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Posts Tagged ‘Kurt Schrader’

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Oregon is ranked dead last among the fifty states in corporate taxes. That’s why Measure 97 is on the ballot come election day in November. The top federal corporate rate is 35 percent, yet many corporations making billions of dollars a year each pay little or no taxes. In many cases, corporations receive federal tax rebates by the billions on taxes they never paid. That means the effective tax rate for many major corporations is negative. This explains another reality; US corporations are the least taxed of any major industrialized nation, regardless of the myths and lies thrown out by the Fox Propaganda and other networks.

Corporations like Nike currently own such Oregon politicians as Wall Street Senator Ron Wyden, Wall Street congressional representatives Earl Blumenauer, Greg Walden, Suzanne Bonamici and Kurt Schrader. These representatives are always voting to redistribute income from the 99 to the 1 percent on behalf of big corporations. Corporations should be made to pay higher state taxes in Oregon in order to pay the people of Oregon for the use of their politicians.

When you total up all the taxes businesses really pay, and compare that amount to the total corporate profits generated in the state, liberal Oregon is dead last. That’s the best way to compare effective tax rates. Other rankings, like those published by the Tax Foundation, ignore the actual amount of taxes companies pay and focus instead on incidental factors.

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Most state rankings have a fair degree of variability, with states jostling around a bit in the rankings year to year. That Oregon has remained at the bottom of these rankings for the past three years is a strong sign of just how little corporations pay in taxes in the state, compared to the profits they make in the state.

While Oregon lets big corporations skate by and pay low minimum taxes, the state’s schools and services remain critically underfunded. If Oregon’s corporate tax collections were in line with the rest of the country, Oregon would have the revenue it needs to fund strong schools and services that will grow our economy and help hard-working Oregonians get ahead, protect their health, and retire with dignity.

Measure 97 is the solution to Oregon’s low corporate taxes. By focusing a tax increase only on large C corporations, those doing more than $25 million in Oregon sales, Measure 97 will raise significant revenues for the investments that grow Oregon’s economy, all while protecting smaller businesses that are already paying their fair share.

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Four Graphs that Will Make You Boiling Mad About the Trans Pacific Partnership–Or Why President Trump, former President Obama, along with executives from Nike, Microsoft, Apple and other US corporations Steadfastly Support China’s Currency Manipulations

income inequality

Originally published May 19, 2015 by John Hively

When China manipulates its currency vis-a-vis the US dollar it increases the profits of US job exporters that produce stuff in China and exports that cheap stuff to the USA.

That’s most likely why former President Obama said he will veto any congressional legislation that seeks to stop the Chinese government from manipulating its currency.

Why do President Obama and executives of US based multinational corporations, like Nike, want the Chinese government to manipulate its currency? And what does this have to do with the Trans Pacific Partnership and Fast Track Authority?

The answer to one of these questions is simple: the TPP will force China to manipulate its currency even more than is currently the case.

Take a look at the graph below. On the left side is the Yuan, which is the Chinese currency. On the bottom line is the dollar. Now look at the two intersecting lines, which is the supply and demand for dollars. In this example, 600 yuan can purchase $100 in the currency markets, which is roughly what the two currencies currently exchange for.

So when Nike, Microsoft or Apple Inc. manufacture a product in China that costs the consumers, say, 600 yuan in China, given the exchange rate, the same product will cost $100 in the United States, after, of course, it is exported from China to the USA. Assume these US corporations have a 25% profit margin. That means these companies get 150 Y profits in China per product, and $25 profit when they export their products to the United States.

The same is true for companies that manufacture products in the USA, and then export them to China. American manufacturing companies earn $25 per $100 of product sold in the USA, and 150 Y when their products are exported from the USA to China.

The government of China has been accused of manipulating the value of its currency. So what happens when it does this? It purchases dollars. This shifts the D1 line to the left, because there are less dollars on the market, which is shown in the graph below as line D2. This makes the Yuan less expensive in terms of dollars.

Why would President Obama encourage the Chinese government to manipulate its currency by threatening to veto US legislation aimed at stopping it? Why would Wall Street Senator Ron Wyden only pay lip service to the evil of Chinese currency manipulation, while apparently supporting it? Why are the higher up folks at Nike, Microsoft, Apple and every US corporation that is producing goods in China for export to the United States against any legislation that seeks to address Chinese currency manipulation? There is a very good reason they’re all for this.

Look at the example in the next graph below. When the Chinese government manipulates it’s currency by purchasing dollars, 800 Y will now purchase $75. Do the math; 600 Y will purchase now $56. What does that mean?

