Jim Hightower's Common-Sense Commentaries

MADOFF IS NOT THE PROBLEM

sitehelp AT jimhightower DOT com (Jim Hightower) — Thu, 09 Jul 2009 00:00:00 -0700

Well, they sure nailed Bernie Madoff, didn't they?

The 71-year-old Ponzi schemer was sentenced to 65 years in the federal pokey for fraud, 50 years for money laundering, 20 years for filing false reports, and 5 years each for false statements, perjury, and theft. He'll be 221 years old when he gets out.

Madoff was a crook on an almost-unimaginable scale, having run the largest, longest, most widespread Ponzi scheme in history. He bilked some $80 billion from tens of thousands of victims. His fraud wiped out the life savings of hundreds of small investors. Meanwhile, he was living the high-life of Wall Street elites, including owning a $7-million New York penthouse, yachts, and a French villa.

So Bernie's gone, and that's that. Only, it isn't. Madoff was not just some rogue financial slick who worked the dark corners of the system. He was the penultimate system insider who brazenly committed his gigantic fraud in broad daylight. Wall Street's other barons lionized his acumen and Washington officials not only saluted his integrity, but actually sought out his advice on relaxing regulatory policies. He is the product of an era of financial excess and laissez-faire foolishness. He didn't scam the system – the system is a scam, and he merely rode it further than most.

Putting Bernie away for a century-and-a-half (a sentence three times longer than even the prosecutors sought) takes care of him, but not the system. The phony swirl of Wall Street's swaps and derivatives, the job-busting deals of hedge funds, the government's weak and meek regulatory structure, and the culture of excess that allowed Madoff to flourish – all of this continues.

It's not the occasional outlaw that's the problem, but the in-laws – those who rig the system for their gain, at our expense.

CORPORATE CONTROL OF FOOD SAFETY INSPECTIONS

sitehelp AT jimhightower DOT com (Jim Hightower) — Thu, 09 Jul 2009 00:00:00 -0700

E. coli 0157: H7 sounds like a character in an international spy thriller. And, in fact, 0157: H7 is an assassin, a deadly serial killer that takes out over sixty Americans every year.

What we have here is a vicious bacteria, and it has spread all across the country as our food supply has become industrialized, conglomeratized, and globalized. It's a sneaky assassin, coming at us in the form of contaminated hamburgers, peanuts, spinach, orange juice... and, now, cookie dough. Yes, death by cookie.

In June, a 29-state outbreak of E. coli was traced to a Virginia food plant owned by Nestlé, the Swiss-based food giant. The particular perpetrator is Nestlé's very popular, refrigerated Toll House cookie dough. It's like being poisoned by someone you love.

The Food and Drug Administration is investigating the mystery of how E. coli get into chocolate chip cookie dough, and they don't yet have an answer. But the incident has uncovered a silent accomplice in E. coli's poisonous rampage: our food safety laws.

Rules supposedly meant to protect consumers have been perverted to protect the big manufacturers. FDA does send inspectors into these food plants, but – get this – the corporations can dictate what our inspectors can and cannot look at. It turns out that Nestlé has been less than cooperative, refusing to allow FDA inspectors to review consumer complaints and to inspect the company's program for preventing food contamination. It has also denied access to pest-control records and refused to let inspectors photograph any part of the plant.

E. coli has come into our food supply because corporate profiteers are taking dangerous shortcuts on sanitation. That's bad, but it is unconscionable that our elected officials have also allowed the profiteers to control our food safety inspection system.

BANKERS BEHAVING BADLY

sitehelp AT jimhightower DOT com (Jim Hightower) — Wed, 08 Jul 2009 00:00:00 -0700

What is it that makes bankers behave badly? Is it genetics? Or is it just that no one ever taught them the golden rule?

You'd think that, these days, top Wall Street bankers would want to make nice with us. After all, their greed-fueled financial gimmickery wrecked our economy. Then, despite that bad behavior, we commoners have put up $12 trillion in public funds to save their sorry hides.

