CRIMINAL CRYPTO CAPITALI$M FTX

Boies law firm makes odd moves in FTX case against Tom Brady, celebs

Alison Frankel
Thu, December 15, 2022 

Lawyer David Boies speaks on the phone after a bail hearing in

 U.S. financier Jeffrey Epstein's sex trafficking case in New York City

By Alison Frankel

(Reuters) - The law firm led by famed litigator David Boies appears to have engaged in some unusual litigation tactics on behalf of FTX crypto exchange users who accuse NFL quarterback Tom Brady, supermodel Gisele Bundchen, comedian Larry David and other celebrities of inducing them to open FTX accounts.

This tale ventures deep into the weeds of federal court filing procedures, but the upshot is that Boies’ firm, Boies Schiller Flexner, and co-counsel from The Moskowitz Law Firm filed three different but obviously related FTX lawsuits in the same federal court in Miami without asking the court to consolidate the cases before just one judge.

The cases were assigned to three different Miami federal judges before the judges realized they were related. Last week, U.S. District Judge Michael Moore of Miami entered an order consolidating the lawsuits and clarifying that he will oversee the litigation.

That was apparently not what the Boies and Moskowitz firms were hoping. In mid-November, the firms filed the first of their three FTX lawsuits in federal court. The suit, a class action on behalf of FTX accountholders in the U.S., alleged that FTX founder Sam Bankman-Fried and celebrity endorsers violated Florida securities and consumers laws by promoting the FTX yield-bearing accounts as a safe way to invest in cryptocurrencies.

I’ll pause here to point out that law firm Latham & Watkins, which is representing Brady, Bundchen and David, declined to comment on the cases. Bankman-Fried counsel Mark Cohen of Cohen & Gresser did not respond to a query. I also did not receive a response from the NBA’s Golden State Warriors, which is also named as a defendant.

As you are doubtless aware, Boies is known for high-profile matters, including his representation of Democratic presidential candidate Al Gore in the U.S. Supreme Court case that decided the election of 2000. More recently he has represented Jeffrey Epstein accusers including Virginia Giuffre.

On the official form that accompanied Boies Schiller's FTX lawsuit, which is known as a cover sheet, the Boies and Moskowitz firms said the FTX class action was related to a different class action that the firms are litigating on behalf of crypto investors who used the Voyager Digital Ltd platform. The Voyager case similarly accuses a celebrity crypto endorser – Dallas Mavericks owner Mark Cuban – of deceptive promotion of a crypto investment. Cuban counsel Stephen Best of Brown Rudnick told me he is confident the class action will be tossed, in part because Voyager account holders did not rely on Cuban's endorsement.

Presiding over that case is U.S. District Judge Roy Altman, who was a partner at the plaintiffs' firm Podhurst Orseck before joining the bench in 2019. He has yet to rule on Cuban's motion to dismiss the case, but in November determined that the Boies and Moskowitz firms were entitled to discovery from Cuban.

By asserting that the first FTX suit was related to the Cuban case before Altman, the Boies and Moskowitz firms apparently hoped Altman would also be appointed to oversee the FTX class action, even though there was no overlap between the plaintiffs and defendants in the cases.

The court instead assigned the case to Moore, a George H.W. Bush appointee and former federal prosecutor, on the same day it was filed.

On Nov. 21, the Boies and Moskowitz firms filed a second FTX class action, this time on behalf of non-U.S. FTX customers. The cover sheet said the case was not related to any other proceeding in Miami federal court, although it mentioned the Voyager class action in a box where such information can be listed. The cover sheet did not refer to the case before Moore.

The second suit was assigned to U.S. District Judge Darrin Gayles.

On Dec. 7, the Boies and Moskowitz firms filed a third FTX class action in federal court in Miami, this time on behalf of all FTX customers, in and out of the U.S. Once again, the cover sheet for the filing did not mention the firm’s previous (and very similar) FTX suits. Once again, the Voyager class action showed up in the box for related cases.

The third suit was assigned to U.S. District Judge Beth Bloom. (Both Bloom and Gayles are former Florida state-court judges who were appointed by former President Barack Obama).

The day after Bloom’s assignment to the case, the Moskowitz and Boies firms voluntarily dismissed the two previously-filed FTX class actions before Moore and Gayles. They then submitted an amended complaint in the case before Bloom, adding the lead plaintiffs from the other two now-dismissed suits.

