Article 43


Tuesday, January 24, 2006

Deep Running Corruption

The Truth About America
By Johnny Peaceseed
Online Journal Guest Writer
December 31, 2005

Open the newspaper. “Scandal, corruption and malfeasance” scream the headlines. Same as yesterday. And the day before. They’re all going down! Wait, they got away with it! Wait, there’s more! Yeah, the private will pay the price! Too bad the generals won’t. They lied us into war? But wait, we’re winning! We’re bringing democracy to Iraq! Wait, democracy means a fundamentalist government? Wait, we upped the air strikes! A scream erupts from my throat, long and unmelodious. I’m taking a news break.

We need, at times, to pause and catch our collective breath. From the lies that got us into Iraq, to the lies that keep us there, from the CORRUPTION that is the REPUBLICAN PARTY to the CORRUPTION THAT PERVADES our largest CORPORATIONS, from the secret orders that take away our civil liberties to the secret prisons where torture is the norm. The breadth and scope of the corruption is STAGGERING.

But, as we try to take stock of the horrendous calamities our leaders have brought us, we might ask the question: ARE THESE EVENTS NIGHTMARE ABERRATIONS, just a hiccup in our history? And will we be able to regain the certitude that our nation is, once again, “the greatest country in the world?”

To find out we must look at America’s actions today and compare and correlate them with the historical actions of the United States from its inception. Sadly, upon examination, we see an unbroken HISTORY of corruption shockingly similar to what we are witnessing today.

We’ve been duped again and again. And each time that we are taken in, it is done in the same way. An event occurs or is orchestrated by our leaders. The leaders and their minions describe the event in mythic terms designed to induce fear or hate. “Our borders aren’t safe.” “The yellow scourge.” “Savage heathens.” “Welfare mothers.” “America isn’t Santa Claus.”

Perhaps an illegal alien kills a marshal as he crosses the border. Our leaders scream that our borders aren’t safe and we must enact harsher laws. Or a judge says you can’t have religious symbols in a public building. The next thing you know we have God in the Pledge of Allegiance. UNIONS started to gain power for their members. Our leaders responded with attempts to portray UNIONS AS UN-AMERICAN.” Now our leaders are saying that the left is stealing Christmas. No telling where that will go. The events that the leaders seize upon are transformed into myths designed to trigger us to act with hate, fear, greed, or just impotence --just as long as we continue to serve the hidden agendas of our leaders. The popular press eagerly joins in the frenzy. Politicians fan the flames. The people are inundated with the myths until the myths transmogrify into what passes for the truth. Seventy or 80 or 90 percent of the people aligned behind a new national identity. We come to see issues in black and white. “United we stand.”

Then, the bloodbath can begin. Then, we will accept oppression. Then, we gladly march to war. To kill the enemy, the enemy that the myths create. We will slaughter the Native Americans and pray for our holy victory. We will enslave and lynch black people and believe we are only supporting “states’ rights.” We will send soldiers to kill the “commie” union workers who just ask for a fair shake. We, the people, will swim in the blood of the vanquished. Glory is ours. The greatest country in the world. With God at our side.

When our leaders want to attack other countries --Mexico, Spain, The Philippines, Vietnam, Nicaragua, Panama, Iraq, etc. --grand slogans are crafted to demonize the new enemy. They reverberate down through our history: “The Monroe Doctrine;” “Remember Goliad;” “Remember Pearl Harbor;” “Remember the Alamo;” “Speak softly but carry a big stick;” “The stakes are too high to stay home;” “The war to end all wars;” “a day of infamy;” “Make the world safe for democracy;” “Better dead than Red;” “the Evil Empire;” “The War on Terror;” “Freedom is on the march.”

And the myth-makers sit back and pull the strings and watch the show as we dance to their bidding. Until we are spent. Until the myth that victory is ours. Then, after a brief pause, a new myth is born. A new threat. A new fear to get us all excited. And off we go again. And again. And again.

Occasionally the puppeteers slip and allow us a peek behind the curtain, allow us to briefly SEE THE STRINGS. So, we rise up in righteous anger at being betrayed. We demand that legislation be passed to address our grievances. Then the process drags on and on with compromise after compromise and we end up settling for legislation that merely hides the strings and once again pulls the veil back over our eyes.

This is the great SECRET of America. That corruption is built in. It is not something that attacks the fiber of our nation. No, it IS the fiber of our nation. It is our raison d’etre. And it will always be so. Right? Or ARE WE READY TO DO SOMETHING about it? Now, wouldn’t that be a New Year’s resolution!


