In Support of the Occupiers October 31, 2011March 25, 2017 Have you seen Margin Call? Wow, what a good film. And not completely irrelevant to questions about Wall Street. In the meantime, I commend to you this widely reposted recent essay. From Daily Kos: A Voice From the 1% by Gaius The impetus behind the Occupy Wall Street movement – a vague sense that the rich are getting ever richer while everyone else suffers – was confirmed by a recent report from the Social Security Administration showing that while total employment and average wages remained stagnant, the number of people earning $1 million or more grew by 18% from 2009 to 2010. Those figures give real substance to the “We are the 99%” slogan, yet Republicans continue to insist, despite all evidence to the contrary, that if anything those “job creators” deserve an even greater share of our national income. The Tea Party, meanwhile, has launched its own “53%” movement, inexplicably rallying the working class to the defense of the wealthy. The one group rarely heard from in this rancorous debate is the 1%, whose incomes and taxes are its focus. I am one of them, and here is my perspective, which may surprise you. First let me note that I am not part of the yacht and private jet set, which represents an even smaller subset of incomes than mine. The threshold for inclusion in the top 1% of income earners in 2008, the most recent year for which published data is available from the IRS, was $380,354, enough for an extraordinary life but nowhere near enough for a harbor berth in St. Moritz. Nevertheless, I am – for now – comfortably ensconced in that demographic. Herman Cain’s 9-9-9 plan would save me roughly $400,000 a year in taxes, and President Obama’s tax proposals would cost me more than $100,000, yet I support the latter and consider the former laughable. Thus you can imagine my amazement this summer when I watched the Republicans in Congress push the United States to the brink of default – and the world to the brink of ruin – over whether to repeal a portion of the Bush tax cuts and raise my taxes by 3.5%. I know a lot of people with high incomes and even the conservatives among them were confused by that sequence of events. Here is a secret about rich people: we wouldn’t have noticed a 3.5% tax increase. That is not only because there isn’t a material difference between having $1 million and $965,000, which is obvious, but also because most of us don’t actually know how much money we are going to make in a given year. Most income at that level is the result of profits rather than salary, whether it comes in the form of bonuses, stock options, partnership distributions, dividends or capital gains. Profits are unpredictable and they tend to vary wildly. At my own firm, the general rule of thumb is that if we are within 5% of our budget for the year, everyone is happy and no one complains. A variation of 3.5% is merely a random blip. I was not amazed but disgusted when John Boehner and his crew tried to justify the extremity of their position by rebranding the wealthy as “job creators.” While true in a very basic sense, it obscures the fact that jobs are a cost that is voluntarily incurred only as a result of demand. Hiring has no correlation at all to profits or to income – none. Let me keep more of my money without increasing customer demand and I will do just that – keep it. Perhaps I will spend a little more of it, though probably not, but even if I do it won’t help the economy very much. Here is another secret of the well-to-do: we don’t really buy much more stuff than everyone else. It may be more expensive stuff, sure, but I don’t buy cars, or appliances, or furniture, or anything else more frequently than the average consumer. The things I do spend more money on are services such as travel, entertainment, restaurants and landscaping, none of which generate well-paying middle class jobs. There, in a nutshell, is the sad explanation of what has happened to the American economy over the last 25 years of “trickle down” economics. That’s why I was so pleased when the Occupy Wall Street protests began. I support them wholeheartedly, for several reasons. First, because I fervently believe in the exercise of first amendment rights, and I have been waiting for years for the American people to wake up from the torpor of the Bush years, when they were seemingly cowed into submission to corporate authoritarianism. Second, because I am dismayed by the thuggish tactics of the NYPD. I would have expected as much from Michael Chertoff or Dick Cheney, but not from the Bloomberg administration. Third, there is no question that the increasing income inequality in our society is a bad thing, in the short-term and the long-term, for both workers and for business. It is bad in every way and for everyone, with the sole exception of Wall Street itself. Fourth, I love the hysterical reaction it has provoked from arch-conservatives such as Eric Cantor and Glenn Beck. As George Orwell wrote in “Homage to Catalonia” about fighting fascists, I don’t always need to know what I am fighting for when it is clear what I am fighting against. Fifth, and most important, it changed the national media narrative and sucked almost all of the energy out of the tempest that was the Tea Party. It is the Tea Party’s effort to recapture that energy, through the “We Are the 53%” movement, that has truly bewildered me. I have spent far more hours than I should have these last few weeks puzzling over the postings on that website, trying to understand who these people are and why they would possibly care about my taxes. I don’t really have an answer to those questions, but I do have a few insights. To begin with, a fair number of the posters there don’t seem to understand the actual issues, or even the meaning of “53%,” which is supposed to refer to the percentage of people in recent years who actually owed – and paid – federal income taxes. From their own descriptions of themselves as unemployed, underemployed, or struggling to raise families, it seems likely that many of these posters actually AREN’T part of that 53%, but rather, like most of the 47% they