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And by proxy a mechanism for wealth sapping. Look how many years kids have to work to pay off those loans.
The Elite: It's a Big Club and You're Not in it
- Thread starter OfficePants
- Start date
And by proxy a mechanism for wealth sapping. Look how many years kids have to work to pay off those loans.
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In a lot of respects yes. Wasteful time management and 4 year degrees that could be taught in 2 year of year round study.
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Or much less, more effective, and paid, if young people were drafted strait into working environments. Now the "intern" scam lives on. I understand the efficacy of a well rounded education because cell phone millennials are too lazy to learn about the world, but what does Art 101 have to do with a kid wanting to be an electrical engineer? If he likes art, drive to a fucking museum. Don't make it a requirement of getting your ass into the work world where you can produce something.
Zé Ferreira
JAJAJAJAJAJAJAJJA
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I will forever shudder at this concept. What an absolute waste. Unpaid internships should be legislatively banned.
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If it means another $20 in the pocket of an elite, no chance.
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How More and More U.S. Corporate Profits Escape the Corporate Income Tax
Posted on January 29, 2015 by Yves Smith
Yves here. This post makes an important and simple point about one big source of the fall in the relative importance of corporate income as a source of Federal tax revenue that is often ignored in official discussions: the rise in the use of pass-through entities. An older theory was that, generally speaking, you could get the benefits of limited liability and pass through treatment only if you were a small fry. The S corporation election was meant to promote entrepreneurial activity. If you want to be a partnership and get the tax bennies, fine, but you have to live with the risk of unlimited personal liability.
The use of limited liability corporations started to pick up steam in the later 1990s (I recall asking my regular attorney about converting to an LLC in 1997 and she though they were too untested legally to be worth the risk) and are now common. And the impact over time of this change, as well as the use of other tax-reduction strategies, has been significant. In 1952, corporate income tax provided 33% of total Federal tax receipts. By 2013, it had fallen to 10%.
Yves here. This post makes an important and simple point about one big source of the fall in the relative importance of corporate income as a source of Federal tax revenue that is often ignored in official discussions: the rise in the use of pass-through entities. An older theory was that, generally speaking, you could get the benefits of limited liability and pass through treatment only if you were a small fry. The S corporation election was meant to promote entrepreneurial activity. If you want to be a partnership and get the tax bennies, fine, but you have to live with the risk of unlimited personal liability.
The use of limited liability corporations started to pick up steam in the later 1990s (I recall asking my regular attorney about converting to an LLC in 1997 and she though they were too untested legally to be worth the risk) and are now common. And the impact over time of this change, as well as the use of other tax-reduction strategies, has been significant. In 1952, corporate income tax provided 33% of total Federal tax receipts. By 2013, it had fallen to 10%.
By John Miller. Originally published at Triple Crisis
The effective corporate income tax rate is almost exactly the same in the United States as in other OECD countries. (While the U.S. statutory corporate tax rate is well above the OECD average, the many loopholes in the U.S. corporate tax bring the effective rate down substantially.) Then how is it that corporate taxes account for a much smaller share of GDP in the United States than in other high-income countries? The answer lies in forms of incorporation that allow U.S. corporate profits to be taxed at the lower individual income tax rate.
Two changes paved the way for more and more profit to escape the corporate income tax in the United States. The federal government extended limited legal liability, which protects owners from losing their personal assets if their business fails, to some partnerships and “pass through” corporations not subject to the corporate income tax. Then the tax reform of 1986 cut the top tax bracket of the individual income tax to 28%, well below the statutory corporate income-tax rate. That opened up a large tax advantage for owners who paid individual income taxes on their profits instead of corporate income taxes.
Pass-through businesses—-S-corporations (which afford up to 100 owners limited liability), partnerships (including limited liability partnerships in which all the partners enjoy limited liability), and sole proprietorships—-have flourished over the last three decades. In 1980, corporations subject to the corporate income tax (called “C-corporations”) generated nearly four fifths (78%) of business net income, a measure of a business’s profitability. By 2007, pass-through businesses’ share of net income surpassed that of C-corporations. In fact, partnerships, S-corporations, and sole proprietorships each outnumbered C-corporations.
That was not the case in other high-income countries. In 2004, for instance, nearly two-thirds of U.S. businesses with taxable profits over $1 million were not subject to the corporate income tax. Meanwhile the next-highest share among large, high-income countries belonged to the United Kingdom, with just 26%.
The three-decade decline in the corporate share of net income, enabled by the rise in pass-through businesses with limited liability, has eroded the tax base for the U.S. corporate income tax. That explains how U.S. corporate income tax receipts as a share of GDP (2.3% in 2011) were able to drop well below OECD average (3.0% in 2011), even while the U.S. and OECD effective tax rates on corporate income were nearly identical.
Today, the majority of business profits are taxed at an even lower rate than that imposed by a corporate code riddled with loopholes. A thorough-going reform of taxes on profits must therefore not only close loopholes in the corporate income tax but also no longer extend limited liability to businesses that don’t pay corporate income taxes. With the profits of S-corporations and limited liability companies added to its base, the corporate income tax would be extended to at least another one-fifth of business net income. No longer extending limited liability to millionaire owners of S-corporations and limited liability companies, by itself, would add more than one-tenth of business net income to the base of the corporate income tax.
Posted on January 29, 2015 by Yves Smith
Yves here. This post makes an important and simple point about one big source of the fall in the relative importance of corporate income as a source of Federal tax revenue that is often ignored in official discussions: the rise in the use of pass-through entities. An older theory was that, generally speaking, you could get the benefits of limited liability and pass through treatment only if you were a small fry. The S corporation election was meant to promote entrepreneurial activity. If you want to be a partnership and get the tax bennies, fine, but you have to live with the risk of unlimited personal liability.
The use of limited liability corporations started to pick up steam in the later 1990s (I recall asking my regular attorney about converting to an LLC in 1997 and she though they were too untested legally to be worth the risk) and are now common. And the impact over time of this change, as well as the use of other tax-reduction strategies, has been significant. In 1952, corporate income tax provided 33% of total Federal tax receipts. By 2013, it had fallen to 10%.
Yves here. This post makes an important and simple point about one big source of the fall in the relative importance of corporate income as a source of Federal tax revenue that is often ignored in official discussions: the rise in the use of pass-through entities. An older theory was that, generally speaking, you could get the benefits of limited liability and pass through treatment only if you were a small fry. The S corporation election was meant to promote entrepreneurial activity. If you want to be a partnership and get the tax bennies, fine, but you have to live with the risk of unlimited personal liability.
The use of limited liability corporations started to pick up steam in the later 1990s (I recall asking my regular attorney about converting to an LLC in 1997 and she though they were too untested legally to be worth the risk) and are now common. And the impact over time of this change, as well as the use of other tax-reduction strategies, has been significant. In 1952, corporate income tax provided 33% of total Federal tax receipts. By 2013, it had fallen to 10%.
By John Miller. Originally published at Triple Crisis
The effective corporate income tax rate is almost exactly the same in the United States as in other OECD countries. (While the U.S. statutory corporate tax rate is well above the OECD average, the many loopholes in the U.S. corporate tax bring the effective rate down substantially.) Then how is it that corporate taxes account for a much smaller share of GDP in the United States than in other high-income countries? The answer lies in forms of incorporation that allow U.S. corporate profits to be taxed at the lower individual income tax rate.
Two changes paved the way for more and more profit to escape the corporate income tax in the United States. The federal government extended limited legal liability, which protects owners from losing their personal assets if their business fails, to some partnerships and “pass through” corporations not subject to the corporate income tax. Then the tax reform of 1986 cut the top tax bracket of the individual income tax to 28%, well below the statutory corporate income-tax rate. That opened up a large tax advantage for owners who paid individual income taxes on their profits instead of corporate income taxes.
