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A Choice For Corporate America: Are You With America Or The Cayman Islands

Tuesday, February 12th, 2013

By Senator Bernie Sanders
February 9, 2013

When the greed, recklessness, and illegal behavior on Wall Street drove this country into the deepest recession since the 1930s, the largest financial institutions in the United States took every advantage of being American. They just loved their country – and the willingness of the American people to provide them with the largest bailout in world history. In 2008, Congress approved a $700 billion gift to Wall Street. Another $16 trillion in virtually zero interest loans and other financial assistance came from the Federal Reserve. America. What a great country.

But just two years later, as soon as these giant financial institutions started making record-breaking profits again, they suddenly lost their love for their native country. At a time when the nation was suffering from a huge deficit, largely created by the recession that Wall Street caused, the major financial institutions did everything they could to avoid paying American taxes by establishing shell corporations in the Cayman Islands and other tax havens.

In 2010, Bank of America set up more than 200 subsidiaries in the Cayman Islands (which has a corporate tax rate of 0.0 percent) to avoid paying U.S. taxes. It worked. Not only did Bank of America pay nothing in federal income taxes, but it received a rebate from the IRS worth $1.9 billion that year. They are not alone. In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens to avoid paying some $4.9 billion in U.S. taxes. That same year Goldman Sachs operated 39 subsidiaries in offshore tax havens to avoid an estimated $3.3 billion in U.S. taxes. Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis.

On and on it goes. Wall Street banks and large companies love America when they need corporate welfare. But when it comes to paying American taxes or American wages, they want nothing to do with this country. That has got to change.

Offshore tax abuse is not just limited to Wall Street. Each and every year corporations and the wealthy are avoiding more than $100 billion in U.S. taxes by sheltering their income offshore.

Pharmaceutical companies like Eli Lilly and Pfizer have fought to make it illegal for the American people to buy cheaper prescription drugs from Canada and Europe. But, during tax season, Eli Lilly and Pfizer shift drug patents and profits to the Netherlands and other offshore tax havens to avoid paying U.S. taxes.

Apple wants all of the advantages of being an American company, but it doesn’t want to pay American taxes or American wages. It creates the iPad, the iPhone, the iPod, and iTunes in the United States, but manufactures most of its products in China so it doesn’t have to pay American wages. Then it shifts most of its profits to Ireland, Luxembourg, the British Virgin Islands and other tax havens to avoid paying U.S. taxes. Without such maneuvers, Apple’s federal tax bill in the United States would have been $2.4 billion higher in 2011.

Offshore tax schemes have become so absurd that one five-story office building in the Cayman Islands is now the “home” to more than 18,000 corporations.

This tax avoidance does not just reduce the revenue that we need to pay for education, healthcare, roads, and environmental protection, it is also costing us millions of American jobs. Today, companies are using these same tax schemes to lower their tax bills by shipping American jobs and factories abroad. These tax breaks have contributed to the loss of more than 5 million U.S. manufacturing jobs and the closure of more than 56,000 factories since 2000. That also has got to change.

At a time when we have a $16.5 trillion national debt; at a time when roughly one-quarter of the largest corporations in America are paying no federal income taxes; and at a time when corporate profits are at an all-time high; it is past time for Wall Street and corporate America to pay their fair share.

That’s what the Corporate Tax Dodging Prevention Act (S.250) that I have introduced with Rep. Jan Schakowsky (D-Ill.) is all about.

This legislation will stop profitable Wall Street banks and corporations from sheltering profits in the Cayman Islands and other tax havens to avoid paying U.S. taxes. It will also stop rewarding companies that ship jobs and factories overseas with tax breaks. The Joint Committee on Taxation has estimated in the past that the provisions in this bill will raise more than $590 billion in revenue over the next decade.

As Congress debates deficit reduction, it is clear that we must raise significant new revenue. At 15.8 percent of GDP, federal revenue is at almost the lowest point in 60 years. Our Republican colleagues want to balance the budget on the backs of the elderly, the sick, the children, the veterans and the most vulnerable by making massive cuts. At a time when the middle class already is disappearing, that is not only a grossly immoral position, it is bad economics.

We have a much better idea. Wall Street and the largest corporations in the country must begin to pay their fair share of taxes. They must not be able to continue hiding their profits offshore and shipping American jobs overseas to avoid taxes.

Here’s the simple truth. You can’t be an American company only when you want a massive bailout from the American people. You have also got to be an American company, and pay your fair share of taxes, as we struggle with the deficit and adequate funding for the needs of the American people. If Wall Street and corporate America don’t agree, the next time they need a bailout let them go to the Cayman Islands, let them go to Bermuda, let them go to the Bahamas and let them ask those countries for corporate welfare.

Posted in Capitalism & Corporations, Corporate takeover of Government, Corruption, CrashBlogging, Financial melt-down, Human Rights, Politics - The Wrong Way, The Perfect Storm, Wealth Disparity | No Comments »

The new face of how corporations dominate governments

Monday, October 15th, 2012

...that's the way you do on the M. T. V.

I’ve been watching developments with the proposed Trans Pacific Strategic Economic Partnership Agreement (TPP) between the United States, New Zealand, Brunei, Australia, Chile, Singapore, Peru, Vietnam, Canada, Mexico and Malaysia. Japan, Korea, Taiwan and the Philippines have also expressed interest in joining.

The TPP negotiations have been largely held in private so people here in New Zealand have only a small idea of what our government is putting out on the table as negotiating chips. The same is apparently true in the U.S. and and I would strongly suspect it is also true in the other negotiating countries.

Trouble in America

In the U.S., various groups are speaking out against the TPP.

In May 2012, a group of 30 legal scholars, critical of the Office of the United States Trade Representative‘s “biased and closed” TPP negotiation process and proposed intellectual property-related provisions, publicly called upon Ambassador Kirk to uphold democratic ideals by reversing the “dialing back” of stakeholder participation and to release negotiating texts for public scrutiny.

