I agree with the analysts who say we should not call the current budget negotiations the “fiscal cliff” ( I like Krugman’s description of it as an austerity bomb), but I can’t do much about other people calling it that. This is another issue that conservatives to have both ways – like chanting freedom and then listing all the freedoms that would flush. Cons in DC and on the net are warning of the most dire of consequences if President Obama and Democrats do not come to a “compromise”. Meaning as usual that if the austerity freaks do not get everything they want, Democrats did not compromise. While the usual suspects – Malkin, Redstate, Fox, The Washington Free Beacon are providing the echo, the noise machine’s messages still originate with the American Free Enterprise Institute, the Chamber of Chamber, David Koch’s Americans for Prosperity and FreedomWorks. The economic calamity message from the radical Right is meant to get the conservatives next door to provide what looks like populist support. Once again convincing some working class Americans to advocate against their own rational self interests. This is a tried and somewhat proven tactic on the Right’s part. The reason, or at least part of the reason it works in regards the debt ceiling and balancing the budget is that Democrats are citing the very real dire consequences. So amidst all that chattering what are relatively clear facts get lost and the working class Right gets snookered into helping the wealthy put another heads they win, tails they win, Some of America’s richest people are about to get even richer thanks to the fiscal cliff
The risk that the US government could raise taxes on dividends as part of a deal on the forthcoming “fiscal cliff” has finally forced corporate America to do something with its massive pile of cash. Here’s a look a the Smaug-worthy* hoard companies have been accumulating:
US Corporate Cash
And what will they do with this haul? Spend it on investment? Hah! They’re rushing to give some of it to shareholders. Both the Wall Street Journal and the Financial Times have taken note of the trend in recent days. The Journal writes:
The moves would send hundreds of millions of dollars back to shareholders before tax hikes that could kick in next year either automatically or as a result of negotiations between the White House and Congress.
And the FT reports that since the beginning of the fourth quarter, “a record 103 companies have announced they will pay special dividends before the end of the year, according to Markit. The data firm is forecasting that 123 companies will announce special fourth-quarter dividends, compared to the previous average of just 31.” This is similar to what happened during the fourth quarter of 2010 the last time that the so-called Bush tax cuts were about to expire.
With a ton of cash, there’s no reason companies shouldn’t be giving at least some of it back to shareholders. Especially if those shareholders are well, the controlling ones. The Journal rightly notes that some rich Americans stand to gain quite a bit from getting their cash now, thanks very much. For instance, Las Vegas Sands CEO—and well-known backer of Republican political candidates—Sheldon Adelson could collect about $1.2 billion from the $2.75 a share special dividend on his 52% ownership interest in the casino company, which said it would pay a new one-time dividend next month.
We’ve been told over and over again the top 10% have to have low taxes so they’ll invest it and create jobs. They invest it in each other, they horde it and they spend very little on it in entrepreneurial enterprises. They’re sitting on so much cash that no honest argument can be made that tax rates are at levels that a disincentive to investment or job creation on their part. The Right has always claimed that we can cut spending to find our way to fiscal paradise. That was never true and untrue now more than ever, just ask anyone in Europe. The wealthy are whining because of greed. They just want your conservative neighbors to believe the fairy tale about them creating jobs if only they had a few dollars to spare, but big bad gov’mint is taking all their hard earned profits and buying stuff for the United Nations. The top 10% is going to win no matter how the tax cuts are finally settled. It is mind boggling to believe that someone with millions of dollars in assets is going to be really upset if they have to start paying the same marginal tax rates they did during the Clinton boom years. The real purpose of the tax cuts for the Right is to edge a little closer to not just gutting Medicare and other safety net programs, but to do away with the Department of Education and the Environmental Protection Agency and anything else that protects the average citizen. Taxes will thus never be low enough until we reach the point where Monsanto can exercise its God given right to poison entire counties with impunity and the anti-rationalist can teach their children that humans were created out of space dust a couple thousand years ago with no competing science based narrative. I have read Democratic bloggers talk about their personal experiences trying to convince relatives of how dangerous the conservative movement is. That despite all the flag waving the last thing conservatives hold dear is the best interests of the country. Many Americans just find it hard to believe that a movement that talks so much about values has so little of them. Making the USA into a permanent Pottersville wasteland is hardly the dream of most Americans when you get the conversations down to specifics. If companies such as Walmart brought back have their exported jobs to the U.S. and paid their average retail workers a living wage they would still make billions. But money equals power for them and less power for the average citizen, and that’s the way they want it. Even if people have to die to keep it that way, Wal-Mart’s strategy of deniability for workers’ safety
The Bangladesh factory supplied clothing to a range of retailers, and officials who have toured the site said they found clothing with a Faded Glory label — a Wal-Mart brand. Wal-Mart says that the factory, which had received at least one bad report for its fire-safety provisions, was no longer authorized to make its clothing but one of the suppliers in the company’s very long supply chain had subcontracted the work there “in direct violation of our policies.”
If this were an isolated incident of Wal-Mart denying responsibility for the conditions under which the people who make and move its products labor, then the Bangladeshi disaster wouldn’t reflect quite so badly on the company. But the very essence of the Wal-Mart system is to employ thousands upon thousands of workers through contractors and subcontractors and sub-subcontractors, who are compelled by Wal-Mart’s market power and its demand for low prices to cut corners and skimp on safety. And because Wal-Mart isn’t the employer of record for these workers, the company can disavow responsibility for their conditions of work.
We’re not talking about a company that is forced to do what it does to make a fair profit. We’re talking about a company and a nation wide mentality when if they can make a hundred million doing things this way, hey, they can make even more if they export more jobs and give more workers the shaft. They’ll scream anti-American Marxist at anyone who criticizes them. I remember reading about Marx and the standard for being a Marxist has found a new definition according the current Republican Partay – anyone who believes in reason and decency. I think these figures are a little low because I have read other papers that say people tend to lie about their virtues or lack of them, Wall Street Professionals Admit: Yes, Lots of Us Are Corrupt
Is Wall Street corrupt? Responses vary depending on whom you ask. But ask the folks who work in the financial services industry and you’ll get a surprisingly clear answer: “Yes.”
A recent survey of 500 financial services professionals, conducted by market researcher Populus at the behest of law firm Labaton Sucharow, turned up some surprisingly candid results from the folks surveyed. For example:
39% of financial industry insiders surveyed “reported that their competitors are likely to have engaged in illegal or unethical activity in order to be successful.”
And this was more than just suspicion. “26% of respondents indicated that they had observed or had firsthand knowledge of wrongdoing in the workplace.”
Nearly one in four “believed that financial services professionals may need to engage in unethical or illegal conduct in order to be successful.
Nearly one in three said they themselves felt “pressured by bonus or compensation plans to violate the law or engage in unethical conduct.
Add in the ones who say they would engage in corrupt activity if pressured to by their company and you have almost half of Wall Street either engaged in criminal activity or willing to under the right circumstances. And even some irony for dessert,
All of a sudden, the epidemic of mortgage fraud, the Bank of America (BAC)-Merrill Lynch bonus debacle, the Madoff scandal — all of it starts to make sense. Suddenly, you start to understand why Goldman Sachs (GS) CFO David Viniar, when asked earlier this week whether decreased profitability at his firm was a cue to cut costs after he had just noted that Goldman was paying out 44% of all corporate revenue as compensation for his employees, responded simply that “we aren’t going to cut our way to prosperity.”
Another moving holiday story of sacrifices by the hardest working people in America.
It pays to be rich, it does not pay so much for work. Or at least does not value work like the old fashioned values conservatives pretend to believe in,