Looking at Scott Brown’s independence (or lack of it), academic Lawrence Lessig suggests what’s wrong with Congress, and how to fix it. This is worth a listen!
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Tags: corporatism
“[I]f Mark Hurd can grab $35 million before making his emergency exit from Hewlett-Packard, I’ve got no problem with JetBlue flight attendant Steven Slater grabbing a cold brewski before popping the disaster slide on Flight 1052 and kissing his airline career goodbye.” –Mike Cassidy, Mercury News editorial
Steven Slater, a JetBlue flight attendant, reportedly was smacked in the face by a passenger’s bag. One news report describes the incident thus:
Mr Slater told passengers to remain seated upon landing. But when a passenger started collecting his belongings from the overhead bin, disregarding the instructions, Mr Slater tried to stop him but was hit in the head by the baggage and became irate. When Mr Slater “asked for an apology”, the passenger “instead cursed at him.”
Slater then got on the PA, told off the passenger, thanked those passengers who had behaved politely over his 20-year career, said “I’m outta here,” grabbed a beer, pulled the emergency slide, and exited the aircraft.
The dramatic exit got him charged with reckless endangerment. It has also made him a folk hero. He has done what David Allen Coe wrote about, and Johnny Paycheck made famous: “Take this job and shove it.”
Brett Michael Dykes notes that some consider Slater “a man who lost control in a job where losing control is absolutely forbidden.”
Folk hero or psychopath? That depends on your perspective. Photos of Slater taken shortly after the incident show blood running from a cut on his head from the bag hitting him. That, at the very least, suggests extenuating circumstances: having been injured by the actions of a passenger in the act of violating airline instructions (a crime, by the way), who subsequently cursed at him.
Such dramatic exits are not usually the result of a single incident, especially in the case of someone who has been on the job for years. Rather, it is the result of a long buildup of stress. I know this from personal experience: on July 5, 1990, I threw my phone on the floor and walked of my corporate job of ten years. For this, I became a folk hero for a while. People spoke proudly of “pulling a D.J.”
I can’t say that I was (or am) particularly proud of my actions. But I can say that I was at the time working in an office whose staff had been cut in half with no reduction in work, and the incident occurred on a particularly high stress day, culminating with a conversation with a government inspector who was not only unhelpful, but rude. The result: I lost it, throwing a ten-year career out the window. Or, if you prefer, embarking on a career of self-employment that, after a couple of tough years, has served me well.
Judging by the popular response to Slater’s actions, there’s a lot of frustration and anger among employees of the corporate world. I’m not surprised. Employment is down, wages are down, and efficiency is up. That means fewer people are doing more work. There is no job security anymore– even IBM will lay you off the moment they don’t need you. And people wonder, “Why should I be loyal to them if they’re not loyal to me?”
It’s a valid question. Many corporations these days treat employees as a commodity. They know it would be a hardship for an employee to leave. And there are more applicants than positions, so workers are nothing but numbers to them.
Employees, too, know it would be a hardship to leave. There are few jobs available. We’re not trained in how to run our own businesses. So they won’t take that step until they absolutely can’t stand it anymore. Meanwhile, they dream of making a dramatic exit.
What happens when the dramatic exit finally comes? Slater will probably get a movie deal. Others turn violent and don;t have to worry about future employment. For myself, I had to learn how to make it on my own. Because with freedom comes responsibility. No one is going to bring in the business but me.
I won’t tell you it was easy– it wasn’t. But I will tell you it was rewarding, and for 20 years I haven’t had to go back to punching the clock. I keep my own hours. I choose my clients. I work from home.
The future of the economy is local. We need more small businesses. If you’re frustrated with your corporate job, start thinking about what you’d rather do. Then plan for it, learn about it, and put the pieces in place.
I stayed on the job until I smashed the phone for one simple reason: I felt trapped. I couldn’t find another job, and I didn’t believe I could run my own business. In hindsight, I was only trapped because I thought I was.
