Progress And Have a Happy New Year! December 30, 2010March 19, 2017 ALL NEW FIRST-CLASS STAMPS TO BE ‘FOREVER STAMPS’ Alan Questell: “Finally! As reported here.” ☞ See? And it took just 11 years from the time we first made the request. PROGRESS: AND IN DETROIT, NO LESS CBS News reports 500 new health care information technology jobs sited here instead of South America . . . 3,700 new jobs from Quicken . . . a boost to the small businesses serving them all lunch . . . signs of life at last. HOW WE REALLY MOVE FORWARD A good note, I hope, on which to usher in a promising new year: Remarks of President Barack Obama Forsyth Technical Community College Winston-Salem, North Carolina Monday, December 6, 2010 Hello, Winston-Salem! It is great to be back in North Carolina. And it is an honor to be here with all of you at Forsyth Technical Community College. It’s been about a month now since the midterm elections. And in Washington, much of the chatter is still about the political implications of those elections – what the results mean for Democrats, what they mean for Republicans, and already, what they mean for the next election. But I came to Winston-Salem because I believe that right now, there are bigger issues at stake for our country – issues that call on us to respond not as partisans, but as Americans. At this moment, we are still emerging from a once-in-a-lifetime recession that has taken a terrible toll on millions of families – many here in North Carolina who have lost their jobs, their businesses, and their sense of security about the future. Fortunately, we’ve seen some encouraging signs that a recovery is beginning to take hold. An economy that had been shrinking for nearly a year is now growing again. After nearly two years of job loss, our economy has added over one million private sector jobs in 2010. And after teetering on the brink of liquidation not two years ago, our auto industry is posting healthy gains. But as we saw in November’s jobs report, the recovery is simply not happening fast enough. Plenty of Americans are still without work. Plenty of Americans are still hurting. And our challenge now is to do whatever it takes to accelerate job creation and economic growth. In the short-term, that means preventing the middle-class tax increase that’s scheduled for January 1st. Make no mistake: this tax hike would be a disaster for working families, a drag on our economy, and we have to stop it. We should also keep in place other tax cuts for working families and businesses that are set to expire. There’s no reason these Americans should see their taxes go up. And we should extend unemployment insurance for workers who have lost their jobs through no fault of their own. That’s not only the right thing to do, it’s the smart thing to do – because if millions of Americans stop spending money, it slows down businesses, it slows down hiring, and it slows down our recovery. [NOTE: ALL THIS GOT DONE SHORTLY AFTER HE MADE THIS SPEECH.] Still, even if we take these and other steps to boost our recovery in the short-term, we also have to make some serious decisions about our economy in the long run. We have to look ahead – not just to the next year, but to the next five years and ten years and twenty years. And we have to ask ourselves, “Where will the new jobs come from? What will it take to get them? And what will take it to keep the American Dream alive for our children?” Just like past generations did, we must be prepared to answer these questions in our time. Over the next several weeks, I’ll be meeting with my economic team, business leaders and others to develop specific policies and budget recommendations for the coming year. But today I want to outline the broader vision that I believe should guide these policies – a vision that will keep our economy strong, growing, and competitive in the 21st century. That vision begins with a recognition of how our economy has changed over time. When Forsyth Technical opened fifty years ago, it was known as the Forsyth County “Industrial Education Center.” Machine shop and automotive mechanics were some of the first classes you could take. Of course, back then, you didn’t even need a degree to earn a decent living. You could get a job at the local tobacco or textile plant and still be able to provide for yourself and your family. That world has changed. In the last few decades, revolutions in communication and technology have made businesses mobile and commerce global. Today, a company can set up shop, hire workers, and sell their products wherever there’s an internet connection. It’s a transformation that has stitched the world together in what we call the global economy; and one that has touched off a fierce competition among nations for the jobs and industries of the future. The winners of this competition will be the countries that have the most educated workers, the strongest incentives to innovate, and the fastest, most reliable ways to move people, goods, and information. To succeed, you need the best schools and the best teachers; a serious commitment to research and technology; access to quality infrastructure like roads and airports; high-speed rail and high-speed internet. These are the seeds of economic growth in the 21st century. Where they are planted, the most jobs and businesses will take root. In the last century, America was undoubtedly that place. Our economic leadership in the world went unmatched. Now it’s up to us to make sure that we maintain that leadership in this century. At this moment, the most important contest we face as a nation is not between Democrats and Republicans. It’s between America and our economic competitors in the world. There is no doubt in my mind that we can win this competition. The United States is home to the world’s best universities and research facilities; the most brilliant scientists, the brightest minds, and some of the hardest-working, most entrepreneurial people on Earth. But as it stands right now, the hard truth is this: in the race for the future, America is in danger of falling behind. In just a decade, we’ve fallen from 1st place to 9th place in the proportion of our young people with college degrees. When it comes to high school graduation rates, we’re ranked 18th out of 24 industrialized nations. We’re 27th in the proportion of science and engineering degrees we hand out, and 48th in the quality of our math and science education. When global firms were asked a few years back where they planned on building new research and development facilities, nearly 80% said either China or India. In fact, the largest private solar research and development facility in the world was recently opened in China – by an American company. Today, China also has the largest airport, the fastest trains, and most recently, the fastest supercomputer in the world. In 1957, just before this college opened, the Soviet Union beat us into space