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Posts Tagged ‘corruption’

Many corporations pay no taxes, and actually receive tax rebates from the government, and much of this tax avoidance is passed on to rich investors in the form of capital gains, dividends and bond interest. Corporate tax avoidance is only one way the rich get richer at the expense of the rest of us. There are a ton of others ways this occurs. Amazon paid no federal income tax in 2018 and received a $129 million tax refund on taxes it did not pay. That $129 million and the unpaid tax money goes straight into the pockets of billionaire shareholders. Click here for other ways the government is making the rich wealthier at your expense.

Reuters reported last week that the US government is “giving millions of dollars in American taxpayer money via the CARES Act to a number of corporations that have avoided paying U.S. tax.

“In all, Reuters’ analysis of public data found around 110 publicly traded companies have each received $4 million or more in emergency aid from the program.

Of those subject to taxes,” which means profitable, “12 of the companies recently used offshore havens to cut their tax bills, the analysis found. All together, these 12 received more than $104 million in loans from U.S. taxpayers. Seven of them paid no U.S. tax at all for the past year.

The program, which provides low-interest loans that are forgivable if companies use most of the money to pay employees, has been widely criticised for problems ranging from early bottlenecks that prevented small businesses from receiving money, to confusion that led millions of dollars to be handed out to relatively affluent firms.

The Treasury Department declined to comment.

Of the almost 110 recipients of $4 million or more, Reuters found 46 paid no U.S. corporate tax for the last year.”

This is just another example of the massive corruption of both major political parties, the Supreme Court, and the Federal Reserve. The billionaires control them all.

 

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As I mentioned back in March 2020, the economy is in free fall but the billionaires are thriving, and stocks of big private equity firms are soaring dramatically higher. As usual, the billionaires have been the real beneficiaries of the federal government’s massive rescue efforts. 

Ten weeks into the worst crisis in 90 years, the government’s effort to save the economy has been both a spectacular success and a tremendous failure.

Two events showed this better than anything. On Friday, May 8th, 2020, the government reported that 20.5 million people had lost their jobs in April. That is massive damage to the middle class. The rich receive 2/3rds to 100 percent of their income from holding corporate stock. The stock market rallied with the news of the 20.5 million lost jobs. They are likely expecting trillions more from the Federal government and the Federal Reserve. 

The second event happened on Thursday, May 14th. The government reported the middle class lost another 3.8 million jobs, and the stock market rallied again both that day and the following day. 

If you’re looking for the billionaire’s decision on who has won the four government and Federal Reserve bailouts, consider these returns: Shares of Apollo Group, the giant private equity firm, have soared 80 percent from their lows. The stock of Blackstone, another private equity behemoth, has risen 50 percent. The Nasdaq Composite Index has gotten back nearly all of its losses. 

 

ProPublica reports that billionaire clubs such as “Apollo and Blackstone, disproportionately the wealthiest and most influential, have been insured by the world’s most powerful central bank. This largess is boundless and without conditions. “Even if a second wave of outbreaks were to occur,” JPMorgan economists wrote in a celebratory note on May 9th, “the Fed has explicitly indicated that there is no dollar limit and no danger of running out of ammunition.”

“Many aspects of the coronavirus bailout that assist individuals or small businesses, meanwhile, are short-term or contingent. Aid to small businesses comes with conditions on what they can do with the money. The sums allocated by the CARES Act for stimulus and expanded unemployment insurance are vast by historical standards. But the relief they provide didn’t prevent tens of millions from losing their jobs. The assistance runs out in weeks, and the jobless live at the mercy of a divided Congress, which will decide whether that help gets extended and, if so, for how long.”

Meanwhile, the billionaire’s investment clubs can expect additional trillions of dollars from the Federal Reserve and U.S. government. Picture the CEOs of these firms manipulating puppets by a string, then picture Nancy Pelosi and Mitch McConnell and you’ll understand how politics work. 

ProPublica went on, “The Fed’s efforts, universally praised for their boldness and speed, have come in two stages. First, in February and March, the central bank shored up the capital market “liquidity,” which marks how willing investors are to buy and sell. The central bank’s role is to be a “lender of last resort,” working through banks so they can get money to companies and people.

