Your morning jolt: Coke chief says U.S. becoming more hostile to business than China
Coca-Cola’s top dog on Monday told the Financial Times that, thanks to an antique tax code and political infighting, the United States is becoming a more hostile place to do business than China:
Muhtar Kent, Coke’s chief executive, said “in many respects” it was easier doing business in China, which he likened to a well-managed company. “You have a one-stop shop in terms of the Chinese foreign investment agency and local governments are fighting for investment with each other,” he [said].
And Washington gridlock? “There’s too much comfort. We need more needles to stick in politicians.”
Kent made his remarks at the Clinton Global Initiative conference. See the FT video here.
***
Apparently, a certain former political figure has no plans to return to elective office. Bloomberg reports that former Democratic attorney general Thurbert Baker has been hired by the debt collection industry to help fight new restrictions in several states:
DBA International, the debt-buying industry’s trade association, hired Baker, the former Georgia attorney general, to cultivate relationships with key regulators in advance of state legislative sessions in early 2013. That way, Baker said in an interview, the industry will be “at the table to help draft legislation, if it comes to that.”
***
The legislative committee that oversees MARTA held a friendly meeting with transit officials on Monday. From my AJC colleague Aaron Gould Sheinin:
Rep. Mike Jacobs, R-Atlanta, the chairman of the MARTOC Committee, said consensus is building among lawmakers in favor of a major change in MARTA funding.
The meeting was a far cry from the days when the committee was run by a more confrontational Rep. Jill Chambers, R-Atlanta, who lost a re-election contest last year.
But by coincidence, while her old committee was holding forth, Chambers sent out an e-mail advertising her new services as a private investigator – looking through court records, conducting background searches and locating witnesses. Her fee:
$25 per hour + expenses (database fees, parking, copy costs, mileage @ $0.50/mile)
Which is a bargain. Jim Rockford was charging $200 a day plus expenses 20 years ago.
***
Over at the Athens Banner-Herald, Blake Aued says U.S. Rep. Paul Broun’s Republican primary opponent has surfaced:
Mac Collins said there is a better-than-even chance he’ll run against Broun in a radically redrawn 10th District. He said he expects to make a final decision by the end of October.
Collins, 67, served 12 years in Congress from 1993 to 2005. He said he’s more experienced than Broun, who’s served four years.
“I’ve been there at these tough times like we’re having today,” he said.
But in order to run against Broun, Collins will have to concede that Democrat Jim Marshall beat him in 2006 – something that Collins has yet to do.
***
The AJC’s Politifact Georgia today examines U.S. Rep. Paul Broun’s claim that federal stimulus cash used to cut down on childhood obesity is killing jobs.
***
State Sen. Doug Stoner, D-Smyrna, is making the case that his newly re-drawn Senate district is just as important to Georgia Democrats as U.S. Rep. John Barrow’s stand in east Georgia. From an analysis by the Marietta Daily Journal triumvirate:
“It’s one of the key races Republicans are hoping to flip to their column — it would help them gain a supermajority and also help them gain a majority in the Fulton County legislative delegation,” said Dr. Kerwin Swint, a political science professor at Kennesaw State University. “It’s also a textbook case of gerrymandering, taking a district that was completely in Cobb, and stretching it far into north Fulton County, making it a majority Republican district.”
- By Jim Galloway, Political Insider
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155 comments Add your comment
Billy Sherman
September 27th, 2011
10:37 am
Everything is terrible
Billy
September 27th, 2011
10:38 am
Yeah, above poster, libs ARE the problem, like or not. Who signed the NAFTA into law? It wasn’t a GOP president, now, was it?
Free trade is supported by BOTH parties, like or not. Why anyone supports free trade, I don’t know, because naturally businesses will send jobs oversees. But that, along with PBO and the Dims assault on small business with onerous health care, over regulation, and artificially jacking up energy prices, doesn’t work, won’t ever work. Pile on a zillion dollar stimulus, still didnt’ work. And libs think they can post a bunch of hatefull comments and talk down to those that know better. Yeah, you guys keep punching that keyboard and tell all what’s wrong and how to live, even though it’s obvious the only thing you’re talented at is laying around on your buns and hating others who worked a day in their lives and have something to show for it. Yeah, keep it coming…
oldfart
September 27th, 2011
10:38 am
Translation: It’s easier to know who to payoff in China and you don’t have to pay as many. Politicians are the same the world over and all are for sale. Witness who the former “Democratic” attorney general Thurbert Baker is working for and now this person who sold themselves as a champion of the people has sold out as a lobbyist. Democracy to the highest bidder.