by launching a satellite known as Sputnik. It was a wake-up call that caused the United States to boost our investment in innovation and education – particularly in math and science. We offered more scholarships and more loans and more research funding. As a result, we not only surpassed the Soviets, we developed new American technologies, American industries, and American jobs. Fifty years later, our generation’s Sputnik moment is now. If the recession has taught us anything, it’s that we cannot go back to an economy driven by too much spending, too much borrowing, and the paper profits of financial speculation. We must rebuild on a new, stronger foundation for economic growth. We need to do what America has always been known for: building, innovating, and educating. We don’t want to be a nation that simply buys and consumes products from other countries. We want to create and sell products all over the world that are stamped with three simple words: “Made In America.” I came to Forsyth Technical today because you have shown what this future can look like. You have shown that it’s possible to change with the times. Half a century later, you’re still giving students the skills and training they need to get good jobs, but courses in machine shop and car mechanics have broadened to degrees in mechanical-engineering technology, nanotechnology, and biotechnology. Meanwhile, the unique partnerships you’re building with advanced manufacturing and biotechnology firms will ensure that the businesses of the future come here and stay here and hire right here in Winston-Salem. In fact, as a national leader in bioscience and innovation, North Carolina is now the country’s third largest employer in biotechnology. And when Caterpillar recently decided to build a plant in this community, they told President Green one of the main reasons was that “…they were convinced that Forsyth Tech had the capability or providing them with the technical workforce they need.” That’s something everyone in this room should be very proud of. Of course, none of this progress happened on its own. It happened thanks to the hard work of the students here at Forsyth, the commitment of local leaders, the foresight of local business owners, and it happened because there was a decision made to invest in the collective future of this community. It happened because there was a decision to invest in this college, as well as the loans and scholarships that make it affordable to go here. To invest in the basic research and development that helped jumpstart North Carolina’s biotech industry. To invest in new buildings and laboratories and research facilities that make your work possible. These are the kinds of investments we need to keep making in communities across America – investments that will grow our economy and help us stay competitive in the 21st century. Now, I say this knowing full well that we face a very difficult fiscal situation. When I took office, our deficit was $1.3 trillion. And if the economy had been humming along, reducing that deficit would have been one of my first priorities as President. Instead, we found ourselves in the middle of the worst economic crisis of our lifetimes. And so our most important job was to do whatever it took to prevent a second depression – even if those steps added to the deficit temporarily. Now that threat of a depression has passed, and a recovery is beginning to take hold, reducing our long-term deficit has to be a priority. In the long run, we won’t be able to compete with countries like China if we keep borrowing from countries like China. That’s why I proposed a three year freeze in all spending that doesn’t have to do with national security. That’s why I proposed a two year freeze in pay for all federal workers. And that’s why we’re currently studying the recommendations of the bipartisan deficit reduction panel I commissioned. We need to be bold and courageous in eliminating spending and programs that we don’t need and can’t afford. What we can’t do, however, is cut back on those investments that have the biggest impact on our economic growth – because the best antidote to a growing deficit is a growing economy. To borrow one analogy, cutting the deficit by cutting investments in areas like education and innovation is like reducing the weight of an overloaded aircraft by removing its engine. It doesn’t make any sense. It will stunt our growth. And it will make us less competitive in the long run. That’s why even as we scour the budget for cuts and savings in the months ahead, I will continue to fight for those investments that will help America win the race for the jobs and industries of the future – investments in education, innovation, and infrastructure. In an era where most new jobs will require some kind of higher education, we have to keep investing in the skills and education of our workers. We know that the countries who out-educate us today will out-compete us tomorrow. And that’s why we are on our way to meeting the goal I set when I took office: by 2020, America will once again have the highest proportion of college graduates in the world. To get there, we are making college more affordable for millions of students. We are making an unprecedented investment in community colleges just like this one – and just like Forsyth, we’ve launched a nationwide initiative to connect graduates that need a job with businesses that need their skills. And we are reforming K-12 education – not from the top-down, but from the bottom-up. Instead of indiscriminately pouring money into a system that’s not working, we’re challenging schools and states to compete with each other – to see who can come up with reforms that raise standards, recruit and retain good teachers, and raise student achievement, especially in math and science. We call it a Race to the Top, where you get more funding if you show more results. Once our students graduate with the skills they need for the jobs of the future, we also need to make sure those jobs end up in America. We need to make sure the United States is the best place to do business and the best place to innovate. It’s time we have a tax code that encourages job creation here in America. And to boost our recovery, I’ve already proposed that all American businesses should be allowed to write off all the investment they do in 2011. To encourage home-grown, American innovation, we should make it easier to patent a new idea or a new invention. And if you want to know one reason why more companies are choosing to do their research and development in places like China and India, it’s because the United States now ranks 24th out of 38 countries in the generosity of the tax incentives we provide for that purpose. That’s why I’ve proposed a bigger, permanent tax credit for companies for all the research and innovation they do here in America. Still, a lot of companies don’t invest in basic