Posted by Elvis on 01/24/06 •
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Unions Hold Their Own in 2005

By John Schmitt and Ben Zipperer
Center For Economic and Policy Research
January 20, 2006

According to the latest annual “Union Members” REPORT, released today by the BUREAU OF LABOR STATISTICS (BLS), union membership last year grew at roughly the same pace as overall job growth, leaving the share of U.S. workers in unions in 2005 unchanged at 12.5 percent.

The BLS distinguishes between workers who are union members and workers who are covered by unions at their workplace but not actually members of a union. In 2005, the union-coverage rate fell slightly, by 0.1 percentage point, to 13.7 percent of the workforce. Union membership increased from about 15.5 million in 2004 to about 15.7 million in 2005; workers covered by unions was basically unchanged at 17.2 million workers.

This year’s report marks a milestone in U.S. union history: for the first time ever, the share of workers in manufacturing who are covered by a union is no higher than the share of covered workers in the rest of economy (both 13.7 percent). Manufacturing workers are now no more likely to be represented by a union than the average U.S. worker. Union-membership rates are still slightly higher in manufacturing (13.0 percent) than in the economy as a whole (12.5 percent), but if recent trends hold, union membership in manufacturing will also soon fall behind the rest of the economy.

While the overall union membership and coverage rates were basically unchanged, the flat movement masks important difference by gender and race. Unionization rates fell for men (membership rates from 13.8 to 13.5 percent, coverage rates from 15.0 to 14.7 percent), but rose for women (membership from 11.1 to 11.3 percent, coverage rates from 12.5 to 12.6 percent).

African Americans are still much more likely to be covered by a union contract (16.5 percent) than whites are (13.4 percent), but the traditionally higher union rates for blacks relative to whites have eroded substantially over the last two decades. The unionization rate for Hispanics rose (membership rates from 10.1 to 10.4 percent, coverage rates from 11.4 to 11.5 percent), but Hispanics are still under-represented in unions relative to their representation in the total workforce.

Patterns for 2005 also varied across industry. Unionization rates remained high in the public sector (36.5 percent membership rate, 40.5 percent coverage rate), primarily because of high unionization rates in many local and state government functions including teaching, and fire and police services. Among federal employees, however, unionization rates dropped last year (membership down 2.1 percentage points to 27.8 percent, coverage down 1.9 percentage points to 33.1 percent).

Construction, which saw significant job growth overall in 2005, nevertheless experienced a decline in unionization rates (membership down 1.6 percentage points to 13.1 percent, coverage down 1.6 percentage points to 13.7 percent).

The government’s new “Information” industry category, which is more heavily unionized than the economy as a whole, also lost union members in 2005; membership rates fell from 14.2 percent in 2004 to 13.6 percent in 2005, while coverage fell a full percentage point from 15.4 percent to 14.4 percent in 2005.

The report may be a sign that the U.S. unions have stopped, if not reversed, a long-term decline in membership and coverage rates, but a review of recent BLS reports suggests caution. Union membership rates, for example, have dropped almost continuously from 20.1 percent in 1983, the earliest year with comparable data, to the current 12.5 percent rate, despite occasional pauses, most recently between 1998 and 1999, and again between 2000 and 2001.


Posted by Elvis on 01/24/06 •
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The Union Conspiracy Against Wal-Mart Workers

by Thomas DiLorenzo
Ludwig Von Mises Institute
January 23, 2006

Most of the commentary on the ongoing propaganda campaign against Wal-Mart ignores what is probably the most important aspect of it: It is primarily a labor union-inspired campaign against Wal-Mart employees, as well as the company in general. This is the essential truth of all union organizing campaigns. Historically, all of the violence, libel, and intimidation that goes along with “organizing campaigns” has been directed at competing, non-union labor, not management. The Wal-Mart campaign is no different.

The propaganda campaign against Wal-Mart is what is known as a “corporate campaign” in the labor union literature. There are very few strikes these days in America; so-called “corporate campaigning” is the new form of organizing. Unions finally wised up to the fact that, while striking may be great fun, with all the name-calling antics, bashing in of car windows (of cars belonging to “scabs"), puncturing of tires, and destruction of company property, it rarely got them anywhere. In fact, if replacement workers are hired during a strike all union employees lose their jobs. Strikes increasingly became an all cost/no benefit proposition, which is why they are so rare these days.

