Daily Archives: February 17, 2004

Corporate Ethics

I know, I know, it’s an oxymoron. Just to prove the point, the tax-dodging shenanigans of yet another Texas oil company.

When Houston-based Nabors Industries, the nation’s largest oil-rig company, reincorporated in the island tax haven of Bermuda in 2001 and secured a $10 million tax break, it had no intention of forsaking the benefits of being a corporate U.S. citizen, just the costs.Nabors owns a 33-ship fleet to service its rigs, which it has tried to register as all-American. Although the Jones Act of 1916 prohibits foreign-owned ships from doing business solely in U.S. waters, Nabors claims its ships don’t belong to the mail-drop parent company, but rather to its “American subsidiary.”

The company’s domestic competitors are crying foul — adding that they may soon have no choice but to follow Nabors offshore. A lobbyist for the Bermudan company dismissed its critics as “whiners.”

How hard would it be to write a law that forbids offshore mailboxes from having their own “subsidiaries” so the corporation can duck their tax obligations? I’m assuming this is legal, though there’s no earthly reason it ought to be. Of course, even if it wasn’t legal, the chances that the IRS would go after that $$$10Mil$$$ tax liability are practically nil. Take a look at FITE’s latest newsletter:

Would you believe that a local city council ordered the chief of police to permanently reassign his police to parking meter duty because the low income residents were cheating too many parking meters? And when the city was hit with a major crime wave, the council allowed a few reassignments, but left most police on parking meter duty? Of course you wouldn’t!That’s why it is so hard to believe that Congress ordered the IRS to do the same thing with taxes. Not sort of. Not temporarily. And it has been getting to this point since 1983.

Make no mistake about it. This is painfully true. Pulitzer prize winning New York Times [reporter] David Cay Johnston writes about this incredible story in his best selling book, “Perfectly Legal”. It took him 9 years to write.. It is not sensationalist. Everything he says has been carefully documented. Here are some of the rules imposed on our tax police:

* Don’t examine the tax returns of the super rich or even the very wealthy. Anyone violating these rules is either fired or demoted.

* Focus mostly on the poorest taxpayers even though. most of their violations are honest errors and little is recovered.

* Only rarely investigate the tax returns of small businesses worth $1 to $5 million. This is a group well known to cheat a lot.

* Do not investigate people who publicly announce in big newspaper ads that they will no longer pay taxes. Many thousands of citizens over the past several years have joined them, and NOT ONE of them has been investigated

* Don’t penalize corporations that violate tax laws. Ten years ago, the IRS penalized 2,400 corporations. Today it’s 20.

The cost to all of us is absolutely staggering. If the IRS took action, they could use the recovered funds to exempt half of all Americans earning less than $500 from paying taxes, and cut $4000 off the average tax bill of the rest of us. Count up all the losses, and it’s enough to set the federal budget right again.

The above is only a small sample. Every one of Johnston’s 21 chapters reveals a lot more. There is no doubt that Congress and the IRS have cooperated to destroy the system of taxes we count on to keep our democracy going.

We must emphasize that this is neither a joke nor sensationalism. We think every American should learn about Johnston’s revelations. That’s why we will feature them in several of the newsletters to come.

What can you do?

* Do anything you can think of to spread these facts. Forward this newsletter to everyone you know. Print it up and post it at work, at your local laundry, your place of worship or anywhere else you can think of.

* Invite us to speak more about this. We will go anywhere to talk to three or more people. We will train anyone interested in how to present these facts. Quite a promise!

Knowledge is power. Let’s spread the word and stop this obscenity. (emphasis added)

Yes, let’s.

Direct Mail Marketing and Politics

Dave Johnson at Seeing the Forest, in a post titled “The Arrogance of the Informed”, goes through the ABC’s of marketing in an attempt to educate the clueless. It’s a noble effort and certainly welcome as a first step. Unfortunately, Dave is rehashing an argument that was all but settled 50 years ago. But he’s a software engineer, and we can’t expect him to know that.

There is a REASON that direct mail is all so similar and reads the way it does. BECAUSE IT WORKS! Because they have been doing it for decades and have studied it and refined it and refined it and tested it and refined it again, and it makes money – more money than other things they have tried because more people respond to it. And by extension, I came to understand that there is a reason that there are all those stupid ads on TV that we all hate, and ads in magazines, and billboards, and posters in subways, and huge ads on the sides of buses. And I came to understand why big companies spend BILLIONS on advertising when they are otherwise so cheap they ration pencils to their employees. BECAUSE ADVERTISING/MARKETING WORKS!

And I came to understand why they use such stupid appeals that are insulting to me. Because it works on most people, even if it does not work on me. And this is because I am informed BUT MOST PEOPLE ARE NOT.

This came to Dave as a blinding flash of unexpected insight, and good for him, but anybody who has ever lived in the trenches with the people at whom those pitches are aimed figured that out ten minutes after they landed. Yes, mass marketing does work on the masses of the uninformed, and no, more sophisticated and honest and less irritating and stupid marketing does NOT. Vance Packard told us that 50 years ago, and he told us how and why Mad Ave did what they did. None of it is exactly a secret, except maybe from software engineers.

Dave wants his audience to understand and accept the fact that not everybody knows as much as they do–a good point–and that they have to begin to be willing to use the same techniques the other side uses because they WORK:

The people behind the Republicans…are people who DO understand regular Americans. We should learn from them. That bulge in Bush’s flight suit and the Marlboro man are are both designed to convey simple, basic, short messages on an emotional level to specific target audiences. That’s marketing.

Simple, basic, short messages that reach the target audience on an emotional level, repeated and repeated.

I fear that we online consumers of news suffer the arrogance of the informed. I think we all, bloggers and readers alike, might benefit from taking a step back, seeing a bigger picture – one that encompasses millions of less informed voters – and trying to understand what THEY think and how THEY react to things they hear.

And so we would, to some degree, but marketing isn’t nearly as simple as Dave suggests. If it’s just a matter of copying the marketing techniques of the other side, why hasn’t that worked very well for the Democrats, who have, after all, been trying to do it for 30 years? We’ve had some success but not as much or as consistently as the right. Why not?

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