Pass-through businesses—-S-corporations (which afford up to 100 owners limited liability), partnerships (including limited liability partnerships in which all the partners enjoy limited liability), and sole proprietorships—-have flourished over the last three decades. In 1980, corporations subject to the corporate income tax (called “C-corporations”) generated nearly four fifths (78%) of business net income, a measure of a business’s profitability. By 2007, pass-through businesses’ share of net income surpassed that of C-corporations. In fact, partnerships, S-corporations, and sole proprietorships each outnumbered C-corporations.
That was not the case in other high-income countries. In 2004, for instance, nearly two-thirds of U.S. businesses with taxable profits over $1 million were not subject to the corporate income tax. Meanwhile the next-highest share among large, high-income countries belonged to the United Kingdom, with just 26%.
The three-decade decline in the corporate share of net income, enabled by the rise in pass-through businesses with limited liability, has eroded the tax base for the U.S. corporate income tax. That explains how U.S. corporate income tax receipts as a share of GDP (2.3% in 2011) were able to drop well below OECD average (3.0% in 2011), even while the U.S. and OECD effective tax rates on corporate income were nearly identical.
Today, the majority of business profits are taxed at an even lower rate than that imposed by a corporate code riddled with loopholes. A thorough-going reform of taxes on profits must therefore not only close loopholes in the corporate income tax but also no longer extend limited liability to businesses that don’t pay corporate income taxes. With the profits of S-corporations and limited liability companies added to its base, the corporate income tax would be extended to at least another one-fifth of business net income. No longer extending limited liability to millionaire owners of S-corporations and limited liability companies, by itself, would add more than one-tenth of business net income to the base of the corporate income tax.
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"Today, the majority of business profits are taxed at an even lower rate than that imposed by a corporate code riddled with loopholes"
One of Gufus' favourite words. May he RIP
One of Gufus' favourite words. May he RIP
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For anyone with a WSJ subscription:
http://www.wsj.com/articles/how-a-two-tier-economy-is-reshaping-the-u-s-marketplace-1422502201
http://www.wsj.com/articles/how-a-two-tier-economy-is-reshaping-the-u-s-marketplace-1422502201
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Read that this morning. Not a very well done article.
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Yo, copy paste that for us poors.
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I was interested when I saw the header, but it devolves into a gigantic correlation = causation tripe instead of any real analysis.
WOODINVILLE, Wash.—Five years ago, Quadrant Homes churned out starter houses in the Seattle area with an average sales price of $269,000 and the marketing slogan, “More House, Less Money.”
But facing a debt-burdened middle class and rising land prices, Quadrant has since exchanged entry-level buyers for customers free of credit worries and ready to splurge. Its new slogan, “Built Your Way,” accompanies homes with vaulted ceilings and gourmet kitchens that last year sold for an average price of $420,000. “We used a lot of market research to tell us that our old model wasn’t going to work,” said Ken Krivanec, Quadrant’s chief executive.
The emergence of a two-tiered U.S. economy, with wealthy households advancing while middle- and lower-income Americans struggle, is reshaping markets for everything from housing to clothing to groceries to beer.
“It’s a tale of two economies,” said Glenn Kelman, chief executive of Redfin, a real-estate brokerage in Seattle that operates in 25 states. “There is a high-end market that is absolutely booming. And then there’s everyone in the middle class. They don’t have much hope of wage growth.”
The recession blew holes in the balance sheets of all U.S. households and ended a decadeslong loosening of credit for middle-class borrowers. Now, credit is tight, and incomes have been flat or falling for all but the top 10th of U.S. income earners between 2010 and 2013, according to the Federal Reserve.
American spending patterns after the recession underscore why many U.S. businesses are reorienting to serve higher-income households, said Barry Cynamon, of the Federal Reserve Bank of St. Louis.
Since 2009, average per household spending among the top 5% of U.S. income earners—adjusting for inflation—climbed 12% through 2012, the most recent data available. Over the same period, spending by all others fell 1% per household, according to Mr. Cynamon, a visiting scholar at the bank’s Center for Household Financial Stability, and Steven Fazzari of Washington University in St. Louis, who published their research findings last year.
The spending rebound following the recession “appears to be largely driven by the consumption at the top,” Mr. Cynamon said. He and Mr. Fazzari found the wealthiest 5% of U.S. households accounted for around 30% of consumer spending in 2012, up from 23% in 1992.
Indeed, such midtier retailers as J.C. Penney , Sears and Target have slumped. “The consumer has not bounced back with the confidence we were all looking for,” Macy’s chief executive Terry Lundgren told investors last fall.
In luxury retail, meanwhile: “Our customers are confident, feel good about the economy in general and their personal balance sheets specifically,” said Karen Katz, chief executive of Neiman Marcus Group Ltd., last month. Reported 2014 revenues of $4.8 billion for the company are up from $3.6 billion in 2009.
Revenue for such luxury hotel chains as St. Regis and Ritz-Carlton rose 35% last year compared with 2008, according to market research firm STR Inc. Revenues at midscale chains such as Best Western and Ramada were down 1%.
On grocery aisles, the recession and its aftermath boosted sales of economy brands. At the high end, Whole Foods Market Inc. reported record sales per gross square foot last year.
ENLARGE
“Demand bifurcated,” said Jason Green, chief executive of the Cambridge Group, a growth strategy firm that is part of Nielsen NV. “The familiar stuff my middle-class family had in the pantry, those are under significant pressure.”
In the grocery market’s middle tier, Safeway Inc., the second-largest supermarket chain in the U.S. was purchased last year by the private-equity group that owns Albertsons, the fifth-largest grocery retailer. Company officials said the deal would allow the companies to reduce costs—and lower prices for customers—as they fend off competition from low-price outlets and high-end stores.
In the cold case, sales of premium lagers are up 16% since 2007 after adjusting for inflation, while sales of economy brands grew 8%, according to research firm Euromonitor International. Sales of midprice beers are down 1%.
The trend hit auto makers some years ago, when BMW AG ’s former chief executive Helmut Panke described the U.S. market as an hourglass: lots of demand for budget and luxury brands but little in between.
Steve Bates, general manager of BMW Seattle for the past 12 years, said new-car sales at his dealership were up 25% last year, while used-car sales were flat. The M4 series, a sporty coupe priced from $64,000, has been “selling out as soon as it touches the ground,” he said.
Then there are consumers like Vicki Oliver, 68 years old, of Temecula, Calif. She bought a used Hyundai Sonata last year to replace a wrecked 1995 Ford Explorer. Ms. Oliver and her husband, a real-estate agent, added onto their home two years ago so her daughter and son-in-law, a general contractor, could move in with their family.
“That was a way to make things work in hard times,” Ms. Oliver said. Caribbean cruises and trips to Florida are now memories. “We haven’t done that for years,” she said.
The housing market illustrates how weakness among middle-class consumers holds back the U.S. economy. Homes are generally the biggest purchase Americans make. Housing dollars ripple through the economy by triggering spending on appliances, furniture and landscaping.
Inequality in America
ENLARGE
For the first time, U.S. builders last year sold slightly more homes priced above $400,000 than those below $200,000. As a result, the median price of new homes exceeded $280,000, a record in nominal terms and 2% shy of the 2006 inflation-adjusted peak.
Total sales last year, however, were up just 1% compared with 2013, and more than 50% below their average from 2000 to 2002, before the housing bubble.
New homes are also getting bigger. The median U.S. home was more than 2,400 square feet in the third quarter of 2014, a 20% increase from early 2000 and a 10% increase from the peak of the housing market in 2006.
