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Ten Turkeys for Thanksgiving

by Brent Blackwelder

This Thanksgiving is a good time to spot the Golden Fleece Turkey, a bird that epitomizes economic irrationality and environmental destruction. This remarkable breed pollutes air and water and wastes tax dollars, while scamming the public in the process. Although known for its camouflage, especially its ability to hide wrongdoing, the Golden Fleece Turkey regularly treats birdwatchers to astonishing displays of stupidity. Such birds could not exist in a sustainable economy, but the present economic climate provides an ideal habitat, and they’re spreading like many other invasive species.  Below are 10 recent sightings of the Golden Fleece Turkey.

(Note: Wisconsin Senator William Proxmire presented Golden Fleece Awards in the 1970s and 1980s for taxpayer boondoggles.  This Daly News entry is dedicated to his memory.)

1. Animal Factory Slums

Sometimes masquerading under the name of Confined Animal Feeding Operations (CAFOs), these gigantic lots keep thousands of animals in filthy, cramped quarters. They produce over 500 million tons of manure annually, some of which spills because lagoons leak and pipelines break. The spills cause massive fish kills downstream and spread dangerous bacterial contamination. Up to 70% of the antibiotics in the US are used on animals in CAFOs, thereby aggravating antibiotic resistance and jeopardizing one of the miracles of modern medicine. Emissions from these animal slums, tainted with putrid sulfur dioxide, sicken rural neighbors.  “Cheap” food from CAFOs isn’t such a bargain when you add up all the health costs.

2. Continued Subsidies for Nuclear Reactors

In the wake of the Fukushima disaster in Japan (a tragedy that’s still unfolding with more bad news each month), there is a real possibility that damages could top a trillion dollars. Despite such concerns, the nuclear industry keeps fleecing America. The US Congress and the Obama Administration continue to support loan guarantees for new nuclear reactors and to provide liability insurance for nuclear reactor accidents. If reactors are as safe as the industry alleges, one would think that private insurance companies would be eager to make some money here. As we have seen from Japan this year, there is a lot we are not being told, and there’s still a high potential for accidents.

3. The Keystone XL Tar Sands Pipeline from Canada to the Texas Gulf

The extraction of oil from tar sands takes a lot of energy and leaves behind a polluted landscape that native people of Alberta have to live with. The pipeline would pose a threat to every river it crossed en route to the Texas coast. Embarrassed by revelations of shady dealings at the State Department and the announcement of an Inspector General investigation, the Obama Administration has just delayed a decision on whether to approve the biggest pipeline fleece in history.

4. US Automobiles That Travel 200 Miles Per Hour

Ford and Chevrolet have announced their intentions to produce super-fast cars, capable of speeds between 180 and 200 mph. So much for the goals of saving lives, preventing injuries, and conserving fuel. For the past half century 30-50,000 people have died annually in auto accidents, and hundreds of thousands more have been injured.

5. Offshore Tax Havens

It is estimated that the US Treasury loses $100 billion annually as a result of offshore tax havens. This is about the same amount of money the desperate “Supercommittee” of Congress is scrambling to find for deficit reduction by the November 23 deadline ($1.2 trillion over a decade = $120 billion a year). The two biggest bank recipients of taxpayer bailouts are Citicorp and Bank of America. Citicorp operates subsidiaries in 427 tax havens, and Bank of America does so in 115.

6. Tax-Dodging Corporations

Corporate income taxes provided 35% of federal revenue in 1945, but today that total is just 9%. Some of the world’s best known and most profitable companies (e.g., General Electric) play a variety of accounting games and avoid paying any corporate income taxes. Such companies protest that they are obeying the law, but they don’t say that they are lobbying intensively to keep all the loopholes in place. As a result, the American public is told that it will have to endure massive budget cuts to avoid further increases in government debt.

7. Corn Ethanol Subsidies

75 cents of every tax dollar spent on renewable energy goes to corn ethanol. US taxpayers are shelling out over $6 billion in subsidies each year for the corn ethanol program. Corn is an energy-intensive crop to grow, and it often involves the use of the carcinogenous herbicide atrazine (banned by Italy and Germany in 1990). The Volumetric Ethanol Excise Tax Credit is a shameful subsidy (45 cents per gallon blended) that should be cut. On top of that, life-cycle studies show that corn ethanol fails to ameliorate greenhouse gas emissions.

8. Clean Development Mechanism (CDM)

The United Nations administers the world’s largest carbon offset program, the CDM, created by the Kyoto climate agreement. The objective is to provide credits to projects that offset greenhouse gas emissions. The idea is to develop useful projects that would not be built without such a subsidy. But there’s a problem: the UN is awarding credits worth billions to projects that are already built or being built — large, environmentally unsound dams provide perhaps the most egregious example. The Clean Development Mechanism is better labeled the Filthy Scam Mechanism. As of October almost 2,000 dams (2/3 in China) were in line for billions in tax credits with no guarantee of compliance with standards of the World Commission on Dams.

