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Former Tax Lobbyists Are Writing the Rules on Tax Dodging

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Congress too often shrugs off its responsibilities to the public in favor of getting money from wealthy donors and corporations. So it is with tax policy, as reported by Lee Fang in The Intercept:

The secret tax-dodging strategies of the global elite in China, Russia, Brazil, the U.K., and beyond were exposed in speculator fashion by the recent Panama Papers investigation, fueling a worldwide demand for a crackdown on tax avoidance.

But there is little appetite in Congress for taking on powerful tax dodgers in the U.S., where the practice has become commonplace.

A request for comment about the Panama Papers to the two congressional committees charged with tax policy — House Ways & Means and the Senate Finance Committee — was ignored.

The reluctance by congressional leaders to tackle tax dodging is nothing new, especially given that some of the largest companies paying little to no federal taxes are among the biggest campaign contributors in the country. But there’s another reason to remain skeptical that Congress will move aggressively on tax avoidance: Former tax lobbyists now run the tax-writing committees.

We researched the backgrounds of the people who manage the day to day operations of both committees and found that a number of lobbyists who represented world-class tax avoiders now occupy top positions as committee staff. Many have stints in and out of government and the lobbying profession, a phenomenon known as the “reverse revolving door.” In other words, the lobbyists that help special interest groups and wealthy individuals minimize their tax bills are not only everywhere on K Street, they’re literally managing the bodies that create tax law: . . .

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The way that Congress now serves the wealthy and not the public is another sign of the decline of the US, IMO.

Written by LeisureGuy

27 April 2016 at 8:59 am

Obamacare’s Competitive Markets Are Starting to Work Pretty Well

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Some good news, reported in Mother Jones by Kevin Drum:

The decision last week by United Healthcare to drop out of Obamacare got a lot of attention, but the truth is that UH was a pretty small player in the exchanges. What’s more important—but hasn’t gotten much attention—is the fact that more and more Obamacare insurers are getting close to profitability. Richard Mayhew comments:

2014 was a year where there were only guesses about both the Exchange population, the market structure, and federal policy structure (specifically the risk corridor revenue neutrality restrictions. 2015 had a bit more clarity on who was coming into the market, what was working and what was not working, and what federal policy on risk corridors would actually be. 2016 is the first year where the policies are priced on functionally decent real information and some of the amazingly dumb strategic decisions have been unwound through either course changes or through exiting the market.

As a simple reminder, competitive markets should see some companies make money and some companies that offer more expensive and less attractive products lose money. I would be extremely worried if everyone was making money after three years, just like I would be extremely worried that everyone was losing money after three years of increasingly better data.

Obamacare critics have spent a lot of energy trying to pretend that premiums on the exchanges have skyrocketed, but that’s never been true. What is true is . . .

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Written by LeisureGuy

27 April 2016 at 8:27 am

A whistle-blower behind bars

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Eyal Press has a follow-up to his story (blogged earlier) on how Florida Department of Corrections abuses mentally ill prisoners:

On January 24, 2013, the Florida Department of Corrections received a grievance letter from an inmate named Harold Hempstead, who was imprisoned at the Dade Correctional Institution. The letter was brief and its tone was matter-of-fact, but the allegations it contained were shocking, raising troubling questions about the death of a mentally ill inmate named Darren Rainey, who had collapsed in a shower seven months earlier, on June 23, 2012—a case that I wrote about in the magazine this week. According to Hempstead’s letter, the death had been misrepresented to disguise the abuse that preceded it. The reason Rainey collapsed in the shower, Hempstead alleged, was that he had been locked in the stall by guards, who directed scalding water at him. Hempstead’s cell was directly below the shower. That night, he had heard Rainey yelling, “I can’t take it no more,” he recalled. Then he heard a loud thud—which he believed was the sound of Rainey falling to the ground—and the yelling stopped. Hempstead concluded his letter by calling for an investigation.

