Monday, February 1, 2016

The West Is Reduced To Looting Itself

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I, Michael Hudson, John Perkins, and a few others have reported the multi-pronged looting of peoples by Western economic institutions, principally the big New York Banks with the aid of the International Monetary Fund (IMF).

Third World countries were and are looted by being inticed into development plans for electrification or some such purpose. The gullible and trusting governments are told that they can make their countries rich by taking out foreign loans to implement a Western-presented development plan, with the result being sufficient tax revenues from economic development to service the foreign loan.

Seldom, if ever, does this happen. What happens is that the plan results in the country becoming indebted to the limit and beyond of its foreign currency earnings. When the country is unable to service the development loan, the creditors send the IMF to tell the indebted government that the IMF will protect the government’s credit rating by lending it the money to pay its bank creditors. However, the conditions are that the government take necessary austerity measures so that the government can repay the IMF. These measures are to curtail public services and the government sector, reduce public pensions, and sell national resources to foreigners. The money saved by reduced social benefits and raised by selling off the country’s assets to foreigners serves to repay the IMF.

This is the way the West has historically looted Third World countries. If a country’s president is reluctant to enter into such a deal, he is simply paid bribes, as the Greek governments were, to go along with the looting of the country the president pretends to represent.

When this method of looting became exhausted, the West bought up agricultural lands and pushed a policy on Third World countries of abandoning food self-sufficiency and producing one or two crops for export earnings. This policy makes Third World populations dependent on food imports from the West. Typically the export earnings are drained off by corrupt governments or by foreign purchasers who pay little while the foreigners selling food charge much. Thus, self-sufficiency is transformed into indebtedness.

With the entire Third World now exploited to the limits possible, the West has turned to looting its own. Ireland has been looted, and the looting of Greece and Portugal is so severe that it has forced large numbers of young women into prostitution. But this doesn’t bother the Western conscience.

Previously, when a sovereign country found itself with more debt than could be serviced, creditors had to write down the debt to an amount that the country could service. In the 21st century, as I relate in my book, The Failure of Laissez Faire Capitalism, this traditional rule was abandoned.

The new rule is that the people of a country, even a country whose top offiials accepted bribes in order to indebt the country to foreigners, must have their pensions, employment, and social services slashed and valuable national resources such as municipal water systems, ports, the national lottery, and protected national lands, such as the protected Greek islands, sold to foreigners, who have the freedom to raise water prices, deny the Greek government the revenues from the national lottery, and sell the protected national heritage of Greece to real estate developers.

What has happened to Greece and Portugal is underway in Spain and Italy. The peoples are powerless because their governments do not represent them. Not only are their governments receiving bribes, the members of the governments are brainwashed that their countries must be in the European Union. Otherwise, they are bypassed by history. The oppressed and suffering peoples themselves are brainwashed in the same way. For example, in Greece the government elected to prevent the looting of Greece was powerless, because the Greek people are brainwashed that no matter the cost to them, they must be in the EU.

The combination of propaganda, financial power, stupidity and bribes means that there is no hope for European peoples.

The same is true in the United States, Canada, Australia, and the UK. In the US tens of millions of US citizens have quietly accepted the absence of any interest income on their savings for seven years. Instead of raising questions and protesting, Americans have accepted without thought the propaganda that their existence depends upon the success of a handful of artificially created mega-banks that are “too big to fail.” Millions of Americans are convinced that it is better for them to draw down their savings than for a corrupt bank to fail.

To keep Western peoples confused about the real threat that they face, the people are told that there are terrorists behind every tree, every passport, under every bed, and that all will be killed unless the government’s overarching power is unquestioned. So far this has worked perfectly, with one false flag after another reinforcing the faked terror attacks that serve to prevent any awareness that this a hoax for accumulating all income and wealth in a few hands.

Not content with their supremacy over “democratic peoples,” the One Percent has come forward with the Trans-Atlanta and Trans-Pacific partnerships. Allegedly these are “free trade deals” that will benefit everyone. In truth, these are carefully hidden, secret, deals that give private businesses control over the laws of sovereign governments.

For example, it has come to light that under the Trans-Atlantic partnership the National Health Service in the UK could be ruled in the private tribunals set up under the partnership as an impediment to private medical insurance and sued for damages by private firms and even forced into abolishment.

The corrupt UK government under Washington’s vassal David Cameron has blocked access to legal documents that show the impact of the Trans-Atlantic partnership on Britain’s National Health Service. http://www.globalresearch.ca/cameron-desperate-to-stop-scandal-as-secret-plans-to-sell-the-national-health-service-are-discovered/5504306 [1]

For any citizen of any Western country who is so stupid or brainwashed as not to have caught on, the entire thrust of “their” government’s policy is to turn every aspect of their lives over to grasping private interests.

In the UK the postal service was sold at a nominal price to politically connected private interests. In the US the Republicans, and perhaps the Democrats, intend to privatize Medicare and Social Security, just as they have privatized many aspects of the military and the prison system. Public functions are targets for private profit-making.

One of the reasons for the escalation in the cost of the US military budget is its privatization. The privatization of the US prison system has resulted in huge numbers of innocent people being sent to prison, where they are forced to work for Apple Computer, IT services, clothing companies that manufacture for the US military, and a large number of other private businesses. The prison laborers are paid as low as 69 cents per hour, below the Chinese wage.

This is America today. Corrupt police. Corrupt prosecutors. Corrupt judges. But maximum profits for US Capitalism from prison labor. Free market economists glorified private prisons, alleging that they would be more efficient. And indeed they are efficient in providing the profits of slave labor for capitalists.

