Category: Business

Corporate news from all over

Taxes at the Top

Seth Anderson0 comment

Shouldn't That Be a Right Turn?
Shouldn’t That Be a Right Turn?

Mitt Romney isn’t the only clown who pays too little in taxes.

Paul Krugman writes, in part:

Defenders of low taxes on the rich mainly make two arguments: that low taxes on capital gains are a time-honored principle, and that they are needed to promote economic growth and job creation. Both claims are false.

When you hear about the low, low taxes of people like Mr. Romney, what you need to know is that it wasn’t always thus — and the days when the superrich paid much higher taxes weren’t that long ago. Back in 1986, Ronald Reagan — yes, Ronald Reagan — signed a tax reform equalizing top rates on earned income and capital gains at 28 percent. The rate rose further, to more than 29 percent, during Bill Clinton’s first term.

Low capital gains taxes date only from 1997, when Mr. Clinton struck a deal with Republicans in Congress in which he cut taxes on the rich in return for creation of the Children’s Health Insurance Program. And today’s ultralow rates — the lowest since the days of Herbert Hoover — date only from 2003, when former President George W. Bush rammed both a tax cut on capital gains and a tax cut on dividends through Congress, something he achieved by exploiting the illusion of triumph in Iraq.

Correspondingly, the low-tax status of the very rich is also a recent development. During Mr. Clinton’s first term, the top 400 taxpayers paid close to 30 percent of their income in federal taxes, and even after his tax deal they paid substantially more than they have since the 2003 cut.

So is it essential that the rich receive such a big tax break? There is a theoretical case for according special treatment to capital gains, but there are also theoretical and practical arguments against such special treatment. In particular, the huge gap between taxes on earned income and taxes on unearned income creates a perverse incentive to arrange one’s affairs so as to make income appear in the “right” category.

And the economic record certainly doesn’t support the notion that superlow taxes on the superrich are the key to prosperity. During that first Clinton term, when the very rich paid much higher taxes than they do now, the economy added 11.5 million jobs, dwarfing anything achieved even during the good years of the Bush administration.

(click here to continue reading Taxes at the Top – NYTimes.com.)

Just seems like greed to me, and short-sightedness on the part of the 1%. If the US continues its slow, inexorable decline into a banana republic, that can’t bode well for the rich. Hard to stay wealthy when the risk of kidnapping and robbing is real, and omnipresent. America did the best when the middle class had enough money to spend on things…

Kodak Was First to Digital

Seth Anderson0 comment

Kodak
Kodak

I hope Kodak pulls themselves back to profitability, I still prefer to use their photo paper when creating framable prints, and while I shoot mostly digitally these days, when I do shoot film, I nearly always use Kodak film.

All that said, Al Ries of Ad Age disputes the oft-told reason for Kodak going bankrupt, namely that Kodak was too slow to recognize digital photography was the future.

Conventional logic blames Kodak’s weak position on the product. Why is this so? Because most people believe the better product wins in the marketplace. And since Kodak is No.6 in the market, it obviously didn’t have the better product. Nice, tightly-reasoned thinking. Who can argue the point? I can. What’s the difference between Kodak photographic film and Kodak digital cameras? Kodak means “film” photography. Kodak doesn’t mean “digital” photography.

When a category is changing, the worst thing that can happen to a brand is being stuck in the past. The Kodak brand was stuck in the past and the only thing that could have saved the company was a second brand.

Kodak should have given its digital brand a different name than its film brand.

There’s a lot of evidence the brand name “Kodak” is not worth much outside of photographic film. Consider the introduction of the following Kodak products that never achieved much success.

In 1975, Kodak plain-paper copiers.

In 1976, Kodak instant cameras.

In 1984, Kodak videocassette recorder and cameras.

In 1985, Kodak floppy disks.

In 1986, Kodak batteries.

In 2005, Kodakgallery.com.

In 2007, Kodak ink-jet printers.

There are a lot of reasons for a product to fail, but two of the most important reasons are: (1) the product itself and (2) the name. But nobody ever seems to consider the latter. It’s always the former.

(click here to continue reading Marketing Myth-Busting: Kodak Was First to Digital | Al Ries – Advertising Age.)

