Category: Business

Let’s Call “Inversions” What They Are: Immoral, Disgusting Subversions of Democracy

The current juggernaut of corporate inversions is Pfizer’s planned “merger” with Allergan in a $160 billion blockbuster deal. In case you’re not following this mind-boggling story, here’s the plot line in a nutshell.

  • Allergan is a drug company based in New Jersey. Some time ago, even though it was formed in the United States and continued to operate precisely as it had before, it “merged” with a company in Ireland by the simple process of filing a few papers and a change of address. Poof! Allergan was no longer an American company.
  • Pfizer now proposes to merge with Allergan the result of which will be a single Irish company and the disappearance of billions of potential tax dollars from the U.S. Treasury. A deficit you and I get to make up. Sweet deal, eh?

This “Irish” company operates almost entirely in the United States but it pays little to no U.S. corporate tax. Translation: it can take full advantage of American infrastructure, academia, research, local and state tax breaks, and thousands of other benefits of being a U.S. corporation while contributing essentially not one dime to the cost of those benefits.

If I run a wire from my house to your cable connection and pirate the signal, that’s illegal. I’m benefiting without paying. Thievery, pure and simple.

The same is undeniably true of American corporations which undertake inversions of this heinous and disgusting type.

The problem has two dimensions at least:

First, the U.S. corporate tax code has a massive loophole. Many members of Congress have been working for years to close this one to no avail, thanks to these corporations — who are now, by choice, foreign companies, remember — buying influence in our national Legislature. (An act which ought to be illegal but is also loopholed in place.)

Second, it has always been seen that it is in America’s interest to encourage foreign businesses to set up operations and do business in this country. But the immoral and greedy American corporate culture has twisted this benefit into a huge detriment to this country.

Some estimates are than these inversions cost the American economy upwards of $600 billion per year in tax revenue across all levels of government. That number could well be low by orders of magnitude. We can’t know because one of the advantages these inverted companies get is the right not to disclose much financial detail. (See “encouraging foreign business”.)

This is a travesty. It must be stopped. This single argument alone is enough to justify a significant increase in the regulation of capitalism before it literally destroys our nation.

It’s Not Green Energy That’s Hitting Hard Times, It’s the Usual Corporate Greed Story

As a longtime journalist, I am aware of the power and impact of headlines on news stories and opinion pieces. More often than not when I hear or read someone commenting on a recent posting, the slightest probing reveals that they didn’t read the piece in its entirety. In fact, rarely do they read past the lead paragraph. But in far too many cases, they talk as if they were knowledgeable about a subject when all they’ve read is the headline.

Headlines are the primary means by which memes are created and spread. By their nature, they are incomplete. By design, they are intended not so much to educate readers but to entice then to read the piece.

Thus it is that when I encounter a particularly misleading headline, I tend to react strongly.

Today’s Christian Science Monitor online has an article headlined, “Has Renewable Energy Hit Hard Times?” That question might well cause you to ask whether wind and solar have somehow been found to be uneconomical or counter-productive. But the opening sentence of the article begins to reveal the real agenda behind the story. “Just last summer, renewable energy was considered a booming industry,” it tells us. Aha, so this is not about green energy, it’s about green energy companies who are disappointed in their profit margins.

Sure enough, The main focus is on SunEdison, the very epitome of Big Green. That company has pursued a relentless and highly risky policy of growth by acquisition and has a well-documented shady business plan that involves the main company building and then selling or licensing alternative energy capacity to subsidiaries it owns. It turns out the “hard times” are being encountered by SunEdison’s investors who are angry that “Stock prices have plunged in recent months as [they] have begun to question the companies’ business model.”

The CSM article concludes, “Moving forward, renewable energy needs simpler and more transparent business practices to meet the world’s growing enthusiasm for energy alternatives.” Exactly. Supplanting the exploitative practices of Big Oil and Big Coal with Big Green isn’t going to shift the ethics or priorities of the market. This is precisely why the development of wind and solar cannot be entrusted solely to private enterprise whose only motive is short-term profit and who will cut and run at the first sign that their last-century approach to business isn’t going to be rewarded in the New Global Economy.

Meanwhile, the CS Monitor would do well to retrain its editorial staff in the construction of useful and accurate headline writing. I know it’s a lost art, but it’s not rocket science.

