Who stood up for you, who stood up for the corporations

There has been a lot written about the Monsanto Protection Act, that was slipped into Farm Bill in a house committee before passage.  If you don't know much about it, you can read about it here, here, and here.  Opposition has appeared from both the left and the right on this one, but that has not stopped Republicans from lining up to support it.

When Sen. Jeff Merkley (D-Ore.) introduced an amendment to strip that from the bill in the Senate, it was blocked by Ayotte (R-NH), Burr (R-NC), Coburn (R-OK), Crapo (R-ID), Cruz (R-TX), Enzi (R-WY), Fischer (R-NE), Graham (R-SC), Grassley (R-IA), Heller (R-NV), Inhofe (R-OK), Johnson (R-WI), Kirk (R-IL), Lee (R-UT), McCain (R-AZ), Paul (R-KY), Portman (R-OH), Risch (R-ID), Roberts (R-KS), Rubio (R-FL), Scott (R-SC), Tester (D-MT), Toomey (R-PA), Vitter (R-LA), Flake (R-AZ),and Moran (R-KS).  Yes, there was one Democrat on the list too.

There was another attempt to amend the bill, one that would have allowed individual states to have GMO labeling requirements.  This amendment (refer to SEC. 12213 on this page) would protect states from being sued for enacting DMO labeling laws.  The amendment was resoundingly defeated, and the opposition included a number of surprising names.

Voting against were Alexander (R-TN), Ayotte (R-NH), Baldwin (D-WI), Barrasso (R-WY), Baucus (D-MT), Blunt (R-MO), Boozman (R-AR), Brown (D-OH), Burr (R-NC), Carper (D-DE), Casey (D-PA), Chambliss (R-GA), Coats (R-IN), Coburn (R-OK), Cochran (R-MS), Collins (R-ME), Coons (D-DE), Corker (R-TN), Cornyn (R-TX), Cowan (D-MA), Crapo (R-ID), Cruz (R-TX), Donnelly (D-IN), Durbin (D-IL), Enzi (R-WY), Fischer (R-NE), Franken (D-MN), Gillibrand (D-NY), Graham (R-SC), Grassley (R-IA), Hagan (D-NC), Harkin (D-IA), Hatch (R-UT), Heitkamp (D-ND), Heller (R-NV), Hoeven (R-ND), Inhofe (R-OK), Isakson (R-GA), Johanns (R-NE), Johnson (D-SD), Johnson (R-WI), Kaine (D-VA), Kirk (R-IL), Klobuchar (D-MN), Landrieu (D-LA), Lee (R-UT), Levin (D-MI), McCain (R-AZ), McCaskill (D-MO), McConnell (R-KY), Menendez (D-NJ), Moran (R-KS), Nelson (D-FL), Paul (R-KY), Portman (R-OH), Pryor (D-AR), Risch (R-ID), Roberts (R-KS), Rubio (R-FL), Scott (R-SC), Sessions (R-AL), Shaheen (D-NH), Shelby (R-AL), Stabenow (D-MI), Thune (R-SD), Toomey (R-PA), Udall (D-CO), Vitter (R-LA), Warner (D-VA), Warren (D-MA), Wicker (R-MS).

Now the bill has not yet cleared the Senate, it will be taken up again after the June recess.  You know who they are now, time to hold their feet to the fire.
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Try this and watch Corporate America run away from Citizens United

OK, I know Americans have short attention spans so here is a brief recap.

A little after 6 in the evening, on September 9th, 2010, there was an explosion in the California city of San Bruno.  A gas line exploded, killing 8 people and destroying 38 homes.  The owner of the was pipeline was Pacific Gas and Electric.  It was later revealed that 100 million dollars that was supposed to be used for safety operations was diverted to executive pay, including bonuses.

The California Public Utilities Commission is considering levying a 2.25 billion dollar fine against Pacific Gas and Electric.  That is exactly the wrong thing to do.

They correct thing to do?  Charge Pacific Gas and Electric with negligent homicide, or even first degree murder.

The Citizen's United decision says corporations are people.  If people commit murder, they go to jail, even face the death penalty.  Here is the perfect case to put a lie to that.

The San Bruno district attorney should be filing murder changers against Pacific Gas and Electric.  It was their job to ensure the safety of the pipeline, they had the money to do it, they used the money for something else.

When people are killed in a bank robbery, it is first degree murder.  It does not matter if the robbers planned to kill someone.  They walked into a bank with guns prepared to kill someone.

This is the same.  The corporation stole money, and in the process, and as a consequence, people died.  If a corporation is a person then that corporation must face the same penalties as any other person would face.

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A power play by AAA

Do you have AAA insurance?  I do, and for the most part I have loved them as an insurer.  If you have AAA insurance, and you are in an accident, you will find they are a strong advocate on your behalf.  So I was surprised when I read the proxy statement they mailed to me this week.

I am referring to the Northern California, Nevada, and Utah region, which is the area I live, as AAA is not an homogenous national organization. The proxy asked (as they all do) that I allow management to vote on my behalf.  Then I read what they were proposing.

The insurance arm of AAA is run by a board referred to as the Insurance Board.  The California Insurance Code requires that rules governing selection of that board be determined by the subscribers.  So management wants the members of that board to be voted in, by the members of the Insurance Board.  How's that for corporate governance in the interests of the stakeholders?

What you would have is a closed loop system, where management determines who management will be.  Do you see anything wrong with this picture?  Corporate America is filled with corporations whose primary loyalty is to entrenched management at the expense of the shareholders.  I liked to think that AAA was better than that, but I guess I need to rethink my position.

