Occupy - Phase II

Those who occupied Wall Street and those who occupied hundreds of cities around the globe have done a great service by calling into question the outsized influence of money in our political system. If we weren’t aware before, the movement has brought attention to the influence of money in politics and how that influence leads to laws and judicial decisions that favor the rich. But it’s more than ‘favoring’ that has us riled.

The cynic will argue that money has long been equated with power. It’s just the way it is, many would argue. If it were just tilting the odds in favor of the rich and powerful, there wouldn’t be enough energy behind the movement to change anything. The protesters would be labeled as envious, deadbeats, freeloaders. Oh, they already are labeled as envious, deadbeats and freeloaders. And communists, socialists, anarchists and criminals.

What gives this movement the energy and legitimacy of a real movement is the blatant greediness and the egregious extent to which the rich and powerful have written the laws and bought the justices, making their acts ‘legal’ and their actions upheld. It is now clear: the laws allow pillaging of the middle class; the courts legitimize what the laws don’t allow; and now we see that the military and police are the enforcers for the rich and powerful.

Tax loopholes - including estate tax breaks, corporate income tax breaks, oil depletion allowances, free pollution rights and dividend income exclusions, among just a few – are laws scripted by lobbyists. Court decisions – including Bush v. Gore and Citizens United – clearly show that the highest court in the land is no longer interested in civil rights, only the ‘civilized’ rights of the rich and powerful. Military and police actions – including the invasions and occupations (in some cases, just behind-the-scenes control) of Iraq, Afghanistan, Pakistan, Yemen, Columbia, and attempts to subvert Venezuela, Guatemala, Honduras, Haiti, the Philippines, Indonesia, Mexico, Panama, et al – show that we will use our weapons, money, people and any means (e.g. torture) to protect and assist the rich in getting richer. Now our local police are exposed as the domestic military, beating, intimidating, pepper spraying, imprisoning and evicting peaceful protesters, from tree huggers to Occupy Movement protesters.

So, it’s time to up our game. There are only two tools we have left: voting and spending. The propaganda machine can blanket the airwaves, making it tough to know what’s fact or fiction. The consolidation of businesses makes it tough to shop for alternative providers. But we can start chipping away. Here’s what I think we need to do next:

1. Pick five of the most egregious corporate interferers in our political system.

2. Demand they stop campaign contributions and lobbying elected and regulatory bodies.

3. Boycott their products or services until they stop the contributions and lobbying, and find alternative providers.

4. Direct a letter writing campaign to newspapers, politicians and companies, bringing attention to companies we’re targeting and supporting companies that stay out of politics (mostly those small companies that can’t afford to lobby).

5. Start proxy initiatives to change corporate behavior.

Everyone can help. Let’s first build the list of our top five corporate offenders. Then we’ll research the list to ensure we can defend our choices. When that is done we’ll develop a boycott strategy to have maximum impact. Then we’ll get more ideas on media relations and stockholder revolts.

Now, let’s get started!

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ImaginePolitik Supports BradBlog

Imaginepolitik is thrilled to help acclaimed independent journalist Brad Friedman continue his excellent work at Brad Blog. Brad’s investigative work on electronic voting manipulation has been groundbreaking and was the inspiration for a key plot turn in Imaginepolitik. You can help support his work by following this link to a Premium Offer for contributors.

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Budget Deficit Follows Trade Deficit

Bruce Mulliken writes a newsletter on renewable energy developments and research that I've followed for years. His ability to see the big picture, challenge traditional concepts and 'get technical' is enlightening and motivating. This article from his August 29, 2011 newsletter is typical of his insights.

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BUDGET DEFICIT FOLLOWS TRADE DEFICIT.
by Bruce Mulliken, Green Energy News

Spending a little helps pay the way for many. Buying a candy bar helps
pay the wage of the laborer on the candy bar production line. It
doesn't stop there. Down the candy production and distribution chain a
fraction of a cent from the purchase went to the wage of the machinist
who built the candy bar making machine. Another fraction went to the
worker in the mill that made the steel for that candy machine. A
fraction of a fraction of a cent went to the iron ore miner or the
worker in the steel recycling facility providing the raw material to
make the steel to make that machine. Of course some made profits too.

