HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Demeter » Journal
Page: 1 2 3 Next »


Profile Information

Gender: Female
Hometown: Ann Arbor, Michigan
Home country: USA
Member since: Thu Sep 25, 2003, 01:04 PM
Number of posts: 85,373

Journal Archives

Anonymous Weekend Economists August 31-September 3, 2012

Why Anonymous?

Well, I am hoping to be as anonymous as the next man or woman...keep my head down and all that. And I am hoping that Anonymous is still on the side of all those men and women...although, one never knows who will sell you out next. I doubt that the 1% has the brains to try to buy off Anonymous...because the price would most likely include depriving them of a small portion of all the loot they have stolen.

But mostly it's Anonymous because I am otherwise without a theme--Clueless has already been taken.

Anonymous (used as a mass noun) is a loosely associated hacktivist group. It originated in 2003 on the imageboard 4chan, representing the concept of many online and offline community users simultaneously existing as an anarchic, digitized global brain. It is also generally considered to be a blanket term for members of certain Internet subcultures, a way to refer to the actions of people in an environment where their actual identities are not known. It strongly opposes Internet censorship and surveillance, and has hacked various government websites. It has also targeted major security corporations. Its members can be distinguished in public by the wearing of Guy Fawkes masks.

In its early form, the concept has been adopted by a decentralized online community acting anonymously in a coordinated manner, usually toward a loosely self-agreed goal, and primarily focused on entertainment. Beginning with 2008, the Anonymous collective has become increasingly associated with collaborative, international hacktivism. They undertook protests and other actions in retaliation against anti-digital piracy campaigns by motion picture and recording industry trade associations. Actions credited to "Anonymous" are undertaken by unidentified individuals who apply the Anonymous label to themselves as attribution. Some analysts have praised Anonymous as the freedom fighters of the internet, and a digital Robin Hood, although others have condemned them as "anarchic cyber-guerrillas".

Although not necessarily tied to a single online entity, many websites are strongly associated with Anonymous. This includes notable imageboards such as 4chan, their associated wikis, Encyclopædia Dramatica, and a number of forums. After a series of controversial, widely publicized protests, distributed denial of service (DDoS) and website defacement attacks by Anonymous in 2008, incidents linked to its cadre members have increased. In consideration of its capabilities, Anonymous has been posited by CNN to be one of the three major successors to WikiLeaks. In 2012, American magazine Time named Anonymous as one of the most influential groups of people in the world.---Wikipedia

And why not Anonymous? The 1%ers are embarrassed to garner public attention...because it's usually when they are caught with their pants down, hands in the cookie jar, or running around with boorish political hacks. Or all three.

So, let's take their masks off, shall we?

Revolt of the Rich



...the super-rich and the corporations they run would secede from the nation state. I do not mean secession by physical withdrawal from the territory of the state, although that happens from time to time—for example, Erik Prince, who was born into a fortune, is related to the even bigger Amway fortune, and made yet another fortune as CEO of the mercenary-for-hire firm Blackwater, moved his company (renamed Xe) to the United Arab Emirates in 2011. What I mean by secession is a withdrawal into enclaves, an internal immigration, whereby the rich disconnect themselves from the civic life of the nation and from any concern about its well being except as a place to extract loot. Our plutocracy now lives like the British in colonial India: in the place and ruling it, but not of it. If one can afford private security, public safety is of no concern; if one owns a Gulfstream jet, crumbling bridges cause less apprehension—and viable public transportation doesn’t even show up on the radar screen. With private doctors on call and a chartered plane to get to the Mayo Clinic, why worry about Medicare?

Being in the country but not of it is what gives the contemporary American super-rich their quality of being abstracted and clueless. Perhaps that explains why Mitt Romney’s regular-guy anecdotes always seem a bit strained. I discussed this with a radio host who recounted a story about Robert Rubin, former secretary of the Treasury as well as an executive at Goldman Sachs and CitiGroup. Rubin was being chauffeured through Manhattan to reach some event whose attendees consisted of the Great and the Good such as himself. Along the way he encountered a traffic jam, and on arriving to his event—late—he complained to a city functionary with the power to look into it. “Where was the jam?” asked the functionary. Rubin, who had lived most of his life in Manhattan, a place of east-west numbered streets and north-south avenues, couldn’t tell him. The super-rich who determine our political arrangements apparently inhabit another, more refined dimension.

