Suggested Answers to the First Short Quiz

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1. Has Donald Trump proposed another economic meltdown equal to 2008???

2. Does Donald Trump really think there is $2.5 TRillion (yes, that’s TRillion with 12 zeros) stuffed in mattresses in the tax-haven subsidiaries of the U.S.-based Multi-National Companies (MNC’s)???

3. Does Donald Trump even realize that he is proposing that the CHUMP American Companies that did NOT export American jobs would be forced to reduce their payrolls and capital expenditures by $2.5 TRillion in order to repay their loans from the tax-haven subsidiaries of the U.S.-based MNC’s that DID export American jobs???

4. In other words --

Is Donald Trump “Phishing” for the “Phools” he believes American voters to be???

OR

Is Donald Trump himself a “Phish” who has been “Phooled” by the slick lobbyists of the U.S.-based MNC’s that have exported American jobs???

5. Have we already seen this movie???

*****
Hint = Please see --

(A) the seventh posting under the first section of http://www.ReadingLiberally-SaltLake.org dated 11/14/2012 and entitled “$5 Trillion Reductions in American Payroll > Meltdowns” and

(B) the third posting under that same first section of http://www.ReadingLiberally-SaltLake.org dated 2/12/2014 and entitled “Renewing 1968 Executive Order 11387 To Halt American Job Exports.”

*****

6. Would it be better to elect Carly Fiorina who at least understands how U.S.-based MNC’s have exported American jobs and what the ramifications of that are???

7. And would it be better to elect Ben Carson who appears to have the common sense not to listen to lobbyists for U.S.-based MNC’s which have exported American jobs -- but instead might be able to perform as a brilliant surgeon who carefully deals with the problems created by the loans to the CHUMP American companies that did NOT export American jobs from the tax-haven subs of the U.S.-based MNC’s that did???
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johnkarls
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Joined: Fri Jun 29, 2007 8:43 pm

Suggested Answers to the First Short Quiz

Post by johnkarls »

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Question 1

Has Donald Trump proposed another economic meltdown equal to 2008???

Answer 1

Yes!!! (Please see Q&A-5.)

Question 2

Does Donald Trump really think there is $2.5 TRillion (yes, that’s TRillion with 12 zeros) stuffed in mattresses in the tax-haven subsidiaries of the U.S.-based Multi-National Companies (MNC’s)???

Answer 2

Obviously!!! (Please see Q&A-5.)

Though it is hard to believe that an experienced business person such as Donald Trump would be gullible enough to think that the world’s largest corporations would stuff that much money into mattresses!!!

Question 3

Does Donald Trump even realize that he is proposing that the CHUMP American Companies that did NOT export American jobs would be forced to reduce their payrolls and capital expenditures by $2.5 TRillion in order to repay their loans from the tax-haven subsidiaries of the U.S.-based MNC’s that DID export American jobs???

Answer 3

Hopefully not!!!

One would hate to think that he wishes such ill for the American economy!!!

Question 4

In other words --

Is Donald Trump “Phishing” for the “Phools” he believes American voters to be???

OR

Is Donald Trump himself a “Phish” who has been “Phooled” by the slick lobbyists of the U.S.-based MNC’s that have exported American jobs???

Answer 4

Who knows???

But does it make any difference after the American economy is once again in ruins???

Question 5

Have we already seen this movie???

*****
Hint = Please see --

(A) the seventh posting under the first section of http://www.ReadingLiberally-SaltLake.org dated 11/14/2012 and entitled “$5 Trillion Reductions in American Payroll > Meltdowns” and

(B) the third posting under that same first section of http://www.ReadingLiberally-SaltLake.org dated 2/12/2014 and entitled “Renewing 1968 Executive Order 11387 To Halt American Job Exports.”

*****

Answer 5

Yes!!!

In brief, U.S.-based Multi-National Companies (MNC’s) that export American jobs are typically able to capture as much as 99% of their worldwide profits in tax-haven subsidiaries.

The U.S.-based MNC’s orchestrate the creation of nominally-independent manufacturing companies in the low-wage countries to hire the workers. The nominally-independent manufacturing companies then manufacture the MNC’s products to the MNC’s specifications under the MNC’s supervision using the MNC’s technology.

The U.S.-based MNC uses a tax-haven subsidiary to interface with the in-country manufacturing company and often captures 99% of the MNC’s worldwide income in the tax haven. Historically, so-called “non-resident Singapore subs” have been the tax-haven subsidiary of choice for U.S.-based MNC’s dealing with China.

[And, historically, Microsoft for example had captured at one point more than $1 TRillion (yes, that’s TRillion with 12 zeros!!!) in tax-haven subsidiaries, causing stock analysts to value Microsoft as a BANK rather than as a SOFTWARE COMPANY!!!]

Under U.S. tax law, that income is NOT subject to the regular 35% U.S. corporate income tax until it is paid as a dividend to the U.S. parent company, or as a “constructive dividend” which includes loans to the U.S. parent company and/or its domestic subsidiaries.

