Monthly Archives: May 2013

Humor: The Borowitz Report

Obama Under Fire for Using Free Government Housing

Posted by
borowitz-obama-housing.jpg

WASHINGTON (The Borowitz Report)—In the latest scandal to rock the Obama Administration, a leading Republican congressman accused the President today of using his position to obtain free government housing for himself and his family.

According to Rep. Paul Ryan (R-Wisconsin), Mr. Obama “has arrogantly exploited the office of President to gain access to a fifty-five-thousand-square-foot residence that could double as a museum.”

“While the average American is struggling to pay his bills, President Obama is living in a luxury home, adorned with priceless paintings and antiques as far as the eye can see,” Rep. Ryan alleged.

Additionally, the Wisconsin congressman said, the President has availed himself of “sumptuous free meals—breakfast, lunch, and dinner—all on the taxpayer’s nickel.”

“Day after day, he selfishly sucks on Uncle Sam’s teat,” he said.

In keeping with Mr. Obama’s bloated lifestyle as “Superstar-in-Chief,” the congressman added, “The President travels with an entourage of highly trained bodyguards who would put Jay-Z’s posse to shame.”

Drawing a line in the sand, the Republican warned Mr. Obama to cut back on his lavish living arrangements “or face possible impeachment.” “Across America, people are tightening their belts,” Rep. Ryan said. “The President should not be living like a head of state.”

Get the Borowitz Report delivered to your inbox.

Official White House Photo by Pete Souza.

Krugman on Starving the Least

From the Mouths of Babes

By 

Like many observers, I usually read reports about political goings-on with a sort of weary cynicism. Every once in a while, however, politicians do something so wrong, substantively and morally, that cynicism just won’t cut it; it’s time to get really angry instead. So it is with the ugly, destructive war against food stamps.

Paul Krugman
The food stamp program — which these days actually uses debit cards, and is officially known as the Supplemental Nutrition Assistance Program — tries to provide modest but crucial aid to families in need. And the evidence is crystal clear both that the overwhelming majority of food stamp recipients really need the help, and that the program is highly successful at reducing “food insecurity,” in which families go hungry at least some of the time.

Food stamps have played an especially useful — indeed, almost heroic — role in recent years. In fact, they have done triple duty.

First, as millions of workers lost their jobs through no fault of their own, many families turned to food stamps to help them get by — and while food aid is no substitute for a good job, it did significantly mitigate their misery. Food stamps were especially helpful to children who would otherwise be living in extreme poverty, defined as an income less than half the official poverty line.

But there’s more. Why is our economy depressed? Because many players in the economy slashed spending at the same time, while relatively few players were willing to spend more. And because the economy is not like an individual household — your spending is my income, my spending is your income — the result was a general fall in incomes and plunge in employment. We desperately needed (and still need) public policies to promote higher spending on a temporary basis — and the expansion of food stamps, which helps families living on the edge and let them spend more on other necessities, is just such a policy.

Indeed, estimates from the consulting firm Moody’s Analytics suggest that each dollar spent on food stamps in a depressed economy raises G.D.P. by about $1.70 — which means, by the way, that much of the money laid out to help families in need actually comes right back to the government in the form of higher revenue.

Wait, we’re not done yet. Food stamps greatly reduce food insecurity among low-income children, which, in turn, greatly enhances their chances of doing well in school and growing up to be successful, productive adults. So food stamps are in a very real sense an investment in the nation’s future — an investment that in the long run almost surely reduces the budget deficit, because tomorrow’s adults will also be tomorrow’s taxpayers.

So what do Republicans want to do with this paragon of programs? First, shrink it; then, effectively kill it.

The shrinking part comes from the latest farm bill released by the House Agriculture Committee (for historical reasons, the food stamp program is administered by the Agriculture Department). That bill would push about two million people off the program. You should bear in mind, by the way, that one effect of the sequester has been to pose a serious threat to a different but related program that provides nutritional aid to millions of pregnant mothers, infants, and children. Ensuring that the next generation grows up nutritionally deprived — now that’s what I call forward thinking.

And why must food stamps be cut? We can’t afford it, say politicians like Representative Stephen Fincher, a Republican of Tennessee, who backed his position with biblical quotations — and who also, it turns out, has personally received millions in farm subsidies over the years.

These cuts are, however, just the beginning of the assault on food stamps. Remember, Representative Paul Ryan’s budget is still the official G.O.P. position on fiscal policy, and that budget calls for converting food stamps into a block grant program with sharply reduced spending. If this proposal had been in effect when the Great Recession struck, the food stamp program could not have expanded the way it did, which would have meant vastly more hardship, including a lot of outright hunger, for millions of Americans, and for children in particular.

