Entitlement mentality

[jstoesz]

I am not sure there is anyone in this country who goes hungry any more…”Poor” people in america are among the most overfed people in the world.

If the poor can’t pay taxes, they sure as heck shouldn’t be able to afford a TV, AC, Cell phone…etc.

[CA renter]

[quote=jstoesz]I am not sure there is anyone in this country who goes hungry any more…”Poor” people in america are among the most overfed people in the world.

If the poor can’t pay taxes, they sure as heck shouldn’t be able to afford a TV, AC, Cell phone…etc.[/quote]

Have you ever been in a poor family’s house? Somehow, I doubt it.

Okay, so Mitt Romney shouldn’t have to pay higher taxes. He should be able to buy that private plane, yacht, etc. for all the good he’s done for society [sarcasm!] so that poor people can live without TV (one of their only sources of entertainment — and a relatively cheap one, at that), air conditioning (I know precious few poor people with A/C), cell phones (usually their only method of communication), etc.

Can you point to a society with such huge wealth/income disparities — not to mention a tax system that’s set up to accelerate and intensify that disparity — that has ended well?

[bubba99]

Another type of corporate welfare rarely discussed is the copyright and patient protection. That is how Apple can sell a product that costs $100 to produce for four times that much. We (US Taxpayers)fund hundreds of millions to run CBP Trade Operations. These Trade groups work tirelessly interdicting anything that resembles an Iphone, or Microsoft logo, or any other copyrighted name or product that does not have “Permission” to use the name or likeness, or technology.

The imitation Windows 7 disk can be made and sold at a profit for less than a tenth of the Microsoft price, but most of the “illegal” copyright infringing copies are seized at the border. Without CBP protecting the overpriced prices of corporate giants, the consumer could have the same product for 10 cents on the dollar. Microsoft leaves billions in profits offshore to avoid taxes, and the US taxpayer protect their overpriced sales strategy with legions of public servants.

Sure overtime, the producer would stop producing leading technology or be forced to develop a better sales strategy. But for now, the taxpayer foots the bill.

[CA renter]

Thank you, bubba.

Let’s also not forget that one of the primary jobs of our military is to force foreign markets to remain open for US businesses (either so we can sell into it or exploit their resources — including labor) and to keep the sea lanes open for US business interests. It has very little to do with protecting Joe Sixpack’s “freedom.”

[Anonymous]

[quote=CA renter]Let’s also not forget that one of the primary jobs of our military is to force foreign markets to remain open for US businesses (either so we can sell into it or exploit their resources — including labor) and to keep the sea lanes open for US business interests. It has very little to do with protecting Joe Sixpack’s “freedom.”[/quote]

Just a couple of days ago you were spouting about how the economies of our Cold War adversaries collapsed solely because of US trade embargoes.

Today you are claiming that the military is about “forcing their markets to remain open.”

Which one is it? (don’t bother to answer, please)

You do know that people in the military are government employees?

Patent and trade enforcement? Government employees.

Where does Joe six-pack work, BTW?

Probably Qualcomm if he lives around here. (Do you think Qualcomm cares about patents?) Maybe Microsoft. Maybe he’s an engineer at Apple. Maybe an assembly line at GM. Maybe his wife Suzie works in HR at GE.

Most likely he works at one of the thousands of large companies that employ millions of Joe and Suzie six packs and sell their products here and all over the world.

But apparently it’s all evil, so let’s shut it all down.

Let’s make them get other jobs, working for the government, because there wouldn’t be many other alternatives. (But only the parts of the government that you find agreeable.)

They can find jobs paid with taxpayer money.

Hey, where did all the taxpayers go?

It’s amazing, we still have Useful Idiots in the 21st Century.

[Coronita]

Ha ha… speaking of M&A/IPOs/ibank conflicts….
Sure folks, I’m sure all for tech IPO’s/M&A, they are different…unlike these, and are actually meaningful non-bank driven… wink wink….

http://finance.yahoo.com/news/goldman-both-sides-deal-now-114811971.html

Goldman Sachs appears to be everywhere in a $21.1 billion buyout of a pipeline and energy giant – or at least on every side where money can be made.

