Friday, March 20, 2009

Biting the hand that feeds

AIG is suing the US government to get back tax payments it made, but figures it can argue its way out of using the usual array of barely legal tax avoidance tricks:

http://www.nytimes.com/2009/03/20/business/20aig.html

Oh, and they're probably using Federal funds to pay for the law suit! You couldn't make it up.

Of course, in a certain sense all this is a perfectly rational response to the regulatory and legal framework*. Which just underlines how much work is needed to overhaul the entire framework to rehabilitate the financial sector as a normal corporate citizen, rather than the renegade it appears to have become. I realize all firms engage in some of these sorts of activities, but at least they mostly create wealth. Plus, I somehow don't think a Google, Microsoft or Apple offers clients services as dubious as "regulatory arbitrage"...

(*Although net of negative publicity and related downtream effects perhaps not so rational.)

1 comment:

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