On May 23, 2012, United States Senator Ron Wyden introduced S. 3225, proposed legislation that would require the Office of the United States Trade Representative to disclose its TPP documents to all members of Congress. Senator Wyden said,

“The majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations—like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America—are being consulted and made privy to details of the agreement. […] More than two months after receiving the proper security credentials, my staff is still barred from viewing the details of the proposals that USTR is advancing. We hear that the process by which TPP is being negotiated has been a model of transparency. I disagree with that statement”.

Let’s get that straight. Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America can all see the current texts of the negotiations – and we cannot?

Trouble in New Zealand

At a public forum on 6 July 2011, legal experts in New Zealand presented their concerns that the agreement could undermine law regarding Maori culture, genetic modification, copyright, and remove the subsidized medicine New Zealanders have access to through Pharmac.

More about this in a moment.

The Investor-state arbitration provisions

But perhaps the most worrying of the potential problems are the Investor-state arbitration provisions of the TPP that have been revealed from leaked documents. This is from the Wikipedia article on the TPP:

The leaked draft treaty also caused a stir among anti-globalization groups that are opposed to investor-state arbitration, which permits foreign investors to bring claims directly against states before panels of trade arbitrators if they perceive public policy or legislative actions have expropriated their property or treated their investment (defined broadly enough to include most forms of intellectual property) “unfairly”. Those groups and other critics of the investment protection regime argue that traditional investment treaty standards are incompatible with environmental law, human rights protection, and public welfare regulation, meaning that TPP will be used to force states to lower standards for e.g. environmental and workers protection – or be sued for damages. As a worst case scenario, investor-state arbitration gives transnational corporations powers to trump the sovereign powers of nations and states and hold back important policy developments related to sustainability and a clean energy future. The Australian government and its negotiators have stated that they will not be agreeing to investor state dispute settlement provisions that give greater rights to foreign than domestic businesses in the TPP.

So, what’s the worry?

Well, just considering the Investor-state arbitration provisions, one can see that if New Zealand enters into these agreements and then later NZ, for example, wants to legislate that cigarette packages have to be plain with no advertisements and with bold warnings about the health risk, then the tobacco companies in the U.S. could sue us for damages under these provisions.

They would say that our new legislation undercut their profits from selling cigarettes and thus we’d hurt their financial interests. Does that sound like something any country should open itself to?

Governments should be free to make whatever legislation they see fit for the betterment of their own people. That’s what being a sovereign nations is all about, really.

In this proposed situation, government decisions would be checked by their possible economic consequences on the economic interests of foreign corporations.

Canada puts its willy in the Wringer

Canada

Canada has signed a new agreement that comes into effect at the end of October. It’s called The Canada-China Foreign Investment Promotion and Protection Act (FIPPA). It seems to be a model of what not to do to me.

In one instance, it prevents Canada from doing anything that will infringe on Chinese profits from the Enbridge Northern Gateway pipeline. These limitations will continue for 31 years.

In an article from the Vancouver Sun it says:

“This treaty, in effect, will pre-empt important elements of the debate of the Northern Gateway pipeline and may frustrate in a very significant way the ability of the current BC government or any future government—if the NDP were to win in spring—from stopping that pipeline or bargaining a better deal for BC,” said Gus Van Harten, an Osgoode Law professor who specializes in international investment law.

Van Harten noted that arbitrators in foreign investment agreement disputes will most likely judge in favour of Chinese investors in cases where the host country attempts to impose new or updated regulations that may interfere with the investor’s bottom line.

“If this treaty comes into effect, and there’s any Chinese ownership whatsoever in assets related to this pipeline—minority ownership, ownership we generally don’t know about—then Canada will be exposed to lawsuits under this treaty, because the BC government will be discriminating against a Chinese investor, which is prohibited by the treaty.”

The treaty will protect investors’ rights for 31 years as of November 1.

Some sense?

I can see that corporations who make significant international investments in infrastructure will want to control things to protect their investments and to guarantee their profits. These are corporations, after all, so such behaviors should be expected without question.

But why would sovereign governments want to sign negotiations that will limit their ability to make laws that are in the best interests of their own peoples?

Could it be (gasp) money?

Who’s making the deals – who are they?

When I first started considering all of this, I had a hard time wrapping my head around the idea that anyone negotiating on behalf of a sovereign government could possibly think treaties like this would be a good idea.

Then the light turned on when I thought about who our negotiators are.

Who is it these days who have risen so high in national governments that they have a seat at the table where such negotiations are done?

Business people, my friends, usually it is business people.

Trans Pacific Partnership

Here in New Zealand, we are led by John Key in a conservative government which is very business-friendly.

Canada is currently led by the Harper government of which we could very much say the same.

And the United States, as I’ve asserted for some time, has basically been captured by, and is largely under the control of, corporations and their minions; the business people.

Do you begin to see?

So, John Key is a major businessman here in New Zealand. A millionaire who has made his money through business.

So, if he leads a negotiating team to the TPP negotiations that is willing to put our subsidized pharmaceuticals (PHARMAC) on the table as a negotiating chip, then he’s put something out there that the other side (big Pharma in the U.S.) would like. And that’s free access to our NZ markets where they can sell us our pharmaceuticals for the same outrageous prices they sell them to the U.S. public for.

Unequal contest

John Key

In exchange, John Key, and the other business types he’s allied with here in New Zealand, will get access to new offshore markets through the TPP where they can sell the sorts of things they like to do business in.

In the end, by negotiating away something that belongs to all of us in New Zealand (PHARMAC), they will reap huge personal profits.

Now, they will say that some of that new money they will make will ‘trickle-down‘ into the pockets of other New Zealanders and that we will all be better off for it in the end.

Yeah right! It’s been a long time since I’ve believed in ‘trickle-down’ anything other than political bullshit. Trickle-down is just a conscience-saving mental ploy of the rich to try to make their profiting at our expense more palatable.

The new face of how corporations dominate governments

Is through international free trade agreements. Watch for it – coming to nation like yours soon.

