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News Release Archive | economy | Accuracy.Org

$21 Trillion the Wealthy are Hiding: The Shocking Facts — and the Great Opportunity

July 25, 2012

ABC News is reporting: “The super-rich are hiding at least $21 trillion in accounts outside their home countries, according to a report by an activist group called the Tax Justice Network. The wealth hidden in these tax shelters is the equivalent of the United States and Japanese economies combined, according to the report, ‘The Price of Offshore Revisited.’” PDF summary of report can be read here.

JAMES S. HENRY, jamesshelburnehenry at mac.com
Henry, lead researcher for the report and former chief economist at the international consultancy firm McKinsey & Co., said today: “First, this hidden offshore sector is large enough to make a significant difference to all of our conventional measures of inequality. Since most of missing financial wealth belongs to a tiny elite, the impact is staggering. For most countries, global financial inequality is not only much greater than we suspected, but it has been growing much faster.

“Second, the lost tax revenue implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries, especially developing countries that are now struggling to replace lost aid dollars and pay for climate change. Indeed, once we take these hidden offshore assets and the earnings they produce into account, many erstwhile ‘debtor countries’ are in fact revealed to be wealthy. But the problem is, their wealth is now offshore, in the hands of their own elites and their private bankers. Indeed, the developing world as a whole has been a significant CREDITOR of the developed world for more than a decade. That means this is really a tax justice problem, not simply a ‘debt’ problem.

“Third, it turns out that this offshore sector — which specializes in tax dodging — is basically designed and operated, not by shady no-name banks located in sultry islands, but by the world’s largest private banks, law firms, and accounting firms, headquartered in First World capitals like London, New York, and Geneva. Our detailed analysis of these banks shows that the leaders are the very same ones that have figured so prominently in government bailouts and other recent financial chicanery.

“Fourth, given all this, it is scandalous that official institutions like the Bank for International Settlements, the IMF, the World Bank, the OECD, and the G20, as well as leading central banks, have devoted so little research to this sector. This scandal is made worse by the fact that they already have much of the data needed to estimate this sector more carefully. For reasons of their own, they have tolerated the growth of the offshore sector for far too long, out of sight. It is time for them to live up to their promises, and work with us on concrete policies to get it under control.”

He adds however: “From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems. We have an opportunity to think not only about how to prevent some of the abuses that have led to it, but also to think about how best to make use of the untaxed earnings that it generates.”

NICOLE TICHON, nicole at tjn-usa.org
Tichon is executive director of the Tax Justice Network-USA. See the full report, “The Price of Offshore Revisited” and an accompanying study, “Inequality: You Don’t Know the Half of it,” which demonstrates that “all studies of economic inequality to date have failed to account properly for this missing wealth. It concludes that inequality is far worse than we think.” Both are available here.

Tagged With: corporations, economy, inequality, James S. Henry, Nicole Tichon,

Empty Anniversary: Minimum Wage Stuck as Poverty Climbs

July 23, 2012

July 24 is the anniversary of the last federal minimum wage increase to $7.25 in 2009. The minimum had been increased on July 24 on 2007, 2008 and 2009 and not since. Senator Tom Harkin of Iowa and Rep. George Miller of California have proposed raising the minimum wage to $9.80 by 2014 in three annual steps and then adjusting it for inflation.

An AP survey finds: “The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.”

HOLLY SKLAR, hsklar at businessforsharedprosperity.org
Director of Business for a Fair Minimum Wage and co-author of Raise The Floor: Wages and Policies That Work For All Of Us, Sklar said: “Time flies when you’re moving backward. With the federal minimum wage stuck at $7.25 an hour – just $15,080 a year — since 2009, workers now have less buying power than they did in 1997 at the start of the longest period in history without a raise. At minimum wage’s high point in value in 1968, retail workers, cooks, health aides and other minimum wage workers made $10.55 adjusted for inflation. The biggest problem for Main Street businesses is lack of customer demand. We can’t build a strong economy on downwardly mobile wages. It’s time to raise America by raising the minimum wage.”

