G.E.: No Tax Special

If I hadn’t just read it, I’d never believe it. G.E.—you remember, the company Ronald Reagan used to shill for; the company that built many of the nuclear reactors now under suspicion; the company whose CEO, Jeffrey Immelt, was recently appointed by President Obama to be his liaison to the business community, as well as to head up the President’s “Committee on Jobs and Competitiveness” (slated to discuss corporate tax policy, the Pres. says, so as to LOWER the corporate tax rate)—last year “reported worldwide profits of $14.2 billion,” $5.1 billion of which came from its U.S. operations. And its American tax bill? ZERO. No tax paid. “In fact, G.E. claimed a tax benefit of $3.2 billion,” writes David Kocieniewski in the 3/25/11 New York Times.

How can this be? you might ask. The government is crying about its indebtedness. Republicans and even Democrats are calling for austerity—i.e. cutting spending, i.e. cutting the benefits to the neediest members of our society, with plans to cut even more. And one of the richest corporations in America is paying NO TAX? Could it be that America doesn’t have a spending problem, that it has an INCOME problem because the richest individuals and corporations are paying less and less each year??? Do you think? Listen to what Kocieniewski writes, after recounting how G.E. spends a fortune in lobbying ($200 million over the last decade), and on a G.E. tax department headed by former IRS employees and lawyers numbering no less than 975 individuals! who do nothing but work on how to take advantage of tax breaks so that G.E. pays NO taxes:

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

Did you get that? Corporations—the alleged lifeblood of our economy, the ones who were just given permission, as PERSONS, to contribute unlimited amounts to political campaigns—not long ago paid nearly a third of the U.S. tax burden, but now pay less than a tenth and may soon pay less than a twentieth.
Ah but, they keep saying, we need to be competitive. What’s good for us is good for America and American workers. Oh really? Here’s the truth:

Since 2003, the company has eliminated a fifth of its work force in the United States, while increasing overseas employment. In that time, G.E.’s accumulated offshore profits have risen to $92 billion from $15 billion.

And what does earning all that money overseas do for G.E.? Well several things. This is because the other big change in G.E.’s business has been a shift from producing goods (like lightbulbs and all the “good things G.E. brings to life”) to providing financing for its products. “GE Capital” is the name of this finance division and more than half of G.E.’s profit recently has come from financing. Then the company managed to muscle changes in the tax laws that allow multinationals “to avoid taxes on some kinds of banking and insurance income.” This is known as “active financing.” It means that “if G.E. financed the sale of a jet engine or generator in Ireland, for example, the company would no longer have to pay American tax on the interest income as long as the profits remained offshore.” G.E. has been diligent in doing this, that is, booking a huge percentage of its profits in low-tax countries like Ireland and Singapore and keeping them there, a practice that, according to one tax economist, has “allowed G.E. to bring its U.S. effective tax rate to rock-bottom levels.” In the past year, in fact, to ZERO. No, less than zero, because it got a tax benefit of $3.2 billion!

So, in effect, G.E. has said to the United States and its people: “fuck you.” It manufactures more and more of its goods abroad, thus destroying American jobs, makes and keeps its profits abroad, and then gets tax benefits for all this that are applied to the little tax obligation (from goods still manufactured in the U.S.) it hasn’t found a loophole to worm its way out of. G.E. explains this by saying it has an obligation to its shareholders to “legally minimize its costs.” Some would call it more like “corporate welfare” (I would call it corporate thievery.) And what I’m wondering is, How is it that Americans who can barely buy food are pilloried as “welfare queens,” and made to work for their benefits, while these big time welfare queens get lionized, deferred to in every way, and even appointed to the President’s inner circle of advisers?

It’s called corruption, folks, and because of it the United States is looking more and more like one of those banana republics we used to laugh at in the old days. No more. If there’s a question left, it can only be: how long can such wanton pillaging of a nation go on? The answer is simple: as long as we the people let it.