research because it doesn’t pay off right away. But that doesn’t mean it’s not essential to our economic future. Forty years ago, it probably didn’t seem useful or profitable for scientists and engineers to figure out how to increase the capacity of integrated circuits. Forty years later, I’m still not quite sure what that means. What I do know is that their discoveries have made possible things like iPods, cell phones, GPS, and CT scans – products that have led to new companies and countless new jobs in manufacturing, retail, and other sectors. That’s why I’ve set a goal of investing a full three percent of our Gross Domestic Product into research and development. If this is truly our Sputnik moment, we need a commitment to innovation that we haven’t seen since President Kennedy challenged us to go to the moon. And we’re directing a lot of that research into one of the most promising areas for economic growth and job creation – clean energy technology. Because I don’t want to see new solar panels or electric cars or advanced batteries manufactured in Europe or Asia. I want to see them made right here in America, by American businesses and American workers. I also want to make it easier for our businesses and workers to sell their products all over the world. The more we export abroad, the more jobs we support at home. That’s why we’ve set a goal of doubling U.S. exports in five years. And that’s why I’m so pleased that last week, we came closer to meeting that goal by finalizing a trade agreement with our ally South Korea – a nation that offers one of the fastest-growing markets for American goods. This deal will boost our annual exports to South Korea by $11 billion, which will support at least 70,000 American jobs. The final area where greater investment will lead to more jobs and economic growth is America’s infrastructure – our roads, railways, runways, and information superhighways. Over the last two years, our investments in infrastructure projects have already led to thousands of good, private sector jobs, particularly for those in the construction industry who the recession has hit especially hard. But we still have a long way to go. There’s no reason that over 90% of the homes in South Korea should have broadband internet access, while only 65% of American households do. There’s no reason China should have nearly 10,000 miles of high-speed rail by 2020, while America has just over 400; or why they should have trains that operate at speeds of over 200mph while we do not. And there’s no reason America’s infrastructure should be getting a grade of “D” from our own engineers. We are the nation that built the transcontinental railroad and the first airplane to take flight. We constructed a massive interstate highway system and introduced the world to the power and possibilities of the internet. America has always been built to compete, and if we want to attract the best jobs and businesses to our shores, we have to be that nation again. Throughout history, the investments I’ve talked about today – in education, innovation, and infrastructure – have commanded support from both Democrats and Republicans. It was Abraham Lincoln who launched the transcontinental railroad and opened the National Academy of Sciences; Dwight Eisenhower who helped build our highways; and Republican Members of Congress who worked with FDR to pass the GI Bill. More recently, infrastructure bills have found support on both sides of the Congressional aisle. The permanent extension of the research and development tax credit was proposed by both Bill Clinton and George W. Bush. Our education reforms have been praised by both Democratic and Republican governors. The point is, there are no inherent ideological differences that should prevent Democrats and Republicans from making our economy more competitive with the rest of the world. After all, we are all Americans, and we are all in this race together. And so those of us who work in Washington have a choice to make in the coming weeks and months. We can allow ourselves to be consumed with the same small bore politics that have held us back before. We can focus on what’s necessary for each party to win the news cycle or the next election. Or we can do what this moment demands, and focus on what’s necessary for America to win the future. For as difficult as the times may be, the good news is that we know that future could look like for the United States. We can see it in the classrooms that are experimenting with groundbreaking reforms, and giving children new math and science skills at an early age. We can see it in the wind farms and solar plants and advanced battery plants that are opening across America. We can see it here at Forsyth Technical – in your laboratories and research facilities and over at the biotechnology firms that are churning out jobs and business and life-saving discoveries. And just the other month, I saw part of America’s future during the science fair we held at the White House. It was the first science fair we’ve ever held, and talking to some of these amazing young people was probably the highlight of my month. There was a team from Tennessee that had designed a self-powered water filtration plant so that homes in Appalachia could have access to clean water. There were children who had designed a way to make an entire town more energy-efficient. And the last person I spoke to was a young woman from Dallas, Texas. Her name is Amy Chyao, and she’s sixteen years old. Her parents came to the United States from China, and Amy was born here. When she was a freshman in high school, she studied biology and became interested in cancer research. So after teaching herself chemistry over the summer, she designed a device that uses light to kill hard-to-reach cancer cells while leaving the healthy ones untouched. At 16 years old. Amy went on to win the international science competition, and now she’s being approached by laboratories all across the country who want to work with her on developing this breakthrough cancer drug. And as I’m standing there talking to Amy, and trying to pretend I understand everything she’s telling me, I’m looking at the portrait of Abraham Lincoln hanging over her head in the State Dining Room. And I remembered all that we’ve been through and all that we’ve overcome, and I thought to myself, you know what? The idea of America is alive and well. We are going to be just fine. As long as there are people like Amy and her parents, who still want to come to this country and add to our story. As long as there are people like the men and women here at Forsyth Technical, who are keeping us at the top of our game. And as long as all of us are willing to look past the disagreements of the moment to focus on the future we share. If we can do that, I have no doubt that this will be remembered as another American century. Thank you, God Bless you, and may God Bless America.
