Is the Republican Party on the Brink of All Out Civil War?
The Alabama primary could be a sign of things to come.
By David Smith / The Guardian
Looking out over a packed Alabama barn, Steve Bannon paced the stage and declared: “I come to you unshaven, unkempt, in this old bomber jacket, just like I was on the campaign.” What happened 24 hours later left some asking, or perhaps dreading: could this be the new face of the Republican party?
Bannon delivered invective about Mitch McConnell, deriding the Senate majority leader as part of a political class that is “the most corrupt and incompetent group of individuals in the country”, and rallied the crowd at an election eve rally for Roy Moore’s insurgent campaign.
The next day, Moore – a conservative jurist who had waved his gun at a campaign rally and arrived on horseback to cast his vote – won the Republican special election primary against Luther Strange, an incumbent backed to the tune of millions of dollars by McConnell, the National Rifle Association, the Chamber of Commerce – and Donald Trump himself.
It was a defeat for Trump, who for once had allowed his head to rule his heart, but not for Trumpism, of which Moore is a worthy avatar. It was equally a coup for Bannon, seldom heard in public during his spell as Trump’s campaign manager and White House chief strategist, but now startlingly transformed into a firebrand speech-maker armed with a right-wing website, Breitbart News, against the Republican establishment.
Kurt Bardella, a former media consultant for Breitbart, said: “It was very important to Steve to show that he’s more than one-trick pony. After Steve left the White House, Alabama was his first visible show and he wanted to win this one to show that he is just as strong, if not stronger, than he was before and that he will continue to be an influential force during the Trump presidency and beyond.”
Alabama was also the opening salvo in a potential Republican civil war in the 2018 midterm elections as the party continues to grapple with the rise of Trump and the lasting political consequences. Republicans have been unable to leverage Trump’s shock victory last year for legislative success.
With terrible timing this week, their failure to repeal and replace Barack Obama’s signature healthcare law may now be complete. Senators Bill Cassidy and Lindsey Graham’s last-ditch attempt did not make it to the floor when it became clear the votes were not there. This was only likely to fuel anger and feed the perception that Republican elites are do-nothings, ripe for a shakeup from an army of mini-Trumps.
Already Bannon is touring the country and meeting with candidates who will carry forward such an agenda. He told the Bloomberg agency: “The populist-nationalist movement proved in Alabama that a candidate with the right ideas and a grassroots organization can win big. Now, our focus is on recruiting candidates to take over the Republican party.”
The election eve rally in Alabama was a reunion of sorts of those in Bannon’s political orbit. Two potential candidates, Chris McDaniel of Mississippi and Mark Green of Tennessee, attended along with Paul Nehlen, a primary challenger last year to the House speaker, Paul Ryan, whose campaign was heavily promoted by Breitbart.
McDaniel described Moore’s win as “incredibly inspiring” for his own challenge to Senator Roger Wicker in 2018. “We know Mitch McConnell was rejected tonight and Roger Wicker is just another part of Mitch McConnell’s leadership apparatus,” McDaniel told the Associated Press.
“We supported Donald Trump because he was an agent of change, and he’s still an agent of change. In this instance, he must have been given bad advice to retain this particular swamp creature.”
On Thursday, Bannon spent two hours with Tom Tancredo, who worked on Nehlan’s behalf and is considering a run for Colorado governor next year. Tancredo, a former congressman, told the Guardian: “He was encouraged by what happened in Alabama and was certainly hoping he can replicate it.
“He’s trying to establish an awareness of the fact the Republican party should be standing for the values he and others have tried to articulate over the years. It’s a hugely difficult undertaking when you consider the power of the establishment and the swamp. He just kept reiterating: ‘I need to try to save the country.’”
Asked about the prospect of a Republican civil war, Tancredo replied: “A good philosophic blood letting is not necessarily a bad thing.”
Bannon is magnifying a trend already evident in the Tea Party, the rise of Trump and a wave of anti-establishment anger. In June Ed Gillespie, a former chairman of the Republican National Committee, was given a scare by the populist Corey Stewart in the party’s gubernatorial primary in Virginia. He eventually won, but by a surprisingly narrow margin that rattled the Republican establishment.
Bill Kristol, editor at large of the conservative Weekly Standard, said: “Even if Steve Bannon did nothing, the Trumpy candidates would emerge. There are plenty of activists, state legislators and others around the country who’ll look at Alabama – and the near success of Stewart against Gillespie in Virginia – and decide to take a shot. So it will be all-out civil war – and to some degree out of the control of the self-appointed generals on either side.”
