Ozzie & Harriet – What Was So Awful About That? June 30, 2011March 24, 2017 Jeff Madrick had it right on “Countdown” Tuesday night: “We’ve got to raise taxes not to balance the budget but to reinvest in the economy. We have been neglecting this for a few decades now.” Madrick, whom I first knew as a Business Week reporter decades ago, has just published Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present. It’s infrastructure we need to be spending on, not bigger yachts. (In related news, it was reported that Americans are consuming 570 more calories a day, on average, than in the 1970s. More and more of us have grown fat. We are out of shape personally and as a country, competing against nations with high savings rates and modern infrastructure.) The 35 years after World War II were not terrible for America – Ozzie and Harriet had good happy lives in the Fifties and Sixties, as did many of their viewers – including their wealthy viewers. (The top federal tax rate was 90% on interest and dividends, 36% on long-term capital gains.) Mary Tyler Moore had a good life in the Seventies, as did many of her viewers – including her wealthy viewers. (The top rate was 70% on interest and dividends, 28% on long-term capital gains.) During those 35 years we built the Interstate Highway System (putting a lot of people to work, productively) and funded the Marshall Plan and launched the Peace Corps and put a man on the moon – and we worked the National Debt down gradually from 121% of GDP in 1946 to just 30% when Ronald Reagan and George Bush took over in 1981 and began our long fiscal decline, handing Barack Obama a debt they had taken back up to 100% of GDP, plus a $1.5 trillion deficit, two wars, deteriorating infrastructure, and an economy on the brink of Depression. It’s time to get back to taxing rather than borrowing to fund the investments we need to make to keep our country strong, healthy, and competitive. And to make those investments. No one is suggesting we go back to 90% or 70% top tax rates. But couldn’t we let “the Bush tax cuts” expire as, by law, they were scheduled to?
Let The Bush Tax Cuts Expire June 29, 2011March 24, 2017 Oh, for God’s sake, people: let the Bush tax cuts expire – were the Bush years really so good for most people? – and let’s grow up about cutting the deficit (to do that, you need more revenue). Were the Clinton/Gore years, despite those tax rates, really so terrible? It’s that simple. Take the rest of the day off.* Tomorrow, we can cut the defense budget and make modest long-term actuarial entitlement adjustments that, over many decades, bend the cost curves in a prudent but acceptable way. The truth is that the next couple of decades need to be more about public investment – infrastructure – and less about personal consumption. It will make our country stronger and more prosperous, our lives safer and more comfortable. And guess what funds infrastructure? Taxes. *As the for the Republican threat not to raise the debt ceiling if billionaires are not spared the Clinton/Gore rates, this is a ridiculous bluff, as Keith Olbermann pointed out Monday night on Countdown. A default by the Untied States? Wealthy Republicans would lose trillions of dollars in the ensuing catastrophe. They will not allow Congress to decimate their fortunes.
Keep The Faith June 28, 2011March 24, 2017 FCSC Suggested here two months ago at $1, FCSC dropped 24% to 72 cents yesterday on huge volume. Guru explains that some months ago the company sold 30 million shares and warrants at 50 cents in a private deal with a “lock-up” period that just ended. Finally free to sell, institutions unloaded 11 million shares yesterday, nearly 8 times the stock’s average daily trading volume. “Could put pressure on the stock for a while longer,” Guru opines, “but then the stock will probably rebound.” Guru had not expected so many institutions to rush to take their profits and did not take his own. (His fund was in on the deal). I bought more at 71 cents with money I can truly afford to lose. KEEP THE FAITH The President spoke at three Obama Victory Fund 2012 fundraisers in New York last Thursday, first to a large LGBT audience, then to a small group of wealthy donor/diners, then after a performance of “Sister Act.” All three are worth reading. Here’s a bit of the third one: . . . We can’t stop investing in education. We can’t stop investing in medical research. We can’t stop investing in building our infrastructure, all the things that help make us the greatest country in the world. (Applause.) We cannot stop caring for our seniors and the disabled and the most vulnerable in our society. (Applause.) And so what you’re going to see over the next several months, but also over the next several years, is a debate about who we are — because there’s a way for us to solve our deficit problems and our debt problems in a way that’s fair and balanced and that shares sacrifice so that we’re not just doing it on the backs of the poor. (Applause.) We’re not just doing it on the backs of