In Seattle, the median new-home size topped 2,500 square feet last year, a record, according to research firm Metrostudy Inc. Since the market hit bottom in 2011, sales of new homes priced above $600,000 have tripled, while sales below $400,000 are down 16%, according to CoreLogic DataQuick.
Builders boost profits selling more expensive homes. But less construction overall means fewer new jobs and reduced total spending.
ENLARGE
Residential construction in Woodinville, Wash. The builder, Quadrant Homes, has turned from entry-level homes to building larger, more expensive houses. Photo: Stuart Isett for The Wall Street Journal
“Over the long haul, I worry that you can’t run our housing market, which depends on volume, on affluent buyers alone,” said Diane Swonk, chief economist at Mesirow Financial in Chicago.
Young households have been slow to buy homes because of the tough job market. Many would-be buyers can’t save enough for a down payment or don’t earn enough to qualify for a mortgage. Student debt holds others back.
A typical household, for example, would need around $60,000 in cash to make a 20% down payment on the median-priced new home in the U.S. To qualify for a mortgage, they would need good credit and to show an annual income of about $45,000, assuming little other household debt. A government-insured loan in this example could call for an $11,000 down payment but would require an annual income of $60,000.
Lisa and Nathan Trione are looking for a house in Denver big enough for their five children. But there is little in their price range: $250,000 and under.
“You’re already intimidated by the process,” said Ms. Trione, a 28-year-old paralegal and office manager. “And then you see this huge price, and you say, ‘I’m not ready to do that right now.’”
Ms. Trione is paying off debt she incurred while earning her associate degree. She also is trying to raise her credit score, which, she said, fell during a series of early financial missteps.
Well-heeled customers, meanwhile, have their pick of mortgages. At the same time, some banks have pulled back from federally insured loans that allow for smaller down payments.
“We would like to build a smaller, higher-quality and less-volatile business,” Marianne Lake, chief financial officer at J.P. Morgan Chase & Co., told investors last year.
With fewer potential customers, builders have largely abandoned the entry-level market. “If a builder can make money on something, he’ll build it. The problem is that they can’t make money at the entry level,” said John Burns, of Irvine, Calif., a consultant to builders.
But rentals, the low-end of the housing market, are booming. Apartment construction has neared its fastest pace since 1989. Two of the nation’s largest home builders, Toll Brothers Inc. and Lennar Corp. , have both launched multifamily construction divisions, each with around 5,000 units in the pipeline.
“We all wished we had a big apartment portfolio through this downturn,” said Douglas Yearley, Toll’s chief executive, during an earnings call last year.
With sales plunging in 2009, Quadrant called in a research firm that concluded more buyers might materialize if the company built more expensive homes. “When it’s data driven, the courage to make a remarkable change is easier than when you’re using your gut,” said Mr. Krivanec, the company’s chief executive.
Quadrant, a unit of TRI Pointe Homes Inc., was finishing seven homes per workday in 2004. They now finish less than two of the more expensive houses a day. But the share of buyers who back out of a deal, typically because they can’t get a loan, is down 10% since 2010.
To serve more higher-end buyers, Quadrant opened a design studio two years ago that lets buyers choose from dozens of cabinets, countertops, tiles and flooring. Some new buyers spend nearly twice as much on such upgrades, the company said, which adds to the profitability of home sales.
Common design features now include a walk-in closet and bathroom nearly as big as the master bedroom. Kitchens have a walk-in pantry.
On a recent Tuesday afternoon on Little Bear Creek Place, a cul-de-sac in this Seattle suburb, electricians, landscapers and framers worked on some 23 Quadrant home sites.
Nearby, Nick and Adriana Stoll unpacked boxes in their new four-bedroom home. The home is twice the size of the 1,200-square-foot, one-bedroom apartment they rented in nearby Bellevue.
ENLARGE
The Stolls customized almost every feature and finish, including hinges on kitchen cabinets that prevent the doors from slamming shut. “I’m typically the kind of consumer where I make a quick decision,” Mr. Stoll said. “But when it comes to your home, well, we stared at 100 countertops for an hour.”
The Stolls survived the recession and have prospered. Mr. Stoll purchased a Seattle condominium in 2008, the day before learning he was losing his job at Washington Mutual, the thrift sold to J.P. Morgan after it was seized by the Federal Deposit Insurance Corp.
Mr. Stoll changed jobs twice before he was recruited in 2011 to work at a technology company. He broke even on the sale of his condo last year. “Other people encountered problems where maybe it’s student loans or credit cards or car payments,” he said, “and we have none of that.”
The couple put 20% down on their new home, which cost $579,000. Ms. Stoll works as a client associate for a large financial services company.
Growth in new home sales this year will depend, in part, on whether builders revive their interest in first-time buyers.
Two years ago, D.R. Horton Inc., the nation’s largest home builder, launched Emerald Homes, a luxury division. Last year, the company rolled out Express Homes, a division that pioneered no-frills housing for the entry-level market.
Mr. Krivanec, Quadrant’s CEO, said he doesn’t see a return to his company’s former model. There are enough people with good-paying jobs in the area—at Boeing , Amazon and Microsoft—to keep sales going, even it means building fewer homes. “We like where we’re at,” he said.
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Thanks. Didn't learn much.
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Per that long documentary I posted... more false flag.
Embedded media from this media site is no longer available
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While Deflategate and Chaitgate Rage, America Quietly Robs Its Elderly
That's the scene where Leo's whacked-out boss talks about the three keys to success on Wall Street: jerking off, cocaine and "revolutions," i.e. keeping the client on the investment Ferris wheel indefinitely, while you burn him for fees. On and on it goes, the park is open, 24/7, 365 days a year…
"He thinks he's getting rich, which he is, on paper," McConaughy says. "But you and I are making cold hard cash – on commission, motherfucker!"
A graphic demonstration of that scene, and the financial-services industry ethos it describes, just hit the news in the form of a wild new report on the wide-scale scamming of ordinary investors. The "Ferris wheel" of conflicted payments, unnecessary fees and other shady practices apparently beats retirees for up to $17 billion a year, according to an internal White House memorandum.
Bloomberg's Dave Michaels and Margaret Collins did an excellent report on the topic. They wrote that back on January 13th, Jason Furman, the Chairman of President Obama's Council of Economic Advisors, issued a scathing memo about shady broker practices and how they impact ordinary savers, especially working people who use brokers to manage their retirement funds.
Specifically, the White House investigation concluded that this particular corner of the financial services is teeming with loophole-permitted conflicts of interest. Brokers can legally and in most cases undetectably grind their clients for fees and/or put them into plans that offer fat commissions for the brokers themselves, while offering lower returns for the client.
The particular practice of making a client pay endlessly for transaction fees within the fund – known as churning – is described as a serious problem, one in which brokers "repeatedly buy and sell assets when additional transactions aren't necessary," while exhibiting "poor market timing."
Revolutions!
Another practice the study cites involves recommending that clients roll over their 401(k)s into IRAs. Many firms do this, the study says, "without any knowledge of a client's financial situation, and fail to mention the likely possibility that the fees they would face if their assets remained in the employer plan may be lower."
There are lots of people in this country who have their antennae all the way up when they buy a used car, but no clue at all when it comes to turning their retirement money over to be managed.
For instance, it might surprise a lot of Americans to know that most brokers handling retirement funds aren't required by law to act in the best interests of their clients.
Instead, the standard is a humorously amorphous thing called "suitability," which basically means the broker must only have a "reasonable basis for believing that recommendation is suitable for you."
Under that absurd standard, McConaughy-style brokers can justify just about any kind of "investment strategy," including one that explicitly makes themselves more money through fees and commissions while making less for you, the client.
