brainiac conspiracy

Ain't Nuthin' But a Party, Y'All

Suppose it's not difficult to figure out why we have such strong bipartisan consensus amongst our government and media types on the need to punish the poor and cut our job creators' tax rates since, basically, it's their government---and their media---not ours:

The two biggest after-dinner events, one hosted by Vanity Fair and Bloomberg Media and another hosted by MSNBC, will fete 400 and 750 people, respectively, in rented embassies (France and Italy, respectively). The Vanity Fair-Bloomberg party is so chichi that guests have been asked to send digital headshots of themselves in advance in order to discourage gate-crashers.

At least a dozen other media companies, including People magazine, the Hill newspaper, Yahoo, Reuters, Politico, the New Yorker and the co-owned Atlantic and National Journal will do up their own parties (The Washington Post is hosting a pre-dinner reception at the Hilton).

The schmooze-a-palooza has grown so elaborate that news organizations have offloaded some of their costs. Not only have some hosts teamed up (Bloomberg and Vanity Fair, Yahoo and Reuters), but most events are “sponsored” by other companies that pay the host, in cash or in kind, for the privilege of piggybacking on the party.

Some of the victuals at MSNBC’s bash, for example, will be brought to guests by Starbucks, Ben & Jerry’s, Smartwater and Bacardi. One party-giver, Capitol File magazine, lists a “presenter” (the Bipartisan Policy Center) and five corporate sponsors on its invitation, including Mercedes-Benz and Corona Light [...]

The most unusual arrangement may be Atlantic Publisher David Bradley’s exclusive “welcome” dinner party at his home Friday night. Bradley plans to treat a select crowd of 150 to a “festive” dinner previewing the “Ballets Russes” exhibit that will open to the public at the National Gallery of Art on May 12. The underwriters of Friday’s dinner include Exxon Mobil, General Motors, Siemens and Altria . . . But Politico has a much longer guest list of corporate figures for the dinner the night before, including top executives from AT&T, Bank of America, the Business Roundtable, Coca-Cola, Chevron, GE Transportation, Goldman Sachs, Google, MGM Resorts, Microsoft, Northrop Grumman, Qualcomm and Siemens. (We know this because Politico is among several media organizations that have issued news releases bragging about their guests.)

Absent armed rebellion, this is the reason why we are all doomed to suffer endless wars, financial crises, environmental disasters, terror attacks, etc.: Because we are governed by people who are profiting handsomely off a social order that fosters wars, financial crises, environmental disasters, terror attacks, etc., and lavishing themselves with praise for their good works. Since elections don't seem to matter much anymore, I'm not sure how we can ever free ourselves from the grip of these awful people without blood running in the streets of every major American city---but as a hedge against civil war, your humble blogger is making his own future plans.

---Baron V

Shareholder Value

In general, it has proven to be pretty much of a disaster ever since businesses embraced the concept as their overarching operating model as it sacrifices long-term stability for short-term gain, makes enterprises more vulnerable to stock manipulation and hostile takeovers, etc. As an alternative, what if every publicly-traded corporation in this country were required by law to allot a certain percentage of its voting shares---even if it's in the form of options---to its employees? You know, the people who actually generate the company's wealth and who have the greatest stake in its long-term success. If classical economic theory is correct, it should incentivize greater productivity and efficiency from the workforce since the workers would share in the rewards (and the bonuses) when the company does well, and also bear its share of the losses when the company does not. It would also give workers an active voice at shareholder meetings, which might help to diversify the kind of intellectual monoculture that has come to dominate so many American businesses. Also too, there's fairly solid evidence that companies that are partly or entirely owned by their employees are, well, more successful and more profitable. And workers who might not otherwise be well-versed in the ways of the market will be forced to learn to become savvier investors. Win-win-win-win!

So why isn't anyone suggesting this? Other than the fact that it would make companies smarter, more honest, more stable, and more focused on long-term growth,. And once workers are allowed to have some (ahem) skin in the game, it might even help alleviate income inequality. Just trying to be helpful here.

