% of recommended cuts from Bowles Simpson going into effect this year, the year 2013, occurring until the start of fiscal year 2023 actually happen every year accumulating up to 1.5 trillion in real cuts. These are the indisputable facts.

Eight of the 14 Democrats who are up for reelection in 2014, three from red states, have taken a stand against Pres. Obama’s proposed Social Security cuts:

The majority of Senate Democrats running for reelection in 2014, including three running in red states, have broken with President Barack Obama and are opposing his effort to cut Social Security benefits, imperiling the austerity project known as the “grand bargain.” [..]

Democratic Sens. Kay Hagan (N.C.), Mark Begich (Alaska) and Mark Pryor (Ark.), all running in states won by Republican Mitt Romney in 2012, have publicly opposed the president’s effort, going so far as to co-sponsor a Senate resolution against chained CPI last week. Sens. Al Franken (D-Minn.), Jeff Merkley (D-Ore.), Jack Reed (D-R.I.) and Brian Schatz (D-Hawaii), running in bluer states, also co-sponsored the resolution. [..]

Other Senate Democrats up for reelection who didn’t sign the resolution were still unfavorably disposed toward chained CPI. Sen. Jeanne Shaheen (D-N.H.) opposes the cost-of-living cut, her office confirmed to HuffPost, and has said Social Security should be off the table in debt talks.

Sen. Chris Coons (D-Del.) has been open to the chained CPI cut, but insisted a “circle of protection” must be established for the most vulnerable Americans.

Alaskan Senator Mark Begich will introduced two bill that would protect Social Security benefits:

Begich plans to introduce the Protecting and Preserving Social Security Act and the Social Security Fairness Act of 2013 when he returns to Washington, DC next week. He says his plan has three points. The Protecting and Preserving Social Security Act would remove a cap on high income contributions. The cap is now at 113,700 dollars. Removing the cap would make high income earners pay into Social Security just like everyone else, he says. [..]

The second part of that bill would revise how SS payments are adjusted to better reflect how America’s senior spend their income. Currently, payments are based on a Consumer Price Index model that does not accurately reflect higher costs seniors pay, for medications, for example. The bill would create a CPI – E for elders.

The Social Security Fairness Act would remove penalties that are now placed on retirees who worked more than one job, paid into Social Security, but then retired under a different retirement system. Under current law, they are denied their Social Security benefits Many government workers and some teachers in Alaska fall into this category.

It’s about time the Democrats stood up to the Republican in the White House.

It’s really sad it has come to this. There are many people that have jumped to branding President Obama as the second coming of famed economist John Maynard Keynes in what has become a rather sad attempt to deflect his austerity along with the deficit hysteria he preaches on a daily basis. Some people pretend the sequester he and Gene Sperling wrote along with putting chained CPI on the table(cutting seniors income) in order to get out it somehow “makes Obama a textbook Keynesian.” Nope.

It doesn’t take a lot of effort to know this is false.

“The boom, not the slump, is the right time for austerity at the Treasury.”

– John Maynard Keynes (1937) Collected Writings

I’ve been writing about the Trans Pacific Partnership for over a year, it still flies under the radar in the news media for a number of reasons, the most obvious reason is that the corporate giants don’t want the public knowing how really bad this trade agreement is. It is so bad that Mitt Romney urged Pres. Obama to finish negotiations and ratify it. Those negotiations are slowly coming to a conclusion.

Political corruption and the ‘free trade’ racket by Dean Baker, Al Jazeera

In polite circles in the United States, support for free trade is a bit like proper bathing habits: It is taken for granted. Only the hopelessly crude and unwashed would not support free trade.

There is some ground for this attitude. Certainly, the US has benefited enormously by being able to buy a wide range of items at lower cost from other countries. However, this does not mean that most people in the country have always benefited from every opening to greater trade.

And it certainly does not mean that the country will benefit from everything that those in power label as “free trade”. That is the story we are seeing now as the Obama administration is pursuing two major “free trade” agreements that in fact have very little to do with free trade and are likely to hurt those without the money and power to be part of the game.

The deals in questions, the Trans-Pacific Partnership (TPP) and the US-European Union “Free Trade” Agreement are both being pushed as major openings to trade that will increase growth and create jobs. In fact, eliminating trade restrictions is a relatively small part of both agreements, since most tariffs and quotas have already been sharply reduced or eliminated.

Rather, these deals are about securing regulatory gains for major corporate interests. In some cases, such as increased patent and copyright protection, these deals are 180 degrees at odds with free trade. They are about increasing protectionist barriers.

AS part of these agreements, the worst parts of the zombie bill, Stop Online Piracy Act (SOPA), are being incorporated to “police” the internet.

Foreseeing opposition and difficulty getting the 2/3rd’s majority to pass this nightmare, Sen Orrin Hatch (R-UT) has proposed amendments to a Senate budget resolution that would speed its passage and implementation:

Hatch, who has been pressing the White House to move forward with fast-track authority, intends to offer an amendment that calls for implementation of the Trans-Pacific Partnership (TPP), which is expected to be completed this year, along with a U.S.-European Union trade deal, which is set to begin talks in June, and any other potential free-trade agreements to be done under trade promotion authority (TPA). [..]

Meanwhile, all of these negotiations have been held in secret. Yves Smith writes this at naked capitalism:

Congressional staffers have confirmed that the text of the TPP draft is classified. That means that only people with security clearances, which for practical matters means Congressmen and certain staffers on key committees (House Ways and Means and the Senate Finance Committee) in theory have access. That is already a monster impediment. Congressmen almost never have the time (even where they have the ability) to read long agreements in full and parse how key sections work (which often mean going back to definitions and in some cases, existing law). So keeping most staffers and third parties with expertise away assures that (until the last minute) the discussion and “clarifications” of the provisions under negotiation will come only from parties that are already in the tank.

But practice is even worse than theory. The full draft text is being withheld. And as anyone who has been involved in legal-related drafting knows, the actual language is critical. General terms and concepts that sound innocuous can serve as Trojan horses for all sorts of clever “gotcha” provisions.

Yves also brings attention to an article from Truthout

   Under federal law, members of the House Ways and Means and the Senate Finance Committees are designated official advisers to the USTR. In addition to every Representative and Senator, those panels’ staffers – being on “committees of jurisdiction” – are made privy to the American delegation’s proposals.

   Not a single person in Congress, however – or in any legislature of any country party to the deal – is allowed to even once-over the latest version of the actual draft agreement. In an email to Truthout, USTR spokesperson Carol Guthrie confirmed that senators and Congresspeople on committees of jurisdiction, along with their staffers, are only allowed to see the USTR proposals – not the working agreement. She added that “others at the discretion of the committees’ chair and ranking member” are given access to USTR proposals.

It is time for some cleansing sunshine.

We need to start to take action by calling our Senators and Representatives to tell them to stop this bill that will give international corporations more power that our own government, laws and courts,