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Labor Leaders Speak Out Against Scott Brown’s Outsourcing Strategy

Small Business and Labor Leaders: Outsourcing Record Makes Brown
Obvious Choice for U.S. Chamber of Commerce Endorsement
But Wrong For New Hampshire

Group That Profits Off The Offshoring of U.S. Jobs Will Spend Millions to Elect Buddy Scott Brown, Who Endorsed Outsourcing Strategy of Company That Paid Him $270K

Manchester, NH – Scott Brown is getting endorsed today by the U.S. Chamber of Commerce, a group that has a long history of supporting outsourcing, much like Scott Brown, who voted to protect tax breaks for companies that outsource while in the Senate, and just a few months ago endorsed a business strategy that included the offshoring of U.S. jobs to Mexico and China.

“Scott Brown is touting the support of an organization that would rather see big companies make more money than support American jobs,” said Charlie Balban, Chair of the New Hampshire Sheet Metal Workers Local 17 Political Action League. “This is just the latest example of why Scott Brown is wrong for New Hampshire. He’d rather align himself with big money groups that champion job-killing policies than with the working families of our state.”

“Scott Brown was a reliable ally of companies that outsourced jobs while he was in the Senate, and now he is cozying up to a pro-outsourcing group that is trying to buy him New Hampshire’s Senate seat,” said Joe Donahue, business manager of Carpenters Local 118. “When push comes to shove, Brown will always take sides with the corporate interests that are lining his pockets and filling his campaign coffers. That’s the only explanation for him to accept the Chamber of Commerce’s endorsement today.”

“Working families in New Hampshire should know exactly who is spending millions to get Scott Brown back in the Senate: companies that outsource and groups that support outsourcing,” said Mark MacKenzie, President of NH AFL-CIO. “Last month we learned that Brown was collecting a personal paycheck—to the tune of more than a quarter million dollars—from a company that outsourced. And today, Brown accepts the endorsement of a pro-outsourcing group. We know who Brown is working for, and it’s not Granite Staters.”

“Jeanne Shaheen has always stood up for New Hampshire small businesses and her work has made a real difference for our state,” said Adria Bagshaw, small business owner and Chair of the New Hampshire Small Business Development Center Advisory Board.  “Scott Brown’s record may have scored him an endorsement from a pro-outsourcing interest group, but it’s not what New Hampshire needs in the Senate. We need a Senator like Jeanne Shaheen who will promote job creation here at home, not someone like Scott Brown who profits from outsourcing companies and protects tax breaks to create jobs overseas.”

In August, it was revealed that Scott Brown signed legal documents clearly endorsing the outsourcing strategy of Kadant, Inc, a company that paid him more than a quarter million dollars to serve on its Board of Directors. The SEC document, signed March 12, 2014—just days before Brown announced his New Hampshire Senate run—reads: “We pursue a number of strategies to improve our internal growth…using low cost manufacturing bases, such as China and Mexico.”  Previous filings with the SEC that also have Brown’s signature include the same language and endorsement of outsourcing American jobs.

Marilinda Garcia Is A Member Of ALEC, And Why That Is Important To YOU!

ALEC

Right now State Rep. Marilinda Garcia is attempting to move up the political ranks from State Rep. to US Congresswoman. She has been out on the campaign trail talking about how she wants to fight for the middle class and that she speaks for the “millennial” generation.

Other than the fact that Marilinda is still living with her parents at age 32, she is just another politician who has been bought and paid for by corporate lobbyists and big money donors like the Koch Brothers.

Hopefully by now you have heard about ALEC, the American Legislative Exchange Council, but just to make sure we are all on the same page, I will go over a few highlights.

ALEC brings in state legislators from across the country to luxurious five-star hotels, where corporate lobbyists wine-and-dine legislators.

While enjoying their all expense paid vacation junkets, legislators are courted by corporations into submitting model legislation back in their home states. This model legislation usually benefits the corporation like reducing pollution standards (RGGI), increasing profit margins by pushing Right To Work laws, and hundreds of other pieces of legislation.

Marilinda Garcia (Gage Skidmore CC FLIKR)

Marilinda Garcia (Gage Skidmore CC FLIKR)

Even though Rep. Garcia told the Union Leader [1/27/12] that, “there was nothing wrong with lobbyist taking legislators out for dinner,” these legislators are meeting with corporate lobbyists in secret. Legislators are skirting ethics laws by submitting legislation — on behalf of the corporate special interests — as if they wrote it, even thought they received the model legislation on a junket paid for by ALEC’s corporate backers.