LEW PRINCE, debussyhayden at hotmail.com
Co-owner of Vintage Vinyl, an independent music store in St. Louis, Missouri, and a leader in Business for a Fair Minimum Wage, Prince said: “Trickle-down economics doesn’t work. People are falling out of the middle class instead of rising into it. Putting money in the hands of people who desperately need it to buy goods and services will give us a trickle-up effect. I’m sick of my tax dollars subsidizing money machines like Walmart and McDonald’s that are dribbling out wages their workers can’t live on, lobbying against minimum wage increases, and draining the lifeblood out of our local economies.”

ARIEL JACOBSON, ajacobson at uusc.org.
Jacobson is senior associate in the Unitarian Universalist Service Committee’s Economic Justice Program, an international human rights organization based in Cambridge, Mass. and is on the board on Let Justice Roll. She said today: “Raising the minimum wage is an economic necessity and a moral issue that should weigh on our national conscience. The least we can do is to make up lost ground and bring the minimum wage closer to the adequate living standard it was intended to be. Raising the minimum wage is a moral and economic imperative for the future of our workers and communities, our economy and our democracy.”

Tagged With: Ariel Jacobson, economy, Holly Sklar, Lew Prince, minimum wage,

Has the Military Budget Been Slashed? Is It Effective at Creating Jobs?

July 19, 2012

The House is having a series of votes on military spending today. The Boston Globe reports today: “Congressional Republicans have begun a drumbeat of opposition to Pentagon cuts they agreed to last summer as part of the debt deal with President Barack Obama, and want to shift the burden of cuts to food stamps, school lunches and other domestic programs.

“Armed with an industry-backed analysis that shows the loss of 2 million jobs — particularly in the aerospace industry in California and the swing state of Virginia — Republicans are blaming Obama in an attack that stretches from Washington to the presidential campaign trail.”

CHRIS HELLMAN, chellman@nationalpriorities.org
Hellman is communications liaison at the National Priorities Project and specializes in the military budget. He said today: “The notion that the military budget has sustained deep cuts in service to deficit reduction is outrageous. The military budget has grown every year for more than a decade — it has grown like a ‘gusher,’ to quote former defense secretary Robert Gates. Now the Department of Defense base budget faces a slim 2.5 percent cut in fiscal 2013. This myth that the military has been hit hard is holding up progress in today’s budget debates.”

HEIDI GARRETT-PELTIER, hpeltier at econs.umass.edu
Assistant research professor at the Political Economy Research Institute at the University of Massachusetts, Amherst and co-author of the report “The U.S. Employment Effects of Military and Domestic Spending Priorities: An Updated Analysis,” Garrett-Peltier said today: “My calculations show that the arms industry’s claims about increased unemployment are vastly exaggerated. A billion dollars spent on military production created about 11,000 jobs, compared to about 17,000 from clean energy, 19,000 from health care, and 29,000 from education.”

She also co-wrote the piece “Benefits of a Simmer Pentagon: Despite Claims to the Contrary, Cutting Military Spending Could Actually Boost the Economy.”

Filed Under: Tagged With: Chris Hellman, economy, Heidi Garrett-Peltier, jobs, military spending,

Obama and Romney Both Backing Secret Job-Killing Deal?

July 12, 2012

As the campaigns of President Obama and Mitt Romney trade attacks while claiming each is a friend to workers, a secretive trade deal of the type backed by both campaigns is emerging in international talks.

Romney claims he is representing “job creators” whose dealings will benefit society as a whole while Obama claims that his vision is opposed to “top-down economics” and will grow “the middle class.”

AP reports: “Negotiators from the United States and eight other Pacific Rim countries concluded a round of talks Tuesday on one of the most ambitious trade agreements in decades, as pressure mounted on Japan to decide if it wants to join Mexico and Canada as the newest members of the pact. The administration of President Barack Obama notified Congress this week that Mexico and Canada were joining the Trans-Pacific Partnership, triggering a 90-day waiting period before those two countries can enter talks later this year. … It has met stiff opposition in the U.S. Congress, largely from Democrats and allies of organized labor who complain the talks have been shrouded in secrecy.”

