Archive for the ‘Business’ Category
Lee Fang reports in The Intercept:
Searching for the “best kept secret in outsourcing,” one that can “provide you with all the advantages” of domestic workers, but with “offshore prices”? Try prison labor!
That’s the message of Unicor, also known as Federal Prison Industries, a government-owned corporation that employs federal workers for as little as 23 cents an hour to manufacture military uniforms, furniture, electronics and other products.
Though FPI markets itself as an opportunity for inmates to obtain skills training, critics have attacked the program as exploitative. Small business owners have also complained that FPI’s incredibly low wages make it impossible to compete.
What’s more, businesses that partner with FPI are organized and regularly lobby the government on prison-related issues. Their trade group, the Correctional Vendors Association, lobbied Congress last year on the Justice Safety Valve Act, a bipartisan bill giving judges the power to impose a sentence below the mandatory minimum, including in drug-related cases.
View FPI’s promotional video here or below.
I’ve been laid off in a general staff reduction and it is devastating. But… welcome to capitalism. Jordan Person reports at Motherboard:
When MakerBot, the Brooklyn-based 3D printing company, became a subsidiary of 3D printing giant Stratasys, Inc. in 2013, everyone expected there would be changes.
Today, MakerBot has fired roughly 20 percent of its staff. Figures from 2014 placed the company’s ranks at 500, meaning the cuts could equate to roughly 100 employees. The orders came from new CEO Jonathan Jaglom, Motherboard was told.
“It’s about 20 percent of staff,” a MakerBot representative, who asked not to be identified because she had not received approval to speak to the press, told Motherboard. “Everyone suspected that something would be coming with the new CEO, and that there would be restructuring coming.”
Employees are apparently being led out of the company’s Brooklyn office by security today, according to an anonymous Reddit post.
The reasoning for the layoffs, the employee told Motherboard, is that MakerBot is looking to integrate further with Stratasys, its parent company, and is streamlining its operation to further that end.
“It’s consolidating with Stratasys, so it’s economies of scale and looking at duplicate positions and consolidating,” the employee said. “We have a new CEO, so he has a different plan in mind,” she said, crying. “I’m sorry, it’s a hard day.”
MakerBot was founded in 2009 by Bre Pettis and quickly . . .
ProPublica’s Terry Parris, Jr., and Annie Yu report:
How The World Bank Broke Its Promise To Protect The Poor (International Consortium of Investigative Journalists / Huffington Post)
“The World Bank often neglects to properly review projects ahead of time to make sure communities are protected, and frequently has no idea what happens to people after they are removed. In many cases, it has continued to do business with governments that have abused their citizens, sending a signal that borrowers have little to fear if they violate the bank’s rules.”
The True Cost of Gun Violence in America (Mother Jones)
“Direct costs account for $8.6 billion—including long-term prison costs for people who commit assault and homicide using guns, which at $5.2 billion a year is the largest direct expense. … Indirect costs amount to at least $221 billion, about $169 billion of which comes from what researchers consider to be the impact on victims’ quality of life,” according to an analysis by Mother Jones and public health researcher Ted Miller of the Pacific Institute for Research and Evaluation.
Video Chats Are Replacing In-Person Jail Visits, While One Tech Company Profits (International Business Times)
“Securus now obligates many of these correctional facilities to eliminate in-person visits completely, in favor of their video systems. In other words, even if a family member or friend shows up to the jail to visit an inmate in person, they’d be forced to talk to the inmate through a Securus-branded video tablet. … One may wonder why a jail’s administration would agree to this. The answer, in a nutshell, is money.”
“The reporting problems highlight an Achilles’ heel in the FDA’s oversight of medical devices: the responsibility for identifying potential safety problems falls primarily on manufacturers themselves. And if a flaw in a medical implant, a surgical instrument or some other device goes unreported, the product can remain in use for months or years, raising profound public health risks.”
Even the FDA has no idea what’s in the food you eat. And here’s why (Center for Public Integrity)
“[Companies have] taken advantage of a loophole in a decades-old law that allows them to deem an additive to be ‘generally recognized as safe’ — or GRAS — without the [FDA]’s blessing, or even its knowledge. The loophole is so big that companies can market additives … that the FDA has found to pose dangers.”
When pets are killed over unpaid fines (CNN Money)
“When owners of seized or lost dogs can’t afford to get their pets back, they relinquish their rights to the animal, which can result in a pet being euthanized…Outraged pet owners and animal rights attorneys say these harsh tactics are all about generating money and unfairly impact low-income Americans.”
