Category Archives: Finance

Chart of the day II: Recreational marijuana sales


From Marijuana Business Daily, monthly sales of recreational marijuana in the three states where it’s now legal. Should California go green in November, the Golden State should top the list:

BLOG Weed

Trump companies in debt to China, Goldman Sachs


But of course. . .

Both candidates operate behind financial shields; Hillary through a family foundation and the Trumpster. . .well.

From the New York Times:

{A]n investigation by The New York Times into the financial maze of Mr. Trump’s real estate holdings in the United States reveals that companies he owns have at least $650 million in debt — twice the amount than can be gleaned from public filings he has made as part of his bid for the White House. The Times’s inquiry also found that Mr. Trump’s fortunes depend deeply on a wide array of financial backers, including one he has cited in attacks during his campaign.

For example, an office building on Avenue of the Americas in Manhattan, of which Mr. Trump is part owner, carries a $950 million loan. Among the lenders: the Bank of China, one of the largest banks in a country that Mr. Trump has railed against as an economic foe of the United States, and Goldman Sachs, a financial institution he has said controls Hillary Clinton, the Democratic nominee, after it paid her $675,000 in speaking fees.

Real estate projects often involve complex ownership and mortgage structures. And given Mr. Trump’s long real estate career in the United States and abroad, as well as his claim that his personal wealth exceeds $10 billion, it is safe to say that no previous major party presidential nominee has had finances nearly as complicated.

As president, Mr. Trump would have substantial sway over monetary and tax policy, as well as the power to make appointments that would directly affect his own financial empire. He would also wield influence over legislative issues that could have a significant impact on his net worth, and would have official dealings with countries in which he has business interests.

Yet The Times’s examination underscored how much of Mr. Trump’s business remains shrouded in mystery. He has declined to disclose his tax returns or allow an independent valuation of his assets.

So you’ve got the Clinton foundation, bankrolled by Goldman Sachs, oil sheikhs, and a host of major corporations, and you’ve got Trump, bankrolled by some the those very same people.

Like our pappy always said, “In America, you’ve got the best politics money can buy.”

Steve Breen: The Hillary Clinton makeover


From the editorial cartoonist of the San Diego Union-Tribune:

BLOG Breen

And the story behind the cartoon from United Press International:

The Clinton Foundation will stop accepting all foreign donations and former President Bill Clinton will step down from running the charitable organization if Hillary Clinton wins the presidency, the group said.

The Clintons have faced criticism from Republicans for alleged “pay-for-play” arrangements between foundation donors and Hillary Clinton’s State Department while she was secretary. Emails obtained by a conservative group showed Douglas Band, a top adviser to Bill Clinton, seeking to arrange access for a donor to American diplomats in Lebanon. That same adviser also tried to land a job for a former foundation employee at the State Department.

Neither of those requests were sent to Hillary Clinton directly, but several of her top aides responded, saying they would try to help.

The Clintons have denied that any financial donations to their family foundation prompted official action by the State Department. A spokeswoman for the department also downplayed the emails, obtained by the group Judicial Watch, which filed a freedom of information lawsuit against the State Department to gain access to Clinton’s emails.

The Washington Post has more:

More than half of the Clinton Foundation’s major donors would be prevented from contributing to the charity under the self-imposed ban on corporate and foreign donors the foundation said this week it would adopt if Hillary Clinton won the White House, according to a new Washington Post analysis of foundation donations.

The findings underscore the extent to which the Clintons’ sprawling global charity has come to rely on financial support from industries and overseas interests, a point that has drawn criticism from Republicans and some liberals who have said the donations represent conflicts of interest for a potential president.

The analysis, which examined donor lists posted on the foundation’s website, found that 53 percent of the donors who have given $1 million or more to the charity are corporations or foreign citizens, groups or governments. The list includes the governments of Saudi Arabia and Australia, the British bank Barclay’s, and major U.S. companies such as Coca-Cola and ExxonMobil.

The foundation’s announcement drew skepticism Friday from the right and the left as critics wondered why the Clintons have never before cut off corporate and overseas money to their charity — and why they would wait until after the election to do so.

