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Corruption

The Entitled Rich

In a Global Marketplace, why pay taxes when you can use a nation’s resources for free?

In 1993 a young Eduardo Saverin was brought to the United States because, in Miami, the tax supported police force and justice department would keep him safe from being kidnapped and held for ransom.

When Eduardo grew up, enjoying the fruits of taxpayer funded infrastructure, rooting for taxpayer subsidized sports teams, this talented young man went to Harvard University. Despite being a private institution, Harvard received hundreds of millions of taxpayer dollars from the federal government.

There he met Mark Zuckerberg. Together, these friends developed a business plan that made use of the internet, a technology developed at taxpayer expense, and associated software, also subsidized by taxpayers. This plan sold advertising space on a social networking cite transmitted to user’s computers, another taxpayer subsidized technology, via taxpayer subsidized communication lines.

This business idea was so successful that it recently went public on the stock market, an institution kept afloat when taxpayers spent hundreds of billions of dollars to bail out the corrupt finance industry after they wrecked the world economy.

However, shortly this company when public, from which Saverin was expected to make billions of dollars, he gave up his American citizenship…

…in order to avoid paying taxes on the resulting income. After all, if he was forced to pay a whole 15% on the $4 billion he was estimated to make from Facebook’s IPO, that would only leave him with a measly $3.4 billion. And who can live on that?

A true American success story.


You must watch this movie!


ACORN and the Politics of Perfection

The situation with ACORN has really got me thinking.  Okay, I’ll have to admit that I think there should be some penalty for the group which, at the very least, was caught doing something stupid in re, offering tax advice to a pimp.  What has me intrigued, however, is the amount of effort and energy and scrutiny that has been heaped on ACORN in the last few years.   This is a group that has been under the glass for a while.  That some embarrassing information has surfaced may indicate some larger, more significant issues with the organization, or could be seen as just a matter of time.

I can’t help but wonder if I were placed under such scrutiny what kind of embarrassing details might come to surface? I shudder to think. Now multiply that effect by placing an institution, not an individual, but a collective of flawed individuals, under such a magnifying glass.  Is it any wonder that, eventually, some shortcomings might be dug up.

Granted, it could be said that offering tax advice and legitimacy to a pimp and prostitute who were planning an under-aged sex ring could be considered significantly more than a “shortcoming.” It’s not my place to minimize the significance here. I just wonder what would be dug up if we subjected  James O’Keefe and Hannah Giles to such scrutiny how would they fare after a few years.


More Smart Investing in Elite Interests

Banks don’t have the money to extend loans, or help working people who are struggling in an economy that was destroyed by the banks, but apparently they have plenty of dough to spread through DC.  According to the New York Times lobbying by banking interest have intensified as new legislation is brought to the Congressional floor to curb the power and corruption of banks.  These last investments appear to have paid off well.  For just a few million dollars, banks killed a provision that would have allowed judges to lower mortgage rates, saved $13 billion in fees and vouched banks even more bailout loot.  Oh, if the common man had access to such easy money.

New York Times Graph

 

In the graph above, it is obvious that the stale economy has done nothing to slow down bank lobbying.  The 2009 figure represents the first three months of the year.

None of this is surprising to students of C. Wright Mills. Government is an extension of elite interests. Corporate and bank lobbying is just another institutional insinuation of elite interests into government chambers supposedly dedicated to the good of the nation as a whole. Look forward to more of the same; some niggling legislation touted as populism, while behind the scenes the elite walk away with more loot and just as much influence as ever.


Don’t tank up until you watch this video!


Walk out on your bank

Thank you Stephen Pizzo from newsforreal.com.  Stephen is encouraging Americans to walk out on their large, multinational banks in favor of local, community banks.

According to Pizzo, an any reasonable and attentive American, the Obama Administration is not likely to offer a real challenge to the banking system. No surprises there. With banking interests the funding base for the political economy it is unlikely that any viable reforms will be made of banking.  Instead, bankers will continue to receive bailouts instead of pink-slips.  There might be some prefabricated, politically expedient temporary measures of accountability that will be well publicised, but within the next few months the bankers will settle down to business as usual.

