26 March 2020   Leave a comment

The United Nations Security Council has been debating a resolution calling for the cessation of hostilities among nations because of the impact of COVID-19 on societies globally. According to NBC News:

“Although the U.N. has a separate public health body — the World Health Organization — the Security Council has sought to warn how ongoing global conflicts could exacerbate the crisis and undermine the response.

“France, a permanent member of the council, proposed a version demanding a ‘general and immediate cessation of hostilities in all countries,’ including a 30-day humanitarian pause in conflicts, to allow coronavirus-related supplies to flow, according to a text reviewed by NBC News.

The debate on the resolution has been stymied by the US insistence that the resolution contain language that identifies China as the source of the virus: “the outbreak of the coronavirus disease (COVID-19) in Wuhan, Hubei province in the People’s Republic of China (PRC) in November 2019.”  The US and China have been engaged in a bootless contest over the origins of the coronavirus with the Chinese claiming that the US military brought the virus into China and the Americans wanting to blame China for a slow response to the spread of the virus. The German media outlet, Der Spiegel, also reports that the G7 meeting (which was held electronically–a bizarre circumstance given that the 7 countries span 13 different time zones) did not issue a final communique because the US insistence that the COVID-19 virus be called the “Wuhan” virus. In a press conference about the health crisis, US Secretary of State, Mike Pompeo, made the following statement: “The Chinese Communist Party poses a substantial threat to our health and way of life, as the Wuhan virus outbreak clearly has demonstrated”. Nancy LeTourneau, writing in The Washington Monthly, argues that the tactic of blaming China for the crisis is a way of shielding US President Trump from criticism over his handling of the crisis. Politico has obtained a copy of the “playbook” on handling a pandemic that was issued by the Obama National Security Council in 2016. It is 69 pages of a step-by-step process to contain and minimize the effects of a pandemic on the US population. One cannot say if the playbook would have been effective, but, upon reading it, I can confidently say that the Trump Administration did not take a majority of the steps outlined. It is dry reading, but it seems to be quite comprehensive.

The US Senate passed a huge bill designed to mitigate the effects of the pandemic on the US economy and it is expected that the House of Representatives is scheduled to vote on the bill tonight. There is one part of the bill that is quite interesting: the money allocated to support the cruise line industry. Much of that industry is not registered in the US. The industry flies “flags of convenience”, such as Liberia or Panama, in order to avoid paying US taxes and to avoid safety and environmental regulations. It is estimated that only about 5% of the workers for the industry are American.

“Despite many of them being based in Florida, major cruise lines conveniently rely on legal loopholes by registering their companies in low tax jurisdictions. Their cruise ships also fly the flags of other countries so that they do not have to abide by US labor laws, a loophole known as a “flag of convenience”. 

Carnival, the largest cruise company in terms of market share, is incorporated in Panama according to Panama’s registry and the other two major companies in the industry employ similar tactics. Norwegian is incorporated in Bermuda, and Royal Caribbean has been incorporated in Liberia since 1985.

“Despite the fact that all three of their corporate headquarters are in Miami, annual filings show that these companies are part of an industry that paid an average tax rate of under 1%, which is well below the required 21% corporate tax rate in the United States.”

We should seriously ask why the industry will receive tax money derived from US citizens even though it has contributed very little to that pool of money. The passage of this part of the bailout bill will benefit only the owners of the cruise ships and not the American people. In fact, the American people will be poorer as a result.

Posted March 26, 2020 by vferraro1971 in World Politics

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