#MuckReads Local: Clark County’s private guardians may protect — or just steal and abuse (The Las Vegas Review Journal)
But they should not get away with it—it’s a particularly pernicious example of businesses externalizing costs (i.e., letting someone else, usually the taxpayer, pay for services the business uses). Kashmir Hill reports at Fusion.net:
Several years ago, Boston lawyer Shannon Liss-Riordan was visiting family and friends in San Francisco. While she was out at a restaurant in the West Portal, one of her friends pulled out his smartphone. “You have to see this, Shannon. It’s a new thing and it’s changed my life,” she recalls him saying. The friend fired up Uber, the car-hailing app. “You push a button and a car comes to pick you up.”
Then, Liss-Riordan says, her friend looked at her. “He saw what was going through my mind. Then he said, ‘Don’t you dare. You’re going to put them out of business.’”
Liss-Riordan, 45, has spent her entire legal career going after employers for allegedly short-changing their employees. She specializes in worker misclassification lawsuits—the illegal practice of companies who classify their workers as independent contractors, rather than normal employees, in order to avoid paying them benefits they’re owed under federal law. She’s filed class-action lawsuits on behalf of truck drivers, waiters, delivery men, cable installers, call center workers, and exotic dancers.FedEx and Starbucks are among companies that have paid out millions of dollars for misclassifying workers and misallocating workers’ tips, respectively, as a result of suits she’s filed.
Now, her sights are set on the so-called “on-demand economy”—the constellation of tech start-ups that provide transportation and delivery services at the tap of an app.
In recent months, Liss-Riordan has filed lawsuits against Uber, Lyft, Homejoy, Postmates, and Try Caviar—five of the largest on-demand start-ups in the world. These suits all boil down to a rather simple allegation: these companies pay the people who supply the equipment and manpower that power their businesses like independent contractors, while burdening them with the work expectations of employees. Representatives of Uber, Lyft, Homejoy and Caviar declined to comment on pending litigation, and Postmates did not respond to request for comment.
Harold Lichten, Liss-Riordan’s law firm partner, describes her as “a pit bull with a chihuahua in her mouth” when it comes to suing on-demand start-ups. “She will make life as difficult as possible for these companies,” he said. “Here’s Uber — this business model with $40 billion behind it, that is seen as the future — but if she’s correct about their needing to classify all of these drivers as employees, it destroys that model. And it means all these venture capital investors who have poured millions of dollars into the company have bought a pig in a poke.”
Liss-Riordan’s foray into the on-demand economy started in 2013, when Boston taxi drivers working for Uber came to her firm complaining that Uber was keeping half of the tips that passengers were paying them. That case struck her as a legal lay-up: Massachusetts state law prohibits managers taking a cut of workers’ tips. The case is ongoing.
But as Liss-Riordan looked more closely at Uber’s business model, she realized there was a much larger legal problem looming: namely, the company was built on the backs of so-called “1099 employees”—drivers who formed the base of Uber’s operations, but whose income was counted as 1099 freelancer income for tax purposes. Uber claimed these drivers were fully independent and had control over their own work schedules — even making a point of calling them “driver-partners” instead of simply “drivers” — but the company also gave them strict guidelines for participation which made them look like employees according to the IRS’s 20-prong test. Uber screened and trained its drivers, and drivers could get deactivated by Uber for having their rating dip below what local managers set as a cut-off, for not accepting a certain percentage of trip requests, or for customer complaints. In one case, says Liss-Riordan, a driver was fired for “not showing respect” to Uber staff.
Liss-Riordan smelled blood. She realized that if Uber’s drivers were reclassified as normal W-2 employees, rather than 1099 independent contractors, Uber would be required to pay payroll taxes for them, and provide them with benefits like workers’ compensation insurance and unemployment. In some states, such as California, Uber would also be required to reimburse drivers for the costs of the job, including gas, wear-and-tear on their cars, and car insurance. If Uber had indeed misclassified its drivers, the company’s entire business model was built on a legal mistake. . .
Uber has never paid much attention to the law, and that is about to bite them badly. The entire article is worth reading. Later in the article:
In March, judges in San Francisco ruled that the lawsuits Liss-Riordan had filed against Uber and Lyft could go to trial. U.S. District Judge Edward Chen noted that Uber sets drivers’ rates, screens them, can fire them, and needs them in order to make money. “The idea that Uber is simply a software platform, I don’t find that a very persuasive argument,” he said.
Because corporations spend $34 on lobbying for every $1 spent by any other entity (unions, public interest groups, etc.). Lee Drutman reports in the Washington Post:
To judge from polls, Americans are deeply concerned about political corruption. They share a widespread belief that members of Congress are unethical, with lobbyists as the only group seen as more unethical. The implicit understanding of politics is that the “special interests” and their lobbyists “buy” politicians, sort of like you’d buy a candy bar or a bag of chips out of a (very high-dollar) vending machine.