Here is a news report on UK Prime Minister Cameron denying information about the effect of the Trans-Atlantic partnership on Britains’ National Health.
http://www.theguardian.com/business/2016/jan/26/anger-government-blocks-ttip-legal-documents-nhs-health-service [2]

The UK Guardian, which often has to prostitute itself in order to maintain a bit of independence, describes the anger that the British people feel toward the government’s secrecy about an issue so fundamental to the well being of the British people. Yet, the British continue to vote for political parties that have betrayed the British people.

All over Europe, the corrupt Washington-contolled governments have distracted people from their sellout by “their” governments by focusing their attention on immigrants, whose presence is a consequence of the European governments representing Washington’s interests and not the interest of their own peoples.

Somthing dire has happened to the intelligence and awareness of Western peoples who seem no longer capable of comprehending the machinations of “their” governments.

Accountable government in the West is history. Nothing but failure and collapse awaits Western civilization.

Job cuts and threats of defaults as commodity prices fall

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Plummeting oil and commodity prices are cutting a swathe through entire economies, bringing announcements of mass layoffs and the possibility of defaults by so-called emerging markets on their debts.
On Thursday, the South African mines minister Mosebenzi Zwane announced that as many as 32,000 jobs could go in the iron ore, platinum and manganese mining industries. At the same time, the International Monetary Fund and the World Bank sent officials to oil-exporting Azerbaijan to try to avert a debt default in what could be the first in a series of such interventions.
Last September the National Union of Mineworkers in South Africa warned that as many as 22,000 mining jobs were threatened. Zwane said this figure was now 32,000. “Commodity prices have fallen for quite some time and that is causing problems in terms of jobs and restructuring,” he said.
Zwane said the government would do everything in its power to “control the situation” until “the price of commodities improves.” While there may be limited fluctuations, any general increase is not going to occur, according to the World Bank, which last week lowered its estimates for prices in 36 of the 47 of the commodities which it monitors. It warned that “while we see some prospects for commodity prices to rise slightly over the next two years, significant downside risks remain.”
As the minister issued his update, the Anglo American-owned Kumba Iron Ore unit announced that it was set to reduce its workforce by more than a third with a plan to axe 3,900 jobs. The cuts will hit 2,633 workers directly employed by the company plus some 1,300 contractors.
The cuts are part of the plan announced in December by Anglo American to reduce its global workforce from 135,000 to 50,000 and close or sell-off 60 percent of its assets.
Kumba management said it had experienced a 35 percent fall in iron ore prices in the past year and would cut back production at the mine and convert it into a “smaller, more focused operation.” The latest decline in prices is part of a longer-term trend which has seen iron ore prices fall to a quarter of their peak levels reached in 2011.
Lonmin, one of the world’s largest platinum mines, has announced that it has carried out 85 percent of the 6,000 job cuts unveiled last November in the wake of a $2 billion loss.
The fall in commodity prices is having a devastating impact on the South African economy which is highly dependent on mineral exports. Mining employment at 444,000 accounts for 14 percent of all employment and is the biggest economic sector after agriculture. Primary mining exports account for 35 percent of all the country’s merchandise export revenue and accounts for 25 percent of all investment in the economy.
Towards the end of last year, the rand fell to an all-time low and the central bank has lifted interest rates for the second time in two months in the face of rising inflation. The central bank forecast is that after hitting 4.6 percent last year, inflation will rise to 6.8 percent this year and 7 percent in 2017. It is being fuelled by the decline in the rand and rising food prices, with a heavy impact on the country’s unemployed who account for 25 percent of the workforce.
There is no end in sight, with mineral commodity prices under continual downturn pressure. Earlier this month the International Monetary Fund revised its forecast for economic growth to 0.9 percent for this year, the lowest since 2009 when South Africa was hit by the global financial crisis.
Falling export revenues and currency values, coupled with rising inflation and the threat of debt default, are becoming the characteristic features of a number of oil-exporting countries. The IMF-World Bank intervention in Azerbaijan has raised the question of which country is next.
It could well be Venezuela. Dependent on oil for 95 percent of its export revenue, the country has been hard hit by the fall in prices, raising questions about whether it will be able to service its debts. According to a report in the Financial Times last Tuesday: “Caracas might be making soothing noises about plans to service its debts but there are growing fears that the government, and state-owned oil company Petroleos de Venezuela are running out of money. As the state printing press continued to churn out new banknotes, inflation is expected to hit a fantastical 720 percent this year.”
Barclays bank has warned that a “credit event,” that is, a default, is likely unless oil prices start to rise.
Nigeria is in a similar position, relying on oil for more than 90 percent of its export revenue. A visit to the capital Lagos by IMF managing director, Christine Lagarde earlier this month sparked media speculation that the purpose of the visit was to discuss bailout terms. Lagarde dismissed such suggestions and the government said the country was not seeking a loan, claiming it did not need one. But the government and the World Bank are engaged in discussions on a possible $2–$3 billion loan to provide budget support.
Ecuador could be on the same path. Dependent on oil revenues, it is a fully US-dollarised economy, meaning that its trade position is being worsened because of the rise in the value of US currency in global markets.
The jobs cuts announced so far and the growing threats of default are only the beginning of a wave of destruction as the breakdown of the global capitalist economy which began with the financial crisis of 2008 intensifies