There are several rationales for corporate campaigns. For one, they have been a way of unionizing a workplace without directly involving the employees in cases where unions know they do not have employee support. There have been many instances where unions have lost certification elections by very large margins, telling them that they have no hope of organizing a particular company’s employees. Rather than giving up, however, they will frequently initiate a corporate campaign against the company. The idea is to use every means possible to impose costs on the company, forcing it to increase its prices; embarrass the company’s management with a campaign of slander; and portray the company in the media as some kind of social outlaw. It is easy for unions to generate such publicity with the assistance of various economically ignorant, capitalist-hating “nonprofit” groups, from clergy to environmentalists. If the company gives up and signs a union contract, all the complaints disappear immediately.

One tactic is to issue thousands of complaints about the company to regulators, who must then investigate the complaints, forcing the company to spend huge sums on legal fees. In addition, the union will issue press releases about how many complaints there have been about the company, implying that all the complaints are somehow real and legitimate. This may cost the company some customers if the publicity is bad enough. In the 1990s the corporate campaign against the non-union grocery chain Food Lion caused the organization to shut down dozens of stores. (The company subsequently recovered as consumers discovered for themselves that the union’s charges against Food Lion were bogus, but it still cost the company millions).

In Maryland recently, the state legislature which is totally in the pocket of the state’s unions ֖ passed a law forcing Wal-Mart to provide its workers with expensive, governmentally-prescribed health insurance, something that will certainly drive up its costs and make it less competitive compared to unionized stores.

The ultimate goal is to get the company to sign a union contract without ever involving the employees, a process that labor scholars call “pushbutton unionism.” So much for the fable of “union democracy.”

The United Food and Commercial Workers Union (UFCW), the largest union in the grocery industry, has been at the forefront of many corporate campaigns and is the chief organizer of the campaign against Wal-Mart. It is no secret that Wal-Mart’s grocery prices are very much lower than they are in your typical, unionized grocery store chain. The “problem” facing the UFCW is that unionized grocery store chains tend to be much more expensive than non-union grocery chains (and often much dirtier and less consumer-friendly in general). Thus, they have waged long campaigns against such companies as Food Lion in an attempt to drive up grocery prices all in the “public interest,” of course.

As long as there is competition by the superior, non-union grocery stores, the unionized stores cannot compete as well with their bloated costs and their low-quality goods and service. The unionized stores will lose business to their superior, non-union competitors and may even go bankrupt. The union will lose members and, more importantly, dues revenues. Thus, the role of the corporate campaign, if it is successful, is either to unionize the non-union stores so that they will become just as expensive and inefficient as the unionized ones, or at least impose costs on the non-union companies that will achieve essentially the same outcome.

In either case, it is a patently anti-consumer policy that can only harm the employees of the “targeted” company. Consequently, the whole idea of a corporate campaign is based on a Big Lie: That the union is somehow concerned about the well-being of non-union employees at places like Wal-Mart. In reality, the objective of the union is to force every one of those employees to either join its union (and pay its expensive dues) or become unemployed. This is true of all corporate campaigns, including the ones against Nike and other companies operating in Indonesia.

While the media may portray unions as collections of Mother Teresas, concerned only with the plight of poor Indonesians, the reality is that the real objectives of the unions is to throw every last Indonesian who is employed by Nike out of work, forcing many of them to resort to begging, stealing, prostitution, or worse. That way, competition for higher-priced/lower quality textile goods produced in unionized factories in America will be reduced or eliminated. And the unions pretend to take the moral high ground in this patently immoral crusade.

America’s universities are filled with economically ignorant haters of the free market, so university campuses have become major forums for union denunciations of such companies as Nike, Wal-Mart, and others. Faculty and students claim to be concerned about “social justice,” but they are simply being used as dupes by unions who are not at all concerned with justice of any sort. Rather, their main concern is increasing the coffers of union treasuries by driving non-union competitors from the market.

The great majority of today’s college students may never learn the principles of supply and demand, or understand how many billions of dollars annually companies like Wal-Mart save American consumers (including their own families), but they are indoctrinated as freshmen that any “moral” person should hate Wal-Mart, Nike, and other “outlaw” corporations (as defined by the union movement).

Economically ignorant clergy often lend a hand in this union crusade to throw thousands of people out of work, lending an aura of “God’s work” to this immoral and anti-social crusade. And of course there are all the other usual suspects - environmentalists, “consumer activists,” trial lawyers, and Wal-Mart’s higher-cost competitors who are happy to be a part of such smear campaigns because it satisfies their own self interests (or fattens their wallets) as well.

So far, millions and millions of Americans have expressed disagreement with the smears against Wal-Mart by the UFCW and its accomplices by shopping there in record numbers. As always, the public has nothing at all to do with such anti-corporate campaigns, which are always the work of small groups of union rabble rousers, intellectuals, and pundits desperate to portray themselves as being “on the side of the people.” The danger is if these opinion makers succeed in convincing enough politicians to follow the actions of the Maryland legislature, which is arguably the most economically ignorant group of legislators in America (I speak from experience, having testified several times before committees of these jokers). If this happens then the grocery industry will become less competitive, costing American consumers billions and destroying even more billions of dollars in shareholder wealth along with it.

