This election season as the cacophanous din reaches its deafening crescendo, blocking out all reason, common sense and substance, you will hear a lot about raising or not raising taxes. Why bother? Why bother paying taxes at all? You hire the government that fucks you at every turn, and pay for the privilege, and you can do little about but vote, your one puny stone tossed into a wine dark sea, raising barely a splash.
Now comes this: the top ten US companies by earnings pay on average 9% of their profits in taxes. How can that be? Read the story directly below this one for a partial explanation.
The government hands out over $100 billion in subsidies, aka corporate welfare, to US companies every year. This legislative confidence game is really a mechanism for wealth transfer from US taxpaying citizens to US corporations and, through excessive pay and bonuses, executive CEOs, some of the richest motherfuckers on planet Earth.
But, suspending all disbelief, many think corporations are people too, and being good Christian folk, they don't like to witness suffering, so they muse and mutter to themselves while standing in the unemployment line, 'They must be hurting these people-corps, in this economy? Christamighty.'
As they stand there under rainless skies, baking like withered crops in the scorching sun, waiting their turn to be denied meaningful employment, they'd be wrong, still not employed and sweating like the Devil's nutsack. Corporations are doing just fine, thank you.
So fine in fact that 26 large US people-corps paid more to their CEOs than they did in US taxes. Yes, stop and read that line again. This is but one interesting tidbit found in a new report by the Institute for Policy Studies. Here are some others:
That's not all. The majority of these firms stash their loot, much of it made here in the US, in offshore tax havens. That's why they pay so little in taxes. Read this eye-opening passage from the report:
Over half of global trading activity currently passes through tax havens, and collectively, as the London-based Tax Justice Network recently reported, the world’s wealthiest have $21-$32 trillion stashed in them. Some 90 percent of the income from assets in these tax havens, estimates former McKinsey & Company chief economist James Henry, goes totally unreported. Citizens for Tax Justice estimates that tax evasion by individuals costs the Treasury $70 billion a year while corporate tax avoidance adds an additional $90 billion revenue loss.
People-corp are doing just fine, and they thank you, from the bottom of their welfare loving heart.
The Federal Reserve is a central bank, privately owned by a very small group of rich motherfuckers. It has a monopoly, with full permission of the US government, to create the US money supply. The FED prints money, cost to them: nothing. It lends that money to the US government for a fee called interest.
The FED grants itself the right to lend money to select crony banks. Through the wonderful invention of the fractional-reserve system, the crony bank can loan out $10 for every $1 in their vaults, or put another way, for every $1 they borrowed from the FED. So presto chango, even these crony banks can in effect print money, therefore expanding the money supply. The cost to the bank of the crony loan: nothing (or close to it), and the fee charged to you for a loan is interest. When you spend more than you take in, debt is created. Citizens incur debt, banks charge interest.
This wonderful system of infinite, circular debt creation, the engine of the US, and the world, economy is no longer sustainable.
Keep it secret, keep it safe. That seems to be the governing philosophy behind the Trans-Pacific Partnership Agreement, a radical treaty with a bland name. Nine countries have been meeting behind closed doors for over a year to strike broad agreements on various trade issues. Want to know the specifics? You can't because the negotiations are secret, even those on intellectual property. The treaty recommendation for dealing with issues of intellectual property is censorship, pure and simple.
The Great Gazoo, Timothy Geithner, helped create the FED's financial doomsday machine, a design he perfected as Treasury Secretary. Some call it TARP, some call it LIBOR, some call it repeal of Glass-Steagall, some call it quantitative easing. Now we learn that they are all parts of the same machine.
During congressional testimony recently, Geithner let slip that TARP was implemented using manipulated LIBOR rates. LIBOR, which Geithner knew was hinky, was nonetheless used by Treasury, because "You have to choose a rate and... use the best rate available at the time." Essentially he's admitting that Treasury used LIBOR and not some other index because the interest rate fix was in.
What does that mean? It means that banks got together and said, hey, let's push LIBOR down as low as we can because a government bailout is coming and we can cash in on all that free taxpayer money.
So AIG and the too-big-to-fail banks got 'loans' from the government at artificially low rates, providing in essence a backdoor bailout for the company. Cheaper money for AIG and the banks, poorer returns for the American taxpayer, a zero-sum game rigged for and by the wealthy bastards who pushed the button on the doomsday machine that blew up the world.
Bush-Obama's financial eggheads decided the best way to deal with the avalanche of home foreclosures was to give money to the big banks, who committed the fraud that got us here. The 'thinking' here was akin to trickle-down economics, and was as effective: The wealthy and big banks would become so bloated with loot thanks to government largesse that their coffers would overflow onto the sorry noggins of the great unwashed down here in Realityland.