 

How Republicans Killed Own Pet Oil Pipeline Project

Seth Anderson2 Comments

Gas At Last
Gas At Last

The GOP only cares about symbolic victories, not about actual governance. For example, the infamous Keystone XL pipeline. Obama would have happily punted on the decision until after the election, but the GOP was more interested in scoring political points, so they forced Obama’s hand.

At the peak of December’s payroll tax cut showdown on Capitol Hill, two top Republican aides discussed with me the pros and cons of making the Keystone XL pipeline a centerpiece of the debate. They relished the idea of forcing President Obama to take a public stand on the pipeline early in an election year, instead of after the election as he had wanted. And they were eager to force him to choose between supporters in the labor movement, some of whom are pushing for the pipeline, and others in the environmental movement who vehemently oppose it. So they decided to go for it.
At the same time they knew he’d likely have to reject the project, and for them that created a dilemma.

“It’s a question of whether we’d rather have the pipeline or the issue,” said one of the GOP aides. Black or white.

In the end they chose the issue.

On Wednesday, as expected, Obama shutdown the project, dooming it unless the Canadian company angling for the project goes through the costly process of reapplying and winning approval next year.

Pipe Tool Industrial
Pipe Tool Industrial

All to generate some talking points, and talking points based on lies…

The political attack here is based on a number of false and exaggerated claims — including that the pipeline construction would have created 20,000 jobs (the only independent study of the project concluded that the true number would’ve been much lower) and that the oil is now destined for China instead of the U.S.

At her own Capitol briefing Wednesday, House Minority Leader Nancy Pelosi took issue with these claims.

“If the Republicans cared so much about the Keystone pipeline, they would not have narrowed the president’s options by putting it on the time frame they did,” Pelosi said. “They left him very little choice…. This oil was always destined for overseas. It’s just a question of whether it leaves Canada by way of Canada, or it leaves Canada by way of the United States. So without taking a position on the pipeline, I don’t agree to the stipulation that this is oil that’s going to China now instead of the US. It was always going overseas. I don’t know where to, but it wasn’t for domestic consumption. And that’s really an important point because the advertising is quite to the contrary.”

(click here to continue reading How Republicans Killed Own Pet Oil Pipeline Project | TPMDC.)

Legal Tender
Legal Tender

Not to mention this little under-reported factoid:

In the meantime, House Speaker John A. Boehner (R-Ohio) launched a “countdown clock” that ticks off the time until the permitting deadline expires and posted a video on YouTube that touts the pipeline as a chance to create jobs with private investment. Playing off Obama’s mantra of “We Can’t Wait,” the video flashes phrases across the screen including, “We Can’t Wait for Leadership. We Can’t Wait for Jobs.” Environmentalists note that in December 2010, according to Boehner’s financial disclosure forms, he invested $10,000 to $50,000 each in seven firms that had a stake in Canada’s oil sands, the region that produces the oil the pipeline would transport. The firms include six oil companies—BP, Canadian Natural Resources, Chevron, Conoco Phillips, Devon Energy and Exxon—along with Emerson Electric, which has a contract to provide the digital automation for the first phase of a $9.4 billion Horizon Oil Sands Project in Canada.

Bill McKibben, a climate activist and co-founder of the group 350.org, wrote in an e-mail that Boehner has received more than $1 million from fossil-fuel companies, “and now we find out that he’s got extensive personal investments in companies dependent on tarsands oil.”

“He was willing to shut down the government in part to prevent enough time for serious environmental review,” McKibben added. “In any other facet of our public life . . . this whole list taken together would be seen for the gross conflict of interest that it is.”

(click here to continue reading Daily Kos: John Boehner’s Keystone XL conflict of interest.)

For God So Loved the 1 Percent

Seth Anderson0 comment

Don't Ask Me To Believe In Too Many Things
Don’t Ask Me To Believe In Too Many Things

Just like the Pledge of Allegiance, common, every-day usage of the phrase “One Nation Under God” did not have noble pedigree:

The concept of “one nation under God” has a noble lineage, originating in Abraham Lincoln’s hope at Gettysburg that “this nation, under God, shall not perish from the earth.” After Lincoln, however, the phrase disappeared from political discourse for decades. But it re-emerged in the mid-20th century, under a much different guise: corporate leaders and conservative clergymen deployed it to discredit Franklin D. Roosevelt’s New Deal.

