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Sunday, November 21, 2010

Warren Buffett Isn’t Much Helping the Conversation About Taxes

Warren Buffett believes that the truly wealthy should pay more taxes, asserting, essentially, that his peers don’t pay their fair share. He is a smart business man, but I’m not sure what he thinks a higher tax rate on the wealthy will accomplish. It won’t balance the budget and the money won’t be used well even if those taxes do increase.

If he wants the wealthy to be a force that helps the economy and helps the government’s bottom line, then he should encourage the wealthy to invest in new businesses, to invest in ideas, to work to support what they believe will lead our nation to better days. And if our government wants to see jobs created, they won’t get in the way. Every new job created is a productive, contributing citizen when that job comes from the private sector. Every new job created by the government, on the other hand, is another tax-funded drain on the coffers. We need more of the former and fewer of the latter--and Buffett is advocating for the wrong side of the equation.

If he wanted to help even more, he would encourage a smarter, more disciplined government less eager to spend money that it doesn’t have. I doubt very seriously that he would dare to run a business using the same rules that our government does--and if his business were running into the same kinds of difficulties, he would be looking for ways to run leaner and more efficiently. Our government, on the other hand, has a pair of crutches to keep it from having to behave in an adult manner: taxpayers and the ability to manufacture money. Why make the hard decision to cut programs or benefits, why austerity, when it is so much easier to print more money or raise taxes.

Whatever the case, though, Mr. Buffett is encouraged to give give give to the government coffers. The money won’t be used well and it won’t be used efficiently and it won’t make a difference in the final calculation. If it makes him feel like a better man to throw good money after bad, though, there is no one stopping him. If he doesn’t, though--if he chooses to find smarter, better ways to invest and spend and give charitably--then it proves that he doesn’t believe his own lie. It proves that he knows that the government isn’t the path to the best results.

Wednesday, December 09, 2009

“Little Drummer Boy,” Ray Charles

Ray Charles sings one of my favorite versions of “Little Drummer Boy"--complete with slide guitar, brass, and a really great vibe.


You know you love it.

None of which explains why our friends in Britain are imposing a 50% special tax on bankers’ bonuses. What irritates most about this (and do read the comments at the linked article) is the raw popularity of this kind of move. Class warfare like this is neither good business (in trying to punish these people, it fairly encourages work-arounds to maintain the pay schedule and avoid the extra taxes--achieving precisely neither of the stated goals) nor is it good ethics (it is not simply unfair, but injurious that a person face confiscatory and capricious taxes of this nature simply because of his or her chosen field).

The British government on Wednesday said banks would pay a one-time, 50% tax on bonuses worth more than 25,000 pounds ($40,700) in an effort to encourage banks to rebuild their capital bases and continue lending to individuals and businesses.

David Wessel reports on results from a panel dissussion on international regulation, along with Sir Andrew Crockett, Dame Clara Furse and Fichard Gnodde at the Future of Finance conference.

Chancellor of the Exchequer Alistair Darling delivered the blow in his annual pre-budget report, which also laid out the government’s plans to cut the deficit over the next four years.

Darling said he was giving banks, which have all benefited directly or indirectly from massive government aid, a choice.

“They can use their profits to build up their capital base. But if they insist on paying substantial rewards, I am determined to claw money back for the taxpayer,” he said.

You won’t see too many people crying for those bankers; the portrait of the banker is the fat cat who profits on the labors of the little people, so who cares about them? The principle is worth supporting, though: no citizen should live in fear of an arbitrary tax being levied against them because they chose the wrong job.

What do I know, though? I’m just some marketing guy who trusts that the government won’t come along and crush me with new taxes, regulations, and fees for such whimsical reasons. Which might just be another way of saying “sucker.”

Friday, November 06, 2009

Expensive Rights

For all the talk about making health care a “right” for all Americans (or, at least, everyone who happens to be sick, injured, diseased, or otherwise needy in a health care sort of way), it sure sounds potentially hazardous to fail to exercise your right in just the right way. If you take my meaning.

Prosecution is authorized under the Code for a variety of offenses.  Depending on the level of the noncompliance, the following penalties could apply to an individual:

• Section 7203 – misdemeanor willful failure to pay is punishable by a fine of up to $25,000 and/or imprisonment of up to one year.

• Section 7201 – felony willful evasion is punishable by a fine of up to $250,000 and/or imprisonment of up to five years.”

I know that there are readers of this blog (and friends of mine) who are big supporters of the Democrat’s health care reform proposals, but the more I read about it the more disturbed I am. Good intentions don’t make good policy; what the Democrats are trying to pass right now might be with the best intentions, but I’m terrified that it will hurt our already bleeding economy.

If it does manage to pass, though, I’ll have an easy guide to who to vote against in the upcoming elections.

Read the rest.

Thursday, September 10, 2009

Mr. President, You Haven’t Changed My Mind

Firstly, Mr. President, you argue in bad faith. When you assert that I and my fellow Republicans oppose health care reform because we want to score cheap political points, you are wrong. We oppose bad reform because we disagree with you over the proposed solutions. Most Republicans, and most Americans, want reforms, but we disagree wildly on what the best fixes should be.

Either you misunderstand our disagreement or you are intentionally miscasting it for, well, your own cheap political points.

With the country sinking in a hole of debt, I think this is a wonderful time to be skeptical of big, new government programs. While you, again, try to score cheap political points by tying the last administration as the bad guy whenever the debt question comes up, there are two things to realize: most of us understand that President Bush definitely helped the budget problems along, but most of us also understand the role that your administration has had in compounding the problems.

We don’t trust you with our money.

While we do our best to convey our opposition to things like the public option, you do your best to minimize our concerns by telling us to stop bickering. Let me explain something: voices are being raised because a sizable portion of the population is pretty sure you stopped listening. Instead, we are being told, in so many words, to “get out of the way.” With all due respect, Mr. President, I’m not much in the mood to get out of the way.

