Building a better Black Friday

I've never ventured into the fray on a Black Friday but my inner sociologist is compelled to watch, in fascinated horror, as the annual fail of civil society unfolds in news reports. This seems to have been a better year than any in recent history. As far as I've seen, no one got trampled and no one died at the hands of deranged shoppers.

Which is not to say there weren't some inevitable incidents of Black Friday rage. Actually found the fact that a guy in Texas wasn't charged with a crime for pulling a gun on a line jumper because it wasn't against the law more disturbing than the fact the guy pulled a gun in a massive crowd of innocent bystanders to protect his right to save $50 on a fking flat screen teevee. But he didn't shoot it, so there's that.

More hopeful for the future of humanity was what turned out to be a successful Walmart protest. Despite corporate's attempts to minimize it, there were a thousand small but vigorous protests all over America. I saw a lot of local coverage in a random check this morning. Sure they didn't hurt Walmart's bottom line and few employees could afford to walk off the job. But the activists won the battle.

Their message got out. Big box retailers, as exemplified by Walmart, exploit their workers and foist their costs onto the taxpayers in order to increase their profits. This model of "job creation" isn't an avenue to an equitable society. It's a parasitic drain on our national economy.

People were talking about it. It reached widely into the social nets. Hoping the activists find more ways to keep this conversation going.Would be useful to discuss it at further length.

Obligatory Black Friday post

Walmart is always the focus of our Black Friday voyeurism though all the big box stores are just as guilty of exploiting their workers and ruining the formerly thriving Main Streets of our youth. But in the end, none of us escape the blame. The business model exists only because we support the big box/Walmart stores by shopping there.

There's a new twist to Black Friday this year because Walmart workers and workers rights activists are pushing back with a strike of sorts and various protests across the nation. Not sure it's going to have much effect. The organizers claim there's 1000 protests across 46 states but none look bigger than the crowds of shoppers to me.

The Chicago event looks the biggest that I've seen. But the photos are rolling in from Miami, Dearborn MI and various other locations. My personal favorite is this one in Kenosha:

[photo via]

Still the number of strikers/protesters can't compete with the bargain hunters, who are willing to do serious battle for an iPhone. It's frightening to realize they look more menacing than actual riots. I took this BuzzFeed quiz and only got 10 out of 15 right.

It's unlikely today's protests will hurt the corporation financially. It certainly won't hurt the Walmart heirs who together hold as much wealth as the collective wealth of 41% of lower income Americans. But to the extent that it generates some mainstream media attention on Walmart's business practices, it's a start. The majority of their employees work as many hours as they can get, yet they can't exist without food stamp and Medicaid assistance. Walmart stores don't build unless they get huge tax breaks and other government subsidies. If the protests raise even a little awareness on how we're all paying for their cheap pricing whether or not we shop there, it will be worth it.

Skew the polls

I see Lynn Sweet, the woman who single-handed derailed an important national conversation about health care reform and generated a weeks long media circus with her ill-timed, off the wall, out of context question about the Henry Gates arrest at a major presidential news conference, is flogging yesterday's buzz on Romney's alleged surge in the polls. Today's polling has already made those polls somewhat irrelevant.

Of course, regular readers know I put little stock in the polls at any time. They're useless as predictive tools. They only encourage horserace coverage over policy analysis and I'm coming to believe they really are skewed. Not for partisan purposes. Strictly for business reasons.

Polling used to be rare and done by only a few trusted organizations. Now they're a big business and lots of people making serious money on them. If they all asked the same questions, phrased neutrally, they would all get the same results and eventually one or two big firms would eliminate the smaller competitors. Delivering wildly conflicting results is one way to ensure that the horserace obsessed will slavishly follow every damn one of them. And a lot of websites making money on apps that aggregate the results.

I'm not suggesting there's any collusion, but in the brave new world of digital media, traffic stats equal money. I see no incentive to challenge the whole premise of daily polling and plenty of incentive to encourage it. Which only serves to engender hysteria among nervous partisan observers. Ultimately, it's the electorate, and indeed our system of government, that loses when the focus is on who's winning which demo because of the way they said it, instead of reporting on the real world ramifications of the policy proposals being put forward. Not I expect it to change in the foreseeable future.