The second stage of the Fed’s extraordinary rescue goes beyond liquidity. It has said it will buy assets it has never bought before. For almost 100 years, the Fed purchased only government bonds. Now it has announced a wide variety of programs to buy various forms of corporate and other debt, either by direct lending, by buying bonds, or buying loans.”

The mere announcement that the Fed would do this had an immediate effect, spurring the boom in corporate borrowing. For example, if Amazon issued a bond costing $1 trillion at face value and it comes due in five years. The Fed simply buys the bond and Amazon gets $1 trillion from the Fed. When the bond comes due in five years,  the Fed will simply print up the money and pay itself. Meanwhile, Amazon and its mostly billionaire and multi-millionaire shareholders divvy up the trillion dollars among themselves. 

ProPublica reported, “The Fed didn’t stop with the most solid, safest corporate stalwarts. In early April, it also announced something unprecedented. The central bank said it would buy junk bonds, debt issued by fragile companies, many of which already have crushing debt loads. Sure enough, junk bonds roared back and their cousins, leveraged loans, revived.

In doing so, the Fed backstopped the riskiest markets in the world. The most dangerous investments in the world, it should go without saying, are not owned by middle- and working-class Americans, to whom every politician pledges fealty. No, they are owned by the most risk-seeking investors in the world, the ones that need the highest returns: private equity firms and hedge funds.

The Fed has to work through the credit markets. The House and Senate have much greater powers, the power of the purse and of legislation. Congress could have passed laws that directed help in different ways. Europe has essentially nationalized payrolls, a much more direct form of aid to people who have lost the ability to work. However, the rotted corruption of the U.S. Federal government has seen it reluctant to use sufficient fiscal measures going back to the 2008 rescue.

What happens if the economy doesn’t come back soon? If the health crisis does not pass quickly, or if the economy does not roar back, the Fed’s actions might prove inadequate. But investors shouldn’t be too worried. They have been taught they can count on the government to rescue them from their bad investment decisions, and so they can make plenty of bad investment decisions. 

The Bailout is Working for the Rich-ProPublica

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The United States Federal Reserve Bank (the Fed) is bailing out the billionaires again. This time the Fed is making certain that losses suffered by hedge funds are reversed. Hedge funds are not banks. They are private billionaire investment clubs which manage investments for clients and which cannot have more than 99 clients. This is why many hedge funds will not take on clients who are unwilling or unable to invest $10 million or more with them.

On March 16, 2020 the Wall Street Journal reported Hedge Funds Hit by Losses in “‘Basis Trade.’ A wide swath of hedge funds was hit by the recent unwinding of the so-called basis trade last week. The basis trade is a long-running investment that seeks to exploit pricing gaps between Treasury securities and futures.” This is a useless activity in which nothing is made, no services and no goods are produced.

The Journal went on, “The Federal Reserve rushed to repair disorderly trading conditions in the Treasury market last Thursday.” Translated, that means the Fed rushed in to make certain these billionaire investor Hedge Funds did not lose money. Not until 2008 did the Fed rush in to save billionaires from their stupid investment losses through banks and other forms of business, like hedge funds.

The Journal went on, “The Fed’s intervention Thursday and over the weekend ended up aiding Citadel and many (hedge) funds deploying the basis trade, said people familiar with the matter.” That means whatever the Fed did made certain rich folks did not lose money. Citadel manages about $30 billion for 99 or less clients.

Guess who works for Citadel. None other than Ben Bernanke, the former Chairman of the Fed, and the person who turned the Fed into a money laundering organization for billionaires back in 2008-09. The New York Times reported back in 2015, “For eight years, Ben S. Bernanke, the former Federal Reserve chairman, was steward of the world’s largest economy. Now he has signed on to advise one of Wall Street’s biggest hedge funds. Mr. Bernanke will become a senior adviser to Citadel, the $25 billion hedge fund founded by the billionaire Kenneth C. Griffin. He will offer his analysis of global economic and financial issues to Citadel’s investment committees. He will also meet with Citadel’s investors around the globe. It is the latest and most prominent move by a Washington insider through the revolving door into the financial industry.”