Those maneuvers seem to have caught Bloom’s attention. She issued an order on Dec. 9, transferring the remaining class action to Moore, who had been assigned the first suit filed by Moskowitz and Boies. Moore issued his order consolidating the litigation in his courtroom on the same day.

I emailed Adam Moskowitz of the Moskowitz firm and four Boies Schiller lawyers, including David Boies, to ask why they had said the first FTX suit was related to the Voyager case and why they failed to disclose that their second and third FTX suits were related to the first class action. Specifically, I asked if they were trying to avoid Moore and get the FTX litigation before Altman, the judge overseeing the Voyager case.

Moskowitz said in two email responses that the firms’ goal has always been to have all of the federal cases consolidated before one judge. (His firm and the Boies firm also have filed several cases in Florida state courts.)

“As we got more cases, we filed more cases,” Moskowitz said. “We wanted to make sure to cover all of these victims.”

Moskowitz said the firms “always try our best to complete all information on all court forms.” He and Boies lawyers, he said, have been coordinating with defense counsel in both the state and federal FTX cases, despite the “different cases, different clients and different law firms.”

Both the state and federal cases, Moskowitz said, are now sorted out and will be overseen by one judge in federal court and one in state court.

“After four weeks of hard work, cooperation and coordination, including with defense counsel, we are happy to at least have two avenues for all of those victims across the globe (in Florida state and federal courts),” Moskowitz said. “It is a good day for the victims.”

Boies lawyers did not respond beyond Moskowitz’s emails.

Read more:

FTX's Bankman-Fried, Tom Brady and other celebrity promoters sued by crypto investors

'They ain't seen nothing yet': President Biden has accused oil companies of 'war profiteering' and threatened them with a new windfall tax.

 Will it help with gas prices?

Sigrid Forberg
Fri, December 16, 2022


In the wake of scorching inflation and Russia’s war in Ukraine, major gas companies like Chevron and Exxon Mobil are raking in profits. And it’s got President Joe Biden hot under the collar.

In November, days before the midterm elections, Biden launched an attack on the industry, calling their record profits "a windfall of war," not the result of anything "new or innovative."

And now, his international energy envoy is calling on oil companies to think of American consumers.

“I think that the idea that financiers would tell companies in the United States not to increase production and to buy back shares and increase dividends when the profits are at all-time highs is outrageous,” Amos Hochstein told the Financial Times. “It is not only un-American, it is so unfair to the American public."

"You want to pay dividends, pay dividends. You want to pay shareholders, pay shareholders. You want to get bonuses, do that, too. You could do all of that and still invest more. We are asking you to increase production and seize the moment.”

With gas prices still elevated, and an expensive winter ahead, Biden says he’s ready to force these oil companies to act — but while his words for these companies may be strong, he may not have the power to back them up.

Biden doesn’t mince his words

Biden has been waging a battle with oil companies over the last few months, but he escalated it in November when he called on them to “act beyond their narrow self-interest,” to “invest in America by increasing production and refining capacity” on behalf of “their consumers, their community and their country.”

And if they don’t? Biden warns they’re going to face “a higher tax on their excess profits and … higher restrictions.”

The president didn’t elaborate on what those restrictions might be, but promised his administration would work with Congress to evaluate all the available options.

“It’s time for these companies to stop war profiteering, meet their responsibilities in this country and give the American people a break,” Biden added.
Oil companies fire back

While gas has dropped from a record high of over $5/gallon in June, it’s still currently hovering around $3.21. And that, along with a dangerously low oil supply and a dwindling diesel stockpile is clearly weighing on Biden.

But oil companies argue they’re already contributing to the cause. Exxon Mobil’s CEO Darren Woods took a moment during the company’s third-quarter earnings call on Oct. 28 to address Biden. “There has been discussion in the U.S. about our industry returning some of our profits directly to the American people,” Woods said. “That’s exactly what we’re doing in the form of our quarterly dividend."

The president didn’t take kindly to that, tweeting his response a few hours later: “Can’t believe I have to say this but giving profits to shareholders is not the same as bringing prices down for American families.”

Any taxes would face an uphill battle

Biden appears to be proposing a “windfall” tax to redistribute profits to American consumers still paying out the nose at the pump. But even with Biden’s backing, there’s no guarantee he’ll be able to pass a new corporate tax. For that, he’d need support from Congress and with a Senate divided in half between Republicans and Democrats, that seems unlikely.

