Inversion: The New Name For Corporate Tax Evasion.

Some of the world’s largest corporations were founded in the US. They were capitalized by selling shares to Americans on American stock markets. They relied on our infrastructure, our labor force, and the stability of our currency in order to prosper and grow. That growth was accelerated by tax incentives and government giveaways. They lobbied our Congress and the Federal Trade Commission to turn a blind eye as they swallowed up smaller competitors to create virtual monopolies. At the same time, these corporate giants took advantage of tax loopholes in order to reduce their tax rates to single digits.

So how have these companies repaid American taxpayers for their investment and their patronage?

Many corporations shipped their manufacturing jobs overseas in search of cheaper labor. They then dumped low cost products on our markets in order to force smaller competitors into submission. More recently, they stashed billions of dollars of their ill-gotten profits in foreign banks demanding that our government create a tax holiday to encourage them to “repatriate” the funds at greatly reduced tax rates. Now they are purchasing or merging with foreign competitors so that they might move their books overseas and avoid paying US taxes altogether.

The name for this latest off-shoring scheme is “inversion.”

Inversions are already costing our nation billions in lost revenue…revenue needed to maintain the infrastructure and economic stability these corporations rely upon. Medtronic recently resorted to the inversion scheme. Other companies to take advantage of the accounting trick include Aon, Applied Materials, Eaton Corporation, Fruit of the Loom, Halliburton, Ingersoll-Rand, Omnicom, and Tyco. The latest corporation to consider the scheme is Walgreens, which would presumably move its books from “the corner of happy and healthy” to Switzerland.

To add salt to this festering (and costly) wound, most of these inversions are being aided by our “too big to fail” banks; The very banks that were bailed out of certain bankruptcy in 2008 with our taxpayer funds.

So call it what you want, this latest corporate accounting trick is just another name for tax evasion. And I’d suggest another name for any corporation that resorts to such tactics…Traitor.

When US Jobs Are Shipped Offshore, It’s In A Shipping Container.

Since Malcom McClean invented the modern shipping container in the late sixties, no individual item has had a greater impact on the US and world economies.  These large, steel and aluminum boxes can be filled with products, carried by truck to the nearest port, and loaded by crane onto a ship specifically designed to carry them.  Then, upon reaching the next port, the containers are stacked onto a rail car and carried across country, loaded onto another truck and hauled to a warehouse before being unloaded and the products distributed to stores.

Shipping containers have not only revolutionized shipping.  They have revolutionized manufacturing and distribution.  More than any other single factor, they have enabled and defined globalization.

In the process, they have eliminated jobs of dock workers and merchant mariners.  They nearly destroyed our railroads.  And they have allowed manufacturers to export jobs to countries with the lowest salaries and least regulations.  Indeed, the equipment from manufacturing plants in the US was likely shipped to new manufacturing plants in China and other parts of Asia in shipping containers.

True, these containers also bring us cheaper products.  But, following the loss of high-paying manufacturing jobs, an increasingly smaller percentage of Americans are able to afford them.

During a recent interview on National Public Radio, Rose George, author of Ninety Percent Of Everything; Inside Shipping, The Invisible Industry That Puts Clothes On Your Back, Gas In Your Car, Food On Your Plate, explained that the efficiency of the shipping container has impacted virtually every industry on every part of the planet.  For example, she noted it is now cheaper for Scotland’s fishing industry to load fish caught in the North Atlantic into containers and ship them to China to be filleted then shipped back than to have workers fillet them in Scotland!

This is good for the companies, good for China, and good for the consumer.  It’s bad for Scottish workers and bad for the environment.  For even though maritime shipping is, in itself, fuel efficient, such unnecessary shipping adds to the carbon emissions that accelerate climate change.  Ships and their sonar also create noise that disrupts communications of sea life, such as dolphins and whales.  And there is the inevitable pollution of waste from the ships.

There are other negative aspects of shipping containers.  Since they have overwhelmed ports around the world, there are far too many to be checked by customs and law enforcement, making it easier for smuggling rings to operate.  They have even been used to smuggle humans into the US.  The increased maritime traffic has also rejuvenated the once-dying pirate trade.  And increased shipping has accelerated the transfer of invasive species.

Often the shipping containers used to bring finished products to the US are filled with our toxic e-waste and shipped to countries that have few environmental regulations for the heavy metals to be reclaimed, damaging the environment and risking the health of low-paid workers in the process.

George’s book and another, The Box: How the Shipping Container Made the World Smaller, by Marc Levinson examine the scope of the container shipping industry and all of its impacts, both positive and negative, on our society.

Both books are fascinating reads.  But they could just as well have been titled How the Shipping Container Destroyed the American Middle Class.