The nation's economy is helped when the candy bar, the candy bar
machine and the metal for the machine are made at home. The economy is
further helped if candy, machine, or steel is exported to foreign
markets. Exports bring new money into an economy, money that wasn't
there before. Imports see money go away. Money completely disappears
from an economy when imports exceed exports for a long period of time.

The U.S. has had an annual trade deficit for more than 30 years. No
surpluses in all those years. The last trade surplus was in 1975. It
was only a few years later, in the early 1980s, that annual federal
government budget deficits, and the cumulative national debt, began to
skyrocket.

Maybe there's a connection.

The reliance on foreign oil and its increasing price has raised havoc
on the trade deficit in recent years. In the years 2001 through 2010
the U.S. imported $1.79 trillion's worth of oil out of the total
accumulated "trade debt" of $5.6 trillion. In the later years, 2008,
2009, and 2010 oil made up roughly half of our annual trade deficits,
according to data from the U.S. Census. In 2001 oil imports were only
20 percent of the trade deficit for the year.

Warren Buffett, of Berkshire Hathaway said in 2006, "The U.S trade
deficit is a bigger threat to the domestic economy than either the
federal budget deficit or consumer debt and could lead to political
turmoil... Right now, the rest of the world owns $3 trillion more of
us than we own of them."

(Is the Tea Party political turmoil?)

Buffett, the third wealthiest person in the world, thinks taxes should
raised on the wealthy to help the US get out of debt. Other wealthy
folk probably agree.

Concerned about the mounting national debt, and trying to make
political hay, the U.S. Congress is now poised to begin arguments on
spending cuts. Capitol Hill is expected to be a ugly place in coming
months as foul words fly across the political aisle. Don't expect
efforts to rein spending to help retain or create new jobs though.
Some spending cuts will mean layoffs. Other cuts will mean less cash
in people's pockets. Either way, fewer candy bars will be bought.
Somewhere down the line a steel worker will lose his job.

Republicans and Tea Partiers in Congress have said they have no
interest in raising taxes to increase revenues to reduce annual budget
deficits and the national debt. Instead maybe they should take a
closer look at the more evil trade deficit, including the oil trade
deficit. Money not shipped out of the country by the boatload would be
spent at home to save and create jobs. Some of that money that stays
within our borders will end up in government coffers reducing our
national debt.

Right now exports from the U.S. are being helped by a weak dollar
which makes U.S. products more appealing overseas. Conversely imports
have become slightly more expensive reducing the buying power of
consumers.

Other work to reduce the trade deficit is coming from the White House.
The Obama Administration's work in increasing fuel economy standards
in cars and trucks will, in future years, reduce the nation's trade
deficit in oil. An added bonus will be a reduction in carbon
emissions. Further, consumers will save by the new regulations by
spending less on gas. Automakers, too, will benefit. They'll be forced
to innovate and develop new products energy efficient enough to be
sold in foreign markets. With the new regs, imports of oil should go
down and exports of cars and trucks could go up.

Now we're sending container loads of money to bolster other's
economies. Instead we need to fill those containers with goods like
candy bar making machines and see the containers come back to our
ports filled with cash. We shouldn't relying on the value of the
dollar to help exporters. Instead we should be focusing on export
products engineered, designed for global markets.

*Reprinted with permission from the author. See more from Bruce Mulliken at Green Energy News.

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OCCUPY WALL STREET from Main Street

Occupy Monterey Peninsula (California’s Central Coast) held its first meeting last Saturday, and I attended my first protest rally. I’m very proud of the young people that organized the rally, and of the 200 people in attendance. They were patient, non-violent and smart about the issues. I was embarrassed that it was my first in-person involvement in a group rally . . . but glad I finally showed up.

The parallels with Imaginepolitik were clear: both the fictional story and the OWS movement use the tool of mass protest in multiple cities to attempt to take back democracy from a short-sighted, cannibalizing corporatocracy. Capitalism isn’t the problem. But when the power of money begins to manipulate industries, society and government policies to bring its owners more power and more money, capitalism is no longer simply an economic system. It becomes an oligarchy or fascist state, where a few conglomerate corporations and individuals control economic life.

