Thanks to Globe and Mail for this one.

Most of America’s largest publicly traded corporations — including several that are receiving billions of dollars from U.S. taxpayers to finance their recovery — have set up offshore operations that could help them avoid paying U.S. taxes on their profits, a government study released yesterday found.

American International Group, Bank of America, Citigroup, and Morgan Stanley are among the companies that are getting bailed out by U.S. taxpayers while having subsidiaries in locations where they can avoid paying U.S. taxes, according to the Government Accountability Office.

Read the full story here.

It’s not a new thing for companies to try to lower their tax burden in order to maximize profits.  That has occurred since the beginning of taxing coporations.

However, what is relatively new in capitalist economies is for government to bail out these institutions when they begin to fail.  So, I’m still curious as to exactly how these guys will ever be allowed to fail…  What will it take for GM or Citigroup to actually declare bankruptcy and shut down entirely?

Perhaps they could invest all of the bailout money into toxic toys for children.  Would that be enough to outrage the public and make the politicians fear giving away more taxpayer money to these greedy bastards?

What if they decided to publicly burn all of the cash on their front lawns?  Besides that being a federal offense, I bet Nancy Pelosi and George W. Bush (and soon to be Barack Obama) would still stand up and shout, “We can’t allow these companies to fail!  It would bring about dire consequences for the economy!”

How about if they fired all of their workers and made a public display of clothing the executives in golden underwear?  Perhaps that would entice the politicians to disavow support for the corrupt practice of gambling with the public’s money.

I’ve lost all faith.

I don’t give 2 sh**s about the American auto industry. If YOU are worried about YOUR job, YOU are self-centered. IF the American auto industry deserves to be preserved, then it should be because the American auto industry makes a superior product, sells it cheaper, and supports it better than anyone else in the world. (please don’t tell me you think this is the case). …our manufacturing capacity…. geez, lady, you give me gas. I just wish I could put it in my tank.

America! You are still the best country. I firmly believe that. But, it is not because your union wages are the highest in the world. I heard ages ago that the reason America will fail is because technology has been used to make money, not to improve the quality of life. And now, I am afraid it is true. Take another attitude, give a lesser person, or country, a leg up. Quit worrying about your personal situation. IF you are thinking globally, (you yuppie putz), then let the third world country win one. Who cares if Kia sells more cars than Ford, if they are ‘better’ cars? (I know the answer, it is the UAW and Ford employees. SCORE!!!).

Be honest with yourself, and hope you can still vote secretly. Go get ‘em, brothers!!!

Sincerely, and please respond with more venom.

Duke

The slide rule industry. With the unfair competition imposed by the nerds of society, the slide rule unions are calling ‘FOUL!’. Quotes from union pickets in front of upstart companies Sierra Online and MicroSoft range from “You can’t send a man to the moon using a keyboard! Ridiculous! You have to have a slide rule. Just take a look at the movie Apollo 13!” to “If we keep buying computers, what will our kids cipher on?” And this gem, “Google? Nobody could ever count that high, anyway!”

The Buggy Whip industry. There are more and more disturbing sightings of the so-called ‘horseless carriage’ these days. The idea that a refined gentleman would prefer transport in one of those hideous contraptions instead of a carriage? Preposterous! Robert Ezekiel, local steward of IBOB (International Brotherhood Of Buggywhipmakers) stated that the demise of the buggy whip manufacturing complex would spell doom for the entire livelihood of the whole world. States IBOB’s Bob, “Without buggy whips, the horses will not move, paralyzing completely the economy of America. Without buggy whips, there is no reason for leather, thus there is simply no reason to raise cattle. America cannot be expected to wear enough shoes to absorb the excess.” (editor’s note: the steward of the cattle-for-beef union remains in a coma from a random act of violence and could not be revived for comment on this article).

Clearly, if either of these industries is allowed to fail, it will spell certain doom for all of America. Please, learn from history. And don’t forget what $4 per gallon gasoline felt like.

Thank god.  That’s the verdict according to Fox News.

Not that Fox is to be trusted entirely, but…  seems like a pretty real statistic.

Any hopes at “change” from the current bailout mentality should be readily dashed.

“President-elect Barack Obama said on Thursday he hoped a congressional deal to bail out the struggling U.S. auto industry could be reached this week, saying again that Detroit’s “Big Three” automakers could not be allowed to collapse….”

