Above: Photo Collage / Lynxotic / Simon & Schuster
Naomi Klein’s new book is third in a venerated series on problems we face as a species
As the disasters mount and more and more are definitively linked to man-made climate change and global warming, millions around the globe recognize the need for solutions. More and more the solutions arise, only to be blocked or derailed by the same phenomena: corrupt governments beholden to status quo power and short-sighted corporate greed.
This dynamic; available solutions being actively opposed by business and governments that answer to those powerful corporate entities, even as they mount massive multi-million dollar ad campaigns to “green-wash” their image and try to appear aligned with the very solutions they violently oppose is nearly all pervasive.
Meanwhile, as the problems continue to grow, it has become clear that we, that is to say humanity and its future survivors, are not just fighting a battle against the problem itself, the rapidly deteriorating climate caused by Carbon dioxide (CO2), the primary greenhouse gas emitted through human activities, but even more so a political battle is underway which pits an entire entrenched, unequal and corrupt system (regardless of ideology) against the very issue that needs to be tackled in order for our species to survive.
Without solving the problem of Capitalism’s built-in bias toward profit at any cost, any solution to the climate crisis will be stopped or hindered before it can take root and make enough impact to give us a chance against the looming disasters.
Recently Greta Thunberg posted a statement that governments were literally doing nothing, while at the same time preaching and advertising their “commitment” to solving the problem.
This basically sums up our current situation. The “code red” IPCC report came out a week ago. Since then not one politician has been held accountable. Not one politician has been asked how they are going to act in line with this. 1/4 (Graph by @Peters_Glen ) pic.twitter.com/1r4vljDzJw
Naomi Klein represents a voice, a top selling author, that has stayed focused on this specific aspect of the challenge for decades. The documentary based on her best-selling book “This Changes Everything” (trailer below) is now a classic and zeros in on the monumental importance of this problem, and how the political and economic systems of the world will require massive and immediate change if we are to survive.
This is not about the tired tropes of Socialism vs Capitalism vs Communism and so on, but rather about the specific corruption and suicidal deception that threatens us all, as fake dedication to solving the problem is paraded simultaneously with efforts that double-down on protecting the homicidal status quo of greed and destruction.
Now, with the Biden administration touting its green status and the green new deal, there must be accountability and more than just words and slogans. The new book shown below is an in-depth look at just what needs to happen to confront the political gridlock and the tendency for real solutions to be blocked or destroyed in the crib.
Naomi has been at the forefront reporting on the many ways the economy has waged war one planet and people for over 20 years.
An instant bestseller, On Fire shows Klein at her most prophetic and philosophical, investigating the climate crisis not only as a profound political challenge but also as a spiritual and imaginative one. Delving into topics ranging from the clash between ecological time and our culture of “perpetual now,” to the soaring history of humans changing and evolving rapidly in the face of grave threats, to rising white supremacy and fortressed borders as a form of “climate barbarism,” this is a rousing call to action for a planet on the brink. An expansive, far-ranging exploration that sees the battle for a greener world as indistinguishable from the fight for our lives, On Fire captures the burning urgency of the climate crisis, as well as the fiery energy of a rising political movement demanding a catalytic Green New Deal.
Within this text, you will find her essays, written whilst in the midst of natural disasters, dire warnings of the future that is waiting for us if we do nothing to change. The long-forms essays display both the prophetic and philosophical while also challenging the spiritual and imaginative.
Her writings span events ranging from the smoky skies of the Pacific Northwest, the barren Great Barrier Reef to the post-hurricane Puerto Rico and many other climate crises.
This Changes Everything: Capitalism vs. the Climate
Author Naomi Klein wants readers to embrace the radical, that there is no longer the option to remain at the status quo. Climate Change isn’t just something to be “fixed” it is a crisis that requires immediate action. Also now a feature documentary.
In her book she exposes climate change deniers, delusions of geoengineers, why mainstream green initiatives have failed thus far and how capitalism will only make things worst.
The most important book yet from the author of the international bestseller The Shock Doctrine, a brilliant explanation of why the climate crisis challenges us to abandon the core “free market” ideology of our time, restructure the global economy.
The Shock Doctrine: The Rise of Disaster Capitalism
Klein introduces us to a new term, disaster capitalism, how those who experience catastrophic events (i.e. war/extreme violence or tsunami/ natural, ect) not only had to suffer from the disaster but also were being taken advantage by “rapid-fire corporate makeovers”.
“The Shock Doctrine” shows how economic policies have capitalized on crises, how at the core of disaster capitalism is to use a cataclysmic event to radicalize privatization.
In her groundbreaking reporting, Naomi Klein introduced the term disaster capitalism. Whether covering Baghdad after the U.S. occupation, Sri Lanka in the wake of the tsunami, or New Orleans post-Katrina, she witnessed something remarkably similar. People still reeling from catastrophe were being hit again, this time with economic shock treatment, losing their land and homes to rapid-fire corporate makeovers.
The Shock Doctrine retells the story of the most dominant ideology of our time, Milton Friedman’s free market economic revolution. In contrast to the popular myth of this movement’s peaceful global victory, Klein shows how it has exploited moments of shock and extreme violence in order to implement its economic policies in so many parts of the world from Latin America and Eastern Europe to South Africa, Russia, and Iraq.
Watch Trailer for Documentary: ‘This Changes Everything’
Periodically, we get a glimpse into the financial lives of the ultrarich. A pro athlete signs a huge contract, a tech CEO sells a boatload of shares in their company, or a billionaire heir unloads a Manhattan penthouse. Based on these nuggets of information, the media speculates as to how much income the rich might bring in every year. But nobody actually knows.
The analysis also shows how much they paid in federal income taxes — and it demonstrates how the American tax system, which theoretically makes the highest earners pay the highest income tax rates, fails to do so for the people at the very top of the income pyramid.
The top 400 earners pay noticeably lower tax rates than the merely rich; and, if you include payroll taxes, a married couple making $200,000 a year could end up paying higher tax rates than a person making $200 million a year. (The full analysis is here; it includes selected names beyond the top 15.)