To some degree the rich have always secluded themselves from the gaze of the common herd; their habit for centuries has been to send their offspring to private schools. But now this habit is exacerbated by the plutocracy’s palpable animosity towards public education and public educators, as Michael Bloomberg has demonstrated. To the extent public education “reform” is popular among billionaires and their tax-exempt foundations, one suspects it is as a lever to divert the more than $500 billion dollars in annual federal, state, and local education funding into private hands—meaning themselves and their friends. What Halliburton did for U.S. Army logistics, school privatizers will do for public education. A century ago, at least we got some attractive public libraries out of Andrew Carnegie. Noblesse oblige like Carnegie’s is presently lacking among our seceding plutocracy...In both world wars, even a Harvard man or a New York socialite might know the weight of an army pack. Now the military is for suckers from the laboring classes whose subprime mortgages you just sliced into CDOs and sold to gullible investors in order to buy your second Bentley or rustle up the cash to get Rod Stewart to perform at your birthday party. The sentiment among the super-rich towards the rest of America is often one of contempt rather than noblesse.

Stephen Schwarzman, the hedge fund billionaire CEO of the Blackstone Group who hired Rod Stewart for his $5-million birthday party, believes it is the rabble who are socially irresponsible. Speaking about low-income citizens who pay no income tax, he says: “You have to have skin in the game. I’m not saying how much people should do. But we should all be part of the system.” But millions of Americans who do not pay federal income taxes do pay federal payroll taxes. These taxes are regressive, and the dirty little secret is that over the last several decades they have made up a greater and greater share of federal revenues. In 1950, payroll and other federal retirement contributions constituted 10.9 percent of all federal revenues. By 2007, the last “normal” economic year before federal revenues began falling, they made up 33.9 percent. By contrast, corporate income taxes were 26.4 percent of federal revenues in 1950. By 2007 they had fallen to 14.4 percent. So who has skin in the game?



Mike Lofgren served 16 years on the Republican staff of the House and Senate Budget Committees. He has just published The Party Is Over: How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted.

Why Neil Barofsky’s Book “Bailout” Matters


Neil Barofsky’s new memoir, Bailout, is not just a great read, it’s also a very important story about what happened after the financial crisis. Barofsky, who was the Special Inspector General for TARP, was in a vantage point to view the entirety of the Obama policy apparatus, from the use of TARP to pad bank balance sheets to Treasury’s PPIP program to the reorganization of the auto industry to the housing crisis. And he doesn’t disappoint, packing the story full of flashy anecdotes which give more than any book I’ve read a sense of what it’s like to be in DC in a powerful position where your goal is not to get along with the actors controlling the status quo. The book paints the atmosphere in DC’s melange of agencies, bureaucracies, and Congressional halls as a mix between the drudgery and petty bureaucracy of Office Space and the world-cleaving tension of Too Big to Fail. As a Congressional staffer, I worked a bit with Barofsky’s office, so I’m going to give a slightly different perspective on the book than what you might have read elsewhere. You see, what very few have picked up on, even those who liked this book, is that it’s essentially a story about the importance of Congressional oversight in reigning in corruption, and the problems of our imperial Presidency.

By way of background, it’s helpful to understand why Barofsky was even in DC and what his job actually was. As it turns out, the US government has a variety of mechanisms for preventing corruption. The one relevant to this story is the Inspector General position, which is a standard oversight “ombudsman” style operation that pretty much every government agency has. These officials are supposed to oversee their departments, writing reports about their activities and ferreting out problems and corruption. IGs tend to report their findings to Congress (usually to the special subcommittee on oversight for each specific committee), and Congress then takes action (or not). Barofsky was the Inspector General for the Troubled Asset Relief Program, or TARP, a position created by a skeptical Congress when Treasury Secretary Hank Paulson asked for $700 billion to buy toxic assets on the balance sheet of various banks.

To put it simply, this is the book that explains that in fact, yes, your suspicions of what Treasury was up to are correct. It’s not a series of hints and parsing of statements of various high level officials, it’s a straightforward account by a watchdog who fought with Geithner via bureaucratic tricks, the press, in Congress, and in meetings with Treasury and DOJ personnel. Throughout Barofsky’s 27 months in office, members of Congress on both sides of the aisle and Neil Barofsky’s office worked together to attempt to reign in the worst of Treasury’s abuses.

