We need more financial regulations...not less

The story below is must read for all, especially those who think financial reform (Dodd-Frank) went too far.  To all those in Congress who want to repeal Dodd-Frank, here’s the story about the big banks you are defending and why Dodd-Frank didn’t go far enough.

Bloomberg
11-28-11

Secret Fed Loans Gave Banks $13 Billion

By Bob Ivry, Bradley Keoun and Phil Kuntz

Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

Read more

If you can't compete...attack the rules of the game

This week the U.S. House is expected to start voting on legislation to turn back regulations and make it nearly impossible for federal agencies to develop new regulations in the future. If that happens, Congress might as well just stop passing any new laws because the rules for implementing them will never be developed. 

One of the big targets for the anti-regulation crowd is Dodd-Frank, the financial reform that passed last year to try to put regulations of big financial institutions in place so we won’t repeat this great recession.

The majority party in the House, spurred on by the big banks, blame Dodd-Frank for stopping loans to small businesses.  But apparently what the real problem for these banks is that Dodd-Frank has fostered greater competition for the commercial and industrial (C&I) loan business and smaller banks are winning.

According to Jeff Harding, writing in the Daily Capitalist:

What we see is that C&I loans took off starting in the first quarter of 2011. While the data for large domestic banks shows steady C&I loan growth since the fourth quarter of 2009, small domestic bank C&I lending shot up in the first quarter of 2011, from zero base to $20 billion.  Even more surprising is that average loan size for small banks increased from about $100,000 to almost $650,000….The main reason for this sudden increase in loan activity is competition. Ever since Dodd-Frank, banks have been scrambling to figure out how to make more money, as many credit card and other account fees were prohibited in an attempt to protect consumers. One way to offset that loss is to gain more business customers, and there has been a scramble by both large and small banks for SME customers….Small banks have the most to gain or lose in this competition because SMEs are their territory. So they are pursuing customers. Many also believe that there is a window of opportunity with favorable spreads and thus the timing is critical to expand business before that window closes. The initial beneficiaries seem to be the banks in the $5 billion to $10 billion asset range, which are classified as small banks.

No wonder the big banks want to repeal Dodd-Frank with its unintended consequence of fostering loan competition.  They’re not doing so well in the “small-business friendly” department.

Unfortunately this new competition isn’t leading to more smaller loans in the $50,000 and under range that so many microenterprises need.  But still, Dodd-Frank is working so obviously it MUST die.

Thanksgiving prayer not enough

As we celebrate Thanksgiving with family and friends tomorrow, our thoughts should be with Americans who are struggling…and there are more than you think.

According to a report released yesterday by Wider Opportunities for Women (WOW) 45% of all American households are struggling financially.  Not just struggling, unable to cover housing, food, healthcare and more. 

Donna Addkison, President and CEO of WOW says that this report “is a wake-up call for Congress, for our state policy-makers, really for all of us.”  “Nearly half of our nation's families cannot cover the costs of basic expenses even when they do have a job. Under these conditions, cuts to unemployment insurance... and other programs families are relying on right now would push them from crisis to catastrophe.”

Before the end of the year Congress will be making decisions about extending unemployment benefits and keeping the payroll tax cuts for working Americans.  They’ll also be debating how to create new jobs the nation’s citizens desperately need.

Congress needs to hear the plight of the real America not just so they can include these families in a Thanksgiving dinner prayer but to motivate them to take action before the end of the year to reverse these grim statistics. 

Note to offiicals in other states...check in with S.C.

Maybe South Carolina actually does have something the rest of the country can emulate—at least as it relates to the Occupy movement.

Last night, S.C. Governor Nikki Haley backed off last week’s order that the Occupy Columbia protesters had to be off of the State House grounds by 6 p.m. or be arrested for trespassing.  Last Wednesday 19 protesters were arrested by the Bureau of Protective Services officers when they refused to leave.

Outrage immediately followed with attorney’s weighing in that the arrests violated the First Amendment.  Occupiers were buoyed by the Mayor of Columbia, Steve Benjamin, and his police chief, Randy Scott, refusing to take part in any way in the arrests saying that the protesters were not breaking the law.

All this led to a showdown last night at the front steps of the State Capitol.  The word went out calling for supporters of Occupy Columbia’s 19 to be at the State House at 6 p.m. for a peaceful protest and challenge to Governor Haley. 

In what was probably the largest turnout since the opening day of Occupy Columbia, First Amendment supporters came to be part of the “General Assembly”.   Certainly more media was there than ever before.  Many if not all the original 19 arrested were back protesting.