He does seem prepared to compromise, though. According to a report in Bloomberg, Energy Secretary Jennifer Granholm addressed oil and gas executives in Washington on Wednesday at a meeting of the National Petroleum Council, an outside federal advisory group with members from Exxon Mobil Corp. and Royal Dutch Shell Plc.

“We are eager to work with you,” Granholm said, adding that fossil fuels are likely to be around for a while.

She also acknowledged the administration has "butted heads" with the industry, referring to it as the “elephant in the room." And with growing demand and a shortage of diesel in the Northeast, she says the administration is aware fossil fuel production will need to increase soon.

Still, the president isn’t likely to back down entirely. In November, Exxon and Chevron, two of the country’s biggest oil companies, reported hefty profits for the fourth consecutive quarter. That same day, in a briefing from the White House, Biden pointed out that six of the largest companies “made $70 billion in profit” in just 90 days.

Appalled that all that money was going back to their shareholders and executives, Biden issued a promise: “I’m going to keep harping on it. [These companies] talk about me picking on them, they ain’t seen nothing yet. I mean it. It outrages me.”

Ending finance for new oil and gas drilling projects is the minimum banks should do

Tim McDonnell
Fri, December 16, 2022 


London-based bank HSBC will immediately stop lending and underwriting for new oil and gas drilling projects, the bank announced Dec. 14, making it the first large multinational bank—and top-tier funder of fossil fuels—to adopt such a policy.

The policy change follows a year of pressure from activist shareholders, and raises the bar for other major banks that have set long-term goals to decarbonize their lending but have so far been reluctant to close the purse strings for oil and gas producers.

“HSBC’s announcement is groundbreaking and will send shockwaves to governments and fossil fuel giants,” said Jeanne Martin, head of the banking program at ShareAction, an advocacy group that spearheaded climate-related shareholder resolutions at HSBC and worked with the bank on its new oil and gas policy.

HSBC will continue lending to fossil fuel companies

To be clear, the policy only affects project-specific finance, where an oil and gas company seeks a loan for a particular new drilling project or infrastructure to support it. HSBC will continue to lend and provide financial services to oil and gas companies, including those with plans to expand drilling, at the general corporate level, i.e., finance not designated for one particular project. On average across European banks, 92% of finance for oil and gas companies came at the corporate level, with only 8% for specific projects, according to ShareAction. HSBC is the top European financier of oil and gas companies, providing $59 billion in lending, underwriting, and other financing from 2016 to 2021.

Still, cutting off project finance “sends a clear signal to its clients that the bank is losing its appetite for this kind of activity,” Martin said. And it could be a stepping stone to more wide-reaching restrictions; all major European banks now have some restrictions on corporate-level financing for coal companies, a broad shift that also started with project-level finance.

HSBC can still clean up its advertising

There’s still plenty HSBC can do to improve on its climate policies, Martin said. In October, UK officials banned some of the bank’s ads for making claims that were misleading or greenwashing. And although HSBC has said it will require its corporate clients to deliver net-zero transition plans, it hasn’t said how it will assess those plans or whether it would sever ties with clients whose plans are inadequate.

Still, if HSBC can at least target project finance, there’s no reason why JP Morgan Chase, Bank of America, Citi, and other major fossil fuel financiers can’t follow suit. And the more expensive and elusive finance for drilling becomes, the more pressure oil and gas companies will feel to speed up their shift to lower-carbon business models.

“The fact that HSBC could make this commitment makes it very hard for other banks to not make similar commitments,” Martin said.

California’s Reparations Task Force looks beyond slavery, turns to state discrimination



Marcus D. Smith
Fri, December 16, 2022 

Looking beyond the abuses of enslavement, California’s Reparations Task Force at an Oakland meeting this week dug into racist state policies of the 20th Century as it worked to quantify harms committed against Black communities.

Dozens of people gathered at Oakland City Hall to contribute to the discussion, sharing concerns and seeking information about California’s first-in-the-nation effort to advance reparations.

The committee has already recommended that California provide financial reparations to descendants of enslaved people and Black Californians who can trace their ancestry in the state to the 19th Century. It’s expected to submit a final report to the Legislature next year, after which lawmakers and Gov. Gavin Newsom could act on its findings.

