Monday, December 27, 2010

Pharmaceutical Industry Fraud

Guest Perspective By Ralph Nader

The corporate defrauding of taxpayers (eg. Medicaid and Medicare) and prescription drugs with skyrocketing prices was the subject of a report by Public Citizen's Dr. Sidney Wolfe and his associates (see

Dr. Wolfe's team compiled a total of 165 federal and state settlements since 1991 totaling $19.8 billion in penalties. A key finding is that the drug industry's penalties under the Federal False Claims Act exceed even those assessed against the overcharging defense industry for fraud.

Before we become overly impressed with the cumulative amount of the penalties, specialists in corporate crime law enforcement believe that adding more federal cops on the corporate crime beat, backed by a determined law and order Justice Department with White House backing, would have greatly increased the number of cases and imposition of penalties on these drug industry giants.

Nonetheless, Dr. Wolfe's study shows that the pace of penalties has picked up over the past five years. This is due to "a combination of increased violations by companies and increased law enforcement on the part of federal and state governments," says the report.

Many of these cases were initiated by company whistleblowers, who under the False Claims Act can receive a share of the settlements. Since the corporate bosses of these drug firms are almost never prosecuted, what these executives fear the most are company employees who go public with the evidence of corporate misdeeds.

These violations do more than financial damage to consumers and government health insurance programs. One of the worst violations involves companies promoting unproven, often dangerous uses for their medicines. Last year, Pfizer paid $1.2 billion for illegal off-label promotion -the largest criminal fine in U.S.history. Other major corporate violators were GlaxoSmithKline, Eli Lilly, Schering-Plough, Bristol-Myers Squibb, AstraZeneca, TAP Pharmaceutical, Merck, Serono, Purdue, Allergan, Novartis, Cephalon, Johnson & Johnson, Forest Laboratories, Sanofi-aventis, Bayer, Mylan, Teva and King Pharmaceuticals.

The violations by these and other drug companies point to the wide range of impacts, including taking many lives of patients, which stems from these recurrent activities. These criminal or civil illegalities cover (1) overcharging government health programs, (2) unlawful promotion, (3) monopoly practices, (4) kickbacks, (5) concealing study findings, (6) poor manufacturing practices, (7) environmental violations, (8) financial violations and (9) illegal distribution.

Outside the purview of the Public Citizen study are the ravages of counterfeit drugs and poorly inspected ingredients in drugs, now mostly coming from China and India, due to the outsourcing by U.S. and European drug companies in their thirst for even greater profits.

Drug company sales are huge, growing from $40 billion in 1990 to $234 billion in 2008, and far exceeding inflation with their annual price gouging. To make matters worse, in 2003, the Congressional Republicans, with decisive support from some Democrats, passed the drug benefit bill which explicitly prohibited Uncle Sam, the payer, from bargaining for volume discounts with drug companies.

With over 400 full-time drug company lobbyists putting pressure on Congress, and tens of millions of dollars flowing into the legislators' campaign coffers, budgets for federal investigators, prosecutors and inspectors are kept to a minimum. Unfortunately, crime in the suites pays over and over again, despite occasional penalties.

A bright spot is the increasing enforcement action at the state level.

By last year, 32 states had enacted false claims acts, including fourteen states that qualified as strong laws by federal standards.

Still, the Wolfe report concludes that the "current system of enforcement is not working." He gives the examples of the $7.44 billion in financial penalties assessed over the past twenty years on GlaxoSmithKline and Pfizer, as compared to their combined total of $16.5 billion in global net profits in one year alone.

What would deter these illegal practices and risks to public safety? Dr. Wolfe says "the lack of criminal prosecution that would result in jailing of company executives." is key. Moreover, the report notes that "a felony conviction could result in their companies becoming ineligible for reimbursement from federal and state health programs, a critical source of pharmaceutical company revenues."

A flicker of hope that a little change is on the way came from the Food and Drug Administration's Deputy Chief Counsel for Litigation, Eric Blumberg. He indicated that the government is considering going after drug company executives for violations such as off-label promotions. He stated: ".unless the government shows more resolve to criminally charge individuals-at all levels in the corporate hierarchy--.we can not expect to make progress in deterring off-label promotion."

The problem is that the final operating decision is in the hands of the Justice Department-historically short-staffed and short-willed to entreaties for prosecution by the FDA and other regulatory agencies.

Furthermore, for over 30 years, the Justice Department has stone-walled requests that it start a corporate crime database as it has done with street crimes. Congress likes it this way, as it continues to cash corporate campaign checks.

