Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
The New York Times is making it clear. Not only will chained CPI reduce social security benefits, but Obama is actually all for it.
At the end of last year, just shy of the 11th hour in the fiscal cliff negotiations, President Obama made an offer that included a Republican-backed idea to cut spending by lowering the cost-of-living adjustment for Social Security benefits. The move shocked Congressional Democrats and dismayed Mr. Obama’s liberal base.
As the next round of deficit reduction talks gets under way, the administration seems determined to include the COLA cut in any new package of spending reductions. Rather than using the issue as a bargaining ploy, the administration appears to have embraced it as a worthy end in itself.
One of our favorite topics is moving money and jobs around the globe to avoid paying taxes. Seems nations are getting sick of being played against each other finally. Tax avoidance is on the table at the next G-20 meeting.
“The aggressive tax planning of the last 20 years was achieved with the complicity of governments themselves to cope with tax competition,” he says. “This mindset is seriously changing.”
Galvanising co-ordinated action, Britain, Germany and France have thrown their weight behind an urgent review of the international tax standards, which they say, faces “difficulty keeping up with changes in global business practices, such as the development of ecommerce in commercial activities”.
The potential reforms will start to take shape next month at a Group of 20 meeting in Russia, where the Paris-based OECD will release an interim report on tax. Governments are already locking horns with businesses over how far the measures will go.
The New York Times is on a roll amplifying how stagnant wages is one of the main reasons there are less tax revenues.
FEDERAL income tax rates will rise for the wealthiest Americans, and certain tax loopholes might get closed this year. But these developments, and whatever else happens in Washington in the coming debt-ceiling debate, are unlikely to do much to alter one major factor contributing to income inequality: stagnant wages. For millions of workers, wages have flatlined. Take Caterpillar, long a symbol of American industry: while it reported record profits last year, it insisted on a six-year wage freeze for many of its blue-collar workers.
Wages have fallen to a record low as a share of America’s gross domestic product. Until 1975, wages nearly always accounted for more than 50 percent of the nation’s G.D.P., but last year wages fell to a record low of 43.5 percent. Since 2001, when the wage share was 49 percent, there has been a steep slide.
We actually went into deep statistical details on wages in in this post with many graphs.
Anonymous Hacks MIT
When I read about Aaron Swartz's suicide, buried in the initial reports was sidelined blurb. MIT had Swartz arrested in 2011 for stealing Academic JSTOR journal articles. The hacker politic Anonymous group immediately hacked MIT's website in protest.
Swartz, a Reddit cofounder who championed open access to documents on the Internet, committed suicide on Friday. The 26-year-old was arrested in July 2011 and accused of stealing 4 million documents from MIT and Jstor, an archive of scientific journals and academic papers. He faced $4 million in fines and more than 50 years in prison if convicted.
Beyond the issue of copyright law and enforcement, that's one hell of a penalty for stealing a bunch of very overpriced articles written by others who frankly don't get a dime in royalties from the publications.
Schwartz's story of getting burned high tech corporate culture is something most can relate to as well. Matt Stoller writes about Schwartz's political activism.
Aaron also spent a lot of time learning how advocacy and electoral politics works from outside of Congress. He helped found the Progressive Change Campaign Committee, a group that sought to replace existing political consulting machinery in the Democratic Party.
Map the Fed
The Financial Times overviews some new research questioning the role of Central Banks.
The key issue at stake, Pozsar and McCulley argue, is that long-term debt cycles tend to produce diametrically opposed states of the world, in two different fields, which can be plotted as axes on a graph. Sometimes private sector creditors are in a “leveraging” mode; sometimes they are “deleveraging” instead. So too with public policy: sometimes fiscal policy is restrictive (via austerity); sometimes it is stimulative (ie governments are borrowing).
If you plot those two factors as two different axes on a chart, you get four quadrants, representing different points in economic history. When public and private activity is stimulative, there is a credit boom (which central banks need to rein in by damping inflation). When you have deleveraging in one sector, the pattern is mixed. But when both the private and public sector are deleveraging, there is often deflation and a liquidity trap: borrowers do not want to borrow, no matter how cheap money becomes, making monetary policy less effective.