Accordingly, as a practical matter the U.S. income tax law forces the tax-haven subsidiaries to loan their money to the CHUMP American companies that did NOT export American jobs.

That is why the American Jobs Creation (sic) Act, which temporarily permitted the earnings of the tax haven subsidiaries to be paid as a dividend to their U.S. parents at a special 5.25% corporate income tax rate rather than the regular 35% rate, caused the tax haven subs to demand that the CHUMP American companies that had NOT exported American jobs REDUCE THEIR PAYROLLS AND CAPITAL EXPENDITURES BY $4 - $5 TRillion (yes, that’s TRillion with 12 zeros) in order to repay their loans from the tax-haven subsidiaries so that the tax-haven subs could pay their dividends.

During the 2008-2012 financial meltdown, newspaper headlines across the nation screamed about how the CHUMP American companies that had NOT exported American jobs were in desperate need of loans and could not obtain them!!!

THAT IS WHY THERE WOULD HAVE BEEN A 2008-2012 FINANCIAL MELTDOWN WHETHER OR NOT THERE HAD EVER BEEN A SINGLE SUB-PRIME MORTGAGE ANYWHERE IN AMERICA!!!

Still skeptical???

The annual Gross Domestic Product (“GDP”) of the American economy is only about $18 TRillion.

Now the CHUMP American companies that have NOT exported American jobs are required over a short period to REDUCE PAYROLL AND CAPITAL EXPENDITURES by $4 - $5 TRillion!!!

That’s about 25% of GDP!!!

REDUCED PAYROLLS is a euphemism for massive layoffs of WORKERS!!!

REDUCED CAPITAL EXPENDITURES means massive layoffs of WORKERS in the companies that produce the assets used by other businesses (i.e., their “capital expenditures”) to produce their products.

WHEN THERE ARE SUCH MASSIVE LAYOFFS, the laid-off workers of course can’t afford to make their mortgage payments EVEN IF EVERY ONE OF THOSE MORTGAGES HAD BEEN A STANDARD 20%-DOWN, 30-YEAR, FIXED-RATE MORTGAGE!!!

And the bottom is going to drop out of the real-estate market (and the value of the mortgages held by banks and investors in mortgage pools is going to tank) BECAUSE SO MANY LAID-OFF WORKERS ARE BEING FORECLOSED SIMULTANEOUSLY!!!

No big mystery!!!

Except to economists such as Paul Krugman who were NOT able to figure out the real reason why the real-estate market collapsed and the value of mortgages held by banks and investors in mortgage pools, in turn, tanked!!!

Blaming sub-prime mortgages indeed!!!

The same result would have occurred if every one of them had been a standard mortgage!!!

And despite our demands since 11/14/2012 that Paul Krugman “man up” and admit his mistake, he has steadfastly maintained his position that he would rather see the American economy go over another cliff like the one Donald Trump is lining up the American economy to go over, than admit that he, Paul Krugman, was wrong!!!

MIT should revoke Paul Krugman’s PhD!!!

If only to save MIT’s own reputation!!!

Much more by way of detail is available in the two postings referenced in the question.

Question 6

Would it be better to elect Carly Fiorina who at least understands how U.S.-based MNC’s have exported American jobs and what the ramifications of that are???

Answer 6

Of course!!!

An inspection of her website (http://www.carlyforpresident.com/answers) discloses that she has NOT “drunk the Kool Aid” of the slick lobbyists of the U.S.-based MNC’s that have exported American jobs.

And presumably she never will because, having served as CEO of Hewlett-Packard, she certainly understands in incredible detail how U.S.-based MNC’s exported American jobs and she is smart enough to appreciate the ramifications of that for the U.S. economy, including the horrendous impact on American payroll and American capital expenditures if the tax law is once again changed to permit the earnings of the tax-haven subs to be paid as dividends at low tax rates.

It should also be noted that to the extent Hewlett-Packard manufactured its products abroad, Carly Fiorina did NOT invent the concept of exporting American jobs and, at most, was only forced by competitors to continue to do so.

Which is UNLIKE Bill Gates and Microsoft, which had NO EFFECTIVE COMPETITION for most of their software lines but still managed, as noted above, to accumulate more than $1 TRillion (yes, that’s TRillion with 12 zeros) all by themselves in tax-haven subsidiaries causing their stock analysts to evaluate Microsoft as a bank rather than a software company.

Question 7

And would it be better to elect Ben Carson who appears to have the common sense not to listen to lobbyists for U.S.-based MNC’s which have exported American jobs -- but instead might be able to perform as a brilliant surgeon who carefully deals with the problems created by the loans to the CHUMP American companies that did NOT export American jobs from the tax-haven subs of the U.S.-based MNC’s that did???

Answer 7

What do you think???

So far, Ben Carson has only proposed a flat tax of 10% (following the example of the Biblical tithe) while getting rid of all loopholes.

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