Category: Corporatism

Monday Wake Up Call – May 8, 2015

“Ethics is knowing the difference between what you can do and what you should do.” – Justice Potter Stewart

It looks like Scrooge McDuck runs human resources at Disney. Disney World laid off 250 tech workers, who were American programmers and computer operators that have been replaced by Indian techies with H-1B visas. The techs were supplied by HCL America, an Indian outsourcing firm.

H-1B visas are intended for high-level professionals who, in concept, fill jobs for which no Americans are available. 85,000 of these visas are granted each year, and they are in high demand. Technology giants like Microsoft, Facebook and Google repeatedly press Congress to add to the annual quotas, saying there are not enough Americans with the skills they need.

In Disney’s case, the Americans were not only available, they were actually working in the jobs.

The H-1B visa program has been great for tech innovation, and the Wrongologist supports it, but this is an egregious abuse of the corporate right to employment at will, and of the spirit of the H-1B visa laws. From the NY Times:

The chairman of the Walt Disney Company, Robert A. Iger, is a co-chairman with Michael R. Bloomberg, the former mayor of New York, and Rupert Murdoch, the executive chairman of News Corporation, in the Partnership for a New American Economy, which pushes for an overhaul of immigration laws, including an increase in H-1B visas.

Companies speak a lot about teamwork, esprit de corps, and group identity, all in the context of helping the company reach its goals. But the Disney lesson is that we’re really good at ignoring those lofty ideals, while driving an anti-employee, mean-spirited chase of a marginal dollar of profit.

If employers really need a foreign employee resource, they should be charged an annual fee of $50K for each H1-B visa they use. For truly unusual skills, it would be worth the fee. For Disney, who is just looking to buy labor for a few dollars less than the going rate for American citizens, it would remove the economic advantage. We need to ask our corporations to stop defending the indefensible.

Republicans shout from the mountaintops about illegal immigrants, while on the other hand, they are quite willing to add to the numbers of H-1B visas, immigration of a kind. Furthermore, H-1Bs allow for chain migration (kids and spouses) as well, and thanks to new rules, H-1B spouses can work as well.

Time to wake up America! Disney’s H-1B’s are the first step in a process. They have been brought in by Disney so that they can gain the experience to manage Disney’s IT operation. And some time down the road, Disney’s Florida HCL people will work with HCL’s India-based IT workers, allowing Disney to move most of their IT operation over there at a fraction of the cost that Disney pays here.

Corporatism has inverted Henry Ford’s mantra to pay his workers enough to afford his cars. The new mantra is, pay only a few employees enough to afford your goods, and let the government worry about the rest of them.

America has to be more than a spreadsheet and a flag.

Today’s wake-up is another in our spring bird collection. It is the Orchard Oriole, the smallest of North America’s orioles, it builds hanging, pouch like nests during its breeding season. We get both the Baltimore Orioles and these guys in Mid-May:

For those who read the Wrongologist in email, you can view the video here.

Monday’s Hot Links:

The Wall Street Journal had a blog post open letter to consumers asking why consumers didn’t spend more money. Imagine their concern, since mean US family income is stuck at the same level as in the late 1990s. Remember that the WSJ supports the TPP trade legislation, like the last deal that outsourced millions of middle class jobs. Please, WSJ, go back to talking to companies, and leave consumers alone.

A list of the top 50 restaurants in the world. 5 are in the US. Wrongo and Ms. Right are going to #49 later this month.

In a stunning discovery that overturns decades of textbook teaching, researchers at the University Of Virginia School Of Medicine have found that the brain is directly connected to the immune system.

Owning a home no longer plays the same role in the lives of Americans that it has in the past. And it is clear that many middle-income Americans cannot realistically aspire to become homeowners anytime soon. A recent survey conducted by the American Institute of CPA’s found that most Americans are now more concerned about having enough money to retire than about becoming a homeowner.

China has 30,000 tons of gold, (which is almost more gold than the rest of the world’s central banks, combined). It’s also important to make explicit that the Chinese are slowly laying the groundwork for it to take over the dollar’s role as the global reserve currency sometime in the future.

Chinese state media has warned that war with the US may be “inevitable.” Beijing published a policy paper detailing how its military will shift its focus from land and coastlines to the open seas. They criticized “external countries…busy meddling in South China Sea affairs. The money quote:

We do not want a military conflict with the United States, but if it were to come we have to accept it.

 

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Where Are The Activists?

And why aren’t they out in the streets? Why isn’t every bank office, and every legislature, “occupied?”