As the clock ticked close to 6:30 p.m. and the crowd waiting for some sign of enforcement of the Governor’s order, word arrived to the protesters that no arrests would be made—an announcement that was met by a large cheer. 

The lesson—elected officials can do the right thing even after making a bad decision.  It applies to the Occupy movement and, for that matter, every decision.  Just do what is right.  The political world won’t end.   

We'll miss David Huffstetler

Last Wednesday David Huffstetler resigned as Commissioner of the S.C. Workers’ Compensation Commission.  The news stories by Michael Whiteley of  Workcompcentral indicate that Huffstetler, whose term was up in June next year anyway, made the decision to resign rather than be involved in a media circus over his recusing himself from a case due to a personal conflict of interest.

Apparently the attorney’s involved with the case have filed a complaint against the former Commissioner with the state Ethics Commission, not because Huffstetler admitted that he had a conflict of interest, but because they didn’t like his comments as to why he recused himself.

Regardless of the merits of the complaint, the small businesses of South Carolina have lost a true ally on the Commission.  Huffstetler was steadfast in his conviction not to make changes to healthcare provider compensation schedules that would increase workers’ comp premiums. 

When he was chairman of the Commission, Huffstetler supported the implementation of a hospital fee schedule that has saved businesses about $100 million a year in workers’ comp costs.  Just recently he expressed his unwillingness to vote to carve out higher reimbursements for some healthcare providers and opposed changing the law to allow future Commissions to alter healthcare provider compensation without approval of the General Assembly.

I wish Commissioner Huffstetler well in his retirement.  Workers’ compensation premiums have been better for small business because of his service.

RAA: The end of accountability as we know it

Who doesn’t like the concept of accountability?  We instinctively understand that people and organizations should be accountable for their behavior.  Politicians and government should be accountable for their words and actions. 

Accountability is as American as mom and apple pie--except when it is just a phony adjective as in the Regulatory Accountability Act (RAA) being considered by Congress.

The first warning that the RAA is just a bogus use of the word “accountability” is who is supporting the legislation.  There are well over 30 bills in Congress right now that have the stated purpose of stopping regulations in one fashion or another.  And these bills have something else in common—they all have the same Congressional supporters and these supporters also support the RAA. 

So how does a bill with the word “accountability” in its title really strive to stop regulations and produce less accountability?  And why is that bad for small and mid-size businesses?

The RAA throws over 60 years of procedures for government agencies making deliberate, thorough, publicly crafted regulations out the window.  In exchange it gives the real power to lobbyists for big corporations and the courts to make decisions on carrying out, or more likely not carrying out, the will of our elected officials.

The RAA does this by micro-managing every step of the rulemaking process.   According to a report released this week by the Coalition for Sensible Safeguards, Impact of the Regulatory Accountability Act, the RAA adds more than 60 new procedural and analytical requirements.  K-Street lobbyists will have more time and opportunity to practice their special-interest influence.  The RAA, says the report, “would add no fewer than 21 to 39 months to the rulemaking process”, a process that can already take years.  As a result the RAA will dramatically increase the cost to taxpayers for the regulatory process and never produce the results envisioned in the federal laws passed by Congress.

The RAA is also a corporate attorney’s dream.  Every aspect of the RAA is geared toward encouraging special interests to legally challenge every regulation of an agency.  Even frivolous lawsuits are protected under the bill because the RAA defines as "substantial evidence" for a lawsuit to be anything the special interest thinks is "reasonable."

The 32-page RAA mentions judicial review, litigation, the court and other lawsuit terminology 18 times. The bill even includes a provision guaranteeing "immediate judicial review" for any special interest on every aspect of the prescribed rulemaking process.   If any regulation can survive this legal quagmire, it will deliver nothing that resembles the intent of our elected leaders.

With the federal regulatory process shut down, accountability of big corporations is gone.  These corporations, and especially multinational corporations, will have more freedom to pursue their profitability without regard to the effect on the American public’s health and safety.

Small and mid-size businesses won’t stand a competitive chance against the deep pockets of corporate giants unleashed from regulatory control.  Access to capital will diminish even more and protection from financial predators will decrease.  With no accountability for big corporate American, small and mid-size businesses will suffer.

That’s why the American Sustainable Business Council, Main Street Alliance and Small Business Majority are opposing the RAA.  It is an “accountability” fraud on the American public and the real businesses that have made this country great. 

