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In poll after poll, the American people say they are far more concerned about the jobs crisis than the “debt crisis.” A powerful coalition of CEOs says they have an answer for both problems.
Give us more tax breaks, they say, and we’ll use the money to invest and create jobs. The national economic pie will expand and Uncle Sam will get plenty of the frothy meringue without having to raise tax rates.
That’s the line of the Fix the Debt campaign. Led by more than 90 CEOs, this turbo-charged PR/lobbying machine is blasting the message that such “pro-growth tax reform” should be a pillar of any deficit deal (along with cuts to benefit programs like Social Security and Medicare).
And it might be a good line — if not for some pesky real-world facts. You see the same corporations peddling this line have already been paying next to nothing in taxes. And instead of creating jobs, they’ve been destroying them. Here are five examples of job-cutting, tax-dodging CEOs who are leading Fix the Debt.
1. Randall Stephenson, AT&T
U.S. jobs destroyed since 2007: 54,000
Average effective federal corporate income tax rate, 2009-2011: 6.3%
Randall Stephenson presides over the biggest job destroyer among the Fix the Debt corporate supporters, having eliminated 54,000 jobs since 2007. The company also has one of the largest deficits in its worker pension fund — a gaping hole of $10 billion.
Can Stephenson blame all this belt-tightening on the Tax Man? Not exactly. Over the last three years, AT&T’s tax bills have been miniscule. According to the firm’s own financial reports, they’ve paid Uncle Sam only 6.3 percent on more than $43 billion in profits. If the telecom giant had paid the standard 35 percent corporate tax rate over the last three years, the federal deficit would be $12.5 billion lower.
So where have AT&T’s profits gone? A huge chunk has landed in Stephenson’s own pension fund. His $47 million AT&T retirement account is the third-largest among Fix the Debt CEOs. If converted to an annuity when he hits age 65, it would net him a retirement check of more than a quarter million dollars every month for the rest of his life.
While his economic future is more than secure, Stephenson emerged from a meeting with President Obama on November 28 “optimistic” about the chances of reforming (i.e., cutting) Social Security as part of a deal to avoid the so-called “fiscal cliff.”
2. Lowell McAdam, Verizon
U.S. jobs destroyed since 2007: 30,000
Average effective federal corporate income tax rate, 2009-2011: -3.3%
Another telecommunications giant, Verizon, is close behind AT&T in the layoff leader race, with 30,000 job cuts since 2007. Like its industry peer AT&T, Verizon also has a big deficit in its pension accounts. It would need to cough up $6 billion to meet its promised pension benefits to employees and another $24 billion to meet promised post-retirement health care benefits.
Did the blood-sucking IRS leave Verizon no choice but to slash jobs and underfund worker pensions? Far from it. The company actually got money back from Uncle Sam, despite reporting $34 billion in U.S. profits over the last three years. If Verizon had paid the full corporate tax rate of 35 percent, last year’s national deficit would have been $13.1 billion less. Had that amount been used for public education, it could have covered the cost of employing more than 190,000 elementary teachers for a year.
Verizon’s new CEO, Lowell McAdam, already has $8.7 million in Verizon pension assets, enough to set him up for a $47,834 monthly retirement check. McAdam’s predecessor, Ivan Seidenberg, who has also signed up as a Fix the Debt supporter, retired with more than $70 million in his Verizon retirement package.
Wanna see who is rounding up the worst five? Read the rest at Alternet.
December 6, 2012 · By Brian Cruikshank
Daphne Wysham on Al Jazeera discussing the World Bank and climate change:
"It was 1992 when the World Bank was asked at the Rio Earth Summit to begin to marshall the funds to address the climate crisis, to help the developing world move away from fossil fuels, and they have done the exact opposite."
December 6, 2012 · By Janet Redman
While the costs of mitigating and adapting to climate change rise and thus the need for climate finance in developing countries grows, wealthy governments shift focus from public support to private finance. But can the private sector meet the needs of those most impacted by climate change?
In the halls of the UN climate negotiations in Doha, Qatar, you will hear a mantra that’s being echoed by developed country governments from their capital cities to international forums. It goes something like this: We’re broke. There’s no public money. And so, we have to use the scarce resources we do have to leverage massive wealth in the private — and particularly the financial — sector.
You’ll also find in the halls of the annual climate summits the faces of private interests — industry reps, investors, and carbon traders. They’re a regular fixture here, but this year the private sector has taken centre stage in debates over climate finance.
At COP18 there are seven times as many side events about getting private finance and carbon markets engaged in climate action as events highlighting the role of public funds.
There has also been a strategic shift in the rhetoric of developed countries away from talking about “providing” climate finance to speaking about “mobilising” money. The former implies public flows. The latter suggests countries are shifting emphasis toward looking outside national budgets for financial resources.
