Category Archives: The Economy

March 28, 2011 · 9:11 pm

The Real Reason Gas Prices Are Soaring – DailyFinance

Like I keep saying, our Financial system is totally screwed up…

It has become like an Atlantic City Casino with Las Vegas morals…

Dan Dicker, who has spent nearly three decades in the oil market, has a profoundly disturbing explanation of why the price of oil, and the gasoline that comes from the crude product, has risen so dramatically in recent months. It turns out, Dicker says, that the price has nothing to do with supply and demand for oil. It’s the financial market for oil, filled with both professional speculators and amateur investors betting on poorly understood oil exchange-traded funds, who have ratcheted up the price of gas to such sky high levels.

“There is no supply issue going on here – what you have is the perception of the possibility of a supply issue,” Dicker says. “A whole bunch of people are pouring money into an oil market trying to take advantage of what they perceive to be a real risk in supply. It’s a marketplace that I argue should not be allowed to be wagered on like a stock or bond.”

Dicker notes that Libya produces only 1.3 million barrels of oil a day, just a tiny fraction of the world oil market. Even if Libyan crude were lost to the world market in the current turmoil, and there is no sign that it is, Saudi Arabia has 5 million barrels a day to use in case of an emergency.

Dicker, who has just published a book called Oil’s Endless Bid: Taming The Price of Oil To Secure Our Economy, makes a strong case that if the government stepped in and regulated oil trading so that only investors with a genuine interest in the physical product, such as airlines and heating oil companies, could buy and sell oil futures, then the price of oil would fall by 50% overnight and our economy would be much better off.

via The Real Reason Gas Prices Are Soaring – DailyFinance.

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March 28, 2011 · 8:14 pm

Two Thirds of US Corporations Pay No Federal Income Taxes

US Uncut held a National Day of Protest over the push to cut vital government programs while major, profitable Corporation pay No Taxes…

Sorry, but this just isn’t right….

From The Nation:

“I’m tired of people calling for shared sacrifice and it’s all coming from the workers and nothing’s coming from the top,” says protester Dave Sonenberg. “I’m sick of companies like Bank of America not paying their taxes.”

Bank of America hasn’t paid a nickel in federal income taxes for the past two years, and in fact raked in an additional $1 billion in tax “benefits.” The bank is enjoying these profits after accepting $45 billion from taxpayers, which the company then got to count as a deduction when they paid back the money.

Big corporations get to play by a whole different set of rules, says tax expert Bob Willens of New York-based Robert Willens LLC:

It’s also not unusual for a company to pay no federal taxes, while still paying state and local taxes, Willens said. Items that can be deducted for federal purposes aren’t always deductible for state and local returns, he said. State taxes can also be based on the amount of capital deployed in a state, not pre-tax income.

This is why two-thirds of corporations in America pay no federal income taxes. If they were forced to, we’re told, the whole country would suffer. Jobs would be lost, salaries slashed. Thank heavens we’ve avoided such calamity by allowing corporations to shape legislation in their favor.

In 2010, Bank of America handed out $2.2 million in campaign contributions to Congressional representatives and PACs (36 percent went to Democrats, 64 percent to Republicans). By throwing around that much cash, huge companies like BoA have a big say when it comes to crafting legislation that permits them to escape paying taxes, according to US Uncut organizer J.A. Myerson.

“The reason it’s not illegal is because they have bought and paid for the people who make the laws. The laws are made to accommodate this sort of nefariousness,” he says, adding that the process is wrong, and ordinarily that would mean approaching Congress to ask them to fix it, but there’s no point in attempting that when the system is so heavily rigged in favor of the rich and well connected. “So what US Uncut is doing right now is not Capitol Hill lobbying because that doesn’t seem like it’s a fruitful avenue. It’s trying to directly undermine the ability of Bank of America to earn record windfall profits by depleting the public trust that they are an upstanding member of society.”

via When Illegal Doesn’t Matter: US Uncut’s National Day Of Protest | The Nation.

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March 26, 2011 · 9:49 am

GE, World’s Largest Corporation, Paid Zero Dollars in U.S. Taxes Last Year | AlterNet

This is really nothing short of disgusting….

You know how we’ve been covering the efforts of U.S. Uncut, the growing campaign to stop corporate tax dodgers from exploiting overseas tax havens? Well here’s an excellent example of why such efforts are desperately needed, from the front page of the New York Times:

General Electric, the nation’s largest corporation, had a very good year in 2010.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

How can that be, you ask?

The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

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

If that doesn’t make your blood boil, I don’t know what would.