Some legislators are proud of their connection to ALEC, like New Hampshire’s State Rep. Jordan Ullery, (State Senate candidate and) State Rep. Gary Daniels, and former Speaker of the House William O’Brien.

Others are not as forthcoming about their connection to the controversial lobbying group. “Members of ALEC from New Hampshire include 2nd Congressional District candidate Marilinda Garcia,” the Telegraph reported. [Nashua Telegraph, 12/08/13] 

As a member of ALEC, legislators are expected to submit the ALEC model legislation, created for and by corporate special interests, or face the wrath of the Americans For Prosperity political action fund. Americans for Prosperity was created and is heavily funded by ultra-conservative millionaires and billionaires like the Koch Brothers, to push candidates to do their bidding or face an AFP primary challenger for their seat.

After these junkets, politicians vow to support their new corporate sponsors over the people who elected them. Some would even say this is legalized corporate bribery.

State Rep. Marilinda Garcia has been called out for this type of activity before, when she was flown down to Philadelphia for an all expense paid trip to view a for-profit cancer treatment center. The Cancer Treatment Centers of America spent hundreds of dollars per person to fly out Garcia and four other legislators, in hopes they would support legislation, submitted by Rep. Garcia, which provided monetary incentives to CTCA to build a new center in New Hampshire.

In response to criticism that she is taking campaign contributions from CTCA in trade for submitting this legislation Rep. Garcia told the Union Leader [1/27/12],   “There have been no campaign contributions or junkets offered by the Illinois-based company. But Garcia said she doesn’t see anything wrong with lobbyists taking legislators out for dinner.”

I don’t know about you, but I do see something wrong with corporate lobbyists bribing our state legislators with expensive trips and fancy dinners.

This makes me wonder, what would Congresswoman Marilinda Garcia be like? Would she be a true representative of New Hampshire’s Second Congressional District or will she continue to do the bidding of her corporate sponsors?

I want someone in Washington who is there to represent me, not a bought and paid for puppet for the millionaire and billionaires who fund her campaign and the corporate special interests who shower her with lavish vacations and all expense paid junkets.

Millennials Play A Key Part In Our Elections. Why Is Fosters Trying To Scare Them?

Money ('PT Money' ptmoney-com)

Image via ‘PT Money’ at ptmoney.com

Republicans and Democrats are actively trying to court “millennials” to vote for them. Of course the Republicans are at a big disadvantage in this fight because they are stigmatized by the fact that many feel the GOP is nothing but a party of old rich white guys.

It does not help when you see editorials like this one (Another day older and deeper in debt) from the ultra-conservative editors at Fosters Daily Democrat. They are trying to push millennials into voting against Senator Shaheen because she wants to help reduce their student loan debt, and they say that could raise taxes on, “your parents”. Say what?

“Democrats such as U.S. Sen. Jeanne Shaheen would like to offer you lower interest rates, at the expense of raising taxes on, perhaps, your parents.”

This is complete garbage. Senator Shaheen is pushing for a bill authored by Senator Elizabeth Warren, which would allow students to refinance their student loans from interest rates of 6-8% to less than 1%.

Fosters does get a few things right:

  • The average college graduate in New Hampshire leaves school with $33,000 in student loan debt.
  • The federal government is making money off of your student loans.

These are absolute true, and I think it is appalling. The federal government made upwards of $66 billion dollars in profit off of student loans between 2007 and 2012. Senator Elizabeth Warren essentially said that if banks can borrow from the government at .75% then our students should be given the same deal as the big banks.

So what would happen to the federal budget if they cut out the $66 billion dollars in profits from student loans? Fosters wants you to believe that this will result in a tax increase on your parents. This is completely untrue. None of these changes would increase taxes on the middle class families of New Hampshire.

The tax increase that Senator Warren suggested has been dubbed “the Buffet rule” after billionaire Warren Buffet. The tax increase would only effect the ultra-wealthy 1% of America. Warren Buffet has said in many different ways that it is absolutely wrong that he pays a lower effective tax rate than his own secretary. He suggested that the ultra-wealthy 1% could, and should, be paying a higher tax rate.