It surprised no one that it didn't work, but it did help create even fewer banks with even more consolidated power, and it substantially increased the wealth of the 1%. Mission accomplished.
Well now, two intriguing ideas have been floated to solve the housing foreclosure crisis. They are similar but different. When the Depression hit, and people began losing their homes to foreclosure, FDR created the Home Owners Loan Corporation. HOLC bought-up distressed mortgages and acted as the homeowners new mortgage holder, offering lower interest rates and much more tolerance and patience than private banks. Over the long term it worked. This was what Bush/Obama prayed banks would do with all the money thrown at them after the meltdown. The trickle never happened.
Rolling Stone is reporting on a second plan that focuses on local government's ability to seize properties under eminent domain. Many people don't like the legal implications of eminent domain, seeing it as license for a government power grab. But a group of venture capitalists is trying to convince localities to bypass Wall Street and big banks to save their communities.
A venture capital firm would raise funds with which municipalities could buy foreclosed homes and underwater mortgages from the banks, who are often eager to get them off their books. Using eminent domain, the local government offers fair market value for the property, which has often been downwardly adjusted to account for the sagging housing market, meaning they are getting a good deal. A locally controlled holding company, overseen by the municipality, would manage all these new loans (mortgages). Just like with HOLC, the homeowner would have a chance to renegotiate a new loan with the holding company at better terms, or they could cash-out and take the eminent domain offer.
Several California cities are deep into the planning stages of this scheme, so it remains to be seen if it will work, or if corruption is inevitable. Rolling Stone's Matt Taibbi thinks this is an end-run around the pitiless money machinery of Wall Street, which it is. But just because this plan cuts out the big picture Wall Street con artists doesn't mitigate the inherent risks of relying on the fundamental beneficence and ethicality of venture capitalists, who are tossing golden apples at local government officials. We've witnessed systemic corruption where regulators enabled those they were tasked with overseeing. Learning from history isn't America's strong suit, even something so recent as a financial meltdown.
How rampant was fraud at Countrywide? They cut and pasted signatures from one document to another, they had templates made to facilitate the rapid production of fraudulent documents, they constructed fake bank statements to improve clients chances for a loan, on and on it went. When a whistleblower stepped forward, she was shitcanned. Here is the Department of Labor report detailing the fraudulent activities and ordering Bank of America, who bought Countrywide, to reinstate Ellen Foster with back pay and other financial compensation. Was anyone ever prosecuted for this bullshit? Never.
HSBC is finally being called out for laundering drug money. But they really needn't worry, their apology should be enough for US regulators. Other banks hit with allegations of money laundering drug money - Wachovia (bought by Wells Fargo), Citigroup, Bank of America - received US taxpayer bailouts, a pretty good deal. In fact, drug money was used to prop up failing US banks during the financial meltdown. At any rate, these allegations against HSBC are several years old at this point. Money laundering investigations by US law enforcement have yielded exactly zero, not a single prosecution. Yeah, an apology will do nicely.
Peter Doyle, with 20 years at IMF, resigned recently, but not before clearing his steam vents in a letter to top agency officials. Here's the moneyshot, "After twenty years of service, I am ashamed to have had any association with the Fund at all."
Say you had all the best and brightest US economists in a lifeboat on the wine dark sea from say 2002 until 2006, 2007. They rowed, they argued, they theorized. So busy were they defending their postage stamp sized intellectual turfs, or nursing on their tenure-teats, or dressing up turds for their Wall Street bosses, so busy with their economic duties were they that very, very few of them saw, dead ahead, the hulking Mount Clusterfuck, toward which they were rowing in a nice, straight graph-like line.
One man who did see it, who yelled 'Holy Fuck! Clusterfuck dead ahead! Can't you See it? Stop Rowing! Stop Rowing!' was Nouriel Roubini. For his clear-eyed predictions of looming financial catastrophe he earned the nickname Dr. Doom, which, we hope, he's done little to discourage. What does he see now, what does he predict? A perfect storm in global financial markets. Clusterfuck, dead ahead.
Join us in banging our heads in frustration against the sidewalk outside the US Capitol after watching JPMorgan CEO Jamie Dimon's congressional testimony. Witness the people's advocates, US congressmen, asking Dimon, "what should the function of our regulators be?"
This after Dimon's company lost what was reported to be $2 billion, recently revised upwards to $7 billion, gambling. These bets are little more than bankerly hijinks, adding nothing of any value to the economy, producing nothing but ledger entries, addressing no financial issues; their function is purely speculative gaming for its own sake, to make a few bucks for sport.
