Our economy is not in the doldrums- that would be an improvement. And, the problem is that it’s not just us (the US)- there’s Europe, too. And, with that problem, the potential (really) of the failure of the Euro. If you don’t think this scenario sounds reminiscent of the interlude between WWI and WWII, then think again.
There are, however, tremendous differences. Now, corporations (the big ones) are sitting on their kettles of gold. They are not spending money, complaining that the “people” are not buying. That is true in part because the corporate heads have been paying themselves 50, 100, 200, and 500 times the average wages of their employees- if they have not laid them off, either.
Now, these same big firms that laid off roughly 2.5 million Americans since late 2007 and hired the same number overseas, want special provisions to “repatriate” these profits here. Because there is nothing worth buying there!
And, why should they pay the US taxes? (Most of the big corporations pay a lower rate than the middle class worker (the class that is rapidly disappearing) pays. Don’t quote the theoretical- divide federal taxes paid by gross revenue or net profits and be astonished.)
Well, how about offering them this “cookie”? You want a special rate (yes, they want 0%, but will “accept” 5%) to bring your profits back? For every $ 100,000 paid in NEW employee salaries, you get your 5% credit on $ 200,000 (which includes that $ 100K of salary). If you drop them (render them unemployed again) in less than 18 months, you get hit with a tax penalty of $ 200K, like the ones imposed on folks who hit bottom and need to cash in their IRA’s.
Given the numbers the corporations are claiming they will repatriate, this would mean hiring about 4 to 5 million people. Which would eliminate unemployment in the US. And, would let the companies repatriate their more than $ 1 trillion yielding them at least $ 480 billion tax-free- and drive demand in the US sky high, since unemployment would be gone and spending would explode.
I admit that this is an oversimplification of the situation. But, don’t you think we should try something new and get a win-win?
By the way, the payroll tax proposals (and the social security tax holiday) that have been suggested were proposed by me- loud and clear– two years ago.
Yes, I do think we should try something new and get a win-win. What would happen to the workers overseas? If they lose their jobs, would they move over here to work? You raise some very valid points and I hope and pray that change is coming soon.
I doubt they would, Janette. And, with more employment, the companies sales and profits would increase, since there would be more consumers with money.
Roy
We could use a win-win. Ever thought of running for office, Roy?
Suerae:
Of course, I have. But, it was a lot less personal to help others win elections. And, I am fairly certain I would be like Senator Jimmy Webb- he loves the fact that he can make a difference, but hates the company he has to keep.
Roy
Oh, my, if Roy ran for office he would be bombarded with crud and called a liberal socialist tree-hugging hippie who wants to tax everyone. That seems to be what happens to anyone who asks corporations to pay their fair share, anyway.
Amethyst:
I doubt they would limit their statements to Liberal. I am sure my past activities registering Blacks to vote, blockading a few universities to raise awareness of their political actions, and the divestiture of certain laboratories that only promoted death, war, and destruction would be among the choice items.
And, like the Bellamy Brothers sang… He’s an old hippie, and he don’t know what to do…
Roy
Roy, since we are talking politics I would like to ask you to use your political influence to spread the word about Rick Perry. He is a HYPOCRITE. He brags about all the jobs in Texas when the truth is he has cut millions from the education budget and hundreds of teachers have lost their jobs in the past 2 years (including my daughter who is a U.S. Navy veteran).
I think Rick Perry said it all- unintentionally- last night. He responded to Michelle Bachmann by saying he was insulted that she thought he could be bribed for a mere $ 5000. A smarter individual would have asked him exactly how much would it take! (It seems to be somewhere between $ 25K and $ 40K),
And, in addition to destroying the state, Texas is in deep financial trouble. Without accepting the Federal Funds he so decries, the yawning canyon that is the state budget gap would be clearly in evidence And, without federal and state/local jobs (which he decries), the state would have a negative job growth.
Roy
This is an interesting suggestion, Roy. I’m generally a little independalibertarialist when it comes to politics and the “free” market. However, I think your suggestion is fair-minded and provides incentives for businesses to move their jobs back. For too long we’ve held a “devil-may-care” attitude as long as we were getting cheap stuff.
I’m encouraged to see that although the corps are sitting on their cash, many are starting the long haul of moving their manufacturing back to the US. I heard the Best Buy is repatriating (if that’s the term) their IT operations from overseas. I know that Lands’ End is setting a corporate strategy to bring all their manufacturing back to the US. (It will take a while because the supplier infrastructure has been neglected/outsourced for so long, but it is an encouraging bit of news).
I have not heard that Best Buy is moving things back- but I am sure that is more related to the blowback they have earned from their abysmal services over the past few years.
Lands End is part of the Sears network and there is no long term thinking discernable in that organization. But, who knows, miracles do occur.
I hope folks notify their senators and congressman about this potentiality, so that it may see the light of day on the Capitol floor.
Roy
Hi Roy,
Please don’t run for office. We need people like you to not be sucked into our warped system and share their voice of reason.
My problem with corporations is their lack of big thinking when it comes to their role in the economy. It’s all short-term thinking about how to save themselves and make more profits for the shareholders.
Sherrie
Sherrie:
I have absolutely no intention of running for office. I have worked with various candidates to advance their causes, when their philosophy meshes with mine.
Corporations understand their role in the economy – but have decided that they can play chicken with the politicians, giving them a few bucks of lobbying funds (why are they never called bribes?) to advance their cause with little or no risk to themselves
Roy
Repatriating jobs is easier and faster than creating new ones. It would increase the internal demand which could possibly create more jobs.
