Tag Archives: Stocks

Business, Sustainable Energy

How Electric Trucking Options are Coming to Freight Businesses 

There’s been a lot of talk lately about transitioning to sustainable energy sources, and for good reason. With the threat of climate change looming, it’s more important than ever that we work to reduce our reliance on fossil fuels.

Transportation options that are more sustainable than gas-powered vehicles and also much cheaper are out there. Believe it or not, sustainable energy transport is not only possible; it’s becoming increasingly popular as companies and consumers alike move towards greener options.

In this post, we’ll explore how transport companies can transition to sustainable energy transportation. We’ll also look at some of the challenges and benefits associated with making this switch. So if you’re interested in learning more about sustainable energy transportation the information below may be useful.

What Is Sustainable Energy Transportation and Why Is It Important?

At its core, sustainable energy transportation refers to any form of transport that relies on renewable energy sources or non-polluting fuels. Sustainable energy sources include electric or solar power plus things like wind farms and biofuels.

Many freight companies are looking into sustainable energy transportation because it helps reduce greenhouse gas emissions and air pollution. In fact, the transportation sector is responsible for a significant portion of greenhouse gas emissions in the United States—nearly 30 percent, according to the Environmental Protection Agency (EPA).

Furthermore, changing regulations and consumer preferences may significantly impact the future of sustainable energy transportation. For example, many cities are now starting to implement strict emissions standards for taxis and buses, which could result in more companies shifting towards electric or hybrid vehicles.

For transportation businesses to remain competitive in the future, it’s important to start exploring sustainable energy transportation options now. Not only will this help reduce their impact on the environment, but it will also help them stay ahead of the curve.

Challenges of Transitioning to Sustainable Energy Transportation

Of course, making the switch to sustainable energy transportation isn’t without its challenges. Perhaps one of the biggest obstacles for transport companies is investing in the new technologies and infrastructure required for these types of vehicles. For example, electric vehicles need charging stations, and solar-powered vehicles may need special equipment to harness the sun’s energy.

Another challenge that transport companies face is changing consumer behavior. While there is a growing interest in sustainable energy transportation options, many consumers are still unfamiliar with these technologies or are hesitant to switch from traditional methods like gas-powered vehicles.

This means that transport companies need to find ways to educate consumers about the benefits of sustainable energy transportation and convince them to make the switch. This can be a costly and challenging process, but it’s essential if we want to see widespread adoption of these technologies.

The final challenge to consider when transitioning to sustainable energy transportation is the availability of resources. Currently, sustainable energy sources like solar and wind power are still not as widely available as fossil fuels. This means that transport companies need to be strategic about where they source their energy and how they use it.

However, despite these challenges, more and more transport companies are making the switch to sustainable energy transportation. And as more businesses and consumers become educated about the benefits of this technology, we’ll likely see even broader implementation in the future.

Benefits of Transitioning to Sustainable Energy Transportation

Despite the challenges that come with transitioning to sustainable energy transportation, there are also a number of benefits that make the change worth it.

For one thing, sustainable energy sources like wind and solar power are becoming much cheaper than traditional fossil fuels. Using sustainable energy can help companies save money on fuel costs, as renewable energy is more affordable, in aggregate, compared to conventional fossil fuels.

As an example, at Cross Country Car Shipping detailed examples are shown breaking down the cost of shipping vehicles across the country. In the future, this cost could be greatly reduced as more transport companies start using sustainable energy.

Additionally, sustainable energy transportation options are becoming increasingly available as more companies invest in this area. This means that transport companies have more choices when it comes to finding vehicles and technologies to meet their needs. Plus, these types of vehicles produce fewer emissions, which can help improve air quality and reduce health problems like asthma.

The benefits of transitioning to sustainable energy transportation are clear. And not only will they help transport companies save money and reduce their environmental impact, but they’ll also help these businesses remain competitive in an ever-changing marketplace.

How Can Transport Companies Make the Switch to Sustainable Energy Sources?

Making the switch to sustainable energy transportation can be challenging, but it’s essential work that must be done if we want to see a more sustainable future for transportation. 

There are many ways transportation and shipping companies can transition to sustainable energy sources. Some possible strategies include investing in electric or hybrid vehicles, using solar power, and utilizing renewable fuels like biofuels. Additionally, companies may need to make changes to their infrastructure and educate consumers about the benefits of sustainable energy transportation to facilitate this transition. 

Transitioning to sustainable energy transportation is an important step many companies are taking to be more environmentally friendly and cost-effective. And while the challenges involved in this process should not be underestimated, the potential benefits make the switch well worth it.

The Takeaway on Transport and Sustainable Energy

As the world looks for ways to become more environmentally friendly, many transport and shipping companies are making the switch to sustainable energy transportation. This transition can be challenging, but it comes with many benefits that can help businesses save money. It’s also an important step in protecting our planet for future generations.

There are a few key things that companies need to think about when it comes to making the switch to sustainable energy, including harnessing the right technologies and communicating the benefits of this transition to consumers. And with some forethought and planning, companies can make the switch successfully while helping to protect our planet for years to come.​

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News, Observation, Politics

What’s at stake as Supreme Court appears intent on overturning Roe v. Wade – 3 essential reads

A leaked draft opinion written by Justice Samuel Alito suggests the Supreme Court is on the brink of overturning two rulings, including Roe v. Wade, that guarantee the right to abortion in the U.S.

The Supreme Court confirmed that the document, obtained and first reported on by Politico, is real, but said “Although the document described in yesterday’s reports is authentic, it does not represent a decision by the court or the final position of any member on the issues in the case.”

The opinion is due to be issued later in the year. The leaked document indicates that a conservative majority in the court is on track to end a woman’s constitutional right to abortion, opening the door for states to enact bans.

Although a seismic development in the long-running legal battle and social debate over abortion rights, the development is not entirely unexpected. In recent years, pro-abortion rights advocates have been ringing alarm bells over threats to Roe. Legal scholars, health experts and sociologists have helped explain in The Conversation U.S. what is at stake and what it would mean for American women should the historic ruling be overturned.

1. How Roe changed women’s lives

A lot has changed in the nearly 50 years that separate the constitutional enshrining of the right to abortion in the U.S. to the brink of ending that right.

Constance Shehan, a sociologist at the University of Florida, provides a snapshot of life for women prior to the landmark case. In 1970, the “average age at first marriage for women in the U.S. was just under 21. Twenty-five percent of women high school graduates aged 18 to 24 were enrolled in college and about 8 percent of adult women had completed four years of college,” she notes. But today, she says, “roughly two generations after Roe v. Wade, women are postponing marriage, marrying for the first time at about age 27 on average. Seventeen percent over age 25 have never been married. Some estimates suggest that 25 percent of today’s young adults may never marry.”

How much of this change in the experiences of American women is due to Roe? And if it is overturned, will the trends be reversed? Such questions are difficult answer. But there is evidence that carrying through with an unwanted pregnancy may have a detrimental effect on a woman’s education – and that, in turn, has an impact on career opportunities and income, writes Shehan. “Two-thirds of families started by teens are poor, and nearly 1 in 4 will depend on welfare within three years of a child’s birth. Many children will not escape this cycle of poverty. Only about two-thirds of children born to teen mothers earn a high school diploma, compared to 81 percent of their peers with older parents.”

Medical abortion isn’t the only option for young women seeking abortion. As Shehan notes: “With the availability of a greater range of contraception and abortion drugs other than medical procedures available today, along with a strong demand for women’s labor in the U.S. economy, it seems unlikely that women’s status will ever go back to where it was before 1973. But Americans shouldn’t forget the role that Roe v. Wade played in advancing the lives of women.”

2. Who might be affected?

“One important group’s voice is often absent in this heated debate: the women who choose abortion,” writes Luu D. Ireland at UMass Chan Medical School. She notes that 1 in 4 American women have the procedure at some point in their life, yet because of the perceived stigma involved, their perspective is largely missing. As an obstetrician/gynecologist, Ireland does, however, hear on a daily basis stories from women who opt for an abortion.

She notes that while abortion is a routine part of reproductive health care for many, and women of all backgrounds choose to end their pregnancies, unintended pregnancies are more common in certain groups: poorer women, women of color and those with lower levels of formal education.

“Women living in poverty have a rate of unintended pregnancy five times higher than those with middle or high incomes. Black women are twice as likely to have an unintended pregnancy as white women,” she writes.

The reason women opt to terminate a pregnancy varies. The most common reason is that the timing is wrong – it would interfere with education, careers or caring for family members. The second most cited reason is financial – the women seeking an abortion just can’t afford the associated costs of raising a child at that time. One impact of abortion restrictions, research has shown, is that women unable to get one “are more likely live in poverty or depend on cash assistance, and less likely to work full-time,” Ireland writes.

More than just financial risks

Financial problems are one result of restricting safe, available access to abortions. Another is a jump in the cases of pregnancy-related deaths. Amanda Stevenson, a sociologist at University of Colorado Boulder, looked into what would happen should the U.S. ends all abortions nationwide.

To be clear, this is not what would happen should the Supreme Court overturn Roe – rather, it would allow states to implement bans based on the ending of a constitutionally guaranteed right to abortion. Nonetheless, Stevenson’s research gives context as to risks involved for women who may find themselves in states that do not allow abortion, and who lack the means to get to a state that does.

She notes that staying pregnant actually carries a greater risk of death than having an abortion.

“Abortion is incredibly safe for pregnant people in the U.S., with 0.44 deaths per 100,000 procedures from 2013 to 2017. In contrast, 20.1 deaths per 100,000 live births occurred in 2019,” she writes. Stevenson estimates that “the annual number of pregnancy-related deaths would increase by 21% overall, or 140 additional deaths, by the second year after a ban.” The jump in deaths would be even higher among non-Hispanic Black women.

Matt Williams, Breaking News Editor, The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Elon Musk, Twitter

Elon Musk’s Latest Tweet Says it All, or Does it?

Perhaps in a moment of incoherence, this three-tweet set was launched. It is just plain goofy (unless he is buttering up “the right” for after mid-terms…?)

In what looks like some kind of twisted attempt at being diplomatic, Elon Musk’s latest tweet manages to clarify his stance regarding “free-speech“ about as much as a mud bath clarifies a cupcake.

Leading off with a bizarre attack on what he Calls “the far left “, he explains that it is his contention that they “hate everyone including themselves”.

Standing alone this is already a bizarre statement, which seems like a far right talking point, typical of the Joe Rogan school of anti-cancel culture and anti-so-called “woke-mob”.

He follows this up with a disclaimer of sorts, as bland as it can be stating that he is “no fan” of the far right, either.

One would have to be forgiven if they thought that this implied, in its very wording, an actual bias toward the far right which is what many already believe.