The NYT reported on their NYT/CBS News poll on income inequality. It found that Americans are broadly concerned about inequality of wealth and income despite the improving economy. Among the findings:

Nearly six in 10 Americans said government should do more to reduce the gap between the rich and the poor.

Inequality is no longer a partisan issue. The poll found that inequality is important to almost half of Republicans and two-thirds of independents, suggesting that it is likely to be a central theme in next year’s general election. We are already seeing populist appeals by politicians of both parties who are trying to capitalize on the sense among Americans that the economic recovery benefited only a handful at the very top.

Sadly, the surveillance society has changed the costs and benefits of protests. The Occupy movement was crushed with a coordinated 17 city paramilitary crackdown. In this day of background checks as a condition to get a job, a misdemeanor arrest for protesting can make you unemployable. You can find yourself on any one of a variety of official lists that cannot be challenged because of secrecy laws; there are sham arrests like those conducted at Occupy Wall Street or, at the NYC Republican convention in 2004 by then-Mayor Bloomberg.

And the financial services industry seems to be able to get cops to come in and round up people on their behalf.

It is not enough to gather in the street. Once you are there and gathered, it must lead somewhere, there must be a goal. Admittedly, the problem with activism is that the fight is to change perceptions and narratives, and progress toward those goals is slow, and rarely concrete and visible.

It’s astonishing today to see how Americans have been conditioned to think that political action and engagement is futile. The Wrongologist was a demonstrator when the reverse occurred, when activism in the 1960s produced significant advances in civil rights for blacks and women, and eventually led the US to exit the Vietnam War. But today, when activism is an option, quite a few argue that there is no point in making the effort, that we as individuals are powerless. Yet, what Richard Kline wrote about protest in 2010 still applies:

The nut of the matter is this: you lose, you lose, you lose, you lose, and [then] they give up. As someone who has protested, and studied the process, it’s plain that one spends most of one’s time being defeated. That’s painful, humiliating, and intimidating. One can’t expect typically, as in a battle, to get a clean shot at a clear win.

What activism does is change the context, and that change moves the goalposts on your opponent. It also raises the political price for governments that make bad decisions. Demonstrations helped stop LBJ and Nixon from making a few bad decisions. The same principle could apply to the Conservative’s desire to kneecap Social Security, Medicare and Obamacare while they hand out more baubles to their rich friends. This kind of class inequality is deeply un-American, but it has big political benefactors in both parties.

We can’t use the protests of the 1960s as a model in today’s political environment. Back then, power feared the people. Power feared the people because there was a free press to publicize and record events. The White House press confronted presidents; they didn’t pander, or act as stenographers as they do now.

That no longer exists. The press has been destroyed by corporate consolidation and foreign ownership. Investigative reporting and the institutions that nurtured and supported it were alive and well.

In the 1960s, few local politicians would refuse a permit for a peaceful demonstration, if in fact, a permit was even required. That is no longer true. No permit, no demo. The arrogance of power is demonstrated repeatedly right in front of cameras and reporters; the police harass and provoke, restrain and intimidate at peaceful demonstrations. They also create incidents to blame on demonstrators, which are dutifully captured by the cameras.

If one unit of protest worked in 1965, we need 10 units today to achieve similar results. In the meantime, reflect on this quote from a noted demonstrator:

“When the idea is a sound one, the cause a just one, and the demonstration a righteous one, change will be forthcoming”–Martin Luther King, Jr.

See you on Sunday.

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End Government Subsidies of Private Equity

We have written about taxpayer-funded corporate subsidies this week. Let’s talk about the Private Equity (PE) industry, where profit margins are pretty high. By PE we mean investing in assets that include equity securities and debt of operating companies that are not at the time of the investment, publicly traded. Having a number of streams of income coming from a variety of investments or income generating assets is one of the best ways to build wealth. You see, hPE is a re-branding of leveraged buyouts (LBOs) which were the way Wall Streeters built wealth in the 1980s.

In the past 35 years, we have seen a finance-led revolution that has generated fantastic wealth for PE managers. PE has in large part, helped create the growing chasm between America’s most wealthy and everyone else. This is shown in the disproportionate numbers of private equity and hedge fund principals in the top .1% of American wealth. That wealth doesn’t only come from just making a killing when the target company goes public or is acquired, it also comes from favorable tax treatments for the PE company principals and investors.

Although the PE industry is often held up as an exemplar of free-market capitalism, it is surprisingly dependent on government subsidies for its profits. In a typical deal, a PE firm buys a company, using some of its own money and some borrowed money. It then tries to improve the performance of the acquired company, with an eye toward cashing out by selling it, or taking it public.