Washington to escalate US Mideast wars

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The Obama White House has given the green light to demands by the US military for an escalation of the ongoing intervention in Iraq and Syria, as well as the opening up of a new theater of war in the oil-rich North African nation of Libya, according to published reports.
Citing a senior administration official, the New York Times reported Friday that President Barack Obama is “willing to consider raising the stakes in both Iraq and Syria” by deploying hundreds more US troops to the war-torn countries.
Describing Obama as having earlier “resented” Pentagon pressure for military escalation, the Times report indicated that the US president is now bowing to the military brass for the deployment of substantially more troops.
The plan reportedly involves sending some 800 more US soldiers to join the roughly 3,700 already deployed in Iraq, along with US special forces units operating inside Syria.
The Times noted that both “the White House and the Pentagon have taken pains to avoid describing the deployment as combat troops, instead calling them special operators, trainers and advisers.” These terms of art are designed to obscure for the American public the reality that US imperialism is once again embarking upon a major new war of aggression in the Middle East.
According to the Times, top US commanders have pitched the latest escalation as a matter of building on supposed successes in the military campaign against the Islamic State of Iraq and Syria (ISIS), arguing that these could be expanded to the extent that Iraqi forces are “coached and trained by Americans.”
They have pointed in particular to the recent “liberation of Ramadi,” insisting that it can be followed by “liberating” both Mosul, Iraq’s second largest city, and Raqqa in Syria, the nominal capital of the ISIS-occupied territory.
Ramadi was re-taken last month by an elite US-trained counterterrorism unit of the Iraqi army after protracted and devastating US airstrikes. Estimates are that over 60 percent of the city was reduced to rubble, leaving it virtually uninhabitable for the roughly half million people who previously called it home.
It is by no means clear how such an operation can be repeated in Mosul, a much larger city with a population of over one million, unless the Pentagon’s plans are to level it as well. The counterterrorism unit is too small for the job, and larger regular Iraqi army units have proven unreliable.
The logic of the US objectives in Iraq is an ever greater escalation of American forces leading to a reprise of the kind of war and occupation that was launched in 2003.
Meanwhile, the Wall Street Journal reported that President Obama convened a meeting of his national security advisers at the White House on Thursday to discuss the expansion of the US campaign against ISIS into Libya.
The White House issued a statement late Thursday stating, “The president emphasized that the United States will continue to counter ISIL [ISIS] terrorist plotters in any country where it is necessary.”
The White House statement continued by stating that “ISIL affiliates and other violent extremists attempt to find safe haven in areas with limited or poor governance” and vowing that Washington would “continue efforts to strengthen governance and support ongoing counterterrorism efforts in Libya…”
Of course the White House release makes no mention of how Libya became an area “with limited or poor governance” or how ISIS acquired the strength to occupy part of the country’s Mediterranean coast. Both are bound up with the 2011 US-NATO war for regime change that toppled and murdered the country’s longtime ruler, Muammar Gaddafi.
In addition to a protracted campaign of airstrikes, Washington and its allies armed and aided Al Qaeda-linked Islamist militias to serve as proxy ground troops. These same forces were then funneled into Syria along with large quantities of arms seized from Libyan government stockpiles, escalating the war for regime change there against the government of President Bashar al-Assad. Some of these same fighters then returned to establish strongholds in Libya itself.
In other words, the Pentagon and the Obama White House are proposing a second war in Libya to counter the effects that were created by the first. In both cases, the real US objective is to impose US domination over the North African country, which boasts the largest oil reserves on the African continent.
Even as plans are being rolled out for escalating the war in Iraq and Syria and launching a new one in Libya, the US Army general appointed to command American forces occupying Afghanistan testified at a Senate hearing Thursday that an escalation of the US intervention may be required in that country as well.
Lieut. Gen. John “Mick” Nicholson told the Senate Armed Services Committee that the security situation in Afghanistan was deteriorating and that US military forces would be required not only for stepped up “counterterrorism” operations, but also “to prevent the Taliban from retaking the provincial capital” of Kandahar.
The Taliban currently control more territory in Afghanistan than at any time since the US invasion of 2001, while the Afghan security forces are suffering record casualties—16,000 killed or wounded in 2015—that are described by US commanders as “unsustainable.”
Nicholson testified that in some areas, the Afghan security forces “have years to go” before they will be able to stand on their own. He indicated his agreement with the committee’s Republican chairman, Senator John McCain, who attacked Obama’s troop reductions.
There are currently 9,800 US troops occupying Afghanistan. As in Iraq, they are formally designated as advisers, trainers and special operators. In reality, they are heavily involved in combat operations, as was exposed in last October’s US war crime, the airstrike on the Doctors without Borders hospital in Kunduz that killed 42 medical staff and patients.
President Obama last October rescinded his previously announced plan to pull out virtually all US forces from Afghanistan, adopting a plan dictated by the Pentagon to keep the roughly 10,000 troops there, likely beyond the end of his presidency.
Nicholson’s testimony was followed Thursday afternoon by a statement to Pentagon reporters by Defense Secretary Ashton Carter, who vowed that the US military will “stick with Afghanistan, but not just in 2016, that’s 2017 and beyond.”
What clearly emerges from the events of the past week is that the Obama administration, which came to power on a wave of opposition to the two wars of aggression that killed over a million people under President George W. Bush, is preparing to leave the White House with the US military still engaged in combat operations in Iraq and Afghanistan, while waging new wars in Syria, Libya and beyond.