Just last week, however, outgoing Judiciary Committee Chairman, Democrat John Conyers introduced a bill (H.R. 6545) to create such a corporate crime data base in the Justice Department. Well, as the saying goes, everything starts with a gesture!

2010 Blizzard Timelapse

Very cool time lapse photography here:

December 2010 Blizzard Timelapse from Michael Black on Vimeo.

Thursday, December 23, 2010

A little (or a long) vacation ...

Just a quick "thank you" to all of you who still visit Politizine and OurConcord even though I haven't been posting much. Family and work have been taking a lot of my life of late. The former is fine; I won't get into the latter except to say that I have had a disappointing few weeks but I think 2011 will be an interesting year.
Politizine, specifically, enters its ninth year of existence this week. It's hard to believe that but it's true. Readership has fluctuated from the hundreds to the thousands and back down again, depending on what I have written about or how many other people linked to my site. OurConcord was created and grew out of a frustration with local media outlets not really getting at the heart of many stories. I have been very happy with some of that work. But it can be a daunting, exhaustive task.
Despite all that I have done at this point in my life, I'm facing 45 and I'm really beginning to wonder about things. It isn't just the economy or a moment in time or anything like that. It's just become very clear that I have not been setting priorities. I thought I was, but I wasn't (once again). I have to look no further than the piles of paper in different places in my home, the list of things I have been wanting to get done, both personally and professionally, etc., to see that I have not been focused. Things are not where they should be.
Thankfully, we're not hoarders, not like those folks on television, which is frightening to see. We don't have a lot even though we have much more than some. But even though I'm considered one who takes actions, I do put things off ... and then put them off and put them off again. I always have. It's time though to stop putting things off. And, I need to take some time off.
I'm going on a little or a long vacation. I'm not sure which yet. I'll let you all know in January, when I get back.
I don't know what role Politizine or OurConcord play in my future. I'm wondering about a lot of things lately. But know and understand that I have appreciated your readership, time, and comments about what I have been doing with these sites.
Have a great holiday season. Merry Christmas. And talk to you all again soon.

Monday, December 20, 2010

Wikimania and the First Amendment

In The Public Interest by Ralph Nader

Thomas Blanton, the esteemed director of the National Security Archive at George Washington University described Washington’s hyper-reaction to Wikileaks’ transmission of information to some major media in various countries as “Wikimania.”

In testimony before the House Judiciary Committee last Thursday, Blanton urged the Justice Department to cool it. Wikileaks and newspapers like The New Yorks Times and London’s Guardian, he said, are publishers protected by the First Amendment. The disclosures are the first small installment of a predicted much larger forthcoming trove of non-public information from both governments and global corporations.

The leakers inside these organizations come under different legal restrictions that those who use their freedom of speech rights to publish the leaked information.

The mad dog, homicidal demands to destroy the leaders of Wikileaks by self-styled liberal Democrat and Fox commentator, Bob Beckel, the radio and cable howlers and some members of Congress, may be creating an atmosphere of panic at the politically sensitive Justice Department. Attorney General Eric Holder has made very prejudicial comments pursuant to his assertion that his lawyers considering how they may prosecute Julian Assange, the Wikileaks leader.

Mr. Holder declared that both “the national security of the United States” and “the American people have been put at risk.” This level of alarm was not shared by the public statements of defense Secretary Robert Gates and Secretary of States Hillary Clinton who downplayed the impact of these disclosures.

The Attorney General, who should be directing more of his resources to the corporate crime wave in all its financial, economic and hazardous manifestations, is putting himself in a bind.

If he goes after Wikileaks too broadly using the notorious Espionage Act of 1917 and other vague laws, how is he going to deal with The New York Times and other mass media that reported the disclosures?

Consider what Harvard Law Professor Jack Goldsmith, who was head of the Office of Legal Counsel in George W. Bush’s Justice Department just wrote:

“In Obama’s Wars, Bob Woodward, with the obvious assistance of many top Obama administration officials, disclosed many details about top secret programs, code names, documents, meetings, and the like. I have a hard time squaring the anger the government is directing towards Wikileaks with its top officials openly violating classification rules and opportunistically revealing without authorization top secret information.”

On the other hand, if Mr. Holder goes the narrow route to obtain an indictment of Mr. Assange, he will risk a public relations debacle by vindictively displaying prosecutorial abuse (i.e. fixing the law around the enforcement bias.) Double standards have no place in the Justice Department.

Wikileaks is also creating anxiety in the corporate suites. A cover story in the December 20, 2010 issue of Forbes magazine reports that early next year a large amount of embarrassing material will be sent to the media by Wikileaks about a major U.S. bank, followed by masses of exposé material on other global corporations.