What about devaluating the dollar a bit? That would also indirectly increase the internal demand making US products more competitive. As a side product, it would decrease de debt also, and indirectly help my country (did you know we use the US dollar as the national currency?)
Gustavo:
The dollar has been devalued over time. But, now with the imminent failure of the PIGSI nations, the dollar has climbed up against the Euro. That is international shenanigans for which no one nation has total control.
Roy
The challenge Roy is that the whole world is out of whack and has been for many years. Most of the western world now has debt to the countries they used to lend money to and profit for profit sake is better than community and true shareholder value.
We need to redress balance worldwide but we also need to find new ways to evaluate worth rather than just money and things.
BTW – stay out of the government but play politics. Much easier to express opinions.
Roberta:
The balance of payment is a national (each nation) issue. Corporate profits that remain overseas means that moving them back to the Corporate parental location (in this case, the US), can make a dent in the balance of payments.
Roy
Maybe there’s a difference between corporations in the UK and US. Corporations over here have no loyalty, no heart, no consideration for others. They serve the sole purpose of making profits and keeping their shareholders happy. The chief executives have big pockets and want to keep filling them. They believe in the principle of Win-Lose
Larry:
There is some truth to that situation. However, when they want something- and in this case, their overseas profits are doing them no good, since the economy elsewhere is not providing a sink for these funds- they at least make believe they plan nice.
Now is the peoples’ opportunity to get some equity.
Roy
As always, thought provoking insights.
Thanks for dropping in, Tor.
And, glad you found the post of interest.
Roy
the corporations do need to change with that I totally agree, we can’t put citizens back to work if there is no place to go. Offer the tax incentives and watch it work.
I am learning some things from you that Roy, I truly am.
Thanks for visiting, Jan- and for your comments.
Corporations – and many others- seem to think it’s someone else’s job to spend the first buck. Yet, in this instance, big business knows that it really can’t spend these stockpiled profits anywhere else. Let’s get a benefit from their request to do so virtually tax-free.
Roy
Hi Roy,
You are so right, something does have to be done. I was one of those folks who lost their job twice because the very large Pharma company I worked with decided to send jobs overseas. Ultimately, I and many others are taking the fall.
Thanks for your post,
Cindy
Of course, Cindy- and it’s YOUR fault. 🙁
Now, they have all these profits from overseas efforts. And, the markets are not developed enough for them to use them there!
Roy
I like your perspective Roy. No doubt that something needs to change to make our current situation better. And a win-win is an excellent idea.
Thanks for your visit and your comments, Lisa.
I can only hope that our politicians stark looking for win-win’s… this salting of the earth to insure the other side loses helps no one!
Roy
Coaching is all about experimenting with something new. It is very true you can’t do the same action and get a different outcome. After all, they called it “The New Deal”, right…not the “Same Deal” or the “Old Deal”…and I am all for simplification. So many aspects of government seem to complicate things in a way that just seems to make sure they stay employed while many small business owners drown in paperwork, forms and regulations. I vote Roy Ackerman for President….now can I stick my head back in that hole…it’s all very comfortable down there 😉
It’s too much of “I need to win, you need to lose”, Tambre.
And, it also has a lot to do with agglomerating power. If the poor stay poor, the middle class are sold a bill of goods that there is upward mobility, all the while insuring that there isn’t, power and riches accumulate to those in power.
Oh, that’s SO cynical. Yet, true.
Roy
Roy I am all for win-wins. Ever since I first read Stephen Covey in the 80s I discovered the possibility of mutual beneficial scenarios, it can open up the world to possibility.
Me, too, Maureen.
I am trying to recall if that’s where I first coalesced my thinking or did someone else help stir those thoughts.
Roy
Ok so I am voting for Roy Ackerman for President! Seriously though Roy, you know your stuff. And numbers sound pretty good and pretty fair. But for the life of me I still don’t know why there are not more people screaming, lets do something different.
I agree, we need a change but not the kind of change Obama said he would make, and did he make a change? Hmmm…. I guess you can call it a change, highest poverty level in 52 years! I guess that is a change.
Sorry, Lynn, I have NO desire to run. But, I do have a desire for our country to grow and succeed.
So, I keep writing Senators (who don’t want communications from folks not in their states- even as they sit on national committees) and Congresspersons (same reason here)- who seem to listen only to the lobbyists who augment their rather substantial salaries and lifetime benefits. (Shouldn’t we call them bribes?)
Roy
You know, Roy, I just learned that a similar thing was happening with a local NGO. There were so many budget cuts, but what was *not* changing was how much the president and other leaders were being paid. Instead, there were drastic consequences for the projects and for the workers. Needless to say, many people are being treated unfairly both within the NGO and with the beneficiaries. How scary to think about this happening on a national scale because of the economy!
Love your solution, Roy! Always insightful to read your thoughts!
Thanks for your comments, Samantha.
I admit that I have not been following the NGO’s. And, I don’t mean to slur their names, but I was familiar with one very large not-for-profit entity that was certifying products for environmental applications. They paid their executives outrageous sums. And, they charged each firm a decal fee- in other words, to get approved the fees were $X (tens of thousands) with a fee for each product they sold. They never reinvestigated the products- they just collected residual income. I’m not sure that protected anyone.
Roy
Hey Roy,
The discussion is going strong. But please do run for office; I strongly believe that “good and workable” people need to be in the decision making chairs! As long as they think and think for the better and are ready to put that into action. So, please do!
As for the economy, I am still finding it tough to understand so many things. And such high unemployment is just one of the mysteries.
If you are talking about win – win… it might be more than helpful. Think about suggesting this idea in a leading publication?
Thanks, Hajra.
I have submitted this to several key Senators and Congresspersons. We’ll see what happens.
Roy