Common Ground, Uncommon Reader December 29, 2010March 19, 2017 COMMON GROUND You know we’re making progress when, apparently, the #1 sitcom among Republican viewers is ABC’s (wonderful) “Modern Family.” Tonight at 9, if you haven’t already set your TiVo. THE KING’S SPEECH You still haven’t seen it? Seriously? It’s such a wonderful – true – story. About King George VI, though you don’t need to know a thing about British royalty to enjoy it. AN UNCOMMON READER This is a novella about King George VI’s daughter, Queen Elizabeth – and not true. A novella, as you know, is like a Shetland pony. Sort of a pony, but much shorter. And this one imagines that the Queen, after nearly 50 years on the throne, starts to read. Books. I don’t want to give any of it away. I’d just recommend you read it out loud to someone you love, as I did, because it is (and here I desperately search without success for a word more manly to make the point) delicious. Better still, read it on a Kindle or iPad so you can tap words you don’t know and get their definition. Invigilate? Divagation? My favorite part is the way the Queen speaks. Not with the royal we, but generally referring to herself as “one.” “One is not accustomed to this form of speech, but one comes quickly to be charmed by it.” It’s a wonderful, imagined peek inside the head that wears the crown. READING ALOUD – II Last week’s read-aloud suggestion – A Christmas Carol (“Marley was dead: to begin with. There is no doubt whatever about that. . . .”) – elicited this from one of you: Marge Wright: “An idea I LOVE about reading out loud: There are groups that promote moms in county jails reading to their children who are on the outside. Think for a moment how that could strengthen the bonds between a mother and child. It works like this. A volunteer goes to the library and chooses excellent books for young children, and makes an appointment with the county jail to take the book and a tape/CD recorder. (I’m sure there are all kinds of details about which kinds of tape/CD recorders, etc. to prevent contraband.) The volunteer shows a book to the inmate and if she likes it, records the inmate reading it, including a personalized introduction and ending. Imagine how important this could be to a six-year-old waiting six months for mom to get home. It makes the mother feel better (and actually BE a better mother). It shows/reinforces an idea of how to be a good parent. Some parents were never read to and don’t know how important it is for their children. As the mother and the volunteer develop a relationship, the volunteer is better able to select the perfect book for that family. I’ve heard of some programs buying the book to mail to the child so he/she can read along at home with the CD or tape. There’s such a program in my county and I’m going to be a volunteer in the new year. It’s such a win/win/win situation.” ☞ Well, what about fathers, I asked Marge. “Hey, fathers can be right there at the microphone reading, too! In fact, they are! The national group, called Friends Outside, was started 55 years ago (by Quakers, hence the ‘Friends’). Here’s a press account of the Sonoma County effort.” DEPO / CRME / YMI On DEPO in October: Suggested at $4.50 a year ago and a few weeks later at $3.02 – and a few months later still at $2.47 – our patience (obstinacy?) has begun to pay off, with the stock closing at $4.81 last night. Guru thinks it will be over $6 in a year. I wouldn’t rush to buy it here and have sold some shares in my tax-deferred account – but am happy holding the rest. With the stock closing at $6.41 last night, I asked Guru “what now?” Also, CRME, suggested last month at $4.60; last night $5.82. “Hold both,” he suggested. I forgot to ask about YMI, touted two weeks ago at $1.65, now $2.25. And it is certainly tempting to take a quick 35% profit. But the point of a speculation like this – to be made only with money you can truly afford to lose – is to shoot for a reward commensurate with the risk. So he would advise hanging on to this one, too.
