Jefferson, Madison, and Balance December 16, 2010March 19, 2017 I am indebted to reader Allen Brand for pointing me to these two items, from Thomas Jefferson and James Madison, which Allen has headed . . . EMERGENCY! EMERGENCY! SOCIALISTS ARE AMONG US! AND HAVE BEEN FOR 234 YEARS! As Jefferson was not big on paragraph breaks, and the modern mind (or at least mine) tends toward a shorter attention span, I’ve taken the liberty of punching it up a bit with bold face. Thomas Jefferson to James Madison, October 28, 1785 Seven o’clock, and retired to my fireside, I have determined to enter into conversation with you; this [Fontainebleau] is a village of about 5,000 inhabitants when the court is not here and 20,000 when they are, occupying a valley thro’ which runs a brook, and on each side of it a ridge of small mountains most of which are naked rock. The king comes here in the fall always, to hunt. His court attend him, as do also the foreign diplomatic corps. But as this is not indispensably required, and my finances do not admit the expence of a continued residence here, I propose to come occasionally to attend the king’s levees, returning again to Paris, distant 40 miles. This being the first trip, I set out yesterday morning to take a view of the place. For this purpose I shaped my course towards the highest of the mountains in sight, to the top of which was about a league. As soon as I had got clear of the town I fell in with a poor woman walking at the same rate with myself and going the same course. Wishing to know the condition of the labouring poor I entered into conversation with her, which I began by enquiries for the path which would lead me into the mountain: and thence proceeded to enquiries into her vocation, condition and circumstance. She told me she was a day labourer, at 8. sous or 4 d. sterling the day; that she had two children to maintain, and to pay a rent of 30 livres for her house (which would consume the hire of 75 days), that often she could get no emploiment, and of course was without bread. As we had walked together near a mile and she had so far served me as a guide, I gave her, on parting 24 sous. She burst into tears of a gratitude which I could perceive was unfeigned, because she was unable to utter a word. She had probably never before received so great an aid. This little attendrissement, with the solitude of my walk led me into a train of reflections on that unequal division of property which occasions the numberless instances of wretchedness which I had observed in this country and is to be observed all over Europe. The property of this country is absolutely concentered in a very few hands, having revenues of from half a million of guineas a year downwards. These employ the flower of the country as servants, some of them having as many as 200 domestics, not labouring. They employ also a great number of manufacturers, and tradesmen, and lastly the class of labouring husbandmen. But after all these comes the most numerous of all the classes, that is, the poor who cannot find work. I asked myself what could be the reason that so many should be permitted to beg who are willing to work, in a country where there is a very considerable proportion of uncultivated lands? These lands are kept idle mostly for the aske of game. It should seem then that it must be because of the enormous wealth of the proprietors which places them above attention to the increase of their revenues by permitting these lands to be laboured. I am conscious that an equal division of property is impracticable. But the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree is a politic measure, and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on. If, for the encouragement of industry we allow it to be appropriated, we must take care that other employment be furnished to those excluded from the appropriation. If we do not the fundamental right to labour the earth returns to the unemployed. It is too soon yet in our country to say that every man who cannot find employment but who can find uncultivated land, shall be at liberty to cultivate it, paying a moderate rent. But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders [which today might be rephrased: successful working-class families] are the most precious part of a state. ☞ Seven years later, Madison mused on the same theme: James Madison, January 23, 1792 . . . The great object should be to combat the evil: 1. By establishing a political equality among all. 2. By withholding unnecessary opportunities from a few, to increase the inequality of property, by an immoderate, and especially an unmerited, accumulation of riches. 3. By the silent operation of laws, which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort. . . . ☞ It’s a balance – communism, at one extreme, is a terrible idea; unbridled capitalist plutocracy, at the other, is, too. We had the balance pretty good in the 90s. It went badly out of whack in the decade that followed – and thanks to the Republican insistence on keeping the tax rate on the plutocrats at 15% (and lowering the estate tax on billionheirs) – it will be a while before we start moving back toward what is, arguably, a better balance. TAXES Victor Kava: “A lot of people talk as if getting back to regular federal income rates is some sort of disaster. I don’t think so. Current rates range from 10% to 35%. We have had these rates for 10 years now, along with seriously expanding debt. Before this, the income tax rates ranged from 15% to 39.6%. Unemployment was as low as 4.7%, prompting economists to write research papers to try to understand how that could happen! And the federal budget came into balance for a while, actually paying down some of the long term debt. Taxes, as grown-ups know, are the way that the government pays for what our elected representatives spend. Right now, that includes two wars. Matching the tax to the spending is probably the best way to a healthy economy. There is really no ‘increase.’ The 15% to 39.6% rates [if we allowed the ill-advised Bush tax cuts to expire] would be unchanged.” KINDLE Less Antman: “The only Kindle edition of your book Amazon offers is of the 2005 version, and I’m sure some people will be very annoyed if they purchase the six-year-old book (the Kindle version lists a publication date of July 22, 2010, which is going to confuse some people into thinking it is the current edition). You might want to mention that on your site (that the Kindle version of the 2011 book is not yet available). It gives you an excuse to mention the book again.” ☞ The book? All excuses welcome. In addition to being current, the physical version is actually cheaper anyway (just $8.30 on the Barnes & Noble site), and certainly more suitable for wrapping. (One for your dentist? Your child’s orthodontist? Your pet’s vet? The company receptionist?)