---Baron V

In Uruguay, They Don't Tax Income Earned Abroad

Riffing off a previous post, another reason why the job market is booming:

A decade ago, Wal-Mart had little involvement in politics and lobbying, reflecting founder Sam Walton’s policy of shunning politics. As the company grew both in the U.S. and globally, its political interests expanded into issues involving labor, trade and other matters.

Its campaign giving has also broadened and changed. In the early 2000s, checks from its employees and political action committees went mostly to Republicans. Today, it donates almost evenly to Democrats and Republicans, according to an analysis by the Washington-based Center for Responsive Politics.

Yes, yes, I know, now's not the time to grumble about regulatory capture, and we need to circle the wagons for Team Democrat because the Teabillies are coming and Supreme Court Ryan Plan unborn babies, etc. Not that those things aren't important, but we should also not disabuse ourselves of the gritty reality that what was once a two-party adversarial system that revolved around the twin poles of capital and labor at more-or-less equal rates of oscillation is now a single-party corporate-sponsored entity which employs two distinct aliases to suggest a divergence in ideology that really doesn't exist in point of actual policy anymore other than at the cultural fringes. To be fair, one faction of the duopoly capitulates out of rational calculation; the other side, out of unhinged religious zealotry. But think "Wal-Mart" and "Sam's Club," and you get the drift. I'll keep voting for Team Democrat because there's no other viable option, but in the more distant future I may be doing it from overseas.

---Vitelius

Now They Tell Us

Guessing our leaders have decided it's unwise to attempt to fix things until all of the the facts are in. Well, all of the facts are now in:

Companies and workers fared worse over the past three years than previously estimated. Before-tax corporate profits adjusted for the value of inventories and capital depreciation were revised down over the period by a combined $233.2 billion, mainly reflecting lower earnings at financial institutions.

After-tax personal income was revised down by $66.4 billion, or 0.6 percent, in 2009; by $52.6 billion, or 0.5 percent, in 2010; and by $44.2 billion, or 0.4 percent, last year.

---Vitelius

Used to Call it Bullshit

But now we call it smart and sensible energy policy:

Now, you always hear these arguments that somehow there’s this huge contradiction between the environment and economic development, or the environment and energy production. And the fact of the matter is that there are a lot of folks right now that are engaging in hydraulic fracking who are doing it safely. The problem is, is that we haven’t established clear guidelines for how to do it safely, and informed the public so that neighbors know what’s going on, and your family, you can make sure that any industry that’s operating in your area, that they’re being responsible.

Also too, the fact of the matter is that there a lot of folks right now that are engaging in widespread groundwater contamination and triggering earthquakes who are doing it safely. The problem is, we haven't established clear guidelines for how to contaminate groundwater and trigger earthquakes safely, and informed the public so that neighbors know what's going on with their contaminated groundwater and the foundations of their homes that are cracking from earthquakes, and your family, you can make sure that any industry that's contaminating groundwater and triggering earthquakes in your area, that they're being responsible. Glad we cleared that up!

---Vitelius

Innocent Bystanders

Just minding their own business when they got caught in the crossfire:

Bagley and Thurston said that HSBC's compliance had been fragmented and that oversight had been poor. They said that had now been changed. The bank has now adopted a global compliance structure and doubled the amount of money it is spending on oversight.

"Criminals operate globally and if we are to combat them and stop them from accessing and abusing the financial system, we must look at issues from a global perspective. Institutions which operate internationally, like HSBC, will be targeted by these criminals, and our experience in Mexico vividly demonstrates that you are no stronger than your weakest link," said Thurston.

Those thieving little Mexicans! Look what they made us do!

Because, you know, financial institutions would never behave like criminal enterprises if they were securely vouchsafed to adhere to their own best practices.

---Vitelius

Suggestion

Instead of handing out more money to a bunch of insolvent banks, maybe our leaders would consider using it to buy up some houses or cars, or some other stuff like that? Might be a smart move, considering:

Retail sales across the US fell by 0.5% in June, much worse than the 0.2% rise which economists had expected. Not an encouraging sign from the world's biggest economy.

---Vitelius

21st Century Schizoid Man

I guess he really is the perfect candidate for the Citizens United era:

Romney has figured out a loophole---one can lie over and over, and those lies quickly become part of the political narrative, practically immune to "fact-checking". Ironically, the more Romney lies, the harder it then becomes to correct the record. Even if an enterprising reporter can knock down two or three falsehoods, there are still so many more that slip past.