In wearing different hats in Kinder Morgan’s proposed acquisition of the El Paso Corporation, Goldman may have done nothing improper. Still, a lawsuit challenging the deal raises some important questions about how investment banks do business.

Goldman has a long, close-knit history with Kinder Morgan. The investment bank was instrumental in helping Kinder Morgan’s chief executive, Richard D. Kinder, take Kinder Morgan private in 2006. Goldman’s private equity arm owns 19.1 percent of Kinder Morgan and has two appointees on its board. Goldman then led Kinder Morgan’s initial public offering last year, earning billions for Mr. Kinder and Goldman’s private equity investors. And the main investment banker representing Goldman on Kinder Morgan’s acquisition had worked with El Paso for about eight years.

But when Kinder Morgan first approached El Paso about a combination, Goldman was advising El Paso on a possible spinoff of its exploration and production business.

So Goldman’s interests on both sides of this transaction would appear to be a clear conflict.

Indeed, both El Paso and Kinder Morgan realized immediately that Goldman had too many fingers in the pot. Even Goldman did. Once Kinder Morgan began considering a bid, Goldman’s two director appointees on the Kinder Morgan board recused themselves immediately from discussions about this potential purchase.

Goldman’s own internal conflicts committee reviewed the situation and informed El Paso that Goldman could still advise El Paso, but that another investment bank should be retained. The lucky bank turned out to be Morgan Stanley, which was hired to be El Paso’s main adviser on a potential sale. El Paso was also being advised by the law firm Wachtell, Lipton, Rosen & Kratz.

What happened next is the subject of debate.

El Paso shareholders have brought a lawsuit in Delaware, contending that Goldman’s conflicts resulted in El Paso being sold too cheaply. They say that despite the steps taken to deal with its conflict, Goldman still steered the El Paso directors toward an acquisition, pushing them to ignore the benefits of remaining independent and spinning off the exploration and production business. Goldman, according to the lawsuit, was in league with El Paso executives, who were said to be interested in buying the exploration and production business after a sale of El Paso to Kinder Morgan.

The plaintiffs say that this occurred because Goldman continued to advise El Paso on a sale for a fee of $20 million. The presence of Morgan Stanley as an adviser to the board did not ease the conflict, because at Goldman’s behest, Morgan Stanley was permitted to advise only on the sale and not on alternative transactions, like a spinoff. Because Morgan Stanley’s $35 million fee was contingent on a sale occurring, the shareholders claim that Morgan Stanley did not have an adequate incentive to present all alternatives to the El Paso board.

The plaintiffs also note that Goldman had a powerful incentive to steer the process toward a sale of El Paso at a low price. Every dollar shaved off El Paso’s share price would translate into a savings of $150 million for Goldman’s private equity arm. There is even an e-mail that plaintiffs say supports their case. Their lawsuit says that a Morgan Stanley banker wrote the following:

“Over Wachtell’s objection, GS got a letter signed which engaged them as an advisor in the sale of the company. …Between that fact and the enormous conflict as a 22 percent shareholder of Kinder. …this is GS at its most shameless.”

Goldman, El Paso and Kinder all dispute the allegations.

In separate briefs filed with the court, each asserts that the conflict was recognized and addressed. On the Kinder Morgan side, the Goldman directors recused themselves; on the El Paso side, an independent investment bank was hired to become El Paso’s main adviser. Moreover, when Kinder started suggesting it might take the bid hostile, Goldman stopped providing advice to El Paso on the sale except for updating some numbers on the potential of a spinoff.

Besides, the premium offered in the acquisition was rather large – 37 percent over the closing price per share the day before. As for that e-mail, Goldman Sachs said in a court filing that it was a “selective” quote and the parts eliminated showed that Goldman had a significantly reduced role in the sale. Clearly, fighting between Morgan Stanley and Goldman Sachs is nothing new.

El Paso and Kinder Morgan argue that the plaintiffs’ claims are innuendo. Goldman’s private equity division is separate from its investment banking unit. Goldman’s conflict, they say, was recognized, disclosed and managed.

The plaintiffs’ complaint feeds in part off Goldman’s public reputation as a “vampire squid,” greedy and overreaching.

