Anthem Of Greed

Rethuglicans like to say that their aim in "reforming" health insurance is to return decision making over to patients and their doctors. That, of course, is arrant horseshit. First, their TrumpCare proposal is a massive transfer of wealth to the richest Americans, through a massive $275 billion tax break, as Senator Bernie Sanders, among others, has pointed out. Second, the proposal hands decision making back (and considerable money) to the health insurance business, in particular to their chief executives. So it's not very surprising that the CEO of the U.S.' s second largest health insurance conglomerate, Anthem, just wrote a letter to Congressional leaders urging swift passage of the TrumpCare proposal. Last year, Anthem threatened to leave the insurance exchanges established by the Affordable Care Act apparently because they weren't making enough billions in profit. News that they are also seeking to acquire another health insurance giant for $54 billion adds a key rationale for their money grab under TrumpCare.

Our health insurance system isn't faltering because of the Affordable Care Act, Medicaid expansion or allowing people with pre-existing conditions to be insured. It's faltering under the intense greed of the Anthems of the world, whose favorite operation is extracting more and more money from your wallet while giving nothing in return.

If Gordon Gekko's* Turd Came Alive...

…it would be former hedge fund manager and soulless s.o.b. Martin "Screw You" Shkreli, who decided it would be a good idea to create Turing Pharmaceuticals and acquire the rights to Daraprim, a drug used for treating toxoplasmosis in AIDS patients and others with compromised immune systems.  He also thought it would be a good idea to raise the per pill price of the drug from $13.50 to $750, a 5,500% increase.  Each pill has a reported cost of $1 to manufacture.

The 32 year old poster boy for rapacious greed has a history of acquiring long-existing pharmaceuticals and raising their prices.  But is he in the least bit chastened by the exposure of his greed?   “It really doesn’t make sense to get any criticism for this,” Screw You explained.  Actually, it would make more sense if there were a windfall profits / predatory business practices law that he could be tried and convicted under.
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*for the cinematically challenged, he's this guy.

Sunday Reading - Corporate Tax Dodging

In this morning's once great Washington Post Bezos Bugle, Allan Sloan has an informative column about a growing number of tax-dodging American corporations reincorporating overseas where the corporate tax rate is lower, a process known as "inversion."  Here's Sloan:

A company does this by reincorporating in a place such as Ireland, where the corporate tax rate is 12.5 percent, compared with 35 percent in the United States. Inversion also makes it easier to divert what would normally be U.S. earnings to foreign, lower-tax locales. But being legal isn’t the same as being right. If a few companies invert, it’s irritating but no big deal for our society. But mass inversion is a whole other thing, and that’s where we’re heading.  [snip] 

Inverters don’t hesitate to take advantage of the great things that make America America: our deep financial markets, our democracy and rule of law, our military might, our intellectual and physical infrastructure, our national research programs, all the terrific places our country offers for employees and their families to live. But inverters do hesitate — totally — when it’s time to ante up their fair share of financial support of our system.

Sloan names some of the "deserters:"

Companies that have gone the inversion or never-here route but that act American include household names such as Garmin, Michael Kors, Carnival and Nielsen. Pfizer, the giant pharmaceutical company, tried to invert this spring, but the deal fell through. Medtronic, the big medical-device company, is trying to invert, of which more later. Walgreens is talking about inverting, too — it’s easier to boost earnings by playing tax games than by fixing the way you run your stores.  [Ed. note:  Snap, zing!]

As promised, he goes into great detail about the proposed Medtronic inversion.  Here's the scheme they're considering:

The current poster child for inversion outrage is Medtronic, the multinational Minnesota medical-device company that once exuded a cleaner-than-clean image but now proposes to move its nominal headquarters to Ireland by paying a fat premium price to buy Covidien, itself a faux-Irish firm that is run from Massachusetts except for income-tax-paying purposes. For that, it is based in Dublin. That’s where the new Medtronic PLC would be based, while its real headquarters would remain on Medtronic Parkway in Minneapolis. Of course, the company is unlikely to return any of the $484 million worth of contracts the federal government says it has awarded Medtronic over the past five years.