complain about, receive full refunds of their taxes each year, or perhaps even more thanks to the Republican-sponsored family tax credits. I suspect they think that because they work, and have taxes withheld, and file a tax return, they are different than the “47%” they decry as lazy layabouts. Of course they are not, but sadly they don’t even realize it. Next, ALL of the posters there seem quite proud of themselves. No doubt they should be, but they seem to have derived very different conclusions from their life experiences than I have from mine, which could read like an exaggerated version of one of their posts. My family is from one of the poorest counties in the country, in rural Appalachia. My grandfather was a coal miner who left school after 5th grade to help support his impoverished family. My grandmother wasn’t allowed to attend high school because according to her parents women didn’t need an education. I never knew my father. My mother and I subsisted on food stamps for several years. I got my first job at 13, working as a bus boy for $2 an hour, and I have never been unemployed in the 37 years since. I worked my way through college, which I paid for myself. When I started my career I worked 60+ hour weeks every week for nearly 15 years before that effort began to pay off. I employ nearly 20 people, I have no debts, and I have no doubt that I have earned every penny I have. And yet, I am living proof of Elizabeth Warren’s maxim that no one gets rich on their own. If not for the UMWA helping to secure a living wage for my grandfather, I would probably have had to leave school to help support my family, as he had done. If not for my grandmother’s passionate belief in the value of the education she was denied I would never have aspired to go to college at all, and if not for my mother teaching me to love books, I would never have been able to succeed there. If not for my wife I would never have been inspired to work as hard as I did to see what I could become in life. How many smart, talented children don’t have those positive influences? How many have exactly the opposite? My good fortune did not end there. It was sheer luck, rather than moral virtue, that I never had the criminal record many of my less fortunate friends did when I was young. It was sheer luck that neither I nor any of my family members ever had a major illness, or accident, or disability, despite lacking health insurance much of the time. How different my life could easily have been! How different the lives of others still could be. I understand too that but for food stamps, I would have gone hungry as a child, that but for public subsidies and federally guaranteed loans I could never have afforded college. I know that without the internet and airports, both of which were developed with federal taxes, I could not earn an income even close to what I make today. That all seems so obvious to me that I don’t understand how anyone could question it, and those are just a few of the many reasons I am happy to pay my fair share of taxes, whatever that share maybe. Paying a lot of taxes just means you make a lot of money, and it is hard, frankly, to complain about that. One last observation. Many of the 53% crowd seem quite proud of their Christian faith. I am not religious myself, but I am reasonably certain that Jesus would not respond to the poor and unemployed with shouts of “Get a job!” I vividly remember what it was like to be poor. To be concise, it sucked, and my heartfelt sympathies automatically go out to anyone who has to experience it, especially children who are blameless for their circumstances. Whenever I meet someone who has not been as lucky as I have been, I recognize how easily our roles could have been reversed by the random forces of fate. And despite my lack of religion, I instinctively think “There but for the grace of God go I.” If only those who actually believe in God would think the same thing more often they might not be so eager to cut my taxes. Originally posted to Gaius on Fri Oct 21, 2011 at 12:48 PM PDT.
Science and Happiness October 28, 2011March 25, 2017 AASIF MANDVI ON: SCIENCE Treat yourself to these very funny 6 minutes: Rick Perry, Michele Bachmann, Rick Santorum, and some very cute science fair kids. Then, if you have a few minutes more (and don’t mind blue humor), watch John Stewart’s lead-in to that clip. In it, he notes the hullabaloo that Fox News and others made over ‘Climategate’ (the emails that suggested scientists may have been phonying data to support the global warming thesis) . . . then notes how effective that hullabaloo was at sowing doubt in the public mind . . . and, finally, contrasts that relentless coverage with the near total silence that greeted release . . . in the Wall Street Journal no less . . . of research . . . funded by the Koch brothers no less! . . . that . . . wait for it . . . debunks Climategate. Turns out, according to the Koch brothers-funded research, the science was right all along. Yet the debunking of that misinformation got a total of 24 seconds of cable news coverage. It was reintroduction of McDonalds’ McRib that grabbed the TV news. Just like ACORN: The allegations got 24/7 coverage. The exoneration? Not a peep. And so our nation is weakened, one misinformation campaign at a time. PAUL VOLCKER ON DODD-FRANK AND THE VOLCKER RULE A lot of liberals think the Administration caved on ‘the Volcker Rule.’ Paul Volcker disagrees. He gives the Administration good marks. TOUGH TIMES FOR TWENTY-SOMETHINGS EARNING $500,000 A YEAR Happiness, I have long argued, is a matter more of direction than amount. To quote my own book (reviewed here), ‘I believe happiness lies less in how much you have than in which way you’re headed. Consider two young families, one with an income of $200,000 a year but somehow knowing it is headed down to $150,000; the other earning $30,000 a year but somehow knowing it is headed up to $50,000. I submit that the family earning $30,000 a year, though far less affluent, might well be the happier of the two.’ Jim Chanos: ‘See last three paragraphs of this story. Only on Wall Street would a 27-yr old trader whine about making less than $500,000 this year, despite having to ‘work harder.’ And they wonder why people are angry?!’ DVAX – UPDATE TO YESTERDAY’S UPDATE Guru: ‘In a surprise about three months earlier than expected, they announced the results of the hepatitis B vaccine trial in patients with chronic kidney disease [yesterday]. Not a surprise, they showed superiority to the currently marketed hepatitis B vaccine with no evidence of a safety problem. Patients with chronic kidney disease are immunosuppressed. The ACIP of the CDC has already recommended all such patients get hep B vaccines. This Phase III data can now be added to the FDA filing for the hep B vaccine. It seems reasonable that they would get a partnership with one of the vaccine companies for the hep B vaccine. They used to be partnered with Merck. Perhaps Merck will return. Either way, their hep vaccine should eventually come to dominate much of the market when it is launched next year. They also have earlier-stage products in their pipeline in collaboration with Glaxo, Novartis, and Astra Zeneca. All that said, there were a number of negatives on yesterday’s analysts call that suggest we move out of this stock and into something else for the time being: (1) The company will not file for FDA approval in 4Q 2011 (their previous guidance), but rather in Jan or Feb 2012. It’s not a big delay, but it’s a delay. (2) The company is hoping for priority review (6 months), but it is more likely they will get standard review (10 months) and they will have a panel meeting to review the possibility of autoimmune side effects. (The data indicate overall that there are no differences, but it sounds like this issue will need a thorough sorting out.) (3) The company expects to market the vaccine by themselves in the people over 40 years old, excluding diabetics. This means no partner – something different from what we have been expecting. (4) The company will file today’s kidney failure data as a supplement, so this data will NOT be part of the first approval. (5) Consultants at the meeting emphasized that sales of vaccines in adults grow slowly, compared to sales of vaccines in children. Thus, even assuming a launch in 2012, sales might not hit a target of $300 million for several years. (6) European approval will also proceed slowly and not occur until 2013. Bottom line: the product works really well, but we are at least a year away from getting a product launch and then sales may progress slowly. You win some, you try not to lose to badly on the others. Maybe in this crazy market it goes higher. But I think there will be better opportunities in the short-term.’
Hope Even For Some of Our Speculative Biotechs October 27, 2011March 25, 2017 REPUBLICANS Kevin Brown: “What struck me about yesterday’s David Frum piece [“It’s Time We Republicans Finally Admitted That Paul Krugman Might Be Right”] was this line: ‘Can it be that our enemies were right?’ Really, David? Enemies? Disagreeing on politics or economics is one thing, but equating those who disagree with you with North Korea, terrorists, the French? (That last one is tongue in cheek, I point out.)” A GRAND TIME TO BE RICH AND POWERFUL As widely reported yesterday, the Congressional Budget Office found that from 1979 to 2007, average inflation-adjusted after-tax income grew by 275% for the top one percent, compared with 18% for people in the bottom fifth (and not quite 40% for people in the middle three fifths). And as noted yesterday, the Republican front-runners believe the top one percent need still further help, which the bottom 99% would wind up providing. HOUSING HOPE Not having been able to get the Republican controlled Congress to do anything (they literally control the House and have essentially controlled the Senate by “filibustering” anything a majority might otherwise pass – those being “snicker quotes” around the word filibustering, as my old mentor, New York Magazine editor Sheldon Zalaznick used to call them . . . in this case because the senators, in their wisdom, long since removed the requirement to actually stand up all night talking in order to filibuster a bill) . . . the President is doing all he can to get the economy moving and help families that are hurting without the approval of Congress. Tuesday, he announced an important rules change that could help a million or so homeowners whose homes are under water (worth less than the mortgage balance) refinance at the prevailing interest rates. That will save them thousands of dollars a year, make it easier for them to stay in their homes, make it less likely those homes will go into foreclosure blighting their neighborhoods further, and making the loans more secure for the lenders, because a borrower is less likely to default if his payments are lower. Helping a million families isn’t enough; but a million here and a million there, and – to paraphrase Everett Dirksen – pretty soon you’re talking about real progress. STUDENT LOAN HOPE Yesterday, as reported by CBS: Speaking to a crowd of college students in Denver, Colorado, the president outlined a new “Pay As You Earn” plan. The proposal would expedite the timeline for an already-approved loan repayment plan that would lower monthly federal student loan payments for Americans whose burden of debt is disproportionate to their earning abilities. According to the original plan, which Congress approved in 2010, borrowers would be able to reduce their monthly payments from 15 to ten percent of their discretionary income as of 2014. Additionally, that plan dictated that the balance of their debt would be forgiven after 20 years of payments rather than in 25 years. On Wednesday, the president said he would use an executive order to make those benefits available to borrowers as early as 2012. ☞ To keep taxes on the rich at historic lows, Republican prefer to cut funding to state universities, which drives up tuition (and thus student debt). They also opposed the President’s plan – passed along with the health care bill – that removed the banks from getting in between student borrowers and the federal government that was guaranteeing the loans anyway. UPDATES Guru: TTNP ($1.51 up 24 cents yesterday but still below the $1.77 some of us paid this summer): “The company met with the FDA Tuesday and received the green light to file for approval. There had been some concern after the last call that they did not have enough patients treated for at least six months, but based on our analysis and what they said came out of the meeting yesterday, it appears that they do have enough. I believe a green light to file for approval from the FDA is what most partners were looking for, so I expect they will be able to close a partnership – or possibly sale of the company – fairly soon. Can make a case for $4/share without working too hard. Stay tuned.” As always: only with money you can truly afford to lose. These things do NOT always work out. DVAX ($2.75, about unchanged from first mention): “The ACIP division of the CDC formally voted to put diabetics under age 60 on the list of ‘high risk’ people who should get vaccinated. They also voted that diabetics over 60 ‘may’ get vaccinated as well. There was no formal recommendation for a specific vaccine, since the two approved vaccines are virtually identical, but they did report that the current vaccine does not produce adequate protection in a significant portion of diabetic patients. DVAX recently presented data from their Phase III trial showing very high levels of protection: much higher than in the currently approved vaccine. DVAX has an ‘investor day’ Thursday [i.e.: today] and it expects to file for approval this quarter, setting up potential approval in 2012. Although small cap biotech stocks can be very volatile, DVAX should trade into the $4-$6/share range next year on approval.” As always: only with money you can truly afford to lose. These things do NOT always work out. CRME ($3.38, down from $4.60 nearly a year ago): “I do believe it will be higher in a year. Merck has consolidated its position and now owns rights to the intravenous and oral forms. The intravenous is approved in Europe and is generating sales. In the US, we await a decision on whether Merck will restart the US phase III or whether it has enough safety data (efficacy is not in question) to file for approval in the US. Merck is expected to start the Phase III oral soon. The biggest problem is that we are at the mercy of Merck to provide the news. However, there is no question that the product works and is safe in its indication. The competitor from Sanofi has lots of problems. So I believe next year we will have a successful intravenous outcome in the US and be close to a successful oral outcome. On that basis, I expect it to move towards 7/share.” As always: only with money you can truly afford to lose. These things do NOT always work out. KERX ($2.92, way down since first mention at $5.25): “They have results of a Phase III trial in colorectal cancer out by the end of the year or early 2012. There is some real controversy about this one. KERX recently published a Phase II trial in 38 patients. It looks flawless and highly successful. I don’t see any holes in the data. The caveat is that 38 patients is a very small number. IF there were imbalances at baseline in only a few patients, then such imbalances could skew the data to make it look like it is working when it is not. The molecule, perifosine, is structurally similar to miltefosine, which was studied extensively for cancer and abandoned for lack of efficacy. The perifosine Phase II was done as an adjunct to capecitabine, an approved drug for colorectal cancer. Neither perifosine nor miltefosine as a single agent has a meaningful effect on cancer. There is a valid mechanism to back perifosine’s benefit, but mechanism data don’t guarantee success. So while I can say the Phase II data look as good as they could for a small trial at this stage, there is a lot of risk based on the history of these types of compounds. Behind perifosine in their pipeline is Zerenex, an iron-based agent for high phosphate in dialysis patients. There is no question it works – it has been launched in Japan. We are awaiting the results of a one year-safety study and expect it to be positive. Some analysts show a valuation model in which at $3/share there is no value ascribed for perifosine. I think such a valuation is aggressive and expect that if the colorectal cancer data does not work, the stock will drop a point or more. There then should be a recovery in anticipation of Zerenex data, but Zerenex will also require a commercial partner. So under the outcome that perifosine doesn’t work, I expect the stock could be 2-3/share a year from now. IF the perifosine data succeeds, I expect the stock to be 6-10/share next year, but it is high risk.” Thus: only with money you can truly afford to lose. ALXA ($1.35, up 35% from first mention): “They just announced they will have an FDA advisory panel meeting Dec 12. ALXA has a device that delivers an approved drug for acute schizophrenia in a puff to the lungs, allowing it to get very rapidly into the blood. The onset of action is faster than taking the drug orally or as a shot. There is no question it works and several opinion leaders have spoken favorably about the therapy. The FDA has been concerned, however, that in the trials, patients with asthma or COPD saw some decline in lung function. The company proposes to exclude those patients from the label. Since this product is used only acutely – one or two puffs in the emergency room – I don’t think the issues in asthma or COPD patients should derail the product. I expect the panel will vote ‘yes.’ I note, however, that the FDA has been very cautious on drugs administered to the lung that are not for lung diseases. It did approve Pfizer’s inhaled insulin for diabetes (a product no longer being marketed), but has not approved a similar product from MannKind despite numerous attempts. Inhaled insulin is taken chronically, so a very different situation from ALXA. Still, I’m not sure what the FDA’s perspective is on ALXA and they have been cautious about these ‘inhaled delivery’ products. If the panel votes yes, ALXA should trade to the range of 2-3/share.” Only with money you can truly afford to lose.
