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Arianna Huffington on Corporations

2004 former Independent Challenger for CA Governor


AIG bank bailout would close all state budget gaps of $166B

America's states faced a cumulative budget gap of $166 billion for fiscal 2010. Total shortfalls through fiscal 2011 are estimated $380 billion--and could be even higher depending on what happens to unemployment.

These are massive numbers. But when you remember that we spent $182 billion to bail out AIG ($12.9 billion of which went straight to Goldman Sachs), you realize that this amount alone would be more than enough to close the 2010 budget gap in every state of the Union. Toss in the $45 billion we gave to Bank of America and the $45 billion we gave to Citigroup, and we would be well on the way to ensuring that no state's vital services are cut through 2011.

But instead that money has gone to the banks without any fundamental reform to the system, without any strings attached or edicts about how much they have to lend to help the real economy recover--or, indeed, without even having to tell us what they did with our money.

Source: Third World America, by Arianna Huffington, p. 10-11 , Sep 2, 2010

Banks got 40% of all corporate profits, paid by middle class

The financial industry made up 2.5% of America's GDP in 1947. By 1970, it had grown to 4%. By 2006, just before the meltdown, it was 8.3%.

The trend is even starker when you look at the financial sector's share of U.S. business profits. Between 1973 an 1985, the financial industry's share of domestic corporate profits topped out at 16%. In the 1990s, it spanned between 21% and 30%. Just before the financial crisis hit, it stood at 41%.

The expansion of the financial industry has come at a significant cost to the rest of us. And those who have paid the highest price are the members--and former members--of America's middle class.

It's no wonder that Wall Street breathed a deep sigh of relief when the Senate passed the Restoring American Financial Stability Act in May 2010. It was considered mission accomplished for financial reform. Unfortunately, it didn't do enough to rein in Wall Street. It didn't end too-big-to-fail banks, and it kept taxpayers on the hook for future bailouts.

Source: Third World America, by Arianna Huffington, p. 21-22 , Sep 2, 2010

Safety net protects those hurt by supply-and-demand

An unregulated free market is sooner or later corrupted by fraud and excess. In other words, it isn't free at all. In fact, it's as fixed as a street-corner game of three-card monte. And the interests of the elites have become disconnected from the publi interest.

In the three decades since the Reagan Revolution, Americans have been [told that] unregulated markets are the true path to a higher standard of living. Along the way, the social contract--especially the subsections protecting workers, poor people, and our air, water, and oceans--was fed into a shredder. Starting with the New Deal, we began constructing a social safety net to help the most vulnerable among us. But who needed a safety net when the laws of supply and demand were there to protect us, when the trickle-down theory would provide sustenance for us all?

The missing tenet in this new free-market fundamentalism was the recognition, central to capitalism, that businessmen have responsibilities above and beyond the bottom line.

Source: Third World America, by Arianna Huffington, p. 49-50 , Sep 2, 2010

Offshore tax havens evade $100B taxes per year

The corporate class makes sure its license to break the rules is built into the rules themselves. One of the most glaring examples of this continues to be the ability of corporations to cheat the public out of tens of billions of dollars a year by using offshore tax havens. Indeed, it's estimated that companies and wealthy individuals funneling money through offshore tax havens are evading around $100 billion a year in taxes--leaving the rest of us to pick up the tab.

In 2004 US multinational corporations paid roughly $16 billion in taxes on $700 billion in foreign active earnings--putting their tax rate at around 2.3%. Know many middle-class Americans getting off that easy at tax time?

In Dec. 2008, 83 of the 100 largest publicly traded companies in the country had subsidiaries in tax havens. Washington has been trying to address the issue for close to fifty years--JFK gave it a go in 1961. But time and again corporate lobbyists have managed to keep the loopholes open.

Source: Third World America, by Arianna Huffington, p. 56-58 , Sep 2, 2010

2005 Bankruptcy Bill protected bankers, not consumers

Bankers knew that the housing bubble, like all bubbles before it, had to eventually burst. And when it did, massive foreclosures & bankruptcies would result. So they needed to set their self-protecting bear traps.