Wall Street celebrates mounting signs of US slump

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On Friday, the Commerce Department released the latest in a series of economic reports pointing to a dramatic slowdown in the US economy, with vast global implications. The response of Wall Street was a euphoric surge on US markets, sending the Dow Jones industrial average up by nearly 400 points and leading every major stock index around the world to close sharply up for the day.
The Commerce Department said US economic growth fell to a near-standstill in the last quarter of 2015, with the gross domestic product (GDP) expanding at an annualized rate of just 0.7 percent, down from 2 percent in the third quarter. The grim report included a dramatic fall in business investment and a marked slowdown in consumer spending.
This followed a report Thursday that durable goods orders, a key indicator of manufacturing output, tumbled by 5.1 percent in December in the sharpest monthly fall since the 2008–2009 financial crisis.
These statistics coincide with a series of mass layoff announcements by major US corporations. They include 16,000 layoffs at retailer Walmart, 10,000 at oilfield contractor Schlumberger, 6,000 at chemical company DuPont, 4,000 at education resources company Pearson LLC, 2,000 at the Norfolk Southern rail network, 3,000 at consumer products conglomerate Johnson & Johnson, 886 at mining company Alpha Natural Resources, 829 at mobile phone service Sprint, and 800 at technology company VMware.
Also this week, a number of giant US-based corporations, including United Technologies, Boeing, Apple and Caterpillar, reported poor figures for the end of 2015 and even worse estimates for 2016. Apple is anticipating its first annual revenue decline since 2003. Caterpillar, saying its revenues fell 20 percent last year and this year’s revenues could hit the lowest level in six years, announced Friday that it would eliminate 670 US jobs and close five plants in the Midwest.
How is the giddy upturn in stock prices in the face of signs of an economy sliding into recession to be explained?
For the broad mass of the population, economic stagnation and slowdown mean a further descent into economic distress, unemployment and outright poverty. The recent developments explode the claims of economic “recovery” and confirm that the destruction of decent-paying jobs, pensions and social services that followed the Wall Street crash of 2008 is not a temporary condition, but only the beginning of a permanent and escalating attack on working class living standards.
For the financial aristocracy, on the other hand, the signs of slump are welcome indicators that the Federal Reserve will continue to pump trillions of dollars into the financial markets, delaying further interest rate increases and perhaps rolling back the initial increase it imposed in December. Bankers and hedge fund speculators were rubbing their hands on Friday in anticipation of still more cheap credit to underwrite their parasitic financial operations.
The euphoria on Wall Street was a demonstration of the essential character of what the government and media call economic “recovery.” Just over two weeks ago, President Obama in his State of the Union address praised the economic “surge” that had made the US economy “the strongest, most durable… in the world,” and said claims “America’s economy is in decline” were a “fiction.”
There has been no genuine recovery in the real economy. Instead, a massive diversion of public resources has been carried out to rescue and further enrich the financial oligarchy at the expense of the productive forces and the working class. The focus of domestic policy has been to subsidize the utterly parasitic and quasi-criminal speculative activities of the banks and financial institutions, starving the real economy of productive investment, in order to engineer a further concentration of income and wealth among the top 1 percent and 0.1 percent of the population.
Now, with the slowdown in China, the crisis of the “emerging market” economies, the collapse of industrial commodity prices, and signs that the mountain of debt is unraveling, the financial elite is demanding even more free cash to prop up its Ponzi scheme operations.
At the same time, it is demanding the squandering of even greater sums to finance its wars for geo-political dominance and economic plunder in the Middle East and its preparations for war against its nuclear-armed rivals Russia and China.
The mounting economic crisis, for which the ruling class has no rational or progressive solution, intersects with and exacerbates geo-political tensions around the world and social tensions at home. The corporate-financial elite, fearing the spread of social opposition, prepares all the more feverishly the means for violent state repression against the working class.
The deepening economic crisis is playing out against the backdrop of an election that has already revealed deep-seated popular alienation from and disgust with the entire political system and both big business parties, and a profound crisis that threatens to tear apart the two-party system through which the American ruling class has exercised political domination for a century-and-a-half.
There is a growth of working class militancy, reflected in the opposition of auto workers to the sellout contracts imposed by the United Auto Workers last year and protests by workers in Flint against the poisoning of the city’s water supply and by teachers and students in Detroit against intolerable conditions in the schools. At the same time, the broad support for the candidacy of Bernie Sanders, who calls himself a socialist and denounces inequality and Wall Street, even as he seeks to channel popular opposition behind the Democratic Party, reflects a political radicalization and growth of anti-capitalist sentiment among working people and youth.
There is growing fear within the ruling class of impending social upheavals, reflected in a wave of articles and studies on social inequality and worried commentaries on the implications of the support for Sanders. On Friday, the Wall Street Journal published a column by Peggy Noonan, a former speech writer for Ronald Reagan, under the headline “Socialism Gets a Second Life.” She writes, “The rise of Bernie Sanders means that accommodation is ending, and something new will take its place,” and adds, “Do you know what’s old if you’re 25? The free-market capitalist system that drove us into a ditch.”
The coming struggles of the working class must be guided by the understanding that its interests are incompatible with those of the financial oligarchy that dominates the economy and political system. The euphoric response of Wall Street to economic news that spells growing distress and suffering for countless millions is a demonstration of an irreconcilable conflict of social and class interests.
The fight to secure basic social rights—to decent-paying jobs, education, health care, housing, pensions—and halt the drive toward a new and catastrophic world war is a fight to break the power of the ruling financial oligarchy and end its private ownership of the banks and corporations. It is a fight against the capitalist system itself.

The Latest Tax Scam in Corporate "Inversion" - Who Pays Instead?

