- AFL-CIO: CEOs' Pay Packages Played Role In Mortgage Crisis (4/1408) - CNN/Money
WASHINGTON -(Dow Jones)- Labor union officials, who blame the nation's mortgage mess in part on runaway executive pay, are calling for Congress to adopt a "say on pay" bill that would let shareholders weigh in on CEO compensation.
Chief executives at Countrywide Financial (CFC) and Washington Mutual Inc. ( WM) were paid "obscene amounts" even when their company's performance faltered as subprime borrowers defaulted on home mortgage loans, AFL-CIO Secretary- Treasurer Richard Trumka said at a press briefing Monday. The bad loans devalued mortgage-backed securities tied to them, leading to large write-downs in assets at a number of financial firms..
Countrywide Chief Executive Angelo Mozilo, Washington Mutual CEO Kerry Killinger, former Bear Stearns Cos. (BSC) CEO James Cayne, and former Citigroup Inc. (C) CEO Charles Prince were among those rewarded lavishly for betting on risky loans, according to labor officials. Mozilo and Cayne are also chairmen.
"When the house of cards fell, they didn't pay for it, we did," said Trumka.
- Elections in America: Millionaires Accusing Each Other of Elitism (4/14/08) - AlterNet :
But is Barack Obama really an elitist as his opponents claim? Well of course he is -- he's running for president of the United States! He wouldn't have gotten this far in life if he'd spent the past 20 years driving a truck or moonlighting as a fry cook at Arby's. Like every other successful politician in the United States, Obama is a member of America's political ruling class, which means that like every other presidential candidate in recent memory, he is typically insulated from the lives of ordinary people. Does Obama really have any idea what it's like to live like a "Real American?" Of course he doesn't, and neither do John McCain and Hillary Clinton! Does any rational person out there believe that Obama, Clinton and McCain spend their free time away from the campaign trail hanging out at Jimmy Ray's Chicken'n'Beer Depot playing darts with the common folk?
In theory, this point should be fairly obvious. Even before getting elected, most politicians made a good deal of money in their careers as lawyers, doctors, actors or oil tycoons -- you know, real salt-of-the-earth sort of work. But for reasons that have long confounded sane people everywhere, our national millionaire press corps gives positive coverage to political candidates who are the most adept at lying about their ability to connect with regular folks. And because it apparently takes too much work for our press corps to sift through the candidates' policy positions to figure out what each of them is actually offering blue-collar voters, we don't even get rational assessments of politicians' working-class cred. Instead, we get piles and piles of anecdotal evidence.
- Three Amigos Summit (4/15/08) - Foreign Policy In Focus (FPIF) :
President George W. Bush will soon host what has become an annual “Three Amigos Summit.” The leaders of Mexico, the United States, and Canada will be gathering in New Orleans on April 21 and 22. What do you suppose is on the agenda? A rational response to immigration, perhaps? A thoughtful renegotiation of the unpopular North American Free Trade Agreement? Lessons from Canada’s affordable medicines program?
No. No. And no. Rather than putting their heads together around pressing issues such as these, the three leaders will be advancing a so-called Security and Prosperity Partnership (SPP). And while that may sound well and good, this initiative, begun in 2005, is unlikely to produce either security or prosperity. That’s because the partnership is only with big business.
The chief executives of Wal-Mart, Chevron, and 28 other large corporations are in on the closed-door negotiations, while members of Congress, journalists, and ordinary citizens are excluded. And the secrecy is not just around the presidential summits, but also the meetings of about 20 SPP working groups that carry on negotiations over the course of the year.
What’s on the table? Not much is public, but we do know that the executive powers of the three countries are hammering out regulatory changes that they claim do not require legislative approval. And given who’s in the room, it’s a safe bet that these changes will favor narrow corporate interests over the public good.
- Global hunger, corporate greed: When will enough be enough? (4/16/08) - The Jakarta Post
Media around the world are currently feeding off the increasing price of food everywhere. The World Bank chief has joined in with the prediction that starvation is a distinct possibility for many of the weaker nations, leading to political turmoil.
The Food and Agricultural Organization (FAO) chief says only 14 percent of available water is used in Asia, 2 percent in Africa, with the rest flowing into the oceans each year. If this is the sorry state of affairs, what do our political leaders and their henchmen do at the office every day?
The instinctive urge to shoot the messenger is of course misdirected energy. But when you put the disparate pieces of our puzzling world on the table, the emerging picture is embarrassing indeed.