Sam and Martha December 28, 2010March 19, 2017 STILL MORE PROGRESS . . . . . . if, that is, you think the Supreme Court has veered too far toward the rich and powerful. As in, for example, its 2000 decision that gave us the Bush years or its 2010 Citizens United decision that gave corporations and billionaires yet more political influence. This Los Angeles Times analysis suggests that Justices Sotomayor and Kagen are making their voices heard: By David G. Savage, Washington Bureau Reporting from Washington — For most of the last two decades, Supreme Court conservatives led by Justice Antonin Scalia dominated the debates during oral arguments. They greeted advocates for liberal causes with sharp and sometimes caustic questions, putting them on the defensive from the opening minute. But the tenor of the debate has changed in recent months, now that President Obama’s two appointees to the court, Sonia Sotomayor and Elena Kagan, have joined the fray and reenergized the liberal wing. Gone are the mismatches where the Scalia wing overshadowed reserved and soft-spoken liberals like now-retired Justices David H. Souter and John Paul Stevens. Instead, the liberals often take the lead and press attorneys defending the states or corporations. “They’re clearly on a roll,” said Washington attorney Lisa S. Blatt, who has argued regularly before the high court. “They are engaged and really active. It just feels like a different place.” . . . Imagine if John McCain had won. He promised to move the Court further to the right: “I’ve said a thousand times on this campaign trail, I’ve said as often as I can, that I want to find clones of Alito and Roberts. I worked as hard as anybody to get them confirmed. I look you in the eye and tell you I’ve said a thousand times that I wanted Alito and Roberts. I have told anybody who will listen. I flat-out tell you I will have people as close to Roberts and Alito [as possible].” And I guess I wasn’t going to tell you this, but I was at a Christmas party a couple of weeks ago, mostly with Democratic donors, many of whom I knew – or who at least looked familiar – and one friend, heading over to the dessert buffet, passed me off to a Princeton classmate of his, Sam something and his wife, Martha. He looked really familiar (Martha not so much), and we chatted for a while – at what fundraiser had I met them? isn’t it amazing how Washington shuts down over an inch or two of snow? – and later, when I reconnected my friend, he asked, “So what did you and Justice Alito discuss?” Aghhhhh! In the category of “missed opportunities,” I would say this ranks right up there with the time I was offered 10,000 shares of Google at 50 cents and declined. Except that never happened, whereas my brain-dead conversation with Justice Alito (who is not a Democratic donor, by the way) really did. I am an idiot. Justices Sotomayor and Kagen are the extreme opposite of idiots. To me, the fast start they’ve gotten off to represents progress. IT GETS BETTER Not to beat a dead horse, but here is yet another “It Gets Better” video to share with your kids (in case they have any friends they think might be gay), this one from White House Staff. EARMUFFS Cool? Perhaps not. Warm? Yes, and – as at long last I recently found – they make all the difference in the world. Stop being an idiot and put them on. (The same company sells gloves that apparently work with the touch screen of your phone.)
Progress December 27, 2010March 19, 2017 TWO YEARS OF PROGRESS Watch the video! (And it doesn’t even mention the food safety bill! Or the 9/11 first responders bill! Or our regained status among the community of nations! Or the new line of embryonic stem cells that might one day save your child’s life!) CLICKABLE PROGRESS This site provides numbers – nationally, by state, or for your specific Congressional district. MORE PROGRESS It now seems as though we may grab the opportunity January 5 that comes around just one day every two years to change the rules of the Senate. It needs to be done thoughtfully – but can anyone think the Senate is not broken? When a single Senator can thwart the combined will of the President, the House of Representatives, a super-majority of his fellow Senators and of the American people? Or when a filibuster no longer requires, at the very least . . . filibustering? MY MOMENT WITH HARRY REID Which leads me back to an item I posted this past February, about the question to then Senate Minority Leader Harry Reid in 2005, with President Bush poised to begin his second term. Could Senator Reid not force President Bush to compromise more by threatening to shut things down if he didn’t? The short form of that story: Senate Reid rejected the idea. It would have been an unprecedented, irresponsible abuse of the Senate rules. Yet that’s exactly what the Republicans wound up doing. Now, just days from now, there’s a chance to rein in some of the worst abuses, which Harry Reid resisted but Mitch McConnell seemed to relish. If we do, it will be one more step on the long road back to better times. Now, go watch the video.
Joy to the World December 24, 2010March 25, 2012 Have yourself a merry little Christmas. Peace on Earth . . . good health . . . good will. Truly.
Do You Have Lots of Money? December 23, 2010March 19, 2017 JOY TO THE WORLD With ratification of the New START Treaty yesterday, the threat of accidental nuclear annihilation – or just a loose nuke falling into the hands of terrorists – notched down a little. How can that not be good? With the added plus that we’ll soon need many fewer billions each year to maintain our 30%-reduced nuclear arsenal. The President also signed Don’t Ask / Don’t Tell repeal yesterday. By broadening the talent pool, this can only strengthen our military; and by rejecting discrimination, it further perfects our union. An effort 17 years in the making, it was a moving ceremony, to say the least. I don’t even know where to begin, so I won’t. Except to say that the feeling in the auditorium of the Interior Department (held there – like the signing of the health care bill – because the crowd was too large for the White House) was something few in attendance will soon forget. CHRISTMAS READING You know what can be really fun to do (and one gets a bit better at it with practice)? Reading a book, out loud, to one’s family or better half. You can hardly miss with A Christmas Carol, of course, which has the added virtue of being free. Just download it to your phone or Kindle or iPad. Takes just a few seconds. You don’t even have to decide which version to read – the Reginald Owens or the Alistair Sim or the Albert Finney or the Muppets or any of the others. This is the book. It is not just A Christmas Carol but The Christmas Carol, if you will, from which all others are imagined. A more modern offering for your consideration: Steve Martin’s wonderful new novel, An Object of Beauty. You will love it if you happen to be an art dealer and may very well love it even if, like me, you have only a passing familiarity with the art world. And speaking of books . . . PRICE WAR CONTINUES! I am slack-jawed. Amazon