How to Fight the Koch Brothers

If you haven't already heard about the nefarious multi-billionaire Koch Brothers--Charles and David--the sons of Fred Koch, the co-founder of the notorious neo-fascist John Birch Society that smeared president Eisenhower as a communist, you can read Julian Brooks's exposé in the April 20, 2012, issue of Rolling Stone, entitled  The Koch Brothers – Exposed!

Excerpt: "[The Koch Brothers] are the plutocrats from central casting – oil-and-gas billionaires ready to buy any congressman, fund any lie, fight any law, bust any union, despoil any landscape, or shirk any (tax) burden to push their free-market religion and pump up their profits. 

"...Over the past 30-some years, they've poured more than 100 million dollars into a sprawling network of foundations, think tanks, front groups, advocacy organizations, lobbyists and GOP lawmakers, all to the glory of their hard-core libertarian agenda. They don't oppose big government so much as government – taxes, environmental protections, safety-net programs, public education: the whole bit."

If you want to lean even more about this evil duo, read Jane Mayer's explosive exposé in the August 30, 2010 issue of the New Yorker, entitled Covert Operations The billionaire brothers who are waging a war against Obama 

If you've finished the articles, your blood must be boiling and you are wondering, how can I fight these guys?  How can I stop the nefarious billionaire Koch Brothers from taking over the United States of America and turning into a fascist state run by monster corporations and billionaire plutocrats?

The answer is easy: cut off the money!  The only language plutocrats like the Koch Brothers understand in money; therefore, the only way to fight the Koch Brothers is to stop giving them your money.  And how can you stop giving the nefarious Koch Brothers your hard-earned cash? By avoiding any of the products and services produced by the Koch Industries conglomerate!

Click on this link to find a  list of brands owned by the Koch Brothers entitled Breaking the Koch Habit. You'll immediately recognize paper proucts such as Dixie Cups, Quilted Northern, Brawny and textiles such as CoolMax, Cordura, Lycra and Stainmaster.  Take the list with you the next time you go shopping and don't buy anything on the list. 

[Now some of you might be wondering if, by refusing to buy Koch Industries products and services you might be hurting ordinary shareholders or mutual-fund shareholders who invested in Koch Industries.  Don't worry!  There aren't any ordinary shareholders in Koch Industries because Koch Industries is privately-owned by the Koch family! In fact, it's the second-largest privately-owned company in America [after Cargill] with 2010 revenue of $102 billion  There are no shares traded on the stock market; so you won't hurt any ordinary investors.]

Let's get started--avoid Koch Industries!

OMG! It's a shareholder revolt!

In the 1976 film "Network," UBS News Network anchor Howard Beale [Peter Finch] galvanizes the nation when he pursuades his viewers to shout, "I'm as mad as hell, and I'm not going to take this anymore!" out their windows.

Howard Beale [Peter Finch] delivering his "mad as hell" speech

Well, it seems that in 2012, some of America's shareholders are shouting the same slogan--but this time they're "mad as hell" about the obscene amounts of money being taken away from their dividends and handed over to the CEO's, many of whom are being rewarded for destroying the value of the companies they mismanage!

AP reports on some of the annual meetings that shareholder activists and advisory firms say they are watching most closely this year:

Chesapeake Energy. In 2008, a year when the stock plummeted from about $39 to $16, Chesapeake paid CEO Aubrey McClendon $12 million for his personal collection of antique maps. (A shareholder lawsuit is now forcing him to buy them back.) That same year, Chesapeake paid $3.5 million to sponsor the NBA's Oklahoma City Thunder, of which McClendon owned almost 20 percent.

Thursday, under pressure from shareholders, Chesapeake agreed to end a program that allowed McClendon to take personal stakes in company wells. At the end of 2008, the company gave McClendon $75 million to use toward those purchases.

McClendon's salary was $975,000 in 2011, and he received perks that included $500,000 worth of personal use of private jets.