those without a voice, or those who can’t afford a lobbyist in Washington. (Applause.) One of the disagreements that we have is even after we’ve made all these cuts — and we’re making some painful, difficult decisions. The notion that I, who, because a bunch of you guys bought my book, am actually doing very well — (laughter) — should not have to pay a little more; the notion that I’d get a $200,000 tax break, and as a consequence of that tax break, hundreds of kids might not be able to go to Head Start, or as a consequence of a tax break for me, that senior citizens might end up having to pay thousands of dollars more for their Medicare — see, that’s not who I think we are. (Applause.) . . . THE PRESIDENT: Now, let me just say that I know I’m preaching to the choir here. (Laughter.) But I also know that over the last two and a half years there have been times where you think to yourself, gosh, I’m not feeling as hopeful. (Laughter.) This change, I’m not sure I can believe in it. (Laughter.) I know you still got the poster. (Laughter.) But there have been times where you say, you know, how come we didn’t get the public option? (Laughter.) Or, why did health care take so long? Or the — you know, I know that there are times where you get frustrated and you — AUDIENCE: Never! THE PRESIDENT: Well, no, that’s not true. (Laughter.) Maybe you don’t get frustrated, but — and the reason I say that is I get frustrated. I would love to be able to just — our whole program just got implemented in six months and I would then just relax. (Laughter.) But you know what? We live in a democracy, and it’s a big and messy democracy. And it’s noisy and it’s contentious. But that’s what democracy is. (Applause.) It requires engagement and it requires citizens to take these debates seriously and to pay attention, and to suffer setbacks. . . .
Love, Heat, and Accounting June 27, 2011March 24, 2017 So much to say – beginning with . . . I LOVE NEW YORK Hats off to New York Governor Andrew Cuomo, to 29 Democratic and 4 Republican state senators, and to so many others who helped (Mayor Bloomberg being another): New York State Friday joined Iowa, Connecticut, Massachusetts, New Hampshire, Vermont, and the District of Columbia (not to mention Canada, Holland, Belgium, Spain and Portugal, Norway and Sweden, Argentina, South Africa, and Mexico City) in adopting marriage equality. Charles and I never actually wanted to get married. But we wanted the right to do so, if we ever changed our minds, just like anyone else. What could be more fundamentally American than equal rights under the law?* I called my recently widowed full-service broker to sell Anadarko Petroleum (APC) this morning, not knowing how dependent its earnings might be on natural gas derived from shale – see below – and (because this is the sort of joking you can do with a full service broker, and one of the reasons the commission is 50 times as high) said, “Hey. You’re single. I’m single. Do you want to get married?” We’ve been friends for 35 years, after all. Long pause. “I’d have a really steep learning curve,” he said, letting me down gently and entering my order a point or two below Friday’s close. *Or the right of churches to discriminate – which is an entirely separate issue, to be handled on those churches’ own timeline. (As anyone who’s seen “The Book of Mormon” knows, God changed His mind about black people in 1978. Maybe one day He will change His mind about me.) IT HIT 117º IN TEXAS YESTERDAY Bryan Norcross: “Following up on the Al Gore Rolling Stone article, Jeff Masters is the best online climate writer/blogger there is. Everyone should read his June 24 entry about how extraordinary the weather in the last 18 months has been.” ☞ Lots of great photos, too, and this conclusion: . . . the ever-increasing amounts of heat-trapping gases humans are emitting into the air puts tremendous pressure on the climate system to shift to a new, radically different, warmer state, and the extreme weather of 2010 – 2011 suggests that the transition is already well underway. A warmer planet has more energy to power stronger storms, hotter heat waves, more intense droughts, heavier flooding rains, and record glacier melt that will drive accelerating sea level rise. I expect that by 20 – 30 years from now, extreme weather years like we witnessed in 2010 will become the new normal. . . . ☞ At which point, one assumes, there might also be the occasional abnormal year where things are even dramatically worse. According to yesterday’s New York Times, natural gas may not be as much of the answer as hoped: NATURAL GAS FROM SHALE Here’s the article that scared me out of Anadarko. Not only may the fracking be poisonous, so may be the accounting. (I absolutely don’t know the extent to which these concerns apply to Anadarko – for all I know, this may actually be a great buying opportunity – but I decided to exit until I find out.) Lots more to say tomorrow. Three Presidential Speeches, a tough critique of our financial system . . . maybe an acrostic.