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Johnson Controls Inc. and Tyco International PLC have announced a $14 billion merger, with the resulting company pretending to be "Irish." This is called an "inversion" and is all about dodging taxes.
Johnson Controls is actually based in Milwaukee. Tyco is based in Princeton, NJ but became "Irish" through its own prior tax-dodging inversion(s). The Washington Post explains this, in "Manufacturing giants Tyco and Johnson Controls agree to merge":
This is not the first time Tyco, which started as a New Jersey-based research laboratory for the US government in the 1960s before growing into a global behemoth with workers in about 50 countries, has made use of tax-avoidance measures. In 1997, it merged with a Bermuda-based company in another corporate inversion before moving its headquarters to Switzerland in 2008. It moved to Ireland in 2013.
Tyco is also remembered for its former President Dennis Kozlowski, who was convicted in 2005 of various crimes related to looting shareholders and using the money for things like a 2001 $2.2 million party on the island of Sardinia.
The Inversion Tax Scam Game
An inversion allows corporations to pretend to be non-US companies and dodge taxes while still getting the full benefits of our country's taxes: roads and other physical infrastructure, advanced legal system, educated workforce, police and other protections, military protection, and so on.
November's post, "Pfizer Buying Allergan So It Can Pretend To Be Irish In Tax Scam" explained how this works: "In other words, the resulting merged company will make and sell products in the same places it makes and sells them now. The same executives will occupy the same buildings. It will receive the same taxpayer-funded US services, infrastructure, courts and military protection that it receives now. But the company will now claim it is "based" in tax-haven Ireland and thereby dodge US taxation."
The thing is, corporations and shareholders already pay lower tax rates than regular people do. They also get special privileges including "limited liability." People who make money trading corporate shares get a special, lower "capital gains" tax rate. (This capital gains tax rate is lower because the wealthiest make most of their income from capital gains, and the wealthiest make most of their income from capital gains because the capital gains tax rate is lower.)
But they want more. They want it all. And they're getting it.
Who Pays Instead?
The billionaires and other shareholders already enjoy special lower tax rates than the rest of us (low capital gains tax rates, the Social Security "cap," the carried interest loophole, multitudes of other breaks…) This is just one more tax break they utilize as their wealth builds and builds. And that massive accumulated wealth buys more and more privileges and breaks.
We the People of the United States, through our elected Representatives in Congress, allow this. Or, to put it in today's reality: Billionaires and their corporations pay handsomely for a Congress that allows this.
But when these giant corporations and the billionaires behind them don't pay their taxes, guess who has to either make up the difference or suffer the cutbacks in the things government does to make our lives and economy better? (Hint: Register to vote today and be absolutely sure to show up and VOTE this time. Don't be misdirected, demoralized, suppressed or otherwise tricked into not voting. Talk to other people about registering and voting, too.)
The Candidates
The Republican candidates generally propose stopping corporate inversions to avoid US corporate taxes by reducing or even ending US taxation of corporations.
Presidential candidates Bernie Sanders and Hillary Clinton have similar proposals for limiting these "inversions."
"It is outrageous when large multinational corporations game the tax code and shelter money overseas to avoid paying their fair share, including through maneuvers like inversions. As I have said throughout my campaign, these efforts to shirk US tax obligations leave American taxpayers holding the bag while corporations juice more revenues and profits."
Clinton's "detailed and targeted plan to immediately put a stop to inversions and invest in the US" includes:
  • A 50 percent threshold for foreign company shareholder ownership after a merger before an American company can give up its US identity.
  • An "exit tax" to ensure multinational companies that change their identity pay a fair share of the US taxes they owe on earnings stashed overseas.
  • A crackdown on "earnings stripping," one of the key benefits of inversions.
Sanders released a statement condemning "corporate deserters":
"The potential Johnson-Tyco merger would be a disaster for American taxpayers," Sanders said. "Profitable companies that have received corporate welfare from American taxpayers should not be allowed to renounce their US citizenship to avoid paying US taxes. These corporate inversions must stop.
"My message to these corporate deserters is simple: You can't be an American company only when you want corporate welfare from American taxpayers or you want lucrative contracts from the federal government," Sanders continued. "If you want the advantages of being an American company then you can't run away from America to avoid paying taxes."
  • Ending the rule allowing American corporations to defer paying federal income taxes on profits of their offshore subsidiaries.
  • Closing loopholes allowing American corporations to artificially inflate or accelerate their foreign tax credits.
  • Preventing American corporations from claiming to be foreign by using a tax-haven post office box as their address.
  • Preventing American corporations from avoiding US taxes by "inverting." Under Sanders' bill the US would continue to tax such a company as an American corporation so long as it is still majority owned by the owners of the American party to the merger or acquisition.
  • Prevent foreign-owned corporations from stripping earnings out of the US by manipulating debt expenses.
  • Preventing large oil companies from disguising royalty payments to foreign governments as foreign taxes.

How Americans Are Increasingly Turning Their Backs on the Poor

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With the winter winds of January came a flurry of reports that several states were moving to cut thousands of people from their Supplemental Nutritional Assistance Program (SNAP, or “food stamp”) rolls.

In New Jersey, for example, Governor Chris Christie pulled the plug on benefits to 11,000 unemployed state residents.

By this spring, an estimated 500,000 people nationwidecould be cut off. For most of them, the maximum benefit of less than $200 a month is all the federal aid they get. For some, it’s their entire income.

These people live in states that have chosen to reinstate work requirements on able-bodied adults without children, which had been suspended since the 2008 economic downturn. It means that single adults who aren’t working at least 20 hours a week or participating in a job-training program may only get three months of nutrition assistance in a three-year period. After that, they’re on their own.

Some people call this a successful example of welfare reform at work. But to experts like Joe Soss, a University of Minnesota professor who studies the drive to “end welfare as we know it” that started in the 1990s under President Bill Clinton, it’s the latest chapter in a misguided ideological campaign.

This drive is a consequence, he told me, of political rhetoric suggesting that low-income people are poor because of their inability to exercise self-discipline and make good choices.

“It’s a modern update of longstanding prejudices,” Soss explained. These “get-tough policies are cast as benefiting the poor in the long run,” he added, while their hardline supporters claim to shield taxpayers from “criminal thugs, undocumented immigrants, and those who live off the welfare system.”

His 2011 book, Disciplining the Poor, chronicles the rise of what Soss calls “poverty governance” over the past 40 years. “Efforts to get tough with the poor have often been a bipartisan affair,” Soss said. “But Republican-controlled states have generally been at the forefront of efforts to restrict social supports — from cash aid to nutrition, housing, and health care — and to use poor people’s behaviors as a litmus test for government help.”

That approach was evident earlier this year, when six of the Republican presidential candidates attended an antipoverty forum in South Carolina inspired by the late “bleeding-heart conservative” politician Jack Kemp. Christie took part. But the way his policies have played out is less bleeding-heart than cold-blooded.

