Since federal mandatory minimum sentences were enacted in 1986 and prosecutors began to “run our federal criminal justice system,” as the judge said, much of the debate has focused on the reduction of judges’ power in sentencing. The Booker case and others have restored some of it, but there remain excessive mandatory minimums, which Congress should rescind. But Judge Young, like other judges and scholars, has campaigned to restore the jury’s constitutional role in sentencing to ensure that criminal laws are applied fairly. The federal sentencing guidelines and mandatory minimums have substantially diminished that role. In this case, Judge Young properly used it in imposing a sentence based on the jury’s finding about a critical fact.

June 1, 2012

A Jury Draws a Line

Rodney Gurley faced a mandatory minimum sentence of 10 years in federal prison for possession of 28 or more grams of crack cocaine with an intent to distribute it because he had previously been convicted of a felony.

The police found 32 grams in the apartment where he was arrested, but a federal jury in Boston found that the amount of crack “properly attributable” to Mr. Gurley did not exceed 28 grams. Relying on the jury for guidance, Federal District Judge William Young sensibly imposed a sentence of 30 months. That riled the Justice Department, which insisted it was entitled to have the judge, not the jury, decide factors in sentencing and that Mr. Gurley should have gotten the 10-year minimum. The government has appealed the sentence to the United States Court of Appeals for the First Circuit.

The Supreme Court ruled in 2005 in United States v. Booker that any fact necessary to increase a defendant’s sentence “must be admitted by the defendant or proved to a jury beyond a reasonable doubt.” The government’s view in this case is that since the police found 32 grams of cocaine, Judge Young should have imposed the longer term. In his recent sentencing opinion, Judge Young explained that his discretion was limited by the jury’s finding once the government agreed that the court should ask the jury to decide the cocaine amount at issue as “a factual question central to the defendant’s culpability.”

Since federal mandatory minimum sentences were enacted in 1986 and prosecutors began to “run our federal criminal justice system,” as the judge said, much of the debate has focused on the reduction of judges’ power in sentencing. The Booker case and others have restored some of it, but there remain excessive mandatory minimums, which Congress should rescind.

But Judge Young, like other judges and scholars, has campaigned to restore the jury’s constitutional role in sentencing to ensure that criminal laws are applied fairly. The federal sentencing guidelines and mandatory minimums have substantially diminished that role. In this case, Judge Young properly used it in imposing a sentence based on the jury’s finding about a critical fact.

There are two unavoidable conclusions from the May jobs report: The slow economy is getting slower, and there is no help on the way. While the alleged "liberal, socialist, Muslim" President Barack Obama twiddles his thumbs (Former President Cheney could teach him a thing or two about ramming legislation he cared to pass through). But then, Obama's constituencies ave always been corporate, and the state of Israel.

EDITORIAL

How Slow Can It Go?

Published: June 1, 2012

There are two unavoidable conclusions from the May jobs report: The slow economy is getting slower, and there is no help on the way.

Republicans in Congress seem more determined not only to block any boost that President Obama wants to give the economy, but they are preparing to take the nation’s credit rating hostage again over the debt ceiling. Mitt Romney, the Republican presumptive presidential nominee, has no new ideas (That's because the intellectual "giant" of the Republican Party, GNEW NINGRICH is out on the trail stumpin' with former Presidential Candidate Al Sharpton for raise support nation-wide for CHARTER SCHOOLS - the privatization of public education TA FUCKEN DA Rev Al, way to go, for half a million shekles, I'd probably sell my soul too).

The statistics on Friday were daunting. Only 69,000 jobs were created last month, far lower than what’s needed just to keep up with population growth. The job tallies for March and April, shabby to begin with, were revised down, for an average monthly tally of 96,000 over the past three months, versus 252,000 in the prior three months.

The weakness was not only displayed in job growth. Average weekly wages declined in May, to $805, as a measly two-cents-an-hour raise was more than clawed back by a drop to 34.4 hours in the length of the typical workweek.

Similarly, the rise in the number of people looking for work is normally considered a sign of optimism, but, on closer inspection, it appears to be simply the reversal of a drop in job-seekers in April.

Granted, it is better for jobless workers to be actively looking for work than sitting on the sidelines. But without enough jobs to go around, the inevitable result is higher official unemployment. The jobless rate ticked up from 8.1 percent in April to 8.2 percent in May, or 12.7 million people. Of those, 42.8 percent, or 5.4 million people, have been out of work for more than six months, a profound measure of personal suffering and economic decline.

There’s no sign that Washington is prepared to shoulder this responsibility. President Obama’s last big push for job creation, the $450 billion package proposed last fall, would have created an estimated 1.3 million to 1.9 million jobs by providing aid to states for teachers and other vital public employees, investments in infrastructure and tax breaks for new hiring. It was filibustered by Senate Republicans and not brought up for a vote in the Republican-dominated House, with Republican lawmakers claiming that deficit reduction was more important. Since then, they have balked at even smaller administration proposals, like modest investments in clean-energy projects.

Blocking constructive action is bad enough, but it’s not the worst of it. Recently, the House speaker, John Boehner, has ratcheted up economic uncertainty by pledging to force another showdown this year over legislation to raise the debt ceiling. A debt-ceiling debacle would come on top of the expiration at the end of 2012 of the Bush-era tax cuts and the onset of some $1 trillion in automatic spending cuts. If allowed to take effect as planned, those measures would take a huge bite out of growth, further weakening the economy.