“In an interview, Mr. Bernanke said he was sensitive to the public’s anxieties about the “revolving door” between Wall Street and Washington and chose to go to Citadel, in part, because it “is not regulated by the Federal Reserve and I won’t be doing lobbying of any sort.”

It is odd that this billionaire investor club and other hedge funds are getting bailed out by the Fed since the Fed does not regulate them. The Fed is simply printing up money by the billions and rescuing them and their clients from their losses. Why is the Federal Reserve ensuring that billionaire investor clubs do not lose money, and how does Bernanke’s employment depend on the Fed’s actions?

Hedge funds, like Citadel, do not make produce anything that you use, such as machines, food and water. They simply gamble with other people’s billions.

Why is it that when rich people make incredibly stupid investment decisions the government and or the Fed is always there to bail them out? The answer is we do not have a democracy. We have plutocracy in which the rich rule via both of their major political parties.

The billionaires reap the benefits of the financial markets when the markets are going up but do not have to share in the losses with the 99 percent when the markets are heading down.

Historically, the Fed was supposed to serve as a central bank by providing short term loans to banks when necessary and only if the needy banks had “good collateral.” Its job is also to keep inflation and unemployment low using interest rates, and buy U.S. debt when nobody else wants to buy them. That changed in 2008 when the bank under the direction of Ben Bernanke gave $26 trillion to twelve banks, four of them foreign. That is when the Fed became a money laundering criminal enterprise for the wealthy. For that report click The CoronaVirus Stimulus Bill: The Rich Get 5 Trillion, We Get Crumbs

 

 

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Income inequality continues to rise, according to a September 2019 study from the United States Census Bureau. However, it is terribly understated. In Oregon, income inequality continues to grow. This reflects what is happening nationally, as well as internationally.

According to the Oregon Center for Public Policy (OCPP), “Oregonians are facing a scary reality: the income gap separating those Oregonians in the middle of the income ladder and those at the very top has never been wider. In 1980, it took 26 typical (median income) Oregonians to equal the average income of the highest-earning taxpayers — the top one-tenth of 1 percent. By 2017, this had grown to 131 typical Oregonians. That is nearly a five-fold increase.”

“As frightening as income inequality is, inequality by wealth is even scarier. Income refers to how much money you earn in a year, while wealth is the sum total of all of your assets minus all of your debts. No good sources for wealth inequality at the state level exist, but national figures show that wealth is even more concentrated at the top than income. In 2018, the wealthiest 10 percent of Americans together held 70 percent of the nation’s wealth, while the bottom half of Americans together owned only 1 percent of the nation’s wealth.” In addition, three Americans (Jeff Bezos, Bill Gates and Warren Buffett) hold more wealth than the bottom 50 percent of Americans, and these figures are from two years ago, meaning these figures are most likely understated as of 2020.

With rising inequality, our faith in the “American Dream” is fading, being replaced instead with an American Nightmare. Research from the Center for American Progress found that as income inequality has increased, it has contributed to Americans becoming more pessimistic and less trusting of one another and our political leaders.

Federal policy, and the policy of both major political parties, is to redistribute income and wealth from the 99.5 percent to the 0.5 percent, the multi-millionaires and billionaires.

Quite naturally, the corporate media have now undertaken a campaign of disinformation, questioning what is obvious to the vast majority of Americans, seeking to instill doubt about the extent of income and wealth inequality.

However, both inequalities are far more significant than have been accepted. For example, three economists have examined U.S. income tax returns from the last several decades. These three have determined the top 1 percent receive 22-23 percent of all income produced in the United States nowadays compared to 8 percent in 1979. The Census Bureau’s study shows the top five percent took 23.2 percent of all income in 2018, compared to 22.3 percent in 2017.

On the other hand, there is unreported income, income hidden in Panamanian and Swiss banks, as well as elsewhere. The reality is that the top 1 percent steal closer to 38 percent of all income made in the USA. No doubt their accumulation of wealth mirrors that since you need income to generate wealth.

