Wednesday, May 06, 2009

Obama: The First 106 Days

It's a good thing that, as a blogging outfit, highwayscribery decided to stay clear of the "first 100 days" traffic and waited patiently for the no less important FIRST 106 DAYS milepost.

On top of highwayscribery's little peep being overwhelmed by the roar of outlets both mega and minor, President Obama's ensuing stand against offshore tax havens and unequivocal nod to industrial syndicalism might have gone unremarked.

Offshore tax havens are the things that people who don't get 10-99 or 1040 forms at the end of year use to avoid paying taxes the people who get 10-99 or 1040 forms can't use to avoid the annual tithe.

Like, say, Warren Buffet.

When the Oracle of Omaha was asked by "New York Times," business columnist Andrew Ross Sorkin, why his empire was structured as a conglomerate when he advised other investors to "keep it simple," Buffet responded, "We've got this ability in terms of moving money around into various opportunities without tax consequences."


Jackie Calmes and Edmund Andrews at the "New York Times," (NYT) reported that Obama's is a move which, "appeals to growing populist anger among taxpayers but that is likely to open an epic battle with some major powers in American commerce."

To quote a very unpopular former president, "Bring it on."

The new President, you see, is fulfilling a campaign promise to end tax breaks for American companies that send American jobs overseas.

John Castellani of the Business Roundtable gave the reporters a canned reaction: "This plan will reduce the ability of U.S. companies to compete in foreign markets, which will also cripple economic growth here in the U.S."

The obvious question is what is it that makes these countries "American"? You also have to wonder if other companies in other countries pay taxes and, if they do, how they compete.

Finally, while blessed with all these neat tools for avoiding taxes, why has economic growth been crippled anyway?

If the NYT reporters are to be taken at their word, Obama merely wants to fix provisions that no longer serve the original purpose of protecting multinational corporations from being taxed twice: once overseas and once by the Internal Revenue Service.

But according to the same article, in 2004, the last year for which there are figures, corporations deferred reporting earnings and wracked up tax credits that led to a paltry 2.3 percent contribution on what is supposed to be a 35 percent tax rate.

In short, they didn't come even close to paying their fair share.

the highway scribe, by the way, is still being forced to pay his.

The Obama plan has left open one big, fat loophole, according to Lynnley Browning, also of the "New York Times" (which should give you an idea of what political blogging's future will look like when all these "real" newspapers go under).

The Obama plan, apparently, doesn't do away with "transfer pricing," a concept we feel no need to explain since most of you aren't going to need it and because the outcome is essentially the same, where multinationals and taxes are concerned.

There's a pattern developing with the president, who seems to throw big punches, but them dance off into a corner when battling the big boys.

Robert Reich at thinks the president throws a lot of stuff out there, and keeps some close to his chest, because he's trying to affect great changes in American society. More often than not, Reich believes, he will run into the same people at the negotiating table and all of these plans and provisions will serve as so many bargaining chips on its coffee-stained surface.

For example, when the American car industry started going belly-up, there were complaints from people the scribe has coffee with that the bankers were bailed out, while unions were being required to eat their contracts in most usual and inequitable fashion.

But lo-and-behold, at Chrysler Obama practically went syndicalist, which is a philosophy that believes unions, workers councils, and others cooperative labor groups are best-suited to running industrial entities.

On May Day itself, "NYT" subscribers awoke to a headline that claimed "Chrysler Files for Bankruptcy, UAW and Fiat Take Control."

True, it's not the revolutionary syndicalism preached by Pierre Prodhoun, but it's still United Auto Workers control with $8 billion in government grease for the wheels.

Or as Jim Rutenberg and Bill Vlasic, again, of "The Times" noted, "It was a stark moment, and one unseen in modern times..."

Micheline Maynard, of (yes) "The Times," penned "In Chrysler Deal, Union Takes Rare Front Seat," and observed that Chrysler's Chapter 11 could end up being the "Cadillac" of bankruptcies for the United Auto Workers.

Apparently Chrysler didn't have a luxury model that could make the analogy workable.

Quoted in the piece was an expert in bankruptcy restructuring of Washington-based Arent Fox saying, "This is extraordinary, truly extraordinary. I never would have thought a year ago that this would occur. These are truly unusual times."

Change indeed.

Maynard noted that the United Auto Workers is not just any union thanks to its heavy political contributions, but that's a narrow conclusion that lacks a back story.

Which is why you come to highwayscribery.

The UAW is the holy grail of democratic trade unionism in this country with a not inconsiderable reputation around the world as well. The union's dramatic history is woven into labor lore. The auto workers have cut a noble and progressive profile in countless fights since their formation by the Reuther brothers in the 1930s.

In 1986, when the highway scribe was a cub reporter, he was assigned to cover the union's national convention in Anaheim, Calif.

Now reporters are a pretty jaded lot. We've got to sift through a lot of buffalo chips to get at the truth and many events we cover are shows concocted especially for our delectation and/or distraction.

But the sight of 5,000 UAW delegates, sitting at long tables across the sprawling convention floor, rising to their feet and singing "Solidarity Forever" stamped a memory in the scribe's mind that 23 years have barely dimmed.

And that's part of what is behind this move. A progressive president standing by a blue chip labor union and assuring its members get a fighting chance rather, rather than sacrificing them to the cold and heartless logic of the marketplace.

No comments: