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It recently came to light that Apple, one of America's most-profitable corporations, legally sidesteps a hefty portion of its annual Federal corporate tax obligation by taking advantage of certain loopholes in the U.S. Tax Code (and international financial law) via a complicated series of overseas banking transfers. Over $75 billion dollars in potential federal tax payments got avoided that way between 2009-2012. Lots of people are pretty bent out of shape over it.

But! They didn't do anything illegal. No law was broken. Like if some normal middle class American guy notices a loophole in the tax code that legitimately allows him to deduct his socks if he buys them in Guatemala. So he imports his socks from Guatemala so he can legally take advantage of the deduction, saving several hundred dollars a year on his taxes. Is that guy a crook? Nope. Just someone who found and exploited a legitimate lapse (or unintended benefit) in the tax code.

Don't like it, IRS? Amend the law and close the loophole. Readers may recall that Mitt Romney (who?) came under fire during the last presidential election when people noticed he saves a buttload on income taxes by squirreling away personal income in tax shelters, off-shoring portions of it in overseas banks where the IRS can't touch it. Yet he does this LEGALLY. Because IRS be damned, there's no way to stop it-- apart from investing millions of American dollars pursuing years of diplomacy signing treaties with foreign governments to gain better access to overseas banking records.

It's LEGAL. Stop whining, IRS, and pass legislation to stop it. You might also want to quit profiling certain types of political groups. Just play fair and run everyone through the same ringer. Otherwise, expect to get messily called out for it (which is a great scandal to distract us from realizing Congress remains stalemated, since no one dares put forth any serious legislation from ether side). Thanks for the smoke screen, Cleveland IRS guys! Wouldn't want anyone to notice that our shiny new Congress isn't doing its job.

But corporate influence remains the biggest, sneakiest, most pernicious problem in Washington.

Federal prosecutions of financial fraud recently hit a 20-year low... though to be fair, the number of such prosecutions has fallen every year since 1999. Politicians seem perfectly happy to accept corporate campaign donations and leave the private financial sector to its own devices, while entire industries openly scoff at safety and trade regulations. Deregulation continues on all fronts, and it keeps allowing hundred-car financial pile-ups in the corporate fast lane (plus the occasional ugly industrial accident).

The gap between rich and poor has been rising unchecked since 2001. America's most profitable companies use loopholes to pay zero in taxes, but the Obama administration's farcical proposed tax overhaul would lower the corporate tax rate even further. The worst offending Wall Street greedoids got off scott-free for crashing the economy. Our entire "recovery" has just been a lunatic attempt to re-inflate the same massively-inadvisable financial bubble built on never-ending economic expansion-- because American economists are too scared to imagine anything else. That's the same bubble that goes flat whenever too much deregulation unleashes a greedy financial free-for-all of investment money grabs, torpedoing our economic infrastructure. Lost middle class jobs get hastily replaced with low-wage jobs for a net loss. Median household income has fallen.

Is the United States bouncing back? Kind of. But we're just re-building the same stack of cards. Business as usual, as the corporations say.

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Last week I promised you we would bag on Pepsi, so here goes:

Way back in the early 1990s (during the heady days of "the Cola Wars") Pepsi Cola was getting seriously stomped by Coca-Cola in foreign markets-- even in spite of the "new Coke" debacle we discussed last week. So in an attempt to capture a larger market share, Pepsi ad executives rubbed their pointy-little-heads together and dreamed up a completely original marketing scheme called a "lottery." And yes, it's precisely as impressive as it sounds. Basically they just followed in the well-worn steps of every cheesy food marketing scheme in the history of cheesy food marketing by painting three-digit numbers inside Pepsi bottle caps and handing out LOTS of crappy "second prizes" (free sodas), all the while promising one lucky winner the fantastic sum of 1 million pesos (roughly $40k in US dollars). They named these contests the awesomely-creative "Number Fever," because apparently the height of 1990s advertising ingenuity knew no bounds.

There were problems right out of the starting gate: one 1992 Number Fever promotion in Chile became a huge public debacle when the misinterpretation of a smudgy plastic-coated fax (remember those?) resulted in an incorrect "winning" number accidentally being released to the public. The Chileans didn't care if it was a mistake-- they wanted their prizes. So Pepsi had to shell out a lot of additional cash fighting numerous lawsuits against reneged contest winners who felt cheated. Meanwhile, Pepsi's sales in countries where the Number Fever campaign was happening increased by 40%. So what are a few hundred lawsuits when compared to such sweet success?

But there was worse to come: less than a year later, in the Phillipines, the Pepsi reps running the promotion expanded the number of prizes to over 1,500 and extended the contest for five extra weeks, selling countless millions of sodas to well over half the Filipino population. Number Fever was a hugely successful promotional gimmick. Now all Pepsi needed to do was choose a winner.

As in every such lottery-type marketing scheme, certain numbers were specifically NOT intended to be selected as the winner; in this case it was the number 349, which was printed on 800,000 bottle caps. So the consulting firm hired to draw the winning number-- who had presumedly been warned "whatever you do, DON'T DRAW NUMBER 349"-- fired up their computer program and DREW THE NUMBER 349. LIVE, ON FILIPINO TV.

Naturally Pepsi executives balked when hundreds of thousands of joyous Filipinos showed up on their doorstep, each planning to claim his million pesos.

Acknowledging their massive (and ironically hilarious) mistake, Pepsi still stubbornly refused to pay a few billion dollars in accidental prize money. Pepsi tried to deflect the whole thing by inventing the bullshit story that the caps "didn't contain the correct security code." Which story the thousands of disappointed Filipino near-millionaires accepted happily and went home. Okay, sorry, my bad. ACTUALLY, the entire nation of the Phillipines went on an insane anti-Pepsi Cola riot binge, descending into the throes of soda-addled madness.

Rioters bombed Pepsi bottling plants and burned Pepsi delivery trucks while American Pepsi executives made a mad dash to escape the country. Thousands of lawsuits followed, and Pepsi lamely offered $20 bucks to each cheated winner. 

When the smoke cleared, Pepsi's planned $2 million in prize payouts had ballooned into more than $10 million in restitution and legal fees.

There's no joke here. The whole sordid tale is its own punchline.