So, as some of you may know, my brother recently moved to the Los Angeles, California area. Some of you may also know that my brother is an avid fan and player of “soccer” (football), by pressing play below you can see a local insurance ad that he and his teammates were asked to “stand in for.” (he is the dude in orange flipping the coin and the only guy form his team to actually be in the ad. (he was a very lucky man for this, as you will see.))
The crazy part is not that my bro was asked to be in a local commercial in L.A., but rather that the piece of paper he signed in compliance with California’s unionized laborforce of Actors ended up entitling him to over $3000.00 in “suprise” checks in his mailbox for his unexpected “role” as a “principle” for 2 seconds in the resulting local auto insurance company ad. Amazing. (the ad IS slated to air over 2000 times on cable in California/WestCoast markets, but still seems like a nice chunk of change for 2 hours “work” 🙂 to me!)
While this is clearly an example of some rather unlikely “right place at the right time” luck and seemingly outrageous pay for 2 hours of “work” :), I also see this as just one small example of how a nationwide/trade-wide return to the American tradition of Unionized Labor membership may soon help all working Americans regain fair value for their labors and hopefully a “LIVING WAGE” for anyone willing to work 40+ hours every week. The point I want you all to see is that what happened to my brother here would never have been possible were it not for the long history of hard work, stubborn willpower, and years of sacrifice and organizing of thousands of people for many years. People who had the courage, the optimism and the self-respect to fight for their own financial rights in the face of overwhelming structural/legal forces that have long been fostered to boost corporate profits at the expense of worker wage/living incomes.
The “Union-made” rule/regulation by which the corporation/production company/insurance company had to play by in California in this case is what allowed for my brother, the “worker” to be paid so handsomely for his “work.”
Santa Clara County v. Southern Pacific Railroad Company, 118 U.S. 394 (1886)was a United States Supreme Court case dealing with taxation of railroad properties. The case is most notable for what it did not hold, but was later misunderstood to have held–namely, that juristic persons are entitled to protection under the Fourteenth Amendment.
This misinterpretation was the beginning of the end of government for, by, and of the people in the United States of America and the sitting president, Grover Cleveland knew it then when he said in his 1888 state of the Union address:
“As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel.
Corporations, which should be the carefully restrained creatures of law and the servants of the people, are fast becoming the people’s masters.”
(given in a joint session of Congress)…(following the 1886 Santa Clara County Court Decision, which paved the way for Corporations enjoying 14th Amendment Protection and “corporate personhood.”)
The following is grim news for people who live in the United States,as reported By TIM PARADIS at Associated Press on August 19, 2008:
“NEW YORK (AP) — U.S. stocks headed for a sharply lower open Tuesday after a steeper-than-expected jump in wholesale inflation raised fresh concerns about the drag rising prices are having on the economy.
The Labor Department’s Producer Price Index showed inflation pressures faced by companies increased in July at more than double the expected rate, rising 1.2 percent. Wall Street forecast a 0.5 percent increase, according to Thomson/IFR.
The increase means prices have risen in the past 12 months at the fastest pace in 27 years and follows figures released last week showing consumers are also facing rising inflation.
A Commerce Department report on July housing starts, meanwhile, showed that construction of homes and apartments fell to the lowest level in more than 17 years. Starts fell to an annual rate of 965,000 units for July; the figure was higher than the rate of 950,000 units analysts had predicted on average but didn’t appear strong enough to quell investors’ worries about the sector.
The weakness in housing has not only imperiled home builders and suppliers but has left financial companies reeling over how to cope with soured mortgage debt.
Following the reports, Dow Jones industrial average futures fell 106, or 0.92 percent, to 11,393. Standard & Poor’s 500 index futures declined 12.50, or 0.97 percent, to 1,269.80, while Nasdaq 100 index futures fell 16.25, or 0.84 percent, to 1,927.25. Futures weakened after the reports.
Bond prices were down after the economic reports. While investors ordinarily seek the shelter of government debt when bad news arrives, inflation is just as bad for bonds as stocks because it can eat into the more modest returns Treasurys usually show. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.83 percent from 3.82 percent late Monday. The dollar was mixed against other major currencies, while gold prices fell.
The latest readings don’t reflect all of the pullback in oil seen since mid-July. Oil is down more than $30 a barrel since its July 11 peak of $147.27. Light, sweet crude fell 51 cents to $112.36 a barrel in premarket electronic trading on the New York Mercantile Exchange.
Retailers reported mixed quarterly results, adding to investors’ uncertainty about the economy.
Home Depot Inc. reported a 24 percent decline in its second-quarter earnings but topped Wall Street’s expectations. The nation’s largest home improvement retailer reiterated its forecast for the year amid a weak housing market.
Target Corp. said its second-quarter earnings fell 7.5 percent but topped Wall Street’s expectations despite continued weak sales amid a challenging economy.
