Tag Archives: plutonomy

Who “Built” the Kochs’ Business

By: IFG
August 30, 2012

As David Koch is feted in Tampa as an “Entrepreneur Building America” by Americans for Prosperity (or AFP, the fake grassroots group he funds to advance his hardline agenda for “economic freedom”), IFG’s Plutonomy Program asks, who actually “built” Koch Industries’?

The answers emanating from AFP are about as clear as the air we breathe thanks to the Kochs’ family fortune of fossil fuels polluting of our atmosphere, and the “Koch Cash” corrupting our democracy.

Yet it will only get worse if the Kochs get their way: the thrust of Romney-Ryan economic plan is to exclude carbon from the Clean Air Act, a policy proposed precisely to defend the Kochs’ wealth.

The truth is that every living being that breathes air and exists in our rapidly destabilizing atmosphere has sacrificed to “build” the Kochs’ business by allowing them to take our planet over the edge: two thirds of America is covered in drought, Arctic ice is receding to record lows, and the Kochs’ own scientists are now undoubtedly convinced that our earth is warming.  Poor people and future generations will pay the highest human price, even as entire ecosystems face extinction.

Others who helped to build the Kochs’ business include:
  • Countless workers, who have made the billionaire brothers, together, the world’s third wealthiest individuals after Carlos Slim and Bill Gates.
  • Communities with cancer clusters could be a legacy at some of the Kochs’ industrial sites, and a forthcoming report from IFG will explain more of this unexplored topic.  Corpus Christie, Texas, is one place where Koch Industries brazenly leaked benezefrom its facility, only to award itself for environmental achievement when it eventually complied with the law.
  • Crops crashing due to drought:  The Kochs’ cheerleading for carbon emissions are leaving farmers in the lurch and countless people hungry as food prices rise globally.  US taxpayers are now on the hook for another $14B in payouts for crop insurance due to this summer’s damage.
  • Veterans of oil wars who went to serve their country but found themselves fighting for access to oil to feed the refineries that the Kochs and others built to support the fossil fuels infrastructure.  Too much blood and treasure has been spent to secure supplies that keep oil flowing and the Kochs cashing in.
  • US Taxpayers: who paid for the roads, bridges, tunnels, highways and other public infrastructure from which the Kochs’ oil refineries and other products make their money.

How wealthy are they?  The Kochs quintupled their combined net worth in the last six years by investing their industrial earnings into oil derivatives speculation, in which an unregulated market with no ban on insider trading allows investors to influence energy supplies via manipulating their refineries, pipelines, storage, etc.

The Kochs’ economic freedom agenda poses that government has no role in regulating how things are produced, unless it harms others. Tobacco companies “willful negligence” led them to ignore their own scientific findings of the cancer-causing agents they produced.

Building a business shouldn’t be on the backs of people and the planet.

Stay tuned for original IFG podcasts and corresponding reports that will explore the Kochs and their political influence. They will be available HERE and via our emails next month.

Read More: Koch Brothers Exposed: Fueling Climate Denial and Privatizing Democracy , Kochs’ Web of Influence, The Koch Brothers 

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See Americas Biggest Bank Run From Its Responsibilities

By: IFG
April 25, 2012

Hiding behind riot police and scurrying into alleyways, executives from America’s biggest bank, Wells Fargo, entered their April 24 shareholders’ meeting in San Francisco while hundreds of peaceful protesters stood outside demanding accountability and justice. Inside,  several proxy shareholders were arrested as they called to end Wells’ fraudulent foreclosures, tax dodging, predatory lending, profiting from private prisons, and paying-off politicians to rig the rules.

IFG’s Plutonomy Program posits that globalization’s extreme concentrations of wealth and power require people to deal more directly with the individuals at the very top.  So we stood in solidarity with over400 events organized by Occupy, families fighting foreclosure, indebted students, immigrants’ rights groups, and even Wells’ own workers, as they blocked-off several streets in SF’s Financial District.  See this video of a foreclosure fighter sharing her story at IFG’s recent Teach-in on Wells Fargo.

John Stumpf, American banking’s highest-paid CEO who made almost $20M in 2011, called the shareholders’ meeting to order inside while, outside, janitors who clean Wells’ offices told the crowd how profits were squeezed from cutting workers’ healthcare and holding down wages.  But the bank’s record profits in 2011 were driven mainly by mortgages, where Well’s ruthless “Robo-signing” practices continue to foreclose on families, 84% of which in SF were found to be “clear violations of law” by a recent report from the City Attorney.

Warren Buffet, Wells’ single biggest shareholder, owns almost twice as many shares as any other investor.  His legendary investment fund, Berkshire Hathaway, has made him America’s second wealthiest man (after Bill Gates) with a personal net worth of $44B. Buffet has been in the news lately as the namesake of  President Obama’s proposed “Buffett Rule” which would  begin to  reverse years of  regressive taxation in America. Buffett says his secretary now pays taxes on a higher proportion of her income than Buffett himself pays.  That’s because capital gains are now taxed at  only 15% while wages are taxed at almost double the rate. Meanwhile, Wells Fargo avoided ALL taxes from 2008–2010.