Another brokerage house disappears millions in client money. Sound familiar? This time it happened in the heartland, Iowa, involving Peregrine Financial Group. The owner is currently in a coma after attempting suicide, eliciting a huge sigh of relief from federal regulators who might have had to... do something, take some kind of crazyass fed-action (read: regulate) if the guy weren't brain dead. He'd been forging bank documents for over two years. The Commodity Futures Trading Commission (CFTC), the federal agency charged with regulating the futures industry and therefore Peregrine Financial, now says the company committed fraud. Here's the kicker: for two years CFTC has signed off on Peregrine's accounts, as recently as six months ago. In January the federal regulator, roundly jeered after it was Corzined in the MF Global fiasco (why isn't Corzine in a jumpsuit?), declared Peregrine in full compliance with federal regulations. Now will someone please fire CFTC head and ex-Goldman shill Gary 'Skeletor' Gensler?
Peregrine owner Russell Wasendorf apparently emerged from his coma and was arrested for fraud. Two reviews by government regulators in 2007 and 2008 found nothing amiss at Peregrine, another job well done.
The European Central Bank committee announced that the EU has run out of assets to use as collateral even as the economy's of several of their clients continue to circle the drain. Actually in keeping with opaque banker speak, it said this, "The [ECB] Governing Council has reduced the rating threshold and amended the eligibility requirements for certain asset-backed securities (ABSs). It has thus broadened the scope of the measures to increase collateral availability."
For those of us without the ability to print more money, or to change the rules to keep us out of the poorhouse, running out of collateral translates to foreclosure.
Delaware, long-time favorite of CIA and drug runners, offers anonymous, secure incorporation for anyone with cash and a lawyer willing to sign some papers. Shell corporations are mainly used to avoid taxes and pesky regulations and provide opacity to company owners. It's all legal and corrupt as hell. For an in-depth look at shell corporations, how they work, where they are, and their historical importance, see Nicholas Shaxson's Treasure Islands.
Pour a stiff one before reading through this collection of stories about the explosion of the prison industry.
So you want to shove your snout deep into the trough of taxpayer money, being shoveled out like so much pig slop by the US defense industry? How to go about it? Follow the lead of US defense contractor United Technologies, who recently pled guilty to 'Willful Violations of the Arms Export Control Act' and 'False Statements to the United States Department of State.' UT agreed to pay a $75 million dollar fine. This for the fifth largest federal contractor raking in $58 billion in yearly profit, and nearly $8 billion in contracts last year. In the last 17 years, United Technologies has resolved 17 misconduct penalties. Not a single UT executive went to jail. See this federal misconduct database, showing violations against the largest federal contractors.
Why, John Roberts, why did you allow your Supreme Court to give Obama a pass on the socialist experiment, the Constitution shredding, the gutless sell-out of a health care bill? Because, smug progressives and outraged teabaggers, it's corporate friendly, an elephant through the front door insurance industry bailout, because the freaking bill was written by insurance industry insiders.
It's a dirty little secret among bankers, DEA and intelligence agencies that US and UK banks are laundering huge amounts of drug money. This according to a recent study by two Colombian economists.
FOG previously published details of US banks reliance upon drug money during the banking crisis, concluding that both the banks and government officials knew of money laundering, but did nothing to stop it (story here). In fact, they needed the huge cash infusions to keep the teetering economy from complete collapse. This new report confirms many of our previous conclusions.
A former hedge fund wunderkind predicts we are on the brink of worldwide economic meltdown. How dire is it? "We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses."
And this, "Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe." Finally this, "After that... we put on our tin helmets and hide until the new system emerges... 2012 and 2013 will usher in the end."
Another heartwarming story of a whistleblower. An analyst with a Wall Street firm blows the whistle on his own company about insider trading and is subsequently fired. Not a team player.
When he took evidence of large scale insider trading to the SEC (you know those folks responsible for the integrity of stock exchanges and the securities industry), they declined to pursue the case. Now no Wall Street firm will touch him.
The US FED is engaged in a backdoor bailout of European banks using an arcane program called a 'liquidity swap.' Here's how it works: the FED and the European Central Bank swap dollars and euros, for which the FED receives a small percentage pawning fee. The ECB then auctions off the artificially inseminated money to the highest bidder in the Eurozone. If this seems unnecessarily complicated (why not loan money directly to ECB? Or even loan money directly to European banks?) that's because it is, by design. The FED is trying to head off criticism that US taxpayer money is being used to prop up the European economy. That's exactly what's being done, but in a shady, backdoor man kind of way. You've been Bernanked. Again.