I agree with Fosters that the national debt is a problem. We must find a way to reduce our national debt that helps to build a stronger economy and a better community. The editors at Fosters and I disagree on the ways we need to address this problem. They want to follow the GOP rhetoric that we must reduce the size of government and force draconian cuts to all federal programs (except for anything surrounding the DOD). I disagree with this. If you look back at history, it was government investment through work programs (building roads and bridges), increasing the minimum wage, a strong manufacturing base and strong unions that pulled us out of the Great Depression. At the same time we created “Social Security” to help our seniors retire with dignity.

Next we need to raise our gross domestic product. We need to increase manufacturing here at home and start reducing our debt by changing our trade deficit to a trade surplus. The more we make right here at home, the more people have jobs. The more jobs we have, the more money is spent in our local communities. It starts by looking for the “made in the USA” label!

Next to reduce government spending and reduce our national debt, we must start by increasing the minimum wage. Too many Americans are working one, two or even three jobs and can barely afford to pay their rent and feed their children. By increasing the minimum wage, to a real living wage, full time workers would be making enough to take care of their family without any assistance from the government.

Of course there are other solutions that none of the “Tea Party” conservatives want to talk about. One is placing a .5% tax on Wall Street. The tax would take a fraction of a penny on every transaction. This “Robin Hood Tax” would generate upwards of $350 billion dollars a year. $350 billion would cover the loss in revenue from the student loan interest, restore some of the cuts made to social programs, and still have plenty more to begin to repay our national debt. This would also have the added benefit of slowing down Wall Street and encouraging corporations to invest more of their profits in workers and the longevity of their company, not inflating their stock prices.

Ultimately it is about ensuring that corporations and the millionaires and billionaires are paying their fair share in taxes.

 __________________________________________

One last thing, Fosters tossed in this line about Social Security which is another attempt to scare millennials into believing that Social Security will be extinct by the time they reach retirement.

“According to Pew Research, 90 percent believe Social Security benefits will be reduced (39%) by the time you become eligible or won’t exist at all (51%).” (Emphasis added)

This statement is nothing more than proof that the majority of Americans do not understand what is really happening to Social Security. These numbers are the results of a poll where people believe that Social Security will completely fall apart.

As the AFL-CIO laid it out, “Social Security is not going broke. It will always be able to collect payroll tax revenue to fund benefits. According to the Trustees, Social Security can pay 100% of promised benefits until 2033. Without any changes at all, Social Security can pay three-fourths of promised benefits indefinitely after that.

The Social Security Trust Fund collects money from payroll taxes. By increasing the minimum wage, it would automatically increase the revenues collected through the payroll tax therefor strengthening Social Security, and adding to its fully funded longevity.

Many elected leaders like Sen. Elizabeth Warren and Sen. Bernie Sanders think that minor adjustment to the Payroll Tax would strengthen Social Security and would allow for higher benefits for retirees. They just want to remove the Social Security cap forcing the ultra-wealthy to pay into Social Security Trust Fund like all the rest of us. Problem completely solved!

 

NH Insurance Commissioner Leads Workers’ Compensation Commission

Concord, NH ­– New Hampshire Insurance Commissioner Roger Sevigny today chaired the first meeting of the Commission to Recommend Reforms to Reduce Workers’ Compensation Medical Costs.  The commission was created by Governor Maggie Hassan earlier this month in response to the Insurance Department’s announcement that workers’ compensation medical fees in New Hampshire are significantly higher than those in other states.

The commission has been asked to review state data, analyze other states’ efforts to lower workers’ compensation costs, and develop recommendations to reduce costs and premiums while ensuring that injured workers have access to quality care. The commission’s final report to Governor Hassan is due Dec. 1.

Commissioner Sevigny heads the group, which consists of Brian Allen of HELIOS; Donald Baldini of Liberty Mutual Insurance; Pamela Bronson of Access Sports Medicine & Orthopedics; Paul Chant of Cooper Cargill Chant; Tammy Denver of NH Public Risk Management Exchange; Edward Dudley of Catholic Medical Center; Mark Erdody of Cove Risk Services, LLC; Marc Lacroix of the New Hampshire Physical Therapy Association and Concord Hospital; David Lang of the Professional Firefighters of NH; Mark Mackenzie of the NH AFL-CIO; Peter McNamara of the NH Automobile Dealers Association; Dr. Gregory Soghikian of New Hampshire Orthopaedic Center; and Ben Wilcox of Cranmore Mountain Resort.

Governor Hassan thanked members of the commission at the start of the meeting.