Once seen as a master strategist, McConnell is struggling to capitalise on his narrow 52-48 majority in the Senate. After the healthcare debacle, he must now try to thread the needle on tax reform, the budget, immigration and the credit limit.
Bardella said Bannon had helped villainise McConnell, making him a toxic symbol of the Republican establishment and an albatross around the necks of vulnerable Republicans such as Jeff Flake of Arizona and Dean Heller of Nevada. A seat in Tennessee following Senator Bob Corker’s announcement that he would not seek re-election in 2018 could also be a target.
“Every dollar that is spent on a candidate by Mitch McConnell and the Republican party is a dollar spent against them,” Bardella added. “And that’s because it plays right into the theme that they’re bought and paid for by the establishment.”
Among the “establishment” donors likely to oppose Bannon in a series of running battles are the billionaire brothers Charles and David Koch. Bannon himself has admitted there is not “a deep bench” of viable candidates to represent his agenda.
But he can expect at least tacit backing from Trump, who was said to be furious about having backed the wrong horse in Alabama: the president even deleted three tweets that endorsed Strange. Bannon also has powerful benefactors in the shape of the billionaire hedge fund investor Robert Mercer and his daughter Rebekah Mercer. The New York Times reported that Bannon and Robert Mercer began working out a rough outline for a “shadow party” that would advance Trump’s nationalist agenda during a five-hour meeting last month at the family’s Long Island estate.
Bannon has also been consulting with Henry Kissinger and other foreign policy veterans, Bloomberg reported, and is preparing make the threat posed by China a central cause. “If we don’t get our situation sorted with China, we’ll be destroyed economically,” he said.
Rick Tyler, a political analyst and former campaign spokesman for the Texas senator Ted Cruz, said: “Roy Moore has demonstrated that the establishment and all its money can be beaten. You can only spend so much money in Alabama before it becomes irritating: you can only stuff so much in people’s mailboxes or run so many ads on TV.
“The floodgates are open. You’ll see a lot of this, one after another, and Steve Bannon’s going to be at the centre of it. He’s one for one. It’ll be a civil war; it has been for quite some time.”
Republican memories are still raw from 2014, when the House majority leader, Eric Cantor, was beaten in a primary contest by Dave Brat, a little-known professor backed by the Tea Party. But Bannon could make the establishment versus Tea Party battle look like a mere skirmish.
Andrew Surabian, a political strategist who worked under Bannon at the White House, told USA Today: “Bannon is plotting a strategy to launch an all-out assault on the Republican establishment. I think it’s fair to say that if you’re tied to Mitch McConnell, any of his henchmen in the consulting class, or were a Never-Trumper during the campaign, you’re not safe from a primary challenge.”
Additional reporting by Lauren Gambino and Ben Jacobs
David Smith is the Guardian’s Washington correspondent.
So Few Americans Understand What the Second Amendment Is Really About—or Its Dark History
The Second Amendment is an anachronism that’s no longer relevant today.
By Thom Hartmann / AlterNet
With the crazed assault in Las Vegas that killed over 50 and wounded hundreds as only the most recent example, America’s gun violence problem has reached a breaking point. While we can talk all we want about assault weapons bans, universal background checks and terror watch lists, there’s only one real solution to this problem: We need to repeal the Second Amendment.
This, of course, is completely unacceptable to Republicans, but that’s because they don’t know the real history of the Second Amendment, and the real history of the Second Amendment is as ugly as it gets.
Thanks to corporate media’s unquestioning regurgitation of right-wing talking points, most Americans think that Second Amendment is in the Constitution to protect the rights of individual gun owners from the government.
But that’s not even remotely true.
The “Second Amendment” as we know it today is a legal fiction invented by the gun industry and their buddies on the Supreme Court and sold to Americans by an expensive multi-decade-long PR campaign.
Despite what you might hear on Fox So-Called news, there actually was no “individual right to own a gun” until 2008, when the Supreme Court said there was in its decision in the case of District of Columbia v. Heller.
That decision, which struck down Washington, D.C.’s handgun ban, was the culmination of a decades-long push by the gun industry to twist the Second Amendment into something that would help it sell more weapons, and it had zero basis in real Constitutional history.
It’s what former Chief Justice Warren Burger called a “fraud on the American public,” and it’s a fraud that now makes it very, very hard to put in place sensible gun control laws.
So, if the Second Amendment wasn’t originally about protecting gun rights, why is it in the U.S. Constitution? What were the Founders thinking?
Well, the first and most obvious answer, and the one accepted by most historians, is that they were trying to prevent the existence of a standing army during times of peace.
The Founders were scholars of classical history, and they knew that history teaches that when given too much power, armies, repeatedly and throughout history, would overthrow democracy and put in place a military dictatorship. There’s even a phrase to describe it: a military coup.