Price War! December 15, 2010March 19, 2017 WHY 2011 IS DIFFERENT FROM 2001 George Galla: ‘On most things I agree with you but not the tax compromise. First of all Pres. Obama gave in much too quickly. Second, he should have taken a tougher stance in defending the position he talked so much about. Personally I’m 65 live on about 30 thousand a year and would rather see the tax cuts expire for all segments. We can’t afford them. We didn’t need the tax cut in 2001 why do we need it now?‘ ☞ ‘We need it now’ (and the other stimulants the President got as part of the compromise) because the economy is in a deep hole and the Fed lacks the ability it had in 2001 to lower interest rates – zero is as low as they go. And because the Republicans block what would be far preferable: a massive infrastructure spending bill. It’s shameful that the Republicans require their ‘ransom’ for millionaires and billionaires – but they do. All the tax cuts should expire as soon as the economy is moving again or (better still) as soon as we can pass big infrastructure programs to replace demand for Starbuckses and Xboxes with demand for investments in our efficiency and competitiveness. In the meantime, the tax cuts for the best off should expire even if the economy does not pick up. They just weaken our country. Bernie Sanders was spot-on in his eight and a half hour tour de force on the Senate floor, at least the portions I got to see. And Rachel Maddow was correct in lamenting that the media mainly covered its length, not the highlights of its substance. But – because Senator Sanders failed to persuade his Republican colleagues – we are stuck paying the ransom. JEFFERSON TO MONROE These days, we forward a note with ‘FYI’ in the subject line and click SEND. In Jefferson’s day, it was not so simple. I know this because I collect ‘historic documents’ and thus get to see catalogs filled with all manner of wonderful things I can’t afford. Here is how in 1820, in a handwritten note (remember those?), Jefferson passed on a now-lost letter to President James Monroe: What can I do, my dear friend, with such letters as the inclosed, but forward them to you? I presume you must have known the merits of the writer as well as I did: that he was an active Whig and officer in the revolution of 1776, and Jim Republican in that of 1800. I reject the numerous applications made to me to be troublesome to you; but now and then comes one which principle or feeling does not permit me to refuse. I am sure I deposit it in the hands of justice when I commit it to you. Ever and affectionately yours Th: Jefferson ☞ Written from Monticello, January 16, 1820 (sans the hyperlink). ‘I reject the numerous applications made to me to be troublesome to you; but now and then comes one which principle or feeling does not permit me to refuse. I am sure I deposit it in the hands of justice when I commit it to you.’ Is that great or what? Yours, for $29,500.* *The dealer has been known to negotiate. If you are wondering how to spend the tax break on your $15 million bonus, I’d suggest making a low-ball offer. You never know. YMI If you have yet more money you can truly afford to lose, Guru suggests adding a few shares of YMI ($1.65 last night) to our latest speculative basket (to which we also added CRME at $4.60). PRICE WAR Barnes & Noble is now selling The Only Investment Guide You’ll Ever Need for $8.30, an even more spectacular discount from the $14.95 list price – 32 cents cheaper than Amazon – and promises ‘free delivery by Christmas’ if you’re a B&N member.