The book is a memoir, and it starts just before Barofsky went to Washington as SIGTARP, recounting briefly his career in the US Attorney’s office in the Southern District of New York. The Southern District is an office with jurisdiction over Wall Street, a track record of effective high profile white collar prosecutions, and a strong bipartisan alumni network. Barofsky talks about one of his cases going after the narco-terrorist cartel in Colombia, or FARC, and how he jousted with various government agencies – the DOJ and the State Department – to push the case forward in the face of bureaucratic stubbornness. Barofsky came dangerously close to being assassinated by the cartel, as he learned later. At one point during the case, while on the Amtrak train, he noticed a man staring at his computer screen, and it turned out to be Joe Biden. Biden told him that the biggest obstacle to enforcing international narcotics laws was not corruption or traffickers, but “the United States State Department.” It’s these little nuggets that are the heart of the book. For instance, at one point, Barofsky notes that if you see the media reporting on a high profile arrest of a criminal, it’s most likely that the FBI leaked the arrest to the press, since the agency is a notorious manager of its own self-important image. Barofsky also discusses another case, of a fraudulent commodities company called Refco, which introduced him to the complexities of the modern financial system, including the repo market. Barofsky presents himself, accurately, as a straight shooter New York Southern District prosecutor, someone who dislikes DC and just wants to do his work going after bad guys...


PART 3: Kiss the Ring and You Will Succeed

In case you have never been involved in the process of bringing an innovative product (IP) to market, here’s how it works:

  1. you have to have a patent that is fairly young. Patent protection only lasts so long. If your patents get to be much over ten years old and you haven’t gotten funding, the Vulture Capitalists begin to refer to your deal as being “long in the tooth”. The longer the tooth, the lower the chances anyone will give you funding. Once patent protection expires, the technology is lost forever. No one will ever fund it.

  2. You must be willing to assign your patents to the Vulture Capitalist. It’s your IP they are interested in, not you, not your business acumen. If you aren’t willing to give up your IP, you can forget funding.

  3. In addition to placing your IP up for sale, you have to be willing to give up a significant portion of the equity in your company. By significant portion, think along the lines of 90%, especially if this is your first time. If you have been down the road before and you are a proven winner, there is a chance you can negotiate a better deal. No matter what, if you aren’t willing to give up significant portions of your equity, you can forget funding.

  4. Money breathes life into a company. You get the equipment and people you need to produce your widget and bring it to market. This is a dangerous time for you as an entrepreneur, especially if developing your technology requires a lot of capital. The MBA’s and the engineers take over and it is not uncommon for the developer of the technology to be pushed aside into a ceremonial role with no responsibilities.

  5. The final step in all of this is the IPO, the initial public offering. This is the stage where the Vulture Capitalists get out. They sell their equity position to the Street and your stock is traded on whatever board they sell to. If you haven’t already, you now lose control of your company. You have stockholders to satisfy and they are a steely eyed bunch if there ever were.

But what about your IP? Where did that go? It went to the banks. How did that happen? Well, you don’t think the Vulture Capitalists used their money to fund your little operation did you? Some, certainly, but a great deal of what they used was other people’s money. Who are those other people? The banks. And what was the price to get the bank involved? Your IP.

According to Ken Dost, the researcher whose work this series is based upon, Bank of America, while holding some 600 patents of their own, also holds some 55,000 patents belonging to other companies. JP Morgan, Citi and Goldman Sachs hold similar numbers. Why would these banks hold the rights to so many other companies’ intellectual property? It’s the price they charge for funding. The banks know that if you hold a company’s IP, you don’t need to own stocks to control what the company does. If you control the rights to the intellectual property you control the company.

Louis Brandeis, probably the most brilliant jurist this country has ever produced, wrote a series of essays for Harper’s Magazine in 1913 called “Other People’s Money and How Bankers Use It”. In 1914 it was turned into a little book which is still available. Here is the synopsis from Wikipedia:

The book attacked the use of investment funds to promote the consolidation of various industries under the control of a small number of corporations, which Brandeis alleged were working in concert to prevent competition. Brandeis harshly criticized investment bankers who controlled large amounts of money deposited in their banks by middle-class people. The heads of these banks, Brandeis pointed out, routinely sat on the boards of railroad companies and large industrial manufacturers of various products, and routinely directed the resources of their banks to promote the interests of their own companies. These companies, in turn, sought to maintain control of their industries by crushing small businesses and stamping out innovators who developed better products to compete against them.

