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Archive for the ‘corporate criminals’ Category

Wells Fargo is in trouble for illegally repossessing hundreds of cars from active duty military service members. Because Too Big To Fail is also Too Big To Prosecute.

Solution: Break up the banks. Again.

Again, you say? Yep. Prior to 1864, all banks were state-chartered banks that were only allowed to operate in a single state. In 1864, the National Banking Act of 1864 established national banks chartered by the Federal Government. Until 1927, they were required to operate within a single building. In 1927, the McFadden Act not only extended the Federal Reserve into perpetuity, but also gave national banks the right to open branches within the state within which they were chartered, to the extent allowed by their state’s laws. They were still, however, not allowed to operate outside the state in which they were chartered.

The net result is that until 1994, a bank could only fuck up the state it was operating in — it couldn’t fuck up other states. Needless to say, as banks in New York and San Francisco got larger and more powerful, this pissed them off. The first thing they tried to do was create bank holding companies that would own banks in multiple states. The Bank Holding Act of 1956 put these holding companies under the regulation of the Federal Reserve and forced them to divest non-bank enterprises such as other financial corporations, but the net effect was that you had interstate banking of a sorts. Bank A in state A was technically not the same bank as Bank B in state B, but they were both owned by the same holding company so could cooperate to do interstate banking for the large corporations that were spreading across America. The next thing that happened was when San Francisco based Bank of America (which has nothing to do with the current Bank of America, which is a descendant of Charlotte North Carolina based Nations Bank) created the first credit card (as versus charge card) in 1966: Bank Americard.

The problem with Bank Americard was that it could only be used in California, because that was the only place that Bank of America was chartered to operate. That is why the modern credit card clearing house system was created — banks in other states were given the right to issue Bank Americard credit cards too, and then a processing network was set up to handle the inter-bank transfers to get the money from customer account at bank A in state X to the merchant account at bank B in state Y. A couple of years later, banks feeling left out or that didn’t like Bank of America’s terms for licensing the Bank Americard name and access created the Mastercard network which operated the same way, except with no single bank dominating it like Bank of America dominated BankAmericard, something which eventually resulted in Bank of America losing control of its network, which became rebranded as Visa.

Finally, during Ronnie Raygun’s regime, we saw massive deregulation of the savings & loan industry that caused the collapse of both that industry and of many commercial banks. This caused the collapse of roughly 2,000 banks, resulting in a massive buy-out of the collapsed banks in many states by these bank holding companies and thus de facto interstate banking. In 1994, Democrats wrote and passed the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 which removed all restrictions on interstate banking, and President Bill Clinton both praised it and signed it.

The result? The number of banks drastically declined from 12303 in 1990 to 7752 in 2003. And to 5210 as of the second quarter of 2016. Furthermore, Federal Reserve regulations intended to make sure that banks are properly capitalized have had the practical effect of making it impossible to form new banks (note — because this is a Federal Reserve paper it doesn’t blame the Fed, but yes, it was the Fed). The end game is five banks owning half the banking industry. And as with all oligopoly industries, these banks copy each other’s efforts to improve their profits more than they compete for customers, and feel free to rip off customers because they feel customers have no real alternative. Well, except for credit unions, which is why the big banks are attacking credit unions and trying to get them banned.

The only realistic option: break up the banks by outlawing interstate branching again. Banks would be required to spin off as separate non-owned entities all branches, deposits, and assets in states other than the state in which they are chartered, and bank holding companies would face the same restriction — they would only be allowed to operate in one state. Furthermore, bank holding companies and banks would not be allowed to own non-bank businesses. Any insurance, securities, stock brokerage, etc. that they do would have to be spun off as independent companies.

So, some of the objections I’ve heard:

  1. “What about ATM’s?” Yeah, what about them? My credit union is not allowed to operate beyond my county. Yet I can still walk up to nearly 30,000 ATM’s nationwide and 5,000 credit union branches nationwide and do fee-free banking. Why? Because they’ve formed a cooperative network to reciprocally handle each other’s transactions. Banks can form cooperative networks just as easily as credit unions can — and in fact, have done so for ATM’s.
  2. What if you’re in another state and need to do business? Well, just as with the CO-OP network, if a bank is not allowed to do business in state B, that doesn’t prohibit the bank from forming a reciprocal agreement with a bank in state B to handle each other’s transactions. Nothing stops them from forming a cooperative network like the CO-OP network.
  3. But… I’m a multinational corporation, how do I issue checks?! Uhm, just like now — your HR department prints them out drawn on your bank of choice wherever it is located and hands them out, or does a direct deposit via the inter-bank transfer network.
  4. But… I’m a retail chain with stores in every state, how do I do my banking?! Well gosh, sucks to be you, Walmart! I guess you’d have to open deposit accounts with local community banks, and wire the money from the previous night’s deposits every morning to the Mothership. My heart bleeds, bleeds I say, for you having to deal with a locally owned business like the ones you previously drove out of business.

