Carl Levin Takes on Tax Cheats and Dark Money in Retirement Statement

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Carl Levin, a pretty old but very healthy 78, but relatively young given MI’s very old Congressional delegation, announced his retirement today.

I don’t always agree with Levin. But he is one of the smartest, most effective (when he wants to be) Senators in the Senate. I will miss having him represent me in DC.

I expect Gary Peters will replace Levin.

I’m just as interested in how Levin will go out. Here’s most of his statement:

I have decided not to run for re-election in 2014.

This decision was extremely difficult because I love representing the people of Michigan in the U.S. Senate and fighting for the things that I believe are important to them.

As Barbara and I struggled with the question of whether I should run again, we focused on our belief that our country is at a crossroads that will determine our economic health and security for decades to come. We decided that I can best serve my state and nation by concentrating in the next two years on the challenging issues before us that I am in a position to help address; in other words, by doing my job without the distraction of campaigning for re-election.

Here are some of those issues. Years of bipartisan work by the Permanent Subcommittee on Investigations that I chair have shed light on tax avoidance schemes that are a major drain on our treasury. The huge loss of corporate tax receipts caused by the shift of U.S. corporate tax revenue to offshore tax havens is but one example of the egregious tax loopholes that we must end. Thirty of our most profitable companies paid no taxes over a recent three year period although they had over $150 billion in profits.

Tax avoidance schemes that have no economic justification or purpose other than to avoid paying taxes may be legal but they should not be. These schemes add hundreds of billions of dollars to the deficit. They lead to cuts in education, research, national security, law enforcement, infrastructure, food safety and other important investments in our nation. And they add to the tax burden of ordinary Americans who have to pick up the slack and accelerate the economic inequality in our country. I want to fight to bring an end to this unjustified drain on the Treasury.

Second, I want to ensure that the manufacturing renaissance that has led Michigan’s economic comeback continues. We’ve made progress in building the partnerships we need to help U.S. manufacturers succeed, but the next two years will be crucial to sustaining and building on that progress.

A third item I want to tackle is a growing blight on our political system that I believe I can help address: the use of secret money to fund political campaigns. Our tax laws are supposed to prevent secret contributions to tax exempt organizations for political purposes. My Permanent Subcommittee on Investigations needs to look into the failure of the IRS to enforce our tax laws and stem the flood of hundreds of millions of secret dollars flowing into our elections, eroding public confidence in our democracy.

Finally, the next two years will also be important in dealing with fiscal pressures on our military readiness. As Chairman of the Senate Armed Services Committee, I am determined to do all I can to address that issue. I also believe we need to pursue the rapid transfer of responsibility for Afghan security to the Afghans. And, as our troops come home, we must do a better job of caring for those who bear both the visible and invisible wounds of war.

These issues will have an enormous impact on the people of Michigan and the nation for years to come, and we need to confront them. I can think of no better way to spend the next two years than to devote all of my energy and attention to taking on these challenges.

Carl Levin has said his priorities in the next two years will include finding a way to tax the rich and prevent the rich from stealing our elections. Having made the decision he will not need those rich donors to fund his reelection, he will have significant flexibility to piss them off.

Levin has never been known to shy away from pissing people off in any case.

May Senator Levin go out in style, taking on those rich looters who are gutting our country.

 

Enjoy A Valentine’s Day Sampler

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Made just for you via cryptogram.com

Made just for you via cryptogram.com

It’s difficult lately for me to sit down and spend time on a blogpost. I manage a handful of minutes here and there to do reading or research. An email may take hours to draft.

But there’s too much juicy stuff floating around deserving more attention. I’m going to gather content as I see it and aggregate it into a post when I have time, rather than let them slip by. Perhaps you can make more of them than I can.

•  MIT Technology Review acknowledges the dawn of a new age in Welcome to the Malware-Industrial Complex. I’m rather surprised at the tone of this piece; it’s not au courant, rather a bit behind the times since the MIC launched more than a handful of years ago. Two important points emerge: 1) Zero-day exploits are being traded like weaponry–think very hard about the source of these exploits and ask yourself why they are tolerated in government computing environments, let alone any other production environment; 2) This new age is the military face of the paradigm shift from the industrial to the information age. Weapons are information; they are no longer separate from the weapons themselves. With this in mind, the last two grafs of this article display the already-anachronistic thinking of the author and his sources.

•  Syracuse University MA/PhD student Seth Long performs a rather fascinating analysis on alleged cop killer Christopher Dorner’s manifesto. But equally fascinating is his earlier analysis on Ted Kaczynski’s Unabomber manifesto. Compare the two assessments, and then ask yourself what any blogger’s online writings might say about them if Long’s analytical process is eventually automated with algorithms. Scary, hmm?