But is there gratitude? Noooo. Instead, top banking executives make whiney comments about the public "intruding" into their private business. Worse, many of the giants we rescued are now turning on us. For example, rather than rushing out loans to save or create jobs, Wells Fargo, has become an aggressive job buster. In January, This huge bank, which had just received $25-billion from taxpayers, cut off credit to Hartmarx, our country's largest maker of men's clothing. Hartmarx was a successful enterprise, but with no financing, it was forced to shut down, and 3,500 highly-skilled employees were thrown out of work.

JPMorgan Chase, on the other hand, is putting some of the $25 billion it got from us toward a new job-creation program. But the jobs are in India. Not Indiana, where unemployment is rampant, but faraway India, where Morgan says it can hire thousands of information technology workers for a third of what it would pay Americans. A Morgan spokesperson proudly announced that our bailout gave the bank the resources it needed to increase its ousourcing to India by 25 percent.

If this bad banker behavior doesn't move you, check your bank and credit card statements. Bank of America, Chase, Citibank, and other bailed out giants are suddenly assaulting us with a rash of sneaky and stout fee hikes. Apparently, this is the bankers' way of saying, "Thanks for the bailout, suckers."

THE GOVERNOR IS OUT

sitehelp AT jimhightower DOT com (Jim Hightower) — Mon, 06 Jul 2009 00:00:00 -0700

It's Monday – do you know where your governor is?

The recent outbreak of hot and heavy gubernatorial hanky-panky by South Carolina's Mark Sanford has caused some political panic in governors' offices all across the country. Sanford, the disappearing governor who's now infamous for taking a loooong, five-day "hike" on the Appalachian Trail – a secret trip that actually took him to a romantic rendezvous with his mistress in Argentina – has raised questions about other governors. The Associated Press telephoned every governor's office to ask if the incumbents were... well, in.

Most were, and the staff of those who were not assured AP that they always could find their boss. In fact, some governors might be too reachable. For example, When Florida's Charlie Crist got married last December, he didn't let romance get in the way of duty – his press aide says she "talked to the governor 100 times while he was on his honeymoon."

Sometimes, though, you'd rather not know what your governor is doing. When AP's reporter called Rick Perry of Texas and Tim Pawlenty of Minnesota, neither was working on the people's business. Instead, both were working their lists of fat-cat contributors, hustling campaign cash.

It turns out that a few states are totally relaxed about their governors' whereabouts. In North Dakota, John Hoeven drives his own car and doesn't have a security detail, so who knows where he goes? Or cares?

Indeed, the one newsworthy tidbit that AP uncovered in its survey is that Sanford himself found it easy to hop out of the country undetected. He simply lied to his staff and family and dismissed his security detail. As the head of South Carolina's security agency put it: "As an adult male, he's free to come and go as he pleases. And so we just honestly quit looking for him." That won't boost Sanford's ego – but it does make sense.

A SOFT LANDING IN ROUGH TIMES

sitehelp AT jimhightower DOT com (Jim Hightower) — Fri, 03 Jul 2009 00:00:00 -0700

These are rough times. How rough, you ask? So rough that even the relative roughness of toilet tissue has arisen as a question of economic and political fairness.

This pressing issue is being played out in California (naturally) – a state that is always in the forefront of public policy debates. Specifically, the county of Riverside is grappling with the delicate matter of tissue texture.

It all started a couple of years ago when county employees complained that the one-ply toilet tissue being used was... well, rough. So, the county supervisor rolled out a new policy of putting two-ply in all stalls. Employees beamed with smiles of comfort.

But not for long. The county's 18,500 employees recently learned that a double level of tushy cushiness has been delivered to the toilet stalls used by the top 10 elected officials and the executive staff. These special ones are blessed with a four-ply tissue, sold under the brand name of "Angel Soft."

Why do these 100 or so executive-level employees get twice the softness that we do, demanded the other 18,400 county workers? There was no good answer. A county spokesman could only say, "There was a texture test, and then the Facilities Management Department decided that Angel Soft would be utilized for elected officials and their guests."

This did not sit well with the two-ply crowd, which was already feeling shorted by having to take a 10-percent pay cut due to budget constraints. After all, every three sheets of Angel Soft cost the county a penny more than three sheets of the common tissue, so it also became a matter of budgetary integrity.

Good News – top county officials now say that, in the interest of tissue egalitarianism, they'll revert to two-ply! Once again, California has put itself on the cutting edge of social progress.