LORI WALLACH, Arden Manning, amanning at citizen.org
Wallach director of Public Citizen’s Global Trade Watch, which put out a recent statement: “A text of the TPP’s investment chapter that leaked last month shows that it includes an expanded version of the rules in NAFTA [North American Free Trade Agreement] that incentivize investment and job offshoring by eliminating the risks of relocating to lower-wage countries and guaranteeing preferential treatment for relocated firms.

“During last week’s secretive TPP talks in San Diego, state legislative leaders from all 50 states sent a letter to President Barack Obama’s senior trade official, warning that they will oppose the deal unless the administration alters its current approach. “The lack of transparency of the treaty negotiation process, and the failure of negotiators to meaningfully consult with states on the far-reaching impact of trade agreements on state and local laws, even when binding on our states, is of grave concern to us,” the legislators wrote in their July 5 letter.

Wallach said: “U.S. negotiators have tried to keep TPP negotiations totally below the radar, but even so, opposition to the current ‘NAFTA-on-steroids-with-Asia’ approach is escalating, which is good news for the public but a serious complication for the Obama campaign’s attack on Romney as a U.S. job offshorer.”

See Public Citizen’s Trans-Pacific Partnership webpage, which includes information about sections of the trade deal that were recently leaked.

See Wallach’s recent piece “NAFTA on Steroids“

Filed Under: Tagged With: Asia, economy, Lori Wallach, TPP,

LIBOR Scandal: The Conundrum of Bank Regulators

July 10, 2012

STEPHANY GRIFFITH JONES, sgj2108 at columbia.edu,
Stephany Griffith Jones is Financial Markets Program Director at the Initiative for Policy Dialogue at Columbia University. With José Antonio Ocampo and Joseph E. Stiglitz she co-edited Time for a Visible Hand: Lessons from the 2008 World Financial Crisis. She was recently featured on the IPA news release “Barclays Scandal Highlights Need to ‘Clean the Cesspit.’” She said today: “An important reason why this potential rigging of LIBOR is so significant is because over $500 trillion of transactions worldwide — of interest rate derivatives, but also of mortgages, credit card debt and student loans of millions of people — are influenced by LIBOR. It is not morally acceptable that such a crucial variable for so many could be lied about so as to benefit a few traders and bankers.”

RICHARD WOLFF, rdwolff at att.net
Wolff is author of the book Occupy the Economy: Challenging Capitalism. He said today on the LIBOR scandal: “The long-standing, mutual assistance relationship between global bankers and regulators has been exposed for serving their interests at the expense of the world economy. Such exposures happen when extreme economic crises such as today’s provoke searches for scapegoats. Punishing big banks and regulators leaves intact the basic economic system that created the incentives and provided the rewards for what they did. The real issue is the need for system change.

On the European economic crisis, Wolff said: “Global capitalism is a system in deep crisis. Beginning in the U.S., it was worse there in 2008 and 2009 than it was in Europe. Then, partly because U.S. policies failed to end the crisis, global markets spread it to Europe and beyond in 2010 and 2011. ‘Austerity’ policies in Europe worsened its crisis that now, via global markets, returns to further depress the weakened U.S. economy. Global capitalism, a broken, dysfunctional system, persists because ideological blinders refuse to question let alone change it.”

He is a Professor of Economics Emeritus, University of Massachusetts, Amherst, and currently a visiting professor in the Graduate Program for International Affairs at the New School University in New York City. Video of his talk “Capitalism Hits the Fan” is available here.