A week after receiving this information, the Florida D.O.C. sent Hempstead a terse response. “Your grievance appeal is being returned without action,” it stated. In the months that followed, Hempstead continued to file grievances with the D.O.C. He also wrote to the Miami-Dade County Medical Examiner Department and to the Miami-Dade police. At first, nothing appears to have been done in response to the letters, which is perhaps not surprising: prisoners routinely level false accusations at guards. Hempstead’s allegations might have carried more weight if an employee at Dade had backed them up. However, as I noted in my article, the psychiatrists in the mental-health ward at Dade feared (reasonably) that reporting even minor misconduct could trigger harsh retaliation from the guards, putting their own safety at risk. When Hempstead turned to some counsellors for support and guidance, they urged him to keep his accusations vague and to stop “obsessing” about Rainey. But Hempstead, who has been diagnosed with obsessive-compulsive disorder, was determined to get the word out. With the help of his sister, Windy, he eventually contacted the Miami Herald, which on May 17, 2014, published a front-page story on Darren Rainey, called “Behind bars, a brutal and unexplained death.”
The literature on whistle-blowers is full of stories about moral crusaders who risk everything to expose misconduct and succeed only in upending their own lives. (This is one of the themes of my own book on the subject, “Beautiful Souls.”) At first glance, Hempstead’s story appears to veer dramatically from this script. Prompted in part by the revelations he made, the Justice Department has launched an investigation to determine whether Rainey’s death was part of a broader pattern of abuse. Some of the guards in the mental-health ward at Dade have been reassigned. The Florida D.O.C. has adopted a series of reforms, including crisis-intervention training for corrections officers and other steps that may deter future violence.
But it is also possible that Hempstead’s story will end less happily, particularly when it comes to the question of whether justice will be done. Although investigations are ongoing, none of the guards who allegedly took Rainey to the scalding shower have been charged with any crimes. (They have since resigned, and their files included no indication of wrongdoing.) Earlier this year, an autopsy of Rainey that was forwarded to state prosecutors ruled the death “accidental,” and did not recommend criminal prosecution.
Meanwhile, Hempstead has paid a steep price for exposing the circumstances under which Rainey died. After the reporter Julie Brown, of the Miami Herald, interviewed him, several corrections officers threatened him with solitary confinement. Hempstead has since been transferred to another prison and placed in “protective management” status by the D.O.C., but his reputation as a whistle-blower (“Miami Harold,” as some now put it) has not been forgotten, and will follow him as long as he remains behind bars.
That will be a long time: specifically, until 2161, the year Hempstead will be released, if he somehow lives long enough to serve the hundred-and-sixty-five-year sentence that Judge Brandt Downey handed him, in 2000, for his involvement in dozens of house burglaries. Hempstead, who is now forty, was twenty-two at the time. . .

Continue reading.

Written by LeisureGuy

27 April 2016 at 8:21 am

Signs of decline: Walmart’s Made-In-USA shell game

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Todd Oppenheimer writes in Craftsmanship magazine:

If you spend much time nosing around Walmart’s website, it won’t be long before you run into a rather bizarre sleight of hand.

First, to promote its devotion to American manufacturing, the world’s largest retailer ($482 billion in sales in 2015) created a special section of Walmart.com under the banner, “Made in USA.” Over time, this has enabled customers to gather hundreds of purchase options, each one claiming to have been made in America. An example is this T-shirt: “American Beauties Made in the USA Nose Art T-Shirt by Erazor Bits.”

If you look further into the product descriptions on this and other “Made-in-USA” items, you are greeted by this helpful note: “Important Made in USA Origin Disclaimer: For certain items sold by Walmart on Walmart.com, the displayed country of origin information may not be accurate or consistent with manufacturer information. For updated, accurate country of origin data, it is recommended that you rely on product packaging or manufacturer information.”