So what are you waiting for? Choose a business and start to plan for it. That way, you don’t have to stay on the job until you can’t stand it anymore. There are better ways to quit than making the six o’clock news.
(Rene S photo: The Utah capitol.)
Utah objects to federal interference in its affairs. Logic says if it wants the Fed out, it should stop taking federal money– and some conservatives want the state to forgo the teacher funds offered by Congress this week. Will Utah stand its ground and turn down the money? Deseret News quotes The Senate President, a Republican:
“Heavens, no!”
That is the ultimate lever by which the fed commands loyalty: no one turns down money. and the Fed is its source.
Tags: corporatism, Utah
This week’s Fed decision to try to stimulate the economy confirmed what many already suspected: economic conditions are not good. Official statistics show that the rate of growth on the economy os slowing, and analysts are concerned about a long-term. Japan-style meltdown.
Despite a 10% rise in the Dow, unemployment remains stubbornly high. Nevada (14.2%), Michigan (13.2%), and California (12.3%) together represent over 3 million unemployed Americans. Some 128 cities have unemployment rates over 10%, and 12 have rates over 15%– ten of these are in California.
In the short term, analysts expect this to translate into an advantage for the GOP in the fall elections. Despite the GOP getting us into this mess, the failure of the Dems to get us out has hurt incumbents. And a desire for change means “the other guy” wins.
WSJ‘s Peggy Noonan has a darker assessment:
[D]o our political leaders have any sense of what people are feeling deep down? They don’t act as if they do… In Washington they don’t seem to be looking around and thinking, Hmmm, this nation is in trouble, it needs help. They’re thinking something else… They don’t seem to know or have a sense of the mood of the country. And so they make their moves, manipulate this issue and that, and keep things at a high boil. And this at a time when people are already in about as much hot water as they can take.”
She warns that we’re in danger of “boiling over.” And she’s right.
Rural America is outraged that “their” administration betrayed their values in favor of corporations, then got defeated by a bunch of liberals. Urban America is outraged that after eight years of corporate conservatism, “their” administration gave them not change, but more of the same. In short, Washington has alienated almost everyone outside the beltway. Their biggest fear should be that we figure out it wasn’t rural conservatives or urban liberals who did this to us– it was our elected officials of both parties who looted the treasury while they had us fighting each other.
Americans Left and Right are disgusted with the state of our national government. States from Arizona to California are passing legislation that defies federal law. And even some of our largest states have become dysfunctional– California can’t even pass a budget.
If we are to survive as a nation, we need change– and not just some political slogan by a guy the corporations have already bought and paid for. We need to stop looking for a one-size-fits-all solution to impose on our rivals. The Federal government isn’t going to fix us.
Let’s recognize that we have regional differences. What works in Los Angeles won’t work in rural Arkansas or Utah– and may not work in San Francisco, either.
Let’s recognize that power is the problem: so long as we’re fighting over who has it, we can’t get anything done. The federal government is too big and too intrusive.
I’m not suggesting that we eliminate medicare, social security, or the EPA, but I am suggesting that the assumption that everything can be and should be regulated by, fixed by, and funded by our central government deserves another, more critical look. Are we willing to sacrifice our liberty for some temporary (and elusive) security? I hope not. Are we willing to alienate our neighbors by forcing our religious views on them, be they for or against abortion, school prayer, same-sex marriage, or recreational drug and alcohol use? I hope not. Have we become so selfish that we imagine success means we have to have everything our own way, no matter who it angers? I hope not.
As a nation, we are on the verge of losing our cohesiveness. We need to find our common ground again– and that common ground is that we believe in the self-evident rights to life, liberty, and the pursuit of happiness. We are Americans. We have always overcome adversity. And we have, since our inception, looked to our neighbors in our communities (not some distant power center) for our strength and support.
Tags: corporatism, self determination, tolerance, violence
In a reminder that our economy requires excess to survive, the Fed made moves today to discourage saving and encourage spending.
