Starbucks on Tuesday reported a 31% increase in profits during the final three months of 2021, but the massive Seattle-based coffee chain nevertheless announced plans to further hike prices this year, drawing outrage from critics who say the company is pushing higher costs onto consumers to pad its bottom line.
“Corporations are jacking up prices on consumers and using concerns about inflation as cover to do so.”
Starbucks CEO Kevin Johnson—who saw his compensation soar by 39% to $20.4 million in 2021—told investors during the company’s earnings call Tuesday that “supply-chain disruptions” and rising labor costs are to blame for the coming price increases, of which he suggested there will be several.
“We have additional pricing actions planned through the balance of this year, which play an important role to mitigate cost pressures including inflation,” said Johnson, who also touted the company’s “strong revenue growth” in the quarter.
Starbucks’ revenue grew to $8.1 billion at the tail-end of 2021, a 19% jump compared to the previous year.
To progressive observers, Starbucks’ announcement of price hikes fits a pattern of U.S. corporations—in sectors across the economy—raising costs for consumers while raking in record profits, boosting executive pay, and squeezing regular employees. Starbucks employees nationwide are increasingly fighting back against their low wages and poor working conditions by launching union drives.
Historian Andy Lewis argued that Starbucks’ explanation for the impending price increases amounts to nothing more than “word salad to hide corporate greed.”
The consumer advocacy group Public Citizen, for its part, responded with outrage to Starbucks increasing prices for customers after giving its CEO a nearly 40% raise last year.
During testimony before the House Energy and Commerce Committee on Wednesday, Rakeen Mabud of the Groundwork Collaborative noted that “in sector after sector, in company after company, corporations are jacking up prices on consumers and using concerns about inflation as cover to do so.”
“We see that in Kimberly-Clark taking advantage of the pandemic to raise prices on masks,” the economist said. “We see Proctor & Gamble using the fact that they sell essential goods that families depend on like diapers to raise prices in this moment of crisis. And we even see companies like McDonald’s raising prices on consumers even as they enjoy massive increases in sales.”
“So in short,” Mabud added, “this is a really broad-based problem—it’s unfortunately not limited to a specific sector of the economy.”
Originally published on Common Dreams by JAKE JOHNSON and republished under a Creative Commons license (CC BY-NC-ND 3.0)
A new legal filing by New York’s attorney general this week accused former President Donald Trump’s company of misleading lenders about the financial health of its landmark downtown Manhattan skyscraper, 40 Wall Street, while seeking to renew the building’s mortgage.
Though the Trump Organization called 40 Wall Street “one of the great success stories post 2008,” lender Capital One found the company’s estimates of the building’s worth so unbelievable that the bank declined to refinance the tower’s loan in 2015, the filing alleges.
“Capital One harbored great skepticism regarding the Trump Organization’s valuations,” says the filing, which was submitted by Attorney General Letitia James in response to Trump’s efforts to block her from questioning him and his children as part of an ongoing investigation by her office.
The new accusations offer startling details about possible financial fraud involving 40 Wall Street — one of the subjects of a 2019 ProPublica story that highlighted conflicting financial documents the Trump Organization had filed for the building.
ProPublica’s story documented how income, expense and occupancy numbers cited in the eventual refinance for 40 Wall Street and another Manhattan building sometimes didn’t match those the company had filed with city tax authorities. A lower valuation for the city would produce a lower tax bill, while a higher valuation for lenders would make it easier to get a new mortgage.
One expert said it appeared like the Trump Organization was keeping “two sets of books.”
“It feels like a set of books for the tax guy and a set for the lender,” said Kevin Riordan, a financing expert and real estate professor at Montclair State University, at the time.
In her filing, James asserts that Trump Organization employees, including Trump’s children, took part in a pattern of deception in which they misled lenders, insurers and the Internal Revenue Service by vastly overstating values for 40 Wall Street and a host of other Trump properties, including golf courses in Scotland, Los Angeles and Westchester and his buildings on Fifth and Park avenues.
The Trump Organization on Thursday lashed out at James, a Democrat, via a statement emailed by a spokesperson, saying, “The only one misleading the public is Letitia James.
“She defrauded New Yorkers by basing her entire candidacy on a promise to get Trump at all costs without having seen a shred of evidence and in violation of every conceivable ethical rule,” the organization’s statement said. It asserted that James “has no case” and that the “allegations are baseless and will be vigorously defended.”
Alan Futerfas, a lawyer for Trump’s children Donald Jr. and Ivanka Trump, also criticized James, accusing her of making “repeated threats to target the Trump family” and ignoring legal protections for “the very people she is investigating.”
James is seeking to compel testimony and obtain documents from Trump, Donald Jr. and Ivanka, who she said have not cooperated with her investigation.
