[Photo: Annie Spratt via Unsplash]

What Happened To The Cultural Elites: Changes in the Conditions of Production

My series on Trumpian Motion concluded with the question “What happened to the cultural elites?”; meaning why did they not do a better job of resisting the conditions that produced Trump and the ugly Republican party. Of course there is no single answer, but there are several contributing explanations. It’s worth examining these partial explanations, if for no other reason than the hope that open discussion might lead to changes.

I use the term cultural elites in the sense of Pierre Bourdieu as explained in David Swartz’ book Culture and Power: The Sociology of Pierre Bourdieu. Swartz says Bourdieu believed that culture is largely created by cultural producers such as artists, writers, academics, intellectuals; movie and TV writers, actors and producers; and both social scientists and physical scientists. I assume today Bourdieu would include technologists, especially computer tech workers who design and produce web sites, games, and platforms and much else. The products of these workers shape our interactions with the world and society, and provide a structure through which we understand ourselves and our roles in society.

In the US we don’t have a separate category for intellectuals. We have experts, who have mastered a chunk of knowledge and are able to use it to advance that knowledge and to offer specific guidance where their knowledge is relevant. And we have pundits, who aren’t experts but who have great confidence in their ability to explain things to the rest of us. They too are cultural producers and maybe even cultural elites, people like Tom Friedman, and David Brooks and others I won’t mention; they aren’t all old, you know. There are plenty of these people scattered across the political and ideological spectrum.

In a section discussing the relationship between workers and intellectuals, based in large part on a book on French intellectuals Bourdieu wrote in the late 1980s,Swartz offers an idea that seems relevant to the issue of why cultural elites did not forcefully resist the rise of neoliberalism.

Finally, Bourdieu points to changes in the conditions of intellectual production as a source of ambiguity in political attitudes and behaviors among highly educated workers. He notes a significant decline in the numbers of French intellectuals working as self-employed artisans or entrepreneurs and their increasing integration as salaried employees within large bureaucratic organizations where they no longer claim full control over the means of their intellectual production. P. 239, cites omitted.

This change might encourage more aggressive efforts against the dominant culture, because cultural producers might rebel against their dominated status. But this seems more likely:

These new wage earners of research, [Bourdieu] charges, become more attentive to the norms of “bureaucratic reliability” than act as guardians of the “critical detachment from authority” afforded by the relative autonomy of the university. Moreover, their intellectual products bear the imprint of the “standardized norms of mass production” rather than those of the book or scientific article or the charismatic quality traditionally attached to the independent intellectual. P. 239-40, cites omitted.

This seems like a good partial explanation of the failure of cultural elites to respond to neoliberalism. It also partially explains a point Mike Konczal raised in his article Why Are There No Good Conservative Critiques of Trump’s Unified Government? And, it helps explain the rise of Trumpism as discussed here.

The trend Bourdieu describes is obvious in the US; in fact integration of research workers into the ranks of salaried workers seems even stronger than Swartz’ description. The trend is perhaps worse here because colleges and universities have become so infused with neoliberal business practices, primarily the use of adjuncts (the gig economy for teachers) who have little stability, little opportunity for sustained research, little protection from the gatekeepers of orthodoxy, and much less “critical distance from authority”. Nevertheless, I think (hope) there is still a large amount of independence in academia, especially among tenured faculty. That independence is centered around expertise in fields of study, where depth of knowledge in small areas is paramount. Many of those areas of study are far too specialized for the general public, and for policy-making.

Much of academic study is intermediated for the public and for policy-making by and through think tanks and similar groups. Of course, those organizations do some interesting research, but most of the worker’s time and energy is spent extracting useful ideas from the bowels of journals and academic books and rewriting it so that the rest of us can understand and maybe act on it.

These organizations are dependent on their rich donors, and don’t tolerate much from workers that conflicts with the interests of their donors. As an example, Barry Lynn was at New America Foundation, a prominent democratic think tank for years. He wrote often on the problems of monopoly and lack of competition in the US economy. Then he wrote an article critical of Google, one of the big sponsors of New America, and was driven out. He and a few of his associates started Open Markets Institute with funding from George Soros, another wealthy donor with his own agenda.

Charles and David Koch tried to take over the Cato Institute, which they funded, and which claims to be a libertarian think tank. This effort which was not completely successful, causing a lot of distress on the conservative side. Not much critical detachment from authority there.