I think the jury is still out on communism as we have yet to see it in real application to an entire country. China would be best labeled a dictatorship by committee and they seem to be playing the capitalism game pretty good as of late. How many billionaires do they have now? Communism to the highest bidder?
Last Man Standing
September 27th, 2011
10:39 am
Ol’ Timer:
@Jackie — There’s no envy. I just think big business should play by the same rules everyone else does — including paying their fair share of taxes.
Yeah, pay their “fair share” – just like I want the 50% of people who pay NO FEDERAL INCOME TAX to pay their “fair share”.
Ol' Timer
September 27th, 2011
10:40 am
Maybe Coke should consult with the Koch Brothers who, inspite of taxes and regulations, saw their wealth quintuple in eight years.
Maybe it’s not the taxes and regulations and a hostile business environment, but the competitive environment that’s eating Coke’s lunch.
Frankly, I quit consuming Coke products years ago, so it’s no great sacrifice for me.
markie mark
September 27th, 2011
10:41 am
@ greg – you need to get a clue…business does not work “for the people”. Its mandate is to get a return on investment for its shareholders. You need an Econ 101 class.
Billy Sherman
September 27th, 2011
10:42 am
“Really? How do you figure? What is the first general rule of any company in business? MAKE A PROFIT.”
Instead of regurgitating things everyone already knows, look up price elasticity of demand (and supply for good measure). Depending on the product and the market, companies have to ‘eat’ certain costs, it’s seldom as simple as simply passing on the buck to the consumer. It’s fascinating to read and learn!
RAMZAD
September 27th, 2011
10:44 am
Thurbert Baker either sold out his principles or was about to become part of the long term unemployed.
Billy Sherman
September 27th, 2011
10:45 am
“Who signed the NAFTA into law? It wasn’t a GOP president, now, was it?”
Glorious Reagan signed not one, not two, but three free trade agreements into law as president
Roekest
September 27th, 2011
10:45 am
@ greg “This is why we don’t have more jobs in this country. The big business owners have placed money ahead of the everyday citizens and workers . These big business/corporate elite folks will sell their mother to make a dollar.”
You do realize you live in a CAPITALIST economy, right??? The purpose of any company is to MAKE MONEY. If you don’t understand these basic concepts, I urge you to repeat middle school.
And while I’m not a Coke employee, I can say they do use those profits to benefit this country through charities and what-have-you.
If you think that the sole purpose of a company is to dole out welfare to the least of us, then you, Obama, and the entire Democratic base can find an island somewhere in the ocean and create your own little Utopia. Let me know how that works out after Pelosi realizes she’ll have no more makeup to cover up that hideous, reptilian face of hers.
Alphare
September 27th, 2011
10:46 am
Well, if you can bribe some Chinese officials, every thing is easy for you, not just business, you can try murder too and easily get away.
Maybe that’s why most American business would hire relatives of some high ranking Chinese officials?
SBinF
September 27th, 2011
10:47 am
Gee, a command economy provides a better climate to make billions, whod’ve thunk it?
The Chinese government sets wages, the Chinese government sets prices, the Chinese government decides what is bought and sold. People like Chuck who argue the U.S. is more socialistic than China should take a basic high school government/economics course.
Billy Sherman
September 27th, 2011
10:48 am
“You do realize you live in a CAPITALIST economy, right??? The purpose of any company is to MAKE MONEY. If you don’t understand these basic concepts, I urge you to repeat middle school.”
^^ Hard hitting conservative genius right here y’all ^^
RAMZAD
September 27th, 2011
10:48 am
Pepsi tastes better than Coke anyway. I rarely drink soda, and never select Coke over Pepsi, so
maybe it is the taste of Kent’s drinks that is his American problem.
Smoke
September 27th, 2011
10:52 am
You get a 32% increase in salary and now make $25 million a year, your running buddy John Brock got a 47% hike and now makes $23 million, and the GOP put a cherry cola on top by keeping your personal tax rate down so that you can create jobs. Meanwhile, Coke laid off 6,000 Americans. Yep, this is class warfare.
td
September 27th, 2011
10:53 am
Billy Sherman
September 27th, 2011
10:42 am
Companies do eat certain cost but if they do it to taking a loss then they go out of business. If the tax burden on the company makes their product or service untenable then they are going to either pass those cost along to the consumer or find other ways to cut cost (ie shipping jobs overseas for cheaper labor cost, making a smaller portion of a product or going to a cheaper material). You can talk about elasticity all you want and it is a sound theory but the bottom line is a company will make a profit some way or the other or they will go out of business.