The Sky IS Falling June 24, 2011March 24, 2017 I linked to Al Gore’s Rolling Stone essay yesterday, but it’s too important to leave it at that, so here is a taste of what he has to say: . . . The best available evidence demonstrates beyond any reasonable doubt that the reckless spewing of global-warming pollution in obscene quantities into the atmospheric commons is having exactly the consequences long predicted by scientists who have analyzed the known facts according to the laws of physics. . . . As with financial issues like subprime mortgages and credit default swaps, the climate crisis can seem too complex to worry about, especially when the shills for the polluters constantly claim it’s all a hoax anyway. And since the early impacts of climatic disruption are distributed globally, they masquerade as an abstraction that is safe to ignore. . . . Here is the core of it: we are destroying the climate balance that is essential to the survival of our civilization. This is not a distant or abstract threat; it is happening now. The United States is the only nation that can rally a global effort to save our future. And the president is the only person who can rally the United States. Many political advisers assume that a president has to deal with the world of politics as he finds it, and that it is unwise to risk political capital on an effort to actually lead the country toward a new understanding of the real threats and real opportunities we face. Concentrate on the politics of re-election, they say. Don’t take chances. All that might be completely understandable and make perfect sense in a world where the climate crisis wasn’t “real.” Those of us who support and admire President Obama understand how difficult the politics of this issue are in the context of the massive opposition to doing anything at all — or even to recognizing that there is a crisis. And assuming that the Republicans come to their senses and avoid nominating a clown, his re-election is likely to involve a hard-fought battle with high stakes for the country. All of his supporters understand that it would be self-defeating to weaken Obama and heighten the risk of another step backward. Even writing an article like this one carries risks; opponents of the president will excerpt the criticism and strip it of context. But in this case, the President has reality on his side. The scientific consensus is far stronger today than at any time in the past. Here is the truth: The Earth is round; Saddam Hussein did not attack us on 9/11; Elvis is dead; Obama was born in the United States; and the climate crisis is real. It is time to act. Those who profit from the unconstrained pollution that is the primary cause of climate change are determined to block our perception of this reality. They have help from many sides: from the private sector, which is now free to make unlimited and secret campaign contributions; from politicians who have conflated their tenures in office with the pursuit of the people’s best interests; and — tragically — from the press itself, which treats deception and falsehood on the same plane as scientific fact, and calls it objective reporting of alternative opinions. All things are not equally true. It is time to face reality. We ignored reality in the marketplace and nearly destroyed the world economic system. We are likewise ignoring reality in the environment, and the consequences could be several orders of magnitude worse. . . . ☞ May I suggest you take a little time to read the whole essay? It starts out with professional wrestling – you won’t be bored. Have a great weekend. (Turn off the lights when you leave the room.)
