Did American Workers “Get What They Deserved?”

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
What did people expect would happen when they voted for Reagan, Bush and other conservatives, or supported their policies? In the Holland (Michigan) Sentinel community columnist Ray Buursma writes, American workers got what they deserved. Some of the things he says might resonate with many of us,

Remember the Reagan standard? Are you better off today than you were a decade ago? Two decades? Three? Unless you make more than $380,000 a year, the answer is no. In fact, your standard of living over the last quarter century has actually decreased while millionaires have added 30 percent to their net wealth. Why? Two reasons.
First, hundreds of thousands of manufacturing jobs went overseas while the politicians you elected did nothing to stop them. Yet you continue to elect leaders who offer nothing but tax cuts, as if that would stem the flow of disappearing jobs.
Did you demand your leaders address America’s trade imbalance or continuous outsourcing of jobs? Did you demand your leaders require foreign countries to buy a dollar’s worth of American goods for every dollar of goods they sell here?
No and no. You didn’t bother.

Buursma writes that instead of resenting people who make more because they are in a union, people should join a union and fight for your job, wages and benefits. He continues,

Maybe you’re thinking, “I’m not a union worker, so this doesn’t affect me.”
Stop being stupid. Union benefits provide a standard other companies have to match, or at least come close to. When those benefits are cut, yours are, too. Or do you think you operate in your own little employment vacuum?

Agree or disagree, please click through and read his entire piece.
Whose Fault?
There is no question that things are not going the way they should be going. We see decline all around us — all pointing back to the changes made after the election of Ronald Reagan. Tax cuts led to massive debt. Deregulation led to mine, oil and financial disasters that cost us more than deregulation ever saved. The infrastructure is crumbling. It seems like we are entering third-world status.
So is it the fault of American workers that their wages and benefits have declined as jobs are shipped overseas?
I don’t blame working people. After all, they’re working! So they’re busy, and stressed, and focused on work. They can’t be expected to keep up with the little details and facts and nuances — especially when they are attacked daily with a barrage of well-funded and professionally crafted corporate/conservative propaganda!
This assault on information and truth has been going on for decades. Under Reagan there was a dramatic shift toward “market” — one-dollar-one-vote — sources of information and away from objective, citizen-oriented democratic — one-person-one-vote — sources. This market-sourced information necessarily reflects a conservative/corporate view because it is driven by money and profit instead of humanity and humanity’s needs.
Information for Democracy!
How do we counter the corporate/conservative assault on truth? One answer to the problem of getting accurate, objective information is to use (and support) alternative sources that are not offered by the conservative/corporate machine. Here is a list of a few links to alternative news sources. Please send these to relatives, friends, and even post them to conservative forums.

PLEASE suggest more progressive information and news sources in the comments! And forward this to others.
Added suggestions, not necessarily just news:
AFL-CIO Now Blog
Manufacture This
Scholars & Rogues
Crooks And Liars
Firedoglake
Black Agenda Report
Washington Monthly
Eschaton
AMERICAblog
The Raw Story
Agonist
Today’s Workplace
Republic of T
Democrats.com
Hullabaloo
Jack and Jill Politics
Liberal Oasis
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Negotiation 101 For Dems: The Right Policies Are The Right Politics

