All the news, views, and filtered excellence fit to consume during your morning grumpy.
1. Unemployment remains high, middle class wealth is declining, wages are stagnant, and consumer confidence is down. Companies are forcing their employees to do “more with less” and the great speedup continues unabated. It must be tough for American corporations to witness all of this happening, if only they had some operating capital, they might be able to help fix this mess, right?
IRS data suggests that, globally, U.S. nonfinancial companies hold at least three times more cash and other liquid assets than the Federal Reserve reports, idle money that could be creating jobs, funding dividends or even paying a stiff federal penalty tax for hoarding corporate cash.
The Fed’s latest Flow of Funds report showed that U.S. nonfinancial companies held $1.7 trillion in liquid assets at the end of March. But newly released IRS figures show that in 2009 these companies held $4.8 trillion in liquid assets, which equals $5.1 trillion in today’s dollars, triple the Fed figure.
This cash pool came to $16,700 for every man, woman and child in the United States, a 53 percent real increase from 2004
In short, U.S. companies hold vastly more cash than is needed to finance their operations.
Still waiting for that glorious trickle-down effect.
2. Mitt Romney claims he has no idea if his money is stashed in overseas tax havens like the Cayman Islands, Switzerland, Bermuda and Luxembourg, amongst others. Why? Because his money is controlled by a “blind trust” and he alleges that he has no control over it. Let’s see what the 1994 version of Mitt Romney had to say about politicians using “blind trusts” as a means to obfuscate and fool the voters.
Also in 1994, Mitt Romney demanded that Sen. Ted Kennedy release his tax returns in order to provide transparency for voters.
With the tax-filing deadline looming, Republican Senate candidate Mitt Romney yesterday challenged Sen. Edward M. Kennedy to disclose his state and federal taxes to prove he has “nothing to hide”
Of course, Romney had not released his own returns, but he issued the demand of Kennedy anyway.
Then, in 2002, he demanded that his opponent in the Massachusetts Gubernatorial election release the tax returns of her husband as a means to provide transparency to the voters.
On April 16, he lambasted his most likely Democratic foe, Shannon O’Brien who discloses her tax return for filing separately from her husband who does not. The husband is Emmett Hayes, a former state representative and until recently a Beacon Hill lobbyist. One of Mr. Hayes’s clients was Enron. Mr. Romney is in high dudgeon that Ms. O’Brien hasn’t released Mr. Hayes’s tax forms with her own. ‘Her hands aren’t clean!’ he says.
No, Romney had not released his own yet, but that sure didn’t stop him from making the demand of his opponent.
Mr. Romney brushed aside calls for him to make public more than the 2010 returns he has released and the 2011 documents that he has said are coming soon.
“Those are the two years people are going to have, and that’s all that’s necessary for people to understand something about my finances,” Mr. Romney said in an interview on CNN.
What could Romney be hiding in those tax returns, Bloomberg BusinessWeek takes a look.
As a member of the ultra-rich, Romney probably wasn’t spared major losses. And it’s possible he suffered a large enough capital loss that, carried forward and coupled with his various offshore tax havens, he wound up paying no U.S. federal taxes at all in 2009. If true, this would be politically deadly for him.
Also, in case you missed it, Romney still hasn’t released his full 2010 tax return. This could very well be the least honest man in politics.
To sum up, Mitt Romney’s running for President on his merits as a business man and world-class investor, right? However, he’d like us to not analyze his time at Bain Capital nor examine his claims regarding his financial situation. GOP2012!
3. Mr. Wizard was kind of a dick.
4. Four government spending myths debunked.
Spending Myth 2: Military and other national security spending have already taken their lumps and future budget-cutting efforts will have to take aim at domestic programs instead.
The very idea that military spending has already been deeply cut in service to deficit reduction is not only false, but in the realm of fantasy. The real story: despite headlines about “slashed” Pentagon spending and “doomsday” plans for more, no actual cuts to the defense budget have yet taken place. In fact, since 2001, to quote former Defense Secretary Robert M. Gates, defense spending has grown like a “gusher.” The Department of Defense base budget nearly doubled in the space of a decade. Now, the Pentagon is likely to face an exceedingly modest 2.5% budget cut in fiscal 2013, “paring” its budget down to a mere $525 billion—with possible additional cuts shaving off another $55 billion next year if Congress allows the Budget Control Act, a.k.a. “sequestration,” to take effect.
But don’t hold your breath waiting for that to happen. It’s likely that lawmakers will, at the last moment, come to an agreement to cancel those extra cuts.
The only Bunk I ever liked was on The Wire.
5. I subscribe to The New York Times, but with my schedule it can take a full week to read everything packed into the Sunday edition. I just finished reading this piece on “The Other Mothers of Manhattan” and it was incredibly well done.
Slightly more than four million babies are born in the United States every year, and 55 percent of their mothers remain in the work force. We go to college, live together or marry and have kids — often with little more thought to the daily routines of raising children than our grandparents gave them, when women by and large stayed at home.
Given the mobility of American families (making a nearby grandparent a luxury) and the absence of public day-care options, a significant number of children (and not only those born into the 1 percent) are raised — at least for a few years — by paid helpers.
Fact Of The Day: The Boy Scouts of America openly discriminate against atheists, agnostics and homosexuals.
Quote Of The Day: “The more you can increase fear of drugs and crime, welfare mothers, immigrants and aliens, the more you control all the people.” – Noam Chomsky
Video Of The Day: Zach Anner is “Riding Shotgun” in his new Reddit-powered travel series. Zach is from Kenmore and is a pretty awesome guy. Here’s his backstory.
Song Of The Day: “Death To My Hometown” – Bruce Springsteen & The E Street Band
The greedy thieves that came around
And ate the flesh of everything they’ve found
Whose crimes have gone unpunished now
Walk the streets as free men now
And they brought death to our hometown, boys
Death to our hometown, boys
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