Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
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Topics today include:
The Federally Funded Poverty Industry
Beware of 5% Bonds that Really aren't Bonds
Dunking Exhibition You Will Find Hard to Believe - NBS Stars Did
Bird Brains Are Similar to Humans
Is Department of Homeland Security Involved in Partisan Politics?
Monsanto Whistleblower Gets $22 Million
Are America's Problems Due to Barack Obama?
Top Chicago Principal Resigns, Blasts Mayor Emanuel
The EU Makes a Tax Ruling Against Apple Retroactive for 10 Years
Ireland Is Phasing Out Its Tax Scam
UK Has Great Divisions Over Brexit Execution
Islamic State Leader Killed
A Mount Everest Scam
Articles about events, conflicts and disease around the world
Department of Homeland Security Has Surprise for Bernie Supporters at DNC Lawsuit Hearing (Pam Martens and Russ Martens, Wall Street On Parade) The Martens have contributed to GEI. There is a lot more in this article than just the fact that a Homeland Security vehicle honked disruptively as a Bernie Sanders supporter attempted to video a news report outside the South Florida court where a suit is being presented alleging bias against Sanders by the Democratic National Committee (DNC) during the opening days of the trial. Further, the Martens assert that the very existence of the trial has been ignored by mainstream media.
SEC awards $22 million to Monsanto whistleblower (Reuters) A former Monsanto Co (MON.N) executive who tipped the U.S. Securities and Exchange Commission to accounting improprieties involving the company's top-selling Roundup product has been awarded more than $22 million from the agency's whistleblower program, the executive's lawyer said on Tuesday. The award of $22,437,800 was tied to an $80 million settlement between the SEC and Monsanto in February, according to the lawyer, Stuart Meissner in New York, in a statement. It is the agency's second largest under the program. Meissner declined to reveal the whistleblower's identity. The mis-deed by Monsanto involved overstating revenue by failing to properly account for rebates paid to customers.
America's problems aren't Obama's fault. They're George W Bush's (The Guardian) Richard Wolfe argues that the unhinged arguments at the heart of the 2016 presidential election are not really a debate about the outgoing president. They’re about Bush’s legacy. Econintersect: If you accept Wolfe's opinion as true, we still argue that Obama has failed to adequately address the problems left behind by "W" and his three (probably should say four) predecessors in the Oval Office. The chief among these is the neoliberal construct of a TBTF financial oligarchy which has overtaken and smothered the 'real economy'. Obama might offer an excuse in that the Republican controlled Congress (for all but 2 years of his administration) limited his ability to act in the reform arena. But we do not accept that - he never articulated anything indicating he understood the problem, to say nothing of wanting to resolve it.
The EU's Apple Ruling Is a Victory for Tax Confusion (Bloomberg) The European Commission’s decision to impose a tax bill of €13 billion ($14.5 billion) on Apple is unjust and unnecessary. And the harm is not confined to a single company: The ruling has cast a cloud of uncertainty over Europe’s corporate-tax rules, potentially affecting all multinational investors. EU Competition Commissioner Margrethe Vestager says Ireland violated state-aid rules, which prohibit the selective support of particular companies. She may well be right. If so, the offenders are Ireland’s tax authorities, not Apple, which believed it was in compliance with the relevant national law.
The ruling will be appealed, and the grounds appear to be strong. A decision that looks back to taxes due 10 years before the Commission even opened its probe seems quite a stretch, if legal certainty counts for anything. Tax agreements between national governments and individual companies aren’t uncommon. If they can be reviewed after such a long delay, and with such huge financial consequences, multinational companies cannot know where they stand tax-wise.
Divisions emerge as Whitehall draws up Brexit scenarios (The Guardian) A‘continuum’ of options stretches from liberal access to single market to stringent border controls. Civil servants have been asked to assess the impact of a wide range of Brexit scenarios, from full membership of the European Economic Area (EEA) to a system under which some Europeans would need visas just to holiday in Britain. Theresa May gathers her cabinet at Chequers on Wednesday with Brexit at the top of the agenda, and the scenarios exercise has already started to expose potential divisions in government.