Look, I understand the supposed rationale: We’re becoming a nation of takers, and doing stuff like feeding poor children and giving them adequate health care are just creating a culture of dependency — and that culture of dependency, not runaway bankers, somehow caused our economic crisis.

But I wonder whether even Republicans really believe that story — or at least are confident enough in their diagnosis to justify policies that more or less literally take food from the mouths of hungry children. As I said, there are times when cynicism just doesn’t cut it; this is a time to get really, really angry.

Mario Piperni on White Fright

GOP – America’s White Party

MAY 30, 2013 BY 

Quotes - Phylis Schlafly  :   http://mariopiperni.com/

Surprise, surprise. Stupidity is alive and well in the racist wing of the conservative movement.

Eagle Forum’s Phyllis Schlafly is riled up about comprehensive immigration reform, and she has hardly been hiding the reason why. Last month, Schlafly predicted that comprehensive reform would be “suicide for the Republican Party” because immigrants “come from a country” where they expect “a handout” from the government. Last week, she lamented that today’s immigrants are less patriotic than the “Irish, Italian, Jewish, etc.” immigrants of “earlier generations.” Then, she claimed that Mitt Romney lost the presidential election not because of eroding support for the GOP among people of color, but because “his drop-off from white voters was tremendous” – which is just blatantly false.

But in an interview this week with conservative radio program Focus Today, Schlafly just came right out and said it. Calling the GOP’s need to reach out to Latinos a “great myth,” Schlafly said that “the people the Republicans should reach out to are the white votes, the white voters who didn’t vote in the last election.”

That’s a lot of stupid packed into Schlafly’s statement. First of all, Mitt Romney did not suffer a drop-off from white voters. In fact, it was quite the opposite. Republicans picked up 59 percent of the white vote in 2012 – a 4 point improvement over John McCain’s 55 percent in 2008. Romney lost the presidential election because he was unable to pick up a majority of votes from the key demographics. He lost the women’s vote (45%), the Black vote (7%), the Hispanic vote (29%) and the Asian vote (27%).

In fact, Romney lost the election for the exact reason that Schlafly claims was not a factor – eroding support for the GOP from people of color. To claim otherwise is delusion at its grandest…but Democrats won’t mind a bit if Republicans take up Schafly’s advice and adopted a renewed Southern Strategy. Republican opposition to immigration reform and more stirring up white resentment toward immigrants will ensure that Republicans get an even smaller share of the minority vote in 2016.

But all that aside, Steve Benen has a great question for all conservatives who, like Schlafly and Pat Buchanan, feel that the Republican party needs to become even more conservative in a bid to attract every last white person in America.

I have a related question for Schlafly and those who agree with her: exactly what would it look like if Republicans tried even harder to “reach out to … the white votes”? The GOP is already looking an awful lot like the driven snow, so what more can party leaders do, specifically, to make white folks feel even more welcome?

Great question. Short of donning white hoods and burning crosses on Hispanics’ lawns, what more could the GOP possibly do to draw out every last white vote?

___

Follow MarioPiperniDotCom on FacebookTwitter and Google+.

Naked Capitalism on Bankster “Justice”

Bill Black: How Dare DOJ Insult HSBC’s Crooks as Less “Professional” than Liberty Reserve’s Crooks?

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City

Standard Chartered and HSBC’s leaders must be doubly humiliated by the description by Mythili Raman, the acting head of the U.S. Department of Justice’s (DOJ) Criminal Division, of Liberty Reserve’s money laundering operation. UK laws are, of course, very congenial to those suing for libel and I am sure that these banking titans are meeting with their solicitors to demand a retraction and apology from Raman.

In the very first clause of her May 28, 2013 statement to the media on the actions against Liberty Reserve’s controlling officers, Raman emphasized how “professional” they were as money launderers: “Today, we strike a severe blow against a professional money laundering enterprise charged with laundering over $6 billion in criminal proceeds.” In four paragraphs, she used the word “professional” three times and “sophisticated” once to describe Liberty Reserve’s money laundering.

In her second sentence she continued her emphasis on how large Liberty Reserve’s money laundering operations were. Raman claimed that DOJ’s action against Liberty Reserve was “the largest international money laundering prosecution in the history of the Department.” She described the scale of Liberty Reserve’s operations as “enormous” and a “massive criminal enterprise.” Paragraph 10 of the indictment labels the scope of operations as “staggering.”

The indignant response of Standard Chartered and HSBC’s leaders to Raman has to be: “and what are we, chopped liver?” The government charged Standard Chartered was a massive money launderer that Iran used to escape sanctions designed to keep them from developing nuclear weapons,

[T]he New York State Department of Financial Services [NYDFS] accused Standard Chartered of laundering $250 billion for the state of Iran and other Iran-based clients over a 10-year period which, the regulator said, “left the US financial system vulnerable to terrorists, weapons dealers, drugs kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity”.

