As global capital becomes ever more powerful, giant corporations are holding governments and citizens up for ransom — eliciting subsidies and tax breaks from countries concerned about their nation’s “competitiveness” — while sheltering their profits in the lowest-tax jurisdictions they can find. Major advanced countries — and their citizens — need a comprehensive tax agreement that won’t allow global corporations to get away with this.

Google, Amazon, Starbucks, every other major corporation, and every big Wall Street bank, are sheltering as much of their U.S. profits abroad as they can, while telling Washington that lower corporate taxes are necessary in order to keep the U.S. “competitive.”

Baloney. The fact is, global corporations have no allegiance to any country; their only objective is to make as much money as possible — and play off one country against another to keep their taxes down and subsidies up, thereby shifting more of the tax burden to ordinary people whose wages are already shrinking because companies are playing workers off against each other. 

I’m in London for a few days, and all the talk here is about how Goldman Sachs just negotiated a sweetheart deal to settle a tax dispute with the British government; Google is manipulating its British sales to pay almost no taxes here by using its low-tax Ireland subsidiary (the chair of the Parliamentary committee investigating this has just called the do-no-evil firm “devious, calculating, and unethical”); Amazon has been found to route its British sales through a subsidiary in low-tax Luxembourg, and now receives more in subsidies from the British government than it pays here in taxes; Starbucks’ tax-avoidance strategy was so blatant British consumers began boycotting the firm until it reversed course. 

Meanwhile, At a time when you’d expect nations to band together to gain bargaining power against global capital, the opposite is occurring: Xenophobia is breaking out all over. 

Here in Britain, the UK Independence Party — which wants to get out of the European Union — is rapidly gaining ground, becoming the third most popular party in the country, according to a new poll for The Independent on Sunday. Almost one in five people plan to vote for it in the next general election. Ukip’s overall ratings have risen four points to 19 per cent in the past month, despite Prime Minister David Cameron’s efforts to wrest back control of the crucial debate over Britain’s relationship with the European Union. 

Right-wing nationalist parties are gaining ground elsewhere in Europe as well. In the U.S., not only are Republicans sounding more nationalistic of late (anti-immigrant, anti-trade), but they continue to push “states rights” — as states increasingly battle against one another to give global companies ever larger tax breaks and subsidies. 

Nothing could strengthen the hand of global capital more than such breakups. 

“This systematic abuse cannot be fixed with just one resignation, or two,” said David Camp, the Republican chairman of the House tax-writing committee, at an oversight hearing Friday morning dealing with the IRS. “This is not a personnel problem. This is a problem of the IRS being too large, too intrusive, too abusive.”

David Camp has it wrong. There has been a “systematic” abuse of power, but it’s not what Camp has in mind. The real scandal is that:

The IRS has interpreted our tax laws to allow big corporations and wealthy individuals to make unlimited secret campaign donations through sham political fronts called “social welfare organizations,” like Karl Rove’s “Crossroads,” the U.S. Chamber of Commerce, and “Priorites USA.”

This campaign money has been used to bribe Congress to keep in place tax loopholes like the “carried interest” rule that allows the managers of hedge funds and private equity funds to treat their income as capital gains, subject only to low capital gains taxes rather than ordinary income taxes, and other loopholes that allow CEOs to get special tax treatment on giant compensation packages that now average $10 million a year.

Despite a growing number of billionaires and multi-millionaires using every tax dodge imaginable – laundering their money through phantom corporations and tax havens — the IRS’s budget has been cut by 17 percent since 2002, adjusted for inflation. To manage the $594.5 million in additional cuts required by the sequester, the agency will furlough each of its more than 89,000 employees for at least five days this year.

Finally, all of this, coming at a time when the Supreme Court has deemed corporations “people” under the First Amendment and when income and wealth are more concentrated at the top than they’ve been in over a hundred years, has enabled America’s financial elite to further entrench their wealth and power and thereby take over much of American democracy.

This is the real scandal and the real abuse, Congressman Camp. Your indignation over the IRS’s alleged “targeting” of conservative groups is a distraction from the main event.  

Six months into a second term and the Obama White House is on the defensive and floundering: Benghazi, the IRS’s investigations of right-wing groups, the Justice Department’s snooping into journalists’ phone records, Obamacare behind schedule, the Administration’s push for gun control ending in failure.

Should the blame fall mainly on congressional Republicans and their allies in the right-wing media, whose vitriolic attacks on Obama are unceasing?

After all, the only thing the GOP stands for – the sole mission that unites its warring factions — is an unwaivering determination to block anything the Administration seeks while distracting public attention from any larger issue.