SPREADING THE ORGANIC MOVEMENT COAST TO COAST

sitehelp AT jimhightower DOT com (Jim Hightower) — Thu, 02 Jul 2009 00:00:00 -0700

What's the number one outdoor activity in America? Not baseball, soccer, jogging or golf. Instead, it's gardening!

I happen to be part of this happy activity. Maintaining a small organic garden in my yard lets me dig in compost, rejoice at ripening tomatoes, clip fresh herbs – and devour the luscious results. So, when Michelle Obama recently planted an organic garden on the White House lawn, I joined gardeners and organic food advocates all across the country in applauding this symbolic stand for good food, the environment, and common sense.

Not everyone joined in the joy, however. An outfit called the Mid American Croplife Association (MACA) was in a full-tilt snit over this "First Garden." MACA is the lobbying front for such pesticide purveyors as Monsanto, Dow, and DuPont – not a bunch that's simpatico with the organic movement. Indeed, MACA executives zipped out an alarmist notice to their members: "Did you hear the news," they asked? "The White House is planning to have an 'organic' garden... The thought of it being organic made [us] shudder."

Well, they'd better get used to shuddering, for political leaders from coast to coast are getting on board with the good food movement. Agriculture Secretary Tom Vilsack, for example, is putting an organic garden on the National Mall to encourage visitors to plant their own back home. Also, governors and mayors – from Annapolis to Sacramento – are vying with each other to put in the biggest and best organic gardens. In Baltimore, Mayor Sheila Dixon notes that her plot in front of City Hall is nearly twice as big as the White House garden.

Yes, these are symbolic gestures, but symbolism is a powerful tool for educating the public and affirming the virtues of local, sustainable, non-chemical food production. Spread the word.

REINING IN CORPORATE TAX DODGERS

sitehelp AT jimhightower DOT com (Jim Hightower) — Wed, 01 Jul 2009 00:00:00 -0700

The British Virgin Islands – the very name conjures up a Caribbean paradise of soft sand beaches, tropical breezes, and the leisurely island lifestyle. Surprisingly, though, this tiny spot is home to more than 400,000 major corporations!

Not that you'd find any factories, corporate headquarters, or even employees on the islands. Indeed, all 400,000 companies are located in one gray, two-story building on the island of Tortola. This is where the global giants register incorporation papers for their very special subsidiaries. You see, the place is a tax haven. By registering there, corporations can claim they are based on the islands – even though they do no business there – letting them dodge paying taxes back home.

This is the kind of scam that President Obama intends to stop. He has recently proposed to close loopholes that allow such giants a Goldman Sachs, Microsoft, Citigroup, Pfizer and Procter & Gamble to hide income in order to shirk their tax responsibilities to America.

Corporate America, whose lobbyists and political lapdogs plugged these loopholes into our taxcode, have been frequent fliers to tax havens all over the world. Of the 100 largest U.S. corporations, 83 have created subsidiaries to stash profits in these havens, located in such places as the Caribbean, Liechtenstein, the Philippines, Uruguay, and Labuan – wherever that is.

Citigroup, for example, has created 427 of these tax-avoidance subsidiaries! In the past six years, it has more than quadrupled the amount of profits it tucks into the havens, presently stashing nearly $23 billion in them. This is, of course, the same Citigroup that has taken a $45-billion bailout from us taxpayers.

To support the crackdown on this shameful corporate shell game, contact the Public Interest Research Group at www.uspirg.org.

FINDING WAYS TO PERK UP CEO PAY

sitehelp AT jimhightower DOT com (Jim Hightower) — Mon, 29 Jun 2009 00:00:00 -0700

As we're learning the hard way, CEOs are not quite the brilliant cockadoodledoos they wanted you and me to think they were.

To be fair, however, let's admit that the top honchos are astonishingly creative and bold, in one special aspect of big business leadership: goosing up their own paychecks. Yeah, yeah, I know that the salary and bonuses of corporate chieftains actually dropped six percent last year, now averaging a mere $10 million. But, hey, these people are nothing if not clever, so while their pay sagged, they quietly reached into the goodie bag and increased the number and value of perks they receive by seven percent.