Tax Cuts December 14, 2010March 19, 2017 Yesterday, in pointing out their collective support for the tax compromise, I asked: “Who are smarter, better informed, more capable, or better-intentioned than President Obama, President Clinton, and Mayor Bloomberg?” “Paul Krugman!” Several of you replied, linking me to his most recent op-ed. Tom Roth: “He’s at least as smart and he’s not so convinced.” ☞ I am a huge Krugman fan, as most of you know, and agree entirely that it’s infrastructure spending (broadly defined) not tax cuts that are the right kind of stimulus. I believe the Administration agrees as well. The reality, however, is that the Republicans, who have veto power in the Senate, block most of it. And the further reality is that we probably don’t want unemployment benefits to stop and taxes to go up for everyone January 1. So in the short term, this compromise should be accepted. But we all need to do everything we can to help get Krugman’s message out: deficits should be incurred to spur demand for things that will make us more efficient and competitive as a nation – not to spur demand for Frappuccinos and Xboxes, wonderful as both are. To which Tom replied: “I live in Ohio. We’re getting a new Governor in January, John Kasich. One of the original bomb throwers. First thing he’s done, even before his inauguration, is send back the $400 million Ohio got from the stimulus for high speed rail. Doesn’t believe in it. Pray for Ohio.” Kevin Knopf: “Who’s smarter than Obama/Clinton/Bloomberg? Is that a real question? Why don’t we start with Paul Krugman, winner of the Nobel prize in Economics? Professor of Economics at Princeton. He clearly opposed the government handout to the uber-rich, as do I.” ☞ As do I, too! As does President Obama! I think he’s said that 100 times. As does President Clinton! Kevin continues: “I would hope that if only 26% of the country want something our President would honor the 74% overwhelming majority.” Absolutely. But do we think that 74% are okay with seeing their tax cuts expire and unemployment benefits end in order to keep from extending the cuts over $250,000? That’s the choice the Republicans have given us. “No,” Kevin replied, “I was saying call the Republicans’ bluff. Let the public know WHY unemployment was held up – it’s a Faustian bargain; to continue unemployment we have to give outrageous tax breaks to the rich. Oy vey.” ☞ And what if, having had their bluff called, the Republicans had not have caved? The President didn’t want to play Russian roulette with millions of struggling families’ lives. Especially knowing that, come January 5, he’d face an even more truculent, majority-controlled Republican Congress. TAX HIKES INCREASE SMALL BUSINESS SPENDING Glenn Justice: “I used to be ‘banana Republican’ but finally saw the light. It was actually simply a matter of seeing the last decade of a totally right-wing government that I stopped drinking that Kool-Aid. I’d like to relate a story that I see repeated over and over with my small business clients, that on the surface defies logic, but is the way people actually act. Businesses spend more when tax rates are higher! As a small-business tax preparer, I can tell you they look at the after-tax cost of an investment. Here is a conversation that I had with a small business client just the other day: ‘I need to reduce my tax bill. What should I do?’ she asked. She was thinking about a $20,000 equipment purchase. Since she has been in the 15% tax bracket, I told her that a $20,000 investment would probably save her $3,000 in taxes. She was not impressed. However, after working out her current year numbers, I saw she had a good year and jumped into the 25% bracket, so the savings would now be $5,000 in taxes. She decided to make the purchase. This is the reality that I see that goes unmentioned in the debate. Small business owners are more apt to spend money when the after-tax cost goes down. Maybe that’s one of the reasons we had a much better economy in the 90’s under Clinton.” ☞ This behavior will not apply to everyone, but it doesn’t defy logic at all – the higher the tax brackets, the lower the after-tax cost of taking a risk. Why else would so many of us have gone into the nutty tax shelter deals we did in the 70s? (Bull semen, anyone?) The same with charity: at high rates, it costs people little to be generous.