When Heroes Collide June 23, 2011March 24, 2017 FCSC Guru was right; the FDA approval came through yesterday. The stock shot from $1.16 to $1.60, but there was a lot of “selling on the news” (“buy on the rumor, sell on the news,” goes the adage), so the stock closed the day up just a penny, at $1.17. If Guru continues to be right, FCSC has more upside than downside over the next year, so my plan is to sit tight, with money I can truly afford to lose. HOT COFFEE Chris: “I still don’t understand how one is unaware that coffee is hot. Or that it might spill. This could not have been the first time this woman ever experienced coffee and she must have been aware that brewed coffee starts out life hot. Just like the edge of a knife is sharp, the burners on a stovetop and light bulbs get hot when in use, and the tip of a pencil can puncture one’s skin. Not having followed the whole story, I assume there are reasons the judge didn’t throw the case out immediately. I suppose it’s good that the case didn’t result in coffee growers having to label each unroasted bean.” ☞ You “still don’t understand” because you haven’t seen the full story. Her injury was horrendous (wait til you see), the car was not moving, the coffee, as a matter of policy, was served at a truly scalding temperature – even after 700 previous claims for the same injury had not led to a change in policy. All she was asking for was $10,000 in medical reimbursement; McDonalds offered $800 and basically was going to make her #701 and just keep ignoring this. The jury was unanimous in its verdict. Karl Rove and the Chamber of Commerce would have you think that all 12 jurors are idiots, but after you see the film, may begin to think Karl Rove is a bit of a sociopath. Premieres on HBO Monday. And extends in reach way beyond the hot coffee case. Must-see TV. HOT BOOK DEAL So Amazon is now selling the only investment guide you’ll ever need – EVER! – for $5.98. At least as of last night. The Money Magazine plug must have bumped it up to a better discount. It actually costs less than the e-book (imagine that: nothing to print or ship, no paper required, yet it costs more than the physical book) and just 3 cents more than the 1978 hardcover edition – which in 2011 dollars would have been $21, and which some dreamer is offering new, 33-years-old though it may be, for $75.91. WHEN HEROES COLLIDE Here is Al Gore – who won the Presidency in 2000 with both the popular vote and, had all the overvotes and chads been counted, Florida’s electoral vote – in a long, important essay faulting President Obama – who in the face of phenomenally difficult circumstances is doing a spectacular job – for not forcefully enough leading on climate change. My guess is that the President would agree with most of what Gore has written. In any event, this being the only planet available to our species for the moment, it’s worth reading what he has to say.
The Surprising Truth About Tort Reform Insect Repellent -- The App June 22, 2011March 24, 2017 HOT COFFEE Remember the woman who held her drive-through coffee between her legs, scalded herself, and won a $3 million lawsuit against McDonalds? I got to see a preview of ‘Hot Coffee,’ the HBO documentary that debuts Monday. It begins by making fun of her, using the Seinfeld episode where Kramer sneaks hot coffee into the movie theater by putting it in his pants. And sues? Loved that one. But you will quickly conclude (I think) that – far from being a frivolous lawsuit and a runaway jury – McDonalds got off easy. Were you aware of that? Almost no one is. Turns out, we have been sold a bill of goods on this case and much else about frivolous lawsuits (with Karl Rove to thank for a lot of it) and you have already lost many of your rights as a consumer. As someone who edited a Twentieth Century Fund report of medical malpractice tort reform recommendations thirty years ago, and who put three (moderate, sensible) tort reform initiatives on the March, 1996, California ballot, I’m no shill for the trial lawyers. But I’m awfully glad they’re there. And you will be too – and outraged after you watch this must-see documentary. You really will be. Even if you are one of my more conservative readers. Set your TiVo. Make a date to visit a friend who does get HBO. This is must-see TV. BUGSPRAY APP Just when I thought all was lost – there’s serious talk this will be the last season the community I visit sprays for mosquitoes . . . there’s an app for that. Search iPhone’s app store for Bug Spray Ultrasonic (which emits one of three high pitched tones) and even if you don’t download it (free) – not least because all of the scary disclaimers and waivers of liability – you might enjoy the comments. (‘Tried this app on a horsefly it pissed him off and he gave me a black eye, so I am scared to use it anymore.’) According to many of the comments, it works.