“We are going through a tremendous change in health care … and one of the things we really looked at is that from the state’s perspective, we pay significantly more in workers’ compensation costs,” she said. “That’s money that gets spent that could, in theory, be spent on other things that we care about. What we’re looking for is to understand what’s driving costs. I am really looking forward to following your work.”

New Hampshire went from being listed as the 14th most expensive state for workers’ compensation in the country in 2008 to the 9th most expensive in 2012, according to the Oregon Workers Compensation Rate Ranking Study.

Deb Stone, the Insurance Department’s director of financial regulation, told commission members that in New Hampshire, almost three-fourths of the costs of workers’ compensation claim dollars are paid out for medical costs, as opposed to 60 percent nationwide.

“Our medical costs are high and rising,” she said.

Members of the public are welcome to attend commission meetings. More information, as well as meeting minutes, may be found online: http://www.governor.nh.gov/media/news/2014/pr-2014-09-04-workers-compensation-commission.htm.

The New Hampshire Insurance Department’s mission is to promote and protect the public good by ensuring the existence of a safe and competitive insurance marketplace through the development and enforcement of the insurance laws of the State of New Hampshire. For more information, visit www.nh.gov/insurance.

State Employees Association Hosts Appreciation Event for State Employees

Governor Maggie Hassan Proclaims
October 1 State Employees’ Appreciation Day
 

Tow Plow - Turnpikes

Concord, NH, September 25, 2014 – Next Wednesday, rain or shine, the spotlight will be on the public servants who deliver critical services to the citizens of NH.  Sponsored by the State Employees’ Association, the event is taking place at the State House from 10:00 a.m. to 2:00 p.m. with a brief presentation beginning at noon.  The event is open to the general public.

If you have ever wondered just what NH state employees do each day, this is a great way to learn.  A dozen state departments and scores of programs will be on hand to exhibit and provide information about their respective department’s responsibilities and how they can assist Granite Staters.

The Department of Transportation is bringing along a mini “touch a truck” event that should be a big hit with kids of all ages.  They will be showcasing a 75’ long Tow Plow truck, a Service Patrol Truck and a Pavement Van.  You can learn how each of these pieces of equipment is used.

The NH Liquor Commission will be featuring its “Summer Fun” van, even though summer has officially ended.  NH Employment Security will be on hand to provide information much like they do at their official employment fairs. And, NH Banking Department will be there to talk with folks about foreclosure prevention.  These are just a few of the many things you can learn about during the event.

Governor Maggie Hassan has proclaimed the day as State Employees’ Appreciation Day and many local Concord businesses are offering special discounts to state workers.  Puppy Love, a popular downtown hot dog stand will be offering a special discounted lunch to state workers on site at the capital. The stand will not be in its usual downtown space; instead it will be at the State House. SEA/SEIU Local 1984 will be providing complimentary ice cream (from Arnie’s) to state workers, as well.  State employees are asked to provide their ID to receive the discounts.

Service Patrol I-95Participating State Agencies and Organizations

·         Community College System of NH

·         Department of Administrative Services

·         Department of Agriculture

·         Department of Corrections

·         Department of Environmental Services

·         Department of Fish & Game

Pavement Van·         Department of Health & Human Services

o   Asthma Program

o   Healthcare Associated Infections

o   Public Health Lab

o   Tobacco Prevention and Control Program

·         Department of Resources and
Economic Development

·         Department of Safety

·         Department of Transportation

·         Operation Santa Claus

·         NH Banking Department

·         NH Employment Security

·         NH State Liquor Commission

·         State Employees Association/SEIU Local 1984

Kuster Says Highway Funding Can’t Wait Until Next Year

Kuster to Boehner: Delays on Sewalls Falls Bridge Unacceptable; Long-Term Highway Funding Bill Can’t Wait Until Next Year

Kuster highlights negative impacts of closing Sewalls Falls Bridge this winter and calls for action to ensure that other important projects aren’t jeopardized

WASHINGTON, DC – Congresswoman Annie Kuster (NH-02) has called on Speaker John Boehner to work with both parties to pass a long-term reauthorization of the Highway Trust Fund and other surface transportation programs before the end of this year.  The Highway Trust Fund (HTF), which provides crucial funding to states for road and bridge projects like the Sewalls Falls Bridge and the I-93 expansion, nearly ran out of money this summer before Congress acted at the last-minute with a short-term funding patch.