Names That Won’t Surprise You
Scan the names on the list of the top 15 income earners and you’re certain to recognize several names — or at least the names of the companies they founded. Bill Gates hasn’t been involved in the day-to-day operations of Microsoft for over a decade, yet he still earned the most during the years we studied, reporting an average yearly income of $2.85 billion — and an effective federal income tax rate of 18.4%. Steve Ballmer, his former colleague, is also a well-known public figure, both for his time as Microsoft CEO and his current ownership of the Los Angeles Clippers NBA team.
Ballmer’s average annual reported income of $1.05 billion landed him in the 10th spot on the list, and his effective federal income tax rate was 14.1%. The other side of the PC/Mac wars is represented here by Laurene Powell Jobs, widow of Apple founder Steve Jobs.
Her average reported income of $1.57 billion ranked fifth-highest; she paid an effective tax rate of 14.8%. (ProPublica sought comment from everyone mentioned in this article. Nobody disputed the numbers cited here. Unless otherwise noted, representatives for people named in this article either declined to comment, declined to comment on the record or did not respond to requests for comment.)
Another well-known billionaire sits just below Gates on the list: Media and tech mogul and former New York City mayor Michael Bloomberg, with an average reported income of just over $2 billion, paid an effective income tax rate of 4.1%, by far the lowest rate among the top 15. (A spokesperson told ProPublica for an earlier article that Bloomberg “pays the maximum tax rate on all federal, state, local and international taxable income as prescribed by law,” and cited Bloomberg’s philanthropic giving.)
The presence of Amazon founder Jeff Bezos — either the first- or second-wealthiest person in America, depending on the day — won’t shock most people, but Bezos’s annual reported income during these years of $832 million put him only at number 15. He paid an effective tax rate of 23.2%; as we’ve previously reported, Bezos had so little income in a couple of recent years that he was able to pay $0 in federal income taxes in those periods.
Who Are These Others and Why Are They Paying Higher Tax Rates?
Tech billionaires dominate the top 15, but hedge fund managers account for a full third of the names on this list, and some of their incomes were just as huge. Most of them paid relatively high effective tax rates, especially compared to most of the tech sector representatives. Hedge fund managers often make their money through short-term trades, which are taxed at a much higher rate than when tech titans cash in on long-term investments.
The highest-earning hedge funder is Ken Griffin, founder of the Chicago-based firm Citadel. From 2013 to 2018, he reported an average income of nearly $1.7 billion, putting him fourth on the list. Griffin paid a tax rate of 29.2% during these years. (A spokesperson for Griffin said the tax rates in the IRS data “significantly understate” what Griffin pays, because they were lowered by charitable contributions and do not reflect local and state taxes. He also said Griffin pays foreign taxes, which aren’t included in IRS calculations of effective tax rate.)
Israel Englander, co-founder of Millennium Management, paid at a 30.8% rate, while the co-founders of Two Sigma Investments, David Siegel and John Overdeck, paid tax rates of 31.6% and 34.2%, respectively.
Some of this variation in rates reflects how people structure their businesses under tax law. Income earned by publicly traded corporations is taxed at the company level. When it’s passed on to big shareholders, such as tech billionaires, it can come in the form of dividends, which are taxed at lower rates than ordinary income. By contrast, the income from some manufacturing companies and hedge funds flows directly to company owners, who pay taxes on it, resulting in higher effective tax rates on average.
Where Are the Heirs?
Lists of the world’s wealthiest individuals are always heavily populated by heirs, ranging from descendents of old money to scions of more recently minted fortunes. Dozens of heirs made ProPublica’s list of 400 biggest income earners. Descendents and relatives of Sam Walton, founder of Walmart, claim 11 spots.
The DeVos family, heirs to the Amway fortune, also have multiple members in the top 400. Perhaps the best known is Betsy DeVos, who served as U.S. secretary of education during the Donald Trump administration. With a reported annual income of $112 million, she was the 389th-highest earner in this period.
Much like the tech titans who top the list, most of these heirs get their income from dividends or long-term investments, which are taxed at a lower rate. Their effective tax rates ranged from as low as 10.6% for Betsy DeVos to a high of 23% paid by Walmart heirTom Walton.
Don’t Forget the Deductions
Another key way that some top earners reduced their tax liability was to claim significant deductions, often in the form of large charitable contributions. This is particularly true for wealthy investors who are able to make their donations with shares of stock. Thanks to a generous provision of the tax code, they can then deduct the full value of the stock at its current price — without having to first sell it and pay capital gains tax.
Michael Bloomberg achieved a tax rate of 4.1% from 2013 to 2018 by taking annual deductions of more than $1 billion, mostly through charitable contributions. From 2013 to 2017, he also wrote off an average of $400 million each year from what he’d paid in state and local taxes. The 2018 tax overhaul limited that deduction to $10,000 — but also introduced a huge new deduction for pass-through companies that Bloomberg benefited from.
Wait — What About the Celebrities?
The earnings of actors, musicians and sports stars are a subject of nonstop scrutiny in the media, yet few celebrities cracked the list of the top 400 earners, which would have required them to report annual incomes of at least $110 million.
ProPublica’s trove has data on many celebrities. One who came close to the top 400 is basketball superstar LeBron James, who averaged $96 million a year in reported income. Grammy-winning singer Taylor Swift also came within reach of the top 400, averaging $82 million in reported income during these years. Actor George Clooney would have had to double his average income of $55 million to crack the top 400.
New report lists Uber, Lyft, DoorDash, Instacart, and Grubhub worker victims, and the tally is likely even higher
When the St. Louis police arrived on the scene last April, Lyft driver Elijah Newman was already dead. Officers found him in the driver’s seat of his car with a gunshot wound to his torso. In a probable cause statement provided to The Markup by the Circuit Attorney’s office, detectives say they located a bullet casing next to Newman’s body and a Lyft light affixed to the front dashboard.