The Furman memo, first obtained by Bloomberg (I only just read it today), offers some startling numbers. It concludes that investors who rely upon conflicted brokers stand to lose enormous percentages of their savings. According to the internal report:
An investor receiving conflicted advice who expects to retire in 30 years loses at least 5 to 10 percent of his or her potential retirement savings due to conflicts, or approximately 1 to 3 years worth of withdrawals during retirement.
The report further adds that the estimated cost to investors is somewhere between $8 billion and $17 billion annually. To put that in DeflateGate perspective, that means that financial advisors annually siphon about as much or more from retirees through bogus fees and other tricks as the entire NFL makes in revenues every year.
The Obama administration is proposing to fix the problem by changing the rules and imposing a fiduciary duty standard on brokers, forcing them to act in their clients' best interests. If this Labor Department proposal ever gets past the 50 yard line, expect the financial services lobby to carpet-bomb Washington with studies showing that apart from nuclear winter or inviting al-Qaeda to occupy the White House, nothing could be worse for America than forcing brokers to act in the best interests of their clients.
As the Bloomberg reporters put it:
The Securities Industry and Financial Markets Association, Wall Street's largest trade group, declined to comment specifically about the memo. The group has previously said that opposing the Labor Department plan is one of its top priorities in Washington this year.
"Any signal that the DOL proposal is moving forward would cause us concern," Andy Blocker, a Sifma lobbyist, said in a statement.
None of this is terribly surprising. It's just that if the White House is right, the numbers are somewhat higher than might have been expected. $17 billion a year is a fairly sizable amount of money even by financial services scamming standards. Three years worth of retirement payments is lot of money even to Americans, who by now are used to being ripped off.
Whether the solution is a new law or simply raising awareness, beware of the Ferris wheel…
- by Matt Taibbi
- Jan. 29, 2015
- 3 min read
- original
That's the scene where Leo's whacked-out boss talks about the three keys to success on Wall Street: jerking off, cocaine and "revolutions," i.e. keeping the client on the investment Ferris wheel indefinitely, while you burn him for fees. On and on it goes, the park is open, 24/7, 365 days a year…
"He thinks he's getting rich, which he is, on paper," McConaughy says. "But you and I are making cold hard cash – on commission, motherfucker!"
A graphic demonstration of that scene, and the financial-services industry ethos it describes, just hit the news in the form of a wild new report on the wide-scale scamming of ordinary investors. The "Ferris wheel" of conflicted payments, unnecessary fees and other shady practices apparently beats retirees for up to $17 billion a year, according to an internal White House memorandum.
Bloomberg's Dave Michaels and Margaret Collins did an excellent report on the topic. They wrote that back on January 13th, Jason Furman, the Chairman of President Obama's Council of Economic Advisors, issued a scathing memo about shady broker practices and how they impact ordinary savers, especially working people who use brokers to manage their retirement funds.
Specifically, the White House investigation concluded that this particular corner of the financial services is teeming with loophole-permitted conflicts of interest. Brokers can legally and in most cases undetectably grind their clients for fees and/or put them into plans that offer fat commissions for the brokers themselves, while offering lower returns for the client.
The particular practice of making a client pay endlessly for transaction fees within the fund – known as churning – is described as a serious problem, one in which brokers "repeatedly buy and sell assets when additional transactions aren't necessary," while exhibiting "poor market timing."
Revolutions!
Another practice the study cites involves recommending that clients roll over their 401(k)s into IRAs. Many firms do this, the study says, "without any knowledge of a client's financial situation, and fail to mention the likely possibility that the fees they would face if their assets remained in the employer plan may be lower."
There are lots of people in this country who have their antennae all the way up when they buy a used car, but no clue at all when it comes to turning their retirement money over to be managed.
For instance, it might surprise a lot of Americans to know that most brokers handling retirement funds aren't required by law to act in the best interests of their clients.
Instead, the standard is a humorously amorphous thing called "suitability," which basically means the broker must only have a "reasonable basis for believing that recommendation is suitable for you."
Under that absurd standard, McConaughy-style brokers can justify just about any kind of "investment strategy," including one that explicitly makes themselves more money through fees and commissions while making less for you, the client.
The Furman memo, first obtained by Bloomberg (I only just read it today), offers some startling numbers. It concludes that investors who rely upon conflicted brokers stand to lose enormous percentages of their savings. According to the internal report:
An investor receiving conflicted advice who expects to retire in 30 years loses at least 5 to 10 percent of his or her potential retirement savings due to conflicts, or approximately 1 to 3 years worth of withdrawals during retirement.
The report further adds that the estimated cost to investors is somewhere between $8 billion and $17 billion annually. To put that in DeflateGate perspective, that means that financial advisors annually siphon about as much or more from retirees through bogus fees and other tricks as the entire NFL makes in revenues every year.
The Obama administration is proposing to fix the problem by changing the rules and imposing a fiduciary duty standard on brokers, forcing them to act in their clients' best interests. If this Labor Department proposal ever gets past the 50 yard line, expect the financial services lobby to carpet-bomb Washington with studies showing that apart from nuclear winter or inviting al-Qaeda to occupy the White House, nothing could be worse for America than forcing brokers to act in the best interests of their clients.
As the Bloomberg reporters put it:
The Securities Industry and Financial Markets Association, Wall Street's largest trade group, declined to comment specifically about the memo. The group has previously said that opposing the Labor Department plan is one of its top priorities in Washington this year.
"Any signal that the DOL proposal is moving forward would cause us concern," Andy Blocker, a Sifma lobbyist, said in a statement.
None of this is terribly surprising. It's just that if the White House is right, the numbers are somewhat higher than might have been expected. $17 billion a year is a fairly sizable amount of money even by financial services scamming standards. Three years worth of retirement payments is lot of money even to Americans, who by now are used to being ripped off.
Whether the solution is a new law or simply raising awareness, beware of the Ferris wheel…
- Messages
- 40,409
Oh give me a break you intolerant bastard. You give someone who you think is supposed to be looking out for your interests and he skims off the top, and it's your fault? Do you blame clients for lawyers who overbill?
Zé Ferreira
JAJAJAJAJAJAJAJJA
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Brokers exist to make money, not concern themselves with yours.
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First of all, 99.99% of 401(k) accounts don't have a "broker". These are institutionally invested on behalf of all participants. So to start, your premise is wrong. Also, you're right... nobody should trust anyone with their money, ever. Broker, lawyer, whatever.
Second, most people are forced to use it since there isn't any other way in a tax deferred manner.
Third, people are financial buffoons. Even though they lose much of their gains to the Wall St trash can, they'd do better than trying to invest with an issue of Money magazine.
Lastly, it's not an assumption, it's a lack of choice. My current 401(k) gives me complete control. I can buy absolutely anything I want, you name it. I am not trapped in this bullshit of being forced to invest in these fee laden funds. These "plans" companies buy are a large part of the problem, they are loaded with the practices in the article.
The laws around 401(k)'s are there to protect the stupids, but like any law butted up against the banality of evil, it's been eviscerated by the elite. The elite don't need 401(k)s, we get the scraps.
If you don't have time to manage your money then drop a hobby and spend some time researching what suits your needs best in terms of investments. If you're an ultra stupid numb nuts, own a rental property (not that it's a bad investment, just easy).
Last edited:
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You sound like a lawyer.
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Did either of you read the article? These are not stock brokers.
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I completely agree with you. Also, absolutely irrelevant to the point of the article or the message sent.