We cannot rely on the political body to drive a stake into the heart of its symbiotic economic body. It is, therefore, up to the American people to make the necessary excisions.

Pizzo suggests a massive walkout of the major banks.  In most cases there are local alternatives to international banks.   The Independent Community Bankers of America have a search engine for community banks in your area.  I was surprised when I typed in my address just how many options their were and how many services the local banks offer.

Check out your options and take your money out of the hands of corrupt and incompetent banking conglomerates.


Another Good Investment

Twenty years ago the infamous oil taner Exxon Valdez, commanded by a drunk, spilled 10.8 million gallons of oil into Alaska’s beautiful Prince William Sound.  The oil slick covered over 11,000 square miles and destroyed the natural habitat of the Alaskan shore.

Though there were some efforts to clean up the overwhelming contamination, these were mostly unsuccessful.  Local residents claim that Exxon was not cooperative in efforts to clean the sludge. According to reporter Greg Palast, even after twenty years, the oil remains hidden in the sediment of the shoreline. Palast Article

Since we know that Exxon has not spent the last twenty years effectively cleaning their own mess, what has it been doing? Why, it’s spent over $10 million on politicians! In this case, over 86% of contributions went to the Republican Party.


Good Investment in Banking

I’ve always been taught that if you want to understand the truth about an issue the first thing you should do is follow the money.  Some might say this is cynical, even counter-sociological, and I would not suggest that a sociologist should follow the money and stay there.  It is, however, a very telling enterprise.

Currently, companies like AIG are being criticised for their lousy investments, but this isn’t entirely fair.  If you follow the money you will find that, in fact, many of the banks being bailed out have made at least one exquisite investment that has paid huge dividends.

When corporations invest in politicians the returns are just enormous.  Let’s take AIG as an example because they are under such intense scrutiny lately.  Their business practices have resulted in a global economic collapse. One would think that their investors are incompetent noobs.  But they are not.  Look at how they’ve invested in politicians.

In the 2008 campaign cycle AIG invested a mere $854,905 in campaign contributions according to opensecrets.org.  Sixty-nine percent of these investments were made in Democratic candidates, but the remaining 31% was no small sum to the Republicans.  Even more telling regarding AIG’s political investment is their twenty year trend. This reveals an even split between Democrats and Republicans.  AIG wasn’t making these contributions because they were fans of the a particular politician over another. No. They were hedging their bets.  When the political tides shifted, so did their contributions.  in 2000, for instance, AIG invested over $2 million on politicians, 60% of whom were Republicans.

This year, despite the relatively small sum, they spread influence around smartly.  Their top four recipients were Barack Obama ($104,000), Chris Dodd (imagine that at $103,000), John McCain (wait, didn’t you support his opponent? $59,000) and Hillary Clinton ($38,000).  That’s one president, two influential senators and a Secretary of State in your pocket–a veritable political Swiss Army Knife of influence. Some other presidential candidates stuffed in part by AIG are Mitt Romney, John Edwards and Rudy Giuliani.

And what a pay off.  For a small investment of less than a million dollars this year, and less than ten million dollars over the last twenty years what did AIG receive in return? Not one, but two financial bailouts totalling $70 billion! (propublica.org)

So why do we think AIG has the audacity to pay out bonuses using taxpayer money, or to sue the government, who now owns 80% of the company, for the return of $300 million that they unsuccessfully hid away in offshore accounts.  Could it be that they know that they’ve bought a chunk of the United States Government, so they are more or less immune to silly stuff like the law or civic responsibility.

Of course, AIG isn’t the only company that so wisely invested in political capital.  Below is a chart of seven recipients of taxpayer bailout money.  These seven were chosen because they were among the top ten recipients of TARP funds and are members of opensecrets.org’s list of Heavy Hitters (members of the top 100 campaign contributors). The chart includes their ranking among TARP recipients, the amount of cash they received from TARP, next to the amount of investment they put into the 2008 campaign and how that money was split between Democrats and Republicans.

