This is a map of “The Corporate States of America“. For each of the fifty states (and the District of Columbia), I selected a corporation or brand that best represented the states. My criteria are subjective, but in each case, I picked a brand that a) has ties to that state and b) is still in business (as of 2013).HT: Andrew Sullivan
The complex proposal includes tax incentive for large business projects, grants for local infrastructure and affordable housing, and millions of dollars for education.
It would be funded by tax revenue from projects incentivized by the fund, and from part of the state’s “unclaimed property” revenue from banks.Meanwhile, the New York Times reports that the Dow has hit a record high.
The Dow Jones industrial average, which measures the performance of 30 blue-chip companies, rose more than 100 points in morning trading on Tuesday, surpassing its previous record close of 14,164.53, which it achieved nearly five and a half years ago, as well as its record intraday high, set around the same time, of 14,198.10.The Times also reports, "the split between American workers and the companies that employ them is widening and could worsen in the next few months as federal budget cuts take hold." That trend seems unlikely to change:
With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.
“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”
The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India.The Times also reports that this golden age of corporate profits has not been seen in decades:
As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966. In recent years, the shift has accelerated during the slow recovery that followed the financial crisis and ensuing recession of 2008 and 2009, said Dean Maki, chief United States economist at Barclays.
Corporate earnings have risen at an annualized rate of 20.1 percent since the end of 2008, he said, but disposable income inched ahead by 1.4 percent annually over the same period, after adjusting for inflation.
“There hasn’t been a period in the last 50 years where these trends have been so pronounced,” Mr. Maki said.Let's review:
1. South Dakota legislators believe that companies that are making record profits can be given incentives to come to South Dakota
2. Despite record profits corporations aren't hiring new workers and the workers who are on the payroll are not getting raises.
3. In effect, South Dakota is going to give corporations awash in cash a chance to make more money even though the evidence indicates that they will not do anything to employ more workers or raise the salaries of the workers they do employ.Why is this a good idea?
Fresh from paying back a $182 billion bailout, the American International Group Inc. has been running a nationwide advertising campaign with the tagline “Thank you America.”
Behind the scenes, the restored insurance company is weighing whether to tell the government agencies that rescued it during the financial crisis: thanks, but you cheated our shareholders
The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”I have nothing to add. AIG concedes the bailout was needed. The bailout saved the company from bankruptcy. AIG's managment earned huge bonuses for nearly destroying the world's economy, but some shareholder believes he didn't get his cut so he wants to sue. Since words fail me, I'll use these paragraphs to conclude. (emphasis mine.)
Some government officials are already upset with the company for even seriously entertaining the lawsuit, people briefed on the matter said. The people, who spoke on the condition of anonymity, noted that without the bailout, A.I.G. shareholders would have fared far worse in bankruptcy
“On the one hand, from a corporate governance perspective, it appears they’re being extra cautious and careful,” said Frank Partnoy, a former banker who is now a professor of law and finance at the University of San Diego School of Law. “On the other hand, it’s a slap in the face to the taxpayer and the government.”
The study was done on land owned by Iowa State University called the Marsden Farm. On 22 acres of it, beginning in 2003, researchers set up three plots: one replicated the typical Midwestern cycle of planting corn one year and then soybeans the next, along with its routine mix of chemicals. On another, they planted a three-year cycle that included oats; the third plot added a four-year cycle and alfalfa. The longer rotations also integrated the raising of livestock, whose manure was used as fertilizer.I admit that I haven't searched every South Dakota newspaper to see if this article has been picked up, but I couldn't find the study mentioned in the Argus Leader or the Yankton Press & Dakotan. The Times points out that many publications seem to ignore this study; it has been ignored by " has been largely ignored by the media, two of the leading science journals and even one of the study’s sponsors, the often hapless Department of Agriculture." The article documents the journals that might fear corporate repercussions if they publish the findings.
The results were stunning: The longer rotations produced better yields of both corn and soy, reduced the need for nitrogen fertilizer and herbicides by up to 88 percent, reduced the amounts of toxins in groundwater 200-fold and didn’t reduce profits by a single cent.
In short, there was only upside — and no downside at all — associated with the longer rotations.
The agency declined to comment when I asked about it. One can guess that perhaps no one at the higher levels even knows about it, or that they’re afraid to tell Monsanto about agency-supported research that demonstrates a decreased need for chemicals. (A conspiracy theorist might note that the journals Science and Proceedings of the National Academy of Sciences both turned down the study. It was finally published in PLOS One; I first read about it on the Union of Concerned Scientists Web site.)The Times points to the obvious conclusion:
So this is a matter of paying people for their knowledge and smart work instead of paying chemical companies for poisons.Since the people who have the knowledge and are willing to work smart aren't going to increase Monsanto's bottom line, it's obvious that the sponsor of most corporate agriculture practices will continue to prefer poisons to people.