NYDFS found that Standard Chartered laundered funds for Iran for a decade and made elaborate efforts to prevent regulators from learning of their frauds. Like fish, Standard Chartered rotted from the head. When an American officer objected to the bank’s frauds, the response was heated.

Richard Meddings, Standard Chartered’s executive director, was quoted using expletives to disparage America’s insistence on an economic blockade of Iran. He told an official in the bank’s New York branch: “You fucking Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?”

I described in a prior article how HSBC hit the money launderer’s trifecta.

1. Laundered billions of dollars for some of the most murderous drug gangs in the world. These gangs have murdered many thousands of Mexicans and devastated much of the nation.

2. Aided Iranian entities to evade U.S. financial sanctions on Iran. If Iran is actually developing a nuclear weapon and if it uses such a weapon to attack it could kill tens of thousands of people and HSBC and Standard Chartered will likely have proven useful to Iran in developing the weapon.

3. Aided Hamas, Hezbollah, and al Qaeda to evade U.S. financial sanctions. The U.S. considers them terrorist organizations.

“In total, the bank’s U.S. and Mexican units failed to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of U.S. dollars from HSBC Mexico (BIBC), Breuer said.”

To sum it up, just one facet of Standard Chartered’s money laundering and one facet of HSBC’s money laundering operation were, respectively, over 40 and 100 times larger than Liberty Reserve’s “staggering” total money laundering for all purposes. The frauds came from the top and in the case of Standard Chartered the sincerity of the remorse at the top was promptly and publicly demonstrated [Yves: Black is being ironic].

Peace, who told reporters at a March 5 press conference that the firm had no “willful” intention to dodge U.S. rules, said in a statement today that earlier claim was “wrong.”

Standard Chartered Plc Chairman John Peace said his original comment “directly contradicts Standard Chartered’s acceptance of responsibility in the deferred prosecution agreement.”

Under the settlement it reached with U.S. regulators last year, the bank entered into a deferred prosecution agreement with the Department of Justice. As part of that deal, the U.S. charged the bank with conspiring to violate the International Emergency Economic Powers Act, a charge that will be dismissed after two years as long as the bank abides by the agreement.

“As part of these agreements, we rigorously monitor the banks for continued compliance, and subsequently addressed this violation by Standard Chartered for not accepting responsibility for its misconduct,” Joan Vollero, a spokeswoman for the Manhattan District Attorney, said by e-mail. “We demanded a public repudiation and they complied.”

Peace, 64, said his original comment “directly contradicts Standard Chartered’s acceptance of responsibility in the deferred prosecution agreement.” The firm “unequivocally acknowledges and accepts responsibility, on behalf of the bank and its employees, for past knowing and willful criminal conduct in violating U.S. economic sanctions.”

What this all means is that two of the largest banks in the world, which reap massive explicit and implicit subsidies from the government, were criminal enterprises for at least a decade. Each engaged in violations that were vastly larger than Liberty Reserve. Liberty Reserve’s violations were huge, severe, and warranted the toughest possible prosecution – complete with freezing and forfeiting all of its accounts. The violations of the banks, by contrast, were massively larger, occurred over a longer period, led to vastly greater profits for the banks and the officers, and did vastly greater harm to the world including the loss of life and the potential mass loss of life in the future. DOJ refused to prosecute any of the officers for “knowing and willful criminal conduct.” Incredibly, it insisted on only a two-year period of DOJ leverage over Standard Chartered’s operations to ensure (short-term) compliance with the law. Standard Chartered promptly violated the agreement – and DOJ insisted they apologize.
The DOJ’s claim that Liberty Reserve’s leadership was “professional” and “sophisticated” is farcical. They were clowns. Their web site is illiterate (once one gets past the initial screen). Their invitations to join the many Ponzi schemes they pushed on their web pages are so unprofessional (though littered with the word “professional”) and unsophisticated that one cannot have any sympathy for anyone victimized by the Ponzis. Here’s an example of one of the pitches that is more literate in English (but financially illiterate):

By far our most popular investment pays investors a daily return of 900% daily [sic] for a period of 4 days for a total return of 3600% with a minimum investment of only $50,000 USD!

The word DOJ should have ascribed to the leaders of the Liberty Reserve control fraud was “audacity” – not any variant of “professional” or “sophisticated.” Audacity is the characteristic that separates the most dangerous frauds from their peers.