The key to this strategy is debt: the PE firms borrow to invest since, just as with your mortgage, the less money you put down, the bigger the potential return on investment. But debt also increases the risk that companies will go bust, so early on, the amount of debt PE firms employed was conservative.

That has changed in the last 10 years. After using debt to buy them, many PE funds now have their portfolio companies borrow even more. They then use that money to pay themselves “special dividends.” This allows them to recoup their initial investment while keeping the same ownership stake.

Before 2000, big special dividends were not common. But between 2003 and 2007, PE funds took more than $70 billion out of their companies. These dividends created no economic value-they just redistributed money from the company to the private-equity investors.

As an example, in 2004, Wasserstein & Company bought the mail-order fruit retailer Harry & David. The following year, Wasserstein and other investors took out more than $100 million in dividends, paid for with borrowed money. In 2011, Harry and David defaulted on its debt and dumped its pension obligations on the US government. And when an investment goes bankrupt, there are more fees, and maybe more tax write-offs for the PE partners.

Taxpayers are left on the hook. Interest payments on that debt are tax-deductible, and when pensions are dumped, a federal agency, the Pension Benefit Guaranty Corporation (PBGC) picks up the company’s pension liability. That means taxpayers are on the hook for those unfunded pensions.

And the money that PE dealmakers earn is taxed at a much lower rate than normal income, thanks to the US tax code’s carried interest loophole, which permits that income to be taxed at capital gains rates.

Most do not know that the single largest source of investment capital in PE funds is government pension funds. According to Preqin, a database company that tracks investment in PE, approximately 30% of capital in US PE funds is contributed by government pension funds. Government pension funds are usually called “public” pension funds, administered by government employees and governed by officials who are directly elected by the public or appointed by elected officials.

A key point about the power and reach of PE. They have more than $3.5 trillion under management. Assuming normal leverage (30% equity) that gives them $11.7 trillion in buying power. That’s about 40% of the value of publicly-traded firms in the US. Think about the political clout they have by investing government pension money. Not only do PE firms own a huge portion of America’s productive businesses, unlike the diffuse ownership of public companies, they control them outright.

So, PE is a government-sponsored enterprise, both via tax subsidy and via funding. We taxpayers are helping them to fabulous paydays, thanks to our Congress Critters.

If PE firms are as good at remaking companies as they claim, they shouldn’t need tax loopholes to make their money. If we capped the deductibility of corporate debt, and closed the carried-interest loophole, it would not prevent PE firms from buying companies or improving corporate performance.

But it would add to our tax revenues, and that might keep a bridge or two from falling into a river during rush hour somewhere in America.

“The American Dream: You have to be asleep to believe it.” -George Carlin

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Why Don’t Low-Wage People Get Better Jobs?

Regarding Tuesday’s post, “More About Taxpayers Subsidizing Corporations“, which deals with taxpayers subsidizing the low-wage employees of restaurant chains, long-time blog reader Kevin asks: “Why don’t the folks who flip burgers go out and get better jobs?” Excellent question.

Two thoughts. First, they should move up whenever possible, and the chart below about restaurant employee turnover should lead us to believe that they do move out, if not up. When it comes to workplace changes, everyone deserves the chance to move up into higher positions and therefore, this will increase the rate of employee turnover. Research from Work Institute has suggested that 22% of turnover was due to career development and a higher chance of job growth. Being able to excel in your chosen career can only happen if these people decide to make this change. But, whether they leave or not, those jobs will remain at or below minimum wage, and the taxpayers will continue to subsidize these restaurant corporations who underpay them. It falls to the social safety net to make up the difference. Take a look at restaurant employee turnover statistics:

Restaurant employee turnover

Source: People Report, a division of TDN2k

The burger flippers turnover is the highest among restaurant hourly employees, and it is growing. These are the people who don’t even get tips, so since employee turnover is the highest where wages are the lowest, it’s the burger flippers who move on. This could also be due to job satisfaction they may feel in the workplace. It could be argued that they do not feel the same level of appreciation within a service profession as they would in an office environment that would buy gifts for employees in order to boost their morale in an attempt to keep them for longer.

A second thought is, what jobs can they move up to? Here is a little background:

The US lost more than 8.84 million private sector jobs in the Great Recession. Now, five years after employment hit bottom in February 2010, private sector employment has returned to prerecession levels. The National Employment Law Project (NELP) indicates in a study that low-wage job creation didn’t just happen in the first phases of the recovery, but today, five years in, job growth is heavily concentrated in lower-wage industries. Lower-wage industries accounted for 22% of job losses during the recession, but 44% of employment growth.