Perhaps we should read this as an example of another phenomenon Bourdieu describes, the attempt to exchange cultural capital for economic capital. There is nothing inherently wrong with this of course. For example, in the university setting, getting tenure should involve both teaching and research. Competition for status and other resources in one’s field should be driven by these skills, and so should be a net gain. Good teachers and researchers should be rewarded with tenure and a steady income to support further study and teaching.

3It isn’t obvious that this will happen in the think tank world. Further it’s hard to imagine how the kind of competition we see in academic fields would work in the private sector, where there are powerful forces at work to limit the scope of intellectual activity and control access to influence.

There are similar patterns in other areas of cultural production: journalism, movies, TV, magazines, book publishing, and large parts of the music industry. Consolidation and business failures have increased the control of the few over cultural production. Where once there were many outlets for culture producers, today there are fewer, and most of them are more rigidly ideological.

It’s easy to see how people can lose their independence in these settings. They see themselves as brain workers, employees responding to the cues of their work environment, trying to do good work and advance themselves in a bureaucratic system. Institutional pressures dominate independent thinking critical of existing authority. It isn’t necessary to attribute bad motives to them to despair at the outcome.

Cambridge Analytica Uncovered and More to Come

A little recap of events overnight while we wait for Channel 4’s next video. Channel 4 had already posted a video on March 17 which you can see here:

Very much worth watching — listen carefully to whistleblower Chris Wylie explain what data was used and how it was used. I can’t emphasize enough the problem of non-consensual use; if you didn’t explicitly consent but a friend did, they still swept up your data

David Carroll of Parsons School of Design (@profcarroll) offered a short and sweet synopsis last evening of the fallout after UK’s Channel 4 aired the first video of Cambridge Analytica Uncovered.

Facebook CTO Alex Stamos had a disagreement with management about the company’s handling of crisis; first reports said he had resigned. Stamos tweeted later, explaining:

“Despite the rumors, I’m still fully engaged with my work at Facebook. It’s true that my role did change. I’m currently spending more time exploring emerging security risks and working on election security.”

Other reports say Stamos is leaving in August. Both could be true: his job has changed and he’s eventually leaving.

I’m betting we will hear from him before Congress soon, whatever the truth.

Speaking of Congress, Sen. Ron Wyden has asked Mark Zuckerberg to provide a lot of information pronto to staffer Chris Sogohian. This ought to be a lot of fun.

A Facebook whistleblower has now come forward; Sandy Parkilas said covert harvesting of users’ data happened frequently, and Facebook could have done something about it.

Perhaps we ought to talk about nationalization of a citizens’ database?

Another Shoe Dropped: Cambridge Analytica Used Its Own Kompromat

I confess, I did NOT see this coming, a perfect example of blindness based in preconceived notions about technology companies.

UK’s Channel 4 just aired a report in which Cambridge Analytica executives were secretly filmed discussing the creation and use of compromising material in campaigns. Some of the acts described violate UK Bribery Act and the US Foreign Corrupt Practices Act.

Watch:

Last evening there had been teasers revealing Cambridge Analytica had used actual Facebook users’ account information while demonstrating their psychographic profiling product, without masking the users’ personal information. This is ugly on its own, violating users’ privacy without permission.

But the creation and use of kompromat…wow.

This is an open thread. Have at it.

Three Things: This Matin, Think Latin

I have three things cluttering up my notes — just big enough to give pause but not big enough for a full post. I’ll toss them out here for an open thread.

~ 3 ~
Aluminum -> Aeronautics -> Stock Market and Spies
I’ve spent quite a while researching the aeronautics industry over the couple of years, trying to make sense out of a snippet in the Buryakov spy case indictment. The three spies were at one point digging into an aeronautics company, but the limited amount of information in the indictment suggested they were looking at a non-U.S. company.

You can imagine my surprise on December 6, 2016, when then-president-elect tweeted about Boeing’s contract for the next Air Force One, complaining it was too expensive. Was it Boeing the spies were discussing? But the company didn’t fit what I could see in the indictment, though Boeing’s business is exposed to Russia, in terms of competition and in terms of components (titanium, in particular).

It didn’t help that Trump tweeted before the stock market opened and Boeing’s stock plummeted after the opening bell. There was plenty of time for dark pool operators to go in and take positions between Trump’s tweet and the market’s open. What an incredible bonanza for those who might be on their toes — or who knew in advance this was going to happen.