For their massive and highly profitable crimes, DOJ took no action against any officer of Standard Chartered or HSBC. It announced, instead, the shameful “too big to prosecute” doctrine that announced DOJ’s surrender to crony capitalism. Now, DOJ wishes to tout Liberty Reserve as the great triumph that proves that money laundering will never succeed. But Liberty Reserve’s criminal customers overwhelmingly succeeded. First, they succeeded because the initial sentence of five years imprisonment for the leaders of what would become Liberty Reserve for their crimes at their prior firm that specialized in money laundering was reduced to probation. The leaders immediately began their new fraudulent scheme. Criminal justice penalties for white-collar frauds are often absurdly low. Second, DOJ failed to act for years even though Raman emphasized that the co-founder of the Liberty Reserve control fraud noted that DOJ knew it was a control fraud.

His co-founder doubled down on that sentiment in an online chat captured by law enforcement, noting that “everyone“ in the United States, such as “DOJ,“ knows that Liberty Reserve is a “money laundering operation that hackers use.”

The obvious question for reporters to ask is when DOJ first knew that Liberty Reserve was a money laundering operation. Given the criminal records of its controlling officers, the public manner in which Liberty Reserve operated, its structuring of every aspect of the firm’s operations to assist money laundering, and the fact that the DOJ states that the users of Liberty Reserve’s services were “virtually all” criminals (including 200,000 in the U.S.) DOJ should have had ample intelligence on Liberty Reserve’s criminal nature within weeks of when it began operation in 2006. (See Indictment, paragraph 10.) The government eventually had an investigator open Liberty Reserve accounts, which confirmed the anonymity and lack of anti-money laundering systems. The government could have done so at any time.

We know from paragraph 10 of the indictment that once Liberty Reserve ramped up its operations (it began by “growing exponentially,” Indictment, paragraph 13), every year the DOJ delayed closing down Liberty Reserve an average of 12 million unlawful financial transactions occurred totaling $1.2 billion. We also know that during its over six years of operations Liberty Reserve conducted roughly 55 million (“virtually all” criminal) financial transactions totaling over $6 billion and that DOJ has asked the court to issue a forfeiture order for $6 billion.

Paragraph 19 of the Indictment contains this wonderfully revealing insight into DOJ’s willful blindness about Standard Chartered and HSBC’s vastly larger, longer lasting, and more damaging money laundering: “Liberty Reserve users … engaged in criminal transactions with an impunity that would have been impossible in the legitimate financial system.” Right, unless, of course, we consider Standard Chartered and HSBC. The DOJ shares the unintentional irony of the finance professors who recently authored a study that concluded that control fraud was “pervasive” at our “most reputable” banks during the run-up to the ongoing crisis.

Paragraph 26 of the Indictment reveals that FinCEN sent out an alert on November 18, 2011 that Liberty Reserve was being used by criminals to launder funds.

Raman boasted at the press conference that DOJ and its international partners had succeeded in “restraining over $25 million in criminal proceeds.” That represents less than one-half of one percent of the money that was laundered. Raman claims that the greatly delayed prosecution of Liberty Reserve sent the message that law enforcement always triumphs over money laundering. The reality (revealed by DOJ’s own indictment) is that over a million criminals were able to launder over $6 billion in criminal proceeds through Liberty Reserve for over six years. Other criminals were able to launder far greater amounts through Standard Chartered and HSBC for over a decade. DOJ keeps calling massive defeats stirring victories.

The thing that is most troubling about Liberty Reserve is that it had no political power in the U.S. No one in power in the U.S. would have pushed back if DOJ had put Liberty Reserve out of business in 2006 or early 2007. The FBI, DEA, Secret Service, and Treasury would have learned about Liberty Reserve’s illegal operations almost immediately – they were too large, too open, and it was run by felons who were known money launderers. With a million money launderers using the site we must have had scores of informants who knew that Liberty Reserve was being used to launder proceeds and there must have been thousands of criminals arrested who had the incentive and ability to reduce their sentence by informing on Liberty Reserve. The fact that a money laundering operation as blatant and crude as Liberty Reserve’s (the web site screams “fraud”) with no political patrons in the U.S., and no concerns about “too big to prosecute” could stay in operation for over six years despite the government’s knowledge that it was engaged in massive money laundering and be allowed to “grow exponentially” and become “the bank of choice for the criminal underworld” (Indictment, paragraphs 13, 19) demonstrates how badly our criminal justice system has failed against control frauds.