The capitalist system is based on competition, voluntary exchange and informed, equal exchangers. No society has every experienced this ‘pure’ equilibrium. In this country and in many others, competition exists only between job seekers. Voluntary exchange nowadays is being able to choose between buying something and doing without. Informed exchangers assumes everyone has a law degree from a top-ten law school. And equal exchangers exist only at the local garage sale.

I still feel uncomfortable participating in a group. I still can’t bring myself to join a political party. The group and its other individual participants will have different views and solutions than I have. They have different lifestyles, different priorities. But the sooner I admit that I can’t compete with corporate America by myself, the sooner I’ll recognize these people as my allies and our only hope of retaking our democracy. So it’s time I join the chorus.

“What do we want?”
“Justice!”
“When do we want it?”
“NOW!”

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MY TICKET FOR 2012

Reich/Krugman.

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Ten Years of Tax Cuts and Hollow Promises - Guest Column

By and with permission of Steven Conn, professor and the director of public history at Ohio State University. Steven has authored dozens of op-eds which have appeared in newspapers around the country.

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Ten years of tax cuts and hollow promises

Economic growth and new jobs haven't materialized.

By Steven Conn

It's been 10 years since George W. Bush began cutting taxes, especially for wealthy individuals and large corporations. The bills he signed to do so had names like the "Economic Growth and Tax Relief Reconciliation Act," the "Jobs and Growth Tax Relief Reconciliation Act," and the "American Jobs Creation Act."

As the names suggest, these huge tax cuts were supposed to stimulate the economy and create jobs. The theory was that shifting vast sums of money to big corporations and the wealthiest Americans would enable them to invest in new businesses, expand existing ones, and bring greater prosperity to the rest of us.

So, 10 years later, it's worth asking: Did it work?

Figuring out cause and effect when it comes to economic policy is always tricky. Although many economists pretend otherwise, economics is not a hard science. There are more variables than you can control for, and you don't get to run the experiment twice.

Still, let's look at some numbers. In mid-2003, the Bush administration predicted that by the end of 2004, its tax cuts would create 5.5 million jobs. The administration also acknowledged that even without the tax cuts, the economy would probably add 4.1 million jobs during that period.

The actual result? The economy gained only 2.6 million jobs. In fact, Bush's job creation record in his first term was among the worst since Herbert Hoover's.

And the numbers are even worse than they appear, because many of those jobs were produced by increased military spending related to the wars in Iraq and Afghanistan.

In the middle years of the last decade, the most robust sectors of the economy - housing and real estate - were fueled not by big tax cuts, but by a bonanza of home-equity loans and other forms of easy money. We all know how that turned out.

And at the end of Bush's second term, of course, the economy fell off a cliff. By the time he left Washington, unemployment was soaring toward 10 percent. So much for job creation.

So what happened to all the tax-cut money that was supposed to be invested?

Some of it was invested in hedge funds, derivatives markets, and other places where it made rich investors richer but produced little of any value for the economy. And, by 2003, more American money was being invested overseas than in the United States. In other words, those tax cuts did help create jobs - in China, India, Brazil, and other foreign countries, but not in the United States.

Since we didn't get the jobs we were promised, what did these tax giveaways cost us? It's hard to calculate the lost revenue with precision, but the consensus is that the Bush tax cuts have cost about $2.8 trillion over the past decade. Add that to the costs of the wars in Iraq and Afghanistan, which are approaching $1.5 trillion, and you have enough to more or less clean up our current fiscal mess. In that sense, today's deficit was created by tax cuts that were too big and wars that were fought with credit cards.

It's important to revisit this recent history given the current budget debates around the country. In Washington, congressional Republicans have said everything is on the table in budget negotiations with the White House - except any increase in taxes on the wealthiest. And in states from New Jersey and Pennsylvania to Ohio and Texas, massive revenue shortfalls are being addressed with equally massive cuts to spending on education, health care, and other services. Republican governors have refused even to consider raising taxes on millionaires or large corporations.

And in all these places, we hear the same refrain: Tax cuts create jobs! But clearly, in the last decade, they haven't - unless you're looking for work in China.

Remember that old definition of crazy? It's doing the same thing over and over and expecting different results. Given the evidence at hand, the Republican position on taxes - that if we keep moving money from the middle class to the rich, we'll all benefit - starts to sound pretty crazy to me.

