Showing posts with label Corporate Force. Show all posts
Showing posts with label Corporate Force. Show all posts

Monday, November 04, 2013

Thursday, September 12, 2013

The Future of Renewable Energy

It's going to be interesting to see what happens in Boulder over the next few years. Something else that struck me about this video. Isn't the action of these residents, in no small way, a rally against big government? They are assuming local control of their power and shunning the government sponsored monopoly. Perhaps this is a way we could find some common ground in the renewable energy debate.

Saturday, August 31, 2013

Friday, August 23, 2013

Ripped Off!

So, this was discovered recently...

Scandal: 'Double Stuf' Oreos Don't Actually Contain Double the Stuff

After weighing 10 Double Stuf cookies both with and without their chocolate wafers, the class plugged the numbers into mathematical equations and came up with the horrifying truth: Double Stuf Oreos were only 1.86 times larger than regular Oreos.

Say it ain't so!

But kudos to an excellent instructional method:)

Tuesday, July 23, 2013

Let The Free Market Sort It Out

This is what happens when you let the free market sort itself out.

This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange, an investigation by The New York Times has found. The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal. It also increases prices paid by manufacturers and consumers across the country.

But wait, though, pricing regulations set up by an overseas commodities exchange?

The inflated aluminum pricing is just one way that Wall Street is flexing its financial muscle and capitalizing on loosened federal regulations to sway a variety of commodities markets, according to financial records, regulatory documents and interviews with people involved in the activities.

Ah, that explains it.

Now this is happening which never would have if Mitt Romney had won the election.

Saturday, July 06, 2013

Monday, July 01, 2013

The Rich Getting Richer off the Poor

An article in The New York Times describes how many employers pay workers with payroll cards instead of cash or paper paycheck:
[...] Employees can use these cards, which work like debit cards, at an A.T.M. to withdraw their pay.

But in the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.’s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.
Not only do these people get screwed for taking their money out, they also get screwed for saving their money!
These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.

Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.
Many of the people who are paid with these cards are at the bottom of the economic ladder: they work part-time for McDonalds, Wal-Mart, Taco Bell, and so on.

The banks get employers to coerce employees into using the cards by giving them kickbacks:
In the case of the New York City Housing Authority, it stands to receive a dollar for every employee it signs up to Citibank’s payroll cards, according to a contract reviewed by The New York Times.
The richest banks in the country are using their economic muscle to bribe employers into participating in a scam to nickel-and-dime the poorest people in the country to the tune of hundreds of billions of dollars a year.

Just another example of the rich getting richer off the poor.

Monday, June 24, 2013

On Stiglitz: Part Seven

The next chapter in Joseph Stiglitz's The Price of Inequality is titled "Justice For All? How Inequality Is Eroding The Rule Of Law?" Even though it is the shortest chapter of the ten in the text, it takes sharp aim at how our justice system has helped to further inequality in this country. The rule of law is supposed to protect the weak against the powerful yet in today's society, if someone is suing a corporation, we have all been conditioned to view that person as "gold digger" and the corporation as a "victim" (This simple fact is covered extensively in the stunning film Hot Coffee).

As Stiglitz notes,

As the old poem goes, "No man is an island." In any society what one person does may hurt, or benefit, others. Economists refer to these effects as externalities. When those who injure others don't have to bear the full consequences of their actions, they will have inadequate incentives not to injure them, and to take precautions to avoid risks of injury. 

The Right has a real cognitive dissonance problem with the sentiment above. They want to live in a society where everyone is a "rugged individualist" yet still want all the trappings of a modernism. They can't accept the fact that in any sort of society one person's actions has a direct effect on another's life. and that's with or without government interference.