So, Pozsar and McCulley argue that in this fourth quadrant we need to embrace a mental flip. Instead of considering central bank independence to be a good thing, because it prevents inflation, central banks need to lose that independence, and work under finance ministries instead. Monetary policy and fiscal expansion must both be stimulative, since loose money alone will not work. Thus the central bank needs to monetise the public debt by buying lots of government bonds, say, or take other steps to co-ordinate fiscal and monetary measures.
Universities are Corporate Marketing Centers
Not only are people going into debt to get a sheepskin, they are being taken over by corporations:
As public universities have been driven by budget-whacking lawmakers to seek ever-more private funding, schools that once prided themselves as being centers of free thinking are increasingly dominated by corporate-think, turning their institutions into sales centers.
"A lot of schools are taking a much more corporate approach," exulted a PRexecutive who works with top university administrators, marveling that "a CMO didn't even exist on most campuses 10 years ago."
Tax Avoidance Costs $3 Trillion Annually
So says this post on HuffPo.
Three trillion dollars a year. That's how much the wealthiest Americans avoid through the system of subsidies and schemes and sweet deals that deprive middle-class workers of their earned benefits. That's three times more than the deficit. That's enough for a full-time job for every middle-class household in America.
Civil Penalties Really a Joke
In case you've forgotten, civil penalties against businesses are tax deductible, an expense of doing business.
The dollar signs are big, but they aren’t as big as they look, at least for the banks. That’s because some or all of these payments will probably be tax-deductible. The banks can claim them as business expenses. Taxpayers, therefore, will likely lighten the banks’ loads.
There is nothing new about corporations reaping tax benefits from payments made to remedy wrongdoing. Every so often, though, the topic stirs outrage. After the Gulf of Mexico oil spill, for example, BP received a $10 billion tax windfall by writing off $37.2 billion in cleanup expenses.
Debt Over, Now the Economy
Gee wiz, that austerity was fun, now let's focus on the economy:
European leaders declaring they’ve gained the upper hand in the three-year-old debt crisis are sharpening efforts to channel a rebound in financial markets to an economic recovery to chip away at soaring unemployment.
Even as euro-area chiefs call for more time to lock in a bailout package for Cyprus and elections loom next month in Italy, German Finance Minister Wolfgang Schaeuble said Jan. 11 that the single currency is “over the worst of the crisis.”
“Financial markets are starting to appear normal again,” Erik Nielsen, chief global economist at UniCredit SpA (UCG), wrote in a note to clients yesterday. He referred to European Central Bank President Mario Draghi’s Jan. 10 comments forecasting that the euro-area economy will climb out of recession this year.
Draghi’s six-month-old pledge to do whatever it takes to deliver the 17-member currency out of the crisis has been credited for declining yields and an easing in market turmoil. That’s given leaders more room to grapple with issues such as unemployment in Europe, which climbed to a record 11.8 percent in November, with every other Spanish youth out of work.
More Economics Site Rankings
Naked Capitalism has the chart and are #2. We ain't do that badly, in the top 50.
Ran into some major snags over the weekend, but hopefully this can be done and over with soon. In the final stages. What I get for trying to cut corners. ;)
Is there such a thing as suing the federal government
for non performance?
You'd think that the people should have some recourse for removing a politician who lied to get elected and then didn't perform as promised.
Like this DINO in the White House!
I want my money back
Wouldn't that be nice, to ability to sue a representative for fraud when they break an explicit campaign promise?
1) "Non-profit" universities; 2) US intervention in Mali
Oh, there's something special about schools that just can never seem to find the money they need and now look to the plutocrats for even more $. I know people enjoy the phone calls for cash for years (apparently until a grad dies of old age) after graduation. Seriously, the $40,000 - $60,000 these bastards demand in tuition and endless fees just aren't enough? Some professors are pulling in $200,000, in addition to BS lucrative "consulting" gigs they get. Administrators often pull in much, much more. Isn't one of these "non-profits" Presidents from Columbia now sitting on the Board of the NY Fed? Do many of these clowns serve in our govt. then return to "academia" or work in finance? They know all about raking in big cash, teaching maybe a few hours per week (recycling the same materials), exploiting PhD students to do the bulk of the teaching, and go off like they came up with the theory of relativity. Charlatans getting rich for jacksh*t.