But surely some of the seeming disarray is due to the President, whose insularity and aloofness make him an easy target, and whose eagerness to compromise and lack of focus continuously blurs his core message.

Is the central goal of his second term to achieve a grand bargain on the budget deficit? Or progress on gun control? Or restore jobs? Or reform the immigration laws? It is difficult to tell.

Vulnerabilities come with any Administration’s second term — when officials are exhausted, public support has worn thin, “A” teams have departed, the media are disenchanted, and all of the low-hanging fruit in a president’s agenda has already been picked.

I painfully recall Bill Clinton’s second term (I left before Monica). George W. Bush’s second term was marred by Iraq and a colossal failure on Social Security. Ronald Reagan’s, by the Iran-Contra scandal. Even FDR got mired in a so-called “court-packing” scheme that lost him public and congressional support.

Which is why it’s so important for a second-term White House to define itself — to give the public a clear sense of what it stands for, and how it intends to tackle the largest challenges facing the nation. And then to work hard on this core agenda without becoming overly distracted by the inevitable fires that have to be extinguished along the way. 

Even if a president fails to achieve this larger objective, he will at least have established a predicate for the future, and given the public a larger goal around which to mobilize and organize. 

Barack Obama is allowing the fires to dominate because he has not defined his core agenda. During the 2012 campaign it appeared to be restoring jobs, rebuilding the middle class, and reversing the scourge of widening inequality. Since then, though, the core has evaporated – leaving him and his administration vulnerable to every pyromaniac on the Potomac.

Many of you soon-to-be college graduates are determined to make the world a better place. Some of you are choosing careers in public service or joining nonprofits or volunteering in your communities.

But many of you are cynical about politics. You see the system as inherently corrupt. You doubt real progress is possible.

“What chance do we have against the Koch brothers and the other billionaires?” you’ve asked me. “How can we fight against Monsanto, Boeing, JP Morgan, and Bank of America? They buy elections. They run America.” 

Let me remind you: Cynicism is a self-fulfilling prophesy. You have no chance if you assume you have no chance.

“But it was different when you graduated,” you say. “The sixties were a time of social progress.”

You don’t know your history. 

When I graduated in 1968, the Vietnam War was raging. Over half a million American troops were already there. I didn’t know if I’d be drafted.  A member of my class who spoke at commencement said he was heading to Canada and urged us to join him.

Two months before, Martin Luther King Jr. had been assassinated. America’s cities were burning. Bobby Kennedy had just been gunned down.  

George (“segregation forever”) Wallace was on his way to garnering 10 million votes and carrying five southern states. Richard Nixon was well on his way to becoming president.

America was still mired in bigotry. 

I remember a classmate who was dating a black girl being spit on in a movie theater. The Supreme Court had only the year before struck down state laws against interracial marriage.

My entire graduating class of almost 800 contained only six young black men and four Hispanics.

I remember the girlfriend of another classmate almost dying from a back-alley abortion, because safe abortions were almost impossible to get.

I remember a bright young woman law school graduate in tears because no law firm would hire her because she was a woman.

I remember one of my classmates telling me in anguish that he was a homosexual, fearing he’d be discovered and his career ruined. 

The environmental movement had yet not been born. Two-thirds of America’s waterways were unsafe for swimming or fishing because of industrial waste and sewage.

I remember rivers so polluted they caught fire. When the Cuyahoga River went up in flames Time Magazine described it as the river that “oozes rather than flows,” in which a person “does not drown but decays.”

In those days, universal health insurance was a pipe dream.

It all seemed pretty hopeless. I assumed America was going to hell.

And yet, reforms did occur. America changed. The changes didn’t come easily. Every positive step was met with determined resistance. But we became better and stronger because we were determined to change.

When I graduated college I would not have believed that in my lifetime women would gain rights over their own bodies, including the legal right to have an abortion. Or women would become chief executives of major corporations, secretaries of state, contenders for the presidency. Or they’d outnumber men in college.

I would not have imagined that eleven states would allow gays and lesbians to marry, and a majority of Americans would support equal marriage rights.

Or that the nation would have a large and growing black middle class.

It would have seemed beyond possibility that a black man, the child of an interracial couple, would become President of the United States.  

I would not have predicted that the rate of college enrollment among Hispanics would exceed that of whites.

Or that more than 80 percent of Americans would have health insurance, most of it through government.  

I wouldn’t have foreseen that the Cuyahoga River – the one that used to catch fire regularly – would come to support 44 species of fish. And that over half our rivers and 70 percent of bays and estuaries would become safe for swimming and fishing.