More uncertainty means less consumer and business confidence — and less hiring.

In response to the jobs report, Mr. Romney scoffed at Mr. Obama’s campaign slogan, “forward,” saying the president was leading the nation backward. In fact, the way forward has been blocked, time and again, by Republicans pushing the same tax-cut and deregulatory policies, now espoused by Mr. Romney, that have failed in the past to spur the economy.

In the meantime, millions of Americans need jobs.

“Right here in Des Moines,” he said, “there was a big subprime outfit, Wells Fargo Financial. No one there has been prosecuted. They are only going after people who lost their homes after the bubble burst. It’s a scandal.”

OP-ED COLUMNIST

The Mortgage Fraud Fraud

By JOE NOCERA

Published: June 1, 2012

I got an e-mail the other day from Richard Engle telling me that his son Charlie would be getting out of prison this month. I was happy to hear it. 

Perhaps you remember Charlie Engle. I wrote about himnot long after he entered a minimum-security facility in Beaver, W.Va., 16 months ago. He’s the poor guy who went to jail for lying on a liar loan during the housing bubble.

Charlie’s ordeal isn’t over yet, of course. When he leaves prison on June 20, Charlie, 49, will move temporarily to a halfway house, after which he will be on probation for another five years. And unless he can get the verdict overturned, he will have to spend the rest of his life with a felony on his record. 

There were two things about Charlie’s prosecution that really bothered me. First, he’d clearly been targeted by an agent of the Internal Revenue Service who seemed offended that Charlie was an ultramarathoner without a steady day job. The I.R.S. conducted “Dumpster dives” into his garbage and put a wire on a female undercover agent hoping to find some dirt on him. Unable to unearth any wrongdoing on his tax returns, the I.R.S. discovered he had taken out several subprime mortgages that didn’t require income verification. His income on one of them was wildly inflated. They don’t call them liar loans for nothing.

Charlie has always insisted that he never filled out the loan document — his mortgage broker did it, and he was actually a victim of mortgage fraud. (The broker later pleaded guilty to another mortgage fraud.) Indeed, according to a recent court filing by Charlie’s lawyer, the government failed to turn over exculpatory evidence that could have helped Charlie prove his innocence. For whatever inexplicable reason, prosecutors really wanted to nail Charlie Engle. And they did.

Second, though, it seemed incredible to me that with all the fraud that took place during the housing bubble, the Justice Department was focusing not on the banks that had issued the fraudulent loans, but rather on those who had taken out the loans, which invariably went sour when housing prices fell.

As I would later learn, Charlie Engle was no aberration. The current meme — argued most recently by Charles Ferguson, in his new book “Predator Nation” — is that not a single top executive at any of the firms that nearly brought down the financial system has spent so much as a day in jail. And that is true enough.

But what is also true, and which is every bit as corrosive to our belief in the rule of law, is that the Justice Department has instead taken after the smallest of small fry — and then trumpeted those prosecutions as proof of how tough it is on mortgage fraud. It is a shameful way for the government to act.

“These people thought they were pursuing the American dream,” says Mark Pennington, a lawyer in Des Moines who regularly defends home buyers being prosecuted by the local United States attorney. “Right here in Des Moines,” he said, “there was a big subprime outfit, Wells Fargo Financial. No one there has been prosecuted. They are only going after people who lost their homes after the bubble burst. It’s a scandal.”

The Justice Department has had a tough run recently. Last week, Eric Schneiderman, the New York attorney general — who was recently given a role by President Obama to investigate the mortgage-backed securities issued during the bubble — complained publiclythat he wasn’t getting the resources he needed from the Justice Department. And, of course, on Thursday, a federal judge declared a mistrial on five charges of campaign finance fraud and conspiracy in the trial of the former presidential candidate John Edwards.

In the Edwards case, the Justice Department spent tens of millions of dollars, and trotted out novel legal theories, to prosecute a man who was essentially trying to keep people from discovering that he had had a mistress and an out-of-wedlock child. Salacious though it was, the case has zero public import. Yet this same Justice Department isn’t willing to use similar resources — and perhaps even trot out some novel legal theories — to go after the pervasive corporate wrongdoing that gave us the financial crisis and the Great Recession. (I should note that the Justice Department claims that it “will not hesitate” to prosecute any “institution where there is evidence of a crime.”)

Think back to the last time the federal government went after corporate crooks. It was after the Internet bubble. Jeffrey Skilling and Kenneth Lay of Enron were prosecuted and found guilty. Bernard Ebbers, the former chief executive of WorldCom, went to jail. Dennis Kozlowski of Tyco was prosecuted and given a lengthy prison sentence. Now recall which Justice Department prosecuted those men.

Amazing, isn’t it? George W. Bush has turned out to be tougher on corporate crooks than Barack Obama.

No.  This is hardly amazing at all.  FOR YEARS, I have been writing that Barack Obama is the best Republican President this country has ever had, better even than William Jefferson "Slick Willy" Clinton.  And just what exactly do I mean by writing that he is the best Republican President?  It means that he can always be counted upon to (1) kow tow to Israel, (2) reduce spending on social insurance - by passing legislation to do so, and (3) getting down on his knees, genuflecting, and bowing before international corporate power - he lets Goldman Sachs dictate US domestic and international foreign policy, he passes legislation that gives big pharma an historic pay day (Obamascare) without even using the collective buying power of the US governments teat trough to enforce lower pricing of pharmacuetical products, (4) he privatized the profits and socialized the losses of the "to big too fail investment banking industry" and continues to provide them with zero interest loans that they use to buy government securities paying 3% and book the interest a profits to be distributed to the managing partners.  In Obama's world, THERE ARE NO SUCH THINGS AS CORPORATE CROOKS.  He's a friggin Republican with a mulatto-colored face is all.  The new, friendly, face of the greatest purveyor of violence, mayhem, and murderer in the history of the world!  USA!  We're #1!

