So, Why Do First-World “Elite” Store Money Abroad?

In a previous post, I talked about the tendency of third-world “elite” to store money abroad. A few readers thought I was implying that whites are somehow better.

Sadly, for them, that is not the case. White “elites” in the first-world are just as likely to steal, scam and store money in tax free havens as non-white “elites”. It is just that the system does not let them go as far as they otherwise would.

How many large US and other western corporations pay even a cent of income tax? Aren’t accounting rules and law great- for the rich?

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005. More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said. During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study

So who is benefiting from the money which would have gone to the government?

Shareholders.. Looked at the stock market in the last three years? Institutional investors.. Read your pension fund statements of late? Maybe the capitalists are putting it back in the economy by starting new businesses and creating new jobs.. Fat chance, unless you are talking about China.

So what are they doing with all that extra money?

Some of it is just sitting around- What Will It Take for Companies to Unlock Their Cash Hoards?

All told, the companies in the Standard & Poor’s 500-stock index are sitting on more than $960 billion in cash, a record.

Remember that the quoted figure of $960 billion is probably a fraction of the real amount hidden by all types of corporations through open obfuscation, made-to-order laws, creative classification and clever accounting. You bet that most of this money is being used for financial speculation and similar scams that hurt almost everybody else.

So, who benefits from hoarding a few trillion dollars- You? the average person? the economy of first-world countries?
There are only two groups that really benefit from hoarding such large amounts of money-

a. The senior management of companies (rulers and despots).

b. People who ‘manage’ that money (bankster-types)

So how is this situation fundamentally different from third-world rulers and despots stealing money to hoard it abroad?

Comments?

  1. June 15, 2011 at 6:53 pm

    yes, Mr. Crapacoli–doesn’t the bankers bailout make you sick to your stomach????

    obviously the system is f*cked

  2. Ryu
    June 15, 2011 at 7:45 pm

    We ought to be begin by recognizing who it was that built the system that “does not let them go as far as they otherwise would.” Those systems, of course, were designed by white men, anticipating this unchecked greed. Here is one instance where the white elite is superior to the third world dictator – a limit on greed, a realistic view of human nature.

    BULLSHIT!!

    Almost all those legal constraints came during the progressive era (1930s-1970s). Since then it has been downhill..

    It is true that many corporations do not pay income tax. What about payroll tax, unemployment tax, other state and federal taxes, donations, philantropy? It’s not the case that they get off for free. That gives off a very false impression.

    You were right the first time: shareholders gain from the money that would have gone to government. Most shareholders are ordinary workers, retirees, real Americans. I get a dividend, the company is accountable to me and all of the other shareholders at the annual meeting. Most “institutional investors” work for ordinary people.

    You are never going to benefit from the ‘system’- so stop sucking dick. You are just another useful (and disposable) idiot.

    The difference is, that 3rd world dictators are hiding their loot in preperation of the day that they are deposed. They know their time is limited. It’s insurance. On the other hand, 1st world elites are just working the system, trying to eck out a few more pennies per dollar. There may be an aspect of insuring themselves, but it has to do with avoiding taxation. It is not driven by fear. There is a tremendous difference between Mugabe sitting in his compound surrounded by armed guards and a CEO who sees his employees every single day.

  3. the dude
    June 15, 2011 at 8:44 pm

    LOL. Right on the third world point, but this argument here made me laugh. Hint- it stems from policies you advocate for in your posts on ‘economics’

  4. Commander Shepard
    June 15, 2011 at 10:30 pm

    “Almost all those legal constraints came during the progressive era (1930s-1970s). Since then it has been downhill.” -AD

    All hail the KKKONservative revolution!.

  5. Commander Shepard
    June 15, 2011 at 10:38 pm

    I’d like to add that the white and third world elites are like princes of the catholic church. They all adhere to the same ideology but owe allegiance to no one country.

  6. Ryu
    June 16, 2011 at 12:34 am

    You have to picture the third world dictator – in a palace, surrounded by bodyguards, travelling with an armed escort. All of his citizens are impoverished and wouldn’t hesitate to kill or steal from him.

    Compare this to a 1st world country. When I go to the gym tomorrow, I’ll see a few members who are multimillionaries and who have run banks – elites. In Zimbabwe, they’d have the armed detail. Here, they are driving their own car, buying groceries, I can walk up, shake his hand, and talk to the guy.

    I suppose one could say that here, when one man would rise, all would rise a bit. It isn’t like Equitorial Guinea, where one family is multibillionaries, and everyone else lives in the dirt. The difference is fear of ordinary people. With the S &L Crisis in the 80s, the junk bond era and today’s bailouts, things are changing. Still, they are not bad yet. There are enough people who want to become the rich, not just to take what they have.

    This has been changing over the last 20 years. There is as CC Shepard, a group of elites who have no home country, and jet set from Paris to London , Zurich and Mombasa. They have no alliances except to money.

    Further, because I am a WN, the logic of the situation is that as the US assimilates more third world people, it will become more like a third world nation. Our actions, morals, and politics will resemble those of Vietnam, Mexico,Iraq , South Africa or Guatamala. In such places, the attitude of the rich is to screw everyone and to just buy more security. Then hide your cash offshore in case you need to beat feet. As is beginning to happen here – exactly as predicted.

    • June 16, 2011 at 1:36 am

      So what you are saying is that “Third World” peoples know who the thieves are and are after them, while “First World” peoples let the thieves among them as wolves among sheeps.