Stiglitz writes that one of the big reasons why American corporations have been so successful in the last 30 years is they have been able to avoid the consequences of their actions by rigging the game in their favor. This has never been more true than in the financial sector, specifically the banks. There were no real consequences for the predatory lending and fraud committed by the banks in the run up the financial crisis of 2008. Stiglitz notes that some states like Georgia tried to enact laws that would have stopped this sort of behavior in the first place.They were repaid by Standard and Poor's threatening them to not rate any of their mortgages. This would be the same Standard and Poor's who downgraded the US credit rating. This would also be the same S & P labelled "A" what turned out to be "F" rated mortgages. So, any attempt to stop predatory lending by government entities was met with (ahem) corporate force.

Stiglitz goes on to discuss how bankruptcy law has also become massively corrupted in a similar way. He touches on the student loan problem and how banks seem intent trapping young people into impossible situations with insurmountable, lifelong debt. This helps to cement the inequality in this country.

Stigliiz then turns to the mortgage crisis that was the driving force behind the 2008 economic crisis. In a nutshell, he asserts that "rule of law" was tested in this country and the results clearly showed that there was no justice for all. In fact, there was justice for very few people in the financial sector.

The banks wanted a speedier and less costly way of transferring, so they created their own system called MERS but like so much of what the banks had done in the gold rush days, it proved to be a deficient system, without safeguards, and amounted to an end run around a legal system designed to protect debtors. 

So, the banks unilaterally decided to rewrite property law. When the crisis hit, they were supposed to be able to prove how much they actually owed. They couldn't and it was largely because there was no oversight to make sure they did. It didn't really matter to them anyway. There was so much money flying all over the place that they knew the government would have no choice but to bail them out. What were they going to do? Let the economy collapse?

Worse, Stiglitz points out that if corporations were indeed people, they should have been prosecuted for fraud as they were unable to prove that there financial records were valid. There still has not been any significant pursuit, by the government, towards foreclosure fraud. This is a complete and total failure by the US government, specifically Eric Holder. It's amusing how much people on the right bitch about him for the phantom things he's done but not the main thing that he has neglected to do. Recall that the DOJ prosecuted over one thousand cases in the S & L scandal in the early 1990s.

Stigliz notes a Wall Street Journal piece which also uncovered discrimination on the basis of income regarding the foreclosure process. On average, it took banks two years and two months to foreclose on mortgages over one million dollars, six months longer than on those under one hundred thousand dollars. Banks were bending over backwards to accommodate bigger debtors and their team of lawyers that were the best money could buy. The little guy had none of this, of course, and worse, considering just how much the law had been eroded.

We've come to a point in our society where the government does more to protect the interests of corporations and less to protect the rights of individuals. People in Congress are being paid large quantities of money to look the other way and allow the private sector, especially the financial sector, massive leeway in their business. We don't need a "bigger" government. What we need are elected officials who can quickly recognize factors such as externalities and market power in the private sector and intervene quickly to prevent another crisis such as the one we had in 2008. A good place to start is the financial sector and we have, at least, taken steps down that path with the Dodd-Frank bill.

The people who are elected to Congress have to understand that they are performing a public service. They aren't the extended legal staff of the various corporations in the United States.

Tuesday, June 04, 2013

Monday, March 04, 2013

On Siglitz: Part Six

The sixth chapter of Joseph Stiglitz's The Price of Inequality is called, "1984 is Upon Us." In this section, Stiglitz details how many of the wealthy in this country try to frame the discussion in a way that benefits their interests, realizing that, in democracy, they cannot simply impose their rules on others. He posits that, in one way or another, they have to "co-opt" the rest of society to advance their agenda. They do this using their own, more subtle version of "newspeak."

An example of this can be seen in how our society responds to the word "socialism."

In American parlance, "socialism" is akin to communism , and communism is the ideology we battled for sixty years, triumphing only in 1989 with the fall of the Berlin Wall. Hence labeling anything as socialism is the kiss of death. Medicare is a single payer system-the government pays the bill, but the individual gets to choose the provider. Most of the elderly love Medicare. But many are convinced that government can't provide services efficiently that they believe that Medicare must be private.