Scroll Down December 13, 2010March 19, 2017 THREE WISE MEN Who are smarter, better informed, more capable, or better-intentioned than President Obama, President Clinton, and Mayor Bloomberg? To those who reject the tax cut compromise, I would just point out that all three think it’s a compromise worth making. (If you missed it, here’s Bloomberg on yesterday’s Meet the Press. “I think we don’t give the President enough credit,” he says, along with much else.) VIRTUAL TELESCOPE Jeff Irving: Re Friday’s link to the virtual telescope, here’s another great way to link to the amazing universe that surrounds our tiny world. A new Astronomy Picture of the Day greets me each morning and somehow always seems to help with some intrapersonal calibration about one’s place midst it all. And the explanatory material is educational to boot.” # SHAMELESS SELF-PROMOTION # Here are things readers have written about The Only Investment Guide You’ll Ever Need in recent years. Scroll down only if you can stomach it. My motivation is mainly self-aggrandizement. But I actually hope people may find the book helpful. (One for your postman, one for your UPS guy, one for each of your kids, one for each of your each of your kids’ teachers, one for your chauffeur . . . ) “The title says it all.” —Aaron Ellsworth, Richardson, TX, August 21, 2001 “I purchased your book about 5 years ago. It changed my life. Thanks to your advice, I have been able to eliminate credit cards, sock away a few thousand bucks, and even purchase my first home. My credit is now acceptable, I live well, and I am on my way to a nice career and retirement (only 30 more years to go).” —Brandon Hunt, Elyria, OH, September 6, 2001 “Given many times as a gift! There is no better book that I have ever read on personal finance. Better than that, [it’s] fun to read.” —trdrmac, Raleigh, NC, March 5, 2002 “Great for college age students, teenagers, or those with little or bad experience with handling finances. Crisp and clean!” —Cory D. Tuck, Topeka, KS, September 16, 2002 “Informative as well as entertaining, this could be the best twelve bucks you’ll ever spend.” —Alexander Petrochenkov, Moscow, Russia, October 17, 2002 “I’m a professor at the Harvard Business School and a big fan. Before virtually every class, I think of your ‘The Greatest Moment of My Life’ story.” —Terry Burnham, Boston, MA, March 16, 2003 “I studied finance at a top business school and understand the theory of investing from some of the top professors in the country. But in terms of netting it out into something usable and understandable from an everyday personal investing standpoint, this was better than all of that combined. The best investment book out there.” —KC, Stamford, CT, November 25, 2003 “Thanks for writing The Only Investment Guide. I first read it back in high school (close to 20 years ago), and I’ve found it incredibly helpful.” —Russil Wvong, Vancouver, Canada, April 3, 2004 “Not only informative—regularly hilarious!” —Todd Schmeltz, Oak Harbor, WA, April 24, 2004 “I read this in college and because of following it (along with a little hard work by my wife and me!), my family’s financial situation is in great shape today.” —Don Culp, Scotch Plains, NJ, May 14, 2004 “I purchased 8 copies this year for graduation gifts. I have read countless books on investing over the years. Yours is the best.” —Ron Turner, Moraga, CA, May 17, 2004 “I can honestly say this book changed my life by opening my eyes on how investing and money really work.” —Prasanth Manthena, May 16, 2006 “This is the only investment book I have read that truly made sense.” —Dallas Mavericks owner Mark Cuban, US News May 13, 2007 “I heard about your investing guide on WSB radio years ago, and bought a copy. Loved it! My husband and I have lived the principles in your book as long as we’ve been married. We’ve never lived cheap. Just smart. When we married 23 years ago, we had two paychecks and an apartment full of used furniture. At this point, our net worth is close to $700K. I tell my friends not to be intimidated by money. Once you educate yourself, it’s extremely empowering to have control over your financial life.” —Lisa B, Atlanta, GA, January 13, 2010 “Just wanted to say that though I didn’t inherit a million dollars, Chapter 11 of your book inspired me to simplify my investments in a major way. I’ve read countless books and articles on the subject, yet when I came across your words describing just how simple investing really can be, I said to myself, ‘Yes, of course!’ Thanks for your encouragement to find what works for me.” —David Fawcett, Berkeley, CA, February 5, 2010 “I bought my first copy of your book in 1979, and every subsequent edition since. Contrary to your humble disclaimer in the first chapter, your book made me rich. By ‘rich,’ I mean I never have to work again. Although I never made more than $28,000 per year, I was able to retire at 60 without a company pension. I have so much money that I do not intend to take Social Security until I am 70, so that my check will be a maximum. As people I knew got wind of the fact that I saved and invested my money, they would ask me for advice. I always responded, ‘I have the only investment guide you’ll ever need,’ and then I either gave them one of my older editions, or sent them to the bookstore to buy their own.” —John Williams, Houston, TX, May 2, 2010