Billy Sherman
September 27th, 2011
10:55 am
If they can’t afford to even pay their taxes, maybe their business plan isn’t sound in the first place.
GaBlue
September 27th, 2011
10:57 am
Smoke,
Don’t you know? It’s only class warfare when we TALK about the systematic dismemberment of the middle class, rising poverty rates, and economic policies which dramatically increase the wealth held by a smaller and smaller percentage of “job creators.”
Actually supporting and implementing the policies that make it happen is not “class warfare,” but “good business practices.”
Smoke
September 27th, 2011
10:58 am
Sorry. The source of the salary information is that liberal rag the AJC, Sunday June 5th, 2011. On May 29th, 2011, the AJC reported that Coke was raising prices 4% because of increased raw material costs. It looks like about 15% of the increase in prices will go to pay just the salaries of Kent and Brock. Yep. Class warfare, and the real working Americans are losing big time.
td
September 27th, 2011
11:00 am
Billy Sherman
September 27th, 2011
10:55 am
If they can’t afford to even pay their taxes, maybe their business plan isn’t sound in the first place.
But you libs want their tax rate at 39%. That is a big burden to handle in the elasticity model.
Smoke
September 27th, 2011
11:03 am
No EPA, no OSHA, no minimum wage, no employee benefits, no FDA, etc. Yep, China doesn’t have class warfare, but America does. On the other hand, I wonder if having a population of 1.3 BILLION has anything to do with business being better in China.
Phil Smith
September 27th, 2011
11:06 am
Jim- You are telling your age. The Rockford Files was not 20 years ago! It was broadcast from 30 to 38 years ago!!! Dude, we are getting old.
doktor
September 27th, 2011
11:10 am
Let’s all boycott Coke Products. I know that I will.
Jeffro Bodeen
September 27th, 2011
11:12 am
Screw you Mr. Kent!!! The bottom line is all that you consider and as long as that is what all corporate decisions are based up, along with NAFTA, then the American working man is bent over and waiting!!
Billy Sherman
September 27th, 2011
11:13 am
“But you libs want their tax rate at 39%. That is a big burden to handle in the elasticity model.”
I’ve never said anything about 39%, but corporate tax rates in the US have never been lower than now in modern history so when corporations and their sycophants start to cry about taxes I just assume they’re either lying or ignorant.
Ghost
September 27th, 2011
11:18 am
So why isn’t he moving Coke’s headquarters to China, if it’s so much easier to operate there? He’s either disingenuous or incredibly stupid.
Please
September 27th, 2011
11:25 am
Oh and he forgot to mention a working class that exists one step above slavery… that helps his bottom line as well.
JAWJA
September 27th, 2011
11:31 am
Every time I see how much this suckers earns(coke ceo) I say I’m giving it up. I believe he’s finally !pushed me over the line. Made a pot of decaf, chilled it, no coke today
As to Thurb, maybe he’ll put some heart in this job. He never did much as AG.
Songbird
September 27th, 2011
11:32 am
All of you who are slamming Coke, don’t know anything about the company I worked for for more than 25 years. They’re not perfect, no company is, but they take better care of their people than most. Coke does all of their production and selling locally, employing local people. They’ve created jobs all over the world and lifted many out of poverty. They donate money and products to people in need all over the world. They’ve helped build wells in Africa getting clean water to people who had to walk for miles before for clean water. They are always the first to donate money and bottled water during national disasters here and abroad. If something bad happened here in Atlanta, they would stop production of soft drink lines to produce bottled and canned water and donate it regardless of the lost revenue. All of you haters need to get a life. All you ever do is look for the negative in everything. So sad.
mike
September 27th, 2011
11:36 am
Coke will remove the finish from your car, they have been poisening Americans for years and is a major player in the “obesity” epidemic in this country.