America’s ethnic wealth divides are growing deeper


BLOG Wealth

The chart is from a sobering new report from the Institute for Policy Studies: The Ever-Growing Gap: Without change, African-American and Latino families won’t match white wealth for centuries.

Key findings from the report:

  • Over the past 30 years, the average wealth of White families has grown by 84% — 1.2 times the rate of growth for the Latino population and threetimes the rate of growth for the Black population. If the past 30 years were to repeat, the next three decades would see the average wealth of White households increase by over $18,000 per year, while Latino and Black households would see their respective wealth increase by about $2,250 and $750 per year.
  • Over the past 30 years, the wealth of the Forbes 400 richest Americans has grown by an average of 736% — 10 times the rate of growth for the Latino population and 27 times the rate of growth for the Black population. Today, the wealthiest 100 members of the Forbes list alone own about as much wealth as the entire African-American population combined, while the wealthiest 186 members of the Forbes 400 own as much wealth as the entire Latino population combined. If average Black households had enjoyed the same growth rate as the Forbes400 over the past 30 years, they would have an extra $475,000 in wealth today. Latino households would have an extra $386,000.
  • By 2043 — the year in which it is projected thatpeople of color will make up a majority of the U.S. population — the wealth divide between White families and Latino and Black families will have doubled, on average, from about $500,000 in  2013 to over $1 million.
  • If average Black family wealth continues to grow at the same pace it has over the past three decades, it would take Black families 228 years to amass the same amount of wealth White families have today. That’s just 17 years shorter than the 245-year span of slavery in this country. For the average Latino family, it would take 84 years to amass the same amount of wealth White families have today — that’s the year 2097.

Next, an interview by The Real News Network‘s Kim Brown of one of the authors of the report, Josh Hoxie , who heads the institute’s Project on Opportunity and Taxation:

A Post-Racial Society With a Racial Wealth Divide?

From the transcript:

HOXIE: Historical policy definitely has played a role in contributing to the racial wealth gap. And one of the interesting things about studying wealth is that it’s really where the result of past policy meets the present that’s impacting people’s lives. So income can tell us a snapshot of where people are at right now, but wealth really gives us that longitudinal view. And as you pointed out, the historical public policies in this country have contributed directly to the growing racial wealth gap we’re witnessing today. And unfortunately, current policies that we have right now also contribute to the racial wealth gap we see today.

Just one example of that is the tax expenditures that we see come out of Congress year-in, year-out, which now total over half a trillion dollars, $600 billion, to be exact. So we’re seeing this money come out that’s designed to be helping people generate wealth. It’s for retirement savings, it’s for home ownership, it’s for things like saving for your child’s college. But the problem is that it’s being skewed into fewer and fewer hands, people at the tippity-top of the economic spectrum who don’t need huge subsidies in order to maintain or generate wealth. People at the bottom are not getting the same amount of help, or anywhere near the amount of help that people at the top are getting.

BROWN: And your report notes that, that there has been tremendous accelerated wealth, growth by the top 1 percent of Americans. You cite the Forbes 400 and you say that they have seen wealth gains of over 700 percent in the last 30 years. I’m curious, because most of the Forbes 400 are white Americans, now, if you were to somehow exclude these very wealthy hundreds of people from this equation, does that change the wealth gap at all? Does that shrink it between when you’re looking at average black, white, and Latino families? Or is the gap still about the same?

HOXIE: Well, it’s certainly true the wealth has concentrated over the past 30 years in an incredible amount into the tippity-top of the economic spectrum. The Forbes 400, as you mentioned, had an average wealth gain of over 700 percent. For context, that’s 10 times faster than the rate of growth for an average Latino family and 27 times the rate of growth for an average black family. So no doubt that money has been concentrating significantly.

And to you direct question, I think there is a role that money concentrating at the top plays in driving the averages up for white families. Because if we look at the median income, or median wealth, excuse me, black wealth over the past 30 years for the median family has actually gone down. So we talk a lot in this report about the average family which, you know, the statistical average is being pulled up by those at the top, and the same is true for white families.

Now, the median white family has gone up, but less than the average, which implies that the top of the spectrum is pulling up that average. But for the black median family and for the Latino median family those rates have been going down. So what we’re seeing is that a typical family that you see on the street is not doing as well as they were 30 years ago when it comes to generating and maintaining wealth.