Under Christie’s leadership, New Jersey has sharply reduced the share of federal block grant moneyit spends on direct cash assistance to needy families, according to the Center for Budget and Policy Priorities. But as the number of people getting help has fallen, the percentage of the state’s residents living in poverty actually went up— from 9 percent to 11 percent — between 2009 and 2012.

Now, community servants worry that more stringent work rules for food assistance are being imposed when there isn’t enough job and education assistance for people who need it. “I don’t know where these work programs are. And I know we are not ready for this,” Diane Riley of the Community FoodBank of New Jersey told NJ.com.

It’s a story that’s being repeated across the country. The trend is also fueling a debate — not over whether people should be working instead of receiving welfare, but whether we get there by investing more in education, training, and job creation, or by slashing budgets, shaming the poor, and turning our backs.

Will the 2016 Primaries Be Electronically Rigged?

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"You've heard the old adage 'follow the money.' I follow the vote, and wherever the vote becomes an electron and touches a computer, that's an opportunity for a malicious actor potentially to ... make bad things happen." — Steve Stigall, CIA cyber-security expert, in remarks to the US Election Assistance Commission
Primary election rigging in the coming weeks and months is all but assured if American voters and candidates don't take steps to prevent it now. Evidence that US voting systems are wide open to fraud and manipulation should be taken seriously in light of the unprecedented high-stakes elections we're facing.
Not in recent history have American voters been presented with such radically polarized candidates, forcing a crucial choice for the direction of our future, and possibly upending long-established centers of power.

Local fixers, insider operatives, rogue hackers and even foreign countries could all rig US elections electronically.

It's no secret that US primaries have been tightly controlled by the two ruling parties, usually to the benefit of their favored candidates. If this internal manipulation (some might call it rigging) is not publicly condoned, neither is it loudly condemned.
This year, however, the primary season is shaping up to be a battle royal between the political establishment and outsider insurgencies who are challenging the party elites and defying their usual filters, money and manipulations. And it seems all bets are off.
As a brazen Donald Trump kicks down the door of the GOP, tens of millions in super PAC dark cash has (so far) failed to buy the candidacy for a lackluster Jeb Bush. Accusations abound that Democratic National Committee Chair Debbie Wasserman Schultz has stacked the deck for Hillary Clinton. Yet nothing - not even corporate media's censorship or outright hostility toward Bernie Sanders - has blunted his skyrocketing grassroots campaign.
You might ask: What is left, then, for the party powerful to ensure outcomes in 2016? Would any of them be so desperate as to actually rig the final vote count? Could they?
Indeed, they could.
But to be fair, so could a lot of other people. Local fixers, insider operatives, rogue hackers and even foreign countries could all rig US elections - in whole or part, in 50 states and most of the United States' 3,143 counties - electronically, and without detection.

Time and again, the beneficiaries of suspicious primary elections are establishment-favored candidates.

