If They Take The Senate Republicans Will Pass Trade Deals That Clinch Plutocracy

Trade deals like NAFTA have helped create terrible inequality by outsourcing jobs to low-wage countries so “investors” can pocket the wage difference. These corporate trade deals also create “corporate courts” that bypass the borders of democracy and place billionaires and their corporations beyond the reach of governments when it comes to deciding on laws and regulations that protect citizens.

There are more of these “NAFTA-style” being negotiated right now. These are much bigger than the trade deals that have already created such inequality and corporate hegemony. If Republicans take the Senate and keep the House they will pass these new trade deals and clinch this deal worldwide – and President Obama has already indicated he will sign them. This is serious so try to talk a few non-voting friends into showing up this time.

Trade Deals Being Negotiated Now

The big corporations are pushing our government to finalize three very big trade agreements: the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TISA). These are not really trade deals but cover all kinds of issues, including the ability to place corporate rights alongside or above the rights of countries to make their own laws.

These “trade” deals will, if passed by Congress and signed by the president, cement a corporate right to profits above the rights of citizens to pass laws to protect our health, environment, wages, working conditions and anything else we might decide to do to make our lives better. That’s right, these trade agreements place corporate rights above national sovereignty, and they do this behind a veil of secrecy.

These deals, like NAFTA and other “NAFTA-style” agreements, have “investor-state dispute settlement” (ISDS) provisions that let giant corporations sue governments for passing laws that might cause investors to make lower profits. For example, these (and current) agreements allow tobacco companies to stop governments from engaging in anti-smoking initiatives to protect the health of their citizens. These suits do not come up in front of government courts. These are adjudicated by corporate-controlled tribunals of private arbitrators — “corporate courts” set up by these trade agreements. The “judges” are often corporate lawyers who just happen to also represent global investors and whose livelihood depends on the very corporations they are judging.

These deals are being negotiated with only the interests of the giant corporations at the table. Citizens groups, labor groups, consumer groups, environmental groups, health groups and other representatives of stakeholders in the world’s economy are excluded from the process.

Why is our own government negotiating a deal that gives so much to the big corporations and the billionaires behind them, and takes so much away from regular people? Rep. Alan Grayson (D-Fla.) sums it up, saying there are three kinds of people negotiating these agreements on behalf of our government:

  • People who used to work for the giant corporations that benefit from these agreements.
  • People who want to work for the giant corporations that benefit from these agreements.
  • People who used to work for the giant corporations that benefit from these agreements and want to work for the giant corporations that benefit from these agreements again.

Why would the giant corporations and the billionaires want these agreements? Because they clinch the deal and get them around the borders of democracy.

Wow, That Sounds Extreme

Trade deals are placing corporate rights above national sovereignty? They are intentionally undermining democracy? This sounds extreme. What kind of person would make such extreme accusations?

Yes, it sounds extreme. This is a dilemma progressives continually face when describing the agenda and actions of the corporate/conservative right. Because so much of what they are accomplishing is hidden behind a veil of secrecy, obfuscation and long-term step-by-step strategy (think frog in a pot with the water being heated slowly), and because people pay very little attention to the news and current events until something smacks them in the face (or wallet) you sound like a crazy extremist when you simply describe to people what is going on.

  • They’re trying to privatize Medicare? What an extreme accusation to make.
  • They are trying to make it hard for legitimate citizens to vote? Wow, what an extreme statement.
  • They’re trying to get rid of public schools? What an extreme thing to say.
  • They’re trying to engineer a cut in everyone’s pay and benefits? What an extreme … oh, wait, we all can see now that they did that.

The corporate right depends on this one-two punch of secrecy and a poorly informed public to get their way.

Tea-Party Republicans vs. Chamber Of Commerce Republicans

So far enough Democrats have opposed these trade deals to keep the Congress from passing the “fast-track” trade promotion authority that is used to push them through. Fast track requires Congress to rush to a vote immediately after the treaty is made public, prevents Congress from amending the agreements and prevents filibusters from blocking them in the Senate. But if Republicans take the Senate and keep the House, there may no longer be enough non-corporate-controlled members of Congress to keep this from happening.

However, there would still be one hope for blocking these trade deals, even if Republicans take the Senate, and that’s the party’s tea party wing.