“It was like a fist to the gut,” Elizabeth Hylton, Newman’s long-time friend and roommate, said when she heard the news.
Newman, an immigrant from Ghana, was one of more than 50 gig workers murdered while on the job over the past five years in the U.S., according to a new study published by worker advocacy group Gig Workers Rising.
The study draws data from The Markup’s report on 124 carjackings of ride-hail drivers, as well as news articles, police documents, legal filings, GoFundMe fundraisers, and other online searches. Gig Workers Rising said the study fills the void of any company or government data on the dangers of gig work. The Markup independently verified the incidents listed in the report.
“These are not one-off incidents,” said Lauren Jacobs, executive director of a coalition of nonprofits that focus on inequality, PowerSwitch Action, which contributed to the report. The companies don’t seem to be concerned enough with worker safety, she added.
“This is a pattern.”
According to a spreadsheet that Gig Workers Rising provided to The Markup, 22 of the workers were driving for Uber when they were killed, and four were couriers for Uber Eats. Seventeen were working for Lyft, eight for DoorDash, two for Instacart, one for Grubhub, and one for Postmates (which is owned by Uber). The Markup also independently verified the incidents in the spreadsheet, a handful of which the companies said happened after the worker had logged off the app.
It’s estimated that more than one million people in the U.S. work for one or more of these gig companies. The assaults happened across the country, from Arizona to Kentucky to Pennsylvania, and the majority happened in 2021, with 28 reported homicides. Seven murders tracked by Gig Workers Rising occurred in the first two months of this year alone.
Some of the workers were accidentally caught in drive-by shootings, others in road rage incidents or botched carjackings and robberies. While cities across the country have seen a rise in carjackings and associated crimes over the last couple of years, these incidents appear to be happening to gig workers at an especially high rate.
“Gig work is becoming increasingly dangerous,” said Bryant Greening, an attorney and co-founder of Chicago-based law firm LegalRideshare, who says he gets calls from gig workers who’ve been carjacked on a weekly basis. “Criminals see rideshare and delivery workers as sitting ducks, susceptible to carjackings, robberies, and assaults.”
Uber spokesperson Andrew Hasbun said, “Given the scale at which Uber and other platforms like ours operate, we are not immune from society’s challenges, including spikes in crime and violence.” He added that “we continue to invest heavily in new technologies to improve driver safety,” and “each of these incidents is a horrific tragedy that no family should have to endure.”
Lyft spokesperson Gabriela Condarco-Quesada said, “Since day one, we’ve built safety into every part of the Lyft experience. We are committed to doing everything we can to help protect drivers from crime, and will continue to invest in technology, policies and partnerships to make Lyft as safe as it can be.”
DoorDash spokesperson Julian Crowley, Instacart’s senior director of shopper engagement Natalia Montalvo, and Grubhub spokesperson Jenna DeMarco provided similar comments, saying that the companies take safety seriously and have protocols in place for emergency situations.
Gig Workers Rising said the tally of more than 50 workers “is not comprehensive and likely excludes many workers.” The Bureau of Labor Statistics and most police departments don’t compile data specifically on gig worker deaths. None of the gig companies The Markup contacted would say how many of their workers have been killed on the job. Uber’s Hasbun and Lyft’s Condarco-Quesada pointed The Markup to company safety reports, both of which had some data on fatal physical assaults for riders and drivers. The most recent data was from Lyft in 2019.
Gig Workers Rising said its spreadsheet includes only reported homicides, not traffic accidents or other causes of death. Most of those killed—63 percent—were people of color, according to the group, which also reported that several families say they received little support from the companies after the incidents.
Gig workers are treated as independent contractors by the companies, so they’re not given employee benefits like workers’ compensation, full company health insurance, or death benefits. When something goes wrong during rides or deliveries, workers and their families are often the ones shouldering medical costs, car payments, and funeral expenses.
Two drivers told The Markup that after they were carjacked, Uber and Lyft offered to help with some of their expenses only if they agreed to sign nondisclosure agreements.
Uber’s Hasbun didn’t respond to questions about nondisclosure agreements but said that “every situation is unique, we have programs in place to support families, including with insurance.” Similarly, Lyft’s Condarco-Quesada said, “While every situation is unique, our specialized group of trained Safety advocates work with the driver’s family to determine their specific needs and provide meaningful support to them directly.” Crowley, Montalvo, and DeMarco also said DoorDash, Instacart, and Grubhub reach out to support workers’ families in these instances and both DoorDash and Instacart offer injury protection insurance for free to eligible workers.
Along with its report, Gig Workers Rising demanded reforms from the companies, which included workers’ compensation for all drivers and couriers, the end to forced arbitration clauses in contracts so that workers can publicly pursue legal claims in court, and a requirement that the gig companies report worker deaths annually.
“No one when they show up to work should be killed,” Cherri Murphy, a former Lyft driver and organizer with Gig Workers Rising, said in a statement. “The lack of care for these workers is a direct outcome of a business model set up to milk as much as possible for executives.”
Some families have filed wrongful death lawsuits against the companies. Among them are the relatives of Uber driver Cherno Ceesay, a 28-year-old immigrant from Gambia who was allegedly fatally stabbed by two passengers while driving in Issaquah, Wash., and the family of Beaudouin Tchakounte, a 46-year-old Cameroonian immigrant who also drove for Uber and was allegedly shot to death by a passenger in Oxon Hill, Md.
A federal district court judge in Maryland dismissed Tchakounte’s case in February, but the family is appealing. Ceesay’s case is pending trial in a Washington federal district court later this year.
Uber’s Hasbun didn’t respond to requests for comment on the lawsuits.
Isabella Lewis was 26 years old when she was allegedly killed by a passenger in August 2021 near Dallas, Texas. According to Gig Workers Rising, Lyft hasn’t assisted the family, which started a GoFundMe page to raise money for Lewis’s funeral. Lewis’s sister, Alyssa Lewis, told Gig Workers Rising, “My sister lost her life over a Lyft trip that totaled … 15 dollars.”