Apple Finds Out It Took the Tax Game Too Far (Bloomberg) This article describes just how Apple organized its business so that European sales income ended up being 'laundered' through its European headquarters in Ireland to a tax haven.
Ireland to abolish controversial ‘double Irish’ tax arrangement (The Guardian) The arrangement, which has drawn the wrath of the US Senate as well as the Republic’s EU partners, helped global corporations to move most of their taxable revenue from an operating firm in Ireland to an Irish registered firm in an offshore tax haven. The tax structure has enabled Ireland to attract an outsized proportion of corporations around the globe te move operations to the Emerald Isle, depriving many countries of corporate tax revenues they would otherwise have received. The tax laws involved will be phased out over the next four years.
Islamic State leader in charge of foreign attacks killed in Syria (Reuters) The Islamic State group announced on Tuesday that one of its longest-serving and most prominent leaders, responsible for attacks overseas, Abu Muhammad al-Adnani, had been killed in Aleppo province in Syria. Adnani had been one of the last living senior members, along with self-appointed caliph Abu Bakr al-Baghdadi, that founded the group and stunned the Middle East by seizing huge tracts of Iraq and Syria in 2014. As Islamic State's spokesman, he was its most visible member. As head of external operations, he was in charge of attacks overseas, including Europe, that have become an increasingly important tactic for the group as its core Iraqi and Syrian territory has been eroded by military losses.
Indian couple banned from climbing after faking ascent of Everest (The Guardian) Claims by Dinesh and Tarakeshwari Rathod to have climbed world’s highest peak were verified by authorities but later doubted. Thye two, both police officers, were hailed as the first Indian couple to climb the world’s highest peak on 23 May. In June complaints were lodged by several other mountaineers including Satyarup Siddhanta, a climber from West Bengal, who said the couple had used doctored versions of photographs from his successful ascent two days earlier.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
At least since the passage of California’s Proposition 13 in 1978—in which property owners voted to halve their property taxes—the United States has struggled with an anti-tax mentality revolving around the belief that government is ineffective. That sentiment is nowhere so clearly expressed as in wingnut Grover Norquist’s famous dictum that government should be small enough to drown in a bathtub. Indeed, the right’s efforts to starve government of the level of resources necessary for competent functioning have made a self-fulfilling prophecy of the claim that government is moribund.
Daniel L. Hatcher’s The Poverty Industry exposes one way that states have responded to the anti-tax climate and diminishing federal funds. Facing budget crises but reluctant to raise taxes, many state politicians treat federal dollars available for poverty-relief programs as an easy mark from which they can mine revenue without political consequence. They divert federal funding earmarked for social programs for children and the elderly, repurposing it for their general funds with the help of private companies that in effect launder money for them. A law professor at the University of Baltimore who has represented Maryland victims of such schemes, Hatcher presents a distressing picture of how states routinely defraud taxpayers of millions of federal dollars.
This is possible because there is a near-total absence of accountability for how states use federal money intended to fight poverty.
These bonds still yield over 5 percent—but are they safe for investors? (CNBC) Catastrophe bonds are yielding over 5% in an environment of ultra-low interest rates, but market-watchers warn investors need to take care before entering the $25 billion market. Catastrophe bonds — or cat bonds for short — were created in the 1990s as a means of protection for insurance companies if a major natural disaster occurred and they needed to pay out large premiums. Investors typically receive a high yield on the bonds, but will have to pay out if a specific catastrophe occurs. The main risks covered are hurricanes and earthquakes, particularly in the U.S., but also Japan. Econintersect: These "bonds"are actually funds that will pay out principle for unexpected losses by insurance companies. They turn investors into insurers.
Bird Brains (Nova - Science Now) (You Tube) Hat tip to Sanjeev Kulkarni. Birds have a sophisticated vocal communication system derived from human-like brain functions that are not present in primates other than humans.
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