The Galts went over the mountains …
posted at 12:55 pm on March 12, 2009 by Ed Morrissey
Share on Facebook | printer-friendly
The phrase “going Galt” has suddenly become very popular, and according to Reuters, very apropos. American energy companies with the wherewithal have started transferring their businesses to places like Switzerland, where they can shield themselves from Barack Obama’s onerous tax policies for the next few years. Congress and the Obama administration will try to cut off this retreat route, but may not have much success:
The tidy towns and mountain vistas of Switzerland are an unlikely setting for an oil boom.
Yet a wave of energy companies has in the last few months announced plans to move to Switzerland — mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama’s tax-seeking administration.
In a country with scant crude oil production of its own, the virtual energy boom has changed the canton or state of Zug, about 30 minutes’ drive from Zurich, beyond all recognition. Its economy was based on farming until it slashed tax rates to attract commerce after World War Two. …
Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.
“Switzerland has a stable and developed tax regime and a network of tax treaties with most countries where we operate,” Transocean Chief Executive Bob Long said in a statement in October, when it announced its move. “As a result, the redomestication will improve our ability to maintain a competitive worldwide effective corporate tax rate.”
Companies have relocated businesses offshore in the Bahamas and Cayman Islands for decades, but the US government has pressured both to change its tax policies to curtail it. That will not likely work with Switzerland, because as Reuters notes, the Swiss have a lot more political clout on the world stage than either of these two have. The US can rattle its sabers over tax policy, but the Swiss hold more cards in Zurich and Geneva.
We can expect the usual demonization to follow, of course. John Kerry tried this with his “Benedict Arnold CEOs” line during his unsuccessful run at the presidency in 2004, but Kerry had it backwards then and Obama has it backwards now. Businesses exist to return profit to their shareholders, and they will structure the business to maximize that return within the limits of the law. If the US wants to attract businesses rather than repel them, then it needs to make itself an attractive place for businesses to operate. Calling them names and saddling them with heavy tax burdens won’t keep productive capital in the US, and in fact will repel it as other markets offer more welcoming environments.
These results are sadly predictable. Hiking taxes in a recession only discourages investment and increases costs to consumers. Either prices go up or jobs get lost. When producers can’t make profit any longer, they stop producing. None of this should come as a surprise to anyone, but the Obama administration keeps acting as though government confiscation of capital has no effect on economic performance. As long as that incompetence remains, expect more companies to go abroad, or go Galt.
You must be logged in to post a comment.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2
PimFortuynsGhost on March 12, 2009 at 3:02 PM
No, what I fail to understand is why cons aligned themselves with greedy Madoff capitalists when most of them do not have money because their party destroyed the economy.
Yet, they want the gop back in power to destroy the economy again. I do believe that is the definition of insanity.
getalife on March 12, 2009 at 3:09 PM
Too big to fail is one of the greatest lies of the past 100 years…right up there with, “Sure, I’ll respect you in the morning” and “I’ll love you forever.”
Companies, businesses, even banks, fail every day, and have for the past century and longer. Having government prop them up does what? Raises costs for all of us, and rarely enables that company, business, or bank to resolve internal and external factors that caused it to become non-profitable.
Profit is not a dirty word.
Profit pays wages.
Profit enables innovation.
As a single example, out of many, had GM filed for bankruptcy last summer, they’d be in a much more advantageous position to actually protect jobs, and produce a product at a profit.
Now? Forget it. The UAW does not want them to file for bankruptcy. Apparently, neither does this Congress, nor this White House. But, bankruptcy is what is needed.
Yes, let them fail…all of them. Then, let smarter, more wise individuals who understand a business cycle and actually understand making a profit, pick up the pieces, or that aspect of the market, and build something new from the ashes.
