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Today in Gall

[ 29 ] August 6, 2014 |

The oil industry might admit that climate change is happening but it, along with coal, is more responsible than anyone for making sure that the U.S. does nothing about it. So I really love it that oil refineries are now asking for government bailouts.

An oil refinery in Delaware is asking taxpayers to pay for protecting it from rising sea levels. The refinery is on the waterfront, and rising tides and extreme storms could threaten it. The federal Coastal Zone Management Act provides grants to states for projects such as building out natural barriers, like dunes, to protect against storm surges. Delaware has such a program in place. And now the oil refinery, after contributing to climate change for more than 50 years , is coming with its hand out. Amy Roe, conservation chair of the Sierra Club’s Delaware chapter, writes:

In Delaware, severe storms are eroding the shoreline and affecting homes and businesses up and down the coast — including the business of an oil refinery. The functioning of the Delaware City Refining Company property just south of New Castle, a division of PBF Energy, is threatened by increasing extreme weather. In other words, climate disruption is hitting the doorstep of its source.

The refinery has tried to get help, submitting an application with the Coastal Zone Management Act seeking shoreline protections due to “tidal encroachment” — which is one way of saying sea level rise.

“The extent of the shoreline erosion has reached a point where facility infrastructure is at risk,” says the permit application from the company.

Roe goes on to argue that this facility is a particularly bad actor even by the standards of oil refineries since it is refining dirty tar sands oil. Moreover, its proposal could direct more storm surges toward Delaware City, the adjacent town.

That is impressive. And typical. But hey, I’m sure this refinery has always paid its fair share in taxes, so it’s about time it got some of its money back, amiright?


Which Side Am I On? When it Comes to American Labor Unions, the Side of American Workers

[ 55 ] August 6, 2014 |

Andrew Ross’ position in this debate at Truthout over Israel and Palestine bothered me because he calls for the American labor movement to support the BDS movement. Although I personally support BDS, I don’t see why American labor would do that. How would this benefit American workers? What possible upside is there here? Who would make such a decision? Would it be democratic or would it be a top-down decision made by the big union bureaucrats the left loves to hate? Because when it comes to foreign policy and organized labor, the left does seem to be interested in a top down approach to these problems. Well, either that or this debate is existing in a fairyland that believes American workers would care enough about the issue and then vote or otherwise democratically decide to take a position on a foreign policy question that does not concern their lives specifically–and that those workers would take the left-wing position on that foreign policy question.

In other words, this is the kind of the debate that a place like Truthout loves (and that’s fine) but which doesn’t have any real resonance for American workers as they exist in the real world.

There is a weird relationship between the left and organized labor on foreign policy. We all know how horrible the AFL-CIO was in the Cold War, supporting right-wing coups, serving as willing dupes of the CIA, etc. It’s an awful and inexcusable history. I think there is also absolutely no question that to extent that American rank and file workers had opinions on these issues, the overwhelming majority were anti-communist and would have fully supported its leaders in fighting communism. But left more unquestioned is why American labor should have a foreign policy on issues outside of those affecting workers overseas. When, broadly conceived, there are lots of workers in both Israel and Palestine, it’s unclear what the point of getting involved would be. Justice, you say. But is worldwide justice on all issues in fact the point of the labor movement?

In the end, the left wants organized labor to be the IWW. But while the Wobblies were very good at international solidarity, they not only had very little ability to mobilize American workers on these questions, but these positions were largely held by even a small number of Wobblies–its small leadership class, some of its east coast unions, and the hard-core syndicalists. Even for the IWW, the majority of its rank and file members ranged from not caring to being quite pro-patriotism on foreign policy issues, at least in my reading of the union’s history and exploring the relationship between committed Wobblies who wrote in Industrial Worker and people who joined up because it gave them some hope to improve their lives.

If the left critiques organized labor as having a bad foreign policy, in the past if not in the present, the other major critique is that unions are undemocratic and that this lack of democracy is a major reason for the decline of the labor movement. While I agree that there isn’t a lot of democratic decision making in many unions, I rather strongly disagree that it is why labor is struggling today (the structural changes of automation, globalization, capital mobility, and the organized business lobby are far more important). I think a real problem a lot of leftists have in conceptualizing labor is that they assume democracy=the position in which they believe. But of course, democratic decision making in labor unions in the last 50 years would have meant (and often did mean) racial segregation. It meant gender discrimination. It meant hating environmentalists who were not at fault for workers’ lost jobs. It also meant a Cold War foreign policy. And today, it would probably mean supporting Israel, not Palestine. And if Ross and others want the AFL-CIO leadership to make bold pronouncements on these issues, I do think they have to reconcile it with whether such a decision would represent the rank and file in any meaningful way.