But apparently that's not enough nowadays. Nope, the beast demands even more $. So they are willing to sell what little integrity these schools have and name everything possible after donors and submit the actual curriculum to corporate (some private corporations based out of Kansas, hint hint)approval. Do you think they will be teaching critical thought? Issues about kleptocracy in Russia and here? Why do you think they hate liberal arts so much (even though they are so thickheaded they don't realize they are also bashing math and science because those are also classic "liberal arts). Because they want non-thinking, non-questioning drones. And if those drones are heavily in debt getting the "education" the plutocratic masters demand they get to line up jobs, and those jobs are only good for Job [fill-in-the-blank] with Plutocratic Corporation #1, those drones will certainly not cause problems for the corporation because their livelihood and future welfare depends on them getting that one job and keeping it. And if the plutocrats decide that drone is too expensive working for $2/hr., oh well, they'll replace him anyway with a robot or a Chinese prisoner. And what does the heavily in debt drone that has no other education other than cog work do? Well, our government, "non-profit" schools, and plutocrats don't care, so don't ask them. Again, Jefferson knew all about this and thought long and hard about not just setting up UVA, but about the need and importance of all public education. The irony is his views on public education won't be taught in public schools. Again, how far these scoundrels have taken us. We haven't fallen, because I know most of us did everything right. Nope, we were taken here.
And as for other news, watch US involvement in Mali. This is yet another foreign adventure that we will sink money into while fellow Americans are dying from homelessness and joblessness here and our recent foreign interventions haven't gone cheaply or according to plan. 28 million unemployed, many many long-term, politicians everywhere talking about the debt and making our lives even tougher, but both sides of the political aisle can't seem to stop spending money on foreign interventions. It's a big world with tens of thousands of issues and problems. Billions of people hate each other. So watch as our govt. and lobbyists constantly find another conflict to spend our money on (that we borrow from China to spend and we never benefit from). Eisenhower, a man who knew plenty about the govt. and military, knew what he was talking about. Mali is twice the size of Texas and about twice the size of Afghanistan. Yet watch the MSM and listen to politicians as they discuss sending support to the French there and supporting ECOWAS troops (who are reluctant to send even hundreds of troops to a country that size that borders them).
Whenever the govt. and lobbyists through the media want our $, they always mention Al-Qaeda. Islamists are also in Nigeria, the Philippines, Indonesia, Somalia (and operate in Kenya), Uganda, Chechnya, Yemen, places we are in or recently left, etc., etc. Where does it end for us and intervening? Why again don't the banksters that launder money for terrorists sit in prison in the US again after admitting their crimes? Why don't the MSM and politicians criticize the banksters that help arm terrorists? Oh, they are above the law and work with the govt. too, I forgot. Yes, Al-Qaeda has a presence in Mali. But there was a coup originally from a minority in the North. That coup was supplanted by more powerful Islamists. And that's where we are now. Toss in the usual corruption and ethnic hatred in many countries and of course civil wars will become inevitable and might even spread across regional borders - do we need to get involved in every single one? Really, at this time, do we need to spend more money overseas anywhere? So predictable, so predictable. Iraq, Afghanistan, Libya, Syria, Yemen, now Mali? Really, Mali? It's endless. Well, more money we'll never see. Any time they want to spend our money that we borrow, they will and do it right quick. As far as keeping American jobs here and helping Americans financially and creating JOBS, nope, no help there and it's endless talk for decades. So tell me, who does this govt. serve?
has to be a better way for higher education
These days one can self-teach so extensively and university costs are through the roof. Take textbooks. One can find earlier edition textbooks for as low as a $1 (this site links extensively to Abe Books for that reason!) yet to take a course for credit, you're looking at $300+ per book, that's ridiculous. Then, tuition is absurd when so often courses are 1. listen to lecture 2. do homework 3. take three exams 4. labs
Labs are the most useful and probably should really cost and so should TA, help, the people helping, teaching. Yet the lectures, the books, the tests, all of it can be and should be done on one's own.
At this point I think there should be online something that allows one to just prove their mastery of a topic with a "you have mastered this topic" only "grade" that has a lot of security integrated so we know the person who mastered topic x, really is person y and they really did work z and did not lift it from others (very common in technical tests including interviews!)
As in award a degree, give credibility to such a system and let it replace or be equal to traditional college degrees.
Higher education at this point is diverging from mastery and knowledge of the subject at hand.
BTW: Many libraries pay licenses to various Academic Journals and so on so one can often get copies of research that way. But paying $10/$20/$30 for each paper is obscene! If one is doing a literature review, one might read over 50 articles and papers. That's absurd.