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
Bloggers always wonder why Democrats couldn’t get anything done even when they had a solid majority in the House and 60 votes in the Senate, while Republicans get everything they want even when they are in the minority. Take the current budget negotiations, for example.
A few weeks ago the Congress passed and the President signed yet another round of massive tax cuts for the wealthy, thereby greatly increasing the deficits. Now these same geniuses are engaged in cuts-only budget negotiations with military spending largely off the table.
What about the country and our people? Every poll shows that the public wants the same thing that economists say we need: increases in spending on the things that grow our economy, cuts in military and tax increases on the rich and big corporations (2/3 of which pay no taxes at all) — the very items that are “off the table” in the budget negotiations!
The country needs and the people demand spending increases on the things government does for We, the People, tax increases on the wealthy and a massive downsizing of the huge, vast, stratospheric, unbelievable, shocking, nonsensical, terrifying, extreme, astonishing, gut-wrenching military budget, the biggest drag on our economy today. We spend more on military than every other country combined and our businesses and people and economy have to scrape to pay for that while our competitors do not.
How bad are our negotiators, when the public is solidly behind the right thing to do, and they are negotiating with a starting position that is the opposite of good policy and public demand?
The Right Starting Position
The first rule of negotiating is to pick the right starting position, understanding that you will have to give some things up to reach agreement. At the very least Democrats should start with the best policies for the public, and negotiate from there. The problem is, they don’t.
In the stimulus battle the President’s economists (and progressive bloggers) were calling for much more stimulus than the President began negotiations with. They said the economy needed at least $1.2 trillion, but the President’s starting position was much lower. And to top it off, the President then just threw in that much of the stimulus package would be tax cuts, which leave behind nothing but debt! He said he did it to attract Repubican votes. How many did he get? The policy result of this negotiating strategy was too little stimulus that led to a political rout.
In the health care reform effort the starting position was that Medicare-For-All — the right policy for the country and the economy, and the position the public supported — was so far “off the table” that people advocating for it at committee hearings were ejected and arrested! And that was done by the Democrats, with the Democrats in control of the House and with 60 votes in the Senate! The end result of this effort to do something about the damage caused to our people and our economy by the predatory insurance giants was a law ordering us to purchase insurance from … the predatory insurance giants.
In the current budget battle the starting position should be the right policy position: we need to spend more to create jobs and take care of our people, and to boost the economy to grow our way out of the deficits. But instead our Democratic negotiators start with a budget freeze — offered up unilaterally — and Republicans begin by demanding $30 billion in cuts. Then the Tea Party (also known as “the Koch brothers”) demanded an increase in cuts to $60 billion, and now we are headed to a “deal” cutting the budget by $30 billion which is the Republican starting position! The Democratic negotiators conceded entirely, winning nothing. The policy result will be a disaster for our people and our economy.
Make A Hero Out Of Boehner?
Worse yet, in the political press this kind of deal makes John Boehner the hero of the process! He wins a deal with $30 billion in cuts, passed by corporate/Blue Dog Democrats plus some Republicans, but no Tea Party votes. Boehner becomes the hero of the “center” and the Washington elite will celebrate. But the public and the economy loses.
DC’s Conservative Information Environment
Democrats seem to think the public wants corporate/conservative policies enacted, when polls show they do not. How could this be possible? Polls show that the public wants tax increases on the wealthy and cuts in military spending, not cuts in entitlements and the other things We the People (government) does for us and our economy. And these are the right policies. Why is there such a gap between what we want and need, and what our leaders think we want?
Policymakers are up against a massive corporate/conservative lobbying machine designed to influence legislation. If you live and work in DC you experience a different “information environment” than the rest of us. The main channels of information there are very much influenced by the corporate/conservative machine, making it difficult to find a non-conservative perspective. To break through this you first have to understand this. Then you have to make an effort to get information that does not pass through these gatekeepers. But if you are doing almost anything in Congress you are busy, so it gets harder and harder to make the effort (if you even know you need to) to get past the corporate/conservative worldview that is being handed to you.
There is no massively-funded objective information machine countering the corporate/conservative information machine, and protecting our democracy. (And they are working to defund even PBS.)
DC is the policy target so DC is the information target. The ads on DC TV cable news are targeted at the DC political crowd. Right-wing dominates radio, almost no alternate perspective can be found. Getting on the Metro you are handed an Examiner so you can read about how the country wants corporate/conservative solutions to problems. You pull up the Politico smartphone edition as you ride in because it is formatted and timed for that. (You should be reading Progressive Breakfast, so sign up here.) Congressional offices are saturated with corporate/conservative astroturf designed to look like constituents are calling and writing and demanding conservative policies. If you pull up information from Wikipedia it is edited by paid activists. Even some comments at many blogs you might read are left by paid commenters.
Billions upon billions are at stake, and the huge investment made in communicating a conservative position to policymakers and their staff pays off.
Root Of The Budget Problem: Wrong Assumption About Cause Of Deficits
The root of today’s budget-negotiating problem isn’t as much the deficit as the public’s and the policymaker’s misunderstanding of the cause of the deficit. Since President Obama took office there has been an unanswered drumbeat that Obama and “Democrat spending” are the reason we have a deficit. Every right-wing talk show, blog, TV pundit, op-ed, etc. starts from this position – Obama caused the massive deficits. (Did you hear Limbaugh going on about that today? And if you are not monitoring Limbaugh you are not paying attention to what they’re telling the public.)
If the assumption going in to budget negotiations is that “Democratic spending” is the problem, then the solution naturally is going to be to cut spending. But what about the harm this mistaken approach will do to people and the economy? When even the starting position doesn’t take that into account, what kind of results will we see?
The fact is that President Bush’s last budget year had a $1.4 trillion deficit. It was conservative policies and cleaning up after the results of those policies that brought us these massive deficits. Conservatives have tricked people into thinking this was President Obama’s fault. President Obama has actually reduced the deficits below Bush levels.
Playing By The Right’s Rules
The typical Democratic pragmatic approach is to say we already lost that argument in the public mind, so we have to go with what the public thinks. That is the pollster-dominant way of doing politics. This is the old 1990s approach that didn’t yet recognize that there was a well-funded, strategic corporate/right “echo chamber” and “noise machine” out there that used “Overton Window” tactics to shift everything to the right.
But playing by those rules has now allowed politics to shift so far to the right that even Ronald Reagan would be called a RINO and couldn’t win a Republican primary today. The result is that the politics and the policy needs diverge.
The Democrats need to start negotiations with the right policies for the people and the economy. This is the right politics, too, because it happens to also be what the public wants.
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IMPORTANT: Call Now To Save Social Security