Personally, I don’t think American labor has too much business getting involved in these questions, especially given the dire situation it finds itself in. Yes, taking more positions on international issues that aren’t directly related to its own interests but that are just might endear it to the left, but that’s a very small number of people and it always was. When the communists ran the International Woodworkers of America in the late 1930s, the newspaper ran tons of stories on the Spanish Civil War and other anti-fascist stories. The newspaper focusing on this stuff instead of the actual organizing of Northwestern loggers was a powerful tool in the hands of the anti-communists, who eventually won control of the union with the assistance of John L. Lewis and his lieutenant Adolph Gerner. But that battle wasn’t just top down. It was basically the entire rank and file in Oregon revolting against the communists near the Canadian border. It does not help us understand the labor movement to assume the rank and file always wanted to move to the left and the big bad leadership wanted to move to the right. Often, it was the opposite of that. I’m not confident the situation would be any more favorable to the left with the American rank and file today.

This is probably too long of a post for a relatively minor article, but I think the point is important. Promoting American labor taking controversial foreign policy stances is probably pretty undemocratic and doesn’t help American unions organize workers or represent the ones they have under contract. If American unions do want to take this issue on, then they should go for it, but I don’t see much evidence that it would be on the side of Palestine and if it wasn’t, it’s far too easy to just dismiss this as another example of the legacy of the Cold War. Because again, I’m not seeing a rank and file clamor for American labor to expend political capital support Palestine.

Unpaid Internships

[ 25 ] August 5, 2014 |

The more unpaid interns who sue profitable companies taking advantage of the system to exploit labor without paying them, the sooner this system of exploitation will end.


[ 15 ] August 5, 2014 |

While I’m not at all questioning the terrible state of infrastructure in the Philippines and how it costs the nation much productivity and thus money, but it’s worth noting that the decaying infrastructure of the United States is also costing us a lot of money, whether it be the horrific traffic of I-35 in Austin where the city grew far faster than the road system could handle or people dying in Minnesota bridge collapses, or busted water pipes at UCLA destroying the floor at Pauley Pavilion.

A big public works program would be a great investment in our future, like it was for Americans in the mid-twentieth century but of course it isn’t going to happen.


[ 35 ] August 5, 2014 |

Michael Hiltzik on one of the most insidious American corporate activities of the New Gilded Age–moving their official operations abroad to nations with lower corporate tax rates while keeping all actual operations in the U.S. This is called an inversion and it is nothing more than rich people stealing money from the federal government.

Here, for example, is Heather Bresch, chief executive of the generic drug maker Mylan (and daughter of Sen. Joe Manchin III (D-W.V.), telling the New York Times, “You can’t maintain competitiveness by staying at a competitive disadvantage. I mean you just can’t.” The credulous Times quotes her as saying she entered into her inversion deal (by acquiring a European firm and moving the tax base to Holland) “reluctantly, and she genuinely seems to mean it.”

Uh-huh. Is Mylan uncompetitive? Over the last two years its sales have increased 12.7% and profits 16%; among its big competitors paying putatively lower taxes, British-based GlaxoSmithKline gained 3.14% in sales and 11.23% in profits, and Israel-based Teva’s sales gained 11% and its profits declined 54%. Israel’s top corporate tax rate is 26.5%, the equivalent top U.S. federal rate is 35%.

The use of inversions to avoid U.S. corporate taxes has moved onto the front burner in Washington in recent months. The wave seems to be picking up, and some of the candidates are very high-profile, including Walgreens and Pfizer. The Congressional Research Service recently identified 47 such deals in the last decade, many of them in the pharmaceutical industry. In the previous 20 years there were only 29. Conservatives use the trend as an argument for cutting or eliminating the U.S. corporate tax: If ours were as low as those of other countries, no one would have to flee, they say.

Well, we all know how impoverished the pharmaceutical industry is so one can understand why these 99%ers would make such a move. President Obama is trying to crack down on this. There is much that could be done, including creating separate and very high tax brackets for executives living in the United States or with American citizenship that hold stock or executive positions in companies that engage in such practices. You don’t have to take radical action. You just have to hit the executives where it hurts–their own personal pocketbooks and pride. Of course, that doesn’t mean it’s easy to do in this political climate.

Here is another, and probably more realistic, set of solutions:

Kleinbard proposes a three-pronged approach. First is to close a loophole allowing an American firm to declare itself foreign-owned if at least 20% of its post-merger shareholders are foreign. The threshold should be 50%, which would require inversions to be genuine foreign acquisitions. This would put the kibosh on many, if not most, pending deals. This change has been proposed by the Obama administration and introduced in Congress by Rep. Sander M. Levin (D-Mich.).