Yet the real test of their case will come on Thursday, when a Delaware State Court will consider the shareholders’ request that the El Paso sale be halted until the company retains a third independent adviser and runs a new sales process, one that allows for full consideration of a spinoff.

It does seem odd that El Paso’s board didn’t appear to consider more seriously completing the spinoff and selling the remaining pipeline business to Kinder. The board appeared to decide that this was not a viable option, perhaps because Kinder Morgan threatened a hostile approach. When Kinder Morgan increased its bid by $2 a share, or 11 percent above its initial offer, El Paso agreed to a deal.

Delaware courts have been quite hard on investment banks of late, most recently in the litigation over the $5 billion buyout of Del Monte Foods. In that case, the court found that Barclays Capital had unduly influenced the sale process for Del Monte. The case was settled for $89.4 million.

The El Paso case will be the next test of how the Delaware court manages banker conflicts. Yet, unless the court finds that Goldman or management deliberately steered this process toward Kinder Morgan, the plaintiffs will have a hard time winning.

The El Paso board consisted of 11 independent directors. Goldman might have done better in stepping back from the transaction, but the sale decision was made based on advice from Morgan Stanley. (Goldman declined to comment for this column.)

The market is changing. The conduct of investment banks is increasingly scrutinized and any ties are inherently suspicious. There have been too many examples where management or a banker appears to have steered a deal.

In this light, some may argue that Goldman should have fully recused itself from Day 1. Instead, it tried to still advise El Paso and bowed out only when things started to get heated. While recusal may not be required legally, it may be the better practice.

In any case, the dispute shows that is hard being Goldman these days. Being on all sides of a deal is becoming increasingly more difficult. And when it happens, as in the El Paso-Kinder Morgan deal, it is only a misstep or an embarrassing e-mail away from liability or another public relations disaster. And that is not a good place for any investment bank to be.

[Anonymous]

Here flu, this will make you feel better:

California Housing Market Braces for Facebook Millionaires

(Notice I didn’t paste the whole article.)

[sreeb]

[quote=briansd1]no such reality, the employer and employee payroll and social security taxes together is 15.300%. The $30,000 employee generates that percentage to the government.

Property taxes are higher than 1% most states of the Union. Consider NJ and TX.

A “tax” would include the education of the kids also, maybe community college and university tuition.

My point is that people don’t “pay nothing”. Working people pay a large percentage of the income in “taxes” and “fees” just to get by.

Fair is all relative and proportional, IMHO.

Maybe you think I implied the rich don’t pay enough, but I didn’t even say that. Regardless, using words such as “pay nothing” is disingenuous.[/quote]

You are ignoring credits and transfer payments from the government. Yes they are taxed at some level but there are many programs that return the money.

If you are going to create tax payers by adding in social security taxes, you need to remove those whose social security income exceeds their taxes.

[jstoesz]

[quote=CA renter]
Have you ever been in a poor family’s house? Somehow, I doubt it.
[/quote]

For someone who claims to try and keep it civil, your comments reek of calling me ignorant. Have you forgotten that I have somewhat recently graduated College? Many of my friends graduated into a very awful job market. One lost his job 3 times in a year and a half. Another has been looking for work for 2 years. Both with a decent pile of student loan debt. They did not collect food stamps nor welfare, some didn’t qualify for unemployment insurance, because they had not yet been employed. One of my closest friends accidently got pregnant and had a kid (she is married), she was marginally unemployed and then unemployed and the other was in the middle of grad school, yet somehow they managed to stay of government assistance and buy health insurance. Currently my parents would qualify for food stamps and welfare after my dad’s last employer stopped paying him but did not lay him off, but they have enough assets to keep their pride.

I suspect though that this is not the kind of poor people you are referring too. You are referring to the type that have themselves on their heels with poor decisions and seem to constantly take steps back. Well I know a few of those people to, but to spell that out seems a bit unflattering.

In my view neither group of poor people needs free stuff, they need opportunity.

I wonder if you have ever been to a poor persons house.

[sdrealtor]

Looking around SoCal I see very few poor people. I grew up near and spent alot of time in Camden NJ growing up and worked in Newark NJ. That is poor like nothing I have seen around here. Boarded up homes, no windows, no heat and sometimes not running water in frigid temparatures and searing heat/humidity. I have been in some of their homes too. CAR grew up and spent essentially her whole life in SoCal. I doubt she has ever been exposed to true poverty.