Today is a national call-in day to let Senators know that there is support for keeping Social Security out of the budget debate.
Here are some facts. Social Security cannot borrow, so it does not contribute to the deficit. In fact, working people have been paying a large share of their earnings into Social Security to save for their retirement, and because of this the program has been running a huge surplus. The government has been borrowing FROM Social Security to fund tax cuts for the rich. This borrowed money was used to purchase Treasury Notes, just like China does when we borrow from them, and those notes earn interest, just like China’s, which also helps fund the program. So all of this money people have been putting aside for their retirement adds up to a huge trust fund, which doesn’t get used up until approx 2037 — if the economy doesn’t get better; later if it does. Even then it only runs a bit short.
So the only threat to Social Security is that if nothing is done there might be some cuts in benefits in 2037. The solution is not to cut benefits to avoid cuts in benefits. That doesn’t make sense. The solution is to “raise the cap.” Today only incomes below about $100K pay into Social Security. Raising that $100K “cap” fixes the problem. Better yet, remove the cap on incomes above $250,000.
The following is from the Strengthen Social Security coalition, of which Campaign for America’s Future is part:
We need you to call your Senators and demand that they vote for the Sanders/Reid Social Security Protection Amendment.
Senator Sanders and Majority Leader Reid are leading the fight in the Senate to protect Social Security from drastic cuts.
Their amendment simply says:
Social Security benefits for current and future beneficiaries should not be cut and Social Security should not be privatized as part of any legislation to reduce the Federal deficit.
Call your Senators RIGHT NOW at 1-866-251-4044. You’ll be given a choice of which of your state’s two senators to be connected with. Call BOTH of your senators if you have the time. It only takes a minute each.
Tell the person who answers the phone:

  • I am a voter/constituent living in [your state]. I am calling to tell the Senator:
  • I oppose all cuts to Social Security and
  • I urge them to vote yes on the Sanders/Reid Social Security Protection Amendment.

Please take the time for this very important effort today. This is for all of us who depend on Social Security.
Call Today: 1-866-251-4044.
AFTER YOU CALL:
Stay involved, the threat to Social Security continues. Please click to stay involved in the fight.

Call Today To Save Social Security

Call Congress on Tuesday and Wednesday!
Senate Majority Leader Harry Reid led a press conference and rally to save Social Security yesterday:

Senate Majority Leader Reid, Other Democrats, Join Hundreds to Demand No Cuts to Social Security
Sens. Reid, Harkin, Sanders, Franken and Blumenthal Follow Emotional Speeches by Americans Who Depend on Social Security and Oppose Cuts
… Under the slogans “Back Off Social Security” and “Hands Off Social Security,” more than 350 fired-up retirees and others packed a meeting room on Capitol Hill to hear from the Senators and program beneficiaries, and to demand no benefit cuts, no retirement age increase, and no privatization. The large public event happened as the battle heats up in Washington between those wanting to sacrifice Social Security as part of a deficit-reduction deal and those demanding that it not be cut.

The following is from the Strengthen Social Security coalition, of which Campaign for America’s Future is part:
We need you to call your Senators and demand that they vote for the Sanders/Reid Social Security Protection Amendment.
Senator Sanders and Majority Leader Reid are leading the fight in the Senate to protect Social Security from drastic cuts.
Their amendment simply says:
Social Security benefits for current and future beneficiaries should not be cut and Social Security should not be privatized as part of any legislation to reduce the Federal deficit.
Call your Senators RIGHT NOW at 1-866-251-4044. You’ll be given a choice of which of your state’s two senators to be connected with. Call BOTH if you have the time. It only takes a minute each.
Tell the person who answers the phone:

  • I am a voter/constituent living in [your state]. I am calling to tell the Senator:
  • I oppose all cuts to Social Security and
  • I urge them to vote yes on the Sanders/Reid Social Security Protection Amendment.

Please take the time for this very important effort today. This is for all of us who depend on Social Security.
Call Today: 1-866-251-4044.
AFTER YOU CALL:
Stay involved, the threat to Social Security continues. Please click to stay involved in the fight.

Budget Fight: Why Are Republicans Forcing A Shutdown?

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
Why are Republicans forcing a government shutdown and doing other things aimed at blowing up the economy? The question isn’t “are they,” it is why are they? Their election strategy for 2010 was to obstruct everything and keep the economy from creating jobs, and then blame Democrats. It worked. So now they’re doing it even more. But is that the whole plan?
In every instance Republicans are obstructing the very things that can help the economy recover and provide the jobs people need. Everything they do is aimed at making things worse. It is hard to understand their actions except as a systematic attempt to blow up the economy.

  • They are blocking agreement on a budget to keep the government going.
  • They are terrifying the credit markets by threatening to block an increase in the country’s debt limit.
  • They are refusing assistance to states, forcing the states to lay off hundreds of thousands of teachers, etc.
  • They are fighting to roll back every regulation that relates to banking and finance.
  • They are killing high-speed rail and solar and wind projects.
  • They are blocking renewable energy standards and other policies that trigger investment and jobs.
  • They are blocking needed stimulus programs that help recovery.
  • They are blocking unemployment benefit extensions.

