Robbing Hoods?

Robbing Hoods?

Every government dollar that progressives and liberals see wasted, or that goes uncollected in the form of tax dodges, is a dollar that could be spent on our children, paying down the national debt, or afforded to future generations.

-       Jay M. Hamilton, Absolute Power Corrupts Absolutely

A company’s profits should be taxed in the country where the value is created.

-       Apple CEO Tim Cook, Reuters – E.U. hits Apple with $14.5 billion Irish tax demand

By Jay M. Hamilton (10-2-2016)

Gallon of black coffee, dark roast.  Check.

Smoldering maduro cigar.  Check.

Vodka-tini, no vermouth – slightly bruised… Check again.

It’s 3:00 PM somewhere.

Vivaldi, cranked…

Okay.  Let’s do this.

The U.S. Congress is perennially under fire as ineffective, somnolent, and venal.  An easy target, no doubt, read here, here and here.  But we often forget that the U.S. Congress, like the legislatures of most Western democracies, are merely doing the ownership class’ bidding.  Citizens United, and a whole host of other judicial rulings, means that if Congress is comatose, it’s likely, at their master’s instructions.

That is to say, the Congress maybe deliberately sabotaging government, based upon instructions from above: so as to make citizens more dependent upon the private sector; the agenda could be to make voters more apathetic, which tends to support the U.S. political duopoly & incumbents; and least improbable, the existing rules, laws, and regulations are an exceptional benefit to the ruling/plutocratic class (e.g. our existing tax code).  So why mess with success?

Congress presents itself as an easy target, but what of its puppet masters?  The corporations, multinationals, banks, and the billionaires who pull the government’s strings, and carry around judges & politicians in their pockets, like so many nickels and dimes.

And therein lies the problem: American business is sacrosanct, and its CEOs are often treated as deities and celebrities; and yet, they – often - continually work at cross purposes with the interests of the American people.  

Four rogue corporations recently came to mind, which upon review and carefully scrutiny, we learn are stealing from the American people and – in some cases - the E.U.:

Mylan Pharmaceutical’s CEO, Heather Bresch, has been in the news for jacking up the price of the EpiPen, a life saving drug required for those suffering allergic shock.  Congress called Ms. Bresch in, (who happens to be the daughter of U.S. Senator Manchin), they held their show hearing, Congress vowed to study the matter, and off Ms. Bresch went, free to rob the taxpayer & the community at large.  Mylan’s solution: don’t do the right thing and lower the EpiPen's price, but rather, have the medicine placed upon a “federal list of preventive services.”  By having the EpiPen placed on this federal list, much of the cost of the EpiPen is picked up by the disenfranchised and faceless American taxpayer.  Some might call this socialism, or crony-capitalism… in essence, using the government to subsidize one’s profits, and Mylan exec bonuses.  Others just might call it outright theft.  But don’t look to the U.S. Congress to hold Mylan accountable… it’s already been swept off the front pages.

Seems that Warren Buffett’s beloved Wells Fargo bank, and its CEO Mr. Stumpf, are the current news, much to Mylan’s relief.  Wells Fargo – at a time when bank lobbyist were attempting to roll back more bank rules & regs, generated as a result of the ’08 crisis – appears to have been caught in a cross selling scheme.  Wells Fargo employees, in order to stay employed and fed, sold real financial products to unsuspecting real customers, based upon fictitious consent.  The financial products were sold to juice numbers and results, and executive pay packages.  Wells got caught, and their solution:  fire some five thousand employees, and let the executive in charge skate with a multi-million dollar pay package (although as of this writing, and thanks to the public outcry, some executive bonuses maybe clawed back).  Wells is now faced with a barrage of lawsuits from customers, former employees, and stockholders.  And, per the usual, management is using ignorance as their excuse.  Wells Fargo is now just another example of corporate excess, greed, and the need for a quarterly gain triumphing over the interests of the American people.  Some might call it poor risk management, while others might call it theft or stealing.