Corporations argue that the U.S.’s top corporate tax rate of 35% is prohibitively high and puts them at a disadvantage against foreign companies. But even if you buy that argument (and I do not, because I think corporations should be responsible for paying taxes in countries in which they reap huge profits), it’s hard to swallow when the corporation in question — and not just any corporation, but the biggest in the world — is claiming a tax benefit. Not only did GE not pay any taxes in the U.S. last year, it effectively got money back from the U.S. government.

via GE, World’s Largest Corporation, Paid Zero Dollars in U.S. Taxes Last Year | AlterNet.

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March 24, 2011 · 8:02 pm

Congress Making Themselves and Friends Richer, While Everyone Else Struggles to Make Ends Meet | | AlterNet

This is a glaring truth that too many people still are ignoring…

The sad thing is, campaigns are so expensive now you almost have to be a millionaire to run for office.

And this crowd currently in DC is not about to change campaign finance laws to correct the situation…

While the great majority of workaday Americans are struggling to make it on about $30,000 a year — and having, at best, puny pensions and iffy health coverage — these incoming lawmakers tend to be sitting pretty on hundreds of thousands of dollars each in accumulated wealth. Their financial reports show them holding extensive personal investments in such outfits as Wall Street banks, oil giants and drug makers.

Their wealth and financial ties might help explain the rush by the new Republican House majority to coddle these very same corporate powers. From gutting EPA’s anti-pollution restrictions on Big Oil to undoing the restraints on Wall Street greed, they’re pushing for a return to the same laissez-fairyland ideology of the past 20 years that got our country in massive messes.

At the same time, they’re out to kill a green-jobs program, bust unions, cut Social Security, defund Head Start and generally stomp on the fingers of working families trying to hold onto the middle class rungs of the economic ladder.

The change in Congress is taking America backward, not forward, for the new majority literally is the voice of millionaires. That’s not progress.

via Congress Making Themselves and Friends Richer, While Everyone Else Struggles to Make Ends Meet | | AlterNet.

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March 24, 2011 · 8:02 am

Warren Buffet: There is Class Warfare and the Rich Are Winning – MarketWatch

Per my previous column about the Rich being different…

Buffet is Wealthy, one of the good guys, not one of the Evil Rich…

Yes, “there’s class warfare, all right,” warns Warren Buffett. “But it’s my class, the rich class, that’s making war, and we’re winning.” Yes, the rich are making war against us. And yes, they are winning. Why? Because so many are fighting this new American Civil War between the rich and the rest.

Not just the 16 new GOP governors in Wisconsin, Michigan, Ohio, Florida, and across America fighting for new powers. Others include: Chamber of Commerce billionaires, Koch brothers, Forbes 400, Karl Rove’s American Crossroads, Grover Norquist’s Americans for Tax Reform — which now has 97% of House Republicans and 85% of the GOP Senators signed on his “no new taxes” pledge — the Tea Party and Reaganomics ideologues.

Buffett: Deals wanted

Warren Buffett said he is ready to make more acquisitions in Korea, the U.S. or the UK, and he said “the bigger the better”. Shira Ovide talks with Kelsey Hubbard about Berkshire Hathaway’s next move, plus Buffet’s positive outlook on Japan.

Wake up America. You are under attack. Stop kidding yourself. We are at war. In fact, we have been fighting this Civil War for a generation, since Ronald Reagan was elected in 1981. Recently Buffett renewed the battle cry: The “rich class” is winning this war. Except most Americans still don’t realize they’re losing, don’t see the prize at stake.

via New Civil War erupts, led by super rich, GOP Paul B. Farrell – MarketWatch.

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March 22, 2011 · 9:35 pm

“Tax, Tax, Tax the Rich!” Calls to Tax Wealthy Making Right Wingers Sweat? | | AlterNet

It’s about time….

The main driver of the Federal Deficit is the Bush Tax Cuts for the Wealthy.

End those tax cuts for the wealthy and get out of Afghanistan and Iraq and we won’t have any budget problems…

A simple but powerful chant is now starting to reverberate, all across the country, in protests against budgets cuts gone wild.

“How to fix the deficit?” marchers are shouting. “Tax, tax, tax the rich!”

That sentiment, unfortunately, hasn’t yet reached deep into many law-making chambers. Last week, in the nation’s capital, Rep. Jan Schakowsky from Illinois did introduce legislation that would up taxes on income over $1 million, from the current 35 percent to a range of new rates that run from 45 to 49 percent.

But the budget debate in Congress still revolves almost exclusively around questions about how much to cut, with no attention at all to the vast untaxed fortunes of America’s super rich. In state legislatures, largely the same story.

So why are cheerleaders for America’s rich starting to sweat? They’re hearing the rising drumbeat — from labor and community groups the nation over — for new “millionaire” taxes. And they’re watching the polls, too. Over 80 percent of Americans, the latest surveys show, want higher taxes on our richest.

via “Tax, Tax, Tax the Rich!” Calls to Tax Wealthy Making Right Wingers Sweat? | | AlterNet.