Posted in Capitalism & Corporations, Human Rights, Mental Irrationality, New Zealand, Politics - The Wrong Way, The Perfect Storm | 2 Comments »

$1.6b cyber attack tip of iceberg, says top official

Tuesday, June 26th, 2012

Cyber attacks by a foreign state resulted in a British company losing £800 million ($1.58 billion) in revenue, the head of MI5 revealed yesterday.

This “was not just through intellectual property loss but also from commercial disadvantage in contractual negotiations”, said Jonathan Evans.

“They will not be the only corporate victims. The extent of what is going on is astonishing, with industrial-scale processes involving thousands of people lying behind both state-sponsored cyber espionage and organised cyber crime.”

Most state-organised cyber attacks in Britain are believed to be carried out by China and Russia, with an array of targets ranging from weapons manufacturers to petroleum producers.

The director general said the Security Service was involved in the investigation of “cyber-compromises in over a dozen companies and is working with many others that are potential future targets of hostile state activity. But this is only a tiny proportion of those affected.”

– More… ➡

Posted in CrashBlogging, CyberChaos, Politics - The Wrong Way, The Perfect Storm | No Comments »

End of an Era

Tuesday, June 26th, 2012

– Parents, it is time to think about where your children are going to be when the sh** hits the fan. I don’t think we’re going to avoid this mess but you could shift them to a place where another generation or two might have reasonable lives. If you think that might be in a big city in the U.S., I think you are missing the point.

– Dennis

– – – – – – – – – – – – – – – –

By George Monbiot, published in the Guardian 25th June 2012

It is, perhaps, the greatest failure of collective leadership since the first world war. The Earth’s living systems are collapsing, and the leaders of some of the most powerful nations – the US, the UK, Germany, Russia – could not even be bothered to turn up and discuss it. Those who did attend the Earth summit last week solemnly agreed to keep stoking the destructive fires: sixteen times in their text they pledged to pursue “sustained growth”, the primary cause of the biosphere’s losses(1).

The future

The efforts of governments are concentrated not on defending the living Earth from destruction, but on defending the machine that is destroying it. Whenever consumer capitalism becomes snarled up by its own contradictions, governments scramble to mend the machine, to ensure – though it consumes the conditions that sustain our lives – that it runs faster than ever before.

The thought that it might be the wrong machine, pursuing the wrong task, cannot even be voiced in mainstream politics. The machine greatly enriches the economic elite, while insulating the political elite from the mass movements it might otherwise confront. We have our bread; now we are wandering, in spellbound reverie, among the circuses.

We have used our unprecedented freedoms, secured at such cost by our forebears, not to agitate for justice, for redistribution, for the defence of our common interests, but to pursue the dopamine hits triggered by the purchase of products we do not need. The world’s most inventive minds are deployed not to improve the lot of humankind but to devise ever more effective means of stimulation, to counteract the diminishing satisfactions of consumption. The mutual dependencies of consumer capitalism ensure that we all unwittingly conspire in the trashing of what may be the only living planet. The failure at Rio de Janeiro belongs to us all.

– More… ➡

Posted in Biodiversity Loss, Capitalism & Corporations, Climate Change, CrashBlogging, CyberChaos, Deforestation, Desertification, Extinctions, Financial melt-down, Food Shortages, Fundamentalism, Human Rights, Immigration Stress, Methane, Nuclear Waste, Ocean Acidification, Ocean Dead Zones, Pandemics, Peak Oil, Politics - The Wrong Way, Pollution, Rising Ocean Levels, Social Breakdown, Terrorism, The Perfect Storm, Water Shortages, Wealth Disparity, Weather deterioration, Women's Rights | No Comments »

NZ Asset Sales Policy Began On Wall Street

Saturday, June 23rd, 2012

– I love my new country but I do believe that New Zealanders can be naive. Perhaps it is because of their long isolation. But the stuff John Key, our current conservative PM, is trying to implement here is the same stuff that the Chicago Boys have tried around the world with repeatedly disastrous consequences.

– And I’m reading that it will likely pass 61 to 60. Isn’t it utterly amazing that not one of those 61 people will change their vote when the majority of New Zealanders clearly do NOT want asset sales. One can only hope that the voters remember the transgressions of the 61 later at the polls.

– Read this analysis – it will curl your hair.

– Dennis

– – – – – – – – – – – – – – –

The Key government’s asset sales agenda is derived from the Washington Consensus – a set of Wall Street-driven policies that were pronounced dead after the global financial meltdown in 2008.[1] The New Zealand government, however, remains loyal to this failed ideology.

Why? The obvious link is Prime Minister John Key – a former investment banker for Merrill Lynch, the world’s largest brokerage failure.

In most other countries, state asset sales have become a last resort on the road to poverty and ruin, but for the Key government, asset sales are “business as usual.” [2]

So what’s really behind asset sales?
All wealth extraction is facilitated by international and national economic policies, coupled with the private banking system, which together deliver benefits to the financial elite by transferring wealth upward within and between nations.

The state asset sales policy is just one of several reforms under the Washington Consensus, a set of monetary and economic policies designed to allow: the privatization of public resources and utilities, the removal of barriers to foreign investment and ownership, the sale of state assets, trade liberalization, deregulation, the lowering of business taxes, and cuts to public services.[3]

These “free market” reforms are collectively termed neoliberalism.[4] Simply, they provide big business with improved legal access to markets and assets worldwide.

The Key government’s asset sales agenda fits obediently into this ideology ? the same ideology that ushered in financial deregulation, record bank bailouts, and the Second Great Depression.[5]

Governments in New Zealand have succumbed to the neoliberal movement since 1987, when the first round of asset sales began, as a Reagan-Thatcher-Douglas experiment.

