‘The little guys’ had a good week last week, to GOP’s chagrin

(AP)

(AP)

Last week, the Obama administration announced new “tax inversion” regulations designed to discourage U.S. companies from pretending to relocate overseas as a ploy to evade taxes. The rules change was of course sharply criticized by congressional Republicans, who took the side of corporations wanting to flee for tax purposes even while they keep most of their profit-generating operations here in the United States.

In short, those corporations want all the benefits of this country, without having to help pay the bill.

And GOP opposition notwithstanding, the new rules have already had a powerful and beneficial impact. Two days after the new rules were announced, the pharmaceutical giant Pfizer — which reported $49 billion in revenue and $7.74 billion in net income last year — canceled plans to move its official headquarters to Ireland, thus keeping jobs and corporate tax revenue right here in the United States.

In a second important initiative completed last week, the U.S. Department of Labor finalized new “fiduciary rules” that require stockbrokers and other financial advisers to actually honor the best interests of their clients when people come to them for financial advice.

What a concept, huh?

Under previous regulation, certified financial planners were already required to give advice based on their clients’ best interests; stockbrokers, however, were not. They were legally free to steer unwary customers into high-cost investment options that padded their own income, even at the expense of the client. They were also under no obligation to disclose that glaring conflict of interest to their clients.

For example, brokers could — and research shows they usually did — steer their unwary customers to invest in funds for which the brokers received a big commission or an undisclosed fee that in other industries would be called a kickback. According to the Obama administration, that practice drains retirement accounts of some $17 billion a year in reduced savings, and adds that $17 billion annually to Wall Street’s bottom line.

Now, I don’t know how the White House arrived at that figure, and I’m sure you could quibble with it if you wish. Wall Street, however, seems to agree with its overall thrust.

As CNN reports:

“Many financial firms’ stocks plummeted in recent weeks as it became clear the White House was moving forward with the rule.

The stock of LPL Financial, the nation’s largest independent broker-dealer, has tanked over 40 percent this year. Charles Schwab  and E*Trade are both down about 20 percent. Firms have until January 2018 to comply fully.

There are concerns that financial firms won’t make as much money once the rule is fully in effect, but a recent Morgan Stanley report says the impact is likely to be ‘substantially less’ than what the beaten-down stocks imply.”

So which side did congressional Republicans take in this dispute? As if you had to ask:

“Congress must act to stop this costly, complicated and potentially conflicting rule that’s unfair to millions of American families who only want the freedom to plan for financial independence and the right to shape their own destiny,” House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said in opposing the new rules.

Please note how Hensarling attempts to frame the issue in terms of “freedom” and financial independence for American families, with no mention of Wall Street’s 17 billion reasons to keep putting its its own interests over that of its clientele. Note also that over the previous two years, Hensarling has received almost $735,000 in campaign contributions from the banking, financial services, real estate and insurance industries.

In one sense, the tax inversion and fiduciary rule changes announced last week are technical fixes to the regulatory system. But in a larger sense, they offer important illustrations of how the system can be gamed one way or the other to advantage certain well-connected parties. American voters concerned that they’re not getting a fair shake, that the “big guys” have gained too much unchecked power, ought to take note of who is fighting for which side.

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313 comments
Paul42
Paul42

"American voters concerned that they’re not getting a fair shake, that the “big guys” have gained too much unchecked power, ought to take note of who is fighting for which side."

That may be the thing that's changed the most this cycle - people feel misused, not represented and they're actually beginning to pay attention to who is doing what.  As people look at the record of who (person/party) did what when it comes to their interests or corporate interests, the conclusions will become obvious.   The whole drumbeat of "they don't represent us, we send them to Washington and they become part of the system, the system's rigged against the average person" the Trump campaign has been beating will simply make it easier for people to shed ideology and accept facts.



BabyCakesATL
BabyCakesATL

I support Bernie Sanders because I believe him to be more authentic and I am more aligned with his views.  His record on his stated values is second to no other.  His vote speaks louder than his words.  He is not afraid to get out EARLY, and unabashedly, in front of his issues, with consistency.  Hillary, to me, is an extremely calculating politician.  She tests the wind then makes her stance.  This is why millions and millions of DEMs and Independents find her inauthentic and untrustworthy.  She is a successful political machine - good or bad.  My mother forecast during the Lewinsky scandal that Hillary would stay with Bill because he was her ticket to becoming President.  People's feelings about her have NOTHING to do with her sex.  Her campaign would do well to steer away from such academic notions at every turn as it only further tarnishes her appeal. 


