Random Thoughts on Other Notable Headlines of the Day — Issue XIV

May 6, 2009  

• KBR, the company that had a Vice-President of the United States as their guardian angle, is now under investigation for fraud. The Commission on Wartime Contracting in Iraq and Afghanistan says there are 32 cases of suspected fraud going back to 2004, of which KBR accounts for 43% of the estimated $13 billion lost in fraud. Are we supposed to be surprised at this? The last White House administration not only set the stage for this kind of criminal activity, but made sure they were protected when exposed. And we wonder why the rest of the US business world feels absolutely free to rip off the taxpayers of this country.
• “The United States has the second-highest corporate tax rate in the world, though at just over one-tenth of the budget, the overall share of revenue it raises is remarkably small, both because the corporate tax base is chopped up by so many deductions, exemptions and credits, and because larger companies have great flexibility in shifting their profits around the world to lower their tax bills” [bold/underline added]: Quote from this Washington Post article. But the only thing we hear from our “friends” on the right side of the isle is the “second-highest corporate tax rate in the world“. But the millions of us who agree with the right-side-isle also do something they don’t do — acknowledge that because of the deductions, exemptions, credits, and other loop holes, US corporations actually pay less than any other industrialized country. If the right side gets the rates they want and we leave the other “goodies” in place, not only will corporations not be paying any taxes at all, they will most likely be getting taxpayer subsidies such as the oil companies and many others already get. So yea, I’m most definitely behind President Obama’s tax reform. But we can’t expect not to have a fight. When people have been practically getting a free ride, along with the lions share of the benefits, for as long as corporations have, they are not about to just count their past (criminal) blessings and give in. (Linda Beale gives a good insight to this subject.)
• As I’ve said many times, it’s good to have friends (and family) in high places. Democratic Representative John P. Murtha made sure his nephew, Robert C. Murtha Jr., got $4 million dollars in Pentagon work without going through the competitive bidding process (a mini-KBR). Murtha the politician is the chairman of the House Appropriations subcommittee which hands out spending money to the Defense Department. Representative Murtha denies any wrong doing, which is not surprising. When you’ve been a crook as long as he, you become convinced there is nothing wrong with being a crook. By the way, the two of them have living quarters in the same building. How convenient.
• The paper industry is grabbing all they can before their government “entitlements” are yanked away from them. International Paper alone got $540 million of taxpayer money during the 1^st quarter of this year. They can get the money even though they might pay no taxes at all. Man that’s better than Social Security. At least SS recipients have to pay something in to get something out. Wall Street analysts put the total cost to taxpayers as high as $8 billion for all of the paper industry “entitlements”. Isn’t it terrible to be living in a country with the second highest tax rate?
• Bloomberg.com says “Flawed Credit Ratings Reap Profits as regulators fail”. Standard & Poor’s, among others, are being sued by 68 year-old Ron Grassi for negligence, fraud and deceit. That’s because all three of the credit raters gave Lehman Brothers Holdings at least an “A” rating right up until the day Lehman filed for bankruptcy. Good for Grassi. I wish him all the luck in the world. Obviously our government isn’t going to hold those lying bastards accountable.
• Bruce Webb for the “Angry Bear” wrote Leona Helmsley Omnibus Tax Reform Act of 2009. It’s his argument in favor of tax reform, which makes a lot of sense unless you’re one of those multi-millionaires or a big corporation. And, of course, unless you one of those working stiffs who have been assimilated into believing the latter is really treated unfair. But remember this — if you are one of those, it’s your money that will have to make up the difference of them not paying their fair share.
• Steve Pearlstein says hedge fund managers are hypocrites. He’s talking about those hedge fund managers who refused to go along with Chrysler restructuring because they felt they would be treated unfairly if they did. Pearlstein says “Since when did any of these guys ever worry about fairness? Certainly fairness was not an overriding concern of hedge-fund managers when they threatened to move even more of their operations to the Cayman Islands if forced to pay a regular tax rate on their exorbitant management fees. Nor do I recall receiving even a single e-mail from a hedge-fund manager complaining about how unfair it was that the government stepped in to bail out creditors and counterparties of Citigroup, Bear Stearns and AIG“. Well, Steve, I must say; if you haven’t figured out by now that these people (and their media Public Relations spokespersons) have two sets of rules (one for themselves and another for the rest of the world) then you’ll never understand. And here I was thinking you were a smart man.