Ending his three-tweet soufflé on the flat “Let’s have less hate and more love” the responses, not surprisingly, were a very loving mix of WTF and ????

To be fair, there were also lots like this:

And this:

But, the way his tweets were so oddly posted, there was definitely a sense among “lefties” that he was biased. And it didn’t take a genius, but merely @cjwalker21, to retort:

It actually seems odd, that Elon Musk would wade (or dive head first) into a “left vs. right” argument that has no hope of any kind of resolution. And pretending that the disagreements are equal on some level and love can just be ratcheted up as if it was cheap rocket fuel, seems odd…

Then, in what’s gotta qualify as “far left’ in Elon’s book, this gem:

https://twitter.com/Grizzy_333/status/1520210804330704897?s=20&t=4N4AdzxcqVPa3BiO9XkCjg

Honestly, if you just look at the numbers, maybe you don’t see taxes as the answer, but considering the company Elon is in (Zuckerberg and Bezos?) there’s clearly something wrong with this picture?

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Breaking News, Hot-Lynx, Politics

Breaking: Trump Held in Contempt and Faces $10k in Fines per day Until Docs Delivered

The New York Times has reported that Former President Donald J. Trump was ordered to turn over materials sought by Letitia James, the New York attorney general, and will be fined $10,000 per day until he does so.

On Monday judge, Arthur F. Engoron held Donald J. Trump in contempt of court for failing to turn over documents to the state’s attorney general, which was previously anticipated but is nevertheless an extraordinary turn of events.

Trump will be assessed a fine of $10,000 per day until he turns over the documents. The ruling essentially implies that the judge concluded that Mr. Trump had failed to cooperate with the attorney general, Letitia James, and did not follow the court’s orders.

As quoted by the Times: “Mr. Trump: I know you take your business seriously, and I take mine seriously,” remarked Justice Engoron of State Supreme Court in Manhattan, before he held Mr. Trump in contempt and banged his gavel.

Alina Habba, a lawyer for Mr. Trump, said she intended to appeal the judge’s ruling.

Although Trump’s legal team plans to appeal the ruling the news is still significant and represents a history for the New York attorney general.

Read More at:

New York Times

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Climate Solutions, Earth Day, Social Media

Social Media Giants’ Climate Misinformation Policies Leave Users ‘In the Dark’: Report

“Despite half of U.S. and U.K. adults getting their news from social media, social media companies have not taken the steps necessary to fight industry-backed deception,” reads the report.

Weeks after the Intergovernmental Panel on Climate Change identified disinformation as a key driver of the planetary crisis, three advocacy groups published a report Wednesday ranking social media companies on their efforts to ensure users can get accurate data about the climate on their platforms—and found that major companies like Twitter and Facebook are failing to combat misinformation.

The report, titled In the Dark: How Social Media Companies’ Climate Disinformation Problem is Hidden from the Public and released by Friends of the Earth (FOE), Greenpeace, and online activist network Avaaz, detailed whether the companies have met 27 different benchmarks to stop the spread of anti-science misinformation and ensure transparency about how inaccurate data is analyzed.

“Despite half of U.S. and U.K. adults getting their news from social media, social media companies have not taken the steps necessary to fight industry-backed deception,” reads the report. “In fact, they continue to allow these climate lies to pollute users’ feeds.

The groups assessed five major social media platforms—Facebook, Twitter, YouTube, Pinterest, and TikTok—and found that the two best-performing companies, Pinterest and YouTube, scored 14 out of the 27 possible points.

As Common Dreams reported earlier this month, Pinterest has won praise from groups including FOE for establishing “clearly defined guidelines against false or misleading climate change information, including conspiracy theories, across content and ads.”

“One of the key objectives of this report is to allow for fact-based deliberation, discussion, and debate to flourish in an information ecosystem that is healthy and fair, and that allows both citizens and policymakers to make decisions based on the best available data.”

The company also garnered points in Wednesday’s report for being the only major social media platform to make clear the average time or views it allows for a piece of scientifically inaccurate content before it will take action to combat the misinformation and including “omission or cherry-picking” of data in its definition of mis- or disinformation.

Pinterest and YouTube were the only companies that won points for consulting with climate scientists to develop a climate mis- and disinformation policy.

The top-performing companies, however, joined the other firms in failing to articulate exactly how their misinformation policy is enforced and to detail how climate misinformation is prioritized for fact-checking.

“Social media companies are largely leaving the public in the dark about their efforts to combat the problem,” the report reads. “There is a gross lack of transparency, as these companies conceal much of the data about the prevalence of digital climate dis/misinformation and any internal measures taken to address its spread.”

Twitter was the worst-performing company, meeting only five of the 27 criteria.

“Twitter is not clear about how content is verified as dis/misinformation, nor explicit about engaging with climate experts to review dis/misinformation policies or flagged content,” reads the report. “Twitter’s total lack of reference to climate dis/misinformation, both in their policies and throughout their enforcement reports, earned them no points in either category.”

TikTok scored seven points, while Facebook garnered nine.

The report, using criteria developed by the Climate Disinformation Coalition, was released three weeks after NPR reported that inaccurate information about renewable energy sources has been disseminated widely in Facebook groups, and the spread has been linked to slowing progress on or shutting down local projects.

In rural Ohio, posts in two anti-wind power Facebook groups spread misinformation about wind turbines causing birth defects in horses, failing to reduce carbon emissions, and causing so-called “wind turbine syndrome” from low-frequency sounds—a supposed ailment that is not backed by scientific evidence. The posts increased “perceptions of human health and public safety risks related to wind” power, according to a study published last October in the journal Energy Research & Social Science.

As those false perceptions spread through the local community, NPRreported, the Ohio Power Siting Board rejected a wind farm proposal “citing geological concerns and the local opposition.”

Misinformation on social media “can really slow down the clean energy transition, and that has just as dire life and death consequences, not just in terms of climate change, but also in terms of air pollution, which overwhelmingly hits communities of color,” University of California, Santa Barbara professor Leah Stokes told NPR.

As the IPCC reported in its February report, “rhetoric and misinformation on climate change and the deliberate undermining of science have contributed to misperceptions of the scientific consensus, uncertainty, disregarded risk and urgency, and dissent.”

Wednesday’s report called on all social media companies to:

  • Establish, disclose, and enforce policies to reduce climate change dis- and misinformation;
  • Release in full the company’s current labeling, fact-checking, policy review, and algorithmic ranking systems related to climate change disinformation policies;
  • Disclose weekly reports on the scale and prevalence of climate change dis- and misinformation on the platform and mitigation efforts taken internally; and
  • Adopt privacy and data protection policies to protect individuals and communities who may be climate dis/misinformation targets.

“One of the key objectives of this report is to allow for fact-based deliberation, discussion, and debate to flourish in an information ecosystem that is healthy and fair, and that allows both citizens and policymakers to make decisions based on the best available data,” reads the report.

“We see a clear boundary between freedom of speech and freedom of reach,” it continues, “and believe that transparency on climate dis/misinformation and accountability for the actors who spread it is a precondition for a robust and constructive debate on climate change and the response to the climate crisis.”

Originally published on Common Dreams by JULIA CONLEY  and republished

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Business, Elon Musk

Do poison pills work? A finance expert explains the anti-takeover tool that Twitter hopes will keep Elon Musk at bay

Poison pills usually work, but Elon Musk appears undeterred. screenshot from china launch video

Tuugi Chuluun, Loyola University Maryland

Takeovers are usually friendly affairs. Corporate executives engage in top-secret talks, with one company or group of investors making a bid for another business. After some negotiating, the companies engaged in the merger or acquisition announce a deal has been struck.

But other takeovers are more hostile in nature. Not every company wants to be taken over. This is the case with Elon Musk’s US$43 billion bid to buy Twitter.

Companies have various measures in their arsenal to ward off such unwanted advances. One of the most effective anti-takeover measures is the shareholder rights plan, also more aptly known as a “poison pill.” It is designed to block an investor from accumulating a majority stake in a company.

Twitter adopted a poison pill plan on April 15, 2022, shortly after Musk unveiled his takeover offer in a Securities and Exchange filing.

I’m a scholar of corporate finance. Let me explain why poison pills have been effective at warding off unsolicited offers, at least until now.

What’s a poison pill?

Poison pills were developed in the early 1980s as a defense tactic against corporate raiders to effectively poison their takeover efforts – sort of reminiscent of the suicide pills that spies supposedly swallow if captured.

There are many variants of poison pills, but they generally increase the number of shares, which then dilutes the bidder’s stake and causes them a significant financial loss.

Let’s say a company has 1,000 shares outstanding valued at $10 each, which means the company has a market value of $10,000. An activist investor purchases 100 shares at the cost of $1,000 and accumulates a significant 10% stake in the company. But if the company has a poison pill that is triggered once any hostile bidder owns 10% of its stock, all other shareholders would suddenly have the opportunity to buy additional shares at a discounted price – say, half the market price. This has the effect of quickly diluting the activist investor’s original stake and also making it worth a lot less than it was before.

Twitter adopted a similar measure. If any shareholder accumulates a 15% stake in the company in a purchase not approved by the board of directors, other shareholders would get the right to buy additional shares at a discount, diluting the 9.2% stake Musk recently purchased.

Poison pills are useful in part because they can be adopted quickly, but they usually have expiration dates. The poison pill adopted by Twitter, for example, expires in one year.

A successful tactic

Many well-known companies such as Papa John’s, Netflix, JCPenney and Avis Budget Group have used poison pills to successfully fend off hostile takeovers. And nearly 100 companies adopted poison pills in 2020 because they were worried that their careening stock prices, caused by the pandemic market swoon, would make them vulnerable to hostile takeovers.

No one has ever triggered – or swallowed – a poison pill that was designed to fend off an unsolicited takeover offer, showing how effective such measures are at fending off takeover attempts.

These types of anti-takeover measures are generally frowned upon as a poor corporate governance practice that can hurt a company’s value and performance. They can be seen as impediments to the ability of shareholders and outsiders to monitor management, and more about protecting the board and management than attracting more generous offers from potential buyers.

However, shareholders may benefit from poison pills if they lead to a higher bid for the company, for example. This may be already happening with Twitter as another bidder – a $103 billion private equity firm – may have surfaced.

A poison pill isn’t foolproof, however. A bidder facing a poison pill could try to argue that the board is not acting in the best interests of shareholders and appeal directly to them through either a tender offer – buying shares directly from other shareholders at a premium in a public bid – or a proxy contest, which involves convincing enough fellow shareholders to join a vote to oust some or all of the existing board.

And judging by his tweets to his 82 million Twitter followers, that seems to be what Musk is doing.

[Like what you’ve read? Want more? Sign up for The Conversation’s daily newsletter.]