Now it’s working on other questions, such as how to compensate people for unjust property takings by eminent domain, devaluation of Black businesses, housing discrimination and homelessness, over-policing and the disproportionate mass incarceration of Black people, and health harms.

“This conversation deserves a lot more, it’s the most important conversation that we’re going to have,” said task force member Monica Montgomery Steppe.

The task force is trying to determine a time frame to assess damages against Black Californians.

For unjust property takings, the task force suggested the state consider damages from 1920 to today. Committee members described how city governments razed several Black residential areas and replaced them with infrastructure, such as railroads and highways. That dynamic played out throughout the Bay Area, including in San Francisco’s Western Addition and in a once-thriving commercial strip in West Oakland.

When it comes to the devaluation of Black businesses, the task force proposed to trace damage as early as 1900, which could include a lineage requirement.

In dealing with housing discrimination and homelessness, the task force advised lawmakers to revisit the Community Reinvestment Act of 1977 and Home Owner’s Loan Corporation in 1937, which effectively created redlining, the blueprint to keep Black American to specific neighborhood with less resources.

Between 1946 and 1960, the task force found through studies that less than 1% of Federal Housing Administration loans went to Black people living in Northern California.

Redlining forced Black Californians into under-resourced neighborhoods, contributing to health harms that African Americans continue to face today. The task force report determined Black residents are 40% more exposed to carbon dioxide and particulate matter from cars, trucks and buses than white California residents.

The report found that Black people are 75% more likely to live near hazardous waste facilities. The task force considers 1900 to present day as a damage time frame regarding health harms Black residents face.

Committee members suggest that mass incarceration and over-policing became heightened in 1970 due to the War on Drugs, an issue which continues to persist in the present day and economists agree.

To repair some of the harms inflicted, members of the task force suggested a plethora of recommendations such as ending the three-strikes sentencing, implementation of anti-bias policing, allocate funds to remedy harms of incarceration such as abolishing cash bail, among other suggestions.

The task force is continuing to analyze how compensation fits into the deliberation of reparations. It is still unclear on how reparations will be paid and measured to ensure the form of payment aligns with an estimate of damages.

Task force members voted to continue the conversation to its next pair of meetings scheduled for Jan. 27 and 28 in San Diego. The task force will plan to hold meetings in Sacramento in February 2023.

Thousands protest in Brussels over cost-of-living crisis, hitting public transport

People demonstrate against the rising cost of living in Belgium


Fri, December 16, 2022 


BRUSSELS (Reuters) - Thousands of demonstrators took to the streets of Brussels on Friday to protest against the rising cost-of-living, hitting public transport systems and disrupting this week's European Union (EU) summit.

The Brussels police said 16,500 people had turned up at the demonstration, which was organised by trade unions representing many public sector workers demanding better pay and working conditions as inflation rises across Europe.

"Increase Wages And Pensions!," read one banner held aloft by a protester.

Gas and electricity prices have surged in the wake of Russia's invasion of Ukraine. Belgium's headline inflation figure stood at 10.63% in November, while consumer inflation within the euro zone as a whole is at around 10%.


"You get back home to your children, you want your house to be warm. You should not be having to make calculations on using energy," said one demonstrator.

The event passed off peacefully, but Brussels Airport said flights had to be cancelled as a result of the protest, while local police said traffic had been disrupted.

(Reporting by Christian Levaux and Sudip Kar-Gupta, Editing by William Maclean)

WHERE IS THE OUTRAGE OVER ROGUE NATION TEST
India tests long-range missile for nuclear deterrence

ASHOK SHARMA
Thu, December 15, 2022 

NEW DELHI (AP) — India on Thursday successfully test-fired a long-range “Agni-5” intercontinental nuclear-capable ballistic missile, a government minister said, that is expected to strengthen its deterrence against long-time rival China.

Parliamentary Affairs Minister Pralhad Joshi said the missile was fired Thursday from Abdul Kalam Island in eastern Odisha state.

“The missile will add great value to the defense and strengthen national security to a greater extent,” Joshi tweeted, citing its range of 5,400 kilometers (3,300 miles) or more.

Ahead of the test, Indian authorities issued a notification and declared the Bay of Bengal as a no-fly zone, said Indian media reports, adding that its range covers almost the entire China mainland.

Fresh tensions arose between India and China following clashes between their army soldiers Dec. 9 along their disputed border in Arunachal Pradesh state.

