Porpoise Towels August 3, 2011March 28, 2017 HOW APPLE WOULD SOLVE THE DEBT PROBLEM John Leeds: ‘This Marketwatch commentary analyzes how a good business, versus a bad business, would approach the US deficit.’ The top line: If U.S. were run like business, it wouldn’t cut spending Spending is good. Borrowing is better. Washington is doing neither. It’s liquidating. ☞ Exactly. We need a huge, decades long renewal of our infrastructure that would, among other things, kick our economy back into gear, end our dependence on foreign oil, and assure our long-term prosperity. One cries at the ignorance that has led us to Sarah Palin’s Republican Party. At the avarice that has led us to the Koch brothers’ Republican Party. At the irony that fervent Christians, who should be all about aiding the poor and turning the other cheek, would become the party of tearing down the social safety net and launching wars of choice. So what are liberals, progressives, and Eisenhower Republicans (who are now, for all intents and purposes, moderate Democrats) to do? Do we give up? (Bad.) Do we take out our frustration on ourselves? (Worse.) Or do we throw our energy and resources into the effort to register and turn out millions of like-minded voters to take back the House, hold the Senate and White House, and flip state legislative chambers back from red to blue, so we can get America back on track to win the future? Let me hand the microphone back to David Weidner, author of that piece: I’ve been covering Wall Street and corporate America for going on two decades, and if there’s anything I’ve learned it’s that there are really only two kinds of companies: those growing and those shrinking. The U.S. government today has officially become the latter. The difference between a growing business like Apple (AAPL) and a shrinking one such as Eastman Kodak (EK) has less to do with spending and revenue and than with psychology. Growing companies go through tough times. They adapt, and they’re poised to strike when conditions are right. They don’t stop innovating. Defeated companies may be producing steady profits. But they lose their entrepreneurial spirit. They stop looking at the future. They get intimidated. They quit fighting. They look for a sale. They try to buy growth. They play not to lose – and end up losing anyway. Which of those does Washington sound like? So, what would happen if Apple had to tackle the debt crisis? First, it would eliminate spending that’s not working. Then it would make a commitment to spend if necessary. Third, it would look for ideas to spend on. Finally, it would call customers’ bluff. How much are you willing to pay for what the government gives you? . . . . . . [E]ven with all the mistakes the government makes, it still doesn’t make sense for it to be run as if the country has been defeated. It’s interesting to note that our deficit of $14 trillion is the biggest since World War II. In 1945 the deficit was 120% of gross domestic product, compared with about 97% today. So how did the nation respond? By spending on infrastructure and raising taxes. We built housing and roads, and we invested. Unemployment fell from 3.9% in 1946 to 2.9% in 1953. By the time Harry Truman left office in 1953, the deficit was 71% of GDP. When Dwight Eisenhower left office, it was 55%. Bill Clinton raised taxes in 1993, and the U.S. saw the biggest peace-time expansion since the 1950s. . . . THE FLAG Nate Black: ‘You wrote: ‘Someone gave me 10 terrific big, bright American flag beach towels. But . . . can I use them? Is it disrespectful to use the flag in this way?’ For you, as a pinko liberal, yes. For a true patriotic Tea Party type it would be just fine.’ ☞ Nate included one of those little winky emoticons, to be sure I knew he was smiling. But the truth is, I think he nailed it. I’m returning them for rainbow flag towels. Or maybe big money or porpoise towels. Dick Theriault: ‘Can you keep these towels? I say, no you can’t. The Code says the image of the flag is not to be used in any disrespectful manner. Like painting it on the ground in a Largo, FL, park. Or on the bottom of a swimming pool. Or on a beach towel. It’s not an actual flag on the ground, but it is the image of the flag that it being disrespected. This is a distinction without a difference: The piece of fabric is not the respected object – it is the IMAGE ON that fabric that is ‘the flag.’ Your towels could be displayed as flags. Their ‘towelness’ doesn’t count; their ‘flagness’ does. . . . You cite the Code. Section 176 of it makes all this pretty damn clear. To me, the absolute worst disrespect I’ve ever seen was Ralph Lauren’s flag boxer shorts, with the Union to the right of the fly and the stripes wrapping from the left of the fly around the back. First, the wearer would be sitting on the flag and second, the act of urinating between the Union and the stripes is about as gross disrespect as can be imagined. . . . Our military violate the code often by carrying the flag horizontally or furling it against the staff. The Chairman of the Joint Chiefs wore a flag shirt at an Independence day parade. President G.W. Bush AUTOGRAPHED the flag! [§176(g)] Others may have also, but this was televised. . . . The Flag Code lives more in violations than observations, and we see it daily. Nobody really gives a damn – or knows enough to realize it. How about some Flag Code education?” ☞ Thanks, Dick! I think you just provided us with some. And then Dick wrote back: “The code states, ‘The flag should never be used for . . . anything that is designed for temporary use and discard.’ Then consider the USPS flag stamp. What more perfectly fits ‘designed for temporary use and discard’? Plus the defacement of cancellation. I just get furiouser and furiouser.” Chris Hurley: “Whether sewn from pieces of silk, cotton, or polyester; whether stars are embroidered by hand or stitched on by machine; whether woven on a loom or imprinted on terrycloth, it’s the American flag. (That said, I have little beef with protesters ‘desecrating’ the flag, for the flag is not holy. If anything, our right to protest is closer to being a sacred thing.)” Bill Spencer: “The US Flag Code you referenced says that if you were in the District of Columbia you would be in violation of the law and subject to a fine or $100 or 30 days in jail for possession of those towels. Ten towels? Maybe $1000 or 300 days? At least that’s how I read it. Go up to your [fancy-ass] roof deck and burn them.* May I take this opportunity to express a pet peeve of mine? It is common practice to lower and remove the US flag in inclement weather, and that in my opinion includes severe wind storms, lest the flag be damaged. So why are there so many idiots who, as a sign of their patriotism, drive their cars at highway speeds with US flags, some of them in shreds, flapping in the 65+ mph winds generated by their car? (Thank you. I’ll reserve all my other opinions for the moment.)” *Bill did not say “fancy-ass,” but another reader did.
Frustration – But At Whom? August 2, 2011March 24, 2017 The debt ceiling deal does NOT slash spending in the next year or two, while the economy is so fragile; PROTECTS the social safety net; and does NOT close the door on increased revenues from the rich (or Exxon). To my friends who are quick to assume the President has unaccountably become a different person (uncaring? slothful? dim-witted?) when we don’t get what we want on our timetable, I’d say I totally share the frustration – as I’m quite sure the President does. But I direct most of it at the opposition, whose first priority is to see him fail and whose second priority is to protect billionaires from paying anywhere close to the 28% rate on investment income they paid under Ronald Reagan (second greatest man who ever lived). More on this in the coming days, I assume. IF YOU DON’T LIKE TAXES Peter Snow suggests Republicans read this list of things not to do. It’s a little simple-minded – but so is the argument that smaller government and lower taxes are always best. DVAX Jeff Cash: “Thanks for the DVAX tip. I bought on July 26th and have enjoyed the 20% pop! But I’m confused by something, and suspect that other readers might be, as well. On July 26, you wrote: ‘Guru says he agrees with this report from William Blair that puts the fair market value at $8.’ . . . but then Friday: ‘Target for the stock over the next 6 to 12 months is 6 or higher.’ I’m baffled as to why guru went, in 3 days, from a current fair market value of $8 to a hope for $6+, when the only thing happening in the interim was GOOD news….???” ☞ Good question. Stock valuation is, in the first place, in no way an exact science. (And I guess I should point out that “6 or higher” would include 8.) But if something DOES have a fair market value of 8, that doesn’t mean it will SELL for 8 – especially in a bad market when people need to be tempted with great bargains to take any risk. Sometimes, specific stocks or market sectors – and often the market as a whole – tend to be undervalued. Other times, overvalued.