Tuugi Chuluun, Associate Professor of Finance, Loyola University Maryland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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News, Politics

America’s Top 15 Earners and What They Reveal About the U.S. Tax System

by ProPublica

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.Series: The Secret IRS Files Inside the Tax Records of the .001%

Above: Photo Collage / Lynxotic / Adobe Stock

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.

Thanks to an analysis of its unprecedented trove of IRS data, ProPublica is revealing the 15 people who reported the most U.S. income on their taxes from 2013 to 2018, along with data for the rest of the top 400.

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.

THE TOP 15

Here are the details on the top 15 income earners. Read the full analysis of the top 400 here.

For the full list of America’s top 400 income earners and their tax rates, along with our methodology, click here.

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Apps, Business, Crypto, Tech

New Block Cash App Feature called ‘Paid in Bitcoin’ announced at Miami Bitcoin 2022

During the 2022 Bitcoin conference in Miami the mobile payment service Cash App (developed by Block, Inc.) announced they would allow its customers to receive their paycheck earnings in bitcoin.  The feature is called “Paid in Bitcoin”.

‘Paid in Bitcoin’ would allow customers with Cash Cards to customize an amount, a percentage (1% to 100%) of their direct deposits which would then automatically be invested into the cryptocurrency, effective starting April 7. Cash App integrated with Lightning Network, the decentralized blockchain payment portal in January with plans to further expand to make it even easier for customers to make instant bitcoin transfer via QR codes.

Jack Dorsey, founder of Block (formerly named Square) and a Bitcoin Maximalist spoke at the 2021 conference and said he was committed to making the crypto “the native currency for the internet”. 

In addition to the Cash App feature that will convert your paycheck to bitcoin, the company has more features they plan to roll out in the following weeks including ‘Round Ups’.  Round Ups would enable customers to automatically invest in either bitcoin, stocks or exchange traded funds with the change (rounded to the nearest dollar) from a debit transaction. 

These new roll outs also come on the heels of a major data breach, where more than 8 million Cash App customers may have had their personal information compromised, possibly as a result of a former employee that downloaded internal reports without permission.

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Apps, Elon Musk, Social Media, Twitter

New Elon Musk tweets Confirm he will not be a Silent Stakeholder: Board Seat Declined

In another weekend explosion, this time, revealing the hands on bent of ideas for TWX project

Once again the weekend is seeing a barrage of tweets from Elon Musk, this time with a solid bulls-eye on Twitter itself and changes he has on his wishlist. Implementation schedule appears to be, well, immediate.

https://bookshop.org/a/565/9780553418835

The first tweet we are featuring was a preview of just how much of an activist shareholder he is planning to be.

Looking forward to the first board meeting he will attend since his $2.9 billion 9.2% stake in the bird platform – Musk reposted a meme of his infamous “Ganja weed” interview – essentially creating an instant meme of memes:

**note – on Sunday night (April 10th, 2022) it was revealed that Elon Musk joining the board would not be a thing, after all. Most likely reason sited in the avalanche of reactions? A board seat would have capped the maximum investment / stake percentage at 14.9% and brought potentail legal issues. As the largest shareholder the door remains open to his acquiring the company outright, and continuing the activist direction clearly indicated in the tweets below…

Next, the constructive criticism started, first taking note (perhaps already up his sleeve as he contemplated shelling out 3 bil of pocket change) of how many of the accounts with the most followers post “very little content”. Summing up his thoughts with the question “Is Twitter dying?”

Next, in replies to himself he got granular, citing two very specific examples, how @taylorswift13 and @justinbieber are remiss when it comes to staying active and tweeting on a regular basis…

Apparently, the day was just beginning to get interesting, cause he posted a Yogi Berra-like conundrum next, pointing out that statistics, including this very one, presumably, are very often false. Posted at 1:14 PM he may have had a siesta and found himself ready to rumble cause with the next tweet at 5:03 PM things started to cook…

He dug into his infographic trove of insights and pulled out this re-tweeted gem, showing how the Weather Channel is distrusted by nearly 50% of Republicans and about 35% percent of Democrats.

This tweet is an interesting one as there has been a lot of hand wringing and dire predictions made in the “media” that Elon Musk, known as having a Libertarian prediliction, will somehow be Trump’s savior and that his idea of “free speech” is similar to those that are somewhere to the Right of Q-anon.

This, I would venture, is highly unlikely. It’s far more likely that his idea of free speech might actually be closer to, well what it sounds like, less censorship. Oddly both the left and the right are anticipating disappointment, and perhaps, that is one of those be-careful-what-you-wish-for things.

The tweets of April 9th, seem to bear out the idea that he will be active, vocal and, above all, amusing, but unlikely to follow any faction or party.

Next came more specific and sort of practical tweets, like this one suggesting twitter “sell” the authentication checkmark as part of the Twitter Blue $3 subscription package. This, bizarrely, is a great business concept, and might actually happen, crazy as it sounds.

After reflecting briefly on the idea, it became clear that the invention of a new plebian version of the coveted mark is needed, lest it be confused with the rare and hard to acquire “public figure” or “official” accounts.

https://twitter.com/elonmusk/status/1512957577092608004?s=21&t=p5FTMofYfTHgM4X5Gm2n8Q

A quick followup tweet with self replies included the observation that the edit tweet feature that has had much action this week is already a done deal in the future paid Twitter landscape.

Then, as if out of the blue like a bolt of lightening Elon decides that there should be no ads! Ok, so this does make sense in a genius billionaire kind-of-way here’s the new breakdown:

  1. Everybody pays $3 per moth
  2. Advertising is cancelled
  3. We all get checkmarks and an edit tweet feature
  4. Corporations stop “dictating policy”
  5. Twitter SF HQ is converted into a homeless shelter (unhoused refuge)
https://twitter.com/elonmusk/status/1512962115270754306?s=21&t=p5FTMofYfTHgM4X5Gm2n8Q

Good idea?:

https://twitter.com/elonmusk/status/1512966135423066116?s=21&t=p5FTMofYfTHgM4X5Gm2n8Q

Then, in a semi-final, inspired burst of sunshine, there’s a great suggestion – actually a tweet from earlier in the am – 7:39 to be exact but pinned for now, the man who must be heeded points out that “crypto scam accounts” represent a large percentage that should be subtracted from the real accounts. ow if they can just remove the 3 billion fake accounts across all social media…

Apparently not able to quit while ahead, or maybe under the influence of jet lag or substances, this gem dropped:

https://twitter.com/elonmusk/status/1513045405029711878?s=21&t=Rw_ry5HVOGgsmXRxJJzSbA

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News, Observation, Politics

Airbnb’s Ukraine moment is a reminder of what the sharing economy can be

As desirable vacation destinations go, war-torn Ukraine must surely rate low. But in the first month of Russia’s invasion, Airbnb bookings in Ukraine boomed, as people around the world used the accommodation platform to channel more than US$15 million in donations to the country.

As with other forms of direct donation, using Airbnb to channel aid to Ukraine has been problematic. The company was relatively quick to waive the 20% commission it usually charges on transactions. But stopping scammers from setting up fake accounts to collect money from well-meaning donors has proven more difficult.

It’s a story that illustrates both the potential and limitations of the so-called sharing economy.

Idealistic visionaries once imagined the internet would connect individual buyers and sellers, peer to peer (or P2P), without the need for intermediaries and their commissions. But this promise of market democratisation and inclusivity has largely failed to materialise.

Instead, the platforms that have arisen – eBay, Uber, Airbnb and so forth – are very much like traditional capitalist enterprises, putting the squeeze on rivals, exploiting labour, and making their founders and executives among the wealthiest people on the planet.

Platform capitalism

The founders of these companies didn’t necessarily begin with such ambitions. Airbnb’s founders, for example, started their website in 2007 to provide an alternative to mainstream hotels and motels, enabling anyone to offer a spare room or residence for short-term stays in the expensive San Francisco market.

Now Airbnb’s market capitalisation rivals that of the world’s biggest hotel chain, Marriott. In 2021, Airbnb reported US$1.6 billion in earnings before interest, tax, depreciation and amortisation, compared with Marriott’s US$2 billion.

Co-founder and chief executive Brian Chesky’s personal fortune is an estimated US$14 billion, placing him 157th on Forbes’ world billionaires list.

The fortunes made by the dominant sharing platform have not all come from technological innovation.

Uber, for example, has squeezed taxi cooperatives, reduced wages for drivers and normalised precarious “gig work”. Airbnb has been criticised for contributing to rental affordability and supply problems, as property owners chase higher returns from the short-stay market.

There’s little that is democratic about these platforms. The owners have the last say in the equation, dictating which actions and exchanges are allowed or cancelled.

Creating a true sharing economy

Our research on the sharing economy shows that digital platforms can be a powerful tool for individuals to collaborate in developing solutions to their needs. But for the promise of the sharing economy to be realised, platforms must be far more open, democratic and publicly accountable than they are now.

As the non-profit P2P foundation argues, peer-to-peer networks create the potential to transition to a commons-oriented economy, focused on creating value for the world, not enriching shareholders.

For that to happen, all users must have input into decisions about why a platform exists and how it is used.

Examples of what is possible already exist. Perhaps the best known is Wikipedia – a hugely valuable service that runs on volunteer labour and donations. It’s not perfect but it’s hard to imagine it working as a for-profit enterprise.

There are many attempts to create collectively owned, more democratic sharing platforms. In New York, for example, drivers have organised to create ride-sharing alternatives to Uber and Lyft based on cooperative principles. Such endeavours are known as platform cooperativism.

But these ventures routinely struggle to raise the money needed to develop their platforms. Members also vary largely in their knowledge of business practices, particularly the skills needed to manage democratic decision making.

To help these platforms thrive, we need public policies that assist them to raise funds. We also need programs that deliver financial and business education to platform members.

Beyond these practical difficulties, users also need to have a stake in how these platforms run for them be a fully transformative version of the sharing economy.

We’ve drifted a long way from the early hopes for the sharing economy. But it’s not too late to change course and work to co-create more equitable, human-focused models of exchange.

Daiane Scaraboto, Associate Professor of Marketing, The University of Melbourne and Bernardo Figueiredo, Associate Professor of Marketing, RMIT University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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News, Politics

Biden bets a million barrels a day will drive down soaring gas prices – what you need to know about the Strategic Petroleum Reserve

Several sites, such as one near Freeport, Texas, store the hundreds of million of barrels in the United States’ Strategic Petroleum Reserve. Department of Energy via AP

Scott L. Montgomery, University of Washington

The Biden administration on March 31, 2022, said it plans to release an unprecedented 180 million barrels of oil from the U.S. Strategic Petroleum Reserve to combat the recent spike in gas and diesel prices. About a million barrels of oil will be released every day for up to six months.