All TARP and “the stimulus” does is cause the failure to be postponed until a new Congress or a new Administration comes along…shift the blame…and when they fail, it will be at a vastly more significant cost to all of us over the long run, because we will still be paying for the next few generations for it all….plus having bankrupt companies lying like discarded litter along our highways, and no market to aid in their being able to sell a product or service.
coldwarrior on March 12, 2009 at 3:12 PM
Social engineering in our debt markets is what did it, sh!t for brains. The idiot left forced mispriced debt on the market (CRA and Fannie/Freddie meddling) and that mispricing propagated throughout the system.
Get a brain.
progressoverpeace on March 12, 2009 at 3:12 PM
You’re not a commenter. You’re not a political opponent. You’re lying filth. You are scum.
JiangxiDad on March 12, 2009 at 3:13 PM
Madoff was a Dem, and I’d rather deal with a greedy capitalist than a thuggish government.
PimFortuynsGhost on March 12, 2009 at 3:14 PM
Okay, we have to put all of those together in one list:
Did I miss any?
——————————————————————————————————
Government is the only place that rewards Stupidity and Failure
Galt2009 on March 12, 2009 at 3:14 PM
Madoff was a very big Democrat contributor.
coldwarrior on March 12, 2009 at 3:14 PM
The liberals’ programs of the last 60 years, and especially the ones on housing for those who can’t afford them, destroyed the most part. The Madoff crook went to jail, where the rats should gnaw at his derriere.
Also, the definition of insanity is when you do the same thing and expect different results.
We have been, and continue to be, screwed by both parties. We don’t want your socialist left, and we don’t want GWB righties either.
Entelechy on March 12, 2009 at 3:15 PM
This is, and should remain, a sysgem of profits and losses. Size is not relevant.
Entelechy on March 12, 2009 at 3:16 PM
Potential losses as well as potential profits are incentives. Remove incentives…and might as well fold the tent and move elsewhere. (A hot cup of Swiss chocolate sounds good right about now.)
(Size doesn’t matter? /s ) :-)
coldwarrior on March 12, 2009 at 3:19 PM
Unfortunately, you can’t fix stupid…and that’s just what you have in DC right now.
GarandFan on March 12, 2009 at 3:21 PM
S/b “system of profits and losses”.
coldwarrior, stay focused.
Entelechy on March 12, 2009 at 3:21 PM
Yes, ma’am.
coldwarrior on March 12, 2009 at 3:22 PM
Looks like a struck a nerve.
getalife on March 12, 2009 at 3:22 PM
No. We just do not like diarrhea all over the clean table linens.
coldwarrior on March 12, 2009 at 3:24 PM
coldwarrior, if you don’t, it really won’t matter :(
Entelechy on March 12, 2009 at 3:25 PM
what exactly is it that you do for work?
upinak on March 12, 2009 at 3:25 PM
I agree in principle. However, it is sometimes easier said than done. For example, I believe (just as you would) that the government did the right thing in letting Lehman Brothers fail last year. But, the way it was done did send horrors through the market and cratered investors’ confidence. Letting businesses rise and fall on their own is a sentiment that I love (and you would be preaching to the choir to convince me on it), but going “down and dirty” on the details have made me realize there will always be certain exceptions.
peter_griffin on March 12, 2009 at 3:25 PM
“PUNISH THEM!” –Barack Obama
Glenn Jericho on March 12, 2009 at 3:26 PM
A fine sentiment, dear Sir!
peter_griffin on March 12, 2009 at 3:27 PM
Absolutely agree with the sentiment. Trying to enforce that without *any* exceptions can be extraordinarily challenging, however. I would think, even given all the exceptions we have given, our country as a whole has remained true to that principle.
peter_griffin on March 12, 2009 at 3:32 PM
Must have been a tough question…thinking…thinking…how to answer this one?…thinking…
What s/he and the likes do is plot every day how to annyoy the likes of us. It’s not working, except that it’s good for Capitalism/HA.
