Federal prosecutors are continuing their assault on various antitrust violations and 2012 marks the second straight year that the Department of Justice has levied more than $1 Billion in fines. The most recent example of the DOJ’s campaign came last September (2013) with their announcement that nine Japan-based auto parts manufactures pleaded guilty to charges relating to a widespread price-fixing racket alleged to have added over $5 Billion to the cost of new vehicles.
Understand (of course you do) that parts manufactures have facilities and distribution sites not only in Japan but also Korea, throughout the E.U., Canada, Mexico and Australia each producing or distributing parts for most of the known Auto Brands. This structure has long been shaded in such a manner to appear as the thoughtful mechanism of an illogical premise that is somehow intended to substantiate the idea that there is a labor cost savings and elements of efficiency to be gained by affecting the same. Perhaps, if only to confine the argument to one that lives and survives solely on the labor cost savings, then it’s quite difficult to beat the slave-labor pricing argument but then how does one live past the fundamental hypocrisy imbedded in the abuse particularly when the actual costs to consumers not only do not reflect this claim but that there is a far more relevant truth which contains an expense multiplier far in excess of the alleged savings.
“Social and lost opportunity costs, in the aggregate, are not quantifiable in specific monetary terms; they are costs that rage in geometric and exponential proportions; they are cross-generational; they are lasting. When you disable a medium of growth you not only remove the processes that fuel said growth, you suspend the processes that endorse upward and expansive mobility in social, intellectual and physiologically enriching mediums. In point of fact what occurs is a degenerative spiral collapsing upon itself.” C. Greco – Valor In Prosperity.
I’ll leave the anthropological costs discussion for another time so, for now, let’s get back to the allegations of Price Fixing: Two key points remain concealed by the FEDS, and I’ve written extensively about each them, and the inherent conflicts associated with each: (1) Transfer Pricing – the ability to favorably alter or shift pricing between Business Segments or in International Transfers/Transactions. And, (2.) Multi-National Identity Concealment – direct or controlling ownership of so-called Foreign Companies remains privileged information due to Foreign Government regulations that prevent, seal or simply do not require specific details on Priority, Preferred or Trust Ownership Interests.
What does this all mean? A simple example: Let’s say GM wants to shift income to a country that has a lower tax base; all they do is increase the cost of the various parts/components that they import from a controlled interests located in a Country which just happens to have a lower tax rate or lower cost (operational) environment. This simple technique allows a company to shift revenues outside the U.S. simply by instructing its foreign business segments to increase the parts/components costs they ship to their U.S. assembly lines. Now then it often very difficult to know who is connected to the controlling interest because ownership interests are cleverly disguised by various governmental regulations the consequences of which make it near impossible to determine whether or not there is an element of related party collusion. Yes, it is that simple.
This practice is so unbelievably common and the fact that it is can only be explained as rank complicity between the Government and the Multi-National entities. No, it’s not Price Fixing; it’s simple Tax Evasion and you pay for it in higher taxes, higher prices, social degradation, infrastructure decay, political infidelity, lower standards of living, lost job opportunities, loss of key industries, loss of technological advantage, loss of transferable skills, loss of personal freedom and autonomy and this list self-propagates on from there.
“Tacit in the human mind, heart and spirit is an ever present notion; I am that none should be at a loss from my being so and ever more the better from my having been. Torment of loss occurs were none seem the wiser that such a notion must prevail; always.”
C. Greco – “The Mind of Wonder, Wanders”
Curtis C. Greco, Founder