These disclaimers are often followed by Walmart’s additional squirms away from its original Made-in-USA claim. For the American Beauties T-shirt, for example, the manufacturer information that Walmart lists in its product specifications states the following: “Country of Origin—Components: USA and/or Imported… Country of Origin—Assembly: USA and/or Imported.”

The company’s little shell game used to be far more blatant than this. And the whole story has not been sitting well with Bonnie Patten, executive director of Truth in Advertising. Consider its odd history.

On July 14, 2015, Patten wrote an 8-page letter to the U.S. Federal Trade Commission (the agency charged with the nation’s consumer protection) complaining that Walmart was deceiving its customers. “Walmart.com is replete with false and deceptive advertising,” her letter stated. Even more curiously, Patten noted that after her organization had warned the company about the deceptions on June 22, the company promised to fix the problem (which it described as “coding errors”) within two weeks. Yet nothing had changed almost a month later. From that point forward, the twists and turns begin to multiply even further.

For months, there was little change. Finally, in the fall of 2015, . . .

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The decline in this case is the way the US government seems unable to do its job and fulfill its responsibilities to the people—and there is no accountability for the failure.

Written by LeisureGuy

26 April 2016 at 7:19 pm

Posted in Business, Government, Law

The acknowledged decline of the US

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Tom Englehardt writes at TomDispatch.com:

The Real Meaning of Donald Trump
He’s a Sign of American Decline (Just Not in the Way You Think)
By Tom Engelhardt

Low-energy Jeb.” “Little Marco.” “Lyin’ Ted.” “Crooked Hillary.” Give Donald Trump credit. He has a memorable way with insults. His have a way of etching themselves on the brain. And they’ve garnered media coverage, analysis, and commentary almost beyond imagining.  Memorable as they might be, however, they won’t be what last of Trump’s 2016 election run.  That’s surely reserved for a single slogan that will sum up his candidacy when it’s all over (no matter how it ends). He arrived with it on that Trump Tower escalator in the first moments of his campaign and it now headlines his website, where it’s also emblazoned on an array of products from hats to t-shirts.

You already know which line I mean: “Make America Great Again!” With that exclamation point ensuring that you won’t miss the hyperbolic, Trumpian nature of its promise to return the country to its former glory days. In it lies the essence of his campaign, of what he’s promising his followers and Americans generally — and yet, strangely enough, of all his lines, it’s the one most taken for granted, the one that’s been given the least thought and analysis. And that’s a shame, because it represents something new in our American age. The problem, I suspect, is that what first catches the eye is the phrase “Make America Great” and then, of course, the exclamation point, while the single most important word in the slogan, historically speaking, is barely noted: “again.”

With that “again,” Donald Trump crossed a line in American politics that, until his escalator moment, represented a kind of psychological taboo for politicians of any stripe, of either party, including presidents and potential candidates for that position. He is the first American leader or potential leader of recent times not to feel the need or obligation to insist that the United States, the “sole” superpower of Planet Earth, is an “exceptional” nation, an “indispensable” country, or even in an unqualified sense a “great” one. His claim is the opposite. That, at present, America is anything but exceptional, indispensable, or great, though he alone could make it “great again.” In that claim lies a curiosity that, in a court of law, might be considered an admission of guilt.  Yes, it says, if one man is allowed to enter the White House in January 2017, this could be a different country, but — and in this lies the originality of the slogan — it is not great now, and in that admission-that-hasn’t-been-seen-as-an-admission lies something new on the American landscape.

Donald Trump, in other words, is the first person to run openly and without apology on a platform of American decline. Think about that for a moment. “Make America Great Again!” is indeed an admission in the form of a boast. As he tells his audiences repeatedly, America, the formerly great, is today a punching bag for China, Mexico… well, you know the pitch. You don’t have to agree with him on the specifics. What’s interesting is the overall vision of a country lacking in its former greatness.

Perhaps a little history of American greatness and presidents (as well as presidential candidates) is in order here.