If all the oil is released, it would represent almost one-third of the current volume of the Strategic Petroleum Reserve. It follows a release of 30 million barrels in early March, a large withdrawal until the latest one.

But what is the Strategic Petroleum Reserve, why was it created, and when has it been used? And does it still serve a purpose, given that the U.S. exports more oil and other petroleum products than it imports?

As an energy researcher, I believe considering the reserve’s history can help answer these questions.

Origins of the reserve

Congress created the Strategic Petroleum Reserve as part of the Energy Policy and Conservation Act of 1975 in response to a global oil crisis.

Arab oil-exporting states led by Saudi Arabia had cut supply to the world market because of Western support for Israel in the 1973 Yom Kippur War. Oil prices quadrupled, resulting in major economic damage to the U.S. and other countries. This also shook the average American, who had grown used to cheap oil.

The oil crisis caused the U.S., Japan and 15 other advanced countries to form the International Energy Agency in 1974 to recommend policies that would forestall such events in the future. One of the agency’s key ideas was to create emergency petroleum reserves that could be drawn on in case of a severe supply disruption.

The map shows the locations of the oil held in the Strategic Petroleum Reserve. Department of Energy

The Energy Policy and Conservation Act originally stipulated the reserve should hold up to 1 billion barrels of crude and refined petroleum products. Though it has never reached that size, the U.S. reserve is the largest in the world, with a maximum volume of 714 million barrels. The cap was previously set at 727 million barrels.

As of March 25, 2022, the reserve contained about 568 million barrels.

Oil in the reserve is stored underground in a series of large underground salt domes in four locations along the Gulf Coast of Texas and Louisiana, and is linked to major supply pipelines in the region.

Salt domes, formed when a mass of salt is forced upward, are a good choice for storage since salt is impermeable and has low solubility in crude oil. Most of the storage sites were acquired by the federal government in 1977 and became fully operational in the 1980s.

History of drawdowns

In the 1975 act, Congress specified that the reserve was intended to prevent “severe supply interruptions” – that is, actual oil shortages.

Over time, as the oil market has changed, Congress expanded the list of reasons for which the Strategic Petroleum Reserve could be tapped, such as domestic supply interruptions due to extreme weather.

Prior to March 2022, about 280 million barrels of crude oil had been released since the reserve’s creation, including a 50 million release that began in November 2021.

There have only been three emergency releases in the reserve’s history. The first was in 1991 after Iraq invaded Kuwait the year before, which resulted in a sharp drop in oil supply to the world market. The U.S. released 34 million barrels.

The second release, of 30 million barrels, came in 2005 after Hurricanes Rita and Katrina knocked out Gulf of Mexico production, which then comprised about 25% of U.S. domestic supply.

The third was a coordinated release by the International Energy Agency in 2011 as a result of supply disruptions from several oil-producing countries, including Libya, then facing civil unrest during the Arab Spring. In all, the agency coordinated a release of 60 million barrels of crude, half of which came from the U.S.

In addition, there have been 11 planned sales of oil from the reserve, mainly to generate federal revenue. One of these – the 1996-1997 sale to reduce the federal budget deficit – seemed to serve political ends rather than supply-related ones.

A better way to avoid pain at the pump

President Joe Biden’s November decision to tap the reserve was also seen as political by Republicans because there was no emergency shortage of supply at that time.

Similarly, the latest historic release of 180 million barrels could also be seen as serving a political purpose – in an election year, no less. But I believe it also seems perfectly legitimate in terms of fulfilling the Strategic Petroleum Reserve’s original purpose: reducing the negative impacts of a major oil price shock.

Though the U.S. is today a net petroleum exporter, it continues to import as much as 8.2 million barrels of crude oil every day.

[Over 150,000 readers rely on The Conversation’s newsletters to understand the world. Sign up today.]

But in my view, the best way to avoid the pain of oil price shocks is to lower oil demand by reducing global carbon emissions – rather than mainly relying on releases from the reserve.

This is an updated version of an article originally published on Nov. 24, 2021.

Scott L. Montgomery, Lecturer, Jackson School of International Studies, University of Washington

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Business, News, Observation, Politics

Workers in New York Vote to Form Amazon’s First-Ever Union in US

“We want to thank Jeff Bezos for going to space, because while he was up there, we were organizing a union,” said Christian Smalls, president of the Amazon Labor Union.

Above: Photo Collage / Lynxotic / Pixels / Adobe Stock

Amazon warehouse workers in Staten Island, New York won their election Friday to form the retail giant’s first-ever union in the United States, a landmark victory for the labor movement in the face of aggressive union-busting efforts from one of the world’s most powerful companies.

According to an initial tally released by the National Labor Relations Board (NLRB), there were 2,654 votes in favor of recognizing a union and 2,131 against. The number of disputed ballots, 67, is not nearly enough to change the outcome.

The historic unionization drive was spearheaded by the Amazon Labor Union (ALU), a worker-led group not affiliated with any established union. Christian Smalls, the president of ALU, was fired by Amazon in 2020 after he led a protest against the company’s poor workplace safety standards in the early stages of the coronavirus pandemic.

“When Covid-19 came into play, Amazon failed us,” Smalls said during a press conference after the union victory was announced. “We want to thank Jeff Bezos for going to space, because while he was up there, we were organizing a union.”

Long-time labor journalist Steven Greenhouse wrote Friday that “the unionization victory at the Amazon warehouse in Staten Island is by far the biggest, beating-the-odds, David-versus-Goliath unionization win I’ve seen.”

“America’s wealthiest, most powerful, most seemingly indispensable company has lost to a pop-up coalition of workers,” Greenhouse added. “A generation, the younger generation, is stirring.”

Amazon, which spent $4.3 million on anti-union consultants in 2021 alone, worked hard to crush the unionization effort, forcing employees to attend hundreds of captive-audience meetings and threatening workers with pay cuts and other potential consequences.

But the company’s union-busting campaign wasn’t enough to overcome the upstart revolt led by ALU, which was founded just months ago.

Derrick Palmer, a co-founder of ALU and an employee at the Staten Island warehouse, said he expects Friday’s victory to be one of many.

“This will be the first union,” said Palmer, “but moving forward, that will motivate other workers to get on board with us.”

Widespread celebration followed the official announcement of the union’s election win, with progressive lawmakers and activists hailing the victory as a potential watershed moment for the U.S. labor movement, which has struggled for decades in the face of corporate America’s relentless assault. Union membership in the U.S. declined by 241,000 workers in 2021, according to Labor Department figures.

“The organizing victory at Amazon on Staten Island is a signal that American workers will no longer accept exploitation,” Sen. Bernie Sanders (I-Vt.) tweeted Friday. “They’re tired of working longer hours for lower wages. They want an economy that works for all, not just Jeff Bezos.”

The union has much work ahead of it. As HuffPost labor reporter Dave Jamieson noted, the union must now negotiate “a first collective bargaining agreement with one of the most powerful companies in the world.”

“It can take years for a union to secure a first contract, and some never manage to,” Jamieson wrote. “Amazon would have a strong incentive not to offer the union a decent deal, for fear it would only encourage more unionization elsewhere.”

 Originally published on Common Dreams by JAKE JOHNSON and republished under Creative Commons (CC BY-NC-ND 3.0)

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Business, Climate Solutions, News, Politics

As Consumers Pay, Oil CEO’s Refuse to Testify to Congress About Soaring Prices

“While Americans struggle with high gas prices, these companies are doing victory laps, showering their already wealthy executives and shareholders with billions in stock buybacks and bonus compensation,” said one watchdog group. “They should be ashamed.”

As people across the United States face record-high gas prices—compounded by rising grocery bills and prices for other essentials—executives at three major oil companies are refusing to testify before Congress about what their firms could do to lessen the burden on U.S. households, leaving Democratic lawmakers and consumer advocates to condemn the companies for profiting amid lower and middle-class people’s financial pain.

Rep. Raúl M. Grijalva (D-Ariz.), who chairs the House Natural Resources Committee, had invited the CEOs of EOG Resources Inc., Devon Energy Corp. and Occidental Petroleum Corp. to testify next week, only to be rebuffedTuesday by the executives, who have personally profited off gas prices which averaged $4.24 per gallon on Monday.

“I invited these companies to come before the committee and make their case, but apparently they don’t think it’s worth defending,” Grijalva said in a statement Tuesday. “Their silence tells us all we need to know—that cries for more drilling and looser regulations are nothing more than another age-old attempt to line their own pockets.

Since oil and gas prices began rising earlier this year as traveling and commuting increased, and went up further following Russia’s invasion of Ukraine in February, the fossil fuel industry has claimed the Biden administration should release more permits for drilling on public lands and accelerate approval of permits for building energy infrastructure, with the American Petroleum Institute pushing for what Grijalva called “a domestic drilling free-for-all” earlier this month.

Lawmakers including Grijalva have argued that the companies could easily stabilize gas prices immediately, considering the billions of dollars in profits EOG Resources, Devon Energy, and Occidental Petroleum raked in last year.

Instead, watchdog group Accountable.US said Tuesday, Occidental Petroleum planned to use $3 billion for stock buybacks in 2022, while Devon Energy gave nearly $2 billion in share buybacks and dividends to shareholders last year. EOG Resources gave CEO William R. Thomas a $150,000 raise in 2021, making his total compensation $9.8 million.

“We want to work with them to reduce gas prices, but it seems as though they’re too busy taking in record profits while refusing to pass savings on to consumers,” said Rep. Mike Levin (D-Calif.), a member of the Natural Resources Committee.

Rep. Mark Pocan (D-Wis.) sarcastically expressed empathy for the “spineless” executives who refused to testify before Grijalva’s committee.

“It is hardly surprising that EOG Resources, Devon Energy, and Occidental Petroleum are dodging accountability by refusing to testify in Congress,” said Kyle Herrig, president of watchdog group Accountable.US. “While Americans struggle with high gas prices, these companies are doing victory laps, showering their already wealthy executives and shareholders with billions in stock buybacks and bonus compensation. They should be ashamed.”

Grijalva noted that while the industry has used the Russian invasion of Ukraine to call for even more freedom to drill for oil and gas, fossil fuel companies hold leases on 26 million acres of land.

“These same companies already have over 9,000 approved permits they can use whenever they want,” Grijalva told Public News Service on Tuesday. “And the very companies with thousands of acres of existing leases and hundreds of unused permits are the same ones shouting that they need more land for drilling.”

According to Accountable.US, the three companies refusing to speak to Grijalva’s committee “are among the top leaseholders of public lands oil and gas leases with 4,114 leases covering nearly 1.5 million acres.”

Companies including BP, Chevron, Exxon Mobil, and Shell have also been invited to testify at upcoming hearings on their business practices and impacts on consumers. In February, board members from the four companies refused to testify about the firms’ climate pledges.

