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“The Corporate Predator State”: This Isn’t The Free Market, It’s A Rigged Market

Bipartisan agreement in Washington usually means citizens should hold on to their wallets or get ready for another threat to peace. In today’s politics, the bipartisan center usually applauds when entrenched interests and big money speak. Beneath all the partisan bickering, bipartisan majorities are solid for a trade policy run by and for multinationals, a health-care system serving insurance and drug companies, an energy policy for Big Oil and King Coal, and finance favoring banks that are too big to fail.

Economist James Galbraith calls this the “predator state,” one in which large corporate interests rig the rules to protect their subsidies, tax dodges and monopolies. This isn’t the free market; it’s a rigged market.

Wall Street is a classic example. The attorney general announces that some banks are too big to prosecute. Despite what the FBI called an “epidemic of fraud,” not one head of a big bank has gone to jail or paid a major personal fine. Bloomberg News estimated that the subsidy they are provided by being too big to fail adds up to an estimated $83 billion a year.

Corporate welfare is, of course, offensive to progressives. The Nation and other media expose the endless outrages — drug companies getting Congress to ban Medicare negotiating bulk discounts on prices, Big Oil protecting billions in subsidies, multinationals hoarding a couple of trillion dollars abroad to avoid paying taxes, and much more.

But true conservatives are — or should be — offended by corporate welfare as well. Conservative economists Raghuram Rajan and Luigi Zingales argue that it is time to “save capitalism from the capitalists,” urging conservatives to support strong measures to break up monopolies, cartels and the predatory use of political power to distort competition.

Here is where left and right meet, not in a bipartisan big-money fix, but in an odd bedfellows campaign to clean out Washington.

For that to happen, small businesses and community banks will have to develop an independent voice in our politics. Today, they are too often abused as cover for multinational corporations and banks. The Chamber of Commerce exemplifies the scam. It pretends to represent the interests of millions of small businesses, but its issue and electoral campaigns are defined and paid for by big-money interests working to keep the game rigged.

An authentic small-business lobby has finally started to emerge, as William Greider reports in the most recent issue of the Nation. The American Sustainable Business Council, along with the Main Street Alliance and the Small Business Majority, are enlisting small business owners to speak for themselves — and challenging the corporate financed propaganda groups such as the Chamber and the National Federation of Independent Business. Their positions often align with those of progressives. They loathe the big banks and multinationals that work to undermine competition.

Greider reports on the antipathy these small business owners have for the big guys. Camille Moran, president and chief executive of Caramor Industries and Four Seasons Christmas Tree Farm in Natchitoches, La., rails against the “Wall Street wheelers and dealers.” They knew, she argues, that they “ would get no sympathy saying that ending the high-income Bush tax cuts would hurt them, so instead they pretend it would hurt Main Street small business and employment. Don’t fall for it. . . . That’s a trillion dollars less we would have for education, roads, security, small business assistance and all of the other things that actually help our communities.”

ReShonda Young, operations manager of Alpha Express, a family-owned delivery service in Waterloo, Iowa: “We’re not afraid to compete with the biggest delivery companies out here, but it needs to be a fair fight, not one in which big corporations use loopholes to avoid their taxes, stick our business with the tab.”

Polls show these aren’t isolated views. The ASBC, the Main Street Alliance and the Small Business Majority sponsored a poll by Lake Research of small business owners. Ninety percent believe “big corporations use loopholes to avoid taxes that small businesses have to pay,” and three-fourths said their own businesses suffer because of it.

The ASBC and its allies have the potential to become what Jamie Raskin, a Maryland state senator, dubbed a “Chamber of Progress,” a small-business voice that is willing to take on the big guys that tilt the playing field.

The possibilities are endless. Wall Street argues for rolling back financial regulation on the grounds that it hurts community and small banks. What if community and small bankers joined the call of conservative Dallas Federal Reserve President Richard Fisher to break up the big banks?

Multinational executives have just launched the “LIFT America” Coalition to push for a territorial tax system that would exempt from U.S. taxes all profits reported abroad. ASBC and its allies could rally small businesses to demand closing down overseas tax havens and imposing a minimum tax on profits sitting abroad, so that they didn’t face a higher tax burden that their global competitors.

In today’s Washington, powerful corporate interests stymie progress on areas vital to our future. Can a right/left, small-business/worker odd bedfellows alliance emerge to counter the predatory interests? We can only hope so.

 

By: Katrina vanden Heuvel, Opinion Writer, The Washington Post, March 26, 2013

March 27, 2013 Posted by | Corporations, Wall Street | , , , , , , , | Leave a Comment

“He’s Not One Of Us”: Why Mitt Romney Is Organizing His Entire Campaign Around “You Didn’t Build That”

Now that we’re having a real debate about the fundamentals of capitalism and success, it’s worth considering another part of the now-infamous “You didn’t build that” speech President Obama recently gave. When he was accused of taking Obama’s words out of context, Mitt Romney’s defense was that “The context is worse than the quote.” As evidence, he cited not the actual context of “You didn’t build that” but what Obama said a paragraph before, about the role of fortune in success. And it’s that idea—that success has to do not only with hard work and talent but also with luck—that really got Mitt Romney steamed. Here’s the passage in question:

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there

You might think that this would be hard to argue with, but as David Frum observed, many successful people find the idea that luck played a part in their success to be deeply offensive. And it makes me wonder whether Mitt Romney himself believes that the fact that his father was a wealthy industrialist and governor had nothing to do with his financial success. Does he think that if he been born to a poor single mother in backwoods Appalachia, he would have grown up to be the same private equity titan he turned out to be?