Another Amazon Post. Must Be Their Turn

I am ill this week so I’m sleeping more, thinking less intensely and writing much less. I don’t know why but that seems to have resulted in my thinking a lot more than usual about Amazon.com. This is one of my favorite companies in many ways. Not that I’m a fanboy. And I know about some of their politically incorrect excesses. Still, I use their services a good deal, including not only their retail presence but also Amazon S3.

The multiplicity of reader apps available for the Kindle format which is Amazon’s proprietary design for reading materials is fundamentally a good idea. I read Kindle books (and PDFs for that matter) on a Mac desktop, a Chromebook netbook, an iPhone 5, and a Kindle Fire HD tablet. While the interfaces vary somewhat from platform to platform, I seem able to adjust to those for the most part.

But  one aspect of the different functionality of these apps really bugs me. About half of my reading is non-fiction. I use Kindle books to quote from other writers’ works on my blog, in my many articles, lessons, classes and ebooks that I write, and in private discussions with friends over email. The question of whether you can copy from the contents of a Kindle eBook isn’t consistent. Most surprisingly, there is no way, as far as I can tell at least, to copy text from a Kindle eBook when I’m reading it on my Kindle tablet. Now that seems to me to be just silly. If I choose their hardware platform, I  can’t copy-paste a tidbit for another editorial use.

I understand, particularly as an author, limiting the amount of copying a reader can do from a given title. And it makes sense to me to limit the size of any one clip based on what might constitute fair use under copyright laws. But on the Kindle — and only on the Kindle hardware — the fact that I cannot copy any content at all makes no sense.

So, hey, Amazon! How about opening up that capability to those of us who use your systems to read your books? Whaddyasay? It just seems fair, doesn’t it?

 

Amazon Smile, A Great Program That Needs a Little Work

Some time ago, I discovered the Amazon Smile program (which you can access by going to smile.amazon.com). This program enables you to have many of your purchases produce a donation to a charity of your choice.

amazon-smileYou simply go to amazon.smile.com and select the charity you want to support. Thereafter, every time you make a purchase from the Smile portal of the Amazon.com site, a percentage will go to that charity. The program is pretty well designed. Not only is it transparent to use, Amazon.com even reminds you from time to time when you forget to type in the “smile” in your URL that you have a charity you’re trying to support and, with one click, transfers you there.

I wish this service had a couple of features that I think could strengthen it considerably.

First, I’d like to know, after I make a purchase at smile.amazon.com, how much I just contributed to my cause. It would be nice if I could see the total I’d contributed to the cause over time using smile.amazon.com.

Second, I’d love to see the overall impact of the smile program on my charity. How much has been raised altogether? How many people are contributing this way?

Third, I’d like to see this group of people supporting this charity turned into an ad hoc community. This would enable me to perhaps interact with other people who are supporting it, permit me to invite friends to join in the contribution fun, and otherwise “communitize” this experience.

I applaud Amazon.com for this great idea and for its excellent implementation. Now let’s take it up a notch!

 

More Proof — As if it Was Needed — That “Analysts” Are Morons

Picking on analysts has long been one of my favorite pastimes. I honestly don’t know how these so-called “experts” who take apart a company’s financial and operation processes and both predict how their stock will do and presume to tell their C-level teams how to run the businesses.

The latest example is Google. In this New York Times piece, “analysts” are quoted as, at one and the same time:

  • worrying about what Google is going to do next to counter Apple’s new payment technology, improve YouTube’s competitive stance, and cash in on mobile advertising; and…
  • complaining that R&D costs are on the verge of getting out of control as core businesses begin to shrink (which they haven’t yet).

So let me get this straight. Google needs to spend more on R&D to stay ahead of the competition but they shouldn’t spend more on R&D because, you know, analysis.

These folks have clout in the marketplace completely out of proportion to their repeatedly demonstrated ignorance and conflicting advice. Over one period of four years when I watched Apple analysts closely, these so-called experts offered completely contradictory advice on no fewer than 11 occasions.

If you ask me (and, nope, nobody has…yet), these people are more interested in covering their own asses than they are in making useful comments and predictions about business performance.

They are, in short, narcissistic parasites on the economy. We’d all be better off if they went away and became, oh, I don’t know, hedge fund managers?