Saks Inc. is reporting a wider-than-expected loss in the second quarter as its affluent shoppers cut back on apparel amid a slowing economy. The luxury goods retailer also issued a downbeat forecast for the year.”
“We were flabbergasted to see how many countries around the globe have inflation running in the double digits,” he added. “We found around 50 countries. And we probably missed some more where data are hard to come by.”
With heavily populated countries such as India on that list, they represent 42 percent of the world’s people grappling with soaring prices that threaten to crimp economic growth.
Oil prices hit another record high above $142 per barrel on Friday, while flooding in the U.S. Midwest, where much of America’s corn and soybeans grow, sent grain markets to record highs.
That will surely stoke already high food and fuel prices and hit emerging markets particularly hard.
India raised interest rates twice in June and economists think more increases are imminent after inflation hit its highest level in more than 13 years in mid-June.
Mexico’s central bank raised its key interest rate on June 20 for the first time in eight months. That surprised many economists, who thought Mexico would keep borrowing costs unchanged because of concerns that weakness in the United States, its top trading partner, would hurt the economy.
Given the widespread price pressures, it is little surprise that the Fed vice chairman, Donald Kohn, stressed that tackling inflation required an international response.
“Policy makers around the world must monitor the situation carefully for signs that the increases in relative prices globally do not generate persistently higher inflation,” Kohn said in a speech last week.”
Uncle Sam may be coming after the buyout kings. If the tax collector gets his way, Henry R. Kravis, Stephen A. Schwarzman, David Bonderman, David M. Rubenstein and the rest of the leveraged-buyout crowd could soon be forced to add some zeros to the taxable income line on their federal forms… Read on.
History is pretty clear on this one: Whenever the finance industry discovers a path to quick investment riches for a select few—S&Ls, junk bonds, Long-Term Capital Management, Enron, the list goes on—a massive reckoning can’t be far behind. Today’s implosion in the making? Private equity… Read on.
MORE than a year ago, Victor Fleischer, an untenured professor at the University of Illinois College of Law, finished a draft of a paper about the tax treatment of private equity. At the time, he was just hoping to get the paper published. Taxes are an unglamorous topic, and… Read on.
Talk about an inside job. It’s little wonder that CEO pay continues to soar when the consulting firms many corporations hire to determine executive pay levels also earn millions of dollars for handling other consulting work for the same company. After all, why tick off… Read on.
The deals are just the start. The original ‘barbarians at the gate’ now command a $107 billion global empire. Here’s how the buyout giant fires up its companies with a profit-or-perish creed. It’s a great time to be Henry Kravis, as he’s quick to remind people… Read on.
The Internal Revenue Service has begun an inquiry into suspected tax abuses at hedge funds and private- equity firms after determining many firm partners don’t file returns and may have improperly characterized transactions. The tax-collection agency is studying whether funds… Read on.
For mysterious reasons, people can suddenly become indignant about government policies they have accepted for years as a matter of course. Such a seismic shift seems to be happening in public attitudes toward taxation of America’s super-rich financiers. The three leading Democratic candidates… Read on.
As a central villain in the famous book “Barbarians At the Gate,” Henry Kravis has become one of the world’s richest mavens of private equity — the Wall Street sector that buys up companies, breaks them apart and sells their assets. In 2006, Kravis made $450 million, or more per hour ($51,000) than the average American makes in a year… Read on.
Not long after the Blackstone Group bought Travelport Ltd. last August, workers at the company’s office campus here began feeling the squeeze. Two months after the deal closed, scores of employees were lugging boxes of personal belongings to their cars, having lost their jobs. Under Blackstone’s ownership, the travel-reservations conglomerate has laid off 841 people, about 10% of its work force… Read on.
“Everything about America is threatened today … this is an epic struggle for the future of America,” Edwards told the cheering crowd. “Corporate greed and the very powerful use their money to control Washington and this corrupting influence is destroying the middle class.” While all of the presidential campaigns… Read on.
Today we are living under the control of that military-industrial complex. In 1975, there was a great movie called Rollerball starring James Caan. In a nutshell, it was about a futuristic society (2018) where corporations controlled everything. Not individual corporations mind you, but giant worldwide conglomerates… Read on.
Private equity funds are complicated entities. Essentially, they are unregulated pools of private capital raised and controlled by investment managers, otherwise known as “general partners.” Typically, managers buy up undervalued companies, de-list them from public exchanges… Read on.
Florida’s tomato growers have long faced pressure to reduce operating costs; one way to do that is to keep migrant wages as low as possible. Although some of the pressure has come from increased competition with Mexican growers, most of it has been forcefully applied by… Read on.
Henry R. Kravis, the billionaire founder of the corporate buyout movement, was working the hallways of Capitol Hill, hoping to kill legislation that would raise his taxes and those of other investment fund executives. While known to powerful people in Washington through longstanding personal.. Read on.