Or that some 200,000 premature deaths and 700,000 cases of chronic bronchitis would have been prevented because the air is cleaner.

Or that the portion of children with elevated levels of lead in their blood would have dropped from 88 percent to just over 4 percent.

I would not have believed our nation capable of so much positive change. 

Yet we achieved it. And we have just begun. Widening inequality, a shrinking middle class, global warming, the corruption of our democracy by big money – all of these, and more, must be addressed. To make progress on these — and to prevent ourselves from slipping backwards — will require no less steadfastness, intelligence, and patience than was necessitated before. 

The genius of America lies in its resilience and pragmatism. We believe in social progress because we were born into it. It is our national creed.

Which is to say,  I understand your cynicism. It looks pretty hopeless.

But, believe me, it isn’t.

Not if you pitch in.

My mother went into paid work soon after my father’s clothing store was flooded out in a hurricane, almost wiping him out. She had no choice. We needed the money.

This was some two decades before a tidal wave of wives and mothers went into paid work.

For the few with four-year college degrees the transformation was the consequence of wider educational opportunity and new laws against gender discrimination that opened professions to well-educated women. But for the vast majority it was because male wages were dropping, and wives and mothers had to get paid jobs in order to prop up family incomes.

In 1966, only 20 percent of mothers with young children worked outside the home. By the late 1990s, 60 percent. For married women with children under age 6, the transformation was even more dramatic: from 12 percent in the 1960s to 55 percent by the late 1990s.

Yet America hasn’t accommodated this shift.

I was proud to have implemented the Family and Medical Leave Act when I was Labor Secretary, but, unlike most rich nations, we don’t require that employers offer paid leave.

Nor do we require equal pay for equal work (women’s pay still lags behind male pay for the same job).

Nor, like most rich nations, do we provide universal child care.

More women workers are in minimum-wage jobs than men, yet our minimum wage hasn’t kept up. (If it had kept up with inflation since 1968 it would be over $10 today.)

We’ve even cut aid pre-natal and post-natal medical care for poor infants and mothers.

And we have put a five-year limit on aid to single women with children — a limit that the ongoing effects of the Great Recession have already proved to be too limited.

Nor have we begun to cope with the reality of stagnant or declining real wages that has caused families to work so much harder and longer. Almost all of the economic gains since the late 1970s have gone to the top 1 percent, but our representatives in Washington refuse to acknowledge this or take steps to reverse the trend.

The best way to celebrate Mother’s Day would be to acknowledge that most mothers are now in paid work — or seek to be — and, as working mothers, deserve better.

After years of repeated reports of sexual assaults — and years of promises to prevent them, and then years of studies and commissions to find the best way of doing so — a Defense Department study released Tuesday estimates that some 26,000 people in the military were sexually assaulted in the last fiscal year, up from about 19,000 the year before. 

Moreover, it turns out the Air Force lieutenant colonel in charge of preventing sexual assault has been arrested for  … sexual assault. According to the police report, a drunken Lt. Col. Jeff Krusinski allegedly approached a woman in a parking lot in Arlington, Va. Sunday night, and grabbed her breasts and buttocks. 

Why has it been so difficult for the Air Force or the Defense Department to remedy this problem?

Speaking of which, the Air Force has just removed from duty seventeen launch officers at the Minot nuclear missile base in North Dakota — one of three bases responsible for controlling, and, if necessary, launching, strategic nuclear missiles — for violating weapons safety rules. The base commander characterized their negligence as “rot.”

One officer was found to have intentionally broken a safety rule that could have compromised the secret codes enabling missiles to be launched.

Secretary of the Air Force Michael Donley points to the removal of the seventeen as evidence that the Air Force has strengthened its oversight of the nuclear force. And he explains that members of the launch crew are usually relatively junior officers with limited service experience. 

Reassuring? 

Further steps will be taken to prevent one of our missiles from accidentally causing a nuclear holocaust. But I hope the Air Force does a better job remedying this problem than it’s done preventing sexual assaults. 

The West, Texas chemical and fertilizer plant where at least 15 were killed and more than 200 injured a few weeks ago hadn’t been fully inspected by the Occupational Safety and Health Administration since 1985. (A partial inspection in 2011 had resulted in $5,250 in fines.)

OSHA and its state partners have a total of 2,200 inspectors charged with ensuring the safety of over more than 8 million workplaces employing 130 million workers. That comes to about one inspector for every 59,000 American workers.

There’s no way it can do its job with so few resources, but OSHA has been systematically hollowed out for the years under Republican administrations and congresses that have despised the agency since its inception.

In effect, much of our nation’s worker safety laws and rules have been quietly repealed because there aren’t enough inspectors to enforce them.