India's Defense Minister Rajnath Singh said no Indian soldiers were seriously hurt and troops from both sides withdrew from the area soon afterward. A statement from the Indian army Monday said troops on both sides suffered minor injuries.

Rahul Bedi, a defense analyst, said this was the second user test by India's Strategic Forces Command since it was inducted in 2018. The first test was carried out in 2021.

Bedi said Indian authorities did not take cognizance of the reported presence of a Chinese spy ship in the region and went ahead with the test.

India has developed a family of medium- to intercontinental-range ballistic missiles called “Agni,” which means “fire.” Agni missiles are long-range, nuclear-capable, surface-to-surface ballistic missiles.

For decades, India and China have fiercely contested the Line of Actual Control, a loose demarcation that separates Chinese and Indian held territories from Ladakh in the west to India’s eastern state of Arunachal Pradesh, which China claims in its entirety. India and China fought a war over the border in 1962.

Mexican president condemns gun attack on prominent journalist


March in support of Mexican President Andres Manuel Lopez Obrador, in Mexico City

Fri, December 16, 2022 

MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador on Friday condemned an apparent assassination attempt on a prominent news anchor and critic of the president who said assailants had opened fire on him while he was driving his car.

Television and radio presenter Ciro Gomez Leyva said on Twitter two unidentified people on a motorcycle had shot at him around 200 meters (660 feet) from his home on Thursday night, and shared images of bullet impacts on the vehicle.

Thanks to the vehicle's armor, he was still alive, he said. Gomez was back on the air on his morning radio show on Friday.

Lopez Obrador, who has repeatedly lambasted Gomez and other prominent journalists critical of his policies, opened his daily morning conference by denouncing the attack.

"He's a journalist, a human being, but he's also a leader of public opinion. Hurting a figure like Ciro creates a lot of political instability," Lopez Obrador said.

On Wednesday, Gomez was singled out for criticism during a regular section of the news conference dedicated to identifying what Lopez Obrador calls the media's "lies of the week".

"Imagine if you just listened to Ciro or Loret de Mola or Sarmiento," Lopez Obrador said, naming him and other leading journalists. "It's even bad for your health, I mean if you listen to them a lot, you could even develop a brain tumor."

Mexico is the world's most dangerous country for journalists, according to a report published Wednesday by media watchdog Reporters Without Borders.

The report identified 11 killings of media professionals this year, though other groups have documented a higher number.

Pope returns Greece's Parthenon Sculptures in ecumenical nod



Vatican Parthenon Sculptures

The marble head of a young man, a tiny fragment from the 2,500-year-old sculptured decoration of the Parthenon Temple on the ancient Acropolis, is displayed during a presentation to the press at the new Acropolis Museum in Athens Pope Francis has decided to send back to Greece this and other two fragments of Parthenon Sculptures that the Vatican Museums have held for two centuries.

 (AP Photo/Thanassis Stavrakis)

NICOLE WINFIELD
Fri, December 16, 2022 


VATICAN CITY (AP) — Pope Francis will send back to Greece the three fragments of the Parthenon Sculptures that the Vatican Museums have held for two centuries, in the latest case of a Western museum bowing to demands for restitution of artifacts to their countries of origin.

In announcing the decision Friday, the Vatican termed the gesture a “donation” from Francis to His Beatitude Ieronymos II, the Orthodox Christian archbishop of Athens and all Greece, and said it was “a concrete sign of his sincere desire to follow in the ecumenical path of truth.”

The return, which is expected to still take some time to execute, is likely to add further pressure on the British Museums, which has refused decades of appeals from Greece to return its much larger collection of Parthenon sculptures, which has been a centerpiece of the museum since 1816.

The 5th century B.C. sculptures are mostly remnants of a 160-meter-long (520-foot) frieze that ran around the outer walls of the Parthenon Temple on the Acropolis, dedicated to Athena, goddess of wisdom. Much of the frieze and the temple's other sculptural decoration was lost in a 17th-century bombardment, and about half the remaining works were removed in the early 19th century by a British diplomat, Lord Elgin.

Aside from the British Museums, fragments have ended up in museums around Europe, and recently a small museum in Sicily decided to return its lone fragment to Greece in a loan that Greek authorities hope will be extended indefinitely.

