U.S. Taxes Drive International Deals

By on 4.28.14 | 3:11PM

Until fairly recently, most corporate takeovers (i.e. one company buying another) were done primarily for business development reasons, for economies of scale, for access to increased distribution, and/or because the target company seemed inexpensive to the acquirer (though sometimes an outsider would wonder just what value management of the buying firm thought they saw in the target).

More recently, while those factors remain important, another impetus for international M&A (mergers and acquisitions), specifically U.S. companies buying foreign companies, is for the U.S. company to be able to become a foreign-domiciled company to avoid the U.S.'s destructive corporate tax code which, unlike almost any other country's tax code, taxes income earned overseas.

Thus, part of American drug giant Pfizer's interest in British drug firm Astra Zeneca is because if a merger were to happen, Pfizer would legally turn itself into a British company (while maintaining headquarters in New York and listing on the New York Stock Exchange).

Why We Get Bad Policy from ‘Good’ People

By on 11.19.10 | 12:16PM

A few months ago North Carolina State University economics professor Richard Stroup, who directed the Office of Policy Analysis in the Department of Interior during the Reagan Administration, explained to a John Locke Foundation audience how we so often get bad public policy from dedicated public servants (he calls them "good;" I'll let you make that evaluation). The reasons are, not surprisingly, narrowminded mission focus and self-interest. Discussing his premise in the context of climate change policy, Stroup expounded further in an interview for JLF's radio program:

Media Mystified as Failure of Obamanomics Becomes Apparent

By on 7.1.10 | 11:53AM

"New claims for state unemployment aid unexpectedly rose last week, heightening fears the U.S. economic recovery is stalling."
-- Reuters, "Surprise Rise in Jobless Claims Stokes Recovery Worries," July 1, 2010

Hmmm. As of noon today, the Dow Jones Industrial Average was at its lowest point in more than eight months, and an analyst says the latest economic data are "clearly pointing to a double-dip recession."

Italy’s Sequel to Calzada Study

By on 5.11.10 | 1:06PM

A little over a year ago Chris Horner, among others, directed attention to a Spanish study conducted by Dr. Gabriel Calzada of King Juan Carlos University on environmentalism-driven economic incentives, which found that for every "green" job created due to government programs, 2.2 Spanish jobs were destroyed.

Menzie Chinn Joins Me in Nihilism

By on 12.3.09 | 3:11PM

I take Menzie Chinn's second attack on me as a compliment, as his blog Econbrowser is probably the most sophisticated economics blog extant and has been one of my favorites and a daily read for about two years now. But I fear for Econbrowser, because Dr. Chinn has established that I am a nihilist, while at the same time endorsing all my claims, which inescapably leads me to conclude that he, too, is a nihilist.

Let's approach Dr. Chinn's latest broadside, "Politico Joseph Lawler Goes Nihilist," piece by piece:

Be afraid, be very afraid...again. From Joseph Lawler

On “Jobs Created or Saved” and the CBO

By on 12.1.09 | 5:37PM

Yesterday the CBO released, as mandated by the American Recovery and Reinvestment Act (ARRA, the stimulus bill), an analysis commenting on the reports filed by recipients of stimulus funds. I have argued in the past that interpretation of such analyses is difficult, and that the Obama administration's public interpretations have not demonstrated a corresponding level of exactitude.