[P]rivate debt is money that we owe ourselves if ‘we’ are one with corporate executives, predatory bankers and their apologists in academia. But if that is truly the case, let them pay the debt.

WEEKEND EDITION JUNE 1-3, 2012

The Return of the Royal "We"

Getting Dazed and Confused With Paul Krugman

by ROB URIE

Paul Krugman is at it again, pushing his economic patch-jobs at the plutocrat state instead of imagining the social struggle needed to resolve ongoing economic and financial crises. The offending passage from his New York Times piece (link) reiterates the economic truism that debt is “money that we owe ourselves.”

This is misdirection through aggregation, conflating corporate and government debt owned by pension funds and charitable organizations with underwater mortgages, student loans and sub-prime auto loans in their economic effects. And within his own economics, disaggregating the “we” renders far different results than he suggests.

The explicit issue is this: certain types of debt, defined by context, represent a transfer of wealth from productive to speculative uses. And in a class struggle framework, the transfer to speculative uses correlates highly with increased empowerment of a predator class that is largely responsible for the current crisis of capitalism and that has successfully stifled attempts by well-meaning economists like Mr. Krugman to save the existing political-economic order from its own internal contradictions.

An example: approximately one-third of households with mortgages owe more on the mortgages than their houses are worth. The economic implication is that every dollar of mortgage principal repaid is lost savings for the homeowner in proportion to the difference between the original loan amount and the ultimate value of the house. This difference also represents the transfer of these lost savings to the bank that made the loan and that accepted the house that has declined in value as collateral. So who should take the loss, the homeowner or the bank?

Repaying the full loan amount would reduce the savings of the household (reducing lifetime consumption) while rendering the bank whole for risk that they knowingly undertook. When this is aggregated personal tragedy becomes a major economic drag for the next sixty years. But also importantly, given the current state of banking, renewed lending by the banks would go to speculate on financial asset prices, as loan demand for productive investment is non-existent these days.

This asset-price speculation, or in economist Hyman Minsky’s terms, “Ponzi” finance, was behind the most recent financial and economic crises. And until this type of finance is ended there is little chance that Mr. Krugman’s Keynesian prescriptions would be more than temporary patches in a series of ongoing crises. But it also is the reason why not all debt is created equal. Ponzi finance is economically destructive because it is destabilizing, something that Mr. Krugman refuses to acknowledge.

Mr. Krugman’s confusion lies in the term ‘investment.’ Companies ‘invest’ by borrowing money to increase production enough to repay the loan and earn a profit. Students take student loans to, with apologies for the terminology, ‘increase their human capital.’ And workers take mortgages to buy houses so that they have a place to live while they work. And workers take out auto loans to buy cars so that they have a way to get to work and back. In an economic sense, borrowed money must be part of the productive process for the system to function.

Because most loans take years to repay, they in a sense draw against future production. If too much money is borrowed against future production, the risk increases that if it fails to materialize, a financial and economic calamity will result. Add outright lender fraud on an industrial scale and this is what happened in the 2000s.

But it is the particulars that get lost in Mr. Krugman’s conflation of productive and speculative investment that matter. Beginning in the 1970s Western economies were restructured along neo-liberal, or radical free market capitalist, lines. The “free-market” terminology is misleading because corporations are fundamentally dependent on government research, transfers and expenditures, but it helped neo-liberal proponents sell the fiction that “natural” forces were behind the structural changes that they created.

What neo-liberal policies have achieved is to reduce wages for working Americans, reduce the proportion of Americans working, and shift the balance of corporate revenue away from workers and into corporate profits. This has coincided with a dramatic increase in household debt, in part to maintain standards of living in the face of declining wages and in part at the encouragement of banks to feed their securitization (financial fraud) pipelines.

Large corporations have been able to repay their debts because they are keeping an increasing proportion of corporate revenues that had previously been paid to labor in wages. The banks survived because they received several trillion dollars in free money in the bailouts. They continue to survive on government guarantees and economic predation. On the other hand, households have seen their fortunes greatly diminished while the institutional mandate that they repay misbegotten debts by any means possible has been strengthened.

Prior to the 2000s home mortgages tended to be of the 30-year fixed rate type. This meant that households that took mortgages were borrowing against 30 years of future income. As wages have declined, paying these mortgages has required a larger proportion of household income. This point is made for several reasons. In the first, press reports have framed the mortgage equity extraction of the 2000s as a way of maintaining previous levels of consumption. Well, yes, but with wages squeezed, this was in some fair proportion out of necessity rather than decadent desire.

Second, prior to the 2000s the American economy was structurally set up for stable, if cyclical, labor markets as evidenced by the types of loans offered (30-year fixed rate). By setting into motion a long-term decline in wages and by increasing employment insecurity, the capitalist reformers (neo-liberals) set the household debt crisis into motion at least a decade before it became evident in the financial crisis. With existing mortgage payments taking an increasing share of household income, household debts became more burdensome even without the amount of debt increasing.