We don’t trust you to hear our voices.

The issue is compounded whenever I hear you talk about calling people out for spreading misinformation. While standing up and heckling isn’t much my style (at least, not outside my own home), I sympathize mightily with the sentiment because it seems that you are the one trying to mislead us.

When you tell us you’ll listen to constructive criticism and look at alternative plans, we know you aren’t telling the truth because you’ve continue to work to minimize our voices. When you tell us that you won’t sign onto a plan that will raise the deficit, we don’t believe you because it’s just another empty campaign promise, really, and the follow up that you’ll promise to make cuts to balance out new expenses if you prove to be wrong is simply laughable. Actually, it would be laughable coming from nearly any politician this side of Ron Paul, but from you it’s downright hilarious.

We don’t trust you to tell us the truth.

The left is absolutely right about one thing: Americans do want health care reform. That doesn’t we want the reform that they are selling, though, and it doesn’t mean that we have to sit down and shut up just because we are the minority party. To paraphrase one Van Jones, some of us have to get a little uppity.

Saddling the country with new debt and new regulations before we’ve even emerged from this recession is suicidal, and I don’t believe that he can achieve what he wants to achieve without adding new debt. Regardless of the feel good factor--and, yes, it would be lovely if we could live in a world where all the medicine and health care you needed was cheap and abundant and there weren’t any lines to get the good stuff--the reality is that government programs pretty much always cost more and do less than they were intended. If you want efficiency, then get government out of the way; if you want bureaucracy, long lines, confused consumers, and legislation that makes it harder to run your business, then, yes, more government is the answer for you.

You can keep pushing for this, Mr. President, but we will push back. We won’t be intimidated by union thugs or talk of “punching back twice as hard.” We won’t be shamed into submission for opposing legislation that would be harmful to the economy or to our health care system. And we don’t apologize for offering up our own solutions.

And let it be known: if it comes to a vote and the reform package is wrong, we damn well won’t vote for anyone, be they Republican or Democrat, who votes for that package. For a lot of us, this is the line.

Some other voices:
Bob Hayes on health care co-ops.
Doesn’t seem that De Doc trusts our government overly much, either (although this post is from a few weeks back).
A political cartoon on Protein Wisdom captures my thoughts nicely.
Thoughts from Rove via Sama. (And, as an aside, Sama is using Feed a Fever as his RSS Reader. Which is fun to say out loud.)
Roger Fraley has some thoughts.
Distributed Republic is, ahem, skeptical.
And then there’s the football-shaped, stuffed french toast issue. Which might have nothing to do with health care today, but give it a few years to harden some arteries.

Wednesday, July 15, 2009

Colorado, Crisis, and a Larger Reflection (Updated)

Somehow this, from the Denver Business Journal:

A forthcoming report by a research center at the University of Denver says Colorado’s state government faces a looming financial crisis, DU said Monday.

The report from the Center for Colorado’s Economic Future at DU is titled “Colorado’s State Budget Tsunami.” It is to be formally released Tuesday.

“There is simply not enough money to pay for the government we have created,” the report says. “Barring a quick and dramatic turnaround of the economy, it appears that the current fiscal system cannot be sustained.”

In announcing the report’s findings, DU noted that “anticipated fiscal demands for K-12 education, prisons and Medicaid will swamp today’s revenue-generating tax and fee system” in Colorado.

Doesn’t square so happily with this, from this morning’s Denver Post:

Thousands of low-income Coloradans reliant on public assistance could get a free cellphone under a plan before the state Public Utilities Commission.

If approved, the plan by TracFone Wireless in Miami would make Colorado the 17th state it has settled into with free cell service for the indigent, a form of wireless welfare that proponents say taps into one of the last untapped markets for the telecom technology.

Certainly, the money comes from different buckets. Our financial crisis is one based around a general fund that doesn’t quite pay for the soup of services, handouts, freebies, and bureaucracy that voters and lawmakers have built up in Colorado. The free phones will be paid for by fees that the rest of us non-free users pay on our existing phones. Which is to say, those of us who actually pay for the service subsidize those who do not.

My problem, then, is philosophical in nature: in this country we continue to push the bar higher and higher on what constitutes a right even against all evidence that we can’t actually pay for what we promise. No service is unlimited, no pot of money is bottomless, and good economic times don’t last forever.

With our nation bleeding red (and my state’s politicians, who know that they don’t have the votes to raise taxes, finding creative ways to raise fees on everything from getting married to milking cows) why are we finding ways to spend even more money on things that can hardly be defined as core functionality for our government?

And that report about Colorado’s economy? It’s hard to imagine that you couldn’t read our nation’s future in its words, too.

The problem is that our government is built to constantly grow, but it doesn’t have a mechanism for pulling back when times get tough.

When you, as an individual, face a tough month, you probably cut back on eating out or some other indulgence. At the same time, you pay your electric bill, your mortgage, and make sure you still have some left over to buy food. You have a priority list that defines what you need instead of what you merely want. Or, at least, you should.

Government, as dumb a beast as there is in the world, doesn’t recognize the difference. Once a thing is voted on and the money starts flowing, it’s a perpetual need and it often contains some mechanism for automatic growth. The government almost never steps back and says, “Yeah, that’s a nice service, but I can’t afford it this year. Let’s just not do that for a bit.”

Colorado’s TABOR (Tax Payers Bill of Rights)--which requires votes for tax increases, sets standards for government growth, and contains a ratcheting mechanism to decrease spending in times of hardship--was meant to address that. And it does, but TABOR has been undermined by voters, too (quite likely by many of the voters who helped establish it in the first place). TABOR says that you can’t raise taxes without the consent of the citizens and that spending has to contract in bad times. Other spending bills over the years have mandated increases regardless of the economy. Which is why that study cited in the DBJ story goes on to say this:

“Education, prisons and health care consumed about 54 cents of every general fund dollar a decade ago. They now eat up nearly 76 cents of every general fund dollar, and that figure will jump to 91 cents in five years if the average growth rate continues. Eventually, at this rate, there would be no money for other programs.”