•  Really great long read at Bloomberg Businessweek on the unmasking of a Chinese hacker by a Dell Computers malware expert. This is a snapshot of asymmetric warfare in progress; it’s not as if China has not told us rather candidly (and more than a decade ago) they would engage us in this manner as well as in other non-internet battlefields. Any surprise on the part of U.S. government officials at this point is utterly ridiculous–it’s either feigned or it’s should-get-another-day-job stupidity.

•  I’m so annoyed by this long read in Aeon Magazine–a really great mag, by the way–that I may yet muster the time to write something longer. Author Damien Walter is rather specious in his identification of a new “creator culture” and its necessity to society’s continued success. The problem isn’t that we need to adopt and nurture a new creator culture; it’s that we killed the one we had quite willingly over the last 25-35 years by offshoring production and the subsequent commodification of goods. We allowed corporations and their one-percenter shareholders to tell us that getting our hands dirty through craftsmanship and in manufacturing was bad (mostly bad for their profit margins). We’ve become a culture that doesn’t fix anything; we buy replacements made overseas in third world countries. We’ve lost our can-do spirit along with this shift, and only recently have both the economic crisis and a new hipster-hobbyist ethos encouraged a resurgence of the do-it-yourself handyperson. Unless we’re conscious of our role in killing creativity, nurturing it again through supporting Etsy and Maker Faires is merely temporary relief from the crush of profit-driven consumerism.

•  But perhaps all of this will be moot tomorrow if the cosmos decides to make a bank shot with asteroid 2012 DA14. This “small” asteroid will fly within 17,200 miles of earth tomorrow afternoon. This is awfully bloody close–close enough that scientists say disruption of cellphone and other satellite service is not impossible, but unlikely. That’s a whisker’s breadth, in cosmic scale. Best to check in tomorrow afternoon after 3:00 pm CST to see if we’re still here. See you then.

DHS: Happy to Spend $$ To Keep People Out, But Not Illicit Trade

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A few weeks ago, a nonpartisan group revealed that the Federal government spends more on immigration enforcement than all other law enforcement combined. Altogether it spends $18 billion a year–most of it to keep people out of the country and prosecute and deport those who get in without documentation.

The United States spends more money on immigration enforcement — nearly $18 billion in the 2012 fiscal year — than on its other law enforcement agencies combined, according to a report released Monday from the nonpartisan Migration Policy Institute.

That spending went to U.S. Immigration and Customs Enforcement, Customs and Border Protection and US-Visit, a program that helps states and localities identify undocumented immigrants.

By contrast, the U.S. spent $14.4 billion — combined — on its other prime law enforcement agencies: the FBI, Secret Service, Drug Enforcement Administration, U.S. Marshal Service and Bureau of Alcohol, Tobacco, Firearms and Explosives.

Today, Janet Napolitano basically told Congress to fuck itself and its demand that all shipping containers bound for the US be screened. Apparently, the one time $16 billion price tag is too much to ensure that our trade cargo undergoes the same scrutiny actual people do.

Homeland Security Secretary Janet Napolitano on Thursday suggested that her department does not plan on meeting a congressional requirement that all foreign cargo shipped to the United States be scanned for dangerous materials that could be used in a terrorism attack.

Congress in 2007 approved a law that requires all ship cargo bound for the United States be screened for weapon-usable nuclear and radioactive materials and other dangerous substances before the vessels sails away from foreign seaports. After missing an initial deadline last July to come into compliance with the law, the Homeland Security Department now has until July 2014 to meet the mandate.

“I actually looked into this issue very thoroughly,” Napolitano said during a Wilson Center event here.

Last spring, Napolitano told lawmakers it would cost $16 billion to deploy screening technology at all of the approximately 700 international seaports that send cargo to the United States.

“It’s one of those things where as we have grown and become more knowledgeable about how to really manage risk, we have recognized that mandates like that sound very good but in point of fact are extraordinarily expensive and that there are better and more efficient ways to accomplish the same result,” Napolitano said on Thursday.

Mind you, what shipping container screening is being done is largely included in that $18 billion a year figure, which includes Customs and Border Patrol’s budget of $3.5 billion. So fulfilling the Congressional mandate would only inflate the larger number.

Moreover, I’m willing to entertain the notion that it doesn’t make sense to scan each and every shipping container.

You know? In the same way it simply doesn’t make sense to make each and every airplane passenger take off her shoes and go through a backscatter machine?

