Skip to content

“Merchants Have No Country”

August 25, 2011

Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains. ~Thomas Jefferson

Cases in point:

“Some of the country’s best-known multi-national corporations closely guard a number they don’t want anyone to know: the breakdown between their jobs here and abroad.

So secretive are these companies that they hand the figure over to government statisticians on the condition that officials will release only an aggregate number.”

Call that return on investment.

“The latest data show that multinationals cut 2.9 million jobs in the United States and added 2.4 million overseas between 2000 and 2009.

As the country faces an unemployment crisis, President Obama, lawmakers and business lobbyists have all touted the country’s biggest companies as critical to creating jobs.

The head of Obama’s jobs council, General Electric chief executive Jeff Immelt, said during a tour of a company plant in Greensboro, S.C., that firms should be ready to answer questions from the public.

…GE breaks out its employment numbers in company filings to the Securities and Exchange Commission. In 2010, about 46 percent of GE’s 287,000 employees worked in the United States, compared with 54 percent in 2000.

But many firms, including some whose executives have counseled Obama on the economy, do not put their number of U.S. workers in their annual reports.

IBM chief executive Sam Palmisano has met a number of times with the president, most recently in July at a lunch with other executives to talk about jobs and the economy. IBM stopped giving its U.S. head count in 2009.

…Data from before 2009 showed IBM rapidly shifting workers to India. Dave Finegold, dean of the Rutgers School of Management and Labor Relations, estimates that 2009, when the company stopped sharing its U.S. employment figure, also marked the first time the company had more employees in India than the United States.

You won’t find Procter & Gamble’s U.S. head count in its filings, either. When initially asked for the number, company spokesman Paul Fox wrote in an e-mail: “We do not track nor report U.S.-specific jobs numbers vs. jobs overseas.” After it was pointed out that P&G’s chief executive, Bob McDonald, had cited such figures in a Cincinnati Enquirer op-ed piece, Fox acknowledged the company did track that data. The number of U.S. employees is 35,000 out of 127,000 total, or 28 percent.

Other companies that do not reveal their job breakdowns include Hewlett-Packard, AT&T, Apple and Pfizer, which stopped reporting the number in its SEC filings in 2000.

The latter two are part of a coalition of companies pushing for Congress to give them a tax break on money they have parked overseas, saying that any money brought back to this country would spur hiring.”

But…

“…that’s not how it worked last time.

Congress and the Bush administration gave companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment.

While the tax break lured 800 companies into bringing $312 billion back to the United States, 92 percent of that was used for dividends and stock buybacks, according to the nonpartisan National Bureau of Economic Research. The study concluded the program “did not increase domestic investment, employment or research and development.”

Indeed, 60 percent of the benefits went to 15 of the largest U.S. multinational companies — many of which laid off domestic workers, closed plants and shifted even more profits and resources abroad in hopes of cashing in on the next repatriation holiday.”

“For chief executives of multinational companies who are used to answering only to their shareholders, the country’s jobs crisis has uncomfortably switched the political spotlight onto their decisions about who they employ and where. It has also thrown into relief the fact that when U.S. multinationals chase profits and hire workers anywhere in the world, they become less tied to any one country, including this one.”

Like Jefferson said.

Healthful Happy Meals?

July 27, 2011

Oxymoron of the day–a healthful Happy Meal:

“Under pressure from health and children’s advocacy groups, McDonald’s Corp. is making changes to its famed Happy Meals. The fast food chain will add a serving of fruit or vegetable to all of the meals, which are aimed at children, and shrink the portion of French fries.The changes, to be announced Tuesday, will take effect in September in some markets and then roll out to all 14,000 McDonald’s restaurants in the U.S. by April.

[...]

The new French fry holders in Happy Meals will contain 1.1 ounces of potatoes, down from 2.4. Apple slices will often be included as the healthful side dish, but it could also be carrots, raisins, pineapple slices or mandarin oranges, depending on the time of year and the region in which they’re being served, Fields said.”