Associated Press surveyed some 300 major corporations and found that the median value of such executive perks as chauffeured limousines, free personal use of the corporate jet, and memberships in exclusive clubs has risen to $170,000 last year. That's more than three times the income of most families!

Chauffeurs and jets turn out to be the least of it. Take Ray Irani, CEO of Occidental Petroleum. Not only was he paid $30 million last year, but he also was given $400,000 to cover the cost of his financial planners. An Occidental spokesperson explained that this perk was beneficial to the corporation because it helped Irani "keep his complete attention on the company’s business." What, is Irani so flighty that he can't focus on his job without worrying about his personal money? Maybe so, but – come on – with a $30 million paycheck, couldn't he afford to cover them out of his own pocket?

Meanwhile, some corporations are concerned that these pricey and princely bennies look bad to the public. Not to worry, though – that problem can be handled by another executive perk that's increasingly popular with CEOs: bodyguards.

DEATH BY PIE

sitehelp AT jimhightower DOT com (Jim Hightower) — Mon, 29 Jun 2009 00:00:00 -0700

How's this for a tombstone? "Here lies a guy/ Killed by a pie."

More accurately, the killer is corporate globalization and greed. Food conglomerates scavenge the globe in a constant search for ever-cheaper ingredients from low-wage nations that have practically no food-safety protections – which could make that pot pie in your freezer a killer.

Consider the case of ConAgra Foods, a massive conglomerate that sells more than 100 million pot pies a year under the Banquet label. Its pies contain 25 ingredients, though sometimes they contain an extra one not listed on the label: salmonella. Poisoning customers is bad for repeat business, so ConAgra does do spot checks for pathogens. However, it has been unable to pinpoint which ingredient is the culprit.

In fact, as the New York Times has reported, such food giants concede that their supply chain is so far-flung that they "do not even know who is supplying their ingredients, let alone if those suppliers are screening the items for microbes." The problem is so widespread that makers of Banquet, Swanson, Nestlé, Hungry Man and other brand name foods admit they can no longer ensure the safety of their products.

So, you might assume they'd be changing their suppliers to get better ingredients. Ha! What a silly dreamer you are! That could squeeze their profits. Instead, they are simply shifting the responsibility for the safety of their products to you, the consumer. The Banquet pot pie package, for example, now instructs you to cook the pie to exactly 165-degrees "as measured by a food thermometer in several spots."

Hello – this is supposed to be a convenience food, not a science experiment. Most families don’t even have a food thermometer. Instead of thrusting safety instructions at us, how about just putting safe ingredients in the pies?

ECONOMIC LESSONS FROM AMERICA'S "BOOZE INDICATORS"

sitehelp AT jimhightower DOT com (Jim Hightower) — Fri, 26 Jun 2009 00:00:00 -0700

Jack Welch, what a guy! The former-CEO of General Electric – who paid himself a fortune while slashing jobs and busting the wages of GE's workers – had an epiphany in 1995. Actually, what he had was heart-bypass surgery, which prompted him to consider his own mortality and reassess his values.

Waxing philosophical, Jack says that, upon reflection, he now feels remorse for how he had lived. What was his chief regret? "Before the operation," he says, "I didn't spend enough money. Before that I tended to buy inexpensive wine. I would never spend $100 on a bottle of wine. Now I never spend less than that."

Wow, what a deep thinker. He gives narcissistic self-entitlement a bad name.

However, there are a couple of groups that wish more of us would think like Jack: restaurateurs and wine merchants. It seems that today's economic malaise is causing consumers to cut back on their booze purchases, thus squeezing a very large and broad economic sector.

Not that people are drinking any less. In fact, the overall volume of wine, beer, and liquor sales is up – perhaps because folks feel a need to drown their economic woes. The problem is that, unlike such fat cats as Jack, customers are trading down. Instead of selecting a nice bottle of chardonnay at the store for 20 bucks, they're going for the "Two-buck-Chuck." Likewise, bars and restaurants are hurting because more people are choosing to eat and drink at home, and those who do go out are foregoing the pricier top-shelf stuff. In today's economy, the new seven-course dinner is a six-pack and a Slim Jim.

What we're re-learning from America's "booze-indicator" is that the trickle-down effect of the wealthy few can't sustain an economy – we need the percolate-up impact that only comes when the many are doing well.