Will these releases inform the people about very bad activities by drug, oil, financial and other companies along with corruption in various countries? If so, people may find this information useful. We can only imagine what sleazy or illegal things our government has been up to that have been covered up. Soon, people may reject the those who would censor Wikileaks. Many people do want to size up what’s going on inside their government in their name and with their tax dollars.

Wasn’t it Jefferson who said that “information is the currency of democracy” and that, given a choice between government and a free press, he’ll take the latter? Secrecy—keeping the people and Congress in the dark—is the cancer eating at the vitals of democracy.

What is remarkable about all the official hullabaloo by government officials, who leak plenty themselves, is that there never is any indictment or prosecution of government big wigs who continually suppress facts and knowledge in order to carry out very devastating actions like invading Iraq under false pretenses and covering up corporate contractors abuses. The morbid and corporate-indentured secrecy of government over the years has cost many American lives, sent Americans to illegal wars, bilked consumers of billions of dollars and harmed the safety and economic well-being of workers.

As Cong. Ron Paul said on the House floor, why is the hostility directed at Assange, the publisher, and not at our government’s failure to protect classified information? He asked his colleagues which events caused more deaths, “Lying us into war, or the release of the Wikileaks papers?”

Over-reaction by the Obama administration could lead to censoring the Internet, undermining Secretary Clinton’s Internet Freedom initiative, which criticized China’s controls and lauded hacktivism in that country, and divert attention from the massive over classification of documents by the Executive Branch.

A full throttle attack on Wikileaks is what the government distracters want in order to take away the spotlight of the disclosures on their misdeeds, their waste and their construction of an authoritarian corporate state.

Professor and ex-Bushite Jack Goldsmith summed up his thoughts this way: “The best thing to do….would be to ignore Assange and fix the secrecy system so this does not happen again.”

That presumably is some of what Peter Zatko and his crew are now trying to do at the Pentagon’s famed DARPA unit. That secret initiative may ironically undermine the First Amendment should they succeed too much in hamstringing the Internet earlier advanced by that same Pentagon unit.

Sunday, December 19, 2010

Couple of important WSJ stories ...

Recently, I broke down and re-subscribed to the WSJ. I shifted some money around and was able to free up the $10 a month commitment (in a lump sum, unfortunate). However, already, it has paid off in at least mental knowledge, in just a couple of weeks. And it's great having the WSJ app on my iPhone, so I can read it anywhere. Here are a few of the stories this week that I found interesting:

First, this story about Groupon and its founder is pretty amazing: ["Groupon's $6 Billion Gambler"]. The article is especially interesting when you consider what the company has done in 2.5 years, in the middle of a recession that is hammering retail sales. That said, the key to its success was figuring out a way to offer consumers a deal for things they want. There have been other programs that have attempted this (it reminds me of the Radio Advertising Bureau half-off program, which is used successfully in some markets). This, however, is pretty incredible.

Keeping with the state of retail sales, there was another story in the print edition of the WSJ showing that sales at "dollar" stores was surging and taking away business from Walmart. I wasn't able to find it online, but there have been other articles looking at similar statistics.

Wondering why the employment situation is so bad? Well, a lot of companies are holding onto cash instead of hiring people and expanding their businesses: ["Companies Cling to Cash"]. The key sentence is the opening lines:
"Rather than pouring their money into building plants or hiring workers, nonfinancial companies in the U.S. were sitting on $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June, the Federal Reserve said Thursday. Cash accounted for 7.4% of the companies' total assets—the largest share since 1959."
That's up $130 billion in three months. That's a lot of money. That's 2.6 million $50,000 a year jobs ... just on the increase in cash holdings, not even the rest of the billions ... Wow.

Lastly, a bit about the trick ... the shopping trick ... how retailers get you to buy stuff during the holiday season: ["Many Discounts, Few Deals"]. Take the interactive quiz and see how you make out [I got four out of five].

So you want to be a journalist?

Oh yeah, this is funny ... and sad ... and maddening ...

Judy Pancoast's great new video ...

Local children music performer Judy Pancoast has a great new video out. This is simply awesome! PS: I didn't know she was nominated for a Grammy! Wow. Congrats, Judy. :-)

Saturday, December 18, 2010

Who's hot and who's not?

James Pindell has the latest up and down of NH pols here: ["Political Standing for Dec. 17, 2010"].