BTW, all those kids in Camden still seem to be able to afford Air Jordans (or whatever the cool shoes are now), iPods, Cell Phones and mCDonalds all the time.

[Coronita]

[quote=pri_dk]Here flu, this will make you feel better:

California Housing Market Braces for Facebook Millionaires

(Notice I didn’t paste the whole article.)[/quote]

But I like to paste the entire article and take up bandwidth and disk space. That way, my western digital stock will go up, my cloud computing/vmware will go up too, because every $1 in extra revenue I help generate for those companies, you have an entire I-bank team that will tell you the valuation of the company is now $100 more, based on their “projections” of future earnings…

Actually, I look forward to all those facebook millionaires. Because that means my house in the Santa Clara county will go up in value even more ridiculously…. and if I keep it as a rental I eventually can start charging a ridiculous $3000/month for a 2000 sqft home… I was also laughing at my relative who bought a home in Pacific Heights a few years back…I’m not laughing anymore, because those areas have gone up too with the rebound of the tech sector. Because unlike in san diego, really in the bay area, there is no more land to build new homes.

Some of us were from the Bay Area for the first .com wave, and while we didn’t clean house then, we definitely didn’t leave empty handed. Unfortunately, for a lot of us, we’re too old for this second wave (basically, if you’re over 30, you’re too old unless you can land SMGMT/CTO position), it ain’t worth it….That’s why we’re here in SoCal and trying to do business with the mothership up there, preferably remotely…

I won’t bother going into details on how some startups at the time tried to pass off was revenue.. Step 1: create a partnership with company X. Commit capital Y to company X, as an investment. Have Company X use commited dollars to buy your product, and then book the sales as revenue…. My favorite was while doing a B2B company, how with a half backed system, our CEO during a demo told a colleague to go to the server room and manually copy the purchase order from one system to the other to fake that it went through our system (when it clearly wasn’t working)… Yeah, the company was eventually sold for $250million. Go figure.

The other game I loved hearing about from colleagues was a big software company (I won’t name names) use to promise a product was done to customers (sometimes government customers). Only at the time they said the product was “in production/shipping”, it hadn’t been developed yet… Said software company, the story goes would end up shipping blank CD’s to customer, counting on that because of the bereaucracy at the customer (government), no one would actually open the software install disk until 3-4 months later. because the consulting arm of the said software company would bury the customer in planning/”design”/”architecture” before actually doing anything with the software…Meanwhile, product development would happen during the 3-4 months window. And finally, if the customer did crack open the CD months later, it would be “oops, we sent a bad CD, here’s the one that’s not broken”. Yup, that’s why when I was a system architect down here and I heard that company was trying to sell a solution to us, I was like “you’re kidding ,right? Is it real, or is it Memorex?”

[an]

[quote=sdrealtor]Looking around SoCal I see very few poor people. I grew up near and spent alot of time in Camden NJ growing up and worked in Newark NJ. That is poor like nothing I have seen around here. Boarded up homes, no windows, no heat and sometimes not running water in frigid temparatures and searing heat/humidity. I have been in some of their homes too. CAR grew up and spent essentially her whole life in SoCal. I doubt she has ever been exposed to true poverty.

BTW, all those kids in Camden still seem to be able to afford Air Jordans (or whatever the cool shoes are now), iPods, Cell Phones and mCDonalds all the time.[/quote]
I can truly say, even the poorest of the poor here don’t even come close to the poor in the 3rd world country I’ve lived in.

[jstoesz]

100% agree. From my travels through south american and eastern Europe. The poor here are rich in comparison (that is a good thing).

[Anonymous]

[quote]I can truly say, even the poorest of the poor here don’t even come close to the poor in the 3rd world country I’ve lived in.[/quote]

Here’s a good article about that very subject:

http://www.economist.com/node/5323888

The article is from 2005.

Mr Banks, for his part, expresses an intense dislike of President George Bush. “If someone shoots that sonofabitch, I’ll celebrate,” he says.

I’m curious what Mr Banks thinks about Obama today (actually I’m not.)

[jstoesz]

Great article, thanks for the link.

[Author]

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