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Obama's Fatal Corporate Addiction
If it had been revealed that Jeffrey Immelt once hired an undocumented nanny, or defaulted on his mortgage, he would be forced to resign as head of President Barack Obama’s “Council on Jobs and Competitiveness.” But the fact that General Electric, where Immelt is CEO, didn’t pay taxes on its $14.5 billion profit last year—and indeed is asking for a $3.2 billion tax rebate—has not produced a word of criticism from the president, who in January praised Immelt as a business leader who “understands what it takes for America to compete in the global economy.”
AP Photo/J. Scott Applewhite President Barack Obama applauds GE CEO Jeffrey Immelt, right, before speaking to workers at the GE plant in Schenectady, NY on Jan. 21.
What it takes, evidently, is shifting profit and jobs abroad: Only one out of three GE workers is now based in the U.S., and almost two-thirds of the company’s profit is sheltered in its foreign operations. Thanks to changes in the tax law engineered when another avowedly pro-business Democrat, Bill Clinton, was president, U.S. multinational financial companies can avoid taxes on their international scams. And financial scams are what GE excelled in for decades, when GE Capital, its financial unit, which specialized in credit card, consumer loan and housing mortgage debt, accounted for most of GE’s profits.
That’s right, GE, along with General Motors with its toxic GMAC financial unit, came to look more like an investment bank than a traditional industrial manufacturing giant that once propelled this economy and ultimately it ran into the same sort of difficulties as the Wall Street hustlers. As The New York Times’ David Kocieniewski, who broke the GE profit story, put it: “Because its lending division, GE Capital, has provided more than half of the company’s profit in some recent years, many Wall Street analysts view G.E. not as a manufacturer but as an unregulated lender that also makes dishwashers and M.R.I. machines.”
Maximizing corporate profits at the taxpayer’s expense is what top CEOs are good at, and after all it was Immelt who presided over GE when it got so heavily into the subprime mortgage business that it needed a government bailout to avoid bankruptcy. This was before Obama made him a trusted adviser.
Back at the end of 2008, Bloomberg reported that the U.S. government had agreed to insure an additional $139 billion in GE Capital’s debt holdings, the second such intervention within a month, adding, “The company’s exposure to the deepest financial crisis since the 1930s has cut its market value by more than half this year.” A Washington Post exposé titled “How a Loophole Benefits GE in Bank Rescue” documented the power of Immelt’s lobbying operation in Washington. GE was not initially deemed eligible for the debt guarantee program offered to failing banks, “but regulators soon loosened the eligibility requirements, in part because of behind-the scenes appeals from GE.” And it worked; as the Post reported, “The government’s actions have been `powerful and helpful’ to the company, GE chief executive Jeffrey Immelt acknowledged.” For the next two years, GE would still report enormous profits without paying taxes, adding insult to the injury that financial shenanigans had inflicted on ordinary taxpayers who bailed the company out.
On Feb. 6, 2009, Immelt sent a contrite annual letter to GE shareholders, admitting, “Our Company’s reputation was tarnished because we weren’t the ‘safe and reliable’ growth company that is our aspiration.” While conceding his own culpability in GE’s downturn, Immelt predicted a rosy future: “I accept responsibility for this. But, I think the environment presents an opportunity of a lifetime.”
Not, obviously, for the 50 million Americans who have either lost their homes or are deeply underwater in a housing market that is still in steep decline thanks to the lending practices of companies like GE Capital. Nope, the good times are in the offing only for corporations that know how to make the U.S. government a partner in their scams. As Immelt stated blatantly: “The global economy, and capitalism, will be `reset’ in several important ways. The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.”
That’s the essential blueprint for Obama’s restructuring of the economy, as the president put it in selecting Immelt to replace Paul Volcker as head of his outside team of economic advisers. Volcker had become increasingly critical of the corporate high rollers. Obama, although noting the suffering of ordinary Americans, clearly believes that such populism is now beside the point. As the president put it in announcing Immelt’s appointment on Jan. 20, 2011: “The past two years was about moving our economy back from the brink. Our job now is putting our economy into overdrive.”