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No, dammit, that's not the takeaway. Stop watching that Fox news horseshit. Wall street is criminally under-regulated. The simple facts of the article should have told you that much. This is the takeaway:
These people are licensed representatives of large banking institutions calling up parents, employees, and soldiers to grift them out of their current retirement plans, all so they can make a few extra dollars. That's an important point - these people ARE NOT investing new money (so this isn't a Boiler Room situation, like you think all Wall Street concepts are). They are lying to these people to get them to shift out of their employer provided 401k's. And its completely legal because they can basically say whatever the fuck they want and get away with it:
Just like that.
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Honestly, did you start taking a sideline gig with the Republican party? Where do you come up with this shit?
Serious question - should used car dealerships be allowed to lie about what's on the odometer? Whether a car's been in a flood?
How about restaurants? Should they be allowed to lie about safety inspections? Contractors be allowed to lie about fraud? Where does the limit of your no government horseshit stop?
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http://robertreich.org/post/109894095095
The Share-the-Scraps Economy
Monday, February 2, 2015
How would you like to live in an economy where robots do everything that can be predictably programmed in advance, and almost all profits go to the robots’ owners?
Meanwhile, human beings do the work that’s unpredictable – odd jobs, on-call projects, fetching and fixing, driving and delivering, tiny tasks needed at any and all hours – and patch together barely enough to live on.
Brace yourself. This is the economy we’re now barreling toward.
They’re Uber drivers, Instacart shoppers, and Airbnb hosts. They include Taskrabbit jobbers, Upcounsel’s on-demand attorneys, and Healthtap’s on-line doctors.
They’re Mechanical Turks.
The euphemism is the “share” economy. A more accurate term would be the “share-the-scraps” economy.
New software technologies are allowing almost any job to be divided up into discrete tasks that can be parceled out to workers when they’re needed, with pay determined by demand for that particular job at that particular moment.
Customers and workers are matched online. Workers are rated on quality and reliability.
The big money goes to the corporations that own the software. The scraps go to the on-demand workers.
Consider Amazon’s “Mechanical Turk.” Amazon calls it “a marketplace for work that requires human intelligence.”
In reality, it’s an Internet job board offering minimal pay for mindlessly-boring bite-sized chores. Computers can’t do them because they require some minimal judgment, so human beings do them for peanuts — say, writing a product description, for $3; or choosing the best of several photographs, for 30 cents; or deciphering handwriting, for 50 cents.
Amazon takes a healthy cut of every transaction.
This is the logical culmination of a process that began thirty years ago when corporations began turning over full-time jobs to temporary workers, independent contractors, free-lancers, and consultants.
It was a way to shift risks and uncertainties onto the workers – work that might entail more hours than planned for, or was more stressful than expected.
And a way to circumvent labor laws that set minimal standards for wages, hours, and working conditions. And that enabled employees to join together to bargain for better pay and benefits.
The new on-demand work shifts risks entirely onto workers, and eliminates minimal standards completely.
In effect, on-demand work is a reversion to the piece work of the nineteenth century – when workers had no power and no legal rights, took all the risks, and worked all hours for almost nothing.
Uber drivers use their own cars, take out their own insurance, work as many hours as they want or can – and pay Uber a fat percent. Worker safety? Social Security? Uber says it’s not the employer so it’s not responsible.
Amazon’s Mechanical Turks work for pennies, literally. Minimum wage? Time-and-a half for overtime? Amazon says it just connects buyers and sellers so it’s not responsible.
Defenders of on-demand work emphasize its flexibility. Workers can put in whatever time they want, work around their schedules, fill in the downtime in their calendars.
“People are monetizing their own downtime,” Arun Sundararajan, a professor at New York University’s business school, told the New York Times.
But this argument confuses “downtime” with the time people normally reserve for the rest of their lives.
There are still only twenty-four hours in a day. When “downtime” is turned into work time, and that work time is unpredictable and low-paid, what happens to personal relationships? Family? One’s own health?
Other proponents of on-demand work point to studies, such as one recently commissioned by Uber, showing Uber’s on-demand workers to be “happy.”
But how many of them would be happier with a good-paying job offering regular hours?
An opportunity to make some extra bucks can seem mighty attractive in an economy whose median wage has been stagnant for thirty years and almost all of whose economic gains have been going to the top.
That doesn’t make the opportunity a great deal. It only shows how bad a deal most working people have otherwise been getting.
Defenders also point out that as on-demand work continues to grow, on-demand workers are joining together in guild-like groups to buy insurance and other benefits.
But, notably, they aren’t using their bargaining power to get a larger share of the income they pull in, or steadier hours. That would be a union – something that Uber, Amazon, and other on-demand companies don’t want.
Some economists laud on-demand work as a means of utilizing people more efficiently.
But the biggest economic challenge we face isn’t using people more efficiently. It’s allocating work and the gains from work more decently.
On this measure, the share-the-scraps economy is hurtling us backwards.
The Share-the-Scraps Economy
Monday, February 2, 2015
How would you like to live in an economy where robots do everything that can be predictably programmed in advance, and almost all profits go to the robots’ owners?
Meanwhile, human beings do the work that’s unpredictable – odd jobs, on-call projects, fetching and fixing, driving and delivering, tiny tasks needed at any and all hours – and patch together barely enough to live on.
Brace yourself. This is the economy we’re now barreling toward.
They’re Uber drivers, Instacart shoppers, and Airbnb hosts. They include Taskrabbit jobbers, Upcounsel’s on-demand attorneys, and Healthtap’s on-line doctors.
They’re Mechanical Turks.
The euphemism is the “share” economy. A more accurate term would be the “share-the-scraps” economy.
New software technologies are allowing almost any job to be divided up into discrete tasks that can be parceled out to workers when they’re needed, with pay determined by demand for that particular job at that particular moment.
Customers and workers are matched online. Workers are rated on quality and reliability.
The big money goes to the corporations that own the software. The scraps go to the on-demand workers.
Consider Amazon’s “Mechanical Turk.” Amazon calls it “a marketplace for work that requires human intelligence.”
In reality, it’s an Internet job board offering minimal pay for mindlessly-boring bite-sized chores. Computers can’t do them because they require some minimal judgment, so human beings do them for peanuts — say, writing a product description, for $3; or choosing the best of several photographs, for 30 cents; or deciphering handwriting, for 50 cents.
Amazon takes a healthy cut of every transaction.
This is the logical culmination of a process that began thirty years ago when corporations began turning over full-time jobs to temporary workers, independent contractors, free-lancers, and consultants.
It was a way to shift risks and uncertainties onto the workers – work that might entail more hours than planned for, or was more stressful than expected.
And a way to circumvent labor laws that set minimal standards for wages, hours, and working conditions. And that enabled employees to join together to bargain for better pay and benefits.
The new on-demand work shifts risks entirely onto workers, and eliminates minimal standards completely.
In effect, on-demand work is a reversion to the piece work of the nineteenth century – when workers had no power and no legal rights, took all the risks, and worked all hours for almost nothing.
Uber drivers use their own cars, take out their own insurance, work as many hours as they want or can – and pay Uber a fat percent. Worker safety? Social Security? Uber says it’s not the employer so it’s not responsible.
Amazon’s Mechanical Turks work for pennies, literally. Minimum wage? Time-and-a half for overtime? Amazon says it just connects buyers and sellers so it’s not responsible.
Defenders of on-demand work emphasize its flexibility. Workers can put in whatever time they want, work around their schedules, fill in the downtime in their calendars.
“People are monetizing their own downtime,” Arun Sundararajan, a professor at New York University’s business school, told the New York Times.
But this argument confuses “downtime” with the time people normally reserve for the rest of their lives.
There are still only twenty-four hours in a day. When “downtime” is turned into work time, and that work time is unpredictable and low-paid, what happens to personal relationships? Family? One’s own health?