Republicans One, Two, Three, and Frum October 26, 2011March 25, 2017 RICK PERRY RESCUES THE RICH Jonathan Bernstein, writing in the Washington Post: “Rick Perry finally released his ‘flat tax’ and budget plan today. Boil it down and what you’re left with is tax cuts for the rich and tax returns they can do on postcards – while offering nothing but more complexity for everybody else. . . .” MITT ROMNEY, TOO He’d keep the Bush tax cuts for the wealthy and, sweeter still, eliminate the estate tax – even on billionheirs. AND THE FRONT RUNNER, MOST OF ALL Herman Cain – who in the latest poll not only tops Romney again but is miles ahead of Perry – has the most regressive plan of all. A massive tax cut for the rich, who would now pay just 9% on their income and 0% on their capital gains. REPUBLICANS: PLEASE READ This, from Henry Blodget: DAVID FRUM: It’s Time We Republicans Finally Admitted That Paul Krugman Might Be Right By Henry Blodget Few economists have been more correct about the economic crisis of the last several years than the proudly liberal Paul Krugman. Krugman spotted the “liquidity trap” early on (since the problem with the economy was too much debt, cutting rates and creating easier money would not get us out of it). Krugman shot down the hyperventilation about a coming hyper-inflation, arguing that the global labor glut would prevent easy credit from inflating wages. Krugman quickly pronounced the Obama Administration’s stimulus as far too small and said it would not get the job done. Krugman scoffed at the idea that interest rates were about to skyrocket as our creditors decided en masse that we were so fiscally irresponsible that they couldn’t possibly lend us any more money. Krugman has been wrong about some things, but he has been right on all those counts. Recently, Krugman has denounced the “austerity” push of the GOP, arguing that tackling our debt and deficit problem right now with spending cuts is the worst move we can make. Such cuts, Krugman argues, will put more people out of work and shrink the economy. And this, in turn, will increase, not decrease, the deficit. Krugman thinks we should tackle the debt and deficit problem later, when the economy is on more solid footing. He points to record-low interest rates as a sign that the world is still willing to lend us as much money as we want, practically for nothing. And he argues that, instead of cutting back, we should be using that money to build infrastructure, strengthen the economy, and put more Americans back to work. And some Republicans, it seems, are starting to notice. A couple of months back, Republican commentator David Frum made a startling observation on his site: Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right? Will Frum be ostracized for that remark? After all, Paul Krugman is supposed to be Public Enemy No. 1. Or will more Republicans begin to agree that, although government spending does indeed need to be cut eventually, and the debt problem does need to be addressed, suddenly chopping, say, $1 trillion of government spending next year is not the best way to get ourselves out of this mess? ☞ And by the way, argues Krugman, we are not the only ones who need a massive infrastructure program rather than slashing budgets – Europe does, too.
Is It Really Okay for a Judge to Vacation with One of the Parties to the Case? Seriously? October 25, 2011March 25, 2017 YOUR CELL PHONE BILL Are you paying too much? BillShrink.com will grab your cell phone records (if you let it) and recommend a better plan based on your usage and the months left on your contract. Free. THE COURT Growing up, we thought of Supreme Court Justices as above reproach. Now it’s beginning to seem as though they’re simply above the ethical standards that apply to lesser judges. Watch. And then consider hosting a screening. ROMNEY ON THE FLAT TAX As reported here: 1996: “A tax cut for fat cats.” 2011: “I love a flat tax.”