Worse, low-wage jobs account for 100% of the net job growth in the economy. Today NELP reports that there are:

• 958,000 fewer mid-wage jobs than at the start of the recession
• 976,000 fewer high-wage jobs than in 2008

The National Restaurant Association’s 2015 economic forecast says the restaurant industry in 2014 added 1,000 jobs per day. It is projected to provide a record 14 million jobs in 2015.

So, where do the motivated, striving burger flippers go?

The glibertarians say the burger flippers should work hard, save money from their minimum wage jobs, get a better education, and move on to a higher paying job, maybe in an office or a laboratory. OK, that’s possible for some.

They say that Mr. Market determines what the value of a burger-flipping job should be. And, if it isn’t a living wage, the burger flipper should study some more.

But when they move on, odds are that they will move to another low-wage job, more likely than not, in the restaurant industry.

And regardless of what new low-wage job they take, the taxpayers’ subsidy of the Corporatists will continue.

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More About Taxpayers Subsidizing Corporations

Yesterday we talked about how apartment rents can’t be afforded by minimum wage workers. Today, we look at one industry with low wage workers, the full-service restaurant industry. Full service restaurants are the large name brands like Appleby’s, Cracker Barrel, Chili’s, Outback and Olive Garden.

Full service restaurants employ over 4 million people and that is expected to grow by nearly 10% by 2022, which means that these companies are in a profitable market segment. The top 5 full service chains made $705 million in profits last year, while paying out another $751 million in dividends and stock buybacks.

A new report by the Restaurant Opportunities Center (ROC), shows that five of the ten lowest paid jobs as reported by the Bureau of Labor Statistics (BLS) are in full-service restaurants. Since many full-service restaurant workers receive wages below what is needed to meet their basic necessities, these workers rely on taxpayer-funded programs in order to meet their basic needs. We pay the full-service restaurant industry a double subsidy:

• High numbers of full-service restaurant workers are on public assistance
• By paying a less-than-minimum wage, customers are paying restaurant workers’ wages directly through tips

The ROC’s analysis looked at utilization of public assistance programs to estimate annual benefit expenditures for families of full-service restaurant workers for the years 2009-2013. Here is a summary of their findings:

• Nearly half of the families of full-service restaurant workers are enrolled in one or more public-assistance programs
• The cost of public assistance to families of workers in the full-service restaurant industry is $9,434,067,497 per year (that’s $9 billion for the math-impaired)
• Tipped restaurant workers live in poverty at 2.5 times the rate of our overall workforce
• The taxpayer underwriting of social programs for low-wage workers in a single Olive Garden is $196,970 annually.

ROC estimated that low wages and lack of benefits at the five largest full-service restaurant companies in the US cost taxpayers an estimated $1.4 billion per year. They focused on the major means-tested public programs that provide income supplements for working families. These included Medicaid and Children’s Health Insurance Program, or CHIP, the federal earned income tax credit (EITC), food stamps (the Supplemental Nutrition Assistance Program, or SNAP), basic household income assistance (Temporary Assistance for Needy Families, or TANF).

Since 1991, the federal tipped sub-minimum wage has been set at $2.13 per hour, but states may establish a minimum wage that is higher than the federal government’s. So restaurant workers in 22 states receive the federal sub-minimum wage of $2.13 per hour, while restaurant workers in 20 states receive higher state sub-minimum wages of up to $5.00 per hour. Restaurant workers in eight states receive the full minimum wage.

Women make up 66% of all tipped workers, and people of color make up 40% of the total. Unsurprisingly, their poverty levels are higher in states that pay a $2.13 sub-minimum wage than in states that pay one minimum wage for both tipped and non-tipped workers.

You will pay more for a meal at most of these restaurants than at the fast food places. And that cost will go up if you believe in a fair wage for a fair day’s work. Naturally, the industry, represented by the National Restaurant Association is fighting any increase in the minimum wage for restaurants. This is something ALEC has been working with the National Restaurant Association and state governments to fight.

How about if the 535 well-coiffed rubber stamps in Washington start by raising the wages on any companies where public assistance subsidizes payroll wages? Why should taxpayer money be going to fund stock buybacks and bonuses to restaurant chain CEOs?

We could dream big, of tying the minimum wage to the cost of local resources like housing. Given the problem we reviewed yesterday, the minimum wage could be linked to how many hours is necessary to pay a month’s rent and utilities.

Every low wage worker needs a place to sleep when they aren’t working. It shouldn’t be on the street so that their employers can repurchase more stock.