As James Madison told the Philadelphia Constitutional Convention in 1787,
“A standing military force… will not long be safe companions to liberty. The means of defense against foreign danger have been always the instruments of tyranny at home. Among the Romans it was a standing maxim to excite a war, whenever a revolt was apprehended. Throughout all Europe, the armies kept up under the pretext of defending, have enslaved the people.”
With this situation in mind, the Founders wrote the Second Amendment, which says that, “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”
The key word here is “Militia.”
At the time the Bill of Rights was written, America had no real professional army, and what military it did have was in the form of 13 separate state militias.
The Founders saw these militias as the best check against the rise of the standing army, and so they wrote the Second Amendment to make sure that they were always protected. But that’s only part of the story.
By protecting the militias, the Founders weren’t just preventing or trying to prevent the rise of mischief by a standing army; they were also protecting the institution of slavery that was the key to the southern economy. In states like Georgia, Virginia and the Carolinas, militias were also known as slave patrols.
And after the Constitution was written, southern slave-owners, led by Patrick Henry (Virginia’s biggest slave owner) started freaking out that their slaves could be constitutionally freed and then drafted by the federal government, which was given the power under Article 1, Section 8 to raise a national militia.
The slave-owners worried that this national militia would eventually be used by Northern anti-slavery types to destroy the slave patrols and maybe even the institution of slavery itself. So what did those slave-owners do?
They had the Founders write into the Second Amendment specific protections for slave patrols.
These protections aren’t obvious, but they’re there, and we know this because of the difference between James Madison’s original draft of the Second Amendment and the final version included in the Bill of Rights. Madison’s original version of the Second Amendment reads as follows:
“The right of the people to keep and bear arms shall not be infringed; a well armed, and well regulated militia being the best security of a free country: but no person religiously scrupulous of bearing arms, shall be compelled to render military service in person.”
This version of the Second Amendment didn’t fit well with slave-owners because it included words like “country,” words they felt could be used to justify the creation of a national militia that would include freed slaves—a backdoor way for a Northern president to free Southern slaves. And so Patrick Henry lobbied James Madison to rewrite the Second Amendment into the version we know today.
He spoke passionately at the Virginia Ratifying Convention:
“If the country be invaded, a state may go to war,” Henry said, “but cannot suppress [slave] insurrections [under this new Constitution]. If there should happen an insurrection of slaves, the country cannot be said to be invaded. They cannot, therefore, suppress it without the interposition of Congress … Congress, and Congress only [under this new Constitution], can call forth the militia.”
“In this state [of Virginia], there are two hundred and thirty-six thousand blacks, and there are many in several other states. But there are few or none in the Northern States … May Congress not say, that every black man must fight? Did we not see a little of this last war? We were not so hard pushed as to make emancipation general; but acts of Assembly passed that every slave who would go to the army should be free.”
As Michael R. Burch wrote, “Henry was obviously convinced that the power granted the federal government in the new Constitution could be used to strip the slave states of their slave control militias. He anticipated exactly what Abraham Lincoln would end up doing:
“‘They will search that paper [the Constitution],’ Henry said, ‘and see if they have power of manumission. And have they not, sir? Have they not power to provide for the general defence and welfare? May they not think that these call for the abolition of slavery?
“May they not pronounce all slaves free, and will they not be warranted by that power? This is no ambiguous implication or logical deduction. The paper speaks to the point: they have the power in clear, unequivocal terms, and will clearly and certainly exercise it. This [slavery] is a local matter, and I can see no propriety in subjecting it to Congress.’”
To satisfy Henry, James Madison changed the word “country” to the word “state,” a change Patrick Henry demanded to make it explicitly clear that the Constitution protected the state militia (aka slave patrol) in Virginia.
The big picture here isn’t a pretty one: The Second Amendment, which is now used by the weapons industry to justify selling weapons of war to civilians, was originally created, at least in part, to help preserve slavery in the South. You really couldn’t ask for a better metaphor for everything that’s challenging about America and its history.
But here’s the thing: we don’t need to be trapped by that history.
Ever since it was ratified, Americans have repeatedly changed parts of the Constitution that don’t match up with the times. We’ve changed electoral rules so that the person who comes in second place in a presidential race no longer becomes vice president, we’ve given women the right to vote; we’ve given black people full citizenship; we made alcohol illegal, and then re-amended the Constitution to make it legal. These are just a few examples of ways in which we’ve broken with our past and moved toward a better future.
It’s time we did the same with the Second Amendment.
