Tag: Ayn Rand

Sears whined and threatened to sue Illinois over tax credit dispute

Seth Anderson0 comment

You Were Still Strolling In A Time Of Your Own
You Were Still Strolling In A Time Of Your Own…

Ayn Rand worshiping executive of Sears secretly dependent upon governmental handouts to stay in business, film at eleven…

The company threatened legal action in a monthslong battle over $14.8 million in state tax credits Sears believed it earned in 2016 before it fell short of the minimum employee count required to qualify for future incentives.

Sears and the state settled that dispute in December, with the state granting Sears the 2016 tax credits and the company agreeing not to seek incentives for its 2017 fiscal year. In total, the company qualified for $51.3 million during the three years it was eligible to earn the tax breaks under an incentive deal inked in 2011 — after Sears threatened to move its Hoffman Estates headquarters out of state.

The deal, part of Illinois’ Economic Development for a Growing Economy program, or EDGE, was valued at an estimated $15 million a year for up to 10 years. It required Sears make in-state capital investments and retain at least 4,250 employees at its Hoffman Estates headquarters and Loop office.

The Department of Commerce and Economic Opportunity told Sears in June that agreement was “suspended,” citing media reports that Sears had acknowledged falling short of the employment benchmark.

…

The state also gave Sears permission to use the tax credits through Sept. 30, 2019, even if its employee count remains below the minimum level. The original incentive deal said unused tax credits could be carried forward only while the company was in compliance with the terms of its agreement.

(click here to continue reading Sears threatened to sue state over tax credit dispute – Chicago Tribune.)

Smile Your Crooked Smile
Smile Your Crooked Smile

If taxpayers had some say in how our money gets splurged on wasteful corporate welfare, these deals would stop. At least Sears isn’t getting as sweet a deal as Foxconn is getting in Wisconsin…

When the state deal with Taiwanese company Foxconn was first announced, the numbers were bold and clear: the company would get $3 billion in subsidies from the state and in turn would build a $10 billion plant and create 13,000 jobs.

That stood not just as the largest subsidy in state history, but the largest government subsidy to a foreign company in American history.

But the giveaway has continued to grow, while Foxconn’s required investment has shrunk.

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Meanwhile American Transmission Company has announced it will build a new substation to provide electric power to Foxconn at a cost of $140 million, which will then be charged to the 5 million customers of We Energies in southeast Wisconsin. The project “essentially would ask the public to contribute still more to Foxconn through higher electric rates,” the Journal Sentinel reported.

Foxconn has also been exempted from environmental regulations, and some experts believe this will cause pollution that might eventually require remediation paid for by taxpayers. And Foxconn’s newest demand is for its plant to be treated as a foreign trade zone, which could reduce its customs duties and cut the company’s costs. Odds are, it’s not the last demand the company will make.

Ald. Bob Bauman tallied the total costs for taxpayers in a speech before a Common Council committee and concluded it would cost $4.5 billion. That might be a tad high, unless you believe the I-94 widening would have never happened. But even without it, the total cost is nearly $4.1 billion, to get a $9 billion plant. That’s astounding: a cost of $1,774 per household in Wisconsin.

Back when the subsidy was $3 billion the Fiscal Bureau estimated it would take till 2043 or later for taxpayer to recoup all the money being spent, and even that was based on “speculative” figures on spinoff jobs, it noted. At $4.1 billion it’s safe to say it will take until 2050 to recoup those costs.

And for taxpayers outside southeast Wisconsin, it’s likely they will never see a full payoff, which may be why Walker seemed to be deemphasizing the issue in other parts of the state.

 

(click here to continue reading Murphy’s Law: Foxconn Subsidy Now Exceeds $4 Billion » Urban Milwaukee.)

Ayn Rand-loving CEO destroys his empire

Seth Anderson0 comment

Who Is John Galt?
Who Is John Galt?

This really made me giggle, though I feel sorry for the employees of Lampert’s companies…

Once upon a time, hedge fund manager Eddie Lampert was living a Wall Street fairy tale. His fairy godmother was Ayn Rand, the dashing diva of free-market ideology whose quirky economic notions would transform him into a glamorous business hero.

For a while, it seemed to work like a charm. Pundits called him the “Steve Jobs of the investment world.” The new Warren Buffett. By 2006 he was flying high, the richest man in Connecticut, managing over $15 billion thorough his hedge fund, ESL Investments.