One of the effects of the recession has been a new financial responsibility by many American households, who have been saving more and debting less. But while that’s good for individuals, it’s bad for the economy, which requires spending and more spending to stay afloat. More than 2/3 of the U.S. GDP is consumer spending.
Think about that: if consumers stop spending to excess, then people lose their jobs. That means many Americans are employed in making, delivering, or selling stuff we don’t really need. We have fewer people employed in farming, manufacturing, and durable goods than ever before– thanks largely to efficiency and the global economy. When was the last time you bought a shoe or television made in USA?
We are told that this is good for us because the increased global opportunities for American businesses. But does our experience support that premise?
Globalization means that companies can manufacture wherever it is cheapest to do so, and sell wherever it is most profitable to do so. It is rarely cheaper to manufacture in the U.S. when an average Sri Lankan factory worker earns $3 per day. That means the pressure on American wages is always downward, as we compete with China, India, Sri Lanka, Vietnam, and a plethora of other third world nations.
Globalization may be good for corporations and their stockholders, but it isn’t good for American workers. The current recession, and the Feds moves today, should abundantly confirm that.
Tags: corporatism, recession
Dear Rep. Matheson,
I am disturbed that HR 4213 continues to make its way through Congress containing huge tax increases for small businesses like mine.
As written, the bill’s Section 413 would increase taxes for many small service businesses. For example, I am a bookkeeper and tax preparer practicing through a Subchapter S corporation with a net income of about $20,000 per year. At present, I take a reasonable salary, and any additional profits flow through to me as distributions or dividends that are not subject to self-employment tax. Currently, my wife and I do not make enough money to pay income tax, but after FICA taxes the business provides us with disposable income of $18,500. HR 4213 contains nothing that excludes low-income or unlicensed professions within the “excluded” industries. If it passes, our increased tax liability will leave us only $17,000 in disposable income. Could you live on that?
We are not alone. In-home nurses, paralegals, process servers, freelance computer programmers, data conversion specialists, personal trainers, struggling actors and scriptwriters, and potentially many other occupations will incur a massive tax increase as a result of this bill.
AICPA opposes Section 4213. They argue, rightly, that a business owner is entitled to a return on capital invested. They also point out that social security recipients who still work part-time through an S Corporation will lose benefits under the new bill.
I understand the need to raise revenue, but to hit small businesses with a major tax increase in the midst of a recession is just plain wrong– especially when the money will be used t give tax breaks to large corporations. Is this where the Democrats stand: for big business and against small business? Although I am not a member of either party, I voted for both you and Mr. Obama in the last election. Was I mistaken?
Please amend HR 4213 to remove the tax increase on small businesses. If revenue must be raised, please don’t do it on the backs of small business at a time when we can least afford it.
Thank you for your consideration.
Tags: corporatism, taxes
Senator Orrin Hatch responded to my letter about HR 4213, which would raise taxes on small businesses. His letter was on point, addressed the issues I raised, and was typed in a typewriter and signed in felt-tip pen. The typist’s information indicates that he wrote it (or dictated it) himself, rather than delegating it to an aide. This wasn’t a canned letter, and I appreciate him taking the time.
His letter amplified the points I made:
H.R. 4213 would change the treatment of S Corporation earnings by applying SECA taxes to all S corporation earnings for shareholders in in disqualified S corporations. A disqualified S corporation under the pending legislation includes any S corporation in the professional services industry. The professional services industry is defined to include “the fields of health, law, lobbying, engineering, architecture, accounting, actuyarial science, performing arts, consulting, athletics, investment advice or management, or brokerage services.”
He also gives an update of the bill’s status:
The latest House-passed version is currently being debated on the Senate floor.
The he gives his position:
I agree with you that this bill is not worthy of support. I believe the tax increases included in this bill are unnecessary and inappropriate.
Then he mentions that the bill includes “billions of dollars” in new spending, and adds,
In short, the bill would raise taxes but would not cut spending– continuing more of the “tax and spend” mentality that we have been seeing far too often.
