OK, Boomer


To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.


How FedEx Cut Its Tax Bill to $0   [New York Times]

“The company, like much of corporate America, has not made good on its promised investment surge from President Trump’s 2017 tax cuts.”

“Nearly two years after the tax law passed, the windfall to corporations like FedEx is becoming clear. A New York Times analysis of data compiled by Capital IQ shows no statistically meaningful relationship between the size of the tax cut that companies and industries received and the investments they made. If anything, the companies that received the biggest tax cuts increased their capital investment by less, on average, than companies that got smaller cuts.”

“FedEx’s financial filings show that the law has so far saved it at least $1.6 billion. Its financial filings show it owed no taxes in the 2018 fiscal year overall. Company officials said FedEx paid $2 billion in total federal income taxes over the past 10 years.”


Fact check: TRUE.



Fact check: ALSO TRUE.


I think FedEx is one of the crown jewels of Western capitalism. This is a company that has invested (and continues to invest) billions of dollars in the US economy, creating (and continuing to create) tens of thousands of jobs.

I think FedEx can spend whatever tax cut windfalls they might receive in whatever way is best for their shareholders. There’s nothing unfair or wrong about that.

I think Fred Smith is one of the crown jewels of Western capitalism, too. His personal story is an inspiring one of risk-taking and patriotism.

I think Fred Smith, entrepreneur and risk-taker, can be as rich as he wants to be, and there’s nothing unfair or wrong about that, either.

But here’s the thing …

If I hear another lecture from Fred Smith and his fellow billionaires on trickle-down tax cuts and the “benefits to the United States economy, especially lower and middle class wage earners”, I’m going to lose it.

If I hear another lecture from Jay Powell and his fellow centimillionaires and decamillionaires at the Fed on trickle-down monetary policy and the “benefits to the United States economy, especially lower and middle class wage earners”, I’m going to lose it.

OK, boomer.


What’s the boomer world?

It’s a world where our current President is an on-the-make billionaire, and our most recent former President seems hell-bent on becoming one. A world where lawyers from Citadel write our securities regulations, and VPs from Boeing run our Defense Dept. A world where corporate managers can become billionaires – not by innovation or risk-taking – but by stock-based comp at scale. A world where asset managers can become billionaires – not by invention or outperformance – but by asset-gathering at scale.

It’s a world that has been systematically hollowed out for decades, through Narrative capture of monetary policy, trade policy, antitrust law, mass media and the tax code.

“Yay, trickle-down economics!”

It’s a bipartisan thing. It’s a Zeitgeist thing.

And the 2017 Tax Cuts and (LOL) Jobs Act was just the latest smiley-face punch in the gut.

Worried about losing your freedom to a redistributive State? I think you’ve already lost it.

Just not in the direction you thought.


Comments

  1. This is an unintended consequence of central banks saving the world. Theoretrically, capitalism is self-correcting but without the unpleasant part of the cycle it doesn’t work. It isn’t working and it is going to get ugly…

  2. Avatar for Zenzei Zenzei says:

    This is a natural consequence of what happens when systems involving people grow in complexity to the point where they are no longer understandable by the participants in the system. To make up our deficiencies in understanding we create ideas about how the system should or ought to work. We ascribe to it moral qualities (a fair system) or semi-intelligent attributes (the system will adjust). Then when the raccoons emerge and take advantage of the lovely trash bins that the system has deposited all over the place, we react with indignation and “quelle surprise” simply because we forgot that the raccoons were there in the first place.

    So we try and design systems to deracoonify, and those systems too end up being run by raccoons, who cleverly have now put on different suits that allow them to be respectable, like the regulator suit, or the civil servant suit.

    We keep looking to the system for answers, when we probably should spend a lot more time looking in the mirror.

  3. If you make it all about money - why not? If you have a patently corrupt government at all levels-why pay taxes you don’t have to?

  4. Off the top of my head, I can’t think of any large cap US business that has been more consistently and thoroughly critiqued by Wall Street analysts for spending TOO MUCH on capex in the last 2 years.

Continue the discussion at the Epsilon Theory Forum

Participants

Avatar for bhunt Avatar for Zenzei Avatar for Flat_Arthur Avatar for captalan330 Avatar for bdoran10gmail-com

The Daily Zeitgeist

ET Zeitgeist: Raccoons Never Sleep

By Ben Hunt | May 28, 2021 | 5 Comments

Lemonade (LMND) isn’t just an insurance company. No, no … they’re an AI Company! ™.

Plus Chamath is up to his old tricks.

I hate raccoons.

Inflation as Ad Campaign

By Ben Hunt | May 24, 2021 | 0 Comments

An ET Pack member sent me this. Anyone else come across ads that directly call out inflation expectations? Would love to collect more screenshots like…

Many People Are Saying … Bitcoin is Art

By Ben Hunt | May 24, 2021 | 0 Comments

The Bitcoin Is Art thesis that I put out back in 2015 (The Effete Rebellion of Bitcoin) and recently put forward again (In Praise of…

The Zeitgeist – 3.19.2019

By Rusty Guinn | March 19, 2019 | 6 Comments

Today’s Zeitgeist is about tweet nudges, massive law partner payouts, a big reason for massive law partner payouts, your closet, the people who want to sell you…rope, and more.

The Zeitgeist – 3.18.2019

By Ben Hunt | March 18, 2019 | 1 Comment

The Lyft IPO prospectus is out today, so we’re sure to hear plenty of dueling banjos in financial media over the next few weeks and months. It was a fun vacation for Burt Reynolds and the boys at the start of that movie.

Also, more on ESG and other myths in today’s Zeitgeist.

The Zeitgeist Weekend Edition – 3.16.2019

By Rusty Guinn | March 16, 2019 | 5 Comments

First it’s a healthy reminder of the narrative strength of health care costs. Then it’s a brief education on the narratives of elite universities.

But mostly it’s Fiat News. Lots and lots of Fiat News.

DISCLOSURES

This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results.

Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.