
Apple Could Make Money by Bailing Out Greece - rbc
http://www.bloombergview.com/articles/2015-05-11/apple-could-make-money-by-bailing-out-greece
======
smegel
Hold on...are they talking about extending Greece a loan or simply paying of
it debts in return for said benefits?

The problem with a loan is that loans need to be repaid, and Greece seems
unwilling to take the kind of internal reforms needed to generate enough
revenue to pay back loans.

The issue has never been the willingness of others to extend Greece a bailout
- it has been the _unwillingness_ of Greece to accept the kinds of conditions
attached to such bailouts. If Greece was willing and able to commit to the
right kinds of internal reforms, then I am sure that Germany and other
countries would be quite happy to extend another bailout. No-one (in the EU at
least) wants to see Greece collapse.

On the other hand, simply giving away $200B for the kind of sweetheart tax
deal that is usually achieved simply by gracing a country with the presence of
a multinational headquarters (bestowing employment, secondary industries and
prestige), seems to be insanely bad business. I mean, even if they wanted to
bribe their way in, would it not be far more effective to bribe politicians a
few tens of $M rather than an entire country $200B?

~~~
TheOtherHobbes
That's very much the party line, and very much incorrect. Greece has - rightly
- been unwilling to crash its own economy in pursuit of some fictional idea of
austerity which has been proven to fail whenever it's been tried.

The UK has tried a more moderate version of the same nonsense, and if you look
at the facts and past the propaganda it's clear that "growth" is stagnant. In
fact there's no British recovery to speak of, beyond a trivial dead cat bounce
and a foundationless wave of QE-induced share price inflation - which makes
the "recovery" the slowest since the Great Depression.

The problem is entirely political. Who runs the government of Greece - the
Greek people, or the IMF and the ECB?

The IMF and the ECB want to prove it's the latter. Unfortunately a Grexit
would be a disaster for the EU and possibly the rest of the financial world,
and the Greek negotiating team is well aware of this.

I think it's quite likely anyway, because in international banking it's more
important to save face and status than to save an economy. But we'll see.

~~~
soup10
> In fact there's no British recovery to speak of, beyond a trivial dead cat
> bounce and a foundationless wave of QE-induced share price inflation

[http://i.imgur.com/hIfnD7N.gif](http://i.imgur.com/hIfnD7N.gif)

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serve_yay
They could also make money building and shipping products. Wonder which one
they'll pick

~~~
peeters
The article does actually talk about this.

> Unless Apple starts building cars -- or perhaps spaceships -- it will keep
> accumulating cash.

Their point is that Apple has so much cash (coupled with an MO of not casting
a wide net in new product efforts) that they will never spend it all on R&D.

------
gesman
Apple could buy Greece, become a government and exempt itself from income
taxes for the next 10,000 years!

(And replace apple symbol with olive too)

>> ...and the American companies will keep accumulating cash they don't know
how to spend.

Not too many US companies are having this problem though.

~~~
drzaiusapelord
>and exempt itself from income taxes for the next 10,000 years!

Greece is an unsustainable welfare state full of tax fraud where the
government is the largest employer. If Apple "buys it" (partners with the
current government for some kind of super sweetheart deal) and cannot send out
those monthly public sector checks then a lot of angry hot heads with machine
guns will be its biggest problem, not a cool reception to the Apple Watch.

Even if they cut a modest low tax deal, the EU would balk at a unilateral
Greek deal cutting their tax revenues. At most Greece could offer Apple a low
tax haven for domestic sales, but considering how small Greece's economy is,
it would be financially stupid in both the short and long run to do this.

As a Greek-American and Greek landowner, I'd prefer the Greeks stop fucking up
and get fiscally responsible for once instead of courting corporations or
other nations to take care of them. I don't want the ancient lands of my
ancestors sold off for some short-term cash relief. Nor do I want it to become
some Cayman Islands-like tax shelter that will isolate it economically and
become the plaything of the American super-rich.