Your Own Virtual Telescope (Free!) December 10, 2010March 19, 2017 THE KING’S SPEECH Have you seen it? So good I’m plugging it twice. SELF-PROMO I pre-ordered a copy of my own book (well, someone had to), and Amazon emailed hours ago to tell me it will ship earlier than expected – it should arrive at my door December 15, in loads of time for me to wrap it and give it to myself for Christmas. This is exciting news, because from everything I can tell, it’s worth many times its price – especially now that Amazon has set that price at $8.61. (It’s also terrible news for local retailers – how are they supposed to compete and stay in business? One seemingly sensible change would be to charge the applicable state sales tax on Internet purchases. Why should your local Book Nook have to charge tax and its main competitor not?) Please buy a dozen copies (or here, at Barnes & Noble, same crazy price) and give them as gifts to everybody you know or need to tip, beginning with the FedEx or UPS man/woman who delivers it to you. DON’T ASK / DON’T TELL Repeal got just one Republican vote yesterday? Really? Just one? I know some will blame the Democrats for that somehow – I blame the Republicans – but whoever was to blame for Republicans blocking it, I’m guessing it will still get done this month, before the session ends, or else the Department of Justice will stop appealing the court cases that have ruled the policy unconstitutional, and thus achieve “repeal” that way. With the support of the military, the House, a wide majority in the Senate and among the American people, there will (finally) be sufficient ground for the Administration to take the rare but not unprecedented step of failing to defend the law of the land. HALF FULL As frustration over this and the tax compromise mount, an ardent and admirable Democrat on a list-serve I follow wrote: “So far the President has been failing miserably to do the jobs a majority of voters hired him to do. I want a competent executive who gets things done.” I responded that, well, he did manage to keep us from an outright economic collapse. (It’s easy to dismiss this, but picture your life in that circumstance. It would have impoverished many of us.) And he did manage to launch great things in education reform (the much lauded “race to the top”) and in the energy department (with major investments seeding potential breakthrough technology). And there was healthcare – by imposing an added 3.8% tax on the investment income of those at the top, he got the universal coverage we’ve been trying to achieve for a century. (Know anyone with a preexisting condition?) And he got financial reform and credit card reform and Lily Ledbetter and the new stem cell line that might save the life of someone you love. And two progressive Justices instead of two more Roberts/Alitos. And he pretty much restored our standing in the world and got a treaty with Russia that will remove the threat of 700 Russian missiles and our expense maintaining 700 of our own. And saved the auto industry that the Republicans would have let fail. And got gays hospital visitation rights and “hate crimes” legislation extended to include gender identity and the military to essentially halt all LGBT discharges and call on Congress to repeal DADT. And more. (Billions from BP for oil spill victims, anyone?) “So” (I concluded my response) “I just want to say that I, too, am very disappointed we’ve not made more progress. And I’m sick over the tax cut compromise. But I blame most of that not on the President or Democrats but on their opposition. Under the circumstances, it really hasn’t been a slouch of a first 23 months.” TURN YOUR COMPUTER INTO A VIRTUAL TELESCOPE Eduardo Santiago Fernandez: “The way things have been going on Earth lately sometimes I need to get away and just be Way Out There!” ☞ Eduardo offers this link. Free and cool. # MYM DOS GEEKS ONLY: # LENOVO’S DAYS ARE NUMBERED PCs have retained their dominance because of their ability run the DOS version of Managing Your Money. (Isn’t that the reason?) Well, that may be about to change. In response to my inquiry yesterday (are there any Mac users out there who’ve found a way to run it?): James Troutman: “You ask whether anyone uses MYM on a Mac. I do. I’ve been using it on a Mac for about seven years, using a series of different software emulators. Currently it’s running under VMware Fusion. From time to time I’ve tried other personal finance programs, but none are as simple to use.” Dan Critchett: “MYM runs just great on Mac using DOSBox, a free program designed to run old DOS games. You can even write a one-line script to get it to open as soon as you click the Mac icon you install. You can install a folder in your Applications with all the MYM files, backups, and everything. I’d have switched to something else if only something else did budgets as well as MYM. For the life of me, I can’t find a program that can handle one-time receipts like bonuses and vacation rental property income. Even the new Quicken for Mac (Mint) will handle only one-time expenses, but not income. Insane.” ☞ I inch ever closer to taking the plunge. (I’ll probably never get there, but inch ever closer.)