Edward
September 27th, 2011
11:37 am
Let’s get rid of all those liberal regulations so we can let business dictate the quality of our air, water, stock market, interest rates. Look how well China’s economy is doing, so what if a few hundred kids die from tainted milk, let the free market decide if that milk should be sold. So what if a few hundred thousand die in collapsed buildings from shoddy construction, the free market can take care of that. Let the nearly pure capitalist model of China and its glorious economy be the beacon for how the US should be!!!!
Songbird
September 27th, 2011
11:42 am
He didn’t say get rid of all regulations and safety measures or minimum wages, etc. He mentioned the antiquated tax code and the disfunction in Washington. All of you have just gone off the deep end with your BS. What a joke. It’s no wonder this country is going down the toliet. Just read the stupid comments on this blog.
jose
September 27th, 2011
11:42 am
Not to say that I am boycotting Coke Products, I just stop using them two decades ago because of quality of the product – color sugar water in a can is what they are selling. Don’t miss it at all.
Old South
September 27th, 2011
11:44 am
Coke is saying this because they aren’t seeing the USA as a growth market anymore. We’ve woken up to how unhealthy the core product is.
Dr. Warren
September 27th, 2011
11:49 am
I’m an Atlantan who has lived in China for the past 5 years. Doing business here is never easy. Period. Because Kent is a CEO–and like most American execs, has likely spent little time on the ground involved in the nitty-gritty here on the Mainland–he is offering superlatives to make himself sound savvier than he really is and to complain. It seems to be a common phenomenon among high-ranking businesspeople and politicians who come here for brief visits and get charmed, knowing little about how truly corrupt this country is top to bottom. Keep in mind that Chinese–and some Western–managers who work for MNC’s here commonly use locally accepted, but not-so-Kosher tactics to maintain “Guanxi” (advantageous connections) with government officials to smooth the road, so to speak. Things that wouldn’t fly back in the U.S. It happens all the time. It’s the norm. So maybe we should keep how “easy” it is here in perspective.
DannyX
September 27th, 2011
11:50 am
Georgia Republicans love the Chinese system.
In China the environment is heavily polluted. The priority is making money.
China has a one party system, just like Georgia.
Sonny Perdue spent most of his 8 years visiting China. Deal has already made the trip.
Government officials in China get kickbacks, just like Georgia and the lobby loot. Tom and Chip’s miraculous free million dollar loan would make even the Chinese blush.
China hates labor unions, Georgia hates labor unions.
Georgia Power got a huge break from Georgia Republicans, a mangled socialist mess of a break, that requires the ratepayers to do the job of investor. China would be proud. I wonder if Sonny got the idea on one of his Chinese visits.
td
September 27th, 2011
11:55 am
I can not believe how anti capitalism the posters are on this board. You all have such an entitlement mentality that you think that a owner of a company sets up his business to give you all jobs, benefits and everything else and you do not have to give anything back to the company. Lord help us all when we get to the same way as Greece and we really have to cut. The world does not owe you anything. It is up to you to get an education and work for what you earn.
hunglo
September 27th, 2011
12:01 pm
Yes, we should try be more like glorious Chinese peoples. Chinese learn to follow emperor first and Communist central managment now. Chinese OK with putting lead into toothpaste. It’s OK, Joe, if it makes a profit for central government. You Americans learn to like lead toothpaste and Yangtzee Coke in good time. Yes, you will. Yea, Chinese, Yea!
No more COKE products for my home!
September 27th, 2011
12:02 pm
Well if this is how he feels, then I will ONLY purchase non-coke products for my home. Pepsi tastes a helluva lot better anyway!
Vonny
September 27th, 2011
12:04 pm
to those asking if we should be more like china so as to keep business in the US: The problem is that China is being more like us to do that and that we are being less like us to do that. You want to whine about how “Fine I wont drink coke anymore then!” Fine. Coke does more than enough business outside the US. A lot of you people seem to think of big business as the enemy when they arent. But keep treating them that way and buying into wealth envy and class warfare and soon you wont lose business to communists…youll be one. China is becoming more capitalist everyday and if you cant see that then you suffer the fate of an ostrich.
Ghost
September 27th, 2011
12:05 pm
“I can not believe how anti capitalism the posters are on this board.”
So you equate Communist China with capitalism? I think you’re confused, my friend.
DannyX
September 27th, 2011
12:06 pm
Georgia Republicans love communist China. Sonny Perdue spent most of his 8 years in office over there. Nathan Deal paid them a visit first thing.