But overdrive, with CEOs like Immelt shifting the gears, is what brought us so close to the brink. Once again Obama seems fatally addicted to the notion that the heavy hitters who got us into this mess are the very folks to be trusted to get us out of it. What he seems incapable of grasping is that while they are personally very good at avoiding the precipice, the rest of us are hardly passengers in their limos.
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159 Comments so far
Show AllFar be it for me to defend giant corporations, but I recently caught an interview on TV with Cisco boss John Chambers. According to him, US corporate tax rate is 35 percent, whereas in many European countries it is far below that. If I recall correctly, Chambers said US companies have something like $1.2 trillion in overseas profits, which, of course, are not being taxed under US law since these profits were made from overseas holdings.
Could someone shed some light on this--namely, the "high" US tax rate which actually encourages (according to the corporations, to shift operations overseas.
The 35 percent tax rate in the U.S. for corporations is an amusing scam. If you go to any of the right-wing sites such as Cato Institute, American Enterprise Institute, Chamber of Commerce, etc. or listen to the trained proponents of their ideological blather, you will hear much gnashing of teeth over this onerous yoke dragging down our business class into the muck of veritable socialism.
The trick is that almost none of them pay anything like that rate--and the worst offenders such as GE -- have negative tax rates meaning U.S. tax payers support them!
The U.S. tax system, devised by the business class for the business class, provides so many loopholes and incentives to avoid domestic taxation that only the most hapless pay anything close to the nominal rate.
http://www.reclaimdemocracy.org/corporate_welfare/real_tax_rates_plummet.php
However, whenever an apologist for the corporate class speaks publicly -- they cite this shocking burden shackling them. Weep for the poor Promethean business leaders of America.
It's the best of both worlds!
First off, don't forget who opened the doors to allow the corporations to simply "shift operations".
Here’s one trick I know of to avoid taxes and earn more profits. A corporation like GE has many foreign subsidiaries they can be locally incorporated in say Singapore so they pay taxes locally not to the country of the parent company. GE America will sell parts to that subsidiary at cost (no profit) the subsidiary will markup the part 300% making all the profit in the country with the much lower tax rate.
First the tax rate gets lowered, then the wages, then the regulations and before you know it a century of work has been undone. It's just another race to the bottom.
"The interaction between government and business will change forever. In a reset economy, the government will be... an industry policy champion, a financier, and a key partner.”
-Immelt
“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”
-Mussolini
That quote by Immelt above stopped me dead in my tracks. That is one of the most profoundly terrifying things I have heard or read in a very long time. Good on you for calling attention to it.
A+
I am so exhausted with the sappy "Obama doesn't get it" meme. He gets it. Stop playing into the framing - if we don't count the Obama administration as only the latest in a thirty-year pattern of criminal conspiracies against this country, we are part of the problem. Suck it up, Mr. Scheer - much as I respect you, you need to take that last step and call Obama what he is. He's not a noodge who doesn't get it, he's obeying orders and continuing the work of concentrating power and wealth - looting and demolishing what remains of Main Street, and indeed the American economy. He works for the people who are taking this country down. Say it. It's the truth.
Sheer and his type will never "get it" because if they did they would have to admit that:
1. they've been used and Punked into being lackeys of the fascists
2. democracy is dead - and they are profiting from the fascists
3. the 2 party system is a charade - a good cop bad cop power play meant to keep people from truly Acting.....
Hope= not having to ACT
Believe = not having to THINK
"What he seems incapable of grasping is that while they are personally very good at avoiding the precipice, the rest of us are hardly passengers in their limos."
Incapable of grasping? Nope, I don't think so. Obama understands exactly what he's doing, he's now in the limo, he doesn't need the rest of us anymore. We got him elected and now he can ride with the big boys. So just shut up and get outa here.
Scheer still seems to believe in Obama's good intentions. What a sucker!