Senate Majority Leader Chuck Schumer (D-N.Y.) noted last week that oil prices dropped in recent days, but no savings were passed onto consumers.

“The bewildering incongruity between falling oil prices and rising gas prices smacks of price gouging and is deeply damaging to working Americans,” Schumer said last week. “The Senate is going to get answers.”

Originally published on Common Dreams by JULIA CONLEY  and republished under Creative Commons (CC BY-NC-ND 3.0).

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Economics, Finance, News, Politics

Why the Fed can’t stop prices from going up anytime soon – but may have more luck over the long term

Above: Photo Adobe Stock

The Federal Reserve has begun its most challenging inflation-fighting campaign in four decades. And a lot is at stake for consumers, companies and the U.S. economy.

On March 16, 2022, the Fed raised its target interest rate by a quarter point – to a range of 0.25% to 0.5% – the first of many increases the U.S. central bank is expected to make over the coming months. The aim is to tamp down inflation that has been running at a year-over-year pace of 7.9%, the fastest since February 1982.

The challenge for the Fed is to do this without sending the economy into recession. Some economists and observers are already raising the specter of stagflation, which means high inflation coupled with a stagnating economy.

As an expert on financial markets, I believe there’s good news and bad when it comes to the Fed’s upcoming battle against inflation. Let’s start with the bad.

Inflation is worse than you think

Inflation began accelerating in fall 2021 when a stimulus-fueled demand for goods met a COVID-19-induced drop in supply.

In all, Congress spent US$4.6 trillion trying to counter the economic effects of COVID-19 and the lockdowns. While that may have been necessary to support struggling businesses and people, it unleashed an unprecedented bump in the U.S. money supply.

At the same time, supply chains have been in disarray since early in the pandemic. Lockdowns and layoffs led to closures of factories, warehouses and shipping ports, and shortages of key components like microchips have made it harder to finish a wide range of goods, from cars to fridges. These factors have contributed to a worldwide shortage of goods and services.

Any economist will tell you that when demand exceeds supply, prices will rise too. And to make matters worse, businesses around the world have been struggling to hire more workers, which has further exacerbated supply chain problems. The labor shortage also worsens inflation because workers are able to demand higher wages, which is typically paid for with higher prices on the goods they make and the services they provide.

This clearly caught the Fed off guard, which as recently as November 2021 was calling the rise in inflation “transitory.”

And now Russia’s war in Ukraine is compounding the problems. This is mostly because of the conflict’s impact on the supply of gas and oil, but also because of the sanctions placed on Russia’s economy and the ancillary effects that will ripple throughout the global economy.

The latest inflation data, released on March 10, 2022, is for the month of February and therefore doesn’t account for the impact of Russia’s invasion of Ukraine, which sent U.S. gas prices soaring. The prices of other commodities, such as wheat, also spiked. Russia and Ukraine produce a quarter of the world’s wheat supply.

Inflation won’t be slowing anytime soon

And so the Fed has little choice but to raise interest rates – one of its few tools available to curb inflation.

But now it’s in a very tough situation. After arguably coming late to the inflation-fighting party, the Fed is now tasked with a job that seems to get harder by the day. That’s because the main drivers of today’s inflation – the war in Ukraine, the global shortage of goods and workers – are outside of its control.

So even dramatic rate hikes over the coming months, perhaps increasing rates from about zero now to 1%, will be unlikely to make an appreciable impact on inflation. This will remain true at least until supply chains begin to return to normal, which is still a ways off.

Cars and condos

There are a few areas of the U.S. economy where the Fed could have more of an impact on inflation – eventually.

For example, demand for goods that are typically purchased with a loan, such as a house or car, is more closely tied to interest rates. The Fed’s policy of ultra-low interest rates is one key factor that has driven inflation in those sectors in recent months. As such, an increase in borrowing costs through higher interest rates should prompt a drop in demand, thus reducing inflation.

But changing consumer behavior can take time, and it’ll require more than a quarter-point increase in rates at the Fed. So consumers should expect prices to continue to climb at an above-normal pace for some time.

Higher interest rates also tend to reduce stock prices, as other investments like bonds may become more attractive to investors. This in turn may lead people invested in stock markets to reduce their spending because they feel less wealthy, which may help reduce overall demand and inflation. The effect is minimal, however, and would take time before you see the impact in prices.

The good news

That is the bad news. The good news is that the U.S. economy has been roaring at the fastest pace in decades, and unemployment is just about down to its pre-pandemic level, which was the lowest since the 1960s.

That’s why I think it’s unlikely the U.S. will experience stagflation – as it did in the 1970s and early 1980s. A very aggressive increase in interest rates could possibly induce a recession, and lead to stagflation, but by sapping economic activity it could also bring down inflation. At the moment, a recession seems unlikely.

In my view, what the Fed is beginning to do now is less taking a big bite out of inflation and more about signaling its intent to begin the inflation battle for real. So don’t expect overall prices to come down for quite a while.

Jeffery S. Bredthauer, Associate Professor Of Finance, Banking and Real Estate,, University of Nebraska Omaha

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Breaking News, Politics

Dems Introduce Windfall Tax on Big Oil So Companies ‘Pay a Price When They Price Gouge’

Above: Photo Collage / Lynxotic / Adobe Stock

“This is a bill to reduce gas prices and hold Big Oil accountable,” said Rep. Ro Khanna, who led the measure in the U.S. House.

Congressional Democrats on Thursday introduced the bicameral Big Oil Windfall Profits Tax to target price gouging by profit-gorging fossil fuel companies amid Russian President Vladimir Putin’s invasion of Ukraine.

“We need to curb profiteering by Big Oil and provide relief to Americans at the gas pump—that starts with ensuring these corporations pay a price when they price gouge.”

“This is a bill to reduce gas prices and hold Big Oil accountable,” declared Rep. Ro Khanna (D-Calif.), who’s leading the measure in the U.S. House.

“As Russia’s invasion of Ukraine sends gas prices soaring,” said Khanna, “fossil fuel companies are raking in record profits. These companies have made billions and used the profits to enrich their own shareholders while average Americans are hurting at the pump.”

Sen. Sheldon Whitehouse (D-R.I.) introduced the legislation in the upper chamber along with co-sponsors including Sens. Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), and Bernie Sanders (I-Vt.).

The proposal followed President Joe Biden’s announcement earlier this week of a ban on U.S. imports of Russian fuels and amid swelling accusations that Big Oil has been taking advantage of the crisis in Ukraine to “pad their bottom line with war-fueled profits.”

The Democrats’ proposal aims to get some relief for Americans, who are facing average gas prices of $4.31 a gallon.

Big oil companies, specifically those that produce or import at least 300,000 barrels of oil per day, are targeted under the measure. They would face a per-barrel tax—whether the oil is domestically produced or imported—equal to 50% of the difference between the current price of a barrel of oil and the average price per barrel between 2015 and 2019.

The measure exempts smaller companies, which, according to a statement from the lawmakers, account for roughly 70% of the domestic production. This approach is meant to deter the larger multinational producers from simply raising prices.

The tax imposed on the energy firms would be quarterly. Consumers would receive quarterly rebates, with the relief phasing out for single filers earning more than $75,000 annually and joint filers earning more than $150,000 annually. The lawmakers project the tax to raise $45 billion per year at $120 per barrel of oil, delivering to single filers $240 annually and joint filers $360 annually.

“While Putin’s war is causing gas prices to go up, Big Oil companies are raking in record profits,” Warren said in a statement. “We need to curb profiteering by Big Oil and provide relief to Americans at the gas pump—that starts with ensuring these corporations pay a price when they price gouge, and using the revenue to help American families,” she said.

A number of social justice and climate groups heaped praise on the legislative proposal.

According to Richard Wiles, president of the Center for Climate Integrity, “The oil and gas industry got the world into this mess by lobbying and lying to keep us hooked on fossil fuels. Now they’re using the war in Ukraine to distract us from the fact that they are ripping off hard working Americans with high gas prices as they reap record earnings.”

“It’s time we stop allowing Big Oil to use its record profits, earned on the backs of hard-working American families, to reward wealthy shareholders and CEOs, and instead make them pay a fair share to lower the cost for consumers,” he added.

Collin Rees, U.S. program director at Oil Change International, welcomed the proposal as precisely the opposite of what the fossil fuel lobby has called for to counter Putin’s power, namely expanded domestic fossil fuel production.

“The so-called ‘solutions’ to the energy crisis being put forward by Big Oil companies and the American Petroleum Institute would do nothing but further line their own pockets and lock in a climate-wrecking, fossil-fueled future,” he said. “What’s needed now is immediate relief for American consumers, which is what this commonsense windfall profits tax bill would provide.”

The bill also drew plaudits from Lukas Ross, program manager at Friends of the Earth, which released an analysis Thursday along with BailoutWatch finding that Big Oil CEOs have “absolutely” used the spiked in fuel prices triggered by Russia’s invasion of Ukraine to “price-gouge and profiteer.”

In a statement responding to the new legislation, Ross said: “All-American oil oligarchs are profiteering off the war in Ukraine while sacrificing our communities and climate. The windfall profits tax will require Big Oil to pay their fair share while putting billions of dollars back into the pockets of taxpayers.”

Originally published on Common Dreams by ANDREA GERMANOS and republished under  a Creative Commons license (CC BY-NC-ND 3.0)

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News, Observation, Politics

Economic sanctions may deal fatal blow to Russia’s already-weakdomestic opposition

The West has responded to Russia’s invasion of Ukraine by imposing harsh economic sanctions.

Above: Photo Collage

Most consequentially, key Russian banks have been cut out of the SWIFT payments messaging system, making financial transactions much more difficult. The United States, European Union and others also moved to freeze Russian Central Bank reserves. And U.S. President Joe Biden is weighing a total ban on Russian oil imports.

These sanctions are aimed at generating opposition from both Russian President Vladimir Putin’s inner circle and everyday Russians. As a scholar who studies regime change, I believe the risk is that they will actually drive the Kremlin’s weak opposition further into obscurity.

A ‘punishment logic’

Economic sanctions follow a “punishment logic”: Those feeling economic pain are expected to rise up against their political leaders and demand a change in policies.

Everyday Russians have already felt the pain from the newest sanctions. The ruble plummeted in value, and Russia’s stock market dipped. The effects of Western sanctions were seen in the long lines at ATMs as Russians tried to pull out their cash before it was lost.

But the odds of an uprising are not great. Empirical research suggests that sanctions rarely generate the sorts of damage that compel their targets to back down. Their greatest chance of success is when they are used against democratic states, where opposition elites can mobilize the public against them.

In authoritarian regimes like Putin’s, where average citizens are the most likely to suffer, sanctions usually do more to hurt the opposition than help it.