We use the phrase “Pyrrhic victory” because of the candor of King Pyrrhus of Epirus. He won multiple victories over the Romans, already renowned for their military prowess, in southern Italy. When he was offered congratulations on these victories he replied that one more such victory would ruin his army. Pyrrhus’ victories were real. He inflicted greater losses on the Roman troops and he held the field after the battles. Pyrrhus demonstrated competence as a military leader and bravery in the field. Pyrrhus understood, however, that his lines of supply were long and that he could not replenish his lost men and experienced officers while the Romans could do so. The Justice Department has been losing the struggle against control frauds for well over a decade. Pyrrhus was competent and candid enough to proclaim that his tactical victories represented a strategic defeat. DOJ propagandists are now expert at claiming that abject defeats represent triumphs. In honor of the unintentional comic genius dubbed “Baghdad Bob” who announced Iraqi forces’ fictional triumphs over the U.S. army, we should honor the DOJ’s propagandists with the sobriquet: “Beltway Bob.”

Humor: The Borowitz Report

Congress’s Average I.Q. Expected to Rise in 2015

Posted by
boro-bachmann-iq.jpg

WASHINGTON (The Borowitz Report)—The average I.Q. of a member of the House of Representatives is expected to rise sharply in 2015, experts said today.

The experts, who indicated that they were “cautiously optimistic” about the development, said that the gains were most likely to be made in the Midwest.

The expected rise in I.Q. could mean that the average congressperson would have a greater grasp of basic concepts in math and science, including the law of evolution, as well as addition and subtraction.

The last time a branch of the federal government experienced such a significant increase in average I.Q., experts said, was the executive branch in 2009.

Get the Borowitz Report delivered to your inbox.

Photograph by Alex Wong/Getty.

Mario Piperni on Barbara

Bye, Bye Bachmann

MAY 29, 2013 BY 

Michele Bachmann - Epic Fail  :   http://mariopiperni.com/

All good bad things must eventually come to an end.

Tea Party favorite Michele Bachmann, who last year ran for the Republican presidential nomination, announced on Wednesday that she will stand down from her seat in the U.S. House of Representatives.

In a video posted on her website and on YouTube, the stressed that her decision to stand down from her Minnesota seat was not due to any concern she would be defeated at the next election in 2014 or the inquiries into activities of her former presidential campaign staff.

And she said she would continue to fight for the policies she believes in and that her future was “limitless and my passion for America will remain.”

Whatever. The truth is that Bachmann came close (less than 5000 votes) to losing the heavily Republican Minnesota 6th District last time around. With another two years of lunacy under her belt, her fortunes were not about to improve in 2014. Combine that with her embarrassing presidential run and the ensuing Federal Election Commission investigation into her campaign, and one might see why Bachmann found this to be the opportune time to call it quits on the political front.

Besides, as Mrs. Palin can attest to, there’s a fortune to be made in conservative media and the right-wing speaking circuit. There is no shortage of fools on the right waiting to get their little heads filled with all the news they can get from inside the bubble. And who better than a Michele Bachmann to keep little wingers happy and satisfied. It’s cash-in time.

___

The Michele Bachmann source photograph is a Creative Commons licensed image from photographer Gage Skidmore.

Follow MarioPiperniDotCom on FacebookTwitter and Google+.

Naked Capitalism on the Apple Model

Is Apple Risking Its Brand Overseas With Its Tax Gimmicks?

Posted: 28 May 2013 11:16 PM PDT

One of the striking aspects of the Senate Permanent Subcommittee on Investigations hearing on Apple’s aggressive tax-avoidance strategies is the way the Senators bent over backwards to declare Apple love even as they poked and prodded at the tech giant’s various, um, devices. Being an icon of US tech prowess, even if the halo is slipping, will do that.

For those with less Apple lust or otherwise unwilling to cut the Cupertino giant slack just because it has sleek products and cool stores, a new article by tax maven Lee Sheppard at Forbes gives a layperson-friendly overview of how Apple managed to keep $44 billion of revenues out of the hands of the tax men (I’ve spoken to Sheppard, who has also given me copies of her vastly more technical, paywalled articles at the journal Tax Notes on l’affaire Apple).

One of the things that readers might not realize that even with the Senate scrutiny, tax pros still have to engage in a bit of guesswork to figure out precisely how Apple arrived at the miraculous result of having foreign sales, which contribute roughly 60% of Apple’s total profit, taxed nowhere. But certain parts are clear.

Apple has achieved a result that is similar to Google’s parking its intellectual property overseas. The consumer products company has an Irish holding company at the apex of its foreign operations. This company is in Ireland and has no employees or operations. But it is the group finance company. And the money is not in Ireland, but in New York banks and managed by employees in Nevada. So the funds are in the US even though they are domiciled abroad. This company has no residence from a tax perspective and pays taxes nowhere.