Poster child for the 1%

On this Day of Action for the Occupy movement fighting for the 99% of Americans outraged over corporate greed on Wall Street and in Congress that is destroying the middle-class, we now have a poster child for the 1%--Tom Donohue, president and CEO of the U.S. Chamber of Commerce.

The U.S. Chamber is the leading advocacy organization for everything 1%.  From defending the practice of multinational corporations off-shoring jobs and profits to opposing every effort to protect the personal and financial health and safety of Americans and small businesses.

For Mr. Donohue’s largely successful efforts to lead this 1% organization, he was paid $4.6 million in 2010 according to U.S. Chamber Watch.   That is one million more than his compensation the year before. 

In a Huffington Post story yesterday, spokesperson for U.S. Chamber Watch Christy Setzer says: 

The U.S. Chamber is an organization that's made up of the one percent, to advocate for the one percent. That's reflected in every aspect of the Chamber's operations, from the nearly $5 million compensation package received by their president, Tom Donohue, to the policies for the wealthy that they've taken their biggest stances on -- including their support for extending the Bush tax cuts and a tax 'holiday' on overseas profits. That may be cool comfort to big corporate CEOs, but hardly helpful to struggling Mom and Pop shops across America.

If you’re a business person and want to support the Occupiers efforts to focus the nation’s attention on the growing wealth disparity in the country and the resulting plight of small businesses suffering from low customer demand, then sign on to the letter below from my friend Ben Cohen, co-founder of Ben & Jerry’s.  Simply send an email to Molly.Turner@BenJerry.com.  Molly will be in touch with you

 

Statement in Support of Occupy Wall Street

October 2011

We, the undersigned businesses and businesspeople, wish to express our deepest admiration to all of you who have initiated the non-violent Occupy Wall Street Movement and to those around the country who have joined in solidarity.  The issues raised are of fundamental importance to all of us.  These include:

·         The inequity that exists between classes in our country is simply immoral.

·         We are in an unemployment crisis.  Almost 14 million people are unemployed.  Nearly 20% of African American men are unemployed.  Over 25% of our nation’s youth are unemployed.

·         Many workers who have jobs have to work 2 or 3 of them just to scrape by.

·         Higher education is almost impossible to obtain without going deeply in debt.

·         Corporations are permitted to spend unlimited resources to influence elections while stockpiling a trillion dollars rather than hiring people.

We know the mainstream media will either ignore you or frame the issue as to who may be getting pepper sprayed rather than addressing the despair and hardships borne by so many, or accurately conveying what this movement is about.  All this goes on while corporate profits continue to soar and millionaires whine about paying a bit more in taxes. And we have not even mentioned the environment.

We know that words are relatively easy but we wanted to act quickly to demonstrate our support.  We realize that Occupy Wall Street is calling for systemic change.  We support this call to action and are honored to join you in this call to take back our nation and democracy.

Sincerely

Ben Cohen

Co-Founder

Ben & Jerry’s

Jerry Greenfield

Co-Founder

Ben & Jerry’s

Shrinking middle-class, shrinking customer demand

Efforts to shut down Occupy encampments across the country might be having some limited success, but the issues that drive the 99% movement continue to be exposed.  You want to know why small businesses are struggling?  Read The New York Times story below.

The New York Times
November 16, 2011

Middle-Class Areas Shrink as Income Gap Grows, New Report Finds

By SABRINA TAVERNISE

WASHINGTON — The portion of American families living in middle-income neighborhoods has declined significantly since 1970, according to a new study, as rising income inequality left a growing share of families in neighborhoods that are mostly low-income or mostly affluent.

The study, conducted by Stanford University and scheduled for release on Wednesday by the Russell Sage Foundation and Brown University, uses census data to examine family income at the neighborhood level in the country’s 117 biggest metropolitan areas.

The findings show a changed map of prosperity in the United States over the past four decades, with larger patches of affluence and poverty and a shrinking middle.

Read more

U.S. Senator Coburn releases report exposing billions in giveaways for millionaires

With the on-going battle in Congress over increasing taxes on the wealthiest Americans to reduce the deficit and/or pay for needed government programs, the most fiscally conservative Republican Senator is exposing taxpayer subsidies for people making over a million dollars a year.  Unemployment checks for these folks....really?