How Putin has quelled dissent

Putin has used a variety of tools to try to quell domestic opposition over the past two decades.

Some of these were subtle, such as tweaking the electoral system in ways that benefit his party. Others were less so, including instituting constitutional changes that allow him to serve as president for years to come.

But Putin has not stopped at legislative measures. He has long been accused of murdering rivals, both at home and abroad. Most recently, Putin has criminalized organizations tied to the opposition and has imprisoned their leader, Alexei Navalny, who was the target of two assassination attempts.

Despite a clampdown on activism, Russians have repeatedly proved willing to take to the streets to make their voices heard. Thousands demonstrated in the summer and fall of 2020 to support a governor in the Far East who had beaten Putin’s pick for the position only to be arrested, ostensibly for a murder a decade and a half earlier. Thousands more came out last spring to protest against Navalny’s detention.

Putin has even begun facing challenges from traditionally subservient political parties, such as the Communist Party and the nationalist Liberal Democratic Party.

Flickers of opposition

Importantly, Putin has occasionally shown a willingness to back down and change his policies under pressure. In other words, as much as Putin has limited democracy in Russia, opposition has continued to bubble up.

The result is a president who feels compelled to win over at least a portion of his domestic audience. This was clear in the impassioned address Putin made to the nation setting the stage for war. The fiery hourlong speech falsely accused Ukrainians of genocide against ethnic Russians in eastern Ukraine. “How long can this tragedy continue? How much longer can we put up with this?” Putin asked his nation.

Since Russia invaded Ukraine, Russians have continued to show their willingness to stand up to Putin. Thousands have gathered to protest the war in Ukraine, despite risking large fines and jail time.

They have been aided by a network of “hacktivists” outside Russia using a variety of tactics to overcome the Kremlin’s mighty propaganda machine. These groups have blocked Russian government agencies and state news outlets from spreading false narratives.

Controlling the narrative

Despite these public showings, the liberal opposition to Putin is undoubtedly weak. In part, this is because Putin controls state television, which nearly two-thirds of Russians watch for their daily news. Going into this war, half of Russians blamed the U.S. and NATO for the increase in tensions, with only 4% holding Russia responsible.

This narrative could be challenged by the large number of Russians – 40% – who get their information from social media. But the Kremlin has a long track record of operating in this space, intimidating tech companies and spreading false stories that back the government line. Just on Friday state authorities said they would block access to Facebook, which around 9% of Russians use.

Putin has already shown he can use his information machine to convert past Western sanctions into advantage. After the West sanctioned Russia for its 2014 takeover of Crimea, Putin deflected blame for Russians’ economic pain from himself to foreign powers. The result may have fallen short of the classic “rally around the flag” phenomenon, but on balance Putin gained politically from his first grab on Ukraine. More forceful economic sanctions this time around may unleash a broader wave of nationalism.

More importantly, sanctions have a long track record of weakening political freedoms in the target state. As the situation in Russia continues to deteriorate, Putin will likely crack down further to stamp out any signs of dissent.

And former Russian president Dmitry Medvedev reacted to the country’s expulsion from the Council of Europe by suggesting Russia might go back on its human rights promises.

Another casualty of the war

This has already begun.

In the first week of the war, Russian authorities arrested more than 7,000 protesters. They ramped up censorship and closed down a longtime icon of liberal media, the Ekho Moskvy radio station. The editor of Russia’s last independent TV station, TV Dozhd, also announced he was fleeing the country.

Russia already ranked near the bottom – 150 out of 180 – in the latest Reporters Without Borders assessment of media freedom. And a new law, passed on March 4, 2022, punishes the spread of “false information” about Russia’s armed forces with up to 15 years in jail.

Ironically, then, the very sanctions that encourage Russians to attack the regime also narrow their available opportunities to do so.

Ultimately, the opposition seen on the streets in Russia today and perhaps in the coming weeks may be the greatest show of strength that can be expected in the near future.

The West may have better luck using targeted sanctions against those in Putin’s inner circle, including Russia’s infamous oligarchs. But with their assets hidden in various pots around the world, severely hurting these actors may prove difficult.

Even in the best of circumstances, economic sanctions can take years to have their desired effect. For Ukrainians, fighting a brutal and one-sided war, the sanctions are unlikely to help beyond bolstering morale.

The danger is that these sanctions may also make average Russians another casualty in Putin’s war.

[The Conversation’s Politics + Society editors pick need-to-know stories. Sign up for Politics Weekly.]

This article is republished from The Conversation BY Brian Grodsky, University of Maryland, Baltimore County under a Creative Commons license. Read the original article.

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‘Love to Afghanistan’ Vigils to Demand Return of $7 Billion Stolen by US

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“This money belongs to the people of Afghanistan, not to the United States,” said an Afghan protest organizer in Kabul over the weekend.

With the people of Afghanistan facing one of the most severe humanitarian crises in the world, U.S.-based peace activists—who largely blame the policies of their own government for inflicting pain on millions of innocent Afghans—are using Valentine’s Day on Monday to demand the Biden administration return billions of dollars of seized assets to the war-torn country before more lasting harm and “cruelty” is done.

Under the banner of “Love to Afghanistan,” nationwide actions were scheduled for the weekend and localized vigils organized set for Monday (Feb. 14) by Peace Action, World Beyond War, and other humanitarian groups who argue that $7 billion frozen by the U.S. government and subsequently seized by an executive order issued Friday by President Joe Biden rightfully belongs to the Afghan people, who without it face an economy on the brink of collapse and a healthcare system and federal infrastructure without adequate support amid the Covid-19 pandemic and a worsening food crisis.

Thus far vigils for Valentine’s Day are taking place in Illinois, Kentucky, Maine, New York, and other states.

According to a call to action by organizers:

After 20 years of war in Afghanistan, Peace Action welcomed the withdrawal of troops from the country and an end to the war.

Yet when the United States military pulled out of Afghanistan, the Biden administration also responded by choking off assets to Afghan banks and the economy by freezing the reserves of the Afghan Central Bank held in the U.S. They also imposed sanctions on those doing business with Afghanistan and cut aid. Jobs and income disappeared, people cannot afford to buy food and mass starvation is now occurring.

The Afghan people are suffering now more than ever. Hunger could kill more now than in two decades of war. This humanitarian crisis in Afghanistan is in the words of the International Red Cross a “human-made catastrophe.” “Human-made” largely by coercive U.S. economic policies.

In Decemebr, 46 members of Congress wrote a letter demanding the U.S. unfreeze assets that had been locked following the U.S. military withdrawal earlier in 2021. But instead of heeding that call, Biden on Friday took the step of more permanently seizing the funds that otherwise would be under control of Afghanistan’s central bank, the Da Afghanistan Bank (DAB), which now operates under the authority of the Taliban government.

Biden’s executive order includes setting aside half of the funds, $3.5 billion, for possible settlement claims by families who lost loved ones in the 9/11 attacks of 2001, but critics have said the Afghan people—who had nothing to do with the crimes of that day twenty years ago—should not be punished for the acts of Al Qaeda jihadists, most them Saudis and Egyptians.

Promoting the “Love to Afghanistan” events in an op-ed for Common Dreamslast week, peace activist Jean Athey, coordinator of the Montgomery County Peace Action group in Maryland, said the economic war against the Afghan has the potential to be just as deadly as the 20 years of war and occupation they have just endured. Explaining the current situation and the “liquidity crisis” gripping the country, she wrote:

The government has almost no money and cannot pay workers, who cannot buy food for their families. Most have received no payment for months. In addition, Afghans have limited access to their own funds in banks. International commerce has halted. 

Given U.S. sanctions and the liquidity crisis, even international humanitarian relief organizations have great difficulty operating in Afghanistan, despite U.S. government assurances. Relief efforts designed to stave off starvation—although critically important right now—cannot endure for long since no one is willing to provide assistance indefinitely to a country of almost 40 million people. The country needs a functioning government and economy, and needs access to the international financial system.

“Political backbone” is now required of the Biden administration, argued Athey, who said the president should not be scared of predictable GOP attacks or media hit pieces about somehow appeasing the Taliban by giving the everyday people back money the money that rightfully belongs to them. “The lives of one million children are more important than a negative headline in a tabloid. The U.S. should unfreeze Afghan government assets and lift sanctions hindering the recovery of the Afghan economy and humanitarian relief efforts. We must end the U.S. economic war on Afghanistan.”

On Saturday, the DAB demanded the funds ostensibly stolen by the U.S. government be returned and called the move by Biden an “injustice against the people of Afghanistan.”

Also in Saturday, protests in Kabul decried the theft of the money.

“This money belongs to the people of Afghanistan, not to the United States. This is the right of Afghans,” Abdul Rahman, a civil society activist and the demonstration’s organizer, told the Dawn newsaper.

A spokesperson for the Taliban government, Mohammad Naeem, also decriedthe move in a post on social media Saturday.

“The theft and seizure of money held by the United States of the Afghan people represent the lowest level of human and moral decay of a country and a nation,” Naeem tweeted, added that while victory and defeat are evident throughout history, “the greatest and most shameful defeat is when moral defeat combines with military defeat.”

Originally published on Common Dreams by JON QUEALLY and republished under a Creative Commons (CC BY-NC-ND 3.0) license.

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Economists Warn Against the Fed Raising Rates at Worst Possible Time

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“A large across-the-board increase in interest rates is a cure worse than the disease,” says economist Joseph Stiglitz. “That might dampen inflation if it is taken far enough, but it will also ruin people’s lives.”

As the U.S. Federal Reserve mulls hiking interest rates in the coming weeks in an effort to curb inflation, progressive economists are warning against such a move—arguing that it will hurt workers and fail to address the real source of rising prices: unmitigated corporate power.

“The last thing average working people need is for the Fed to raise interest rates and slow the economy further.”

“A large across-the-board increase in interest rates is a cure worse than the disease,” Joseph Stiglitz, a Nobel laureate in economics and Columbia University professor, wrote Monday in Project Syndicate. “We should not attack a supply-side problem by lowering demand and increasing unemployment. That might dampen inflation if it is taken far enough, but it will also ruin people’s lives.”

Josh Bivens, director of research at the Economic Policy Institute, echoed Stiglitz’s message, writing Monday: “The inflation spike of 2021 has been bad for typical families and is a real policy challenge. But it remains the case that an overreaction to it could end up causing the most damage of all.”

Stiglitz and Bivens’ essays came three days after Robert Reich, professor of public policy at the University of California, Berkeley, made a similar warning.

According to Reich:

Fed policymakers are poised to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices—and that this wage-price spiral could get out of control.

It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage.

Although Federal Reserve Chair Jerome Powell “has expressed concern about wage hikes pushing up prices,” Reich wrote, “there’s no ‘wage-price spiral.'”