Entelechy on March 12, 2009 at 3:33 PM
He runs the US branch of the Goebbels institute. Equating Madoff’s crimes with capitalism, as in “Madoff capitalists,” is as clever as anything the fascists created. I’m just hoping that Ed and Allah have tired of being part of the distribution network.
JiangxiDad on March 12, 2009 at 3:33 PM
It is when we start making exceptions to those exceptions that things get messy, and fast.
The market was vastly over-inflated. Housing was an accident waiting to happen for over the past decade. Corporate America being crucified by the MSM and Congress in general when they tried to re-adjust, tried to maintain a cash flow, tried to keep job going. The Unions making more demands for “free stuff” from corporate America, and then having Congress stand in their corner egging them on.
Re-adjustment should have been allowed to be ongoing for over the past two decades. 5% unemployment used to be considered by most reliable economists and business leaders as full employment.
Putting off the inevitable only makes the day of reckoning far more messy and painful than it need to have been.
coldwarrior on March 12, 2009 at 3:33 PM
“From the Wall Street Watch Project, here is their list of the 12 deregulatory steps to financial meltdown. Read their report for more details.
1. Repeal of the Glass-Steagall Act and the Rise of the Culture of Recklessness
2. Hiding Liabilities: Off-Balance Sheet Accounting
3. The Executive Branch Rejects Financial Derivative Regulation
4. Congress Blocks Financial Derivative Regulation
5. The SEC’s Voluntary Regulation Regime for Investment Banks
6. Bank Self-Regulation Goes Global: Preparing to Repeat the Meltdown?
7. Failure to Prevent Predatory Lending
8. Federal Preemption of State Consumer Protection Laws
9. Escaping Accountability: Assignee Liability
10. Fannie and Freddie Enter the Subprime Market
11. Merger Mania
12. Rampant Conflicts of Interest: Credit Ratings Firms’ Failure”
http://wallstreetwatch.org/reports/executive_summary.pdf
There ya go, blame away but just another huge mess for the President to clean up.
getalife on March 12, 2009 at 3:34 PM
There’s nothing like a U.S. president as ‘victim’. Poor puppy. He’s got a crisis and we’re in his way. Baby…I’ll cry him a river…except I’m no good at it.
Entelechy on March 12, 2009 at 3:38 PM
It runs a ferris wheel at an amusement park.
AubieJon on March 12, 2009 at 3:39 PM
Hear, hear.
progressoverpeace on March 12, 2009 at 3:40 PM
Entelechy on March 12, 2009 at 3:38 PM
Look at the Dow the last three days.
Thank the President.
getalife on March 12, 2009 at 3:41 PM
“Either prices go up or jobs get lost” Yes, I think Hussein Dingy and piggy just put us all on the bread line. Its gonna get ugly.
dogsoldier on March 12, 2009 at 3:41 PM
Heh, I don’t care about a 3-day Dow. I didn’t see you here bemoaning that it dropped as much as it did since hid inauguration. Darling, I’m pretty good with math and stats, and with reality checks. I can give you one, any time.
Entelechy on March 12, 2009 at 3:42 PM
Entelechy on March 12, 2009 at 3:38 PM
Okay lucky charms, forget reality.
It’s a con world which you dwell.
getalife on March 12, 2009 at 3:44 PM
Everyone talks these days about “going John Galt”.
With all the Tea Party activity recently, we should talk about “going Samuel Adams”!
dougwinship on March 12, 2009 at 3:45 PM
do you know how to answer a question? Are you employed? What exactly is it you do? As you are no day trader… that I can tell.
upinak on March 12, 2009 at 3:46 PM
Please tell me you don’t drive.
AubieJon on March 12, 2009 at 3:46 PM
I hope by “con” you don’t mean a “crook”. Never have taken much of what belongs to others, except a pen, here and there, and even returned those, if I found the right owner.
About “reality”, you have no idea how much I live in it, for good and for bad. I’ve been called a realist more than anything. You, on the other hand, keep dreaming of Nirvana.