I wonder about people like Scheer, who are obviously well informed and intelligent - are they fooled by Obama, are they delusional or are they bought?
gotta protect the $150,000 1/2 hour speech after his time in the White House -
so when Obama wins reelection in 2012 THEN he'll really turn into the corporate monster -
NOT as the delusional say "in 2012 Obama will do the right thing as he has no donors to worry about then"
he'll protect his 150,000 speeches at ALL COSTS - which means throwing WE THE PEOPLE under the bus..... with glee I might add.....
and Immelt is just a "savvy businessman" according to the fascist in chief - oilybomber
"naive"?
Obama is not naive. He's a cynical SOB, who's marked out his path to making millions or even billions upon leaving office. He's reveling at being part of the elite. He's living the dream. And to all of the people (including the earnest hippies) who got him elected, get lost suckers!
US Productivity has doubled since 1970 and American wages have fallen by 7%.
For 40 years the Democrats have been complicit in this transfer of wealth - it did not start with Obama.
In 2012 you can:
1. Vote Democratic and continue this wealth transfer;
2. Vote third-party, which helps elect Republicans;
3. Not vote at all, which helps elect Republicans; or,
4. Vote Republican and continue this wealth transfer - but at least you get rid of the fake Democrats.
Crazy world, where a vote FOR your own self-interest acts against you and a vote AGAINST your own self-interest is the only way to accomplish anything. That's what's the matter with Kansas.
Vote 3rd party - if and when enough vote 3rd parties the 2 main fascist parties will recognize it.........
Historically no progressive policy was passed until a 3rd party pushed it into the mainstream.... The 3rd party may not have won an election but it pushed the debate......
That's why voting for democrats is akin to throwing your energies down a black hole.
Or join the majority of eligible voters and simply Opt Out and wait for the shit to hit the fan.....
as it's now doing on an ongoing basis....
I like the concept of a third party (or for that matter, a fourth, fifth or sixth party). Unfortunately, after Ross Perot got 19 percent of the popular vote in 1992, after he warned of the "giant sucking sound" of jobs exported to other nations following NAFTA,, the duopoly rigged the deck to make certain that no third-party candidate could ever threaten the ruling elite again.
It's long past time to abolish the AmeriKKKan government and replace it with one that benefits We the People, not the fascist ruling elite.
General strikes, boycotts, non-violent direct action. NOW!
Agreed, a party not linked to a G20 global-capitalist pro-corporate agenda is not going to happen. Corporations control the system required to effectively promote and create a mass movement (i.e., mass media).
But I fear boycotts, strikes and non-violent direct action may not be enough either. The powers that be just don't give a shit. Protest all you want they'll just round you up and throw you in jail,(See Toronto G20), strike all you want (they already planned to outsource your job anyway). People have been marching, striking and boycotting for ages… has it worked yet? All of those methods assume that somehow we can make our rulers see the light, that if we just squeeze them a little they will acquiesce. I think that may be dangerously naïve. I don't believe there will be any changing our rulers' minds, squeezing them will not relieve the pressure on us it will only make their grip stronger. They will show no mercy and if they have to, "take no prisoners" in order to maintain their power.
I think it has to be either revolution or perhaps we can pull our money out of the economic system and speed up its collapse... that's about all I can come up with. But no one has ever accused me of being overly optimistic.
http://kiely-flashpoint.blogspot.com/2011/03/they-have-hunted-and-slaughtered-our.html
Why not shoot oneself in the head instead?
egg2001
Brother, we are outcast here, just a very few. They hate us, but some posters are very respectful and I deeply appreciate. They would rather have a Black Democrat President in the WH. it sure beat having McCain and Palin.
Watch your step. Someone will throw rotten eggs at us. BTW I am a former Kansan.
Koch should pay you double for that one
I think you misunderstood the intent of his/her post. It was very not something that Koch Industries would pay for.
It illustrates the conundrum that faces those of us on the left faced with the fact that the power base, and current leadership, of the Democratic Party is absolutely aligned with those same corporate henchmen as are Republicans.
It seems to me that you miss the post's attempt to highlight the absurdity of that conundrum.
This is not an attack on you, so don't take it as such please.
It is only a conundrum so long as people believe the mythology about "American democracy," so long as they buy into the MSM induced fantasy that elections control who is in power and what they do.