Stoked by his Wall Street success, Lampert plunged headlong into the retail world. Undaunted by his lack of industry experience and hailed a genius, Lampert boldly pushed to merge Kmart and Sears with a layoff and cost-cutting strategy that would, he promised, send profits into the stratosphere. Meanwhile the hotshot threw cash around like an oil sheikh, buying a $40 million pad in Florida’s Biscayne Bay, a record even for that star-studded county.

Fast-forward to 2013: The fairy tale has become a nightmare.

Lampert is now known as one of the worst CEOs in America — the man who flushed Sears down the toilet with his demented management style and harebrained approach to retail. Sears stock is tanking. His hedge fun is down 40 percent, and the business press has turned from praising Lampert’s genius towatching gleefully as his ship sinks. Investors are running from “Crazy Eddie” like the plague.

That’s what happens when Ayn Rand is the basis for your business plan.

(click here to continue reading Ayn Rand-loving CEO destroys his empire – Salon.com.)

Turns out Ayn Rand is as good of a real-world economic strategist as she is a writer of fecund, pithy prose. In other words, horrible. No wonder she ended up on welfare…

Which End Has the Pot of Gold?
Which End Has the Pot of Gold?

For instance:

Plagued by the realities threatening many retail stores, Sears also faces a unique problem: Lampert. Many of its troubles can be traced to an organizational model the chairman implemented five years ago, an idea he has said will save the company. Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.

Instead, the divisions turned against each other—and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources. (Many declined to go on the record for a variety of reasons, including fear of angering Lampert.) Shaunak Dave, a former executive who left in 2012 and is now at sports marketing agency Revolution, says the model created a “warring tribes” culture. “If you were in a different business unit, we were in two competing companies,” he says. “Cooperation and collaboration aren’t there.”

(click here to continue reading At Sears, Eddie Lampert’s Warring Divisions Model Adds to the Troubles – Businessweek.)

More Spare Change
More Spare Change

and because this should get repeated more often – hedge fund managers are not necessarily the geniuses they think they are:

But the epic incompetence of guys like Lampert may be dispelling the myth that financiers are the smartest guys in the room. Research suggests that not only do hedge fund managers typically understand squat about running a company, they’re often not much good at beating the stock market, either. A recent Bloomberg article points out that in 2013, hedge funds returned 7.1 percent. That doesn’t sound so bad, until you consider that if you had just stuck your money in the Standard & Poor’s 500 Index you would have seen returns of 29.1 percent.

Ayn Rand’s vision of idiocy: Understanding the real makers and takers

Seth Anderson0 comment

Who Is John Galt?
Who Is John Galt?

Feeling lazy right about now1, so I’ll simply point you toward this…

For those who haven’t had the great misfortune of reading “Atlas Shrugged,” the book is premised on the idea that if the world’s “creative leaders,” businessmen, innovators, artists (i.e., the “makers”) went on strike, our entire society would collapse. These strikers hide out in a utopian compound in the mountains of Colorado while the rest of us despondently wail and gnash our teeth and beg for them to once again bestow their creativity upon us.

The book mirrors in many ways the more lefty “Elysium,” where to escape the environmental degradation they have wrought, the wealthiest go off to form their own society in the sky. The rest of the human population remains mired in slum-like conditions, because the only thing standing between humanity and savagery is Bill Gates. But have no fear! Rather than collectively solving our problems, humanity needs a salvific “Jesus” in the form of (who else?) Matt Damon to make us citizens of Elysium and thereby save humanity. These two, very disparate tales of woe both have common elements (what I will call the “Randian vision”): society relies on the wealthy; collective action through government is either meaningless or detrimental; and a few individuals (“great men”) should be the center of social change and innovation. But all of these assumptions are false.

…

The arts are largely supported by public funding, not private donations. And many businesses are less self-sufficient than they imagine, requiring bailouts and competition between states to support them. Many corporations, like Walmart, dump poor employees on to government largess rather than pay them enough to feed themselves. And who builds the roads and takes out the garbage?

Were the richest .01% to venture out and form their own society, the rest of us would not devolve into violent conflict; rather, without the expensive burden of the wealthy tapeworms siphoning our common wealth, we could begin to solve our problems. So to the rich who threaten to leave New York, I say, “go.” If the rich somehow manage to form their own planet, we can start fixing the problems on ours. We are the makers, they are the takers.

(click here to continue reading Ayn Rand’s vision of idiocy: Understanding the real makers and takers – Salon.com.)

Continue reading “Ayn Rand’s vision of idiocy: Understanding the real makers and takers”

Footnotes:
  1. probably due to this, and this [↩]