What more to say?

Obama administration’s private prison payoff


The whole notion of letting private corporations run American prisons is abominable, going back to 1852 when California opened the first such institution, the now state-run San Quentin Prison.

Privatization failed to gain traction, and governments ran prisons, which, after all, are extensions of the governments’ judicial systems, until Ronald Reagan took over the White House.

Reagan, an avid proponent of turning public institutions into centers for private profits, inaugurated a building boom, with privately owned and operated prisons proliferating like noxious weeds across the country.

The prison contractors have emerged as the nation’s most potent lobbying force, reported the Washington Post in April, 2o15:

The two largest for-profit prison companies in the United States – GEO and Corrections Corporation of America – and their associates have funneled more than $10 million to candidates since 1989 and have spent nearly $25 million on lobbying efforts. Meanwhile, these private companies have seen their revenue and market share soar. They now rake in a combined $3.3 billion in annual revenue and the private federal prison population more than doubled between 2000 and 2010, according to a report by the Justice Policy Institute. Private companies house nearly half of the nation’s immigrant detainees, compared to about 25 percent a decade ago, a Huffington Post report found. In total, there are now about 130 private prisons in the country with about 157,000 beds.

>snip<

The Justice Policy Institute identified the private-prison industry’s three-pronged approach to increase profits through political influence: lobbying, direct campaign contributions, and building relationships and networks.

One current presidential candidate, Libertarian Gary Johnson, won the New Mexico governorship on a platform which included the promise to privatize all prisons in his state.

From the Sentencing Project:

Gary Johnson’s platform during his initial 1994 run for governor of New Mexico included a pledge to privatize every prison in the state. By the time he left office in 2003 44.2 percent of the state’s prisoners were in privately run facilities.

And the Obama administration jumped on the bandwagon, no doubt with the prompting of his former chief of staff Rahm Emanuel, who since decamping to win the job of mayor of Chicago has ruthlessly privatized public housing, schools, parking meters, nursing services, and more.

It’s no wonder that private prisons are an American corporate success story: With only five percent of the planet’s population, the U.S. accounts for 25 percent of the global incarceration population.

Mapping the Prison/Industrial Complex

This map, from the federal Bureau of Prisons, shows the locations of prisons currently run by private corporations on behalf of the notional government:

BLOG Prisons

Another map, this time from The Private Prison Project, shows the locations of state and federal prisons run by the three largest private prison corporations:

BLOG Prisons all

Federal prisons mushroom, violence reigns

So how effective are private contractors at running their prisons?

A just-released review of private federal prisons by the Justice Department’s Office of the Inspector General concluded:

We found that in a majority of the categories we examined, contract prisons incurred more safety and security incidents per capita than comparable BOP [Bureau of Prisons — esnl] institutions. We analyzed data from the 14 contract prisons that were operational during the period of our review and from a select group of 14 BOP institutions with comparable inmate populations to evaluate how the contract prisons performed relative to the selected BOP institutions.  Our analysis included data from FYs [fiscal years — esnl] 2011 through 2014 in eight key categories: (1) contraband, (2) reports of incidents, (3) lockdowns, (4) inmate discipline, (5) telephone monitoring, (6) selected grievances, (7) urinalysis drug testing, and (8) sexual misconduct. With the exception of fewer incidents of positive drug tests and sexual misconduct, the contract prisons had more incidents per capita than the BOP institutions in all of the other categories of data we examined.

And just how much more violent are private prisons compared to prisons run by Uncle Sam?

One chart from the Inspector General’s report says it all:

BLOG Prisons assaults

A massive release of documents acquired by The Nation revealed a stunning lack of concern:

[N]ew records show that BOP monitors documented, between January 2007 and June 2015, the deaths of 34 inmates who were provided substandard medical care. Fourteen of these deaths occurred in prisons run by CCA. Fifteen were in prisons operated by the GEO Group. The BOP didn’t respond to repeated requests for comment or to written questions before deadline.

The records and interviews with former BOP officials reveal a pattern: Despite dire reports from dozens of field monitors, top bureau officials repeatedly failed to enforce the correction of dangerous deficiencies and routinely extended contracts for prisons that failed to provide adequate medical care.