And, of course, the media explained this all away as Trump’s “Art of the Deal” tactics, ignoring the fact he wasn’t yet president and he was renegotiating the terms of a signed government contract before he took office. (Ignoring also this is not much different than renegotiating sanctions before taking office…)

I was surprised again only a couple weeks later about Boeing and Lockheed; this time I wasn’t the only person who saw the opportunity, though the timing of the tweet and market opening were different.

Again, the media took note of the change in stock prices before rolling over and playing dead before the holidays.

There have been a few other opportunities like this to “take advantage of the market,” though they are a bit more obscure. Look back at the NYSE and S&P trends whenever Trump has tweeted about North Korea; if one knew it was coming, they could make a fortune.

A human would only need the gap as long as that between a Fox and Friends’ mention of bad, bad North Korea and a corresponding Trump tweet to make the play (although one might have to watch that vomit-inducing program to do this). An algorithm monitoring FaF program and Trump tweets would need even less time.

Yesterday was somebody’s platinum opportunity even if Trump was dicking around with U.S. manufacturers (including aeronautics companies) and global aluminum and steel producers. His flip-flop on tariffs surely made somebody beaucoup bucks — maybe even an oligarch with a lot of money and a stake in one of the metals, assuming he knew in advance where Trump was going to end up by the close of the market day. The market this morning is still trying to make sense of his ridiculous premise that trade wars are good and winnable; too bad the market still believes this incredibly crappy businessman is fighting a war for U.S. trade.

Just for the heck of it, go to Google News, search for [trump tariffs -solar], look for Full Coverage, sort by date and not relevance. Note how many times you see Russia mentioned in the chronologically ordered feed — mine shows exactly zero while China, Korea, Germany are all over the feed. I sure hope somebody at the SEC is paying as much attention to this as cryptocurrency.

I suppose I have to spell this out: airplanes are made of aluminum and steel, capisce?

~ 2 ~
Italian Son
One niggling bit from Glenn Simpson’s testimony for Fusion GPS before the Senate Intelligence Committee has stuck with me. I wish I could time travel and leave Simpson a note before testimony and tell him, “TELL US WHAT YOU SEE, GLENN!” when he is presented with Paul Manafort’s handwritten notes. The recorder only types what was actually said and Glenn says only the sketchiest bit about what he sees. Reading this transcript, we have only the thinnest amount of context to piece together what he sees.

Q. Do any of the other entries in here mean anything to you in light of the research you’ve conducted or what you otherwise know about Mr. Browder?

A. I’m going to — I can only speculate about some of these things. I mean, sometimes —

MR. LEVY: Don’t speculate.

A. Just would be guesses.

Q. Okay.

A. I can skip down a couple. So “Value in Cyprus as inter,” I don’t know what that means.”Illici,” I don’t know what that means. “Active sponsors of RNC,” I don’t know what that means. “Browder hired Joanna Glover” is a mistaken reference to Juliana Glover, who was Dick Cheney’s press secretary during the Iraq war and associated with another foreign policy controversy. “Russian adoptions by American families” I assume is a reference to the adoption issue.

Q. And by “adoption issue” do you mean Russia prohibiting U.S. families from adopting Russian babies as a measure in response to the Magnitsky act?

A. I assume so.

Bold mine, to emphasis the bit which has been chewing away at me. “Illici” could be an interrupted “illicit”; the committee and Simpson use the word or a modifier, illicitly, eight times during the course of their closed door session. It’s not a word we use every day; the average American Joe/Josie is more likely to use “illegitimate” or the even more popular “illegal” to describe an unlawful or undesirable action or outcome.

(I’m skeptical Manafort was stupid enough to begin scratching out “illicit” and catch himself in time, but then I can’t believe how stupid much of this criminality has been.)

But the average American Joe/Josie doesn’t travel abroad, speak with Europeans often, or speak second languages. The average white Joe/Josie may be three or more generations from their immigrant antecedents.

Not so Mr. Manafort, who is second generation Italian on both sides of his family. He may speak some Italian since his grandfather was an immigrant — and quite likely Catholic, too. Hello, Latin masses in Italian American communities.

Did Manafort mean “illici,” a derivative of Latin “illicio,” which means to entice or seduce? Or was it a corrupted variant of Latin “illico,” which means immediately?

Or is Manafort a bad speller who really meant either “elici”, “elicio,” or “elicit,” meaning to draw out or entice?

Like Simpson, these are just guesses. Only Manafort really knows and I seriously doubt he’ll ever tell what he meant.

~ 1 ~
If you haven’t checked your personal online privacy and cybersecurity recently, give Privacy Haus’s checklist a look. Nearly all of the items I’ve already addressed but I tried one of the items suggested as a fix to an ongoing challenge. Good stuff!