The Vatican's three fragments include a head of a horse, a head of a boy and a bearded male head. The head of the boy had been loaned to Greece for a year in 2008.

Greece’s Culture Ministry said it welcomed the pope’s donation, which it said followed a request by Ecumenical Patriarch Bartholomew I, the spiritual leader of the world's Orthodox Christians.

The decision helps Greek efforts for the return of the Parthenon Sculptures from the British Museum “and their reunification with those on display in the Acropolis Museum,” a ministry statement said. The Acropolis Museum, for its part, also welcomed Francis' gesture.

The Vatican statement suggested the Holy See wanted to make clear that it's donation was not a bilateral state-to-state return, but rather a religiously inspired donation from a pope to a primate. The intent may be to avoid a precedent that could affect other priceless holdings in the Vatican Museums, amid broader demands from Indigenous groups and colonized countries for Western museums to return looted artifacts, and artworks and material culture obtained under questionable circumstances during colonial times.

In the case of the Vatican Museums, Indigenous groups from Canada have made clear they want the Holy See to return artifacts sent by Catholic missionaries to the Vatican for a 1925 exhibition and are now part of its ethnographic collection.

Jos van Beurden, who administers the “Restitution Matters” Facebook group that tracks the global restitution debate, suggested the use of the term “donation” for specifically religious purposes and “not a government to government affair” was deliberate and could inspire other groups to seek the return of items on similar grounds.

“Does this offer a chance to a claim of an Ethiopian diaspora group in the USA for the return of hundreds of ancient manuscripts looted from the Debre Libanos Monastery by the Italian fascist Enrico Ceruli during Italy’s occupation of Ethiopia?” he asked. “Or to the Ethiopian claim for eleven Tabots in the British Museums?”

He was referring to the 11 plaques that are a foundational part of the Ethiopian Orthodox Church and have been the subject of repeated appeals from Ethiopian patriarchs and others to the British Museum for restitution. According to the Museum Association, the plaques were looted by the British in an 1868 battle but have never been displayed or photographed in recognition of their sanctity.

The British Museum recently pledged not to dismantle its Parthenon collection, following a report that the institution’s chairman had held secret talks with Greece’s prime minister over the return of the sculptures, also known as the Elgin Marbles.

The Parthenon was built between 447-432 B.C. and is considered the crowning work of classical architecture. The frieze depicted a procession in honor of Athena.

Francis last met with Ieronymos in 2021 in Athens where he issued an appeal for greater unity between Catholics and Orthodox. At the time, Francis “shamefully” acknowledged the “mistakes” that the Catholic Church had inflicted on others over the centuries, actions which he said “were marked by a thirst for advantage and power.”

4 Social Security Changes Joe Biden Wants to Make: Is 2023 the Year They Become Reality?

By Sean Williams – Dec 10, 2022 

Motley Fool 

KEY POINTS

America's top retirement program could be forced to cut benefits by 23% in 2034.

Prior to being elected president, Joe Biden laid out a four-point plan to strengthen Social Security.

A new Congress in 2023 offers little hope for reform.


Social Security has a $20 trillion problem, and President Biden believes he has the solution.

THE REASON IS THAT CONGRESS RAIDS SOCIAL SECURITY FOR PROGRAM FUNDING

For most Americans, Social Security doesn't just provide "some check" they'll receive after they retire. According to national pollster Gallup, Social Security supplies a source of income retirees deem necessary to make ends meet. Since 2002, anywhere from 80% to 90% of annually surveyed retirees lean on their monthly payout to some degree to cover their expenses.

Although Social Security is the U.S.'s most successful retirement program, having provided retired workers with benefits for 82 years (and counting), it's on shaky ground. And as the sustainability of Social Security payouts comes into question, it's lawmakers who come into focus -- specifically President Joe Biden.

JOE BIDEN LISTENING TO THEN-PRESIDENT BARACK OBAMA. IMAGE SOURCE: OFFICIAL WHITE HOUSE PHOTO BY PETE SOUZA.

Could you handle a 23% cut to your Social Security benefit?

Since retired worker payouts began in 1940, the Social Security Board of Trustees has released a report each year that examines the financial state of the program. This often-lengthy report takes into account demographic changes, fiscal policy implemented by Congress, and a multitude of other factors to provide an all-encompassing look at how firm the foundation is for Social Security over the short term (the next 10 years) and long term (the next 75 years).