It's the forensic equivalent of carpet-bombing, basically, which dovetails seamlessly with the kind of billion-dollar, scorched earth media campaigns that are going to drive the framing of our daily political narratives, for as far into the future as anyone can see, by fracturing and traumatizing the American collective psyche with endless repetitions of fear-based falsehoods. I really don't like to say this, but I suspect that candidates like Willard---telegenic, robotic, pandering to a public that's grown increasingly detached from rational thought---will be the rule, not the exception, in our future politics. Would love to be proved wrong, but until then, welcome to our world.

---Vitelius

Might as Well Swear in Vice-President Ryan

Since it's obvious that the forced impoverishment of the masses is going to continue for the foreseeable future---no matter who's President---we might as well get over our liberal outrage, hand the keys to the White House to the Chamber of Commerce---hell, they already own Congress and the federal judiciary---and let their awesome Austerian economic policies trigger Great Depression 2.0 sooner rather than later. Because the way things stand now, we're just getting a Depression in tiny increments on an installment plan, and that's why nobody is fixing it---because our leaders in Washington don't see the extent of the underlying problem.

---Vitelius

The Fix is In

Shocked, shocked I tell you, to hear that they're not planning to raise taxes without the obligatory display of bipartisan consensus:

The strange thing about my plan is that even though almost every single Democratic member of Congress agrees that taxes should be higher than they are now but lower than full expiration would make them, this plan is not the consensus Democratic approach . . . Instead the party seems to be in the grips of a dangerous obsession not with increasing tax revenue but with getting Republicans to vote for an increase in tax revenue.

This assumes Democrats in Washington are operating in good faith. They're not, any more than the Republicans. The reason why they haven't voted to raise taxes is because their leadership doesn't want them to raise taxes. Because raising taxes on rich people would be partisan and shrill, because it might adversely affect fundraising, and because the signature achievement of the current two-term Democratic administration (assuming it wins in November) will be the same as the signature achievement of the last two-term Democratic administration: To reach across the aisle and End Welfare as We Know It™. Which type of welfare? I'm guessing block-granting Medicaid to the states, but you can take your pick among food stamps, Medicare, veterans' benefits, etc.

But that's how it is going to go down if the President wins re-election, let's not kid ourselves. Unless, by some fluke, Democrats actually win control of both houses of Congress, but I don't see how that happens at all. Much more likely is an all-Republican Congress and a Democratic White House.

Like I've said before, given the current Beltway political culture and the current state of our campaign finance laws, our people are simply not to be permitted the luxury of liberal government anymore. Because the dominant power elite in Washington will only countenance its existence if it reaches across the aisle in a spirit of cooperation, and plunges millions of Americans into states of abject poverty.

But hey, in return liberals get gay marriage and contraception! What, they want more? They're overreaching.

---Vitelius

Hate, Just Hate to Admit This

But if I worked for Team Republican, I'd be advising this guy to give this speech every day from now until Election Day. The tone's a bit strident, and of course his policy proposals are even worse than the incumbent's, but sad to say, the primary talking points are not easily rebutted:

Mitt Romney called President Barack Obama's handling of the economy a "moral failure of tragic proportions," suggesting he's failed the American people by enacting policies that have been "muddled, confused and simply ineffective."

Speaking at a campaign event in St. Louis, the Republican nominee said it is "painfully obvious" that Obama was "inexperienced" and "simply not up to the task" of leading the country out of this "great economic crisis."

"We have waited, and waited and waited for recovery, and enough time has passed to pronounce judgment on the economic policies of this administration: They have not worked," Romney told supporters at a campaign event in St. Louis. "Your government has failed you."

I think the moral of this story for future Democrats is: Don't waste two years of your time and precious political capital playing into the hands of people who want to destroy you because they will, uh, destroy you. Just trying to be helpful here.

---Vitelius

America's Job Creators

They pay an honest dollar for an honest day's work. If they feel like it:

Nearly two out of three low-wage workers experienced some form of wage theft each week, according to a 2009 survey of nearly 4,400 low-wage workers in Chicago, Los Angeles and New York. Three out of four reported underpayment or non-payment of wages, and one in four said they were paid subminimum wages. On average, these workers lost about $51 a week in unpaid earnings, the survey found.