I’m guessing he does, but it would be interesting to hear what he said if someone asked him, “Governor, what role do you think luck played in your success? Do you think you had more of a chance to succeed because of who your parents were?”

Don’t know about you, but I’m happy to admit that luck played a large part in whatever success I’ve had. I was fortunate in my parents; we weren’t rich, but they valued education highly, created an environment with lots of opportunities for learning, and moved us to a town with excellent public schools. Had I been born in more deprived circumstances, I’m quite sure I wouldn’t have had anything like the opportunities I did, and I seriously doubt I would have pulled myself up by my bootstraps unless some other piece of luck fell my way. Luck played some part in getting most of the jobs I had, even if it was just knowing someone who knew someone who had an opening. I work hard enough, but I’m not such a jerk that I don’t understand how lucky I am to have a career as a writer, which is absurdly cushy compared to the jobs of people who stand on an assembly line or run around a distribution center or change bedpans. In my youth I had just enough exposure to a series of not-particularly-pleasant jobs like waiting tables and working a cash register in a supermarket to make me never forget how absurdly lucky I am to make a living doing what I do.

Mitt Romney is right about one thing: it’s hard to start and maintain a business. And it’s particularly hard if, unlike someone like Mitt Romney, you can’t live off your stocks when you do it. So I understand why some business owners would get their backs up when Romney tells them that Barack Obama told them they didn’t actually build their business. I’d hope they’d take the time to figure out that Romney is actually lying to them about that, but what can you do. But what I struggle to understand is the rich guy who thinks that luck played absolutely no part in him getting where he is. Maybe I’m wrong, but I don’t hear that coming from a guy who built up a construction business from the ground up. People like that have usually had exposure to enough bad luck to know good luck when they see it. It’s only the people whose entire lives have been nothing but a string of good luck who so angrily assert that there’s no such thing. It’s the Wall Street tools who got six-figure jobs in their uncle’s firm fresh out of Wharton who insist so vehemently that everything they have is because of their own talents. Only if you think that could you genuinely believe that an increase in your income tax of a few points constitutes some kind of communist attack on success.

 

By: Paul Waldman, Contributing Editor, The American Prospect, July 31, 2012

August 1, 2012 Posted by | Election 2012 | , , , , , , , , | 1 Comment

“No Such Thing As Good Luck?: For Mitt Romney, His Entire Life Has Been A String Of Good Luck

Now that we’re having a real debate about the fundamentals of capitalism and success, it’s worth considering another part of the now-infamous “You didn’t build that” speech President Obama recently gave. When he was accused of taking Obama’s words out of context, Mitt Romney’s defense was that “The context is worse than the quote.” As evidence, he cited not the actual context of “You didn’t build that” but what Obama said a paragraph before, about the role of fortune in success. And it’s that idea—that success has to do not only with hard work and talent but also with luck—that really got Mitt Romney steamed. Here’s the passage in question:

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there

You might think that this would be hard to argue with, but as David Frum observed, many successful people find the idea that luck played a part in their success to be deeply offensive. And it makes me wonder whether Mitt Romney himself believes that the fact that his father was a wealthy industrialist and governor had nothing to do with his financial success. Does he think that if he been born to a poor single mother in backwoods Appalachia, he would have grown up to be the same private equity titan he turned out to be?

I’m guessing he does, but it would be interesting to hear what he said if someone asked him, “Governor, what role do you think luck played in your success? Do you think you had more of a chance to succeed because of who your parents were?”

Don’t know about you, but I’m happy to admit that luck played a large part in whatever success I’ve had. I was fortunate in my parents; we weren’t rich, but they valued education highly, created an environment with lots of opportunities for learning, and moved us to a town with excellent public schools. Had I been born in more deprived circumstances, I’m quite sure I wouldn’t have had anything like the opportunities I did, and I seriously doubt I would have pulled myself up by my bootstraps unless some other piece of luck fell my way. Luck played some part in getting most of the jobs I had, even if it was just knowing someone who knew someone who had an opening. I work hard enough, but I’m not such a jerk that I don’t understand how lucky I am to have a career as a writer, which is absurdly cushy compared to the jobs of people who stand on an assembly line or run around a distribution center or change bedpans. In my youth I had just enough exposure to a series of not-particularly-pleasant jobs like waiting tables and working a cash register in a supermarket to make me never forget how absurdly lucky I am to make a living doing what I do.