A kilogram of rice costs more than US$1 and a barrel of oil costs over $100. One influences the other. The subprime loan crisis will cost more than $1 trillion and the Iraq war will cost the United States alone as much as $3 trillion.
Different problem, same instinct. Many pundits will argue none of this has any connection to global hunger, as if these colossal costs aren't real and do not affect the common man.
It is all too easy to throw stones at our politicians and bureaucrats. But those of us in business would do well to spend a minute pondering the glass houses we go to work in.
The altar of the shareholder has become the convenient excuse for inexcusable conduct. The voracious appetite for dividends and stock prices has allowed CEOs to hold boards and investors alike to ransom.
Systemic deception has become acceptable culture in too many boardrooms, with nothing more than a wink and a nod required down the chain of command. When it gets to a point that an accountant is unable to explain complex new financial instruments and their equally befuddling acronyms, disaster cannot be far away.
Not even a decade ago, the Internet bubble exploded with disastrous consequences, ripples felt around the globe. Everybody who then believed the lessons were learned have been proven wrong not even a decade later. For every errant CEO who has gone to jail, there are hundreds who have made millions in severance pay alone. Regulators and lawmakers appear not to be troubled.
It seems as if the profit motive is no longer an adequate driver of business today. Unbridled greed has taken over, a global corporate culture spreading like a cancer unchecked.
- Big Tax Breaks for Businesses in Housing Bill (4/16/08) - NY Times
Washington - The Senate proclaimed a fierce bipartisan resolve two weeks ago to help American homeowners in danger of foreclosure. But while a bill that senators approved last week would take modest steps toward that goal, it would also provide billions of dollars in tax breaks - for automakers, airlines, alternative energy producers and other struggling industries, as well as home builders.
The tax provisions of the Foreclosure Prevention Act, which consumer groups and labor leaders say amount to government handouts to big business, show how the credit crisis, while rattling the housing and financial markets, has created beneficiaries in the power corridors of Washington.
It also shows how legislation with a populist imperative offers a chance for lobbyists to press their clients' interests.
This has proved especially true on the housing legislation, which many lawmakers and lobbyists view as one of the last opportunities before Congress grinds to a halt amid election-year politics.
In the Senate bill, the nation's biggest home builders, some now on the verge of bankruptcy, won a provision that would let them claim millions in tax refunds by charging their current losses against the huge profits they made three or four years ago. Other struggling industries would benefit from this provision.
"This is our biggest legislative effort since the Tax Reform Act of 1986," said Jerry M. Howard, chief executive of the National Association of Home Builders. Hundreds of the association's members flooded the district offices of representatives and senators while they were home for the spring recess last month.
Supporters of the bill, including Senator Max Baucus, Democrat of Montana and the chairman of the Senate Finance Committee, say it represents sound tax policy carefully focused to help stimulate the lagging economy. But the White House opposes the Senate bill, and Democratic leaders in the House not only have promised to provide more relief for individual homeowners, but have also dropped the corporate tax provisions from their version.
Downtrodden automakers - Ford and General Motors - were especially dogged in securing a tax break that would let them collect alternative minimum tax credits, also known as the A.M.T., that would otherwise be out of reach because they did not pay enough taxes in recent years to claim a rebate.
If the provision becomes law, it could mean checks up to $40 million for the car manufacturers, as long as the companies had made investments in plant or equipment in that amount.
A Ford spokesman, Mike Moran, said he was aware that Ford would benefit from the tax credit in the bill passed by the Senate. But Mr. Moran said that the credit applied to a range of industries, not just automakers. A General Motors spokesman could not be reached.
Domestic airlines and manufacturers other than automakers would be eligible to claim the A.M.T. break as well. One lobbyist said that the companies that had sought the tax breaks in meetings with lawmakers included Ford, General Motors, American Airlines, Northwest Airlines and Goodyear Tire and Rubber.
Companies could claim only one of the new tax breaks, which in all, are expected to cost $6 billion through 2018. The jockeying among industry groups, including Realtors, home builders and bankers, is certain to intensify in coming weeks as lawmakers move to reconcile the Senate bill with a more ambitious package of housing legislation now under way in the House.
