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 Investigative, detailed journalism January 6, 2009
I've read numerous authors to learn what ails our system: Lou Dobbs, Dick Morris, Susan Eisenreich, David Cay Johnston's "Perfectly Legal," and nothing draws it all together as factually and dispassionately as "Free Lunch." It's the perfect primer for how our system really works. Though copyrighted in 2007, it provided a premonition of the '08 financial collapse and present turmoil. It explains why the cheats don't get caught, the pressures that come to bear, how our legal/political/economic system has been hijacked, and why the wealthy always seem to get more. It was surprisingly non-partisan. His final chapter--on what we can do in response--is remarkably tame for such a provocative book. One criticism: lack of footnotes for re-verification of claims, examples, and quotes. It'd be nice to read a rebuttal, and find out what a supporter of our present system would have to say. In some cases, Johnston has been able to head off opposing arguments. This is not a partisan book or angry rant but a straightforward analysis of why things aren't right.
Alan Binder states, in the next decade or two, as many as 40 million US job will be at risk of moving overseas November 29, 2008
1. The stock market has replaced the local bank as the place where people keep their savings.
2. In 2007, seventy percent of Americans own their homes with a mortgage payment with a potential collective worth $20 trillion.
3. In 2005, the 300,000 individuals comprise the top 1 percent had nearly as much income as the 150 million lower income individuals.
4. Bandon Dunes golf course, historically, benefited from subsidized air travel from the Department of Transportation. Bandon Dunes is the Hampton, of the West Coast.
5. Where ever, the world has civilized rules based on some moral or practical principle one can see prosperity and freedom, though not always together.
6. For more than a quarter century the government has been adopting rules that tilt the playing field in favor of the rich, the powerful, and the politically connected.
7. In 2001, Steve Jobs was alleged too have received 7.5 million share options at a board of directors meeting that never took place. "7.5 million-option grant to him in 2001 had been backdated by two months--and that company records were falsified to create the impression that a special board meeting had taken place to approve the grant when no such meeting had ever actually occurred." The back dating is illegal and implies falsified documentation and causing government governance to raise red flags. Backdating is picking a date in the past, when a stock's value was lower, and assign an exercise price of the option. Backdating affects the reportable amounts in terms of earnings to the investors.
8. Wal-mart and target and a host of lesser-known retailers receive city taxpayer subsidies when they open new stores
9. Buffett's firm has a two-thirds-billion-dollar, interest-free loan from our government
10. Shanghai is expected to have 5,000 skyscrappers twice the number built in New York city. China is a magnetic pull. Magnequench, a pioneer in Neodymium iron boron magnets. "In 1995, Beijing San Huan New Material High-Tech Inc. and China National Non-Ferrous Metals Import & Export Corporation partnered with investment firm the Sextant Group Inc. to acquire Magnequench." The result is that China now possesses the largest production capacity for Neodymium iron Boron powder. The technology is being used in military smart weapons and brushless magnetic motors used by Toyota, Honda, and Nissan. Complaints on the sale of Magnequench were made in the US because of the military application for the magnets.
11. 85 percent of the planet's known stores of neodymium are in China.
12. Chinese Corporate income tax trends towards taxes owed to US will going down. The first reason is that American business profits earned overseas are not taxed so long as the money stays offshore. Second, the US allows American companies to reduce taxes on profits by the amount they pay to foreign governments, a dollar for dollar credit. US tax credit originated with the oil industry. Corporate income taxes paid in China are often used to benefit the company that pays. Taxes may finance a new road or railroad spur or police presence and other services the company requires.
13. A company with operations in the US and another country can borrow money at home, deduct the interest and lower it taxes.
14. Company that moves its factory to China will not have worry about unions and union rules. China ignores rules it finds inconvenient. Pirated movies and music are openly sold on the streets of China; forced labor abounds; government controlled unions are allowed; toxins pour into Chinese rivers; toxic ingredients have been found in food, toys, and toothpaste imported from China. In 2006, the trade balance with China reached $232 billion.
15. In 2006, the US imported $136 billion more from Canada and Mexico than we sold to them and imported a third of our oil. China, Japan, Canada, and Mexico accounted for 60 percent of our worldwide trade deficit of $764 billion.
16. Moving a 1,000 jobs to China adds $72 million to the company's annual profits. A company can not raise prices enough for the same volume of production to increase profits by $72 million if it stays in America.
17. Alan Binder states, in the next decade or two, as many as 40 million US job will be at risk of moving overseas. In 2007, there were 147 million civilian jobs with fewer than 7 million unemployed and another 4 million, no longer drawing unemployment. The loss of 40 million jobs would be an economic catastrophe. Binder says, "the balance is shifting against us." Services in medical, legal, information, and accounting are moving overseas. X-Rays being read offshore by technicians, remote robot surgeries, and remote tele operation. Binder suggest spending more money on job retraining, make health care available to all, and improving protection of pensions. In a future where tens of millions of job migrate offshore, who will pay for the economic band-aids?
18. Warren Buffet calculates, America is selling close to 2 percent of its wealth each year to sustain our appetite for imported oil and cheap manufactured goods.
19. Mattera has discovered Wal-Mart subsidies total $1 billion. Subsidies give Wal-Mart against other competitive retailers that do not receive a subsidy and not politically connected. In the past decade, Wal-Mart has collect $52 billion in sales tax from customers and paid a small fee for processing the money. Over the last decade, Wal-Mart paid $4 billion in local property taxes, 25 cents for every 100 dollars revenue. Walmarts revenue for ten years totaled more than $1.6 trillion. The company paid $192 million in income and unemployment taxes to local governments. Income and jobless taxes amount to a penny for each $100 revenue. In 2006, Wal-Mart tool in $348 billion in sales.
Find Out About Corporate Welfare for the Rich November 28, 2008
Get this book: it will make you wonder why the middle class receives so little individual welfare with no apologies to the rich.
FREE LUNCH November 23, 2008
Free Lunch is full of documentation and examples that show how the very wealthiest politicians, corporations,and other individuals have milked US tax payers by using and abusing US Law, using subsidies for great profit. Sam Walton, George W., Enron, and many others are cited for a great fleecing of America. Through intimidation and finagling, The wealthiest have enriched themselves.
I ask: How long will American taxpayers put of with this abuse and misuse of our tax dollars? Does anyone in America even have a conscience? Who will stand up for what is right? Who will demand what is right and just?
Like many jobless people: I don't want a bailout, I just need work. And even if I did get a bailout, I wouldn't party with it.
What is wrong with people? How can they be so very selfish and ruin America with their greed and lack of principles?
The wealthiest don't get it. How much do they even contribute to charities to help others? How do they sleep at night, knowing that their greed has contributed to the economic downturn?
Perfectly Legal November 21, 2008
This an excellent book. Some of the things that it brought out I suspected ,but for the most part I could not have amagined that the tax system was so badly rigged. This is a must read for anyone who want to understand why there is such a great gap in the wealth of the haves and the have nots.
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