Hence the famous "Keep your government hands off my Medicare" line. The irony here, aside from the obvious, is just how much socialism there is in this country that hasn't delivered the promised tyranny we now daily from the Right and, in fact, has been enormously beneficial to our country. Even famed "unbridled capitalist" Adam Smith wrote, in The Wealth of Nations, that the sovereign has

The duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a greater society.

Here, Smith champions elements of socialism and states that they are essential to any successful society. They have certainly worked out very well for us as we are the greatest nation this world has ever seen.

So, the dichotomy here is very frustrating given how the framing of American parlance operates. When we start discussing economics and the high level of inequality we have in this country, we see it again. As Stiglitz notes

Mainstream economics assumes that individuals have well defined preferences and fully rational expectations and perceptions. Individuals know what they want. But in this respect, traditional economics is wrong. If it were true, there would be little need for advertising. Corporations use recent advances in psychology and economics that extend our understanding and preferences and beliefs can be shaped to induce people to buy their products. 

Exactly right. One of the major problems I have with the whole "people act in their own enlightened self interest" meme is that..well...people don't. They are often foolish, emotionally unintelligent, and behave poorly, even engaging in criminal activity. That's why "leaving it all up to the free market to sort out" doesn't work given that the powerful people who run many of these markets can be characterized as all the above.

More importantly, people who don't really know what they want and aren't rational can be easily manipulated. Because of this simple fact, Stiglitz notes that most Americans have no earthly idea how much inequality there is in this country. They believe there is less economic inequality than there is, they underestimate its adverse economic effects, and they overestimate the costs of taking action.

In a recent study respondents on average thought that the top fifth of the population had just short of 60 percent of the wealth, when in truth that group holds approximately 85 percent of the wealth. Interestingly, respondents described an ideal wealth distribution as one in which the top 20 percent hold just over 30 percent of the wealth. Americans recognize that some inequality is inevitable, and perhaps even desirable if one is to provide incentives; but the level of inequality in American society is well beyond that level.

I've brought up this study before but I think it should be revisited given the context of Stiglitz's argument. People don't have any idea just how much the wealthy have in this country. Of course, any discussion about it results in Orwellian screeches and howls from the Right about "Marxism" and "class warfare." Yet this sort of wealth concentration at the top is exactly where liberal economic theory was born. Men like Adam Smith and Samuel Stiles bemoaned the hoarding of wealth by the aristocracy through mercantilism and other protectionist practices. In many ways, Stiglitz has argued the same thing in previous chapters by pointing out the endless cycle of rent seeking, incompetent government action and government inaction. Regardless of the times or the mechanism, the wealthy are continuing to do what they always do: consolidate power.

Now, this is usually the point when people ask, "how much inequality is bad and how much is good?" Well, before we do that, we have to get back to the perception problem.

Not only do Americans misperceive the level of inequality; they underestimate the changes that have been going on. Only 42 percent of Americans believe that inequality has increased in the past ten years, when in fact the increase has been tectonic. Misperceptions are evident, too, in views about social mobility. Several studies (here, here, and here) confirmed that perceptions of social mobility are overly optimistic.

So, we need to solve the problem of awareness first before we can detail any sort of serious metric regarding acceptable or unacceptable levels of inequality. That means we have to combat the 1984ish messaging we see every day from the 1 percent.

After we've done that, the best place to start is the most commonly used measure of inequality: the Gini-coefficient. There is also the Theil index, which has more sub group and sub region development, the Decile dispersion ratio, and the Share of income/consumption of the poorest x%. All of these metrics should be used in tandem for a more accurate analysis.

In taking a look at where we are today, it's obvious that we really do have some very serious perception problems.

Bear in mind, these figures are only through 2010, the last time the Census Bureau did their estimate. Two years ago we were at 46.9 which means we are very close to that .5 tipping point where we quite literally have a country of haves and have-nots. The study from above shows that Americans want our country to be more like Sweden. That's not surprising, given that there Gini coefficient is .23, nearly half of what our's is today.