Lawrence DiStasi

The Billionaires Behind the Hate

That would be the brothers Koch (pron. Kock?), Charles and David. The bros have come into prominence since the rise of the Tea Party, which they direct and supply most of the money for. Staunch Libertarians, which party they also pretty much underwrite, their aim has long been to tear the government “out at the root.” As Jane Mayer in her brilliant article about these dogs in a recent New Yorker article (“Covert Operations,” Aug. 30, 2010) notes, the Libertarian Party platform in 1980, with David Koch on the ticket, advocated abolishing the SEC and the Department of Energy, as well as Social Security, minimum-wage laws, gun control and all income taxes (especially corporate income taxes). What’s alarming is not only the scope of this “anarcho-totalitarianism” (William Buckley’s term), but the fact that so much of it is beginning to come true. And Koch brothers’ money is part of the reason. That’s because they have oodles of it (ca $35 billion), originally coming from the oil-refining business started by their father, Fred Koch (he joined the John Birch Society in the 50s as one of the loonies who called Pres. Eisenhower a communist). It’s laughable, really. These guys give off the aura of that quintessential American culture hero, the self-made man. But what Mayer points out is that they didn’t exactly start on the level playing field they’re so fond of advocating. No. David Koch was left, upon his father’s death, the neat little sum of $300 million dollars! His other brothers no doubt inherited similar sums. Then David and his brother Charles (the CEO of Koch Industries) bought out their younger brother, and now own the family business lock, stock and barrel. That means no nosy stockholders. They are now nearly as rich as Bill Gates and Warren Buffet, and a whole lot of that money goes to their political foundations. Between 1998 and 2008, according to Mayer, these are the donation figures—Charles G. Koch Charitable Foundation: $48 million; Claude R. Lambe Charitable Foundation (controlled by Charlie): $28 million; David H. Koch Charitable Foundation: $120 million; plus $50 million in lobbying, and $8 million to political campaigns through KochPAC (more than 80% to Republicans). In 2010, Koch Industries led all other energy companies (including Exxon) in contributions to political campaigns. And just in case that weren’t enough clout, it was Koch money that in 1977 launched the Cato Institute, a libertarian think tank (they have been prominent in attacking Global warming), and a bit later gave millions to another think tank, the Mercatus Center at George Mason University—“ground zero for deregulation policy in Washington.”

The activities of these “think” tanks would be laughable if they weren’t so perversely effective. Mayer cites a court case in 1997 when the EPA tried to reduce surface ozone pollution, much of it coming from oil refineries (the original Koch business, which has been sued constantly for polluting everything from air to ground water). One Susan Dudley, of the Mercatus Center, argued that the EPA had neglected to consider that “smog-free skies would result in more cases of skin cancer.” The Circuit Court actually believed this crap about smog being good, and ruled that, indeed, the EPA had “explicitly disregarded” the “possible health benefits of ozone.” The fact that the judges in the majority had attended “legal junkets” arranged by another group of Koch foundations, allegedly did not affect the ruling.

You get the picture. Big money buys big results, and the Koch brothers have big money they are quite willing and eager to spend. Another of their spin-off groups (this one designed to inspire and direct the grass roots activism the Tea Party is famous for) is named Americans for Prosperity (all of these names are a lesson in Orwellian language.) Minutely managed by the Kochs, Americans for Prosperity has been a key player in attacking the Obama presidency. That great conservative strategist, Grover Norquist, admitted to Mayer that the rowdy rallies by activists in the summer of 2010 were key to “undermining Obama’s agenda.” The people in the streets gave Republican lawmakers the cover they needed to refuse any cooperation with Obama, and changed the thinking of corporate donors. Prior to the demonstrations, even the Chamber of Commerce had been willing to work with the president; after the loonies took to the streets and “terrorized” Congress, this attitude changed.

There is much more to find out about these latter-day bagmen (their bought-out brother recently called their operation an “organized crime” operation because of their history of stealing oil from under Native American reservations—see Reader Supported News, March 20, 2011: “Koch and Native-American Reservation Oil Theft”), and I would recommend Mayer’s article as indispensable. It’s not just that David Koch is the guy who financed Governor Scott Walker’s election, and no doubt had a say in his recent anti-union legislation in Wisconsin; the Kochs also have bought numerous companies to supplement and diversify their oil-refining business, so the stink of their corruption is everywhere. Here’s a partial list of mostly paper products that they now control, sent to me by Eleanor Walden:

Paper products from Georgia-Pacific, including: Angel Soft toilet paper; Brawny paper towels; Dixie plates, bowls, napkins and cups; Mardi Gras napkins and towels; Quilted Northern toilet paper; Soft 'n Gentle toilet paper; Sparkle napkins; Vanity fair napkins; and Zee napkins. There’s a national campaign to boycott all of these products. I would urge everyone to do so, because if there’s one place these guys can be hurt, it’s in their deep, dirty pockets.
(Related addendum: a March 14 article in Yahoo news noted that U.S. millionaires in a survey complained that even $7 million was not quite enough to feel rich. The poor guys compare themselves to their fellow princelings, and also worry a lot about outliving their meager assets. Doesn’t your heart just bleed for them?)