Casino capitalism

The Mittster is madly trying to keep the focus of the Bain media mania on whether or not he really left management of the corporation in February 1999. But that's not the real issue. Bain business practices before 1999 are just as horrible as what happened after that date:

What’s clear from a review of the public record during his management of the private-equity firm Bain Capital from 1985 to 1999 is that Romney was fabulously successful in generating high returns for its investors. He did so, in large part, through heavy use of tax-deductible debt, usually to finance outsized dividends for the firm’s partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses.

Thanks to leverage, 10 of roughly 67 major deals by Bain Capital during Romney’s watch produced about 70 percent of the firm’s profits. Four of those 10 deals, as well as others, later wound up in bankruptcy.

Read the whole piece. It's not that long and the details are damning.

Back in the day I believe they called these leveraged buyouts, hostile takeovers. The formula is to put in a few million, take over management, load unsustainable debt through leveraged loans, pay themselves huge management fees from the loaned money and then get out with obscene returns on the initial investment. Taxpayers pick up the costs of shorted pension funds, empty factories and workers who lost their jobs in the ensuing bankruptcies.

Bloomberg calls it casino capitalism. If Bain didn't invent it, they certainly perfected it. That's Rmoney's real Bain problem. And likely why he won't release his tax returns. It's not that he did something illegal, it's just that it will expose the inherent greed and callousness of his business practices.

[More posts daily at the Detroit News.]

Find the cost of freedom

I've been in major burnout for the last couple of weeks. Still read the news every single day for hours though and do have some number of saved links to the few items that seemed worth talking about. This one struck me as significant. It appears our financial overlords are noticing climate change might be bad for business after all.

An example? “Global warming is relevant to the risk of catastrophic floods,” said Lehmann. “It is relevant to crop losses from drought, and we see scientific consensus as suggesting those concerns must be taken seriously as we evaluate federal subsidies for flood insurance and crop insurance.”

To which Anne Laurie adds:

[My emphases.] Shorter R Street: Look, denying reality was fine as long as our funders were paying us more than we’d lose when the digestive byproduct hit the fan. But we can’t afford to base insurance calculations on wishful thinking—we’re operating as libertarians, for pete’s sake!

In other words, the cost effectiveness of denialism is diminishing. That may be the only thing that could save this planet. Adding, Tom Toles forgive me for stealing this cartoon; it's just too perfect not to archive.

Which reminded me of this song. "Mother Earth will swallow you, Lay your body down." She always wins in the end.

[More posts daily at the Detroit News.]

Young bloodsucker

This ungrateful parasite pisses me off. Eduardo Saverin, the co-founder of Facebook, renounced his US citizenship last week. He's moving to Singapore.

Saverin, who owns a roughly four percent stake of Facebook, announced that he was expatriating last week, just in time to avoid paying a federal capital gains tax on the fortune heading his way when the social site files its IPO.

Forbes Magazine, calls him an American hero for skipping out on contributing his fair share to our public commons. Then they throw up the old John Galt threat:

Saverin’s departure is also a reminder to politicians that while they can obnoxiously decree what percentage of our income we’ll hand them in taxes, what they vote for won’t necessarily reflect reality. Indeed, as evidenced by Saverin’s renunciation, tax rates and collection of monies on those rates are two different things. Assuming nosebleed rates of taxation were a driver of Saverin’s decision, politicians will hopefully see that if too greedy about collecting the money of others, they’ll eventually collect nothing.

Greedy? Forbes has the gall to call the government greedy for expecting this kid to contribute a relative pittance towards upkeep of the infrastructure which allowed him to make his obscene fortune? It's no stretch to say Saverin would be nothing without US government support that allowed Facebook to flourish and further allowed Saverin to cash in when his partners tried to cut him out. Indeed, it's possible he wouldn't be alive if not for his move to the US in the first place.

This little leech was lucky. He hit it big and now skips out on the tab he rightfully owes in return. He's no hero. He's the poster boy for the unbridled greed that, even now, is shredding the social fabric of America. [graphic via]

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The Bain of Romney's existence

The super-rich are different from you and me. When they leave a job, they get platinum parachutes. Like, for instance, Willard. Though he left his vulture capitalist corporation some 13 years ago, thanks to a sweetheart exit agreement, Romney is still raking in millions from Bain Capital today. And though nobody is disclosing the details, it's a good bet Willard is paying the capital gains tax rate on that dough, not an ordinary income tax levy like us working class schmucks.