Nabors Industries. Eugene Isenberg, who was CEO for 24 years until he stepped down under pressure in October, was in line for a $100 million severance payment until the company announced a few months later that he would waive it.

In a statement at the time, Isenberg said he had planned to give the money to charity. He still got a $1.3 million salary and a $15.6 million bonus for the year, a period when the company's stock lost more than a quarter of its value.  Source: When investors get heated, CEOs feel the pressure

And the shareholder revolt is not limited to America; it's spread across the Atlantic. Reuters reports:
More than a quarter of Barclays shareholders look set to vote against the British bank's controversial pay plan for bosses and Credit Suisse is also facing a backlash as investors seek a greater share of profits.
Stormy annual shareholder meetings at both banks got underway on Friday with many attendees complaining executives are getting too big a slice of bank income at their expense.

"[Barclays] is a good example of a company which recently ... has been paying three times as much in bonuses as it was in dividends to its own shareholders and it's a good example of shareholders standing up and saying no, this is not acceptable," UK Business Secretary Vince Cable told ITV News.

"You [CreditSuisse top executives] should be ashamed of yourselves for taking so much money away from us. We are the owners of this bank, and you are our employees. We should be the ones who decide what you earn," said Rudolf Weber, to applause from other shareholders.
Source: Source: Credit Suisse and Barclays investors revolt over pay

Let's hope that the shareholder revolt grows from a storm into a hurricane of shareholder fury and demands for reform: "We're as mad as hell, and we're not going to take this anymore!"

"SEC Pursues Egan Jones; Moody’s, S&P Remain At Large"

If anybody needed any more proof of the complete and utter incompetence of the SEC and its inaction regarding the misconduct of the ratings agencies Standard & Poor's [S&P] and Moody's, just read this entry on Barry Ritholtz's blog, The Big Picture, entitled "SEC Pursues Egan Jones; Moody’s, S&P Remain At Large."

Excerpts:

“The Securities and Exchange Commission voted Thursday in favor of bringing an administrative action against Egan-Jones...In what would be an unprecedented move, the SEC could seek to punish the firm by stripping it of its ability to issue officially recognized ratings on securities tied to government debt and asset-backed deals. An SEC spokesman declined to comment.

"At the same time, we have a broad set of systemic errors made by the two much larger competitors, Moody's and Standard & Poor's. These two firms, by design, gave triple AAA ratings to piles of junk paper. They did so because that was what they were paid to do by the underwriters.

"These were not good faith errors. They were instead a reflection of a wholly corrupted industry, designed to mislead investors and legitimize junk paper."

Then Ritholtz quotes Nobel-Prize winning economist Jospeh Stiglitz, "[The ratings agencies] were the party that performed that alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the ratings agencies.”  Source.

My comment:

Egan-Jones proudly declares on its home page Mission Statement that it is: "an independent NRSRO* and not paid by corporations issuing bonds."

So here's pint-sized and thorougly honest and impartial Egan-Jones, which--unlike the goliaths S & P and Moody's, who were paid millions by the banksters to rate worthless, toxic instruments as AAA--gets whacked by the thugs at the SEC, while S&P and Moody's, whose criminal conduct is known by one and all, "remain at large."

And S & P and Moody's overtly criminal conduct directly caused the loss of billions of dollars by pension funds, insurance companies, municipalities and other entities not only in America but around the world--and yet nobody has gone after them. 

What is the SEC waiting on, anyway?  After all, the SEC which is mandated by law to protect investors, not to protect the crooks and criminals.  The first sentence of the SEC Mission Statement reads:

The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. 

The SEC's action--punishing the honest agency Egan-Jones while blindly ignoring the intentional criminal conduct of S&P and Moody's--is just more proof of its incompence and its failure to implement the duties and responsibilities required by its own mission statement.

What is needed is to bring S&P and Moody's to justice.  The SEC needs to act now!

*  Nationally Recognized Statistical Rating Organization

Eleven Ways I Would Change Our Constitution

It's my own strongly-held personal belief that the time has come for us Americans to convene a new constitutional convention to replace the 18th century constitution with one that is better suited to the 21st century, while maintaining the fundamental principles elaborated in 1787 such as strict and absolute separation of church and state.