~ 0 ~
That’s it, have at it in this open thread! One last thing: if you didn’t read Marcy’s op-ed, Has Jared Kushner Conspired to Defraud America? in Wednesday’s NYT, you should. You’re going to need it as part of a primer going forward.

About Not Making Nice

[NB: Check the byline – this is a personal essay by me, Rayne.]

Not long ago my mother told me about an incident she found puzzling. She has an odd habit of telling me certain uncomfortable stories in a casual manner, sandwiched between other day-to-day topics; it may take some mental stuttering before I realize what it was she really told me.

Like the time she was talking about her shift in the emergency room and dropped in a passing remark that humans burnt to a crisp smell like chicken. She simply continued on, “Last night was so busy, there must have been a full moon…”

And of course I realized then as I picked my jaw up from off the floor that she needed to unload or run mad with PTSD. We share the horror she dumped on me but at least she was validated and she’s not alone with her burden.

This summer over lunch at a quaint little cafe she told me the refrigerator and stove in my parents’ Florida home needed to be replaced. My father went to the local Big Box Hardware Behemoth to replace them using the store’s credit card.

The store called her and asked her if she knew someone had the store card and was buying appliances with it. “Yes, my husband has the card,” she told the cashier. “How odd was that?” she asked me, before taking a bite from her salad and telling me about the new appliances.

Wait. Back the fuck up. I know my eyes must have bugged out of my head at this point. I asked her to repeat everything she said. My dad had a Big Box store credit card he opened to buy building supplies and appliances when they built their home a dozen years ago. He’s used it without problem up north. But now, in Florida this summer, he was told to wait until the cashier looked up his home’s hardline phone number and called the house to make sure he’s legit.

He had his fucking driver’s license and other forms of ID on him, mind you. And the cashier still called the house.

The nice white lady with the northern Midwest accent at the home number vouched for him.

The nice brown-skinned guy sporting a darker-than-usual tan because he’s been on the golf course a lot was cleared to buy appliances with his own goddamn credit card.

“Mom, that was discriminatory behavior. The cashier was racist. She just treated Dad like a second-class citizen,” I told her.

“No. Why would they do that?” She was in denial, but deep down she knew better or she would never have brought it up and slipped into our lunch chat like a rotten wedge of tomato eased onto the top of a salad.

The other person joining us for lunch gave me a side-eye and a nod. We both know my mom was both uncomfortable with what happened and yet unable to grasp the ramifications that her Asian-Pacific Islander husband, who looks like he could be Filipino or Latinx, was just treated like dirt while she wasn’t there with him to extend her invisible white privilege.

But that was just a single microaggression. There may be worse ahead.

After several reports that ICE has been randomly boarding public transportation and asking people for their identity papers, I’ve told my mother to make sure my dad carries his ID everywhere, all the time. I’ve told her to make sure her to make sure if he leaves the house he tells her where he’s headed and for how long, in case he suddenly disappears.

I can’t tell my father this. He’s a conservative, brainwashed into thinking this stuff only happens to other undeserving people, not a military veteran like him. This credit card thing was just a quirky one-off from his perspective. Never mind that the current occupant of the White House cast aspersions on the value of a birth certificate issued in Honolulu for more than a decade — which is the only kind of birth certificate my father has, born in what was then an American territory.

And never mind that ICE has picked up brown-skinned American citizens and detained them.

Mom struggled with my admonitions as much as she struggled with the idea of a racist cashier. She’s college educated, has multiple degrees in STEM fields, but she can’t see what’s in front of her, blinded by a lifetime of white privilege. She has to buffer it to accept it just the way she drops ugly things in the middle of the most innocuous conversations.

This summer my mother also dropped another nugget mid-chat; my kid brother was worried about the political environment especially because of his wife and kids. My brother is adopted, of AAPI heritage, and his spouse is of Latinx descent. They live in the Midwest near a large city, so they aren’t the only people of color in a sea of Caucasians. But they are still worried based on the little bit my mom wove into her download. Apparently my mom’s worried, too, even if she struggles to articulate what’s bothering her.

I’ve lived with the dull background noise of racism my whole life. I pass for white thanks to my mom’s StayPuft marshmallow-like genetics. My sister doesn’t pass, nor does my other brother by birth. My adopted brother definitely doesn’t pass. By passing I hear and see stuff my siblings don’t, the kind of racism white people have been reluctant to display openly but have no problem sharing when in a crowd they believe to be all white like them. This administration gave these closeted racists permission to come out and share their ugliness. They think they don’t have to spare anybody else’s feelings any more — literally, wearing t-shirts at Trump campaign rallies that read, “Fuck Your Feelings.”