During the Great Depression, the prestige of big business sank along with stock prices. Corporate leaders worked frantically to restore their public image and simultaneously roll back the “creeping socialism” of the welfare state. Notably, the American Liberty League, financed by corporations like DuPont and General Motors, made an aggressive case for capitalism. Most, however, dismissed its efforts as self-interested propaganda. (A Democratic Party official joked that the organization should have been called “the American Cellophane League” because “first, it’s a DuPont product and, second, you can see right through it.”)

Realizing that they needed to rely on others, these businessmen took a new tack: using generous financing to enlist sympathetic clergymen as their champions. After all, according to one tycoon, polls showed that, “of all the groups in America, ministers had more to do with molding public opinion” than any other.

(click here to continue reading For God So Loved the 1 Percent … – NYTimes.com.)

 

FCC Sneaks a Tweak To Media Ownership Rules

Seth Anderson0 comment

WCIU-TV 26

While everyone was on vacation, or thinking about vacation, the FCC quietly (re)proposed some anti-consumer changes to local media rules that will reduce the diversity of news for most of the country. Fox News already got a special exception in New York City, now the FCC wants this model to expand elsewhere. The corporate lackeys at the FCC tried this once before, in 2007, remember?

Anyway:

The Federal Communications Commission is preparing to relax a longstanding rule that limits the ability of companies to own both a newspaper and a television or radio station in the same local market.

The proposal, which was challenged in court the last time it came up, was the most contentious piece of an updating of the nation’s media ownership rules. Congress requires the F.C.C. to review the rules every four years.

Public interest groups and a departing member of the commission, Michael J. Copps, expressed concerns that the newspaper-broadcast rule change could cause more consolidation in the media industry, in which round after round of stations have been sold to bigger companies.

“In the vast majority of cases, I do not believe that newspaper-broadcast cross-ownership advances the public interest,” Mr. Copps, a Democrat, said in a statement. “It means fewer voices in the community, less localism in the industry and steep transactional costs that all too often lead to down-sized or shuttered newsrooms and fired journalists. Our media, and our public policy, need to head in a different direction.”

(click here to continue reading F.C.C. Seeks to Ease Media Ownership Rule – NYTimes.com.)

Adweek adds:

The proposed rules would keep in place the loosening of the ban on cross-ownership proposed by former Chairman Kevin Martin, allowing companies to own both a newspaper and TV station in the top 20 markets. The proposal would essentially codify newspaper-TV combos held by companies such as Tribune and News Corp. The FCC is proposing no change to the current TV duopoly rules, which permit companies to own only two stations in a market as long as both stations are among the top four, or the radio ownership rules.

Public interest groups, which have challenged loosening the ban on cross ownership in court came out swinging. “It appears that the FCC is proposing to adopt the same loophole-ridden scheme that the Bush Administration FCC had tried to push through. The public understands that excessive concentration of media ownership is bad for democracy, so we expect to convince the FCC to take a stronger position in the end,” said Andy Schwartzman, svp, Media Access Project.

(click here to continue reading FCC Tweaks Media Ownership Rules | Adweek.)

Nesting Instinct Prevails
Nesting Instinct Prevails

Some other dissenters include FreePress (a/k/a savethenews.org):

Free Press President and CEO Craig Aaron made the following statement:

“The FCC must be having a Yogi Berra moment, because it’s déjà vu all over again on the failed policies of the previous administration. Those policies were resoundingly rejected by the public, Congress and the courts. The FCC should focus on remedying the mistakes of past administrations — not repeating them.

“This action not only flies in the face of promises made by the president on the campaign trail but will also make it much harder for local and diverse owners to secure a piece of the public airwaves. Instead, the already dwindling number of smaller and independent media owners will be swallowed up by the same media giants that have crushed local journalism, killed local radio and left us with the same cookie-cutter content from coast to coast.

“Especially appalling is the FCC’s failure — once again — to meaningfully address the issue of ownership diversity. A federal court has twice rebuked the FCC for failing to consider rules that would increase ownership opportunities for women and people of color, yet today’s item punts on the issue yet again. The evidence shows that media consolidation hinders opportunities for women and people of color to create and sustain broadcast businesses. If the FCC is serious about addressing the diversity problem, it needs to tighten its rules, not relax them.

