Posts tagged ‘Bailouts’

New Study Shows that Corporate Tax Cuts Won’t Create Jobs


New Study Shows that Corporate Tax Cuts Won’t Create Jobs

BY OLIVIA SANDBOTHE  |  DECEMBER 18, 2013

There’s no correlation between low taxes and job creation.

That’s the finding in a new report from the Center for Effective Government that refutes corporate CEOs, bankers and tea party members of Congress who engage in some serious magical thinking when it comes to taxes and job creation.

We’ve heard these voodoo economics before: cut taxes and jobs will appear.  Right now,corporate tax rates are at their lowest point in 40 years even as profits soar.  Meanwhile, our economy is still struggling. It’s about time we questioned why these policies have yet to result in the job growth that their proponents predicted. 

In the new study, The Center for Effective Government, a nonprofit group that studies the economic impact of public policy, analyzed the Fortune 500 companies that posted profits between 2008 and 2012. Then it compared the job numbers of the companies that paid the highest tax rates to those of the companies that paid the fewest taxes.  

Of the 30 companies that paid more than a third of their profits in taxes, all but eight added jobs between 2008 and 2010. As a group, these companies reported a net gain of more than 200,000 US jobs.

Compare that to the 30 corporations that paid the lowest rates.  Many of these firms are paying no federal income taxes at all.  Even as this group raked in $159 billion in profits, only half of them added any jobs.  In total, they cut more jobs than they added, for a net result of 51,000 jobs lost. 

These numbers tell a story that many of us already knew.  Corporations don’t seek out lower tax rates because they’re eager to start hiring.  They do it to boost profits, and they don’t intend to share those profits with the rest of us.

What it all means is that billions of dollars that could be spent on education and infrastructure that benefits everyone are instead being hoarded by corporate CEOs.  The Center for Effective Government estimates that we could raise $220 billion simply by closing tax loopholes that allow corporations to hide money overseas.  Raising the federal corporate tax rate by only a few percentage points would be even more effective.

Public opinion is starting to turn against trickle-down economics.  Even Pope Francis has come out against the idea. It’s time to use that momentum to push for a tax system that benefits everyone instead of one that chases after imaginary job growth at the expense of our public programs.

You can read the entire CEG report by clicking here.

Credit union flap may reveal Goldman Sachs is bullying community banks



Credit union flap may reveal Goldman Sachs is bullying community banks (via Raw Story )

When it was announced recently that Goldman Sachs had withdrawn its sponsorship of the small community bank at which Occupy Wall Street had set up an account for its donations, it appeared to be merely a petty act of vindictiveness. According to investigative reporter Greg Palast, however, the motivations…

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AIG ex-CEO Greenberg eyes reversing NY fraud case | Reuters


 

Times editorial on how his country’s political system wasted years of prosperity and put the euro at risk.   Read more at Counterparties

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AIG ex-CEO Greenberg eyes reversing NY fraud case

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Former American International Group (AIG) CEO Maurice Greenberg testifies before a House Oversight and Government Reform hearing on “The Collapse and Federal Rescue of A.I.G. and What It Means for the U.S. Economy” on Capitol Hill in Washington April 2, 2009. REUTERS/Kevin Lamarque

Former American International Group (AIG) CEO Maurice Greenberg testifies before a House Oversight and Government Reform hearing on “The Collapse and Federal Rescue of A.I.G. and What It Means for the U.S. Economy” on Capitol Hill in Washington April 2, 2009.

Credit: Reuters/Kevin Lamarque

By Jonathan Stempel

Mon May 14, 2012 6:03pm EDT

(Reuters) – Former American International Group Inc Chief Executive Maurice "Hank" Greenberg said New York’s attorney general should be barred from invoking a 91-year-old state law in a fraud case over two suspect reinsurance transactions.

Greenberg and co-defendant Howard Smith, AIG’s former chief financial officer, sought permission on Monday to appeal to the state’s highest court, the Court of Appeals, a May 8 appellate ruling letting Attorney General Eric Schneiderman pursue civil fraud claims against them under the state’s Martin Act.

That ruling by the Manhattan appeals court cleared the way for the 7-year-old case to go to trial.