Third, the anti-democratic nature of these reforms needs to be emphasized. Not only did economic reformers put policies into place designed to drive wages and employment security down, they did so on a global scale and through mechanisms specifically designed to undermine existing democratic institutions. Many of the trade agreements passed by un-elected officials behind closed doors supercede national policies and once passed are very difficult to reverse. In a real sense the neo-liberal reforms pushed by academic economists including Mr. Krugman were an anti-democratic coup that sealed the plutocrats’ power.

So back to Mr. Krugman: yes, private debt is money that we owe ourselves if ‘we’ are one with corporate executives, predatory bankers and their apologists in academia. But if that is truly the case, let them pay the debt. That would be the real test of this ‘we.’ I write this because what has been missing in recent years is any sense that the ruling elite, the plutocrats, see their lot as in any way tied to ours. And since they’ve given your economic patch-jobs about as much of a listen as our requests for higher wages and more jobs, you may one day start thinking about joining the revolution. If so, we have a place for you. But it won’t be writing love letters to the plutocrats who benefit from our loss.

Rob Urie is an artist and political economist in New York.

[The Big Business Guys] are so terrified of having their political spending disclosed that they are pushing in Congress legislation that would prohibit the government from requiring contractors to disclose their campaign-related spending.

WEEKEND EDITION JUNE 1-3, 2012

Big Business and the Disclosure Thing

The Transparently Secretive Chamber of Commerce

by ROBERT WEISSMAN

Well, the Big Business guys are transparent about one thing: They can’t stand the idea of the public holding them to account for their attempts to buy elections and influence policy, or even that they be prevented from corrupting the government contracting process through campaign spending.

The latest: They are so terrified of having their political spending disclosed that they are pushing in Congress legislation that would prohibit the government from requiring contractors to disclose their campaign-related spending.

Senator Susan Collins, R-Maine, is carrying their water, with the Orwellian “Keeping Politics Out of Federal Contracting Act,” a bill that recently passed the Committee on Homeland Security & Governmental Affairs and may well become law unless the public demands otherwise. To take action to stop this abomination, go here.

The Collins initiative is in response to an excellent initiative floated by the Obama administration, but which the White House failed to implement. The simple idea was to require government contractors to disclose their campaign-related spending, including the kind of secret corporate campaign expenditures enabled by the Citizens United decision.

Contractor disclosure is important for two key reasons. First, virtually every major corporation enters into contracts with the government, so if contractors are required to disclose their campaign spending, that would cover most giant businesses. Second, the corrupting pall of campaign-related contributions is worst in the area of government contracting, since this is where the direct payoffs to corporations from political spending are highest. Disclosure will help mitigate the campaign-contractor corruption nexus.

Last year, it leaked that the Obama administration was considering an executive order requiring contractor disclosure.

The response from the U.S. Chamber of Commerce’s lead lobbyist, Bruce Josten: “We will fight it through all available means. To quote what they say every day on Libya, all options are on the table.” (As I mentioned at the time, just imagine if a prominent figure on the left — one with an office across Lafayette Park from the White House — used such charged, violent rhetoric.)

The Big Business guys have been unwavering in their strident opposition to disclosure of corporate campaign spending.

Said Chamber CEO Tom Donohue last week: ”The disclosure thing is all about intimidation.”

The Chamber has certainly been consistent on the point. Here’s what Donohue said after the 2010 elections, in which the Chamber spent more outside money than any other group: ”It is important to the Chamber not to change its practices [of not disclosing donors] because when it is known who made a contribution, it gives others the opportunity to demagogue them, attack them, or encourage them not to do it.”

As Carl Forti, one of the co-founders of the Karl Rove-affiliated Crossroads operations said after the 2010 election, ”Disclosure was very important to us, which is why the 527 was created. But some donors didn’t want to be disclosed and, therefore, a (c)4 was created.”

The Big Business worry is simple enough. If their spending is disclosed, consumers and shareholders may hold them accountable. This is what Donohue calls “intimidation.”

Back in the real world, the intimidation works the other way. Under relentless attack from the Chamber of Commerce and other business interests, the Obama administration declined to issue the contractor disclosure executive order — despite a strong public call for such action, and strong support from public interest advocates and Members of Congress.

Although there’s not much chance of the Obama administration issuing the contractor disclosure executive order in advance of the 2012 election, it’s conceivable that a second-term Obama administration would do so.

Which is why we’re confronted with the spectacle of legislation that would prevent the government from trying to reduce the likelihood of corruption through a simple disclosure requirement.

If we have any respect for our democracy, we can’t let such a proposal become law. Act now: http://action.citizen.org/p/dia/action/public/?action_KEY=10608.

Robert Weissman is president of Public Citizen.

Families with two breadwinners can end up paying more than twice as much in Social Security taxes as families with just one income.

Social Security's Dual-Income Trap

May 28, 2012 · By Salvatore Babones

Families with two breadwinners can end up paying 

more than twice as much in Social Security 

taxes as families with just one income.

U.S. workers have paid a reduced Social Security tax rate of 4.2 percent for the past year and a half, down from the ordinary rate of 6.2 percent. For most Americans, this has meant some welcome tax relief. But one group is still paying more than its fair share.

Families with two breadwinners can end up paying more than twice as much in Social Security taxes as families with just one income.