“However, we do commend the FCC for raising the important issue of covert consolidation. The FCC must address the proliferation of secret deals to combine local newsroom operations in violation of the agency’s rules. Some broadcasters now control two, three or even four stations in one market, giving a handful of companies extraordinary influence over local debates, issues and news. Now is the time for the FCC to close the legal loopholes and rein in these so-called shared services agreements. Otherwise broadcasters will continue to undermine competition, destroy news diversity and cut jobs in local communities.

“Fortunately, the rules proposed today are not final. The FCC can still reverse course, reject the disastrous approach of its predecessors and refocus on policies that will benefit the public instead of just boosting the bottom line of a few giant media conglomerates.”

(click here to continue reading FCC Ignores Public by Pushing Failed Ownership Policies | Save the News.)

If you have any post-holiday cash left, the good folks at Free Press are soliciting donations…

Television stations make a ton of money, and if this change goes through, in five years, most cities in America will have just one newspaper that parrots the corporate behemoth that owns it. Sort of like what already exists, but with fewer parent companies, and thus less diversity of opinion. And then in twenty more years, the corporate media giants will merge, and most people will get all of their news from Rupert Murdoch’s cloned head…

Upcoming Corporate Welfare Pleas

Seth Anderson0 comment

Dunking on the Sears Tower
Dunking on the Sears Tower

Just like the major league sporting franchise boondoggle, the corporate tax break boondoggle is like a never ending bowl of soup for politicians to ladle out favors from…1

Ramsin Canon of Gapers Block notes:

This week Governor Quinn signed into law special tax incentives for the insanely profitable Chicago Mercantile Exchange and the poorly run Sears. The Associated Press offers a sort-of warning: that scores of companies have tax “packages” that are to expire over the next few years. If you are a shareholder in any of those companies, would you expect anything less than threats to relocate from your CEO? And if you’re a government affairs person representing a business in Springfield, what would your attitude be towards a legislator who voted for this tax package but won’t put forward one for you?

I never bought for a minute that CME and Sears were actually going to leave. Nor do I suspect that Mayor Emanuel, who helped engineer the cuts for CME, or most of the legislators who voted for the cuts, actually bought the threats either. But the threat to leave is a formality that gives cover to politicians who want to hand their political supporters a nice plum but want to obscure the quid pro quo. Seeing now that the tactic works, we should fully expect a tidal wave of employers demanding incentives to stay in the state.

You know, if we cut our tax rates to 0%, we’ll get all the businesses. All the businesses!

(click here to continue reading Give Em An Inch, They Tax Break All Over You – Gapers Block Mechanics | Chicago.)

 

Enraged

Oh joy!

As state senators sent the tax package to the governor’s desk last week, economic development experts said other companies are likely to threaten to move as well unless Illinois offers them more financial goodies. More than 100 companies, including Deere & Co. and Abbott Laboratories, have incentive packages expiring in the next three years — and may want better deals to keep jobs in Illinois.

Businesses thinking of moving to the state could demand even bigger incentives or play Illinois against other states in a bidding war, experts said.

“Once it becomes known that you’re giving incentives, other companies are going to ask for them. Why wouldn’t they?” said Judith Stallmann, a professor at the University of Missouri-Columbia who has studied economic development.

 

(click here to continue reading In the game of tax breaks, states play at their risk | The Salt Lake Tribune.)

Footnotes:
  1. yeah, a horrible metaphor, sorry, pressed for time [↩]

Congressional Techno-morons

Seth Anderson1 Comment

Computer Consultants
Computer Consultants

The Hollywood-funded SOPA1 debate has been tabled for now, to be taken up again next year. Maybe by then Congress can figure out what exactly they are proposing to do.

Or not:

It’s of course perfectly standard for members of Congress to not be exceptionally proficient in technological matters. But for some committee members, the issue did not stop at mere ignorance. Rather, it seemed there was in many cases an outright refusal to understand what is undoubtedly a complex issue dealing with highly-sensitive technologies.

When the security issue was brought up, Rep. Mel Watt of North Carolina seemed particularly comfortable about his own lack of understanding. Grinningly admitting “I’m not a nerd” before the committee, he nevertheless went on to dismiss without facts or justification the very evidence he didn’t understand and then downplay the need for a panel of experts. Rep. Maxine Waters of California followed up by saying that any discussion of security concerns is “wasting time” and that the bill should move forward without question, busted internets be damned.