“City Upon a Hill”

Once upon a time, in a distant America, the words “greatest,” “exceptional,” and “indispensable” weren’t even part of the political vocabulary.  American presidents didn’t bother to claim any of them for this country, largely because American wealth and global preeminence were so indisputable.  We’re talking about the 1950s and early 1960s, the post-World War II and pre-Vietnam “golden” years of American power.  Despite a certain hysteria about the supposed dangers of domestic communists, few Americans then doubted the singularly unchallengeable power and greatness of the country.  It was such a given, in fact, that it was simply too self-evident for presidents to cite, hail, or praise.

So if you look, for instance, at the speeches of John F. Kennedy, you won’t find them littered with exceptionals, indispensables, or their equivalents.  In a pre-inaugural speechhe gave in January 1961 on the kind of government he planned to bring to Washington, for instance, he did cite the birth of a “great republic,” the United States, and quoted Puritan John Winthrop on the desirability of creating a country that would be “a city upon a hill” to the rest of the world, with all of humanity’s eyes upon us.  In his inaugural address (“Ask not what your country can do for you…”), he invoked a kind of unspoken greatness, saying, “We shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty.”  It was then common to speak of the U.S. with pride as a “free nation” (as opposed to the “enslaved” ones of the communist bloc) rather than an exceptional one.  His only use of “great” was to invoke the U.S.-led and Soviet Union-led blocs as “two great and powerful groups of nations.”

Kennedy could even fall back on a certain modesty in describing the U.S. role in the world (that, in those years, from Guatemala to Iran to Cuba, all too often did not carry over into actual policy), saying in one speech, “we must face the fact that the United States is neither omnipotent or omniscient — that we are only six percent of the world’s population — that we cannot impose our will upon the other 94 percent of mankind — that we cannot right every wrong or reverse each adversity — and that therefore there cannot be an American solution to every world problem.”  In that same speech, he typically spoke of America as “a great power” — but not “the greatest power.”

If you didn’t grow up in that era, you may not grasp that none of this in any way implied a lack of national self-esteem.  Quite the opposite, it implied a deep and abiding confidence in the overwhelming power and presence of this country, a confidence so unshakeable that there was no need to speak of it.

If you want a pop cultural equivalent for this, consider America’s movie heroes of that time, actors like John Wayne and Gary Cooper, whose Westerns and in the case of Wayne, war movies, were iconic.  What’s striking when you look back at them from the present moment is this: while neither of those actors was anything but an imposing figure, they were also remarkably ordinary looking.  They were in no way over-muscled nor in their films were they over-armed in the modern fashion.  It was only in the years after the Vietnam War, when the country had absorbed what felt like a grim defeat, been wracked by oppositional movements, riots, and assassinations, when a general sense of loss had swept over the polity, that the over-muscled hero, the exceptional killing machine, made the scene.  (Think:Rambo.)

Consider this, then, if you want a definition of decline: when you have to state openly (and repeatedly) what previously had been too obvious to say, you’re heading, as the opinion polls always like to phrase it, in the wrong direction; in other words, once you have to say it, especially in an overemphatic way, you no longer have it.

The Reagan Reboot

That note of defensiveness first crept into the American political lexicon with the unlikeliest of politicians: Ronald Reagan, the man who seemed like the least defensive, most genial guy on the planet.  On this subject at least, think of him as Trumpian before the advent of The Donald, or at least as the man who (thanks to his ad writers) invented the political use of the word “again.”  . . .

Continue reading.

Written by LeisureGuy

26 April 2016 at 4:08 pm

How the rise of authoritarian governments will kill the internet

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And we see the authoritarians in the US—the FBI, the NSA, the DEA, the police—jumping on board to undermine privacy and hand over control to the security state. Andrew Fishman reports in The Intercept:

Brazilian internet freedom activists are nervous. On Wednesday, a committee in the lower house of Congress, the Câmera dos Deputados, will vote on seven proposals ostensibly created to combat cybercrime. Critics argue the combined effect will be to substantially restrict open internet in the country by peeling back the right to anonymity, and providing law enforcement with draconian powers to censor online discourse and examine citizens’ personal data without judicial oversight.