But the disparity in what DHS is willing to spend to keep people out of the country as compared to what it is willing to spend to keep contraband trade and weapons out is telling.

It makes it clear, first of all, that DHS doesn’t believe it has to fulfill every Congressional mandate, including the one that mandates DHS round up 400,000 people a year to deport. I’m not saying I agree with that; I’m noting that DHS chooses when to follow the requirements Congress sets.

It also makes clear that importers would never be asked to undergo the same inconvenience and cost that actual people do (ultimately, importers should be paying the cost to ensure their shipping containers are safe, not taxpayers).

It appears, then, DHS is far more interested in keeping undocumented people–whether they present a risk to the US or not–out of this country than it is keep contraband trade out.

Government Teat-Sucking Bankster, Steven Rattner, Calls Auto Bailout “Un-American”

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I’m sure someone thought it was a good idea to trot out Steven Rattner to spin the government’s announced plan to sell its GM stake.

But I don’t know how anyone thought a bankster–and particularly this bankster–could say this and still wield any credibility.

From Washington’s point of view, divesting its remaining shares will end an uncomfortable and distinctly un-American period of government ownership in a major industrial company.

Sure. Rattner places this sentiment in “Washington’s point of view.” Still, consider the messenger.

After all, he barely mentions here–as he did in his book–that this was not just a bailout of some industrial companies. It was also a bailout of two finance companies, Chrysler Finance and GMAC (he mentions that the government still owns Ally/GMAC, but still calls the scorecard, “nearly complete”). As such, it was also the bailout of the Private Equity firm, Cerberus, that had spent the previous years stripping Chrysler in the hopes of retaining just the finance arms.

He also neglects to mention that the government still pursues the un-American policy of treating banks according to a different set of rules, not only providing them free money, but seemingly exempting them from all laws.

Finally, he shows no self-awareness of his own history, including paying kickbacks so his firm could make big money off of New York State (for which he, like all banksters, got a mere wrist-slap).

I’m not saying the government should hold onto its GM stake forever (though unlike Rattner, executive compensation is the last reason I’d cite to applaud this sale). But having someone like Rattner call government intervention in purportedly capitalist companies un-American only perpetuates the idea that industrial companies should have to abide by so-called rules of capitalism that the titans of capitalism, the banksters, have all but discarded.

The ameriMac

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Presumably because of Apple’s rocky PR and financial results of late, Tim Cook gave two purportedly “Exclusive!” interviews, to NBC News and Businessweek. The big takeaway from both “Exclusives!” was the same, however: that Apple will move some production of the Mac back to the US next year.

You were instrumental in getting Apple out of the manufacturing business. What would it take to get Apple back to building things and, specifically, back to building things in the U.S.?
It’s not known well that the engine for the iPhone and iPad is made in the U.S., and many of these are also exported—the engine, the processor. The glass is made in Kentucky. And next year we are going to bring some production to the U.S. on the Mac. We’ve been working on this for a long time, and we were getting closer to it. It will happen in 2013. We’re really proud of it. We could have quickly maybe done just assembly, but it’s broader because we wanted to do something more substantial. So we’ll literally invest over $100 million. This doesn’t mean that Apple will do it ourselves, but we’ll be working with people, and we’ll be investing our money.

Thus far, I have not seen any acknowledgment that this move comes just two months after Lenovo made a similar announcement, that it was going to bring production of formerly IBM products back to Tim Cook’s old stomping grounds in IBM’s former production hub of North Carolina.

And so, perhaps predictably, the analysis of the move has been rather shallow. NBC first focuses on the jobs crisis here, and only later quotes Cook’s comments about skills (which echoes Steve Jobs’ old explanation for why Apple produced in China).

Given that, why doesn’t Apple leave China entirely and manufacture everything in the U.S.? “It’s not so much about price, it’s about the skills,” Cook told Williams.

Echoing a theme stated by many other companies, Cook said he believes the U.S. education system is failing to produce enough people with the skills needed for modern manufacturing processes. He added, however, that he hopes the new Mac project will help spur others to bring manufacturing back to the U.S.

“The consumer electronics world was really never here,” Cook said. “It’s a matter of starting it here.”

Businessweek also focuses on job creation (though Cook makes it clear that he doesn’t think Apple has to create manufacturing jobs, just jobs, which is consistent with his suggestion that someone else will be assembling the Mac in the US).

On that subject, it’s 2012. You’re a multinational. What are the obligations of an American company to be patriotic, and what do you think that means in a globalized era?
(Pause.) That’s a really good question. I do feel we have a responsibility to create jobs. I don’t think we have a responsibility to create a certain kind of job, but I think we do have a responsibility to create jobs.