These trade agreements undermine the sovereignty of our country. They allow others to override our own ability as a country to make our own laws. This is one place where the tea party gets it squarely right. And this is one place where the tea party wing of the Republican Party is at war with the Chamber of Commerce (corporate-controlled) wing of the Republicans. National sovereignty is important to tea party Republicans, so they oppose these agreements. Also they oppose them because they are favored by President Obama. “Don’t let Obama negotiate away our national sovereignty” is a tea party rallying cry.

If Republicans take the Senate, let’s hope this appreciation of national sovereignty overrides their appreciation of corporate cash.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Why You Shouldn’t Be “Optimistic” About Corporate “Tax Reform”

Washington elites are “optimistic” about another “reform.” That’s never good.

According to an article in The Hill this week, “WH adviser ‘optimistic’ for corporate tax reform“:

A top economic official in the White House on Tuesday expressed confidence that the next Congress can pass corporate tax reform.

… Obama has proposed lowering the corporate statutory rate from 35 percent to the high-20s while eliminating many deductions. Camp also proposed to lower the rate, but down to the mid-20s.

Camp has proposed shielding most of the profits corporations make offshore from U.S. taxation, while Obama has called for a minimum tax on global earnings.

Why is it that any time you hear the word “reform” coming out of Washington, it always ends badly for about 99 percent of us? They talk about entitlement “reform” – meaning cutting Social Security and Medicare. They talk about regulation “reform” – meaning our food and workplaces are going to be less safe. They talk about spending “reform” – meaning doing less of the things that make We the People’s lives better. (They never “reform” the military budget. It is more than double what it was when ‘W’ Bush took office. Because we have to defend against the Soviet Union.)

“Reform” is lobbyist-speak for opening up the floodgates, hanging the flags out, lighting the savings accounts on fire, letting dozens of blackbirds fly out of the pie, letting the horses out of the barn and generally fleecing the citizenry.

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Oil Cos. Trying To Use Trade Treaty To Bypass Congress And Raise Prices

You may have heard that there is an oil and gas “boom” happening in the US. You might not know that there is a ban on exporting our own oil. This ban is good for the country but bad for oil companies. And the oil industry is attempting an end run around Congress to do something about it.

There is an ongoing “boom” in oil and natural gas production. Production of natural gas is way up. Imports are down about half since 2007. Texas oil production alone has more than doubled since 2011. This increase in domestic oil production has various consequences. We use much of our rail capacity transporting oil to refineries. The increase in natural gas production is pushing coal use down, and lowering carbon emissions as we fight for a transition away from using fossil fuel at all.

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Reagan Set Up The Death Of The Middle Class, But China Was The Clincher

Campaign for America’s Future’s 2010 Reagan Revolution Home To Roost series, especially the post Reagan Revolution Home To Roost — In Charts described the beginning of the great decoupling of the American economy from the middle class.

The summary:

Conservative policies transformed the United States from the largest creditor nation to the largest debtor nation in just a few years, and it has only gotten worse since then.

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Who Gets Rich Harvesting Burger King and the American Economy?

As fast-food workers across the country strike for decent pay, Burger King is still preparing to abandon the U.S. as its home country. How does a burger company get flipped like this and who gets rich when it happens?

Burger King is a company whose products encourage obesity, heart disease and diabetes in its customers and pays its employees so little that they require food stamps and other government assistance just to be able to sustain themselves. Now Burger King is asking us to swallow something even unhealthier than their food and lower than their pay. They are asking us to let them off from paying many of the taxes that sustain the very infrastructure, courts, education system and food safety system that enables them to stay in business – even the trademark system that keeps others from using the name “Burger King” or calling their product a “Whopper®.”

The company has been stripped, financialized and any remaining value is ultimately being moved across the border. The story of what is happening with Burger King is the story of what American capitalism and its financial speculation has been and is doing to the American economy. It is being done to the company and to us by the financiers. In this case it is names like Goldman Sachs, TGP Capital, Bain Capital, 3G Capital – all playing games with Burger King, other companies the American economy and our lives. And the latest plunderer, Bill Ackman and his Pershing Square Capital Management, is a financial manipulator who when he sees a company’s carcass worth plundering, goes after it – even if it involves betting on a company’s stock going down and then working to drive the company into the ground.

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The Cost To Our Economy From Republican Obstruction And Sabotage

The Republican political strategy has been to obstruct efforts to help the economy for everyone but the wealthiest few, and then campaign on complaints that the economy isn’t helping anyone but the wealthiest few. It’s working.

