Credit Suisse and Tax Evasion

Ahh, how wonderful to have the Swiss banks, and the Swiss government looking out for you if you're a maligned US millionaire sheltering a few mil from taxes, but the winds of change may be blowing in an different direction, maybe jail.  The Swiss bankers claim they can't under Swiss law disclose the names of rich tax dodgers in hearings conducted by the Senate Permanent Subcommittee on Investigations chaired by Senator Carl Levin.  The General Counsel Romeo Cerutti said they could go to jail under Swiss law if they divulged their clients.

An angry Sen. Carl Levin (D-Mich.), who has led a six-year crusade against offshore tax evasion, told four Credit Suisse executives that their regrets and promises of changed ways were hollow if they did not help U.S. authorities track down the tax cheats.
"You hide behind the Swiss law even though you're operating here, and that's just simply not going to cut it," he said
On Tuesday, the Senate's Permanent Subcommittee on Investigations released a report accusing Credit Suisse, Switzerland's second-largest bank, of actively helping U.S. citizens hide up to $12 billion in assets in 22,000 accounts at the bank from 2001 to 2008.

Republicans piled on too, with a couple of zingers of their own.

"Where would you like to spend time?" Sen. Tom Coburn (R-Okla.) asked Cerutti. And Sen. John McCain (R-Ariz.) said the bank "must answer for decades of ill-gotten profits."

 So why are these criminals still at large?  They're really rich.

Income Inequality Gets Worse

According to research at MarketWatch.com, the lopsided income distribution portrayed in the series Downton Abbey is the reality of the US economy, our income inequality is about like that of the period 90 years ago in England.  This is the fodder of civil unrest if it gets worse, as is likely.

The richest take home a higher share of national income in America today than did the aristocrats and superrich of 1920s England. The poor today take home a smaller share than the butlers, chauffeurs and other working folk did back then.

Peter Lindert, economics professor at the University of California in Davis, and one of the world’s leading experts in measuring income inequality, will be presenting research at the NBER this week, and he shared his thoughts with me by email. “Britain’s Downton Abbey economy of the 1920s,” Lindert says, was slightly “ less unequal than…the U.S. today” (emphasis added).

For example, he points to the so-called GINI Coefficient, the standard measure of economic inequality used by researchers and organizations around the world, from the Census Bureau to the World Bank. U.S. readings today are about as high as those of 1920s England, says Lindert. They may even be higher. Incidentally, other research has found that U.S. readings of the GINI coefficient are higher than those of Czarist Russia as well.

TPP, Graft and Corporatocracy

The end game is approaching in negotiations for a sweeping "free trade" pact known as the Trans-Pacific Partnership, or TPP for short, and alarm bells are ringing out everywhere.  Public Citizen published a fact-check on the myths promulgated by the TPP supporters.  Elizabeth Warren has warned that:

Sen. Elizabeth Warren raised concerns Tuesday that negotiations over new trade agreements could be used as a backdoor way to water down financial regulations.
Speaking at a Senate confirmation hearing for Export-Import Bank President Fred Hochberg, Warren (D-Mass.) said there are “troubling indications” that negotiations over trade deals with Asia and Europe could be seen as an opportunity for banks to quietly weaken oversight of the financial services industry.  The agreements are “a chance for these banks to get something done quietly out of sight that they could not accomplish in a public place with the cameras rolling and the lights on,” Warren said.

The major banks have indeed given millions of dollars in "bonuses" and "incentives" to former executives that take government jobs at agencies that regulate banking according to a report published at Bill Moyers blog.

Many large corporations with a strong incentive to influence public policy award bonuses and other incentive pay to executives if they take jobs within the government. CitiGroup, for instance, provides an executive contract that awards additional retirement pay upon leaving to take a “full time high level position with the US government or regulatory body.” Goldman Sachs, Morgan Stanley, JPMorgan Chase, the Blackstone Group, Fannie Mae, Northern Trust and Northrop Grumman are among the other firms that offer financial rewards upon retirement for government service. 
Stefan Selig, a Bank of America investment banker nominated to become the undersecretary for international trade at the Department of Commerce, received more than $9 million in bonus pay as he was nominated to join the administration in November. The bonus pay came in addition to the $5.1 million in incentive pay awarded to Selig last year.
Michael Froman, the current US Trade Representative, received over $4 million as part of multiple exit payments when he left CitiGroup to join the Obama administration. Froman told Senate Finance Committee members last summer that he donated approximately 75 percent of the $2.25 million bonus he received for his work in 2008 to charity. CitiGroup also gave Froman a $2 million payment in connection to his holdings in two investment funds, which was awarded “in recognition of [Froman's] service to Citi in various capacities since 1999.”

 Just another day for the Corporatocracy machine.

Utah Gets Tough on Kids

This is one of those "you gotta be kidding" stories, the Uintah Elementary school in Salt Lake City made the national news, and not in a good way.  They served 40 kids their lunch, then confiscated the food and threw it away!  The school district reports that the kids parents hadn't put enough money in their lunch accounts, and this was their way of saying "Pay up".  The district later apologized on their Facebook page. 