Lyft’s Condarco-Quesada didn’t respond to a request for comment on whether the company provided support to Lewis’s family.
The Markup previously found that many gig drivers who were victims of carjackings were elderly, immigrants, and women. In addition to the 124 carjackings we first compiled, we also found that in Minneapolis alone nearly 50 Uber and Lyft drivers were carjacked during a two-month period from August to October 2021.
Some of the carjackings were random incidents, we found, but the majority of the attacks happened after drivers were paired with their would-be assailants by Uber’s or Lyft’s app—often with the passengers using fake names and fake profile pictures. Neither company requires riders to use a valid ID to sign up for the service, so passengers can be anonymous. The suspect in Elijah Newman’s case reportedly used a false name. Gig Workers Rising said this happened in some of the cases it tracked too.
Uber’s Hasbun said the company now requires new riders who sign up for the app and use anonymous forms of payment, like a gift card, to provide a valid ID. Lyft also has this requirement in a few U.S. cities. Neither Hasbun nor Lyft’s Condarco-Quesada responded to questions about why the companies don’t require all passengers to upload a valid ID.
“While the companies publicly tout their commitments to safety, workers quickly discover an alternative reality,” said LegalRideshare’s Greening. “Simply stated, gig workers and their families are left to fend for themselves.”
In a new video from Robert Reich, former secretary of labor and accomplished author, the phenomena we are all experiencing on a daily basis, such as incredible high gas prices, crazy energy prices, more out-of-pocket at the grocery store, and what sure looks like price gouging and price hikes on almost everything, he takes on the root of it all, in other words: Inflation.
Naturally, with all of this being so obvious to you and me there’s no shortage of folks to explain the purported causes, from media outlets like The Washington Post, to Biden administration officials and pundits from left, right and center.
One explanation you will seldom hear, however, is that much of the pain we are experiencing is due to monopoly power, the inequality growing out of the economic concentration of the American economy and the ever increasing concentration of financial and market power to a relative handful of big corporations.
This perspective is not only refreshingly direct, but it actually has a remedy attached, unlike the usual reasons given, such as economic policy, government spending, irresponsible actions by the federal government and federal reserve and so on. While all of these are certainly good candidates for finger pointing, they generally have only one response attached that is suggested as a remedy: higher interest rates.
“How can this structural problem be fixed? Fighting corporate concentration with more aggressive antitrust enforcement. Biden has asked the Federal Trade Commission to investigate oil companies, and he’s appointed experienced antitrust lawyers to both the FTC and the Justice Department.”
– Robert Reich
The idea that corporate greed, massive corporate profits that keep rising, in spite of supply chain disruptions and other issues, could be at the root of the problems, and that aggressive use of antitrust law might just be an appropriate response to the deeper structural issue is spot on.
A real change via antitrust might help to reinstate tough competition, weed out greedy businesses and even slow down the increasing consolidation of the economy, and the concept comes across as a welcome revelation, or at least beats a job and economy crushing series of Paul Volcker-style (huge) interest rate hikes.
There’s an even bigger challenge on the horizon, however, which is the sheer size of the biggest tech firms, who make the companies mentioned in the video, such as Coke, Pepsi, Procter & Gamble, meat conglomerates and the pharmaceutical industry seem tiny by comparison. As noted by the Wall Street Journal, during the pandemic the behemoths such as Facebook, Amazon and Microsoft have surged.
This is evidence of even less competition than in the sectors mention and presented in the video, and yes, the energy sector, consumer goods, food prices are all showing little competition and that situation is getting worse.
At least we have Mark Zuckerberg, from a recent YouTube interview with Lex Fridman, with his sunny personality shining through, saying that “what if playing with your friends is the point [of life]?, and further “I think over time, as we get more technology, the physical world is becoming less of a percent of the real world, and I think that opens up a lot of opportunities for people because you can you can work in different places you can stay closer to people who are in different places removing barriers of geography”. At least, then, there’s that. Thanks Mark.
The video text reads well also on the page. Charts, graphics and the charismatic voice of Robert Reich are worth the watch, but here is the full text, in case you prefer:
Inflation! Inflation! Everyone’s talking about it, but ignoring one of its biggest causes: corporate concentration.
Now, prices are undeniably rising. In response, the Fed is about to slow the economy — even though we’re still at least 4 million jobs short of where we were before the pandemic, and millions of American workers won’t get the raises they deserve. Republicans haven’t wasted any time hammering Biden and Democratic lawmakers about inflation. Don’t fall for their fear mongering.
Everybody’s ignoring the deeper structural reason for price increases: the concentration of the American economy into the hands of a few corporate giants with the power to raise prices.
If the market were actually competitive, corporations would keep their prices as low as possible as they competed for customers. Even if some of their costs increased, they would do everything they could to avoid passing them on to consumers in the form of higher prices, for fear of losing business to competitors.
But that’s the opposite of what we’re seeing. Corporations are raising prices even as they rake in record profits. Corporate profit margins hit record highs last year. You see, these corporations have so much market power they can raise prices with impunity.
So the underlying problem isn’t inflation per se. It’s a lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.
Take the energy sector. Only a few entities have access to the land and pipelines that control the oil and gas powering most of the world. They took a hit during the pandemic as most people stayed home. But they are more than making up for it now, limiting supply and ratcheting up prices.
Or look at consumer goods. In April 2021, Procter & Gamble raised prices on staples like diapers and toilet paper, citing increased costs in raw materials and transportation. But P&G has been making huge profits. After some of its price increases went into effect, it reported an almost 25% profit margin. Looking to buy your diapers elsewhere? Good luck. The market is dominated by P&G and Kimberly-Clark, which—NOT entirely coincidentally—raised its prices at the same time.
Another example: in April 2021, PepsiCo raised prices, blaming higher costs for ingredients, freight, and labor. It then recorded $3 billion in operating profits through September. How did it get away with this without losing customers? Pepsi has only one major competitor, Coca-Cola, which promptly raised its own prices. Coca-Cola recorded $10 billion in revenues in the third quarter of 2021, up 16% from the previous year.
