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Posts Tagged ‘General Electric’

Mega Lobbying Proves Crony Capitalism

Posted by Steve Markowitz on October 7, 2014

Mega Lobbying Proves Crony Capitalism

CNNMoney.com has reported on the company/organizations that spend the most on lobbying in Washington DC. The amount of money is staggering with the top 10 list below spending in excess of $800 million since 2009.

General Electric: $134 million

AT&T: $91 million

Boeing Co: $90 million

Northrop Grumman: $88 million

Comcast Corp: $86 million

Verizon Communications: $86 million

FedEx Corp: $86 million

Exxon Mobil: $85 million

Lockheed Martin: $79 million

Pfizer: $78 million

The lobbying funds are being spent in order to buy influence and it is successful. CNNMoney.com points to the following examples:

  • General Electric has been the biggest lobbyist during Obama’s presidency. This is the same GE that paid no US corporate taxes in 2010 even though it made nearly $11 billion in worldwide profits that year. And yes its CEO Jeffrey Immelt, was named Obama’s Jobs Czar during the President’s first term.
  • Comcast spent $86 million lobbying since 2009. Comcast is looking for governmental for its $45 billion acquisition of Time Warner Cable even though some complain the merger is anti-competitive. This is in addition to the government’s 2011 approval of a $30 billion acquisition of NBC Universal.
  • Northrop Grumman, Boeing, and Lockheed Martin, as defense contractors, are dependent on the government purchasing their military hardware. These three firms spent a total of nearly $280 million since 2009.

It is hard to fathom how $800 million can be spent on lobbying efforts by only 10 companies. It would be naïve to believe that the political elites do not receive significant benefits from the corruptive effects of so much money. Crony capitalism is alive and well in Washington DC. Barack Obama did not bring his promise change to the way Washington/the government operates.

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Posted in Corruption | Tagged: , , , , , | 2 Comments »

Large Companies pay more to Lobbyists than Taxes

Posted by Steve Markowitz on December 13, 2011

Public Campaign, a nonpartisan organization, published a report in December that speaks volumes about the dysfunctional and corruptive US Federal Tax Code.  The report is further proof that the US Tax Code needs to be scrapped and that Congress must be stripped of its ability to choose winners and losers through the taxing code.

The report, which gathered information on 30 large public corporations, is titled “How Corporations Pay More for Lobbyists That in Taxes“.  It offers the following findings on the 30 companies:

  • The 30 corporations paid more to lobbyists than in taxes during the three years spanning 2008 to 2010.
  • The companies had a total profit of in excess of $160 billion during the three years, but actually received net tax refunds of $11 billion.
  • These company spent over $475 million during the same three years on lobbying Congress, an amount equal to about $400,000 for every day of the year.

The chart below share specifics of the 30 companies and their payments.  It is hard to imagine how such a huge lobbying expenses can be spent legitimately.  It is clear at the least that they are corruptive of politicians and directly relate to cajoling Congress into manipulating the US Tax Code to their benefit.

While Barack Obama promised change in the way Washington did business, this was campaign rhetoric.  While Obama may be favoring different companies, the back door deals and special tax breaks continue.  In addition, the President is quick to promote class warfare attacking “millionaires and billionaires”  However, this is disingenuous given that Obama has made General Electric’s CEO, Jeffrey Immelt, the head of his Jobs CouncilGE is number one on the list of negative corporate federal income taxes paid.  …..  As they say, if the quacks like a duck it’s not an elephant.

 


Posted in Congress, Taxes | Tagged: , , , , , , , , | Leave a Comment »

GE’s 57,000-Page Tax Return

Posted by Steve Markowitz on November 19, 2011

To understand the corruption of American politics and taxes we could look to billionaire Warren Buffet.  While the disingenuous Buffet publically calls for higher income taxes on the rich, supposedly including himself, his companies including NetJets seek loopholes and even sues the U.S. government for more tax breaks.  It is obvious that Buffet’s public pronouncements for higher taxes are a rouge offered to seek favors from President Obama Administration, who he supports.