Thomas DiLorenzo is professor of economics at Loyola College in Maryland and the author of THE REAL LINCOLN (Three Rivers Press/Random House, 2003). His latest book is HOW CAPITALISM SAVED AMERICA (Crown Forum/Random House, 2004). . Comment on the BLOG.


Posted by Elvis on 01/24/06 •
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States Lead Way On Minimum Wage Hikes

By Kathleen Hunter, Staff Writer
January 20, 2006

Nearly one-half of Americans now live in states that require wages higher than the $5.15 AN HOUR set by Congress nine years ago. And the trend of states raising their minimum wages in the face of federal inaction shows no sign of fading.

Just since the start of the year, one state has increased its minimum wage, a governor from each party has announced a wage hike is on his agenda, and supporters are rallying in six states where campaigns are under way for wage-hike initiatives on the November ballot.

On Jan. 17, Maryland became the 18th state to set a minimum wage higher than the federal level of $5.15 an hour when the Maryland General Assembly overrode Republican GOV. ROBERT EHRLICH’S veto of a bill raising that state’s minimum wage to $6.15 an hour.

The same day, NEW MEXICO GOV. BILL RICHARDSON (D) in his annual STATE OF THE STATE ADDRESS proposed raising his state’s minimum wage to $7.50 an hour - up from $5.15 an hour - over the next three years.

Even Republican GOV. ARNOLD SCHWARZENEGGER of California ventured into what is traditionally considered the territory of Democratic politicians and called for a $1 increase in California’s minimum wage to $7.75 from $6.75—during his ANNUAL ADDRESS to the Legislature earlier this month.

“The economy has bounced back, so it is now time for those who often work the hardest and earn the least to benefit from California’s growth,” Schwarzenegger said in his speech.

Ballot initiative campaigns are under way in six states, including in Nevada, where voters will consider a pioneering measure this November. Nevadans will decide whether to enact a bifurcated minimum wage requirement in which companies that don’t provide health benefits for employees would be forced to pay a higher minimum wage than those that do. Minnesota already requires employers with annual receipts of $625,000 or more to pay higher wages than smaller companies.

Experts say the growing patchwork of laws setting various wage floors across the country is driven largely by the longest period without a congressionally mandated increase since the federal minimum wage was introduced in 1938.

“I think it will continue to be a hot issue for the states in 2006,” said Jeanne Mejeur, who tracks minimum wage issues for the National Conference of State Legislatures.

Mejeur predicts as many as 30 states could consider legislative proposals to increase the minimum wage this year, including 11 states where such proposals will carry over from 2005.

Efforts to place minimum wage hikes on the ballot this November also are afoot in Arizona, Arkansas, Michigan, Montana and Ohio, according to the Ballot Initiative Strategy Center.

Washington state, which in 2001 became the first state to mandate automatic increases in its minimum wage tied to inflation, currently has the highest minimum wage of any state—$7.63 an hour, according to the NCSL.

Like Washington, Oregon pegs annual increases in the minimum wage to the Consumer Price Index to keep pace with inflation, and Nevada will do the same if the November ballot item passes.

Federal law requires that all workers covered under the Fair Labor Standards Act are paid at least $5.15 an hour. Two states—Kansas and Ohio—set a minimum rate below the federal $5.15 mark for some workers who aren’t covered under the federal law, such as waitresses. Six states have no minimum wage law at all, while 24 have formally adopted the federal rate as the state minimum.

Supporters of minimum wage increases claim they are needed to help lift people out of poverty and to strengthen workers’ bargaining clout, while opponents argue that the minimum wage is too blunt an instrument to effectively combat poverty.

“I’m opposed to the minimum wage because I think it gives people a very wrong idea of how wages are determined in our country and how people get higher wages. ... The notion that the government is going to somehow protect our wages is just unrealistic,” said Richard Burkhauser, professor of policy analysis and economics at Cornell University.

Because a large portion of minimum-wage earners are actually middle-to-upper-class teenagers, tools such as the earned-income tax credit are better at targeting the working poor, Burkhauser said. States such as Minnesota and New York have added supplements to the federal earned-income tax credit, which since the late 1990s has provided refunds to low-income wage earners, particularly single mothers.

Opponents also have argued that requiring companies to pay higher wages results in lower overall employment rates.