 

Nov. 13, 2011

(WASHINGTON, D.C.) – U.S. Senator Tom Coburn, M.D. (R-OK) today released a new report “Subsidies of the Rich and Famous” illustrating how, under the current tax code, the federal government is giving billions of dollars to individuals with an Annual Gross Income (AGI) of at least $1 million, subsidizing their lavish lifestyles with the taxes of the less fortunate.

“All Americans are facing tough times, with many working two jobs just to make ends meet and more families turning to the government for financial assistance. From tax write-offs for gambling losses, vacation homes, and luxury yachts to subsidies for their ranches and estates, the government is subsidizing the lifestyles of the rich and famous. Multi-millionaires are even receiving government checks for not working.

“This welfare for the well-off – costing billions of dollars a year – is being paid for with the taxes of the less fortunate, many who are working two jobs just to make ends meet, and IOUs to be paid off by future generations. We should never demonize those who are successful. Nor should we pamper them with unnecessary welfare to create an appearance everyone is benefiting from federal programs,” Dr. Coburn said.

These billions of dollars for millionaires include $74 million of unemployment checks, $316 million in farm subsidies, $89 million for preservation of ranches and estates, $9 billion of retirement checks, $75.6 million in residential energy tax credits, and $7.5 million to compensate for damages caused by emergencies to property that should have been insured. All and all, over $9.5 billion in government benefits have been paid to millionaires since 2003. Additionally, millionaires borrowed $16 million in government backed education loans to attend college. On average, each year, this report found that millionaires enjoy benefits from tax giveaways and federal grant programs totaling $30 billion. As a result, almost 1,500 millionaires paid no federal income tax in 2009.

Read the full report: here. 

Be careful what you wish for

The U.S. Supreme Court is expected to decide possibly today that it will take up the Florida case opposing national health care reform—the Affordable Care Act or as it is now commonly called “Obamacare”.   Everyone expects that that the Court will rule in 2012 whether the individual mandate for almost every American to purchase health insurance is constitutional. 

The opponents of the law have been clamoring for the Supreme Court to rule as quickly as possible that the mandate is unconstitutional in hopes that Congress will then have to kill off the whole healthcare law or at least make the issue the center piece of the 2012 elections.  But now that they are going to get the first part of their wish, legal analysis of a recent District Court ruling indicates that they might not get the second part. 

Bruce Brown writes in The New Republic that the D.C. Circuit Court opinion “provides the most authoritative, truly conservative defense of the Act thus far, a defense that should buttress the legal position of the Obamba administration before the Supreme Court next year.”

The worry of the opponents is that their favorite conservative Justices won’t share their partisan spirit in their decision.   If that happens, the Republican Presidential candidate won’t be able to claim that because part of the law is unconstitutional then it must be rescinded or that the election should be about nominating more conservative Justices. 

I can’t wait to hear what the new spin will be.

Update on crowdfunding legislation

Last Friday I told you that the U.S. House overwhelmingly passed a bill that would allow small businesses to solicit investment capital of up to $1 million with a $10,000 maximum per individual contribution without having to do all the expensive and time consuming paperwork registering with the Securities and Exchange Commission.  The concept is call “crowdfunding” and it offers another avenue for small businesses to access capital, something desperately needed.

The SC Small Business Chamber has previously advocated for the SEC to waive registration requirements for small businesses that wanted to raise $100,000 from contributions of up to $100.  The theory being that if the maximum someone could lose in the investment was only $100, then there was not a lot of need for the SEC to protect the consumer.

So while I applauded the bipartisan support for the House crowdfunding bill, I and other supporters of the concept were uneasy about raising the maximum individual contribution to $10,000.  That’s a heck of a lot of money to lose and would probably attract a lot of scam artists soliciting for fraudulent investments. 

Fortunately, Senator Scott Brown of Massachusetts has introduced his crowdfunding bill (S.1791) that reduces the maximum individual contribution to $1000 while keeping the $1 million total on capitalization.  That’s a much more acceptable potential investment loss to justify the elimination of much of the SEC registration requirements.

Net neutrality vote today

An important vote will take place in the U.S. Senate today.  The future of a free and open Internet is at stake. 

The Federal Communications Commission (FCC) last year saw signs that broadband providers were beginning to block or degrade website content and applications in order to control access to content.  The writing was on the wall that the Internet service providers were ready to destroy what all of us have come to rely on—an extremely important tool for moving and accessing information without toll booths or roadblocks.  

So the FCC developed some moderate regulations to try to preserve the open, unrestricted Internet we know today.  Those regulations will go into effect on November 20^th if Congress does not block them. 