Wells Fargo isn’t the only bank presently in the spot light.  Germany’s Deutsche Bank has been in the news.  Seems that the SEC has fined the Teutonic bank $14 billion for its role in, allegedly, fraudulent mortgage backed securities transactions leading up to the 2008 crash.  Fourteen billion is not chump change, and Deutsche too, is being sued by shareholders, third party clients, and world governments… to such an extent, that its reserving for legal costs is now both material to its financial wellbeing and in question.

Can you say, “Lehman Event?” 

Turns out, per Bloomberg: “The International Monetary Fund in June said Deutsche Bank may be the biggest contributor to risk among so-called global systemically important banks.”  Deutsche is said to have derivatives positions w/ notional values of $46 trillion; and anybody – who remembers the ’08 crisis – knows there’s a web of counterparties that likely includes financial interests in London and on Wall Street.  And just yesterday, Deutsche got nailed with more fraud allegations.  German taxpayers may soon find themselves on the hook yet again for TBTF, and Merkel’s government on the ropes.  U.S. citizens may find that The Federal Reserve isn’t watching their back, but rather, engaged in being banker to the world … and involved in apolitical moves to bailout banks, and soothe markets, with yet another wave of job killing liquidity, QE, and interest rate suppression.  As bank bailouts continue, owned politicians – on both sides of the Atlantic– will continue to cry for further rounds of fiscal austerity.  That is to say, bailouts for banks, and social program cuts for those most in need…. Or theft by any other name.

It’s not enough that the Congress abdicates responsibility for plutocratic welfare on a daily basis – courtesy of the Fed; but the Congress is also remarkably reticent when the FTC and the Department of Justice authorizes grants of monopolistic pricing power in nearly all U.S. economic sectors.  The U.S. tax code, itself, has become another corporate entitlement, and here again, the Congress has punted.  Trillions of dollars are parked offshore by multinational U.S. based corporations, who enjoy w/in America: the best courts and democracy money can buy; a first class military – second to none - protecting trade routes and multinational interests around the globe; and U.S. sponsored free trade agreements that have established extra-judicial courts, run by and for corporate interests (hence, subverting national sovereignty and citizen interests).

This leads us, of course, to Apple and Mr. Tim Cook.  Seems that the E.U. is cracking down on sweetheart tax deals.  Mr. Cook’s and Apple’s effective tax rate in the E.U., as recently as 2014, was .005%.  Apple achieved this tax rate by running all its European revenue through Ireland, even though there is no distributive, intellectual, or manufacturing based properties located on Irish soil.  The E.U. wants $14 billion dollars in back taxes.  And the E.U.’s Ms. Vestager calls the Apple/Ireland tax deal as nothing short of anti-competitive “state aid.”  Ironic, during a time when the Irish have been suffering high unemployment and fiscal austerity, the Irish government apparently has billions to give away to the likes of Apple, with no reciprocal job creation guarantees.  The some times eloquent Mr. Cook referred to the E.U.’ ruling as “total political crap,” and was quoted in Reuters as stating:  “A company’s profits should be taxed in the country where the value is created.”

Apparently, per Apple, value is created in the country that affords the greatest tax dodge.  Or since the resulting tax burden that Apple dodges is carried in turn by U.S. and Irish citizens, who suffer fiscal austerity on a daily basis…. Value, for Apple, is created by the government that affords the greatest amount of corporate welfare, which Western governments afford by stealing from the poor & the middle class ( – who cannot escape paying taxes or avoid the compounding debt & interest upon same).

…. Sort of like Robin Hood in reverse.

Citizens around the globe are waking up to the massive transfer of wealth that occurs on a daily basis by Western governments, and central banks, owned and operated by the plutocratic elite.

How much longer can Western governments survive, based solely upon: corporate welfare; government enhancing the profits of their billionaire overlords, to the exclusion of citizen’s needs; and crony-capitalism?  The pretense that we live in a democracy, when both U.S. political parties are controlled by corporate/multinational interests, is on full display for any who dare look.

The political solutions to the problem are elementary:  terms limits; caps on both campaign contributions and the amounts spent – by politicians – during an election; limits on the duration of the campaign season; and placing a lock on the revolving door.  Government stability, as well as the elemental security of the West, may ultimately depend upon these fundamental reforms.

Copyright JM Hamilton Publishing 2016