Other proponents of on-demand work point to studies, such as one recently commissioned by Uber, showing Uber’s on-demand workers to be “happy.”
But how many of them would be happier with a good-paying job offering regular hours?
An opportunity to make some extra bucks can seem mighty attractive in an economy whose median wage has been stagnant for thirty years and almost all of whose economic gains have been going to the top.
That doesn’t make the opportunity a great deal. It only shows how bad a deal most working people have otherwise been getting.
Defenders also point out that as on-demand work continues to grow, on-demand workers are joining together in guild-like groups to buy insurance and other benefits.
But, notably, they aren’t using their bargaining power to get a larger share of the income they pull in, or steadier hours. That would be a union – something that Uber, Amazon, and other on-demand companies don’t want.
Some economists laud on-demand work as a means of utilizing people more efficiently.
But the biggest economic challenge we face isn’t using people more efficiently. It’s allocating work and the gains from work more decently.
On this measure, the share-the-scraps economy is hurtling us backwards.
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And here we go again. The root of all endless wars is the variety of military industrial complexes, and ours is about to siphon away some more of the population's wealth. A bit of elite code... when you hear "supply arms", it means steal more from you.
http://www.wsj.com/articles/u-s-weighs-supplying-ukraine-with-missiles-1422918663
U.S. Weighs Supplying Ukraine With Missiles
White House Advisers to Discuss Options for Defensive Lethal Aid This Week
http://www.wsj.com/articles/u-s-weighs-supplying-ukraine-with-missiles-1422918663
U.S. Weighs Supplying Ukraine With Missiles
White House Advisers to Discuss Options for Defensive Lethal Aid This Week
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Interesting take on R Murdoch.
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http://www.nytimes.com/2015/02/03/n...rluxe-benefits-when-others-pay-the-bills.html
In Chris Christie’s Career, a Fondness for Luxe Benefits When Others Pay the Bills
In Chris Christie’s Career, a Fondness for Luxe Benefits When Others Pay the Bills
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I heard that on the radio this morning. Hey, the king of Jordan is just an old friend of mine...
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Glutton. Explains his obesity. Free steaks every night.
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http://www.reuters.com/article/2015/02/03/us-argentina-prosecutor-warrant-idUSKBN0L72BK20150203
Dead Argentine prosecutor had drafted request for president's arrest
Dead Argentine prosecutor had drafted request for president's arrest
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So if this is real, its a stunning leak. How the US is installing a puppet government. Wow. She says "fuck the EU".
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Here you go JimmyRustler, down with regulation!
http://www.washingtonpost.com/blogs...3/the-next-public-health-debate-hand-washing/
Senator says restaurant employees shouldn’t be required to wash their hands
By Colby Itkowitz February 3 at 12:39 PM
Sen. Thom Tillis (R-N.C.) said at the Bipartisan Policy Center that maybe the government should not require food workers to wash their hands after using the bathroom. (C-SPAN)
(This post has been updated.)
Once we’re done debating whether children should be vaccinated, we can move on to other pressing public health questions, such as whether eateries can force their employees to wash their hands after they use the bathroom.
At least one freshman U.S. senator thinks, “nah.” Because freedom.
Sen. Thom Tillis (R-N.C.), at the end of an appearance Monday at the Bipartisan Policy Center, volunteered a story about “his bias when it comes to regulatory reform.”
Tillis said he was at a Starbucks in 2010 talking to a woman about regulations and where businesses should be allowed to opt out. His coffee companion challenged him, asking whether employees there should be required to wash their hands.
“As a matter of fact I think this is one where I think I can illustrate the point,” he recalled telling her. “I don’t have any problem with Starbucks if they choose to opt out of this policy as long as they post a sign that says we don’t require our employees to wash their hands after leaving the restroom. The market will take care of that. It’s one example.” (Is requiring a sign not a regulation?)
Tillis, who told the story with his right hand raised for emphasis, concluded that in his example most businesses who posted signs telling customers their food workers didn’t have to wash their hands would likely go out of business. Ah, the free market!
Closing the event, Bipartisan Policy Center President Jason Grumet said, “I’m not sure if I’m going to shake your hand…” (But then he did.)
Just so you know, in describing why handwashing is required, the FDA says, “Proper handwashing reduces the spread of fecal-oral pathogens from the hands of a food employee to foods.”
If Tillis’s career in politics doesn’t work out, may we politely suggest he pursue anything but food service.
Updated at 5:30 p.m.: An Associated Press reporter caught up with Tillis on Capitol Hill, and the senator did not back down from his belief that businesses should “get to make that decision versus government.”
http://www.washingtonpost.com/blogs...3/the-next-public-health-debate-hand-washing/
Senator says restaurant employees shouldn’t be required to wash their hands
By Colby Itkowitz February 3 at 12:39 PM
Sen. Thom Tillis (R-N.C.) said at the Bipartisan Policy Center that maybe the government should not require food workers to wash their hands after using the bathroom. (C-SPAN)
(This post has been updated.)
Once we’re done debating whether children should be vaccinated, we can move on to other pressing public health questions, such as whether eateries can force their employees to wash their hands after they use the bathroom.
At least one freshman U.S. senator thinks, “nah.” Because freedom.
Sen. Thom Tillis (R-N.C.), at the end of an appearance Monday at the Bipartisan Policy Center, volunteered a story about “his bias when it comes to regulatory reform.”
Tillis said he was at a Starbucks in 2010 talking to a woman about regulations and where businesses should be allowed to opt out. His coffee companion challenged him, asking whether employees there should be required to wash their hands.
“As a matter of fact I think this is one where I think I can illustrate the point,” he recalled telling her. “I don’t have any problem with Starbucks if they choose to opt out of this policy as long as they post a sign that says we don’t require our employees to wash their hands after leaving the restroom. The market will take care of that. It’s one example.” (Is requiring a sign not a regulation?)
Tillis, who told the story with his right hand raised for emphasis, concluded that in his example most businesses who posted signs telling customers their food workers didn’t have to wash their hands would likely go out of business. Ah, the free market!
Closing the event, Bipartisan Policy Center President Jason Grumet said, “I’m not sure if I’m going to shake your hand…” (But then he did.)
Just so you know, in describing why handwashing is required, the FDA says, “Proper handwashing reduces the spread of fecal-oral pathogens from the hands of a food employee to foods.”
If Tillis’s career in politics doesn’t work out, may we politely suggest he pursue anything but food service.
Updated at 5:30 p.m.: An Associated Press reporter caught up with Tillis on Capitol Hill, and the senator did not back down from his belief that businesses should “get to make that decision versus government.”
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This one has
OfficePants
written ALL over it:
http://www.nytimes.com/2015/02/03/n...mailed&version=Full&src=me&WT.nav=MostEmailed
Chris Christie Shows Fondness for Luxury Benefits When Others Pay the Bill
By KATE ZERNIKE and MICHAEL BARBAROFEB. 2, 2015
As Gov. Chris Christie of New Jersey waited to depart on a trade mission to Israel in 2012, his entourage was delayed by a late arrival: Mr. Christie’s father, who had accidentally headed to the wrong airport.
A commercial flight might have left without him, but in this case, there was no rush. The private plane, on which Mr. Christie had his own bedroom, had been lent by Sheldon G. Adelson, the billionaire casino owner and supporter of Israel. At the time, he was opposing legislation then before the governor to legalize online gambling in New Jersey.
Mr. Christie loaded the plane with his wife, three of his four children, his mother-in-law, his father and stepmother, four staff members, his former law partner and a state trooper.