9. Leaf Blowers

Doesn’t anyone rake leaves anymore or sweep a sidewalk? Throughout the year, leaf blowers spew dust, debris, and noise in neighborhoods all across America. Of the 220 million tons of carbon dioxide emitted by off-road vehicles and equipment, power lawn mowers and leaf blowers generate a surprisingly large amount — 12% or 26 million tons. Often powered by dirty engines, these leaf blowers can be a serious source of air pollution. And with unpleasant noise, sometimes exceeding 85 decibels, they can make sitting on the porch seem like sitting at the end of an airport runway.

10. Corporate CEO Pay

CEO salaries are now a whopping 325 times higher than the average US worker.  And the Institute for Policy Studies found 25 companies that paid their CEOs more than they paid in federal income tax.

Decent citizens everywhere should be looking to carve up a Golden Fleece Turkey or two. Happy Thanksgiving!

How to Turn the Power of the Wall Street Protests into Real Reforms

by Brent Blackwelder

As the Wall Street protests have spread from New York City to the rest of the country, some media pundits have criticized the protesters for being unfocused — as if there were only one thing wrong with the financial sector of the U.S. economy. The protests have provided a welcome response to Wall Street’s massive takeover of governance, and continued opposition to the status quo could produce opportunities to enact real reforms.

Don’t expect Wall Street to undertake such reforms voluntarily — some of the shady practices are too profitable. It’s going to take new laws, and key legislation is pending in Congress that could provide important remedies. But new legislation won’t pass without the strongest pressure. That’s where the protesters could make a difference, especially with some forceful activity in the districts where the obstructionists, like House Majority Leader Eric Cantor from Virginia, reside. Cantor said to the conservative Values Voter conference: “I, for one, am increasingly concerned about the growing mobs occupying Wall Street” but he backtracked a week later when cautioned by his political finger-in-the-wind testers about the growing popularity of the protests.

Among all the morally bankrupt practices on Wall Street, there’s one in particular that would be easy to abolish. Easy, that is, if we can translate some the energy of the protests into pressure on lawmakers. Pending in Congress are powerful bills such as Senator Levin’s S. 1346 (Stop Tax Haven Abuse Act of 2011) that would strike hard at tax dodgers. But a bill like that has no prayer of passage unless representatives like Cantor feel the pressure.

Instead of reform, Congress is in fact poised to give another “one-time only” tax holiday to companies that stashed profits in tax havens. Huge and wealthy U.S. corporations are actively seeking what is known as a “repatriation holiday” because they say it would create jobs. Such a holiday would allow them to bring home offshore profits at a reduced rate — a nice holiday for the well-to-do CEOs and shareholders, while the rest of us taxpayers suffer the consequences of losing $80 billion of revenue.

The Tax Justice Network and a number of small business associations are trying to right this wrong. They have sent a letter to Congress to dispute this repatriation holiday, noting: “Too many corporations have turned their tax departments into profit centers, using aggressive accounting manipulation to disguise U.S. profits as foreign profits.”

Bloomberg Business Week has pointed out prime examples: Google reduced its income taxes by about $3.1 billion over three years — first by shifting income to Ireland, then to the Netherlands, and finally to Bermuda. Another example is Forest Laboratories, a company that sells over 99% of its drugs in the U.S. but attributes the bulk of its profits to a law office in Bermuda.

Corporate abuses are all the more frustrating in light of how the Congressional “Supercommittee” is discussing the deficit. The Supercommittee is poised to recommend draconian cuts in important programs, but its Republican members are unwilling to address tax havens and tax dodgers that cost the U.S. Treasury an estimated $100 billion per year. The two biggest banks benefiting from taxpayer bailouts are Citigroup with 427 subsidiaries in tax havens and Bank of America with 115.

A recent report  by the Institute for Policy Studies (IPS) adds more grist to the protesters’ mill. The report notes that the salary of chief executives (CEOs) of the S&P 500 soared 27.8% in 2010 to $10.8 million, making the ratio between average CEO pay and average U.S. worker pay now 325 to 1. Back in the good old days of 2009, the ratio was much more equitable at “only” 263 to 1. The IPS study found that 25 of the top 100 CEOs received more pay than their companies paid in federal income tax. Furthermore, 20 of these 25 companies spent more on lobbying than they paid in federal income tax.

One more recent analysis,  published in the journal of the Association for Psychological Science, provides new support for those advocating major reforms in the tax code. The analysis found that those countries with the most progressive tax codes (those that are the exact opposite of a flat tax where everyone regardless of income pays the same rate) had the highest happiness ratings.

Americans want a sustainable and fair economy. But we won’t get one without fundamental financial reforms and a clamp-down on tax dodgers.  And we won’t get that without applying pressure to lawmakers and corporations.  Now that’s a good focus for a protest.