With their newfound openness, I don’t need to take the time to make nice and get to know people who openly declare their belief I am not entitled to the same rights they have at best, and at worst lack the right to exist. I’m worried about family members, all Americans by birth, two of them military veterans, being detained and denied their rights simply because they are not white. I’m worried family members who are minors and in K-12 education are dealing with harassment which interferes with their learning.

Imagine how much worse this must be for African Americans. I have only just started to worry about my brother or father while their driving their car, only whether ICE will show up and nab one of them while they cut their grass, mistaking them for immigrants working as landscapers. African Americans have lived with this every day.

Making nice with racists to get inside their heads is a luxury some of us really can’t afford. Exit your denial; don’t mistake manners-as-survival-tactic for our acceptance of those who would rather see some of us dead.

Illiberal Hollywood: Kicked in its Pants by a Panther

[Graphic: Black Panther (2018) theatrical release poster, Walt Disney Studios distributor, Marvel Studios producer]

Though conservatives love to disparage the American entertainment industry as liberal, Hollywood’s business practices have been anything but. I’ve written before about its misogyny and sexism; it has only recently received the scrutiny it deserves, thanks to open protests by women actors and directors, and sadly the cascading revelations about sexual harassment and abuse.

Hollywood has likewise been racist; though minorities make up nearly 40 percent of the U.S.’ population, minorities are poorly represented in front and behind the camera. As of 2013-14, only scripted broadcast television had seen any gains in diversity. Their numbers were stable or falling in nearly all other areas. In film alone, minorities were underrepresented by:

  • Nearly 3 to 1 among film leads
  • Nearly 3 to 1 among film directors
  • Nearly 5 to 1 among film writers

(source: UCLA Bunche Center’s 2016 Hollywood Diversity Report (pdf))

Which is why this week’s release of Disney/Marvel Studios’ live action superhero film, Black Panther, has received so much attention. The director (Ryan Coogler), screen writer (Joe Robert Cole), and leads (Chadwick Boseman, Michael B. Jordan, Lupita Nyong’o) are all African American. This is a first for a film belonging to a major franchise (Marvel Studios), produced by a major studio, with a blockbuster-sized budget of $200 million. While there are a few roles played by white actors, they are small parts which exist to support the story — a complete inversion of racial representation typical across the majority of American films.

The film’s reception even before this week’s release was overwhelmingly ecstatic; many theaters sold out once online ticket sales were available. Reaction from viewers at advance press screenings were joyful, which sold even more tickets. Box office sales this weekend are expected to surpass the film’s budget.

Eager audience response offers a solid swat in the butt of Hollywood’s bigotry, which for too long has rejected scripts or denied minority-led/directed/written films adequate funding, saying, These films aren’t what audiences want. We’ve heard the same excuses about women-led/directed/written films, too, yet they often blow away expectations. Like Wonder Woman (female director and lead), which was the third highest grossing film last year at $412M; it would have placed higher except for the release of Star Wars: The Last Jedi (female lead) and long-awaited live action reboot of Beauty and the Beast (female lead).

Another refrain too often heard after a minority-led/directed/written film releases: This film exceeded expectations. Hollywood never sees this as a signal not that the film outperformed their forecasts but that audience demand is greater than films supplied. In other words, institutional racism thwarts normal free market response.

Black Panther has garnered some racist reactions, predictably from those who haven’t even seen the movie. DailyCaller’s EIC Ben Shapiro had one of the stupidest as well as most racist takes:

“‘Blade’ was not enough,” Shapiro quipped, referencing the 1998 film and subsequent two sequels that starred Wesley Snipes.

His rant lumped in Halle Berry’s appearance in Catwoman (2004) and Will Smith as lead in the Men in Black trilogy (1997, 2002, 2012), implying that African Americans should be content with what they have in film representation since they’ve been free for more than 200 years and assured their civil rights more than 50 years ago.

Never mind that his first example, Blade, though it featured Wesley Snipes as its lead was made in 1998 with a white director and writer and predominantly white cast. Ditto for the following two entries in the series, released in 2002 and 2004. Apparently black Americans shouldn’t expect to see a black lead in an action film more than once every couple of years — maybe once a year if they’re lucky.