That’s been the Republican strategy in general: When they can’t directly repeal laws they don’t like, they repeal them indirectly by hollowing them out — denying funds to fully implement them, and reducing funds to enforce them.

Consider taxes. Republicans have been unable to round up enough votes to cut taxes on big corporations and the wealthy as much as they’d like, so what do they do? They’re hollowing out the IRS. As they cut its enforcement budget – presto! — tax collections decline.

Despite an increasing number of billionaires and multi-millionaires using every tax dodge imaginable – laundering their money through phantom corporations and tax havens (Remember Mitt’s tax returns?) — the IRS’s budget has been cut by 17 percent since 2002, adjusted for inflation.

To manage the $594.5 million in additional cuts required by the sequester, the agency has announced it will furlough each of its more than 89,000 employees for at least five days this year.

This budget stinginess doesn’t save the government money. Quite the opposite. Less IRS enforcement means less revenue. It’s been estimated that every dollar invested in the IRS’s enforcement, modernization and management system reduces the federal budget deficit by $200, and that furloughing 1,800 IRS “policemen” will cost the Treasury $4.5 billion in lost revenue.

But congressional Republicans aren’t interested in more revenue. Their goal is to cut taxes on big corporations and the wealthy.

Representative Charles Boustany, the Louisiana Republican who heads the House subcommittee overseeing the IRS, says the IRS sequester cuts should stay in force. He calls for an overhaul of the tax code instead.

In a similar manner, congressional Republicans and their patrons on Wall Street who opposed the Dodd-Frank financial reform law have been hollowing out the law by making sure agencies charged with implementing it don’t have the funds they need to do the job.

As a result, much of Dodd-Frank – including the so-called “Volcker Rule” restrictions on the kind of derivatives trading that got the Street into trouble in the first place – is still on the drawing boards.

Perhaps more than any other law, Republicans hate the Affordable Care Act (Obamacare). Yet despite holding more than 33 votes to repeal it, they still haven’t succeeded.

So what do they do? Try to hollow it out. Congressional Republicans have repeatedly denied funding requests to implement Obamacare, leaving Health and Human Services (the agency charged with designing the rules under the Act and enforcing them) so shorthanded it has to delay much of it.

Even before the sequester, the agency was running on the same budget it had before Obamacare was enacted. Now it’s lost billions more.

A new insurance marketplace specifically for small business, for example, was supposed to be up and running in January. But officials now say it won’t be available until 2015 in the 33 states where the federal government will be running insurance markets known as exchanges.

This is a potentially large blow to Obamacare’s political support. A major selling point for the legislation had been providing affordable health insurance to small businesses and their employees.

Yes, and eroding political support is exactly what congressional Republicans want. They fear that Obamacare, once fully implemented, will be too popular to dismantle. So they’re out to delay it as long as possible while keeping up a drumbeat about its flaws. 

Repealing laws by hollowing them out — failing to fund their enforcement or implementation — works because the public doesn’t know it’s happening. Enactment of a law attracts attention; de-funding it doesn’t.

The strategy also seems to bolster the Republican view that government is  incompetent. If government can’t do what it’s supposed to do – keep workplaces safe, ensure that the rich pay taxes they owe, protect small investors, implement Obamacare – why give it any additional responsibility?

The public doesn’t know the real reason why the government isn’t doing its job is it’s being hollowed out.

We remain in the gravitational pull of the Great Recession. The Labor Department reports that 165,000 new jobs were created in April – below the average gains of 183,000 in the previous three months.

We can’t achieve escape velocity. Since mid-2010, the three-month rolling average of job gains hasn’t dipped below 100,000 but has exceeded 250,000 jobs just twice.

This isn’t enough to ease the backlog of at least 3 million (estimates range up to 8 million) job losses since 2007, just before the Great Recession began. (And as I’ll point out in a moment, 2007 wasn’t exactly jobs nirvana.)

Moreover, most of the new jobs now being created pay less than the ones that were lost.

What’s wrong?

First, government is doing exactly the opposite of what it should be doing. It raised payroll taxes in January (ending the temporary tax holiday), thereby reducing the incomes of the typical family by about $1,000 this year.

More damaging, government cut spending through the damnable sequester – thereby reducing overall demand for goods and services. (Direct government employment dropped another 11,000 in April.)

There’s also a deepening structural problem. All the economic gains from the recovery have gone to the very top, leaving the middle class (and everyone aspiring to join it) with a shrinking portion of the pie.

Consumers are still spending, but tentatively at best. And much of the spending is coming from the rich, whose stock portfolios have grown nicely. (The wealthiest 10 percent of Americans own 90 percent of all shares of stock.)