The lost wages add up. Workers in Houston lose more than $753 million a year, according to a recent study there. While the cities aim to write new protections into law, existing laws often go unenforced.

The U.S. Department of Labor, which monitors compliance with federal wage laws on behalf of more than 130 million workers, has only 1,000 enforcement agents. That’s about one for every 141,000 workers, compared with one per 11,000 workers in 1941.

State wage-and-hour investigators are equally scarce in the wake of massive budget cuts, a 2010 survey found. In 43 states and the District of Columbia, a total of 660 state investigators were covering nearly 90 million workers, about one per 146,000 employees.

Liberal government would put a stop to this. Too bad we're not allowed that privilege anymore.

---Vitelius

Wanker of The Day

Pace Atrios, Bill Clinton.

---Vitelius

Clueless Democrats II

I'm not the only soul
accused of hit and run.
Tire tracks all across your back,
I can see you've had your your fun:

In an MSNBC interview on Wednesday morning, President Barack Obama's deputy campaign manager, Stephanie Cutter, said the recall outcome will have no bearing on the presidential election.

"This is a gubernatorial race with a guy who was recalled and a challenger trying to get him out of office," Cutter said. "It has nothing to do with President Obama at the top of the ticket, and it certainly doesn't have anything to do with Mitt Romney at the top of the Republican ticket. So, no, I don't think -- you know, there may be some that will predict that it means doom for us in Wisconsin in the fall elections, but I think they'll be proven wrong."

Jesus, where to begin.

Playing devil's advocate for a minute, I'll assume they have some horrendous internal polling numbers for this election, which is why they're distancing themselves from the likely outcome, i.e., they don't want to be associated with what they've identified as a Lost Cause. Still, would it have been so difficult to issue some basic boilerplate like:

We're following this race with a great deal of interest as it's a test case to determine whether untold millions of dollars in special-interest money from big banks and oil companies will be allowed to drown out the hopes and aspirations of working Americans who are struggling to make ends meet, and who are only asking for the opportunity to pursue the dream of a better life for themselves and for their families.

See how easy that was?

Yes, it would be sort-of partisan. And yes, it would be sort-of populist. And yes, we know the Serious Persons in Washington take a dim view of both partisan populism and populist partisanship, at least when they're exercised by Democrats. But honestly, if you wanted to depress voter turnout in Wisconsin next week---not to mention union-member turnout next November---you couldn't do much better than what the White House political brain trust is doing, which is greeting a bellwether election in a battleground state with a collective shrug. As with so much else they have done in the past, it's not smart policy, and it's awful politics.

---Vitelius

Colonialism We Can Believe In

Riffing off the previous post, yet another reason why, in the realm of foreign/military policy, our leaders must be either neoliberal or neoconservative interventionists dedicated to upholding the primacy of Empire: Because, frankly, there's a lot of money riding on it:

The New Alliance was announced in conjunction with the G8 meeting last Friday. Under the scheme, some 45 corporations, including Monsanto, Syngenta, Yara International, Cargill, DuPont, and PepsiCo, have pledged a total of $3.5 billion in investment in Africa. The full list of corporations and commitments has just been released, and one of the most notable is Yara International's promise to build a $2 billion fertilizer plant in Africa. Syngenta pledged to build a $1 billion business in Africa over the next decade. These promises are not charity; they are business.

---Vitelius

Why We Need to Reform Entitlements

We simply cannot afford them going forward:

Profits at big U.S. companies broke records last year, and so did pay for CEOs.

The head of a typical public company made $9.6 million in 2011, according to an analysis by The Associated Press using data from Equilar, an executive pay research firm.

That was up more than 6 percent from the previous year, and is the second year in a row of increases. The figure is also the highest since the AP began tracking executive compensation in 2006 [...]

Profit at companies in the Standard & Poor's 500 stock index rose 16 percent last year, remarkable in an economy that grew more slowly than expected.

CEOs managed to sell more, and squeeze more profit from each sale, despite problems ranging from a downgrade of the U.S. credit rating to an economic slowdown in China and Europe's neverending debt crisis.