Matt Yglesias purports to look for an explanation of Apple’s onshoring in this excellent Charles Fishman article on the trend. But with utterly typical cherry-picking from him, he finds the explanation in the 125 words that Fishman devotes to lower US wages rather than the remaining 5,375 words in the article, which describe how teamwork–teamwork including line workers–leads to innovation and higher quality.

Which is too bad, because Fishman’s article and Cook’s comments to Businessweek set up a pretty interesting dialogue about innovation.

Before I look at that, though, let me point to this other comment from Cook, which may provide a simpler explanation for the insourcing.

The PC space [market] is also large, but the market itself isn’t growing. However, our share of it is relatively low, so there’s a lot of headroom for us.

We know Lenovo is insourcing to better provide customized ThinkPads quickly. Here, Cook suggests he sees a way to pick up market share in the PC space. I would suggest it likely the Mac insourcing relates to this perceived market opportunity, and would further suggest that Apple’s reasons might mirror Lenovo’s own: to deliver better responsiveness to US-based customers, if not actual customization (though that would be news).

But that’s not what I find so interesting about the way the Fishman article and Cook interview dialogue.

Fishman’s article largely focuses on why GE has brought production back to its Appliance City in Louisville, KY. And while more docile unions and energy costs are two reasosn GE has made the move, the biggest benefit is that when entire teams–including line workers–focused on products, they could build better quality move innovative products more cheaply. Read more →

Bangladeshi Garment Fire: Downstream Effect of a WalMart Economy?

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One of the things hot on the nets yesterday was Peter Suderman’s pushback against the anti-WalMart action that has been progressing over the last week, culminating in organized protests at numerous stores across the country on Black Friday. Even Alan Grayson got in on the WalMart Thanksgiving protest mix.

But Suderman, loosing followup thoughts after an appearance regarding the subject on Up With Chris Hayes caused a storm. Here is a Storify with all 17 of Suderman’s Tweet thoughts. Suderman, who is a Libertarian and certainly no progressive, nevertheless makes some pretty cogent arguments, and the real gist can be summed up in just a few of the Tweets:

So the benefits of Walmart’s substantially lower prices to the lowest earning cohort are huge, especially on food.
**********
Obama adviser Jason Furman has estimated the welfare boost of Walmart’s low food prices alone is about $50b a year.
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Paying Walmart’s workers more would mean the money has to come from somewhere. But where?
**********
Raise prices to pay for increased wages and you cut into the store’s huge low-price benefits for the poor. It’s regressive.

Suderman goes on to note that WalMart workers are effectively within the norm for their business sector as to pay and benefits.

My purpose here is not to get into a who is right and who is wrong, the protesters or Suderman, I actually think there is relative merit to both sides and will leave resolution of that discussion for others.

My point is that the discussion is bigger than than simply the plight of the WalMart retail workers in the US. WalMart is such a huge buyer and seller that it is the avatar of modern low cost retailing and what it does has reverberations not just in the US life and economy, but that of the world. Ezra Klein came close to going there in a reponse piece to Suderman’s take:

But Wal-Mart’s effect on its own employees pales in comparison to its effect on its supply chain’s workers, and its competitors’ workers. As Barry Lynn argued in his Harper’s essay “Breaking the Chain,” and as Charles Fishman demonstrated in his book “The Wal-Mart Effect,” the often unacknowledged consequence of Wal-Mart is that it has reshaped a huge swath of the American, and perhaps even the global, economy.

Not “perhaps” the global economy Ezra, definitively the global economy. WalMart sets the tone for high volume Read more →

Why Does Matt Yglesias Hate Exports, Innovation, and Productivity Growth?

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I was interested to read this post from Matt Yglesias, which purports to prove that “nothing will bring back manufacturing employment.” Yglesias’ logic is that overall manufacturing employment is falling, largely because of more automation, and so we should stop pushing manufacturing in this country because it doesn’t get us the nice things in life. Here’s his key graf, which I’ll return to.

If you think about what the typical American family needs more of, it’s not manufactured goods. People need cures for illness and educational opportunities for their kids. They need more time to spend on leisure activities and with their family. They need jobs they enjoy. The idea of promoting more widespread affordability of health care services by boostering the share of the population that works in factories is a bizarre Rube Goldberg mechanism compared to directly focusing on improving the health care sector’s ability to deliver useful treatment to people.

Before I get there, though, compare the graphic he uses for his post:

And the one in the McKinsey report he claims supports his argument:

See what he left out? The bit where his chosen source says,

Manufacturing contributes disproportionately to exports, innovation, and productivity growth.