Entelechy on March 12, 2009 at 3:47 PM
BTW, Galt was a fictional character in a fictional book.
It’s not reality people.
Geez.
getalife on March 12, 2009 at 3:49 PM
Actually, while I agree with what you said about the housing, that is not the only problem. I posted the comment (quoted below) in a past thread, and Doctor Zero agreed with this observation. Just one request, please respond with facts and figures. Thanks!
peter_griffin on March 12, 2009 at 3:49 PM
Entelechy on March 12, 2009 at 3:52 PM
Wow, thanks for the link. I knew that a scumbag like Madoff had to be a Democrat; I just didn’t realize to what extent.
Amazing.
Norwegian on March 12, 2009 at 3:53 PM
Yes, stupid…a fictional character usually is found in a fictional book…even in a real book from time to time.
And Atlas Shrugged is very relevant to the present day…as an analogy as to what has happened, what may happen and what the potential outcomes may be.
Ever read it?
coldwarrior on March 12, 2009 at 3:53 PM
You’re saying Galt didn’t exist in a book that didn’t exist? Do people often remark that your breath smells like anti-freeze?
AubieJon on March 12, 2009 at 3:53 PM
coldwarrior on March 12, 2009 at 3:53 PM
Sorry, I don’t read fiction.
I dwell in the real world.
getalife on March 12, 2009 at 3:54 PM
I would have never thought, nor would have Ayn Rand, that her fiction would become this sad reality in only 45 years.
Accellerated destruction…or Catapulted Self-Destruction, the sequal, or the materialization of such fiction of such a short time ago…sad.
Entelechy on March 12, 2009 at 3:55 PM
So do you agree in principle with what I stated? Thanks for taking the time to read through my quote, not a lot of people do that. IMHO, we would be better off if we *analyzed* the issues without trying to feed the trolls or resort to repeating political talking points. Hmmm, maybe I should start a blog if there are sufficient number of interested parties…
peter_griffin on March 12, 2009 at 3:56 PM
Entelechy on March 12, 2009 at 3:55 PM
Oh geez.
getalife on March 12, 2009 at 3:57 PM
I have a fictional story to tell too.
Vitter misses his flight and has airport rage screaming:
“Don’t you know who I am!”
The airport worker calmly replies:
“Sure, you’re that senator who likes to wear diapers with hookers, right?”
getalife on March 12, 2009 at 4:02 PM
The first step toward disaster came with the Community Reinvestment Act (1977); then came the insistence that Freddy and Fannie were to backstop all of these specious loans, loans made under threat of civil suit as a violation of the 1964 Civil Rights Act. Once the USG, through Freddy and Fannie, guaranteed the worth of these instruments, they could then be traded on the open market, and we had the rise of the hedge fund. After a short while, it became apparent that all of this was a house of cards…but Congress blocked time after time any attempt to regulate and address this ponzi scheme based on specious loans, backed by official USG paper, and bought and sold on the international market. AIG, for example, going into the tank, was due in large part to the enormous liabilities they held or guaranteed…financial instruments pegged to the specious loan market.
My fundamental question is how people who could not afford rent, could suddenly be granted a mortgage? The next question is why lending institutions were forced to make specious loans that violated every principle of credit?
Guess barney Frank and Chris Dodd, among others, have the answers to these questions but insist on blaming Bush instead of being honest with all of America.
coldwarrior on March 12, 2009 at 4:04 PM
Ten cents per post, plus it gets two cents for each post that answers, comments upon, or otherwise references its posts.
Yoop on March 12, 2009 at 4:17 PM
Yoop on March 12, 2009 at 4:17 PM
I am retired fruit yoop.
getalife on March 12, 2009 at 4:19 PM
Great speech by our President to business leaders telling them what he believes.
It’s not socialism sillies.
getalife on March 12, 2009 at 4:21 PM
…and suddenly, it all makes sense.
Well, the logic behind his posts, anyway.