Another wealthy Obama supporter is General Electric Corporation (GE) whose CEO Jeffrey Immelt is also Obama’s Jobs Czar.  In 2010 GE made a whopping $14 billion in profits, including $5 billion in the United States.  Incredibly GE did not pay one penny in U.S. income taxes for that year.  GE avoided U.S. taxes by taking a myriad of legal deductions including tax breaks for green energy.

It is obvious why many wealthy businessman and corporations including Buffet, Immelt, GE and Solyndra are so friendly with the Obama Administration and his green energy policies.  The friendships are profitable for these elitist at the expense of average taxpayers.

The Weekly Standard reported that GE’s 2010 tax return, while filed electronically, would have been 57,000 pages long if filed via hard copy.  That’s 19 feet of a corrupted tax code.  This tax code has become so complicated only because politicians use it to dole out favors for their friends.  Unless this code is simplified to no more than a handful pages, it will remain a corruptive tool of politicians and those in power.

Posted in Corruption, Taxes | Tagged: , , , , , , , , , , , , | Leave a Comment »

Obama Stoking the Flames of Class Warfare

Posted by Steve Markowitz on September 18, 2011

Earlier this month President Obama made a presentation to a joint session of Congress that call for in another Stimulus Package, disguised as a jobs program.  While the package may have some short-term stimulative effect, it was heavily tilted towards payback for the president’s union supporters, mainly working for state and local governments, as well as some of the trades.  In addition, the “jobs package” was presented in an effort to shore up the President’s sagging poll numbers.  The President understands that Congress is unlikely to pass at least some parts of his proposals, which he hopes to use for political advantage against Republicans.

The political offense continues with the White House today leaking information concerning the President’s next moves.  It was reported that tomorrow Obama will call for a new minimum tax rate for individuals earning more than $1 million annually.  This move will be popular with many Americans, however, even if enacted will not significantly address America’s deficit problems.

The New York Times reported that the proposed tax increase will only affect 0.3 percent of taxpayers.  Americans who are millionaires are already included in the highest marginal income tax bracket of 35%.  Many actually pay lower effective tax rates if their incomes come from capital gains, which are taxed at 15%, or they are able to take advantage of the many deductions included in the IRS tax code.

If the President was really serious about tax reform he would offer proposals that include eliminating the many deductions created by Congress.  However, that would involve eliminating government “treats” from special-interest groups of which the President is fearful of offending.  Therefore, instead he resorts to class warfare.

In addition, the White House leak indicated that President Obama will not actually propose what the new tax rate should be for millionaires.  Instead, he will leave this for the Congress to resolve, another example of the President’s unwillingness to take political risk.

The President has also brought theatrics into the discussion of taxing the wealthy.  He repeatedly has referred to his billionaire friend Warren Buffett, who has made public statements agreeing with the President’s position.  In Fact, Obama has referred to this tax proposal as the “Buffett Rule”.  Conveniently absent from this discussion is any mention of another close Obama associate, Jeffrey Immelt, who heads the President’s Jobs Council.  Immelt is also president of General Electric who last year paid no income tax in the United States even though they made billions in profits.  The loopholes that GE and others have should be eliminated prior to addressing the tax rates themselves.  However, this is not as politically palatable as the class warfare being promoted by the President

President Obama has often used the phrase “shared sacrifice” when referring to his proposal to increase taxes for wealthier Americans.  This talking point might have some validity if the President was also willing to quantify what one’s “fair share” is.  Clearly the President is implying that wealthier Americans are not currently paying their fair share.  This raises an interesting question as to the nearly 50% of Americans who currently pay not one penny income taxes.  What with the President say is their fair share?

Many Americans at varying tax rate levels are disgusted by the way the Washington politicians have squander taxpayer money.  The recent announcement that the government wasted over $500 million in one failed green energy company, Solyndra, has placed in explanation mark on this concern.  It is reasonable to ask Americans to pay their fair share.  It is not reasonable to ask Americans to give money to a government that has not used productively.