The problem with this view is not only that is it wrong, but also that it misdirects us. In short, it asks us to analyze politics without the actual politics –without the competition between competing interests, without the shifting alliances and coalitions, without parties and ideology, without any sense of there being a policy process, and without the many unpredictabilities and uncertainties that make politics actually interesting. It asks us to analyze transactions between individual politicians and individual special interests, as if they were separate and independent events (they are neither) that can be described as either “corrupt” or “not corrupt” (a useless dichotomy).
In so doing, we miss the bigger and more important story. The real story is not that lobbying or special interests are inherently bad. We have had them as long as we’ve had politics.
The problem is that one set of interests routinely overpowers the rest. In particular, corporate lobbying has metastasized over the last four decades, and this increasingly over-crowded and hyper-contested lobbying environment benefits the large corporations who have the most resources to participate in the day-to-day workings of Congress. This problem is compounded because Congress increasingly lacks its own capacity to keep up.
Organized interests collectively report $3.2 billion a year in lobbying expenditures, and probably equally or greater amounts on non-reported lobbying-related activities. The most active organizations are now hiring upwards of 100 lobbyists to represent them. These statistics alone should tell us that special interests don’t “buy” politicians with campaign contributions. If they did, there’d be no point in spending all that money to hire lobbyists.
The reason to hire so many lobbyists is that genuine political influence is actually hard work. It requires building a compelling case and then making that case over and over and over again. It means being in multiple places at once. Most of the time in Washington, not much is happening at the measurable surface.
But in the slow churn of the “war of position,” relationships are being maintained. Coalitions are being built. Worldviews are being reiterated. Legislation is being drafted and vetted. Carefully selected constituents are being brought in to tell carefully rehearsed stories. People are talking to other people, trying to figure out who will do what, what ideas are “serious” and “not serious,” what has a chance of moving, what isn’t going anywhere, what the press will cover, what voters might care about, and countless other attempts to shape the “common knowledge” of Washington.
The most active participants have many different goals they’d like to achieve: some long-term, some short-term. Scrutinize the lobbying reports of any major lobbying entity, and you will see an impressive range of issues and bills. Like a good venture capitalist, these major lobbying entities are investing in many possibilities, engaging in “spread betting” with the knowledge that one big tax break or patent extension or stalled regulation can more than justify a decade of government relations for a large corporation. Often, the main goal is keeping an issue off the agenda.
To focus only on the campaign contributions as transactional “buying” activity misses all this rich detail. Certainly, campaign contributions help, and all else equal, members of Congress are more likely to listen to those who contribute to their campaigns than those who don’t. But congressional offices get contributions from more people than they can effectively respond to. Often, they get contributions from interests on both sides of an issue.
Lobbyists also gain access because they have personal relationships with members or staff. Or because they have useful policy information or analysis – an especially valuable resource for young staffers who are stretched far too thin and happy for any help. Or because they just keep showing up. For the last 15 years, companies have consistently spent 13 times more on lobbying than they have on PAC contributions.
While considerable empirical work finds that there is no consistent correlation between money spent on outcomes in any given case, it would be a tremendous mistake to then conclude that resources are irrelevant. The key is to understand resources in the aggregate. More resources allow you to hire more lobbyists, to work on more issues – to do more of everything.
Looking at lobbying in the aggregate, what jumps out is the stark imbalance in resources. Corporations blow everyone else out of the water. Business accounts for roughly 80 percent of all reported lobbying expenditures, about $2.6 billion dollars a year now.
Certainly, there has always been “bias in the pressure system” (political science shorthand for the fact that not all interests are equally represented). But what’s new is just how much the steady and continued expansion of business lobbying over the last several decades has outpaced the traditional forces that once kept it in check.
The amount of political activity on behalf of large corporations today is truly unprecedented. The $2.6 billion in reported corporate lobbying spending is now more than the combined under $2 billion budget for the entire Senate ($820 million) and the entire House ($1.16 billion).
Meanwhile, the types of organized interests who we might expect to provide a countervailing force to business — labor unions, groups representing diffuse public like consumers or taxpayers — spend $1 for every $34 businesses spend on lobbying, by my count. Of the 100 organizations that spend the most on lobbying annually, consistently 95 represent business. In interviewing 60 corporate lobbyists for my book The Business of America is Lobbying, I asked them to identify the leading opposition on an issue on which they were currently working. Not a single lobbyist volunteered a union or a “public interest” group.
Even if we take the most benign view of lobbying as merely providing information and legislative support, these data suggest that, on many issues, policymakers hear significantly more often from one side than another. . .