Courtesy of NaturalNews.com. Thanks again to Jim for finding this one for us.

In the meantime, some other companies didn’t have crystal balls either, but managed to create new and economically operable products…

www.teslamotors.com

and a review of the tesla located here.

www.commutercars.com

and a review of the commuter cars here.

http://www.naro.co.uk/index2.htm

and a review of the naro car here.

http://www.think.no/

and a review of the think car here.

Unfortunately, these cars won’t have a free market chance any time soon.  If they are bad products, they will certainly fail as companies.  Yet their failing competitors are being propped up for a few more months…. with money taken from you and I.  Two of the above companies are United States based companies too!   These people have dedicated their lives and careers to these products and they may even be good products but they are overpriced, poorly distributed, and under-marketed…   If they had a fair chance to compete, maybe things would be different?  Maybe?

www.zapworld.com -another U.S. company was just pointed out to me as well.

Priceless

On Monday, an auto industry consulting firm, Planning Perspectives Inc., reported that 68% of participants in a survey of executives for industry suppliers said their companies would have to downsize if General Motors declared bankruptcy, while 12% said their businesses would likely close or would definitely do so. In the Midwest alone, some 275,000 jobs would be lost as a result of a GM bankruptcy. “If they go into bankruptcy, it’s going to have a catastrophic effect on businesses across the board,” says John W. Henke Jr., president of PPI, based in Birmingham, Mich.

There will certainly be a large wave of financial pain felt by many people if these companies fail now. Michigan will likely be one of the hardest hit states in the country if the Big Three fail, and as a former resident of the state, I would hate to see it happen. So many companies are intrinsically tied to the health of the automobile manufacturers, it’s almost terrifying to think of what would happen to those communities if the companies died overnight.

We saw a similar event happen with Flint, Michigan when General Motors pulled out of that city decades ago. That city went into a spiraling decay from which it has never fully recovered.  Crime went through the roof, real estate prices plummeted, and whole communities were abandoned.  This was because the company made the decision to abandon those factories which weren’t profitable enough to maintain.

Nearly 60,000 GM jobs were cut in Flint from the 1980’s to the 1990’s, resulting in massive unemployment.  The loss of the factory jobs led to lower demand for local suppliers, restaurants, and entertainment venues.  Only in the last couple of years has Flint started to recover in terms of lower crime and population growth.  It took roughly 25 years to accomplish this.

Today, we face the prospect of the entire U.S. automotive industry failing.  If this occurs, we will see a very similar story play out in many large U.S. cities.  But, the question shouldn’t be “how much taxpayer money should we hand them?”

There’s a whole slew of questions that need to come out of this situation:

• How did all 3 companies end up in an “imminent failure” position after only a couple of consecutive years of financial losses (shortly after record profits in the late 1990’s)?
• How much restructuring did they do when profits began their decline a few years ago? Why didn’t it work?
• How much of their current losses are attributable to excessive salaries (both at the corporate executive level and at the grunt labor level)?
• Which overseas divisions remain profitable, and what are the major factors which differ there?
• What government regulations are costing the companies the most money to live up to?  Can they be modified to achieve profitability?
• How far will a taxpayer-funded gamble of $25-40 billion really go since GM managed to lose $38.7 billion in 2007 alone (granted, some of that was just a “paper loss”, but…)?
• What have each of them done in the last week to reduce costs in their organizations?
• Why hasn’t fuel efficiency changed dramatically since the Ford Model T (which could get up to 21 mpg)?
• What guarantees do we have that they won’t just close down the U.S. factories anyway and increase foreign production once they have the money?  After all, most of the screaming politicians don’t care about these companies.  They just care about getting votes from the workers and receiving UAW endorsements.
• What’s the criteria that we’re going to use for the “Too Big to Fail” slogan to apply?  10,000 employees? 100,000?
• Should the government have stepped in to prevent the closing of the factories in Flint in the 80’s? Or, was that type of “failure” okay because it was a private-sector business decision?

There are countless more questions to ask, but the “solution” will still be to just hand over more taxpayer money.  We’ll consider it an “investment”, since there are immediate social and economic consequences whenever a large employer shuts down completely.

What are the long term consequences of these actions, though?  How much are we, the taxpayers, willing to give away before actually letting these companies die?  Will we nationalize the auto industry like we did with the banks?  Are there any lines left to be drawn?

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