Those would be the special tax breaks Romney is willing to protect to the death while he exercises his plan to slash and burn social safety net programs under the aegis of "fiscal responsibility." The same sort of fiscal responsibility that sent KayBee Toys into bankruptcy after Bain collected their millions in fees for running it into the ground. All those thousands who lost their jobs there and other Bain "managed" companies just need to work a little harder. Sacrifice just a little more to keep those profits rolling in to the "producers" who sent them to the unemployment line.

I mean, Mitt needs that money. "He's running for office, for Pete's sake!"

[photo credit]

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Buffett says it again

This is being linked all over and Warren Buffet has said it before, but it really can't be repeated often enough. Shorter: Please tax me, bro.

Slightly longer: He never saw an investor in 60 years who refused to enter into a money making investment because they have to pay taxes on the profits. No, higher taxes aren't job killers. And the numbers here are interesting in the context the entire population of the US in 2009 was 305 million.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

I assume the over $10 million demo includes the fabulous 400 households who are worth billions.

And if you don't have time to read the whole short op-ed, these two bits were new:

"In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)"

"Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors."

Useful to remember, it's not really about the money for these guys. It's about the power and the thrill of playing the game. Willing to bet they wouldn't "go Galt" even the rate was raised back to Eisenhower levels. They love the game too much and obviously they can afford to pay to play. As Mr Buffett says, "My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice."

On the backs of the workers

The disturbing trend of forcing more productivity while cutting wages and benefits for the working class continues to grow. Obviously, with the weak economy the owners have the upper hand over hourly employees who are forced to choose between the cuts and having no job at all.

Interestingly, one rarely sees cuts reaching the executive offices. I would bet if we had a rule that the highest paid person in any organization couldn't draw compensation more than 30% higher than the lowest paid employee, management would find better ways to balance the books than on the backs of those who work the hardest to deliver what often turn out to be record profits.

Strange coincidences surround BP gusher in Gulf

This all strikes me as kind of odd. First, I see one of the workers on the oil rig made a will shortly before the explosion. He was worried the construction was being rushed.

"They were getting pressure from someplace higher up to do things that maybe weren't exactly the way Jason thought that they should be," she said. "It was a safety issue."

"Jason's father told us Jason was concerned that BP, which controlled the rig, kept wanting to stray from procedures to finish the well faster, which Jason considered unsafe," Myers reported.

The Transocean CEO sat in the Anderson kitchen and told Shelly how he would take care of her family. But even before the memorial service could take place, Transocean went to court to limit their overall damages.

Second, is the odd timing on this sale of BP stock.

The brokerage firm that’s faced the most scrutiny from regulators in the past year over the shorting of mortgage related securities seems to have had good timing when it came to something else: the stock of British oil giant BP.

According to regulatory filings, RawStory.com has found that Goldman Sachs sold 4,680,822 shares of BP in the first quarter of 2010.

And third, even more strange, is BP CEO Tony Hayward's cashout of his own stock.

Tony Hayward cashed in about a third of his holding in the company one month before a well on the Deepwater Horizon rig burst, causing an environmental disaster.

Mr Hayward, whose pay package is £4million a year, then paid off the mortgage on his family’s mansion in Kent, which is estimated to be valued at more than £1.2million.

I'm not implying or assuming anything, but I'd bet a good conspiracy buff could come up with an interesting theory about this chain of events.

[More posts daily at The Detroit News]

Scary Olympic mascots unveiled

The new Olympic mascots, Wenlock and Mandeville, made their debut yesterday.

Unbelievably, they are the result of endless focus groups and many months of study. Apparently they're supposed to so delight the kiddies that they will badger their parents to give money to the Olympic committee, or something like that. I'm thinking the kids will be crying to go home if they get a look at them, but what do I know? I'm old now. [Graphic via deadspin]

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Small business boom

Republicans and tea party types keep claiming Obama's policies are killing small businesses. A new study proves that to be yet another lie. In fact there have been more new business starts in 2009 than there has been in 14 years.

The only reason they aren't contributing more to job creation is the banksters are too busy holding on to their bucks to pay their own obscene bonuses and still aren't lending to small entrepreneurs. Wonder if the new financial reform bill is addressing that problem?

[More posts daily at The Detroit News]

Good for something government

Krugman is worth reading today on the lessons of the BP leak in the Gulf. This is the quote of the day:

Yet antigovernment ideology remains all too prevalent, despite the havoc it has wrought. In fact, it has been making a comeback with the rise of the Tea Party movement. If there’s any silver lining to the disaster in the gulf, it is that it may serve as a wake-up call, a reminder that we need politicians who believe in good government, because there are some jobs only the government can do.