There's a new aggregate news site covering New Hampshire and the world: ["NH Journal"]. One has to wonder if we really needed another aggregate site. However, they seem to also be creating their own news, which is a good thing too (one of their stories landed on the Drudge Report, just a day or two out of the gate ...). And, the more the merrier, as the saying goes. Good luck to them!

Magellan Strategies releases a 2012 New Hampshire primary poll which shows exactly what I wrote a couple of weeks ago: President Obama would defeat all challengers easily and handily: ["Automated survey"]. It should be noted that the poll was commissioned by NH Journal.

This is too bad because, from what I've seen of this show, I kinda like it: ["At CNN, Talk Show Tensions"]. There's not a lot of yelling. They've had interesting people on, like a poet, and the Doobie Brothers playing live, which is kinda cool. I don't know if the show would work with Eliot Spitzer all by himself. I think Kathleen Parker adds a lot to the co-host chair. These television people really need to let things ride for a bit without always jumping in to monkey around with a show format. Give it time to breath already.

Tuesday, December 14, 2010

Majority of one

In the Public Interest, by Ralph Nader

On Friday, December 10, 2010, Senator Bernie Sanders, Independent Socialist, of Vermont, came of age. At last. With just about the best progressive voting record, Senator Sanders has nonetheless been an underachiever in the minds of those Americans who marveled at his tenure as mayor of Burlington, Vt. before he became a Congressman and now a Senator.

Last Friday, Sanders tore the covers off an oligarchic driven Congress and a concessionary President with eight-and-a-half hours of non-stop presentations of facts and figures and a plea for fairness and justice. His goal was not heated rhetoric, though he showed deep moral indignation, but to attempt to rally the American people “to voice their feelings” to their members of Congress via phone calls, letters and e-mails. C-Span carried him live, since he was the only activity on the Senate floor that day.

He asked the over-riding question of “who is winning and who is losing?” The winners were the giant, bailed out corporations and other companies so coddled with tax breaks and subsidies that they pay no federal income tax at all. He named some of these company bosses who make sky-high salaries and bonuses and take advantage of tax havens. ExxonMobil, Sanders noted, made $19 billion in profits last year, paid no federal income taxes and even received a $156 million refund from the U.S. Treasury!

Senator Sanders filled the Congressional Record with statements about a variety of inequities and contradictions regarding President Obama’s capitulation. Highlights follow:
--A Government Accountability Office report states that two-thirds of corporations making $2.5 trillion in sales over several years paid no federal income taxes.

--During the giant Wall St. bailout of 2008-2009, the Federal Reserve also bailed out with huge credit draws foreign banks from Bavaria to Japan. Such disclosures will be more common as a result of a successful Sanders amendment to the financial reform law earlier this year.

--The Obama-Republican deal would increase the deficit by $900 billion dollars over ten years but devote “not one nickel” to any infrastructure projects in local communities.

--He cited Warren Buffet and 90 other very rich Americans who wrote a letter to Congress opposing a tax cut for rich people like themselves.

--He cited the top one percent of the richest Americans who have wealth equal to the bottom 90 percent and receive 24% of all income. “When is enough, enough, do you want it all?” cried Sanders to an empty Senate chamber. (His colleagues had gone home Friday morning except for Senators Sherrod Brown and Mary Landrieu who conducted brief colloquies with Sanders while he rested his voice or went to the men’s room.)

--The top 25 hedge fund managers each made an average of a billion dollars last year with much of that income taxed only at a 15% rate. The richest 400 families paid a 16.6% effective tax rate on average. The Obama deal would extend their tax cuts for another two years.

--There has been zero net job creation since 1999 leading to a decline in average household income. Inequality of wealth in the U.S. is the worse in the industrialized world.

--The U.S. has the highest rate of child poverty in the western world, in some cases five to six times that of Scandinavia.

--The Obama Republican deal would divert for the first time $120 billion from the payroll tax, leading Sanders to say this is the beginning of the unraveling of social security, “eating our own seed,” he added.

-- “Let us be very clear: This [estate] tax applies only--only--to the top three-tenths of 1 percent of American families; 99.7 percent of American families will not pay one nickel in an estate tax. This is not a tax on the rich, this is a tax on the very, very, very rich.” (The estate tax is reduced, while the exemption is increased, leading to $30-52 billion retained by the very wealthiest of estates over two years.)

--And of course over $120 billion over two years are left with the highest income rich, worsening the deficit in the coming years.

“We can do better” repeated Sanders, noting that Obama challenged his liberal base in Congress by asking “where are the votes?” To which, Sanders replied: “Our job is to mobilize the people of America,” noting a rising flood of support for a fairer deal.