It means that when Nike manufactures a pair of shoes in China which costs 600 Y there, in the US it should cost $56 rather than $100, thanks to China’s currency manipulation, but that rarely happens. The US corporate propaganda machine will lie to you and tell you it makes Chinese imports less expensive. However, the truth is that China’s  manipulation increases the profits of Nike.

Nike still gets 25%, or 150 Y, in profits when its shoes are sold in China. When it exports the same shoes to the USA from China, Nike still gets 25% profit on $56, which is $14 dollars. However, Nike still sells it’s shoes for $100 in the United States, which means another $44 in earnings per pair, in addition to the $14.

That means Nike’s profit margin on a $100 pair of shoes goes from 25% at the old exchange rate to 58% at the new exchange rate. This sends its earnings and stock prices higher. The same thing occurs with Microsoft, Dell, Hewlett-Packard, Apple, and every US corporation manufacturing in China, that are exporting their products to the United States.

So who pays the price for this?

You do; if you work for a living in the United States, or if you’re a  small or medium size business owner. Here’s how. Suppose you are a US manufacturer producing shoes in Oregon that sell in the USA for $100. You ship them to China at 600 Y for $100, and earn 150 Y, or $25, in profits. Now suppose the Chinese government, with the encouragement of your corrupt government and many US business leaders, manipulates its currency by purchasing tens of billions upon tens of billions of dollars. The supply of dollars on the international currency markets shrinks, making dollars more expensive, and as noted above, the D1 line shifts to D2, which represents the new supply of money. BTW, the space between D1 and D2 represents the amount of dollars the Chinese purchased.

Those $100 US made shoes now costs 1000 Y in China. Okay, my graph isn’t too high tech, but the actual figure is 1066 Y, if you do the math, but let’s stick with the 1000 Y, for simplicity sake. There’s still a 25% profit margin per pair of shoes, but at the 1000 Y price, there’s not a whole lot of buyers in China. The US manufacturer could lower the price of the shoes to 750 Y, but he or she isn’t making a penny at that price, and they’re still overpriced for the Chinese market. Say goodbye to the Chinese market for all US products at the new exchange rate.

US exports to China are going to shrink quite rapidly under this scenario. This means fewer American jobs, and less wages for everyone. It means less tax dollars going to schools and other government services, it means no retirement pay for a larger percentage of the 99 percent. Rich folks don’t need the money they’re going to steal from us, except to keep the latest stock market bubble surging, at least until it pops. However, greater profits mean the bubble can keep expanding for a while longer.

So how can US corporate leaders and their corrupt politicians encourage the Chinese government to manipulate its currency even more than it already has?

The scams that have been created to do this are called the Trans Pacific Partnership and Fast Track Authority. So what do these two things have to do with Chinese currency manipulation? More importantly, why would the Chinese

government want to engage in currency manipulation?

The answer in one word; Vietnam.

Vietnam is one of the nation’s involved in negotiating the Trans Pacific Partnership. As you can see from the graph below, China’s annual minimum wage is nearly twice that of Vietnam. The wages in China at those Nike and Microsoft and Apple and Hewlett-Packard factories and their suppliers and contractors and subcontractors have been going up rapidly over the past fifteen years. Those labor costs have been able to go up because the Chinese government has increased the profit margins of its US manufacturers by manipulating its currency. But there’s another reason why China needs to manipulate its currency vis-a-vis the dollar.

As you can see from the map below, there are nearly 313,000 Nike workers toiling in Vietnam, and nearly 250,00 in China. Vietnam clearly has lower labor costs than those in China. The Chinese government, however, can offset its labor cost disadvantage by manipulating its currency. So it can keep those jobs in China, and still allow the wages of Chinese workers to expand. But that might not be the case should the Trans Pacific Partnership (TPP) become a reality.

Tariff is another word for tax. When a US company like Nike manufactures its products in Vietnam, and then exports them to the US, a tariff is charged against the products of between 10 and 15 percent. So another $10 to $15 dollars is added to the cost of a $100 pair of Nike’s Vietnamese made shoes exported to the USA. That means less profits, lower dividends, and lower share prices than would otherwise be the case without tariffs. The US tariffs on US corporate goods manufactured in Vietnamese factories helps to offset some of the Vietnamese labor cost advantages vis-a-vis the cost of Chinese labor.

Under the TPP, should it become law, those tariffs will likely be gone, giving Vietnam a much larger labor cost advantage over Chinese workers.