Mitt Romney is right about one thing: it’s hard to start and maintain a business. And it’s particularly hard if, unlike someone like Mitt Romney, you can’t live off your stocks when you do it. So I understand why some business owners would get their backs up when Romney tells them that Barack Obama told them they didn’t actually build their business. I’d hope they’d take the time to figure out that Romney is actually lying to them about that, but what can you do. But what I struggle to understand is the rich guy who thinks that luck played absolutely no part in him getting where he is. Maybe I’m wrong, but I don’t hear that coming from a guy who built up a construction business from the ground up. People like that have usually had exposure to enough bad luck to know good luck when they see it. It’s only the people whose entire lives have been nothing but a string of good luck who so angrily assert that there’s no such thing. It’s the Wall Street tools who got six-figure jobs in their uncle’s firm fresh out of Wharton who insist so vehemently that everything they have is because of their own talents. Only if you think that could you genuinely believe that an increase in your income tax of a few points constitutes some kind of communist attack on success.

 

By: Paul Waldman, Contributing Editor, The American Prospect, July 30, 2012

August 1, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a Comment

“Preserving Political Viability”: Learning “How To Be An American” Capitalist, Non-Sununu Style

If there’s one thing this presidential campaign has driven home, it’s that not all kinds of capitalism are created equal when it comes to politics.

The first indicators came during the Republican primaries, when former House Speaker Newt Gingrich and Texas Gov. Rick Perry attacked Bain Capital-style capitalism. Perry even branded onetime Bain CEO Mitt Romney a vulture capitalist. The season has moved on — in fact, Perry campaigned for Romney last week in Elk City, Nev. – and the rhetoric has subsided.

But the reality is turning out to be quite problematic for Romney. Some kinds of free enterprise – such as a small family business – are perfect resume entries for a political candidate. But certain kinds of high-flying capitalism come across as cold-blooded and indecipherable, and they’re vulnerable to attack. Anything that involves the phrase “creative destruction,” for instance, would be risky.

What Romney is going through now is an experience neither major party may want to repeat. So if you are interested in running for president, here’s how to preserve your future viability:

1. Get rich the old-fashioned way. Create a product or service or business. Write a best-seller, like President Obama did. Run a successful company, like Herman Cain did. Jump on a trend early, like Virginia Sen. Mark Warner, who saw the potential of cell phones.

2. When you file your tax returns, imagine they will be on the homepages of every website in the world. Be prepared to defend your low tax rate and explain how you’ve used your untaxed money to create jobs. Alternatively, say you’d like to change the tax code so people like you pay more.

3. Related: Keep your money in the United States. Do not shelter income in Switzerland, Bermuda, the Cayman Islands or anywhere else. Repeat: keep the money at home.

4. If you have a lot of money, give away a lot of money. Think Bill Gates and Warren Buffett. If you have enough excess cash, you might be able to help eradicate AIDS or revolutionize inner city education. Tithing to your church and creating trusts for your kids don’t count.

5. When you leave a position, leave the position. Make a clean break. If you don’t, you will have a hard time arguing you are not responsible for what happened after you kinda-sorta departed, but were still CEO and sole owner. Sure, you may not be able to claim credit for good things that happen after you’re gone. But you won’t be on the hook for developments that are politically unpalatable, and possibly a serious threat to your presidential hopes.

 

By: Jill Lawrence, The National Journal, July 16, 2012

July 22, 2012 Posted by | Election 2012 | , , , , , , , | Leave a Comment

“You Want To See Big Government”: The Insanity Of The Socialism Talk

Kevin Drum notes today that all the overheated Republican rhetoric about the president’s tax proposal, suggesting capitalism is on the very edge of disappearing, is a bout of hysteria over a relatively small amount of money for the wealthy:

I just want everyone to be absolutely clear on what this “narrative of aggrievement” is all about. It’s about Obama’s proposal that the marginal tax rate on income over $400,000 should rise from 35% to 39.6%.

That’s your aggrievement. That’s your entitlement. That’s your socialism. That’s your class warfare. An increase in the top marginal tax rate of 4.6 percentage points.

Four. Point. Six.

This is what America’s most prosperous citizens are up in arms about. This is why Barack Obama is an enemy of capitalism. These are the spiteful shackles he proposes to use to subjugate America’s engines of job creation. It’s the reason America’s wealthiest citizens are so frightened about the future of their country.

4.6 percentage points. Just let that sink in.

Add in the fact that Obama is simply trying to restore the top tax rate under which the most rapid accumulation of private wealth in human history–in the late 1990s–occurred, and the insanity of the “socialism” talk becomes especially apparent.

Look, folks, I’m not that old, and I can remember the time a Republican president unilaterally created a policy that was vastly more disruptive of the private-sector economy than anything Barack Obama has even dreamed of: Richard Nixon’s imposition of wage and price controls in 1971. Top tax rates were much higher then, too. Somehow or other, liberty survived.

 

By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, July 13, 2012

July 16, 2012 Posted by | Big Government, Election 2012 | , , , , , , , | Leave a Comment

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