5. Stop spreading the deception that voting controls those in power, that elections could ever lead to serious political and social change, that how each of us cast our one individual vote warrants the obsession people have with it, justifies endlessly talking about it in every discussion on every topic.
It is a crazy world, where the more obvious it becomes that voting and elections are not going to change anything, the more people embrace the fantasy that they could.
it's time to call these scumbags what they are - FASCISTS!
and how did we deal with them during WW2 - the last time they reared their ugly heads to this extent?
http://www.custermen.com/ItalyWW2/ILDUCE/Mussolini.htm
maybe the return of the guillatine, silver bullets and wooden stakes thru their unfeeling hearts.......
regardless it has to get much worse before the braindead American public turns off Dancing w/ the stars and turns onto the fact that they are getting SCREWED.......
Egalitarian elitist
Why is North Africa getting all the revolutions when we need one so badly here in North America...
Sherry: I had the exact same reaction that you did: everything he said during the campaign had the effect of ambiguous fluff, and people chanting "the audacity of hope." I saw a career politician moving up to his next high position and attaining to it.
http://www.bornrich.com/entry/ge-celebrates-royal-wedding-with-the-ultimate-refrigerator/
In xtra large 80's style. When it was cool to be a corporation addict.
It's particularly not cool to be a GE addict right now, Obama, but then you Need to be told that!
Obama's not an addict, he's an accomplice!
Yes, there they stand; side by side.
It's impossible to know the deceit that rests in the minds of political and corporate sociopaths, except that it will harm working people. Working people have chosen hard bodies and soft heads. This isn't a group that can be rallied to support their own self interest, they cannot generally identify their self interest in numbers large enough to improve their lot. Working people will lose their jobs, homes, and pensions and still not get it. They believe in individualism and competition, not cooperation, and rallying them would be like rallying a herd of cats. It ain't gonna happen and thinking American's are mostly clueless too, thus the Obama apologists. Reality check: the elites will first destroy us and then destroy themselves in an environment of Earth related disasters. Those who believe in science are doomed and some who believe in spirit may be elevated. Aggressive irrationality now enfolds us and is powered by aggressive ignorance and the ugly system is increasing in speed. The kids have it right when they say, "holy crap."
"Once again Obama seems fatally addicted to the notion that the heavy hitters who got us into this mess are the very folks to be trusted to get us out of it."
It worked better for Slick Willie who had more control. Young Obama seems to be trying to mimic Slick, but he's giving away the farm.
Is anyone else tired of reading the same story over and over and over? Thank you Mr. Scheer for once again regurgitating the same "GE didn't pay taxes" story that the M$M has been covering for the last 2 weeks. Is GE really the only multi-national corporation that is getting away with not paying taxes? Somehow I doubt it. Here's a thought Mr. Sheer, why don't you try leaving the office, investigating another major corporation, and than report on how they're not paying taxes and ripping us all off. You know, journalism? Thanks. Have a good day.
Worth repeating, more so, everywhere else.. . . . . .
WHEN DO YOU GET MAD?
SHOULD WE TRUST ANOTHER REPUBLICAN IN OFFICE AGAIN?
You didn't get mad when over 200,000 US Citizens lost their lives because they had inadequate care and no health insurance.
You didn't get mad when we gave people who had more money than they could spend, the filthy rich, over a trillion dollars in tax breaks.
You didn't get mad when lack of oversight and regulations from the Bush Administration caused US Citizens to lose 12 trillion dollars in investments, retirement, and home values.
You didn't get mad when Bush rang up 10 trillion dollars in combined budget and current account deficits.
You didn't get mad when we let a major US city, New Orleans, drown
You didn't get mad when GOP Joe Barton (rep. Texas) apologized to BP for BP having to pay people that were affected, displaced by the oil spill .
You didn't get mad when the Supreme Court stopped a legal recount and appointed a President.
You didn't get mad when Cheney allowed Energy company officials to dictate Energy policy and push us to invade Iraq.
You didn't get mad that at the end of the BUSH presidency we were loosing 750 000 jobs a MONTH ( month of October 2010, we gained 151 000 non farm jobs under President Obama. Source: US dept. of labor )
You didn't get mad when we illegally invaded a country that posed no threat to us.