In the letter to Speaker Boehner, Kuster highlights funding delays for the Sewalls Falls Bridge, a critical transportation link for East Concord residents, which were caused as a result of potential funding shortfalls in the HTF this summer.  The aging bridge, which will turn 100 next year, is operating under a reduced weight limit which prevents emergency services vehicles from using the bridge.  Structural problems will force the closure of the bridge on December 1, 2014, adding additional commuting time and costs for East Concord residents.

For more than a year, Kuster worked with Senator Jeanne Shaheen to secure the funding and approvals for the replacement project to move forward. “But then came the prospect of the Highway Trust Fund going broke by August, coupled with months of inaction by Congress to shore up the Fund and avert that crisis,” Kuster says in the letter. “The result was a perfect storm that has delayed funding for the Sewalls Falls Bridge and forced the early closure of the aging structure.”

Kuster has been urging the Speaker and her colleagues in Congress to address this transportation funding crisis since the beginning of this year, and she has repeatedly called on House leadership to take immediate action so that delays like the one facing the Sewalls Falls Bridge could be averted.  In May, Kuster introduced the DRIVE Now Act, legislation which would have provided funding certainty for critical transportation projects and given Congress time to pass a full, six-year reauthorization of the Highway Trust Fund and other surface transportation programs.

Last fall, Kuster joined Shaheen for a tour of the Sewalls Falls Bridge, and earlier this year, she toured the I-93 construction project in Windham and the Route 10 bridge replacement project in Winchester to highlight the urgent need to pass responsible legislation to save the Highway Trust Fund.

The full text of Congresswoman Kuster’s letter is here and below:

September 18, 2014
The Honorable John A. Boehner
Speaker
U.S. House of Representatives
H-232, The Capitol
Washington, DC 20515

Dear Mr. Speaker:

In East Concord, NH, residents have to wait twice as long as normal for ambulances to respond when called.  Soon, they will also have to drive more than 15 minutes out of the way to get to work.  That is because the Sewalls Falls Bridge, a critical transportation link with a reduced weight limit, will be closing permanently on December 1, 2014. 

I bring this story to your attention because it didn’t have to happen.  The City of Concord, NH has been working closely with the New Hampshire Department of Transportation and the U.S. Department of Transportation on plans to replace the aging bridge, which will turn 100 next year.  The proper approvals were granted and the design for the replacement bridge is nearly finished.  The project was on track this summer to move forward with bidding, knowing that 80 percent of the $10 million project would be covered by funding from the federal government.

 But then came the prospect of the Highway Trust Fund going broke by August, coupled with months of inaction by Congress to shore up the Fund and avert that crisis.  The result was a perfect storm that has delayed funding for the Sewalls Falls Bridge and forced the early closure of the aging structure.

This is just one example of why the Highway Trust Fund is so important to New Hampshire and communities across our country.  Without reliable funding we will continue to see our transportation infrastructure degrade, jeopardizing public safety and hurting our economy.  More than 30 million people visit New Hampshire every year, making tourism one of our state’s largest economic drivers.  But without safe and efficient roads and bridges visitors won’t come, and our economy will pay the price.

The extension of Moving Ahead for Progress in the 21st Century (MAP-21) and authorization for the Highway Trust Fund is scheduled to expire on May 31, 2015.  This will be right as states and businesses are planning and starting construction projects, and I am already hearing from businesses in my district who are concerned that uncertainty leading up to the end of May will result in many important projects being put on the shelf for the year.  We simply cannot afford to let this happen

I urge you to work with Republicans and Democrats to craft a common sense, long-term reauthorization of the Highway Trust Fund and our surface transportation programs by the end of this year.  Too much is at stake if we let time run out.  We cannot kick the can down the road any further. 

Thank you for your attention to this issue of significant importance to the people of my district.  I appreciate your consideration of my request and I stand ready to work with both parties to find common ground on a full six-year reauthorization of our surface transportation programs.  The people of East Concord, NH and families all across this great nation are counting on us to get this done.

Sincerely,

Ann McLane Kuster

Member of Congress

Professional Fire Fighters of New Hampshire Support Governor Hassan for re-election

IAFF (1)

Manchester – Today fire fighters from across New Hampshire gathered in Manchester at station seven to proudly support Governor Hassan in her re-election campaign. Governor Hassan is the best choice for Governor of this state because she has demonstrated that she prioritizes public safety, and has fought to ensure that fire fighters are supported so they can do their job of protecting the public.