In fact, the biggest argument I can see is that this will tend to concentrate money in banks in major financial cities, meaning it won’t be available for lending to businesses in smaller states. If Bank of America in Charlotte has $5B on deposit from IBM, the Bank of America branch in Abbeville, Louisiana can lend some of it out so that Boudreaux can buy a new pirogue. On the other hand, there’s nothing to stop the Bank of Abbeville from borrowing money for Boudreaux’s pirogue by selling the loan to Bank of America. This happens all the time with mortgage loans — smaller lenders / loan sourcers regularly sell their loans to larger institutions that have a surplus of cash and a shortage of customers willing to borrow it. The banking industry would just need to go back to their roots again, back to the days when it was normal for big Wall Street banks to buy loans from smaller community banks.

— Badtux the Banking Penguin

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Donald Trump stole at least $285,000 from his own charity in order to pay off personal legal obligations.

In case you’re wondering — yeah, that’s illegal.

But I guess IOKIYR.

– Badtux the Eye-rollin’ Penguin

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16,800 calls to police in the Tampa Bay area from one location in one year. That location: WalMart. The people paying for those calls: Not Walmart.

Essentially you and I are being taxed to provide private security to Walmart on the public dime. Rather than hire private security guards like the mall down the street (which is much larger yet has many fewer calls), Walmart instead calls the police for everything — including minor shoplifting incidents like someone drinking a 12 oz drink without paying for it that, at the mall down the street, would get you taken to the back room at the mall and forced to sign a compensation contract upon penalty of arrest if you don’t. (Been there, seen it, the kid was scared to death and his momma was irate that he cost her $100 in penalties to get the charges dropped just because he wanted to drink a soda he didn’t have the money to buy).

But Walmart doesn’t do that. Rather than have their own private security force use civil remedies where possible, like every other major shopping chain, Walmart calls the police instead. Every. Single. Time. If they were an apartment in the Bronx, they’d be boarded up as an attractive nuisance. But because they’re Walmart, they act as if they’re entitled to have the local cops be their unpaid private security. And it’s not because Florida law makes it illegal for them to detain shoplifters. In fact, Florida law gives shopkeepers almost total immunity from civil and criminal prosecution for detaining shoplifters. They don’t even need probable cause under Florida law to detain a suspected shoplifter. All they need is reasonable suspicion, and they can detain shoplifters for hours before calling the cops — hours that, for most shoplifters, could be used to pursue civil remedies such as signing a contract banning the shoplifter from the store forever, and calling relatives to bring in money to compensate the store both for the merchandise and for the security costs of handling the shoplifting incident, costs that can easily mount into the hundreds of dollars and which it is perfectly legal for the store to demand in exchange for not calling the cops.

But that would require Walmart to act like a responsible corporate citizen rather than like leeches at the public trough. Deadbeats. Welfare whores to beat all welfare whores. That’s Walmart.

– Badtux the Pissed Penguin

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FactCheck.org tries to dishonestly spin Bernie’s accurate numbers about Federal tax receipts and where they’re coming from.

percentage-of-federal-receipts-by-source-chart

The chart needs little explanation, but I’m going to provide it anyhow. Bernie noted that corporate income taxes declined from 30.5% of Federal revenue in 1953, to 10.6% of Federal revenue today, and FactCheck.org then sputtered, “but… but… PAYROLL TAXES!”

Yes, and? The numbers clearly show taxes being shifted from corporate income taxes and excise taxes (which similarly declined from 14.2% of Federal revenue to 3% today) to payroll taxes, of which 50% are paid by individuals and 50% are paid by companies. Even if you add the 50% of payroll taxes paid by companies back into the “company” pile, that’s *still* 28% paid by companies today vs 44.7% in 1953. And who is paying the rest of what companies paid in 1953? Look in the mirror… your taxes are 63.8% of federal revenue today, versus 47.7% of federal revenues in 1953. In 1953, taxes were almost a 50-50 split between paid by individuals and paid by corporations. Today… not so much.

In short, you and I, individual Americans, are paying roughly 16% more of Federal tax collections as a percentage of revenues today than we paid in 1953. Bernie is right, we’re getting fucked. And shame on FactCheck.org on trying to spin that unspinnable reality to make it seem less so.

– Badtux the Numbers Penguin

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Publishers are upset about ad blockers. Forbes did a study and found that 20% of the people visiting their site were running ad blockers, for example. In response they have now instituted a technical fix: If you are running an ad blocker, they now no longer allow you into their site.

The problem is that they’ve overlooked exactly why people are running these ad blockers. Hint: In the past twelve months, Forbes has served viruses to their web site viewers multiple times via the ad networks that have bought space on their pages. And that’s not counting the poor quality ads that generated pop-ups that redirected you to a porn site, or the ads which loaded extensive Flash content that caused the page to run extremely slowly and use excessive resources, or the privacy issues caused by ad networks that do not respect “Do Not Track” browser requests.

The reality is that people don’t install ad blockers because they want to deprive their favorite publishers of the income needed to stay in business. They are installing ad blockers because publishers have sold their souls to Satan — or, rather, to advertising networks that serve poor quality ads — for thirty pieces of silver.