Count to 10 on March 12, 2009 at 4:24 PM
I think this one is going to stick with me for a while.
Also, I think that an image resembling Golem is going to now pop into my head every time I read the tag “getalife”.
Count to 10 on March 12, 2009 at 4:31 PM
That’s right. It’s marxism, which is more encompassing, along with a good dose of a stupid, naked desire for revenge (social and economic “justice”) thrown in.
The Precedent must resign, now. He is a very dangerous joke.
progressoverpeace on March 12, 2009 at 4:31 PM
So, essentially, your argument is that the overwhelming number of hedge funds and derivatives were created because of the housing reinvestment act – is that correct? While that may be true, the hedge funds feeding on the derivatives could have been created by any boom, as I mentioned in my original post. It just *happened* to be houses. But, absent intelligent regulation, or for that matter *any* regulation, they were allowed to foster and grow into this monster. We are really seeing the playout of the tech bust, but on a much, much more massive scale.
peter_griffin on March 12, 2009 at 4:34 PM
progressoverpeace on March 12, 2009 at 4:31 PM
No, he is a free market with regulations kind of President and new Democrat.
getalife on March 12, 2009 at 4:34 PM
Just to be helpful, I fixed those typos for you.
LegendHasIt on March 12, 2009 at 4:34 PM
LOL. Sort of like he is a coal industry with regulations supporter …
Yeah … free market with “regulations”.
Get a brain, you blithering idiot.
progressoverpeace on March 12, 2009 at 4:40 PM
I did not mean that in terms of the financial analysis of the problem, but more as a philosophy of how the following scheme is bound to die:
boom is created in some area –> derivatives are created off of that area (insuring companies, assets or whatever) –> the original boom dies and so everyone in the second part is on the hook and headed for bankruptcy
peter_griffin on March 12, 2009 at 4:40 PM
getalife, I spent 8 years questioning the president I voted for. He got praise when I thought he deserved it and criticism when I thought he deserved that. Do you even have the capacity to question Obama or have you moved on from Hope into blind devoted faith? Because it sure seems the second one…
oddjob1138 on March 12, 2009 at 4:42 PM
Take a look at Iceland…Lehman was their primary line of credit. Lehman had over 20% stake on D.E. Shaw Hedge Fund, alone…and were invested in other hedge funds as well. Last year, last Spring, if one were able to take an inventory of investments by banks across the globe, one would see a huge portion tied to the US housing market…all tied to a house of cards.
Had there been no such inter-connectivity then we could have handled a draw down in the housing market, even been able to weather a few major banks being forced into FDIC takeover. But, when it came crunch time…we found that most of the “wealth” being bought and sold by global financials was pretty much just paper…and bad paper at that.
It was the U.S. Government’s backing (through Freddy and Fannie) that made these financial instruments so “valuable.” After all, the United States was the nation of choice in almost every global crisis we’ve seen over the past 75 years…stable…all the right regulation…and the United States could never ever go bankrupt, we weren’t Zaire or Uruguay, after all.
It was one big pyramid scheme…right up there with Madoff, really…and each time a piece of paper was traded, it gained in price but not in actual worth.
coldwarrior on March 12, 2009 at 4:51 PM
Pres:
Thanks for being so effective of crushing our economy by talking about it as a crisis every chance you get.
Thanks for being such a complete hypocrite about every campaign promise you made.
Thanks for not doing your job.
Thanks for stealing wealth from the next couple generations.
Thanks for rising unemployment through bad policy.
Thanks for making the bread lines longer.
I didn’t vote for you, but I’m stuck with you. Please resign so we can get someone in there who actually knows how to fix this problem.
ammon_of_cs on March 12, 2009 at 4:57 PM
oddjob1138 on March 12, 2009 at 4:42 PM
No, like today I sided with the cons on the knee jerk reaction on “Obama VA: Let’s charge vets for care on service-related injuries”. It does look bad but some more facts came out in the comments. Sometimes, you have to wait a few days for all the facts to come out.