Below that is a principal company, again in Ireland. It houses the contracts with Apple’s Chinese manufacturers, owns the inventory they churn out, and manages the supply chain in Europe and Asia. It has 250 employees but like its parent, it claims tax residence nowhere but did pay taxes to Ireland under a special deal where it paid less than 2% of income, well under Ireland’s already bargain-basement 12.5% statutory rate. This company and another company hold the foreign licenses to Apple’s intellectual property. If you listened to the hearings or read some of the commentary, this is where the “cost sharing” agreements come in. Apple first entered into this cost-sharing agreement in 1980, which is astonishingly early for such aggressive tax planning (the company likely had just begun selling abroad). Cost-sharing rules were more permissive then. Apple has amended the agreement twice, but these agreements are evaluated as of when created, so Apple is effectively grandfathered under the old rules. Note that Sheppard wonders whether the amendments were handled carefully enough for them to deserve that treatment; in her wonky article, she uses words like “brazenness” and in Forbes, depicted Apple’s practices as worse than typical multinational “hokey tax schemes”.

Even though Tim Cook tried to defend Ireland as more upstanding than using one of the Caribbean tax havens, Sheppard sets the record straight:

Ireland is a tax haven. The European definition of a tax haven is a country that cuts deals with foreign companies that don’t do any business there.

She also said that tax professionals who work for big corporations were gobsmacked by Apple’s conduct. It’s one thing for a company that sells oil or makes industrial parts to get edgy in its tax structuring. None of its customers care. By contrast, Starbucks, which had gotten bad press for its tax avoidance in the UK, volunteered to make a significant payment to the government to buy itself some goodwill. And bear in mind that voluntary payment is not a tax and hence not deductible from US taxes. One tax professional told Sheppard that his company made sure to pay tax in every jurisdiction in which it did business to avoid reputational damage. Sheppard writes:

Apple is playing fast and loose with consumers’ affection for its highly discretionary products, especially in Europe. It is ill-advised for any consumer products company not to pay tax where it sells products. Equally important, Apple’s tax avoidance is also testing the patience of strapped European governments that are looking for ways to get American multinationals to pay tax.

Americans may still swoon for Apple, but even here, Samsung is making a serious dent in Apple’s lead. Prospective customers in austerity-racked Europe are going to cut a tax evader a lot less slack when social services are being cut and ordinary citizens are being squeezed dry. Will it take a brick thrown into an Apple store in Europe to get Cook and his fellow executives to realize that their strategy needs to be revamped? And this isn’t just a matter of disaffected citizens. The OECD has a “base erosion” project underway, meaning it is looking into how to crack down on corporations and individuals who manage to exclude some or all of their income from their tax base. The Europeans have already made it clear that they are unhappy with Apple-style practices of not paying taxes where sales are made and paying taxes nowhere.

Sheppard debunks the idea that the US should tolerate these practices because what is good for Apple must be good for America:

Sen. Paul demanded that the subcommittee apologize to Apple for hassling it about taxes because it is a job creator. His argument is that if big companies are indulged on tax, regulation and other matters they will provide jobs and growth….

This syllogism no longer holds. Technology has replaced semi-skilled blue collar jobs with robots and semi-skilled pink collar jobs with computers. Globalization sent unskilled manufacturing jobs to low-cost countries like China.

Apple will never become a mass employer on the order of the old GM. Apple employs a mere 52,000 people in the United States. That is roughly the same number that Ford employed at one large plant, River Rouge, 70 years ago. Apple’s employees are educated and well paid. Ford’s union workers were semi-skilled and well paid.

Ford’s new plant on the Rouge site can be visited by the public. It has relatively few workers and a lot of Japanese robots doing final assembly on pickup trucks. The manufacturing jobs that required sheer brawn and no brains have gone to countries where wages are fraction of U.S. wages. The supposed U.S. manufacturing revival will never create enough jobs to replace the lost and offshored jobs.

And don’t kid yourself that if Apple and its tax-avoiding tech confreres got their sought-after tax holiday, they’d do the right thing and invest. Sheppard again:

Even if Congress naively were to believe that tax-free repatriation of untaxed foreign profits were a good idea, we’ve been there, done that, and got bike oil on the T-shirt. In 2004, Congress granted a tax holiday, and companies with big stashes of offshore profits attributable to valuable intangibles—that’d be pharma and tech—repatriated billions of dollars in the form of dividends and executive bonuses.

The PSI hearings are pretty much certain not to tighten up on Apple’s pet loopholes. But at least the harsh scrutiny should keep the tech companies’ pleadings for more tax gimmies in the form of a tax holiday at bay. And as we noted on the Melissa Harris-Perry, the days of this sort of wildly favorable multinational tax treatment may be coming to an end. If the OECD’s base erosion project does not produce meaningful enough reforms, the UK, France, and Germany have vowed to act unilaterally, and they would provide air cover for smaller countries to follow suit. So this debate may is moving beyond where the US can continue to make the world a safe hunting ground for its multinationals. Given the need to rein in unaccountable international companies, that should be seen as a welcome development.