When confronted they offer ridiculous explanations which are really only cover for the actions, so they can claim to have a reason beyond destruction. But this is only to provide cover and keep the press and public from calling them out for what they are.
Cutting Jobs Creates Jobs?
Speaking of ridiculous explanations, they say they are cutting jobs in order to create jobs. Seriously. Digby today, in Flooding The Market, caught this about the Republican plan,

For example, the [Republican economic report] paper predicts that cutting the number of public employees would send highly skilled workers job hunting in the private sector, which in turn would lead to lower labor costs and increased employment. But “lowering labor costs” is economist-speak for lowering wages — does the GOP want to be in the position of advocating for lower wages for voters who work in the private sector?

Got that? Throw enough people out of work and wages go down, which they say leads to more employment. That’s their plan?
One advantage of throwing so many people out of work is that they will work for very little just to eat and feed their families. This is great if you own a business (and don’t care about people) — not so great if you depend on American consumers to purchase what you sell. But that’s a problem for later, after you’ve broken the unions and cut your labor costs. We know this is one part of their strategy because they said so.
A Grander Strategy Than Killing The Economy To Win In 2012?
Are they killing the economy in order to win the next election? Or is this part of an even grander strategy?
So is there a bigger plan at work here? Step back from the day-to-day for a minute, and away from the fog of propaganda and smoke and sand thrown in our eyes to keep us from seeing what is really happening. For decades conservatives have said government is bad, in the way, intrusive holding business back, bureaucratic, inefficient, etc. You have heard the litany, over and over and over.
So What IS Their Plan?
It seems conservatives are always running one strategy or another, always working on a plan. Speaking of grand strategies and plans, watch this from Lee Camp:


They Hate Government
If you read their websites and magazines you know that they hate government and talk about ways to get rid of it. They have said they just want government to go away and have been running strategies to get it small enough that they can drown it in a bathtub. If you are a Republican who doesn’t think destroying government is the best approach you are called a RINO and shunned.
They don’t talk about governing, they talk about killing government, and when they get power they don’t govern they destroy government. They appoint industry lobbyists to agencies that are supposed to oversee their own industries. They appoint polluters to the agencies that are supposed to protect us from pollution. And they appoint people who have called for getting government out of areas like education, medical care, etc. to head up and dismantle those departments.
They talk about destroying government, not governing. So what makes the DC opinion elite think they want to govern now?
Destroy Government Then Blame Government For The Consequences?
Trickling up from conservative underground lately are more and more arguments that government itself is responsible for the crumbling infrastructure, loss of economic competitiveness. The unspoken answer – so far – is that we need to get rid of government itself to get rid of these problems.
Last Week in Detroit’s Liberal Nightmare, the Heritage Foundation paves the way for what I think we will see coming from conservatives,

Detroit, once known as “the great arsenal of democracy,” has made headlines of late for its notorious fall from grace. … And while the Motor City suffers unemployment from a decimated automotive industry, it suffers crime, high taxes, poor city services, plummeting home values, and a public education system in shambles with a $327 million budget deficit and a 19 percent dropout rate. Is it any wonder people are leaving in droves?

Just today, in Voting With Their Feet, Thomas Sowell blames government for other areas where the census shows are are losing population,

Both whites and blacks are leaving California, the poster state for the liberal, welfare-state and nanny-state philosophy.
Whites are also fleeing the big northeastern liberal, welfare states like Massachusetts, New York, New Jersey and Pennsylvania, as well as the same kinds of states in the midwest, such as Michigan, Ohio and Illinois.

And unspoken in all of their anti-government arguments is just what will replace government, namely the big, powerful corporations and the wealthy few behind them.
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The Lesson Of The 2010 Election Was Jobs, Not Cuts

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
What was the lesson of the 2010 election? Since the election conservatives and the DC opinion elite have been claiming that the public voted for budget cuts. But before the election they ran ad after ad saying Dems cut your Medicare and didn’t provide jobs. Now every single poll shows that the public wants jobs not cuts.
Politico today has one more typical Washington Elite journalism story. Their story, Govs face budget blowback, begins,

“It was supposed to be one of the clearest messages of the 2010 elections: Voters were finally fed up with government spending.”