The solution, to me, would be found in fiscal responsibility or finding programs to cut. That wouldn’t be the government way, though. The government way is to find some backdoor path to the citizens’ wallets.

And it almost always starts with someone saying variation of, “We’re the richest country in the world. Why can’t we spend just a little more and buy lunches for poor students?”

Or buy cell phones for the poor. Or fund massive new health care mandates. Or “protects” us from climate change with a massive and complex system of taxes, payoffs, and giveaways that no one fully understands.

Republicans utterly failed to hold back the tide of spending when they held the House, Senate, and presidency; a failure that speaks volumes about the almost intractably expansionist nature of government and a broader failure of the GOP to actually embrace the conservative values that it has so long preached. It’s no wonder that the citizens didn’t trust Republicans to be good caretakers of the nation. That doesn’t excuse the left’s--especially the progressive left’s--bullying us down the road to ruin just that much quicker.

But it’s not all gloom. Some enterprising souls are still finding ways to grab with both hands.

Rep. Ed Perlmutter of Colorado inserted a provision into the recently passed House climate change bill that would drum up business for “green” banks, such as the one he has invested in and his family and a political donor helped found in San Francisco.

The bill calls on bank regulators to promote green banking and says federal dollars should be used to support energy-efficient home improvements at government-funded housing projects.

Mr. Perlmutter, a two-term Democrat, has two investments in the 3-year-old New Resource Bank, which calls itself the nation’s first green bank. Among other environmentally conscious banking products, the bank offers home equity loans for consumers to make their homes more energy efficient, in addition to construction loans for green builders.

See? The American dream lives on.

Update: A similar question from Foundingbloggers. A wonderful site for conservatives (but you’re probably already a fan, aren’t you?).

Friday, June 05, 2009

And Speaking of…

...Well, no, that just seems unkind.

Anyway, speaking of something of which we weren’t speaking of, so to speak, I though that President Obama said he would stop rewarding companies who ship jobs overseas. Apparently I misunderstood, though. What he actually said was that he was going to encourage companies to ship jobs overseas.

For some reason.

Sunday, May 24, 2009

The Obama Plan, Part 1

The path to national prosperity is lined with ensuring that people don’t want to do business with you.

For some reason.

Tuesday, April 21, 2009

Hey, but 95% of You Get a Tax Cut. So That’s Nice.

100 million steps forward just in time for 5.7 billion steps back. Which hardly seems to be sending us where we wanted to go.

It feels like a card trick: keep your eyes on the $100 million in spending cuts and you probably won’t notice the billions in new spending that the administration has proposed. It is, in the final calculus, a pantomime of fiscal responsibility designed to convince the voters of his seriousness without actually having to do the hard work of being fiscally responsible. And the minuscule tax cut that we supposedly received is just window dressing on the fact that local taxes and fees are rising around the nation, the size of the national deficit has grown to unthinkable levels, and sooner or later someone is going to have to get around to paying back a lot of that new debt that is piling up in the corner. Buying me an extra Happy Meal with every paycheck won’t much change that equation.

It’s like a continuation of the Bush spending policies with an impressively redoubled effort to drown us all in deficit spending. Obama talked about making tough choices to curtail government spending, but he’s displayed a very different philosophy since he’s been in office.

I wonder how many people out there regret their vote right now?

Thursday, March 12, 2009

When Does it Start Getting Better? (Updated)

With all apologies to Perot, that huge sucking sound that you hear is tax money being sucked out of the next generation’s pockets to pay for our excesses. Which hardly seems like a fair trade, especially when the increasingly incomprehensibly-sized stimulus packages (tell me, seriously, can you even imagine one trillion dollars?) don’t seem to be having their desired effects.

Damit, I knew I left a definition of insanity here somewhere…

The prevailing belief in Majority Democratic Washington is that the way to improve the economy is not to increase production and productivity, but rather to borrow trillions out of the economy and let it trickle back in through government spending.

I’m starting to get the feeling that this is going to be a long and tiring four years--and hoping that Republicans can make strong inroads in the midterm elections.

Anyway, read the rest of that NRO post above. It has an interesting idea (a “zero cost” stimulus package) from a couple Republican representatives that has almost zero chance of being implemented. Instead we’ll get the big government double down that will put us even deeper in the hole.

Update: While my imagination may have come short, some folks have done a good job of explaining and showing us precisely what one trillion dollars might actually look like if it were converted into real money. Check it out. Thanks, Nathan!

Wednesday, March 11, 2009

High Rollers

Will congress double down on a bad bet?

Seems like a bad idea to me. But, then, I wasn’t a big fan of the last big bet.

Tuesday, March 10, 2009

Ain’t Exactly True

A few days ago, I wrote the post about John Cramer, Guinness, and the fight against new taxes and bad economic policy. One of the friends of this blog (specific names are being left out of this as no permission was granted to share this conversation) wrote to one of his representatives about this very issue. What he received in response was a missive from la la land--a note about how even in these rough times a tax increase can be a necessary and good thing.

Before going forward, I have to say this unequivocally: in an economic climate like this, punishing the successful, the creative, the investors, and the very people and organizations that provide jobs and opportunities for Americans by raising their taxes is foolish. Raising taxes in ways that hurt the working class and limit their ability to make purchases is just as misguided. That some of the taxes that have been floated (especially raising or eliminating the Social Security tax cap) would move tremendous amounts of capital from the private sector to the US government to be used to offset the excesses of a dubious stimulus package makes me cringe. If the ultimate goal is to cripple the private sector, then this should definitely do the trick.