Of course, Obama has a healthy majority in Congress until January 2011. It is the threat of a Senate Republican filibuster—which Majority Leader Senator Harry Reid et al have never made the Republicans use during the first two years of the Obama Administration—that has neutralized that majority. Moreover, the Senate Democrats could have changed these obstructive rules by a simple majority vote back in January 2009. But they chose not to allow their own working majority of well over 50 votes to prevail.

Obama came to the White House swearing that he would not live in “a bubble” and that he would keep his promises, which explicitly included no further extensions of tax cuts for the rich and a $9.50 federal minimum wage (still lower in purchasing power than the federal minimum wage in 1968!) by 2011.

So what do we see from the President? Well, he boasted about being a community organizer in Chicago years ago. Yet for months, knowing what was coming, he failed to arouse the citizenry against the Republican tax cuts for the wealthy which Obama swallowed last week. He is known to be an expert poker player, but he displayed none of that skill with the Republican corporacrats, Rep. John Boehner and Senator Mitch McConnell. Where are Obama’s touted oratorical skills? How smart can he be−undercutting his own Democrats and presenting them with the results of a closed-door sweetheart deal with their Republican adversaries?

Obama has frittered away his comfortable majority in Congress on many accounts for two years. And millions of people and their children will be paying the bill for his failure to fight for them.

Thursday, December 9, 2010

Obama stim impact: Zero?

Interesting op-ed in the WSJ today, granted, by advocates of lower taxes: ["The Obama Stimulus Impact? Zero"].
The chart, however, goes to something I have assumed before: The federal stim spending circumvented local and state spending. It was just a money shift. If it were an addition instead of a shift, maybe it would have had more impact. But maybe not.
What's worse, is that the shift went from local and state debt to federal debt. Which is better? If state and local governments need more money, those officials should make the hard choices on spending or raise taxes (and deal with the revolt). But when the expense is shifted to the federal debt, it hurts the national economy and lines the pockets of rich people and the Chinese, since they are the only ones grabbing all the debt bonds. This perpetuates more problems.

Wednesday, December 8, 2010

Is this Obama's long-term strategy?

Everyone is in a tizzy about what seems to be a cave by President Obama over the Bush tax issue. However, let's look at a couple of points before assuming this is a bad political move.
First, even though there are fringes on both sides, I'm going to bet that there are enough votes to get this plan approved. And, even if there aren't enough votes, there most certainly will be in January, when the GOP takes over the House.
Also, Obama is probably looking towards 2012. This plan only extends the cuts for two years, meaning that before the next election cycle, it's going to be an issue again. Since 2012 is a presidential election, and turnout in presidential races is much higher than mid-terms, with liberals, students, etc., tending to be more active, there will be a lot of building up of support for the president. Obama can use the compromise to show he tried to work with the other side, whether it was economically beneficial or not. I mean, let's be honest, the debt isn't going to get fixed whether millionaires pay 38.6%, 35%, or 0%. If revenue collections go up, the federal government is just going to squander the money on some other program. This is what the federal government does. Even under Clinton's supposed "re-inventing" government, nothing really changed.
If, however, the economy does not turn around and if all the people who are out of work are still out of work and things still aren't better - and I don't believe it will get better - the Democrats will sweep back into power, on the coattails of the Obama zombies who elected him in the first place. Obama will say, I tried to work with them, but their plans didn't work, see? Give us more time to fix things ...
After the Democrats are back in power, and they will be back in power, they can slam the door on the taxes permanently and monkey around with things for another two years, until the GOP comes back roaring again in 2014, with voters angry at what the Dems did in the previous two years.

A challenge from the left?
Some are speculating that Obama could face a challenge from his left flank ... and maybe more than one. And, he should count on this. There is money and time out there for progressive and populist Democrats to challenge him.
However, so be it. Obama is a shrewd enough pol to play a Clinton and totally use it to his benefit. He will move to the center without totally losing his focus on reconstructing American society into what he thinks it should be (and not what we all think it should be).
Ultimately, the left flank challenge will be unsuccessful. They will be 20 percent of the vote in the primaries, max, and will go nowhere. People forget that the first few Democrat primary states - Iowa, New Hampshire, Nevada, South Carolina - are not Massachusetts, Wisconsin, or New York. They are libertarian Democrat and moderate Democrat places with, admittedly, some hard left-wingers. But not enough to oust a sitting president, the first black president. Believe that.
As well, the super left doesn't have anyone who can build coalitions around a bunch of issues in order to take Obama out either. There is no dynamic Jesse Jackson in 1984 or Jerry Brown in 1992 or Fred Harris in 1976 who can barnstorm around the country on a shoestring getting people all riled up on what could be or should be (although, I would love to cover that campaign ... how exciting!). And, even if the super left did have one of those candidates emerge, they won't be able to win the Electoral College against MILF Palin, Baptist Huckabee or maybe even Romney, the presumed-to-be three strongest GOP contenders for 2012. There are just too many red states.
The only person I can think of who might have any chance of challenging Obama successfully would be someone like Jim Hightower, a wise-cracking, southern populist who could potential mount a serious effort against Obama. But even then, how does he ultimately win the Electoral College battle with a fractured national party? I just don't see it happening. But it could get very interesting.