I don't think the author of this piece remotely understands how incredibly
stubborn and patriotic the average Greek citizen is. Greeks have lost their
autonomy more than a few times in history. They aren't itching to lose it
again. Saying, "You should let Apple buy you," in Athens would probably lead
to a punch in the face fairly quickly for those reasons as well as the general
anti-corporate attitude the largely leftist Greek population subscribes to.
The American love of mega-corporations and super successful CEOs just doesn't
translate there.

~~~
aikah
> or other nations to take care of them

As a greek you should know that when the EU is bailing out Greece, they are
bailing out European banks, not Greece. If Greece fails, the EU banks that are
exposed to the Greek debt will fail too. EU will throw as much money at the
problem as it needs to save EU banks, especially french , english and german
banks that are over exposed to Greek debt. Because otherwise it will be the
2008 crisis x10 in Europe, and possibly the end of EU. Not that I would miss
it though. But you can't have the same money without sharing risk. And if for
Greece it means robbing your land and selling it, they will. There is no
escape anyway, drastic measures WILL be taken, one way or the other.

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endymi0n
People like this guy are exactly what brought Greece down to its knees.
Corporations and rich individuals being able to "buy" themselves into special
deals excluding the general population led to the mind-blowing amount of
corruption that is the main culprit of the current crisis. Sure, why not fix
it with a few more Fakelaki? Seriously, people regarding (only!) 35% of taxes
as an "issue" needing to be resolved instead of just the fair share of
responsibility for an education and infrastructure companies take and use for
free every day make me wanna puke.

~~~
adevine
And oddly enough, even if it worked as expected, in the end it's not Apple
that would bail them out, it's the American taxpayer who would never have
recourse to collect on taxes owed because all of these rich companies would
just set up in these now-legal tax havens.

------
vacri
There are several problems with this concept, the first of which has been
mentioned several times - that rich entities not paying tax is one of the root
problems in Greece in the first place.

Other problems include that laws can always be amended. A law is only as hardy
as your next election, and once Greece gets the money, you have no further
leverage. We saw that happen at the last election, with the current government
throwing out the previous government's solution to the problem.

Another issue is that without significant reform of government and some
changes in society, Greece will end up in exactly the same place if it goes
back to 'business as usual' \- something which would be very easy to do if
bailed out by an entity that has no future leverage.

Similarly, first-world countries with decent economies are doing their utmost
to reverse the trend of tax havens, and if Greece did this, they would suffer
politically in other ways as a result.

Edit: And then, of course, there is the question: Why would Apple spend $100B
to secure a tax haven for themselves? Not only are there already quite a few
tax havens to choose from, including in Europe, but if they turned around and
decided to pay their fair share of domestic taxes, it'd take quite a while
before their tax load would match their $100B in cash. Who knows what the
world would look like then?

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cs702
The idea is not as ridiculous as it may seem at first glance. Apple, Google,
Microsoft and a few other tech companies are together sitting on far more cash
than Greece owes to its creditors.

The author proposes these companies bail out Greece in exchange for permanent
low taxes on non-US operations.

~~~
adventured
If Greece remains in the Euro, most likely that deal would not be allowed.
Most of Europe is already annoyed at the existing low-tax schemes.

If Greece exits the Euro, the Euro group would pass legislation compensating
against the Greek deal, effectively nullifying the new tax scheme.

There's zero chance such an arrangement either is allowed to work, or if put
into practice ends up having enough financial returns after the Euro group
responds to it that it justifies the extreme risk.

~~~
cgio
Not disagreeing with your general assessment, but there is also the scenario
that Greece leaves the Eurozone and remains in the European Union. In that
case no legislation can be passed to compensate against the Greek deal without
Greek consent at the European level.

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spiek
I always thought that Kim Stanley Robinson's "meta nationals" from the Red
Mars series seemed too probable to really be science fiction.

------
Estragon
Does anyone seriously believe Greece would ever pay them back?

~~~
aidenn0
Did you read TFA? The suggestion is to pay off part of the Greek debt in
exchange for a sweetheart tax-deal with Greece, not to assume ownership of the
Greek debt.

~~~
lifeformed
Is $200bn really worth saving 35% in taxes?

~~~
greggyb
If your taxable income is >=$571.43B?

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gpvos
While a nice idea, it would set a bad example, since Greece's main problem is
that all large companies (including the Greek Orthodox Church) and rich people
pay next to no tax.

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vannevar
That we permit corporations (particularly public ones) to accumulate such
massive cash reserves seems absurd. Perhaps we should consider an 'idleness'
tax on overly large corporate cash reserves to ensure that the money is put to
work.