And that much of those tax increases are done for such high-minded reasons doesn’t change the fact that they will be harmful--and it irritates me that our elected officials continue to trot out one cause after another in an attempt to convince me that these things that will drag our economy down will actually act in some miraculous fashion to solve our current woes. They won’t, the money will be wasted, and the bureaucratic structures built to support the new and expanded programs will only suck more and more money out of the private sector, distort economic realities, and make it harder for companies (especially the small companies) to do business. None of that is good for jobs or our current crop of economic failures.

What we are talking about here--a small, new tax on alcohol--isn’t big in the context of our larger economic problems or even in the context of most states’ budgetary shortfalls. It feels like a little thing, but in taxes and budgets, a bunch of little things sooner or later add up to some really big numbers. In this case, those numbers just mean more drag on the economy and the possibility of job losses and failing businesses.

So when Mr. Representative trots out the public good by noting that the state pays for the sins of alcohol consumption and that new taxes will help defray those costs, I find myself feeling that little itch behind my ears that tells me that someone’s lying.

For instance, the Guinness site notes--and, in a depressing display of cynicism, I do believe the Guinness site to be a touch more honest than the typical US Senator or Representative--that taxes on beer and wine currently amount to 41% of the beverage’s retail price and that 59% of the cost of spirits (that booze to you and me) is in taxes. That figure on spirits is roughly supported by this article from US News & World Report, and my guess is that unraveling the trail of fees and taxes on every barrel, bottle, or glass of booze would be a tricky task, indeed. Point being, though, that I think most people would agree that if a compensatory tax were needed for losses incurred by government agencies for their constituents’ overindulgince in alcohol, that tax is already being paid.

Alcohol, like cigarettes, is a great target of opportunity, though. It’s easy to demonize and some puritanical folks are more than willing to buy into any argument that starts with, “Let’s talk about the evils of alcohol...” Unfortunately for the taxers, the public attitude towards drinking isn’t nearly as solidified as the public attitude towards Big Tobacco and recent attempts to raise taxes on alcohol continue to fail. Americans, bless us, still love to tip the bottle on occasion and don’t see the need to make the cost of our drinking any more onerous that it might already be.

So, no, sir, no new taxes for us.

I will, however, say that this particular representative deserves some level of credit for his response. My own emails and letters to my senators and representatives are rarely answered by anything other than form letters or form emails. Sometimes they even ignore in totality the subject of my letters. This gentleman not only answered the substance of the original message, but he gave his phone number in return and gave a reason (a reason I didn’t like, admittedly, but a reason) for his support of those new taxes. Good for him for at least engaging his constituents instead of simply ignoring the stuff he doesn’t like.

H/T to The Source

Thursday, March 05, 2009

Guinness and Jim Cramer are Singing the Same Song (At Least for Now)

As most of you know--you’ve seen the video, I’m sure--Jim Cramer had harsh words for the White House and Obama’s decisions on the economy and how those decisions are destroying wealth in the nation. I’d say that’s undeniable: from a collapse in the stock market and housing prices that could take decades to recover and the very real possibility of inflation around the corner that will render even conservative savers’ nest eggs with tremendously less real buying power than they had just a few years ago, the wealth of millions of Americans has been brutally depleted over the last few months. These are simple facts and one wouldn’t think that they would invite much of a serious rebuttal.

The White House, though, did what it could to diminish Cramer’s words--the words of a man who has admitted to voting for Obama, for believing in Obama’s overall agenda, and for having donated money to Democratic causes in the past. In fact, in no way is Cramer removing himself from the left, but embracing a more measured approach than the administration’s headlong rush to implement sweeping changes on a very short schedule.

“I’m not entirely sure what he’s pointing to to make some of the statements,” Gibbs said about my point that President Obama’s budget may be one of the great wealth destroyers of all time. “And you can go back and look at any number of statements he’s made in the past about the economy and wonder where some of the backup for those are, too.”

Huh? Backup? Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second Great Depression, destroying the profits in healthcare companies (one of the few areas still robust in the economy), tinkering with the mortgage deduction at a time when U.S. house price depreciation is behind much of the world’s morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people.

The market’s the effect; much of what the president is fighting for is the cause. The market’s signal can’t be ignored. It’s too palpable, too predictive to be ignored, despite the prattle that the market’s predicted far more recessions than we have.

[...]Obama has undeniably made things worse by creating an atmosphere of fear and panic rather than an atmosphere of calm and hope. He’s done it by pushing a huge amount of change at a very perilous moment, by seeking to demonize the entire banking system and by raising taxes for those making more than $250,000 at the exact time when we need them to spend and build new businesses, and by revoking deductions for funds to charity that help eliminate the excess supply of homes.

We had a banking crisis coming into this regime, but now every area is in crisis. Each day is worse than the previous one for this miserable economy and while Obama’s champions cite the stimulus plan, it’s really just a hodgepodge of old Democratic pork and will not create nearly as many manufacturing or service jobs as we hoped. China’s stimulus plan is the model; ours is the parody.

Cramer sounds like he’s speaking sense to me. He has a clear-eyed view of the state of our economy and it doesn’t take a prophet to see the damage coming from some of the misguided policy and tax choices Obama’s administration is working to implement. Cramer is speaking good sense.

And he continues to make sense even when he’s championing things that I would fight in the future:

To be totally out of the closet, I actually embrace every part of Obama’s agenda, right down to the increase on personal taxes and the mortgage deduction. I am a fierce environmentalist who has donated multiple acres to the state of New Jersey to keep forever wild. I believe in cap and trade. I favor playing hardball with drug companies that hold up the U.S. government with me-too products.
[...]
But these are issues that we have no time for now, on the verge of a second Great Depression. This is an agenda that must be held back for better times. It is an agenda that at this moment is radical vs. what is called for.

Some of the arguments we have--we on the right with you on the left--can come later when the country is healthy again. Some of those arguments (about what constitutes a “fair” tax rate for whatever passes as wealthy, for example) are luxuries that we can’t afford when we’re just trying to pay the bills. Increasing taxes on the individuals and companies that keep the rest of us employed and paying our bills isn’t going to help. Increasing taxes on the folks who can invest in the new businesses, products, and ideas that fuel our economy isn’t going to help. Huge spending plans that don’t address the real needs of the country--filled with ridiculous earmarks from both parties--are luxuries that we can’t afford when we need to recover a safe climate for businesses to grow and for jobs to be created. Cramer understands that and vows to fight back against the Democrats when their policies will take our country in the wrong direction.