Lawrence DiStasi

Nuclear Reactors--Full Speed Ahead

Amid all the horrors engulfing Japan (and the rest of the world as it watches in fear and trembling) not only via the earthquake and tsunami, but also via the possibility, increasing hourly, of one or more nuclear meltdowns, it is “encouraging” to note that some intrepid Americans are undaunted. Today, for example, that great representative from Texas, Joe Barton, was badgering Energy Secretary Stephen Chu in a hearing before his Energy and Commerce Committee. Barton—who some may remember as the “bright light” who apologized to BP CEO Tony Hayward: “I do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong is subject to some sort of political pressure that is again in my words amounts to a ‘shakedown’ so I apologize” (seriously, those are the words he used) and who, it was later revealed, has received some $1,330,160 in “oil money” during his career—kept asking Chu if the Obama administration’s earlier promise to push for the building of more nuclear plants in the U.S. by providing loan guarantees of $56 billion still held. Chu answered in a complex way, and Barton persisted: “Is that a “yes?” Chu danced a bit more, but then answered, “Yes.” Barton then asked a further question amounting to the same thing, and this time got a prompt “Yes” from Chu. “Ah, you’re learning,” chortled the chairman; for he had the answer he wanted. The United States was not going to be deterred by a little meltdown in Japan, or by the rising panic among the world’s peoples about all the nuclear power plants that could spew radiation in unforeseeable directions due to unforeseeable accidents, or the minor problem of what to do with all that spent fuel lasting millennia. Hell no! Energy is needed, plutonium is needed, and real men like Barton aren’t afraid of what a little radiation does to the human body (nor, it seems, is the Obama administration), so it’s full speed ahead.

So here we are. The Japanese are running out of options to cool down these out-of-control nuclear reactors. They’ve been pumping sea water, probably using fire trucks in tandem to get enough pressure to pump the water onto the fuel rods, or replace the evaporating water from the pools storing spent rods still generating radioactive materials and heat, but they’re running out of fuel to keep the fire engines running. Worse, they’ve just this morning had to allow the skeleton crew (no pun intended) of 50 workers or so to take a break because the radiation levels were getting too high even for these sacrificial lambs. Meantime, the temperature in these reactors keeps rising inexorably. 2500 degrees. 3000 degrees. It’s hell on earth.

Herein lies the crux of the matter. Nuclear fission creates heat. So does just the normal process of radioactive decay of the materials that are used in the fuel rods (i.e. even after the reactor is shut down). The geniuses who designed this technology figured that all they’d have to do was keep the process cool with water. Keep circulating water to cool the fuel rods and all would be fine. But all isn’t fine. Electricity to pump the water fails. Generators to replace the electricity are stored in the basement and a tsunami floods the basement and disables the generators. Then sea water gets pumped in, but that also has its limits. Helicopters are called in to dump sea water into the blown-apart reactors (the explosion caused by the steam created by water on hot rods, and the release of hydrogen which blows up), but the radiation gets too high for the helicopter pilots to fly over the reactors. In short, the breakdown and remedial measures amount to a chain reaction that mimics the chain reaction that creates nuclear energy (and bombs) in the first place.

This hellish, impossible-to-control technology is the reason that governments, like the Obama administration, have to guarantee the loans needed to build these reactors. Investors on Wall Street want no part of this stuff. Banks won’t take the risk on their own. And why? Because the whole process is too hazardous, too fraught with potential disasters: Three Mile Island; Chernobyl; and now Fukushima. So whose money is going to fill the gap? Why, yours and mine, courtesy of the United States government, which pledges that if anything goes wrong (and how could it not go wrong eventually?), the federal government will pay off whatever loans or costs have accrued. And they are huge. Because though it seems “free,” this is expensive technology. And the only entity willing to take the risk by subsidizing it is the government. Reminds us of that other huge risk the government provides welfare checks for: war, the insanely expensive machines of war.

But will the world backtrack from its insane nuclear gamble? Hell no. We need war; we need energy. And so we get Joe Barton, that dimwit who considers global warming natural,

I believe that Earth’s climate is changing, but I think it’s changing for natural reasons. And I think mankind has been adopting, or adapting, to climate as long as man has walked the Earth…Adaptation is the practical, affordable, utterly natural reflex response to nature when the planet is heating or cooling, as it always is.

Global warming? Just adapt, says Joe. Nuclear meltdowns? Just adapt. And the Obama administration, in the face of pressure from the likes of Barton, has to demonstrate its courage even in the face of planetary disaster. It’s what we elect these big boys for, after all: Damn the torpedoes; full speed ahead.

Lawrence DiStasi

Addendum, Mar. 24: Listening to an interview this morning on KPFA with Dr. Jeanette Sherman, consulting editor for the recent book, Chernobyl: Consequences for People and the Environment, I heard something I hadn't heard before (there are apparently lots of these little nuggets being kept under wraps). When asked what was the most important little-known aspect of the Chernobyl accident, Dr. Sherman said: "Its adverse effects on all life." She then pointed out that scientists have now studied not just the meltdown's effects on people, but on "domestic and wild animals, birds, fish, trees, mushrooms, bacteria and viruses." They found damage to them all. They found birth defects, damage to heart and brain, in short, "adverse findings in all systems tested."

This, of course, makes sense. Radiation affects life at its most basic, genetic level, and at that level, all life shares a common inheritance and structure. So the technology we have unleashed, and which its cheerleaders keep assuring us is perfectly safe, if and when it gets hit by the unforeseen accident, attacks not just humans and their cells, but the cells of all living things. Like global warming, the deleterious effects spread out to damage the entire planet. It's something to keep in mind, and, if you're writing your representative, something to point out.

Forget Shame

As I watched Michael Moore deliver a white hot speech in Wisconsin a few days ago, and heard the voices of his audience—state workers protesting the concerted Republican assault on public sector unions by yelling “Shame! Shame! Shame!”—it occurred to me. This time, folks, shaming those in power isn’t going to be enough. Though it was enough to bring down two presidents—Johnson and Nixon—in the 60s and 70s, and to eventually stop the Vietnam War, it won’t make even a dent in the armor worn by today’s ruling class. I mean, just think of it: two short years ago, the country seemed so disgusted by the overt criminality of Bush and his gang in the White House that his name was too toxic to even mention. The entire Republican Party was said to be near extinction, while a Prince of the Left had been elected to the White House. And yet, today that same prince is in retreat on every front, groveling to the right, while the worst yahoos ever seen in public office are screaming for the blood of gliberals and their devastated constituency. So we can forget tears, forget revulsion about war, murder, the evisceration of the social net so laboriously put in place over several generations, the enslavement of the newly impoverished, and all the rest. The power mongers and their lackeys in office are simply not susceptible to these common human emotions. Like their forebears in the Germany of the 1930s, they seem to rather enjoy the suffering of those beneath their boot heels. And they’ll do anything, from dirty tricks to the crippling and/or poisoning of workers, to the poisoning of the entire planet, to protect what they view as “theirs.” Hence, we have this so-called Representative from New York, Peter King, our era’s Joe McCarthy, opening hearings on the “radicalization of the Muslim-American community by Al-Qaeda,” impervious to the tears of Congressman Ellison testifying about the sacrifice of one of these “terrorists” who died trying to save his fellow Americans on 9/11, and begging for the hearings to focus on a wider population than this already terrorized minority. And we have this punk governor of Wisconsin along with his newly-empowered Republican majority, ramming through in secret, when he couldn’t persuade by reason, the bill to strip unionized state employees of their collective bargaining rights. Shame? This crude piece of plastic doesn’t even register the stuff in whatever constitutes his innards. All he registers is the coin he gets from the likes of David Koch, the energy baron who’s the largest funder of anti-global-warming science in the world (even larger than Exxon) and the main bankroller of the Tea Party. I haven’t been able to find out if Koch is involved in ‘hydrofracking,’ the latest darling of energy bandits—see the NY Times, Feb. 27, for information on what ‘horizontal hydraulic fracturing’ does to the huge volume of water needed to “frack” the natural gas out of rock, and the corrosive salts, carcinogens, and yes radioactive elements like radium polluting that water when it drains into nearby rivers and aquifers used for drinking—but I wouldn’t be surprised.

So here’s what we’re up against now. These billionaires who brought the country to its knees and emerged richer than ever have now been given even greater power to control politicians and laws than they had during the Gilded Age. The gap between them and the rest of us has grown in the last thirty years—since that corporate shill Ronald Reagan began his assault on graduated income taxes and regulations keeping the corporate rape of the rest of us within some bounds—to a level of inequality in the distribution of wealth and power that rivals Arab sheikdoms. A few of these mandarins control more wealth than whole counties, whole states, whole regions of us. And they will do anything, corrupt any politician, commit any crime, decimate whole countries, whole planets, to keep it.

Shame them? It doesn’t even merit discussion. The only thing that impresses these robots is force. The force of millions of people screaming for their heads. The force of organized and constant pressure outing them and their crimes. The public employees in Wisconsin have begun this movement. So have a few thousands in states like Michigan and Indiana, where similar bills have been passed or are pending. But it is quite clear from the Wisconsin experience that more, far more, is going to be needed. There’s going to have to be not just a few victories over crumbs; a few compromises like “carbon trading” and extended unemployment; there’s going to have to be systemic change. And as far as I can see, that’s not going to happen unless these bastards are made to fear not only for their fortunes, but for their very existence. How is this to happen? I have no specific solutions; besides, it’s a project for the young. But as Michael Moore pointed out in Wisconsin, and as the people always seem to forget: there are a hell of a lot more of us than there are of them. That’s what terrifies them in the night. They know that if the people ever wake up, if the people ever become conscious of their power and use it, the game, the game whereby the corporate pooh-bahs have not only seized obscene amounts of wealth and power, but used it to exploit and blight everything that makes life itself possible, is over.

I’m putting my money on an awakening. But it had better happen soon, because the damage is accelerating so fast that before long there won’t be much left to save.

Lawrence DiStasi