“To the contrary, workers’ real wages have dropped because of inflation,” he added. “Even though overall wages have climbed, they’ve failed to keep up with price increases—making most workers worse off in terms of the purchasing power of their dollars.”

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Reich conceded that “wage-price spirals used to be a problem” but argued that’s no longer the case “because the typical worker today has little or no bargaining power.”

Declining union membership and corporations’ increased mobility—both key pillars in the ruling class’ highly effective assault on workers that has been carried out on a bipartisan basis for more than four decades—”have shifted power from labor to capital,” wrote Reich. “Increasing the share of the economic pie going to profits and shrinking the share going to wages… ended wage-price spirals.”

It is “totally wrong” to contend that inflation is being fueled by rising wages stemming from a so-called “tight” labor market, Reich argued. He continued:

The January jobs report shows that the U.S. economy is still 2.9 million jobs below what it had in February 2020. Given the growth of the U.S. population, it’s 4.5 million short of what it would have by now had there been no pandemic.

Consumers are almost tapped out. Not only are real (inflation-adjusted) incomes down, but pandemic assistance has ended. Extra jobless benefits are gone. Child tax credits have expired. Rent moratoriums are over. Small wonder consumer spending fell 0.6% in December, the first decrease since last February.

“Given all this, the last thing average working people need is for the Fed to raise interest rates and slow the economy further,” Reich added. “The problem most people face isn’t inflation. It’s a lack of good jobs.”

When it comes to what is causing inflation, Reich blamed “continuing worldwide bottlenecks in the supply of goods, and the ease with which big corporations (with record profits) are passing these costs to customers in higher prices.”

Corporate greed has played a large role in why people are paying higher prices for food and gas, as Common Dreams has reported and a majority of the public appears to understand, based on recent polling. Amid a public health crisis that has claimed the lives of more than 900,000 people in the U.S. and 5.7 million people globally, price-gouging corporations are enjoying mega-profits not seen since 1950.

While pandemic profiteering is evident, the question remains as to what made global supply chains so fragile to disruption in the first place—leading to prolonged shortages of key inputs and increased shipping costs that have been accompanied by price hikes.

According to Rakken Mabud, chief economist and managing director of policy and research at the Groundwork Collaborative, the answer lies in offshoring, financialization, deregulation, just-in-time logistics, and other profit-maximizing policies associated with neoliberalization and globalization.

Mabud made that case last week when testifying at a House Energy and Commerce Committee hearing. She and David Dayen, executive editor of The American Prospect, expanded on that argument in a recent essay introducing a new series on the supply chain crisis.

As a number of economists have warned recently, policymakers on the verge of making life-altering decisions with respect to interest rates may be doing so based on faulty data or misconceptions. 

“Among the biggest job gains in January were workers who are normally temporary and paid low wages (leisure and hospitality, retail, transport and warehousing),” Reich cautioned. “This January employers cut fewer of these low-wage temp workers than in most years, because of rising customer demand and the difficulties of hiring during Omicron. Due to the Bureau of Labor Statistics’ ‘seasonal adjustment,’ cutting fewer workers than usual for this time of year appears as ‘adding lots of jobs.'”

Stiglitz, meanwhile, noted that “the inflation rate has been volatile. Last month, the media made a big deal out of the 7% annual inflation rate in the United States, while failing to note that the December rate was little more than half that of the October rate.”

“Moreover, given that a large proportion of today’s inflation stems from global issues—like chip shortages and the behavior of oil cartels—it is a gross exaggeration to blame inflation on excessive fiscal support in the U.S.,” Stiglitz continued.

While “the U.S. has slightly higher inflation than Europe,” he added, “it also has enjoyed stronger growth. U.S. policies prevented a massive increase in poverty that might have occurred otherwise. Recognizing that the cost of doing too little would be huge, U.S. policymakers did the right thing.”

Stiglitz wrote that his “biggest concern is that central banks will overreact, raising interest rates excessively and hampering the nascent recovery. As always, those at the bottom of the income scale would suffer the most in this scenario.”

“What we need instead,” he argued, “are targeted structural and fiscal policies aimed at unblocking supply bottlenecks and helping people confront today’s realities.”

For instance, wrote Stiglitz, “food stamps for the needy should be indexed to the price of food, and energy (fuel) subsidies to the price of energy.”

“Beyond that, a one-time ‘inflation adjustment’ tax cut for lower- and middle-income households would help them through the post-pandemic transition,” he added. “It could be financed by taxing the monopoly rents of the oil, technology, pharmaceutical, and other corporate giants that made a killing from the crisis.”

Originally published on Common Dreams by KENNY STANCIL and republished under a Creative Commons license (CC BY-NC-ND 3.0)

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Why are people calling Bitcoin a religion?

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Read enough about Bitcoin, and you’ll inevitably come across people who refer to the cryptocurrency as a religion

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Bloomberg’s Lorcan Roche Kelly called Bitcoin “the first true religion of the 21st century.” Bitcoin promoter Hass McCook has taken to calling himself “The Friar” and wrote a series of Medium pieces comparing Bitcoin to a religion. There is a Church of Bitcoin, founded in 2017, that explicitly calls legendary Bitcoin creator Satoshi Nakamoto its “prophet.”

In Austin, Texas, there are billboards with slogans like “Crypto Is Real” that weirdly mirror the ubiquitous billboards about Jesus found on Texas highways. Like many religions, Bitcoin even has dietary restrictions associated with it.

Religion’s dirty secret

So does Bitcoin’s having prophets, evangelists and dietary laws make it a religion or not?

As a scholar of religion, I think this is the wrong question to ask.

The dirty secret of religious studies is that there is no universal definition of what religion is. Traditions such as Christianity, Islam and Buddhism certainly exist and have similarities, but the idea that these are all examples of religion is relatively new.

The word “religion” as it’s used today – a vague category that includes certain cultural ideas and practices related to God, the afterlife or morality – arose in Europe around the 16th century. Before this, many Europeans understood that there were only three types of people in the world: Christians, Jews and heathens.

Above: Photo / Collage / Lynxotic

This model shifted after the Protestant Reformation when a long series of wars began between Catholics and Protestants. These became known as “wars of religion,” and religion became a way of talking about differences between Christians. At the same time, Europeans were encountering other cultures through exploration and colonialism. Some of the traditions they encountered shared certain similarities to Christianity and were also deemed religions.

Non-European languages have historically not had a direct equivalent to the word “religion.” What has counted as religion has changed over the centuries, and there are always political interests at stake in determining whether or not something is a religion.

As religion scholar Russell McCutcheon argues, “The interesting thing to study, then, is not what religion is or is not, but ‘the making of it’ process itself – whether that manufacturing activity takes place in a courtroom or is a claim made by a group about their own behaviors and institutions.”

Critics highlight irrationality

With this in mind, why would anyone claim that Bitcoin is a religion?

Some commentators seem to be making this claim to steer investors away from Bitcoin. Emerging market fund manager Mark Mobius, in an attempt to tamp down enthusiasm about cryptocurrency, said that “crypto is a religion, not an investment.”

His statement, however, is an example of a false dichotomy fallacy, or the assumption that if something is one thing, it cannot be another. There is no reason that a religion cannot also be an investment, a political system or nearly anything else.

Mobius’ point, though, is that “religion,” like cryptocurrency, is irrational. This criticism of religion has been around since the Enlightenment, when Voltaire wrote, “Nothing can be more contrary to religion and the clergy than reason and common sense.”

In this case, labeling Bitcoin a “religion” suggests that bitcoin investors are fanatics and not making rational choices.

Bitcoin as good and wholesome

On the other hand, some Bitcoin proponents have leaned into the religion label. McCook’s articles use the language of religion to highlight certain aspects of Bitcoin culture and to normalize them.

For example, “stacking sats” – the practice of regularly buying small fractions of bitcoins – sounds weird. But McCook refers to this practice as a religious ritual, and more specifically as “tithing.” Many churches practice tithing, in which members make regular donations to support their church. So this comparison makes sat stacking seem more familiar.

While for some people religion may be associated with the irrational, it is also associated with what religion scholar Doug Cowan calls “the good, moral and decent fallacy.” That is, some people often assume if something is really a religion, it must represent something good. People who “stack sats” might sound weird. But people who “tithe” could sound principled and wholesome.

Using religion as a framework

For religion scholars, categorizing something as a religion can pave the way for new insights.

As religion scholar J.Z. Smith writes, “‘Religion’ is not a native term; it is created by scholars for their intellectual purposes and therefore is theirs to define.” For Smith, categorizing certain traditions or cultural institutions as religions creates a comparative framework that will hopefully result in some new understanding. With this in mind, comparing Bitcoin to a tradition like Christianity may cause people to notice things that they didn’t before.

For example, many religions were founded by charismatic leaders. Charismatic authority does not come from any government office or tradition but solely from the relationship between a leader and their followers. Charismatic leaders are seen by their followers as superhuman or at least extraordinary. Because this relationship is precarious, leaders often remain aloof to keep followers from seeing them as ordinary human beings.

Several commentators have noted that Bitcoin inventor Satoshi Nakamoto resembles a sort of prophet. Nakamoto’s true identity – or whether Nakamoto is actually a team of people – remains a mystery. But the intrigue surrounding this figure is a source of charisma with consequences for bitcoin’s economic value. Many who invest in bitcoin do so in part because they regard Nakamoto as a genius and an economic rebel. In Budapest, artists even erected a bronze statue as a tribute to Nakamoto.

There’s also a connection between Bitcoin and millennialism, or the belief in a coming collective salvation for a select group of people.

In Christianity, millennial expectations involve the return of Jesus and the final judgment of the living and the dead. Some Bitcoiners believe in an inevitable coming “hyperbitcoinization” in which bitcoin will be the only valid currency. When this happens, the “Bitcoin believers” who invested will be justified, while the “no coiners” who shunned cryptocurrency will lose everything.

A path to salvation

Finally, some Bitcoiners view bitcoin as not just a way to make money, but as the answer to all of humanity’s problems.

“Because the root cause of all of our problems is basically money printing and capital misallocation as a result of that,” McCook argues, “the only way the whales are going to be saved, or the trees are going to be saved, or the kids are going to be saved, is if we just stop the degeneracy.”

[Explore the intersection of faith, politics, arts and culture. Sign up for This Week in Religion.]

This attitude may be the most significant point of comparison with religious traditions. In his book “God Is Not One,” religion professor Stephen Prothero highlights the distinctiveness of world religions using a four-point model, in which each tradition identifies a unique problem with the human condition, posits a solution, offers specific practices to achieve the solution and puts forth exemplars to model that path.