The current U.S. tax code’s discrimination against workers’ wages in favor of capital investment has been a driving force of increasing inequality in America, where now almost 1 in 2  Americans is either in poverty, or near poverty.  While Buffett positions himself to champion more progressive tax policies, he is even more powerfully poised—as the most influential shareholder of America’s biggest bank—to reduce record inequality by lowering his expectations on the earnings from his own investments.  Otherwise, shareholder profits made by reducing the healthcare costs of Wells’ janitors could, strangely, shift from Buffet to the Gates Foundation, whose philanthropy aims to “improve healthcare.”  The Buffet Rule would work more effectively if Buffet ruled less ruthlessly by insisting on more realistic returns for his investments.

IFG and allies will continue to call upon  those corporations and individuals who  benefit most from—and are therefore most responsible  for—today’s financial system that is destroying people and the planet.

Read More: Protesting The Wells Fargo Shareholder’s Meeting, 24 Arrested At Wells Fargo ProtestActivists Disrupt Wells Fargo Shareholders Meeting

Will Billionaire Koch Brothers Take Over Cato?

By: Kourosh Behnam
April 25, 2012

Depending on your political views, Charles and David Koch have recently become famous or infamous for their influence, supporting libertarian and conservative causes.

The Cato Institute will soon be owned my the Koch Brothers

Recently the Koch Brothers filed a law suit against the Cato Institute.   Founded by Charles Koch 30 years ago, it is the leading libertarian think tank in Washington D.C.  The Institute primarily promotes limited government, and free markets.  Leading scholars at Cato such as Michael Cannon, director of health policy studies, believe the suit would give the Koch’s full power over the institutions research operations.

The Cato Institute is unique in that it is controlled by shareholders.  There are four people who hold equal shares in the organization. The Koch Brothers hold 2 of those shares meaning that they own half of the organization.  However, ownership of the institute can be bought and sold for cash under certain circumstances.  This is only applicable to a number of states in America which is shunned upon by the Internal Revenue Service.  Charles and David Koch are suing to increase their 50 percent stake in Cato to propel their ideological agenda.  This lawsuit, to gain control of Cato, displays that the brothers see ideological political think tanks as a crucial part of their on-going agenda to create a permanent American oligarchy.

If these billionaire brothers prevail then they will own the biggest libertarian think tank in the world. If this happens, the Cato Institute will loose its reputation in the political realm and it will always be known as a organization coddled by the Koch Brothers.

Read More:  Battle For Control of Cato Institute Highlights Unusual Structure , Open Letter To Charles & David Koch, Could Billionaire Koch Brothers Ruin Cato?

How to Reduce Gas Prices and Remove Barriers to Clean Energy: Ban Oil Derivatives

By: IFG
March 21, 2012

Some say higher oil prices are essential to ending our addiction to fossil fuels.

While true in principle, the reality of recent rising costs to consumers has so far been the exact opposite, with political barriers bigger then ever. IFG research shows it can only get worse if current trends continue.

That’s because a major force driving gas prices upward is rampant speculation in unregulated oil derivativesCharles and David Koch are dominant players who in turn plow their profits back in to preventing the phase out of fossil fuels having outspent Exxon and the American Petroleum Institute to kill climate legislation.

While the Koch’s family fortune has steadily expanded with the use of fossil fuels, not until recently did their net worth grow exponentially.  That’s due in large part to their inventing oil derivatives, and then deregulating their trade on Wall Street, and the worldwide.

IFG charts (below) the Kochs’ combined net worth over the past 25 years. It shows how their wealth skyrocketed as speculation on oil markets went wild, with the Kochs making money even when the price of oil goes down.

 Koch wealth for the years 1989, 1995-2000, 2002, 2012-2015 are estimates.

You can see that oil price and Koch wealth are very strongly correlated with a correlation coefficient of 0.94.

With no rules against insider trading, it’s no wonder that the guys who own so much oil infrastructure through which the commodity moves, and also invented the instrument by which traders gamble, can game the system to cash in on such a grand scale.  The Kochs’ combined wealth now ranks them third richest in the world, according to Forbes.

Goldman Sachs recently reported that oil speculation imposes an extra cost of as much as $.56 per gallon of gasoline in the US, an incredible irony when one thinks that this money is then spent to stop the costs of climate change from being included in the price at the pump paid by consumers.

The true price of oil must ultimately reflect its full ecological and social costs, and achieving that requires reducing, if not removing, the role of money in politics. Climate campaigners are currently unable to do that alone, and therefore must work with other movements whose interests are also being bulldozed by these billionaire brothers.

The trajectory of their profits today implies that the undue influence of the Koch brothers is set to soar even higher. Assuming that koch wealth continues in its exponential path their combined wealth will be $82.4 billion in 2015.  Their “shrink government” agenda—which comes amidst calls for massive market interventions to address today’s converging economic and ecological crises—is attacking the very right to clean air, the right to fair wages, and even the right to vote.

Unless key constituencies can come together to counter Koch cash, the implications for people and the planet could be devastating given the Kochs’ control over the current Congress has radically shifted US politics to the right and upcoming elections or ever more driven by cold hard cash.  The Citizens United ruling has spun open the spigot so Koch cash can flow even more freely.

The premise of IFG’s Plutonomy Program is that globalization has, as predicted, upwardly redistributed wealth, where Ultra High Net Worth Individuals are increasingly enabled to exert their own political power and economic ideologies on democratic decision-making everywhere.  Nowhere are the results more clearly expressed than in the rise of the Koch’s wealth and their increasing power over our lives.

Read More: How The Koch Are Fracking America, Charles And David Koch File Suit To Take Over The Cato Institute, Kochtopus Empire