Should President Obama be successful in increasing taxes on the wealthiest Americans it will only result in some tens of billions of dollars of additional income annually.  This is inconsequential when compared to the $1.5 trillion budget deficit America will have for 2011. It is even more minuscule when compared to the unfunded liabilities of Medicaid, Medicare and Social Security that are estimated to be approximately $65 trillion.  The President has shown no leadership in addressing the real problems that face America.  That would require political courage.

Posted in President Obama, Taxes | Tagged: , , , , , , , , , , , , , , , , , , , | Leave a Comment »

Federal Reserve’s Secret Loans

Posted by Steve Markowitz on August 25, 2011

In October 2008 the United States and much of the world was in the midst of a financial crisis caused by the downturn in the US housing market and the related subprime mortgage mess.  This led to the Lehman Brothers bankruptcy that set off worldwide panic and the possibility of a meltdown of other financial institutions.

In an effort to contain the crisis, the Bush Administration came up with TARP (Troubled Asset Relief Program that would allow the US government to purchase up to $700 billion worth of troubled assets.  There was a great deal of debate concerning this proposal that amounted to a huge bailout of private financial institutions with taxpayer funds.

TARP was approved by Congress and implemented, but the jury is still out as to its long-term effects.  While the program helped stabilize financial institutions in the short-run, it has caused other imbalances in the economy and negatively impacted the moral hazard.  The bailed out banks got into trouble because they made imprudent loans.  Te government’s main excuse for the bailouts was that they were too big to fail.  However, soon after the bailouts banks were back to similar poor business practices that included huge bonuses for their executives.

While the argument can be made that TARP stopped a financial panic, there can be no justification as to why these banks’ shareholders and bondholders were not heavily penalized for investing in poorly managed companies.

As troubling as the TARP bailouts were, at least that program was vetted by Congress and in a somewhat transparent manner.  It has been disclosed that an even larger bailout occurred through the Federal Reserve in secret and without oversight or Congressional approval.  The scope of this program recently became public, the result of a Freedom of Information Act lawsuit filed by Bloomberg that went all the way to the US Supreme Court.  After reviewing over 29,000 Fed supplied documents, Bloomberg concluded the following:

  • The Fed bailouts that occurred between August 2007 and April 2010 involved $1.2 trillion in loans to 400 financial institutions and companies.
  • About one half of the banks that received these Fed loans were not U.S. based.
  • In the fall of 2008, US investment bank Morgan Stanley was near insolvency and barrowed $107 billion from the Fed, nearly three times its total profits during the previous ten years.
  • In 2007, Goldman Sachs was the most profitable firm in Wall Street history.  Yet in 2008 it barrowed $69 billion from the Fed.
  • Other companies that were not primarily financial based also barrowed money from the Fed.  This included Ford taking about $7 billion and Toyota getting $4.6 billion.  Even General Electric, who was highly profitable in 2010 but paid no U.S. income tax, received about $16 billion from the Fed.

The size of the Fed’s program is staggering.  The secret loans were 20 times larger than any previous Fed’s lending program, which occurred shortly after 9/11.  However, the most troubling part of the program is the fact that it was hidden from the American public.  In justifying its secrecy the Fed claimed that making the loans public would have caused investors to lose confidence in the receiving banks.  Since the release of this information and the lack of panic, this claim has been proven bogus.  But even more important, so what if there was panic?  The public has the right to know what the Fed does with its money.  The public also has the right to know the true financial conditions of companies that it might bank with or invest in.

Bailouts by the government and Fed were used for the advantage of some companies and citizens over others.  This has no place in capitalism or a free society, nor is allowed under the US Constitution.  The government and Fed have spent significant taxpayer funds without transparency or the required Congressional approvals, willful circumvention of the law and Constitution.

Many, especially on the Left, ignore the dangerous slippery slope that the Country is traveling.  Their fears are mistakenly focused on those attempting to stop the wild and special-interest spending in Washington.  That has allowed the Federal Reserve to debase the U.S. currency, a surreptitious way of increasing the taxes on all Americans.