Sunday, December 5, 2010

Former neighborhood newspapers sold ...

When I lived in Mission Hill, I used to read through the Gazette newspapers, both for MH and JP. Now, they've been sold to another locally owned Boston newspaper chain: ["Gazettes sold to local news group"].

The global economic collapse explained in less than 3 minutes

This was sent to me by a friend. Hilarious:

Let's get real about "the top 2%," spending, and debt

First off, the debate about the Bush tax cuts you are hearing is a phony one. Regular readers of know that I'm as populist as they come. It's in my bones. It's just the way I am. And I can sense phony populism a mile away. This entire "we need to tax the top 2%" argument by some of the Democrats misses the mark, won't fix anything, and is fraudulent, at best.
Let's look at the "top 2%" ... who are they? Households earning more than $250,000, according to the Census (Note: This data will be corrected after the Great Recession numbers start trickling in, with those incomes dropping even lower ...).
Now, that looks like a lot, especially from way down here. And it is. But these folks aren't millionaires. At $250,000, that's two high level professionals. Many of them can pay more in taxes, for sure, assuming that they don't have huge housing, school, credit car, car debt, or property tax bills. But it's their money. Why should they pay more when the federal government already wastes enough money?
The best data to look at is from the IRS which breaks down the data at the $200,000 level, according to the WSJ. There were 3.8 million tax filers in this bracket which is about 7 percent of all returns in the U.S. According to the WSJ, these people paid about $522 billion in taxes or 62 percent of government revenue for 2006. The richest 1 percent, about 1.65 million filers, making nearly $389K, paid $408 billion or 40 percent of tax revenues while earning only 22 percent of the report U.S. income. In other words, rich people really do already pay quite a bit of money into the federal coffers.

Fun with rates
When looking at the Bush tax cuts which are about to expire, it's important to note that the richest people only received a 3.6 percent tax rate cut (38.6 to 35 percent) in the first place while the lower earners received 5 percent cuts (and most lower earners now don't pay anything in federal income taxes. In fact, 40 percent of filers in the lower income brackets pay $0 in federal income taxes now). Yes, one can look at this the other way, It's only a 3.6 percent increase so why complain? However, no one has yet to tell any of us on what effect, positive or negative, this tax increase will have on the supposedly recovering economy.
The WSJ did do an interesting experiment last year. One of the writers said, Hey, why stop at 40 percent, what would happen if the government took all the rich people's money?
According to their figures, if the government took 100 percent of the taxable income of every American making more than $500,000 in 2006, Congress would have $1.3 trillion or less than half the 2006 budget and about one-fourth of the FY10 budget. In other words, even taking all the earnings of the rich, the government still wouldn't have enough money to run the government (The government has to take every single dime of everyone making more than $75,000 to cover the entire federal budget for FY10).
But even though all those rich people pay all those taxes, let's be honest: None of them pay the rates that are listed. None. If you're a millionaire, meaning in the fraction of 1 percent of filers in the U.S., you're never paying 35% or 38.6%. Never. You're rich enough to hire attorneys and accountants to find ways around the tax code so you never pay that amount. You give more of your money away to your charities, where you can be praised at parties and in the newspaper, just so you don't have to pay the government.
I always use the example of George H.W. and Barbara Bush's tax filing from 1991, before the highest rate was reduced. The two earned $2.3 million and paid 9 percent of that amount to the government in income and SSI withholding. In 1991, I earned about $16,000, and paid 23 percent of my income in state, SSI, and federal taxes. Did I pay more actual dollars? No. But I paid a higher percentage that the millionaires did. It's the same today.
That's why all these arguments about rates and everything else is a bunch of hooey. That's why when the debt commission proposing lowering the rate but making it solid, meaning with fewer deductions and loopholes, it's the right way to go because then rich people will actually be paying the higher rate and not hiding their money from the government. It is really that simple.