Investigators claim a transaction with General Re Corp, a unit of Warren Buffett’s Berkshire Hathaway Inc, helped AIG inflate loss reserves by $500 million without transferring risk, while a transaction with Capco Reinsurance Co helped AIG hide more $200 million of losses. Both transactions took place more than a decade ago.

Unlike under federal law, the Martin Act does not require investigators to prove intent in order to prevail on a securities fraud claim.

According to David Boies, a lawyer for Greenberg, a key issue is whether Schneiderman may use the Martin Act "to pursue a de facto securities class action" on behalf of shareholders, despite conflicting federal laws designed to promote "uniformity and certainty" in regulating securities.

In a court filing, Greenberg and Smith said that power would make "every executive of a New York company or a company with shares traded on the New York Stock Exchange potentially liable – personally – for substantial damages for misstatements" by their companies, even absent proof of intent or reliance.

Granting such power would have "far-reaching implications for New York’s continuing role as an economic and financial capital," they added.

James Freedland, a spokesman for Schneiderman, said: "We are confident that their latest attempt to reverse decades of settled law to escape responsibility for their misconduct will be rejected."

Greenberg and Smith were first sued in 2005 by Eliot Spitzer, then New York’s attorney general. Spitzer’s successors Andrew Cuomo and Schneiderman have continued to pursue the case.

Greenberg, 87, left New York-based AIG in March 2005 after nearly four decades at the insurer’s helm.

AIG’s transaction with General Re led to five convictions and two guilty pleas of former officials of those companies. A federal appeals court threw out the convictions in August and a new trial has been scheduled for January 2013. Buffett was not accused of wrongdoing.

The U.S. government still owns 61 percent of AIG, following $182.3 billion of taxpayer-funded bailouts.

Greenberg’s company, Starr International Co, once AIG’s largest shareholder, has sued the government for $25 billion over the bailouts, which it has called unconstitutional.

The case is New York v. Greenberg et al, New York State Supreme Court, Appellate Division, 1st Department, No. 5297.

(Reporting by Jonathan Stempel in New York; editing by Andre Grenon)

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AIG ex-CEO Greenberg eyes reversing NY fraud case | Reuters

Shocker: Paul Ryan’s budget means more big tax cuts for the rich. – CSMonitor.com


The tax cuts in Paul Ryan’s 2013 budget plan would result in huge benefits for high-income people and very modest—or no— benefits for low income working households. No surprise here.

By Guest blogger / March 24, 2012

House Budget Committee Chairman Rep. Paul Ryan, R-Wis., center, and others, leave a news conference on Capitol Hill in Washington, where he discussed his budget blueprint.

Jacquelyn Martin/AP

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No surprise here, but the tax cuts in Paul Ryan’s 2013 budget plan would result in huge benefits for high-income people and very modest—or no— benefits for low income working households, according to a new analysis by the Tax Policy Center.

Howard Gleckman is a resident fellow at The Urban-Brookings Tax Policy Center, the author of Caring for Our Parents, and former senior correspondent in the Washington bureau of Business Week. (http://taxvox.taxpolicycenter.org)

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TPC looked only at the tax reductions in Ryan’s plan, which also included offsetting–but unidentified–cuts in tax credits, exclusions, and deductions. TPC found that in 2015, relative to today’s tax system, those making $1 million or more would enjoy an average tax cut of $265,000 and see their after-tax income increase by 12.5 percent. By contrast, half of those making between $20,000 and $30,000 would get no tax cut at all. On average, people in that income group would get a tax reduction of $129. Ryan would raise their after-tax income by 0.5 percent.

Nearly all middle-income households (those making between $50,000 and $75,000) would see their taxes fall, by an average of roughly $1,000. Ryan would increase their after-tax income by about 2 percent.

Ryan would extend all of the 2001/2003 tax cuts, and then consolidate individual rates to just two—10 and 25 percent. In addition, he’d repeal the Alternative Minimum Tax, reduce the corporate rate from 35 percent to 25 percent, and kill the tax provisions of the 2010 health reform law.

Earlier this week, TPC projected the tax cuts in Ryan’s budget would add $4.6 trillion to the federal deficit over the next decade, even after extending the 2001/2003 tax cuts, which would add another $5.4 trillion to the deficit.