Angry Birds October 24, 2011March 25, 2017 The President has ended the war in Iraq; eliminated Osama Bin Laden and much of Al-Qaeda’s top tier; and led the world in liberating Libya at the cost of not a single American life. The Palestinians privately want to see Obama reelected, and the Israelis say he’s a steadfast ally. The Libyans, we are told, actually like us. (“Thank you, America!”) . . . “Without America, we would not be here,” Ismael Taweel, a businessman, told [Nick Kristof] as he stood by Martyrs’ Square with a huge grin on his face. “I hope there will be more relations between Libya and America now,” he added. That’s a common refrain: Libyans are hungry to rejoin the world. . . . ☞ It’s good to have a strong, deliberate Commander in Chief.* REINVENTING FIRE Watch this to learn how we can “change energy use forever by transitioning to an economy powered by efficiency and renewables by 2050.” Amory Lovins’ new book is out: Reinventing Fire. ANGRY BIRDS I held out as long as I could. But we have to get those smug little pigs. *And, by the way, a magnificent Secretary of State.
The World Is A Better Place October 21, 2011March 25, 2017 QADDAFI “Mr. Obama’s carefully calibrated response infuriated critics on the right and left,” reports the New York Times, “who blamed him either for ceding American leadership in a foreign conflict or for blundering into another Arab land without an exit strategy. But with Colonel Qaddafi joining the lengthening list of tyrants and terrorists dispatched during the Obama presidency, even critics conceded a success for Mr. Obama’s approach to war — one that relies on collective, rather than unilateral, action; on surgical strikes rather than massive troop deployments. ‘I think the administration deserves great credit,’ Senator John McCain, Republican of Arizona, said in an interview on CNN. ‘Obviously, I had different ideas on the tactical side, but the world is a better place.’ ” Add this to the list. Speaking of which: THE LIST – III Andrew Sullivan yesterday quoted one of his readers with a far more succinct, and thus powerful, list of Obama accomplishments: The truth is that this President has done a good job in what has been one of the most difficult periods of modern history. He saved the economy from ruin (until the Tea Party took over Congress) with a stimulus that was as large as possible given the political realities, presided over a stock market that fairly quickly recouped many of its losses, presided over almost consecutive monthly increases in private sector job growth (unfortunately balanced by monthly decreases in public sector jobs which I attribute to the GOP further starving government), enacted the only meaningful healthcare reform ever in our history, passed financial reform (no matter what the Left says, he did this), saved the auto industry (which Romney is on record opposing), fired the first salvo of the Arab Spring with his address in Cairo no less, drawn down our footprint in Iraq in a responsible way (and headed toward almost total withdrawal), stopped numerous terrorist attacks in this country, stopped torture as policy, repealed DADT, joined the international community in a measured and responsible way to bring down an odious tyrant in Qaddafi, and killed a whole generation of al Qaeda leaders. And taking out Osama bin Laden the way he did will go down as one of the bravest military actions in American history. I know this President is not popular, and it is very unpopular to defend him in such a way. I don’t care. For this country to dump him for anyone on the other side would be a terrible thing. Progress is slow and painful, but we are doing it. Is that fashionable to say? No. Again, I don’t care. THE LIBERTARIAN CONSERVATIVE BILLIONAIRE TEA-SWILLING CHRISTIAN RIGHT “A profoundly significant new political alignment within the right flank of the Republican Party is becoming entrenched in American politics . . . For Independents, moderate Republicans and Democrats this new alignment should be a wake-up call that the foundations of Democracy are always fragile and the promises of America must never be taken for granted.” Read all about it.