You didn't get mad when we spent over 800 billion (and counting) on said illegal war.
You didn't get mad when Bush borrowed more money from foreign sources than the previous 42 Presidents combined.
You didn't get mad when over 10 billion dollars in cash just disappeared in Iraq .
You didn't get mad when you found out we were torturing people!!!!
You didn't get mad when you saw the horrible conditions at Walter Reed.
you didn't get mad when Bush embraced trade and outsourcing policies that shipped 6 million American jobs out of the country.
You didn't get mad when the government was illegally wiretapping Americans.
You didn't get mad when as a result of of the reckless BUSH adm. harm done to the country is so massive , we migth never be able to recover from this one..
No.....You finally got mad when a black man was elected President and decided that people in America deserved the right to see a doctor if they are sick!...Obama sucks too!
Who is "you" of which you speak?
"No.....You finally got mad when a black man was elected President and decided that people in America deserved the right to see a doctor if they are sick!...Obama sucks too!"
Criticism of Obama's bloody healthcare industry welfare program that will leave, according to CBO estimates 25 million still uninsured by 2019, has absolutely nothing to do with the fact that his is black.
However those who are racist morons, are the least likely to have had any problem with the many examples of Bush Administration crimes and corruption.
The Obama Administration, along with the current leadership of the Democratic Party are equally corrupt as Republicans. They both serve the big corporations that now write the laws, fund their campaigns, and take care of them after they leave office.
To couch this in racial terms, making this false distinction relative to criticism of Obama, seems to me designed to obfuscate. Are you an apologist for Obama and/or Corporate America?
I think he's talking to the Tea Party. They're the only one's who fit that description pretty well. Although, I'm not sure this is the correct forum?
I think you could be right actually. If so yes that puts it in a bit of a different context.
Goes to show that when not defining the "understood you", the "you" can be misunderstood!
hue_sir_name,
Hi brother have not seen you around lately? (short and simple to a friend) :-)
(please see my reply to BProgress, which I just wrote. If i misunderstood, apologies)
What are you talking about? Far, far more people were "getting mad" when the Bush administration was in office.
I don't think you can find one person who was not mad about those things on your list when Bush was in office, but now are getting mad about them when Obama does them. However, there are thousands maybe millions who were mad when Bush did those things, but are giving Obama a pass.
.
"What he seems incapable of grasping is that while they are personally very good at avoiding the precipice, the rest of us are hardly passengers in their limos."
Incapable of grasping? Nope, I don't think so. Obama understands exactly what he's doing, he's now in the limo, he doesn't need the rest of us anymore. We got him elected and now he can ride with the big boys. So just shut up and get outa here.
Scheer still seems to believe in Obama's good intentions. What a sucker.
The scumbags of the whorporate world are likely hustling to get the most dollar out of the Japan tragedy, especially GE. God's Enemy
Obangum is right in there with 'em just waitin' to see which high paying, bonus getting, punk ass job for all his laying down and takin it in the..so he can get a free lunch pass.
If we don't get all these morons, rep and dem out of office in 2012 then...
it will be 2012, the end of civilization...
which actually ended the day we bombed Hiroshima and Nagasaki.
Stonepig,
Now you are spewing trash? Since our last encounter you were still defending the Union and Obama, and I believe you have officially leave the Democratic party. Holy cow! and when will you return again, maybe sometimes before November 2012? Good Luck :-)
the irony of it all is just unbearable
"Once again Obama seems fatally addicted .."
He only does what he is told – just like GWB did.
“the promise that we made to the American people has been kept, that we have delivered on change that we can believe in.”
- "Artist Formerly Known as Obama" DNC Fund Raising Event, 3/16/11
"Given the choice between a Republican and one who acts like a Republican, people will vote for the real Republican all the time." - Harry S Truman
You really have to love it when modern day Republicans try to pretend they worship Reagan, as opposed to some mythical Reagan they've created to justify their own lame policies.