Ryan argues that eliminating or scaling back deductions, credits, and exclusions ought to be part of the GOP fiscal plan. But he won’t say how.

Cuts in those tax preferences could make a big difference in determining who wins and who loses from the tax portion of his budget. But until House Republicans describe which they’d cut, there is no way to estimate what those base-broadeners would mean.

In truth, unless Republicans raise taxes on capital gains and dividends, it is hard to imagine the highest income households getting anything other than a windfall from this budget. Other tax preferences, such as the mortgage interest deduction, are just not that valuable to them.

And since no high-profile Republicans want to raise taxes on gains and dividends (and many would cut investment taxes even further) this budget would likely result in a huge tax cut for those who need it least.  That’s not a great way to start an exercise whose stated goal is to eliminate the budget deficit.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers’ own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger’s own site by clicking on taxvox.taxpolicycenter.org.

 

 

Shocker: Paul Ryan’s budget means more big tax cuts for the rich. – CSMonitor.com.

CALIFORNIA’S ENEMIES OF SINGLE PAYER MUST RESIGN [Senators CALDERON,CORREA,VARGAS, PADILLA, RUBIO, WRIGHT]


Enemies of the people; they betrayed their communities Juan Vargas knows better than this he grew up in Imperial Valley and his father worked the fields to feed him. This is the gratitude that he gives to his community where he lived and worked most of his life. They killed Single-Payer Healthcare in California, and we are not going to forgive them for this; this is a crime against the people of California

Health Professionals – $89K

Alex Padilla can be contacted in Sacramento at 916-651-4020 or in Van Nuys at 818-901-5588
Insurance – $137K
Health Professionals – $105K
Pharma – $67K

Michael Rubio can be contacted in Sacramento at 916-651-4016 or in Bakersfield at 661-395-2620
Health Professionals – $94K
Insurance – $36K

Juan Vargas In Sacramento at 916-651-4040 or in Chula Vista at 619-409-7690
Insurance – $115K
Health Professionals – $46K
Pharma – $28K

Rod Wright can be contacted in Sacramento at 916-651-4025 or in Inglewood at 310-412-0393
Insurance – $87K
Pharma – $45K
Health Professionals – $43K

Thank Senator Mark Leno for championing SB 810 at Senator.Leno@Senate.CA.gov. We do not want to tie up his phones. It is important to thank legislators when they champion our cause, and not just spank them when they do not.

Help Build a Stronger Movement – Order SB 810 Postcards, direct new people to our website, and consider becoming a monthly contributor to Single Payer Now.

Please order SB 810 postcards. They ask Governor Brown to pass SB 810. The legislation will again be introduced in 2013. Asking new people to sign a postcard is wonderful way to have a discussion about the merits of single payer healthcare. We add the names to our action alert list to keep activists engaged in the campaign for universal healthcare.

The Injustice: What A Rip-Off Bank Settlement Highlights the Feds’ Foreclosure Flop


The $26 billion settlement that 49 attorneys general wrested from the big banks today is a pittance compared to the damage done—but they were forced to act by inaction in Washington.

Go a head and hate the deal the federal government and 49 of the country’s 50 attorneys general just finalized with five of the country’s largest banks over foreclosure fraud. There’s plenty to dislike about the settlement, starting with the price tag: $26 billion. That’s a slap on the wrist given the reckless, sometimes criminal behavior of the banks, and a pittance compared to the trillions of dollars homeowners collectively lost during the subprime debacle. Wade into the fine print and the deal seems even more disappointing. One settlement site says that it can take up to three years for homeowners to know if they’re even eligible for a cash payment. Victims losing their home in a foreclosure can expect a cash payment of between $1,500 and $2,000—enough to maybe cover the costs of a rented truck and storage once they got the boot.


Be mad, but make sure to be angry at the right people. Bank regulators in Washington, and not the country’s attorneys general, should have been cracking down on banks that were routinely evicting people despite incomplete documentation. It’s the U.S. Justice Department and other federal agencies that should have gone after the banks when they were caught fabricating legal papers and routinely “robo-signing” thousands of affidavits at a sitting. The Obama administration also might have added teeth to HAMP (Home Affordable Modification Program) rather than relying solely on incentives, which explains why HAMP has helped only a small fraction of the 3 million to 4 million homeowners it was created to help.

Bank regulators in Washington should have been cracking down on banks.


The $26 billion settlement that 49 attorneys general wrested from the big banks today is a pittance compared to the damage done—but they were forced to act by inaction in Washington, Susan Walsh / AP Photo

“The attorneys general shouldn’t be here, but Obama fell down on the job,” says Prentiss Cox, who in 2006 led the successful case against Ameriquest, an investigation that cost the lender $325 million in fines, when he ran the Minnesota attorney general’s consumer-enforcement division. (He now teaches at the University of Minnesota Law School). “The Obama administration abdicated responsibility. So while many of us are colossally disappointed with where we are, you can’t blame the AGs. The AGs were at least willing to step to the plate.”

And the AGs did a pretty good job, all things considered. As written, the final deal pertains only to the wrongs the five banks (Wells Fargo, Citigroup, JPMorgan Chase, Bank of America, and GMAC/Ally) committed while booting people from their homes. It won’t tie the hands of any AG seeking to investigate subprime frauds beyond the foreclosure mess. The country’s more aggressive AGs, such as Delaware’s Beau Biden (the vice president’s son) and New York’s Eric Schneiderman, can still pursue claims against the banks over origination (fraud committed when making the subprime loans in the first place) or securitization (the packaging of these loans by the large Wall Street firms and the deceptive means they often used to peddle them to unsuspecting customers).


Attorney General Eric Holder, center, announces a settlement regarding mortgage-loan servicing and foreclosure abuse, at the Justice Department in Washington, Feb. 9, 2012, Cliff Owen / AP Photo

“I’ve said from the start,” Beau Biden told me back in September, “I’m only willing to sign off on a deal if it allows us to continue looking into misconduct in the areas of securitization and origination.” The deal also doesn’t prevent individuals from suing their bank or stand in the way of the many private class-action suits that have been filed over improper foreclosures.

And the deal is about more than just money, even if the dollar amount seems about the only issue most people are focusing on. It’s little solace to those who have already been unfairly booted from their home, but it establishes the steps that any bank must take before seizing someone’s home—or face the consequences of more legal action. It will help those millions of people still facing foreclosure, which has been a priority of old hands in the fight against subprime abuse such as Ira Rheingold, executive director of the National Association of Consumer Advocates.

“The most important thing for people like me is fixing the damn system,” Rheingold says. “It’s making sure people who can save their homes have the right to save their homes.” And with the sigh of someone who has been fighting this fight for a long time, Rheingold adds, “I think sometimes we lose sight of what’s possible to achieve.”

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Gary Rivlin is a special correspondent for Newsweek and The Daily Beast. He is the author of five books, including Broke, USA: From Pawnshops to Poverty, Inc.—How the Working Poor Became Big Business. He has worked as a staff reporter for The New York Times, where his beats included Silicon Valley and New Orleans after Hurricane Katrina.

For inquiries, please contact The Daily Beast at editorial@thedailybeast.com.

Analysis: Holder, top DOJ lawyers were partners with big banks


Analysis: Holder, top DOJ lawyers were partners with big banks


 

(Reuters) – U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.

The firm, Covington & Burling, is one of Washington’s biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.

Both the Justice Department andCovington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmaler said Holder and Breuer had complied fully with conflict of interest regulations, but she declined to say if they had recused themselves from any matters related to the former clients.

Reuters reported in December that under Holder and Breuer, the Justice Department hasn’t brought any criminal cases against big banks or other companies involved in mortgage servicing, even though copious evidence has surfaced of apparent criminal violations in foreclosure cases.

The evidence, including records from federal and state courts and local clerks’ offices around the country, shows widespread forgery, perjury, obstruction of justice, and illegal foreclosures on the homes of thousands of active-duty military personnel.

In recent weeks the Justice Department has come under renewed pressure from members of Congress, state and local officials and homeowners’ lawyers to open a wide-ranging criminal investigation of mortgage servicers, the biggest of which have been Covington clients. So far Justice officials haven’t responded publicly to any of the requests.

While Holder and Breuer were partners at Covington, the firm’s clients included the four largest U.S. banks – Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co – as well as at least one other bank that is among the 10 largest mortgage servicers.