Under these policies since the 1980s, New Zealanders have experienced almost the greatest increase in income inequality in the OECD.[6]

The deep roots of neoliberalism
Modern liberalism dates back to the end of World War II, when the Bretton Woods agreement formed the IMF and the World Bank, establishing the US dollar as a de facto world reserve currency, and installing policies aimed at stabilizing the world monetary system. Free private capital flows between countries were restricted because it was believed that international financiers had caused the Great Depression.[7]

For the next three decades, Western governments were characterized by liberal, socially democratic policies that sought to safeguard national economies by keeping trade in balance. The world achieved exceptional economic prosperity during this era known as “The Glorious Thirty” years.[8]

But by the 1970s, corporations began to exhaust the spending power of the “consumer society” as total debt increased under the mathematical bias of fractional reserve banking, exacerbated by the Vietnam War.

Policymakers were faced with a choice between more intervention to protect local economies and social justice, or a more liberal business agenda – neo (new) liberalism. Wall Street interests mobilized to advance a host of “business first” policies that became the Washington Consensus, and the euphoria for deregulation ultimately placed Wall Street beyond the reach of democratic public accountability.

Rising poverty and debt for the majority
Multinational corporations proliferated and expanded, outsourcing cheap foreign labour, extracting oil and other mineral wealth, leveraging weaker economies and favourable exchange rates to monopolise global markets, often assisted by IMF and World Bank development loans.

Globalization is defended as a strategy to boost Gross National Product (GDP) and therefore investment in jobs. But in reality, free trade strengthens capital bargaining relative to labour, so that people who derive most of their income from returns on capital (the rich) gain, while people who earn most of their income from labour (the majority) lose.[9]

The outcomes of neoliberal policies have been similar everywhere in the world. Deregulated markets have benefitted the local educated elite who work with the corporations, while the majority of people have experienced a decline in living standards, with a permanent widening of the gap between the rich and poor.[10] [11]

Neoliberalism has been catastrophic. It has accelerated sovereign debt, collapsed the financial sector, and it has caused the highest ever level of global unemployment, described recently by the International Labour Organization as a worldwide crisis.[12]

Meanwhile, the corporations and the international banking aristocracy have amassed enormous unproductive wealth via their trickle-up incomes.

“Free trade” unlocks foreign assets
The post-World War II version of free trade promoted “fair trade” and often achieved a healthy balance of payments. But the Washington Consensus threw caution to the wind, allowing big business to dominate government policy, making deficits routine.

Free trade agreements, such as the North American Free Trade Agreement (NAFTA), have virtually destroyed US-based manufacturing, leaving Main Street America with a service sector economy.[13]

The Trans Pacific Partnership Agreement (TPPA) signals yet another secretive free trade deal intended to free-up access to foreign assets. The TPPA could render New Zealand government decisions subject to rulings by international tribunals, in the defence of investors from the negotiating countries of Singapore, Chile, Brunei, Australia, Peru, Vietnam and the United States. This is how “free trade” agreements pave the way for the extraction of wealth ? by the erosion of economic sovereignty.

The Key government’s privatisation agenda is well advanced, with various private public partnerships (PPPs) already being developed. This neoliberal doctrine includes the privatization of prisons, schools, water resources, and all infrastructure.

Ultimately on offer is $5-20 trillion[14] in Crown mineral wealth, including gold, coal, lignite, phosphate, iron sand, oil, natural gas, and more, all under the fourth lowest royalty and taxation regime in the world[15] – a paltry 1% of the production value.[16]

“Mixed ownership model” is destined to fail
The Key government plans to sell 49% of four state owned energy companies – Mighty River Power, Meridian, Genesis, and Solid Energy, and a further 23% of Air New Zealand. It is claimed that $5–7 billion can be “freed up” to reduce debt.[17]

What really betrays these asset sales as an ideologically-based policy is the maths. Financial analyst Brent Sheather has calculated that the assets are earning a higher income than the cost of borrowing.

Currently, the cost of borrowing is 4% for ten years, so the cost of $6 billion would be $240 million. The forecast dividends of the four SOE energy companies average $449 million over the next five years, 49% of which is $220 million. Add $20 million for selling 23% of Air New Zealand and the lost dividends average $240 million a year.[18]

Now, add the sales related costs estimated at 3% or $180 million, plus the expected improved performance from substantial recent capital investment, and there is no way for New Zealand taxpayers to come out ahead.

As the Green’s co-leader Russel Norman has said:
“We have seen this before. Like our energy SOEs, Telecom had invested significant amounts of capital in building a modern telecommunications network in the years before privatisation. In the years following Telecom’s privatisation, dividend streams for its new private owners doubled, then tripled within six years. History now seems to be repeating itself with our energy SOEs. National has allowed the taxpayer to build up the asset, only to then on-sell it to the benefit of others.” [19]

The initial public offerings (IPOs) will be snapped up and passed on to larger offshore players, who with only a combined holding of 25% will enjoy foreign-owned status under the Overseas Investment Act (2005),[20] with ample influence at 49% to sway policy. So expect higher power prices.

Over the longer term, asset inflation will provide a mega windfall for shareholders.

In 1999, the NZ Herald reported that: ‘Over the past 12 years 40 state-owned commercial assets have been sold, realising $19.1 billion. As at August 31, 1999 these assets had an estimated value of $35.7 billion, $16.6 billion above their original sale price. … The privatisation programme has been a huge windfall for overseas investors. Just over 79 per cent, or $13.1 billion, of the increase in value has gone to offshore interests.’ [21] [22]

No political party can beat debt under our monetary system
New Zealand’s government debt is presently modest compared to private debt. In the short-term, tax reforms that enable a fairer redistribution of income would slow the deepening tide of all New Zealand debt ? if only the Key government would allow this.

But in our post-peak oil world, without cheap oil to fuel high productivity, sovereign debt in New Zealand ? as elsewhere, will inevitably force austerity measures consistent with the Washington Consensus. The past failure of these policies will be ignored, because ultimately there is simply no other option under the debt-based system.