The filing says that property valuations formed the heart of statements of financial condition that the Trump Organization used to demonstrate its net worth. The statements, which James said contained inaccuracies, were compiled by an outside accounting agency from a data spreadsheet and backup material provided by the Trump Organization.
Trump’s personal guarantees to some banks and insurers required him to certify that his financial statements were correct, according to James’ filing. The documents say her office has evidence Trump was “personally involved in reviewing and approving” the statements.
If the company or its employees are found to have deliberately provided misleading valuations, they could face civil or criminal penalties. The company is under investigation by both James and Manhattan District Attorney Alvin Bragg.
With its classic Gothic Revival style and signature green spire, 40 Wall Street gave Trump a presence in the most famous financial district in the world. His company doesn’t own it, but rather purchased in 1995 the right to act as the landlord for its office and retail space. Finding tenants for that space, however, particularly in the building’s narrow tower, proved a challenge, especially after 9/11, when occupancy sagged and the entire financial district struggled, the ProPublica investigation found.
James’ filing says that as early as 2009, Capital One, which held the mortgage on the property, “raised substantial concerns about cash flow” at 40 Wall Street, prompting in-person meetings with Trump, longtime Trump Organization Chief Financial Officer Allen Weisselberg and others. Donald Trump Jr. was also involved in the discussions, the filing says.
The conversations led to a loan modification in 2010, with bank personnel harboring doubts about the Trump Organization’s representations of the building’s financial standing. During those discussions, the Trump Organization provided the bank with profit numbers for 2010 of $12.3 million, which bank personnel described as “very optimistic.”
More startling were the differences between valuations that appeared on Trump’s statements of financial condition and those prepared by appraisers for Capital One. The Trump Organization set the value of the building at $601.8 million in 2010, while the appraisals for Capital One done by Cushman & Wakefield set it at just less than one-third of that, $200 million.
Weisselberg shared one of the company’s higher valuations for the building with the bank in early 2015, boasting of “considerable capital investment” and “a much improved cash flow.” He wanted Capital One to restructure its loan and waive a principal payment of $5 million due in November.
But Capital One declined to refinance the mortgage, referencing its own internal estimate that the building was only worth $257 million a few months before.
That year, 40 Wall Street’s $160 million mortgage was a thorn in Trump’s side, representing his then-largest single debt as he launched his campaign for the presidency.
After Capital One’s rejection, the Trump Organization turned to Ladder Capital Finance, where Weisselberg’s son Jack was a director. Ladder commissioned its own appraisal. Though Ladder used the same Cushman & Wakefield team that had estimated the building was worth $220 million in 2012, the team this time more than doubled the value to $540 million, legal filings said. Ladder approved the refinance.
James’ filing said that evidence her office obtained suggests the 2015 Cushman valuation “appears to have used demonstrably incorrect facts and aggressive assumptions” to arrive at the higher estimate, which the document said “did not reflect a good faith assessment of value.”
On Thursday, Cushman & Wakefield defended its practices, saying it took “great issue with mischaracterizations concerning the work performed and believe they are not supported by the evidence.
“The referenced Cushman & Wakefield appraisals were undertaken and completed in good faith based upon the material information made available,” the company said in a statement emailed by a spokesperson. “We stand behind the appraisers and the referenced appraisals which reflect fair valuations based upon the underlying facts and market dynamics.”
In 2015, the Trump Organization’s statement of financial condition listed the value of the building as $735.4 million.
Ladder Capital and Capital One did not immediately respond to requests for comment Thursday. Allen Weisselberg and Jack Weisselberg could not immediately be reached.
ProPublica’s 2019 story found several instances of the Trump Organization reporting much lower expenses to its lender, Ladder Capital, than to city tax authorities — including 40 Wall Street’s insurance costs and ground lease. Jack Weisselberg declined to comment at the time on Ladder’s loans or his relationship with the Trump Organization. Executives with Ladder also declined to be quoted for the story then.
In 2019, former Trump lawyer Michael Cohen testified before Congress that the Trump Organization inflated valuations at times to appear more profitable and deflated them to achieve a lower real estate tax bill.
Photo by Extinction Rebellion NYC / Twitter @XR_NYC
At least 40 climate activists were arrested Friday at the New York City offices of JPMorgan Chase, Citibank, and Bank of America, organizers said, as campaigners across the United States demanded financial institutions stop supporting the destruction of the planet.
“People are in denial about the mess we’re in,” said Kerith Creo of Extinction Rebellion (XR) NYC. “We’re sending a message loud and clear that the little action that politicians and greenwashing CEOs have taken so far does not begin to deal with the magnitude of this crisis.”
The protest actions included delivering 150,000 petition signatures as part of the Stop the Money Pipeline (STMP) coalition‘s “Deadline Glasgow: Defund Climate Chaos” campaign to pressure banks ahead of COP 26, a United Nations summit set to start on October 31.