Nowhere is the trend toward privileging the private sector more apparent than in the Green Climate Fund (GCF) — the newest financial institution under the climate Convention. After many contentious debates during the Fund’s design phase, industrialised nations succeeded in creating a sub-fund that guarantees the private sector direct access to the fund.
Countries did win one concession — a ‘no-objection procedure’ that is meant to keep multinational corporations and international investment banks from going directly to the Green Climate Fund to undertake work in countries without the knowledge of national capitals. But investors are already starting to push back, saying that any kind of vetting process by the UN would make private sector engagement untenable.
In light of these challenges, the GCF’s board will have to grapple as they write the Fund’s business model this year with the question of what the ultimate purpose of the Green Climate Fund is — to maximise the involvement of the private sector, or to support low-carbon, climate-resilient sustainable development in poorer nations as its mandate states?
While these two aims don’t have to be mutually exclusive, lessons from existing private sector institutions – like the World Bank’s International Finance Corporation – show that private finance often bypasses low-income countries, fails to reach the poor in middle-income countries, and prioritises large corporations over small and medium enterprises.
In addition, the use of financial intermediaries to repackage and channel capital leads to serious challenges in transparency and public accountability. Particularly important is the fact that private sector money flows where the profit potential is greatest. For a climate fund this means big, mainly mitigation activities — not community-scale projects, adaptation, or disaster relief.
Certainly, the private sector plays a critical role in any economy – and without its participation in making the shift away from dirty energy and polluting industry there will be no transition to a low-carbon future. But the private sector efforts that the Green Climate Fund should support are domestic enterprises that will reinvest wealth to meet the climate priorities of the people and communities most impacted by global warming.
December 5, 2012 · By Janet Redman
As the second week of international climate negotiations begins here in Doha, Qatar, rich and poor countries are staking out very different positions and digging in their heels. The big debates on the floor are about how rich and poor countries will strike a deal to reduce their emissions of climate-altering greenhouse gases. And the provision of fair and effective finance for clean development, adaptation to climate change, and compensation for loss and damages is emerging as the make-or-break flashpoint.
Essentially, rich countries are obstructing the process by demanding positions that poorer countries say they cannot take. Their approach would condemn millions of people to suffer loss of life and livelihood in the wake of severe climate disruption. Climate negotiators from developing countries should call their bluff and stand together to halt the talks.
For climate realists watching from the United States, the best action in the short term is less clear. There is little anyone can do in three days to alter the position of the United States. The American people sealed the fate of these negotiations when we voted Barack Obama back into office before extracting a promise from him around denying a permit to TransCanada for Keystone XL pipeline, or around stepping back from his announcements that he was going to make the United States into the “Saudi Arabia of natural gas.”
In the longer term, however, the crisis currently unfolding in Doha has made one thing clear. After this round of negotiations, it’s up to the populations of the rich countries to make it politically impossible for their governments to take these positions again.
December 5, 2012 · By Emily Schwartz Greco
This week, OtherWords unpacks the fiscal challenges furrowing the brows of our lawmakers and just about every Obama administration official. Columnist Sam Pizzigati highlights the way billionaire Peter Peterson bankrolled the misleading portrayal of Social Security cuts as the only way to balance the budget. The Green Party's Jill Stein points out that the biggest problem we're facing is the "climate cliff" and that any "grand bargain" should do something to stop global warming. I explain that at least $881 billion in creative revenue-raisers and spending cuts belong on the table. If you'd like to check out this deficit-reduction proposal, please download the new report that the Institute for Policy Studies is releasing today.
Be sure to visit our blog, where I recently posted more highlights from the avalanche of fan mail that followed Donald Kaul's heart attack. We're also running bonus pieces from Jim Hightower there — such as his recent take on Texan secessionists. And, consider subscribing to our weekly newsletter if you haven't signed up yet.
- Mother Nature Belongs at the Bargaining Table / Jill Stein
Throwing the nation over the climate cliff will make our current fiscal challenges look like a minor bump in the road.
- Snake-Oil Deficit Savings / Ryan Alexander
Like things you spot in your side-view mirror, many of the budget numbers flitting around the debt talks are larger than they appear.
- The Fiscal Hoax / Peter Hart
Don't believe the cliff hype.
- For Pete's Sake, What's Happened to Our Democracy? / Sam Pizzigati
One billionaire has the wherewithal to totally redirect America's political discourse.
- Dodging the Fiscal Swindle / Emily Schwartz Greco
With a little creativity, we can easily balance the budget without cutting Social Security.
- Solving the Twinkie Murder Case / Jim Hightower
Equity hucksters plundered the company to feather their own nests.
- The Answer Is Blowing in the Wind / William A. Collins
Do we all have to drown in rising seas or broil in epic droughts before we decide it's time to switch to renewable energy?
- Highway Robbery / Khalil Bendib (Cartoon)