Borealis, Which Owns WheelTug Which Now Has Some Competitors June 21, 2011March 24, 2017 LET’S TALK ABOUT WHAT’S REALLY IMPORTANT Is it possible – note photo at left and now here – that I’m not boyish anymore? Who cares about infrastructure or biotech at a time of crisis like this? And while I’m asking questions, who is this guy plugging index funds? Has he ever even seen the site you’re now on, riddled as it is with nutty speculations (to be made only with money you can truly afford to lose)? What on earth would he think of Borealis? BOREALIS Robert C. Brown: “Worthy WheelTug competitor?” ☞ I suppose the name Honeywell inspires a bit more confidence than the name Borealis. It remains to be seen whether our head start (and patents) will pay off. I am counting no chickens. WHEELTUG ‘FRONT-WHEEL DRIVE’ FOR AIRPLANES IMPROVES AVIATION GROUND OPERATIONS PARIS, 21 June — The revolutionary onboard electrical drive system for aircraft being developed by WheelTug plc has stimulated aerospace industry efforts to revamp ground operations. Recent developments are being unveiled at the Paris Air Show this week. The WheelTug system brings front-wheel drive to aircraft, with twin electrical motors in the nosewheels giving aircraft greater maneuverability and efficiency during ground movements such as reversing from a gate and taxiing to a runway, as well as reducing fuel consumption and emissions. New to WheelTug’s display space at the Paris Air Show ((Hall 4-5, Booth G10) is the latest WheelTug unit, designed for narrowbodied aircraft such as the Boeing 737NG and Airbus A320. WheelTug is also showing a hands-on demonstration WheelTug cockpit control panel by which the pilot will be able to control the system and maneuver the aircraft on the ground. The WheelTug team has been working on developing WheelTug’s system design over the past year, and moving towards certification and entry into service. While independent ground maneuverability by aircraft has long been an industry dream, WheelTug’s innovative engines-off taxi technology is becoming a widespread industry expectation in the near future, far sooner than government-devised industry roadmaps projected. A new European Union agenda for the aeronautics industry, called Flightpath 2050 and set by the European Commission on Mobility and Transport, calls for aircraft to be emissions-free during taxi by 2050. WheelTug, which first demonstrated proof of concept hardware allowing taxiing without engines in 2005, expects to conduct on-aircraft tests within 6 months and to introduce the system into service in 2013. “WheelTug will deliver in 2013 what the E.U. has set as a target for 2050,” said Isaiah W. Cox, the company’s president. “We are pleased to have successfully guided the industry here, first by demonstrating that the technology is viable and then by showing that the system’s overall operating cost savings well exceed $500,000 per year on a typical narrowbody aircraft.” Now that WheelTug has proven both the concept and its potential value to the industry, several competitors have emerged. Taxibot is a pilot-driven tug system primarily for use on larger aircraft. The German Aerospace Center (Deutsches Zentrum für Luft- und Raumfahrt; DLR) have shown an in-wheel design for use on the A320. And just this week, Safran and Honeywell announced a joint venture to offer an engines-off taxi solution in 2016. The patented and proprietary WheelTug® electric drive system uses high-performance electric motors, installed in the nose landing gear wheels of an aircraft, to provide full mobility while on the ground without the use of the aircraft’s jet engines or tugs for both pushback and taxi operations. WheelTug enables aircraft to be electrically driven from the terminal gate to the takeoff runway, and upon landing from runway exit to the gate. The resulting improvements in efficiency, flexibility, fuel savings, and reduced noise and engine foreign object damage (FOD) yield projected savings of more than $500,000 per aircraft per year, plus substantial reductions in CO2 and other greenhouse gas emissions. The WheelTug system is being developed initially for the Boeing 737NG, one of the world’s most widely-flown aircraft; systems for other commercial and military aircraft will follow. WheelTug is developing the system with a team of partner companies capable of providing airlines with fully-operational systems years ahead of any competitor.
Updates June 20, 2011March 24, 2017 KEITH OLBERMANN DEBUTS TONIGHT And five nights a week thereafter – 8pm (7pm central) on Current TV, one of your cable channels (enter your zip to find it). [Fill disclosure: I have a stake in Current TV.] OUR LGBT DINNER WITH THE PRESIDENT THURSDAY . . . . . . made the front page of yesterday’s New York Times. (Not mentioned: our host for the evening, Neil Patrick Harris, who hosted the Tony Awards.) It’s not too late to sign up. Folks coming from 22 states. Straight allies welcome! [Full disclosure: we all have a stake in seeing the President re-elected.] AMRN Guru (who, as I told you, exited at $19 a share, up from $7.10 when suggested three months ago): “Given the cautious outlook for the market and the company’s recent comments that they may not complete a partnership til 2012, I can’t make a case for holding on now [with the stock down at $13.69]. I think there may be better buying opportunities.” EMIS Guru (who watched the stock drop 50 cents back to $1.15 Friday, down from $1.25 when first suggested last August): “Oh well. All we know is that the PTH study didn’t work as Novartis wanted it to. We dont know why. Lots of reasons a thing might not work. Today’s announcement has no impact on the validity of the previous 8 oral calcitonin studies, which were positive, or on the 3 previous studies on oral glp-1, which were positive. It does, however, remind us that consistency in biology goes only so far and that in oral delivery of protein, we have had a lot of failures. EMIS at $1/share is really like an option: if the data are positive in calcitonin in the 3Q 2011, the stock should rally significantly from here. If not, it drops to zero. Today’s announcement probably means it will rally less than if PTH had succeeded: I was hoping that the calcitonin data would be a validation of this technology in lots of proteins, but today’s announcement says we really must proceed on a case-by-case basis. It’s hard to believe that if Novartis announces in 3Q 2011 that oral calcitonin has reduced fractures in women with osteoporosis that EMIS won’t rally towards 3 or more, perhaps more like 5. It gives them a drug that can be sold in the marketplace for significant revenue. Also, the NVO multi dose trial of glp-1 is going on and we should hear that data later this year. The NVO multi-dose trial is based on some kind of success NVO saw in a single dose trial last year. BUT always lots of uncertainty in this business.”