That is what the vote in the Senate is about today.  The floor debate took place yesterday with the typical partisanship.  Democrats arguing that the rules are needed to insure that corporate providers maintain a level playing field for total, open access to the Internet and Republicans continuing to beat the drum about too much regulation.

Interestingly, no major telecom firm has publicly supported the effort to block the FCC regulation.  But at least one small telecom company has come out in favor of keeping the regulation.  Matt Bauer, president and co-founder of BetterWorld Telecom (and fellow Board member of the American Sustainable Business Alliance) wrote in The Hill’s Congressional Blog yesterday:

The truth is that if we want to make sure small businesses across this country can grow with the assistance of broadband, the Internet must be open.  We must, as the FCC says, “ensure the Internet remains an open platform—one characterized by free markets and free speech—that enables consumer choice, end-user control, competition through low barriers to entry, and freedom to innovate without permission.” 

If you agree, contact your Senators quickly and tell them to vote NO on the resolution to block the FCC regulation on net neutrality.  There will be a vote today and in this case a simple majority wins.

UPDATE:  The U.S. Senate voted 52-46 today against a resolution to block the FCC's Net-neutrality rgulation.  The new rules should go into effect on November 20th.

Lack of demand is the problem not regulations

Politico
Letter to the Editor
November 9, 2011

Former Sen. Blanche Lincoln, in her Opinion piece “Why Small Businesses Matter” (POLITICO, Nov. 1), insists that too much regulation is “the roadblock that many small businesses cite as their greatest impediment to growth.”

But Lincoln, who is now the chairwoman of an anti-regulation organization created and funded by the National Federation of Independent Business, provides no hard data to prove her — and the NFIB’s — claims about the imperative of regulation reform. And for good reason. Regulations aren’t standing in the way of small businesses creating jobs.
During the first half of 2011, the Bureau of Labor Statistics reports that less than one-quarter of 1 percent (0.0023) of U.S. job layoffs were due to regulations, according to the businesses themselves. About 30 percent of layoffs were in fact due to poor “business demand.”

This data is confirmed by every credible recent survey of owners of small businesses — lack of consumer demand and economic uncertainty are the most important reasons small businesses aren’t adding jobs. It was found by surveys for the Small Business Majority, McClatchy News Service, National Association for Business Economics, U.S. Chamber of Commerce and even the NFIB.

Without the hard data to prove their case, NFIB President Dan Danner has launched personal attacks on small-business organizations that oppose their anti-regulation proposals. “Some of the administration’s friends say that regulation isn’t actually hurting small businesses,” Danner says in the latest radio ads, “I’m not sure if these regulation deniers have ever met a small-business owner.”

As vice chairman of the American Sustainable Business Council (representing over 100,000 small and midsize U.S. businesses), president and chief executive officer of the South Carolina Small Business Chamber of Commerce (with more than 5,000 members) and owner of several small businesses, I have met plenty of small-business owners. To a person, they tell me that what they really need to grow is more customers.

That doesn’t make us regulation deniers or even friends of the administration. It makes us realistic business people without a partisan agenda.

Frank Knapp, Jr.
Vice Chairman
American Sustainable Business Council

Small business saving money on health care

There are at least 228,000 small business owners in the country happy about “Obamacare”.  That is the numbers who have so far claimed the health insurance tax credit for small businesses that offer the benefit to their employees for 2010. 

How much did these businesses save?  $278 million.

Unfortunately, the number of small businesses helped is lower than expected and the IRS plans to find out why.  It could be a lack of awareness, tax professionals not pursuing the credits, business data not readily available or some other barrier. 

Or it could be that the opponents of healthcare reform have poisoned the water so badly that many small business owners won’t drink it even it is beneficial to them. 

It’s a self-fulfilling prophesy for the likes of the NFIB.  They blanket the media and their members with how bad healthcare reform is so that small business owners are convinced that they should stay away from it.  Then when not more small business owners take advantage of the tax credits the NFIB can say “we told you so—Obamacare isn’t good for small business. “

Now all the NFIB has to do is convince the 228,000 and growing number of small business owners that the more affordable health insurance that they’re getting is actually bad for them.  Good luck.

No more "brother-in-law" excuse

All of us have heard the anecdotal stories of how somebody’s brother-in-law is unemployed but yet won’t try to get a job because he’s making more money collecting an unemployment check. 

Some politicians even use these stories to explain the high unemployment numbers.  “If they weren’t getting paid,” they say, “they’d be taking all these jobs that are available.” 