Food prices are soaring, but half of that is from meat, which costs 15% more than last year. There are only four major meat processing companies in America, which are all raising their prices and enjoying record profits. Get the picture?
The underlying problem is not inflation. It’s corporate power. Since the 1980s, when the U.S. government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated. Most are now dominated by a handful of corporations that coordinate prices and production. This is true of: banks, broadband, pharmaceutical companies, airlines, meatpackers, and yes, soda.
Corporations in all these industries could easily absorb higher costs — including long overdue wage increases — without passing them on to consumers in the form of higher prices. But they aren’t. Instead, they’re using their massive profits to line the pockets of major investors and executives — while both consumers and workers get shafted.
How can this structural problem be fixed? Fighting corporate concentration with more aggressive antitrust enforcement. Biden has asked the Federal Trade Commission to investigate oil companies, and he’s appointed experienced antitrust lawyers to both the FTC and the Justice Department.
So don’t fall for Republicans’ fear mongering about inflation. The real culprit here is corporate power.
Ask almost any billionaire how they got so obscenely rich and , invariably, you will get the response: “I just did what the law allows” or some convoluted version of that idea. Tax laws, property and financial regulations and structures, corporate stock options, Roth IRA tricks, all the tried and true methods outlined in a slate of recent articles from ProPublica and others are rightfully given credit for the insanely massive windfalls.
Not that these arrogant, self-centered sociopaths don’t jump at the chance to take credit for their “miraculous” good fortune, or even write books and “let” others write books about all the “genius” ideas and methods they used to conquer the universe.
Jeff Bezos is the most ridiculous example of this, literally dozens of books exist only to extol the virtues and genius of this a-hole that basically used one simple trick: selling dollar bills for .75 cents and using the stock market to “monetize” a trillion in intentional losses and turn them into “wealth”, to amass his absurd mountain of “worth”, yet if you read these books the central concept of his fraud doesn’t even get a mention.
Of course, 25 years later, the FTC and Lina Khan are finally beginning to wake up to the simple fact that, not only is the entire scam something that “ought-a-be-illegal”, but literally is illegal and always was, yet this comes across, so far, as a somewhat pathetic attempt to put a band-aid on the world after a nuclear holocaust has already devastated the planet.
When we say “tax the rich,” we mean nesting-doll yacht rich. For-profit prison rich. Betsy DeVos, student-loan-shark rich.
AOC used her beauty and a cheeky dress to highlight the issue of income inequality
Above: Photo / Wikipedia
AOC at the Met Gala styled herself in a “Tax the Rich” gown. The look on her was beautiful. The subject matter being broached couldn’t be uglier. Tax the rich a not a bad idea, but the system is so screwed up, and so far from any semblance of “fair”, that a few little pin pricks on trillions in undeserved holdings is basically meaningless.
How can it be said that the system is that far gone? It’s in the numbers and the proportions of “wealth”. The extremes of unequal wealth distribution have risen to levels so incredible, that it’s as if they are turning into an economic ouroboros dragon that will expand and swallow itself until it has devoured all life.
The increases, during the pandemic, for example, in the “net-worth” (which is in itself an obscene concept for measuring humans) of the worlds richest animals was like the replication of the virus the rest of us were fighting to avoid, most with too few resources to have any hope of being rescued by medical intervention, if we got infected.
This idea and proof of a system vastly out of balance can be seen everywhere you look…
In a recent, excellent, NYT article on Afghanistan multiple examples were cited illustrating who really “won” that endless war, and points out that it wasn’t the just Taliban. It was locals entrepreneurs and politicians who, early on, saw the opportunity for what it really was, a way to build personal fortunes supplying the US military with support and comfort during the endless, directionless morass.
Several examples were of people who began the war as local american sympathizers and ended up with fortunes hundreds of millions of USD and more, virtually none of which trickled into the local populations which, ostensibly, the war was meant to give a chance for “democratic freedom”. And capitalism.
Here’s a couple of paragraphs from the NYT article in full :
”Consider the case of Hikmatullah Shadman, who was just a teenager when American Special Forces rolled into Kandahar on the heels of Sept. 11. They hired him as an interpreter, paying him up to $1,500 a month — 20 times the salary of a local police officer, according to a profile of him in The New Yorker. By his late 20s, he owned a trucking company that supplied U.S. military bases, earning him more than $160 million.”
“If a small fry like Shadman could get so rich off the war on terror, imagine how much Gul Agha Sherzai, a big-time warlord-turned-governor, has raked in since he helped the C.I.A. run the Taliban out of town. His large extended family supplied everything from gravel to furniture to the military base in Kandahar. His brother controlled the airport. Nobody knows how much he is worth, but it is clearly hundreds of millions — enough for him to talk about a $40,000 shopping spree in Germany as if he were spending pocket change”
New York Times
Redistribution will likely only happen after the entire system collapses of its own stupidity
Hubris and pride before the fall is the reason that, when you read this, you’ll think perhaps this writer has lost his marbles. But the system is unsustainable in its current unequal, and increasingly unjust, form.
Sources: March 18, 2020 data: Forbes, “Forbes Publishes 34th Annual List Of Global Billionaires,” accessed March 18, 2020. August 17, 2021 data: Forbes, “The World’s Real-Time Billionaires, Today’s Winners and Losers,” accessed August 17, 2021.
Just one more ballooning of the one tenth of one percent and the system will be so out of balance, that only a total and complete realignment of reality will allow any kind of improvement in the distribution of resources.
In fact, the opposite outcome is far more likely, where to increase in the imbalance will continue ‘till there are no options, but for the current system to be drowned in its own orgy of self-congratulations.
The solutions that are out there, many even championed ironically and paradoxically by the very billionaires that sit on top of this mountain of inequality, could work. But a “penny tax” or some kind of gratuitous show of “generosity” by those that have wealth that, if the system were designed with any form of equal distribution, they would not, and could not, have, is less than nothing.