Prediction: Kids eat the fries and the apples, carrots, raisins, pineapples, and oranges end up in the trash

GFY, S&P

July 27, 2011

As the extortionists at Standard and Poor’s threaten a credit rating downgrade, not just if the debt ceiling isn’t raised but if the deficit isn’t cut by $4 trillion, Robert Reich points out that if the crooks at S& P had done their effin’ jobs the deficit and debt that they demand be cut wouldn’t be where it is today:

“Who is Standard & Poor’s to tell America how much debt it has to shed in order to keep its credit rating? Standard & Poor’s didn’t exactly distinguish itself prior to Wall Street’s financial meltdown in 2007. Until the eve of the collapse it gave triple-A ratings to some of the Street’s riskiest packages of mortgage-backed securities and collateralized debt obligations.”

A practice from which S&P profited handsomely:

“S&P’s net annual revenues from ratings nearly doubled from $517 million in 2002, to $1.16 billion in 2007.”

And what happened to those securities S&P stamped AAA?

“…90% of the subprime-backed mortgage securities S&P and its competitors rated AAA in 2006-2007 – which means they’re as sound as Treasury notes – were later downgraded to junk bond status.”

Back to Reich:

“Standard & Poor’s (along with Moody’s and Fitch) bear much of the responsibility for what happened next. Had they done their job and warned investors how much risk Wall Street was taking on, the housing and debt bubbles wouldn’t have become so large – and their bursts wouldn’t have brought down much of the economy.

Had Standard & Poor’s done its job, you and I and other taxpayers wouldn’t have had to bail out Wall Street; millions of Americans would now be working now instead of collecting unemployment insurance; the government wouldn’t have had to inject the economy with a massive stimulus to save millions of other jobs; and far more tax revenue would now be pouring into the Treasury from individuals and businesses doing better than they are now.

In other words, had Standard & Poor’s done its job, today’s budget deficit would be far smaller.

And where was Standard & Poor’s…during the George W. Bush administration – when W. turned a $5 trillion budget surplus bequeathed to him by Bill Clinton into a gaping deficit? Standard & Poor didn’t object to Bush’s giant tax cuts for the wealthy. Nor did it raise a warning about his huge Medicare drug benefit…or his decision to fight two expensive wars without paying for them.

Add Bush’s spending splurge and his tax cuts to the expenses brought on by Wall Street’s near collapse – and today’s budget deficit would be tiny.

Put another way: If Standard & Poor’s had been doing the job it was supposed to be doing between 2000 and 2008, the federal budget wouldn’t be in a crisis — and Standard & Poor’s wouldn’t be threatening the United States with a downgrade if we didn’t come up with a credible plan for lopping $4 trillion off it.”  

So why in the hell is anybody listening to what Standard and Poor’s has to say? If we had a Justice Department that was actually interested in justice, the S&P analysts would be behind bars instead of issuing threats.

Wu Resigns

July 26, 2011

Another Congresspervert bites the dust:

“Democratic Rep. David Wu of Oregon has announced that he is resigning in the wake of allegations that he had a sexual encounter with an 18-year-old girl woman.

Democratic leaders had called for a House Ethics investigation after the initial reports of the allegation. Wu had said that whatever occurred was consensual.

Wu said Tuesday the well-being of his children should come first, so he will resign after Congress resolves the debate over the debt ceiling.”

On behalf of the well-being of other people’s children, thank you soon-to-be-ex-Congressman Wu.

It’s the Jobs, Stupids

July 26, 2011

From the Washington Post:

82% say jobs are difficult to find, 85% say they are either just holding on or falling behind. Is anybody in Washington listening? Does anybody in Washington care?

“A Colossal Political Failure”

July 26, 2011

Sam Pizzigati at CAF:

“This “debt crisis” in no way had to happen. No natural disaster, no tsunami, has suddenly pounded the United States out of fiscal balance. We have simply suffered a colossal political failure. Our powers that be, by feeding the rich and their corporations one massive tax break after another, have thrown a monstrous monkey wrench into our national finances.

Some numbers — from an Institute for Policy Studies report released this past spring — can help us better visualize just how monumental this political failure has been.

If corporations and households taking in $1 million or more in income each year were now paying taxes at the same annual rates as they did back in 1961, the IPS researchers found, the federal treasury would be collecting an additional $716 billion a year.

In other words, if the federal government started taxing the wealthy and their corporations at the same rates in effect a half-century ago, the federal debt to investors would almost totally vanish over the next decade.

Similarly stunning numbers have come, earlier this month, from MIT economist Peter Diamond and the University of California’s Emmanuel Saez, the world’s top authority on the incomes of the ultra-rich. These two scholars have shared some fascinating “what ifs” that dramatize how spectacularly the incomes of our wealthiest have soared over recent decades.