Tagged With: corporations, economy, LIBOR scandal, Richard Wolff, Stephany Griffith Jones,

How to Get Better Jobs Numbers

July 6, 2012

NOEL ORTEGA, noel at ips-dc.org
Coordinator of the New Economy Working Group, Ortega is a contributor to the report “JOBS: A Main Street Fix for Wall Street’s Failure,” which states: “The current U.S. jobs debate is largely limited to arguing the relative merits of stimulating the economy by increasing government spending or by granting more deregulation and tax breaks to the rich and to Wall Street corporations. The need for action to correct the institutional failure that caused the jobs crisis is largely ignored.” The report lists concrete actions:

1. “Redefine our economic priorities by replacing financial indicators with real-wealth indicators as the basis for evaluating economic performance.

2. “Restructure the money system to root the power to create and allocate money in Main Street financial institutions that support Main Street job creation.

3. “Restore the middle class by restoring progressive tax policies and a strong and secure social safety net.

4. “Create a framework of economic incentives that favor human-scale enterprises that are locally owned by people who have a natural interest in the health and well-being of their community and its natural environment.

5. “Protect markets and democracy from corruption by concentrations of unaccountable corporate power.

6. “Organize the global economy into substantially self-reliant regional economies that align and partner with the structure and dynamics of Earth’s biosphere.

7. “Put in place global rules and institutions that secure the universal rights of people and support democratic self-governance and economic self-reliance at all system levels.”

Yesterday, the United Nations released a report titled “World Economic and Social Survey 2012: In Search of New Development Finance” which proposes raising $400 billion by mechanisms such as a 1 percent wealth tax on billionaires.

Filed Under: Tagged With: corporations, economy, jobs, Noel Ortega,

Barclays Scandal Highlights Need to “Clean the Cesspit”

July 2, 2012

STEPHANY GRIFFITH JONES, sgj2108 at columbia.edu
Stephany Griffith Jones is Financial Markets Program Director at the Initiative for Policy Dialogue at Columbia University. With José Antonio Ocampo, and Joseph E. Stiglitz she co-edited Time for a Visible Hand: Lessons from the 2008 World Financial Crisis. Available for a limited number of interviews, she said today: “This is just the latest in a series of scandals. Barclays was simply lying about how much it was costing them to borrow money. They did this partly to appear to be in a better position than they in fact were, but mostly to make more money.

“British banks were also improperly selling derivatives to small and medium enterprises. There was also the recent Royal Bank of Scotland problem for transferring money to their account holders. These financial institutions are not competent, nor efficient. They are also in many cases corrupt.

“There’s been criticism from many quarters, including conservative quarters and calls by the Labour leader Ed Miliband for a broad inquiry. At present the government says it cannot prosecute Barclays, as the LIBOR [The London InterBank Offered Rate] misdemeanors are not covered by law. Also, some are saying: Be careful, you don’t want to undermine a strong local industry, and they have influence over the politicians.

“This shows again that we have an appalling financial system that doesn’t support the real economy, but often hurts it. And for that, there’s a growing outrage, a need to ‘clean the cesspit’ as one politician, Vince Cable — the UK Business Secretary — put it.

“Even the IMF has been saying that a smaller financial system might be better for the rest of the economy. Up until now, many have insisted that a large financial system was better for the economy, but it’s clear that with speculative parts of banking running amok, that is not the case.”

Tagged With: corporations, economy, Europe, Great Britain, Stephany Griffith Jones,

Earth Summit: Questioning the “Green Economy”

June 21, 2012

The Miami Herald reports: “More than 50,000 people and representatives of more than 120 countries gather in Rio de Janeiro for the opening of the Rio+20 conference on sustainable development. Topics include the destruction of the rain forest, vanishing coral reefs, land grabs, the need for food security, clean water, the role of women in food production, safe drinking water, energy access, clogged transit systems, jobs and sustainable development as a way of fighting poverty. The conference marks the 20th anniversary of the 1992 Earth Summit in Rio.”