Enough Sniping - at the wrong target - October 20, 2011March 25, 2017 WARREN BUFFETT’S CHAIN LETTER (NOT) Mike Duffy: “Usually when I get a ‘XXX wants you to forward this to N people’ message, I check its veracity on snopes.com. Here’s what they have to say about Warren Buffett’s alleged chain letter. If you haven’t already mentioned it to them, your readers might benefit from knowing about Snopes.” ☞ I use Snopes frequently – and when I don’t, I usually regret it. THE LIST Steve: “Lawrence Lessig wrote Republic Lost and was on NPR Tuesday. He cites Obama as a failure for promising to change the way business is conducted in Washington but being exactly like every other pol who seeks $ and re-election over everything else. Lessig pretty much summed up my thoughts. We can vote for Obama or one of the dwarves, it doesn’t matter in the long term. If you have to list Obama’s accomplishments, Andy . . .” ☞ Steve’s negativity is both unfair and counterproductive – and just plain wrong – though I know it comes from justifiable frustration and values that we all share. Unfair, because, for example, the President and the DNC take ZERO money from Washington’s more than 10,000 federal lobbyists and PACs – even though the RNC does and it’s how “business [has long been] conducted in Washington.” This policy has cost us tens of millions of dollars, yet Steve counts it as nothing. Unfair, because the President has worked so hard – to the dismay of so many of my fellow liberals – to try to work with the other side. Yes, he failed to change the culture of Washington, but not for lack of trying. You blame him for that; I blame the other party. Just plain wrong, because the world would have been SO different if Gore had been allowed to serve, SO different if Lindbergh had defeated FDR (did you read the Philip Roth novel imagining that?), SO different if McCain/Palin were today running the show. It’s preposterous to say “it doesn’t matter in the long run” who wins. The last decade would have been about the same either way? Give me a break. Counterproductive, because negativity saps the enthusiasm needed to advance the causes we share. Enough, Steve: If you really care about all this, as I know you do, get to work – volunteering for Obama, registering new voters, bucking up existing voters, pushing back on your fellow naysayers – and not dismissing three years of incredible accomplishment (given the context) because it’s “a list.” (“If you have to list Obama’s accomplishments, Andy . . .”) Don’t snipe at the good guys, Steve, help us beat back the bad guys. (For the things we believe in, the Koch Bros, Karl Rove, et al, are bad guys.) Feel free to pass this on to Lawrence Lessig. SMBC Aristides’ Chris Brown: “SMBC reported another great quarter. EPS of $1.21. Earnings are still benefitting from the tailwind of the FDIC-assisted transaction last year. Company reported both deposit and loan growth. The ratio of tangible common equity to assets ticked up about 10 basis points and is on pace to easily exceed 7% within 3-4 quarters. Equity/assets is now 9.6%. Loans and deposits both grew quarter-over-quarter. Credit quality improved from perfect to more perfect. With great earnings like this, and great asset quality, I’m leaning more towards the view that management will not issue shares here. Tangible book value per share is $22.51, up from $17.19 a year ago! Short of Armageddon, I think it is going to be a very good next 12-24 months for shares of SMBC.”
A Long List And An EMIS Update October 19, 2011March 25, 2017 9-9-9 The numbers are in. Based on a just-released analysis by the Tax Policy Center, the lowest-income fifth of Americans would pay $1,854 more in federal tax each year under Republican front-runner Herman Cain’s 9-9-9 plan; the middle fifth would pay $4,330 more; but the fifth with the highest income would pay $14,442 less. Meanwhile, those of us in the top 1% would save, on average, $238,422 on our taxes each year and the top tenth of a percent would see average annual savings of $1,356,078. A LONG LIST Here’s a recent list of Obama accomplishments. I leave further introduction to Professor Watson: THE OBAMA RECORD Like all presidents, Barack Obama has enjoyed accomplishments but also made mistakes. As a presidential historian, however, I have been struck by claims being put forward by Obama’s many critics and the news media that he has accomplished little when, in fact, his presidency is easily one of the most active in history. As such, with all the misinformation circulating on talk radio, at town hall meetings, and in the blogosphere about the President, here is a fact-checked list of some of President Obama’s initiatives. At the end are some interesting factoids and misconceptions about the President. — Robert P. Watson, Ph.D., Lynn University October 4, 2011 BUDGETING • Ordered all federal agencies to undertake a study and make recommendations for ways to cut federal spending (2009) • Ordered a review of all federal operations to identify wasteful spending and practices (2009) • Established a National Performance Officer charged with saving the federal government money and making federal operations more efficient (2009) • Signed Weapons Systems Acquisition Reform Act (May 22, 2009) • Overturned the Bush-era practice of not listing certain federal programs in the federal budget (2009) (2010) * Note: Bush did this (so did Reagan) in an effort to hide programs and make the budget look smaller; such “off budget” items are now included in the annual budget • Full appropriations for war are now included in the budget (2009-2011) * Note: Bush did not list many of the appropriations for Iraq, Afghanistan and the War on Terror • Funds for emergency appropriations are now included in the budget (2009-2011) • Signed statutory Pay-As-You-Go Act (Feb 12, 2010) after urging Congress to adopt “Pay-Go” (whereby each dollar of spending is offset by a dollar in cuts or revenues, which was used in the `90s but