Obama’s comment on a Humans of New York post featuring a family in Iran is an important symbolic gesture and a hopeful sign for the future. Although… seeing as it was just signed “bo” we can’t rule out that it was the family dog.
Prophecies from the Oracle of Miami
Jeb Bush attacking Donald Trump in Spanish sounds like the second act of a Greek tragedy where your specific efforts to avert a prophecy make it come to pass.
Op-Ed | Trump’s Bankruptcies In Perspective
The following op-ed originally appeared in The Globalist.
U.S. presidential candidate Donald Trump has publicly described his business empire’s four bankruptcies in the following terms: “I have used the laws of this country…the [bankruptcy] chapter laws, to do a great job for my company, for myself, for my employees, for my family.”
Because his businesses entered “Chapter 11” bankruptcies – named for the provision of the U.S. legal code that allows businesses to restructure without closing shop and liquidating – he sees the four episodes in utilitarian and strategic terms, not as failures.
While I am not defending Donald Trump’s view of his practices, one key question needs to be answered: Are Trump’s business bankruptcies really worse than other corporate legal manipulations and practices?
Gaming the system
True, Chapter 11 bankruptcy is uncommon by comparison to other maneuvers through American business and tax law. Certainly bankruptcy still carries a bit of a scarlet letter stigma even if the risk is somewhat controlled, and so it is generally avoided.
But is manipulating corporate bankruptcy law really worse than those other tactics? Major U.S. companies use and abuse legal provisions constantly to evade and avoid taxes to the government.
Trump, by contrast, used the law to avoid creditors at major investment banks and funds (and most of them came out the other side of his restructurings with lucrative deals).
Some U.S. companies do complicated maneuvers like “offshore reincorporation” and other tax-avoidance mergers – a loophole Trump has actually criticized on the campaign trail.
The entertainment mogul used Chapter 11 for cashflow management purposes (and to slash hundreds of millions of dollars in company debts). If companies use the U.S. legal code to boost their profits and cashflow via tax avoidance, how is that less dubious than using Chapter 11 bankruptcy?
Donald Trump made business deals on the (correct) assumption that he could fall back on restructuring laws. Other firms make deals based on assumptions that they can fall back on tax loopholes.
Firm defenders of American business law might dismiss the existence of business law loopholes as irrelevant either way and might prefer to judge his record solely on what these bankruptcies says about his ability to run businesses responsibly.
Poor financial management
Well, what about comparing it to popular and trendy legal maneuvers that are questionable long-term business practices? Many U.S. companies have been borrowing heavily to reward their shareholders, instead of using it to invest in expansion.
This practice effectively means shareholders are profiting against the company’s future financial health, rather than from current (or future) returns on its previous (or current) investments. That means literally raiding the companies’ future earnings to generate payout cash now.
Such a company will eventually have to pay back the borrowed money with interest. In the meantime, it will not have gained anything from that borrowing because it was used to rain money down on shareholders instead of actually growing the company’s operations.
The vast majority of American stock is held by a very small number of people with a lot of money to throw around. This means companies are putting themselves deeper into a long-term hole, even as wealthy shareholders rake in money in the short-term.
Trump may be incorrect when he asserts that “virtually every person” at the top of the business world has made use of bankruptcy protections. But his claim might simply be a bit ahead of its time – given the short-termist (mis)management of so many major U.S. companies today.
Down the line, by borrowing to benefit shareholders, a lot of American companies could have very high debt burdens. They would also be very underdeveloped compared to foreign competitors who invested in keeping up with the times and growing their long-term potential earnings.
That will make them uncompetitive, as well as vulnerable to bankruptcy or Japanese-style zombification.
And even all of this is to say nothing of the Wall Street debacles in 2008 that would have forced massive bankruptcies were it not for backstop loans by the Federal government.
Trump, business law exploitation pioneer
Sure, Donald Trump flew closer to the sun (and did so sooner) than these other future Icaruses, but the effect may eventually be the same. Singling him out would be mistaken, if not hypocritical.