This blame the victim talk might have been easy to sell when most unemployed were receiving benefits as they were early last year when 75% fit that description.  But not now.

Unemployment data now shows that there is so much chronic unemployment that only 48% are still receiving benefits.  The rest have timed out at 99 weeks or even much less depending on the state.

This trend will continue to get worse even if Congress once again passes the needed extension of federal unemployment benefits to continue to allow those looking for work to have some income for up to 99 weeks.   

More unemployed without benefits will mean less money on Main Street.  Less money on Main Street means small businesses will not be creating jobs and will probably have to let employees go due to lack of customers. 

It’s a vicious cycle that needs to be broken.  Since the big corporations sitting on piles of money won’t help, then government must step in to help create jobs.  Call that any name you want but I call it rescuing our small businesses that didn’t create this financial mess in the first place. 

Hope for bipartisanship and small business?

If your feet felt cold this morning, it’s because Hell has frozen over.

Last evening the U.S. House passed overwhelmingly (407-17) a piece of President Obama’s American Jobs Act.  While the Senate Republicans yesterday blocked the transportation part of the jobs bill, House Republicans and Democrats solidly supported changing Security and Exchange Commission (SEC) regulations to allow small businesses easier access to private investment. 

Last year supporters, including the South Carolina Small Business Chamber, of a concept called “crowdfunding” proposed by the Sustainable Economies Law Center lobbied the SEC for reducing strict registration requirements for small businesses to seek investors for security offerings up to $100,000 with $100 maximum per investor.    We felt that the onerous registration process was there to protect investors.  So if the maximum an investor could lose was only $100, then such requirements should also be minimal.

The SEC listened as did the Administration.   The President’s jobs bill included the general concept of responsibly reducing SEC regulatory burdens if investor risk was low.   And the SEC established an Advisory Committee on Small and Emerging Companies that had its first meeting Monday of this week.  On its agenda was the concept of “crowdfunding” as a vehicle for small businesses to better access capital.

Not waiting for the SEC, last evening the House passed H.R. 2930 with some amendments.  The bill takes our original “crowdfunding” proposal and dramatically raises the cap to $1 million on the amount of funds allowed to be generated through this process that would include internet and other forms of advertising. The cap on how much each individual investor can give was raised to $10,000. 

Small businesses following the “crowdfunding” guidelines would not have to register with the SEC.

Now this bill goes to the Senate and we’ll have to see if that body can also get over its partisan divide.  If it can, then a whole new opportunity for small businesses to meet their capital needs will become a reality.

The most fortunate of the Fortune 500

There are 280 corporations on the Fortune 500 list that are a lot more fortunate than the rest.  According to a just released study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy these 280 corporations paid an average effective tax rate in 2009 and 2010 of just 17.3%. The official corporate tax rate is 35%.

Of this group of fortunate corporations, 78 had no federal taxes due in one year from 2008-2010.  Then there were the most fortunate 30 of them all that “enjoyed a negative income tax rate over the entire three year period on their combined pre-tax profits of $160 billion.”

If you’re not mad enough at this point about you paying your taxes while the giants of Wall Street avoiding paying theirs, you can read more of the press release here and the entire report here. 

Regulatory reform good for multinationals, yet bad for you.

The Hill's Congress Blog

November 1, 2011

By Frank Knapp Jr

 

The Regulatory Accountability Act of 2011 (RAA), a bipartisan bill introduced in the House and Senate, portends to offer common sense rules to affect how Federal agencies analyze costs and benefits. The bill provides extensively detailed procedures for agencies in promulgating regulations that are projected to have a minimum effect of at least $100 million on the United States economy.

However, a thorough reading of the RAA leads to three conclusions. First, the bill will likely to dramatically drive up the cost of almost every rule-making process and budget of a federal agency. Second, federally elected officials will be stripped of their ability to responsibly lead our country. And third, the RAA is a highway to never-ending lawsuits by special interests against the federal government.

The RAA is designed to micromanage every federal agency in its efforts to create rules necessary to carry out legislation passed by Congress.

By doing so, it turns over 60 years of effective regulation promulgation under the Administration Procedures Act into a protracted process that will stretch the time needed for rule-making into decades. Federal agency budgets will need to be expanded by hundreds of billions of dollars to comply with the RAA and perform their usual functions of protecting the public and small businesses from unsafe products and practices.