BartCop.com Funnies

cheney-such-a-dick issa-rap-sheet-4 gop-super-rich-morecare gen-foods-babels-biz

Humor: The Borowitz Report

Syrian Rebels Urge McCain to Get Over Losing to Obama

Posted by
boro-mccain-post.jpg

SYRIA (The Borowitz Report)—During a meeting yesterday with Sen. John McCain (R-Arizona), Syrian rebels told the senator that he still seemed “really bitter” about losing the 2008 election to President Obama and advised him to “get over it.”

After meeting with the Arizona senator in the border region near Turkey, a spokesman for the Syrian rebels told reporters that while they appreciated Sen. McCain’s support, “We were kind of uncomfortable with the place it was coming from.”

“It was pretty obvious to me and the other rebels that everything McCain was doing was just to get back at Obama,” the rebel spokesman said. “And we were like, look, that election was five years ago. It’s time to move on.”

Sen. McCain denied that his support of the Syrian rebels had anything to do with a personal vendetta against President Obama, but according to the rebel, “Every time he said ‘Obama,’ a vein in his head kind of bulged out.”

“The man is a simmering cauldron of rage,” the Syrian rebel said. “He needs to turn his anger toward Obama into something more positive. You can’t carry all of that hate around with you forever—it’s not healthy.”

For his part, Sen. McCain said that he was “finished” with the Syrian rebels and would now focus on starting a war with North Korea.

Get the Borowitz Report delivered to your inbox.

Photograph by Allison Shelley/Getty.

Common Dreams on the Farm Bill

The New Farm Bill is an Economic Disaster

Just when you think Congress can’t get any dumber, it crafts a $1tn farm bill that harms the poor and promotes unhealthy food

The US Congress, its approval rating still near all-time lows, is reinforcing its own record of stupefyingly short-sighted lawmaking with what may be the most harmful piece of economic legislation in America in years: the $1tn 2013 farm bill.

The latest US farm bill smells and looks bad.It should be called the 2012 farm bill – or, officially, the Agriculture Reform, Food and Jobs Act of 2012 – because the habitually sluggish group of lawmakers in Washington were too busy in 2012 to pass it. Campaigning for office and ginning up the fake fiscal cliff crisis occupied a lot of time, so lawmakers passed an extension of the $650bn 2008 farm bill for another year. That set an expiration date of September 30 this year. The delayed timing, however, is the least of the problems with it.

As members of Congress have negotiated over various amendments and riders to the bill, they’ve set an impressively consistent trend: they mix good ideas and bad ideas and combine them to create the absolutely worst possible policies. Elements of the farm bill, as it stands, will cut food stamps to the poor and the previously incarcerated, thus increasing poverty and possibly crime; add to the growing obesity crisis by encouraging chemical sugar substitutes; push genetically modified food at the expense of public health with the so-called “Monsanto Protection Act”; and support factory farming at the expense of sustainable food production with abusive crop subsidies.

That’s quite a lot of damage to wreak with a single law, but this Congress certainly seems up to the challenge.

The farm bill will set US food policy for 2014 to 2023, encompassing everything from agriculture to food stamps. The food stamps show the worst decision-making. Conservatives are apparently annoyed that Americans are using more food stamps. That much is true. Food stamp usage has grown by at least 70% since the financial crisis in 2008, with a record 47.8 million people relying on food stamps in order to afford their weekly grocery bills. This is costing the government $74.6bn.

Members of Congress – whose average pay is $174,000 a year are outraged by this. As they enjoy over $4.6bn in subsidized healthcare, travel and other government perks subsidized by taxpayers, these lawmakers bemoan the waste of government spending on the poor. They pledge fiscal discipline – pinching every taxpayer penny – on the backs of people living below the poverty level, as the lawmakers themselves count on up to $1.2bn in retirement benefits.

So it is that these beacons to financial restraint, surrounded by a $6bn bubble of government-subsidized comfort, have succeeded in cutting food stamp help to the poor by about $20.5bn in this bill. They’ve also planned to eliminate food stamps – for life – for anyone who was ever convicted of a crime, which will disproportionately hurt the urban poor (pdf). Some lawmakers argued the SNAP, or food stamp, program should be cut because of the trend of food stamp users buying things like energy drinks – a trend that continues, not incidentally, due to the low availability of fresh and healthy food in poor areas.

Ironically, while they cut the government help to the poor, some of these lawmakers are the personal beneficiaries, to the tune of thousands of dollars, of government farm subsidies.

Yet they still ask: why do we need food stamps at all? There is an economic recovery, some lawmakers argue, why aren’t more people buying their own food?