At its best, the Second Amendment is an anachronism that’s no longer relevant in an era in which the United States has a standing army but remains a democracy. At its worst, it’s a tool for slave-owners that’s now being used by the weapons industry to prevent any and all sensible gun laws.
There’s only one way out of this mess: it’s time to repeal the Second Amendment.
Thom Hartmann is a talk-show host and author of over 25 books in print.
11 White Men Over 50 Who Have Committed Mass Murders in the Last Decade
The Las Vegas shooter was hardly the first, and he won’t be the last.
By Travis Gettys / Raw Story
A 64-year-old gunman killed scores and wounded more than 400 others during a country music concert in Las Vegas, but his age isn’t unusual for mass shooters.
Many commentators suggested the gunman, identified as Stephen Paddock, was an outlier among recent incidents due to his relative advanced age, but the mass shooter in popular imagination a generation ago was the “disgruntled” middle-aged worker.
The expression “going postal” entered the lexicon as shorthand for a series of incidents starting around 1986 where disgruntled U.S. Postal Service employees shot and killed colleagues and others.
But since the Columbine High School massacre in 1999, mass shooters are often perceived as younger — but that isn’t entirely accurate.
The typical mass shooter is a white man in his 30s or 40s, with the exception of school shooters, and most of them are single, separated or divorced.
That profile describes one of the earliest U.S. mass shooters, 41-year-old James Huberty, who killed 20 people and wounded 20 more at a McDonalds restaurant July 18, 1984, in San Ysidrio, California.
But it’s not uncommon for shooters to be older than 50, based on an analysis of the mass shootings over the past decade.
- James Hodgkinson, a 66-year-old Bernie Sanders fan, opened fire in June on Republican lawmakers at a congressional baseball game practice, where he wounded GOP whip Steve Scalise, Rep. Roger Williams (R-TX) and three others.
- Getachew Fekede, 53, a Kenyan refugee and former employee of FreightCar America killed one worker and wounded three others Oct. 25, 2016, at the company’s building in Roanoke, Virginia.
- Robert Lewis Dear, Jr., was 57 when he allegedly killed three people and wounded nine others Nov. 27, 2015, at a Colorado Springs Planned Parenthood clinic.
- He was reportedly an admirer of Paul Hill, who was nearly 50 when he gunned down an abortion provider and the physician’s bodyguard July 29, 1994, in Pensacola, Florida.
- John Houser, a 59-year-old Tea Party activist, opened fire July 24, 2015, at a showing of the movie “Trainwreck” at a Lafayette, Louisiana, theater, killing two people and wounding nine others before fatally shooting himself.
- Rockne Newell, 59, went on a shooting rampage Aug. 5, 2013, at a Ross Township, Pennsylvania, public meeting, where he killed three and wounded three others as part of a longtime property dispute with township officials.
- William Spengler, 62, deliberately set fire to his Webster, New York, home on Christmas Eve 2012 after killing his sister, and he then shot and killed two firefighters who responded and wounded two others.
- Michael Hance, 51, hunted down and fatally shot seven neighbors and wounded his longtime girlfriend Aug. 7, 2011, during a 10-minute rampage in Copley Township, Ohio.
- Timothy Hendron, 51, killed three coworkers and injured five others Jan. 7, 2010, at ABB power plant in St. Louis, Missouri.
- Jesse Warren, 53, killed four people and wounded one other Jan. 12, 2010, at Penske Truck Rental in Kennesaw, Georgia, after he was fired over his delusional belief that the company was stealing from him.
- Charles “Cookie” Thornton, 52, the only black gunman on the list, went on a shooting rampage Feb. 7, 2008, at Kirkwood, Missouri, City Council meeting, where he killed a councilwoman, two police officers and two other people.
- Jim Adkinsson, 58, fired a shotgun July 27, 2008, during a youth performance at Tennessee Valley Unitarian Universalist Church in Knoxville, where he killed two and wounded seven others in a politically motivated attack against liberals and Democrats.
Travis Gettys is an editor for Raw Story.
We Need More Than ‘Thoughts and Prayers’ After Las Vegas
Don’t mistake grating cliches for genuine compassion.
By Joe Conason / AlterNet
Whenever someone commits a heinous gun crime like the massacre in Las Vegas, politicians swiftly assure us that the victims and their families are in their “thoughts and prayers.” What these mush-mouthed messages mean, in plain English, is that government, as embodied by those politicians, will do nothing to make the country safer from gun violence.
Thoughts and prayers are all we’re going to get.