“Fire fighters and Governor Hassan have something very important in common: it is our jobs to ensure that the citizens of this state are protected and out of harm’s way at all times. This is a job that we both take very seriously. It is clear that her priorities align with ours, as she has had a long track record as our Governor and State Senator to prove it. It’s this kind of tested leadership and unwavering commitment to the public that make her the best candidate to continue to govern New Hampshire,” stated Dave Lang, President of the Professional Fire Fighters of NH.

“A Governor’s first job is to ensure the safety of the people of New Hampshire, and it’s an honor to have the support of New Hampshire’s fire fighters as we work together to protect our communities and keep our state moving in the right direction,” said Governor Maggie Hassan. “Through our bipartisan budget, we’ve worked to strengthen the safety of New Hampshire’s communities and ensure that all fire fighters and safety officials have the support they need and deserve, without a sales or income tax. We need to keep our state moving forward the New Hampshire Way – bringing together Republicans, Democrats and independents to protect our communities and solve long-standing challenges.”

Hassan and PFFNHThe Professional Fire Fighters of New Hampshire, headquartered in Concord, NH represents more than 2,000 active and retired fire fighters and paramedics from 43 locals across the state.  More information is available at www.pffnh.org.

Governor Hassan Launches Statewide School Safety Initiative in Londonderry

Enhancements to School Emergency Notification System to Improve School Safety by Reducing Response Times

LONDONDERRY – As part of her efforts to strengthen the safety of New Hampshire’s schools and communities, Governor Maggie Hassan joined the Londonderry Police Department, local school officials and New Hampshire Homeland Security and Emergency Management (HSEM) Director Perry Plummer at Londonderry High School to launch a new statewide school safety initiative that enhances school emergency notification systems.

The new software, COPsync911, improves communication between schools and police departments by enabling school computers to connect to and alert dispatch without going through E-911. The enhanced system will reduce response times in an emergency, sending an alert to the law enforcement officers closest to the school.

“Ensuring public safety, especially for our schools and our young people, is state government’s most important responsibility,” Governor Hassan said. “This enhanced emergency notification system will improve school security, providing a real-time school threat alert solution that notifies dispatch and the closest law enforcement officers.”

The new emergency notification software will be installed in six Londonderry schools and 14 police cruisers. The schools involved with the new initiative are Moose Hill School, South Elementary School, Matthew Thornton Elementary School, North Elementary School, Londonderry Middle School and Londonderry High School.

The project is funded by a federal Emergency Management Performance Grant awarded to HSEM by the Federal Emergency Management Agency, and the grant was approved by the Executive Council on September 17. HSEM worked closely with New Hampshire’s police chiefs who have identified the new system as a priority.

The initiative is also underway in Lincoln, and approximately 20 additional communities across the state have applied for Emergency Management Performance Grants to install the enhanced school emergency notification systems.

“This important new school safety initiative will strengthen the ability of local police departments to respond to an emergency situation in real-time, reducing response times and saving valuable minutes and seconds by ensuring that the closest law enforcement officer is quick to the scene,” HSEM Director Plummer said.

“This program laudable on its own, serves as a further reminder of the trust-based partnership that exists between the Londonderry Schools and the Londonderry Police Department,” said Londonderry Chief of Police William Hart. “COPSync is a reflection of our mutual commitment to securing the safety of our school community.”

Since entering office, Governor Hassan has made the safety of New Hampshire’s communities, citizens and schools her top priority. Under her leadership, HSEM targeted grants toward improving school safety and offered new training for law enforcement to help them deal with potential active-shooter situations.

Her bipartisan budget put more State Troopers on the road, maintained drug task force teams, funded the Cold Case Unit, restored the Children in Need of Services program and invested in school safety. The Governor also launched a public-private initiative aimed at helping reduce and prevent youth violence through Media Power Youth’s media literacy program.

Rep. Kuster Promotes Made In NH Manufacturing In Milford

Congresswoman Annie Kuster Discusses Efforts to Boost Manufacturing during “Congress at Your Company” Visit to Cirtronics in Milford

Kuster highlighted her work to protect manufacturing jobs and to support ESOP companies during a tour of the Milford electronics manufacturer

Kuster92014

Congresswoman Kuster hears from Cirtronics employees

 MILFORD, NH – This afternoon, Congresswoman Annie Kuster (NH-02) toured and met with workers at Cirtronics, a woman-owned electronics manufacturing business in Milford. During the tour, Kuster reaffirmed her support for Employee Stock Ownership Plan (ESOP) companies like Cirtronics, discussed legislation she supports that would eliminate barriers that currently limit the formation of certain types of ESOPs, and answered questions from employees.