King Abdullah of Jordan picked up the tab for a Christie family weekend at the end of the trip. The governor and two staff members who accompanied him came back to New Jersey bubbling that they had celebrated with Bono, the lead singer of U2, at three parties, two at the king’s residence, the other a Champagne reception in the desert. But a small knot of aides fretted: The rooms in luxurious Kempinski hotels had cost about $30,000; what would happen if that became public?
It did not, for the moment. But it would not have been the first or last time that Mr. Christie’s desire for celebrity access and expensive trips has raised eyebrows.
The governor, a Republican now preparing a run for president, shot to national prominence as a cheese-steak-on-the-boardwalk Everyman who bluntly preached transparency and austerity as the antidote to bloated state budgets. But throughout his career in public service, Mr. Christie has indulged a taste that runs more toward Champagne at the Four Seasons.
He has also quietly let others pay the bills.
That tendency — the governor himself says he wants to “squeeze all the juice out of the orange” — has put him in ethically questionable situations, taking benefits from those who stand to benefit from him.
Mr. Christie is hardly the first politician, in either party, whose embrace of luxury travel has prompted criticism. Hillary Rodham Clinton, for example, a potential Democratic candidate for president, is known for her dependence on private planes often paid for by others.
Last month, Mr. Christie prompted a state ethics inquiry after he flew to at least three games of the Dallas Cowboys, his team since boyhood, on the plane of the owner, Jerry Jones, whose company had received a contract with the Port Authority of New York and New Jersey after the governor recommended it.
A spokeswoman for Mr. Christie, who is currently on a three-day trip to London, did not dispute the details of the trip to Israel and Jordan, which were described in interviews with several people close to the administration or involved in the trip, and in documents seen by The New York Times.
But the spokeswoman, Maria Comella, described King Abdullah as “a friend” the governor met at a salon-style dinner in New York hosted by Michael R. Bloomberg, who was the mayor at the time. “King Abdullah invited the governor and his family to Jordan as his personal guest so the two families could spend time together,” she said on Sunday.
Ms. Comella also said Mr. Adelson had not been personally lobbying the governor against the online gambling bill.
In the end, Mr. Christie signed the bill. He cited pressure from unions that argued it was needed to keep casinos open, and the need for revenue to balance the budget.
Mr. Adelson later told a somewhat different story: He said Mr. Christie told him that had he vetoed the bill, as Mr. Adelson would have wanted, it would have been overridden.
That, in retrospect, seems unlikely. Republicans in the Legislature have previously changed their positions rather than override a veto by Mr. Christie.
The governor has also been a guest on the private plane and in the stadium box of Woody Johnson, the owner of the New York Jets and another opponent of the gambling bill.
Early in his tenure, Mr. Christie set up a group to entice foreign businesses to New Jersey. That group, Choose N.J., is financed by companies that are forbidden by pay-to-play laws to donate to the governor, because they have business before the state, including legal work, and contracts for roads and infrastructure.
(Last month, Choose N.J. announced that it had appointed as its president and chief executive Michele Brown, one of Mr. Christie’s closest confidantes and a neighbor, who has worked for him since his days as a United States attorney.)
The group partly financed the 2012 trip to Israel, as well as three trips the governor has taken over the last year, to Mexico, Canada and his current destination, London.
Mr. Christie’s foreign travel has helped him build his credentials and his contacts as he prepares to run for president. Choose N.J. sounded dubious in a report last year about enticing business from Britain. Interest was strongest, it found, from Belgium, France, Germany, Israel, Sweden and Switzerland. But London is a prime market for fund-raising among American expatriates: In 2012, President Obama and Mitt Romney raised more money in Britain than in any other foreign country.
While previous New Jersey governors have flown commercial for trade missions, Mr. Christie flew privately for three. (His spokeswoman said he flew commercial to London.) He has taken family on all. He stays in five-star properties: the King David in Jerusalem, the Intercontinental in Mexico City. The hotel in London, the Corinthia, has a Baccarat chandelier and masses of flowers refreshed every morning.
Mr. Christie’s entourage takes over conference rooms laid out with elaborate spreads of food at all hours. Ms. Comella said Mr. Christie’s office sought a lower rate for government officials whenever possible.
Letting the king pay for his three-day weekend in Jordan back in 2012 would not have been allowed if Mr. Christie were, say, president or a United States senator; it is illegal for federal employees to accept gifts of more than nominal value from agents of foreign governments. An executive order Mr. Christie signed in 2010 allows New Jersey governors to have travel and related expenses paid by foreign governments; it does not specifically address gifts such as the parties the king held for him, but the governor’s staff said it was covered under a provision that allowed gifts from personal friends.
Mr. Christie has described it as a matter of opportunity. “I relish these experiences and exposures, especially for my kids,” he told a reporter for The Times last summer. “I try to squeeze all the juice out of the orange that I can.”
As he has traveled more widely, particularly during the last year, when he led the Republican Governors Association, Mr. Christie’s first-class tastes have become well known. He made it clear when he campaigned for Mr. Romney in 2012 that he would do out-of-state events only if he was given a private plane, even during the primary, when the candidate’s wife was still flying commercial to save money. The Romney campaign came to understand that he preferred a Cessna Citation X, which, its manufacturer boasts, has exotic wood interiors and a Rolls-Royce engine.
While many high-profile Republican politicians resist insinuating themselves into celebrity circles, Mr. Christie seeks them out — Howard Stern in the Hamptons; Donald J. Trump at Jean-Georges in Manhattan, where the menu begins at $128 per person. He danced onstage with Jamie Foxx at a celebrity benefit at the Hamptons in August before a crowd that included Barbra Streisand, Paul McCartney, Jack Nicholson and Robert De Niro.
State taxpayers paid for Mr. Christie, his wife and two aides to travel to the 2013 Super Bowl in New Orleans, as New Jersey prepared to host the 2014 game. Airfare for four passengers came to $8,146; Mr. Christie’s hotel for three nights cost $3,371.
He has fought to shield the cost of his travel. The Super Bowl expenses were revealed only after a judge’s order in a lawsuit brought by The Record, a newspaper in northern New Jersey. In response to other lawsuits and public records requests, the governor’s office has argued that he is not subject to disclosure laws regarding travel, or that it does not have the records.
Groups like Choose N.J. and the Republican Jewish Coalition, which also contributed to the Israel trip, do not have to disclose their expenses.
As United States attorney for New Jersey, Mr. Christie developed a reputation for flouting the rules on travel. A Justice Department report after he left office found that he was the prosecutor who most often exceeded the charges allowed for hotel stays in different cities, without properly searching for a cheaper alternative, or justifying any exemption from the rules. He stayed at a Four Seasons in Washington and a new boutique hotel in Boston, for example, at more than double the cost allowed for those cities.
The report concerned hotel stays, but Mr. Christie’s preference for car services over taxis earned a footnote: He paid $236 to travel four miles from the airport in Boston, and $562 for a round-trip between Central London and Heathrow. Mr. Christie, who by then was governor, declined to be interviewed by investigators preparing the Justice Department report.
The revelations in the report prompted the Justice Department to tighten rules about exemptions to stay in costly hotels.
OfficePants
written ALL over it:http://www.nytimes.com/2015/02/03/n...mailed&version=Full&src=me&WT.nav=MostEmailed
Chris Christie Shows Fondness for Luxury Benefits When Others Pay the Bill
By KATE ZERNIKE and MICHAEL BARBAROFEB. 2, 2015
As Gov. Chris Christie of New Jersey waited to depart on a trade mission to Israel in 2012, his entourage was delayed by a late arrival: Mr. Christie’s father, who had accidentally headed to the wrong airport.
A commercial flight might have left without him, but in this case, there was no rush. The private plane, on which Mr. Christie had his own bedroom, had been lent by Sheldon G. Adelson, the billionaire casino owner and supporter of Israel. At the time, he was opposing legislation then before the governor to legalize online gambling in New Jersey.
