Originally Published: 3/8/2014
Inequality Rising: Les Leopold (AlterNet) lays out a great argument about the rising inequality. It’s got a lot to do with the fact that Wall Street is “not only too big to fail, but also just too damn big.” As evidence he cites the explosion in financial sector incomes with no rise in economic growth. In other words, all that income they generate for themselves as nothing to do with the wealth of the nation or its citizens. They make nothing. “Between WWII and 1980, the wages of financial workers were the same as those who worked in non-financial industries. Then the 2 lines split apart with Wall Street extracting an enormous premium.” At the same time that financial sector incomes were rising, economic growth was slowing down. Much of the decline of the workers’ share of the economy has been blamed on globalization, but Leopold points out that the International Labor Organization (ILO) recently produced a report “concluding that the biggest factor in the decline in workers’ share of income is financialization - that it accounts for almost 50% of the decline in labor’s share.” He also points to a paper by economists Gerald Epstein and James Crotty that found that Wall Street is charging more and more for its lending services, “which is the exact opposite of what is supposed to happen in capitalism. The rise of advanced technologies, global markets, and more creative work organization should lead to a drop in price, not an increase. But not on Wall Street. If we compare the booming 1960s with the last decade, we see that Wall Street is now charging 4 times more for its services.”
Obama’s Budget: Obama’s proposal tries to help the lower classes somewhat. His $3.9 trillion budget includes some standard progressive policies - things he’s proposed before - like $56 billion in new spending to “expand educational offerings for preschoolers and job training for laid-off workers.” (Washington Post) He also wants to extend the Earned Income Tax Credit to childless workers under 25. The EITC currently only applies to families with children so this proposal would add 3.3 million people between the ages of 21 and 24 to the program and “lift an extra half million childless adults above the official poverty line.” (Guardian) And he wants to help workers, and the nation, with an additional $90 billion spending on infrastructure construction. (New Republic) But his help for the middle class, to me, is the big thing. He is, once again, proposing the death penalty for the “carried interest” loophole. This is where people - primarily hedge fund and private equity profits - receive commissions but they’re called “carried interest” so they’re taxed as capital gains rather than as income. (Business Insider) For a real good explanation of carried interest, see CNBC. He’s also proposing a “fair share tax,” also known as the Buffett Rule, “which would require people making over $1 million to pay at least 30% of their income, after charitable contributions, in federal taxes.” Remember, at one time the top tax rate was 81.1%. (See The Bush Tax Cuts) There’s also a proposal to cap the value of deductions for high-income households and a limit to tax-advantaged retirement accounts “once a person’s combined balance exceeds a certain level.” And, of course, he wants to restore the 2009 estate tax exemption levels and rates. (CNN)
CIA: The Senate Intelligence Committee has been, for years, investigating the CIA’s kidnapping and torturing of suspected terrorists. But the Senate itself has had problems, complaining that “CIA employees were improperly monitoring the work of staff members. . . CIA officers went as far as gaining access to computer networks used by the committee to carry out its investigation.” (NY Times) But the CIA contends that congressional staffers “walked out of the spy agency’s fortress-like headquarters with classified documents that the CIA contended they weren’t authorized to have. (McClatchy) The FBI is investigating. (McClatchy) And the Justice Department now has “2 parallel inquiries,” one into the CIA and one into the Senate committee. (NY Times)
License Plate Tracking: I told you a couple of weeks ago about the Department of Homeland Security’s plan to track us everywhere we go. (TWW, License Plate Tracking, 2/22/14) I guess the criticism and bad publicity was too much to bear so DHS cancelled the contract proposal. (Fox) But, as I also told you, such a tracking system is already in place, run by a private company called Vigilant Solutions. Immigration & Customs Enforcement (ICE) and other law enforcement agencies have been using it for years. (ACLU) Vigilant is so aggressive that it’s suing Utah for passing a law that restricts the collection of license plate data. (KSL.com)
Ukraine: Unrest in the Crimean Peninsula of Ukraine spurred Russia to move its military in to restore civility. Ukraine accused Russia of declaring war. (CNN) Obama “ramped up” pressure by imposing visa restrictions on Russian officials and ordered sanctions against them. (Guardian) In the meantime, Crimean residents have asked Russia “to examine a request for their region to join the Russian Federation.” They’re going to put the referendum on a ballot March 16th. (AFP) How do we solve this issue? Rep. Paul Ryan (R, WI) told CNN host Kate Bolduan that the crisis could be solved by approving the Keystone XL pipeline. (Raw Story) Hmmm.
North Carolina: NC regulators have given 7 citations to Duke Energy. 2 were issued last week against the Dan River Steam Station in Eden, site of the February 2nd coal ash spill. This week they issued 5 more for “lacking required storm water permits.” But, get this: “State regulators indicated they had been aware since at least 2010 that some Duke Energy facilities lacked the required storm water permits, yet took no enforcement action until after last month’s disaster.” If you remember, I told you last week (TWW, North Carolina, 3/1/14) that when Pat McCrory became governor the Department of Environment and Natural Resources was reined in. This is the result. Duke has 30 days response. (Al Jazeera)
Washington: Back in 1998 Washingtonians voted for a state minimum wage and linked it to the cost of living. It’s now at $9.32 an hour. Everyone said it was a job killer. However, job growth in Washington has consistently been above the national rate. (Bloomberg)
Washington, D.C.: The city council passed a proposal that possession of marijuana and smoking it in the privacy of one’s home would no longer be criminal offenses. Mayor Vincent Grey (D) has indicated he will sign the bill. (Washington Post)
Minimum Wage Hike: A report by the Center for American Progress has found that raising the minimum wage from $7.25 an hour to $10.10 an hour “would reduce federal food stamp spending by $4.6 billion a year.” (Washington Post) That means taxpayers can stop paying for corporations’ payroll expenses.