Under fractional reserve banking the rate of growth of debt must be higher than the rate of growth of income to avoid collapse. In aggregate, debt grows exponentially until it cannot be repaid. [23] [24]The world is literally attempting to engage productive overdrive in a hopeless struggle to satisfy unproductive debt servicing.

Almost half of the average earned income is already siphoned off via direct or indirect hidden interest, and in government debt taxes.[25] In sum, almost half of humanity’s productive effort is to serve useless debt, instead of solve the world’s problems.

The pressure to leverage fiscal advantage from assets, of all kinds, comes directly from the ruling power – the international banking elite. No political party can entirely avoid asset extraction under the fractional reserve system. Governments can adjust the debt hand-brake, but the foreign bankers are in the driving seat.

The world is sliding toward zero and eventually negative growth. Sovereign debt can only speed up. New Zealand will join the economic train-wreck down the track.

The only escape route is a public medium of exchange that is debt-free.[26] Every sovereign nation can issue its own currency without debt or interest, but nearly all governments align with the international bankers to extort the “common wealth.”

The Reserve Bank of New Zealand issues less than 2% of the nation’s money debt-free,[27] serving the global central banking cartel, not ordinary Kiwis.

Selling public assets amounts to economic suicide
The European Central Bank (ECB) is clearly demonstrating how economic sovereignty can be wrested from countries through debt peonage.

The world on its present course cannot avoid fuel shortages, debt-deflation, fiscal austerity, increasing poverty, political and environmental conflicts over energy and essential commodities, unprecedented global protests against Wall Street financial injustice, political and legal challenges for full reserve monetary reform, climate and humanitarian disasters, further revolution and war.

We are facing the perfect economic storm, in which sacrificing long-term high performing income would guarantee poverty for the majority. Selling public assets amounts to economic suicide.

Most New Zealanders don’t realize that their country, and their future, is being sold.

________________________________________

[1] Anthony Painter. (2009, April 10). The Washington Consensus Is Dead. The Guardian., Kings Place, 90 York Way, London N1 9GU, UK.
http://www.guardian.co.uk/commentisfree/cifamerica/2009/apr/09/obama-g20-nato-foreign-policy

[2] Mixed Ownership Monitoring Unit. (2011, December 15). Mixed Owner Model For Crown Companies. Crown Ownership Monitoring Unit , 1 The Terrace, Wellington 6011, New Zealand.
http://www.comu.govt.nz/publications/information-releases/mixed-ownership-model/

[3] John Williamson. (2004, September 24-25). A Short History of the Washington Consensus.
http://www.iie.com/publications/papers/williamson0904-2.pdf

[4] Neoliberalism. Wikipedia.
http://en.wikipedia.org/wiki/Neoliberalism

[5] Steve Keen. (2011, December 3). We’re Already In The Second Great Depression, We Just Don’t Realize It Yet.
http://articles.businessinsider.com/2011-12-03/markets/30471134_1_second-great-depression-hope-new-jobs

[6] OCED. (2011, December 5). Governments must tackle record gap between rich and poor, says OECD.
http://www.oecd.org/document/40/0,3746,en_21571361_44315115_49166760_1_1_1_1,00.html
‘The gap between rich and poor in OECD countries has reached its highest level for over 30 years, and governments must act quickly to tackle inequality, according to a new OECD report. “Divided We Stand: Why Inequality Keeps Rising” finds that the average income of the richest 10% is now about nine times that of the poorest 10 % across the OECD.’

[7] Jan A. Kregal. (2003, April). The Perils of Globalization: Structural, Cyclical and Systemic Causes of Unemployment
http://www.cfeps.org/pubs/sp-pdf/SP13-Jan.pdf
‘In the view of US Secretary of the Treasury Morganthau the creation of the Bretton Woods institutions was to keep the control of the international financial system out of the hands of international financiers who were considered to have caused the Great Depression. Keynes agreed that free private international capital flows were incompatible with a stable international financial system and this similarity of views produced a post-war system in which it was presumed that there would be virtually no private international capital flows.’

[8] Embedded Liberalism. The Glorious Thirty years. Wikipedia.
http://en.wikipedia.org/wiki/Neoliberalism
‘The period of government interventionism in the 1950s and 1960s was characterized by exceptional economic prosperity, as economic growth was generally high, was contained, and economic distribution was comparatively equalized. This era is known as les Trente Glorieuses (“The Glorious Thirty [years]”) or “Golden Age”, a reference to many countries having experienced particularly high levels of prosperity between (roughly) World War II and 1973.’

[9] Ian Fletcher. (2011). Free Trade Doesn’t Work, Why the Theory of Comparative Advantage is Wrong.
http://www.worldfinancialreview.com/?p=866
‘As a result, people who draw most of their income from returns on capital (the rich) gain, while people who get most of their income from labor (the rest) lose.’

[10] Richard C. Cook. (2007, June 2). Monetary Causes of the Immigration Crisis. The “Washington Consensus” has wrecked their economies. Global Research.
http://www.globalresearch.ca/PrintArticle.php?articleId=5862
‘The conditions also include a shift of indigenous economies to the production of export commodities, away from local self-sustaining agriculture and small business. This typically results in a mass exodus from rural areas to urban slums and causes poverty, unemployment, and crime. These financial programs benefit the local educated elite who work with the Western agencies and global corporations but cause a deep and permanent stratification among social classes.’