Spending, already ...
What does this all mean? Well, Houston, we have a spending problem.
Federal government spending is simply too high, too burdensome, and now, running up so much debt it's impossible to see where things really get fixed. In addition, while I haven't gone through the entire debt commission report, from what I have seen, there are good and bad things and, frankly, it may not go far enough.
Ideally, even if it hurts the supposed recovery, we should have a sweeping debt reduction program in order to free up more money for regular government spending. What's that? How's that possible? Well, the federal government spends so much money at this point on interest, it's taking away much needed dollars for programs.
In FY10, the interest on the national debt came in at $413 billion. Imagine for a moment what that money could be spent on if it wasn't being awarded to the people, businesses, and countries that buy the government's debt bonds. Even if we could get back to debt interest levels of 1988 of around $214 billion, the government would have almost $200 billion to spend on other things instead of lining the pockets of mostly rich people and China who are getting rich off our government's debt.
This is why debt reduction is so important. And it's more than just taking all the rich people's money. It's about living with less in the federal budget. It's about going through line item after line item after line item and saying, "Is this really necessary? Is it? No? Well cut it already."

Real debt figures
Here's another interesting fact that I thought I would throw out there, since there is some contention on what president created the most debt. There is a really great chart in this week's TIME magazine, that shows large, sharp spikes in all kinds of data. When I saw it I was like, Hmmm, it looks like the Obama and the Democrats have created as much debt in less than two years that Bush and the Republicans (and Democrats) did in eight years.
So, I had to go fishing around for some figures and from different news agencies and the U.S. Debt Clock, here's what I found:
* President Obama and the Congress controlled by Democrats have created about $3.25 trillion in debt in about two years.
* President Bush, with houses of Congress controlled by Republicans mostly but Democrats in the last two years of his administration, created $4.9 trillion in debt during eight years in office.
So, no, it's not the same, but it is pretty close. By the end of next year, it looks like, they will be even, with the Republicans running Congress.

Saturday, December 4, 2010

Cher in Vanity Fair ...

From the mouths of ... er, I mean mouth of a babe:
"I would be willing to pay a lot more taxes, because I make a lot more money, but I don’t want to give them more to just f--- things up more ... It really should fall on people like me to get together and do things to help the people in this country. If you’re not worrying about how to put food on your table, you [should be] worrying about why other people don’t have food on their table. I remember a great America where we made everything. There was a time when the only thing you got from Japan was a really bad cheap transistor radio that some aunt gave you for Christmas."

Thursday, December 2, 2010

Infuriating ...

This is simply infuriating: ["Fed aid in financial crisis went beyond U.S. banks to industry, foreign firms"].
So, instead of letting them all sink, a slew of connected companies got handouts and one of them, a big media company, didn't report on the handouts. Meanwhile, everyone else in the real world - from the downtown shop to the part-time newspaper peddler - got ransacked. Many of us lost a lot or everything. Did any of the big CEOs at these companies take a pay cut to get by when cash flow was drying up? Nope. Come on.
If people don't now realize that everything is upside down, that both political parties are screwing our country, that monetary policy isn't about you or me but about them and control, and that the Fed needs to be audited pronto, you're just a lunatic in the wilderness.

Wednesday, December 1, 2010

Missing the mark on Deficits

Guest perspective by Ralph Nader

The recent reports by the two deficit commissions–one appointed by President Obama ( and the other from the private Bipartisan Policy Center (–do not lack specifics. In fact, they are so specific that they obscure the need for a more explicit public philosophy that reveals both their value biases and their establishment thinking.

The compositions of the two task forces clearly are designed to achieve a legislative consensus on Capitol Hill. There are self-styled centrists, moderates, conservatives and liberals. There are no paradigm-busters, few challengers of assumptions, no backgrounds from unorganized labor, elderly or youth activists. Even Trade Unions advocates are rare. About the only eyebrow raisers are provided by the relentlessly wise-cracking co-chair of Obama’s Commission—former Wyoming Republican Senator, Alan K. Simpson.

It is true that both panels do include very modest cuts in the vast bloated military budget whose empire takes half of the entire federal government’s discretionary spending (not including the insurance programs Medicare and Social Security). Already a tentative suggestion by the Commission’s Co-Chairs to “save” $100 billion in the Pentagon budget by 2015 was called “catastrophic” by Secretary of Defense Robert M. Gates. The two reports make no mention of ending the Iraq and Afghanistan wars, or stopping contractor lobbies from bleeding the Pentagon dry, which would be a solid rejoinder to Gates.

