Yesterday morning’s news brought two stories that together exemplify our current system of government: regulators who are in bed with the regulated; legislators whose sole constituency comprises big businesses; a government dedicated to lowering taxes and regulations above all else.
The first story I saw yesterday led the first page of The New York Times. It was a very well-done report on the truly offensive efforts of large multinational companies such as Apple, Duke Energy, Microsoft and Google to get Congress and the Obama Administration to declare a repatriation holiday, which means that for a period of time, income earned in other countries that companies returned to the United States would be taxed at 5.25% instead of the current 35%. Instead of paying the taxes, multinationals are just storing the money in the foreign countries where they earned it.
In the Times article, the companies and their supporters in Congress piously say that the money transferred back to the United States would be put to good use investing in new facilities and businesses and thereby creating new jobs. But that’s not what happened last time we had a repatriation holiday in 2005, brought to you by Bush II and his economic team. That tax break lured $312 billion back to the United States, but 92% of it went into dividends or buying back company stock. No additional jobs were created.
The Times article does not answer the obvious question: What did the people who got the dividends and sold the stock do with their new riches? Primarily the wealthy and large institutions own stocks, and when they sell those stocks and receive their quarterly dividends, they typically reinvest in other stocks, as opposed to opening new ventures or buying stuff that creates additional demand which creates more jobs. We can assume that most of the $312 billion brought home in the 2005 repatriation holiday went right back into the stock market, which means not only did it add no additional jobs, it contributed to the forming of the big bubble that burst three years later.
It’s just a bad idea. Instead of giving large multinationals a one-time tax break, we should tax them for all income earned abroad even if they keep it abroad, which would probably require some type of international treaty.
Beyond manifesting the egregious piggy-ness of these large companies which already enjoy an historically low tax regime, the Times article shows which special interests really have power in Washington, and the degree to which politicians swallow the false myth that lowering taxes will free money for investing in new jobs.
Lobbying to get a special tax break for rich multinationals who currently pay too little in taxes involves corruption of Congress. The other story of interest in yesterday’s news involved corruption of the executive branch whose agencies administer federal laws. The Associated Press (AP) reported that the Nuclear Regulatory Commission (NRC) has for years routinely lowered standards of nuclear plant operation when plants couldn’t meet the original standards. And in many cases, the NRC ignored the regulation altogether.
Here is a small quote from what is a very extensive—and chilling—AP article about foxes guarding the chicken coop who have the power in their hands to nuke the whole darn farm:
“Examples abound. When valves leaked, more leakage was allowed — up to 20 times the original limit. When rampant cracking caused radioactive leaks from steam generator tubing, an easier test of the tubes was devised, so plants could meet standards.
Failed cables. Busted seals. Broken nozzles, clogged screens, cracked concrete, dented containers, corroded metals and rusty underground pipes — all of these and thousands of other problems linked to aging were uncovered in the AP’s yearlong investigation. And all of them could escalate dangers in the event of an accident.”
Meanwhile, the public thinks we are operating the safest nuclear power plants in the world.
These stories from yesterday morning are just two of the almost daily examples of the contemporary corruption of the executive and legislative branches by big business and big money.
It’s a good thing we have the judiciary. LOL. Late yesterday afternoon, the faint hopes concealed behind that sarcasm were dashed.
It wasn’t a matter of corruption of the judiciary we learned about yesterday afternoon, but of its distortion of constitutional law. In the same day, the Supreme Court ruled that two lawsuits could not proceed: the class action against Wal-Mart for sexual discrimination and the lawsuit by eight states and environmentalists against polluting utilities. Just two more examples of the activist agenda that the current pro-business majority of justices have been pursuing since John Roberts became Chief Justice in 2005. The Roberts Court has expanded the rights of corporations and lifted restraints from them, largely giving our biggest businesses carte blanche to do whatever they like. Now that’s not corruption, but it sure smacks of what psychologists would call “enabling behavior.”
Perhaps Abraham Lincoln had it only half right in the Gettysburg Address: we have government of, by and for, but it’s looking more and more as if it’s “of big business, by big businesses and for big business” and that the only things that are going to perish are a clean and safe environment and the middle class.