Meet Me At The Museum December 9, 2010March 19, 2017 HOPING TO HAVE CAPITAL GAINS THE TAX RATE ON WHICH TO FIGHT OVER We added CRME to guru’s latest speculative small-drug stock basket last month, at $4.60. It’s up 38% but I’m hanging on. (Famous last words?) Also the rest of the basket. THE NATIONAL PINBALL MUSEUM OPENED FRIDAY OMG, get out of my way – let me in! (And savor the symmetry of it! The first pinball game I ever encountered was, yes that’s right, on our Seventh Grade Trip to Washington, DC. And now, two score and a dozen years later, we come full circle.) SOME VIEWS ON THE NEW STIMULUS Even as a lot of us wish ‘the compromise’ had stopped at $250,000 and worry that the one-year 2% payroll tax reduction, from 7.65% to 5.65%, is not the ideal stimulus, there’s reason to hope the overall package will kick the economy back into gear: Mark Zandi, Chief Economist at Moody’s Analytics “It will ensure the economic recovery evolves into a self-sustaining economic expansion… Prior to this, I was less sure of that.” [AP, 12/07/2010] Deutsche Bank Research “According to our calculations, the Social Security tax reduction could add 0.7% to output next year, thereby taking Q4 over Q4 real GDP up to 4.1% versus our current 3.3% projection.” [Deutsche Bank US Daily Economic Notes, 12/07/2010] Macroeconomic Advisers “[T]here are three major components that we had not assumed, and that would, in fact, together significantly impact the economic outlook over the next few years … Based upon what is currently known of these three key proposals, our preliminary analysis suggests that GDP growth in 2011 would be boosted by roughly ½ to ¾ percentage point. This is on top of the 3.7% growth of GDP anticipated for 2011 in our recently published forecast.” [Macroeconomic Advisers’ Macro Musing, “A December to Remember Compromise Boosts Growth,” 12/07/2010] J.P. Morgan Research “Against the backdrop of positive momentum in recent US economic data, this policy shift has convinced us to raise our 2011 growth forecast, from 3.0% (4Q/4Q) to 3.5%. This upward revision is focused in 1H GDP growth, which now is expected to average 3.75% saar, versus 2.5% before.” [J.P. Morgan Daily Economic Briefing, 12/07/2010] Bricklin Dwyer, Economist for BNP Paribas “The package should provide a noticeable boost to GDP in 2011.” [Wall Street Journal, 12/07/2010] ☞ Once the economy shows signs of strength, a lot of folks will be better off – and it may be easier to steer it in a better direction. # GEEKS ONLY # MYM ON A 64-BIT MACHINE Craig Hartley: “I wrote you in April about trying to get Managing Your Money to work on a Windows 7 64-bit machine. At the time we figured it was impossible, that it would only run on a 32-bit machine, which was a bummer because I have 15 years of data on that old MYM program. Anyway, I just got it to work! First, I upgraded from Windows 7 Home Premium to Windows 7 Professional. (I had already copied MYM into the C: drive, but couldn’t get it to work.) Once I was in XP mode, I told MYM to emulate a Windows 95 program. Then I copied the MYM data onto a CD from the old machine and told MYM to restore the data into the new machine. Now it works like a champ! Figured you might be the only other person on the planet who might appreciate the fix!” ☞ No, we are not alone. Leaving aside the extraterrestrials who, given an infinite universe with an infinite number of planets, are likely running MYM on 64-bit machines (and reading Shakespeare typed at random by one of an infinite number of monkeys), there are actual earthlings besides the two of us still pressing F5 to add a transaction. Indeed, just hours before receiving your email there was this: David Ward: “I still use MYM12 for DOS and find it to be extraordinarily flexible. It is my hope and belief that even if Microsoft abandons DOS altogether, this software could work on any computer that uses an Intel chip. If not, I have a technician who is able to keep old computers in operation as long as he can find parts somewhere in the world.” ☞ Actually, has anyone tried running the DOS version on a Mac? Under one of the programs that lets you emulate Windows XP there? There may even be a free way to do it?
Watch December 8, 2010March 19, 2017 AFOP Yesterday, seeing AFOP up around $12.80, I suggested selling half. No harm: no one ever went broke taking 60% gains. But it turns out that Chris thinks the risk/reward ratio remains good here and has sold very little for his fund, so I may have jumped the gun. Hope so. (I still own the other half.) THE CHART Several of you sent me this chart. The Republican / Tea Party narrative is that we are wildly, oppressively overtaxed. Yet Federal tax collections, relative to GDP, are the lowest in 60 years. It’s our parents who paid a lot of taxes – yet, in so doing, kept the Federal budget pretty close to balance (and still managed, for the most part, to have pretty good lives). THE PRESIDENT’S PRESS CONFERENCE As you could tell from yesterday’s column, ‘the compromise’ left me seriously glum. A day later, I still hate the choice the Republicans forced on us. It would be so much better if we stimulated the economy and created jobs by borrowing to make our country more efficient and competitive (via projects carried out largely by private industry like our dredging company) . . . rather than borrowing to extend tax cuts for the best off. The Republican who pushed through the Interstate Highway System, Dwight Eisenhower, could never have made it in today’s Republican Party. So I hated the choice we were handed: play brinksmanship with the economy and struggling families or add 1% to the already out-of-control National Debt in order to give the best off another two years of unnecessary tax cuts. And I’m not certain we made the right choice. (Anyone who is certain I think underestimates the difficulty of the decision.) Neither am I too crazy about borrowing to cut 2% out of the payroll tax when the deficit is so large. As I say, I think there are better ways to stimulate the economy. So I would love to see the deal improved. But all that said, I feel better having watched the President’s press conference – especially his last answer. I hope you will find time to watch or read it, too.