[11] OCED. (2011, December 5). Governments must tackle record gap between rich and poor, says OECD.
http://www.oecd.org/document/40/0,3746,en_21571361_44315115_49166760_1_1_1_1,00.html

[12] ILO. (2011). Global Employment Trends 2011. International Labour Office, CH-1211 Geneva 22, Switzerland.
http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_150440.pdf

[13] Robert E. Scott. (2011, May 3). Heading South: US-Mexico Trade And Job Displacement After NAFTA. Economic Policy Institute, 1333 H Street NW, Suite 300 East Tower, Washington DC 20005, USA, www epi.org.
http://www.epi.org/page/-/BriefingPaper308.pdf

[14] Dr. Don Elder. (2010, September 21). CEO, Solid Energy. Day 2 presentation at the 2010 New Zealand Petroleum Conference, Skycity Convention Centre, Auckland, during which Dr Elder has been quoted as stating that New Zealand has NZ$ 5-20 trillion in Crown minerals.
http://www.nzpam.govt.nz/cms/pdf-library/petroleum-conferences-1/2010-nzpc-speaker-presentations/Don%20Elder.pdf
[15] IPENZ, authorship withheld. (2011, December). Realizing Our Hidden Treasure: Responsible Mineral and Petroleum Extraction. The Institution of Professional Engineers New Zealand Inc., PO Box 12 241, Wellington 6144, New Zealand.
http://www.ipenz.org.nz/ipenz/media_comm/documents/IPENZMineralsandPetroleumFinalDec2011.pdf

[16] Taxation & Royalties for Mining Companies. New Zealand Mineral Industry Association. PO Box 24315, Wellington 6142, New Zealand.
http://www.minerals.co.nz/html/main_topics/overview/taxation_royalties.html
‘The Ministry of Commerce has recently imposed a royalty on minerals owned by the Crown. The royalty is the greater of 1% ad valorem (value of production) or 5% of accounting profits.’

[17] Mixed Ownership Monitoring Unit. (2011, December 15). Mixed Owner Model For Crown Companies. Crown Ownership Monitoring Unit,1 The Terrace, Wellington 6011, New Zealand.
http://www.comu.govt.nz/publications/information-releases/mixed-ownership-model/

[18] Gordon Campbell. (2011, November 24). Gordon Campbell: financial analysts jump ship on asset sales.
http://www.scoop.co.nz/stories/HL1111/S00215/gordon-campbell-financial-analysts-jump-ship-on-asset-sales.htm

[19] Dr Russel Norman. (2011, November 23). National Set To Repeat Telecom Privatisation Mistake.
http://www.voxy.co.nz/politics/national-set-repeat-telecom-privatisation-mistake/5/108571

[20] Overseas Investment Act (2005). Section 7 (1). ‘…or they are 25% (or more) owned or controlled by an overseas person or persons.’ Parliamentary Counsel Office., PO Box 18070, Wellington 6160, New Zealand.
http://www.legislation.govt.nz/act/public/2005/0082/latest/DLM356881.html

[21] Bryan Gaynor, NZ Herald. (1999, October 2). Analysis: Filling Foreigner’s Pockets. The New Zealand Herald, PO Box 32, Auckland, New Zealand.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=15142

[22] The Treasury. (1999, September 30). Income from State Asset Sales. Historical information on the sale price and background to New Zealand Government asset sales as at 30 September 1999. The Treasury, Level 5 (Reception), 1 The Terrace, Wellington 6011, NEW ZEALAND.
http://www.treasury.govt.nz/government/assets/saleshistory

[23] Michael Hudson. (2004, January 24). The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview Part I.
http://michael-hudson.com/2004/01/the-mathematical-economics-of-compound-rates-of-interest-a-four-thousand-year-overview-part-i/
‘Orthodox academic models rarely acknowledge the problems posed by the exponential growth of debt overhead. Such models typically make government policies appear unnecessary to cope with this problem, by focusing on the kind of world that might exist if the financial overgrowth of savings and debts did not double every decade or so, having multiplied again and again over the past century. It thus has been left mainly to non-mainstream writers to address the structural problems created by an accumulation of interest-bearing debt.’

[24] Debt Grows Exponentially. (2010, October 30). The Elephant In The Room: Debt Grows Exponentially, While Economies Only Grow In An S-Curve. Washington’s Blog.
The Elephant In The Room: Debt Grows Exponentially, While Economies Only Grow In An S-Curve
‘Hudson says that – in every country and throughout history – debt always grows exponentially, while the economy always grows as an S-curve. Moreover, Hudson says that the ancient Sumerians and Babylonians knew that debts had to be periodically forgiven, because the amount of debts will always surpass the size of the real economy. … One thing is for sure. The exponential growth of debt is a structural problem which – unless directly addressed – will swallow all economies which try to ignore it.’

[25] Margrit Kennedy. (1995). Interest and Inflation Free Money. Creating an exchange medium that works for everybody and protects the earth. Published by Seva International, ISBN 0-9643025-0-0.
http://kennedy-bibliothek.info/data/bibo/media/GeldbuchEnglisch.pdf
‘On an average we pay about 50% capital costs in the prices of our goods and services. Therefore, if we could abolish interest and replace it with another mechanism to keep money in circulation, most of us could either be twice as rich or work half of the time to keep the same standard of living we have now.’ (Other estimates are 40-45%.)

[26] Positive Money NZ. A campaign for Full Reserve Banking, based on similar campaigns in the UK and USA.
http://www.positivemoney.org.nz/

[27] Deirdre Kent. (2011, November). Money For Nothing. New Zealand Investor.
http://most0010122.e-xpert.co.nz/includes/download.aspx?ID=118572

– To the original article… ➡

– Research thanks to Kierin M.

Posted in Capitalism & Corporations, CrashBlogging, Financial melt-down, Mental Irrationality, Politics - The Wrong Way, The Perfect Storm, Wealth Disparity | No Comments »

Regarding the influence of right-wing media on governments…

Monday, May 28th, 2012

– Saw this quote by former British Prime Minister Tony Blair this morning in an article in the New Zealand Herald:

“Former Prime Minister Tony Blair said today that he couldn’t stand up to the Britain’s media tycoons while in power, telling an official media ethics inquiry that doing so could have dragged his administration into a political quagmire.”

– These big news organizations are, themselves, just one part of the multi-national corporations who are intent on controlling governments and their actions and laws for the ultimate benefit of the corporations themselves. They influence governments, as shown here. They take over mass media such as newspapers, radio and television to use them to promulgate their self serving propaganda, And, for those who are following the Net Neutrality (➡, ➡, ➡, and ➡) debates and skirmishes, they are also seeking to control the Internet for their own benefit as well.