In President Obama’s July 12 weekly address he said, “So far this year, Republicans in Congress have blocked every serious idea to strengthen the middle class.” He could have said, “Since 2009.” Since the 2009 “stimulus,” Republicans have obstructed pretty much every effort to help the economy. In the Senate they have filibustered hundreds of bills, and since the “stimulus” they have managed to keep anything from passing that might help the economy.

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Full Employment Is More Than Possible – It Is Essential

Progressives have not only been able to beat back the D.C.-elite effort to cut Social Security, we put the idea of expanding Social Security on the table instead. We pushed LGBT rights and gay marriage and have won significant victories. Sunday’s Climate March will force climate onto the map.

We got the discussion of income inequality going. We have achieved minimum wage increases and paid sick days in several cities and states. The National Labor Relations Board is functioning and we even saw labor-movement gains in the South this week. We have held back (so far) the drumbeat for big cuts in corporate taxes they’re calling “tax reform.”

Now it’s time to put our demand for full employment policies on the table. And guess what – it’s a great way to win elections!

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Corporate Courts — A Big Red Flag On “Trade” Agreements

Think about everything you understood about our system of government here in the United States. We’re  governed under a document that starts with the words, “We the People.” Right? When We the People agree that something should done to make our lives better, it’s supposed to get done. Right?

You didn’t know it, but that whole system thing changed several years ago. Our government, in our name, signed a document that placed corporate profits above our own democracy. The “investor-state dispute settlements” chapter in NAFTA (and similar agreements) places corporate rights on above the rights of people and their governments.

As a result of “NAFTA-style” investor protections that are part of so-called “trade” agreements,  giant corporations can and do sue governments for trying to pass laws that protect their citizens from harmful chemicals, ban harmful products, and protect the rights of working people, among  other things. Corporations even sue governments for passing laws that might cause the investors in the corporations to make a bit less money — like raising the minimum wage.

But wait, there’s more.

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Hundreds Of Organizations Ask For Change In Trade Policies

Approximately 600 organizations have sent a formal, public letter to Senate Finance Committee Chairman Ron Wyden (D-Ore.) opposing “fast-track” trade promotion authority and calling for a new system for negotiating and implementing trade agreements. The letter asks for trade pacts that “deliver benefits for most Americans, promote broadly shared prosperity, and safeguard the environment and public health.” Read the letter here.

Campaign for America’s Future is one of the organizations that signed this letter. The letter was led by the Sierra Club, AFL-CIO, the Communications Workers of America, the Citizens Trade Campaign, and Public Citizen. The letter was written because new fast-track trade promotion authority is being drafted by Wyden’s committee. An earlier bill introduced by then-Senator Max Baucus and Rep. Dave Camp (R-Mich.) would keep Congress from debating or altering trade pacts like the Trans-Pacific Partnership (TPP) and other upcoming agreements, even though they are considered one-sided in favor of giant multinational corporations over working people and the environment.

The letter asks for a new process for reaching trade agreements in which Congress has a role in selecting trade partners and in which Congress sets up a set of negotiating objectives that must be achieved. The new process would include more transparency and a way for Congress to certify that negotiating objectives have been met before trade negotiations are wrapped up.

Larry Cohen, President of the Communications Workers of America, said this new process can help us decide what kind of economy we want to have, saying, “A new model of trade authority is the only way to ensure that workers and communities have a voice in these trade decisions. We want to determine what kind of economy we have, not simply accept super-power status for multinational corporations and a snails’ pace for the enforcement issues raised by the rest of us.”

The Hill reports on this letter, in “Hundreds of groups call for new framework to negotiate trade deals,” quoting AFL-CIO President Richard Trumka:

“Only with new trade negotiating authority can we secure new trade rules that can help hard working Americans build a sustainable economy and promote broadly shared prosperity,” said President Richard Trumka of the AFL-CIO.

“Chairman Wyden has a chance to make history by being the architect of a new and democratic trade policy, and we commit to doing all we can to help achieve that goal,” he said.

On fast track,

“There is no ‘acceptable’ version of fast track,” said Robert Weissman, president of Public Citizen. “Fast-track must be replaced so Congress can steer international trade in a new direction and create agreements that actually work for most Americans.”