Claptrap – 3 June 17, 2011March 24, 2017 Robert Reeves: “Thought you would be interested in what the right wing is circulating. If it is untrue, someone should respond.” From: DavidXXXXX@aol.com [email obscured to protect naïve sender] Sent: Saturday, June 04, 2011 1:53 PM Subject: Will you sell your house?? If this is true (see below), then this tax may be the nail in the coffin of the housing & real estate markets. When will they get it? Also, what will this do to the banks if homeowners have a market value near their mortgage balance? Many will walk away and make the foreclosure crisis much worse! —– Original Message —– WILL YOU EVER SELL YOUR HOUSE? Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? That’s $3,800 on a $100,000 home etc. When did this happen? It’s in the health care bill. Just thought you should know. SALES TAX TO GO INTO EFFECT 2013 (Part of HC Bill) Why 2013? Could it be to come to light AFTER the 2012 elections? REAL ESTATE SALES TAX So, this is “change you can believe in”? Under the new health care bill – did you know that all real estate transactions will be subject to a 3.8% Sales Tax? The bulk of these new taxes don’t kick in until 2013. If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation who often downsize their homes. Does this stuff make your 2012 vote more important? Oh, you weren’t aware this was in the Obamacare bill? Guess what, you aren’t alone. There are more than a few members of Congress that aren’t aware of it either. Why am I sending you this? The same reason I hope you forward this to every single person in your address book. VOTERS NEED TO KNOW. ☞ It’s ridiculous, of course. If you sell your home for $100K, or even $400,000, there is no “sales tax.” The higher capital gains tax is on the profit only – and only to the extent that profit exceeds $250,000 (or $500,000 if you file jointly) – and only to the extent THAT extra gain puts your total income above $250K. So, yes, if you sell your house with a $1 million gain, you’ll pay 3.8% more on a portion of that gain – but still less, even on that portion, than you would have paid back in those awful Clinton/Gore years. Not too many folks are sitting on $1 million gains in their homes these days. And how awful were the Clinton/Gore years, anyway? The people who wrote this nonsense are, I think, deeply cynical. The people passing it on are quite literally “mis-guided.” Both groups are rightly alarmed by the size and trajectory of our National Debt . . . which was gradually worked down from 121% of GDP after World War II to a far healthier 30% when Reagan took over – at which time the top federal tax bracket was 70% on dividends and interest, 28% on long-term capital gains. Under Reagan, Bush, and Bush, the Debt exploded from the 30% of GDP that Reagan inherited to the 100% of GDP Bush handed Obama – handng him, too, a $1.5 trillion 2009 deficit (set before he was even elected) and an economy on the brink of depression. All this despite Clinton’s turning then deficit around, leaving Bush 43 “surpluses as far as the eye could see.” If high tax rates kill jobs and low tax rates make for tremendous job creation, then 1946-1981 should have seen a disastrous economy (but didn’t), 1981-1992 should have been boom years (but weren’t), 1993-2000 should have been a bust (22 million new jobs were created), and 2001-2011 should have been the best economy the world has ever seen. Give . . . me . . . a . . . break.