The Obama administration greases the skids

And that brings us to the latest boondoggle, reported by the Washington Post:

As Central Americans surged across the U.S. border two years ago, the Obama administration skipped the standard public bidding process and agreed to a deal that offered generous terms to Corrections Corporation of America, the nation’s largest prison company, to build a massive detention facility for women and children seeking asylum.

The four-year, $1 billion contract — details of which have not been previously disclosed — has been a boon for CCA, which, in an unusual arrangement, gets the money regardless of how many people are detained at the facility. Critics say the government’s policy has been expensive but ineffective. Arrivals of Central American families at the border have continued unabated while court rulings have forced the administration to step back from its original approach to the border surge.

In hundreds of other detention contracts given out by the U.S. Immigration and Customs Enforcement agency, federal payouts rise and fall in step with the percentage of beds being occupied. But in this case, CCA is paid for 100 percent capacity even if the facility is, say, half full, as it has been in recent months. An ICE spokeswoman, Jennifer Elzea, said that the contracts for the 2,400-bed facility in Dilley and one for a 532-bed family detention center in Karnes City, Tex., given to another company, are “unique” in their payment structures because they provide “a fixed monthly fee for use of the entire facility regardless of the number of residents.”

The rewards for CCA have been enormous: In 2015, the first full year in which the South Texas Family Residential Center was operating, CCA — which operates 74 facilities — made 14 percent of its revenue from that one center while recording record profit. CCA declined to specify the costs of operating the center.

Prisons and presidential politics

Marco Rubio was the private prison industry’s favorite son, the source of both their largess and of legislation that gained them even greater profits, as the Washington Post reported last year:

Marco Rubio is one of the best examples of the private prison industry’s growing political influence, a connection that deserves far more attention now that he’s officially launched a presidential bid. The U.S. senator has a history of close ties to the nation’s second-largest for-profit prison company, GEO Group, stretching back to his days as speaker of the Florida House of Representatives. While Rubio was leading the House, GEO was awarded a state government contract for a $110 million prison soon after Rubio hired an economic consultant who had been a trustee for a GEO real estate trust. Over his career, Rubio has received nearly $40,000 in campaign donations from GEO, making him the Senate’s top career recipient of contributions from the company. (Rubio’s office did not respond to requests for comment.).

And while Hillary Clinton has made some statements about reining in the trend, as with so many things, her promises may well prove a facade, and the Intercept reported in June:

The chief executive of the largest private prison company in America reassured investors earlier this month that with either Donald Trump or Hillary Clinton in the White House, his firm will be “just fine.” Damon Hininger, the chief executive of Corrections Corporation of America, was speaking at the REITWeek investor forum.

Private prisons have received a great deal of criticism this election cycle, first with Bernie Sanders campaigning to end for-profit incarceration, followed by Clinton taking up a similar pledge.

After The Intercept revealed that the Clinton campaign had received campaign donations from private prison lobbyists, a number of activist groups confronted Clinton, leading her to announce that she would no longer accept the money and later declaring that “we should end private prisons and private detention centers.”

But Corrections Corporation is apparently not concerned. Asked about prospects under Trump or Clinton, Hininger argued that his company has prospered through political turnover by taking advantage of the government’s quest for lower costs.

Chart of the day II: Old Blighty misperceptions


Or would Britain elect Donald Trump?

The same British voters who approved the Brexit, the United Kingdon’s exit from the European Union, were utterly uniformed about key issues that motivated their votes, as revealed by an IPSOS Mori poll, with the graphic by Financial Times via Birgitta Jónsdóttir:

BLOG Brexit

John Oliver tackles used car loan sharks


The latest episode of Last Week Tonight with John Oliver tackles predatory used car lending, complete with abducted babies, annoying beeps, and warnings that yet another lending bubble is about to burst.

As usual, it’s both amusing and omnious, and, as always, well worth your time.

From Last Week Tonight:

Auto Lending: Last Week Tonight with John Oliver

Program notes:

Auto lenders can steer vulnerable people into crushing debt. Keegan-Michael Key and Bob Balaban help John Oliver show exactly how.