At current Social Security tax rates, a married couple in which each partner independently earns $100,000 pays a total of $8,400 in employee Social Security taxes. A single breadwinner earning $200,000 pays just $4,624. A single breadwinner earning $200 million or $200 billion pays the same $4,624.

The reason is that Social Security taxes are paid only on the first $110,100 of each individual's wages.

Because of the complexities of Social Security tax rates and the fact that Social Security taxes are based on individual earnings instead of total family income, dual-income couples pay more in Social Security taxes than anybody else.

As a result, a typical New Jersey married couple in which an actuary (average annual salary $100,050) is married to a database administrator ($82,750) pays 66 percent more in Social Security tax than either New York's bachelor mayor Michael Bloomberg or the unmarried shortstop Derek Jeter.

A married Iowa optometrist ($104,370) and radiation therapist ($82,190) together pay 69 percent more than a single Chicago commodities trader or actor George Clooney, who got divorced in 1993 and says he'll never get married again.

Now, no one is going to starve on combined family incomes like these. But there's a big difference between a family where a single breadwinner makes $200,000 or more a year and a family where two working parents scrape together $200,000 a year on their combined incomes.

Individuals earning more than $110,100 in wage income should pay the same Social Security taxes at the same 4.2-percent rate as everyone else. This isn't just fair. It's also fiscally prudent.

When Congress lowered the individual Social Security tax rate from 6.2 percent to 4.2 percent, it didn't balance this with sufficient taxes or cuts to replace the lost revenue. Applying the reduced 4.2-percent tax rate to all wage income would more than make up for the lost revenue.

To make the Social Security system solvent forever, Congress could simply apply the reduced 4.2-percent individual Social Security tax to all income instead of just wage income. Currently, investment income isn't subject to Social Security tax at all.

We shouldn't penalize dual-income families to subsidize highly compensated individuals. Washington should close the dual-income trap by levying Social Security taxes on all wage income.

Better yet, apply the 4.2-percent Social Security flat tax to all income. With everyone paying their fair share, we can afford to make the reduced 4.2-percent Social Security tax rate permanent — and at the same time ensure that Social Security will be there for our children and grandchildren as well.

Verizon Shortchanges the Facts (Verizon is so successful at avoiding federal corporate income taxes that it claimed refunds of $758 million over the last four years, despite reporting pre-tax profits of nearly $20 billion. Second, we said that Verizon has been a major job destroyer over the last four years. Finally, we asserted that Verizon has a contentious relationship with its primary labor union.)

Verizon Shortchanges the Facts

May 29, 2012 · By Chuck Collins and Scott Klinger

The telecommunications giant twisted the truth 

when it said it wanted to set the record straight 

in the Record-Journal

Verizon's corporate communications director published a guest column a few weeks ago in the Meriden, Connecticut Record-Journal that recently came to our attention.

Bob Varettoni's column responded to our Shortchanging America op-ed distributed via OtherWords, which the Record-Journal also published. In it, he invoked Sgt. Joe Friday, the Dragnet TV show character who always called for “just the facts.” But Varettoni skewed many of his own so-called facts to paint a picture that bears little resemblance to the concerns we raised.

Our op-ed raised three principal concerns about Verizon's lack of corporate responsibility. First, we argued that Verizon is so successful at avoiding federal corporate income taxes that it claimed refunds of $758 million over the last four years, despite reporting pre-tax profits of nearly $20 billion. Second, we said that Verizon has been a major job destroyer over the last four years. Finally, we asserted that Verizon has a contentious relationship with its primary labor union.

Federal Corporate Income Taxes

Varettoni met our challenge concerning Verizon’s lack of federal income tax payment with broad and largely unsubstantiated claims that last year Verizon paid $4 billion in total taxes. That number appears to include all the taxes Verizon paid in 2011. That would mean all U.S. foreign, state, property taxes, payroll taxes, even perhaps sales taxes on merchandise purchased. We don't know for sure, because he doesn't say. This is a common shift-the-focus corporate strategy, particularly among the several dozen firms like Verizon that have turned avoiding federal corporate income taxes into an art form.

We are addressing the fact that Verizon has successfully dodged its federal corporate income taxes. In the tax footnotes of its annual reports, Verizon reports it "current federal income taxes" as follows:

• 2011:  $193 million
• 2010: —$705 million
• 2009:  —$611 million
• 2008:  $365 million

Current income taxes represents the company’s best estimate of taxes due and payable in a given year. Companies also report "deferred taxes." These are taxes which may or may not be payable in future years, due to various loopholes in the corporate tax code. We, and most other observers, use current taxes as the best representation of taxes actually paid. Like most companies, Verizon prepares its annual reports in the spring, but doesn't file its federal tax forms until September. It's therefore possible that there are slight differences between the estimates in the annual report and the actual numbers reported to the IRS, but these differences are generally small and not material.

In our op-ed, we cite more detailed analysis performed by the non-partisan, widely respected research organization, Citizens for Tax Justice. It's frequently called to testify before Congress and is widely cited as a tax authority in mainstream media publications. This organization takes the current tax number presented by companies and performs additional adjustments to correct for the federal tax effect of state taxes paid and stock-based executive compensation. In its most recent analysis, Citizens for Tax Justice found that Verizon’s four-year federal effective tax rate was minus3.8 percent.

