Remember when President Obama was lambasted for saying “you didn’t build that”? Turns out he was right, at least when it comes to lots of stuff built by the world’s wealthiest corporations. That’s the takeaway from this week’s new study of 25,000 major taxpayer subsidy deals over the last two decades.
Titled “Subsidizing the Corporate One Percent,” the report from the taxpayer watchdog group Good Jobs First shows that the world’s largest companies aren’t models of self-sufficiency and unbridled capitalism. To the contrary, they’re propped up by billions of dollars in welfare payments from state and local governments.
Such subsidies might be a bit more defensible if they were being doled out in a way that promoted upstart entrepreneurialism. But as the study also shows, a full “three-quarters of all the economic development dollars awarded and disclosed by state and local governments have gone to just 965 large corporations” — not to the small businesses and start-ups that politicians so often pretend to care about.
In dollar figures, that’s a whopping $110 billion going to big companies. Fortune 500 firms alone receive more than 16,000 subsidies at a total cost of $63 billion.
These kinds of handouts, of course, are the definition of government intervention in the market. Nonetheless, those who receive the subsidies are still portrayed as free-market paragons.
via No, really, you didn’t build that: How the rich became dependent on government subsidies – Salon.com.
A new paper by researchers at the International Monetary Fund appears to debunk a tenet of conservative economic ideology — that taxing the rich to give to the poor is bad for the economy.
The paper by IMF researchers Jonathan Ostry, Andrew Berg and Charalambos Tsangarides will be applauded by politicians and economists who regard high levels of income inequality as not only a moral stain on society but also economically unsound.
via Taxing the rich is good for the economy, IMF says – Business – CBC News.
Chris House has a somewhat odd post in which he argues that unlike in most other academic disciplines, in economics the facts have a conservative bias:
via Economics is liberal: Chris House on conservative economics..
Dont believe the happy talk coming out of the White House, Federal Reserve and Treasury Department when it comes to the real unemployment rate and the true “Misery Index.” Because, according to an influential Wall Street advisor, the figures are a fraud.
via Wall Street adviser: Actual unemployment is 37.2%, misery index worst in 40 years | WashingtonExaminer.com.
Not so long ago and not so very far away, there were people who thought they were masters of the universe. They were very powerful and very rich (and very often both), and each year they got together on a mountaintop in Switzerland to congratulate themselves, network with each other and confer about how best to bring order and prosperity to humankind.
From afar, the confab known as the World Economic Forum in Davos looked a little like Asgard, the mythical home of the Norse gods. Up close, slipping along the icy sidewalks with people partying all night in a hodgepodge of hotels, it looked like Loki, the god of mischief, was running the show.
For decades after the forum was founded in 1971, Davos often appeared a model of disorganization, a 30-ring-circus of panels and plenary sessions, even as the world, with or without its help, looked to be in more or less good order. The Cold War ended; Communism died; technology was spreading opportunities; global trade supposedly was pulling people out of poverty. Even the problems of terrorism and a very shaky euro, while they were disconcerting, seemed manageable.
via At Davos 2014, The Gods Of Mischief Rule – The Daily Beast.
The richest 85 people in the world have as much wealth as the poorest 3.5 billion – or half the world\’s entire population – put together. This is the stark headline of a report from Oxfam ahead of the World Economic Forum at Davos. Is there a reason why the world\’s powerful, gathering at the exclusive resort to sip cognac and eat blinis, should care? Well, yes.
If one subscribes to the charitable view that neoliberal philosophy was simply naive or misguided in thinking that \”trickle down\” would work infinitely, then evidence that it doesn\’t, should be cause for concern. It is a fundamental building block of supply-side economic theory – the tool of choice these past few decades for those in charge to make adjustments. The realisation that governments have been pulling at economic levers which, for some time, have been attached to nothing, should be a wake-up call to the deepest sleepers.
Even if one subscribes to the cynical view that the elite knew what they were doing all along, observing that the \”rising tide\” is lifting fewer and fewer boats and leaving more and more to rot in the sediment – both at a personal and national level – must make most wonder \”am I in the right boat and is it big enough?\” Concentration is rampant. Credit Suisse estimates that the world will have 11 trillionaires within two generations.
via Trickle-down economics is the greatest broken promise of our lifetime | Alex Andreou | Comment is free | theguardian.com.