Bitterness and Sarcasm Oh, no! August 1, 2011March 24, 2017 Okay, it looks as though we will live to fight another day. We can hope that the bipartisan committee, over whose deficit-reduction proposal that fight will take place, will be rational and truly help to set the country on a more even economic keel. Which means back-loading the cuts in spending to take place after we make massive infrastructure commitments that will both yank us out of this awful unemployment (as World War II yanked us out of the Depression) and lead toward a more efficient, energy-independent, competitive country. And this proposal should include ‘revenues’ – both from closing loopholes and from higher tax rates on investment income. Am I the only one who sees a difference between ‘raising taxes in the midst of a recession’ and ‘raising taxes on income over $1 million a year?’ Actually, most of us see that difference. But the Tea Party doesn’t. The Tea Party thinks that if we lay off another couple of million teachers, cops, firefighters and government workers – and perhaps skip a few Social Security payments – that won’t hurt the economy. Smaller government is always better. Look at Somalia! But, they think, if we tax capital gains and dividends closer to the 28% that Ronald Reagan did instead of the 15% we currently do – or if we tax Exxon – it will tank the economy. Taxes are always bad . . . especially on the wealthy, because they are the job creators. This makes no sense in theory. Millionaires won’t stop going to the mall or installing new pool heaters. It’s the lower- and middle-income folks – especially those you throw out of work – who cut back when taxes are raised. No one is proposing to raise their taxes in such a fragile economy. And it makes no sense in fact. We have experience with this. When Clinton, inheriting a stagnant economy, raised taxes – without a single Republican vote – we went on to create 23 million new jobs. Is anyone in the Tea Party old enough to remember this? When Bush slashed taxes for the rich, we created no new jobs. We squeezed the middle class terribly, we turned the gap between rich and everyone-else into a chasm, and we piled up massive debt (with nary a peep from Republicans about a balanced budget amendment). Surely Tea Party congressmen are old enough to remember that. Does Speaker Boehner not know any of this? Does Minority Whip Jon Kyl really not know any of this? (In his radio address Saturday he described what Democrats want to do as ‘huge tax increases on American families.’) What is so sacrosanct about shielding hedge fund managers from paying the same tax rate as their secretaries? How does this affect American families? And doesn’t cutting Medicare and student aid affect American families? A wide majority of Americans favor a ‘balanced approach,’ where even billionaires have to chip in a little. But Sarah Palin, who got a D in economics, knows better. It’s enough to make one crazy. More to the point, it may be enough to even further damage the awful economy that Bush (and a Republican Congress for six of his eight years) handed us. At which point the Tea Party will blame the massive suffering and crime that result (with fewer cops to fight it) on lazy people who just aren’t trying hard enough to find work, and a government that’s too large – we should halt unemployment benefits, cut back on food stamps, stop lending kids money for college, let our infrastructure crumble – and, if possible, lower the estate tax on billionheirs to zero. That should do the trick. BITTERNESS Fred C: ‘Wow, what bitterness I’m detecting the last couple of weeks. Please look to your own party for part of the blame. The Dems had control of all three branches last year and could have let the tax cuts expire. THEY CHOSE NOT TO DO THIS.’ ☞ Listen: there’s a lot to be bitter about. Bullies stole the 2000 election. (And are working hard to keep the weakest among us from voting in the next one – see Friday’s comment.) A lot of people, including a lot of Americans, are dead or badly damaged as a result. We are in deep economic difficulty as a result. We have missed enormous opportunities as a result. So while I don’t generally think of myself as bitter, I do feel frustration – and sadness – at what might have been. As for Fred C.’s substantive point, I, too, would have liked to see us let the tax cuts expire . . . but only on income above some fairly high threshold, like $250,000. Hiking taxes on middle class income in the midst of our economic mess – that first $250,000 any of us makes, say – would have been a bad idea. And shutting off unemployment benefits would have been a worse idea. The Republicans were holding the country hostage: if we wanted continued help for the unemployed, and tax relief for the middle class until the economy recovered, we’d have to protect the wealthy. Now they’re holding us hostage again to protect the wealthy – many of whom don’t want this protection. BANANA REPUBLICANS Such a good piece by Paul Begala over at the Daily Beast. In part: . . . As the economy teeters on the precipice of a double-dip recession, as millions of Americans search in vain for a job, as tens of millions of homeowners are underwater, as poverty soars and the middle class is hammered, the Speaker of the House is pushing a proposal that-let me repeat Greenstein’s analysis-‘could well produce the greatest increase in poverty and hardship in modern U.S. history.’ Deep cuts in every domestic priority-from education for disabled children to food safety to homeland security to clean air and water. Followed by painful cuts in Social Security, Medicare, and Medicaid. But not a dollar in new revenue. Not one corporate loophole closed, not one billionaire asked to pay one penny in higher taxes. . . . . . . Seems to me the GOP seeks a banana republic: a toxic blend of right-wing populism, anti-intellectualism, debt defaults, and an end to the ladder of economic opportunity. They would divide us into a few Haves and a lot of Have-Nots. And they would slowly crush the heart of progressive America-the rising middle class created by Democratic economic policies of education and empowerment. All while preserving, protecting, and defending a tiny oligarchy of millionaires and billionaires. The right wing should ditch the tricorn hats and replace them with mirrored sunglasses. They truly are Banana Republicans. THE DRIVE FOR 54.5 In the midst of this mess, a step in the right direction. Check out the savings that will result from a more fuel efficient fleet of cars and light trucks. Needless to say, we should have been much further along in this process than we are. Does anyone think Gore’s energy and environmental policies would have been as retrograde as Bush’s for 8 years? (There’s that bitterness again.) But at least we’re now moving in the right direction. SARCASM One of you sent me this: Coburn Speaks Truth I am sitting here watching Senator Coburn on the floor of the Senate speaking the truth that I brought up yesterday with the Boehner bill (and Reid’s too) – that they’re scams. That there are no cuts. The claim of “cuts” is a lie. This path will lead to a credit downgrade and ultimately bankruptcy. He’s not pulling his punches – at all. And Kerry is trying to argue against fixing the problem and that “we need more time.” Well, no, we don’t. We’ve had four years since the crisis became emergent. Both House and Senate have refused to deal with the issues. Sorry Kerry, your side has had the gavel and yet your answer is simply to print up more hot checks and lard up the debt. It’s a scam and a fraud. I didn’t think I’d heard someone speak the truth in the Senate or House – that they were all liars. Thank you Senator Coburn. ☞ I missed his remarks, but I do think that just as we chose not to go further into debt to fight World War II – we just couldn’t afford it, with the Depression and all – we should not go any further into debt now to win the war on our crumbling infrastructure / lack of competitiveness / energy dependence. Was it really so bad losing World War II? I’m with Coburn: now is the time to lay off millions of teachers and cops and fire fighters, cut off unemployment benefits and student loans, cut back on maintenance programs for our roads and dams and bridges, cut back funding for research. Some say that will bring on even worse economic times, falling tax revenues, more foreclosures, an even higher deficit and a downward economic spiral. They say we should make long-term cuts NOW, but not have those cuts kick in any time soon, until after we win the war. But they’re elitists. They don’t have Sarah Palin’s native common sense. She can see the economy from her porch. Who can’t! It’s all around us! I’m with Coburn: the way to avoid the downward spiral of depression as we slash employment and government spending is to keep taxes at historic lows for the very wealthy, lest we make the same mistake we made from 1941 to 1960, when they paid 90% on dividends and 36% on long-term capital gains and the economy didn’t grow at all. (And thank God we didn’t build the Interstate Highway system back then, either.) The truth of course is that, even with 90% and 36% tax rates the economy boomed from 1941 to 1960, and we DID win the war and DID build the Interstate Highway System. Kennedy was wise to lower the rates to 70% and 28% and Reagan was wise to lower them further. But that was AFTER we had shrunk the deficit from 121% of GDP to 30%. I’m not suggesting we go back to tax rates anything like those we had under Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford or Carter tax rates. But would it be so terrible if we taxed dividends and capital gains at closer to the 28% rate that Reagan signed into law? Or the Clinton/Gore rates, when we tamed the deficit and added 23 million new jobs? It’s all going to turn out fine in the end, because I just can’t believe ignorance and selfishness will carry the day. Tomorrow (or soon): Your Comments on the Flag