Bank CEO calls it “building relationships” – Senator Warren calls it what it is…a scam

If the above video doesn’t load for you, please follow this link and set aside under ten minutes to watch…it will be well worth it.

Senate committee hearings are meant to be an opportunity for high-profile people to be held accountable for their actions when they affect the wider public but as we all know, more often than not they are reduced to mere “love-ins” due to the fact that the bulk of politicians are “bought” thus making their levels of scrutiny extremely low.

When it comes to Wall Street and the American banking industry, you certainly could not accuse Senator Elizabeth Warren of going easy when she performed her duties on the Senate’s Banking Committee.

Should you be based in Ireland you may not know too much about Wells Fargo Bank but they have been in the US news quite a bit recently on account (pun intended) of their recently publicised practice of “cross-selling”.

The senator from Massachusetts in her extremely direct and properly forceful questioning of CEO Bill Stumpf (who couldn’t look more like a classic bank head honcho if he tried)  not only ignores all the media spin churned out by the company of late but it also leaves you in no doubt as to exactly what has been going on.

“Here’s what really gets me about this, Mr. Stumpf. If one of your tellers took a handful of $20 bills out of the crash drawer, they’d probably be looking at criminal charges for theft. They could end up in prison.

“But you squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket.

Now I know these committees don’t have a whole lot of legal “teeth”.  I know that Mr Stumpf will continue to draw his massive salaries and bonuses.  And I know the establishment will redouble their efforts to silence Elizabeth Warren by fair means or foul, probably the latter (by finding ways to discredit her name most likely).

But there is a lot to be said for public representatives asking such people the real, sensible questions – that’s supposedly what we elect them to do.

Do you think it may be possible an Irish bank or two deserves a similar public grilling?


A must-read perspective on #AppleTax

An article by an Irish Economics expert that fully lays out the #AppleTax situation without towing the government line or simply spelling out what public services can be bought with a sum like €13billion is our kind of article.

Terrence McDonough is a retired professor of economics at the National University of Ireland, Galway and co-editor of Contemporary Capitalism and Its Crises: Social Structure of Accumulation Theory for the Twenty-First Century.

His article appears in the American left-wing quarterly Jacobin and is titled “Ireland’s Bad Apples” and puts a very interesting spin on the reaction of our government to the European Commission’s ruling, particularly that of the “Churchillian” Michael Noonan.

It often seemed like Irish politicians believed they should represent Europe to the Irish people rather than represent the Irish people in Europe. But it turns out their cozy relationship with Europe was weaker than their romance with a major American multinational corporation.

Well worth a read.  Many thanks to Joan Collins TD for sharing.

How RTÉ reported #AppleTax on Nine O’Clock News

Here at FPP we’re not just concerned with what happens, but also how it is reported by mainstream media.  So here is the first of our “report on reports”.

Overall, our analysis of their coverage of the story seems to be one leaning more heavily toward #TeamAppeal.  While there was a fair amount in favour of the #TeamKeep argument it was presented as more of an afterthought.

The lead report was filed by Tony Connelly.  Basically he laid out the facts surrounding made by the European Commissioner for Competition Margrethe Vestager.

Next it was on to the reactions from the Irish Government and Apple itself, as if you could tell the two opinions apart.  Minister for Finance Michael Noonan said the ruling was on “tenuous grounds” and that the Irish govt had done “nothing illegal”.  They read a statement from Apple saying the Commission was “rewriting history” and that they had “complied with tax laws”.

The text of the RTE report went on to speak of the “fundamental differences” between the Irish govt and the EU and using words like “sovereignty” and “taxpayers”.

Next up we had “Economic correspondent” Sean Whelan who laid out the amount of tax paid by Apple and how they diverted it into a “Head Office” that didn’t actually exist.  This is precisely what Vestager did in her announcement by the way, only Whelan had some fancy graphics on display behind him as aids.

Now it was time to go to “outside experts”.  First, speaking for #TeamAppeal was Brian Keegan from Chartered Accountants Ireland, who basically said there was no way we should keep  the money.  Then arguing for #TeamKeep was Dr Jim Stewart – the graphic just had “Trinity College” by his name but it wouldn’t have hurt to add that he is Associate Professor in Finance (Business & Administrative Studies) there.