The problem is that the Trustees Report has been warning that long-term revenue wouldn't be sufficient to cover payouts, including cost-of-living adjustments (COLA), since 1985. As time has passed, the projected long-term cash shortfall has grown. The 2022 Trustees Report estimates that Social Security has a $20.4 trillion cash deficiency through 2096.

If there's a positive takeaway here, it's that Social Security can't go bankrupt as long as people keep working. Around 90% of the revenue collected by Social Security comes from the 12.4% payroll tax on earned income, such as wages and salary. But just because Social Security is in no danger of insolvency, that doesn't mean it's financially healthy.

Without any changes, the Trustees Report predicts the Old-Age and Survivors Insurance Trust Fund, which is responsible for doling out payments to more than 48 million retired workers each month, will require an across-the-board 23% benefit cut by 2034. For the typical retired worker, we'd be talking about thousands of dollars in reduced annual benefits.

Biden has offered a four-point plan to strengthen Social Security

With Social Security's dilemma well-known, Biden laid out a four-point plan to strengthen the program while on the campaign trail prior to his 2020 election. The core of Biden's proposal involves generating more payroll tax revenue, as well as increasing benefits for aged beneficiaries and lifetime low-earners who need it most.

1. Lift payroll taxation on high earners

The most notable change proposed by Biden involves collecting more payroll tax revenue from high-earning workers. In 2023, all earned income between $0.01 and $160,200 is subject to the 12.4% payroll tax. However, wages and salary above $160,200 aren't subjected to this tax. Well over $1 trillion in earned income "escapes" the payroll tax this way every year.

Biden's plan would reinstate the payroll tax on earned income above $400,000, while creating a doughnut hole between the maximum taxable earnings cap (the $160,200 figure in 2023) and $400,000 where earned income would remain exempt. Since the maximum taxable earnings cap increases over time, this doughnut hole would eventually close and subject all earned income to the payroll tax.

2. Change Social Security's measure of inflation from the CPI-W to the CPI-E

The other sweeping change Biden is offering is to shift the program's inflationary tether from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the Consumer Price Index for the Elderly (CPI-E).

The issue with the CPI-W is that it tracks the spending habits of "urban wage earners and clerical workers," which doesn't make much sense when senior citizens make up the bulk of Social Security beneficiaries. Since the CPI-E specifically tracks the expenditures of seniors, it should result in more accurate cost-of-living adjustments being passed along to beneficiaries.

3. Increase the special minimum benefit

A third Social Security reform proposed by Biden involves increasing the special minimum benefit paid to lifetime low-earning workers.

This year, the maximum payout for a lifetime low-earner with 30 years of coverage is just $951 per month. That's more than $180/month below the federal poverty level for a single filer. Under Biden's plan, the special minimum benefit would rise to 125% of the federal poverty level. For a lifetime low-earner, it would mean a monthly payout boost of nearly $500.

4. Boost the primary insurance amount for aged beneficiaries

The fourth and final change would see the primary insurance amount (PIA) steadily increased over time for older beneficiaries. Specifically, the PIA would grow by 1% annually from ages 78 through 82 until a 5% cumulative increase was realized.

The purpose of boosting the PIA is to account for higher late-in-life expenditures. As we age, things like medical transportation costs and prescription drugs can become costlier. This would help offset some of those expenses.


IMAGE SOURCE: GETTY IMAGES.

Is 2023 the year Biden's Social Security plan becomes reality?

The all-important question is: Will a new year will bring new opportunities for Joe Biden to leave his mark on America's top retirement program?

The answer is almost assuredly no.

One thing the New Year will bring is a changed Congress. Following midterm elections, Democrats retained control of the U.S. Senate, while Republicans narrowly took back control of the U.S. House of Representatives. In other words, we're moving from a situation where Biden's party controlled both chambers of Congress to now only controlling one of them (assuming lawmakers vote strictly along party lines). That sort of deadlock usually leads to little legislation getting passed.

The bigger problem for Joe Biden, and pretty much every president for the past four decades, is that getting the needed votes in the U.S. Senate to amend Social Security has been impossible. Whereas a simple majority of the vote suffices in the House, 60 votes are needed in the Senate to make changes to the Social Security program. Neither party has held 60 seats in the Senate since the late 1970s. This means any major overhaul to Social Security will require bipartisan support.