In which case, the Chinese government will have two options; let millions of Nike and Dell and Apple and Microsoft jobs head south to Vietnam, along with the jobs of contractors and subcontractors, or manipulate its currency even more, which means all of those US corporations manufacturing stuff in China for export to the US will see unprecedented and explosive growth of their profits; and all of this will occur at the expense of small and medium sized US companies that make stuff in the United States and export them to China.

That means several unpleasant things will occur to the US economy: US unemployment will grow with the TPP, as exports to China diminish, inequality in wealth and income will continue to increase during the reign of Obama and Wyden, the stock market bubble will continue to expand, the coming stock market crash will be even worse than imaginable, US businesses will need to export more US jobs to China, and all of these bad things will trickle down to more crowded classrooms, less government services, reduced wages, fewer jobs, more poverty, and much more negative stuff for the 99 percent. However, the super rich will become even more super rich. And Chinese currency manipulation will not be the only thing in the TPP contributing to all of these things. See https://johnhively.wordpress.com/2015/04/21/how-the-trans-pacific-partnership-will-destroy-american-jobs-by-destroying-us-exports/

The political game in the US over the TPP and Fast Track Authority currently being played out is a complete farce.

Start with Fast Track Authority, which President Obama, Nike, Microsoft, Ron Wyden, Orrin Hatch, Mitch McConnell and just about every major US corporate CEO and investor desperately want Obama to have. Fast track will limit congressional debate on trade deals, it will scuttle any possible congressional amendments, and eliminate the use of the filibuster in the senate to stop the TPP. Fast track needs to pass through both houses of congress.

As a condition for bringing Fast Track Authority to a debate on the floor of the US senate, on May 13, a number of Democrats who traditionally vote to redistribute income from the 99 to the 1 percent (Ron Wyden, Harry Reid, Patty Murray, Heidi Heitkamp, Bill Nelson, Tim Kaine, Claire McCaskell, and Ben Cardin) agreed to first bring a vote for a bill by which the US will crackdown somehow on China for manipulating currency.

These folks know such a bill may not pass the senate, much less the house of representatives. If it did pass, then it will sit on Obama’s desk until Fast Track Authority passes both chambers of congress. Then he will veto the currency manipulation bill. There’s a ton of income to be redistributed from the 99 to the 1 percent resting on his shoulders.

Then the above senators will pretend to the folks back home that they did all that they could, when in fact, they did nothing when they could have done something to protect the folks back home from the TPP.

Every US senator and every US house representative knows this is the game, and many are willing to play this deadly game so as to justify their support for giving President Obama Fast Track Authority, even though the TPP will likely rip out the guts of the middle class, as well as the US economy.

If the above named Democrats were at all serious about Chinese currency manipulation, then they would agree to wait until Wall Street President Barack Obama signed the bill into law before opening debate on fast track authority.  That won’t happen.

Fast Track Authority is the only way the president can ram the TPP through congress. It’s an income and political power redistribution agreement falsely marketed as a trade agreement. Most of those in the know say the TPP is dead if the president doesn’t receive fast track authority. So fast track is the key.

Save the United States. Fight against this madness called Fast Track Authority. The TPP will only create greater trade deficits in the future than is currently the case. As US Congressman Alan Grayson famously and recently said, “You will find that the largest fourteen trade deficits in the history of the world have been the US trade deficits in each of the last fourteen years….What sane person can look at these trade deficits and conclude we need more free trade?”

The political fight over the Trans Pacific Partnership, Fast Track Authority, and Chinese currency manipulation isn’t about sanity; it’s about greed and government corruption. It’s about raising the already soaring share prices, dividends and earnings of US corporations that have exported millions of US jobs to China and other third world nations, and doing so at the expense of everybody else. It’s about redistributing your standard of living to a small minority of overly rich people who have corrupted and rigged your government in favor of themselves. It’s about redistributing your income and wealth to the 1 percent so as to keep the current stock market bubble expanding. It’s about redistributing the American dream to the 1 percent. It’s about taking the opportunities that once existed for the majority of American citizens and wiping them out by giving 100 percent of all income growth to the 1 percent, and leaving more and more people in poverty.

Currently, the 1 percent steal 37 percent of all income produced in the United States compared to 8 percent in 1980, back when opportunities for financial advancement existed for most Americans. Now the big boys, and the politicians they’ve bought off in one way or the other, want to eliminate your opportunities, as well as those of your children.

Call your senators. Call your congressmen and congresswomen. Stop Fast Track in the senate. Stop the corruption. Stop the insanity.

