Romney's Bain Capital subpoenaed over taxes

Many private equity companies have been riding a fine line with taxes and they may finally be getting called on it. For this group, enough is never enough no matter how much they fleece their country or other businesses. The Guardian:

The subpoenas, which were sent out in July, seek documents related to the conversion of fees these private equity firms charge for managing investors' assets into fund investments, the source said. This means the investigation predates the release last month of confidential Bain fund documents by Gawker that revealed such a practice.

The practice is known as a "management fee waiver." As fund investments, the income would be taxed as capital gains, which attract rates around 15%. Without the conversion, the fees would be ordinary income, taxed at rates around 35%.

Other firms that received subpoenas include Sun Capital Partners; Clayton, Dubilier & Rice; Crestview Partners; H.I.G. Capital; Vestar Capital Partners; and Providence Equity Partners.

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US companies preparing for Grexit

It may still be possible for Greece to remain in the eurozone, but that is increasingly unlikely. If Greece stays, the financial terms are going to be more of the same, which means misery for Greece and favorable terms for the lenders who helped create the problem.

In the meantime, companies are preparing for a Grexit. More from the NY Times:

Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

No one knows just how broad the shock waves from a Greek exit would be, but big American banks and consulting firms have also been doing a brisk business advising their corporate clients on how to prepare for a splintering of the euro zone. That is a striking contrast to the assurances from European politicians that the crisis is manageable and that the currency union can be held together. On Thursday, the European Central Bank will consider measures that would ease pressure on Europe’s cash-starved countries.

JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.

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Krugman on Medicare vs Vouchercare

Krugman [NYT] makes a key point on the GOP promise to "only" replace Medicare with VoucherCare for the under 50s, it's a promise that won't be kept:

Still, the G.O.P. promises to maintain Medicare as we know it for those currently over 55. Should everyone born before 1957 feel safe? Again, no.

For one thing, repeal of Obamacare would cause older Americans to lose a number of significant benefits that the law provides, including the way it closes the “doughnut hole” in drug coverage and the way it protects early retirees.

Beyond that, the promise of unchanged benefits for Americans of a certain age just isn’t credible. Think about the political dynamics that would arise once someone born in 1956 still received full Medicare while someone born in 1959 couldn’t afford decent coverage. Do you really think that would be a stable situation? For sure, it would unleash political warfare between the cohorts — and the odds are high that older cohorts would soon find their alleged guarantees snatched away.

Or to put it another way, Romney plans to break the Medicare promises made by previous GOP presidents to people born since 1957, so what is to stop the next GOP president doing the same thing and breaking the promise to those born before 1957?

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Climate report: "Almost no chance" of less than 3½°F (2°C) rise; 50-50 chance of 5½°F (3°C); headed for 9°F

Housekeeping note: I'm on vacation at the moment. Posting will be intermittent (or worse) for the next week or so. I'll return to regular writing next week.

UPDATE: A complete list of climate series pieces is available here:
The Climate series: a reference post.
________

This is an update on the global warming "floor," currently sits at 1½°C — 3°F.

Just to remind you:

• Current global warming is .8°C — 1½°F. It plays out differently in different places.
  
  
• There's more in the pipeline that can't be stopped. This gives us a current "floor" of 1½°C — 3°F. (When does that arrive? I'm working to find out; stay tuned.)
  
  
• If we keep dumping carbon — and lining the pockets of the carbon CEOs — that floor will be the magic 2°C — 3½°F. World leaders, minus Barack Obama, would like to stop there.
  
  
• At some point the new floor will be James Hansen's "game over" 3°C — 5½°F. That will be a different world, the start of mass extinctions.
  
  
• If the warming runs to its natural end, by whatever means, we get 7°C — 12½°F — assuming there's a "we" to get anything by that time.

Keep your eye on that "floor" — it's moving as we speak.

Which brings me to this news via Channel 4 in the U.K. (my emphasis and paragraphing):

The planet could be facing a catastrophic 5 degree [centigrade; 9°F] temperature rise, and we are losing time to address the threat of climate change, one of the government's leading scientists tells Channel 4 News.

Speaking before he steps down as chief scientist at the Department for Environment Food and Rural Affairs, Sir Bob Watson also warned that governments couldn't afford to do nothing about greenhouse gas emissions despite the economic downturn, writes Channel 4 News Science Editor Tom Clarke [the interviewer in the video below].

At global climate summits like in Copenhagen in 2009 it was agreed to try and limit global warming to two degrees centigrade above pre-industrial temperatures [note again that 1800 is the standard baseline].

"There is really almost no chance now of meeting that [2°C] political target," said Dr Watson, who also served chair of the UN's Intergovernmental Panel on Climate Change.

"If we continue the way we are we've got a 50-50 shot of a 3 degree [warmer] world and I would not rule out a 5 degree world."

Here's the video; he says more than noted above:



Watch this not just for the scientist's replies, but also for the questioner's positioning. For example, at :30 he frames a question about countries not wanting to act as "understandable, given the fact that they're trying to get their economies back off the floor..."

And again at 1:32 he asks if "some of the alarmism" and "extreme viewpoints" and the message about "making people feel guilty about their behavior" is the wrong approach.

As he spoke, I thought, "Ah, conventional wisdom. All the reasons for not acting, and not telling people they should act soon."

I also caught his assumption that changing people's behavior was the answer. Ah, no — my neighbors aren't digging up carbon to put into the air; they're not the ones whose behavior needs to change.

Still, Mr. Clarke hosted the interview, it's a good one, and I thank him for that.

For the record, the "how to stimulate the economy" problem is for me not a valid offset to "how to keep the planet from going mainly pre-industrial" (6:10 in the clip).

In my mind, we may not get all good things into balance; we may have to choose between (ahem) greater evils and lesser ones. The lesser evil may just be the deprivation now that forestalls devastation later. I clearly don't think he's being aggressive enough in his list of solutions — asking isn't going to get results as I see it.

And besides, if you really want to do both, save the economy and save the planet ... well, there's plenty of money amongst the people who are the real perps. The carbon companies and CEOs are loaded, bathing in it. Just saying.

I'll have more on that moving floor, including some timelines if I can find them.

If I read this chart correctly, "game over" 3°C — 5½°F — arrives as early as the 2030s. That means it's "in the pipeline" a whole lot sooner. (Figure 21 in this pdf; zoom to 100%.)

GP

To follow or send links: @Gaius_Publius
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Chris and I are heading to the Democratic Convention in Charlotte

Chris and I will be attending the Democratic Convention Charlotte this week, through Friday.  So posting will be sporadic this week (and Gaius is on travel with his wife). We were at the convention in Denver, and it was quite fun and interesting, but we found ourselves out and about from early morning until midnight or later, hunting for wifi access between events. I'll attempt to use twitter a LOT, on our various accounts:
@aravosis
@americablog
@americabloggay
depending on the topic.  We'll also be posting to the blog we get the chance, but posting will definitely be sporadic.  You've been forewarned :)

Thanks for understanding, JOHN Read the rest of this post...