Despite financial institutions’ net-zero emissions by 2050 pledges, the petition highlights, “they are providing loans, insurance, and billions in investment capital to corporations expanding the fossil fuel industry and deforesting the Amazon and other tropical forests―companies that are guilty of human rights abuses and violations of Indigenous sovereignty.”
The petition calls out some specific projects—such as Line 3—and urges banks, insurers, asset managers, and the Biden administration to “end their support for companies engaged in climate destruction and human rights abuses” before the two-week U.N. summit in Scotland.
@XR_NYC is staging a boat outside @Chase HQ, who is the biggest fossil fuel funder in the world.
They poured $317 billion poured into fossil fuels since the 2015 Paris Agreement. Who pays the price for Hurricane Ida? We do.https://t.co/1pZUyDyRLD
The upcoming negotiations in Glasgow “are the most important international climate talks since the Paris agreement was signed in 2015,” STMP said in a statement Friday. “It is also supposed to be ‘the climate finance COP.'”
In New York City, climate activists set up a boat outside the office of JPMorgan Chase, urging the bank to “stop the greenwashing,” and draped a banner that read “#1 Funder of Climate Death” over the building’s entrance.
At Bank of America’s Manhattan office, “half a dozen women blockaded the entrance and a seventh woman sat in a hammock supported by a large tripod on the sidewalk,” according to XR. Outside Citibank’s building, “activists set up a camp on the lawn near the entrance and put up a tripod to which they locked themselves down.”
And thank you to these activists at @Citibank HQ this morning for also risking arrest to bring attention to the SECOND worst fossil fuel funder @XR_NYChttps://t.co/4bLjmuPgff
“We’ve reached the breaking point,” said Christina See of XR NYC. “We need our government leaders to take action immediately. The New York City area saw over 40 deaths due to record breaking floods just a few weeks ago. The climate crisis is here, now.”
The remnants of Hurricane Ida—which initially made landfall in Louisiana on the anniversary of Hurricane Katrina—caused fatal flooding across the Northeast, sparking warnings from not only climate activists but also political leaders about what the future holds.
While touring damage in New York and New Jersey, President Joe Biden said that “we got to listen to the scientists and the economists and the national security experts. They all tell us this is code red; the nation and the world are in peril. And that’s not hyperbole. That is a fact.”
Climate campaigners responded to Biden’s comments by urging him to declare a national climate emergency and stop all fossil fuel projects, highlighting his refusal to block the Line 3 tar sands pipeline opposed by Indigenous leaders and environmentalists in Minnesota.
The protests came as the U.S. president held a climate meeting with leaders of major economies and confirmed a new global pledge to reduce methane pollution at least 30% by 2030. Biden’s event followed his leadership summit in April, during which he pledged to cut the nation’s overall planet-heating emissions in half within this decade.
Activists on Friday “shut down 4th Avenue in downtown Seattle, and disrupted business at the Canadian Consulate, Chase, and Bank of America,” according to the Washington city’s arm of 350.org.
STMP explained that “they’re targeting the world’s biggest financers of climate chaos, as well as the Canadian government, who bought the troubled Trans Mountain oil pipeline in 2018.”
The demonstrations in New York City, Seattle, and beyond came as a new U.N. analysis revealed that recent emissions reduction pledges governments have made in anticipation of COP 26 are nowhere near ambitious enough to meet the Paris agreement’s 1.5°C target.
According the new report, the world is on track for 2.7°C or warming by 2100—a revelation that prompted U.N. Secretary-General António Guterres to warn that a failure to meet the Paris temperature goal “will be measured in the massive loss of lives and livelihoods.”
Colton Whitehead’s Complex and Charismatic characters tiptoeing on the fringes of Crime
The novel is set in 1960s Harlem and follows Ray Carney, a man that leads a double life. He is a family man, a furniture salesman living in a tiny apartment with his wife Elizabeth and are expecting their second child.
Not many people are aware that Ray comes from a line of uptown crooks. He occasions gets drop-ins from his cousin Freddie who will occasionally drop off a hot ring or necklace to Ray to see for him to appraise.
As he struggles to make ends meet and the bills continuing to build up, he finds himself stumbling fast into the crime world, navigating gangsters, heists and shakedowns.
“Harlem Shuffle” is from Pulitzer Prize Award winning author Colson Whitehead that brought readers “The Nickel Boys” and “The Underground Railroad”.
Equal parts thriller yet hilarious, it’s a “family saga masquerading as a crime novel”, speaking also to the social makeup of race and power, and ultimately a love letter to New York City and especially Harlem.
The book is available for pre-order now and will be published September 14, 2021. Available at Bookshop and Amazon.