In the fall of last year, a group of Swiss scientists, in a study called “The Network of Global Corporate Control”, demonstrated that nearly all of the world’s economic activity is dominated by a group of elite financial institutions who have interlocking directorships. Some of these financial institutions are:

State Street
JP Morgan Chase
Deutsche Bank
Bank of New York Mellon
Goldman Sachs
Bank of America

The more things change, the more they stay the same. In 1913, just before the fall of the US Government to the banking cabal known as The Federal Reserve, Louis Brandeis warned us about the interlocking directorship between the large banking concerns, their large industrialist partners and how together they stifle competition and innovation. In this study, it is pointed out that the same thing still goes on only now it is on a global scale.

  • Give me control of a nation’s currency and I care not who makes its laws.

  • Give me control over the intellectual property of the major industries of the world and I care not who owns them.

  • Give me an interlocking directorship, and I own it all.

    There is a war going on. They want you to believe the blame should fall on a scapegoat – the man who bought more house than he could afford, a foreign country who defies the US, minorities who cross the border illegally and suckle up to the welfare teat. They are not your enemy. The true enemy is this interlocking directorship which controls it all.

    My question is, what are you going to do about it?

  • PART 2: FEDISCOPE – Counting Cards at the Wall Street Casino

    Anyone involved in the Casino industry will tell you that people will go to extraordinary lengths to “game the system”. Counting cards, while not illegal, is highly frowned upon and casino security are trained to spot the card counters. Once spotted, the counter is politely asked to leave, sometimes by brutal bouncers. There is very little difference between the Casinos in Vegas and the Casino on Wall Street. One major difference is, bending the rules and outright cheating is not only condoned on Wall Street, but if you are one of the “market makers” it is expected. In Vegas, everyone knows the odds favour the house. On Wall Street, not only do the odds favour the house, but the dealers at the table have their own con going as well.

    Case on point is FEDISCOPE, a patented business system invented by Bruce Tuckman of New York and assigned to and operated by Barclay’s Capital, Inc., also of New York.. This patented business system is described as “METHODS AND SYSTEMS FOR INTEREST RATE PREDICTION”. Here is the abstract:

    In one aspect, the invention comprises a computer-implemented method for predicting interest rates, comprising the steps of: electronically receiving data describing one or more Fed fund futures rates to obtain adjusted data regarding the one or more Fed fund futures rates; and electronically determining data regarding one or more expected Fed fund target rates. In another aspect, the invention comprises a system for predicting interest rates comprising: one of more processors operable to determine probability distribution data for one or more Eurodollar rates based on Eurodollar futures option data; one or more processors operable to link said probability distribution data for one or more Eurodollar rates to overnight forward Fed funds rate data; and one or more processors operable to link said forward Fed funds rate data to expected Fed funds rate data.

    As you dive deeper into the patent, you find yourself swimming in even more arcane terms of art which can become even more confusing than the abstract. Here are some examples:

    Eurodollar rates are quoted for standard maturities of one month, three months, one year, etc. LIBOR is an example of particular Eurodollar rate. LIBOR is an acronym for the London Interbank Offer Rate. It is the rate that large non-US banks charge other large non-US banks for dollar denominated loans. The LIBOR rate incorporates a risk premium due to political and credit risk and is usually slightly higher than the Fed funds rate.


    The FEDISCOPE uses Eurodollar futures options to determine the probability distributions of Eurodollar rates; Fed funds versus LIBOR basis swaps (…) to link Eurodollar rates to overnight forward Fed funds rates and an estimate of the risk premium to link forward Fed funds rates to expected Fed funds rates.