Mr. Christie loaded the plane with his wife, three of his four children, his mother-in-law, his father and stepmother, four staff members, his former law partner and a state trooper.
King Abdullah of Jordan picked up the tab for a Christie family weekend at the end of the trip. The governor and two staff members who accompanied him came back to New Jersey bubbling that they had celebrated with Bono, the lead singer of U2, at three parties, two at the king’s residence, the other a Champagne reception in the desert. But a small knot of aides fretted: The rooms in luxurious Kempinski hotels had cost about $30,000; what would happen if that became public?
It did not, for the moment. But it would not have been the first or last time that Mr. Christie’s desire for celebrity access and expensive trips has raised eyebrows.
The governor, a Republican now preparing a run for president, shot to national prominence as a cheese-steak-on-the-boardwalk Everyman who bluntly preached transparency and austerity as the antidote to bloated state budgets. But throughout his career in public service, Mr. Christie has indulged a taste that runs more toward Champagne at the Four Seasons.
He has also quietly let others pay the bills.
That tendency — the governor himself says he wants to “squeeze all the juice out of the orange” — has put him in ethically questionable situations, taking benefits from those who stand to benefit from him.
Mr. Christie is hardly the first politician, in either party, whose embrace of luxury travel has prompted criticism. Hillary Rodham Clinton, for example, a potential Democratic candidate for president, is known for her dependence on private planes often paid for by others.
Last month, Mr. Christie prompted a state ethics inquiry after he flew to at least three games of the Dallas Cowboys, his team since boyhood, on the plane of the owner, Jerry Jones, whose company had received a contract with the Port Authority of New York and New Jersey after the governor recommended it.
A spokeswoman for Mr. Christie, who is currently on a three-day trip to London, did not dispute the details of the trip to Israel and Jordan, which were described in interviews with several people close to the administration or involved in the trip, and in documents seen by The New York Times.
But the spokeswoman, Maria Comella, described King Abdullah as “a friend” the governor met at a salon-style dinner in New York hosted by Michael R. Bloomberg, who was the mayor at the time. “King Abdullah invited the governor and his family to Jordan as his personal guest so the two families could spend time together,” she said on Sunday.
Ms. Comella also said Mr. Adelson had not been personally lobbying the governor against the online gambling bill.
In the end, Mr. Christie signed the bill. He cited pressure from unions that argued it was needed to keep casinos open, and the need for revenue to balance the budget.
Mr. Adelson later told a somewhat different story: He said Mr. Christie told him that had he vetoed the bill, as Mr. Adelson would have wanted, it would have been overridden.
That, in retrospect, seems unlikely. Republicans in the Legislature have previously changed their positions rather than override a veto by Mr. Christie.
The governor has also been a guest on the private plane and in the stadium box of Woody Johnson, the owner of the New York Jets and another opponent of the gambling bill.
Early in his tenure, Mr. Christie set up a group to entice foreign businesses to New Jersey. That group, Choose N.J., is financed by companies that are forbidden by pay-to-play laws to donate to the governor, because they have business before the state, including legal work, and contracts for roads and infrastructure.
(Last month, Choose N.J. announced that it had appointed as its president and chief executive Michele Brown, one of Mr. Christie’s closest confidantes and a neighbor, who has worked for him since his days as a United States attorney.)
The group partly financed the 2012 trip to Israel, as well as three trips the governor has taken over the last year, to Mexico, Canada and his current destination, London.
Mr. Christie’s foreign travel has helped him build his credentials and his contacts as he prepares to run for president. Choose N.J. sounded dubious in a report last year about enticing business from Britain. Interest was strongest, it found, from Belgium, France, Germany, Israel, Sweden and Switzerland. But London is a prime market for fund-raising among American expatriates: In 2012, President Obama and Mitt Romney raised more money in Britain than in any other foreign country.
While previous New Jersey governors have flown commercial for trade missions, Mr. Christie flew privately for three. (His spokeswoman said he flew commercial to London.) He has taken family on all. He stays in five-star properties: the King David in Jerusalem, the Intercontinental in Mexico City. The hotel in London, the Corinthia, has a Baccarat chandelier and masses of flowers refreshed every morning.
Mr. Christie’s entourage takes over conference rooms laid out with elaborate spreads of food at all hours. Ms. Comella said Mr. Christie’s office sought a lower rate for government officials whenever possible.
Letting the king pay for his three-day weekend in Jordan back in 2012 would not have been allowed if Mr. Christie were, say, president or a United States senator; it is illegal for federal employees to accept gifts of more than nominal value from agents of foreign governments. An executive order Mr. Christie signed in 2010 allows New Jersey governors to have travel and related expenses paid by foreign governments; it does not specifically address gifts such as the parties the king held for him, but the governor’s staff said it was covered under a provision that allowed gifts from personal friends.
Mr. Christie has described it as a matter of opportunity. “I relish these experiences and exposures, especially for my kids,” he told a reporter for The Times last summer. “I try to squeeze all the juice out of the orange that I can.”
As he has traveled more widely, particularly during the last year, when he led the Republican Governors Association, Mr. Christie’s first-class tastes have become well known. He made it clear when he campaigned for Mr. Romney in 2012 that he would do out-of-state events only if he was given a private plane, even during the primary, when the candidate’s wife was still flying commercial to save money. The Romney campaign came to understand that he preferred a Cessna Citation X, which, its manufacturer boasts, has exotic wood interiors and a Rolls-Royce engine.
While many high-profile Republican politicians resist insinuating themselves into celebrity circles, Mr. Christie seeks them out — Howard Stern in the Hamptons; Donald J. Trump at Jean-Georges in Manhattan, where the menu begins at $128 per person. He danced onstage with Jamie Foxx at a celebrity benefit at the Hamptons in August before a crowd that included Barbra Streisand, Paul McCartney, Jack Nicholson and Robert De Niro.
State taxpayers paid for Mr. Christie, his wife and two aides to travel to the 2013 Super Bowl in New Orleans, as New Jersey prepared to host the 2014 game. Airfare for four passengers came to $8,146; Mr. Christie’s hotel for three nights cost $3,371.
He has fought to shield the cost of his travel. The Super Bowl expenses were revealed only after a judge’s order in a lawsuit brought by The Record, a newspaper in northern New Jersey. In response to other lawsuits and public records requests, the governor’s office has argued that he is not subject to disclosure laws regarding travel, or that it does not have the records.
Groups like Choose N.J. and the Republican Jewish Coalition, which also contributed to the Israel trip, do not have to disclose their expenses.
As United States attorney for New Jersey, Mr. Christie developed a reputation for flouting the rules on travel. A Justice Department report after he left office found that he was the prosecutor who most often exceeded the charges allowed for hotel stays in different cities, without properly searching for a cheaper alternative, or justifying any exemption from the rules. He stayed at a Four Seasons in Washington and a new boutique hotel in Boston, for example, at more than double the cost allowed for those cities.
The report concerned hotel stays, but Mr. Christie’s preference for car services over taxis earned a footnote: He paid $236 to travel four miles from the airport in Boston, and $562 for a round-trip between Central London and Heathrow. Mr. Christie, who by then was governor, declined to be interviewed by investigators preparing the Justice Department report.
The revelations in the report prompted the Justice Department to tighten rules about exemptions to stay in costly hotels.
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^ already posted
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My bad. Totally missed it.
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How would you know? A "we wash" advertising campaign? Come on.
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I don't. But I also don't mind a law that says you must.
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It doesn't.
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It's news to me that restaurant workers cook with their dicks so I guess you're right. Not an elite problem, in any event.