[Would it, then, be safe to say that he hopes that Obama fails in implementing those harmful policies? Or would that be painting him with too Limbaughian of a brush?]

It’s not just Cramer, though. Obviously, investors have no faith that Obama’s plans will create a secure environment for business to flourish. The market’s fall is broken by only occasional spots where bargain seekers buy in and quickly sell off--that downward trend is astonishing. Terrifying.

Which brings me to the Guinness. I like Guinness; it’s tasty beer. I’m on a mailing list where Guinness sends me notes about upcoming boozing events and opportunities to try some of the other alcoholic beverages produced or imported by Diagio North America. I mostly ignore these invitations because, frankly, I don’t need anyone encouraging me to drink. I do just fine on my own. Today’s message caught my eye, though: Guinness Needs Your Help.

God knows I’m willing to help Guinness in a time of need. Here’s what they had to say:

Hi Zombyboy,

As someone who enjoys great brands such as Smirnoff, Crown Royal, Captain Morgan, Johnnie Walker, Ketel One, Jose Cuervo, Tanqueray, Guinness, Beaulieu Vineyard or Sterling Vineyards wines, you are a member of the Diageo family. As a member of our family, you need to be aware that in the coming months, lawmakers will be proposing tax increases that will put jobs in your community at risk and raise the cost of your favorite drink.

There’s a real price to pay when elected officials misguidedly try to replenish state budgets with regressive taxes that will hit us at a time when we are already being hit hard enough economically. These taxes will cause people like bartenders, waiters, waitresses and other folks who work hard every day in our community restaurants and hotels to lose their jobs. In fact, the last time they raised taxes on alcohol, $1.3 billion in wages were lost, while 98,000 people found themselves out of work.

Hardly sounds fair, does it?

It’s time to SAY NO to higher taxes that will put jobs at risk and raise prices on the people who can afford it the least. CLICK HERE to join the fight against irresponsible and regressive taxes.

Together, we can protect our jobs, our livelihoods, and the right to responsibly enjoy a drink.

Cheers!

Guy L. Smith
Executive Vice President
Diageo North America

This is all in support of AxeTaxesNotJobs.com--an effort by Diageo to encourage people to contact their representatives and ask that they act responsibly to help right America’s economy. I doubt very seriously that Diageo wants to be seen as a politically activist company in much the same way that I doubt that Cramer wants to be seen as someone fighting against a popular president or the long-term agenda that he actually believes in. But both are being moved by circumstance to actions that they wouldn’t normally take: standing athwart bad economic policies yelling, “Stop!”

A crisis like this is bound to make some strange bedfellows. An painful economic crisis has--through what can only be seen as poor leadership and shortsighted policies in our political class, but especially in our White House--become something much worse: the potential for a second Great Depression. The potential for crippling unemployment and economic implosion. Good policies can help us avoid that fate, but bad policies--those that Cramer and Guinness fight against and that Limbaugh hopes will fail--will push us right down that hole.

These are scary times and we all need to do what we can to head off a complete economic disaster. We can get back to arguing over the other stuff later.

Since I have borrowed so liberally from Cramer (and please do read the whole thing--it’s insightful stuff), I am going to dip into the well once more to give a good leftist the last word and to encourage you to add your voice to his:

So I will fight the fight against that agenda. I will stand up for what I believe and for what I have always believed: Every person has a right to be rich in this country and I want to help them get there. And when they get there, if times are good, we can have them give back or pay higher taxes. Until they get there, I don’t want them shackled or scared or paralyzed. That’s what I see now.

If that makes me an enemy of the White House, then call me a general of an army that Obama may not even know exists—tens of millions of people who live in fear of having no money saved when they need it and who get poorer by the day.

Read the rest of Jim Cramer’s article.

Tuesday, February 24, 2009

Can I Get an Amen? (The Thinkin’ About a Tea Party Edition)

Via Instapundit, I find this site that hits me as saying precisely what I want to say:

Today’s economic crisis impacts all Americans, not just those who are behind on their mortgages.  Everyone shares concerns over health care, job loss, and the decimation of their retirement savings.  All Americans have made sacrifices over the past year.  The American taxpayer is already on the hook for mismanaged banks, incompetently run auto companies and extravagent stimulus packages.  We don’t need the additional burden of paying for our neighbor’s mortgage.  The bottom line - we believe that being current on one’s mortgage should not be grounds for being put at a financial disadvantage.

That is wildly deserving of an amen.

I find myself wondering how conservatives who bought into the rhetoric of hope and change, who believed that Obama would be governing from a moderate’s position, and who ended up voting Democrat in the elections are feeling about their decision right now? I’m feeling more and more that I voted the right direction: McCain.

Now, the current economic crisis isn’t Obama’s fault. There are a lot of names and administrations that can share the blame for bad regulations, overspending, and refusal to deal with the American economy as something built on money that doesn’t come from the Free Money Fairy. And then there are the people--that is, “we, the people"--who helped by demanding more government services and less fiscal sanity. In fact, we, the people, made it downright difficult for a person to be elected if they threatened our slice of the pie, a fact that has made blue hairs such an important voting block and rational conversation about the future of Social Security such a political hazard.

So, no, it’s not Obama’s fault.

But I remember watching one of the televised debates and hearing McCain promise a spending freeze followed by deep cuts in the budget coupled with a belief that raising taxes on any Americans right now would be foolish and irresponsible. Obama, in contrast, spoke breezily about cutting the budget, but thought that a spending freeze was a bad idea and an increase in taxes on the wealthy (whatever “wealthy” might mean) was a brilliant idea.