Enter the bankruptcy bill that banking lobbyists pushed through Congress in 2005. Instead of cracking down on predatory lending practices, closing loopholes that favor the wealthy, and strengthening the safety net for working people, single mothers, and elderly Americans struggling to recover from financial setback, the Senate put together a nasty little bill that:

Source: Third World America, by Arianna Huffington, p. 67 , Sep 2, 2010

Cuts to consumer safety agencies resulted in dangerous toys

The Right has been successful at placing industry insiders in charge of dismantling regulatory agencies. Here's just a few of their greatest hits.

As Chinese products have flooded the market and NAFTA-juiced trade has increased imports to record levels, the Consumer Product Safety Commission has had a number of conspicuous failures. The best known of them was the unprecedented double recall of both a lead-tainted Thomas the Tank Engine toy and the toy sent to consumers to replace it. The Product Safety Commission has dropped prevention of child-drowning from its list of strategic goals. Its overworked inspectors didn't catch an obvious defect in the Simplicity Crib that killed nine-month-old Liam Johns. None of this is any surprise, since reducing its staff from a high of 978 in 1980 to less than half that today.

The bracing truth is that we now have a regulatory system in which corporate greed, political timidity, and a culture of cronyism are the order of the day.

Source: Right Is Wrong, by Arianna Huffington, p.261-263 , Apr 29, 2008

Corporate criminals are treated with kid gloves

When New York State Attorney General Eliot Spitzer concluded his settlement agreement with the corrupt titans of Wall Street at the beginning of 2003, none of the wrongdoers involved had to admit any wrongdoing. This kid-glove treatment of Wall Street crooks-even in the hands of a real crusader for cleaning up the system-provides a profound example of how we continue to operate under two vastly different sets of rules in this country-one for a select group of elites and one for the rest of America. How dramatically would the numbers change if we were as concerned about personal bankruptcies as we are about business ones? When common criminals are allowed to cop a plea, they plead guilty first as part of the bargain. Crooks in pinstripe suits, on the other hand, even those caught red-handed, donít have to come clean. Itís the ultimate privilege-and the ultimate insult to our intelligence.
Source: Fanatics and Fools, by Arianna Huffington, p. 74-5 , Apr 14, 2004

End loopholes that allow shifting profits overseas

All you really needed to know about the true nature of the economic stimulus package could be found in a largely unnoticed provision that made permanent a gaping tax loophole that was about to expire. It allowed multinational corporations such as GE and Ford to preserve forever a key weapon in the corporate tax dodger's armory: the freedom to shift profits overseas. Tell me, how exactly is it providing incentives to keep money out of our economy supposed to stimulate our economy?
Source: Pigs at the Trough, by Arianna Huffington, p.124 , Jan 27, 2004

Unholy alliance: CEO class and Capitol Hill

Most CEOs and their Praetorian Guard of lawyers, accountants, and advisors are smart enough not to break the law. They don't have to.

The mad stampede of greed that coincided with the waning of the bull market and the bursting of the loony tunes tech balloon would not have been possible without an unholy alliance between the CEO class and their buddies on Capitol Hill. For a small fee, payable at the beginning of each election cycle--some call such fees "political donations"; others, less concerned with semantics, political correctness, and charges of slander, call them "legal bribes"--corporate mandarins can purchase an all-access pass guaranteeing a sympathetic look the other way from our so-called public servants. Sure, for a few weeks last summer, when the WorldCom bomb made them fear for their political lives, our political leaders actually passed a set of reforms. But don't be fooled. Both political parties have a richly vested interest in corporate corruption.

Source: Pigs at the Trough, by Arianna Huffington, p. 9 , Jan 27, 2004

Three Strikes and youíre out for corporate felons

To balance the budget, the first thing I will do is to close corporate tax loopholes, because right now, just in terms of how weíre assessing commercial properties, we are losing about $2 billion in revenue. And if we just change that, if we just assess commercial properties fairly, that would be $2 billion. If we just close the loopholes when it comes to tax shelters, both domestic and offshore tax shelters that would be another $2 billion. Iíd like a three-strike and youíre out when it comes to corporate felons. And right now we have something like that in front of the legislature and it should pass. Because it should be absolutely unacceptable that companies defraud the California public and then the state continues to do business with them.
Source: Recall Debate, Cal. State Univ. at Sacramento , Sep 24, 2003

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Page last updated: Jul 06, 2014