(NEWSER) – Pope Francis\’ blistering attack yesterday on the \”tyranny\” of unchecked capitalism in general and trickle-down economics in particular marks a fundamental shift in church thinking, writes Emma Green at the Atlantic. A half-century ago, the church largely condemned communism and embraced democracy, along with its underlying free-market system. The pope made clear yesterday that those days are long gone. \”This is more than just a lecture about ethics,\” writes Green. \”It’s a statement about who should control financial markets.\” And Francis clearly believes \”the global economy needs more government control—an argument that would have been unthinkable for the pope just 50 years ago.\”
via Vatican's New Bogeyman: Capitalism, Not Communism – Pope Francis' condemnation of trickle-down theory is a shift: Essayist.
Walmart\’s been caught trying to make a top-down social media strategy look like a grassroots action by hundreds of hourly workers—the retail giant is astroturfing, in other words. See, a social media \”Thunderclap\” lets hundreds of people post to Twitter or Facebook at the same time, increasing the likelihood that a topic will trend or at least start to break through the noise. A Thunderclap touting Black Friday as Walmart\’s Super Bowl was identified as being from \”a proud associate.\” But it turns out that proud associate was Umang Shah, Walmart\’s director of social strategy.
Outed by Eric Ming as the originator of the Thunderclap, Shah argued that \”proud associate\” wasn\’t deceptive because:
via Daily Kos: Walmart social strategy director poses as 'proud associate' to cheer Walmart online.
What are future historians going to call this age? Probably not the Era of Good Feelings, which is what we still call the Monroe-era embrace of small-r republicanism. (It was awfully brief.) The Gilded Age has been taken, although we’ve often heard that we’re living in a New Gilded Age.
Lately, I’m wondering if we’ve morphed even beyond that. We know the 1 percent have been partying in contemporary America as never before. And we know the workers at the bottom have been getting hammered. But this week we seem to have entered a phase when it’s OK for the corporations doing the hammering to drop any pretense that they’re supposed to be doing the opposite. It’s quite a moment.
A Walmart store in Canton, Ohio, has been getting some unwanted attention because an employee surreptitiously publicized a store food drive. But this isn’t your run-of-the-mill holiday-season food drive. It is not intended for Canton’s destitute. It’s for the store’s own employees. Signs attached to storage containers in an employee-only area of the store, photographed by the employee, ask other employees to “donate food items here so associates in need can enjoy Thanksgiving dinner.” “Associates in need.” Wow.
This is just one store, but corporate HQ has now involved itself, with a company spokesman attesting that this program shows the spirit of intense bonhomie that pervades the store and indeed the entire corporation. It’s just for workers who may have lost a home in a fire or “something else you can’t plan for,” the spokesman said.
via Walmart and McDonald’s, Out and Proud as Corporate Scrooges.
As Ian Reifowitz of the Daily Kos pointed out, an article in The New York Times’s business section shows that our tax system has been successfully gamed to the point where the wealthiest Americans pay a much smaller percentage of their income than salaried, middle-class taxpayers. Using 2009 IRS data—the most recent available—America’s top 400 earners, who take in an average adjusted gross income of more than $200 million, paid less than 20 percent of those princely sums to the tax man. Those who only made it into the top 1 percent of earners—a few of whom earn as little as $344,000—paid 24 percent.
The reason for this is the ultra-rich’s income tends to derive from capital gains and dividend income. For instance, according to the figures compiled in AR: Absolute Return + Alpha magazine and quoted in the Times, 25 hedge-fund managers in the United States took home more than $350 million in 2009; a few boasted incomes in the billions. Hedge-fund managers and their lobbyists have managed to convince Congress to treat their income as capital gains rather than earned income, which lobbyists convinced Congress to tax at a mere 15 percent. Capital gains for the top 400 taxpayers represented an amazing 16 percent of all capital gains in 2009, the highest percentage by far since the statistics were compiled for the first time in 1992. Their dividend income, which is also taxed at a rate far lower than that of normal income, also hit its zenith in 2009, averaging $10.6 million per person.
via The Super-Rich and Their Monster | Center for American Progress.