I remember thinking that this was one of only two defining issues for me (the other being continued resolution to maintain the most powerful military in the world--surprisingly, continued prosecution of the war in Iraq and Afghanistan was down the list a ways for reasons best discussed in another post on another day). Obama might indeed have intended to govern from the center, but even that night he couldn’t get away from a knee-jerk need by the left to increase taxes (on the right people) and massively increase spending (to the right people).

If the Republicans hadn’t lost the moral high ground on the economy over the last eight years, I imagine that we would be talking about President McCain and his obstructionist tendencies right now.

McCain may have had a hard time leading, given the state of the GOP in both House and Senate, but I think he would have gleefully used his veto pen to kill off this stimulus package and would have forced the Democrats into a fight. Instead, the left pretends at compromise with the complicity of a couple turncoat Republicans and then bulls ahead with whatever the hell it is that they wanted to do in the first place.

Because they won.

I don’t think that trend will last, though, because Americans are already starting to worry about how this latest stimulus package is actually going to help create jobs, foster economic stability, or do much other than run up well over a trillion in new debt. Bush has been criticized, rightly, for the debt that he ran up during his terms in office; a month into Obama’s administration and it’s become apparent that he not only intends to continue down that path, but, indeed, he’ll be upping the ante.

That’s a phrase--"upping the ante"--that I use very specifically. There is an element of the bad gambler to the way our government is handling the crisis, and Obama is cheering on the bad behavior. If you’ve ever seen a guy losing big at the craps tables, you’ll know what I mean.

That guy probably started with relatively conservative bets. He played the come and the pass lines and didn’t place any of the hard ways or other high risk bets. But he was losing--every few rolls of the dice set him back a little bit more until he realized he was down quite a bit. So instead of walking away, he believed the thing that every bad gambler believes: his luck’s going to turn. There were so many bad rolls that a good roll is just bound to be right around the corner.

And when he believes that, the bets get bigger because, when his luck turns, he believes the payout will pull him right out of the hole that he’s dug himself. So he starts betting bigger and he starts betting the high risk/high reward bets. There is luck involved, of course, and he’ll win some rolls. More than that, though, there is simple math: even when he wins a roll or two, he’s dug that hole so deep that he’s still deep down in the dark and he has to keep playing to try to break even.

What he doesn’t realize is that he’s already lost. The money is gone and he needs to be smart enough to step away from the table, go home, and figure out how to rebuild what is already gone.

Our government is that guy: the stimulus plans are getting bigger, the hole is getting deeper, and they believe that one more stimulus bill could hit it big and make those losses go away. Meanwhile, the deficit gets bigger and someone else is going to end up paying the bill because our government has gone way the hell and gone beyond the money that they brought to the table. They’ve borrowed from everyone they know, they’ve maxed the credit cards, they’ve taken out mortgages on our futures--and they’re using it all to place a bad bet that will only take us closer to financial ruin.

And Obama is the one leading us down that path, cheerfully telling us that this is the bet that will make it all better. I don’t believe him.

McCain wasn’t the guy who sent a thrill up my leg.  He wasn’t my perfect candidate and he didn’t mesh with my beliefs on a number of issues. I have a hard time imagining that he would have travelled this particular path, though, and I believe that this path is one that could ruin our nation.

Republicans, libertarians, and all nature of fiscal conservatives will be fighting at a disadvantage for the next few years (at least), but anyone who believes that our salvation is to be found in fiscal responsibility need to start pushing back now. We’re losing the battles right now, but we can’t afford to lose the war.

Monday, February 16, 2009

Day of Really Bad Ideas, Part 1

1,900% beer tax hike.

More states will be proposing big tax hikes to make up for budget shortfalls this year--and it will be rare to see a state admit that smarter budgeting, cutting out programs that are not core to the business of running a state, and making a few tough choices might actually be preferable to creating a tougher business environment. The last thing government should be doing right now is siphoning money out of the private sector and making it harder for folks to do business with each other.

The “1,900%” part makes it sound a bit bigger than it really is, but it is a difference maker for a small business that already had a budget in place. A difference like that can make it harder to hire a new employee or buy an expensive piece of equipment that was already budgeted for this year or even in whether they can continue to offer decent health care to their employees. On the outside it looks like a small thing, but from the view of the person running the business it can be huge.

And that’s not even considering the potential for higher prices to depress the market for the products.

My guess is that small brewers could be facing a bad year, anyway, as consumers continue to realize that they need to be more price-conscious. Another little hit like this could drive some of them out of business or, at least, to consider a move to a more welcoming business climate.

Read the rest.

Tuesday, February 10, 2009

Senator Kerry…

...The mistrust is mutual. The difference, of course, is that you have to take my money to achieve your goals; I merely want to keep what’s already mine.


The link is here for those who hate the embed.

Wednesday, January 28, 2009

Indeed. Heh. Other Such Bloggy Touchstones.

Shawn Macomber, who is now writing for and the reason I’ll be subscribing to Decibel, forwarded a little something from CATO--which, in sharply rebuking the President for the stimulus bill being debated right now, kindly reminds me that there are a few sane folks left in the country.

it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production.

The new stimulus bill has me terrified. Not just that it will buy us more debt than I ever imagined our country could possibly see within my lifetime (actually, we passed that particular milestone when the first half of the last bailout bill went out the door), but my fear is that all of the non-freakin’-stimulus spending in the package will set a new baseline for government expenditures in the future. Not only will we have bloated budgets to deal with, but the billions in new money sent to welfare and social programs by this particular stimulus package will be seen as part of what is expected in future budgets.

Any attempt to return to previous spending levels will be met with cries of outrage as the evil conservatives try to slash important programs.

It’s amazing how the idea of spending cuts has grown from, well, actual spending cuts to cuts in the proposed increases in spending.

Colorado has been blessed with TABOR, which has forced our state government to make hefty cuts in services when downturns come along instead of raising taxes or going deeper in debt. If California had seen a similar law on its books over the last few decades, I wonder how much better their financial situation would be now?