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TAXATION – TIME FOR A RETHINK

One side says we should selectively raise taxes (or reduce tax subsidies); the other says we should cut taxes. The media coverage is about the fight – as it usually is – and not about the underlying arguments. Maybe it is time to step back from sports metaphors and ask ourselves ‘what are we trying to accomplish’.

Taxing people and corporations is an age-old method of allocating the cost of society’s common benefits among those individuals and entities able to pay. America adopted a progressive income tax, meaning the marginal rate of taxation increases as income increases. For the last sixty years, income tax has been the largest single source of federal revenue. Individuals pay over eighty percent of income tax revenue. Corporate income tax as a percent of federal revenue is one-half what it was sixty years ago.

We hear that America’s corporate income tax rate (maximum 35 percent) is the highest of any industrialized country, yet the effective tax rate is one-half of the maximum. And that is on those companies showing a profit. Imagine if individuals paid income tax on their disposable income rather than on their gross income less deductions.

But back to the point: What are we trying to accomplish by taxing the income of people and corporations? Clearly the objective is to raise enough money to fund priorities established by our elected representatives. Determining the proper amount is a political decision rightly decided by our Congress. An inseparable, though not the paramount objective is to raise revenue in an equitable way that supports a sustainable economy and encourages entrepreneurship, sound risk-taking and hard work. A tax structure has got to be fair enough that society and individuals accept its legitimacy as well as its burden.

Fairness is a subjective term, but I believe America has a shared sense of fairness – at least we collectively know what’s not fair. Recent discussion about tax subsidies for corporate jets is heated, but it is not about fairness. Even those who oppose elimination of the subsidy don’t argue fairness; it’s just too blatantly unfair to defend. Instead, they claim elimination of the subsidy amounts to a tax increase, and they oppose tax increases. Really? You expect us to believe that you’re defending us all against a stealth tax increase?

Taxes should be lowered they argue, but their implication is that the distribution of the income tax burden is just about right as codified in the 17,000 pages of Title 26 of the U.S. Code. Or is there a resistance to opening the Pandora’s Box of income tax equity: re-looking at our objectives and how we can achieve those objectives with income tax restructuring?

It’s time we talk. Stop the diversions into sexual transgressions, name calling, idol worshipping (that includes American Idol and Ayn Rand). Let’s find out what we have in common, our sense of fairness, with respect to income taxes. For a moment, let’s suspend the discussion of what’s the ‘right’ amount of income tax we need to raise.


Here are some proposed fairness adjustments to the income tax code and several necessary changes to make the adjustments work for individuals, corporations and the federal budget.

1. Mortgage interest deduction - Keep it to encourage home ownership, but limit the amount of interest deductable to $40,000 per year and only for one mortgage per household.

2. Charitable deduction – Keep it to encourage giving, but limit the income reduction of contributions to no more than ten percent of income.

3. Income is income – Treat all income has ordinary income. The stock market is not some nascent or intrinsically valuable social service that needs our subsidization.

4. Progressive income tax rates – Modify the rates to make them lower, simpler to implement (that is, less deductions and less tax code instruction pages) and apply the same rates to individuals and corporations.

5. Income tax waiver – Exempt from paying income taxes those individuals grossing $60,000 per year and corporations grossing $500,000 or less.

6. Retirement and Medical Plans – Require all individuals and private corporations to pay social security and Medicare taxes on all income.

7. Medicare tax rate – Double the rate (currently 1.45 percent) for individuals and employers and eliminate the need for out-of-pocket medical expenses of those receiving Medicare benefits.

8. Medicare for all – Make everyone eligible for Medicare, raise the reimbursement rates to be competitive with insurance rates, and vigorously enforce anti-fraud practices.

9. All federal subsidies (other than mortgage and charitable contributions) should be made outside the tax code. For example, rather than tax deductions for drilling oil or implementing solar power, direct government grants could be issued as part of the budget process. Tax code deductions and credits are for the wealthy and are not discussed as openly as comprehensive budget deliberations about our collective priorities.

Can we agree on the concepts? If not, let’s work it out, find common ground. Then let’s see what the impact would be on federal tax revenues. We can tweak the tax rates to bring in the right amount . . . whatever that is.

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