Similar to the climate conundrum, things will have to get worse, it appears, to engage and enrage people, and wake enough people up, to set a fire under enough people, to build to a tipping point toward real change. Fortunately, if you accept that inverted and convoluted logic, that day is very near.
In November 2017, with the administration of President Donald Trump rushing to get a massive tax overhaul through Congress, Sen. Ron Johnson stunned his colleagues by announcing he would vote “no.”
Making the rounds on cable TV, the Wisconsin Republican became the first GOP senator to declare his opposition, spooking Senate leaders who were pushing to quickly pass the tax bill with their thin majority. “If they can pass it without me, let them,” Johnson declared.
Johnson’s demand was simple: In exchange for his vote, the bill must sweeten the tax break for a class of companies that are known as pass-throughs, since profits pass through to their owners. Johnson praised such companies as “engines of innovation.” Behind the scenes, the senator pressed top Treasury Department officials on the issue, emails and the officials’ calendars show.
Within two weeks, Johnson’s ultimatum produced results. Trump personally called the senator to beg for his support, and the bill’s authors fattened the tax cut for these businesses. Johnson flipped to a “yes” and claimed credit for the change. The bill passed.
The Trump administration championed the pass-through provision as tax relief for “small businesses.”
Confidential tax records, however, reveal that Johnson’s last-minute maneuver benefited two families more than almost any others in the country — both worth billions and both among the senator’s biggest donors.
Dick and Liz Uihlein of packaging giant Uline, along with roofing magnate Diane Hendricks, together had contributed around $20 million to groups backing Johnson’s 2016 reelection campaign.
The expanded tax break Johnson muscled through netted them $215 million in deductions in 2018 alone, drastically reducing the income they owed taxes on. At that rate, the cut could deliver more than half a billion in tax savings for Hendricks and the Uihleins over its eight-year life.
But the tax break did more than just give a lucrative, and legal, perk to Johnson’s donors. In the first year after Trump signed the legislation, just 82 ultrawealthy households collectively walked away with more than $1 billion in total savings, an analysis of confidential tax records shows. Republican and Democratic tycoons alike saw their tax bills chopped by tens of millions, among them: media magnate and former Democratic presidential candidate Michael Bloomberg; the Bechtel family, owners of the engineering firm that bears their name; and the heirs of the late Houston pipeline billionaire Dan Duncan.
Usually the scale of the riches doled out by opaque tax legislation — and the beneficiaries — remain shielded from the public. But ProPublica has obtained a trove of IRS records covering thousands of the wealthiest Americans. The records have enabled reporters this year to explore the diverse menu of options the tax code affords the ultrawealthy to avoid paying taxes.
The drafting of the Trump law offers a unique opportunity to examine how the billionaire class is able to shape the code to its advantage, building in new ways to sidestep taxes.
The Tax Cuts and Jobs Act was the biggest rewrite of the code in decades and arguably the most consequential legislative achievement of the one-term president. Crafted largely in secret by a handful of Trump administration officials and members of Congress, the bill was rushed through the legislative process.
As draft language of the bill made its way through Congress, lawmakers friendly to billionaires and their lobbyists were able to nip and tuck and stretch the bill to accommodate a variety of special groups. The flurry of midnight deals and last-minute insertions of language resulted in a vast redistribution of wealth into the pockets of a select set of families, siphoning away billions in tax revenue from the nation’s coffers. This story is based on lobbying and campaign finance disclosures, Treasury Department emails and calendars obtained through a Freedom of Information Act lawsuit, and confidential tax records.
For those who benefited from the bill’s modifications, the collective millions spent on campaign donations and lobbying were minuscule compared with locking in years of enormous tax savings.
A spokesperson for the Uihleins declined to comment. Representatives for Hendricks didn’t respond to questions. In response to emailed questions, Johnson did not address whether he had discussed the expanded tax break with Hendricks or the Uihleins. Instead, he wrote in a statement that his advocacy was driven by his belief that the tax code “needs to be simplified and rationalized.”
“My support for ‘pass-through’ entities — that represent over 90% of all businesses — was guided by the necessity to keep them competitive with C-corporations and had nothing to do with any donor or discussions with them,” he wrote.
By the summer of 2017, it was clear that Trump’s first major legislative initiative, to “repeal and replace” Obamacare, had gone up in flames, taking a marquee campaign promise with it. Looking for a win, the administration turned to tax reform.
“Getting closer and closer on the Tax Cut Bill. Shaping up even better than projected,” Trump tweeted. “House and Senate working very hard and smart. End result will be not only important, but SPECIAL!”
At the top of the Republican wishlist was a deep tax cut for corporations. There was little doubt that such a cut would make it into the final legislation. But because of the complexity of the tax code, slashing the corporate tax rate doesn’t actually affect most U.S. businesses.
Corporate taxes are paid by what are known in tax lingo as C corporations, which include large publicly traded firms like AT&T or Coca-Cola. Most businesses in the United States aren’t C corporations, they’re pass-throughs. The name comes from the fact that when one of these businesses makes money, the profits are not subject to corporate taxes. Instead, they “pass through” directly to the owners, who pay taxes on the profits on their personal returns. Unlike major shareholders in companies like Amazon, who can avoid taking income by not selling their stock, owners of successful pass-throughs typically can’t avoid it.
Pass-throughs include the full gamut of American business, from small barbershops to law firms to, in the case of Uline, a packaging distributor with thousands of employees.
So alongside the corporate rate cut for the AT&Ts of the world, the Trump tax bill included a separate tax break for pass-through companies. For budgetary reasons, the tax break is not permanent, sunsetting after eight years.
Proponents touted it as boosting “small business” and “Main Street,” and it’s true that many small businesses got a modest tax break. But a recent study by Treasury economists found that the top 1% of Americans by income have reaped nearly 60% of the billions in tax savings created by the provision. And most of that amount went to the top 0.1%. That’s because even though there are many small pass-through businesses, most of the pass-through profits in the country flow to the wealthy owners of a limited group of large companies.