Congressional and presidential governance will be replaced by bureaucratic decisions designed to appease special interests. Elected leaders will be turned into figureheads whose every effort to exercise the will of the voters will be thwarted by the will of government bureaucrats, special interests and the courts.

Finally, the legislation is a corporate lobbyist dream. It appears to have been written by corporate attorneys for corporate attorneys.

Every aspect of the RAA is geared toward encouraging special interests to legally challenge every regulation of an agency. Even frivolous lawsuits are protected under the bill because the RAA defines as "substantial evidence" for a lawsuit to be anything the special interest thinks is "reasonable."

The 32-page RAA mentions judicial review, litigation, the court and other lawsuit terminology 18 times. The bill even includes a provision guaranteeing "immediate judicial review" for any special interest on every aspect of the prescribed rule-making process. Even the decision by an agency that a rule will not meet the minimum $100 million threshold can be challenged in court, making the developing of any rule subject to the extensive and expensive rule-making process prescribed in the RAA.

There is no way to describe the RAA in any other simpler terms than to call it what it is—a budget-busting, anti-democracy, Corporate Attorneys Full Employment Act.

It is no wonder then that supporters of the RAA are primarily U.S.-based multinational corporations. Increasing the cost of government for taxpayers is not a concern to these corporations that use offshore tax havens and other deceptive accounting practices to avoid paying their fair share of U.S. taxes. If federal agency budgets must be increased because of the RAA, it won't be the multinationals footing the bill.

The multinationals have no allegiance to government and democracy. Their shareholders and corporate executives are the only flags they salute. A diminishing of our democratic governance only serves to give the multinationals more power.

The only authorities these multinationals recognize are the courts. With their enormous wealth, multinationals eagerly pay expensive corporate attorneys to delay, change or kill any government regulation that stands in their way of profit. This means that the RAA threatens every American citizen's health and safety.

In regard to the No. 1 issue today, jobs(other than corporate attorney jobs), the RAA will create none in the private sector. Instead, it endangers the well-regulated marketplace essential in establishing fair competition between small, mid-size and big business. The RAA will allow big business to push smaller competitors out of the marketplace, thus killing jobs.

The RAA is not just bad legislation. It is extremist legislation designed to protect the very entities from which the rest of us need protection-multinational corporations.

Knapp is vice-chair of the American Sustainable Business Council and president of the South Carolina Small Business Chamber of Commerce.

Source:
http://thehill.com/blogs/congress-blog/judicial/191015-regulatory-reform-good-for-multinationals-yet-bad-for-you

November SCSBCC Newsletter

November 1, 2011

Save this Date:

Annual Policy Summit

Tuesday, December 13 from 6 to 8 p.m.

Keynote speaker: South Carolina State Treasurer Curtis Loftis

Heavy hors d’oeuvres, beer and wine

Free (2 complimentary tickets) for members at the Friend ($50), Supporter ($100), Sponsor ($250) and Grand Sponsor ($500) annual membership levels

Tickets are $20 per person for basic, non-dues paying members

Where: South Carolina Press Association at 106 Outlet Point Boulevard (off Bush River Road)

RSVP to mailto:sheila@scsbc.org?subject=RSVP%20-%20Annual%20Policy%20Summit

If you are interested in sponsoring this event by providing resources for food and beverages, please contact Sheila at mailto:sheila@scsbc.org?subject=Sponsor%20-%20Annual%20Policy%20Summit
 

BUYSC Advisory Committee

The SC Small Business Chamber of Commerce has formed an advisory committee for our BUYSC program, a growing FREE online directory of locally-owned small businesses (http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/64b1a01499). Thanks to George Scott of Seeds of Wealth for his service as Chairman of the BUYSC Advisory Committee. We are still looking for a few more members. Our first meeting was on October 17, and our next meeting is scheduled for November 15 at 9:30 a.m. If you are interested in becoming an active advisory committee member, please email sheila@scsbc.org.

Help us “spread the word” about buying locally where your dollar has three times the economic impact than at a big box store. Listing your business on our BUYSC.org directory and encouraging others to use it will strengthen our local economies. We have BUYSC decals that you can display and we encourage you to use BUYSC.org in your promotional and advertising materials.

Also, display our BUYSC logo on your website. You may download the code at http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/0c29f623e4. Scroll toward to the bottom of the page, and copy and paste the code to your Website, Facebook Page, etc.
 