On our dime.

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Tribes of America

We have two tribes in America, largely represented by our two political parties. The parties debate the correct course for the country, without any chance of reaching compromise. One of the parties has begun acting like insurrectionists.

Over the past 40 years, the Republican Party has transformed into a party that flouts the law when it is in the majority, and threatens disorder when in the minority:

• No Democrat has called for secession, as Rick Perry did
• No Democrat defied the Supreme Court by sending in the National Guard and provoking a confrontation with police, as Jeb Bush did during Schiavo
• No Democrat is so anti-science that they believe that if women are “legitimately raped,” they will be protected from pregnancy, as Todd Akin did
• No Democrat has said, what Mike Huckabee has said: The Supreme Court is only that…it is not the Supreme Being. It cannot overrule God…when it comes to life, and when it comes to the sanctity of marriage, the court cannot change what God has created
• No Democrat has suggested that states disregard EPA rules on coal plant emissions while various court challenges occur, as Senate Majority Leader Mitch McConnell did

Politicians keep their jobs because they win elections, and a politician who openly admits that he only believes in democracy if it achieves his desired ends, is at minimum, a radical, or more likely, is an insurrectionist.

There is a precedent for the actions of today’s Republican Party. It is the antebellum Southern Democrats of John C. Calhoun, who threatened to nullify federal legislation, and who later led the fight to secede from the union over slavery.

The homeland of today’s right-wing insurgency is the very same place where the last insurgency originated: The Old Confederacy. History offers some geographical perspective: The South had an almost unbroken control of the Federal Government from 1789 until secession. Our presidents were either Southerners, or when they were Northerners like Pierce and Buchanan, they were puppets of Southern senators and cabinet members.

For 70 years, the Supreme Court had a majority of Southern justices. With the aid of Northern allies and the three-fifths rule, the South continuously controlled one or both houses of Congress. The 15 Slave States, with a white population of not quite eight million, had 30 Senators, 90 Representatives, and 120 electoral votes, while the state of New York, with a population of four million had two senators, 33 representatives, and 35 electoral votes.

Lincoln’s election in 1860 left the South in control of both houses of Congress, and until 1863, Lincoln and the Republicans would have been powerless to pass legislation hostile to the South. Through its control of the Senate, the South could have blocked the confirmation of any Lincoln appointee whom it considered unfriendly. In spite of this, and notwithstanding Lincoln’s repeated assurances that he would not, directly or indirectly, interfere with slavery where it already existed, the South seceded.

Today, the two parties are still the two tribes that were created out of secession, and the same political dynamic prevails today. The civil war map looks starkly similar to the political bases of both parties today, with the addition of the new Randians in the Upper Midwest.

This tribe now includes Republicans, the Tea Party and right-wing conservatives. They now control 36 state legislatures that are trying to eliminate abortions, remove environmental protections, enhance gun rights, and privatize education, all of which need a weak federal government in order to succeed. Time to call it what it is: A domestic insurgency by America’s right wing tribe.

After the Civil War, we passed the 13th, 14th, and 15th Amendments, ending slavery, formalizing birthright citizenship, creating black male suffrage, and guaranteeing equal protection under the law. Later, after the Great Depression, we enacted laws to protect the people from financial abuses by businesses and corporations. With Civil Rights legislation, the federal government protected citizens from abuses at the hand of businesses as well as local governments.

Much of these will be unwound if the insurgency succeeds.

What good are policy proposals in the face of an insurgency? We no longer have fellow citizens, we have enemies. We do not have common views, we have religious, racial, class, and political factions.

When we see each other as enemies, we are the Middle East, we can no longer work together for the common good.

We should deal with our tribal issues at home instead of trying to fix the tribal issues in the Middle East.

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Maximizing Shareholder Value

The Guardian highlights a report by the International Monetary Fund (IMF) about the level of global subsidies paid by governments to the fossil fuel industry:

Fossil fuel companies are benefiting from global subsidies of $5.3tn (ÂŁ3.4tn) a year, equivalent to $10m a minute every day, according to a startling new estimate by the International Monetary Fund.

That’s $5.3 trillion per year. The subsidy estimated for 2015 is greater than the total annual health spending of all the world’s governments. The subsidy is created by polluters not paying the many costs imposed on countries by the burning of coal, oil and gas. These include the harm caused by air pollution.

The IMF said that ending subsidies for fossil fuels would cut global carbon emissions by 20%. They argue that ending the subsidies would also slash the number of premature deaths from outdoor air pollution by 50%, or about 1.6 million lives a year.