Wonderful: the modern American corporation is free of all restraints now. General Motors will have to pay nothing to the survivors killed from their ignition switch problem (which they did their best to ignore, then deny, then conceal) since they reorganized. So the families get nothing, and General Motors can continue to operate in the same mode. No one goes to jail, no settlements are paid, and the American system of justice protects the corporations. Hilary Stout reports in the NY Times:
A federal bankruptcy judge on Wednesday blocked most lawsuits againstGeneral Motors over a defective ignition switch that is tied to at least 84 deaths, sparing the automaker billions in claims and handing it a momentous victory as it tries to move past its gravest safety crisis.
Judge Robert E. Gerber, who also presided over the automaker’s bankruptcy proceedings in 2009, upheld a provision of that agreement that protects the so-called New G.M. from legal action stemming from actions by the company before bankruptcy.
Most of the 2.6 million cars that the company recalled for the defect were made before then, and many of the accidents occurred before that date.
Plaintiffs’ lawyers argued that G.M. denied their clients’ due process in the bankruptcy proceedings because the automaker did not inform them individually, either of the bankruptcy proceedings or that they might have potential claims against G.M.
Judge Gerber’s ruling kept the door open for lawsuits tied to accidents after the 2009 bankruptcy.
The ruling was an unequivocal victory for G.M. and a critical development in the company’s efforts to move beyond a scandal that has prompted numerous investigations, including a criminal inquiry by the Justice Department. . . [“Move beyond a scandal” = being allowed to kill Americans through negligence and incompetence without any penalties or sanctions; able to do as they please. – LG]
Continue reading. I imagine other companies now will see this as a good tactic when they have killed people. I’m surprised BP didn’t think of this.
The GOP really cares nothing about the will of the people—their concern is the will of corporations. Sam Gustin reports in Motherboard:
If anyone thinks that Republicans will roll over and concede defeat in the battle over net neutrality, they’re dead wrong.
On the contrary, GOP lawmakers are laying the foundation for a fierce, multi-pronged attack against the Federal Communications Commission’s new open internet rules, which are designed to preserve net neutrality, the principle that broadband giants shouldn’t be able to pick winners and losers online.
Rep. Doug Collins, a Georgia Republican, introduced a “resolution of disapproval” this week under the Congressional Review Act that would declare that the FCC’s new policy “shall have no force or effect.”
Collins, who represents a rural Northeast Georgia district, said his resolution would be the fastest way to thwart “heavy-handed agency regulations that would slow internet speeds, increase consumer prices and hamper infrastructure development,” according to his office. [If Net Neutrality is killed, you can bet that telecoms will slow internet speeds for everyone unwilling to pay a premium, passed along to customers. Not to put too fine a point on it, Collins doesn’t seem to be all that bright. – LG]
“Resources that could go to broadband deployment will go to federal taxes and fees,” said Collins, whose resolution has attracted 14 Republican co-sponsors and counting. “We’ll all be paying more for less.”
Collins and his colleagues face several hurdles before they can successfully cancel the FCC’s new rules, which are supported by 81 percent of voters nationwide, including 81 percent of Republicans, according to a recent poll conducted by Vox Populi Polling.
But for the most conservative Republican lawmakers, vocal opposition to the FCC’s new policy amounts to great red meat for their core base of highly politically engaged supporters.
On the one hand, these lawmakers can demonstrate their ideological opposition to what they call “federal government overreach.” On the other hand, they can continue to exert reflexive opposition to any policy President Obama supports. Many GOP lawmakers accuse the White House of improperly influencing the FCC.
“The FCC likely forged its net neutrality solution under political pressure and will continue to attempt to grow its power in secret, despite Congress’ authority in this matter,” said Collins.
The Collins resolution is just one piece of the overall GOP attack. Last month, Marsha Blackburn, the Tennessee Republican, reintroduced legislation to block the FCC from implementing its new rules. Blackburn said her bill aims to “block the Obama Administration’s efforts to take over the internet.”
Many Republican lawmakers argue that the FCC’s new rules will stifle online innovation and raise prices for consumers. Last month, the GOP subjected FCC Chairman Tom Wheeler to a marathon series of hearings on Capitol Hill. At one point, Louie Gohmert, a Texas Republican and vocal net neutrality opponent, accused Wheeler of “playing God with the internet.”
The FCC’s new rules also face a fierce industry pushback in federal court. [And that’s no doubt why the GOP, always the handmaiden and servant of big business, opposes Net Neutrality. – LG] US Telecom, a national industry group, and Texas-based service provider Alamo Broadband, have already filed lawsuits calling the new rules “arbitrary, capricious, and an abuse of discretion” by the FCC.