Below is a list of eleven changes I would make to improve our Constitution.

1. Add more seats to the House of Representatives to conform to the intention of the Framers of our Constituion, who stipulated that "The Number of Representatives shall not exceed one for every thirty Thousand" persons. Currently it's around 800,000 persons for each Representative. With the current population of the United States estimated at 313 million people, if we followed the intent of the Constitution, the House of Representatives would have over 6,000 members.
2. Retrocede the current District of Columbia back to Maryland. Originally, Washington, DC, consisted of two parts, the Virginia part and the Maryland part. The Virginia portion of the District of Columbia was retroceded in 1847, and the Maryland portion should also be retroceded.  Currently, citizens of Washngton, DC, pay Federal taxes but can elect no Senators--only a non-voting delegate in the House. That's known as "taxation without representation."
3. Change Election Day from "the first Tuesday after the first Monday in November" [which isn't in the Constitution] to the Fourth of July or hold all Federal elections on Sunday, as in most other democracies, or make Election Day an official, paid holiday, so that citizens would have plenty of time to vote.  At the same time, abolish all electronic or mail-in ballots except for the military, diplomats and expatriat citizens living abroad, and require each eligible voter to appear in person at the polls just as every senator and representative must appear in person on the floor of the chamber to vote.
4. The president should be innaugurated as soon as the voting is finished, as in all other democracies, instead of waiting during a two month-long "lame duck" interregnum until January 20 of the year following the election.
5. Prevent any president from becoming a tyrant, a dictator or a caudillo by replacing the system of one president and one vice-president with a rotating presidency in which each cabinet member would serve a one-year term as president. This is the system used in the other great federal democracy, Switzerland.
6. To eliminate gerrymandering once and for all, abolish all congressional districts [the Constittuion does not require that states be divided up into congressional districdts], and elect all members of the House of Representatives at large.
7. Repeal the first sentence of Article One of the 14th Amendment.  The 14th Amendment was enacted specifically and unequivocally to grant citizenship to former slaves and not to grant citizenship to the offspring of illegal immigrants.
8. Repeal the 17th Amendment and return to the wishes of the Founding Fathers by once again empowering state legislatures to select their state's two senators.
9. Prohibit any sitting senator or representative from running for the office of president or vice-president.  This would have excluded Senators Obama, Biden, McCain and Clinton as well as Congressmen Paul and Kucinich and opened the playing field for candidates such as governors or big-city mayors, who possess the exective-branch experience required to be Chief Executive of the United States. Twenty of our 44 presidents--including Jefferson, Monroe, and both Theodore and Franklin Roosevelt--were formerly governors. Only three sitting senators have been elected president: Harding, Kennedy and Obama.
10. Follow the example of John Quincy Adams and require the president and all other elected federal officials to take the oath of office by swearing on the Constitution of the United States of America instead of the Bible, the Qoran or any other religious book.
11. Enact the 28th Amendment Overturning the Citizens United v. Federal Electoral Commission decision of the Supreme Court.  Some have described this as the worst Supreme Court decision since the case of Dred Scott v. Sandford in 1857 that legalized slavery. Five right-wing activist Republican justices [Roberts, Alito, Scalia, Thomas and Kennedy] overruled the four constitutional justices [Ginsburg, Breyer, Sotomayor and Kagan] thereby opening the floodgates to a tsunami of corporate political contributions to electoral campaigns under the preposterous theory that "money is speech." Republicans and Democrats agree that those millions of dollars are corruping the electoral process in America.
    

African Dictator’s Supercars Seized in Paris

From CarBuzz.com: "The President of Equatorial Guinea has just seen 11 of his supercars confiscated by the French National Police.