The fact that there was any debate over whether to call in experts on such a matter should tell you something about the integrity of Congress. It’d be one thing if legitimate technical questions directed at the bill’s supporters weren’t met with either silence or veiled accusations that the other side was sympathetic to piracy. Yet here we are with a group of elected officials openly supporting a bill they can’t explain, and having the temerity to suggest there’s no need to “bring in the nerds” to suss out what’s actually on it.

“No legislation is perfect,” Rep. Watt said at one point, continuing the insane notion that the goal of the House should be to pass anything, despite what consequences it may bring. Later, Iowa Representative Steve King tweeted, somewhat ironically, about surfing the internet on his phone because he was bored listening to his colleague Shiela Jackson speak about the bill. Then, even more ironically, another representative’s comments calling him out for it were asked to be stricken from the record.

…

This used to be funny, but now it’s really just terrifying. We’re dealing with legislation that will completely change the face of the internet and free speech for years to come. Yet here we are, still at the mercy of underachieving Congressional know-nothings that have more in common with the slacker students sitting in the back of math class than elected representatives. The fact that some of the people charged with representing us must be dragged kicking and screaming out of their complacency on such matters is no longer endearing — it’s just pathetic and sad.

(click here to continue reading Dear Congress, It’s No Longer OK To Not Know How The Internet Works | Motherboard.)

 

Footnotes:
  1. Stop Online Piracy Act. Wikipedia entry [↩]

Bookman’s Alley in Evanston to close

Seth Anderson0 comment

Not Barnes and Noble
Not Barnes and Noble

I’ve never lived in Evanston  1 but places like Bookman’s Alley are why I love to visit. Sad news:

The final chapter is being written in the 31-year history of Evanston’s celebrated used bookstore, Bookman’s Alley. Owner Roger Carlson recently decided to close the doors to his secluded oasis of literary treasures and antique memorabilia.

Citing health issues, declining business, and the urging of his family, the 83-year-old Carlson plans to sell off much of his 60,000-plus books and artifacts — probably by the end of March.

“It seemed I should finally give up, give in and stay home and pester my wife on a 24-hour basis,” Carlson said this week from his usual post behind the desk of his shop, located in an alley off Sherman Avenue in downtown Evanston.

Though hidden from the bustle of downtown traffic, Bookman’s Alley has attracted a loyal following of bibliophiles, drawn to the rare collection and ambiance carefully crafted by Carlson over the years.

“Once you walk in the door, you’re hooked,” said Northwestern University history professor and long-time customer Henry Binford. “It just goes on and on, and it’s all different. Every room is visually and sensually something different.”

(click here to continue reading Owner to close book on Bookman’s Alley — Evanston news, photos and events — TribLocal.com.)

Bookman's Alley

Bookman’s Alley

Books About Evolution
Books About Evolution

Footnotes:
  1. yet, though who knows, it could happen [↩]

Hoffman Estates Battle Over a Tax Break For Sears

Seth Anderson0 comment

A Matter of Degree
A Matter of Degree

Of course, corporate welfare for the 1% trumps education, schools, kids every single time. I’d hoped the outcome was different since Hoffman Estates is not a poor district, and thus has a little clout, but I was wrong.

When Ms.  1 Crates met with Hoffman Estates officials in March, she learned the money might not be coming after all because the tax break might not expire.

“I cried,” Ms. Crates said. “The school district has cut for the last two years. We’ve had no wage increases, and we were planning on that revenue to bring down our class sizes. We have one algebra class with 47 students. It was devastating.”

Ms. Crates and her school district had suddenly found themselves at the epicenter of Illinois’s latest political and financial crisis, described by one lawmaker as round-robin blackmail among Midwestern states. Unless Illinois agreed to extend the tax break, Sears threatened to leave. The state of Ohio, for one, dangled $400 million in tax incentives as a lure.

But when lawmakers agree to corporate demands for property tax relief, they induce strain on the financial stability of schools, local governments, libraries and parks that rely on those taxes as their most stable form of revenue. The State of Illinois, with $3 billion in unpaid bills, has already disrupted local governments’ revenue streams, often delivering payments to schools at least four months behind schedule.

So when Ms. Crates and her colleagues learned in March that Sears might win an extension of its tax break, they followed the lead of many corporations with well-connected lobbyists. They began a fierce campaign.