    The FEDISCOPE is a tool that: (1) uses the prices of short-term fixed income securities to infer the probability distributions of the Fed funds target rate at various future dates; and (2) identifies relative value trades arising from differences between personal views about these probabilities and those implied by market prices. […] the FEDISCOPE uncovers not only the expected Fed funds target rate but also its entire probability distribution. Second, the FEDISCOPE combines, in an internally consistent manner, prices from all of the following markets: Fed fund futures, Eurodollar futures, Fed fund versus LIBOR basis swaps, and options on Eurodollar futures. Third, the FEDISCOPE adjusts market prices so that the interest rate risk premium is not mistakenly interpreted as an expectation of a rising Fed funds target rate.


    […] the invention comprises a computer-implemented method for predicting interest rates.

    It goes on and on to describe the problems this patented business system is designed to solve. So what does all of this mean? It means Mr. Bruce Tuckman of New York, New York figured out a way to count cards and he was so successful at it that Barclay’s Capital, also of New York, pays him an ongoing fee to use this system and method to predict differential interest rates so they can use it and bet accordingly.

    Jim Cramer of Money Matters often talks about how you have to have an edge if you expect to win on Wall Street. Patents like this clearly give the holders an edge. Is it legal? Ask the regulators. Is it cheating? Ask the regulators. Is counting cards cheating? Ask the Pit Bosses who watch the tables like a hawk trying to catch anyone who may try. Get caught counting cards and watch how quickly you are asked to leave the casino and never come back.

    Perhaps the reason people like Mr. Bruce Tuckman of New York are allowed, even encouraged to develop systems like this is because it is the Barclay’s casino who stands to benefit. Who knows? Remember though. Suckers like you and me don’t stand a chance. The odds always favour the house.


    Patented Fraud PART 1

    In order to understand the world of structured finance, you have to come to a new way of thinking. You have to learn to look at the world from a banker’s perspective and not through an average consumer’s perspective. In the world of structured finance, one is dealing with cash flows on a global scale. A good article on this point of view is revealed in a recently publicized report called “Trade-Off: Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse”... To more fully understand the systems one is dealing with when looking at the global economy from this perspective, you realize that the amount of information required to engineer finance at this level is staggering. There needs to be a way to handle the information flow. In order to handle it, integrated computerized systems have been developed to crunch the numbers required.

    This is what the Information Technology boom of the 1990’s was all about. In 1998, the US Court of Appeals issued its State Street ruling (149 F.3d 1368). For the first time in history, business processes, heretofore adjudged trade secrets, became patentable. Now, fifteen years later, the whole banking and money processes supporting the enunciated relationships in the “Trade-Off” article above are patented. Not in a single patent, but in a series of interconnecting patents. These inter-related patents and their attendant Trade Marks and Service Marks map out a virtual world of relationships and sideways associations. This map of the entire real world is mimicked inside of a computer and is manipulated. It is “Six Degrees of Separation from Kevin Bacon” writ large. AI, Artificial Intelligence or, more aptly, expert reasoning software (ERS) is integrated into it as well giving the machine a large measure of control over what happens on an economic daily basis worldwide.

    This computer and information technology system is the only way to handle the information flows required to manage a global economy. All of these patents, trademarks and service marks are listed in the US Patent and Trademark Office. No single patent is, by itself, nefarious but when you start interconnecting a few you catch a whiff of the potential for nefarious activities. Interlink a few more, and you see indications this interlocking technology can be bent to the will of men, and we all know that the will of men, especially high level men of banking, is totally and utterly corrupted, if not outright evil. When you start to see how interconnected the patented systems of automation work, and when you realize the voracious hunger for virtual money this virtual world had for these Mortgage Backed Securities and their derivatives, you realize Wall Street and the Mortgage Banking Industry released a hungry machine upon the United States and the world. Everything from origination to securitization to inter-member trading, to foreclosure, and the collection of deficiency judgments is highly automated and seamlessly interlinked. And this is just the part dealing with your home mortgage.

    It seems, this “Shadow Banking System”, this virtual world imagined in this old IBM commercial has learned how to make real money. Not only that, a strong argument can be made that it has been waging economic warfare upon the real world for many years now. Your very lives have become poker chips for the global banker casino.

    Ken Dost, a mechanical engineer with 25 years in architecture and clean room engineering, had his formally successful American life was destroyed by bank shenanigans. He has spent the last five years picking apart this interconnected world of structured finance. It is his research into the patented software and their attendant trademarks and service marks which reveals the malice of forethought of the banking elite. The take down of America was planned and patented. If you want to know what really happened, follow the map in his head...Over the next few weeks, we shall be revealing to you samples of this map, connecting some dots and showing you how your life is being manipulated by a computer as well as showing you how these patented business processes can be manipulated to the evil intent of evil men.