These same elected officials are almost always poised to rubber-stamp statutes that will make us less safe, such as congressional Republicans’ upcoming proposals to deregulate silencers and expand concealed-carry rights. The Vegas shooter got nearly two-dozen weapons into his hotel room at Mandalay Bay, but our brilliant legislators believe it’s still too difficult to transport weapons of mass murder.
That killer in Vegas could have mowed down dozens more innocent people, if only he could have put a suppressor on his weapon, preventing anyone from seeing the muzzle flash up on the 32nd floor.
So when they tell us we are all in their thoughts and prayers, don’t mistake that grating cliche for genuine compassion. In thrall to the National Rifle Association, as so many legislators are, they are ensuring that more of us—and yes, our families—will suffer violent deaths. The NRA compensates them lavishly to betray us. The last time Senate Majority Leader Mitch McConnell ran for re-election, the gun lobby, which represents firearms manufacturers far more faithfully than ordinary gun owners, gave him almost a million dollars.
With 58 dead so far and hundreds wounded, the Vegas shooting is reportedly the worst in U.S. history, breaking the record set in 2016 at Orlando’s Pulse nightclub. This year alone, America has endured 273 incidents of mass shootings, adding to the list of thousands of slaughters over the past 10 years.
Such phenomenally destructive acts, even as they become more commonplace, shouldn’t make us forget the toll that daily gun violence inflicts on the innocent. Every year, more than 110,000 Americans are shot and more than 20,000 Americans kill themselves with a gun. American women are far more likely to be killed with a gun than women in other advanced countries.
Yet so powerful is the dictatorship of the gun-makers and their servants in the NRA that anyone who dares to mention gun regulation, even in the aftermath of a bloodbath, is castigated for “politicizing” tragedy. In a democracy, this taboo amounts to moral idiocy, enforced even by the “liberal media.” The cable news and broadcast commentators praised Donald Trump’s meaningless statement about Las Vegas as “pitch perfect” precisely because he didn’t mention guns. Of course, Trump knows very well that the NRA spent millions on his election, so the “carnage” that they encourage is perfectly acceptable to him.
Except it is neither acceptable nor inevitable, as the dimmer media bulbs always suggest at these moments. The simple truth is that states with stronger gun regulation are safer than those without similar laws, even though gun traffickers can and do cross state lines. And states with weaker gun regulation—like Nevada, where certain kinds of machine guns are legal, where no permit is required to purchase a firearm, and where Republican Governor Brian Sandoval vetoed universal background checks—are considerably less safe. (Naturally, Sandoval offered his “prayers” for “the victims & all affected by this act of cowardice” in a cheap tweet.)
With murderous neo-Nazis, ISIS-inspired fanatics and assorted other lunatics at large, we need to make it far more difficult to obtain the semi-automatic weapons that can be converted into fully automated killing machines. Instead, as many law enforcement officials worry, our political paralysis enables terrorists of any stripe to acquire as many weapons as they want.
Someday, even the dullest commentators may understand that politicizing urgent public issues is essential to a democratic society. Someday, even the stupidest voters may come to realize that the proliferation of weapons doesn’t protect them or their families, but only increases the likelihood that a maniac will take the lives of their loved ones. Someday, even the most blind and venal politicians may stop tweeting out rote condolences, and take action to end the madness.
Before that day arrives, hundreds and thousands more will surely die.
To find out more about Joe Conason and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
Charles Blow: Trump Is Following a Sinister Playbook from the 1960s
The president’s attacks on Puerto Rico’s mayor and NFL protesters are all too familiar.
By Ilana Novick / AlterNet
Nine months into the Trump administration, pundits and other deluded Americans are still pretending the president is playing 12-dimensional chess—that there is a larger, strategic purpose to his random outbursts and his response to tragic events. Charles Blow is one of the few columnists who has never had any patience for this idea. Not in January, and certainly not in October.
As Blow writes in his Monday column, about Trump’s response to the devastating impact of Hurricane Maria in Puerto Rico, and the NFL players protesting institutional racism, “His responses depend solely on whether he, as a person, and his family empire, are being complimented or criticized.”
This behavior is particularly evident when the president feels threatened or vulnerable. Last week, following his failure to repeal the Affordable Care Act or drum up much in the way of support for his chosen candidate in the Alabama Republican primary, Trump knew he needed to change the narrative. So he took time out from a rally for Luther Strange to rail against NFL players who dared to use their fame and influence to protest racial injustice. His screed got people talking and arguing. As Blow points out, it was about something other than the failures of his presidency.
It was, Blow writes, “all over TV, Trump’s gauge of all things good.” Trump saw it as a win, and polling backed him up: “A CNN/SSRS poll released Friday found that about half of respondents overall and nearly nine in 10 Republicans believed that ‘protesting players are doing the wrong thing to express their political opinion when they kneel during the national anthem.’”
