The New York Times looks at a glut of goods clogging up Chinese warehouses—an ominous sign for the global economy:
Problems in China give some economists nightmares in which, in the worst case, the United States and much of the world slip back into recession as the Chinese economy sputters, the European currency zone collapses and political gridlock paralyzes the United States.
At some point, booms have to turn into busts:
Inventories of unsold cars are soaring at dealerships across the nation, and the Chinese industry’s problems show every sign of growing worse, not better. So many auto factories have opened in China in the last two years that the industry is operating at only about 65 percent of capacity — far below the 80 percent usually needed for profitability.
Yet so many new factories are being built that, according to the Chinese government’s National Development and Reform Commission, the country’s auto manufacturing capacity is on track to increase again in the next three years by an amount equal to all the auto factories in Japan, or nearly all the auto factories in the United States.
A big question for us, beyond the general economic shockwaves, is will China unload its excess production by dumping it on us and U.S. businesses?
— Back in January The Wall Street Journal’s Mark Maremont examined how Romney got between $21 million and $102 million in his IRA, which is limited to a few thousand dollars a year in contributions, something tax experts called “highly unusual.”
Now he looks at how Romney got $100 million in a trust for his boys without paying gift taxes:
One of the mysteries surrounding Mitt Romney’s taxes is how the former private-equity executive managed to get $100 million into a family trust for his children without incurring federal gift taxes.
A potential clue may be found in a previously unreported 2008 presentation made by a partner at law firm Ropes & Gray LLP, which represents the GOP presidential nominee. It focuses on how private-equity executives could minimize gift and estate taxes by giving family members some of their “carried interest” rights, a major form of compensation that entitles private-equity executives to a slice of the firm’s future investment profits…
The attorney at Ropes & Gray wrote that in the 1990s and early 2000s estate-planning lawyers “commonly advised” that executives could claim a value of zero on these transfers of carried-interest rights for federal gift-tax purposes. He said the practice ended by 2005.
— Roger Parloff, who had a terrific piece in Fortune last month on Kim Dotcom and the “twilight of copyright,” reports on how Google and Facebook settle privacy class actions and funnel the money to lobbies that also oppose copyright:
The EFF, CDT, and Stanford’s CIS all reliably line up on the tech sector side in scrimmages with copyright holders. All three supported, for instance, the January Internet blackout protest against the Stop Online Piracy Act — legislation opposed by both Google and Facebook. EFF and CDT also each submitted amicus briefs supporting Google in its two most important recent litigations: Viacom’s suit against Google’s YouTube unit for copyright infringement, and a suit by Rosetta Stone, the language course company, challenging Google’s practices of auctioning off other companies’ trademarks for use as paid-search keywords and allowing them to be used in ad text as well.
Now if some neutral individual had been tasked with awarding money to a charity that was single mindedly devoted to fighting precisely the sorts of wrongs alleged in the Google Buzz and Sponsored Stories class actions, his first choice would probably have been one that the settling parties in each case passed over entirely: the Electronic Privacy Information Center (EPIC).
Unlike any of the 22 cy pres recipients jointly proposed by the parties in the two cases, EPIC actually filed complaints against Google and Facebook with the U.S. Federal Trade Commission over the Google Buzz launch and Facebook’s use of members’ identities and likenesses in ad campaigns without permission. Prompted by EPIC’s complaints, the FTC brought enforcement actions against each company which culminated in consent decrees.
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