Politico begins their story with one more example of the gap between the DC Elite and the rest of the country. In the rest of the country we remember that the Republican campaign theme against Democrats was that Democrats were responsible for “Half A Trillion In Cuts To Medicare”.
Who can forget that? Ad after ad after ad after ad after ad blasted out from the TV saying Rep. So-and-so “cut $500 billion from Medicare” and many of those ads also blasted the Democrat because there was no cost-of-living adjustment to Social Security last year. That is just a fact, the Republicans campaigned against cuts.
Here are just a few of the ad barrage Republicans ran before the election:







And voters were sent flyers like this: (click for larger)
politifact-photos-ron_johnson_flier_combined_660

Talking Points Memo captured it well today, calling it “Opinion Journalism,”

There’s a feature piece in Politico today that perfectly captures the assumptions most national political reporters, especially at certain publications, bring to the core questions of budgetary politics. The gist of the piece is that ‘we’ all agree that the message of the 2010 election was that the public has decided that government is too big and wants dramatic budget cuts. But now it seems like the governors who are really going whole hog on this — overwhelming Republicans — are getting really unpopular. Ergo, the public isn’t really ready for the “grown-up conversation” about budgets than it seemed they might be.

The public wanted jobs before the election, voted for jobs, wants jobs, needs jobs, demands jobs. End of story.
On April 4: We Are One
On April 4, millions of people will come together for the “We Are One” series of community and workplace actions.
“On April 4, 1968, Dr. Martin Luther King Jr. was assassinated in Memphis, where he had gone to stand with sanitation workers demanding their dream: The right to bargain collectively for a voice at work and a better life. The workers were trying to form a union with AFSCME.”
Find local events in your area here.
“Join us to make April 4, 2011, and the days surrounding it, a day to stand in solidarity with working people in Wisconsin and dozens of other states where corporate-bought politicians are trying to take away the rights Dr. King gave his life for.”
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Today’s Plutocracy Post: GE Doesn’t Pay Taxes — Taxpayers Pay GE

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
In 1983 NY hotel-chain-owning billionaire Leona Helmsley said, “We don’t pay taxes. Only the little people pay taxes…” As our country migrates from democracy to plutocracy, this more and more appears to be official policy. Again and again we see tax cuts for the wealthy few, tax breaks and subsidies for the big corporations that operate as fronts for those wealthy few, and budget cuts for the things We, the People (government) do to empower and protect each other. Just a few weeks ago we watched as an extension of the Bush tax cuts and a huge cut in the estate tax rate was pushed through. Now we watch as the discussion turns to cuts in Social Security and the rest of the so-called “safety net.”
Another indicator of plutocracy (government of, by and for the wealthy) is impunity for those at the top. Leona Helmsley actually went to jail for tax evasion. Even as recently as the early-90s Savings and Loan Crisis our government investigated, prosecuted and jailed more than a thousand bad actors for fraud and other crimes. This time, well, … not so much. Well … actually not at all. Times have changed. Don’t look back. Deal with it. Suck it up. Let’s all get on the same team and keep this ball moving forward down the field at the end of the day. Whatever. Hey, look over there!
Today’s Plutocracy Indicator
From the NY Times, G.E.’s Strategies Let It Avoid Taxes Altogether

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

So not only did GE, the highly-profitable recipient of federal contracts and bailout money, not pay taxes, we paid them $3.2 billion!
Revolving Door Writes The Loopholes
How does GE accomplish this? By taking advantage of the “revolving door” where people move back-and-forth from government agencies to the corporations those agencies are supposed to oversee. From the NY Times story,

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

While Congressional staffers they write the loopholes into the laws. Then they go to their reward at corporate headquarters for very high pay. Then they go work in the agencies to make sure the rulings go their way. They then go collect again. It is a lucrative game. They’re the winners — they call themselves “producers.” We’re the losers — they call us … “losers.”
Who Really Benefits?
The use of the general term “corporations” to describe the beneficiaries of these policies is really a smokescreen that masks the fact that really a very few people are benefiting. Yesterday’s post, Lobbyists Admit Corporate Tax “Holiday” Didn’t Work, But Demand It Again, pointed out that it is a very few actual people that we are really talking about here,

Corporate wealth is really just personal wealth, held at arms length from the person to mask what is going on. The wealthiest 1% own 50.9% of all stocks, bonds, and mutual fund assets. The wealthiest 10 percent own more than 90 percent. The bulk of us own less than 1 percent. When you hear about “corporate” holdings, think about this chart from the Working Group on Extreme Inequality:

At The Expense Of The Rest Of Us
These benefits accrue to the wealthy few at the expense of the rest of us. What many people don’t understand is that it is also at the expense of other companies. Our infrastructure and public structures – roads, education, courts, customers – are the soil in which good companies can grow. When tax dodgers are able to avoid contributing to our communities and country, the overall environment for the rest of our businesses deteriorates and our worldwide competitiveness declines. We see it all around us every day.
Ungrateful Bastards
For all the benefits huge multinational companies like GE get from We, the People — subsidies, contracts, bailouts, tax breaks and customers, they aren’t very rateful and certainly are not about to give anything back. Barry Ritholtz at The Big Picture writes,

Yet another reason why you don’t bailout companies whose inability to manage risk allowed themselves to become destroyed: They not only do not deserve to continue with the same management/shareholders/creditors who all created the insolvency in the first place, but they are ungrateful bastards as well.

