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How Costco Avoided the Fiscal Cliff

Written by Gary North on December 3, 2012

The tax rate on dividends will triple on January 1. It pays to pay out dividends this year.

Costco’s Board of Directors decided to pay over $3 million in dividends this year. To pay for this, the company will borrow the money. At today’s low interest rates, that is a savvy move.

The Wall Street Journal cried “Hypocrites!” Why? Because some of the Board’s members are far-Left promoters of Obama.

I say that we need more hypocrisy like this. It’s better for Costco’s shareholders to get dividends at 15% than 43.4%. When Leftists act on behalf of the shareholders, it demonstrates the power of capitalism’s cash nexus.

When Keynesianism gets short-changed by capitalist hypocrisy, I’m all for it.

Are limousine liberals hypocrites? Of course. Do they place their self-interest above their ideology at the expense of their ideology? Usually. Is this good? Yes.

The USSR went belly-up when the Communist Party members at the top decided On December 31, 1991, to shut the whole operation down, declare a dividend, strip the Party of its assets, and transfer the money to senior members’ Swiss bank accounts. This was a great day for the world. It ended the Marxist revolution in Russia.

Marxism was no match for personal self-interest. The love of money is the root of all evil, the Apostle Paul wrote, but the love of power is a far greater evil. When the love of money comes into conflict with the love of money, put your money on money.

Continue Reading on online.wsj.com

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2 thoughts on “How Costco Avoided the Fiscal Cliff

  1. Bill McCroskey says:

    So…. just like another fine example of honor and honesty, former Nixon Attorney General John Mitchell (who was quoted as saying) ''Watch what we do …..not what we say" …. this seems to be the mantra for 'crony capitalists' like Sinegal, Gates Sr. and Munger. It certainly appears Mr. Munger is contradicting his boss Mr. Buffett …. or is it just a John Mitchell moment ??

  2. Just like Doug Casey is fond of saying, when a country has stifling rules and taxes, a little corruption can be your friend…