At first, the district wasn’t even involved in discussions about the bill. The village of Hoffman Estates oversees the distribution of the Sears property tax revenue. Village officials did not mention that they had helped write and introduce legislation to extend the tax break until months after they did so, according to Ms. Crates. “I was dumbfounded that a public agency like ourselves, right next door, didn’t bother to tell us and tried in the middle of the night to pass legislation without telling us,” Ms. Crates said.

(click here to continue reading Town and School District Battle Over a Tax Break – NYTimes.com.)

and I’m with Representative Currie: some state needs to have the gumption to stand firm, and see if moving a giant corporation’s HQ is as simple as renting a moving truck.

The House Democratic leader, Barbara Flynn Currie, questioned whether the state should keep bending to satisfy threats from businesses entertaining other offers.
“Do we respond or do we just say goodbye? Or do we even call their bluff?” she asked. “I mean, sometimes I think we should start calling the occasional bluff and say: ‘Wait a minute. Is this for real?’ Because the costs of moving are certainly significant.”

Footnotes:
  1. Chief Financial Officer Cheryl Crates [↩]

Because Paul Krugman Can Argue

Seth Anderson0 comment

QR Code on NYT Magazine cover
QR Code on NYT Magazine cover

Paul Krugman is one of the top reasons I subscribe to the NYT 1

Jonathan Chait makes a good point:

Before Paul Krugman joined the New York Times op-ed page, it was a genteel place. The classic pattern was to promote distinguished reporters to cushy sinecures as columnists. Because they were trained as reporters, not polemicists, they tended to avoid the work of argumentation and simply tell readers what to think.… Krugman, by contrast, came from academia, where the arguments are fierce, and you either bring the data or you go home. As one of the most acclaimed economists of his generation, he arrived at his Times post in 1999 boasting stronger credentials to hold forth on his chosen topic than possibly any other op-ed columnist in history. But Krugman does not rely on his authority. He crafts arguments.

The most remarkable attribute Krugman has brought to the Times is rudeness. The social niceties that accompany his exalted position are utterly lost on him. He does not seek out the company of famous politicians and cannot be courted with flattery or access. He understands that you can’t arrive at truth without explaining why mistaken beliefs are wrong.

Krugman makes a mockery of the prohibition against arguing with his fellow columnists, larding his columns with rebuttals to unnamed subjects who happen to believe things that were advocated on the Times op-ed page earlier in the week. Thomas Friedman writes a column complaining, “Does anyone know what President Obama’s preferred outcome is? Exactly which taxes does he want raised, and which spending does he want cut?” And the next day, Krugman writes: “Oh, and let me give a special shout-out to ‘centrist’ pundits who won’t admit that President Obama has already given them what they want. The dialogue seems to go like this. Pundit: ‘Why won’t the president come out for a mix of spending cuts and tax hikes?’ Mr. Obama: ‘I support a mix of spending cuts and tax hikes.’ Pundit: ‘Why won’t the president come out for a mix of spending cuts and tax hikes?’ ”

(click here to continue reading Because Paul Krugman Didn’t Keep His Calm – Reasons to Love New York 2011 — New York Magazine.)

 

Footnotes:
  1. weekend edition, but still counts [↩]

Walmart Discloses Internal Investigation Into Corruption

Seth Anderson1 Comment

Walmart Neighborhood Market
Walmart Neighborhood Market

Gee. Um, no comment.

Wal-Mart said in a filing Thursday that it might have violated the Foreign Corrupt Practices Act and that it had begun an internal investigation, hired outside counsel and alerted the Justice Department and the Securities and Exchange Commission.

The company said the investigation was a result of a voluntary internal review of its global anticorruption practices this year along with information “from other sources.”

“The company has begun an internal investigation into whether certain matters, including permitting, licensing and inspections, were in compliance with the U.S. Foreign Corrupt Practices Act,” Wal-Mart said in its quarterly filing to the S.E.C.

The act forbids bribing foreign officials, among other items.

…

Matthew J. Feeley, a lawyer with Buchanan Ingersoll & Rooney who works on Foreign Corrupt Practices Act cases, said companies had incentives to go to the government on their own if they suspected the act had been violated in the hope of getting some type of leniency. “It’s expressly stated that they will give credit for that voluntary disclosure,” he said of the S.E.C. and Justice Department. Outcomes can include the government’s declining to take action, its asking the company to issue a press release or file a court report about the facts of the case, or its levying heavy fines and asking for a guilty plea, he said.