Membership Benefits

Payroll Service: Members can now save on average 20% for professional payroll services with no set-up fee ($100 value) from American Automated Payroll. You’ll receive full payroll processing with over 150 standard reports, direct deposit and ACH reporting, tax payments sent on your behalf with full liability for tax services, quarterly reports, W2’s and end of year reporting as well as many additional benefits. To take advantage of this service and savings, you must be supporter member or above.

To learn more, contact sbchamber@scsbc.org or call 803-252-5733.

Small Business Health Plan: On October 1, 2011, the Small Business Chamber rolled out its new group health insurance plan for members. The interest has been dramatic.

Reggie Bell, Colonial Commercial in Greer, told the Greenville News that this Small Business Health Plan “provides us with a cost-effective way to improve our employee benefit package and continue to compete for talent across the region.”

The plan, through Carolina Care Plan, has seven tiers of benefits, deductibles and co-pays to meet every need. These plans were specifically designed for the Small Business Chamber and are not available on the open market. Gibson & Associates is the independent insurance agency representing the Chamber and members are averaging up to 10% savings over competing plans.

For more information, visit our website at http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/2470a2228b. Click the link on the top banner and complete the form for more information. Or call Lee Long at 800-733-3391 ext. 211. Quotes are free to members and nonmembers, but you must be a supporter member or above to participate in the plan.
 

Follow the Small Business Chamber & President

Blog and Press: Small Business Chamber exec. Frank Knapp blogs 3 to 4 times a week at http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/46e0a04e65. You can sign up to receive the blog automatically. You can also read news stories that include the Small Business Chamber on our home page (http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/3e66a23779) under “press”.

Facebook & Twitter: If you have not liked our Facebook pages, please do it today!

http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/f9dced32d3

http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/07409b6076

If you are a BUYSC member, please be sure to comment and also post any specials or events to our wall to keep other members informed. This is an interactive page, so please participate!

You may have noticed that each week, 5 members sponsor our page. Each sponsor’s logo is posted on our Facebook page for a week. An announcement post of sponsors of the week goes out on Monday and throughout the week, we highlight each sponsor. To find out how you can sponsor our page, contact Sheila at (803) 252-5733 or sheila@scsbc.org.

And, please follow us on Twitter at:

http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/4ad522f330

http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/a110055f4b

Sponsors are also “tweeted” throughout the week.
 

Upgrade Your Membership

To find out all the benefits of upgrading your membership in the Small Business Chamber, contact Sheila at Sheila@scsbc.org or 803-252-5733. You can get enhanced listings on the BUYSC online directory, sponsorships on our social media networks and even free radio ads.
 

Recent Advocacy

October was a busy month. As Vice Chair of the American Sustainable Business Council, Frank Knapp attended that organization’s annual meeting in Washington. While there he met with members of the Administration’s economic team and had numerous meetings with members of Congress (including SC Rep. Tim Scott) and staff advocating for small business.

Frank also spoke in Seattle at the Northwest Regional Primary Care Association along with Lathran Woodard, Executive Director of the SC Primary Health Care Association. They talked about South Carolina’s experience in matching small businesses needing affordable health care for employees with community health centers. To find out more about this program, send an email to sbchamber@scsbc.org.

The Small Business Chamber had a Board of Directors meeting and an evening BUYSC microconference for members to learn and network.

Upcoming Events

November 26 is Small Business Saturday

FedEx and American Express are giving consumers $25 to use to shop on Small Business Saturday. Small businesses can get $100 worth of free Facebook advertising and a range of free tools to use to market their companies.

Read more http://cts.vresp.com/c/?TheSCSmallBusinessCh/b5881c8155/TEST/f7f11007e2


USC Hosts Small and Minority Business Forum

The University of South Carolina will hold a Small and Minority Business Forum from 9 a.m. to noon Wednesday, Nov. 9, in the Koger Center for the Arts, 1051 Greene St.

The forum is part of President Harris Pastides’ community outreach initiative to increase the number of small and minority businesses that participate in the university’s purchasing system’s bidding process.

Concurrent sessions will take place in the donor room and the atrium on the second floor of the Koger Center. One session will focus on how vendors can do business with USC and the state of South Carolina, and the other will provide information on construction project opportunities. The sessions will be led by officials from the procurement services division of the Budget and Control Board, the USC purchasing department and USC facilities construction and planning.

Businesses can register for the session(s) they want to attend by visiting the purchasing web site: purchasing.sc.edu and then selecting Nov 9th, 2011 Small and Minority Business Forum under news and announcements.

Free parking will be available in the Discovery garage at the Park Street entrance.