Even Reagan
Even tax-cutter Ronald Reagan balked when he learned that GE (for which he had been spokesman) didn’t pay its taxes. From the NY Times story,

In the mid-1980s, President Ronald Reagan overhauled the tax system after learning that G.E. — a company for which he had once worked as a commercial pitchman — was among dozens of corporations that had used accounting gamesmanship to avoid paying any taxes.
“I didn’t realize things had gotten that far out of line,” Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan’s 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent.

Isaiah Poole, in Rewriting Eric Cantor’s Cant On Jobs,

“So let’s stop the demagoguery about overtaxed corporations and have a dialogue instead about a tax code that taxes all people fairly. A tax system in which a billionaire like Warren Buffett pays taxes at a lower rate than his secretary is not fair, and an unfair tax code, one that’s riddled with loopholes, perverse incentives and ways to game the system, keeps us limping and unproductive.”

Terrance Heath has been writing a series on The Truth About Tax & Spend Conservatism,

… the truth about “Tax & Spend Conservatism” is that it isn’t about raising or cutting taxes, but about whose taxes are raised and whose taxes are cut. It’s about, as Robert Borsage put it, who gets hit with the tab for the great recession.

Resources
Public Campaign fact sheet titled, GE’s Corporate Tax Dodging that begins,

General Electric spent $235.2 million in political money since 2000–paid no federal income taxes in 2008, 2009, and 2010.

and points out:

G.E. cut American jobs and exported them overseas.
The New York Times reports “[since] 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment.”

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Racing To The Bottom

35 cents an hour, beaten if you protest. THAT is what Americans are competing with. Democracy allowed us to build protections against this. Our trade policies remove those protections and we see the result of that clearly now. We can use trade to lift others instead of to drag us down. We can say, “You are not going to bring that product into the United States unless the people who make them have rights.”
Watch this video:

Workers are again trapped and burned to death behind locked exit gates…
The tragedy of the Triangle Shirtwaist factory fire struck a nerve in the American people, who demanded reforms which remade our industrial landscape and guaranteed the rights of workers. Today these rights have been wiped out in the race to the bottom in the global sweatshop economy, where workers in the developing world toil 14 hours a day, seven days a week for wages just one tenth of what the Triangle workers earned. Workers are again trapped and burned to death behind locked exit gates. One hundred years ago, the outrage over the Triangle fire led to the rallying cry, “Who will protect the working girl?” Where is that cry today?

Lobbyists Admit Corporate Tax “Holiday” Didn’t Work, But Demand It Again

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
The usual suspects are trying to sell us on yet another scheme to keep from paying their taxes. This one is called a repatriation tax holiday—a huge cut in the tax rate on money companies are holding outside of the country. We did this before and it didn’t work out so well for us, so of course they want to do it again.
Multinational corporations hide profits in offshore shell companies to avoid taxes. Here is how the scheme works:
One shell company manufactures in China or another low-cost country, sells the products to a shell company “based” in a tax-haven like the Cayman Islands at a low price so the manufacturer doesn’t show much profit. The tax-haven company immediately sells it to their U.S. company at a very high price, so the tax-haven shell company gets most of the profits.
Then the products are sold here for not much above what was paid, so very little profit is made by the U.S. company. The tax-haven shell company reports all the profits as a result of selling TO but not IN the United States. Low profits here equals low taxes here.
As long as the actual money isn’t brought into the U.S., they don’t pay U.S. taxes on it. So after years of this scheme a ton of cash is sitting in these tax-haven countries, and the wealthy few want to be able to use it to buy even more jets, houses, Maybachs, etc. And, of course, they don’t want to pay their taxes.
So of course, the inevitable “business groups” are trying to get Congress to pass a “repatriation tax holiday” on the profits they are holding outside of the country.
From The Hill, Business groups press Treasury to shift on corporate tax holiday:

The U.S. Chamber of Commerce and the WIN America Campaign, the business coalition … flatly state that U.S. multinationals have little incentive now to bring what they say is roughly $1 trillion in revenues back home and that allowing them to do so at a reduced rate would help stimulate the American economy.

They Always Say It Creates Jobs
The “business groups” argue that bringing the money back would “stimulate the economy” and create jobs. They say everything that helps the rich get richer creates jobs. But then it doesn’t create jobs. Then they say the next thing will create jobs so we go fo it, and then that doesn’t either. Meanwhile they get richer and richer, and we get poorer and poorer and need even more jobs.
Been There, Done That
Here’s the thing, we tried this in 2004. “Business groups” argued that bringing the money back would cause them to invest in the United States—and they got what they wanted. We allowed corporations to bring profits back to the U.S. at a tax rate of 5.25 percent, instead of the top corporate rate of 35 percent.
How did that work out for the economy and jobs? Not so well. Alain Sherter, in Sure, a “Tax Holiday” on Overseas Profits Is a Great Idea — If You Hate America, looked into this and writes,

The nonpartisan Congressional Research Service found that the companies that got the biggest tax breaks following the 2004 rate cut went on to eliminate jobs over the next two years. Instead of hiring, they mostly used the repatriated funds to repurchase stock or pay dividends — and to expand outside the U.S.