DAVID KOCIENIEWSKI, “G.E.’s Strategies Let It Avoid Taxes Altogether,” NYTimes, March 24, 2011
http://www.nytimes.com/2011/03/25/business/economy/25tax.html
In the mid-1980s, President Ronald Reagan overhauled the tax system after learning that G.E. — a company for which he had once worked as a commercial pitchman — was among dozens of corporations that had used accounting gamesmanship to avoid paying any taxes.
“I didn’t realize things had gotten that far out of line,” Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan’s 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent.
Is it just Obama or are we also a part of this fatal corporate addiction? We need the right leadership just to reduce our addiction to Corporate America and what a f-ing travesty that most of us dumbass American voters never gave Ralph Nader a chance to lead the fighting way. But no matter, come next year it'll either be Obama or some wacko Republican for another 4 years.
Calling Americans addicts is blaming the victim.
We are not addicted to corporations (or oil as Bush lied about it). I challenge you to find Americans addicted to energy provided by the carbon industry when sustainable energy exists. I challenge you to find Americans who prefer tasty plastic food to tasty nutritious food.
"We the People" are funnelled into behaviors but that hardly means we are addicted to them. The more appropriate analogy is an abattoir. Do you really think CAFO animals are addicted to their torturous til death existences?
We are being placed at the mercy of corporate/government. The only "leadership" that will save us is the leadership that collapses the whole crazy, nihilistic system propelling the planet to a death spiral.
Anyway, just wanted to say that "addiction" is an appalling storyline which we shouldn't fall for.
I'm not blaming the victim but apologize if my post comes off that way. What I'm talking about is the system that keeps us that way.
" I challenge you to find Americans addicted to energy provided by the carbon industry when sustainable energy exists."
Easy, most of the transportation is on the highways instead of the railways. Traffic jams are still high despite the rising oil prices and that's in the suburbs.
" I challenge you to find Americans who prefer tasty plastic food to tasty nutritious food."
Look all around you. With wages lower when adjusted for inflation and the fact that junk food is priced cheaper than nutritious food, in bad economic times, those making lower wages will settle for cheap food. No offense but it's a fact.
""We the People" are funnelled into behaviors but that hardly means we are addicted to them. "
That we can agree on.
" Do you really think CAFO animals are addicted to their torturous til death existences?"
No but they don't have the same thinking skills to voice their opposition and that's unfortunate.
"We are being placed at the mercy of corporate/government."
True and that's why people are forced to pick between goodwill and survival and that's where getting used to and then addicted to the corporations starts and worsens. Don't get me wrong. I'm not into that "blame the individual" style thinking but I think we need a combination of organization and good leadership.
I was planning to summarize the evidence that condemns Obams as a deliberate collaborator in the Ruling Class plan to reduce the United States to a nation of slaves -- the very reason I call him Barack the Betrayer and "change we can believe in" the biggest Big Lie in U.S. political history.
But then I began reading the contents of this thread and quickly saw how it (like so many other such threads) has deteriorated to nothing but the pointless squabbling of belligerent egomaniacs.
Hence I'll be blunt: Robert Scheer is obviously a disinformation specialist, one of the many employed by the Ruling Class to sustain the maliciously false notion the Betrayer will experience a sudden magical epiphany and at last begin to fulfill his campaign promises.
Such is the imbecility of hope, the opiate with which the Ruling Class hopes to keep Moron Nation sedated for just a little longer.
Likewise Mr. Scheer's repetition of the phrase "Obama seems," the implication being the (now obviously absurd) notion Barack the Betrayer is really a good man unfortunately led astray by bad advice.
As long as Mr. Scheer and (too many) others like him refuse to say outright what is undeniably clear to those of us dying in the quicksands of poverty -- that Obama was never anything more than a Republican fraudster in Afro-Democrat disguise -- there is no chance of building an adequate resistance to what is being done to us: the imposition of a new form of fascism intended to either reduce us to slavery or -- by abandonment and neglect -- eliminate us entirely.
lorenbliss,
I don't quite agree with much of the top portion of your posting, but I fully embrace your last paragraph. I still think a very refreshing discussion. I will still give an A-.
Fatal for who? Him or us?