Well, AFOP Was Up December 7, 2010March 19, 2017 THE COMPROMISE It’s a sad day if this compromise has to stand. (Let’s stay tuned on that one.) What we need is a massive infrastructure program to become more efficient and competitive, not more record-breaking tax cuts for the best off. And most Americans get that. Kevin Knopf: “If only 26% support this, what is wrong with our government that the 74% of Americans can’t get representation?” ☞ What indeed. Kevin links to this from The Atlantic that quotes a new CBS poll: Seventy percent of Democrats want to extend the cuts only on incomes below $250,000. … Forty-seven percent of independents and 41 percent of Republicans agree. Only ten percent of Democrats and one in four independents back the GOP proposal to extend the tax cuts for all. Even among Republicans, support for extending all the cuts is less than half at 46 percent. Don George: “You know what upsets me most? The Republicans were not only just ‘sitting on the sidelines’ during the past two years (as the President is fond of saying), they were actively obstructing every effort the President and the Dems were trying to do to help the economy and jobs situation. Yet with this active obstructionism (tying the fire hoses in knots sabotaging the firemen trying to fight the fire, as I like to put it), the American people were so angry and clueless (blaming the wrong people) that they rewarded the Republicans for this wrongdoing. It depresses me.” ☞ As argued yesterday, it’s depressing in much the same way it was depressing when, decade after decade, the tobacco industry – purveyers of the leading cause of preventable death, actively working to addict children – kept winning in Congress, thanks to the Senators they owned, like Mitch McConnell. Only now, thanks to the Bush Supreme Court (so named both because it appointed him and because he moved it further to the right), the political influence of big corporations and billionaires is greater than ever. (See: Citizens United.) SKEPTICAL OF MY DISMAY Kevin Clark: “Is extending the Bush tax rates for everyone really as apocalyptic as you make it sound? When President Obama’s own deficit commission suggests cutting the top rate to 23%, is leaving it at 35% so unthinkable?” ☞ Number one, let’s be clear: we want to extend the cuts on everyone – up to their first quarter million in taxable income. And, no, leaving the top rate on ordinary income at 35% for a while would not be unthinkable – but misses the point. That 23% top rate you cite would have applied to dividends and capital gains as well as “ordinary” income – and it is dividends and capital gains, now taxed at 15%, that are the main source of wealthy people’s income. So the 23% rate would have been a 53% hike in their current tax rate – not insignificant. (At 23%, the tax on a $100 million capital gain is $23 million, or 53% more than the current $15 million tax bite.) Just look at the difference in outcomes after 8 years of the Clinton tax rates and 8 years of the Bush tax rates. Is it unthinkable that we would stick with the Bush strategy? To me, yes. OH, AND BY THE WAY Jon Kaake: “You wrote: ‘Really? we’ve been talking about global warming for 15 years now?’ Actually, it’s been 45 years. President Johnson’s Science Advisory Committee listed this as one of the important environmental issues in 1965. See here.” AFOP(D) Thanks to Aristides’s Chris Brown, who suggested this one at $8. Closing last night at $12.80, it’s given us 60% in three months. I’m selling half. BOREF According to yesterday’s press release and the YouTube it links to, our WheelTug motor can not only pull a commercial jet across a steaming, sticky desert tarmac in 120 degree heat, as it did 5 years ago, it can also reach full taxi speed on a slick, icy tarmac in the freezing cold, as it did in Prague last week. Borealis soared 25 cents yesterday, to $3 a share (where it was 11 years ago when first written up). It remains highly speculative. But it is not beyond the realm of possibility that someday . . . well, you never know.