– And the irony is that most people do not know this is all going on and, when told, will deny it.

– Wake up people! The thieves of your freedoms are in the house and well past your locked doors.

– Dennis

– – – – – – – – – – – – – – – – – – – –

Former Prime Minister Tony Blair said today that he couldn’t stand up to the Britain’s media tycoons while in power, telling an official media ethics inquiry that doing so could have dragged his administration into a political quagmire.

Blair’s testimony, briefly interrupted by a heckler who burst into the courtroom to call him a war criminal, shed light on the canny media strategy used to create the “New Labour” image that repackaged his party as more mainstream and business friendly, bringing it back to power after 18 years in opposition.

Blair, who was premier from 1997 to 2007, enjoyed strong press support in his early years, including backing from media mogul Rupert Murdoch’s influential newspapers. But he found himself isolated near the end of his decade in power due in large part to his unpopular decision to join the U.S.-led invasion of Iraq.

The greying ex-prime minister said he long had concerns about what he once described as the “feral beasts” of the media but had to tread carefully where press barons were concerned.

– More… ➡

Tags:Net Neutrality
Posted in Capitalism & Corporations, Corruption, CrashBlogging, Culture - How not to do it, Human Rights, Politics - The Wrong Way, Social Breakdown, The Perfect Storm | No Comments »

An Open Letter to the World

Sunday, May 20th, 2012

– Sad news from Canada where the conservative Harper government is decimating science.

– Dennis

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Dear Everyone,

My name is Naomi. I am Canadian. I worked for Environment Canada, our federal environmental department, for several years before our current Conservative leadership (under Stephen Harper) began decimating environmentalism in Canada. I, along with thousands and thousands of federal science employees lost any hope of future work. Their attitude towards the environment is ‘screw research that contradicts the economic growth, particularly of the oil sands’. They have openly and officially denigrated anyone that supports the environment and opposes big-money oil profit as ‘radicals’ (http://tinyurl.com/7wwf8dp).

Every day in Canada, new information about their vendetta on science and the environment becomes quietly public and keeps piling up. I have been privy to much first-hand information still because I retain friendships with my ex-colleagues (though my blood pressure hates me for it).

While I was working there, scientists were effectively muzzled from speaking to the media without prior confirmation with Harper’s media team (http://tinyurl.com/7bnsqp4) – usually denied, and when allowed, totally controlled. Scientists were threatened with job loss if they said anything in an interview that was not exactly what the media team had told them to say. This happened in 2008. The public didn’t find out for years.

During one of my contracts, I was manager of a large, public database set. Contact information for all database managers was available for anyone. I knew what was going on with the information and could answer questions immediately and personally. During this time, I noticed that a media team from Quebec started asking me “What would I say” to certain questions. I answered unwittingly. After a certain period of time, I noticed that all contact information had been removed from the internet –eliminating the opportunity for a citizen to inquire directly about these public data sets without contacting the media team. The Conservatives effectively removed another board from the bridge between science and the public, and I had inadvertently helped.

Since then, the Conservative government has been laying off thousands and thousands of full-fledged scientists that have been performing research for decades (http://tinyurl.com/8xtkaro), shutting down entire divisions and radically decimating environmental protection and stewardship in a matter of a couple years.

I am afraid for my country. Canada is the second largest land mass in the world – though our population is small, you can be sure that when a country that encompasses 7% of the world’s land mass, and has the largest coastline in the world says “screw it” to environmental protection, there will be massive global repercussions.

The Conservative leadership have admitted to shutting down environmental research groups on climate change because “they didn’t like the results” (http://tinyurl.com/7kpqk7d), are decimating the Species at Risk Act (our national equivalent of the IUCN Red list), are decimating habitat protection for fisheries, are getting rid of one of the most important water research facilities in the world (Experimental Lakes Area – has been operational since 1968, and allows for long-term ecosystem studies [http://tinyurl.com/cdygbdk] ), are getting rid of almost all scientists that study contaminants in the environment, have backed out of the Kyoto protocol – and the list goes on and on and on.

Entire divisions of scientific research are being eliminated. Our land, our animals, our plants, our environment are losing all the protection that has been building for decades – a contradictory stance to the rest of the world. (Please see their proposed omni-bill that basically tells the environment to go screw itself, while also being presented in an undemocratic fashion that limits debate on any of the 70+ changes [http://tinyurl.com/89ys2nf]).

David Schindler, a professor from the University of Alberta (and founder of ELA) quoted. “I think we have a government that considers science an inconvenience.”

I am writing this to implore every single person to please – look into this subject, and help us, help ourselves. Contact your MP, the Fisheries minister, Stephen Harper, anyone, everyone. I can’t sit by and just post rants on my Facebook page anymore. Share this letter, discuss, anything. Canada is an important nation environmentally, and our leadership doesn’t give a fig for science or the environment. But we do. This Conservative minority leadership was voted in on a thin string in the lowest voter election turnout in recent history, but thanks to our ridiculous voting laws, have 100% full power to do whatever they want. And in the name of short-term monetary oil profit, they have realized that science and the environments is a threat to their goals, and are doing everything possible to eliminate both.

We are depressed, and frustrated, and mad, and need all the help we can get to protect the value of science and our environment. In the age of globalization, intentional stone-age evilness is going to affect everyone. We share our waters, air, and cycles with all of you. Science IS a candle in the dark, and we cannot let greed extinguish that flame. What happens in Canada – will happen everywhere.

Thank you.

Sincerely,

A Canadian that cares about science and the environment

– To the original post over on uncloaked … ➡

Posted in Capitalism & Corporations, CrashBlogging, Mental Irrationality, Politics - The Wrong Way, Science, The Perfect Storm | No Comments »

Let’s just say it: The Republicans are the problem.

Monday, April 30th, 2012

– For my American friends … because politics have become such fun there.