Up to 40 kids at Uintah Elementary in Salt Lake City picked up their lunches Tuesday, then watched as the meals were taken and thrown away because of outstanding balances on their accounts — a move that shocked and angered parents.

"It was pretty traumatic and humiliating," said Erica Lukes, whose 11-year-old daughter had her cafeteria lunch taken from her as she stood in line Tuesday at Uintah Elementary School, 1571 E. 1300 South.

Lukes said as far as she knew, she was all paid up. "I think it’s despicable," she said. "These are young children that shouldn’t be punished or humiliated for something the parents obviously need to clear up."

Jason Olsen, a Salt Lake City District spokesman, said the district’s child-nutrition department became aware that Uintah had a large number of students who owed money for lunches.

As a result, the child-nutrition manager visited the school and decided to withhold lunches to deal with the issue, he said.

But cafeteria workers weren’t able to see which children owed money until they had already received lunches, Olsen explained.

The workers then took those lunches from the students and threw them away, he said, because once food is served to one student it can’t be served to another.

Republicans take on NSA

I never thought I would agree to anything the Republican party did, but they finally came up with a position I agree with as reported in The Guardian.  The Republican National Committee adopted a resolution denouncing the NSA bulk collection of phone data in the US, which they learned about thanks to Edward Snowden.  Now if they were kind enough to thank him and accord him whistleblower status, I might have to think more kindly of them, at least for a few minutes.

In its resolution, the RNC also called for a special committee to “investigate, report, and reveal to the public the extent of this domestic spying” and “hold accountable those public officials who are found to be responsible for this unconstitutional surveillance”. The resolution goes on to say that “the mass collection and retention of personal data is in itself contrary to the right of privacy protected by the fourth amendment of the United States constitution".  “I think that the committee's resolution this morning was about reflecting where it thinks sentiment lies,” the RNC deputy press secretary, Raffi Williams, told the Guardian.

“The Republican National Committee encourages Republican lawmakers to enact legislation to amend Section 215 of the USA Patriot Act, the state secrets privilege, and the Fisa Amendments Act to make it clear that blanket surveillance of the internet activity, phone records and correspondence – electronic, physical, and otherwise – of any person residing in the US is prohibited by law and that violations can be reviewed in adversarial proceedings before a public court,” the resolution says.
It also “encourages Republican lawmakers to immediately take action to halt current unconstitutional surveillance programs and provide a full public accounting of the NSA’s data collection programs”.

No word if George W Bush and Dick Cheney will be hauled before a congressional committee.

Free Trade Swamps All Boats

 This article from The Huffington Post says it all on the subject of "free trade", courtesy Alan Grayson.

A picture is worth 1000 words. So let me show you two of them. On the left, our trade balance between 1962 and 1992, before so-called "free trade agreements." And on the right, our trade balance since then:

What sane person could look at these two charts, and conclude that what America needs is more "free trade"?

We have run a trade deficit of at least $350,000,000,000.00 every single year since 2000, with no end in sight. The result is that we have gutted the U.S. manufacturing base, and run up enormous debt to foreigners -- almost $6 trillion ($6,000,000,000,000.00) in U.S. Treasury debt alone.

We buy their goods, putting their workers to work. They buy our assets, driving us deeper and deeper into debt.

Ultra Rich and the Rest of Us

A new report has been published by Oxfam, an international organization that works to eradicate the sources of poverty, showing that the richest 85 people in the world control the same wealth as the poorest 3.5 Billion people throughout the world, and the inequality is still increasing.  Titled "Working for the Few", it examines the consequences of extreme wealth inequality.

Some economic inequality is essential to drive growth and progress,

rewarding those with talent, hard earned skills, and the ambition to

innovate and take entrepreneurial risks. However, the extreme levels of

wealth concentration occurring today threaten to exclude hundreds of

millions of people from realizing the benefits of their talents and hard

work.

Extreme economic inequality is damaging and worrying for many

reasons: it is morally questionable; it can have negative impacts on

economic growth and poverty reduction; and it can multiply social

problems. It compounds other inequalities, such as those between

women and men. In many countries, extreme economic inequality is

worrying because of the pernicious impact that wealth concentrations can

have on equal political representation. When wealth captures

government policymaking, the rules bend to favor the rich, often to the

detriment of everyone else. The consequences include the erosion of

democratic governance, the pulling apart of social cohesion, and

the vanishing of equal opportunities for all.

Given the scale of rising wealth concentrations, opportunity capture and

unequal political representation are a serious and worrying trend. For

instance:

•

Almost half of the world’s wealth is now owned by just one percent of

the population.

•

The wealth of the one percent richest people in the world amounts to

$110 trillion. That’s 65 times the total wealth of the bottom half of the

world’s population.

•

The bottom half of the world’s population owns the same as the

richest 85 people in the world.