- The End of the World as You Know It…and the Rise of the New Energy World Order (4/15/08) - TomDispatch.com
Take the food riots now spreading across the planet because the prices of staples are soaring, while stocks of basics are falling. In the last year, wheat (think flour) has risen by 130%, rice by 74%, soya by 87%, and corn by 31%, while there are now only eight to 12 weeks of cereal stocks left globally. Governments across the planetary map are shuddering. This is a fast growing horror story and, though the cry in the streets of Cairo and Port au Prince might be for bread, this, too, turns out to be a tale largely ruled by energy: Too many acres turned over to corn (and sugar cane) for the creation of biofuels; a historic drought in Australia and other climate-change-induced extremes of weather -- a result of the burning of fossil fuels -- that have affected crop yields; and many new middle-class consumers, in China and elsewhere, coming on line, with a growing desire for meat, the production of which is heavily petroleum based.
From resource wars to oil wars (the subjects of his last two books), Michael Klare, Tomdispatch's energy expert, has long been ahead of the curve when it came to ways in which our planet was being reshaped at the most basic level. Today, he offers Tomdispatch readers a peek into some of the key themes in his staggering new book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy. If you want to grasp the true shape of our shaky world, of where exactly we've been and where we might be going, this is a book not to be missed. It offers the profile-in-formation of a shape-shifting planet, a planet in transition and on a road to nowhere pretty. Check out as well the latest Tomdispatch brief video (produced by TD's Brett Story) -- in which Klare discusses key issues in his new book -- by clicking here. Tom
- Are Americans unusually stupid or is it something our president put in the water? (4/15/08) - TruthDig
By so unabashedly embracing the most glaringly failed U.S. president ever, McCain has surrendered the right to be considered an independent candidate, judged on his own merits and personal history. A vote for McCain is a vote for that rancid recipe mixing religious bigotry, imperial arrogance and corporate greed that he had stood against in the run-up to the 2000 presidential election when he challenged George W. Bush, but to which he now has capitulated.
Too harsh? Then consider just how tight the space is between the rocks of our failed Mideast policy and the hard place of our impending financial disaster. The sudden out-of-control spike in the cost of oil—the key short-term market variable, the specter that stokes inflation fear and limits moves to avoid recession—is not a natural disaster or in any realistic way the result of inefficiency in the use of energy. What more than doubled the price of petroleum in the short run was not that too many of us bought Hummers, but rather that the political stability of the region that contains the bulk of that oil was deliberately and recklessly roiled.
In the name of fighting the 9/11 terrorists, the Bush administration overthrew the one Arab government most adamantly opposed to the Saudi financiers of that son of their system, Osama bin Laden. Instead of confronting the royal leaders of a kingdom that supplied 15 of the 19 hijackers, we invaded a nation that supplied not a single one. While Bush overthrew Saddam Hussein, who had no ties to the hijackers, he embraced the leaders of Pakistan, Saudi Arabia and the United Arab Emirates, the only three nations in the world that had diplomatically recognized and supported the Taliban sponsors of al-Qaida.
Consider that historical marker at a time when the UAE and Saudi Arabia bankers are buying major positions in distressed U.S. financial and other key corporate institutions. I know, it all sounds too conspiratorial, like imagining that we might wake up from this national nightmare and discover that the CEO of Halliburton, who replaced Dick Cheney when the latter selected himself to be Bush’s vice president, now has his headquarters in Dubai, tucked safely into the obscenely oil-revenue-rich UAE that our troops were sent to Iraq to protect.
There is no national outrage, or even seriously sustained media interest, over the fact that Cheney’s old company profited enormously from ripping off U.S. tax dollars going into the Iraq occupation. Nor is there even much curiosity about the shenanigans of Halliburton, which is doing business with Arab oil sheiks at a time when the U.S. banks these Middle Eastern oil interests bought into are moving to foreclose on American homeowners.
It’s just the sort of egregious betrayal of the trust of the taxpayers that Sen. McCain would have gone after, before he sought to don the soiled robes of the Bush presidency.
- Biofuel: the burning question (4/15/08) - The Independent
Graham Wynne, chief executive of the RSPB, said: "The volume of biofuel that can be genuinely described as sustainable is at present very small indeed and is nowhere near enough to warrant the 2.5 per cent obligation. The impacts of biofuel production on forests and wetlands are already being seen worldwide. It is a tragedy that customers' money is going to be spent on driving this destruction."
The World Bank and the UN have, in recent days, expressed concern about the impact of biofuels on world food prices, sparking riots from Haiti to the Philippines. Gordon Brown, who has put the issue on the agenda at the forthcoming G8 summit, has also voiced concerns at EU level about deforestation and loss of habitats caused by biofuel production. And Alistair Darling, the Chancellor, raised the issue at the weekend's G7 meeting in Washington.