Stiglitz has much more to say in this chapter regarding perceptions in terms of market behavior, fairness, and a whole host of other issues like the public view on estate taxes and bank recapitalization. It's quite a bit of information to absorb so I chose to focus on the more general theme of the chapter-the perception of inequality. For the finer points, as always, I recommend reading the book and the sources contained at the end of each section, some of which I have listed here.

So, the facts show that it's a more subtle version of newspeak, isn't it? It's not quite war is peace (although the Right's view on guns is certainly close to that) but it's still just as contradictory. The people of this country need to know just how much inequality there is and, as Stiglitz noted in previous chapters, the detrimental effects it is inflicting on our country.

Saturday, August 18, 2012

Sunday, August 05, 2012

Monday, June 04, 2012


Capitalism is too important to be left to ... capitalists.

It turns out that capitalism is a marvelous creation for efficiently producing and distributing goods and services. It is the genius that unleashes creativity through human energy and effort. It satisfies the human need to build something, for people to say "this is what I accomplished."


But there is also a dark side of capitalism. When its excesses have been left unchecked, as they have been at times in our history and were again preceding the Great Recession, government leadership has emerged to save capitalism from itself. It took the analyses of historians to appreciate what Presidents Theodore Roosevelt and Franklin Roosevelt accomplished. At the time of their courageous leadership, they were hated by business leaders. It is a classic case of the dogs of capitalism biting the hand that preserved their existence. 

Hmm...that sounds familiar:)

Unfortunately, the previously mentioned dark side of capitalism is the outcome of a system without constraints, the necessary regulations that serve to check the negative consequences. The harm to society has been legendary. Examples are child labor, acid rain, rivers catching fire, destruction of our atmosphere's life-protecting ozone, lead poisoning, black lung disease, mountaintop removal, the dead zone in the Gulf of Mexico, toxic waste dumps, selling lethal tainted meat and produce, the destruction of urban rail transit systems, and lung cancer induced by cigarettes. This last example calls to memory the tobacco CEOs arrogantly telling Congress that "no, we don't believe cigarettes are addictive or cancer causing."


You see, capitalism is too important to be left to the whims of capitalists. When Barack Obama took the oath of president, his inbox came straight from hell. Over the objections of a GOP that wanted government to imitate the disastrous inaction of Herbert Hoover, Obama and the Federal Reserve unfroze the panicked financial system and averted a collapse into another economic depression. The lessons of the 1930s were not forgotten. 

These lessons again teach that the temptation to put a businessman in the White House should be rejected. It would be courting disaster.

No shit. And it's nice to hear that what I have been saying all along comes from a retired engineer and business executive.

Thursday, February 02, 2012


Wednesday, September 14, 2011

The Regulation Rap

Everyone knows the Republicans have no intention of passing any of Obama's jobs proposals. To do so would improve the economy and put people back to work, and that's something the Republicans just can't abide.

But in response, like some third-rate rapper, all the Republicans can do is repeat the same line over and over, even though it doesn't rhyme with anything: "slash regulations." This is a completely disingenuous proposal, a delaying tactic calculated to kick the can down to the road till the next election and accomplish nothing other than to keep the economy in the doldrums and make Obama look bad.

Exactly what regulations do they want to eliminate? FAA regulations for what things people can carry on planes, or spacing restrictions on how closely planes can follow each other landing? USDA regulations on slaughterhouses and dairies that prevent E. coli infections? FDA regulations on food safety and drugs? Consumer Product Safety Commission regulations on the materials that can be used in kids' toys? NHTSA standards for brakes and collision worthiness? EPA regulations on lead, mercury and sulfur in automobile exhaust and power plant emissions, which cause brain damage in children and acid rain that was on the verge of killing all life in northern lakes and forests 30 years ago? SEC regulations on the banks and corporations who just screwed us over in the financial meltdown with their irresponsible lending and investment practices? Regulations that limit the number of people you can cram aboard an airplane, ferry or bus?