has the new edition of The Only Investment Guide You’ll Ever Need now marked down from $14.95 to $7.96 – this, for book that, if worth it’s weight in gold, should fetch north of $15,000. They are practically begging you to buy it. And Barnes & Noble has matched it! (Beware the Kindle and Nook editions, which inexplicably remain the 2005 edition without clearly letting you know.) DO YOU HAVE LOTS OF MONEY? I’ve found a private investment, in increments of $100,000, that pays what appears to me to be a very safe (albeit not Federally guaranteed) 8% rate of interest; sports an “equity kicker” that will probably not be worth anything but just might be worth a lot; and provides an “environmental kicker” in that it will finance the weatherizing of 100 homes to reduce their fuel consumption and carbon footprint. If you are an accredited investor interested in learning more, email and I’ll put you in touch with the company. ROTH Patricia Bingham: “You might want to mention that the benefits of conversion are considerably more clear cut for people who have non-IRA funds to pay the tax bill for conversion, and that people who don’t might not come out ahead, especially if they are under 59½ and have to pay a 10% penalty on the amount they keep back to pay taxes in addition to regular income tax on the full amount of the withdrawal.” Yes! The whole point is to pay the tax with money from outside your retirement plan, because that is in effect a way to sock away a lot more tax-deferred, as suggested Monday. “You might also want to clarify that people who don’t act by December 31 will not have missed their chance to make a conversion, only their chance to spread the income out over two years. On the financial blogs and forums that I follow, a surprising number of people believe that the income limit was lifted for 2010 only and that the conversion window for taxpayers with an AGI over $100K closes at the end of this year. Your wording (“…there’s probably still time for you to convert your traditional IRA to a Roth IRA”) may inadvertently reinforce this idea. For lower-income taxpayers, a series of partial conversions, up to the limit of whatever bracket one is in, is another idea worth mentioning.” All good points, as was John Critchlow’s suggestion Tuesday to split one’s retirement funds between both types of IRAs.
Thoughts On Exceptionalism December 22, 2010March 19, 2017 The days are getting longer again! I love that! Not only will the sun come out tomorrow, it will stay out a few extra seconds. And we have hot water. Still . . . we have our challenges. OH, MY – II Stephen Gilbert: “Even worse than so many believing that the earth was created ten thousand years ago [per yesterday’s column] is the overwhelming belief that the USA is the greatest country on earth, the greatest there has ever been. We may have the greatest fighter planes and submarines and aircraft carriers, but we’re first in little else, or at least little else worth bragging about.” ☞ This is a touchy yet important point. We’re first in obesity, first in incarceration, first in energy inefficiency . . . but still first also in, among others, I think, idealism, diversity, and – of special significance – higher education. Yet so many voters see the highly educated as elitist and even the enemy. Who wants the editor of the Harvard Law Review or a Rhodes Scholar when he can have a regular guy who tells us we pay too much in taxes; or a gal bursting with vitality and TV pizzazz who got a D in economics? Who wants the sophisticated professionalism of NPR or The New York Times or The Economist when he can have it all explained by Glenn Beck? Who wants to hear a consensus of global scientists say we face a climate crisis when he can hear others tell us not to worry? The knowing thing to be is skeptical of all those elitist PhD’s. (By the way: did you notice this summer that Bjorn Lomborg, upon whose analysis many on the right based their mockery of Al Gore, changed his mind? I wonder how hard that was played up on Fox News.) We want elite athletes and elite brain surgeons – but Presidents? Give me the guy who was third from the bottom of his class of 897 and says economics is not his strong suit. He can cut through the fiendish complexity of the problems we face. Give me the guy who can’t name the president of Pakistan – because I can’t either, so I feel more comfortable with him. ADVANCED ELITISM Well, advanced search, anyway. Tom Anthony: “As per this post from MIT, Google ‘Advanced Search’ lets you see the ‘reading level’ of various sites. For example, it compares the strikingly different reading levels that Fox News and PBS expect of their viewers.” And the Smartest Site on the Internet Is… Google now lets you filter sites by “reading level.” By Christopher Mims 12/16/2010 The Internet used to be full of highbrow reading material, until broadband penetration exploded and everyone with a credit card managed to find his or her way onto the Web. Finding your way back to the rarefied air that used to suffuse the ‘net can be a slog, so Google has a new way to help you out: You can now sort sites by reading level. (For those of you following along at home, under Google’s “advanced” search, simply switch on this option by hitting the dropdown next to “Reading level.”) The results are fascinating. Searching for any term, no matter how mundane, and then hitting the “advanced” link at the top strips away all the spam, random blogs and all the rest of the claptrap from the advertisers, hucksters and mouthbreathers. This is only one of the varieties of elitism enabled by the new feature, which was created by statistically analyzing papers from Google Scholar and school teacher-rated Web pages that are then compared to all the other sites in Google’s index. As pioneered by Adrien Chen of Gawker, by far the most interesting application of the tool is its ability to rate the overall level of material on any given site, simply by dropping site: [domain.com] into the search box. ☞ Read the rest to see the Fox News and PBS comparisons. The last thing anyone should do is talk down to, or disrespect, others. And there’s no question that a PhD is no substitute for – or guarantee of – common sense. But somehow – and for all our alleged brains, we sure haven’t done a great job of finding how – we need to restore pride in and respect for academic excellence, science, and competent, dedicated public service. AMERICAN EXCEPTIONALISM We are exceptional. But as someone recently pointed out, we only remain exceptional if we continue to do exceptional things. Success and respect don’t come to us simply by being born here; simply by agreeing to pay less tax and shop more; simply by declaring that our health care system is the best in the world. I have little doubt we’ll get back into gear. I think that with the Education Department’s Race to the Top and the Energy Department’s unprecedented investment in new technology and the State Department’s reengagement in the world – to take three examples – the up-shift has already begun. The last decade was, I hope, something of an exception.