Still, there wasn't much immediate benefit for the shareholders. The S&P 500 ended the year unchanged from where it started. Including dividends, the index returned a slender 2 percent.

I am willing to bet that decades hence, historians will view our era as a kind of turning point: Either as a second "Gilded Age" which eventually spawned a New Progressivism that predominated in the second half of the 21st Century; or, as I suspect, as the point where the American Century officially came to a close, and the empire descended into irreversible decline. Would love to be proved wrong, of course.

---Vitelius

The Rising Tide That Lifts All Boats

Tom Friedman has got to be sporting some serious wood over this:

Only Mexico’s middle class has grown over the past 30 years in North America, while income disparity has increased in Canada and the United States, according to a study here out Tuesday.

“Mexico’s middle class has benefited from urbanization, greater female employment, improved education and better social programs,” said economist Lars Osberg, the author of the report by the Canadian Centre for Policy Alternatives (CCPA).

In the study Osberg, a professor at Dalhousie University, tracks the rise and fall of income inequality in the three North America Free Trade Agreement (NAFTA) partners.

Similar trends in Canada and the United States helped maintain middle-class growth until the 1970s, Osberg said, but those trends “have since run out of steam.

“Globalization, technological advances, a drop in unionized work, and a deregulated labour market have contributed to stagnant real incomes for most in Canada and the US since the 1980s,” he said.

Osberg said that income disparity “has accelerated” in both Canada and the United States.

“This combination of stagnant real incomes for most people and a rapid rise of the incomes of the richest one percent in the United States and Canada has produced steadily increasing income inequality---to a level that hasn’t been seen since the 1920s,” he said.

“Increasing inequality is not a sustainable trend,” Osberg warned. “When those at the top keep amassing income, their growing savings have to go somewhere.”

This is why I find the entire "Is private equity good or bad capitalism?" discussion that's in vogue at present to be, frankly, a bit of a joke (and Tim Noah's take is one of the more thoughtful ones I've read this week) since the entire point of private equity---like the financialization of banking and the globalization of trade---is to maximize value for shareholders. Period. If you're not a shareholder, the objective is to minimize your value as a laborer or employee. In the zero-sum game our job creators abide by, that's simply how it works.

In the case of private equity, this means by necessity transforming acquired companies into ATM machines wherein revenues that could be used to invest in things like capital improvements or re-training for workers are instead diverted to pay dividends for shareholders, management fees to the private-equity guys, and interest payments (and tax deductions) for the banks. Employee compensation? Health-care coverage? They're a drain on profitability. And on your ability to siphon money away from the business and into the partners' pockets. There's nothing "creative" about this "creative destruction"---it's only "creative" in the way it rewards its backers. What it "destroys" is worker compensation.

Think about it: even the companies that people like Mitt Romney like to boast about saving, like Staples and Domino's, are minimum-wage service companies with low pay, shitty benefits and high employee turnover; by contrast, a lot of the "failing" companies, like Worldwide Grinding and GS Industries, were old-school industrial outfits with (ahem) a unionized workforce and higher pension and overhead costs. To say these companies were "failing" and needed the "creative destruction" of private equity is a ruse; if these people really believed in self-correcting markets, they wouldn't be engaging in leveraged buyouts of "troubled" companies at all; instead, they'd allow these companies to, well, fail, then acquire them in bankruptcy liquidation for pennies on the dollar. But they don't do this for a simple reason: Because they'd have to make a long-term commitment to rebuild the business, because revenue streams would be meager for the short term, and because those union workers in those troubled companies would still expect the same pay and benefits they had before the Chapter 11 filing. And that all goes against the business model. Why? Because you can't return the kinds of huge profit margins you've promised to your investors (that's how these people get banks to lend them so much money, by portraying themselves as financial alchemists who can turn shit into gold) by making serious long-term investments in the business and by paying people a living wage, with pensions and health benefits and all those other things that are a drag on short-term profitability.