Kleinbard also advocates tightening up rules against earnings-stripping, largely by lowering the limit on how heavily a company can saddle its U.S. operations with debt. Finally, he suggests ending “hopscotch” maneuvers, through which an inverted company bypasses U.S. tax rules by advancing its offshore cash stockpile directly to the new foreign company.

The appeal to corporate morality is eye-catching enough. But rhetoric like this has limited effectiveness. The proper way to deal with corporate immorality is to wipe it out through the law.

“There is a breach of moral obligation and fiduciary duty here,” Kleinbard says. “The moral failing is the refusal of Congress to do the most fundamental kind of loophole-closing.”

In other words, the most effective comeback to “it’s legal” is this: “It was legal. But not anymore.”


[ 61 ] August 4, 2014 |

At the same time that U.S. courts are limiting the ability of foreign citizens to sue American corporations for their malfeasance abroad, they are facilitating U.S. banking companies to collect debts from poor developing world nations, as Saskia Sassen explores. Elliott Associates essentially goes after poor nations and their debt, taking a no holds barred approach to collect that debt with no concern for long term economic growth in those countries, the poverty it creates, or international relations. Essentially, Elliott Associates is capitalism at its purest and least acceptable, a system that exists only for shareholders and to hell with the rest of the world. Obviously, this should be stopped and Elliott Associates’ assets expropriated and returned to the nations it has devoured.

Given all this, it makes sense that Argentina would just default on its debt. Good move.

Okay, that’s not entirely fair. After all, it’s been 13 years since the last time it did. That’s not bad for Argentina, which has now defaulted eight times in its 200-year history. But this latest one was certainly its strangest. Argentina didn’t default because it couldn’t pay its bondholders. It defaulted because a New York judge wouldn’t let it pay its bondholders—not unless it also paid the hedge funds that were holding out for a better deal on its old defaulted debt.

That’s where Elliott Associates comes in. I hope the company never receives a peso.

The Trip North

[ 15 ] August 4, 2014 |

Alfredo Corchado has a powerful story of the plight of Central American migrants trying to move through Mexico to get to the United States. Heartbreaking stories about people we should be welcoming into the United States.

The Wages of the Industrial Food System

[ 11 ] August 4, 2014 |

The obscene use of fertilizer and chemicals leads to algae blooms that make the water supply of Toledo undrinkable. The problem is exacerbated by the non-native zebra mussels that eliminate animals that eat the algae to create a perfect storm of 21st century environmental disaster.


[ 88 ] August 3, 2014 |

When Republicans want to send children back to Central America, this is the horror they want to send them back to. In the 2010s, we often look at U.S. immigration policy toward Jews in 1930s Germany, refusing to allow them in even though it was clear their lives were on the line, as an immoral and horrible period in American history defined by racism and fear of a people not like “us.” I don’t see much difference between that and not allowing children to escape rape and murder in Central America because they are brown and speak Spanish and don’t have proper papers.

How Republican Judges Are Facilitating Corporate Exploitation Abroad

[ 27 ] August 3, 2014 |

Right-wing judges have consistently narrowed the use of American courts in recent years to crack down on corporations who engage in extremely egregious behavior abroad that violates human rights. Such is the case in the recent decision by a Reagan-appointed judge to throw out a lawsuit against Chiquita (formerly United Fruit) for paying Colombian paramilitary organizations. The company claims it was extorted by the paramilitaries, the Colombian people behind the lawsuit hold Chiquita responsible for the at least some of the deaths caused by the paramilitaries. In any case, it is quite clear that Chiquita knew it was violating U.S. anti-terrorism statutes in making these payments and didn’t care, which certainly makes one suspicious of its claims throughout not the case (not to mention its own history in violating the civil rights of millions of Latin American citizens over the decades).

The same principle of right-wing judges shielding American corporations from the consequences of their actions abroad also then applies to the violation of labor rights and environmental degradation. The American court system could and should be used to hold these corporations responsible for their global behavior, but for the judges of a political party that doesn’t want corporations held responsible for the domestic behavior, obviously that’s a non-starter, allowing the Thomas-Alito views to win.

Today in Rich Liberal NIMBY Hypocrisy

[ 79 ] August 3, 2014 |

Shorter residents of luxury Brooklyn Heights condos: “We love the idea of affordable housing, but if it affects our view, send them to Newark.

A Sunday Morning Quiz

[ 103 ] August 3, 2014 |

From the Ladies Home Journal, May 1957:


After taking this quiz, act appropriately. Whatever that may be.

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