I've been trying to drive this point home to my tea party readers at DetNews for a long time now. Bitching about government "theft" of "their money" fails to recognize the benefits of the spending. Not like there's no money wasted or that there aren't any stupid laws or regulations, but to condemn the whole entity on the basis of its flaws is kind of like saying you should ban all motorized transportation because they break down sometimes.

[More posts daily at The Detroit News]

CNN ratings keep spiraling down

Who could have predicted that if they try to grab the wingnut demo by hiring right wing hosts and pundits like Erik "Restate Strike Force" Erickson, CNN's ratings would drop? Besides everybody except the CNN execs, I mean. Sadly I remember when CNN was a real news station that you could depend on for factual reporting. Those days are long gone.

I haven't joined the CNN boycott movement that sprung up when they hired Erik the Red. I figure it's a lesson they have to learn on their own. Nobody can out-crazy Fox and Fox viewers aren't going to switch stations no matter how many wingnuts they hire. Meanwhile, the rational viewers are going to tune out in disgust at the pandering to that delusional crowd. News was so much better when the stations cared about good reporting instead of good ratings.

[More posts daily at The Detroit News]

What socialism isn't

I meant to post this sooner. Harold Meyerson's op-ed, even though it's in the WaPo is so good it's worth breaking my no link rule to post it. Meyerson is a self-proclaimed socialist and points out for all the fearmongering about socialism on one side, and selling out to corporatism on the other that our President really kind of falls in the middle. He says in part:

If Obama realizes his agenda, what emerges will be a more social, sustainable, competitive capitalism. His more intellectually honest and sentient conservative critics don't accuse him of Leninism but of making our form of capitalism more like Europe's. In fact, over the past quarter-century, Europe's capitalism became less regulated and more like ours, one reason Europe is tanking along with everyone else. [...]

Judging by the failures of the great Wall Street investment houses and the worldwide crisis of commercial banks; the collapse of East Asian, German and American exports; the death rattle of the U.S. auto industry; the plunge of stock markets everywhere; the sickening rise in global joblessness; and the growing shakiness of governments in fledgling democracies that opened themselves to the world market -- judging by all these, a more social capitalism is on the horizon because the deregulated capitalism of the past 30 years has blown itself up, taking much of the known world with it.

This strikes me as a correct assessment of Obama's approach. He's never going to take down the corporatocracy but neither do I see him as mindlessly supporting the status quo. I suspect that if he's successful, what emerges from his agenda will look very much like this.

[More posts daily at The Detroit News]

Fed Turns Profit on Bailout

Much as the bankster bailouts pissed me off, this is a small bit of good news:

Wall Street firms aren't the only banks that had a banner year. The Federal Reserve made record profits in 2009, as its unconventional efforts to prop up the economy created a windfall for the government.

The Fed will return about $45 billion to the U.S. Treasury for 2009, according to calculations by The Washington Post based on public documents. That reflects the highest earnings in the 96-year history of the central bank. The Fed, unlike most government agencies, funds itself from its own operations and returns its profits to the Treasury.

There are still many ways the Fed can lose money on this, so I'm reserving the champagne. On the other hand, this development cheers me up much more. Don't know what will come of it, maybe nothing, but it's a good first step in cracking down on irresponsible bankster compensation practices.

The FDIC, which collects fees from all banks to repay depositors in failed banks, is considering a plan to impose higher fees on banks with compensation practices that the agency regards as encouraging reckless pursuit of short-term profits without sufficient regard for the risk of long-term losses.

The agency's board voted Tuesday by a narrow 3 to 2 margin to seek public comment on a preliminary version of the proposal, the first step in a process likely to take at least a year.

I'd guess it's more likely to take many years to see fruition but you have to start somewhere. It's not much, but I'll take it.


[More posts daily at The Detroit News]

How can a corporation be a person when it has no heart?

So infuriating. These big box corporations are really just large scale, low class con men. They come into a community with big promises. But they won't build without big tax breaks. They drive out the small independent merchants and further erode the tax base. They structure their employee compensation so their workers need social services that the city can't afford. And then they do this:

"This week the New York Times reported a disheartening story about two of the largest retail chains. You see, instead of taking unsold items to sample sales or donating them to people in need, H&M and Wal-Mart have been throwing them out in giant trash bags. And in the case that someone may stumble on these bags and try to keep or re-sell the items, these companies have gone ahead and slashed up garments, cut off the sleeves of coats, and sliced holes in shoes so they are unwearable."