Eventually we get to the reaction of the other Irish parties.  Fianna Fail (who had a soundbite from spokeperson Michael McGrath TD) and Labour (no soundbite) came out on #TeamAppeal.  The other “left-wing” parties are firmly on #TeamKeep and there were soundbites from Pearse Doherty of SF, Richard Boyd Barrett of PBP and Catherine Murphy of the Social Democrats.

The most important reaction will be that of the so-called “Independent Alliance” that is currently propping up the Minority Government along with the “silent partners” Fianna Fáil.  We had a brief soundbite from John Halligan but apparently their opinion would be made known to a Cabinet meeting the following day.

Finally the report went to two more RTE correspondents – David Murphy, who laid out the “morality issue” of the notion of the Irish government denying its own Exchequer and award of such size, and Martina Fitzgerald, who repeated the importance of the Cabinet meeting today.  Not sure if that reportage was a two-person job, but there you go.

Like I said earlier, I got the sense that this report was presented with a leaning more toward the #TeamAppeal side of things, much like Joe Duffy had done on his Liveline show earlier that afternoon on RTE radio.

To provide a bit more balance, perhaps they could have actually spoken to the Commissioner herself, as did American public broadcaster PBS NewsHour :

Any member state can have their own legislation we would never question that – but the thing is you cannot give a specific company a benefit or advantage.which is not open to other companies.

Sounds to me like a reasonable statement from someone with the job title European Commissioner for Competition?

Now to wait and see what happens next.  Paschal Donohoe was on today’s Morning Ireland and said the Dáil would not be brought back early from its recess so we’ll see how this morning’s Cabinet meeting pans out.

A strong case for #TeamKeep made by Fintan O’Toole #AppleTax

So just a few hours after that stunning EU ruling, which has effectively done a “Wikileaks” on Irish foreign investment policy over the past few decades, public opinion seems to have quickly evolved into a debate between #TeamKeep and #TeamAppeal.

No doubting what side the national public broadcaster is on.  Joe Duffy had a few dissenting voices in his half-hour’s coverage today but miraculously his supposedly “reliable” text poll produced an impressive 56% support of appealing the ruling by “over 3000” of his listeners.

In general the thrust of the #TeamAppeal argument is that by keeping the money we’d be “penny wise, pound foolish”.  All of a sudden American multinationals will be fleeing the country like there’s no tomorrow and this in turn would doom our futures with all of the jobs and tax revenues that would go with them.

But what I say to that is…I’m sure if there was a national debate on the first of these “sweetheart deals” with Apple when they were made 25 years ago in 1991 (when the Minister of Finance job was held by Albert Reynolds up to November, Charlie Haughey for a week and Bertie Ahern from then on – it was Brian Cowen in 2007) we’d have been told about the importance of the investment in Ireland’s future.

Yet now, when there’s €13billion on offer, we want it to help our schools, we want it to help our hospitals, we want it to help our housing crisis.  Just how sweet a deal for us was that which they made back in 1991?  Where was the real benefit?

But look…I’m not the one to make the case for #TeamKeep.  I’d rather leave that to someone like FIntan O’Toole in the Irish Times :

At the very least, we should not be railroaded into lodging an appeal against the ruling that will define us, for the rest of the world, as the tax-avoider’s crazy little sidekick. We have some big thinking to do – and the cabinet’s job on Wednesday morning is to open up that process of deliberation, not to insist that any democratic decision that Apple does not like is unthinkable.


Irish Exchequer wins a Eurobillions jackpot but Minister for Finance wants to tear up the ticket #AppleTax

We do our best here at FPP to tread lightly when it comes to economics – it can be a complicated area to say the very least and often all is not as it appears.

But when we read some stories about this topic known as #AppleTax we seemed to think we had the basis of what it was all about, only we couldn’t believe it.

Then in an article titled “Q&A : What exactly is at stake in the Apple Tax issue?” the Irish Times pretty much spelled it out as we saw it…

Ironically, the Government will be appealing a decision that a big company must pay it a load of money.

Luckily, it appears that David McWilliams is on the case to explain things, and we generally give his take a lot of weight on Irish economic matters when of course the governments very much don’t.

While we wait for his take, we’re holding the assumption that this is yet another classic case of #CapitalismGoneMad.