6 Shocking Ways Capitalism Is Failing Working America

[Brewman_Jax]

http://www.alternet.org/economy/153901/6...g_america/


The 6 events are:
1. iSlavery
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Why doesn’t Apple manufacture in the United States? Charles Duhigg and Keith Bradsher writing for the New York Times reveal that Apple is looking for a cheap, “flexible” workforce that can be put to work whenever and wherever it is needed on the company's terms.
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2. The Bain (Capital) of Our Middle-Class Existence
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A day doesn’t go by without suffering through another Mitt Romney defense of his career at Bain Capital, his highly profitable leveraged buy-out firm. Mitt repeatedly tells us that Bain created tens of thousands of jobs at Staples, Domino’s Pizza, Sealy, Brookstone, Sports Authority, Burger King, Burlington Coat Factory, Dunkin’ Donuts, and Toys 'R' Us.

For a moment let’s put aside the fact that Bain also drove a large number of companies into bankruptcy while loading them up with debt and extracting enormous profits along the way. Instead, let’s focus on the type of jobs that Staples, Domino’s et al. produce for the American middle-class. While these jobs are not as slavish as those sought after by Apple in China, most Bain companies pay so little and have so few benefits that it is impossible to support a middle-class existence from the jobs they create.

3. Surprise! Federal Auditors Find Big Pay for Bailed-Out Bankers
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Apparently, the bailed-out companies teamed up with Treasury Secretary Timothy Geithner and company to pressure the special master to allow salaries 10 times as high for these failed executives. “Forty-nine people received packages worth $5 million or more from 2009-2011,” according to the auditor’s report. (What the auditor failed to mention is that the law only applies to direct bailout money. It does not cover the big Wall Street firms that took trillions in hidden loans from the Federal Reserve to avoid collapse. Those top bankers earn much more than those at the seven bailed-out firms.)

So what was the excuse for busting the pay cap? Without fatter paychecks, these poor executives would...quit.

Here’s the argument one bailed-out company used to claim a “hardship” exemption so the employee could receive at least $1 million in cash: “This individual is in their early 40s, with two kids in private school, who is now considered cash-poor.” Such people “would not meet their monthly expenses” if the $500,000 a year cap were applied to him. Ouch!
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4. Economically Addicted to War
The news is hot this week with military strife. Iraq is drifting back to civil war. Afghanistan is already there. Iran is threatening to close the Straits of Hormuz, and the New York City police got nabbed using an anti-American Muslim training film on 1,400 of its officers. What does this all add up to? Spending trillions on the military and then asking the middle-lass to tighten its belt to make up for deficits.

Since W.W.II pulled the U.S. out of the Great Depression, massive military expenditures have been used repeatedly to keep the economy near full-employment. During the Cold War, these expenditures contributed mightily to a new form of state capitalism where public funds were used to subsidize private corporations which supplied the military. Along the way, this process also helped prop up the middle-class in defense industry jobs.
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5. Mitt Slithers Through the “Carried Interest” Loophole
Of course, one of the big news items of the week was Mitt’s tax returns, which revealed that he paid only 13.9 percent in federal taxes instead of the 30-plus percent high-income earners are supposed to pay. Like Warren Buffett, Mr. Romney probably pays a lower tax rate than his secretary at Bain Capital. How does he get away with that?

It’s not just that he has a legion of tax sharpies who know how to hide his money in secret Swiss accounts and in the Grand Cayman Islands. The real culprit is a gigantic tax loophole called “carried interest” that allows private equity moguls and hedge fund honchos to essentially lie about what they do for a living.
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6. How the Gringrich/Freddie Tryst Distorts History
This week also treated us with the release of Newt’s $600,000 a year consulting contract with Freddie Mac. Did he get paid for influence-peddling or for his prescient historical insights? Who cares? As sordid as his deal may have been, the real damage comes from the analysis of the financial crash that accompanies the story. We hear again and again by all, including the media, that Fannie Mae and Freddie Mac, the two troubled government housing agencies, caused the financial meltdown.

Not true!

Let’s start with some basic facts about these corporations. They are not government agencies. They are private corporations that have the implicit backing of the government to help provide a massive mortgage market for middle-class Americans (or they were before the crash). The big mistake was allowing these agencies to become for-profit organizations in the first place. But that’s another story.

The widely repeated erroneous analysis claims that Fannie and Freddie caused the crash by underwriting risky housing mortgages. Ron Paul, in particular, blames the Community Reinvestment Act for pushing Fannie and Freddie to buy up “risky” loans that enable underserved minorities in particular to obtain mortgages.
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Failure implies that said thing or event is not working as planned. I'd say that this is not a failure, it's working as planned. The 1% is getting away with it and the 99% is having to pay for it.