Immediately prior to the SC primary, Clinton wraps herself around Obama to appeal to Black voters. She got her surrogates to attack Bernie's civil rights record and aligned herself with grieving Black mothers and Black political establishment while offering bold statements of racial justice.  Everything about her seemed so believable unless you completely forget the nasty, ugly, racial undertones toward Obama during her 2008 campaign. Unlike many of the Black folks in the south, I cannot/have not/will not forget the dog whistles heard very clearly by anyone paying attention.


I would LOVE to see a woman for president!!  I honestly believe most Americans are ready.  Not just ANY woman though.  Elizabeth Warren would be a hands-down better candidate than Hillary or Bernie.  I find it extremely interesting that she has not endorsed either.

BuckeyeGa
BuckeyeGa

@babycakesatl,

Sanders didn't help himself. He didn't appear on key urban tv and radio shows before SC. He was asked multiple times to appear.

BabyCakesATL
BabyCakesATL

@BuckeyeGa He's not the best politician.  And he's not a known brand.  These are indeed weaknesses in today's political climate.

NWGAL
NWGAL

He has definitely got an important message but isn't a good messenger to actually get it accomplished. His long history of criticizing, haranguing Democrats and not helping them during this election cycle have not won him friends. Getting legislation through is a team sport.

BabyCakesATL
BabyCakesATL

@NWGAL Calling out Dems and the GOP to be better angels is a strong suit.  Sometimes Obama had to "go against the grain" and ticked off some liberals and progressives during the process.  Bernie has passed legislature - BIG legislature - so he knows how the system works.  I believe he could rally the DEM caucus behind his progressive ideas (with the help of Warren and others) If he has the support of millions and millions of Americans behind his agenda. 

Donnie_Pinko
Donnie_Pinko

ByteMe

Again, you're confusing the political environment with economics.  Easy for a communist to do :)  The capitalistic model will continue 

--

Hm, so is the fact that I'm a communist - which you don't know, but let's assume it's true - the proof that the capitalistic model will continue? 

Shoddy reasoning?

OriginalProf
OriginalProf

@Donnie_Pinko 

Do communists actually exist any more?  In any case, I think that ByteMe is commenting on your supposed "confusion," not capitalism.

Hedley_Lammar
Hedley_Lammar

Karl Marx


Never ran a company


Never held political office


Never had a job ( Engles supported him )


All applications of his theories have ended in failure.

Wascatlady
Wascatlady

Chagrin and bear it, I always say.

EliasDenny
EliasDenny

How many years did we use the social security surplus to fund all general expenses and now we cry that it costs too much. When you consider the costs of modern weapon systems I wonder if we still actually bid on contracts and what about allowing cost overruns?

Wascatlady
Wascatlady

@EliasDenny Such as Georgia Power, which is allowed to ding consumers for over runs IN THE FUTURE.  Thanks to the state of Georgia Public Service Commission (We serve ourselves first!)  So, although I am likely to be dead when it comes on line, I have to start paying for it NOW.

Donnie_Pinko
Donnie_Pinko

Lol, leave it to provincial Americans to assume that because someone forcefully critiques capitalism, they're a communist. I don't think that assumption would be as quickly made in other countries.

rimsky
rimsky

@Donnie_Pinko I think the "Pinko" word has to do with the label "communist".

If that logic holds true women wearing Pink during breast cancer awarness month are all commies.  LOL

OriginalProf
OriginalProf

@rimsky @Donnie_Pinko 

Ever hear of the historical "Red scare" in this country? I can remember when "pink" meant someone sympathetic to Communism, while not an actual member of the Party. 

Btw, Marx was critiquing the mid-19th century system of industrial labor in Victorian England, and if you knew much about that terrible time you would see how needed he was. 

lvg
lvg

""""Passive-aggressive, much? Having been disinvited from Mitt Romney’s convention in Tampa earlier this year, George W. Bush opted to go to the Cayman Islands — a locale made infamous during the presidential campaign as one of Mitt Romney’s tax havens — to give a speech yesterday.

The fact that Bush chose to go to the Caymans, of all places, five days before his would-be predecessor faces election, is a majorly unreported story, primarily because Bush’s staff imposed a news blackout onto coverage of Bush’s speech:

Organizers of an investment conference in the Cayman Islands have been forbidden from disclosing any details about a speech by former President George W. Bush in the offshore financial haven, an event spokesman said Thursday.

The keynote speech by the former president was “totally closed to all journalists,” and conference organizers were banned from discussing any aspect of it even in general terms, spokesman Dan Kneipp said.

“We’ve got a complete blackout on discussing the Bush details,” Kneipp told The Associated Press."""


ww.pensitoreview.com/2012/11/02/disinvited-from-the-romneys-convention-five-days-before-election-bush-gives-speech-in-mitts-cayman-islands-tax-haven/

I Guess George W will not be invited to a similar conference this year.


Donnie_Pinko
Donnie_Pinko

ByteMe

Here's the thing: Capitalism isn't going to have a crisis.  Some politicians will, some countries will, but capitalism is going to keep rolling on and on. 

--

So much that's wrong with that, but just for starters, do you not realize that capitalism has been gripped by a protracted crisis since 2008? 

As for capitalism simply going on and on, that's not true. There are things that have to happen for capitalism to continue. Growth, for one thing. New markets and resources to exploit being another.
There is no guarantee of that continuing naturally on a perpetual basis.

Mr_B
Mr_B

@Donnie_Pinko The capitalist system has been "gripped by a protracted crisis" since the publication of the Manifesto in 1848.


It's still around, because it's pretty good at adapting to changing conditions and methods of production. 


The obituary is a bit premature.

Donnie_Pinko
Donnie_Pinko

@Mr_B @Donnie_Pinko 

The capitalist system has been "gripped by a protracted crisis" since the publication of the Manifesto in 1848. 

--

Well, in a way it has, but only in the trivial sense that everything carries the seeds of its destruction with it through its existence. But you know, 1848 might not be a bad year to look back to about now.

Btw, who said anything about capitalism being in its death throes? To say that capitalism is in crisis is not the same as saying it's in terminal crisis. 

The points made about capitalism's marvelous adaptability and ability to thrive on chaos are important.

Donnie_Pinko
Donnie_Pinko

@Hedley_Lammar @Donnie_Pinko 

Btw, from your New Yorker propaganda piece: 

Filming an air strike on a hospital, for example, offers no evidence that the attack was planned by the kinds of high-level officials who draw the interest of the international justice system  

This is an instructive point, as it raises the question of how The New Yorker handled another recent case of a hospital bombing? Namely, when the US carried it out, with horrific, grisly results. 

The answer: a whitewash.

https://theintercept.com/2015/11/06/u-s-journalists-who-instantly-exonerated-their-government-of-the-kunduz-hospital-attack-declaring-it-an-accident/

So, yeah, pro-Washington rag.

ByteMe
ByteMe

@Donnie_Pinko Again, you're confusing the political environment with economics.  Easy for a communist to do :)  The capitalistic model will continue.

Visual_Cortex
Visual_Cortex

oh, and just so everyone understands, when they're tallying up median net worth in those charts, yes, they are including home equity.

ByteMe
ByteMe

@_GodlessHeathen_ Again, though: why is the median household value LESS than 2004 in 2013?  Most housing markets have recovered back to at least 2004 at this point, so what's keeping the MEDIAN household so far down for so long?  I don't blame it on a President, but something sure doesn't seem right about the numbers.

ByteMe
ByteMe

@_GodlessHeathen_ My house in 2004 was sold for the same amount in 2010.  So the question is: why is wealth in 2010 AND 2013 so much lower than in 2004?

modcon
modcon

I'm a conservative, but I applaud both of these rulings.

modcon
modcon

@ByteMe @modcon I don't think companies should be able to play shell games with profits to avoid taxes and I believe honesty should be required in any dealings.


Now, I do think we need better tax reform overall, including corporate taxes.  I also think we should see the wealthier paying more taxes.