Posted in Bailouts, Federal Reserve | Tagged: , , , , , , , , , , , , , , , , , | 1 Comment »

GE to Move X-Ray Unit to China

Posted by Steve Markowitz on July 27, 2011

General Electric (GE) announced this week that it is moving its X-Ray unit’s headquarters to China.  This unit, part of GE Healthcare, produces medical-imaging machines such as MRI’s.  The move will be in addition to GE’s previously announced plans to invest $2 billion in China.

This might be just another story of a U.S. company moving to China if it were not for the fact that it is GE.  GE’s CEO, , is the head of President Obama’s Council on Jobs and Competitiveness (Job Czar).  GE also made over $15 billion in profits last year, $5 billion in the United States, but did not pay one penny in federal income taxes last year.  Finally, GE is the beneficiary of the government’s massive subsidizing of the green energy industry.

If President Obama really wanted to understand why American businesses are moving out of the U.S, let him start by asking his own Job Czar, Jeffrey Immelt.  He won’t like the answers.

Posted in economy, Government Ineptness | Tagged: , , , , , , , , | Leave a Comment »

Labor Unions and Political Payoffs

Posted by Steve Markowitz on April 5, 2011

Big unions and large businesses use money to influence political outcomes.  In previous decades, the large companies were often heaving industry and the unions were those involved with the heavy industry.  While this industry and their unions received many benefits for their political payoffs that did not forestall the forces of the market; i.e. supply and demand.  Many in this these industry and their unions have since perished, replaced in size by companies that are not unionized and who spend more effort innovating.

Today, heavy industries have been replaced by banks and conglomerates, such as General Electric, who strive for Washington favors in return for their support.  Union power has shifted to those that represent public employees, the growth opportunity for organized labor.  The amount of money these public employee unions give politicians is staggering, as the chart below indicates, with most of the funds going to Democrats.

There is something unclean in the relationship between the Democrat Party and unionized public employees.  These unions give Democrats cash and in return, the Democrat politicians agree to union demands to the detriment of the taxpayers who they work for.  Clearly this is a conflict of interest.  However, like their private sector brethrens, public sector unions are infamous for eaten their young.  They have taken so much from the taxpayers that many states and municipalities are on the brink of bankruptcy.  The great mediators, the markets, are now exerting themselves on the public employee unions.  The outcome is inevitable.


 

Posted in Democrats, Unions | Tagged: , , , , | Leave a Comment »

Nanny State Controls America through Corrupt Taxing Policies

Posted by Steve Markowitz on April 2, 2011

America has morphed in recent decades from a country comprised of can-doers to one where we look to the government to fulfill our needs.  With approximately 50% of Americans paying no income tax and another 10% paying very little, the Progressives have molded the country in a way that makes the receivers of governmental gifts dependent on that government and guarantees a huge voting block that will continue to give Progressives government jobs.

The pervasiveness of governmental handouts spans from those truly in need to wealthy corporations.  This welfare state mentality stifles private sector growth and individual creativity.  Today this Blog reviews two very different stories of these governmental handouts.

Adoptions: David and Thelma Ward

CNN reported on the refunds available for those who adopt children.  In this case, the Wards of North Carolina lend a helping hand to children in need, adopting five children in a three-year period.  While over the years they filed for tax credits available for the adoptions, because of their lower income level they could not take advantage of them.  However, the credits rolled over to future years, should their taxable income increase.

This year, the government change the rules making the credits refundable that means the money would be made available eve if the party paid no income tax at all.  Therefore, the Wards this year received a check from the IRS for $54,000.  Mrs. Ward was surprised by the refund and said: “We’re just overwhelmed – that amount was so huge it was unbelievable.”  Dee Carter of H&R Block, the Ward’s tax preparer, said: “We had never seen anything like it before, so we had to check it over and over again.”  Nothing should be surprising when it comes to our overreaching government.