Oh, My It's a Good Thing God's On Our Side December 21, 2010March 19, 2017 ROTHOUGHTS John Critchlow: “One IRA conversion question that seems to come up a lot is about the tax implications down the road as you start taking out funds. The opinion of the moment seems to be that taxes are going up in the future. But as you pointed out yesterday, our ever more creative politicians will come up with other ways to change things. So what to do? I think the most pragmatic advice I have seen is to try end up with roughly equivalent amounts in both the traditional and Roth categories. That way you can choose which IRA to draw from depending on what is happening at the time. At the very worst, you will have been only half wrong. Many companies are providing Roth 401Ks that you can contribute to. You could simply leave what is in the traditional 401K alone and start new contributions into the Roth category, thus providing both types down the road and no tax hit in the short term.” ☞ Good point. In my example yesterday I imagined you were 40. So if you just maxed out to a Roth IRA each year going forward, that could make a lot of sense. But if you’re about to retire (which I am, if I can ever sell enough banner ads on this site), you’d have to convert at least a portion of your traditional IRA, as I just have, if you wanted the flexibility you describe. David Morrison: “Everyone should open a Roth IRA account by the age of 54 1/2, even if it is minimally funded. That way, you’ll start the clock, so that when you reach 59 1/2, you can qualify to distribute money tax-free from the account. Even if the assets haven’t been in that account for 5 years, the tax-free scenario works if the account has been open that long.” ☞ Fair enough – although I’d guess most people would not be in a rush to make withdrawals when they are so young, especially from an IRA that was minimally funded. Still, it makes sense. CHEER THE MARINES Yesterday, we cheered the Navy for its green-energy initiatives. Today, with this statement, we have reason to cheer the Marines: Fidelity is the essence of the United States Marine Corps. Above all else, we are loyal to the Constitution, our Commander in Chief, Congress, our Chain of Command, and the American people. The House of Representatives and the Senate have voted to repeal Title 10, US Code 654 ‘Policy Concerning Homosexuality in the United States Armed Forces.’ As stated during my testimony before Congress in September and again during hearings before the Senate Armed Services Committee earlier this month, the Marine Corps will step out smartly to faithfully implement this new policy. I, and the Sergeant Major of the Marine Corps, will personally lead this effort, thus ensuring the respect and dignity due all Marines. On this matter, we look forward to further demonstrating to the American people the discipline and loyalty that have been the hallmark of the United States Marine Corps for over 235 years. — Marine Corps Commandant General James Amos DRYING TOWELS I meant to run this months ago, when it was hot. But print it out and tape it to your dryer, for Spring: Piet Bach: “Regarding your tale of the electric meter and the sudden furious forward spinning of the wheel when Charles turned on the dryer, I’ve been drying my towels on the line on clear days for years and here’s a little tip. Usually, they dry rather stiff — not fluffy, not gentle on our aging (well, my aging) skin. But. If you run them in the dryer on ‘air fluff’ or ‘no heat’ for a few minutes (say, five) before you hang them out, you get much nicer, more comfortable results without paying for the heat in the dryer, which is what spins the meter forward fastest. They fluff up well, and actually seem to dry faster since the fibers have been opened up to let the air move around. I think. If they’re still a bit stiff, I just put them back in the dryer for another five minutes without heat and that seems to do the trick.” OH, MY According to Gallup, 40% of Americans believe God created humans 10,000 years ago. I would expect this puts us first among developed nations in this belief. So now we have gold medals in obesity, energy inefficiency, and whatever is the scientific equivalent of innumeracy (and we are almost surely first in that, too). It’s a good thing God is on our side, or we might be in for a rough competitive ride.