If you’re white — and let’s face it, most of this site’s readers are — imagine a lifetime of rarely seeing anyone who looks like you in film, let alone TV. The idea that minorities, who make up such a large percentage of our population, should be satisfied with rarely ever seeing themselves in all manner of stories is repugnant. It’s both an economic and cultural apartheid. Or worse; it’s not a walling off but erasure of human beings.

It’s a pretty grotesque and deeply unaware stance coming from a guy with the family name Shapiro. It’s an insult to the writers who created Black Panther as a comic book character for Marvel — Jack Kirby and Stan Lee.

There are better criticisms of the film, and they come from those who are much better informed. WaPo’s Karen Attiah interviews Kenyan journalist and broadcaster Larry Madowo on the subject of Black Panther’s fictional fantasy representation of African culture and the ‘messed up’ relationship between Africans and African Americans. Critic Leslie Lee III takes issue with Black Panther’s politics. Warning: Both critiques are spoilery, with Lee’s feedback much more so. However, these critiques are educational for a white audience unfamiliar with African culture let alone African American culture.

Based on casual feedback from creative community and fandom members alike, Black Panther may be the top grossing film this year — and in spite of its release in February, typically the slowest time in the release calendar. It may crack the all-time top 20 films for box office ticket sales.

But will this finally be enough to get through to Hollywood’s other major and minor studios that their expectations need to be reset, that minority-led/directed/written films are successful and deserve a more proportional share of the film market?

In case you’re thinking of seeing Black Panther soon, here’s a decent primer. about its place in the Marvel Studios’ Avengers mythology. I’m not going this week; I’m going a couple weeks from now to an early Monday matinee when I might have 50 percent of the theater to myself so I can take notes. I don’t expect the theater to be less than half full before then.

Open Thread: Guns, Guns, and More Bloody Guns

This is an open thread dedicated to what the National Rifle Association wants you to believe is as necessary as air along with ~13,000 gun homicides each year, and seven children and teen gun deaths each day.

Freedom — we have it at gun point.

For the record, my household has guns. They’re used for hunting. Half the meat this household consumes is venison harvested from family property. They’re secured in a gun safe when not in use.

The Federal Assault Weapons Ban in force from 1994 to 2004 didn’t impede the ability of this household to hunt its annual venison. Mass shootings were markedly lower during the ban, however, though increasing use of high capacity magazines eventually thwarted the effects of the ban.

Do I believe in the Second Amendment? Sure — including the part about a “well regulated Militia.”

The NRA doesn’t believe in that part of the amendment because it affects their actual clients’ profit motive; regulating a militia means gun makers can’t sell more guns.

At some point gun makers and their lobbyists at the NRA need to face reality: the market is saturated, which is why Remington is going into bankruptcy. There are no more arguments to be made to increase gun sales when there are more guns in the U.S. than Americans.

There are no more arguments to be made to sell more guns into a saturated market when gun proponents care more about their guns than the shattered children in classrooms.

Or when gun proponents’ arguments rely on augmentation and dispersion by foreign agents.

Bring your discussions about guns here. Keep them out of other threads so that others can have uninterrupted discussions on topic.

Happy Holidays to All

I’m in PA trying to visit with a bunch of sick relatives, so won’t have much time to voice my appreciation for everything this community does for me.

But I will share my long-time Congressman’s holiday wishes

May today be a safe and joyous day for everyone.

M&M Mars Candy, Trump and The Estate Tax Giveaway

[Ed Note: This is a guest post by our tax law expert friend Bob Lord. It is a particularized abject story of exactly what kind of interests are pushing the Trump “Tax Cuts” agenda, why, and how ridiculously corrupt and insulting to the 99.5% of America the effort really is.]

The Mars family has made billions selling us M&Ms, Snickers, and countless other Halloween treats for a century now. But when it comes to paying tax, the Mars family seems to be all tricks and no treats.

In fact, the family’s latest tax trick may have cost the U.S. Treasury a whopping $10 billion. What could $10 billion do? That’s the cost of delivering prenatal care to hundreds of thousands of expectant moms under Medicaid, an essential program that President Trump and the GOP Congress plan to cut by up to $1 trillion.

According to the current U.S. tax code, any American worth $25 billion can expect 40 percent of that, or $10 billion, to go to Uncle Sam in estate tax, the federal levy on the personal fortunes of deep pockets who kick the bucket. Forrest Mars Jr. had a $25-billion fortune when he died in July 2016. But the Mars family has apparently been able to avoid estate tax on that entire $25 billion.