Varettoni asserts that our calculation of $19.8 billion in profits is wildly overstated. Our $19.8 billion number is U.S. pre-tax profits as reported in the tax footnotes of Verizon’s Forms 10-K. Taxes are calculated off of this pre-tax number. Varettoni cites Verizon’s lower after-tax profits.

If Verizon had paid the full 35 percent federal tax rate on its $19.8 billion in reported U.S. pre-tax profits between 2008 and 2011, the Federal Treasury would have received a $6.93 billion check from Verizon, instead of returning $758 million to the company. This is a difference of nearly $7.7 billion. In his rebuttal, Varettoni points to Verizon's 2011 charitable contribution of $66 million to local communities. Does he really believe that Sgt. Friday, having caught a pickpocket who had lifted wallets containing thousands of dollars, would release said suspect upon learning that he had dropped five bucks in the church collection plate?

Those interested in learning more about Verizon's aggressive pursuit of taxpayer subsidies and avoidance of taxes at all level of government should read Unpaid Bills: How Verizon Shortchanges Government Through Tax Dodges and Subsidies. This report from Citizens for Tax Justice and Good Jobs First shows that Verizon is one of the country's most aggressive tax dodgers and documents Verizon’s behavior, which goes so far as to challenge local property taxes imposed on telephone poles.

Job Destruction

Varettoni argued that our claim of 40,000 jobs destroyed since 2004 is overstated. He points out that 9,000 of those jobs were shed when Verizon sold a piece of its business to Frontier Communication in 2010. We'll have to take his word for this, because the company makes no such disclosure in its 2010 annual report filed with the Securities and Exchange Commission (the very source that Mr. Varettoni suggests readers consult). Unlike many companies that include information about material transfers of employees involved in acquisitions or disposals in the "employee" section of their Form 10-K, Verizon makes no such mention. The company does include a five-paragraph description of its disposal of assets to Frontier (Note 3 of 2010 Form 10-K), which includes a sentence that mentions in passing some employees that were shifted from Verizon to Frontier, it doesn't however quantify the number of employees affected, nor provide the reader any sense that a large number of employees were involved.

Varettoni also tried to defend Verizon by pointing out that 12,000 jobs were cut as a result of voluntary buyouts of union workers. A job lost whether through involuntary layoff or voluntary buyout, is nonetheless a job not available to an American worker. If we accept Varettoni’s assertion that 9,000 employees were transferred as a part of the Frontier deal, Verizon still destroyed 31,000 jobs globally between 2004 and 2011.

Union Relations

The U.S. Bureau of Labor Statistics reports that the largest labor strike of 2011 involved 45,000 unionized Verizon employees. That work stoppage entailed 450,000 days of lost work.

The contentious relations between Verizon and its union can be seen at this Communications Workers of America union website which nicknames the corporation “Verigreedy.” This paints a very different picture than the one of two sides seeking to work things out Varettoni painted.

Varettoni asserts that 150 people were inside Verizon's annual meeting, but makes no mention of the hundreds more who assembled outside and marched through the streets of  Huntville, AL. Local media reports reveal the anger expressed within the meeting itself, noting that workers who protested their treatment by the company were escorted by police from the meeting hall. Photos of the outdoor protests can be viewed here.

Clarifications

Varettoni asserts that our report of Verizon's $106 billion in sales last year was incorrect. On this point he's correct. We used the Fortune 500 2011 listing which itself reported 2010 data. Verizon’s 2010 sales were $106 billion; its 2011 revenues were $111 billion, as he correctly states. Verizon currently ranks No. 15 on the Fortune 500 list.

Time it was, and what a time it was, it was a time of innocence, a time of confidences. Long ago, it must be, I have a photograph. Preserve your memories, they're all that's left you. Congratulations and best of luck, Barrington Consolidated High School Class of 2012!

Barrington seniors preparing for farewells

BY STEPHANIE KOHL

skohl@pioneerlocal.com

Last Modified: May 31, 2012 02:45AM

Graduation is right around the corner for 750 Barrington High School seniors.

As the class counts down the days to graduation, slated for Friday at Willow Creek Community Church in South Barrington, Principal Steve McWilliams said he sees big things from the Class of 2012.

“They’re a very talented class,” McWilliams said. “They’ve got a very bright future, much like all our classes, and we expect a lot of great things from them (perhaps Principal McWilliams has not seen the job reports, especially for recent college graduates.)”