Blow is quick to remind readers that the Freedom Riders weren’t exactly winning popularity contests at the beginning of the civil rights movement. “If a majority agreed with a protest,” he writes, “it would partially negate the need to protest, and second, majorities are not the measure of what is moral.”
Since his “divide and divert” strategy worked so well last week, Trump has decided to employ it against the mayor of San Juan for daring to suggest the federal government’s response to Hurricane Maria has been inadequate. Trump unleashed his Twitter wrath on Carmen Yulín Cruz, using his favorite insult for women (nasty), and ranting about her supposed ungratefulness. Blow knows what he really intended: “blame the victim and berate them as a group: These brown people want/need help, but won’t/can’t help themselves because their community/culture is inferior/ineffective.”
The idea that marginalized groups in America should be grateful is as old as America itself, and was frequently employed against the civil rights heroes of the ’60s. That Trump can divide Americans so easily is more proof that the country clings to these racist falsehoods. And Blow isn’t hopeful this will change any time soon.
“It’s as if Donald Trump has strolled into the political equivalent of a hospice for racist ideologies with a miracle elixir,” he concludes. “Ideas we had hoped were near death have a new verve and vigor.”
Ilana Novick is an AlterNet contributing writer and production editor.
3 Greedy Ways Corporations Are Cheating America
While the middle class bought the work-ethic fairy tales, corporations reaped the benefits of tax cuts.
By Paul Buchheit / AlterNet
Corporate cheating goes well beyond federal tax reporting, as big companies have used various forms of deception to keep taking from America, especially with a complicit corporate media unwilling to report the facts about their behavior.
1. Give Us Your Technology, Infrastructure, Security, Patent Law…But Sorry, Our Profits Were Made in Another Country
Microsoft: Rediscovering its soul while skipping out on its taxes.
Microsoft CEO Satya Nadella writes about the “Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone,” and the company’s commitment to “humans and the unique quality we call empathy.”
The empathy apparently doesn’t apply to the Americans who rely on tax dollars to support basic needs. Microsoft made over half its 2017 revenue in the U.S., and it has 57 percent of its long-lived assets in our country. Yet for 2016 it claimed a loss in the U.S. and a $20 billion profit in other countries. Microsoft goes on to tell its shareholders, “As of June 30, 2017, $127.9 billion was held by our foreign subsidiaries and would be subject to material repatriation tax effects.”
Few other companies have benefited as much as Microsoft from 75 years of technological research and development in the United States. But the company refuses to own up to its tax responsibility and its social responsibility.
Caterpillar: Blaming everyone else while skipping out on its taxes.
Former Caterpillar CEO Doug Oberhelman said, “Legislators in Illinois have created an environment that is unfriendly to business and investment.”
But friendly enough to tolerate Caterpillar’s blatant U.S. tax avoidance. The heavy equipment company has 56 percent of its property, plants and equipment in the U.S., along with over 40 percent of its sales and 43 percent of its employees. But in 2016 it claimed a loss of over $2 billion in the U.S. and a profit of over $2 billion overseas. It took tax credits at both the federal and state levels.
Despite being under investigation by the IRS for overseas tax fraud, Caterpillar’s annual report includes a “Worldwide Code of Conduct,” which boasts about the company’s “high standard for honesty and ethical behavior by every employee, including the principal executive officer, principal financial officer, controller and principal accounting officer.”
Apparently the company’s tax department is exempt from the code.
Other Notable Profit Shifters
Exxon has over half of its natural gas facilities, half its developed acreage, the great majority of its productive and development wells, and half its retail sites in the U.S. but declared $5.8 billion in U.S. losses along with $13.8 billion in foreign profits in 2016. Exxon claimed a credit on its U.S. income tax.
Pfizer CEO Ian Read complained that U.S. taxes had his company fighting “with one hand tied behind our back.” The other hand must be fudging the books. Pfizer had half of its sales in the U.S. in 2016, yet claimed an $8.5 billion loss in the U.S. along with nearly $17 billion in foreign profits. Pfizer paid just 4 percent of its total income on U.S. taxes in 2016, and was one of the nine pharmaceutical companies among the top 30 Fortune 500 firms in offshore tax hoarding.
Dow Chemical had 63 percent of its assets and 35 percent of its sales in the U.S. in 2016, but declared almost 90 percent of its income in other countries.
Abbott reported 40 percent of its revenues in the U.S., but just 7 percent of its profits.
Amgen reported 78 percent of its revenues in the U.S., but just 38 percent of its profits.