But the rich don’t spend as much of their earnings as everyone else. They save and speculate around the world wherever they can get the highest return.

The structural problem of widening inequality also hurt the last recovery, which ended in 2007.

Compared to the one we’re now enduring, the previous recovery seems robust. But it was one of the weakest recoveries since World War II — propelled by borrowing of the middle class against the rising values of their homes.

When the housing bubble burst, the middle class no longer had the purchasing power to keep the economy going.

It still doesn’t.

The federal budget deficit is shrinking more quickly that forecasters had expected, mainly because of government cutbacks and tax payments from the well-to-do.

If there was ever a time for our leaders in Washington to declare victory over the deficit, and focus instead on jobs and inequality, it’s now. But don’t hold your breath.

The Fed’s policy of keeping interest rates near zero is another form of trickle-down economics. 

For evidence, look no further than Apple’s decision to borrow a whopping $17 billion and turn it over to its investors in the form of dividends and stock buy-backs. 

Apple is already sitting on $145 billion. But with interest rates so low, it’s cheaper to borrow. This also lets Apple avoid U.S. taxes on its cash horde socked away overseas where taxes are lower. 

Other big companies are doing much the same on a smaller scale. 

Who gains from all this? The richest 10 percent of Americans who own 90 percent of all shares of stock. 

But little or nothing is trickling down. The average American can’t borrow at nearly the low rates Apple or any other big company can. Most Americans no longer have a credit rating that allows them to borrow much of anything. 

It would be one thing if Apple and other giant companies were borrowing in order to expand operations and create new jobs. But that’s not what’s going on. Apple, remember, is still sitting on $145 billion.

The reason big companies aren’t creating more jobs is consumers aren’t buying enough to justify the expansion. And government is cutting back on spending. 

Big corporations are borrowing simply in order to push stock prices up and reward their investors. 

It’s a sump pump with the Fed on one end buying up bonds to keep interest rates low, and shareholders on the other end raking in the returns. 

Get it? Easy money from the Fed can’t get the economy out of first gear when the rest of government is in reverse. 

Trickle-down economics is the first cousin of austerity economics. Austerity is nuts when so many millions are out of work. And as we’ve learned before, trickle-down is a fraud. Nothing ever trickles down. 

In the election of 1952 my father voted for Dwight Eisenhower. When I asked him why he explained that “FDR’s debt” was still burdening the economy — and that I and my children and my grandchildren would be paying it down for as long as we lived. 

I was only six years old and had no idea what a “debt” was, let alone FDR’s. But I had nightmares about it for weeks. 

Yet as the years went by my father stopped talking about “FDR’s debt,” and since I was old enough to know something about economics I never worried about it. My children have never once mentioned FDR’s debt. My four-year-old grandchild hasn’t uttered a single word about it. 

By the end of World War II, the national debt was 120 percent of the entire economy. But by the mid-1950s, it was half that.

Why did it shrink? Not because the nation stopped spending. We had a Korean War, a Cold War, we rebuilt Germany and Japan, sent our GI’s to college and helped them buy homes, expanded education at all levels, and began constructing the largest public-works program in the nation’s history — the interstate highway system.

“FDR’s debt” shrank in proportion to the national economy because the national economy grew so fast. 

I was reminded of this by the recent commotion over an error in a research paper by Carmen Reinhart and Kenneth Rogoff. 

The two Harvard economists had analyzed a huge amount of data from the United States and other advanced economies linking levels of public debt to economic growth. They concluded that growth turns negative (that is, economies tend to collapse into recession) when public debt rises above 90 percent of GDP.

That finding, in turn, fueled austerics, who insisted that the budget deficit (and debt) had to be cut in order to revive economic growth. 

But Reinhart and Rogoff’s computations were wrong, and average GDP growth in very-high-debt nations is around 2.2 percent rather than a negative 0.1 percent. 

A few days ago, the two offered a defense in an oped in the New York Times, asserting “very small actual differences” between their critics’ results and their own. 

Regardless, Reinhart and Rogoff seem to be correct in one basic respect: Economic growth does seem to be lower in very-high-debt countries. 

But the entire debate over their paper’s flaws begs the central question of cause and effect.

Is growth lower because of the high debt? That would still make the austeric’s case, even without the magic 90 percent tipping point. 

Or does cause-and-effect the other way around? Maybe slow growth makes debt burdens larger. There’s evidence to suggest this is the case. 

If so, government should be fueling growth through, say, spending more — at least in the short run. 

As we should have learned from what happened to “FDR’s debt,” growth is the key.