The potential for this vote-rigging cyberwar is the result of an ongoing crisis in US democracy - a silent coup of sorts. Over many decades, US elections have been quietly outsourced to a small group of private voting machine companies, some with extreme partisan ties and criminal records. They have now almost entirely replaced our publicly counted paper ballots with their secretly programmed, easily hacked electronic voting technology.
For example, the Diebold AccuVote-TS Touchscreen voting machine was recentlyanalyzed by Princeton computer security professors. They found that malicious software running on a single voting machine can be installed in as little as one minute, spreading invisibly from machine to machine through a virus, while stealing votes with little risk of detection.
While recent laws have limited essential hand-counting audits - in some cases making them actually illegal - in 18 states voting machines are used that produce no paper ballot at all, making verification of the results impossible.
Threats to the 2016 Elections
In 2016, Americans will once again cast their votes into this lawless electronic void, and no, we can't solve the problem before these game-changing primary elections. But shining a light on our voting systems does make a difference - as does getting out to vote: Voter apathy and ignorance create the ideal conditions for election rigging. Huge turnout makes election rigging less feasible, particularly when the pre-election polls or exit polls diverge more than 10 percent from actual vote returns. Manipulations usually happen when the spread between candidates is smaller than 10 percent.
What evidence do we have that any election rigging has already taken place? As it happens, extensive documentation exists, compiled over decades by researchers, cyber-security professionals, statistical analysts and even government agencies.
If you haven't heard about it until now, thank the press. A longstanding mainstream media blackout on this issue has prevented the evidence from reaching the public and vulnerable candidates.
While the investigations into rigging are mostly nonpartisan, the results typically are not. Time and again, the beneficiaries of suspicious primary elections are establishment-favored candidates. In general elections, far-right and extremist Republicans have overwhelmingly raked in the "surprise upset" wins.
Why Watch the Primaries?
The primaries in particular should be a major focal point of scrutiny by all democracy advocates and supporters of grassroots, populist and insurgent candidates in both parties.
See the eye-opening statistical analysis of vote results from 2008 to 2012 compiled by citizen watchdog team Francois Choquette and James Johnson. Results showed a highly suspect, so far inexplicable gain of votes, only in larger precincts, only for Republicans (and in the primaries, only for Mitt Romney), and only when votes are counted by computers.
Choquette, an aerospace engineer and Republican, writes, "This substantial effect exceeds reasonable statistical bounds and we calculate that the probability of such election results happening by chance is beyond typical or even extreme."
The potential smoking gun is that the votes gained by Republicans or "chosen" candidates in each precinct increase as a function of precinct size (vote tally), not the precinct location, whether in cities or rural areas. This makes no obvious sense based on any known demographic. Once you factor in rigging, however, it starts to make a lot of sense; stealing votes from a bigger pool is less likely to be detected.
According to Choquette and Johnson's findings, Mitt Romney's ill-gotten gains in 2012 amounted to over 1 million votes "siphoned" or "flipped" from other GOP candidates.
Instead of the flat line expected for each candidate, this chart shows the votes gained by Mitt Romney in a 2012 California primary race, by siphoning votes from other candidates. This “Vote Flipping” is an exchange of votes between candidates, while keeping the total number of votes intact to deter detection. (Chart: Francois Choquette)(Chart: Francois Choquette)
Instead of the flat line expected for each candidate, this chart shows the votes gained by Mitt Romney in a California primary race, by siphoning votes from other candidates. This "vote flipping" is an exchange of votes between candidates, while keeping the total number of votes intact to deter detection.
Figure 6 charts the Vote Gained / Votes Lost results for all 50 states in the 2012 GOP primaries. Because candidate Romney has gained votes in the process, his count is shown in green. The other eight candidates who have lost votes to Romney are shown in red. The total number of votes exchanged between the candidates is approximately 1,233,576 votes. (Chart: Francois Choquette)Figure 6 charts the Vote Gained / Votes Lost results for all 50 states in the 2012 GOP primaries. Because candidate Romney has gained votes in the process, his count is shown in green. The other eight candidates who have lost votes to Romney are shown in red. The total number of votes exchanged between the candidates is approximately 1,233,576 votes. (Chart: Francois Choquette)
Even for the mathematically challenged, the anomalies are evident when you read the report, and certainly lead to some serious head scratching. Choquette, who also co-authored "Republican Primary Election 2012 Results: Amazing Statistical Anomalies," says any high school student with a basic understanding of statistics could verify the work, and he welcomes anyone to run the numbers themselves.
Recently, a Ph.D. statistician took up the challenge. Beth Clarkson of Wichita State University was skeptical at first, but finally announced that she can find no other explanation besides voting machines being used to rig elections to benefit Republicans in the races she analyzed: the 2012 Ohio presidential election, the 2014 Wisconsin gubernatorial election and the Kansas Senate elections. Less often, Clarkson found that votes appear to be shifted to Democrats as well, depending on the state and type of voting machine used.
Clarkson is now building a media campaign and suing her county election commissioner in an attempt to audit her county's 2014 paper voting records, which so far has been denied.
All this new information only bolsters the long-held position of the Election Defense Alliance (EDA), a nonpartisan citizen watchdog organization. EDA finally coined the term "red shift" to describe the persistent pattern of anomalous vote resultspredominantly benefitting the right wing, as described in the 2014 book Code Red: Computerized Election Theft and the New American Century.
Recent History of Early Primary Rigging
Iowa Caucus 2012:
In the 2012 Iowa caucus, Mitt Romney, the favored candidate of the Republican Party's business elite, was declared the winner after a party-controlled vote count.
However, the true winner turned out to be Rick Santorum, an establishment outsider but the favorite of the party's evangelical and far-right wings.
Romney actually received fewer votes than were posted online by the state GOP, enough to swing the election. The wrong number was exposed by precinct vote counter Edward True. His protest garnered media attention and ultimately overturned the results, but it was too late for Santorum; Romney's momentum coming out of Iowa made him the "man to beat" going into New Hampshire.
The right-wing libertarian citizen group Watch the Vote was involved in overturning the Iowa caucus results, and was not convinced it was purely human error. They pledge to keep their eye on Iowa in 2016, stating on their website:
Clearly ... the Iowa GOP will be trying to cheat Donald Trump, Rand Paul, Ted Cruz, Rick Santorum, and Mike Huckabee. They will be trying to make Jeb Bush, Marco Rubio, and John Kasich "win" or "do well" ... but we will be focusing on getting a fair count for everyone.
South Carolina 2010:
South Carolina's bizarre and clearly fraudulent US Senate race in 2010 is the subject of a new documentary on rigged elections, I Voted?
The winner, Tea Party-supported Christian evangelical Jim DeMint, won by a landslide thanks to his implausible Democratic opponent, Alvin Greene, whom it seems was served up by the Democratic primary as the ultimate fail-safe opponent.
Greene, described by the press as "incoherent," was unemployed, accused of a sex offense and living in his father's basement. He had run no visible campaign, posted not one yard sign, appeared at no Democratic events and couldn't even explain where he got the $10,400 needed to file as a candidate.