As things stand now, both parties believe they have the superior plan to strengthen Social Security. While Democrats favor raising additional revenue and switching the inflationary measure to the CPI-E, Republicans prefer gradually increasing the full retirement age and utilizing the Chained CPI, which takes substitution bias into account, in place of the CPI-W. These proposals are ideologically miles apart, and neither side has been willing to work with their opposition to find common ground.

Even with a different Congress, Joe Biden has virtually no chance to enact his four-point Social Security plan in 2023.

Major car companies like Ford, Tesla, and Toyota are at 'high risk' of sourcing parts made by Chinese forced labor, a report finds: 'It's an industry-wide problem'

Jacob Zinkula
Sat, December 10, 2022

Tunahan Turhan/SOPA Images/LightRocket via Getty Images

A new report found "massive and expanding" links between major car companies and China's Xinjiang region.

The Chinese government has been accused of committing human rights abuses in the region.

Similar accusations have been made in the past against Apple, Amazon, and Nike.

If you bought a car recently, some of its parts may have been made through forced labor in China.

That was the key finding of a six-month investigation undertaken by researchers from Britain's Sheffield Hallam University. In a new report, the researchers say their analysis of publicly available documents revealed "massive and expanding links" between major car companies and China's Xinjiang region, where evidence has emerged of human-rights abuses committed by the Chinese government against Uyghur Muslims, including forced labor, government surveillance, forced sterilization, and re-education camps. Some have called it a "genocide."

The 78-page report says "every major car brand" — including the likes of Ford, GM, Tesla, and Toyota — is at "high risk" of sourcing parts from companies linked to these human rights abuses.

"There was no part of the car we researched that was untainted by Uyghur forced labor," the team's lead researcher Laura Murphy told The New York Times. "It's an industry-wide problem."

A year ago, the Uyghur Forced Labor Prevention Act was signed into law, which banned US imports of products made wholly or partly in the Xinjiang region, unless the company could prove they were not using forced labor. Since going into effect in June, customs officials say they've stopped 2,200 shipments — valued at over $728 million — from entering the US.

Car companies contacted by The Times "did not contradict the report," but said they were committed to ensuring their supply chains were free of human rights abuses. Insider reached out to Ford, GM, Tesla, and Toyota for comment.

In a statement, GM said, "We actively monitor our global supply chain and conduct extensive due diligence, particularly where we identify or are made aware of potential violations of the law, our agreements, or our policies," adding that its supplier code of conduct clearly prohibits any forced labor or abusive treatment of workers.

"It is not impossible to audit one's supply chain to identify risks"

The auto industry's supply chains are "closer to a ball of spaghetti than a linear chain," Simon Croom, professor of supply chain management at the University of San Diego, told Insider. The average automaker may have links to as many as 18,000 suppliers, including their direct suppliers, the suppliers of those suppliers, and so on.

The Sheffield Hallam report lists roughly 200 companies in China and across the globe with potential links to Xinjiang, where steel, copper, aluminum, batteries, and other components are produced.

Croom, who previously worked for Jaguar and wrote his PhD dissertation on auto supply chains, says he believes many supply chains — both in the car industry and elsewhere — have connections to forced labor in the region.

"I have been in no doubt that many supply chains incur forced and slave/sweat labor in their upstream tiers," he said, "and it is very clear the auto industry is one such example."

Per Croom, while many companies claim to lack full insight into their supply chains, "it is not impossible to audit one's supply chain to identify risks."

"There is no reason why auto manufacturers or other OEM companies cannot verify their supply lines," he said, "and I firmly believe the lack of transparency is a thing of the past and thus OEMs are willfully ignoring such abusive suppliers."

Susan Golicic, however, a supply chain professor at Colorado State University who previously worked at Chrysler, says that while she can't speak to the report's claims specifically, it can be challenging for companies to keep a full grasp on their extensive supply chains.

"When suppliers are beyond the third tier, it is often tough for the OEMs to keep track of what they are doing, as well as even who and where they are," she told Insider. "Some suppliers can be very small and may lack technology to easily communicate or provide transparency into the front end of the supply chain."

In response to supply chain challenges during the pandemic, many companies have taken steps to "onshore," "friendshore," or "nearshore" — parts of their supply chains, moving them back to the US, to countries that are political allies, or to countries that are closer geographically.

But while these shifts could provide companies greater transparency into their supply chains, many are likely to retain global exposure in the decades to come.