Unless you suffer from high blood pressure, read the column to see what goodies Medtronics is giving its top executives and board members to grease the inversion skids.

Sloan also offers some ideas to fix the problem in the short term (tighten inversion rules in the tax code, as proposed by Sen. Carl Levin and his brother, Rep. Sander Levin - both Michigan Democrats), while we await (and await and await?) corporate tax reform.  Another short term fix Sloan proposes is disclosure - requiring American corporations and their subsidiaries to report on "their U.S. taxable income for a given year and how much income tax they owed."   If more of these companies can be publicly shamed by their tax-dodging, it might help stem the growing culture in which "inversion" (or, as we would call it "corporate mooching") is accepted as normal business practice (as Sloan points out, it worked with Starbucks).  

In the end, though, public shaming is not a substitute for better public policy.  If these tax-dodging corporations have no sense of what it means to be a responsible corporate citizen, and we think most of them don't, then it's government's obligation to act in the interests of all the American people to shut down this shell game.

Corporate America's Gift

Who says corporate America isn't creating jobs? According to the Economic Policy Institute, they've created 1.4 million jobs this year... OVERSEAS. That's compared with less than 1 million here in the U.S.

Despite record profits, two trillion dollars in cash, and a growing stock market, corporations are investing their money -- and sending our jobs -- overseas:

"The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist. 'There's a huge difference between what is good for American companies versus what is good for the American economy,' says Scott."

We don't know the details of President Obama's discussion with corporate CEOs at the White House recently, but if he didn't raise hell with them about this situation, he needs to spend a few months living with families whose jobs have been outsourced.

Oh yes, and more tax cuts for the wealthy, anyone?

Hedge Fund Speculators Fold

"The small but staunch lenders group that stood against the sale of Chrysler disbanded Friday, removing the only major obstacle in the Obama administration's plan to quickly restructure the automaker in bankruptcy court...In a televised speech last Thursday, Obama characterized the holdouts as 'speculators' who 'endanger Chrysler's future by refusing to sacrifice like everyone else.'" News item in today's WaPo.

These pieces of s**t are of the same cloth as those that helped bring about the financial crisis we're in today. Yet these Gordon Gekkos were still out for #1. Masters of the Universe, indeed.

The Corporate Elitists Haven't Learned A Thing

The story of huge bonuses paid by insurance giant AIG got major attention on the Sunday gab fests. AIG, which received $173 billion in U.S. bailout funds, paid $163 million in bonuses to officials in its financial products unit -- the unit that caused the $62 billion in losses for AIG. Now, calls for firing AIG executives are mounting, including House Financial Services Committee chair Barney Frank who said,

"This is an example of people at the commanding heights of the economy misbehaving, abusing the system."

AIG Chairman Edward "Don't Call Me Gordon" Liddy huffily explained that the bonuses represent "contracts" that are legally binding. Fine. Then AIG should pay the bonuses out of whatever assets it has, or can sell. And then the Government should insist on a change in leadership at AIG before any more public funds are spent.

UPDATE: President Obama said today he intends to stop AIG from paying out these bonuses, calling the situation an "outrage."

UPDATE 2: Four experts tell us how the U.S. government can short-circuit the AIG executives' money grab.

Flying The Friendly Skies

The big three auto CEOs got raked over the coals today by Congress for each flying to D.C. in private corporate jets, vs. commercial flights. Members of the House Financial Services Committee ridiculed the big wigs, who are in Washington to ask for a multi-billion dollar Federal bailout of their failing companies. Rep. Gary Ackerman observed:

"It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo."

The clueless CEOs apparently don't have a problem cutting their workforces, as long as they retain the perks they've become accustomed to. If the bailout goes through, we're betting Congress will insist that their corporate jets are sold.