So, if you are insured by AAA and the Northern California, Nevada and Utah region, don't sign the proxy.  And if you can, go to the meeting (August 7th, 3055 Oak Road, Walnut Creek, CA at 11:00 AM) and vote against it.  And raise a little bit of Hell while you're at it.

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What does a company owe to shareholders?

Who remembers the novel Catch 22?  Remember when M&M Enterprises bombed the base?  It was OK because "everyone has a share".  This is the situation we find ourselves in today.


You work for Behemoth Industry Inc, a Fortune 500 company, and you are also a shareholder.  Every paycheck a small amount of money is deducted for the Employee Stock Purchase program.  You also have automatic dividend reinvestment, so every quarter you are watching the number of shares you own grow, helping to build your retirement nest egg.


One Monday morning you come to work and find there is a chain on the front gate, the plant is closed.  You are now unemployed.  A company press release announces that the quarterly dividend will increase one half cent because of their cost saving measures of shipping much of their manufacturing offshore.


You are one of thousands out of work, and the ripple effect hits your town, your county, your state.  Many of those who's lives have been damaged are stockholders also, as they own shares via their 401K's, in mutual funds, and direct investments in their IRA accounts.  All these people get one half cent per share extra per quarter, in exchange for being thrown into poverty.


I am not saying I have an answer here, only that we are a shareholder society.  Shouldn't we as shareholders be getting better treatment?  Is that one half cent per share all that they owe us for our investment?


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When they talk about high US Taxes

The right is always talking about high US corporate tax rates.  You could compare us to places that have legalized slavery and always make us look uncompetitive.  Instead lets compare us to a successful industrialized country, one that is essentially eating our lunch in the marketplace.  Let's look at Germany.

First let's start with the VAT (Value Added Tax).  That is essentially a sales tax, that is tacked on to each transactions at each level.  The rate is generally 19% but for certain foods, books, magazines, flowers, some transportation, it is 7%.  And some things are exempt.  Doctors do not charge VAT tax, nor do public theaters, museums.  This is not a complete list of things that have a reduced or waived VAT tax, but you get the idea.

The tax is charged by the seller. The manufacturer pays it on the raw materials they buy.  The distributor pays it on the finished goods they buy, the consumer pays it.

Let's take the case of the manufacturer.  On a quarterly basis they will pay the tax that they charged to their distributors, minus the tax they paid buying raw materials.

Then there is the corporate tax rate.  According to taxrates.cc the combined (federal and local) tax rate for corporations is 33.3%.  This is actually a rough summary of three different taxes applied to corporate income.  And unlike US corporations, German corporations are taxed on their world wide income, minus of course any taxes paid on income in other countries.  So they cannot hide their income in low tax countries.

Now let's talk about the other two facets of this.  How are German companies doing under this burden, and what do the German people get for their money?

Well, you know that in manufacturing and exports, they are beating us in the marketplace and have been for years.  So paying employees a decent wage, a mandatory 25 vacation days, and taxes on their world wide income does not seem to have stoped them from doing well.  And look at CEO salaries, well in 2009 Deutches Bank CEO Josef Ackermann had a total compensation 9.55 million euros.  He was the higest paid CEO in Germany that year.  It does not compare to some of the packages US CEOs were getting in that same year, but he is still getting rich.

And what do the people of Germany get for these taxes?  How about universal health care, pensions, and tax-funded child, housing, and educational allowances?

So our taxe rates are not, and never have been what is killing our manufacturing, destroying our middle class.  Rather it is the blind faith that if you only appease the oligarchy that owns this country enough, that they will eventually share a few crums with the rest of us. 

You want to see jobs moving back to this country?  Stop giving businesses a free ride to hide their profits overseas forever. When you give them economic incentives to send your job overseas, what do you expect?

If corporations are just like people

Over the years there have been supreme court decisions that have looked at corporations as having similar rights (but somehow, none of the responsibilities) of a person.  Well, perhaps we should take that to the next step.  If they are a person, perhaps they should be treated more like a person.

Interest deductions?  We get to deduct our home mortgages, so I guess it is fair that you can deduct the interest on your factories and office buildings.  And if you would like to take out a line of credit on those, well that would be deductible too.  But interest on bonds, and other sources of capital?  Well when we whip out the credit card to make purchases, or even the loan we take out to but a new car, now of that is written off our taxes, so why should it be written off yours?

Now if I own a small business, even as a sole proprietorship, I can write off the salaries and benefits and taxes I pay to and on behalf of my employees, so those would be remain legitimate deductions.  How about dividends?  Well, using the sole proprietorship model (and admittedly bending it some), any money I take out of the company is income to me, and I pay taxes, social security, all that stuff.  So dividends are just income to the owner, and the owners should pay the same taxes as any other business owner pays on income from their business.

But wouldn't that defeat the whole purpose of the corporation?  Bullshit.  The purpose of a corporation is to permit the formation of capital while limiting the liability of the investors to the money they put in.  Put another way, if you open a bar, and that bar runs up a pile of debts, well, you have run up a pile of debts.  Your creditors can go after your bank account, your house, your car, anything you own.  If a corporation runs up a pile of debts, the creditors can look only to the assets of that corporation.

The morons on the right are always talking about running the government the way you run your family budget, as though that made any sense at all.  So let's test out their theory.  We will require that corporations be run that way, and if it works, well then maybe we will consider running the government that way.