Sunday, October 16, 2011

Occupy This! You Lazy, Pot-Smoking, Hippie, Communists!

Hippie Communist hides face in shame
As the Occupy Wall St movement has spread to other cities across the nation it has begun generating discussion about the financial and political systems that dictate heavily influence the country's policies and the appropriate relationship between business and government.  Indeed, there is a lot of discussion to be had; despite the vague calls for smaller government by the wingnuts, private industry is deeply dependent on government contracts and payments.  In 2012 the federal government is projected to spend more than half a trillion dollars [pdf] on contracts and payments going to private industry.

Another point of discussion, and perhaps the one that is the focus of the "Occupy" movement, is the growing inequality between the top 1% of earners and everyone else.  Salon reported on some interesting statistics.  Among them is this one, which poignantly illustrates how far behind the 'average worker' is falling:
The Rich get richer and fuck everyone else!
But don't construe the lament of this growing disparity as the grumblings of disgruntled do-nothings that simply haven't earned the success that CEOs have.  I would argue that CEOs as individuals have a right to earn whatever they can negotiate (and that sword swings both ways - front line workers have the right to earn whatever they can negotiate - whether collectively or individually).  Certainly executive compensation should be a reflection of the success of the company.

But this is often not the case - it is not uncommon for CEOs whose companies fail to meet earnings expectations to not only receive exorbitant compensation but truly mind-numbing bonuses.  And when the entire financial industry has been pulled back from the brink of epic collapse and failure by its own doing (by the very entity - the government - which many of those critical of the Occupy movement wish to shrink or eliminate) financial industry executives still received staggeringly absurd bonuses.

Consider Thomas Montag from Merrill Lynch who was paid $39m in bonuses in 2008, the year of the financial meltdown.  Now, perhaps we should not rush to judge - it is possible that Montag was able to successfully navigate the perilous environment.  Maybe he actually deserved that $39m.
As head of global sales and trading, Montag ran the Merrill unit that piled up the brunt of the company’s $15.31 billion net loss in the fourth quarter of 2008.
Right - I think that speaks for itself.

But hey, if that's how Merrill Lynch wants to run their operations, that's their prerogative in a free-market capitalist society, right?

Fortunately for Merrill Lynch, the government stepped in and bought their toxic assets for 22 cents on the dollar, so at least then it was the government's problem and not Merrill's.
That unexpectedly large loss forced taxpayers to shell out an additional $20 billion to Bank of America to make sure its $50 billion acquisition of Merrill closed in January 2009.
So in the end, Montag fucked up to the tune of $15 billion, got a bonus that could otherwise support 1000 American families, and the US taxpayers got to foot the bill plus another $20 billion.  Now that is true America economic justice.

What I take away from the Occupy movement is that the system is broken.  That to an increasing degree, politicians are creating policy that specifically benefits corporations and those whose financial security has already been secured at the expense of the interests 99% of Americans who work one or more full time job(s) while trying to raise a family.

One example of this broken system is a news item that gained mainstream media attention in the spring of 2011.  I am referring to the fact that General Electric (GE) earned $14 billion in profits, yet did not pay federal taxes in 2010.

You would expect that a company that is doing so well financially to be hiring personnel to expand its business.  Or at the very least to maintain a steady workforce.  Or if you're a cynic (and perhaps a realist) you might expect GE to lay off tens of thousands of workers.  Well, the verdict is in and the cynics have it.  In 2009 not only didn't pay federal taxes, but actually received a $2 billion tax credit on $11 billion in profit, GE laid off 18,000 of its own employees.

Meanwhile, GE CEO Jeffery Immelt (who, in a clear illustration of the need to examine the public/private relationship, Obama appointed as chairman of his Council on Jobs and Competitivenes) saw his compensation rise to $15 million in 2010.

When the loopholes in the federal tax code are such that a hugely profitable multi-national corporation can pay no taxes, contributing nothing financially to the very society upon which its success rests, while laying off tens of thousands of workers, it should be a glaringly obvious indication that the system is broken.

And the fact is that GE isn't the only large corporation not paying taxes.  The Washington Times gives us a Top-10 list of notable corporations not paying taxes in 2010.  Here are just four of them:

 1. Bank of America took $336 billion in bailouts in 2009, but in 2010, flush with $4.4 billion in profits, it paid no taxes. Even Forbes magazine asked, how is that possible? Probably thanks to their 115 offshore tax havens.
2. Boeing just received $35 billion from our government to build 179 airborne tankers, but despite nearly $10 billion in profits from 2008 to 2010, it too paid no taxes, again thanks to foreign tax havens.
3. Citicorp took $476 billion from the bailout and then made monster profits in 2010, yet it paid no taxes, thanks to 427 subsidiaries in tax havens like the Cayman Islands and Hong Kong.
4. Exxon/Mobil, received huge oil subsidies from the government and earned $45 billion in 2009 but paid no taxes, again thanks to stashing profits in places like the Bahamas and Singapore.
Go read the rest.

One Facebook friend commented
There's a lot to comment on here, but I'll just focus on two things:

1) Your hand is tipped of willful ignorance or simple laziness when you have the internet at your fingertips, yet you are incapable or unwilling to do the research necessary to answer a question on which has been widely reported.  The implication here is that because this person doesn't know what the purpose of the movement is, then it must not have a purpose or that its purpose is somehow not valid.

2) And then we have the victim-blaming as if it somehow the fault of the unemployed that despite 80% of the Dow Jones components beating Wall Street's Earnings per Share estimates, companies continue to lay off workers by tens of thousands out of concern of economic conditions (in which they continue to be profitable and beat estimates).  That these protestors have realized that the system is rigged against them and are voicing that frustration through peaceful demonstration should not be ridiculed as "pointing fingers".

Instead, those of us that actually care about how public policy is (or, rather, isn't) in the interest of 99% of its constituents, should support the Occupy movement in finding its voice and bringing about change that narrows the disparity of the have's and the rest of us.

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