(click here to continue reading Wal-Mart Discloses Internal Investigation – NYTimes.com.)

(parenthetical note: why does the NYT, and so many news outlets spell Walmart with a dash? Notice the photo of a newly opened Walmart I took recently: no dash. Yet the NYT calls the corrupt company, “Wal-Mart”. )

NLRB drops complaint over Boeing

Seth Anderson0 comment

Boeing Logo
Boeing HQ in Chicago’s West Loop

The National Labor Relations Board on Friday officially dropped its high-profile case challenging Boeing’s decision to open a nonunion aircraft manufacturing plant in South Carolina.

The board acted after the Machinists union approved a 4-year contract extension with Boeing earlier this week and agreed to withdraw its charge that the company violated federal labor laws. Lafe Solomon, the board’s acting general counsel, said he had always preferred a settlement. The agency settles about 90% of its cases. Under the deal, Boeing (BA) promised to build the new version of its 737 airplane in Washington state. The Machinists also agreed to drop allegations that Boeing opened the South Carolina plant in retaliation for past union strikes.

(click here to continue reading Labor board drops complaint over Boeing plant – USATODAY.com.)

 

Focus on Fracking in Texas

Seth Anderson0 comment

Natural Science
Natural Science

Water is scarce already, especially in arid places like South Texas and North Dakota. But hydraulic fracturing, aka fracking, slurps up a lot of water.

CARRIZO SPRINGS, Texas—Water has always been a concern for 65-year-old Joe Parker, who manages a 19,000-acre cattle ranch here in South Texas. “Water is scarce in our area,” he says, and a scorching yearlong drought has made it even scarcer.

What has Mr. Parker especially concerned are the drilling rigs that now dot the flat, brushy landscape. Each oil well in the area, using the technique known as hydraulic fracturing, requires about six million gallons of water to break open rocks far below the surface and release oil and natural gas. Mr. Parker says he worries about whether the underground water can support both ranching and energy exploration.

Darrell Brownlow, another cattle rancher, says that if the economically depressed region has to choose between the two, the choice should be simple.

Mr. Brownlow, who has a Ph.D. in geochemistry, says it takes 407 million gallons to irrigate 640 acres and grow about $200,000 worth of corn on the arid land. The same amount of water, he says, could be used to frack enough wells to generate $2.5 billion worth of oil. “No water, no frack, no wealth,” says Mr. Brownlow, who has leased his cattle ranch for oil exploration.

Hydraulic fracturing, or fracking, has revived prospects for oil-and-gas production in the U.S. and provided a welcome jolt to many local economies. Less than three years after its discovery, the Eagle Ford oil field here already accounts for 6% of South Texas’s economic output and supports 12,000 full-time jobs, according to a study by the University of Texas at San Antonio earlier this year, which was funded by an industry-backed group.

But fracking also is forcing communities to grapple with how to balance the economic benefits with potential costs. To date, criticism of fracking has focused mainly on concerns that the chemicals energy companies are mixing with the water could contaminate underground aquifers. Oil industry officials regard that issue as manageable. The biggest challenge to future development, they say, is simply getting access to sufficient water.

The issue isn’t just rearing its head in parched regions like South Texas. North Dakota, another big source of oil from fracked wells, is concerned about the industry depleting aquifers and has threatened to sue the federal government to free up water held by an Army Corps of Engineers dam. Oklahoma, too, is struggling to cope with the industry’s thirst.

(click here to continue reading Focus on Fracking: Oil’s Growing Thirst for Water for Hydraulic Fracturing – WSJ.com.)

So, either short term profits or long term ability to live in an area. Hmm, I know what Darrell Brownlow has chosen, but what about the rest of the people in his community? Are they willing to destroy the local water supply so that he can get rich?

Circling A Single Thought
Circling A Single Thought

And unregulated businesses are always going to choose profit over anything else, despite the oft-repeated GOP mantra: Regulation is UnGodly – or whatever it is they chant

In addition to tapping underground aquifers, oil companies are interested in water from Texas rivers. They have acquired—or are currently seeking to acquire—from local irrigation authorities the rights to nearly 40,000 acre-feet of water a year. That is enough to supply nearly a quarter-million people for a year.