As seniors picked up their caps and gowns and signed each other’s yearbooks on the last day of school for seniors last week, they acknowledged that Barrington has prepared them well for the future ahead (I suppose it is important to think this, but it is also quite dangerous.  Unless these kids have learned how to party like profligates, they are likely to have very close brushes with alcohol abuse when they enter college (as most of them will);  One former BCHS valedictorian returned to the school grounds in November, 1972, and blew his brains out -- not so sure how well "Barrington" by which, the students really mean "Barrington Consolidated High School's teachers, administrators, fellow class mates, coaches" have prepared them for the future ahead - well, quite frankly IT HAS NOT!  While the school has become much more racially diverse, this 60010 zip code is still the 7th highest per capita zip code in the country of zip codes with populations of 20,000+;   These kids are not gonna be prepared to find poverty.  One of Barrington High School's finest athletes and scholars, Brian Clay was murdered, gunned down on the sidewalk outside of his fraternity at UCLA, in the fall of 1968;  Two of BCHS's graduates were raped, for years, by their older brothers.  Both of them lived in Barrington Hills, a far more exclusive area than simply "the village" which truly is just a working person's town, and the way house prices were moving, it was only a working person whose family was doing fairly well BEFORE the housing market first went nuts.  There are very few self-professed households which vote Democratic here; most people choose to get their news from a combination of the Chicago Tribune, The Wall Street Journal, and Fox News;  there are no self-professed socialists in town (other than myself); there are a LOT of very nice and very new cars that park in the student parking lot at BCHS;  an Indian (Eastern, no, not native) family bought a house just as half block from the high school for the son to live in, so he could sleep in a little longer in the morning rather that make the trek to and from campus; most of the graduates will go on to college / university / junior college (in excess of 95%, if the past is predictive of the future in this regards); most of the graduates will have taken golf lessons at one time or another; many of their parents will belong to one of the three very nice local private country clubs.  I will suggest that what BCHS HAS prepared them for is to know how to swim the waters of the power elites of this nation, but swimming merely as life guards / gate keepers.  Many of these graduates will believe that poor people are poor because they are lazy, that "inner city (black)" kids are dumb and can't read, and don't have any interest in education - and that they are all on some form of welfare (finding it more profitable that make babies into perpetuity than to go out and earn an honest dollar at some minimum wage job), the Mexicans are here only because they get such wonderful benefits from "the system" and all of them Mexicans will vote illegally -- FOR DEMOCRATS! .

“I think Barrington High School prepares us well to go off to college (especially so if you plan to frequently get wasted on drugs and / or alcohol -- but not so much so if you plan to take history courses where you will be introduced to some uncomfortable FACTS about this country's history, its "great men", all, of course, taught by socialist radical leftist LIBERAL college professors -- the extent to which this "new history" is taken seriously, studied, synthesized, or rejected out of hand will have a lot to do with accounting for their politics and their charity as they move along into adulthood, and adultery),” said Paige Powell, of Barrington. She’ll attend Miami University in Ohio and is undecided on a major. “I’m excited to be on my own more, be in a new place, with new people, new opportunities and start a new chapter (I don't know Paige, but I will assume she is sincere, and her statement actually speaks volumes about how she got on in the old place, with the old people, and the old (lack) of opportunities).”

Students cited Barrington as having taught them time management skills, organization skills, much-needed communication skills, how to use resources to help you and that there is always someone out there willing to help a struggling student.

“Barrington is full of opportunities and has been for all our lives, but at the same time, I feel we’ve lived a sheltered life,” said Courtney Valentine, of Barrington, adding she is nervous about being immersed in a different culture and community while attending the University of Illinois to study accounting and finance (A different culture and community while attending U of I?  Okay.  It's a culture of LOSING FOOTBALL TEAMS, which is a marked contrast with BCHS; it's a culture that finds that its varsity basketball coach whose teams have almost always won 20+ games for the duration of his tenure is not deserving of a job, because, he didn't do better on the national stage - ergo, Sweet 16 or you're done, coachie.  It's a culture of corn cobs in the summer, where you don't have to go far at all to be in a totally rural surrounding where the people are all, GASP, WHITE!  and most of them will NOT be going to college or university.  True, they do admit black students at Champaign, and they even have a significant foreign student population, they even have MUSLIMS (sacre blueue! Jayzuz KeeRighst!), and there will be far fewer "liberal" Christian denominated churches to choose to belong too; all the diners will have Fox News on all their TVs all the time, the hatred of Obama will be expressed by the locals even more stridently than at the Hometown Barbershop in Barrington; most people WILL own guns;  Lots of the natives (in this new cultural melting pot, known as the Champaign-Urbana area) will drive pick up trucks; there will be far more country and western radio stations than all others; you will still be able to listen to Rush Limbaugh any time you want, no problemo there,  and your fellow accounting and finance students WILL have already embraced all the values, ideations, and myths of the accountants and finance folk that live in Barrington - about how oppressive are the tax rates, especially on the wealthy, how schools can't even teach kids how to make change any more (remember, 95+% of the 99.8+% of the kids that graduate from Barrington Consolidated High School WILL go on to college / university / junior college) and that the crappy education inner city kids get is the worst challenge facing America today (other than that we don't have enough kids studying hard sciences, computer science, math, engineering - which is a statement Barack Obama made, and for which he received an ovation, while speaking at the BCHS auditorium circa January, 2007).

Members of the Class of 2012 expect great things from themselves and their classmates  (and in this, they will, virtually every last one of them, be very disappointed).

“With Barrington, it’s given us so many opportunities, we all kind of know our interests,” said Gavin Schmitz, of Barrington. He’ll attend Washington University in St. Louis and study neuroscience. “Whatever success people achieve, I hope happiness is the main one (one of the LAST things this community prepares you for is happiness - no, it prepares you to have an inferiority complex because of all your friends whose parents are so much better off than yours, of all the more splendid homes your class mates live in; the cooler summer vacations they get to take; the newer and fancier car their folks gave to them:  even the community service the kids perform as part of various local church outreaches (going to the reservations to paint stuff for various indigenous Indian communities is one of the outreaches; of course, such outings are VERY well supervised, by the bestest of intentioned mums and paws).”