The results of these growing inequalities have not been kind to the 99 percent. Suicide rates, alcoholism, rates of depression and other maladies have all increased for the 99 percent during this era of inequality and political corruption. The corporate news media has been supportive of the growing inequalities by sowing the seeds of discord, pitting a variety of sectors of the 99 percent against each other in order to divert our eyes from income and wealth inequality. People trust each other less than in decades past because of the media.

In the meantime, the corporate news media, the billionaires who control both major political parties, have waged war against the only two presidential candidates of the people, while supporting the candidates of the billionaires, such as Joe Biden and Pete Buttigieg. Buttigieg’s recent attacks on Sanders and Warren suggest the billionaires who control him have unleashed him in order to stop veteran billionaire brown-noser Joe Biden from having to do so and alienating Warren and Sanders voters in the process, which might not be a good thing to do with the general election coming up.

Do not fall for this con if you are tired of working more and earning less so that billionaires can have more of what you earned.

US Census Bureau on Income Inequality

See https://www.ocpp.org/2019/10/30/scary-facts-economic-inequality/

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I paid my wealth tax of almost $3000 earlier this month. Doing so left me broke for a couple of weeks. This wealth tax is called a property tax, but the land you own is part of your wealth and my property tax could just as easily be called a wealth tax since it taxes part of my wealth.

Until recently, progressive taxation had been part of the fabric of American democracy for over a century. The idea the rich can pay more is quite biblical, just ask Jesus. Somebody who has $100 billion in wealth is going to pay $3 billion or so in tax, and some of them are acting as though the taxman is going to swing an ax into their billion-dollar genitals if the tax legislation is enacted.
These billionaires have rigged the economy in their favor by using their billions to corrupt both major political parties and the federal government in the process. They have used corruption to redistribute trillions of dollars from working folks to themselves in the process. This is why three people (Bill Gates, Warren Buffett and Jeff Bezos) own more wealth than the bottom half of the U.S. population. This is why the 1 percent have gained $21 trillion since 1989 and the bottom half of U.S. citizens have lost $900 billion (See  the-corrupting-billionaires-have-gotten-richer-by-21-trillion-since-1989)

Exporting millions of jobs via trade agreements alone sent trillions of dollars from working people to the billionaires over the last forty years. The difference between the old higher US pay and the new lower third world pay goes straight into the pockets of the billionaires via higher corporate profits, rising dividends, and surging share prices.

Corruption and class warfare against the 99 percent are running wild in all three branches of government, and that tiny progressive tax is a step in the right direction that might help put an end to it and restore U.S. democracy in the process.

I do not agree with everything Elizabeth Warren and Bernie Sanders propose. However, I agree with former President Barack Obama when he said: “Income inequality is the defining challenge of our time.” He said it one time. Then somebody likely took him to the side, told him never to say it again, and he never did. Now he makes $400,000 a speech, which is $150,000 more than Bill and Hillary Clinton make.

We can put an end to this type of revolving-door corruption and other forms of political corruption. The wealth tax is just a tiny step in the right direction.

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The gap between the richest and the poorest U.S. households is now the largest it’s been in the past 50 years according to new data from the U.S. Census Bureau.

U.S. income inequality was “significantly higher” in 2018 than in 2017, the Census Bureau says in its latest American Community Survey report. Since the rich in the United States possess earnings and investments abroad, it is likely the income and wealth gaps are much larger than the Census Bureau measures.

The gap grew despite a surging national economy that has seen low unemployment and more than 10 years of consecutive GDP growth.

The most troubling thing about the new report, says William M. Rodgers III, a professor of public policy and chief economist at the Heldrich Center at Rutgers University, is that it “clearly illustrates the inability of the current economic expansion, the longest on record, to lessen inequality.”

That is because the rich are using their political power to create income inequality in their favor.

When asked why the rising economic tide has raised some boats more than others, Rodgers lists several factors, including the decline of organized labor and competition for jobs from abroad. He also cites tax policies that favor businesses and higher-income families.