How do we know? Researchers at Forbes and Bloomberg, the two business publications that track America’s billionaire wealth, have some fascinating numbers for us.

Forest Jr. and his two siblings started 2016 with personal fortunes in the vicinity of $25 billion. Now if Forrest’s fortune had been subject to a significant estate tax after he passed on, the collective wealth of his four daughters in 2017 would be substantially less than that $25 billion.

The just-released 2017 Forbes list of America’s 400 richest shows otherwise. Forbes puts the wealth of each of Forest’s four daughters at $6.3 billion, for a total of $25.2 billion. That’s almost identical to the 2017 fortunes of their Aunt Jacqueline and their Uncle John, each at $25.5 billion. The Bloomberg Billionaires Index reports similar numbers.

Should any of this surprise us? Not really. We’re seeing Mars family history repeat itself. Eighteen years ago, Forrest Mars Sr., the original Mars family billionaire, died. The Forbes 400 lists from the years surrounding 1999 show that the Mars family lost no wealth to estate tax back then either.

But the Mars family must at least be paying oodles of income tax, right? Nope. How could that be? This particular tax-avoidance story starts over a century ago, when Frank Mars incorporated his candy business.

Back then, the value of the stock in Mars Inc. had only minimal value. But over the years the stock appreciated considerably in value. By 1988, that appreciation had made the Mars family the wealthiest clan in America. The Mars billionaires still rank as one of America’s wealthiest families, in no small part because none of the gains in the value of the family’s Mars stock have ever been subject to income tax.

Is the Mars family content with its current level of tax savings? Apparently not. The family has joined with 17 other billionaire families and collectively spent $500 million lobbying Congress for reduced taxes on billionaires and the companies they run.

These companies face corporate income tax on their profits. Mars, Inc. has had to pay these taxes over the years. Unlike Mars family members as individuals, the Mars company hasn’t been able to sidestep its tax bills. But the Mars and other billionaire families have found a friend in President Trump and the current Republican-led Congress. The pending Trump-GOP tax plan would take a meat axe to corporate tax rates.

The resulting corporate tax savings, if this plan gets adopted, will likely translate into a multi-billion-dollar tax savings for Mars, Inc. — and a corresponding bump in the net worth of Mars family members.

The real prize for the Mars in the Trump tax plan? That may be in the elimination of the estate tax that the Trump White House is now pushing. Wait, what? How would the repeal of the federal estate tax help a family that’s already avoiding the estate tax?

For America’s ultra-wealthy, repealing the estate tax turns out to be more about the federal income than the federal estate tax. As Mars family history makes painfully clear, tax avoidance vehicles available under current law allow even billionaires to zero out their estate tax.

But billionaires, under current law, do pay an appreciable income tax price for their estate tax avoidance. Assets on which estate tax is avoided carry an offsetting income tax disadvantage. That disadvantage would vanish in a simple estate tax repeal.

What does that mean? Let’s say we have a billionaire who paid $10 million for stock now worth $100 million and does nothing to avoid estate tax on that stock The billionaire never has to pay income tax on that gain. Those who inherit that stock from the billionaire’s taxable estate can sell it for $100 million and not pay any income tax on the gain either.

But if that billionaire stashed that stock into a trust to avoid estate tax, he would forfeit that income tax advantage. The untaxed gain associated with the stock would be passed to the trust beneficiaries. These beneficiaries would face an income tax on the previously untaxed gain when they sell the stock.

If the Trump-GOP estate tax repeal takes the same final form as the estate tax repeal bill introduced in the House of Representatives in 2015, wealthy Americans will get to have it both ways: zero estate tax and the elimination of any untaxed gain at death.

And that would allow the next generation of Mars family members to avoid income tax on over a century’s worth of economic gain. Quite a trick, huh?

So enjoy the candy, America. The Mars family will keep the cash.

Happy Halloween!

[Robert J. Lord, a tax lawyer in Phoenix, Arizona and former Congressional candidate, is an associate fellow at the Institute for Policy Studies.]

Spaced In Time Trash Talk

Welp, moving from KIller Trash Talk to the things that are this weekend takes a lot. Insanity abounds, and is all around. Your healthcare? Yes, that is getting screwed hard. JCPOA (the Iran anti-nuke deal) yes, that too. If it affects the world in at least semi-positive way, the current President is blowing it all up. The fact that a black man might have even touched on any subject seems to infuriate the dementia ridden sundowning asshole in the West Wing even more.