Technical fixes aren’t going to fix this. A swift Google search finds a technical solution to get around Forbe’s technical solution of blocking people who visit with ad blockers enabled, and I have tested this and it works (and AdBlock finds 11 advertisements on the sample page I visit, thus proving that Forbe’s insistence that their web site is “advertising-light” is nonsense). All technical fixes do is instigate a technological arms race where the ad industry and ad blocking industry leapfrog each other.

Yet the only solutions offered by the advertising industry are, to put it bluntly, the purest of bull excrement. They refuse to admit they have a problem, and refuse to do anything about it. At some point something has to be done, because the entire business model of advertiser-supported content cannot continue if ads aren’t visible on web site. But one thing advertising networks and the publishers they’re bullying with threats of “block the ad blockers or we won’t sell ads on your site” cannot do is technologically innovate their way out of this problem, because it’s not a technological problem — it’s a problem with low quality advertising networks, one that is only going to get worse as publishers continue selling space on their web sites to scumbags who would sell their own mother for a dollar. Either publishers need to take back their advertising from the pond scum and kick them off their sites (even if it requires creating their own advertising network to replace the current ones that increasingly sell scammy/virus laden content), or they will go out of business as the advertising death spiral goes into hyperdrive. Which will happen? I don’t know. I just report what is. What happens depends on whether publishers and the online industry return to the reality the rest of us live in, rather than some bizarro world reality where people install ad blockers for no reason at all. Thus far I’m seeing no such indications, but … (shrug).

– Badtux the Technology Penguin

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Here is how the contractor scam works:

Let’s say you’re a big and wealthy corporation. You have lots of money and lots of assets. You have lots of employees.

You’re also evil. But I repeat myself.

Now let’s say that you want to screw your employees. You want to make them work overtime without pay, you want to withhold paychecks from time to time when you yourself want a little spare change to gamble in the stock market, and so forth. Thing is, there’s these little things called “laws”. If you do that, the employees will sue you and the federal government will sue you and lawyers will get rich but you won’t.

What to do… what to do…

Ah yes. Here’s what to do. Create a sequence of shell companies. Have some of those shell companies own another shell company, a contracting company. Fire significant numbers of your workers — the ones you want to rip off — and have them go to the shell company instead. Then have the shell company rip them off.

At that point, the Feds say “Quit doing that, Amazon.” And Amazon says “We’re not doing that, it’s our labor contractors, talk to them!” And the Feds say “Okay contractors, quit doing that!” And the contractor says “Derp derp derp?” And the lawyers for the workers sue Amazon and Amazon files for dismissal because they’re not the employer, Some Shell Contracting Company is the employer, and the court agrees. So the workers sue Some Shell Contracting Company, which loses and promptly declares Chapter 13 bankruptcy and all $3 in their bank account is divided amongst all the workers. End of story, right?

Well, seems like some courts are starting to notice that something smells in contractorland, i.e., that some “contractors” are just employees with all the responsibilities for complying with labor laws pushed elsewhere. Thus FedEx drivers just won a lawsuit to be classified as employees, not contractors, because that’s what they do for a living — they drive FedEx trucks. Bad court. Bad, bad court. How can evil corporations be evil, if you start holding them responsible for their evil? I expect that this trend will shortly be curtailed by law. After all, big and wealthy corporations have plenty of bribe money err “campaign contributions” to spread around, while their victims usually don’t.

But hey, that’s cynical, isn’t it? I mean, that assumes that money buys laws, and that never happens, right? Right?!

– Badtux the Snarky Penguin

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So Carl Icahn has bought into Apple and Juniper and is telling them to do what he wants them to do, or else. Yeah, I remember Carl’s plan for Trans World Airways. His plan was to load up TWA with debt (owed to him), then sell off TWA’s profitable assets to pay off that debt (i.e., put money into his pocket), then leave TWA to bankruptcy and dissolution. Yeah, that worked out well for TWA’s stockholders in the end, didn’t it? Any stockholder who listens to Carl Icahn deserves his eventual fate.

So anyhow, you see these bankers and venture capitalists and hedge fund managers and executives and such, and they have this sense of self-entitlement about them. Like they deserve to be rich because they are “makers”, somehow responsible for “creating wealth”.

The question is, what, exactly do they create? Engineers and technicians and factory workers and artists, they create. They dream up or build brand new products or works of art, and actually create things with their own two hands that never existed before. As far as I can tell, all these rich “master of the universe” types do is move little pieces of green toilet paper with pictures of dead people on it from point A to point B in order to meet supply and demand for little pieces of green toilet paper. That’s a great service, sure, but pretty much the same exact service that a janitor provides.

That’s what these masters of the universe really are: They’re toilet paper shufflers. In other words, they’re overglorified janitors. Necessary, just as janitors are (someone has to clean the toilets and put fresh rolls of toilet paper in the dispensers, after all!), but: man, they are the most overpaid janitors on the planet.

Just sayin’.

– Badtux the Maker Penguin

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