Some of those cuts are to popular programs and some of them are pretty painful to watch. But no government has unlimited resources at its disposal. No government can continue to spend in the red forever. Colorado ensures that its government can’t spend itself to death; our Federal government seems to have no such limitation.

So, this stimulus bill, which wouldn’t do much in the way of actually stimulating the economy (especially in the short term), would succeed in making our government even bigger. It would succeed in growing social and welfare programs. It would succeed in saddling future generations with even more boomer debt.

But don’t expect it to stimulate the economy, create many new jobs, or make our nation any safer or better. From the Wall Street Journal:

In selling the plan, President Obama has said this bill will make “dramatic investments to revive our flagging economy.” Well, you be the judge. Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There’s another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities.

Add the roughly $20 billion for business tax cuts, and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus. And even many of these projects aren’t likely to help the economy immediately. As Peter Orszag, the President’s new budget director, told Congress a year ago, “even those [public works] that are ‘on the shelf’ generally cannot be undertaken quickly enough to provide timely stimulus to the economy.”

And do read the rest. It’s almost painful, but important, to helping understand what the end effect of this stimulus bill might be.

What do you expect for more than a trillion dollars? Miracles?

Friday, January 02, 2009

The Bailout Beat Goes On…

Perhaps the worst aspect of the recent government bailouts of some of America’s biggest industries/welfare recipients with fat stacks of America’s taxed income--and boy are there some ethical, practical, and political “worst aspects” to choose from--is that doling out that much money to bail out failed and failing businesses has given license to everyone with a bad business plan to come, hat in hand, to Uncle Sugar asking for their very own personalized bailout plan. We can argue over the merits of the plans (not that I want to; I’m growing a bit sick of the whole thing), but I did have to highlight what I can’t help but think is a particular bit of lunacy in Matt Rosoff’s letter to Obama: Hey Obama: Reboot the music industry!

But what about the music industry? Yes, the big labels have earned a lot of scorn for their technophobia and suing their customers--a practice which finally ended last week--but music is a multibillion-dollar industry, responsible for employing hundreds of thousands of people, and in the midst of several years of steep sales declines. If we can bail out the U.S. auto industry, and spend at least a trillion dollars saving the global financial system and reinvesting in infrastructure, surely we could spare a dime for the music biz.

Serious economic thinkers might scoff at the comparisons--finance touches everybody, and our entire infrastructure has been designed around the automobile--but music’s more than a lark or a luxury. It’s a core part of the entertainment industry, which is one of the few areas in which the United States is still an exporter and world leader rather than an importer. Even The Economist has acknowledged the deep biological importance of music, leading off its annual double Christmas issue with an investigation of why we love music.

As with Friedman’s proposal to save America, my proposal to save music would start at the bottom--it’s not enough to give the big labels and radio stations a few hundred million dollars to stem their losses and encourage re-investment. Instead, we need to create a culture of music appreciation and nurture the talent that will lead to the next generation of musicians.

It doesn’t take a big-L Libertarian to balk at the idea that the music industry is in need of saving. There is simply no way to begin to make the argument that we are in danger of running out of musicians, that the entire music industry is near collapse, or that it is in our government’s interest to help usher in the next wave of pop music abominations. While I do fear for the future of classical music and opera in America, our government’s involvement isn’t likely to be meaningful or particularly positive. More likely, it would be inept, fill half-empty music halls with less than half-baked talents, cost outrageous sums of money that could have been better used if left in tax-payers wallets, and benefit nearly no one.

His idea of stipends for non-classical musicians is simply dumb. No matter how much it sets wannabe rock stars salivating at the thought of Uncle Sugar paying for their ramen, pot, and cable bill for a few years while they noodle away at a soon-to-be-failed career, what precisely is the payoff for the taxpayer? Where is the benefit to the people footing the bill? That Canada has a similar plan for “self-trained” musicians is hardly a big selling point; I haven’t noticed an emerging army of latter-day Canadian Elvii swarming through the world and hoovering up entertainment bucks from the international buying public in a way that might offset the government expenditures or contribute so significantly in any cultural way as to be an undeniable argument for the nurturing of hundreds or thousands of no-talent hacks who think that being a rock star is the best way in the world to get laid.

So let’s just say “no” to this poorly considered bailout (or “reboot) of the American music industry. There’s no need for it and, even if there were, it would hardly be the responsibility of our ever-growing government to provide the solution.

Luckily, this was an idea from someone who isn’t able to reach directly into my pocket and pull out the cash he needs to fund his dreams. But it’s representative of the direction people will be looking whenever any American industry hits a difficult patch from now on--and that’s going to be a hard habit to break. Once we citizens hand over a responsibility to the government (like our retirements, for instance), it becomes nearly impossible to ever take that responsibility back. Most people prefer the security of a bad investment backed by an agency they trust over the scary monsters of having to find a way to provide for themselves. Government tends to be big, dumb, inflexible, slow, cumbersome, and inefficient--just the kind of organization that can revitalize big, dumb, inflexible, slow, cumbersome, and inefficient industries like those that are now in trouble in the US.

Whatever answers there are that can solve the problems of America’s industries (whether it’s financial institutions, car manufacturers, or the music industry), the answers aren’t likely to come from Uncle Sugar or from money foolishly and inefficiently spent by a government agency.

Monday, October 13, 2008

Obama’s Plan is Wealth Redistribution

I really don’t like Obama’s answer to this question (watch the video to see what I’m talking about), although I suppose I should applaud him for being honest about his desire to help successful Americans do their patriotic duty by giving the country more money.

I don’t know about y’all, but I neither need to see any more of my wealth redistributed nor am I asking for handouts. I mean, I don’t have so much that higher taxes won’t hurt me, but my success in life isn’t hinging on the Obama-Biden plan of patriotically taxing the hell out of people who are doing better than me, either.