It is who and what we life forms are now. And it is sickness in every regard, domestically and internationally. Trash Talk was designed to be a refuge from such things. I just cannot anymore. So, if that is a problem, I am sorry. Hopefully we will not stand by, and will not back down, while assclowns like Donald Trump cravenly politicize even common sports entertainment to soothe the 30% base they so cherish.

Nope.

Puerto Rico is dying in their own streets. Northern California is burning. People are trying to ride out the fire in swimming pools as their houses burn around them. While the Trump Administration and GOP sit on their hands, when they are not actively trying to make the entire situation worse. The fuckers are flying on jets, flying flags and making coins in their own image.

But, hey, the NCAA is moving on. Not sure anybody thought anything different would happen in Chapel Hill. Begging the question as to what happens to Louisville, another legacy NCAA basketball program. The NCAA under the terminally lame leadership of Mark Emmert will never change.

In the pros, it is getting hard to figure who is the bigger asshole. Is it Goodell and the NFL, or is it the, at this point, ignorant scorched earth strategy of Jeff Kessler and the NFLPA? The NFLPA is making an ass of itself in trying the everything and the kitchen sink theory as to Zeke Elliot. The NFLPA had a sympathetic plaintiff, Brady, and a supremely tenuous case by the NFL based on simple physics and chemistry. But then the NFL won in the 2nd Circuit. Zeke Elliot is not an all American kid with multiple championships. He is an abusive punk from Ohio State that is lucky the NFL did not find an aggravating act from when he pulled down a woman’s blouse in public during a parade. If you think Elliot has the better case here, you don’t try cases in real courts.

The thing is, whether under federal or state law, and in this case collectively bargained law, the arbitration rules….and the rules ARE “relaxed”….and control. It is about the process, not the facts. I, and a lot of others, tried to argue in the face of this in both Brady and Peterson. Same in Bountygate prior to those two cases. Those arguments were all made in cases with far more appealing clients than a repetitive malefactor like Zeke Elliot. He will serve the suspension, it is only a question of whether he and Jeff Kessler are smart enough to do so soon, or make it later, when it will really hurt a likely playoff team. We shall see whether the NFLPA scorched earth insanity prevails over the inters of Homer Simpson, er Jerry Jones and the Cowboys.

The games go on. The Natinals really ought to still be around, but the Cubs put them to rest. The Yankees somehow overcame Cleveland. Hard to not think the Tribe was the better team, but they didn’t close the deal, and the Yankees did. That said, the conference championships look truly awesome. I think the Astros are not only a better team, but have some juice right now as opposed to the Yanks. Not betting a lot of real money on that, but I think so. The Dodgers are what the Yankees used to be. The best team that all the money in the world can buy. But Chris Hayes made a Trump for Cubs deal with the devil last year, and I hope it still holds, and the Cubs win. If we “have” to have Trump, let the Cubbies win again.

Syracuse obliterated Number 2 Clemson already. Man, that was ugly. So was the job an average Cal did on Pirate Mike Leach and Washington State. Utah at USC should be interesting. Washington at ASU here might be as well, but Chris Peterson is a light years better coach than ASU’s Todd Graham, so ASU likely to get blown out, even at home.

Back to the pros: Philly already topped the Panthers, thanks to a good game by Wentz and a horrible one by Newton. Won’t always be that way, Panthers are dangerous if they get in the playoffs. Skins host the Niners. Will Kirk Cousins be playing on the other team next year? The Pack at Vikings looked really interesting when it looked like Sam Bradford was returning. Less so now, but Case Keenum can produce and they are in Minneapolise with that damn horn they blow. I’ll take Rodgers and the Cheese, but may be a great game.

My game of the week is the Buccos at Cardinals right here in the Big Toaster. Debut of Anthony Peterson at RB for Phoenix. Carson Palmer has quietly played superb QB so far this year for the Cards….when he is not getting murdered from bad, nee atrocious, O-Line play. If Arizona’s constantly remade O-Line can gel and protect the old man, it will be a hell of a game. Not going to bet on that, but just saying. Rams at Jags might actually be interesting. Glad that matchup is, for once, not in London. Other game of the week is unquestionably Scribe’s Steelers at Arrowhead to see the Chefs. I don’t for one second think Big Ben has lost a step, even if he may finally be maturing. But I am not sure that other forces in that locker room are unified the way past Steeler teams are. This will be a HUGE game for Pittsburgh, and less so for KC. I’ll take the upset on this one.

Okay, that is that. Another week. Another dime. Another dollar. Thank you for being here, and send some love to Puerto Rico and Napa.

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