Many environmental and indigenous groups and social movements attending the conference and the adjacent “People’s Summit” are questioning and criticizing the “green economy” approach as offering “false solutions.” — also see: Rio 20, Gears of Change

WINNIE OVERBEEK, winnie at wrm.org.uy
Overbeek is the executive secretary of World Rainforest Movement (Brazil/Uruguay). She wrote the piece “The Great Lie: Monoculture Trees as Forests,” which states: “Tree plantation companies were ‘pioneers’ in the green economy when, in the early 1990s, they started to influence public opinion with claims about the ‘sustainable production cycle’, promoting the positive idea that they were planting carbon-absorbing ‘forests’. However, the negative impacts of large-scale monoculture plantations on local communities and increasing unsustainable paper consumption, especially in the North, were left unmentioned.

“Monoculture oil palm, eucalyptus, rubber and jatropha plantations are also expanding, validated by their alleged ‘green’ benefits such as agrofuel production and carbon sequestration. Locating such plantations in the South allows polluting projects in the North to continue business as usual, due to the idea of the carbon tradeoff.

“Under the United Nations collaborative program on Reducing Emissions from Deforestation and Forest Degradation (known as REDD), carbon — not wood or pulp — has become the ‘product’ that offers the best market value and profits from trees. Those who pollute most can continue to evade their responsibility to reduce carbon emission levels by opting for the often cheaper alternative of ‘compensating’ their emissions by buying credits from carbon stored in forests. ‘REDD+’ goes further, including conservation, sustainable management of forests and enhancement of forest carbon stocks.

“By commodifying forests, initiatives like REDD and REDD+ may weaken the struggles of forest peoples to guarantee rights to their historic lands and livelihoods. Carbon trading is likely to be distant from local communities’ needs and can impact severely on the lives and opportunities of local people.”

PATRICK BOND, pbond at mail.ngo.za
Professor at the University of KwaZulu-Natal in South Africa, Bond is author and editor of the recently-released books Politics of Climate Justice and Durban’s Climate Gamble. He wrote the piece “The Green Economy is the Environmentalism of the Rich,” which states: “Perhaps a few environmentally decent projects may get needed subsidies as a result of the G20 and Rio talkshops, and we’ll hear of ‘sustainable development goals’ to replace the fatuous UN Millennium Development Goals in 2015. But the overarching danger is renewed official faith in market mechanisms. No surprise, following the logic of two South African precedents: the 2002 World Summit on Sustainable Development in Johannesburg (Rio+10) and last December’s Durban COP17 climate summit. There, the chance to begin urgent environmental planning to reverse ecosystem destruction was lost, sabotaged by big- and medium-governments’ negotiators acting on behalf of their countries’ polluting and privatizing corporations.”
Bond also recently wrote “Inclusive Green Growth or Extractive Greenwashed Decay?”

PABLO SALON, solon at focusweb.org
Salon is the executive director of Focus on the Global South (Bolivia) and was the former ambassador from Bolivia to the United Nations. In his recent piece “At the Crossroads Between Green Economy and Rights of Nature,” he stated: “Nature cannot be submitted to the wills of markets or a laboratory. The answer for the future lies not in scientific inventions that try to cheat nature but in our capacity to listen to nature. Science and technology are capable of everything including destroying the world itself. It is time to stop geo-engineering and all artificial manipulation of the climate, biodiversity and seeds. Humans are not gods.”

LUCIA ORTIZ, lucia at natbrasil.org.br
Ortiz is a coordinator for Friends of the Earth, Brazil. She stated: “World leaders meeting at the Rio+20 Summit should listen to the demands of the alternative Peoples’ Summit in Rio to prove that the UN’s decision-making process and our governments take into account the greater public interest before profit. … The Rio+20 Summit should not promote the ‘green economy’ agenda, which is selling out nature and people, and greenwashing an unjust and unsustainable economic system.”

