While it failed to name the ways specific corporations avoided taxes, the GAO survey, based on Internal Revenue Service records, attributes the failure to three factors: tax credits, operating losses and “transfer pricing,” which means corporations internally shift taxable profits to their own subsidiaries in lower-tax nations.

Transfer pricing means a corporation “sells” its products to a subsidiary in another country at a low profit. They pay taxes on that low profit. The subsidiary then sells the product at full price.

The GAO report (PDF) has much more about how corporations avoid taxes.

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Fernando Lugo has become president of Paraguay promising “the indigenous and the poor will be the privileged of my government.” His election ends 60 years of repressive rule by the Colorado Party.

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I’m geeking out at San Francisco Wordcamp. It’s a WordPress conference, the platform this blog is run on. Probably 400 people are here. The format is 30 minute presentations. So far, SEO for bloggers, open source as income source, microformats, lots more. Meeting some great people too.

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Paul Krugman in the NY Times

The war in Georgia isn’t that big a deal economically. But it does mark the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization.

The Unrepentant Marxist wonders, Has Krugman been reading Lenin?

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You read that right, a new set of pickups and SUVs planned by GM will be touted as having Extra Fuel Economy because they will get 1 mile per gallon more than current models.

We should NOT bailout out GM and Ford because they have conclusively proven themselves to be beyond incompetent. Or, if we must do so, then as a prerequisite, their entire top managements must be fired with no golden parachutes.

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Clean Break explains why. Geothermal is booming in the States too.

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First was subprime, Alt-A is about to explode, but the really nasty shrapnel could be from Option ARMS, as ClusterStock explains.

But when house prices are falling and refinancing is difficult, as is now the case, the option ARM is the financial equivalent of a bikini in winter. Homeowners end up owing more on a property that is worth less.

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