Georgia Republicans are shaping Georgia into the communist Chinese model. Republicans here love one party rule. In fact they are doing some gerrymandering right now to help protect it. Georgia Republicans are not confident enough to let the unwashed masses decide an election.
Georgia Republicans hate labor unions, so does commie China.
China is run by corrupt politicians that get regular kickbacks. Tom Graves and Chip Rogers got a free million dollar loan that had even the communists in China blushing with envy.
China hates the environment, Georgia Republicans hate the environment.
Georgia Republicans gave Georgia Power a deal that made the communist Chinese proud, word is the Chinese gave Sonny the idea to charge Georgia Power residential users only to pay for Georgia power’s share of the new nuclear plant.
Georgia Republicans and communist China….bff’s
td
September 27th, 2011
12:10 pm
Ghost
September 27th, 2011
12:05 pm
“I can not believe how anti capitalism the posters are on this board.”
So you equate Communist China with capitalism? I think you’re confused, my friend.
I guess you have not read all the comments my friend. My comment has nothing to do with China and everything to do with the pure hate from some of these posters about corporations.
td
September 27th, 2011
12:15 pm
DannyX
September 27th, 2011
12:06 pm
I am really surprised that you are not praising the Chinese since that is the model you support the US going towards?
The Multi-Cultural Kid
September 27th, 2011
12:21 pm
Jim, you sure do have dumb readers. Of all stripes.
Kimwana
September 27th, 2011
12:26 pm
“…former Democratic attorney general Thurbert Baker has been hired by the debt collection industry to help fight new restrictions in several states”
I’m all for aggressive debt collection. But holy crap, click the link up in Jim’s blog: the collection industry, mainly the “debt buyers”, want to be able to collect $ from you whether you’re the actual debtor or not. Thurbert is a real POS to defend a practice like that.
Butch Cassidy
September 27th, 2011
12:30 pm
I agree with Kent, it is easier to do business in China. No pesky EPA, very little oversight in terms of product safety,a subordinate workforce willing to do whatever it takes for 75 cents a day, and hey, if your managers screw up, just put a bullet in their head. Saves all the hassle of dealing with the EEOC and the Department of Labor. Yep, China is good times if you want take the easy train to corporate town.
MPercy
September 27th, 2011
12:36 pm
There is a common meme that corporations pay taxes. Corporate taxes are effectively a line-item in the budget that is built into the cost of everything produced–they are passed though, just like the cost of raw materials. By and large, individuals associated with the corporations actually pay the taxes, be they shareholders, employees, or consumers.
The CBO produced a report “THE INCIDENCE OF THE CORPORATE INCOME TAX” in which it states “A corporation may write its check to the Internal Revenue Service for payment of the
corporate income tax, but that money must come from somewhere: from reduced returns to investors in the company, lower wages to its workers, or higher prices that consumers pay for the products the company produces.”
And it goes on to say
“Although economists are far from a consensus about exactly who bears how much of the burden of the corporate income tax, the existing studies highlight the significant types of economic mechanisms as well as the empirical estimates necessary for further quantifying the burdens. CBO’s review of the studies yields the following conclusions:
o The short-term burden of the corporate tax probably falls on stockholders or investors in general, but may fall on some more than on others, because not all investments are taxed at the same rate.
o The long-term burden of corporate or dividend taxation is unlikely to rest fully on corporate equity, because it will remain there only if marginal investment is not affected by those taxes. Most economists believe that the corporate tax system has some effect on investment decisions.
o Most evidence from closed-economy, general-equilibrium models suggests that given reasonable parameters, the long-term incidence of the corporate tax falls on capital in general.
o In the context of international capital mobility, the burden of the corporate tax may be shifted onto immobile factors (such as labor or land), but only to the degree that the capital and outputs of different countries can be substituted.
o In the very long term, the burden is likely to be shifted in part to labor, if the corporate tax dampens capital accumulation.
Read that last one again: in the very long term, corporate taxes are paid for by reduced wages available to labor–labor being the bottom rung. The study also says that higher prices for consumers is also a long-term impact–increased taxes are simply bundled into the price the consumers pay.
North over South
September 27th, 2011
12:42 pm
In 2010, Muhtar Kent made over $24.8 million, this included a base salary of $1.2 million, annual cash bonus of $6.5 million and other compensation totaling $738,000 What a greedy @#%$#
jay
September 27th, 2011
12:43 pm
Why? Will the Chinese work for $.10 an hour?