Taxing the wealthy isn’t the best way to help me be successful.

Wednesday, June 18, 2008

My Kingdom for Freer Markets

Interesting piece from Marketwatch.comtoday that should interest all of us who wish our government would stumble upon a more sane energy policy--and that isn’t just finding responsible ways to use the abundant natural resources with which the U.S.A. has been readily blessed. A sane policy would also stay out of the way of a market finding the real value of a thing. I’ve said (and continue to believe) that the price of a barrel of oil has been distorted by not only a weak dollar, but also by investors far too willing to grasp any hiccup in production or world politics to justify another increase--and sooner or later that kind of run up will end.

Of course, I’ve been saying the same thing for a few years now and I’ve missed some really wonderful investment opportunities of my own, so what the hell do I know?

Still, this Marketwatch piece caught my attention:

In a recent communication to subscribers, [John Dessauer] discussed the impact on the price of oil of the Commodity Futures Modernization Act, which Congress passed in December 2000. One consequence of that legislation, according to Dessauer, is that “the oil market has been grossly distorted.”

By how much?

Dessauer estimates that if the government rolled back the regulatory changes made in that legislation, oil’s price could fall back all the way to $80 per barrel. That would represent a 40% drop from where crude closed on Tuesday.

Dessauer’s analysis should give pause to investors and traders alike. A market that could fall by that much for reasons having nothing to do with underlying fundamentals is not the kind of market that your Economics 101 textbook had in mind.

A possible comeback to Dessauer’s analysis has to do with the role that arbitrage should be playing in stabilizing the oil market. After all, if oil’s price is even close to being in a bubble, then why wouldn’t arbitrageurs load up their portfolios with huge short positions in crude, poised to realize huge profits if and when oil’s price dropped? At least in theory, their short selling should have already tempered oil’s price rise and made it less vulnerable to the kind of market break Dessauer discusses.

The answer is that arbitrageurs do not play the role in practice that theory says they would. In practice, the arbitrage role is mostly fulfilled by a relatively small number of institutional investors such as hedge funds, which invest other peoples’ money and often are highly leveraged. For both reasons, according to researchers who have studied arbitrageurs’ behavior, they cannot afford to hold onto a short sale if it takes too long for it turn a profit.

As John Maynard Keynes famously once put it, “the market can remain irrational longer than you can remain solvent.”

Of course, the people who are now calling for more regulation to control oil costs will continue to ignore the damage that bad regulations do to commodity pricing in precisely the same way that I’ve heard “deregulation” blamed for California’s energy woes. It wasn’t a lack of regulation that caused California’s rolling blackouts; California’s energy market was distorted by partial deregulation, price caps, bad laws, and unscrupulous companies like Enron taking advantage of a poor set of laws that are misleadingly termed “deregulation.” We get that far without even considering how “deregulated” a state’s energy industry is when building the capacity to produce energy is damned near impossible.

The government sets out, with good intentions, to maintain stable markets; unfortunately, what government sets out to do is often at complete odds with what it accomplishes. All government activity should be viewed with some skepticism.

What I find most frightening right now is not the cost of oil--or, at least, not that alone. I find it frightening that inflation is definitely rising to unacceptable levels, the drag in the economy is starting to impact the unemployment numbers, and our country is in a recession. In a way, it is starting to feel like the late 70’s again. But instead of running away from the malaise of the Carter years and into the Reagan revolution, our nation seems to be diving right back in to Carter, part two.

While McCain may only be the smallest bit better on energy policy than Obama, President BHO will be reaching for heavy regulation, price caps, tax increases, and an anti-business bent that will probably bring us an even greater bump in unemployment and a decrease in new investment.

So, America, are we really hoping to drag out this recession as long as humanly possible? Is the illusion of change really that meaningful to you?

Just curious.

I’m not feeling particularly happy about either choice, but I have a feeling that a congress dominated by Democrats with a passionate progressive spurring change from the White House will be far more effective in bringing about change than the idiot Republicans who pissed away the best opportunity the party has ever had to make meaningful changes to government programs. That is, Democrats are far more likely to get what their leadership has been promising than the Republican faithful got from theirs during the first half of this decade.

I like McCain on a personal level--even when I feel the urge to roll my eyes at much of his straying from the supposed conservative values of the party--but I can’t help but feel insulted by a party that gave us broken promises of fiscal responsibility, smaller government, massive entitlement reform, and, well, conservative government in the ideological and pragmatic senses of the word. I’ll be voting for McCain, but it won’t be motivated by party loyalty; my motivation will be avoiding the worst of what I think would happen with Obama in the White House.

Whoever wins, though, the campaign to change our government (and, more personally, my party of choice) begins as soon as this election is over.

Friday, April 25, 2008

Unsupported Statements of the Day (Which I Still Happen to Believe Quite Strongly), Pt. 1

In no way did Wesley Snipes deserve a three year sentence for misdemeanor charges of failure to file his taxes--and a piss poor way of saying thanks for the $5,000,000 in checks that he handed over before sentencing in an effort to show that not only had he learned his lesson, but that he had a newfound willingness to pony up.

As a bonus, I’m also pretty leery of government agents and agencies when they are looking to prosecute harshly in an effort to send a message to the rest of us. That is, quite baldly, a threat. Honestly, I don’t mind “We think it sends a real message” when it’s in the form of high explosives dropped in the laps of terrorists or long sentences doled out to murderers. This doesn’t quite qualify, though, does it?

It’s extremely rare to see a criminal prosecution like this (and remember that Snipes was acquitted of the harshest of the charges) and the prosecution admits to using Snipes’ celebrity to make a point to the rest of us--essentially delivering a different standard of justice to Snipes than I would have faced if I had made the same exceptionally bad decisions as the actor. It rankles when celebrities are given a free pass for stupid (and occasionally criminal) behavior; it’s no less wrong when celebrities are unfairly made into legal targets because of their social standing.

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