"Straight from Paris, France comes a story of 11 supercars that were seized by the French National Police.What is more compelling, however, is that these luxurious automobiles belong (or belonged) to African Dictator Teodoro Obiang Mbasogo.Mbasogo is the 'President' of Equatorial Guinea, a small African country that boasts an astonishingly poor poverty rate of 70 percent."

The haul included a Ferrari Enzo, a pair--a pair!--of Bugatti Veyrons, a Maserati MC12, a Porsche Carrera GT, a Rolls-Royce Drophead Coupe and an Aston-Martin V8 V600 LM.

View pictures of the haul here: here.

As a reminder, do you know where Mbasogo gets the money to buy those cars? Oil!  Equatorial Guinea is the third largest producer of oil in Sub-Saharan Africa, with production estimated at 360,000 barrels a day.

But in the case of Equatorial Guinea, all the royalties go straight into the pocket of the dictator, while the vast majority of the population lives in squalor and abject poverty.

The French will auction the luxury cars: I suggest that the entire proceeds be devoted to building schools, clinics and roads for the impoverished inhabitants of Equatorial Guinea.  And as for Mbasogo, I'd give him a ride to jail--in a decidedly unluxurious Paris police paddy wagon,

Now that we've seen the politics part of this post, let's turn to the investing part to find out who is paying the kleptocrat Mbasogo for his country's oil: ExxonMobil, Hess, Marathon, Devon, and Vanco Energy.

Shareholders of those companies should be angered that the companies they own are shelling out millions to Mbasogo.  And he's not the only kleptocrat pocketing oil money--he's just the most corrupt of the bunch.


Learn more in this February 2012 article from the BBC.  France impounds African autocrats' 'ill-gotten gains' which discusses not only Mbasogo, but two other infamous African kleptocracies, that of Denis Sassou N'Guesso, in Congo-Brazzaville and the clan of Gabon's late leader Omar Bongo and its current leader, his son Ali Bongo.  Estimates of the assets in France of  these three kleptocracies total 160 million euros.

More information about Equatorial Guinea here:  Oil Corruption in Equatorial Guinea.

More data on the kleptocrats on this  French-Language site: Biens mal-acquis

And if you want to know how corrupt Equatorial Guinea was even before oil was discovered, read Tropical Gangsters: One Man's Experience With Development And Decadence In Deepest Africa by Robert Klitgaard, published back in 1991. 

Jagor

Happiest People Pay Highest Taxes

Denmark has taken the top spot on the United Nation's first ever World Happiness Report, followed by Finland, Norway and the Netherlands.

The rankings in the report were based on a number called the "life evaluation score," a measurement which takes into account a variety of factors including people's health, family and job security as well as social factors like political freedom and government corruption. Source: World Happiness Report http://bit.ly/HLpr0Y

What do these happy people have in common?  They all pay the world's highest tax rates!
Those happy Danes pay an income tax rate up to as high as 55.4% and a Value Added Tax [VAT] of 25% on all goods and services.

Those happy Finns pay national [6.5% to 30%] and local [16% to 21%] income taxes and VAT rates from 9% to 23%.

Those happy Norwegians pay up to 47% income tax and a 25% VAT on most goods and services.

Those happy Dutch pay up to 52% in income taxes and a 19% VAT.

What about Americans?  We're #11 on the World Happiness List. We pay from 0% to 25% in Federal income tax and, in some states, from 0% to 10.55% income tax.  State and local sales taxes range from 0% to 10.5% depending on the state and locality.   Source: http://en.wikipedia.org/wiki/Tax_rates_around_the_world

Now I am not claiming that there is a direct cause-and-effect relationship between paying high taxes and happiness!

But what I am claiming is that paying high taxes does not necessarily make people unhappy!

When discussing taxation, I often use the metaphor of a country club.  If you want to belong to a ritzy country club, the dues are high.  You can't belong to a ritzy country club on the cleap; if the dues are too low, the country club goes bankrupt.

But Americans--especially Republican politicans in thrall to Grover Norquist--seem to want to belong to a ritzy country club called America, but without paying the dues.
But in nations, just as in country clubs, you get what you pay for.

Jagor