This is perhaps the most damaging and revealing idea of all. The “recovery” so far consists primarily of vaporous paper money – inflated stock prices and bounding home prices that provide a “wealth effect” but don’t actually fatten anyone’s bank accounts or pay anyone’s bills.

In fact, the rise in food stamp use is neither anomalous nor abusive. It makes perfect sense. Poverty goes up in recessions and in weak recoveries like this one. About 12 million people are out of work. Only about 58% of the population is employed, which is around the lows of the early 1980s recession, and which also has not changed appreciably for around three years.

Long-term unemployment is a persistent problem, with 40% of all unemployed people out of work for six months or longer – at which point many employers arbitrarily deem them unemployable. Poverty has been rising steadily since 2008 – just like the use of food stamps.

Partially responsible for this mess, by the way, is the notably counterproductive fiscal policy decisions made in Congress to support damaging austerity, as even the chairman of the Federal Reserve said last week.

The ability to ignore its own part in the widespread and continuing economic crisis in America is more evidence that Congress, esconced in its marble halls and subsidized cafeterias, has absolutely no idea what is happening in the rest of America, and why so many previously middle-class families have trouble making ends meet.

It would be really something if those grousing lawmakers recognized that more Americans are using food stamps, for instance, because Congress has let them down. While Congress bickered over fake crises – deficits that aren’t pressing and taxes that don’t matter – we have real economic crises. The poverty crisis. The unemployment crisis. The inequality crisis. All of those have gone completely unaddressed by any kind of substantive legislation.

Though food stamp legislation is the biggest embarrassment in the farm bill, it is hardly the only one. Another testament to craven lawmaking is the rider that opponents dubbed The Monsanto Protection Act, for its chief corporate beneficiary. Companies including Monsanto sell genetically modified seeds, which dominate the US farm and food supply. These seeds are laboratory-created to survive being sprayed with powerful and harmful pesticides, which not coincidentally are also sold by Monsanto and its rivals.

The percentage of US soybeans, cotton and corn that come from genetically modified crops hovers between 80% and 90% depending on the crop. Currently, these companies have to wait for the US Department of Agriculture to test the seeds for potential harm to humans. The Monsanto Protection Act would allow big agriculture companies to sell genetically modified seeds before they are tested, and prevent the USDA from interfering with the sale of the seeds even if they are proven to be harmful to humans.

That is self-evidently a total capitulation to corporate interests at the expense of consumers and the American food supply; it’s only recently, however, that opposition has been raised by senators including Jeff Merkley of Oregon, based on opposition from his state’s farmers.

Small farmers rarely win. Right now, big factory farming rules the country. Around 12% of American farms have sales over $250,000; those same wealthy farms account for 84% of the production value in the country according to a useful, if right-leaning, primer from the Heritage Foundation. This is a loss to consumers as larger farms tend to hurt local water supplies due to greater runoff from pesticides and fertilizers. These larger farms also tend to give more power to buyers who buy in bulk, fueling a corporate rather than a consumer market.

Then there is the problem with sugar in the bill. US sugar is expensive – 50% higher than sugar on the world market from 2008 to 2012, according to price data from ICE Futures US obtained by the Wall Street Journal. That’s because the US sets a minimum price for sugar, which, in turn leads to scrapes like the one we’re in now. According to the Wall Street Journal, the USDA may have to buy 400,000 tons of sugar at an estimated loss of $80mn in taxpayer dollars just to keep the price of U.S. sugar artificially inflated.

The farm bill sets a minimum price for sugar, mainly US-grown sugar from beets leading to criticism that the country is fueling “Big Sugar” through loans to farmers and import restrictions from cane-sugar-producing countries like Central America and the Caribbean. Naturally companies that make sweet products, including Hershey’s and Coca-Cola, oppose this.

To a consumer, high sugar prices may seem like a boon, but they’re not. Since sugar is in nearly everything, many supermarket products will cost more when sugar prices rise. And, as long as sugar prices are high, food companies will continue to favor chemical sugar substitutes and products like high-fructose corn syrup, which is derived from heavily subsidized corn instead. Health advocates have criticized high-fructose corn syrup as a potentially harmful contributor to the obesity crisis.

This is a litany of economic and public health disasters from just one bill. The only good thing the farm bill will do is end direct payments; those are subsidies paid to support farmers, regardless of the price or fruitfulness of those crops. Even that move is long overdue.

The farm bill is still being debated, and still may change form. We can only hope it will. In its current form, it’s a short-sighted embarrassment to American lawmaking.

© 2013 The Guardian
Heidi Moore

Heidi Moore is the Guardian’s US finance and economics editor. Formerly, she was New York bureau chief and Wall Street correspondent for Marketplace, from American Public Media.