Veterans: A veterans bill sponsored by Senator Bernie Sanders (I, VT) would have “expanded benefits for former service members and repealed a military pension cut for future troops,” but it couldn’t get enough Republican votes to get out of committee. (Washington Post)
Welfare: Corporate welfare, that is. According to a report by Good Jobs First, a study of 25,000 major taxpayer subsidy deals over the past 2 decades, the world’s largest companies aren’t the models of “doing it on their own” as they claim. They’re propped up by billions of dollars in welfare from state and local governments - and that means us taxpayers. The report found that 75% of “all the economic development dollars awarded and disclosed by state and local governments have gone to just 965 large corporations.” No small businesses. No start-ups. It adds up to about $110 billion going to big corporations. Fortune 500 firms alone received more than 16,000 subsidies at a total cost of $63 billion. So, anyone still want to argue that this is a free market? Nope. Propped up by the hand of government. Koch Industries, for instance, who like to sell themselves as libertarian free-market activists, relied on $88 million in government hand-outs. Intel got 58 subsidies worth $3.8 billion. IBM got more than $1 billion - mostly from New York. Google got $632 million, Yahoo $260 million. The list goes on.
Whistleblower Protections: The Supreme Court, with a 6-3 vote, extended whistleblower protections to “investment advisers, law firms, accounting firms, and other such businesses working for public companies.” Dissenting were Justices Sonia Sotomayor, Anthony Kennedy, and Samuel Alito. (Reuters)
Wasted Money: Just so you know, House Republicans wasted another million dollars this week trying to pass a bill to repeal the Affordable Care Act. This was the 50th time they ran a bill to repeal all or some portion of ACA. And, just as an aside, one Republican voted against it and 27 Democrats voted for it.
Obamacare: Another delay was announced. Health insurers can now extend bare bones plans that fail to comply with Affordable Health Care (ACA) mandates for an additional 2 years, if their home states allow it. “Theoretically, the move allows about 500,000 individual and 1 million small group health policies to continue through October 2017. (McClatchy) In other words, the insurance companies can sell crap insurance for 2 more years.
Chicken: Like chicken? Better get it locally from now on. The Department of Agriculture (USDA) is going to allow U.S. chickens to be sent to China for processing and then shipped back to the U.S. to eat. (EcoWatch)
Chevron Off the Hook: If you remember, Chevron was hit with a $19 billion judgment in Ecuador, which was lowered to $9.51 by its Supreme Court. (TWW, Ecuador, 11/16/13) But U.S. District Judge Lewis Kaplan decided that Chevron had “provided enough evidence that [the] judgement on behalf of rain forest dwellers in the country’s Lago Agrio area was secured by bribing a judge and ghostwriting court documents.” So, he reduced the judgement to $9.5 billion. (Bloomberg) Say what? The U.S. judge lowered the judgement to the same amount that it was in Ecuador? And what is a U.S. judge doing reviewing a court decision in another country? I don’t get it. If someone out there can explain this, please let me know.
BP Oil Spill: The spill from the Deepwater Horizon explosion is the gift that keeps on giving. “A submerged oil mat was found on Langdon Beach near Fort Pickens” in Florida. In 2 days they removed about 1,360 pounds of clumped oil, sand, and water from the oil mat. (Pensacola News Journal)
Great Barrier Reef: Remember the port expansion at the Great Barrier Reef Marine Park that I told you about? (TWW, Great Barrier Reef, 12/14/13) At the time environmentalists condemned Australia’s prime minister Tony Abbot for approving the project for one of his “business mates,” claiming all sorts of environmental damage. Documents have now come to light showing that the Park Authority advised the environmental department not to approve the dredging but the environmental minister, Greg Hunt, approved it anyway. (Guardian) Guess he has “business mates” too.
Marine Mining: “This is the last frontier: the ocean floor, 4,000 meters beneath the waters of the central pacific, where mining companies are now exploring for the rich deposits of ores needed to keep industry humming and smartphones switched on.” Scientists are “alarmed.” The oceans make up 45% of the earth’s surface and they’re already degraded by “overfishing, industrial waste, plastic debris, and climate change, which is altering their chemistry.” Marine mining is still years away, but preparations have started “and governments are not prepared.” (Guardian)
Wastewater Injection: The U.S. Geological Society (USGS) issued a report finding that a human-induced earthquake “can trigger a cascade of earthquakes.” They were looking at the 5.0 earthquake in Prague, Oklahoma in November 2011 that was followed by a 5.7 after-shock. Wastewater injection is used to get rid of wastewater as well as the byproduct of fracking, but the earthquakes were not directly linked to fracking. “The foreshock occurred near active wastewater disposal wells, and was linked in a previously published study to fluid injection in those wells.” The press release also stated: “Historically, earthquakes in the central United States have been uncommon. Yet in the year 2011 alone, numerous moderate-size earthquakes occurred in Colorado, Texas, Oklahoma, Ohio, and Arkansas. Many of these earthquakes occurred near wastewater injection wells, and some have been shown to be caused by human activities.”
Jobs: The Labor Department released the February employment numbers. 175,00 jobs were added, more than expected because of the winter weather, and January numbers were revised up from 113,000 to 129,000. (Guardian)
Retirement: Paul Buchheit, writing at AlterNet, did a brilliant job of setting out “7 numbers that show how most Americans were robbed of a comfortable retirement.” He first points out that we have a $6.8 trillion retirement deficit but that $8 trillion in new U.S. wealth (most of which went to the wealthiest 10%) was created in 2013. Where do you suppose that wealth came from? Go on. Read the rest.