This model can be applied to Bitcoin: The problem is fiat currency, the solution is Bitcoin, and the practices include encouraging others to invest, “stacking sats” and “hodling” – refusing to sell bitcoin to keep its value up. The exemplars include Satoshi and other figures involved in the creation of blockchain technology.

So does this comparison prove that Bitcoin is a religion?

Not necessarily, because theologians, sociologists and legal theorists have many different definitions of religion, all of which are more or less useful depending on what the definition is being used for.

However, this comparison may help people understand why Bitcoin has become so attractive to so many people, in ways that would not be possible if Bitcoin were approached as a purely economic phenomenon.

Joseph P. Laycock, Assistant Professor of Religious Studies, Texas State University

Originally published from The Conversation by Joseph P. Laycock and republished under a Creative Commons license. Read the original article.

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Tax-Dodging Billionaire Dynasties Could Cost US $8.4 Trillion: Report

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The wealth-hoarding by ultrarich families would be equivalent to over four Build Back Better plans

Over the next few decades, the richest American families could avoid paying about $8.4 trillion in taxes, or more than four times the cost of the stalled Build Back Better package, according to a report released Wednesday.

“We can fix our broken estate and gift tax system… or we can trust our democracy to a handful of trillionaire trust fund babies.”

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The Americans for Tax Fairness report—entitled Dynasty Trusts: Giant Tax Loopholes that Supercharge Wealth Accumulation—urges Congress to fix the federal tax code to address dynastic wealth.

The new analysis details how loopholes have made the payment of estate, gift, and generation-skipping taxes—collectively called wealth-transfer taxes—effectively optional for the “ultrawealthy” and thereby accelerate the “accumulation of dynastic wealth.”

“Ultrarich families use dynasty trusts—the term for a variety of wealth-accumulating structures that remain in place for multiple generations—to ensure their fortunes cascade down to children, grandchildren, and beyond undiminished by wealth-transfer taxes,” the report explains.

Some U.S. states, such as South Dakota, have even changed their laws on dynasty trusts to attract wealthy residents, as Chuck Collins of the Institute for Policy highlighted last year.

The new report notes that U.S. lawmakers aren’t planning to address the issue, even if the Senate passes a version of a House-approved package:

The Build Back Better (BBB) legislation now before Congress—otherwise a vehicle for significant progressive tax reform—does nothing to directly reverse this toxic accumulation of dynastic wealth. Moreover, some dynasty trust reforms that were included in the bill passed by the House Ways and Means Committee in September 2021 were stripped out before the House voted on the measure in November.

The BBB bill needs full support from Senate Democrats to pass. Sen. Joe Manchin (D-W.Va.)—one of the primary reasons the legislation hasn’t reached President Joe Biden’s desk—said Tuesday that it is “dead.”

However, Americans for Tax Fairness still uses the whittled-down BBB package to illustrate just how much money wealthy Americans can hoard for their families in the years ahead thanks to the U.S. tax system.

“The tax savings for the richest families could be about $8.4 trillion over the next 24 years or so if the current 40% estate tax rate remains in place,” the report states. “That’s the equivalent of more than four Build Back Better plans costing $1.75 trillion each over 10 years.”

The report adds that “about half of the $8.4 trillion is equivalent to the cost of the expanded child tax credit, which was included in the House-passed BBB bill and is estimated to reduce childhood poverty by 40%, for 24 years at $160 billion a year.”

“This hoarding of wealth is inexcusable,” declared the report’s principal author, Bob Lord, who practiced estate law for 30 years before joining Americans for Tax Fairness as tax counsel.

“The BBB legislation now before the U.S. Senate should be amended to close loopholes in the three components of America’s wealth transfer tax system: the estate, gift, and generation-skipping tax,” he asserted. “Effective reforms have already been developed—all that’s needed is for Congress to recognize the urgency to act now.”

The group’s new analysis and call for action come after Americans for Tax Fairness estimated last month that the 10 wealthiest billionaires in the United States have become approximately $1 billion richer collectively every day of the Covid-19 pandemic.

Wednesday’s report contains a warning about that group of ultra-billionaires, mentioning by name Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, and Elon Musk of Telsa and SpaceX.

“As much as familiar fortunes have blossomed in the low-regulation, low-tax, wealth-worshiping environment of the previous 40 years,” the report says, “the next 40 and beyond could see the rise of economic dynasties that will make the old money look small.”

Along with closing dynasty-trust tax loopholes, Americans for Tax Fairness urges reforms that would “curb the year-to-year accumulation of wealth in existing trusts.” Specifically, it calls for a new income-tax bracket “on undistributed trust income in excess of $250,000 that is five percentage points higher than the maximum income-tax bracket for individuals.”

Noting a proposal from Sen. Elizabeth Warren (D-Mass.), the group also encourages U.S. lawmakers to “impose an annual 2% wealth tax on the portion of a dynasty trust’s holdings that exceed $50 million, and an additional 1% on dynasty trust accumulations in excess of $1 billion.”

“The choice is clear,” according to the report. “We can fix our broken estate and gift tax system and stop the concentration of an ever-larger share of America’s wealth inside enormous dynasty trusts, or we can trust our democracy to a handful of trillionaire trust fund babies.”

“Fortunately, we know what needs to be done,” the report concludes. “The sole remaining challenge is to summon the courage to stand up to the holders of dynastic wealth and their enablers.”

Originally published on Common Dreams by JESSICA CORBETT and republished under a Creative Commons license (CC BY-NC-ND 3.0)

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Business, News, Observation, Politics, Stock Market

Starbucks Profits Soar by 31%—But It’s Raising Prices Anyway

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One critic said the company’s explanation for the coming price hikes amounts to “word salad to hide corporate greed.”‘

Above: Photo collage Lynxotic /Pexels / Adobe Stock

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)

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Climate Solutions, News, Observation, Politics

Top US Banks and Investors Responsible for Nearly as Much Emissions as Russia, Report Finds

Above: Collage by Lynxotic, Original Photo by Unsplash

“Wall Street’s toxic fossil fuel investments threaten the future of our planet and the stability of our financial system and put all of us, especially our most vulnerable communities, at risk.”

Fueling fresh calls for swift, sweeping action by President Joe Biden and financial regulators, a report published Tuesday reveals that if the planet-heating pollution of the 18 largest U.S. asset managers and banks is compared to that of high-emissions countries, Wall Street is a top-five emitter.

“Financial regulators have the authority to rein in this risky behavior, and this report makes it clear that there is no time to waste.”

The new report—entitled Wall Street’s Carbon Bubble: The global emissions of the U.S. financial sector—was released by the Center for American Progress (CAP) and Sierra Club. The analysis was done by South Pole, which replicated an approach it used earlier this year for a U.K.-focused effort commissioned by Greenpeace and the World Wide Fund for Nature (WWF).

Though likely a “gross underestimate,” as Sierra Club put it, because the analysis relies on public disclosures that exclude key data, the researchers found that “just the portions of the portfolios of the eight banks and 10 asset managers studied in this report financed an estimated total of 1.968 billion tons CO2e based on year-end disclosures from 2020.”

Putting that CO2e—or carbon dioxide equivalent, which is used to compare emissions from various greenhouse gases—figure into context, the report notes:

  • If the financial institutions (FIs) in this study were a country, they would have the fifth largest emissions in the world, falling just short of Russia;
  • Financed emissions from the 18 institutions covered in this report are equivalent to 432 million passenger vehicles driven for one year;
  • Financed emissions from the eight banks studied in this report are equivalent to 80 million homes’ energy use for one year; and
  • Financed emissions from the 10 asset managers studied in this report are equivalent to three billion barrels of oil consumed.

The banks analyzed are Bank of America, Bank of New York (BNY) Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street, and Wells Fargo.

The asset managers included are BNY Mellon Investment Management, BlackRock, Capital Group, Fidelity Investments, Goldman Sachs Asset Management, JPMorgan Asset Management, Morgan Stanley Investment Management, PIMCO, State Street Global Advisors, and the Vanguard Group.

When Wall Street is factored into the list of the world’s top 10 countries responsible for the most annual greenhouse gas emissions, it falls after China, the United States, India, and Russia but ranks ahead of Indonesia, Brazil, Japan, Iran, and Germany, according to Climate Watch data.

As the new publication warns:

The findings of this report make clear that the U.S. financial sector is a major contributor to climate change. Given that the indirect emissions of the U.S. financial sector are just below the total emissions of Russia, it should be considered a high-carbon sector and treated as such. Therefore, if President Biden and his administration do not put in place measures to mitigate U.S.-financed emissions, the United States will almost certainly fall far short of its targets to achieve a 50% to 52% reduction from 2005 levels in 2030 and net-zero emissions economy-wide by no later than 2050.

The implications of falling short would be dire. Continued unfettered emissions supported by the financial industry would mean that the deadly wildfires, droughts, heatwaves, hurricanes, floods, and other extreme weather events that Americans and communities around the world are already experiencing will only become worse, and efforts to mitigate emissions will only become more challenging and costly.

Representatives from the groups behind the report echoed its call to action in a statement Tuesday.

“Climate change poses a large systemic risk to the world economy. If left unaddressed, climate change could lead to a financial crisis larger than any in living memory,” said Andres Vinelli, vice president of economic policy at CAP. “The U.S. banking sector is endangering itself and the planet by continuing to finance the fossil fuel sector.”

Vinelli added that “because the industry has proven itself to be unwilling to govern itself,” regulators including the U.S. Securities and Exchange Commission and Office of the Comptroller of the Currency “must urgently develop a framework to reduce banks’ contributions to climate change.”

Ben Cushing, Sierra Club’s Fossil-Free Finance campaign manager, agreed that “regulators can no longer ignore Wall Street’s staggering contribution to the climate crisis.”

“The U.S. banking sector is endangering itself and the planet by continuing to finance the fossil fuel sector.”

“Wall Street’s toxic fossil fuel investments threaten the future of our planet and the stability of our financial system and put all of us, especially our most vulnerable communities, at risk,” he said. “Financial regulators have the authority to rein in this risky behavior, and this report makes it clear that there is no time to waste.”

The report comes as financial institutions worldwide face mounting criticism for their contributions to the climate emergency—including at the COP26 climate summit in Scotland last month—and as the Koch-funded American Legislative Exchange Council (ALEC) is pushing model legislation that opposes fossil fuel divestment.

More than three dozen climate advocacy groups argued Monday that “what ALEC claims to be discriminatory action”—referring to divestment from major polluters—”is instead prudent action to ensure the stability of our financial system and economy.”

“We know from the Great Recession that the financial sector won’t take responsibility,” the organizations noted. “It’s up to regulators to protect people from the impact on climate and financial risk of fossil fuel investment.”

Originally published on Common Dreams by JESSICA CORBETT and republished under a  Creative Commons (CC BY-NC-ND 3.0)

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