To understand even a little of how labor unions have been weakened you only need to look at a few of the legal decisions made by the corrupt corporate wing of the United States Supreme Court when it sided with the billionaires and their corporations in the Janus vs. AFSCME case. The corrupt wing of the court, lead by Cheif Justice John Roberts, decided to put an end to decades of legal precedent in which labor union members who did not want to pay union dues were required to pay a lesser fee to their unions to cover the cost of negotiating new contracts with management. Now labor unions are the only organizations in the United States that must provide free services to members who do not wish to pay. The corrupt wing of the court’s intention in making this decision was to weaken the power of labor unions, and working people in general, vis-a-vis the billionaires and their corporations.

Everybody knew the corrupt corporate wing of the court was going to vote in favor of Janus and end four decades of legal precedent in the process. Everybody knew the billionaires had the corporate wing in their hip pocket.

Income inequality is measured through the Gini index, which measures how far apart incomes are from each other. To do that, the index assigns a hypothetical score of 0.0 to a population in which incomes are distributed perfectly evenly and a score of 1.0 to a population where only one household gets all of the income.

The United States has been one of the most unequal of nations in the world using the Gini coefficient. The U.S. is ranked 103 in the world by the World Bank for income inequality, behind every major industrialized country, and up there with such nations as Haiti and Uganda. The U.S. was ranked at 73 ten years ago, so inequality continues to worsen here.

The billionaires’ control the corrupt corporate wing of the United States Supreme Court, the entire Republican Party, and most Democratic politicians at the national level. Therefore, you can expect income and wealth inequality will continue to get worse in the United States.

In other words, vote for Bernie Sanders or Elizabeth Warren for president.

US Census Bureau Report

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Lewis Powell was a well-to-do, but relatively obscure, attorney in 1971. He was a corporate lawyer who worked with the Tobacco Institute and various tobacco corporations while they marketed and sold their cancer-causing products to unsuspecting customers. Management knew tobacco use caused cancer and denied it for decades.

In 1971, Powell wrote what has become known as the Lewis Powell memo, which advocated a corporate “guerrilla war” of misinformation and corporate take over of our schools, courts and other institutions. That war has been successfully waged. A few months after Powell wrote the memo and presented it to the United States Chamber of Commerce, then-President Richard Nixon successfully nominated Powell to the United States Supreme Court. You already know where Powell’s sympathies lay. He was the rich man’s class warrior. So fast forward to 1978.

That year “First National Bank of Boston vs. Bellotti” came before the Supreme Court. The state of Massachusetts had a law banning corporations from spending money in elections. Some corporations sued the state. Although the United States Constitution only provides people with individual rights and does not mention corporations at all, Powell and his other corrupt corporate sympathizers on the court decided to hell with the United States Constitution and nearly two hundred years of legal precedent and argued business corporations had a legal right to free speech under the U.S. Constitution. Powell just made up this corporate free speech right out of thin air, or more appropriately, it was a lie disguised as make-believe, or perhaps you could call it complete fiction.

Needless to say, Powell and his fellow non-justices were waging class warfare on behalf of their rich friends when they made this decision. The decision was based solely off the Powell Memo and the needs of the rich to control every facet of the lives of the 99 percent so that corporations could maximize the profits, share prices and dividends of the well-to-do.

Corporations are simply ideas, given a legal structure to operate by state law, with limited purposes. They are not people. But they do provide the rich with considerably more legal rights than the founding fathers could ever have imagined or wanted since they are vehicles for organizing rich people’s money into a single powerful entity and using that money to rig the markets for goods, services, finances, politics, and court justices. This was not lost on Lewis Powell and his fellow corporate Supreme Court non-justices. Their decision was based totally on waging war against the 99 percent and on behalf of the wealthy. You only need to read the Lewis Powell memo to understand the truth of this.

This was one of a series of Supreme Court decisions which have replaced the United States democracy with an oligarchy, and with both major political parties controlled by big money. Lewis Powell completely did what he set out to do, which was to subvert democracy and the U.S. Constitution to the will of the rich. The current representatives of the billionaires on the court (John Roberts, Samuel Alito, Brett Kavanaugh, Clarence Thomas, and Neil Gorsuch) continue their mission of subverting and perverting the US Constitution on behalf of the billionaires and the class war they wage against democracy and the rest of us.

First National Bank of Boston v. Bellotti-Reclaim Democracy

The Lewis Powell Memo

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