Speeches December 6, 2010March 19, 2017 THE KING’S SPEECH Absolutely terrific movie. Do not miss. Take the kids. THE PRESIDENT’S SPEECH Did you ever see “The American President” starring Michael Douglas? I forgot “the speech,” but you have to take five minutes to watch it, for the host of ironies and foreshadowings you’ll pick out (really? we’ve been talking about global warming for 15 years now?), and because of the catharsis. If only real life could be scripted by Aaron Sorkin. The overarching plot, as you’ll recall, is that the President has two really important priorities, desperately wants both, but is put in a position where he has to sacrifice one for the other. So here is President Obama, who’s being asked by the Republicans to give $70 billion a year that we definitely don’t have to a small subset of citizens who definitely don’t need it – and if he does that (and seemingly only if he does that) the opposition party might ratify the new START treaty, repeal DA/DT, and extend unemployment benefits to desperate families struggling to keep a roof over their heads. (And maybe go along with a few other things, like health care for 9/11 first responders and the DREAM Act.) It’s horrifying – and disunifying – because it pits liberals (and moderates) like me who are beside ourselves at the thought of going deeper into debt to extend tax cuts above $250,000 (and who are infuriated by the phony notion that this is a smart way to stimulate the economy, or that Bechtel is a “small business”) . . . against liberals (and moderates) like me who desperately don’t want to see us fail to ratify the treaty, extend unemployment benefits, and repeal DA/DT (and maybe those few other things) – and are infuriated that the opposition may indeed be able to force this awful choice on the President. Mitch McConnell blithely said on Meet the Press yesterday morning that Americans don’t want to see anyone’s taxes go up . . . when in fact the last poll I saw showed only 26% saying this. The truth is, it would be a terrible idea to extend the cuts on income above $250,000 even if 96% were for it, but at 26% it’s not even what “the people” want. (And as to those 26%, I will reveal my arrogance in telling you I don’t believe many of them have thought the issue through carefully.) And yet Mitch McConnell and his team just keep insisting that it’s what the people want, and that they are advocating it simply for the greater good – small business owners who will use the money to create jobs – just as President Bush and his team assured us that “the vast majority” of their tax cuts would go to “people at the bottom end of the economic ladder.” And that his tax cuts would not throw us into deficit. The consequences of those ill-advised tax cuts have been dire. And now they’re doing it to us again. The rich must have low tax rates. Senator McConnell even suggested that these low rates made for a good economy during the Bush years (when there was virtually no job growth and middle class income fell), failing to explain how under Clinton’s higher tax rates we managed to fund thousands of start-ups and create 22 million new jobs. It’s the kind of frustration some of us felt for decades as tobacco executives and their “scientists” and advocates in Congress maintained that there was no link between smoking and cancer and pretended they did not try to market to children to addict new customers. These were lies, most people knew they were lies, and yet for decades, the tobacco companies just kept getting away with them. What kind of people do this? Can self-interest run that deep? Obviously, as we know, it can and does. (Mitch McConnell, by the way, is a champion of the tobacco industry and well may be the all-time largest recipient of its political contributions.) If you believe smoking doesn’t cause cancer, if you believe the vast majority of the Bush tax cuts did go to people at the bottom, then you should believe Mitch McConnell is just looking out for small business and trying to create jobs the smartest way he knows how in insisting we borrow $70 billion a year to extend tax cuts on income above $250,000. Just how this will all play out I obviously don’t know. What I do know is that, faced with people like Mitch McConnell, it’s harder to get a good resolution than many of us liberals and moderates realize. Like you, I am hoping for the happiest possible ending.
LED Stocking Stuffer December 3, 2010March 19, 2017 LIGHT BULBS I’ve recommended these 6-watt dimmable LED bulbs before. The price has just been reduced, so I thought I’d mention them again. What amazing gifts! Charles and I replaced the four 100-watt floods we had in our kitchen with four of them. So we went from 400 watts to 24 watts. I am thrilled every time I’m anywhere near the kitchen. And Charles – who has higher standards in such matters than most – has pronounced the quality of light, at full strength, just fine. (When dimmed, too greenish. Likewise, the slightly cheaper, non-dimmable 5-watt, which I don’t recommend.) DEMOCRATS VOTE TO EXTEND TAXCUTS FOR EVERYONE Yesterday, House Democrats voted overwhelmingly and successfully to extend the expiring tax cuts to everyone on their first $250,000 of income. All but three Republicans voted “nay” – against the tax cuts. Their view? That if we’re not willing to borrow yet more tens of billions each year to extend the cuts on everyone’s income above $250,000 as well, then no one should get a tax cut. (Never mind that we’re running massive budget deficits that we should be trying to shrink.) (And never mind that economists all but unanimously agree that tax cuts for the best off are the least effective way to stimulate the economy.) So let’s get this straight: Republicans opposed giving everyone a tax cut. But they favor adding $700 billion to our deficit over the next ten years to give an even much bigger one, that we absolutely cannot afford, to those who need it least. If you’d like your tax cut extended on the first $250,000 of your income, urge your Senators to vote YES on Saturday. Have a great weekend.