 

SV Billionaire Shows Us Why Private Ownership of Land is the Next Big Controversy

Vinod Khosla, a Silicon Valley billionaire VC, has been fighting for some time to avoid having the great unwashed traverse his beachfront property over a dirt road people in the area have used for decades to access Martin’s Beach. The case is in its final phase in a court in San Mateo County.

Protesters demand billionaire VC Khosla re-open public beach access

Protesters demand billionaire VC Khosla re-open public beach access

The legal issues in the case are a bit complex to try to explain here. They involve years of tradition, the California Coastal Commission and its right to control beach access, Mr. Khosla’s argument that requiring him to open the road would in effect require him to operate a business at a loss. But at its root, this is less a legal battle than it is a social conflict. Khosla will almost certainly win the war; he has enough money to keep appealing even if he loses and he seems tone-deaf enough to keep at it now even if a compromise could be struck. But in the long run, it may be a pyrrhic victory.

Excruciatingly wealthy people like Khosla, who made his money as a co-founder of Sun Microsystems, may be perfectly within their rights to lord it over the little people. The question they will face — perhaps sooner than later — is whether they really ought to want to do so.

The abstract notion of income or wealth inequality in our nation — a terrible bane that holds the seeds for our society’s ultimate demise — is tough to get people excited about. As HBO’s John Oliver said on his show recently, the reason even “commoners” feel at least sort of OK about income inequality is because they’ve been sold an absolute bilge of a bill of goods that they, too, might be wealthy one day and then they wouldn’t want that Bad Old Government seizing all their hard-earned (NOT) gains, would they? But take away the peoples’ beaches? Their parklands? Their roads? Ah, then, my friend, you’ve got a war on your hands.

For many years, the people of the Half Moon Bay area have been able to travel from the nearby Highway 1 to Martin’s Beach over that dirt road, pay a small fee for parking, and enjoy what is seen by many as one of the finest beaches on the gorgeous Central Coast. The former owners were local heroes but they tired of trying to maintain the place as a sort of semi-public beach. Their solution was to sell it off.

The Coastal Commission says that in order for Khosla to qualify for some of the development permits he wants, he has to concede the public beach access. His attorneys have a spate of arguments in opposition and, as I say, they may ultimately prevail. But at what cost to Khosla and his family? And at what cost to other similarly situated billionaires around the nation who are flexing their green muscle in ways that just piss people off?

if Khosla were as smart as he is reputed to be, he’d be looking for a better solution than, “Screw ’em. It’s my freaking beach.” But hue probably won’t. And when he finally prevails and the beach is closed to the public for good, that will sow yet another seed of the open rebellion that may be the only way for the Little People to begin taking back their country, one private beach at a time.

 

Presentation.io Bites the Dust…And Free Services Everywhere Take a Hit

About 4,000 years ago in Internet time (so, about 10 or so years on the calendar), my wife signed up for one of the first free photo-storage-and-sharing sites. I can’t even remember the name at the moment. It doesn’t matter. She uploaded hundreds of photos, created albums, shared with friends. She was a happy camper. We talked several times about her willingness to fork over a few bucks for this service if it became necessary to do so.

Then one day she got an email. The service had been acquired by a for-profit company that shut down the company with less than 60 days’ notice. She was stressed, upset, even a little sad. But more  than that, she felt betrayed. Ever since then, she has been distrustful of free online services. Even using Google Drive makes her twitch a little.

Today, word came that Presentation.io, part of Assemblage that had recently been acquired by Cisco, is going to close as of September. All data still on their servers on that date will be lost. The owners, having (presumably; no terms were announced) been greatly enriched by Cisco’s buy-out and now having good-paying jobs at a stable large company, kissed their users good-bye with a thanks and a “get your data off our servers.”

The ingratitude inherent in that treatment is a proper subject for a different post on corporate ethics (a term well on its way to the Great Heap of Oxymoron). The problem with this arrogance in the broader industry view is that other companies that are trying to sustain a freemium model suffer a credibility hit when one of their ilk decides simply to pack its bags and head for the hills. Prospective investors and users, without whom none of these companies can succeed by growth or acquisition, shy away a bit farther, hesitate a bit longer before becoming involved.