One source has been the Rio Grande. Cities along the river, which are among the fastest growing in the state, draw from it to supply water to residents.
“This is a major concern for us,” says Juan Hinojosa, a Democratic state senator from McAllen who represents the area. “The oil companies have a lot more money than we do to buy water rights.”

The intense drought over the summer exacerbated the water concerns of cities. More than 964 public water systems, covering 14.7 million Texans, have imposed voluntary or mandatory restrictions, according to the state.

This summer, the city of Grand Prairie, near Fort Worth, stopped selling water to oil companies as part of its drought-contingency measures, which also included lawn-watering restrictions.
Oil companies have long been exempt from most Texas state water rules and permitting requirements, but the state has begun to take a fresh look at the industry’s ability to drill water wells wherever they have acquired rights to extract oil and gas.

Illinois being held hostage over tax breaks

Seth Anderson2 Comments

South Loop Construction
South Loop Construction

For maybe the first time, I agree 1 with something Dennis Byrne writes, namely that Sears shouldn’t get a dime from a broke-ass Illinois.

If Ohio wants to shower Sears Holding Corp. with $400 million to lure the retailer away from Hoffman Estates, I say, “Fine, do it.” And let Ohio Gov. John Kasich (R) explain to his taxpayers why his state’s bribe is four times greater than the $100 million that Illinois reportedly had offered.

But if I were a stockholder in Sears, I’d ask its board, have you lost your mind? Your stock, say some analysts, is underperforming; you’re losing business to competitors, and last quarter’s financials were disappointing. When you’ve got plenty of challenges just running the business, why are you even thinking about wasting precious time, money and energy moving? Think about the cost of everything — from printing new stationery and business cards to relocating or severing 6,000 employees, hiring new ones, transporting equipment and records, creating new business relationships and on and on.

Seems to me that your problem isn’t so much where you are doing your job as how well you are doing it.

Of course, you’re not the only one trying to extort money from taxpayers to stay. CME Group Inc., the giant derivatives marketplace whose Chicago roots, like Sears, go back more than a century, also wants taxpayer “assistance,” even though it’s already making a nice hunk of change. And Caterpillar Inc., the Peoria-based manufacturing giant, is shopping a new plant and its 1,000 jobs around the country to lure some serious coin from a willing state.

…

The line of companies whose demands for taxpayer largesse seems endless. Motorola Mobility Holdings copping $113.7 million in tax credits over the next decade, $1.25 million in training funds and a $3 million grant to retain 2,500 jobs. Chrysler in Belvidere. Mitsubishi Motors to come and stay in Bloomington-Normal for a mere $276.1 million. Sears, you’ll recall, originally squeezed a taxpayer-subsidized incentive package to move from the former Sears Tower in Chicago to Hoffman Estates. That deal is about to expire and Sears now wants more. If we give it to Sears, why, we can ask ourselves, won’t it happen again? And again. And again.

(click here to continue reading Dennis Byrne commentary: Illinois being held hostage over tax breaks – chicagotribune.com.)

Corporate welfare is never the answer, from my perspective. Politicians need cash to get elected however, so corporations seemingly can always buy tax favors, exemptions, loopholes that are not available to commoners.

Footnotes:
  1. mostly – Byrne adds some clap-trap about IL raising corporate tax rates by a percentage point. The state is broke, remember? [↩]

Sears offered $400 million to Flee Illinois

Seth Anderson2 Comments

Demon Eyed Truck
Demon Eyed Truck

I say, good riddance. If a company like KMart/Sears cannot survive without corporate welfare, then maybe they deserve to be banished. Their executives can home school their kids, etc., and maybe even visit Chicago over the holidays…

Ohio has offered $400 million in incentives to retailer Sears Holdings Corp. to relocate its headquarters from Illinois to Ohio, a source familiar with the discussions told Reuters. The news comes just days after the Illinois state house voted down a proposal that would have given $100 million in tax relief to CME Group and Sears, which have threatened to move to other states. Sears declined to comment. Earlier this week, a Sears spokesman said the retailer had received proposals from about a third of the 50 U.S. states, and executives of the parent of Sears department stores and the Kmart chain have visited Columbus, Ohio, and Austin, Texas, to explore possible sites.

(click here to continue reading Sears offered $400 million to move to Ohio | Consumer | Crain’s Chicago Business.)