Over the past fourteen years, since China was granted most favored nation trade status, Nike’s stock price has risen over a thousand percent, from $10 a share to over a $100. Chinese currency manipulation has helped fuel this bubble. So if you purchased a million shares of Nike in the year 2000, today the value of those shares would be over $10 million. With the TPP and Chinese currency manipulation, the value of Nike’s stock will continue to increase, but only at the expense of everybody else. Much of the US stock market bubble is fueled by the same force, and that goes for the stock prices of Apple, Microsoft, Dell, Adidas, Hewlett-Packard and more. And if the TPP goes through, more US manufacturers will need to shift production to China.

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About 150 protestors rallied yesterday against the looming Trans-Pacific Partnership, the largest income and political power redistribution scam in US history, which is falsely called an international trade agreement by government plutocrats and corporate hacks. The protestors voiced their disapproval of Fast Track Legislation which might be introduced to congress as early as next week.

Representatives from diverse grass roots organizations converged on the meeting places, which included the Oregon offices of Wall Street Senator Ron Wyden, and Wall Street US House Representatives Earl Blumenauer, Suzanne Bonamici and Kurt Schrader. Labor organizations, religious groups (First Unitarian Church) and environmental groups (Sierra Club), as well as human rights groups, such as Black Lives Matter, sent representatives.

The fast track negotiating authority for trade agreements is the authority of the President of the United States to negotiate international agreements that Congress can approve or disapprove but cannot amend or filibuster. Debate is also limited. Fast track negotiating authority is a temporary and controversial power granted to the President by Congress. The authority was in effect from 1975 to 1994, pursuant to the Trade Act of 1974, and from 2002 to 2007 by the Trade Act of 2002. Although it expired for new agreements on July 1, 2007, it continued to apply to agreements already under negotiation until they were eventually passed into law in 2011. In 2012, the Obama administration began seeking renewal of the authority.

As for the Trans-Pacific Partnership (TPP), we know from leaked documents the TPP is a massive income redistribution scam. The TPP has almost nothing to do with international trade. We know that;

* TPP will give incentives for US corporations to export millions of US jobs. The Federal Reserve estimates that 28 million US jobs were exported between 1990 and 2010.

* TPP will increase US income and wealth inequality. The 1 percent have already taken 95 percent of all income growth in the United States since 2009. Currently, the 1 percent are stealing 36+ percent of all income produced in the USA, compared to only 8 percent in 1980. International trade scams and other federal legislation have brought inequality about. For example, when the above jobs were exported, the difference between the old higher US wages and the new lower wages will go straight into the pockets of the 1 percent via higher corporate profits, rising dividends and surging share prices.

* Those lost jobs will no longer be paying the taxes for our infrastructure, K-12 education, higher education (tuition and fees will go up), social safety nets, schools, fire, police, public transportation, social security taxes, but those lost jobs will push the stock markets higher.

* TPP will effectively eliminate your voting rights on local and state issues since it will unconstitutionally grant investors of the 0.01 percent special privileges to challenge labeling and health and safety local laws and regulations of the 99 percent, which most people call voter suppression, but in this case it should be called voter elimination,

* TPP will offer new monopolies for Big Pharma to raise medicine prices they charge you (which redistributes income from the 99 to the 1 percent),

* TPP will limit food safety standards (which redistributes and transforms your health into the profits of the 1 percent),

* TPP will block financial regulations aimed at preventing the next financial crisis (which will make it easier for Wall Street to redistribute your income and wealth to the 1 percent). Bank of America Stands to Gain From This. The bank will be able to steal more money from you with less regulations, which will increase its profits, dividends and share prices, not to mention CEO bonuses. Bank of America is also spending millions of dollars on lobbyists in support of Fast Track and TPP.

* TPP will destroy millions of jobs in Latin America (230,000 in the textile industry of El Salvador alone) forcing millions of undocumented immigrants into the United States.

Yes, believe it or not, Wall Street Senator Ron Wyden supports this massive income and political power redistribution scam, as well as Fast Track, and corporate plutocrats such as Oregon Congresswoman Suzanne Bonamici, and Congressmen Earl Blumenauer and Kurt Schrader keep saying they haven’t made up their minds. What a corporate plutocrat shocker!

* The result of the above will be to depress wages in both North and South America, all to the benefit of the 1 percent, and all at the expense of the 99 percent.

* And we can’t forget that TPP will increase the already massive US trade deficit with other nations, which is supposed to be a bad thing. The exported jobs will be producing goods overseas rather than here, and then US corporations will export their products from China and Vietnam into the United States, exacerbating the current trade deficit.