Praise, Thank, Cheer, Boo, Buy . . . . . . And Convert to a Roth IRA December 20, 2010March 19, 2017 PRAISE THE PREZ The worst day of my life was the day Uncle Sam summoned me to sign up for the draft. No way did I have the courage to join the Army, let alone fight in Vietnam. How ironic that one of the best days of my life was Saturday, when Congress repealed the ban on people like me (albeit, braver ones) serving. Hats off to the President for making this a priority and shepherding it through in a way that achieved military buy-in and permanent, legislative repeal. It did not happen by chance. Hats off to Nancy Pelosi, Barney Frank, Patrick Murphy, and Steny Hoyer in the House and to Harry Reid, Joe Lieberman, and Kirsten Gillibrand in the Senate – among many others – for making this happen. There are still some steps in the process; but all indications are that LGBT Americans will be serving openly next year. If so, it will have been finished in less time than it took Harry Truman to start the process of integrating the military, which then took a further six years to complete (and for which he deserves tremendous credit). THANK THE TROOPS Eduardo Fernandez: “I hope you will post this, where you can pick out a thank you card and Xerox will print it and it will be sent to a service member who is currently serving in Iraq.” ☞ Happily. CHEER THE NAVY Did you see Tom Friedman’s column Saturday? The Navy is sailing ahead with energy innovation – for example, fighter jets running on bio fuel that doesn’t drive up the cost of food (as corn ethanol does) and “that can be grown in ways that will ultimately be cheaper than fossil fuels.” Smart. BOO THE POLITICIAN Contrast that with the $220 million in sand berms Governor Bobby Jindal seems to have championed for all the wrong reasons. Did you see Rachel Maddow’s piece Friday? Dumb. Never mind that sand berms provide a lot of dredging work, and some of us have an interest in America’s leading dredging company. (Up 64% since it was suggested most recently three months ago, GLDD remains for me a long-term holding, though I’ve lightened up somewhat to buy other things mentioned here from time to time, like ALXA. That one is up 29% since Guru suggested it last month. Guru thinks it will get an approval that could put the stock at 5 in a year – but it’s only for money you can truly afford to lose, becase they might not get approval. Really. BUY THE BOOK Price war! Amazon has now matched Barnes & Noble’s $8.30 for my book (discounted from $14.95) – oh, and wait! They’ve now both lowered the price to $8.13! And still time to have it delivered by Christmas. Shouldn’t you give one to CONVERT THE IRA I should have suggested this sooner, mea culpa, mea culpa, mea maxima culpa, but there’s probably still time for you to convert your traditional IRA to a Roth IRA – it’s as simple as filling out a two-page form you can get from your IRA trustee – and it probably makes sense to do so, if you are an organized person who will pay attention, because the IRS gives you the benefit of hindsight. As explained here, you can “recharacterize” the conversion – annul it, basically – up until October 17, 2011. So if you changed your mind once the enormity of your resultant tax bill sank in, no problem. Or, if the value of your IRA fell sharply before October 17, you could recharacterize it . . . and then, instead of a 2010 conversion, perhaps make a conversion at a later date that would entail a lower tax payment on its reduced value. You also get to decide whether to pay the tax due on the conversion all at once, as 2010 income, or – the default – to report half as 2011 income and half as 2012 income. Why would you want to pay the tax before you have to? Because in return, all future appreciation and withdrawals (once you reach 59.5) are entirely federal-income-tax-free and subject to fewer regulations, withdrawal requirements, and paperwork – read my book. Say you’re 40 with $100,000 in a traditional IRA that it costs you $30,000 in taxes to convert to a Roth IRA. And say you are able to grow that $100,000 at 10% a year for 30 years (not easy, but read my book). So now it’s $1,745,000, and you can withdraw as little or as much as you want tax-free. Granted, by then the income tax might have been replaced with a consumption tax. So there wouldn’t have been tax to pay anyway. But something tells me we may have both. Meanwhile, there’s something nice about knowing you have this account growing not just tax-deferred but tax-free. At the end of the day, what the conversion really allows you to do is save more for your retirement. That extra $30,000 in the example above doesn’t go into your IRA; but it significantly increases its ultimate after-tax value to you, which amounts to the same thing. Worth a look. And then, if you rush to do it, worth a re-look sometime prior to the October 17, 2011 deadline for recharacterizing, in case you change your mind.
December 17 Hence, No Column December 17, 2010March 19, 2017 Today is Wright Brothers Day, marking the 107th anniversary of Kitty Hawk and man’s first powered heavier-than-air flight. That we would have landed on the moon just 66 years later tells you something about the speed at which the pieces of the jigsaw puzzle are coming together. That they’re coming together faster and faster (see Kurzweil) drives home the hyperbole of the last century and this next one — after 5 billion years of evolution (with apologies to the Republican presidential candidates who do not subscribe to that theory), it pretty much comes down to these two centuries. What a time to have been born! To be alive! To be part of the struggle to keep it all from flying off the rails. I tell you this because part of that struggle is getting my *#&#X#%%-ing Outlook email imap pop server SMA whatever to be recognized by something that’s not recognizing it, which I can only imagine it suddenly does not do because — for my protection — Microsoft did something to my computer in the middle of the night, and thus I am on the outskirts of computer hell and there will be no column today. But long-time readers will know that even when there’s no column, I at least try to make up a funny (to me) excuse (“roses are red, violets are blue, yesterday’s column will just have to do”) or blame it on some obscure holiday I have chosen to observe. So I looked up December 17 and found that it was maybe National Underdog Day (arguably, December 19; arguably not a day at all) and the 233rd anniversary of France’s recognition of our united states, and Chris Matthews’ 65th birthday, and Chris Mason’s 41st (the English darts player), and really not much else — Bhutan’s National Day — beyond Wright Brother’s Day, federally observed by Presidential Proclamation. So it will have to do. No column today. Go see “The King’s Speech” if, unaccountably, you st-t-t-t-t-ill have not; and have a great weekend.