Once again, as with his xenophobic appeals, one finds that Trump is merely reflecting back a refined and purified vision of what America has become in its re-expanding dark corners – in this case corporate America and the wealthiest 1%.
Those corners of our society exercise financial and political power in a dangerous direction. But he did not make it that way, and he is not the exception.
There is a separate set of rules in the United States accessible only to the very wealthy and their mega-corporations that allows them to evade and avoid debts and taxes that are seemingly inescapable for average Americans.
That lack of fairness in the rules is undermining voter confidence in the political and economic governance system. Ironically (and worryingly), that mix of frustration and apathetic helplessness has created the opening for someone like Trump to step into the breach.
AFD Micron #24
Much better idea than fusion restaurants: alternate history restaurants. Don’t just give me modern Thai-Mexican food, give me a full menu, interior design, and waitstaff uniforms from the world that cuisine emerged from.
We need a conspiracy version of Fivethirtyeight
Guest post by Chris Chinn. You can follow him on Twitter @yeloson.
It would be great to have a conspiracy version of Fivethirtyeight. It’d be a political prediction site, but all of the guesses would be on whether the aliens, the Freemasons, or the government mind control rays were polling better state by state to decide upcoming elections.
“Trump’s surge can only be due to the proximity of the Nemesis Comet. Can he turn that into a real lead by shoring up his support with the Brain Beetles? He’s done a great job so far by blaming the Mexicans for the fears he has about his alien cranial parasite, but dog whistles like that can only go so far, including with xenological aliens…”
Graphic by Bill Humphrey for Arsenal For Democracy. Click to enlarge.
“The prospects for octopus takeover are still fairly remote at present”
News from down under — both in the Australia and water senses — “Octopuses Appear To Take Up Arms As Submarine Warfare Escalates” (NPR News):
Those ornery octopuses have also taken to hurling objects at each other, like shells and bits of seaweed, blasting them through the water with high pressure. And while Godfrey-Smith says there may be other explanations for this behavior, the number of direct hits has him suspecting that the octopuses are using projectile weapons.
“It would be quite significant if it’s happening,” says Godfrey-Smith, who’s been collaborating on this research with David Scheel of Alaska Pacific University. “In general, projectile use is pretty rare among animals.”
Title quote was from the article in response to the inevitable inquiry by reporters.
Pen and wash drawing by malacologist Pierre Dénys de Montfort, 1801, from the descriptions of French sailors reportedly attacked by a colossal octopus off the coast of Angola.
Poor US-Russia relations still thwart Native reunifications
“The ice curtain that divides US families from Russian cousins” – BBC News
The people of this Bering Strait region still see themselves as one people and the border as an irritant. It was first drawn up in 1867 when America bought Alaska from a cash-strapped Tsarist Russia. But no-one took much notice then. Families lived on both islands and criss-crossed back and forth until 1948 when the border was suddenly closed. The Soviet military moved on to Big Diomede and the civilians were forcibly resettled on the Siberian mainland.
[…]
Over the years [since the Cold War ended], hopes continued that the more entwined relationship between the Russia and the West would loosen up the border. But they have been dashed by the Ukraine crisis and by Russia’s military build-up.
June 2001 NASA satellite image of the Bering Strait, where the U.S. state of Alaska (right) meets Russia’s Chukotka Autonomous Okrug (left).
Previously from AFD:
– NASA comes out swinging at Russia, US Congress
Also recently in the news:
The Atlantic: “In Alaska, Climate Change Threatens to Sweep Away the [Native] Village of Newtok” – A longform piece on this devastating trendline for Alaska Natives:
A 2003 report from the Government Accountability Office found that most of Alaska’s 200-plus native villages are affected by erosion and flooding, and that four were in “imminent danger.” By 2009, the GAO said 31 villages were in imminent danger.