Assemblage Logo

Assemblage Logo

Cisco Logo

Cisco Logo

(As an aside, I wonder whether the startling similarities in the two companies’ logos, shown on the left, is a coincidence or indicative of a plan by the Assemblage founders from the beginning. Hmmmm.)

Assemblage is (was?) a Danish company. Perhaps business ethics and expectations are different there than in the United States. I don’t know. What I do know is that the founders of that company — obviously a technically very smart bunch — deserve whatever success they can enjoy as a result of having engineered a buyout by Cisco. But their users deserve better than rank abandonment. Without them, Cisco would never have noticed Assemblage.

Red Cross Claims Trade Secrets for Operations. I Claim Horse Puckey

I’ve never been a big fan of the American Red Cross. When I was in the Army during the Vietnam War era, I saw them time and time again decide that a service member didn’t deserve compassionate leave because the family emergency involved wasn’t serious enough or his or her presence wasn’t essential. I never understood why the Red Cross and not the military made that decision, but it was a key role the ARC played and as far as I could tell they played it badly.

Now there’s a report that the organization — a public charity that has the cloak of independence and eager helpfulness about it — is claiming that some information about how it raised and spent funds on Hurricane Sandy relief are trade secrets. Huh? Seriously?

Over the years, the Red Cross has been attacked and criticized a number of times on large national fund-raising efforts. For example, in the wake of the Sept. 11, 2001, terrorist attacks in New York City and Washington, the Red Cross set up a new separate fund called the “Liberty Fund.” it drew donations in the neighborhood of a half-billion dollars. But many in the press and public questioned the disposition of those funds and its executive director resigned in the midst of that particular scandal. Another press report summarized public concerns about the organization’s tendency to take large-scale disaster fund donations and funnel them into a general-purpose fund where they could be used with more discretion (i.e., less accountabiity).

Now the organization, faced with a public records request from truth-out.org, hired a high-priced law firm to oppose the release of public information it said its “competitors” could use against it. If the idea that a public charity has competitors strikes a sour note with you, join the parade! What they’re saying, in effect, is that if other charities found out how they raised money or decided how to spend it, they might get as good as the Red Cross and some people might choose to donate funds — for the same disasters mind you! — to “competitors.” (By the way, they didn’t identify a single so-called “competitor” in their legal response to the truthout.org request.)

I’m sorry but when any charitable organization balks at answering media queries about how they raise and spend their funds, my BS detector starts screaming. Loud.

 

 

Corporations Holding Religious Beliefs is a ‘Laughable’ Idea

corps_people_executeLegal scholar David Cay Johnson takes the Hobby Lobby case apart bit by irrational bit in a column today on Al Jazeera America. He concludes with this statement:

if we could resurrect the framers, they would surely find the idea that a corporation has First Amendment religious rights laughable. We should too.

A corporation cannot attend church, pray to a deity, be baptized or otherwise initiated, or engage in dozens of other practices of religion that a human being can. Johnson makes a clear and useful distinction between viewing corporations as “people” (a mistake of legal language that should have long since been corrected) and viewing them as “human beings,” which they clearly are not.

There were posters and bumper stickers during the 2012 Presidential campaign in which GOP nominee Mitt Romney was fond of saying, “Corporations are people, my friend.” They conveyed some variation of:  “I’ll believe corporations are people as soon as Texas executes one.”

Amen.

 

Jim Hightower Gets It: Let’s Jail Some Bankers

Jim Hightower in his weekly newsletter today calls for bankers and financial industry workers who cheat, rob, steal and otherwise screw the American public to lose their jobs, their bonuses and their freedom.

Like I said about other corporate officials whose companies are “punished” for wrongdoing that was really the work of the corporate executives.

Surely it must be beyond obvious by now even to the so-called regulators of Wall Street that it’s not the institutions that create the chaos and destroy whole sections of the economy with their greed; it’s the human beings running those organizations, making the decisions, taking the risks, and wringing their hands in joyful contemplation of the profligate spending they’ll be able to do.

As Hightower says, “The problem is that, again and again, Wall Street’s culture of greed is rewarded – bank bosses preside over gross illegalities, are not punished, pocket multimillion-dollar bonuses despite their shoddy ethics, and blithely proceed to the next scandal.”

Toss ’em in the hoosegow and let them rub elbows with the Common Man for a few years. I’ll bet that scares a bunch of ’em straight.