In other words, the TPP has almost nothing to do with trade. It’s about taking away your money, your voting rights, and giving them to the 1 percent.

TPP, in other words, is designed to put more of your money in the hands of the 1 percent, and this money will be used to corrupt government even more while impoverishing you, and redistributing your future and the future of your children to the 1 percent.

You can rest assured, if Fast Track passes, and the TPP passes with it, profits, as well as the tax rebates Bank of America receives, will become greater, and at your expense.

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Congressman Peter DeFazio of Oregon has been fighting on behalf of working Americans for two decades. Now he’s battling the Obama regimes attempt to destroy the middle class via a knockout blow by using the highly and most secretive, corporate and Wall Street driven, biggest corporate trade treaty in US history, known as the Trans Pacific Partnership (TPP). The result of this treaty will be to squash the US Constitution, destroy US environmental and health standards, rape third world people of most of their natural resources on behalf of US corporations, raise prices everywhere, and pretty much redistribute more income and political power from the 99 to the 1 percent, once again. That’s just what Nike, Wall Street and others have ordered.

Several members of congress have signed on to this battle plan of the 1 percent and Wall Street in their war against the middle class. Wall Street Senator Ron Wyden, for example, has voiced his concerns about this treaty, but he always does this, and then he always votes to wage a scorched earth policy against the middle class via corporate trade treaties, so he’ll vote for the TPP. The same holds true for Congressman’s Earl Blumenauer, Kurt Schrader, Greg Walden and others. Not so Oregon Congressman Peter DeFazio. Below is a letter about where he stands, like a real man, unlike Wyden, who constantly lies in town hall meetings about his position on corporate trade treaties.

“I haven’t made up my mind yet,” Wyden always says, and then he always votes for them. What a sniveling liar.

You always know where you stand with Congressman DeFazio. Anyway, below is DeFazio’s letter.

 

Dear Sir,

“Thank you for contacting me about your opposition to the Transpacific Partnership (TPP) Free Trade Agreement (FTA). We are in complete agreement on this issue.

You will be pleased to know that I have repeatedly spoken out against the TPP and expressed my strong concerns regarding the secret negotiations of this trade agreement. I signed onto a letter demanding transparency in the TPP negotiation process. When the U.S. hosted a recent round of TPP negotiations just outside Washington D.C., I wrote to the U.S. Trade Representative asking to observe the negotiations. I was denied access. It is appalling that a Member of Congress that is elected to represent the people of the United States of America, is not allowed access to these trade negotiations but over 600 corporate CEO’s are.

The TPP is the largest FTA to ever be negotiated and would amount to the North American Free Trade Agreement (NAFTA) for the Pacific Rim. It is being touted as a “21st Century Trade Agreement” and the first ever “living agreement”, which would mean any country could join after the agreement has been signed and ratified. In fact, the ultimate goal of this agreement is to get China to join. An FTA with China would spell the end of our domestic manufacturing sector.

Further, the TPP seeks to impose new binding regulations on the U.S. and other countries that would undermine domestic laws and policies designed to protect the public. Corporate representatives of the copyright and pharmaceutical industries are inserting language in the intellectual property chapter of TPP that would censor the internet and undermine drug pricing programs that grant low income people, veterans, and seniors access to affordable medicines. Additionally, like all other U.S. FTA’s, TPP contains investment protections that allow foreign corporations to attack U.S. laws and policies by suing the U.S. government in international tribunals.

Unfortunately the Obama administration has continued the same failed trade policies that originated during the Regan administration. I have voted against every free trade agreement before Congress. I was a leader in the fight against NAFTA, the creation of the World Trade Organization (WTO), and privileged trading status for China. While supporters of these agreements promised they would benefit workers, farmers, businesses, and the U.S. economy, the reality has been very different. These “free” trade agreements have decimated the U.S. manufacturing capacity. The U.S. has lost over 5 million family wage manufacturing jobs including 52,000 here in Oregon, and closed over 54,000 factories in the past ten years, according to the Bureau of Labor Statistics. U.S. trade policy has made it easier for multinational corporations to chase the cheapest wages and lax environmental standards around the world at the expense of U.S. workers.

You can rest assured that I will continue to fight against free trade agreements like the TPP and work for a trade policy that protects the economic interests of small businesses and our manufacturing sector, and creates jobs for American workers. For far too long, multinational corporations have dominated the conversation on trade policy to suit their bottom line, which are increased corporate profits not investment in America and its people.

Thanks for contacting me and please continue to stay in touch.

Sincerely,
Rep. Peter DeFazio
Fourth District, OREGON”

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