That’s code for “I oppose this because it’s a Democratic proposal.” So much for representing his constituents and judging legislation on its merits.
Meanwhile, Rep. Jim Matheson (D-UT) has not yet responded to my letter. Matheson’s website calls small business “critical to our economic strength, to building America’s future and to helping the U.S. compete in today’s global marketplace.” Yet he voted for HR 4213.
Do any of our representatives actually believe that raising taxes on small businesses in the midst of a recession is good for the nation? Are they continuing on their knee-jerk positions, one party opposing whatever the other may propose? Or are they intentionally shifting wealth and power from individuals to corporations? There are so many recent instances of pro-corporate policy that it’s difficult for me to believe otherwise.
Tags: corporatism, taxes
From an email I sent out today:
Dear Clients and Associates,
I have never before asked my professional contacts to take political action. I am not a member of either political party. However, there is a bill pending in Congress that would have devastating effects on small businesses like yours and mine.
Congress is about to raise our taxes. A little-noticed provision in a popular bill may double the amount of tax we have to pay, starting with the 2011 tax year. I’m writing to ask you to email, write, or call your Senators and ask them to drop this tax increase, which would hurt small businesses at a time we cannot afford it.
I’m writing to you because you have a business that would be affected by the bill, or have at some point expressed an interest in setting up a business that would be affected.
The bill, HR 4213, extends unemployment benefits as well as several popular tax breaks. However, its Section 413 raises taxes on Subchapter S corporations in certain industries. The taxes raised by this provision will be used to provide tax credits for large corporations.
Currently, owners of Subchapter S corporations are required to pay themselves a reasonable salary, and any extra profits can be taken as distributions, also called dividends. This is consistent with the premise that there is a risk to starting a business, and that risk ought to be compensated with a dividend. The advantage is that salary is subject to income tax plus 15.3% FICA tax, while distributions are subject only to income tax.
HR 4213 would impose 15.3% FICA tax on distributions from S corporations in certain industries, potentially doubling the amount of tax due.
HR 4213 has passed the House of Representatives, and is being considered in the Senate. This is the final step in the reconciliation process. Despite GOP opposition, it is likely to pass.
Democratic supporters of the tax increase claim they are simply closing a loophole being abused by rich doctors and lawyers. But the bill affects several industries, including health, law, accounting, performing arts, consulting, and athletics. The bill defines those industries in such a way that the tax increase will apply to bookkeepers as well as accountants, nurses as well as doctors, paralegals and process servers as well as attorneys. If the IRS interprets the legislation broadly, it could also affect computer programmers, new age practitioners, personal trainers, and many other small service businesses. These are not wealthy tax cheats, they are small businesses trying to make a living in an environment that increasingly favors large corporations.
AICPA wrote an open letter to the drafters of the bill, opposing Section 413. The letter said in part:
“The AICPA believes that the change in the law proposed by the House represents a major change in policy that should have been the subject of public hearings. This proposal not only threatens to result in a significant increase in taxes and complexity for S corporations and their shareholders, and for certain limited partners, but it continues the definitional blurring between capital and labor begun in the general partnership arena by further expanding laws that were clearly established to tax only labor.”
The full letter can be found here.
Please email, write, or call your Senator and ask him or her to remove Section 413 from HR 4213. Here’s a link to the letter I wrote. And here’s a site that will locate your Senators.
My Senator seemed unaware of the effect this provision would have on small businesses. If we all contact our Senators, perhaps we can change a policy that would make our lives more difficult.
Thank you for your time. Please feel free to forward this message to anyone you think may be interested.
Tags: corporatism, taxes
On CommonDreams.org, Norman Solomon argues that “When the leaders lead, the people have sorrow.“ He alludes briefly to the truism that power corrupts. Then he argues that if we would just vote better (in this case for progressive candidates) all would be fine.
This is the illusion I’ve been fed all my life: if we just vote for the right candidates, our country will be led in the right direction. We must choose a man (or woman) of the people, someone with the values we hold, someone who will wield power responsibly, for the good of the nation.