“Companies like Cirtronics contribute so much to the Granite State economy by expanding the manufacturing base and creating high-skilled jobs for New Hampshire workers,” said Congresswoman Annie Kuster. “I have made it my number one priority in Congress to help support the creation of jobs and opportunity for New Hampshire families.  I was so pleased to tour the facility and hear from employees directly about how Congress can continue to support their success.”

Kuster recently cosponsored the Promotion and Expansion of Private Employee Ownership Act, which would streamline the process of establishing a new S corporation ESOP or expanding the employee-ownership stake in an S corporation.

Kuster’s visit to Cirtronics was part of her ongoing “Congress at Your Company” series.  Since taking office, Kuster has visited New Hampshire businesses all over the state to hear how Congress can best support their success. As a member of the House Small Business Committee, Kuster has focused on efforts to foster job creation and support New Hampshire’s manufacturing industry. She has supported a series of “Make It In America” proposals focused on reshoring jobs and reviving the U.S. manufacturing economy, and she has also fought to establish a Manufacturing Innovation Institute in New Hampshire.

Nightmare on Wall Street? Are Stock Buybacks Creating Another ‘Financial Bubble?’

An American flag festooned with dollar bills and corporate logos flies in front of the Supreme Court during oral arguments in the case of McCutcheon v. Federal Election Commission.  Image by JayMallin.com

Image by JayMallin.com

Some blog posts are easy to forget. But the one I wrote last week is beginning to give me nightmares.

Here’s why: the stock market keeps hitting record highs. But the so-called “economic recovery” – which started in June 2009 – is just beginning to “trickle down” to us average Americans.

And oh, such a sloooooow trickle! “Although the economic recovery officially began in June 2009, the recovery in household income did not begin to emerge until after August 2011. …Median income in February 2014 [was only] 3.8 percent higher than in August 2011.”

And we’re not anywhere near “recovered” from the damage caused by the last two recessions. “The February 2014 median was [still] 6.2 percent lower than the median of $56,586 in January 2000.”

So in last week’s blog post, I took a look at the research UMass Professor Bill Lazonick and his team have done, about how top US corporations have been distributing their net income to shareholders rather than reinvesting money in their business (or workers).

What Professor Lazonick found: since 2004, the surveyed companies have returned 86% of net income to stockholders through dividends and stock buybacks. In 2013, those companies spent an average of $945 million just buying back their own stock. Repeat: $945 million is the average. That’s per company. In one year.

So I took a closer look at that, using a couple of companies as case studies. I keep hoping that I’m completely wrong. I’m not an economist, I’m not an expert. I’m just a blogger who looks at things from my own personal perspective.  And when I looked, here’s what I found:

FedEx:

  • CEO Fred Smith owns more than 15 million shares of FedEx (not counting shares held by his wife, his family holding company or his retirement plan.)
  • Last October, FedEx announced plans to buy back 32 million shares – more than 10% of its stock.
  • FedEx borrowed $2 billion to help pay for that stock repurchasing program. Those bonds run from 10 to 30 years.
  • In the past year, FedEx stock has gained over 44 percent. That translates into a huge increase in net worth for Mr. Smith… somewhere between a half-billion dollars (as of my post last week) and $600 million (the stock price kept going up). Yeah… FedEx borrowed $2 billion… and its CEO personally benefited by a half-billion-plus.
  • But maybe there’s a reason why FedEx stock soared by 44%? Let’s see… according to the International Business Times, its ground shipping business grew by 13% and it is trimming employee benefit costs by 13%; and so the overall corporate profits grew by 24%.
  • Corporate profits grew by 24%… but the stock price grew by 44% (benefiting “company executives who receive stock-based compensation”).
  • But of course there are fewer shares of stock now than there were last year, because of the buyback program. So I looked at the company’s “market cap” – or, the total value of all the outstanding shares. And that also grew: from $39.03 billion when the stock buyback was announced last October… to $50.35 billion as of Friday. So the market cap grew by $11.32 billion – or about 29% – during roughly the same time that profits grew by only 24%.
  • Let me recap: The company grew its business a bit, while at the same time cutting employee costs. It borrowed to buy back stock, enriching its CEO. And Wall Street rewarded this behavior. Stock value grew – at a much faster rate than the company’s profits were rising.

wall_streetThat difference between 24% growth in profits and 29% growth in market value? Isn’t that just a “Wall Street bonus” for taking part in this borrow-and-buyback scheme?  But why is Wall Street is rewarding FedEx for moving toward a “loot the company” model of business behavior?