Tax records show that in 2018, Bloomberg, whom Forbes ranks as the 20th wealthiest person in the world, got the largest known deduction from the new provision, slashing his tax bill by nearly $68 million. (When he briefly ran for president in 2020, Bloomberg’s tax plan proposed ending the deduction, though his plan was generally friendlier to the wealthy than those of his rivals.) A spokesperson for Bloomberg declined to comment.
Johnson’s intervention in November 2017 was designed to boost the bill’s already generous tax break for pass-through companies. The bill had allowed for business owners to deduct up to 17.4% of their profits. Thanks to Johnson holding out, that figure was ultimately boosted to 20%.
That might seem like a small increase, but even a few extra percentage points can translate into tens of millions of dollars in extra deductions in one year alone for an ultrawealthy family.
The mechanics are complicated but, for the rich, it generally means that a business owner gets to keep an extra 7 cents on every dollar of profit. To understand the windfall, take the case of the Uihlein family.
Dick, the great-grandson of a beer magnate, and his wife, Liz, own and operate packaging giant Uline. The logo of the Pleasant Prairie, Wisconsin, firm is stamped on the bottom of countless paper bags. Uline produced nearly $1 billion in profits in 2018, according to ProPublica’s analysis of tax records. Dick and Liz Uihlein, who own a majority of the company, reported more than $700 million in income that year. But they were able to slash what they owed the IRS with a $118 million deduction generated by the new tax break.
Liz Uihlein, who serves as president of Uline, has criticized high taxes in her company newsletter. The year before the tax overhaul, the couple gave generously to support Trump’s 2016 presidential campaign. That same year, when Johnson faced long odds in his reelection bid against former Sen. Russ Feingold, the Uihleins gave more than $8 million to a series of political committees that blanketed the state with pro-Johnson and anti-Feingold ads. That blitz led the Milwaukee Journal Sentinel to dub the Uihleins “the Koch brothers of Wisconsin politics.”
Johnson’s campaign also got a boost from Hendricks, Wisconsin’s richest woman and owner of roofing wholesaler ABC Supply Co. The Beloit-based billionaire has publicly pushed for tax breaks and said she wants to stop the U.S. from becoming “a socialistic ideological nation.”
Hendricks has said Johnson won her over after she grilled him at a brunch meeting six years earlier. She gave about $12 million to a pair of political committees, the Reform America Fund and the Freedom Partners Action Fund, that bought ads attacking Feingold.
In the first year of the pass-through tax break, Hendricks got a $97 million deduction on income of $502 million. By reducing the income she owed taxes on, that deduction saved her around $36 million.
Even after Johnson won the expansion of the pass-through break in late 2017, the final text of the tax overhaul wasn’t settled. A congressional conference committee had to iron out the differences between the Senate and House versions of the bill.
Sometime during this process, eight words that had been in neither the House nor the Senate bill were inserted: “applied without regard to the words ‘engineering, architecture.’”
With that wonky bit of legalese, Congress smiled on the Bechtel clan.
The Bechtels’ engineering and construction company is one of the largest and most politically connected private firms in the country. With surgical precision, the new language guaranteed the Bechtels a massive tax cut. In previous versions of the bill, construction would have been given a tax break, but engineering was one of the industries excluded from the pass-through deduction for reasons that remain murky.
When the bill, with its eight added words, took effect in 2018, three great-great-grandchildren of the company’s founder, CEO Brendan Bechtel and his siblings Darren and Katherine, together netted deductions of $111 million on $679 million in income, tax records show.
And that’s just one generation of Bechtels. The heirs’ father, Riley, also holds a piece of the firm, as does a group of nonfamily executives and board members. In all, Bechtel Corporation produced around $2.3 billion of profit in 2018 alone — the vast majority of which appears to be eligible for the 20% deduction.
Who wrote the phrase — and which lawmaker inserted it — has been a much-discussed mystery in the tax policy world. ProPublica found that a lobbyist who worked for both Bechtel and an industry trade group has claimed credit for the alteration.
In the months leading up to the bill’s passage in 2017, Bechtel had executed a full-court press in Washington, meeting with Trump administration officials and spending more than $1 million lobbying on tax issues.
Marc Gerson, of the Washington law firm Miller & Chevalier, was paid to lobby on the tax bill by both Bechtel and the American Council of Engineering Companies, of which Bechtel is a member. At a presentation for the trade group’s members a few weeks after Trump signed the bill into law, Gerson credited his efforts for the pass-through tax break, calling it a “major legislative victory for the engineering industry.” Gerson did not respond to a request for comment.
Bechtel’s push was part of a long history of lobbying for tax breaks by the company. Two decades ago, it even hired a former IRS commissioner as part of a successful bid to get “engineering and architectural services” included in one of President George W. Bush’s tax cuts.
The company’s lobbying on the Trump tax bill, and the tax break it received, highlight a paradox at the core of Bechtel: The family has for years showered money on anti-tax candidates even though, as The New Yorker’s Jane Mayer has written, Bechtel “owed almost its entire existence to government patronage.” Most famous for being one of the companies that built the Hoover Dam, in recent years it has bid on and won marquee federal projects. Among them: a healthy share of the billions spent by American taxpayers to rebuild Iraq after the war. The firm recently moved its longtime headquarters from San Francisco to Reston, Virginia, a hub for federal contractors just outside the Beltway.
A spokesperson for Bechtel Corporation didn’t respond to questions about the company’s lobbying. The spokesperson, as well as a representative of the family’s investment office, didn’t respond to requests to accept questions about the family’s tax records.
Brendan Bechtel has emerged this year as a vocal critic of President Joe Biden’s proposal to pay for new infrastructure with tax hikes.
“It’s unfair to ask business to shoulder or cover all the additional costs of this public infrastructure investment,” he said on a recent CNBC appearance.
As the landmark tax overhaul sped through the legislative process, other prosperous groups of business owners worried they would be left out. With the help of lobbyists, and sometimes after direct contact with lawmakers, they, too, were invited into what Trump dubbed his “big, beautiful tax cut.”