Burkhauser said he was particularly concerned about the current trend towards automatically increasing the minimum wage to account for inflation. “That has all sorts of potentially mischievous unintended consequences,” such as companies being tied into ever-higher wages during times when inflation is high but the economy is stagnating, he said.

But advocates for the poor still urge minimum wage increases as one of many strategies to combat poverty and to raise the living standards of low-income people. They also contest the notion that raising the minimum wage leads to layoffs.

“These are workers who have the weakest bargaining leverage and are most likely to be exploited, particularly in a period where you have a weak labor demand and a large labor supply,” said Jared Bernstein, senior economist at the Economic Policy Institute, a think tank that supports minimum wage increases.

Bernstein said he particularly supports efforts to tie minimum wage increases to inflation. Otherwise, wages for the lowest earners actually decrease in real terms every year there is no increase, he said.


Posted by Elvis on 01/24/06 •
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Substantial Early Payment

Are you still unemployed or underemployed?  Not 59 1/2 yet? 
Thinking of cashing in your IRA or 401(k) to help meet this month’s bills?
If yes - you may be able to start taking that money out without paying the 10% early withdrawal penalty.

Generally, IRA distributions which are taken before a participant reaches age 59 1/2 must be included in taxable income and are subject to a 10% premature distribution penalty tax. IRC Section 72(t)(2)(A)(iv) excludes from this 10% premature distribution penalty at distributions which are:

IRS Notice 89-25 clarifies how an IRA participant must calculate payments in order to satisfy the exception to the 10% penalty, and it provides three alternative calculation methods under which payment will be considered substantially equal periodic payments.

Q: In the case of an IRA or individual account plan, what constitutes a series of substantially equal periodic payments for purposes of section 72(t)(2)(A)(iv)? 

A: Section 72(t)(1) imposes an additional tax of 10 percent on the portion of early distributions from qualified retirement plans (including IRAs) includible in gross income. However, section 72(t)(2)(A)(iv) provides that this tax shall not apply to distributions which are part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of the employee and beneficiary. Section 72(t)(4) provides that, if the series of periodic payments is subsequently modified within five years of the date of the first payment, or, if later, age 59-1/2, the exception to the l0 percent tax under section 72(t)(2)(A)(iv) does not apply, and the taxpayer’s tax for the year of modification shall be increased by an amount, determined under regulations, which (but for the 72(t)(2)(A)(iv) exception) would have been imposed, plus interest. 

Payments will be considered to be substantially equal periodic payments within the meaning of section 72(t)(2)(A)(iv) if they are made according to one of the methods set forth below. 

Payments shall be treated as satisfying section 72(t)(2)(A)(iv) if the annual payment is determined using a method that would be acceptable for purposes of calculating the minimum distribution required under section 401(a)(9). For this purpose, the payment may be determined based on the life expectancy of the employee or the joint life and last survivor expectancy of the employee and beneficiary. 

Payments will also be treated as substantially equal periodic payments within the meaning of section 72(t)(2)(A)(iv) if the amount to be distributed annually is determined by amortizing the taxpayer’s account balance over a number of years equal to the life expectancy of the account owner or the joint life and last survivor expectancy of the account owner and beneficiary (with life expectancies determined in accordance with proposed section 1.401(a)(9)-1 of the regulations) at an interest rate that does not exceed a reasonable interest rate on the date payments commence. For example, a 50 year old individual with a life expectancy of 33.1, having an account balance of $100,000, and assuming an interest rate of 8 percent, could satisfy section 72(t)(2)(A)(iv) by distributing $8,679 annually, derived by amortizing $100,000 over 33.1 years at 8 percent interest. 

Finally, payments will be treated as substantially equal periodic payments if the amount to be distributed annually is determined by dividing the taxpayer’s account balance by an annuity factor (the present value of an annuity of $1 per year beginning at the taxpayer’s age attained in the first distribution year and continuing for the life of the taxpayer) with such annuity factor derived using a reasonable mortality table and using an interest rate that does not exceed a reasonable interest rate on the date payments commence. If substantially equal monthly payments are being determined, the taxpayer’s account balance would be divided by an annuity factor equal to the present value of an annuity of $1 per month beginning at the taxpayer’s age attained in the first distribution year and continuing for the life of the taxpayer. For example, if the annuity factor for a $1 per year annuity for an individual who is 50 years old is 11.109 (assuming an interest rate of 8 percent and using the UP-1984 Mortality Table), an individual with a $100,000 account balance would receive an annual distribution of $9,002 ($100,000/11.109 = $9,002).


IRS NOTICE 2004-15

Posted by Elvis on 01/24/06 •
Section Dealing with Layoff
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