Tagged With: corporations, economy, environment, Lucia Ortiz, Pablo Salon, Patrick Bond, Rio 20, Winnie Overbeek,

Protests at G20 Summit

June 18, 2012

LACY MacAULEY, lacymacauley at gmail.com, @lacymacauley
MacAuley is an Occupy D.C. activist currently at the People’s Summit in La Paz, Mexico. She said today: “La Paz is the closest that activists can get to the G20 Summit. The town of Cabo San Lucas is under heavy security. No one can travel to or from Cabo unless they are a documented Cabo resident. They have even closed the schools and hospitals. I’ve heard a story from a woman whose pregnant family member in Cabo was told that the hospital would not even be open if she were to give birth during the summit. They were lucky: The baby was born last week. This is just another example of how the G20 acts with total disregard for everyday people — they make decisions behind closed doors that impact all of us, decisions that serve the corporate elite of the world, and leave the rest of us out. We need to build our own solutions to the crises of the world, and move beyond big institutions like the G20.”

JUAN JOSE GOMEZ BERISTAIN, sme.jjgoberis at gmail.com
Beristain is a member of the Mexican Electricians Union (Sindicato Mexicano de Electristas) who is at the People’s Summit in La Paz, Mexico, near Cabo.

He said today: “As a Mexican worker, fired two and a half years ago because of the neoliberal government of Mexico, I’m against the G20 because the G20, a strictly economic organization, have no moral or political responsibility for the people and are the real rulers of the political and economic policies in our countries. We haven’t elected any of them. … Yet they have more power over us than the governments of our countries. And now we’re tired of them. We won’t take another year paying the debt they invented for us, suffering the crisis they built. Now is our time to fight back with unity, unity in action, organized action, informed action.”

HECTOR DE LA CUEVA, correohdc at yahoo.com.mx
De la Cueva is a member of the Mexican Action Network Against Free Trade (RMALC) who is also at the People’s Summit in La Paz. He said today: “We are here because the G20 represents the governments of the main powers of the world. … We are here to make sure that the people’s voices are expressed for the rest of the world. … The People’s Summit represents the people’s interest. It represents the working people. So there’s two sides to the story. We are here to make sure that our story, the 99 percent story, is heard.”

Tagged With: corporations, economy, G20, Hector de la Cueva, Juan Jose Gomez Beristain, Lacy MacAuley, Mexico,

Will JPMorgan’s Dimon Get Serious Questions Today From Senate Banking Committee?

June 13, 2012

Los Angeles Times reports: “The ‘King of Wall Street’ returns to Capitol Hill today, this time to explain how JPMorgan Chase & Co. sustained a $2-billion hole in its ‘fortress balance sheet.’”

THOMAS FERGUSON, thomas.ferguson at umb.edu
Ferguson is professor of political science at the University of Massachusetts, Boston, senior fellow of the Roosevelt Institute, and contributing editor at AlterNet. AlterNet has just published his “How Wall Street Hustles America’s Cities and States Out of Billions.”

He also recently wrote “Senate Banking Chair Calls Jamie Dimon to Testify: But JPMorgan Chase is His Biggest Contributor!”

Ferguson said today: “We obviously need clear answers about what went wrong with risk management at JPMorgan Chase. We have been told repeatedly that America’s banks were well hedged against disaster in Europe. But who now would put much stock in those assurances as investors run on Spain and Italy and we approach the fateful Greek election? But the Senators can’t stop there. They also need to ask some hard questions about the banks’ unwillingness to let our cities and states out of disastrous swap contracts they sold them. These have cost taxpayers billions of dollars. American bankers have benefited from from vast amounts of taxpayer assistance. Not just TARP, but super cheap Federal Reserve financing, Fed, Freddie, and Fannie purchases of mortgage-backed securities, and deposit guarantees as well as tax concessions granted by the Treasury in the wake of the 2008 disaster. For the banks to keep mulcting the people who bailed them out is unconscionable. [Senate Banking Chair Tim] Johnson (D-SD) in particular needs to stand up and represent, not his contributors, but his constituents and start asking the hard questions.”

Also see Ferguson’s piece on Congress and money in the Financial Times.

Filed Under: Tagged With: corporations, economy, Jamie Dimon, JP Morgan, JP Morgan Trading Loss, Thomas Ferguson,
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