And he said, Go forth, and stand upon the mount before the LORD. And, behold, the LORD passed by, and a great and strong wind rent the mountains, and brake in pieces the rocks before the LORD; but the LORD was not in the wind: and after the wind an earthquake; but the LORD was not in the earthquake:When it comes to God's utterances, I'll put my money on Elijah over Bachmann. God wasn't talking through the earthquake or hurricane, but that doesn't mean he's not talking.
“I said ‘corporations are people,’ and the Democrats said, ‘Oh, he’s in big trouble now saying something like that,’” Mr. Romney said. “Well don’t they understand that we work for corporations?” Mr. Romney made his fortune as co-founder of the private equity firm Bain Capital.Suddenly miracles have started to happen. Sarah Palin started making sense. That same Wall Street Journal article reports,
[Romney's speech] was a marked contrast from the approach Ms. Palin took during her speech in Indianola, Iowa, Saturday. After repeatedly accusing President Barack Obama of steering government to benefit corporate campaign donors, she turned to her party’s presidential candidates: “To be fair, some GOP candidates, they also raise mammoth amounts of cash,” Ms. Palin said. “What, if anything, do their donors expect for their investments?”
News reports have shown that some donors to Texas Gov. Rick Perry received state appointments. And this year, he has been slammed anew by many conservatives for a 2007 executive order requiring sixth-grade girls in Texas to get a vaccine made by Merck & Co. to help prevent cervical cancer; Mr. Perry’s former chief of staff is a lobbyist for Merck. Mr. Perry later said that was a mistake. When Ms. Palin was asked afterward her speech if she had Mr. Perry in mind, she replied, “I want all of our GOP candidates to take the opportunity to kill corporate capitalism that is leading to this cronyism, which is ruining our economy.”Hearing Sarah attack corporations is as big of a miracle as hearing Balaam's donkey talk. The full account is here.
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“The process was ugly and it was a red herring of a problem,” Mr Oberhelman said. “The politicians turned [it] into this big giant thing that scares people. I’m equally critical of both sides.”Second, he decries America's failure to improve its infrastructure.
“Spending on infrastructure made us one of the most competitive economies on the planet. But now our infrastructure is deteriorating badly. We have decided as a country not to invest in infrastructure any more. It’s short-sighted and it’s dangerous for the future of our country. We cannot give up our international competitiveness. That’s what’s at stake.”I'm sure Oberhelman want so sell more earth movers, but that doesn't mean he's wrong. He's absolutely right; the poisonous political debate will have long term, concrete consequences. (Pun semi-intentional)
The law firm of Crowell & Moring, which represents the National Mining Association, was none too pleased with a new West Virginia University study showing that mountaintop removal mining may cause birth defects in people who live nearby. So four of the firm's lawyers prepared a memo to undermine the study--a memo that claimed the university's researchers had ignored a significant cause of West Virginia's birth defects: inbreeding.I'd like to go on a long riff about how the lawyers' taking down down the memo is similar to policy debaters shrinking down the text that they don't read or may hurt their cause because it implies the evidence they're reading doesn't say what they claim it does. I could have added that they need to explain that continued mining will prevent nuclear war because every policy debate team has nuke war impacts that won't quit.
The study failed to account for consanquinity [sic], one of the most prominent sources of birth defects.The lawyerly term for inbreeding is "consanguinity." And that's not a charge taken lightly in West Virginia! Crowell & Moring hastily removed the offending memo from its website. But not before quick-thinking Charleston Gazette reporter Ken Ward Jr. preserved a copy. You can read his story here and download the memo her.
Americans spent 28 percent more for gasoline during the first three months of 2011 than the same period in 2010. Meanwhile, the big five oil companies—BP, Chevron, Conoco Phillips, ExxonMobil, and Shell—made 38 percent more profit. The companies then used a major portion of these additional profits to enrich their board of directors, senior managers, and shareholders by purchasing shares of their stock.Further, the corporations "are battling to retain $40 billion of tax loopholes that will be paid for by taxpayers who are already providing their additional profits due to high oil and gasoline prices." In short, Weiss and Vasquez conclude, "While consumers and taxpayers get hit with bills for higher gasoline prices and tax loopholes, Big Oil companies get richer by the minute."