But it did provide a huge incentive to do even more offshoring of profits and jobs, because this scheme worked and the money came back in a tax holiday. So of course they are proposing to do it all over again. Bring the profits back untaxed, and then start the cycle again.
Sherter points out this really does benefit a very few at the expense of the rest of us, including other companies,

Repatriation holidays also favor a handful of huge corporations at the expense of other companies, especially businesses without operations around the globe. In 2004, a total of five companies reaped more than one-quarter of the benefits from the tax holiday, while 15 firms got more than 50 percent. To pay for such a cut without raising the deficit, meanwhile, the U.S. would have to increase taxes on other U.S. businesses or make even deeper cuts in already tight federal spending.

Tom Sullivan posted his own review of repatriation on OurFuture.org in 2009:

Washington Post business columnist Allan Sloan reacted to the [American Jobs Creation Act] in 2006, saying, “Companies don’t add jobs based on one-time chances to repatriate money from overseas.”
And they didn’t, according to Finance Committee Chairman, Sen. Max Baucus (D-MT), who argued against renewing the tax holiday. “The data shows that the last time we enacted something like this there were virtually no new jobs created in the United States. None.” Baucus continued, “Companies used this money for other purposes.”
North Dakota Democrat, Sen. Byron Dorgan rebranded the proposal: “There’s another phrase for repatriation; it’s called rewarding the outsourcing of jobs.”

The Cost
U.S. PIRG, in Tax Shell Game: The Taxpayer Cost of Offshore Corporate Havens says,

Key Findings
• The cost to taxpayers due to the use of offshore tax havens is as high as $100 billion per year – $1 trillion over 10 years. U.S.-based individuals and corporations who pay taxes on their revenues must shoulder this burden for those who do not.
• Taxpayers must shoulder the burden – U.S. PIRG Education Fund calculated each state’s taxpayer contribution proportional to their yearly federal contribution to make up for the $100 billion lost. [For California taxpayers, that figure was $11,679,735,788; for Texas, $8,653,820,2590; for New York, $8,432,456,612; for Florida, $4,932,770,661.]
• Our allies in other nations are also calling for decisive action to reign in these abusive tax havens. The Group of 20 (G-20), which provides a forum for world financial leaders to promote global economic stability, recently issued a communique providing for sanctions against tax haven countries.

Business Groups – Or People?
Corporate wealth is really just personal wealth, held at arms length from the person to mask what is going on. The wealthiest 1% own 50.9% of all stocks, bonds, and mutual fund assets. The wealthiest 10 percent own more than 90 percent. The bulk of us own less than 1 percent. When you hear about “corporate” holdings, think about this chart from the Working Group on Extreme Inequality:
wealth2
So with this tax holiday proposal we’re once again talking about benefits that go to the top few percent, at the expense of the rest of us. At the expense of schools, roads, police, firefighters, nurses, roads, rail, health care and all the things We, the People try to do for each other.
These days we seem to always be talking about benefit to the top few percent, at the expense of the rest of us. Funny how that works.
• Cut back on the things We, the People (government) do for each other, so the top few can have even more.
• Cut Social Security — the money employees have set aside all their lives — to preserve the tax cuts that went to the top few.
• Get rid of the retirement plans of state government employees so the top few don’t have to pay state taxes.
• Get rid of unions so the top few don’t have to pay good salaries or provide benefits.
• Cut back on etc. so the top few get more …
• Cut back on etc. so the top few get more …
• Cut back on etc. so the top few get more …
• Cut back on etc. so the top few get more …
Solutions
Citizens For Tax Justice has a report on this problem, Congress Should End “Deferral” Rather than Adopt a “Territorial” Tax System, and they offer a simple solution: tax it.

Some corporate leaders are pushing Congress to adopt a “territorial” tax system, which would exempt the offshore profits of U.S. corporations. Congress should move in the opposite direction and adopt a “pure worldwide” tax system, which taxes all profits of U.S. corporations the same while providing a credit to avoid double-taxation.

Believe Them
The other day I had a conversation with Bill Parks, who has written here about The Buffett Balanced-Trade Idea. He offered a practical modification of this idea. He proposed that we should just believe companies when they file their accounting reports that list where the sales are, then taxing the percentage of their profits according to that ratio of percentage of sales.
Here is how that would work in the tax -avoidance scheme described above. Remember, they are reporting that the tax-haven country pays a low price and the U.S. pays a high price. The result is high profit sales TO the U.S. but not IN the U.S. So fine, sales to the tax-haven country is a low-percentage of their profits, to the US a high percentage so the US then collects the same dollar ratio of taxes.
Tax-avoidance case: 90% of profits are reported to be made by selling from Cayman Islands shell company TO the U.S.
Tax-collection result: Therefore 90% of taxes on profits have to be paid to the U.S.
Putting American companies to work for us is a better solution than giving them a holiday.
Other resources:
Bloomberg: Tax Holiday for $1 Trillion May Lure Back Profits Without Growth
Center for American Progress: Tax Expenditure of the Week: Offshore Tax Deferral
Chuck Collins, Senior scholar, Institute for Policy Studies, Pay Up, Corporate Tax Dodgers
Phineas Baxandall and Nicole Tichon, PIRG & Tax Justice Network USA, In The Public Interest: A (Non)Taxing Issue
Nicholas Shaxson: Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens
US PIRG: Who Slows the Pace of Tax Reforms?
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m4s0n501

Why Move Jobs From Democracies To Thugocracies?