This anonymous hacker group is fascinating. I disagree 100% with them that DDoS is a form of protest, that's a cybersecurity major threat in my view. That said, I am most amused when they hack up sites and put up "protest signs" on them and change corporate sites and so on to say what they are really about, go grab other stuff to expose x.
A hell of lot of it has been pretty effective and frankly am kind of glad they picked up on the arrest and "crime" and said something for when I first read the news, I just stared at that one sentence about his arrest, history and paused for a very long time, in a kind of knowing way that was probably the thing which pushed him over the edge. Corporate tech culture is so soul numbing, really kill the spirit of someone, their creativity, ability to innovate.
Many people can teach themselves - but get no respect/jobs
Plenty of folks can teach themselves, and teach themselves many things far better than any school could. Colleges are now offering free courses which should definitely be exploited - it won't get a job or recognition, but it does bring free knowledge. Schools are about conformity for the most part, beat down the student so he can work in a cubicle and is used to being beaten down. "Thinking outside the box"? Oh, sure, Microsoft and LinkedIn and politicians spout that, but reflecting on it, really, aren't schools about sitting there in a box or else getting thrown out, colleges force people to sit in boxes with 500+ students to check off boxes during exams (and check of boxes to get into those colleges), and the prize is a box/cubicle at a company where you can drive a box to work and if you dare speak your mind at work, you will be fired for non-conformity, look at a box with ads at home, and then be buried in a box. Nope, it's all about fitting into a box and schools play their role very well.
Especially now with the Internet, if you're motivated and want to learn specific things, it's amazing the amount of knowledge one can gain. Also, as we leave school, college, etc., it's always amazing the way learning becomes truly enjoyable and many fields + areas we never knew about suddenly appear. It's tragic the way businesses, schools, colleges, etc. want people to pigeonhole themselves and if you didn't study such-and-such field for a BA or BS or MA, then you can never learn or excel in that field - what utter crap! It's also part of the way they want to discriminate against people beyond a certain age, they want to force people into high amounts of debt for certain degrees that may or not pay off. Can you imagine these clowns forcing someone with IQs 50% higher than their own dictating whether or not someone can explore or excel in new fields or even make new discoveries at 40 or 50 or 80? Who are they? Leeches and tyrants that do nothing to unleash human potential but merely look for the next dollar or look for ways to crush their fellow Americans. How's that for noble?
Calling for NATO involvement in Mali by linking Al-Qaeda
It's happening, the linking of the Islamists in Mali (Ansar Dine) to Al-Qaeda in the media. I thought Al-Qaeda was almost destroyed and we had it on the run after all these years and trillions in $? Anyway, here's the question, if Ansar Dine is "linked" to Al-Qaeda, then surely HSBC and other banks that aid and abet terrorist financing that helps them buy weapons, kill people, cause insecurity, etc. are also linked to Al-Qaeda. So, who in the media and government is calling for NATO intervention against HSBC and the other banks and employees involved? How about the politicians that accept money from those banks and by logic, also linked to Al-Qaeda? Will there be a NATO strike against them? Because if we're going down this road and getting crazy, let's go all the way and go full farce. NATO shouldn't have a hard time finding the politicians or HSBC or Standard Chartered or other banks. And it would be a whole lot cheaper than sending troops to Mali, or Somalia, or Uganda, or Indonesia, or anywhere else we're sending our people and $.
al-qaeda is a fiction
according to the CIA and the BBC documentary the power of nightmares .
politics of fear
How much did election 2012 cost? $6 billion and that's pretty much wasted cash since most of Congress is in gerrymandered districts. I wouldn't say that terrorists are not real, they very much are, but exploiting it for political gain, oh yeah.
Either people running foreign policy are clueless or plan this
The knowledge is out there, it's available, and there's no excuse for the common man or woman to not know what's going on in so many realms. Now this isn't conspiracy stuff, or fringe talk, but facts, history, etc. Look at Mali. Now, counterinsurgency books (COIN that talking heads in media mention but didn't read anything about) talk about making friends with the locals, sealing borders, and the accepted ratio of troops to insurgents to crush it is 10:1 (could be wrong, but not critical). Listening to people in DC and on TV it's like counterinsurgency and foreign affairs are new concerns. Whatever they do, they can't read history, no, not like the Greeks or Romans or Turks or the Russians or Napoleon or the British or the US had experience with this for the last 2000 years. Books are bad, talking points and endless meaningless talk for ratings and votes is good.