In 2007, Diamond and Saez point out, taxpayers in the nation’s top 1 percent actually paid, on average, 22.4 percent of their incomes in federal taxes. If  that actual tax burden were to about double to 43.5 percent, the top 1 percenter share of our national after-tax income would still be twice as high as the top 1 percent’s after-tax income share in 1970.

So why aren’t we taxing the rich? Why are we now suffering such fearsome “debt crisis” angst? Why are our politicos so intent on shoving the “fiscal discipline” of layoffs and cutbacks — austerity — down the throats of average Americans?

No mystery here. Our political system is failing to tax the rich because the rich have fortunes large enough to buy off the political system.”

Just a Little Bit of History Repeating?

July 26, 2011

Dave Johnson at Campaign for America’s Future has an excerpt from Naomi Klein’s Shock Doctrine that sounds eerily familiar:

“In February 1993, Canada was in the midst of financial catastrophe, or so one would have concluded by reading the newspapers and watching TV. “Debt Crisis Looms,” screamed a banner front-page headline in the national newspaper, the Globe and Mail. A major national television special reported that “economists are predicting that sometime in the next year, maybe two years, the deputy minister of finance is going to walk into cabinet and announce that Canada’s credit has run out…Our lives will change dramatically.

The phrase “debt wall” suddenly entered the vocabulary. What it meant was that, although life seemed comfortable and peaceful now, Canada was spending so far beyond its means that, very soon, powerful Wall Street firms like Moody’s and Standard and Poor’s would downgrade our national credit rating from its perfect Triple A status to something much lower…The only solution, we were told, was to radically cut spending on such programs as unemployment insurance and health care. Sure enough, the governing Liberal Party did just that, despite having just been elected on a platform of job creation.

Two years after the deficit hysteria peaked, the investigative journalist Linda McQuaig definitively exposed that a sense of crisis had been carefully stoked and manipulated by a handful of think tanks funded by the largest banks and corporations in Canada…McQuaig went to Moody’s Wall Street head office and spoke with Vincent Truglia, the senior analyst in charge of issuing Canada’s credit rating. He told her something remarkable: that he had come under constant pressure from Canadian corporate executives and bankers to issue damning reports about the country’s finances,

…[F]or the Canadian financial community, the “deficit crisis” was a critical weapon in a pitched political battle. At the time Truglia was getting those strange calls, a major campaign was afoot to push the government to lower taxes by cutting spending on social programs such as health and education. Since these programs are supported by an overwhelming majority of Canadians, the only way the cuts could be justified was if the alternative was national economic collapse – a full blown crisis.

…By the time Canadians learned that the “deficit crisis” had been grossly manipulated by the corporate-funded think tanks, it hardly mattered – the budget cuts had already been made and locked in. As a direct result, social programs for the country’s unemployed were radically eroded and have never recovered, despite many subsequent surplus budgets.”

Schumer Backs Reid Plan

July 25, 2011

AP is reporting:

“The third ranking Democrat in the Senate says a deficit-reduction proposal put forward by Majority Leader Harry Reid has the best chance of ending the political stalemate and avoiding a government default.

New York Sen. Chuck Schumer tells MSNBC he expects the Nevada Democrat to release details of his plan later Monday. Schumer says the deal would last through 2012, cut spending by the same amount as borrowing is increased and contain no new taxes.”

Which is exactly what Boehner wanted from jump street. The Daily Caller, May 11:

“Boehner took the ambitious stand in negotiations to raise America’s debt ceiling while speaking to the Economic Club of New York, saying, “Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase. And the cuts should be greater than the accompanying increase in debt authority the president is given.”

While the Treasury Department has yet to specify exactly the size of the increase Congress will need to approve for the $14.3 trillion debt limit, estimates are currently settling in around $2 trillion. That means, according to Speaker Boehner, that the White House and congressional Democrats would have to agree to spending cuts equal to at least $2 trillion as well. The only thing “off the table” is tax increases, said Boehner.

So after 6 weeks of kabuki, we’re right back where all this began. And unemployment is still our biggest problem. Nice.