Among the biggest winners during the final push were real estate developers.
The Senate bill included a formula that restricted the size of the new deduction based on how much a pass-through business paid in wages. Congressional Republicans framed the provision as rewarding businesses that create jobs. In effect, it meant a highly profitable business with few employees — like a real estate developer — wouldn’t be able to benefit much from the break.
Developers weren’t happy. Several marshaled lobbyists and prodded friendly lawmakers to turn things around.
At least two of them turned to Johnson.
“Dear Ron,” Ted Kellner, a Wisconsin developer, and a colleague wrote in a letter to Johnson. “I’m concerned that the goal of a fair, efficient and growth oriented tax overhaul will not be achieved, especially for private real estate pass-through entities.”
Johnson forwarded the letter from Kellner, a political donor of his, to top Republicans in the House and Senate: “All, Yesterday, I received this letter from very smart and successful businessmen in Milwaukee,” adding that the legislation as it stood gave pass-throughs “widely disparate, grossly unfair” treatment.
House Ways and Means Committee Chairman Kevin Brady, R-Texas, responded with a promise to do more: “Senator — I strongly agree we should continue to improve the pass-through provisions at every step. You are a great champion for this.” Congress is not subject to the Freedom of Information Act, but Treasury officials were copied on the email exchange. ProPublica obtained the exchange after suing the Treasury Department.
Kellner got his wish. In the final days of the legislative process, real estate investors were given a side door to access the full deduction. Language was added to the final legislation that allowed them to qualify if they had a large portfolio of buildings, even if they had small payrolls.
With that, some of the richest real estate developers in the country were welcomed into the fold.
The tax records obtained by ProPublica show that one of the top real estate industry winners was Donald Bren, sole owner of the Southern California-based Irvine Company and one of the wealthiest developers in the United States.
In 2018 alone, Bren personally enjoyed a deduction of $22 million because of the tax break. Bren’s representatives did not respond to emails and calls from ProPublica.
His company had hired Wes Coulam, a prominent Washington lobbyist with Ernst & Young, to advocate for its interests as the bill was being hammered out. Before Coulam became a lobbyist, he worked on Capitol Hill as a tax policy adviser for Utah Sen. Orrin Hatch.
Hatch, then the Republican chair of the Senate Finance Committee, publicly took credit for the final draft of the new deduction, amid questions about the real estate carveout. Hatch’s representatives did not respond to questions from ProPublica about how the carveout was added.
ProPublica’s records show that other big real estate winners include Adam Portnoy, head of commercial real estate giant the RMR Group, who got a $14 million deduction in 2018. Donald Sterling, the real estate developer and disgraced former owner of the Los Angeles Clippers, won an $11 million deduction. Representatives for Portnoy and Sterling did not respond to questions from ProPublica.
Another gift to the real estate industry in the bill was a tax deduction of up to 20% on dividends from real estate investment trusts, more commonly known as REITs. These companies are essentially bundles of various real estate assets, which investors can buy chunks of. REITs make money by collecting rent from tenants and interest from loans used to finance real estate deals.
The tax cut for these investment vehicles was pushed by both the Real Estate Roundtable, a trade group for the entire industry, and the National Association of Real Estate Investment Trusts. The latter, a trade group specifically for REITs, spent more than $5 million lobbying in Washington the year the tax bill was drafted, more than it had in any year in its history.
Steven Roth, the founder of Vornado Realty Trust, a prominent REIT, is a regular donor to both groups’ political committees.
Roth had close ties to the Trump administration, including advising on infrastructure and doing business with Jared Kushner’s family. He became one of the biggest winners from the REIT provision in the Trump tax law.
Roth earned more than $27 million in REIT dividends in the two years after the bill passed, potentially allowing him a tax deduction of about $5 million, tax records show. Roth did not respond to requests for comment, and his representatives did not accept questions from ProPublica on his behalf.
Another carveout benefited investors of publicly traded pipeline businesses. Sen. John Cornyn, a Texas Republican, added an amendment for them to the Senate version of the bill just before it was voted on.
Without his amendment, investors who made under a certain income would have received the deduction anyway, experts told ProPublica. But for higher-income investors, a slate of restrictions kicked in. In order to qualify, they would have needed the businesses they’re invested in to pay out significant wages, and these oil and gas businesses, like real estate developers, typically do not.
Cornyn’s amendment cleared the way.
The trade group for these companies and one of its top members, Enterprise Products Partners, a Houston-based natural gas and crude oil pipeline company, had both lobbied on the bill. Enterprise was founded by Dan Duncan, who died in 2010.
The Trump tax bill delivered a win to Duncan’s heirs. ProPublica’s data shows his four children, who own stakes in the company, together claimed more than $150 million in deductions in 2018 alone. The tax provision for “small businesses” had delivered a windfall to the family Forbes ranked as the 11th richest in the country.
In a statement, an Enterprise spokesperson wrote: “The Duncan family abides by all applicable tax laws and will not comment on individual tax returns, which are a private matter.” Cornyn’s office did not respond to questions about the senator’s amendment.
The tax break is due to expire after 2025, and a gulf has opened in Congress about the future of the provision.
In July, Senate Finance Chair Ron Wyden, D-Ore., proposed legislation that would end the tax cut early for the ultrawealthy. In fact, anyone making over $500,000 per year would no longer get the deduction. But it would be extended to the business owners below that threshold who are currently excluded because of their industry. The bill would “make the policy more fair and less complex for middle-class business owners, while also raising billions for priorities like child care, education, and health care,” Wyden said in a statement.
Meanwhile, dozens of trade groups, including the Chamber of Commerce, are pushing to make the pass-through tax cut permanent. This year, a bipartisan bill called the Main Street Tax Certainty Act was introduced in both houses of Congress to do just that.
One of the bill’s sponsors, Rep. Henry Cuellar, D-Texas, pitched the legislation this way: “I am committed to delivering critical relief for our nation’s small businesses and the communities they serve.”
Originally published on ProPublica by Justin Elliott and Robert Faturechi