“I hope we’ll be a group of determined and motivated people that will be able to make a difference in the world,” added Lauren O’Keefe, of Barrington. She’ll study biology at University of Illinois (Lauren's identity is strongly entwined with her fellow class mates ... "I hope WE'LL be a group of determined and motivated people" ... but for what, Laruen, do you hope of for yourself.  My apologies again.  I do not know this young lady whose hope is so admirable -- I am thinking of my own self, at a parallel time in 1969, having decided that it was my fate to be drafted, go to Viet Nam, and be killed, just like my Uncle, 1st Lt James Raymond Hockett, not even seeing the point of deciding which school to go to - well, not entirely true, Harvard didn't want me, MacMurray State was too little, and U of I was too big ... a few weeks after graduation my father and I would go to visit Western Illinois University in Macomb, IL, play golf with WIU's legendary golf coach, Harry Musato, dad would buy me my first legal illegal beer at the Holiday Inn, and I was sold on the idea.  I applied to WIU and was accepted.  Then I became a blogger.  In between, not much happened, except life).

Although nervous about leaving their friends as the Class of 2012 scatters across the country on its next journey, at least two students will still have each other. Twins Stephanie and Brad Fischer, of Barrington, will both attend University of Wisconsin-Whitewater to study business (KIDS, what a friggin WASTE - you can cop an MBA in a year, get some of them liberal arts into you, so you can convince a future employer that you know how to write coherently and speak with conviction confidently).

“I’m a little apprehensive about living on my own and having all those responsibilities (like WHAT? setting the alarm clock, learning where your classes are, doing your own laundry, living within a budget, remembering to call home - but only when mostly sober? remembering to do your homework?  come on, if BCHS has not prepared you for the responsibilities of college (learning how to drink enough so that you don't get drunk and raped early on in your college career which has the effect of changing the way you view a LOT of things), but it’s a challenge I’m willing to accept and am looking forward to,” Stephanie said.

Brad said some of his best memories and friends at Barrington High School came from his time on the Cross Country team and he hopes to continue with a team in Whitewater (clearly a loner of a student - while there is something very exhilarating and rewarding in catching up and passing a runner you have chased in a cross country match until the last 200-or-so yards of the course, there is a reason the book The Loneliness of the Long Distance Runner was written.  Chet Knobe, who ran cross country with my my freshman year remained one of my best friends in high school, but I could barely name for you anyone else who was on the team. Hell, you spend most of your time looking at other guy's asses!) .

“I’m excited to live on my own and meet new people,” he said (that livin' on your own part can be a REAL eye-opening experience!).

Building relationships, whether with teachers, staff or students in classes and clubs was a big part of the high school experience for some, and taught students how to interact with all different kinds of people (white upper middle class students, black upper middle class students (not too many of those) hispanic middle class students, Asian and Middle-Eastern upper-class students, yes, to interact with ALL different kinds of people - 'cepting, of course, po' folk with Southern or hill billy accents), students said.

“They really help you grow as a person and help you find yourself and help you grow into what you want to be in the future,” Powell said.

While students are excited for their upcoming graduation, O’Keefe said it’s bittersweet.

“Now that it’s here, you don’t want it to end,” she said (no, you don't want it to end; and in at least some ways, especially with FaceBook and perhaps other social media, it never will end -- but, and there was only one of my high school class mates that I ever had ANYTHING to do with after I graduated from college (he stayed on at Princeton another 3 years - the time it took him to complete his Senior Thesis; what he did was make money playing bridge with his frat brothers, and have sex with the way too young daughters of the university administrators.  WHO wouldn't want to remain in that life.  BUT - and this has been so rewarding to me, so many of my HS class mates have remained true and loyal to what I characterize as a "60's ideal, a 60's ethic" meaning so much more than "sex, drugs, rock & roll:"  SO many of my BCHS class mates are to the political left, and they DO stuff for people, to help the down trodden; they counsel young unwed mothers (Donna Littwin Weismueller) sometimes being the only non-judgmental voice that girl will hear, they work for world peace (Kit Gage, Barbara Fields), they minister in Russia and run PTSD clinics for combat veterans (Kathleen Harris), they maintain 500-year old farm houses in England and Sail Boat around the world (Wendy Effer), they are teachers (Leslie Bills, Wendy Parcher - from Streator, IL High School), they have remained married to the same person all these years, and have raised children who are very successful college graduates and community servants and have presented them with GRAND CHILDREN which are the delight and joy of their grand parents' lives), and thus, if you keep in touch, it doesn't have to end, it can grow, it can flower, it can prosper, it can change the world!  .

And while the future may seem scary, the students are confident they are ready for the next chapter (well, the only difference between the next chapter and the one just closing is that they don't have to go to class, and their folks won't be there to assure that they get up on time, have breakfast, and are out the door in plenty of time so as not to be late for class).

“It’s going to be a little bit scary diving into new opportunities, but I feel confident,” Valentine said. “I feel prepared and ready to go on to the next four years of college even though it’s scary (kid, academically, it ought to be a snap, except for the part about history ... basically it's all mo' duh same ol' samizdat - go to class, take notes, read your books, do the assignments, if you're interested, talk with the prof, it's just that NOW, when you get involved in extracuricular activities, you are either doing it for an EMPLOYMENT RESUME, or you are doing it for yourself - let me STRONGLY and in no uncertain terms suggest this:  Do it for yourself; expand your horizons; take every opportunity you can to talk with kids who are VERY much different from you, and get to know the local merchants, and support them to the best extent you can; find out HOW the locals live.  It is likely to be QUITE an eye-opener, once you get past the ones that work for the university.).”

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