Now look at Afghanistan. The Soviet's mistakes were written down in dozens of books. Their General Staff wrote about mistakes extensively and the books are available to anyone out there. Guess what? We went in and repeated the same mistakes. And the sad thing is we actually armed our future attackers during the 80s, helped harden them, helped foster Al-Qaeda and the Taliban during the 1980s. Too many tribal allegiances, impossible to seal borders, Afghanistan has a history covering centuries of repelling invaders/foreigners. Thousands of reports written, trillions spent that never got down to the US taxpayers, borders impossible to seal, and no one fired or canned or loses prestige in US. No one that dares speaks the truth is hired by the govt. or contractors and if they do say, "Why do we keep repeating the same mistakes and have endless meetings to repeat the same BS?" they are fired.
Mali? Mali? Best of luck. More billions going to waste. Impossible to seal borders (the country is twice the size of Texas). Insurgents aren't strictly Islamists, they also are composed of ethnic minorities pissed off. Africa filled with corruption so that creates insurgents everywhere. It's a desert country where people can melt away and come back after planes + bombs disappear. They can melt into surrounding countries. Who are we going to back up? France, with it's "wonderful" history in Africa? How about ECOWAS? Nigeria has its own massive fight with insurgents from Boko Haram. In addition, corruption in the Niger Delta (involving oil profits, massive environmental pollution) is keeping MEND going strong. Nigeria and other ECOWAS countries won't send troops and if they do, a few thousands won't and can't end an insurgency. And how would the Malians or Algerians feel about foreigners from other African countries "aiding" them? The Algerians' and French history is not a pretty one, and the Algerians' own civil war in the 1990s was also brutal and ugly but lacked international media coverage. But we're going down this road again? Do policy makers and corporate bigwigs and media lackeys not know how to read? Would that disqualify them from jobs in the US + UN and other organizations? Probably.
Remember this, the companies that make billions in Nigeria and elsewhere always complain about a US government that is too big and has too many regulations. Go ask the people in the Niger Delta how they feel about no environmental protections and massive corruption. How do they feel about foreign companies and their own govt. taking resources and they get nothing? And when things go horribly wrong, of course the US govt. (through the unemployed and overworked average taxpayer) now has to bail out the big CEOs that pray at the altar of Grover Norquist and Murdoch and Koch. They help fuel the mess and we get stuck with the bill. That, well, sucks.
And so it begins in earnest - US transporting French to Mali
All that tax money we never see going straight into the military-industrial complex. Really? When they are demanding austerity and fighting 24/7 about debt ceilings? As we hear talking heads ramble on about cutting Social Security, school funds, infrastructure, unemployment benefits for the nearly homeless or dead, let's think about the cash being burned as we transport French troops to Mali. Don't hear Mike Bloomberg talking about it, but do hear him wanting more immigration, more laws against Americans, and more surveillance of law-abiding citizens. Almost like using foreign wars to control the domestic population. I'm sure that's a first in history.
What decade is this? Americans and French in a former colony once governed by France. We're not fighting, but advising. No worries, Mali will welcome the French and other foreigners with open arms. Of course all the insurgents must be Al-Qaeda controlled and can easily be isolated in a desert country (forgetting the lie that they are all Al-Qaeda linked - they aren't, insurgents can flee to other nations, areas, blend in, have friends + allies and many beefs that have nothing to do with Al-Qaeda). It's the war against terror, us vs. them, good vs. evil. Simple maxims play well on Fox and CNN, not in real life. I'm still waiting for that peace dividend. I was sure we'd see it after the wall fell down. But then Iraq I, Somalia, Iraq II, Afghanistan, Libya, chasing Kony in Uganda, Mali, Democratic Republic of the Congo, etc.
Ever notice the way the plutocrats and politicians on TV never criticize these wars but are quick to criticize Americans and our social safety nets? That's because they know they make money in these things and the powers that profit from them are their allies. How much money did these folks launder for Malian officials, Iraqi officials, Afghan officials? How much of that money is helping arm both sides in these conflicts? But we're "lazy" and don't even deserve jobs or Social Security? What utter garbage.