Five things to keep repeating if we want a better economy for everyone

September 3, 2018 at 11:39 am

I was talking this week about the Mueller investigation with a guy I know from Western New York.

He said he’s sticking with Trump because of the economy and because he believes Trump and his tax cuts for the wealthy are responsible for the current strong economy.

I’ve heard this from many many folks who have bought into the narratives that corporate special interests create about our economy. It’s likely you’ve heard some of this advertising and framing:

  • Tax cuts create jobs
  • We need to grow the economy so everyone will benefit
  • Free markets
  • Regulations “hold back” the economy
  • I’m a capitalist, you’re a socialist
  • The private sector is better at everything

And so on. This powerful marketing is used by corporate special interests to elect politicians who will do what corporate special interests want. More power and money for them.

In my experience, we tend to be good at critiquing these claims without describing what would make a better economy. What should we be striving for? Where do we want to be if we can get there?

Towards this end, I thought I’d share the 5 simple points I’ve found to be most successful in talking about the economy.

ECOT: $2.1 million in donations to Ohio politicians, $1 billion in charter school contracts

July 18, 2018 at 12:39 pm

ECOT stands for the Electronic Classroom of Tomorrow. It is a charter school founded in Ohio in 2000 by businessman William Lager and is a story that hasn’t received nearly enough media attention. Probably because it highlights everything that’s wrong with for-profit charter school entities delivering public services.

From 2001 to 2016 Lager’s ECOT received more than $1 billion from Ohio taxpayers to deliver an appalling graduation rate. In 2014, the graduation rate was under 39 percent. For the 2016-17 school year, it was up to a little over 40 percent in four years.This ranks as worst in the nation.

The state of Ohio is working to recover $80 million in overbilled state funds. In 2016, an Ohio audit estimates the school was paid for 9,000 more students than ECOT could document for the 2015-16 school year. In 2018, the state is still working to recover the money, which has since increased to $80 million.

Dave Yost, the Ohio auditor who has himself spoken at past ECOT graduations, said:

With the level of incompetence displayed by both the school and (the Education Department), the regulator, it’s amazing that any money went to education whatsoever.

Over this same period of time, William Lager has donated more than $2.1 million to influential Ohio politicians including several speakers of the Ohio House and Andrew Brenner, the chair of the House Education Committee.

Because much of the news coverage in Ohio only focuses on small pieces of this story at a time, here’s the full story of how ECOT scammed Ohio.

Why companies like Disney are willing to give out temporary bonuses

February 18, 2018 at 12:55 pm

You’ve probably seen announcements from Walt Disney and other companies about bonuses recently. Walt Disney recently announced a $1,000 bonus to each of its 125,000 employees. To the average person, this seems like a significant amount. How is Walt Disney able to do this and, more importantly, why?

In 2017, Walt Disney generated $13.79 billion in pretax income on $54.98 billion in sales. On this income the company paid 34.2 percent in domestic taxes or roughly $4.7 billion. This left Walt Disney with a profit of roughly $9 billion. After paying all of their employees and all of their operating costs and all of their taxes, Walt Disney is returning a profit of $9 billion.

The Trump corporate tax plan drops Walt Disney’s corporate tax rate to 20 percent. Under his plan, Walt Disney only pays $2.76 billion in taxes, saving $1.94 billion. A year. Walt Disney gets to keep an additional $1.94 billion/year (assuming years similar to 2017) in profit forever. Over 10 years, for example, this is a benefit of $19.4 billion.

Now let’s look at what their temporary bonus cost them. Disney announced $1,000 bonuses for 125,000 employees. This is a cost of $125 million or 6.4 percent of what they received in one year of tax savings. Over 10 years, it’s 0.6 percent of the nearly 2 billion/year tax break they received.