The government tax rules on adoption go further.  A typical private adoption costs about $30,000, lending some logic to the refund.  However, the tax laws also allow those who adopt “special needs” children receive the refund even those they have no adoption expenses.  Yet 80% of foster children are considered to have “special needs” by the government.  In addition, North Carolina pays the Wards $3,300 a month the until the children turn 18.

While the Wards decision to adopt undoubtedly comes from a kind place in their hearts, it is not difficult to see how the system can be perverted.  The unintended consequences of the government taking money from some taxpayers and giving it to others often overshadows the positive effects of the government’s policies.

General Electric Corporation

The same Progressive mentality that justifies the Ward’s $54,000 refund permeates all parts of governmental policies.  Even wealthy corporations receive the governmental handouts.

General Electric (GE) is a huge company with $5 billion in profits in the United States alone.  Incredibly, GE did not pay one penny of U.S. corporate income tax for 2010 even though the corporate rate is 35%.  GE did nothing illegal, only taking advantage of available loopholes.  In a statement GE said that “pays what it owes under the law and is scrupulous about its compliance with tax obligations in all jurisdictions.”  True, but left unsaid is that a large part of these deductions came from losses suffered through its subsidiary, GE Capital, during  the Wall Street meltdown.  Yes, GE is one of the large financial institutions that not only benefited from the government’s bailout of Wall Street, but whose lending practices helped create the meltdown in the first place.

Adding insult to injury is GE’s tight relationship with President Obama.  It’s CEO, Jeffery Immelt, is a close Obama’s confidant as his Chairman of the Council on Jobs and CompetitivenessGE is also a major booster (and potential profiteer) of the President’s green energy push.  When one is on welfare, it’s good to have friends in high places in the nanny-state.

There are those that will see obvious justification in the Wards receiving the $54,000 check from the government.  When considered in a vacuum, it’s hard to not be an advocate for the Wards.  However, there is no vacuum when it comes to taxes.  When one party receives a tax refund or break, it comes at the expense of others in that same society.  This gives corruptive powers to those politicians and bureaucrats that decide who is worthy of the special treatment and who is going to pay the bill.

We should not be too tough on either the Wards or GE.  In reality, many of us are drinking from the same trough in one way or another, including all that have taken the mortgage interest deduction.  But this is exactly what the Progrssives in government want.  By offering so special breaks to so many, the government hooks the greatest number of people on the corrupt system thereby guaranteeing its further growth.

The only way to put an end to America’s corrupt taxing system is to eliminate all deductions and loopholes no matter how worthy a special interest group might believe the cause is.  This would not only result in much lower tax rates for all, but also mean that the peoples’ spending habits will not be dictated by the Progressives in Washington, DC.  Those that would fight such a simplified taxing system would do so only because they fear losing the advantage that they currently receive over other taxpayers.

 

Posted in General Electric, Government Handouts, Taxes | Tagged: , , , , , , , , , , , , , , , | 1 Comment »

Middle East Turmoil Proves the Need “Drill Baby Drill”

Posted by Steve Markowitz on February 2, 2011

With the 24-hour news showing pictures of the Egyptian chaos continuously, many are focused on the lawlessness in that country.  Many are also concerned as to what form of government will emerge Egypt after the chaos subsides.  The outcome of these issues will have far-reaching effects on the Middle East and greater world.  This will play out in Egypt and the other countries that will be enveloped in similar situations with the Untied States being but a bystander.

The current Egyptian events again bring the forefront the issue of America’s dependence on oil from unstable regimes in the Middle East.  While Egypt is not an oil producer, the Suez Canal is important in the supply chain for oil.  In addition, the instability with other Middle Eastern countries increases the shipping risk at the chokepoint that is the Straits of Hormuz.

The danger of America’s oil dependence on risky sources should have been addressed years, if not decades ago. However, politicians, mainly on the Left, banded together with radical environmentalists to hinder America’s production in coal, oil and nuclear energy.