This is the lie of liberalism: government, if it is just managed well (i.e. by the right progressive people), can fix all our problems. It is the fairy tale of socialism: if We the People own the means of production (through our governmental proxies), all will be fairer. And it is the fabrication of conservatism: yes, government must be more powerful to ensure our security, but it would never violate the rights of the innocent.
I’ve seen enough now to recognize this for the fiction it is. In our current system, no one gets elected to high office without selling their influence to the highest bidder– and that’s never We the People.
George W. Bush funneled trillions of dollars into corporate coffers through sweetheart defense contracts, bailouts, and tax cuts. Barack Obama has funneled trillions of dollars into corporate coffers through bailouts, rigged legislation, and tax credits. Both supported the Patriot Act, warrantless wiretapping, REAL-ID, and NAIS. There’s regulation on the table (again) to inhibit small farmers in favor of industrial farms, and more that would increase taxes on small businesses in order to fund yet more tax credits for large corporations.
If power corrupts, then it doesn’t matter who we send to Washington. The problem is not who we elect to wield power, but that power has become too concentrated. The answer is to devolve that power to lower levels. If there is no concentration of power, there is nothing to abuse.
If power is to be returned to the People, it will not be because of who we send to Washington. A man or woman with power is unlikely to give it up willingly, no matter his or her principles (if any) while running for office. In Sri Lanka, presidential candidate Chandrika Bandaranaike promised to abolish the executive presidency– but once she held that office, she decided it wasn’t so bad.
As Frederick Douglass observed,
“Power concedes nothing without a demand. It never did and it never will.”
If we want our power back, we will have to take it.
I am not advocating violence against the State. Rather, I am advocating that we treat the State as we wish it to be. Do we wish the federal government to not interfere with our privacy? Ignore its intrusions. Less regulation? Ignore the regulatory agencies and do what we know is right. Object to its support of corporations? Don’t patronize corporations.
In short, make the Fed irrelevant.
Some of these actions call for civil disobedience. To do so is both a right and an American tradition. It implies risk. It implies change, which may or may not be what we expect. (The promise of a utopian democracy is fiction whether purveyed by either Left ir Right. People will disagree, conflict will remain, and some folks will continue to be selfish.)
There is little point to sitting around the TV whining about the state of our nation. It is time for us to either take action, or deliver ourselves willingly to the increasing feudalism of our times.
Tags: corporatism, self determination
The Huffington Post reports that Rhode Island is considering a call for a Constitutional Convention to consider the question of corporate intervention in politics. As the OpEd says,
[I]t is impossible for any fair minded soul, whether Democratic or Republican, to look at the current state of the American democracy and not believe that something has gone profoundly wrong. Our framers intended a Congress “dependent upon the people alone.” We have evolved a Congress dependent upon campaign funders.
Article V of the Constitution providesthat if 2/3 of the states request a convention for the purpose of proposing amendments to the Constitution, Congress must convene one.
There have been many requests to Congress for a Convention, and two general schools of thought regarding their validity. One, which appears to be favored by Congress and the Supreme Court, suggests that requests for a Convention must specify the topic of the amendment to be considered, and there must be requests from 2/3 of the States for an amendment on the same topic. In this case, there have not been enough requests on any particular subject matter– the most numerous being 30 requests for a balanced budget amendment, which is still four states short of the necessary 2/3.
A second view is that only unrestricted requests are valid. In this case, there have been 40 such requests, and Congress is in violation of its duty by not calling a Convention.
The Constitution itself does not specify whether requests are to be restricted or unrestricted. By the letter of the law, then, a Constitutional Convention would seem to be in order. However, no one in Washington wants to upset any apple carts, and the States have so far been too uncoordinated to force the issue.
Perhaps the rising anger, Left and Right, will spark some level of cooperation to address what most agree is the central problem of our democracy: money talks. Those entities that have the most speak the loudest, while the vast majority of us can barely whisper.
Tags: corporatism, self determination
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