I guess the point I'm trying to make is: I think you can draw a direct correlation between the accelerated Romneyfication of our private-sector economy and the stagnation in wages the rest of us have experienced over the past quarter century. Bluntly put, our betters have decided that most of us cost too much to employ, demand too much from them in wages and benefits, and we need to be put in our place. Which is to say, a rung or two above your typical maquiladora worker, and no higher. There were times in our past when we could rely on our government to intervene on our behalf to correct this imbalance, but unfortunately, we don't live in those times anymore.

---Vitelius

Hit 'Em Where it Hurts

A bit simplistic, perhaps, but this is a pretty clever way to craft a political attack ad that doesn't really seem like an attack ad because (a) the tone is light-hearted (almost comical), (b) no candidate's image ever appears in it, and (c) because, well, it also happens to be largely true. It certainly was in the case of the people I used to work for. (To be fair, it wasn't Bain.) If you want to see more ads like this on the Interwebs, you can chip in a few bucks for the cause here.

---Vitelius

Sure Could Use Someone Like Him

Even though he is without doubt a Deeply Unserious Person:

Tsipras also reiterated his belief, aired in an interview with the Guardian at the weekend, that Greece was being subjected to an austerity programme as part of a "neoliberal shock experiment".

"This has driven my country to an unprecedented crisis and a humanitarian crisis. If this experiment is successful in Greece it will be exported to other European countries," he said.

He added: "The war we are fighting in Europe is not between people or nations, it is between the forces of work and the invisible forces of finance and banks.

"It is difficult to be victorious over an enemy when that enemy has no face, no programme, no political party but who governs us even so."

---Vitelius

Awful Human Beings

No matter who wins in November, we're hosed:

Mr. Gregory: Chairman Ryan, let me start with you. This question of austerity in Europe. They had failing economies, nearly depressed economies, the answer throughout the region was to slash their budgets. Has it failed?

Rep. Ryan: Well, no, David, I would say they've also raised taxes, they have--this is a cautionary tale of what happens when politicians who make a lot of empty promises end up running out of the ability to borrow money at cheap rates and now they're broken promises. It's a cautionary tale of what will happen to us if we stay on the path we are on. What we're saying is let's get on growth and prevent austerity. The whole premise of our budget is to pre-empt austerity by getting our borrowing under control, having tax reform for economic growth, and preventing Medicare and Social Security and Medicaid from going bankrupt. That pre-empts austerity. The president, his budget, the fact the Senate hasn't done a budget in three years, puts us on a path towards Europeanlike austerity. That's what we're trying to prevent from happening in the first place.

Mr. Gregory: So this is the problem, Senator, whether if the president's message to European leaders is your approach hasn't worked. He wants a pro-growth agenda. What does that mean? More taxes? More spending? More stimulus? Is that his answer for the U.S. economy as well?

Sen. Durbin: No, Paul, David, I can tell you that Paul and I agree on the basic premise. We are facing serious deficit and debt challenge in this country. Our approaches are different. President Obama, and I agree with his position, thinks that we ought to make certain that we're strong coming out of this recession, that we are creating good jobs and growing businesses. Secondly, focusing on the working people, middle-class Americans, who have been struggling, falling behind when it comes to their income. And making certain that the programs that we preserve as we cut spending are critical programs like education and innovation and infrastructure. When I take a look at Paul Ryan's budget and see $150,000 in income tax cuts for the wealthiest Americans, that is not consistent with those goals. If we really want to bring this deficit down, stick to the Simpson-Bowles Commission approach. Put everything on the table, but first get this economy on its feet and moving forward.

Now, you'd think the natural follow-up question would fall along the lines of, "Well, Senator, if we really do have a serious deficit problem, as you and Representative Ryan say you agree is the case, why are interest rates still falling? Why are investors still flocking to buy up U.S. sovereign debt? Why aren't we seeing the kind of capital flight like they're experiencing in Greece?" But you would not be living in official Washington if you thought that way, because:

Mr. Gregory: But I just want to go back to this point about what Europe is going through and the lessons from Europe because they seem to be very much be part of our political debate, as well, which is can you cut government spending and create economic growth or not?

Sen. Durbin: Well, I think you have to do some cuts in spending, that's part of it, for sure.

The only thing that is really going to be settled in November is how much punishment the unwashed masses will be forced to endure for the next four years. Is it too early to start drinking yet?

---Vitelius