The deceit gets even worse with another form of “profit shifting,” by which understated U.S. profits may be understated even more. Some of the profits reported to shareholders as U.S.-earned may be reported to the IRS as foreign-earned. The result is that profits allegedly earned in foreign countries are held indefinitely overseas, with all taxes deferred. S&P 500 companies—including Apple, Microsoft and Pfizer—have stashed away $2.3 trillion, which represents a loss to America of over $800 billion in tax revenue. Apple itself has moved about two-thirds of its worldwide profits to Ireland, waiting perhaps, for a minimal-tax repatriation deal.
Again the deceit worsens, as tax policy experts note that this tax-deferred hoard of money can be put to use in the U.S. even as it’s being withheld from the U.S., through the purchase of Treasury bonds or stock in other companies.
2. Pass Around the State Tax Deals…You Take This Governor, I’ll Take That One
Amazon is the most recent example of this phenomenon, as Chicago, Minneapolis, Nashville, Cincinnati, Indianapolis and a slew of other contenders are tripping over each other to give tax breaks to the company, to subsidize a warehouse that they would need to build anyway.
Big companies are playing one state government against another, looking for the best tax deal while the rest of us have to make up the lost tax revenue. The Institute on Taxation and Economic Policy (ITEP) and Good Jobs First have done comprehensive studies of the farcical practices.
The worst offenders are the richest corporations, which entice dazzled state officials with promises of jobs. Google, Microsoft, Amazon, Apple and Facebook are together making well over $100 billion a year in pre-tax profits, yet demanded state subsidies to build new data centers. Apple is getting over $200 million from Iowa; Amazon took tens of millions from Illinois and Kentucky; iPhone maker Foxconn negotiated for tax credits from Wisconsin that could amount to $500,000 per job.
The very worst may be Boeing, with more state subsidies than any other company, and which took billions from the state of Washington and then moved to Illinois, where it has become the state’s biggest tax avoider.
Then there’s GE in Massachusetts; Exxon in Texas; Disney’s luxury hotel in California; Chiquita playing off Ohio and North Carolina; Panasonic and Pearson doing the same in New Jersey; Aetna getting $34 million from New York for just 250 jobs; economic incentives from Indiana to keep Carrier from moving to Mexico; and the state of Michigan offering tax breaks to anyone who brings in jobs.
3. To Hell With American Jobs…Just Make Our Stocks Go Up
Forbes calls stock buybacks “fool’s gold,” because they temporarily make a business look good by boosting stock prices, while at the same time resulting in cutbacks in hiring and R&D.
Buybacks were once illegal. But from 2003 to 2012, S&P companies spent over 90 percent of their profits on buybacks and dividends. In 2016, 119 companies in the S&P 500 spent more on buybacks than they generated in earnings. In the future, the threat of corporate tax cuts is likely to accelerate the buyback frenzy. A Goldman Sachs analyst predicted that S&P 500 companies will have spent $780 billion on buybacks by the end of 2017.
All the big companies—technology, pharmaceutical, oil, chemical, agriculture, finance—owe their great profit-making success not so much to individual, self-made, “start with nothing” innovation and entrepreneurship, but rather to the taxpayer-funded research and development that built the foundations for these industries while the middle class trusted in the American work ethic. Now the middle-income jobs are going away, leaving underpaid service-oriented jobs. The tax money withheld by the big corporations is desperately needed to restore living-wage opportunities to millions of workers. Yet these companies refuse to pay for all the benefits they’ve happily taken over the years.
Paul Buchheit is the author of “Disposable Americans” (2017). He is an advocate for social and economic justice. His essays, videos, and poems can be found at YouDeserveFacts.org.
Leaked Memo Reveals White House Strategy to Duck Blame for Puerto Rico Catastrophe
The administration mapped out its “hit” on San Juan Mayor Carmen Yulín Cruz.
By David Ferguson / Raw Story
A memo leaked on Sunday and published by Axios.com reveals that President Donald Trump’s administration is aggressively trying to shift the blame for its dismal response to Hurricane Maria and to carry out “planned hits” against the president’s critics.
Trump’s top Homeland Security advisor Tom Bossert authored the memo, which detailed the administration’s plans to “start a theme of recovery planning for the bright future that lies ahead for Puerto Rico. Planned hits, tweets, tv bookings and other work will limit the need for reactionary efforts.”
He continued by insisting that the Trump administration is not to blame for the fact that relief efforts did not begin in earnest until nearly a week after Hurricane Maria devastated the island.
“The storm caused these problems, not our response to it. We have pushed about as much stuff and people through a tiny hole in as short a timeframe as possible,” he wrote.