It is difficult to get behind the IMF headline to the methodology that leads to their findings. They are basically estimating how much damage global warming is doing and listing that as a government subsidy. The benefits that fossil fuels have delivered to mankind are massive. The pro-fossil fuel argument is that if you could put a price on these things, it would outweigh the $5.3 trillion figure by many thousands of times.

That is true, but the argument misses the point. We need fossil fuels. We use fossil fuels. The issue is why are the costs socialized, while the profits are privatized?

This again highlights the moral and intellectual bankruptcy of the “Maximize Shareholder Value” movement in corporate governance. The 1970-era Clean Air and Water Acts and the 1980-era Superfund, TSCA, and RCRA Acts were among the first attempts to shift the costs of the socialized pollution costs back onto the corporate and municipality originators. Ironically, given today’s political environment, all of the major environmental acts (except the 1980 Superfund) were signed into law by Republican presidents Nixon and Reagan.

In the IMF report, China provided $2.3 trillion of the subsidies. The US was 2nd with $700 billion.

China will be focusing on reducing their pollution and other impacts as their society gets wealthier. Once people’s basic needs are met, they will be looking to improve their lot, and breathing in poisonous smog and living next to putrid water will not be high on their list of desires. As an example, it only took 25 years after the end of WW II for Americans to insist on an improved environment.

And all of the above ignores the costs of wars to keep the fossil fuel supply lines open, as well as the regular costs of our defense and intelligence establishments, and the destruction of democracy as necessary collateral damage.

All that for something we burn. Along with our tax dollars, that is.

Cartoon of the Day: The real truth about DC’s Think Tanks:
Think TanksLinks:

Hillary Clinton on Trade Agreement: “I have been for trade agreements, I have been against trade agreements.” Anybody want syrup with those waffles?

Is Japan becoming extinct? The Japan Times wonders what the projected drop in the country’s population says about its future. They cite a report, “Local Extinctions”, which says that that 896 cities, towns and villages throughout Japan are facing extinction by 2040. Factoid: In 2013, 8.2 million of the more than 60 million homes nationwide were empty, and 40% percent of the 8.2 million empty homes were not being offered for sale or rent.

Here’s how much of your life the United States has been at war. The link shows a ginormous chart of how many years of your life were in wartime. For the Wrongologist, it is 43.8% of his life.

Millions of tiny spiders rained from the sky in Australia. Residents of Goulburn, Australia woke one day this month to find their town shrouded in silken webs, while millions of tiny spiders rained down from above. Apparently this is called “Spider rain.” It happens when large groups of arachnids migrate all at once, using a technique called “ballooning.” Creepy much?

After decades of maintaining a minimal nuclear force, China is re-engineering its long-range ballistic missiles to carry multiple warheads, or MIRVs. China has had the technology for decades, but the decision to put three or more warheads atop a single missile is recent. So far, China has declined to engage in talks with the US about their decision to deploy MIRVs. If America treats China like an enemy, then China WILL BE our enemy. Maybe that’s what the Pentagon and CIA want. They need something to justify their big budgets, and their secret slush funds.

See you on Sunday.

 

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An Easy Path To A Green Card

Over the weekend, the NYT reported on a federal visa program that allows up to 10,000 immigrant investors to qualify for a green card. The program is called EB-5. From the Times:

Under the federal program, a foreigner who invests $500,000…in a project that will create at least 10 jobs can apply for a green card.

In FY 2010, 1,885 EB-5 visas were issued. But by 2014, the entire annual allotment of 10,000 visas had been claimed by August, 4 months before the end of the fiscal year. This year, the quota was reached on May 1. More from the NYT:

Under the program, the family of the investor, including any dependent under 21, can apply for a green card, and each family member is counted toward the quota.

Critics have called the program a “scam” that essentially sells green cards to the affluent and their families. More than 80% of those in the program are from China. Critics clearly have sympathy with the vast amount of people who desperately read each and every Visa Bulletin in the hope that the results will bring them one step closer to permanent residency in the United States.

The EB-5 program was canceled in 1998 for three years because it was seen as corrupt. With $500k as the cost of entry, the US is one of the cheapest developed countries in which to get an investor visa. And the Department of Homeland Security isn’t coordinating with Immigration and Naturalization on these green cards, so there is opportunity for fraud and there are security concerns, it’s also unfair to those that have to legitimately renew green card dates that don’t have to luxury of being able to basically buy it.