Yet that same Greene had miraculously flayed his opponent in the Democratic primary, a respected former judge, four-term state legislator and National Guardsman, Vic Rawl, by a whopping 18 percent margin.
Voters and campaign workers reported that the ES&S iVotronic Touchscreen voting machines "flipped" votes to Greene all day long.
A glaring 10 percent pro-Rawl disparity was found between the paper absentee ballots, which were hand-counted, and electronic votes counted by the secretly programmed machines.
Rawl's formal protest and request for a new primary was denied by the executive committee of the South Carolina Democratic Party. Cynics have attributed this to surreptitious support for DeMint from evangelical Democrats.
However, a disinterest in pursuing justice for candidates whose election might have been stolen has become common practice for the Democratic establishment.
Perhaps, fearing to discourage voters with ugly talk of election rigging, Democratic Party wisdom has consistently valued getting out the vote as a priority over ensuring those votes are actually counted.
New Hampshire 2008:
In 2008, election experts, candidates and conspiracy theorists all questioned whether Mitt Romney or Hillary Clinton had really won the New Hampshire primary.
In the GOP primary, for example, the campaign for popular libertarian crusader Ron Paul found these discrepancies between hand-counted ballots and machine-counted results to be a red flag:
  • Mitt Romney, Diebold AccuVote Optical Scan: 33.075 percent
  • Mitt Romney, Hand-Counted Paper Ballots: 25.483 percent
  • Ron Paul, Diebold AccuVote Optical Scan: 7.109 percent
  • Ron Paul, Hand-Counted Paper Ballots: 9.221 percent
Again in 2012, Paul's supporters made a strong case that he was being systemically and egregiously rigged out in the primaries by the Republican National Committee (RNC) and widely broadcast their accusations. Their protest had merit; the RNC apparently even went so far as to change the rules of the nomination process in midstream to block Paul.
In 2008, establishment candidate Clinton was pitted against insurgent Barack Obama, who had won in Iowa and was clearly leading in New Hampshire by a wide margin in pre-election polls, as well as in the exit polls on election night.
Yet the final Democratic results showed a 10 percent variation from the polls, every one of which had Obama winning for an overall average lead of 8.3 percent. But Clinton won by 2.6 percent, unaccountably gaining 10 points overnight.
New Hampshire Democratic Primary 2008.New Hampshire Democratic Primary 2008.
A range of professional pre-election polls had been fairly spot-on in their predictions for all other candidates in the same race but had mysteriously miscalled the numbers for Clinton and Obama.
Again, the hand-counted paper ballot results favored Obama, while Clinton won in the districts where electronic voting machines secretly counted ballots.
  • Clinton: statewide optical scan tally: 52.73 percent
  • Obama: statewide optical scan tally: 47.27 percent
  • Clinton: statewide hand-count tally: 46.75 percent
  • Obama: statewide hand-count tally: 53.25 percent
Of course, conspiracy theories proliferated in the void where a public, transparent election should have occurred.
Hillary Clinton's upset win was imagined by some as a fix perpetrated by rogue elements among her more conservative New Hampshire Democratic backers. Others pointed the finger at Republican operatives who they believe may have orchestrated her victory, judging Obama the stronger horse against Romney (or any other GOP candidate).
As it happens, the Premier Voting Machine company, which controlled over three-quarters of the New Hampshire primary, was actually the same Republican-friendly Diebold Voting Machine Company involved in the controversial upset victory by President George W. Bush over John Kerry in Ohio in 2004. (The company had just switched names.)
Diebold CEO Walden O'Dell, who had publicly pledged to deliver Ohio to Bush in 2004, was later mired in widespread accusations of a conspiracy to rig out Kerry late on election night in Ohio. Top cyber-security experts charged that Karl Rove's online vote-gathering apparatus used a "man in the middle" hack to alter the results, in collusion with the ultra partisan Ohio secretary of state, Kenneth Blackwell, the co-chair of the Committee to Re-Elect George W. Bush.
The man who built the vote-tabulating system, GOP tech guru Michael Connell, died in a suspicious private plane crash after being subpoenaed and then compelled to testify against Rove. Two election officials were eventually convicted of rigging the Ohio recount.
Programming the counting for the 2008 New Hampshire primary was a little known company called LHS Associates, which used the same infamous GEMS software long proven to be easily manipulated by insiders to alter the outcome of the election andproduce a matching, fraudulent poll tape report.
And the New Hampshire election officials knew. Computer expert Harri Hurstipublicly demonstrated this fraud capacity to the New Hampshire State House Subcommittee on Election Equipment before the 2008 primary. The officials chose to use the fraudulent software anyway.
According to the Election Defense Alliance, had New Hampshire simply chosen to count a 10 percent sample of their ballots in precinct on election night, they could have avoided the need to recount all the Republican and more than half of the Democratic primary ballots by hand a week later, "in adversarial circumstances, and under a cloud of suspicion about chain of custody and the legitimacy of secret vote counting."
How to Protect the 2016 Primaries
In two of the three early primaries, some steps can be taken to deter or detect fraud.
Iowa 2016:
Monitoring the vote count at the Iowa caucus is essential as the parties are piloting a new online cloud-based app for reporting results.
Any new electronic voting system carries a risk of error or malfunction, and online reporting offers the opportunity for rigging the results en route if not carefully compared to the original vote counts at the precinct.
Iowa voters can ensure their votes don't get lost (or rigged) in the cloud by having many eyes on the ground at the precincts. Take pictures of how many people are present and get a physical count at each location. Use cell phones, video, pen and paper, anything to record the original precinct vote totals, and verify that they match the reported results. 
New Hampshire 2016:
According to Verified Voting, New Hampshire widely uses the AccuVote-OS optical scanner to count paper ballots. Security concerns listed include quick-to-pick locks, "sensitive" memory cards, and easily introduced viruses causing the server to crash and falsify votes.
But New Hampshire is one of the rare states where hand counting is still a choice available to all towns and cities. Combined with a minimal 10 percent audit of the AccuVote-tallied ballots, machine fraud is likely to be detected or even deterred - but voters would have to demand it.
South Carolina 2016:
South Carolina continues to use the infamously riggable ES&S iVotronic Touchscreens, which produce no ballot or paper receipt, and cannot be audited. iVotronic machines were used to rig elections by a conspiracy of government insiders and election officials convicted in Kentucky in 2010, just one example out of many in which these machines were involved in fraud.
Some of the iVotronic machines that will be used in the primary are possibly the same physical machines that were used in Florida's highly contested Congressional District 13 race for the US Congress in 2006, when they inexplicably lost some 18,000 votes. After that election, Florida sent many of their faulty voting machines to the landfill. Others were sold to the State of South Carolina.
In sum, the 2016 primary in South Carolina cannot be protected. Democracy advocates in the Palmetto State have little recourse except to make these 100 percent non-verifiable systems illegal for future elections.
The good news is that voting machines are failing nationwide, 14 years after states bought most of them with $3.9 billion from the 2002 Help America Vote Act (HAVA).
Most counties no longer have HAVA funds to replace their aged and malfunctioning machines. Citizens now have the chance to examine their voting systems anew, hopefully with the will not to repeat past mistakes.
Concerned voters and public officials should form task forces in every state and election jurisdiction to push for reforms that secure our elections. Only publicly controlled, transparent vote counting fulfills the conditions of democracy - if democracy is what we want.