Our Current Trade Deals Are Rigged Against Citizens By Choice

Our current trade deals are rigged – designed to benefit a few already-wealthy owners of giant multinational corporations. They were set up in order to transfer good-paying jobs out of the U.S. to take away the bargaining power of organized labor. This has forced down American workers’ bargaining power, resulting in stagnant wages, a shrinking middle class and widespread poverty. Meanwhile the rich get vastly richer.

These rigged trade agreements have also massively increased our country’s trade deficits. We currently run an enormous, humongous trade deficit of more than $40 billion a month.

Germany followed a different trade model. Germany worked with its companies and its labor unions to forge trade agreements that benefit businesses, workers and Germany’s economy. CAF’s Robert Borosage did a great job of laying out what happened in a recent interview on Richard Eskow’s The Zero Hour radio program. (Scroll to 5:15.)

Globalization isn’t an act of nature; it’s a set of policies, tax, trade, financial, monetary policies where you make choices and those choices benefit parts of the economy and injure others.

We made choices. Multinationals basically wrote our globalization strategy and they chose to benefit investors, made it easy to ship jobs abroad, made it even easier to threaten to move jobs abroad and dramatically weakened the ability of workers here at home.

But that was a choice.

In Germany they made a very different choice where unions were stronger, and the companies and the unions together navigated a globalization strategy that has made Germany one of the great export powers of the world and allows German workers to sustain middle class incomes and benefits.

Public Citizen has an action you can join: Write your representative to demand a real replacement to Fast Track and put an end to unfair trade deals.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Why Is SEC Sitting On Corporate Transparency Rules?

Are We the People the boss of the corporations, or are the corporations the boss of We the People? The Securities and Exchange Commission (SEC) needs to be reminded which way that question is supposed to be answered.

The SEC is the agency set up by We the People to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” The SEC states that “all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it. … Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions.”

One would think those basic corporate facts and timely, comprehensive, and accurate information needed by investors would include access to a company’s tax returns. One would think they would include information about where the executives of the company are spending millions and millions of the company’s dollars. And one would think they would include disclosure of the ratio of CEO “pay ratio” of compensation to worker compensation, as required by the 2010 Dodd-Frank law.

But so far the SEC is not asking corporations to provide investors and the public with this information. Don’t shareholders — and We the People — deserve to know what these companies are really doing and how much they are really making?

What Are These Companies Really Earning?

Companies tell their investors that they are making tons of money. But to get out of paying taxes the same companies tell the IRS something entirely different. Don’t investors have a right to know what the companies they invest in are telling the tax office?

Last month Catherine Rampell wrote in the Washington Post, in “Shareholders, public deserve tax transparency,” that:

“[There is an] array of eye-glazingly complicated tax avoidance strategies adopted by America’s biggest companies … The basic rationale behind tax transparency is that shareholders (and creditors and the general public) deserve to know what publicly traded companies are doing, particularly if complicated tax acrobatics are distorting their operational and investment decisions.”

She points out that we started out requiring this.

This is not a new idea. In fact, when the modern federal corporate income tax was introduced in 1909, it came with a requirement to disclose the returns. Such transparency mandates were fought over bitterly for the next couple of decades, and U.S. returns have been confidential since 1935.

What About Company “Donations”?

If a company’s executives are literally giving the company’s money away to politicians, “charities” (maybe run by a relative), “think tanks” (that employ relatives, etc.) or other worthy recipients,  shouldn’t investors be provided with information about who is getting the company’s money, and how much they are getting? (Milton Friedman notably claimed that such donations are “theft” from the company.)

(Note: If a company gives money to a politician, and is not simply “giving the money away” for nothing — with absolutely no expectation of getting anything in return — that would be bribery,  under the law.)

Last week in The Nation Zoë Carpenter wrote about this in, “SEC Faces Renewed Pressure to Consider a Corporate Disclosure Rule”:

The campaign to lift the veil on secret corporate campaign donations hit a milestone on Thursday. More than 1 million comments have been submitted to the US Securities and Exchange Commission calling for a requirement that corporations disclose political spending to their shareholders—ten times more than for any other rule-making petition to the SEC, according to the Corporate Reform Coalition.

“Investors want to know how their money is being spent,” Tim Smith, director of shareholder engagement at the firm Walden Asset Management, said at a press conference outside the SEC in Washington. A sign over his right shoulder read, “Your money is being invested in secret. Why is the SEC doing nothing?”