    In Spain, financial crisis feeds expansion of a parallel, euro-free economy


    Psychologist Angels Corcoles recently taught a seminar about self-empowerment for women, and when she finished the organizers handed her a check with her fee. The amount was in hours, not euros. But Corcoles didn’t mind. Through a citywide credit network that allows people to trade services without money, the 10 hours Corcoles earned could be used to pay for a haircut, yoga classes or even carpentry work.

    At a time when the future of the euro is in doubt and millions are unemployed or underemployed with little cash to spare, a parallel economy is springing up in parts of Spain, allowing people to live outside the single currency.

    In the city of Malaga, on the country’s southern Mediterranean coast just 80 miles from Africa, residents have set up an online site that allows them to earn money and buy products using a virtual currency. The Catalonian fishing town of Vilanova i la Geltru has launched a similar experiment but with a paper credit card of sorts. It implements a new currency worth slightly more than the euro when it is used at local stores. In Barcelona, the country’s second-largest city after Madrid, the preferred model is time banks, which allow people to trade their services in hours without the involvement of money.

    “This is a way for people who are on the fringes of the economy to participate again,” said Josefina Altes, coordinator of the Spanish Time Bank Network.

    Similar projects are popping up in Greece, Portugal and other euro-zone countries with troubled economies....

    ...“Instead of just being a desperate way for people to survive a horrible economic crisis, this is part of the cooperatives, credit unions, community banks, organic farms and recovering factories — the alternate economy — that the Occupy movement is groping towards,” North said.

    Bold New Labor Call for a ‘Maximum Wage’ By Sam Pizzigati


    With Labor Day fast approaching, what better time to reflect about those Americans who earn the least for their labor? These Americans — workers paid the federal minimum wage — are now taking home just $7.25 an hour. On paper, minimum wage workers are making exactly what they made in July 2009, the last time the minimum wage bumped up. In reality, minimum wage workers are making less today than they made last year — and the year before that — since inflation has eaten away at their incomes. And if we go back a few decades, today’s raw deal on the minimum wage gets even rawer. Back in 1968, minimum wage workers took home $1.60 an hour. To make that much today, adjusting for inflation, a minimum wage worker would have to be earning $10.55 an hour. In effect, minimum wage workers today are taking home almost $7,000 less over the course of a year than minimum-wage workers took home in 1968.

    Figures like these don’t particularly discomfort our nation’s most powerful. We live in tough times, their argument goes. The small businesses that drive our economy, we’re informed, can’t possibly afford to pay their help any more than they already do. But the vast majority of our nation’s minimum wage workers don’t labor for Main Street mom-and-pops. They labor for businesses that no average American would ever call small. Two-thirds of America’s low-wage workers, the National Employment Law Project documented last month, work for companies with over 100 employees on their payrolls. The 50 largest of these low-wage employers are doing just fine, even with the Great Recession. Over the last five years, these 50 corporations — outfits that range from Wal-Mart to Office Depot — have together returned $175 billion to shareholders in dividends or share buybacks. And the CEOs at these companies last year averaged $9.4 million in personal compensation. A minimum wage worker would have to labor 623 years bring in that kind of pay.

    So what can we do to bring some semblance of fairness back into our workplaces? For starters, we obviously need to raise the minimum wage. But some close observers of America’s economic landscape believe we need to do more...Larry Hanley, the president of the Amalgamated Transit Union, sits on the AFL-CIO executive council, the American labor movement’s top decision-making body. Earlier this month, Hanley called for a “maximum wage,” a cap on the compensation that goes to the corporate execs who profit so hugely off low-wage labor. This maximum, if Hanley had his way, would be defined as a multiple of the pay that goes to a company’s lowest-paid worker. If we had a “maximum wage” set at 100 times that lowest wage, the CEO at a company that paid workers as little as $15,080 — the annual take-home for a minimum wage worker — could waltz off with annual pay no higher than just over $1.5 million.