Where I probably don't line up with a more left approach is I think we should also be cutting the budget while we raise taxes.  Use these savings to pay off the debt and then see which programs we feel really need to grow or ones that we need to add.


We can't afford free healthcare for all unless we can truly pay for it.  With the trillions of debt we have we should be using new revenues to wisely and once we are debt free look at growing needed programs.

modcon
modcon

@honested @modcon @ByteMe I'm not against cutting the military budget.  Not sure we can cut it by 1/2.  Really don't know the specifics without reasearching it.


Funny thing....all of the countries overseas that provide all of these free services get a lot of help because we are protecting them.  Imagine Norway, Sweden, Denmark, Germany, Britain, etc. offering all the programs they offer without NATO (mostly the US) being the real backbone there.


If we stopped protecting them they would quickly go in debt building up their militaries and could not afford their programs.


When we say we want to be like them it's not a true comparison.

ByteMe
ByteMe

@modcon Pretty sure "the left" is ok with cutting the military and re-organizing the way military purchases are made to ensure that it's not about Congressional districts playing favorites.  But Congress as a whole isn't willing to do either, right or left.


I'm also very sure the left is ok with reducing the number of tax shelters available to corporations and individuals alike... but Congress again isn't so interested in that, right or left.

modcon
modcon

@ByteMe @modcon When I say the budget I don't just mean those.  I mean everything.  Find the waste and get rid of it no matter who's pet it is.


We waste and waste and then can't afford things.


I don't want socialized healthcare, but I doubt it will be stopped.  I sure don't want it to bankrupt us.  We better be wise before we start rolling this stuff out with no way to pay for it.

modcon
modcon

@ByteMe @modcon They do contribute, but not to the level they would without us.  Therefore they can afford programs that we cannot.

ByteMe
ByteMe

@modcon As for "socialized healthcare", we have the worst of both cases: we have no way for the government to negotiate prices with the pharma and device companies, meanwhile we have insurance companies that make more money if they deny health coverage to people.

What we really need is the ability of everyone under the age of 65 to be able to buy into Medicare via their payroll taxes.  Take the main healthcare benefit cost away from the businesses -- who totally gain when you do that.

ByteMe
ByteMe

@foo2u Well, I asked him, because as a conservative, he wasn't following the usual party lines.  So I wanted to see how far on the spectrum he really was.  Seems he's more right-center than anything.

MaryElizabethSings
MaryElizabethSings

@modcon @ByteMe


You make some cogent comments, modcon.  However, where I see the weakness in your thinking is that you are comparing how the government's financial resources work with how an individual citizen's finances work, and the two do not equate.  More complexity is involved in government budgets and economic growth overall, by far, than an individual's budget.


That is a factor I would urge you to place into your thinking. By being more aware of the truth in what I have mentioned, hopefully, you will study HOW and WHY there are differences in personal budgets as opposed to governmental ones. Growth and surpluses accrued in governmental policies account for our financial health as a nation.  Also, notice that during Democratic administrators, budgets usually have had more balance (and surplus) because growth is factored in.  Thomas Jefferson cut the national debt by over 1/3 because that was a primary goal of his, to cut the national debt.

ByteMe
ByteMe

@modcon Those countries do provide money, people, and other resources to NATO.. just not in a way that is comparable to what we provide.  But give them credit for at least contributing.

honested
honested

@modcon @ByteMe 

So are we required to provide 'free security' forever while impinging on US Citizens, or not?

ByteMe
ByteMe

@modcon Waste is in the mind of the beholder.  For example, give us your estimate of how much "waste" is in the current appropriations bill.

If you want to cheat and look up the answer, look at the total budget less mandatory expenditures first.

foo2u
foo2u

@ByteMe @modcon Why?...

Because I don't give two squirts if Pfizer's stockholders take a $1.00/share hit because "US corporate taxes are too high". 

Like the host pointed out, these corporations like all the upside our country offers, but don't want to actually pay for it.

As for the stockbrokers rule... an industry of alpha types playing loose and fast with OPM... what could possibly go wrong?... Long overdue.

honested
honested

@modcon @ByteMe 

If we cut the military in half we can afford to do everything you stated with little change in being American.