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March 22, 2011 · 9:27 pm

How You End Up Bankrolling Fox News: News Corp. and Rupert Murdoch Weasel Out of Paying Taxes | | AlterNet

The GOP is all over NPR…

But what about Fox “News”?

Sounds like they are costing us a lot more than NPR…

But, oh wait, they support the GOP, so they’re safe…

The article goes on to describe how News Corp used a complex network of accounting dodges including as many as 60 shell companies that were incorporated in such tax havens as the Cayman Islands, Bermuda, the Netherlands Antilles and the British Virgin Islands. More recently, an investigation by the New York Times revealed that…

“By taking advantage of a provision in the law that allows expanding companies like Mr. Murdoch’s to defer taxes to future years, the News Corporation paid no federal taxes in two of the last four years, and in the other two it paid only a fraction of what it otherwise would have owed. Du

Fox News has been the beneficiary of government largess for years and it is time stop it and make Fox pay its own way. As far back as 1999, there have been reports documenting how News Corp, Fox’s parent company, exploited loopholes in tax laws that permitted them to avoid levies that all other citizens have to pay. From The Economist:

“…News Corporation and its subsidiaries paid only A$325m ($238m) in corporate taxes worldwide. In the same period, its consolidated pre-tax profits were A$5.4 billion. So News Corporation has paid an effective tax rate of only around 6%. By comparison, Disney, one of the world’s other media empires, paid 31%. Basic corporate-tax rates in Australia, America and Britain, the three main countries in which News Corporation operates, are 36%, 35% and 30% respectively.”

ring that time, Securities and Exchange Commission records show, the News Corporation’s domestic pretax profits topped $9.4 billion.”

via How You End Up Bankrolling Fox News: News Corp. and Rupert Murdoch Weasel Out of Paying Taxes | | AlterNet.

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March 22, 2011 · 9:09 pm

Detroit’s Population Plunges To 713,777 – Down 25% Since 2000 Census

Sad story about the decline of a once great city…

Statistics from the 2010 census reports Detroit’s population suffered another big decline over the past decade.

The U.S. Census Bureau sent new data on Michigan’s population to state officials, who released it just before 2 p.m.

The latest data puts the once-mighty Motor City’s population at 713,777. That’s a 25 percent drop from 951,270 in 2000.

Detroit’s population peaked at 1.8 million in 1950, when it ranked fifth nationally. But an exodus of many residents to the suburbs and the auto industry’s steady decline has taken their toll.

via Detroit’s Population Plunges To 713,777 – Detroit Local News Story –WDIV Detroit.

Here’s a view from a more optimistic time- The 1960’s and Disney’s “The Happiest Millionaire” :

Sad how it all turned it…mainly due to bad management!

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March 16, 2011 · 6:51 pm

Survey shows upbeat outlook from US millionaires | The Raw Story

Of course, the are upbeat…

They own the Government!

This just shows, as Scott Fitzgerald said, “Let me tell you about the very rich.  The rich are different from you and me”…

Totally different perspective….

From RawStory.com:

More than four in 10 American millionaires say they now need $7.5 million to feel wealthy, according to a survey that uncovered surprising levels of optimism about economic prospects.

Conducted by Fidelity Investments, the world’s largest mutual fund firm, the poll analyzed the investing attitudes and behaviors of more than 1,000 millionaire households in the United States.

The 58 percent of millionaires who said they did feel wealthy said they began to feel so with $1.75 million in investable assets, up from $1.5 million in 2008.

Surprisingly, given the current economic climate, the poll revealed that the longer-term outlook was at its most positive since Fidelity began conducting the survey in 2006.

via Survey shows upbeat outlook from US millionaires | The Raw Story.

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March 16, 2011 · 8:17 am

GOP Cuts: A “Guillotine Job” on the Special Olympics | Mother Jones

But they retained the Bush Tax Cuts for Millionaires!

I would say this shows where their hearts are, if they had one….

Again, Elections have consequences!

And we are paying them…

From MotherJones:

Food safety, family planning, cancer research, and low-income housing—now add the Special Olympics to the long list of organizations and federal programs targeted for major funding cuts by congressional Republicans.

The House GOP’s budget, which passed last month, takes a hatchet to programs for disabled kids and Special Olympics athletes. The proposed cuts could force the closure of at least one Special Olympics program, which is funded through the Department of Education. Dubbed Project UNIFY, the program serves more than 750,000 students in 43 states and draws from techniques used in Special Olympics training for activities in public schools.

via GOP Cuts: A “Guillotine Job” on the Special Olympics | Mother Jones.

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