Why Is SEC Sitting On These Rules?

So why is the SEC just sitting on these proposals to disclose basic information to shareholders? In the case of the CEO pay ratio, this is even required by a law passed almost 5 years ago.

Could it be that the people working at the SEC really do know who is the boss now? (“Boss” as in the writer of the big paycheck and future employer.) Maybe, and maybe not. Who’s to say?

In early 2013 the Project On Government Oversight (POGO) released it report, “Dangerous Liaisons: Revolving Door at SEC Creates Risk of Regulatory Capture”:

A revolving door blurs the lines between one of the nation’s most important regulatory agencies and the interests it regulates. Former employees of the Securities and Exchange Commission (SEC) routinely help corporations try to influence SEC rulemaking, counter the agency’s investigations of suspected wrongdoing, soften the blow of SEC enforcement actions, block shareholder proposals, and win exemptions from federal law. POGO’s report examines many manifestations of the revolving door, analyzes how the revolving door can influence the SEC, and explores how to mitigate the most harmful effects.

At the time of the report’s release Bloomberg reported,

From 2001 to 2010, POGO says, more than 400 SEC alumni filed about 2,000 disclosure forms (which POGO obtained using the Freedom of Information Act) saying they planned to represent an employer before the SEC. That may vastly understate the problem because, as POGO points out, former SEC employees must file such statements for only two years after departing.

The SEC has exempted some senior employees (even sometimes blacking out their names on SEC documents) from a one-year cooling-off period during which they are barred from representing clients before the agency, POGO found.

Soon after the report was released: April, 2013, Ex-SEC chief Schapiro takes revolving door back to private sector,

With her seat barely cold at the chairmanship of the Securities and Exchange Commission, Schapiro will become a managing director at a financial consulting and lobbying firm that has hired a slew of former financial regulators over the last several years and that represents for many a nexus of the cozy relations between banks and their regulators.

Are We the People the boss of the corporations, or are the corporations the boss of We the People? Who’s to say? Not the SEC, apparently.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Six Corporate Tax Myths In One Letter to Editor

How MANY mistruths can you count in a letter in today’s San Jose Mercury News?

Lower corporate taxes would boost economy

When the government wants to raise taxes, the counter argument is always that people and corporations will work harder if they can keep their earnings. It is either that, or pass the costs to the consumers. Either way, high taxes are a no-win situation for everybody. Now that we have the highest taxes of any industrialized nation, corporations are “voting with their feet” and using legal tax-inversion strategies to stay competitive. The administration that pushed for high taxes is crying foul and saying this is not patriotic. Now they don’t like the consequences of their greedy tax policies. Drop the corporate tax rate to 15 percent and watch the economy soar.

  1. Myth: People will work harder if they can keep their earnings. Actually, wouldn’t people work harder to make up for the money that goes to taxes?
  2. Myth: Corporations pass the “cost” of taxes onto consumers. Actually corporations can’t pass taxes to consumers. (And taxes are not a “cost.”) Summary: taxes are on profits and prices are already as high as the company can charge. If corporations could just increase prices to cover taxes then the profits would go up, which raises the taxes, so they wold have to increase prices again, which would increase profits, which raises taxes, so they have to increase prices again, etc.
  3. Myth: Taxes are no-win. Actually they pay for the reads, schools, courts, police, military and the rest of the things that enable corporations to prosper.
  4. Myth: We have the highest taxes. Actually we don’t. Corporations are shifting profits out of the country to avoid ever paying taxes. The solution is to make them pay their taxes, not lower tax rates to let them get away with this.
  5. Myth: The administration raised taxes on corporations. Actually the administration didn’t raise corporate taxes. Corporate taxes have been lowered from 46% to 35% since the 80’s.
  6. Myth: If the corporate tax rate was lowered to 15% the economy would soar. Actually there is no relationship between lower tax rates and higher economic growth. In fact, there is a correlation between lower rates and lower growth, possibly because lower taxes cause government to cut back on the things that help the economy prosper, like education, investing in infrastructure, basic research, etc.

The letter-writer probably actually believes the stuff he wrote. Many people do. This shows the effect of decades of corporate/conservative propaganda on the public. Unfortunately these beliefs are leading to policies that are killing our economy and our democracy.