The bills are ripped straight from what has become a standard international playbook: Propose legislation to combat cybercrime; invoke child pornography, hackers, organized crime, and even terrorism; then slip in measures that also make it easier to identify critical voices online (often without judicial oversight) and either mute them or throw them in jail for defamation — direct threats to free speech.

Pakistan, Nigeria, Mexico, Kuwait, Kenya, the Philippines, Peru, the United Arab Emirates, and Qatar have all seen similar proposals recently. Some were met with strong resistance and got shelved, some are still pending, and others made it into law.

“Cybercrime is one of the recurring excuses for creating overbroad legislation which place controls on internet activity,” Katitza Rodriguez, international rights director at the Electronic Frontier Foundation, wrote in an email to The Intercept.

In Brazil, the proposals are the result of the nine-month-long Parliamentary Commission of Inquiry on Cybercrimes, referred to as the CPICiber, created in July 2015 by House President Eduardo Cunha at the request of a congressman from President Dilma Rousseff’s ruling Workers’ Party (PT). The first draft of the report, released on March 30, provoked a massively negative response from civil society groups.

The Brazilian press has not dedicated much coverage to this story — reporters have their hands full with the monthslong political crisiscurrently enveloping the nation — but the Folha de São Paulo, a major national newspaper, published an editorial on Saturday arguing that the proposals use the “pretext of increasing security” online to “increase the power to censor the web and diminish users’ privacy.” According to Folha,the “provisions attack the pillars of the Marco Civil da Internet, a statute enacted in 2014 which put Brazil at the vanguard of the issue” of internet rights. The paper concluded that “this is the type of control used by countries such as China and Iran.”

One particularly controversial proposal would have required social networks to . . .

Continue reading.

Written by LeisureGuy

26 April 2016 at 3:32 pm

The Missing Forty-Three: The Mexican Government Sabotages Its Own Independent Investigation

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Another look at the failure of government in Mexico, this time an article by Francisco Goldman in the New Yorker:

The official scenario, according to the Mexican government, of what befell the forty-three students from the Raúl Isidro Burgos Normal School, in Ayotzinapa, in Guerrero state, on the night and morning of September 26 and 27, 2014, is generally referred to as the “historical truth.” Say those words anywhere in Mexico, and people know what you mean. The phrase comes from a press conference held in January, 2015, when the head of the government’s Procuraduría General de la República (P.G.R.) at the time, Attorney General Jesús Murillo Karam, announced that the forty-three students had been incinerated at a trash dump near the town of Cocula by members of the Guerreros Unidos drug-trafficking gang, after being turned over to them by members of the Iguala municipal police. This, he declared, was the “historical truth.”