~~~
sp332
When someone sells you something, and you pay them money for it, why does it
bother you if they don't spend the money? How would you feel if the government
told you, in this awful economy, that you had too much money sitting around
and should try investing it in something risky or they would take it away from
you?

~~~
cheald
> How would you feel if the government told you, in this awful economy, that
> you had too much money sitting around and should try investing it in
> something risky or they would take it away from you?

It happens. That is, in fact, the explicit point of controlled inflation. The
layman just doesn't realize it.

~~~
eqdw
> It happens. That is, in fact, the explicit point of controlled inflation.

Apple's cash is subject to the same effect

~~~
cheald
Not likely, because Apple's cash is invested elsewhere - they almost certainly
don't have a giant iMattress in the back that they're stuffing it into. The
"cash equivalents" listed in their financials are things like t-bills and
short-term bonds which are, by their nature, inflation-mitigating.

You lose value on liquid cash sitting around in a checking account equivalent
to the rate of inflation (less interest, which is negligible); companies like
Apple know this and keep most of their liquidity in inflation-hedged
instruments rather than in checking accounts.

------
tomelders
Do it I say. It's better than Russia doing it.

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Istof
Couldn't Apple require the European union to reimburse them?

~~~
emodendroket
Why would the EU agree to that? They could just bail out Greece themselves
without requiring onerous austerity measures if that were what they wanted to
do.

~~~
Istof
I guess that depends what deal Apple signs with Greece... and what dirt the
NSA has on EU officials...

~~~
emodendroket
So that raises a different question -- namely, why the US government would
employ top-secret intelligence to squeeze the EU into giving money to a
private corporation.

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jkestner
Apple philosophically isn't interested in making money. That's a byproduct.
How does this further Apple's goals of making better products? Does Greece
have infrastructure to invest in, like lithium or silicon?

> Unless Apple starts building cars -- or perhaps spaceships -- it will keep
> accumulating cash.

Yeah, I think both of those are more likely than bailing out Greece.

~~~
usefulcat
> Apple philosophically isn't interested in making money.

If that were true, why not lower their prices, thereby making their products
affordable to even more people? With their huge margins they could certainly
do it and still remain solvent or even profitable.

Apple is, at a very fundamental level, not different than every other
successful corporation: they are machines for producing profit. Anything else
they happen to produce--products, services, jobs, pollution--is a by-product
of that primary function.

~~~
jkestner
Perhaps I could've parsed it more carefully ("Apple isn't interested in making
money for money's sake"), but I specifically said 'philosophically', based on
what the top two executives say.

Ive: [http://betanews.com/2014/11/15/jony-ive-says-apples-
doesnt-a...](http://betanews.com/2014/11/15/jony-ive-says-apples-doesnt-aim-
to-make-money-hits-out-at-those-who-copy-designs/)

Cook: [http://www.forbes.com/sites/stevedenning/2014/03/07/why-
tim-...](http://www.forbes.com/sites/stevedenning/2014/03/07/why-tim-cook-
doesnt-care-about-the-bloody-roi/)

I suppose I'm a fanboy if I take them at face value (and I don't totally), but
they wouldn't be the first ones to believe that profit is not the purpose of
business: [http://mikenormaneconomics.blogspot.com/2013/03/william-
cohe...](http://mikenormaneconomics.blogspot.com/2013/03/william-cohen-
purpose-of-business-is.html)

The old thing about lowering their prices - Apple wants that money in part
because of institutional paranoia dating back to the 90's tailspin, and in
part because big new things like cars can take a lot of capital expenditures
even by Apple's standards. Buy a $30billion company or two like Tesla, pretty
soon you're talking about real money.

~~~
phatfish
Ugh, the only reason Apple have so much cash is because of the ridiculous mark
up on their products.

Now i can understand that there are other reasons for inflating the price of
your products other than pure profit. Making them feel more exclusive than
they really are being the main one (Apple is after all fast heading towards
being luxury fashion brand).

However if Apple is not interested in "making money for money's sake" why
don't they clean up their supply chain, or stop fixing prices?

Tim Cook and whoever that other guy is are clearly deluded if they think
anyone will believe that sort of rambling.