– Dennis

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

By Thomas E. Mann and Norman J. Ornstein, Published: April 28 in the Washington Post

Rep. Allen West, a Florida Republican, was recently captured on video asserting that there are “78 to 81” Democrats in Congress who are members of the Communist Party. Of course, it’s not unusual for some renegade lawmaker from either side of the aisle to say something outrageous. What made West’s comment — right out of the McCarthyite playbook of the 1950s — so striking was the almost complete lack of condemnation from Republican congressional leaders or other major party figures, including the remaining presidential candidates.

It’s not that the GOP leadership agrees with West; it is that such extreme remarks and views are now taken for granted.

We have been studying Washington politics and Congress for more than 40 years, and never have we seen them this dysfunctional. In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party.

The GOP has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.

When one party moves this far from the mainstream, it makes it nearly impossible for the political system to deal constructively with the country’s challenges.

“Both sides do it” or “There is plenty of blame to go around” are the traditional refuges for an American news media intent on proving its lack of bias, while political scientists prefer generality and neutrality when discussing partisan polarization. Many self-styled bipartisan groups, in their search for common ground, propose solutions that move both sides to the center, a strategy that is simply untenable when one side is so far out of reach.

It is clear that the center of gravity in the Republican Party has shifted sharply to the right. Its once-legendary moderate and center-right legislators in the House and the Senate — think Bob Michel, Mickey Edwards, John Danforth, Chuck Hagel — are virtually extinct.

The post-McGovern Democratic Party, by contrast, while losing the bulk of its conservative Dixiecrat contingent in the decades after the civil rights revolution, has retained a more diverse base. Since the Clinton presidency, it has hewed to the center-left on issues from welfare reform to fiscal policy. While the Democrats may have moved from their 40-yard line to their 25, the Republicans have gone from their 40 to somewhere behind their goal post.

What happened? Of course, there were larger forces at work beyond the realignment of the South. They included the mobilization of social conservatives after the 1973Roe v. Wadedecision, the anti-tax movement launched in 1978 by California’s Proposition 13, the rise of conservative talk radio after a congressional pay raise in 1989, and the emergence of Fox News and right-wing blogs. But the real move to the bedrock right starts with two names:Newt Gingrich and Grover Norquist.

From the day he entered Congress in 1979, Gingrich had a strategy to create a Republican majority in the House: convincing voters that the institution was so corrupt that anyone would be better than the incumbents, especially those in the Democratic majority. It took him 16 years, but by bringing ethics charges against Democratic leaders; provoking them into overreactions that enraged Republicans and united them to vote against Democratic initiatives; exploiting scandals to create even more public disgust with politicians; and then recruiting GOP candidates around the country to run against Washington, Democrats and Congress, Gingrich accomplished his goal.

Ironically, after becoming speaker, Gingrich wanted to enhance Congress’s reputation and was content to compromise with President Bill Clinton when it served his interests. But the forces Gingrich unleashed destroyed whatever comity existed across party lines, activated an extreme and virulently anti-Washington base — most recently represented by tea party activists — and helped drive moderate Republicans out of Congress. (Some of his progeny, elected in the early 1990s, moved to the Senate and polarized its culture in the same way.)

Norquist, meanwhile, founded Americans for Tax Reform in 1985 and rolled out his Taxpayer Protection Pledge the following year. The pledge, which binds its signers to never support a tax increase (that includes closing tax loopholes), had been signed as of last year by 238 of the 242 House Republicans and 41 of the 47 GOP senators, according to ATR. The Norquist tax pledge has led to other pledges, on issues such as climate change, that create additional litmus tests that box in moderates and make cross-party coalitions nearly impossible. For Republicans concerned about a primary challenge from the right, the failure to sign such pledges is simply too risky.

Today, thanks to the GOP, compromise has gone out the window in Washington. In the first two years of the Obama administration, nearly every presidential initiative met with vehement, rancorous and unanimous Republican opposition in the House and the Senate, followed by efforts to delegitimize the results and repeal the policies. The filibuster, once relegated to a handful of major national issues in a given Congress, became a routine weapon of obstruction, applied even to widely supported bills or presidential nominations. And Republicans in the Senate have abused the confirmation process to block any and every nominee to posts such as the head of the Consumer Financial Protection Bureau, solely to keep laws that were legitimately enacted from being implemented.

– More (if you can stand it) … ➡

– Research Thanks to Cara H.

Posted in CrashBlogging, Culture - How not to do it, Mental Irrationality, Politics - The Wrong Way, Social Breakdown, The Perfect Storm | No Comments »

America’s problems in a nutshell

Friday, April 20th, 2012

– A friend of my picked up this perceptive comment on the NYT Blogsphere. I thought it tied a lot of stuff up quite succinctly.

– Dennis

= = = = = = = = = = = = = = = = = = = = = = =

“It strikes me that America has two fundamental, inter-related problems that paralyze it and prevent it from adapting and changing:

One is its constitution and structure of governance. Senate filabustering rules, a politicised judiciary and supreme court, gerrymandered congressional districts, a politicised electoral process, the combination of chief executive and head of state in the same person, an incessant election cycle and so many other flaws means that American government just doesn’t work very well. No wonder it’s system of democracy isn’t replicated by other democracies around the world. It’s not fit-for-purpose.

The other source of paralyisis is ideology. The deification of the founders and the constitution prevents adaptation. The insularity of American exceptionalism prevents global benchmarking and best-practice. The rabidity of individualism prevents social solutions that would benefit the nation as a whole. Beyond the chanting of pledges and the waving of flags, large parts of America have decended into a religious-based extremism that turns its back on truth itself.

The Soviet Union collapsed because its ideology could not adapt to human and economic reality. China succeeds because, when faced with the failure of its ideology it abandoned it and instead embraced pragmatism and did what worked.

America, tied down with unworkable governance and inflexible ideology, seems to be following the Soviet model.”

– Research thanks to Rolf A.

Posted in CrashBlogging, Culture - How not to do it, Politics - The Wrong Way | No Comments »

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