The administration’s enablers at Fox News set out early Sunday to carry out its “hit” on San Juan Mayor Carmen Yulín Cruz, calling her a “far left” radical and complaining that commentator Geraldo Rivera and his camera crew did not actually witness people dying in the streets.
Other administration officials have sought to smear Cruz by saying she has been uncooperative with FEMA and not attended its strategy sessions, but Cruz’s office said that it has sent representatives to all meetings and has been more than cooperative with the bumbling, bureaucratically hamstrung federal relief effort.
The Trump administration went into a full court press on Sunday to congratulate itself on what an excellent job it has done in Puerto Rico, but on Sunday night, the Pentagon pricked the White House’s bubble with an urgent bulletin that half the people in the U.S. territory are still without access to clean water and the situation is steadily worsening.
Robert Reich: The Irrelevance of President Trump
When it comes to the work of governing America, Trump is becoming irrelevant.
Announcement: Donald Trump is no longer the president of the United States.
Oh sure, he has the title and he has the bully pulpit – from which he’s bullying everyone from NBA players to people protesting white supremacists to DACA kids.
But he’s not actively governing the United States. That work is happening elsewhere – in Congress, the courts, the Fed, the career civil service, lobbyists, and in the states. Or it’s not happening at all.
It’s not just that Trump lost the epic battle to repeal and replace the Affordable Care Act. Trump never understood the Affordable Care Act to begin with, and played no part in developing Republican alternatives.
The budget Trump submitted to Congress in March was dead on arrival. House Republicans ignored Trump’s request for $54 billion in cuts to departments and agencies and decided instead to cut non-defense spending by just $5 billion, and explode the defense budget.
The 9-page tax plan congressional Republicans and Trump unveiled last week only vaguely resembles Trump’s original tax proposal from April, and all the important decisions have been left to the tax-writing committees of Congress.
Trump’s relations with Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan have become so strained they have no interest in looping him into policies before they have to.
Meanwhile, Trump has run out of Obama executive orders he can declare void. Major regulations, such as the EPA’s Clean Power Plan, can’t just be repealed. They have to go through a legal process that could take years.
Trump doesn’t seem to be aware of this. He told a cheering crowd in Alabama recently that he had ended the Clean Power Plan by executive order. “Did you see what I did to that? Boom, gone.”
Nope. The EPA will soon reveal its strategy for reversing the Plan, but whatever it is, environmental groups are almost certain to appeal it in the courts. Big businesses and utilities, fearing that the courts may rule against the administration, are lobbying the EPA to come up with a replacement rather than try to eliminate the Plan altogether.
Although General John Kelly has reduced White House chaos somewhat, the firings and shakeups are unremitting.
Trump’s Cabinet secretaries don’t seem to have a clue. Education Secretary Betsy DeVos still wants to spend taxpayer money on for-profit schools and colleges that cheat their students. Won’t happen. The EPA’s Scott Pruitt is trying to strip the agency of scientists. Another brainless scheme.
Treasury Secretary Steve Mnuchin still has no idea how to deal with Congress. He tried to persuade Republican House members to support Trump’s budget deal with the Democrats by asking them to do it “for me.”
Health and Human Service Secretary Tom Price wasn’t fired for his ethical breaches. If ethics were the criteria, most of the Trump administration would be gone. Price broke Trump’s cardinal rule, which was never to get bad headlines for Trump.
Top echelons of departments and agencies are still empty. Trump has said “in many cases, we don’t want to fill those jobs,” which means decisions are being made by career civil servants and industry lobbyists.
By the start of September, more than a third of the leadership positions at the Federal Emergency Management Agency were still vacant. Not a good way to begin hurricane season. Puerto Rico, anyone?
As of mid-September, out of 599 key government positions that require Senate confirmation, Trump had made only 159 nominations, according to The Washington Post. Trump had yet to submit nominations for 320 positions.
Trump’s political clout is waning among Republicans. He couldn’t even get his pick elected to a Senate primary in Alabama, a state bulging with Trump voters.
Business leaders have deserted him over his remarks over Charlottesville. NFL owners have turned on him over his remarks about players. Tom Brady, who once called Trump “a good friend,” now calls him “divisive” and “wrong.”
Don’t get me wrong. Trump is still a dangerous showman and conman – tweeting condemnations of critics and ranting before friendly crowds at his never-ending campaign rallies. He continues to fuel bigotry and meanness. He has reduced America’s standing in the world. His outbursts could start a nuclear war.
But when it comes to the actual work of governing America, Trump is becoming utterly and completely irrelevant.
Robert Reich is the nation’s 22nd Secretary of Labor and a professor at the University of California at Berkeley.
Information provided by AlterNet.