“You’re in a situation where a lot of these markets have pushed to all-time highs and it’s at a point where it became very unstable and that’s where you started to topple,” said Dax L. Wedemeyer, a broker analyst with US Commodities, a brokerage firm West Des Moines, Iowa.Writing for his Mother Jones blog, Kevin Drum points out,
". . . it does make you wonder if we really do have a global economy these days that's inherently built on bubbles of one kind or another. Our financial rocket scientists seem almost incapable of making money in a normal economy — making enough money to satisfy themselves, anyway — so instead they spend their time seeking out smallish bubbles and then working overtime to supercharge them enough to spin out some temporary wealth before everything crashes back down to earth."Of course, the big time folks looked at the bright side.
“I think it’s very healthy,” said Michael Rose, a trader at Angus Jackson. “The market was like a seesaw with everyone on one side, and now the markets will have time to clear out and balance."So everything is good. Consumers pay too much; small investors take a hit, and multi national corporations make out like bandits. Drum muses, "One of these days we might actually get serious about regulating leverage enough to slow this down, but it hasn't happened yet. Maybe another half dozen bubbles will finally do the trick." Drum seems to have be an optimist. It'll probably take two or three dozen bubbles before anyone gets serious.
He added, “The losers are going to be the small investors who thought it was going to go on forever like in the cases of the real estate and Internet bubbles.”
The biggest banks are 20 percent larger than they were before the crisis and control a larger part of our economy than ever. They reasonably assume that the government will rescue them again, if necessary. Indeed, credit rating agencies incorporate future government bailouts into their assessments of the largest banks, exaggerating market distortions that provide them with an unfair advantage over smaller institutions, which continue to struggle.If one parses that last quotation a bit, the true failure of TARP and the true hubris of corporate America becomes clear. The institutions that caused the financial collapse expect to be bailed out again. Further, they are bigger than they were when they were to big to fail. Logically, that means that when they bring America to the brink of collapse again the economic devastation will be greater. Finally, smaller institutions will not be able to catch up. If that's the case, individuals have little or no chance of getting ahead.
Last year, Google reduced its tax burden by $3.1 billion by altering its tax practices. Boeing hasn’t paid any federal corporate income taxes in the last three years, despite earning $10 billion in domestic pre-tax profit. Pharmaceutical companies Pfizer, Eli Lilly, and Forest Laboratories habitually avoid paying U.S. income taxes by recording profits in a country a world away from where the sales occur. (For reference, interactive explanations of the tax strategies of Google and GE can be found here and here.) A study released in 2008 by the Government Accountability Office concluded that 57 percent of U.S. companies doing business in the country paid “no federal income taxes for at least one year between 1998 and 2005.”The frightening part is that
“Companies don’t even have to be creative,” says Robert Willens, a taxation professor at Columbia Business School. “All they have to do is attribute or ascribe as much income as possible to foreign subsidiaries.” Companies register their intangible assets—intellectual property, for example—and income outside of the U.S. and register their liabilities and expenses in the U.S. to effectually reduce their taxable domestic income. Ireland and the Caribbean Islands are common tax havens.I have to sardonically wonder if that lack of creativity is why China is becoming an economic juggernaut and the US is lagging behind
Fact: #1 GE's effective tax rate reported to shareholders has dropped precipitously from the 30s in the 1990s to extremely low levels.
Fact #2: The decline in GE's effective tax rate has little to do with domestic tax breaks but is almost entirely due to low-tax foreign profits.
Fact #3: More and more of GE's business and employment is outside of the United State. Still, profits booked outside of the United States have grown even faster, suggesting GE is taking advantage of lax U.S. transfer pricing rules that make it easy to shift profits into tax havens.
Fact: #4. The rapid increase in profits booked abroad has resulted in a massive accumulation of earnings "permanently invested" outside the United States.
Like the CEOs of most U.S. multinationals, Jeffrey Immelt wants the option of repatriating GE's accumulated $84 billion under the provisions of a temporary tax "holiday" where U.S. tax would only be 5.75 percent instead of the full 35 percent corporate tax rate. Immelt and his CEO brethren argue this will create jobs although evidence from the prior holiday (enacted in 2004) does not support this. Citizens have a right to be concerned the president's new advisor will give priority to promoting the competitiveness of U.S. multinationals rather than the competitiveness of the overall U.S. economy. And why shouldn't he? He has a fiduciary responsibility to his shareholders to do exactly that.
General Electric, the nation’s largest corporation, had a very good year in 2010.The reason is pretty simple; "The company spent $4.1 million on outside lobbyists last year, including four boutique firms that specialize in tax policy." [page 4 of article]
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