It’s not just FedEx.

One analysis, from June 2014:

Since the end of 2012, using the DOW (NYSEARCA:DIA) companies as a large cap company market proxy, share buybacks in dollar volume have exceeded the actual level of after tax profits recorded by the 30 companies in the index. What this means is that somewhere in the DOW there must be more than a handful of companies, which are either borrowing money or deferring capital expenditures in a potentially harmful manner for the sole purpose of buying their shares back in the market to boost share price.

From last week’s Wall Street Journal:

Companies are buying their own shares at the briskest clip since the financial crisis, helping fuel a stock rally amid a broad trading slowdown.

Corporations bought back $338.3 billion of stock in the first half of the year, the most for any six-month period since 2007, according to research firm Birinyi Associates. Through August, 740 firms have authorized repurchase programs, the most since 2008.

No, it’s not just FedEx.

Cisco:

Back in February, Cisco announced an $8 billion bond issue “to help finance stock buybacks after the shares lost almost 6 percent over six months.”

  • Cisco CEO John Chambers owns about 2 million shares of Cisco stock.
  • Cisco stock was trading at $22.12 when that bond issue/buyback was announced. Now, it’s trading at $25.20. Do the math: that’s about a 14% increase in per-share price; and more than a $6 million increase in Mr. Chambers’ net worth.
  • Cisco’s market cap was $113.95 billion when the bond issue/buyback was announced.   Now, it’s $128.7 billion. Do the math: that’s about a 13% increase in Wall Street’s assessment of the company’s total value.
  • But what’s going on with the actual company?   Last month, Cisco released an earnings statement “that illustrated its troubles as one of the tech industry’s giants competing in a rapidly changing environment.”  Profits are down, compared to last year. And it is planning to eliminate 6,000 jobs.
  • Let me recap: Profits are down, layoffs are pending. But the company borrowed $billions to buy back stock, enriching its CEO and other executives.   And Wall Street rewarded this behavior.

Want to know what worries me most about Cisco? It looks like Cisco’s CEO is selling his stock. According to the filings, he owns a lot less Cisco stock now than he did when the bond issue/buyback was announced. Doesn’t he have any faith in his corporation’s long-term prospects?

It’s not just Cisco.

Bloomberg News:

American companies have seldom spent more money than they are now buying back shares. The same can’t be said for their executives. … While companies are pouring money into their own stock because they have nothing better to do with it, officers and directors aren’t… Insiders buying stock have dropped 8 percent from a year ago, poised for the fewest in more than a decade.

wall street bullAnd even worse? That perspective that companies “have nothing better to do” with their money than buy back stock.

As of a couple of weeks ago:

In total, US companies have announced USD309bn worth of share repurchases year-to-date, up from USD259bn for the same period a year ago, according to Thomson Reuters data.

Do the math. Nine months of stock buybacks equals about 6 million median-wage American jobs.

Let me rephrase that.

The money that US corporations are spending buying back their own stock “because they have nothing better to do with it” could give a $52,000-a-year job to every single unemployed American.

Instead… Cisco’s cutting 6,000 jobs. FedEx is cutting employee benefits. And who knows what all the other companies in Professor Lazonick’s survey are doing?

Here’s the thing: buying back stock doesn’t add any intrinsic value to a company. It’s not a new product line, it’s not a new factory, it’s not any kind of investment in the company’s future. All it does is concentrate the stock ownership. Same everything else – just fewer shares of stock. (Sort of like ultra-concentrated dish soap… same basic thing, just in a smaller bottle.)

So, aren’t these rising market caps at least somewhat artificial? Why should a company be worth more, just because it has fewer shares of stock?

Cisco may have declining profits… but its market cap is growing. FedEx may be growing, but its market cap is growing faster. Why?

Here’s the other thing: To accomplish this concentration of stock ownership… corporations are bonding untold billions of dollars. (Yes, that’s another thing I couldn’t find tracked anywhere.)

So yeah, they’re borrowing against the future… to improve stock prices today.

soap bubbleAnd Wall Street is encouraging this.

There’s a technical term for those sorts of artificial increases: they’re called “bubbles.”

And that’s why I’m starting to have nightmares.

I’m wondering when this latest Wall Street bubble is going to burst.

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