Finally, one of our more anti-immigration Republican presidential candidates, Scott Walker (R-WI), makes an exception for the EB-5 visa. The Milwaukee Journal Sentinel (JS) reports that Walker is prominently featured on the website of FirstPathway Partners, a Milwaukee firm that helps foreigners find EB-5 opportunities. The JS reported that Our American Revival, a Walker for president organization said:

The Governor is a proponent of immigration that is supportive of the nation’s economic needs, our working families, and wages. But the system is broken and we need to review the current immigration system to ensure we are achieving those goals

Let’s see that check. OK, now move to the head of the line, sir. Why not make the cost of entry $5 million, and sell green cards to 100,000 a year?

We could begin to put a dent in the deficit.

Today’s Links:

FBI claims hacker took control of plane. They say a hacker admitted that he used his laptop to gain access to the in-flight entertainment system on a United 737, and then overwrote the code on the airplane’s Thrust Management Computer. He and the company he works for, One World Labs, have for some time nagged Airbus and Boeing about how easy it is to connect a laptop to a box beneath an airline seat and access the plane’s systems. The thought that someone could be on a plane and hack in and control it, should make airplane manufacturers panic. But apparently, they are not panicked enough to hire One World Labs!

The FBI spent two years trying to learn the lyrics to “Louie, Louie”. You know the song. You probably think the lyrics are indecipherable. After Robert Kennedy and J. Edgar Hoover received letters saying that the song was “dirty”, the FBI tried to figure out whether the recording included vulgar variations on the published lyrics. The FBI played the record repeatedly, but concluded what everyone else already knew: the lyrics are indecipherable. It took nearly two years for someone at the FBI to think: Isn’t this song registered at the Copyright Office? Maybe we could send someone over there to find out what they think it says? This is one bizarre story of moralism, FBI and governmental overreach, plus, an attack on the First Amendment.

B.B. King: Generations of guitarists used B.B’s “Box”, a fingering technique to learn how to play. With virtually no knowledge of musical theory, guitarists can use the B.B. Box position to pluck out a solo that will work for most blues and rock chord progressions. To change keys, you simply move the position up or down the neck. No need for effects pedals for B.B. He came out of the Mississippi Delta, where guitarists learned their craft by watching other players, so no music theory, maybe not even knowledge of scales: just go on and make the guitar sound as sad as the blues they wanted to sing. RIP Mr. King!

Here is a spectacular National Geographic video of Mobula Rays off the coast in the Sea of Cortez. They breech the water and seem to fly:

They congregate once a year. Maybe it’s Spring Break for Rays. For those who read the Wrongologist in email, you can view the video here.

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Monday Wake Up Call – May 18, 2015

The Amtrak accident in Philadelphia came hours before the House Appropriations Committee was due to meet to debate a transportation bill. Amtrak is a for-profit entity, but its board is appointed by the president, and it is entirely funded by the government, receiving roughly $1.4 billion a year in subsidies. It operates in the red, losing $227 million a year.

Congress has been considering tightening the purse-strings. The Senate has been slow to approve $7.8 billion in Amtrak funding that has been passed by the House. Much of the money would go to prop up sagging rails and refurbish rolling stock.

But John Boehner said discussing Amtrak funding in the wake of the crash was “stupid”. Boehner noted that the crash was caused by the train going too fast, not bad infrastructure. Republicans prefer to attack the national train system because only Democrats ride trains, not good truck driving folks. We should invest in modern high-speed trains to zip Americans around the country. We could also invest in a better safety infrastructure so that train wrecks don’t happen if they are the fault of the engineer or conductor. Instead, the rail industry and its Republican friends are pushing for the reduction of train crews on freight trains, which could cause more crashes.

Sadly, the Goldilocks Moment (when it’s “just right”) to discuss practical responses to a tragedy can be discerned only by Mr. Boehner. Yesterday was too early, and politicized the tragedy by pointing out how Republican policies and governance set the stage for eight people to be killed. At some point, John Boehner will tell us it’s now “too late” to get any legislation in the hopper.

Amtrak has received $45 billion in subsidies from the 1970’s to the present. That’s about one year’s taxpayer support for big oil. Democrats should absolutely push for greater Amtrak funding in the wake of the crash.

Don’t expect Boehner or any Republican to take any real heat for opposing this, but it makes their moral position on these issues completely clear.

Time to wake up America! Infrastructure upgrading is not anti-American. For your morning wake up call, here is the Veery Thrush, also called the Wilson’s Thrush:

For those who read the Wrongologist in email, you can view the video here.