Many regulations aren't even within the purview of the federal government. Building codes, zoning ordinances and land use covenants impede small businesses far more often than federal regulations, and those are governed by states, counties and municipalities. The federal government can't eliminate those regulations unless they usurp local control. Which I thought was bad.

Are there some harmful regulations? Sure. I'm all for revising regulations that have become useless or cumbersome. But it will literally take years to review, make new proposals, open them up for public comment and then revise the regulatory system. Any savings and increased employment wouldn't happen for several years, and it's doubtful that the net gain in employment would be significant (jobs would be lost -- regulators who are no longer needed will be on the job market competing with everyone else). But that suits the Republicans: they don't want to see any improvement in the economy for at least a year and a half.

At this point Republicans will argue that market forces will take the place of regulation. The problem is that market forces -- if they work at all -- are slow, retroactive and punitive. In the meantime, you just wind up with a lot of dead, maimed and sickened people who would otherwise be living and healthy if we had a modicum of sensible proactive regulations.

The Republicans have a three-pronged approach that would actually make individual consumers powerless against big companies, which belies their anti-regulatory fervor: 1) eliminate regulations, 2) eliminate the ability of consumers to sue companies in civil court with "tort reform" and class action suits, and 3) eliminate the government's ability to regulate mergers and prevent monopolies. Together, these three Republican tenets completely undermine the ability of market forces to reign companies in.

Without regulations, making bad products is not illegal. If you die in a car accident because the car doesn't have air bags or crumple zones, it's not the car manufacturer's fault. It's your fault for having the accident or buying the wrong car. If the brakes fail it's not the manufacturer's fault, it's yours because were driving too fast, braked too hard, drove through water, or didn't maintain them properly. If lots of people die in similar accidents, you can't band together to sue the companies for making faulty products because of tort reform and the elimination of class action lawsuits. And since there's no limit on how large companies can get, eventually there will only be one or two car companies. You won't be able to buy a car somewhere else. Your choice will be to own a car or not own a car. And since the oil companies and car companies have destroyed our rail system and Republicans work tirelessly every day to defund public transit, that choice comes down to no choice at all.

In particularly egregious cases where the publicity could adversely affect the company, they will be able to buy the silence of victims or their relatives, or if the victims have some spine the companies will be able spend unlimited amounts of money to discredit or otherwise sue their victims into silence.

In the worst case, the company can just declare bankruptcy. All the principals can just walk away with their personal fortunes intact. They would even be able to buy the assets of the bankrupt company for pennies on the dollar, and do exactly the same thing again under a new name.

Market forces only work when there's a market; they do not function when there's a monopoly. The logical outcome of Republican policies would be total domination of the American economy by market-segmented monopolies owned by foreign conglomerates. These interlocking monopolies will include media outlets, which means bad publicity -- the last remaining check against corporate abuses in the Republican Utopia -- can be prevented by another head of the giant multinational corporate hydra.

Our government doesn't make regulations just for the hell of it. Regulations forbid the use of lead in gasoline and paint because it causes brain damage in children and developing fetuses. Regulations limit emissions from power plants because polluted air kills people with asthma, and causes lung disease in otherwise healthy people. Car safety standards -- regulations -- save people's lives by reducing the forces in collisions on passengers.

If Republicans are really pro-life, they can't categorically condemn all regulations, because regulations have saved literally millions of lives.

And Republicans really aren't against all regulation: they want to regulate who you marry, how you can divorce, whether you have an abortion, how you talk to your doctor, who you have sex with, what kind of birth control you can use, what kinds of drugs you take, who can move into this country, who you can hire, and on and on. They claim to want us to take personal responsibility for our own actions, but do everything they can to allow corporations to avoid responsibility for their actions. They want to regulate our personal and social behavior -- our individual liberties -- but want corporations to be free to do anything they want. All they're really doing is carrying out the agendas of their various campaign contributors with no real ideology other than what their "think tanks" can cobble together as a bunch of talking points.