  7. Ted
    June 16, 2011 at 7:32 am

    I suspect they are holding onto that cash because they see rising prices. Take the recklessly low interest rates in the U.S., and given the fact that oil is priced in declining dollars, companies suspect that they will have to spend more on resources. So, in its place, they will squeeze every last bit of productivity out of its domestic workforce, outsource to China/India the rest. But, if you suggest to them to trim their bloated pay packages, which hold no connection with performance – you get labeled a socialist. Compare American CEO packages with Japanese, French, and German counterparts. American companies are generally worse in the management department, but are rewarded much better.

  8. Ryu
    June 16, 2011 at 8:29 am

    Nestor,

    Even though it doesn’t sound very good, that’s about right.

    Life is too good in the 1st world to hunt down the biggest offenders. I’m busy putting my 40 in, trying to rise in the company, raise a family. In the 3rd world, unemployment is much higher, and they work more for less. The

    In a way, I am in on the scheme, I get a piece of the action. Let’s say I want a piece of Exxons’s profits. Because we have a middle class and I am in it, I can call up my broker and become an owner. I’ll get a dividend. Right now I would get $1.88/year from a stock running 80 dollars.

    Those companies aren’t sitting on cash, they’re sending part of it to me every quarter. Now – maybe I’m not happy with how much I get and I’d like more – but I am free to buy as much as I like and if I buy enough, I could get a seat on the board of directors.

    • Ted
      June 16, 2011 at 8:39 am

      You believe that? You think you can elbow aside CALPERS, PIMCO, and other institutional investors? The myth of the small investor at work.

    • June 16, 2011 at 10:12 am

      But for how long?

    • June 16, 2011 at 1:03 pm

      hahahaha,

      You sound like the spineless masses who went along with Adolf Hitler….

      Your not one of those White Power Mangina types, are ya?

  9. Ryu
    June 16, 2011 at 10:13 am

    Ted,

    I can’t elbow aside the institutions. They have much more capital than I do. The vast majority of clients in finance are normal people. CALPERS works for California’s public employees, you know that.

    I understand why people get mad. I don’t think it’s good that a fund manager can pull idown 500 million a year. I don’t think it’s right for a broker to churn and burn clients. But everyone who is in the market is part of the system. The average investor is just too trusting and uneducated to realize how he’s being fleeced or that he can be fleeced. The reason the “elite” can screw over Joe Blow is because he doesn’t know how things work.

    • Ted
      June 16, 2011 at 10:31 am

      Ryu,

      Since wages have remained stagnant in the U.S. for almost 3 decades, but costs of housing, education and health care far outpace inflation – people need to pay for those items, and need to find ways to get money to pay for it. On the one hand, you saw the vast expansion of credit. If you had a car repair that you just did not have the cash for at the time, you put it on your card. Then, you have to buy a last minute ticket cross country, due to a family health emergency. That debt adds up.

      So, since people are not “earning” enough to pay their bills, they buy the notion that they can “invest” their way to prosperity. One year it will be stocks, the next year houses, then oil, then back to stocks. All the while, “brokers”, “analysts”, “consultants” – all of whom have it in their interest to maintain an information asymmetry with their clients will make sure that the “small investor” does not really know anything.

      Compare that to automobiles. Now, you can walk onto a car lot, with a CarFax report or some other agency report in hand, and know all the details about the car you want to buy. You may even know how much the dealer himself paid for it. There is information equality between buyers and sellers. You can even buy a car from across the country, whereas before you used to be limited to your local dealers. NO one shed a tear when all those car salesmen and dealers lost their jobs, because try as they might, they could never shake the “slimy” reputation they had. Even though banksters have a slimy reputation as well, they still hold a chokehold over information, and use it to their advantage, and the nation’s detriment.

      • June 16, 2011 at 1:06 pm

        Ted,

        unfortunately Carfax doesn’t tell the whole story….. Lots of vehicles are in accidents and it doesn’t wind up on the “report.” Still, it’s something but ya gotta get a vehicle looked over and even then there are risks…..

  10. Ryu
    June 16, 2011 at 1:52 pm

    I like that arguement, Ted.

    Assymetry is everywhere. Cops may lie to suspects, but the opposite is purgery. There are areas where you hold the advantage over me, and others where I hold over you. My God, the way cops use that asymmetry in interogations is amazing. And all the perp has to do is ask for a lawyer and shut up.

    I think the key is to stay in your area of specialization, and fight on your ground. I wouldn’t play Tiger Woods at golf, nor try to out-hustle a NY stockbroker. What I see is that “the elite” are absolutely merciless in taking advantage of that asymmetry. We should do likewise. They are still human, and cannot be the best at everything.

    • Ted
      June 16, 2011 at 2:58 pm

      Ryu,

      One more point – large investors are getting screwed by the banksters as well. Watch “Inside Job” on DVD by Charles Ferguson or read “The Big Short” by Michael Lewis. Both go into great detail about how supposedly “savvy” investors were lied to by the banks – such as how Goldman Sachs devised an investment that was not designed to grow in value, but actually blow up. Or, how because of the revolving door between Wall Street and DC, when the banks were in trouble, they called in favors from their political friends. If large funds, with thousands of employees that are supposed to be studying the bottom line are being hood-winked, what does the average small investor hope to achieve? Is it realistic to expect a high school teacher, after putting in a full-day, and then grading papers at night, to set aside time and read up all she can about her investments?

  1. June 19, 2011 at 1:14 am

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