As usual, there was more to the story so I had to apologize for my knee jerk reaction and will never do it again.
See, many of these silly posts are designed to bring down the dems with anything negative and you have to filter out the bias and bs.
When all the facts are in and it is obvious our President is in the wrong, rest assured I will opine that position.
But if it is just biased silly attacks, I will opine that poition too.
getalife on March 12, 2009 at 4:58 PM
A loan shark is a predatory lender, and even then, it’s the idiot borrower’s choice to accept the money or not.
A person that lies on a loan application in order to get a house that they cannot afford is not a victim of predatory lending.
A bank being forced (whether by laws or threats from community organizers) to lend to people that are at a high risk of defaulting is not a case of predatory lending either.
It’s a nice term to throw around, but it is not at all indicative of what really happened.
JadeNYU on March 12, 2009 at 5:06 PM
JadeNYU on March 12, 2009 at 5:06 PM
Thanks for pointing that out.
Now your opinion on the rest of the list or do we ignore those?
getalife on March 12, 2009 at 5:08 PM
oddjob1138 on March 12, 2009 at 4:42 PM
Do you think the Dow turnaround is worthy of praise for the President?
getalife on March 12, 2009 at 5:11 PM
The “Dow turnaround” has nothing to do with the President. The “Dow turnaround is a short term uptick due to a bunch of short sellers having to hedge their bets, and a few canny big investors buying stocks that look to be improving because the companies are pulling their financial operations out of the US and going to a more stable and safe Switzerland.
LegendHasIt on March 12, 2009 at 5:18 PM
And your man is the biggest con.
Johan Klaus on March 12, 2009 at 5:19 PM
No, you’re just stuck on stupid.
dominigan on March 12, 2009 at 5:22 PM
The Obama/dems recession and they want to raise taxes and drive more businesses away. Economics destruction 101.
Johan Klaus on March 12, 2009 at 5:23 PM
I think it also has to do with the fact that people are turning against The Precedent, so his idiotic ideas have less of a chance of being implemented and killing everything. If people started openly calling for his resignation, the market would be up 1000 points.
progressoverpeace on March 12, 2009 at 5:31 PM
Republicans are simply incapable of creating a recession.
Democrats on the other hand, with their wealth guilt, redistribution mentality, and social engineering schemes…
No politician is capable fixing a bad economy.
Bad economies improve under Republicans because they are friendlier towards business and investors…they create an environment in which money can be freely made-and lost…that is the nature of free enterprise.
If we didn’t learn this in the 1930s then I guess we never will.
Dr. ZhivBlago on March 12, 2009 at 6:49 PM
Wow, it only took two minutes to flush it out in the open that time. Couldn’t anybody get a good sight picture? Troll season is open, afterall; no bag limit.
Yoop on March 12, 2009 at 6:50 PM
Getalife:
http://www.youtube.com/watch?v=_MGT_cSi7Rs
Do any of those people look familiar?
Madoff is doing what Socialist Security does every year: pay current recipients with current investors money – all while investing NOTHING.
DavidM on March 12, 2009 at 7:05 PM
No. Nor would I lay three days of falling solely at Obama’s feet either. But two months… Yeah. As many many people agree, I do put the lion’s share at his feet.
oddjob1138 on March 12, 2009 at 7:38 PM
Yes, Ed, predictable. Only the dumb one doesn’t understand the intricacies of international business. Most international companies will be moving headquarters out of the USA and out of the USA taxes.
In communist countries, like Venezuela, they seize company asets and erect walls to keep the people in. You can see why now.
tarpon on March 13, 2009 at 9:21 AM
Don’t feed the troll. If it doesn’t get anything to eat it will go away, maybe back to Kos or DU. Remember, don’t wrestle with a pig. It will just annoy the pig and frustrate you.
waveman on March 13, 2009 at 5:28 PM
Comment pages: « Previous 1 2