Bailout Chart

 

I’ve always said I think we have the best government that money can buy.  This proves it.  Understand, that I’ve used the word investment intentionally.  These corporate heads see campaign contributions not as speech, as presented in court so slimily, but as investments in the future.Could it be that such investment, and the understanding of its inferred influence, could have been the reason for making such risky and immoral decisions over the last twenty years?


When Elite Privelege has gotten out of Hand!

This will be a very short blog because…well…really, there’s nothing that can be said.  The issue speaks for itself.  AIG! That’s it.  Not only has this company been instrumental in destroying the economy of the most powerful market in the world, thus crippling the world economy, they claimed to be too big to fail so as to justify billions of dollars in bailout money from the taxpayers.  As it stands, the US government owns 80% of this company.  Then the board heaps $160 million in bonuses on the very executives who engineered this fiasco claiming that the bonuses were necessary to “retain talent.” Talent? Oh, did I mention that many who received these bonuses were NO LONGER WORKING FOR AIG!

Now here’s the kicker.  AIG is using taxpayer money to sue the government (the majority owner) to return $300 million in taxes that the the government was so brazen to take from the AIGs fraudulent tax shelters!

You know the elite have gotten a free ride for too long when this kind of stuff happens.

Read the New York Times Article Here


Illinois Politics: Can Corruption be more Blatant

The fall of Governor Blagojevich (whom I suggested we support in his stand against Bank of America just yesterday) is not just an example of despicable personal conduct. Rather it is indicative of a deeper culture of corruption at the institutional level.

If one governor is indicted and convicted on charges of corruption…well, we could say that it happens.  It’s easy to write off such an event as an aberration.  Simply get rid of the corrupt individual, elect someone else and move on.  But the case of Illinois is not such an aberration.

Indeed, when two governors in a row and four of the last eight governors turn out to be corrupt (technically Gov. Blagojevich has not been convicted, but come on!) that might be an indicator that something more insidious is at work.  According to the Chicago Tribune 79 Illinois politicians have been convicted in the last thirty-six years!

Blagojevich         George Ryan

That’s just the number convicted. When we factor in dynamics of power, networks and connections, bureaucratic status and control  and all the myriad ways that those in power can avoid responsibility, and we can assume that there are even more such cases.  I’m not sure of any research to suggest the rate of corrupt politicians that get caught as compared to those who do not, but 50% of governors and almost 80 pols seems pretty high.

What does this mean? Well first, it means that replacing the governor will not solve the problems of corruption in Illinois.  It does not matter the reputation or personal integrity of the person selected for that office.  St. Francis of Assisi could be resurrected and placed in the Illinois State House, and that in and of itself would do nothing to clean up Illinois politics.

The state government, perhaps even the whole government infrastructure from local to state organizations, are corrupt at the institutional level.  The rational process of government is distorted.  In any institution, those most adept at fitting into the bureaucracy have a profound advantage for raising their status. When that institution is corrupt, corrupt individuals possess the advantage.  It could be hypothesized, if this is the case, then the most corrupt individuals will congregate at the top of the hierarchy.

Secondly, the very legitimacy of state authority is questionable in the light of a history of scandals.  An illegitimate power structure, lacking authority pressures those at the lower levels of the hierarchy in how they deal with the public.  A principle function of government is to create and enforce laws. It is those at the lower levels who do the actual work of enforcement, police, civil servants and bureaucrats.  This is the process of norm creation.

But if the instruments of formalizing norms is delegitimized, then it could happen that the norms themselves become meaningless. How can police enforce the rules on the public when those responsible for the institution exist outside of the very laws they create? Why should any citizen accept police authority, or bureaucratic authority within government institutions.  A state of normlessness ensues.

And this normlessness puts strain on the society as a whole.  If people do not feel that they can turn to the government for justice, then they may feel obligated to persue their own justice, as is the case with the Republic Windows and Doors employees.

The state structure of Illinois will need a radical restructuring to purge it of malingerers, thieves and racketeers.  Yet who can the people of Illinois trust to make such a transition? When the very people we turn to to counter corruption are themselves corrupt, who can the people turn to?  Such a purge, in and of itself, could be destabilizing.