Monday’s Hot Links:

The Antarctic’s Larsen “B” and “C” ice shelf’s are going away by 2020. NASA’s Jet Propulsion Laboratory says that the “B” shelf is now “approaching demise.” NASA adds that the ice shelf “is likely to disintegrate completely before the end of the decade.” But, global warming is a hoax…

A 10-year-old oil leak where an offshore platform toppled during a hurricane could continue spilling crude into the Gulf of Mexico for a century or more if left unchecked. No, it isn’t the BP leak. Taylor Energy Company owned the platform and has played down the extent and environmental impact of the leak. The Coast Guard provided a leak estimate that is about 20 times greater than one provided by the company. Quelle surprise! An American company tries to minimize its responsibilities.

A New Zealand company called Touchpoint Group is building a robot that will be angry all the time. The idea is to let angry customers speak to a machine instead of human call center agents. The robot will collect the data to better serve you with bullshit responses.

Inequality Watch: Scientists find alarming deterioration in DNA of the urban poor. Well, if you lived a life of constant worry over money and how you would pay your bills, raise your kids with enough food, clothing and self-respect, your DNA might deteriorate too!!!

Raul Castro says that Pope Francis may get him to return to religion. Mr. Castro said: “I will resume praying and turn to the Church again if the Pope continues in this vein.” This Pope may really be the Rightologist!

Here is an extra wake-up for you this spring morning. Unclear how this pose happened, but it is relaxing:

Frog

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Exactly Who Does the FBI Work For?

The Keystone Pipeline has been off the radar for a few months, but The Guardian brought it back this week with an article describing the FBI’s bad behavior towards activists who are against Keystone:

The FBI breached its own internal rules when it spied on campaigners against the Keystone XL pipeline, failing to get approval before it cultivated informants and opened files on individuals protesting against the construction of the pipeline in Texas, documents reveal.

The documents connect the investigation of anti-Keystone activists to other “domestic terrorism issues” in the agency. The FBI files also suggest that the Houston part of the investigation was opened in early 2013, several months after a high-level strategy meeting between the agency and TransCanada, the company building the pipeline.

The Guardian hired Mike German, a former FBI agent, to help decipher the documentation. German said they indicated that the agency had opened a category of investigation that is known in agency parlance as an “assessment”. An “assessment” was an expansion of FBI powers after 9/11. Assessments allow agents to open intrusive investigations into individuals or groups, even if they have no reason to believe they are breaking the law. German, now a fellow at the Brennan Center for Justice, said:

It is clearly troubling that these documents suggest the FBI interprets its national security mandate as protecting private industry from political criticism

The Wrongologist wrote about this very issue in February 2015, making several points:

• The FBI was meeting with and surveilling anti-Keystone pipeline activists in the US.
• The FBI indicated publicly (and untruthfully) that they could only conduct investigations when they had reason to suspect criminal activity.
• The FBI failed to disclose that they had changed their mission statement. Instead of listing “law enforcement” as its primary function, as it had for years, the FBI fact sheet started listing “national security” as its chief mission.

At the time, we reported that the FBI was essentially doing pre-emptive security work for a Canadian corporation. From Charlie Pierce:

The FBI has no business dropping in on citizens who have not committed a crime, nor are they suspected of having committed one, and especially not at the behest of a private multinational concern.

That would be a foreign private concern. More from Pierce:

Names are going into a file…This never has worked out well in the area of political dissent in this country, and, given the fact that we now have a staggering network of covert domestic intelligence-gathering and a huge government law-enforcement apparatus, it’s unlikely to work out well in the future…

Finally, the new Guardian report states that the FBI said it was compelled to

take the initiative to secure and protect activities and entities which may be targeted for terrorism or espionage.

So, here we go. The FBI, never a friend of civil liberties, has once again violated the law by spying on activists in the absence of any reasonable suspicion that these pose a threat to life and/or property. They shouldn’t be in a position to conduct an unauthorized witch hunt and they shouldn’t be able to just say there is a threat of terrorism.

How convenient that the Houston FBI office didn’t seek approval in advance for their investigation. Plausible deniability for those up the chain of command preserves cushy government pensions.

Our security state says it requires all of this very intrusive information-gathering in order to protect us. Yet we read again and again that some terrorist or another was known to law enforcement prior to their criminal acts, just as the FBI missed clear opportunities to stop the Boston Bombers.

We could all learn from Al Swearengen in Deadwood:

I don’t like the Pinkertons. They’re muscle for the bosses, as if the bosses ain’t got enough edge.

There is a name for what happens when the government’s law-enforcement powers are put at the direct convenience of private corporations. Fascism.

See you on Sunday.

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