Southern Beale has the rant on this already, so I'll just add I assume trashing the goods is the most profitable business decision, but what's good for the corporation is bad for the people and the planet.

[More posts daily at The Detroit News]

Who's to blame for the housing bubble

Helicopter Ben says it wasn't the low interest rates:

Regulatory failure, not low interest rates, was responsible for the housing bubble and subsequent financial crisis of the last decade, Ben S. Bernanke, the Federal Reserve chairman, said in a speech on Sunday.

“Stronger regulation and supervision aimed at problems with underwriting practices and lenders’ risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates,” Mr. Bernanke said in remarks to the American Economic Association.

Barry Ritholtz says, not so fast Ben:

Inadequate regulations and “nonfeasance” in enforcing existing regs were, as Chairman Bernanke asserts, a major factor. But in the crisis timeline, the regulatory and supervisory failures came about AFTER the 1% Fed rates had set off a mad scramble for yields. Had rates stayed within historical norms, the demand for higher yielding products would not have existed — at least not nearly as massively as it did with 1% rates.

If the Fed Chief wants to avoid seeing this occur again, he needs to recognize that this was not a single factor event; rather, this was a complex event set off by numerous factors.

The sooner we learn that, the better a grasp we will have on what actually happened . . .

All I know for sure is they had better figure it out and do something real about it or it will surely happen again. And whether or not the interest rates were responsible, we clearly need much, much stronger regulatory controls on the industry. I'm fine with starting there.

[More posts daily at The Detroit News]

Big Business Rebuffs GOP

Sure the megacorps are the GOPers BFF when they're pushing tax breaks and blocking regulation of their industry but the Business Roundtable's loyalty only goes as far as their wallets.

GOP aides say the party’s relationship with the business association has deteriorated in recent weeks as the Roundtable continues to work with Democrats in the White House and on the Hill to advance healthcare reform.

GOP lawmakers have become increasingly critical of the Roundtable for failing to take more of an active role in standing up to Obama on healthcare reform. But several said they were disappointed and perplexed by the business group’s latest action: the release of a report that gives Obama valuable rhetorical ammunition against Republicans.

Well there's a reason for that. "We estimate that if enacted properly, the right legislative reforms could potentially reduce that trend line by more than $3,000 per employee, to $25,435," the report stated. Of course, much as I love seeing the GOP slapped down on their obstructionism, I admit I'm a bit leery of the BRT's sudden support. Experience tells us that what's good for Big Business is rarely good for the working class. Hoping that's not true this time.

[More posts daily at The Detroit News]

Spinning the numbers

Not much in the way of news today because of the elections. Mostly speculation about the outcomes and "what it all means" for the future of the parties. But there are few short items of interest.

I recently discovered my aeronautical hero, Richard Branson is on twitter. He posts this item today. "Calling all entrepreneurs - we need your video pitches for new PitchTV show." PitchTV is a closed broadcast that will be played on Branson's airliners. I checked out the first clips and the competition isn't that stiff. If you have a good idea that needs funding, it couldn't hurt to enter.

A new study by Pew Charitable Trusts Global Warming Campaign shows 77 percent of respondents favored taking concrete action on climate change, with 18 percent opposed, and 5 percent undecided. Most interesting quote:

For Republicans, part of resistance to climate-change legislation is the desire “not be seen as the deciding vote to help a major Obama initiative,” McInturff said. “I think that is the political dynamic.”

It appears the House GOP really does have an alternate health care reform plan of sorts. Most notable is what the plan doesn't do.

And another quotable post from Ezra on the rhetorical power in the time frame that gets chosen for a given policy.

The stimulus, for instance, was explained as a two-year cost, so it was $800 billion, rather than $400 billion a year. Health-care reform is being sold as a 10-year cost, so it's $900 billion, rather than $90 billion a year. The defense appropriation is explained in terms of single-year cost, so it's $680 billion, as opposed to the $10 trillion or so that it would cost if you took into account expected growth.

That can't be repeated enough when conservatives harp on the deficit. It's being driven by "defense spending" not by social programs. And Ezra tells us that $680 billion doesn't even include the cost of the occupations.

[graphic]

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