Topping each other’s deals — $31.4 billion! $39 billion! $45 billion! K.K.R.’s Henry Kravis and the Blackstone Group’s Stephen Schwarzman are locked in combat at the top of the private-equity heap. The rivalry has only sharpened since Blackstone’s I.P.O. sparked public outrage.. Read on.
On the eve of the 1986 leveraged buy-out of Safeway Stores Inc., the board of directors sat down to a last supper. Peter Magowan, the boyish-looking chairman and cheif executive of the world’s largest supermarket chain, rose to offer a toast to the deal that had fended… Read on.
Hundreds of migrant farmworkers marched through Miami this past Friday to protest a Florida tomato grower maneuver that will cut some tomato picker wages by 40 percent. The growers are refusing to honor deals the state’s top farmworker group has cut with McDonald’s and Taco Bell… Read on.
Last Friday, Rep. Sander Levin (D-MI) introduced a bill to remedy a long-standing tax inequity that allows private equity fund managers the right to claim performance fee income as capital gains rather than ordinary income. This tax break, based on the misnomer “carried interest,”… Read on.
Soon after Rep. Eric Cantor called a meeting of lobbyists two weeks ago, his aides had to find a larger room. Instead of the couple dozen they had expected, 75 showed up. Cantor, a Virginia Republican, convened the gathering to discuss how to defeat a set of fast-moving proposals that would vastly increase taxes on private-equity firms and hedge.. Read on.
This week, Senators Max Baucus and Charles Grassley, the chairman and ranking minority member of the Senate Finance Committee, have been holding “informal meetings” to consider whether the stratospheric incomes of private-equity partners ought to be treated as compensation rather than as capital gains, for tax purposes. Way back in the 1970s, newly-minted MBAs… Read on.
A leading private equity executive on Friday broke ranks with his industry by arguing it does not pay enough tax and warning that the government’s capital gains tax reforms, designed principally to tackle perceived abuses in the sector, would not be sufficient to silence critics. The intervention by Jon Moulton… Read on.
“Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.” So said fictional character Gordon Gekko, the embodiment of a 1980s corporate raider in the movie Wall Street. Yet, sadly, just as the Gekko character was based… Read on.
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Jeff Faux
Jeff Faux is the principal founder of the Economic Policy Institute (EPI) of Washington, D.C. He was President of EPI from 1985 until August 2002, when he became the Institute’s first Distinguished Fellow in order to devote more time to his research and writing. He is also the author of The Global Class War. Read full bio.
*Based on Henry Kravis’s 2006 income of $450 million as reported in Forbes magazine. Calculated at a tax savings of 21.45% (35% income tax + 1.45% Medicare Tax 15% carried interest paid), Henry Kravis saved approximately $96 million in taxes in the year 2006.
“– The dollar fell below 100 yen earlier today for the first time since 1995 and set a record low against the euro after a Carlyle Group fund defaulted on about $16.6 billion of debt, adding to turmoil in financial markets.
The dollar fell to almost one-for-one with the Swiss franc and slumped against the British pound. The drop came as Carlyle said lenders will seize the assets of its mortgage-bond fund, a day after Drake Management LLC said it may shut its largest hedge fund, spurring concern that losses will widen. The tumble in the world’s reserve currency drove gold to a record above $1,000 an ounce as investors sought shelter in the metal.
“The weakening, in reality, is a reflection on how the world is measuring the U.S.,” said Thomas Sowanick, who helps manage $10 billion as chief investment officer of Clearbrook Financial LLC in Princeton, New Jersey. “Until there is a unified central bank effort to support the dollar, the path of least resistance will be down.”
The dollar fell to 99.77 yen, the lowest since October 1995, before trading at 100.68 at 4:20 p.m. in New York, from 101.79 yesterday. The dollar touched $1.5626 per euro, the weakest since the European currency’s debut in 1999, and was at $1.5622, from $1.5551. It slid to a record 1.0045 Swiss francs. Japan’s currency advanced to 157.27 per euro, from 158.30.
The U.S. currency fell against a basket of six major trading partners to the lowest since the index began in 1973. The Dollar Index traded on ICE Futures in New York declined as low as 71.795. The dollar dropped to $2.0320 per pound from $2.0270, touching the weakest since December.
`So Many Holes’
The dollar pared its losses as stocks reversed a decline, after Standard & Poor’s said the end of subprime-related losses is “in sight” for large financial institutions. The S&P 500 index rose 0.5 percent, after earlier losing as much as 2 percent.
“The dollar is trying to find a floor here,” said Alan Kabbani, a senior currency trader at Wachovia Corp. in Charlotte, North Carolina. “The boat has so many holes that it takes a while to fix it.”
Treasury Secretary Henry Paulson reiterated support today for a “strong dollar” that reflects economic fundamentals, after President George W. Bushyesterday said the U.S. currency’s drop was not “good tidings.”
Life in West Tennessee 