U.S Taxpayers Funding the Taliban

July 25, 2011

“Every day, families are figuring out how stretch their paychecks – struggling to cut what they can’t afford so they can pay for what’s really important.  It’s time for Washington to do the same thing…We need an approach that goes after waste in the budget and gets rid of pet projects that cost billions of dollars.” President Obama’s weakly weekly address.

Speaking of:

“A year-long military-led investigation has concluded that U.S. taxpayer money has been indirectly funneled to the Taliban under a $2.16 billion transportation contract that the United States has funded in part to promote Afghan businesses.

The unreleased investigation provides seemingly definitive evidence that corruption puts U.S. transportation money into enemy hands, a finding consistent with previous inquiries carried out by Congress, other federal agencies and the military. Yet U.S. and Afghan efforts to address the problem have been slow and ineffective, and all eight of the trucking firms involved in the work remain on U.S. payroll. In March, the Pentagon extended the contract for six months.

According to a summary of the investigation results, compiled in May and reviewed by The Washington Post, the military found “documented, credible evidence . . . of involvement in a criminal enterprise or support for the enemy” by four of the eight prime contractors. Investigators also cited cases of profiteering, money laundering and kickbacks to Afghan power brokers, government officials and police officers. Six of the companies were found to have been associated with “fraudulent paperwork and behavior.”

Fraudulent paperwork and behavior? That’s no big deal. Just ask the banksters.

Who Said It? Barack Obama or Herbert Hoover?

July 24, 2011

Two presidents, two budget messages. One is Herbert Hoover in 1932, the other is President Obama yesterday. Guess which president made which statement. Here’s one:

“For years, the government has spent more money than it takes in.  The result is a lot of debt on our nation’s credit card – debt that unless we act will weaken our economy, cause higher interest rates for families, and force us to scale back things like education…

Now, folks in Washington like to blame one another for this problem.  But the truth is, neither party is blameless.  And both parties have a responsibility to do something about it.  Every day, families are figuring out how stretch their paychecks – struggling to cut what they can’t afford so they can pay for what’s really important.  It’s time for Washington to do the same thing.  But for that to happen, it means that Democrats and Republicans have to work together.  It means we need to put aside our differences to do what’s right for the country.  Everyone is going to have to be willing to compromise.  Otherwise, we’ll never get anything done.

That’s why we need a balanced approach to cutting the deficit.  We need an approach that goes after waste in the budget and gets rid of pet projects that cost billions of dollars.  We need an approach that makes some serious cuts to worthy programs – cuts I wouldn’t make under normal circumstances.  And we need an approach that asks everybody to do their part.”

Here’s the other:

“In framing this Budget, I have proceeded on the basis that the estimates for [the fiscal year] should ask for only the minimum amounts which are absolutely essential for the operation of the Government under existing law, after making due allowance for continuing appropriations. The appropriation estimates…reflect a drastic curtailment of the expenses of Federal activities in all directions where a consideration of the public welfare would permit it…. The welfare of the country demands that the financial integrity of the Federal Government be maintained…. [W]e are now in a period where Federal finances will not permit of the assumption of any obligations which will enlarge the expenditures to be met from the ordinary receipts of the Government…. To those individuals or groups who normally would importune the Congress to enact measures in which they are interested, I wish to say that the most patriotic duty which they can perform at this time is to themselves refrain and to discourage others from seeking any increase in the drain upon public finances…”

Which one was from President Hoover and which from President Obama? Does it matter? Is there any significant differentiation between the two? Scarecrow at Firedoglake:

“What we now face is a President who insists we are in a debt crisis that reputable economists say is phony, a product of deficit hysteria, political cynicism, and economic ignorance.. And he insists the debt crisis requires we take economically damaging steps that will harm the public by undermining popular and beneficial programs to preserve our future. He’s told us we must do this to achieve economic prosperity and that we can’t even have a meaningful conversation about the jobless until this is done so the debt problem is not just a distraction; solving it is a prerequisite to economic recovery. Eat your peas.

[...]

So take your pick. The White House is now occupied by a man who agrees with Herbert Hoover’s economics and is clueless about everything we learned about macroeconomics during or since the Great Depression, and he can’t be trusted with the family jewels . . . Or he should be supported because he’s a cynical liar who is willing to misinform the public, negotiate in bad faith, and mouth economic gibberish just to fool people.”

FYI, the first one is Obama, the second, Hoover.

Follow

Get every new post delivered to your Inbox.