That’s the problem throughout these reports. They do not come to grips with the need for fundamental changes to expand the economy as if people matter first, to locate new revenues, launch long-overdue public works programs with their jobs throughout communities in America, and reduce the kind of deficits which are empty calories that create no real wealth, such as corporate welfare bailouts and giveaways.

For example, there is much reference to tax reform that rearranges tax rates. The private task force—chaired by Alice Rivlin and former Senator Pete Domenici (R- NM)—would eliminate special tax rates for capital gains and dividends. Fine. But why not also shift the incidence of some taxes from workers to a Wall Street tax or what may be called a tiny sales taxes on purchases of speculative derivatives, as well as stocks and bonds that economists Dean Baker and Robert Pollin say would raise several hundred billion dollars a year?

The Rivlin-Domenici report noted but did not recommend a carbon tax—another major revenue-raiser that would reduce pollution, greenhouse gases and advance solar energy and energy conservation. An added humane and economic benefit is that less coal burning would also save thousands of lives a year from air pollution, according to the EPA. Instead the Task Force proposed a sizable regressive national sales tax.

Under health care, both reports go for what they call medical malpractice reform. What they mean is not doing anything about the 100,000 Americans who die and many more sickened every year from hospital malpractice, not to mention adverse affects from drugs and hospital-clinic infections. No, by reform they mean cutting back on judicially-decided damages now being awarded to far less than the one-out-of-ten victims who even file a claim. Grotesque! A Business Week editorial years ago said the medical malpractice crisis is malpractice. Prevention is the way to save lives and money—a policy entirety ignored by the two commissions.

There is no mention in either report about ending notorious foreign corporate tax havens for U.S. companies that would bring in nearly $100 billion a year. And, remarkably, though some mention is made of tax compliance, they ignore the regular estimate by the Treasury Department of $300 billion a year in uncollected taxes.

Not surprisingly, the two establishment reports did not consider the enormous economic savings from adopting a single payer—full Medicare for all—health insurance system. (See:

Three other large areas were ignored. First is cracking down on corporate crime, including at least $250 billion dollars in annual health care billing fraud and abuse. (See: Both the fines, the disgorgement back to the defrauded and the deterrence to corporate crime amount to large sums of money.

Second, the commission-co-chairs and the task force avoided recommending the proper pricing of our commonwealth assets that are regularly given away free (eg. the public airwaves and hard rock minerals, such as gold and silver, on federal land) or at bargain basement fees (the national forest timber and other minerals).

Third, although both reports emphasize the need for economic growth (which produces more tax revenues to reduce red ink), there was no reference to revising global trade agreements that have left our country's huge trade deficits and its workers in dire straits. Keeping industries and jobs from moving to repressive regimes like China for reexport to the U.S. should not have been ignored. But then, look at the composition of these Task Forces and you’ll see why.

NHPTV to broadcast music documentary

“The Acadia Sessions” Starts December 3rd on NHPTV

13-Week Music Documentary Series Goes Behind The Scenes With

The Region’s Most Talented Musicians

Maine viewers were able to watch the “The Acadia Sessions” earlier this year on Maine Public Television, and now the series is available on NHPTV’s Explore Channel and to Comcast subscribers in New Hampshire, Massachusetts and areas of southwestern Maine beginning Friday, December 3rd at 10pm.

“The Acadia Sessions” is a music documentary series featuring some of New England’s most talented bands and musicians working in an acclaimed Portland, Maine recording studio. Each 30-minute episode documents and explores the song writing process, giving the audience a behind-the-scenes look at the artists’ backgrounds, songs, and interactions with each other.

“The Acadia Sessions” has been described as "an absolutely riveting 13-week music documentary series featuring some of our most interesting and gifted musical minds..." (Portland Daily Sun, 5/7/10); and “artful and smart, with musicians responding to good questions in thoughtful ways." (Portland Phoenix, 5/14/10).

The December 3rd episode features Spencer and the School Spirit Mafia; future episodes document in-studio performances and interviews with The Baltic Sea, Dark Hollow Bottling Company, Rustic Overtones, Batshelter, Olas, Brzowski and Sandbag, Huak, South China, Phantom Buffalo, Boreal Tordu, Peepshow, and Murcielago.

“The Acadia Sessions” team includes Executive Producers Gina and Marc Bartholomew of the Acadia Recording Company, as well as Petra Simmons, Scott Sutherland, and David Camlin, who together have endeavored to put a much-deserved public face on the talented local artists creating music of all genres – from folk to hip-hop, and pop to punk. Members of the team have produced several music documentaries including the “Developer” series and the award-winning “48-Hour Music Project.”

For more information and a preview of the series go to