DEFENDER OF FREDDIE

Servicers perform routine mortgage maintenance tasks, including filing foreclosures, on behalf of mortgage owners, usually groups of investors who bought mortgage-backed securities.

Covington represented Freddie Mac, one of the nation’s biggest issuers of mortgage backed securities, in enforcement investigations by federal financial regulators.

A particular concern by those pressing for an investigation is Covington’s involvement with Virginia-based MERS Corp, which runs a vast computerized registry of mortgages. Little known before the mortgage crisis hit, MERS, which stands forMortgage Electronic Registration Systems, has been at the center of complaints about false or erroneous mortgage documents.

Court records show that Covington, in the late 1990s, provided legal opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac, Bank of America, JP Morgan Chase and several other large banks. It was meant to speed up registration and transfers of mortgages. By 2010, MERS claimed to own about half of all mortgages in the U.S. — roughly 60 million loans.

But evidence in numerous state and federal court cases around the country has shown that MERS authorized thousands of bank employees to sign their names as MERS officials. The banks allegedly drew up fake mortgage assignments, making it appear falsely that they had standing to file foreclosures, and then had their own employees sign the documents as MERS “vice presidents” or “assistant secretaries.”

Covington in 2004 also wrote a crucial opinion letter commissioned by MERS, providing legal justification for its electronic registry. MERS spokeswoman Karmela Lejarde declined to comment on Covington legal work done for MERS.

It isn’t known to what extent if any Covington has continued to represent the banks and other mortgage firms since Holder and Breuer left. Covington declined to respond to questions from Reuters. A Covington spokeswoman said the firm had no comment.

Several lawyers for homeowners have said that even if Holder and Breuer haven’t violated any ethics rules, their ties to Covington create an impression of bias toward the firms’ clients, especially in the absence of any prosecutions by the Justice Department.

O. Max Gardner III, a lawyer who trains other attorneys to represent homeowners in bankruptcy court foreclosure actions, said he attributes the Justice Department’s reluctance to prosecute the banks or their executives to the Obama White House’s view that it might harm the economy.

But he said that the background of Holder and Breuer at Covington — and their failure to act on foreclosure fraud or publicly recuse themselves — “doesn’t pass the smell test.”

Federal ethics regulations generally require new government officials to recuse themselves for one year from involvement in matters involving clients they personally had represented at their former law firms.

President Obama imposed additional restrictions on appointees that essentially extended the ban to two years. For Holder, that ban would have expired in February 2011, and in April for Breuer. Rules also require officials to avoid creating the appearance of a conflict.

Schmaler, the Justice Department spokeswoman, said in an e-mail that “The Attorney General and Assistant Attorney General Breuer have conformed with all financial, legal and ethical obligations under law as well as additional ethical standards set by the Obama Administration.”

She said they “routinely consult” the department’s ethics officials for guidance. Without offering specifics, Schmaler said they “have recused themselves from matters as required by the law.”

Senior government officials often move to big Washington law firms, and lawyers from those firms often move into government posts. But records show that in recent years the traffic between the Justice Department and Covington & Burling has been particularly heavy. In 2010, Holder’s deputy chief of staff, John Garland, returned to Covington, as did Steven Fagell, who was Breuer’s deputy chief of staff in the criminal division.

The firm has on its web site a page listing its attorneys who are former federal government officials. Covington lists 22 from the Justice Department, and 12 from U.S. Attorneys offices, the Justice Department’s local federal prosecutors’ offices around the country.

As Reuters reported in 2011, public records show large numbers of mortgage promissory notes with apparently forged endorsements that were submitted as evidence to courts.

There also is evidence of almost routine manufacturing of false mortgage assignments, documents that transfer ownership of mortgages between banks or to groups of investors. In foreclosure actions in courts mortgage assignments are required to show that a bank has the legal right to foreclose.

In an interview in late 2011, Raymond Brescia, a visiting professor at Yale Law Schoolwho has written about foreclosure practices said, “I think it’s difficult to find a fraud of this size on the U.S. court system in U.S. history.”

Holder has resisted calls for a criminal investigation since October 2010, when evidence of widespread “robo-signing” first surfaced. That involved mortgage servicer employees falsely signing and swearing to massive numbers of affidavits and other foreclosure documents that they had never read or checked for accuracy.