As had already been widely reported, the forty-three students were among a larger group of militantly leftist students who, that night in Iguala, had commandeered buses to transport themselves to an upcoming protest in Mexico City. They’d driven from Ayotzinapa that afternoon in two buses they’d previously taken, and then, the government said, they took two more from Iguala’s bus station. Three other people were killed in initial clashes with the police, and most likely with other forces, in Iguala that night; many more were injured. According to Murillo Karam, the “historical truth” was partly drawn from the confessions of detained police and drug-gang members, including some who admitted that they had participated in the massacre of the students at the Cocula dump, and claimed to have tended the fire and disposed of the remains afterward. Some of those remains had allegedly been deposited by gang members in a nearby creek. Nineteen severely charred bone fragments had been sent to a highly specialized lab in Innsbruck, Austria, which had yielded one positive DNA identification, of a student named Alexander Mora Venancio. That identification seemed to support the P.G.R.’s story that the students had been killed at the dump.
One problem with the “historical truth” was that the families of the disappeared students, mostly indigenous people from impoverished rural Guerrero, did not accept it. Nor did many others who’d been closely following the case. On the day in November when P.G.R. investigators had recovered the remains from the nearby creek, including the bone fragment later identified as belonging to Mora Venancio, the internationally prestigious Argentine Forensic Anthropology Team (E.A.A.F), which was collaborating with the Mexican government, had not been summoned. The organization declared that it could not verify or account for the chain of custody of those remains. The Mora Venancio bone fragment, according to the Argentine specialists, was unlike the others recovered from the site—it was bigger, and not as badly burned, as if it had come through a different fire. The families also protested that the P.G.R.’s explanation discounted the testimony of other witnesses, including students who’d survived the attacks, who claimed that other authorities, including federal police and locally stationed military units, had either participated in or closely observed the actions taken against the Ayotzinapa students that night.
The initial crime inspired huge protests, and its handling by Mexican President Enrique Peña Nieto provoked a worldwide outcry; because of that, along with some other high-profile scandals, the government’s credibility and reputation have been seriously undermined. This may explain why, on November 18, 2014, the government decided to permit an unprecedented intrusion onto Mexico’s vaunted traditional sovereignty by allowing the Inter-American Commission on Human Rights (I.A.C.H.R.) to appoint a group of five legal experts to conduct, with the P.G.R.’s coöperation, an independent investigation of the Ayotzinapa case. Murillo Karam resigned, and was replaced, in February of 2015, by Arely Gómez González. The Interdisciplinary Group of Independent Experts (GIEI), a team of five people from Chile, Colombia, Guatemala, and Spain, and consisting of prosecutors, lawyers, a former attorney general, and a social psychologist specializing in victims’ rights, released its first report—which was more than five hundred pages long—on September 6, 2015, nearly a year after the crime was committed. The group’s next, and presumably last, report, will be released on Sunday.
The September 6th GIEI report demolished Murillo Karam’s “historical truth” and made history of its own. Perhaps never before, and certainly not in recent decades, had Mexican government authorities been confronted with such a thorough legal investigation of a crime of such consequence, and of the state’s handling of that crime. Among many other findings, the GIEI report rejected assertions by the government that federal security forces had no involvement in Iguala on that night in September. They credited the testimony of student survivors and other witnesses who alleged that federal police had been present, and had acted aggressively, and most importantly, that the students’ movements had been monitored by the military, beginning from the time they’d left the Ayotzinapa school on the afternoon of September 26th and on into the night. The witnesses also noted the presence of military units in the streets of Iguala.GIEI found evidence, too, that confessions in the case had been elicited by torture. It also discovered security-camera footage from the Iguala bus station that confirmed what some students had claimed all along: that a fifth bus had been taken that night, one that, according to the fourteen students who rode in it, was detained by federal police as it tried to leave Iguala; those students managed to, or were allowed to, escape into the surrounding hills, but the bus itself disappeared. GIEI reported that when it asked to see the bus, it was shown one that, according to the findings of a video-forensics expert in the United States, was not the same one filmed by the bus station’s security cameras.GIEI was especially interested in that missing bus because, in 2014, the U.S. Attorney’s office in Illinois had charged two alleged members of the Guerreros Unidos gang with smuggling heroin and cocaine from Mexico to Illinois using commercial buses; the report raised the hypothetical possibility that the overblown aggression against the students had been provoked by a frantic effort by a drug gang and complicit authorities to recover a bus.
The part of GIEI’s September report, however, that received by far the most attention in the Mexican media was . . .

Continue reading.

As noted at the link:

This is the eighth part in Francisco Goldman’s series on the missing students from the Ayotzinapa Normal School. He has also written
The Disappearance of the Forty-Three,”
Could Mexico’s Missing Students Spark a Revolution?,”
The Protests for the Missing Forty-Three,”
An Infrarrealista Revolution,”
Who is Really Responsible For the Missing Forty-Three?,”
The Government’s Case Collapses,” and
One Year, Many Lies, and a New Theory That Might Make Sense.”

Written by LeisureGuy

26 April 2016 at 3:01 pm

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