That is, Yglesias stripped McKinsey’s title describing how important manufacturing is to a successful economy, including one that (if workers have some kind of workplace power, which is a big if) contributes to them having time to spend with their families and enjoyable jobs.

Read more →

Creeping Unemployment in the New Battlegrounds: PA and MI

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The big news of the campaign, once you get beyond Mitt’s kabuki storm assistance and auto bashing, is that PA and MI are battlegrounds again.

Maybe.

First, Restore Our Future PAC announced $2 million ad buys in both states.  The the Obama campaign announced they’d buy ads as well.

Today, the Detroit News has a poll showing Mitt within 2.7% of Obama (though polling ended on the 29th, when Mitt’s deceitful auto binge began). In fact, while Romney and Ryan were “not campaigning” yesterday, Ann Romney was, here in Grand Rapids.

Some commentators suggest this is just Mitt’s effort to open up new battlegrounds as it becomes clear he won’t win OH and might not win VA (or FL, but that would be game over for him). That is, Mitt has to look viable, and by moving into MI and PA, he can sustain narratives that he still has a shot.

That may be what’s going on.

But it pays to look at what has been going on with the unemployment rate in both MI and PA (I’ve included OH for comparison and MN because it often gets thrown into these discussions).

MI’s unemployment rate is up 1% off its recent low in April (the downtick this month, and some of last month’s uptick, is probably due to the way the auto companies handled model year layoffs). Part of the uptick is probably due to Rick Snyder’s austerity plans; part is probably due to Obama’s failure to provide real mortgage relief.

PA’s unemployment rate is up .8% from its recent low in May. Here, too, Republican governor Tom Corbett has pursued austerity measures. In addition, PA is exposed to the Euro-related decline that has hurt much of the Northeast.

The point, though, is that both these states have the makings of a battleground state–including a white working class population that can swing with economic tides–plus rising unemployment. Obama is still ahead in both. A few more ads about the auto bailout–indeed, Mitt’s deceitful attacks on GM and Chrysler generally–will probably move MI back towards Obama. And the Philadelphia area was spared the worst of Sandy, staving off the possibility that Pennsyltucky would have unimpeded voting while the Democratic Southeast would have floods. So it’s still most likely Obama will win both by comfortable margins.

But one thing makes movement towards Mitt more realistic here than in, say, MN. The economy is getting worse again. And in spite of all Mitt’s unforced errors in recent days, and in spite of the way that Snyder and Corbett’s state level policies–which mirror those Mitt would adopt at the federal level–have almost certainly exacerbated unemployment, voters may still turn to Mitt as an alternative to a stalled recovery.

Mitt’s play in MI and PA is probably a ploy to look viable. But there are a lot of unemployed workers in both states who will help him along.

Computer Returns

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The Chinese computer company, Lenovo, which bought IBM’s PC division in 2004, has announced it will be opening a small production facility in North Carolina next year.

The world’s No. 2 personal-computer maker says the PC production line now being built at a facility in Whitsett, N.C., will allow the company to become more responsive to U.S. corporate clients’ demand for flexible supplies and product customization. Although the cost of U.S. production will be higher compared with overseas production, an added benefit will be to raise Lenovo’s profile in the U.S., where it ranks fourth in market share by shipment.

[snip]

Lenovo executives said the new production line isn’t a temporary publicity stunt. “I believe this is the first of many steps to increase our production capability,” Mr. Schmoock said. “I’m very, very bullish about what I can get out of this facility.”

Gerry Smith, Lenovo’s head of global supply chain, said the decision to set up a production site in the U.S. is in line with the company’s broader strategy of localizing its production in major markets as much as possible.

The move is interesting simply as a reflection of the way that more customized manufacturing–as Lenovo’s higher-end computers can be–is localizing.

But there’s also an irony here, given all the attention on Apple’s production in China, most recently with the Foxconn riots coinciding with the release of the iPhone 5.

But what it does is present an alternative strategy, with products Cook knows well, as a way to compete better against (among others) Cook’s current company.

If Cook can only get those Apple maps to work he might even return to the Southeast to see how this works!

Before Tim Cook became VP and ultimately CEO of Apple, he worked at IBM–what would become Lenovo’s US headquarters–in North Carolina on manufacturing logistics. And this move is effectively a return of ThinkPad production to IBM’s former stomping grounds.

Apple’s still not going to bring device assembly to the US anytime soon. They sell generic widgets, not customized machines as this plant will produce. And even as expensive as their products are within segments, most of what they sell is still much cheaper than a loaded laptop.