Besides the national security argument that clearly shows the insanity of America’s energy policy, there is also a strong economic argument.  Below are two charts; one showing crude oil spot prices and the other natural gas spot prices from January 4, 2010 to February 1, 2011.  While both commodities serve similar purposes, their pricing history during this period has been quite different.  Crude oil prices hit a record high for this period this week and will probably go higher . For the same period, natural gas prices have significantly decreased from its highs.  The reason for this discrepancy is simple: we are dependent on shaky governments for crude oil with natural gas coming from within United States.

If the United States was lacking in its own energy resources, our use of foreign oil could be justified.  However, given the massive amounts of energy resources in North America, there is no excuse for America to be dependent on foreign sources.  Environmentalists and their comrades have come up with all sorts of excuses and legal moves to stop America from developing its energy resources.  While some of their concerns are valid, there is no greater threat to the United States, both economically and for national security, than being dependent on energy supplies from countries that have disdain for our culture.

The United States must immediately embark on a strategic program towards real energy independence, a goal that is doable.  Unlike previous false efforts, this program must include a plan with mandated dates for achieving predetermined goals, such as amounts of new energy supplies discovered and putting  nuclear power plant production on the fast-track.  Such a program would be similar in size and scope of President Kennedy’s plan to put a man on the moon within the decade of the 1960s.  However, the program would require bold leadership, something our current President has shown little of during his first two years in office.  In fact, his tactical approach to energy issues has hamstrung energy development in United States, focusing excessively on green technologies that do little to cut America’s dependence on foreign energy and merely creates large for companies such as General Electric.

During the presidential campaign, Vice Presidential candidate Sarah Palin used the slogan; “drill, baby, drill”.  This should be a national rallying cry for what will should America’s most important program of this generation.

Posted in National Security, Oil | Tagged: , , , , , , , , , , , , , | Leave a Comment »

GE’s Immelt to Head Obama’s Economic Advisory Panel

Posted by Steve Markowitz on January 24, 2011

President Obama announced that he is replacing retiring economic advisor, retired Federal Reserve Chairman Paul Volcker, with 51-year old General Electric (GE) CEO Jeffrey Immelt.  In appointing Immelt, Obama said: “The past two years was about moving our economy back from the brink.  Our job now is putting our economy into overdrive.”

While on its face Immelt seems to be a reasonable choice for those that believe in capitalism, his past and current priorities raise questions.  As the head of Obama’s panel of economic advisers, Immelt will have even more access to the President than he already had, being on an advisory board for Obama since 2009.  This access could be used to promote the Country’s overall good or more parochial interests of Immelt’s and GE.  Here are issues that make the later more likely:

  • Immelt will maintain his GE CEO position, raising potential conflicts of interest in recommendations made to the President.
  • Over half of GE’s revenue comes from outside the U.S.  In addition, GE has about 300,000 employees of which only 135,000 are based in the U.S.  Given the importance of GE’s business interests outside of the United States it is unlikely Immelt would be willing to make recommendations to the President that would clash with his firm’s foreign interests.
  • GE has owned NBC, a network that heavily favored Obama politically.  In addition, GE spent $39 million on lobbying in 2010, more than any other company according to government figures.  It is clear that this company understands the importance of greasing the wheels in Washington.
  • GE is currently attempting to sell billions of jet engines for the Joint Strike Fighter, an engine that the Pentagon has determined it does not want.  This automatically places Immelt in a conflict position between the two hats that he wears.
  • GE has been on the forefront of green energy and stands to gain from the sale of gear is sold to the government and/or subsidized by it.
  • GE has been criticized for continuing to do business with Iran while Iranian agents caused the deaths of American soldiers in Iraq.

When questioned about his new appointment, Immelt was quoted as saying he “understands what it takes for America to compete in the global economy.”  While a great sound-bite, Immelt’s history is of a person running an international conglomerate.  By their very makeup such corporations and their leaders have little loyalty to any individual country.

Should President Obama want to really understand the issues that small businesses in America face, those businesses that ultimately create most of the new jobs in this Country, he should look elsewhere for advice other than leaders from multi-national corporations and big labor unions.

 

Posted in General Electric, President Obama | Tagged: , , , , , , , , | 2 Comments »