    During World War II, Amalgamated Transit Union president Hanley points out, President Franklin D. Roosevelt called for what amounted to a maximum wage. FDR urged Congress to place a 100 percent tax on income over $25,000 a year, a sum now equal, after inflation, to just over $350,000. Congress didn’t go along. But FDR did end up winning a 94 percent top tax rate on income over $200,000, a move that would help usher in the greatest years of middle-class prosperity the United States has ever known. Throughout World War II, FDR enjoyed broad support from within the labor movement — and the general public — for his pay cap notion. Now’s the time, Hanley believes, to put that notion back on the political table. We need, he says, “to start a national discussion about creating a maximum wage law.”

    Hanley may just have started that discussion, just in time for Labor Day.

    Taxes Avoided by the Rich Could Pay Off the Deficit By Paul Buchheit


    Conservatives force the deficit issue, ignoring job creation, and insisting that tax increases on the rich wouldn't generate enough revenue to balance the budget. They're way off. But it takes a little arithmetic to put it all together. In the following analysis, data has been taken from a variety of sources, some of which may overlap or slightly disagree, but all of which lead to the conclusion that withheld revenue, not excessive spending, is the problem.

    1. Individual and small business tax avoidance costs us $450 billion. The IRS estimates that 17 percent of taxes owed were not paid, leaving an underpayment of $450 billion. In way of confirmation, an independent review of IRS data reveals that the richest 10 percent of Americans paid less than 19% on $3.8 trillion of income in 2006, nearly $450 billion short of a more legitimate 30% tax rate. It has also been estimated that two-thirds of the annual $1.3 trillion in "tax expenditures" (tax subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes) goes to the top quintile of taxpayers. Based on IRS apportionments, this calculates out to more than $450 billion for the richest 10 percent of Americans.

    2. Corporate tax avoidance is between $250 billion and $500 billion. There are numerous examples of tax avoidance by the big companies, but the most outrageous fact may be that corporations decided to drastically cut their tax rates after the start of the recession. After paying an average of 22.5% from 1987 to 2008, they've paid an annual rate of 10% since. This represents a sudden $250 billion annual loss in taxes. Worse yet, it's a $500 billion shortfall from the 35% statutory corporate tax rate.

    3. Tax haven losses range from $337 billion to $500 billion. The Tax Justice Network estimated in 2011 that $337 billion is lost to the U.S. every year in tax haven abuse. It's probably more. A recent report placed total hidden offshore assets at somewhere between $21 trillion and $32 trillion. Using the lesser $21 trillion figure, and considering that about 40% of the world's Ultra High Net Worth Individuals are Americans, and factoring in an annual 6% stock market gain based on historical records, the tax loss comes to $500 billion.

    4. That's enough to pay off a trillion dollar deficit. Reasonable tax changes could pay it off a second time:

  • (a) A non-regressive payroll tax could produce $150 billion in revenue. Get ready for some math. The richest 10% made about $3.84 trillion in 2006. A $110,000 salary, which is roughly the cutoff point for payroll tax deductions, is also the approximate minimum income for the richest 10%. A 6.2% tax paid on $1.43 trillion ($110,000 times 13 million payees) is about $90 billion. The lost taxes on the remaining $2.41 trillion come to about $150 billion.

  • (b) A minimal estate tax brings in another $100 billion. The 2009 estate tax, designed to impact only the tiny percentage of Americans with multi-million dollar estates that have never been taxed, returns about $100 billion per year.

  • (c) A financial transaction tax (FTT): up to $500 billion. The Bank for International Settlements reported in 2008 that annual trading in derivatives had surpassed $1.14 quadrillion (a thousand trillion dollars!). The Chicago Mercantile Exchange handles about 3 billion annual contracts worth well over 1 quadrillion dollars. One-tenth of one percent of a quadrillion dollars could pay off the deficit on its own. More conservative estimates by the Center for Economic and Policy Research and the Chicago Political Economy Group suggest FTT revenues of a half-trillion dollars annually.

    Add it all up, and we've paid off the deficit, almost twice. More importantly, the avoided taxes and a few other sensible taxes could provide sufficient revenue for job stimulus without cutting the hard-earned benefits of middle-class Americans.
  • Mark Ames: Tracy Lawrence: The Foreclosure Suicide America Forgot



    Go to Page: 1 2 3 Next »