This mantra of "less regulation" is just a smokescreen, a lie carefully concocted to make it seem like Republicans are for personal freedom and responsibility, when all they're really doing is delaying serious action for making Americans' lives better.

Wednesday, September 07, 2011

Are You Going To Help Them?

If you want to find out what the world would look like if the Koch Brothers ran it, take a look at income and wealth inequality right now and double it. Hell, triple it. After you have done that, explain to me how things are going to be better when our economy is two thirds consumer spending. If more people have less money and less people have more money, it's going to get worse because the consumer base is going to be so small.

The Kochs realize that they now have a fairly large audience that they can hoodwink into doing their bidding. They also realize President Obama and the Democrats (as well as a few Republicans) are a very large obstacle standing in their way. So what do they do? Compare Barack Obama to Saddam Hussein.

This is an audio recording of Charles Koch rallying his troops last June at their retreat last June. I find it very interesting that all of the things the Kochs do are highly secretive and rarely on display for the press. What are they hiding? To me, it's obvious.

Like the mob, they want to bust the joint out-the joint being America. They don't give a shit about the country or most of its people. They care about accumulating wealth and power. Period. More of it continually would be better. They are pathological in their pursuit of this and are clearly approaching the point in which they will do anything to further this goal.

Are you going to help them?

Thursday, September 01, 2011

Three For Thursday (1)

Well, it's official. CEOs now make more money than their companies pay in taxes. The only uncertainty they must feel is where to spend all that money. Here are some examples.

* eBay whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.

* Boeing, which paid CEO Jim McNerney $13.8 million, sent in $13 million in federal income taxes, and spent $20.8 million on lobbying and campaign spending

* General Electric where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.

So, where are all these high taxes I keep hearing so much that are holding back business? It's very clear to me....I'd say very CERTAIN...that with these low numbers, we also have a revenue problem in addition to a spending problem.

But, hey, being this low on the list of income inequality is no big deal at all. We're what?...60th or something? And the fact that the eroding skills of our work force, due to this inequality, are causing us to fall behind in the global economy should also be of no concern, right?

I'm just being my usual ol' silly self.

Friday, August 12, 2011

Crandall and Putnam

People of the same trade seldom meet together, but the conversation ends in a conspiracy against the public, or in some diversion to raise prices.

---Adam Smith, The Wealth of Nations.

A recent post by Nikto entitled "The Tax Cut Experiment" provoked an interesting discussion in comments and it made me think of the quote above. Clearly, Smith was well aware of corporate force even that long ago. The comments in that post also sparked a memory of the phone call between Robert Crandall, president of American Airlines, and Howard Putnam, president of Braniff Airways, in 1982.

Crandall: I think it's as dumb as sit here and pound the #$%#$ out of each other and neither one is making a $%#$ dime.

Putnam: Do you have a suggestion for me?

Crandall: Yes, I have a suggestion for you. Raise your #$%#$ fares 20 percent. I'll raise mine the next morning.

Putnam: Robert, we...

Crandall: You'll make more money and I will, too.

Putnam: We can't talk about pricing!

Crandall: Oh, ##$%$, Howard! We can talk about anything #$%$ thing we want to talk about.

If Crandall were around today, he'd be running a Tea Party organization.

The simple fact is, folks, that the government can sometimes improve markets. Never is this more true than with the airlines. Time and again we see that if left to their own devices they will collude against the public and produce a market that is not other words, less consumer surplus.

In so many ways, this accurately describes the problem we have right now. We have a decided lack of aggregate demand with consumers (two thirds of our economy) not spending money. The main reason for this is prices from food to gas to health care are completely ridiculous.

With government effectively ball less (vasectomy courtesy of the Tea Party), it's only going to get worse.