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
“Free trade” treaties like NAFTA have wiped out entire regions of our country and left entire segments of our population without good-paying jobs — or in so many cases with no jobs at all. And they have had similar results with our trade “partners.” We can see that now. So why are we even talking about doing more of these treaties?
Democracy vs Thugocracy
Democracies set up protections for their people. Democracies protect wages, rights, safety, dignity and the environment. The so-called “free trade” agreements we have been getting into allow companies to get around the borders of our democracy, pitting their employees against the exploited people living under thugocracies with few or no protections at all.
But these treaties have brought vast wealth to a very few, and maybe that was the point all along. Now with the NAFTA and China trade record clear, the DC/corporate elite and Wall Street/Chamber of Commerce multinationals are pushing new trade treaties with South Korea, Columbia, Oman and Panama. Their goal seems to be to make the rich even richer while making things even worse for the rest of us.
NAFTA – “Case Study In Failure”
Ian Fletcher writing at Huffington Post in, More Free Trade Agreements? When NAFTA Failed?,

How have our past trade agreements worked out? Above all, how’s the grand-daddy of them all, NAFTA, doing?
Unfortunately, NAFTA is a veritable case study in failure.

How is NAFTA working out for us?

For the four years prior to NAFTA’s implementation in 1994, America’s annual deficit with Canada averaged a modest $8.1 billion. Twelve years later, it was up to $71 billion.
Our trade with Mexico showed a $1.6 billion surplus in 1993 but by 2010, our deficit had reached $61.6 billion.

Fletcher cites the Economic Policy Institute to detail the dramatic loss of jobs we have suffered. But not just jobs, also wages.

NAFTA has eliminated some 766,000 job opportunities–primarily for non-college-educated workers in manufacturing. Contrary to what the American promoters of NAFTA promised U.S. workers, the agreement did not result in an increased trade surplus with Mexico, but the reverse. As manufacturing jobs disappeared, workers were down-scaled to lower-paying, less-secure services jobs. Within manufacturing, the threat of employers to move production to Mexico proved a powerful weapon for undercutting workers’ bargaining power.

And how is NAFTA working out for Mexican workers? It turned low-wage workers into even-lower-wage workers.

In reality, the income gap between the United States and Mexico grew (by over 10 percent) in the first decade of the agreement. This doesn’t mean America boomed; we didn’t. But Mexico slumped terribly.
In NAFTA’s first decade, the Mexican economy averaged 1.8 percent real growth per capita. By contrast, under the protectionist economic policies of 1948-73, Mexico had averaged 3.2 percent growth.
… Mexican workers can often be hired for less than the taxes on American workers; the average maquiladora wage is $1.82/hr. The maquiladora sector is deliberately isolated from the rest of the Mexican economy and contributes little to it. Workers’ rights, wages, and benefits are deliberately suppressed. Environmental laws are frequently just ignored.
Mexican agriculture hasn’t benefited either: NAFTA turned Mexico from a food exporter to a food importer overnight and over a million farm jobs were wiped out by cheap American food exports, massively subsidized by our various farm programs.
[. . .] Between 1990 and 1999, Mexican manufacturing wages fell 21 percent.

How have our other free-trade agreements worked out? Fletcher again, (please go read his entire post, and take a look at his book, Free Trade Doesn’t Work: What Should Replace it and Why, as well)

FTA is not America’s only free trade agreement, of course. But our other agreements tell similar tales. We have signed 11 since 2000: with Australia, Bahrain, Chile, Colombia, Jordan, Korea, Oman, Morocco, Singapore, Panama, and Peru. (El Salvador, Nicaragua, Honduras, Guatemala, and the Dominican Republic were lumped together in the Central America Free Trade Agreement or CAFTA.) Every agreement but one has coincided with greater American deficits.

Not such a great record. Let’s not do more of this.
A Better Way
Trade doesn’t have to be used to pit people against each other. It can be used to lift each other up. We can instead negotiate treaties to demand that the thugocracies offer better wages and protections, or they can’t sell to us. Or if they do sell to us as add a tariff that undoes any advantage they get from mistreating their people, and use the money to strengthen our infrastructure and competitiveness in world markets. We can use trade to lift the world for the benefit of all instead of to exploit the world for the benefit of a few.
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