abandoned in the `00s) • Proposed a three-year freeze on federal discretionary spending beginning in 2011 (2010) • Is in the process of cutting 120 federal programs identified as either wasteful or unnecessary (2010-2011) • Established a bipartisan commission on fiscal responsibility, staffed by House and Senate members and private citizens, tasked with submitting proposals to balance the budget (2010) * Note: In the face of Republican opposition, the powers of the commission were watered down • Established a bipartisan commission on the future of Social Security, tasked with submitting proposals to preserve and strengthen Social Security (2010) * Note: In the face of Republican opposition, the powers of the commission were watered down • Cut $20 billion from federal budget and has pledged to cut at least this much every year (2010-2011) • Signed Improper Payments Elimination and Recovery Act (July 22, 2010) • Ultimately decided to cancel planned new presidential helicopter fleet and stick with Marine One (2010) • Freezing all discretionary spending for next three years, except on national security (2010-2011) • Presidential Memoranda to freeze discretionary awards, bonuses, etc. for federal political appointees (2010) • Measures to promote savings in government contracting (Jan 30, 2011) • Measures to reduce size of federal budget/signed Budget Control Act (Aug 3, 2011) CONSUMER PROTECTIONS • Ended the Bush-era policy of protecting credit card companies (2009); signed Credit Card Accountability, Responsibility, and Disclosure Act (May 22, 2009); credit card companies are prohibited from raising rates without advance notification or arbitrarily if customers are paying bills on time (2010) * Note: In place of the old policy, new consumer protections were instituted and the industry’s predatory practices were banned • Instituted a new focus on mortgage fraud (2009) • Signed the Helping Families Save Their Homes Act (May 20, 2009) • Signed Prevent Deceptive Census Look Alike Mailing Act (April 7, 2010) • Signed measures detailing what mailed items can be marked “Census” (May 24, 2010) • Signed Dodd-Frank Wall Street Reform and Consumer Protection Act (July 21, 2010) • Signed Cruise Vessel Security and Safety Act (July 27, 2010) • Signed Social Security Number Protection Act (Dec 18, 2010) • Signed Truth in Caller ID Act (Dec 22, 2010) • Protections from online shopping fraud (Dec 29, 2010) • Signed FDA Food Safety Modernization Act (Jan 4, 2011) • Enhancements to Consumer Protection Safety Commission (Aug 5, 2011) DISASTER RESPONSE • Ordered a review of hurricane and natural disaster preparedness (2009) • FEMA once again reports directly to the president (2009) * Note: Bush removed FEMA (prior to the Hurricane Katrina disaster) from this status • Demonstrated an immediate and efficient response to the floods in North Dakota and other natural disasters (2009) • Ordered that funds be released and red tape be streamlined for the ongoing Hurricane Katrina recovery effort in the Gulf Coast (2009) • Timely and massive relief effort in response to the January 2010 earthquake in Haiti and ensuing humanitarian crisis; signed emergency Aid to American Survivors of the Haiti Earthquake Act (Jan 27, 2010) Components of the response: • The FBI’s National Center for Disaster Fraud was tasked to look into possible fraud with organizations soliciting funds for relief • Announced the Clinton-Bush Haiti Fund • Established an emergency Haiti Task Force in the State Department • Established a website with information, resources, and a posting of a “person finder” online to help families and friends to locate loved ones • Joint aid and relief planning with the U.K. • Sponsored a resolution in the UN Security Council for additional security and police forces in Haiti • Dispatched the US Navy floating hospital (USNS Comfort) and, within 5 days, 9 naval and relief ships, 5 Coast Guard cutters, 8 Coast Guard aircraft, and 12,000 US military personnel • Initial dispatch of several ships and cargo planes full of humanitarian aid and supplies, 6 search/rescue teams (500 personnel), and 265 Department of Health & Human Services personnel for emergency medical and aid support • Established a mobile US air traffic control center at the destroyed airport in Port-au-Prince • Signed Tax Breaks for Haiti Donations Act (Jan 22, 2010) • Signed Haiti Debt Relief and Earthquake Recovery Act (April 15, 2010) • Signed Haiti Economic Lift Program Act (May 24, 2010) • Signed Help Haiti Act (Dec 8, 2010) • After the BP Deepwater Horizon oil spill in the Gulf of Mexico, a freeze was placed on new deep water projects (2010); established a national commission on the BP Deepwater Horizon spill to examine facts and report a plan of action; new efforts to prevent offshore spills (2010) • Executive Order to establish new security measures to minimize accidental release of bio and chemical agents; new strategies for public health and bioterrorism response (2010) • After a slow start in responding to the BP Deepwater Horizon oil spill, the White House is promoting a long-term plan to reconstruct the damaged Gulf and negotiated with BP the establishment of a multi-billion dollar trust fund for victims of the spill (2010-2011) • Signed Disaster Relief and Summer Jobs Act (June 3, 2010) • Extended national flood insurance program for those in need during current economic crisis (2010); signed National Flood Insurance Program Extension (July 2, 2010) ECONOMY • Increased infrastructure spending (roads, bridges, power plants…) (2009-2010) * Note: Bush was the first president since Herbert Hoover to not make infrastructure a priority • Authorized the US auto industry rescue plan and two GMAC rescue packages (2009) • Authorized the housing rescue plan and new FHA residential housing guarantees (2009) • Authorized a $789 billion economic stimulus plan (American Recovery and Reinvestment Act) (Feb 17, 2009) * Note: 1/3 in tax cuts for working-class families; 1/3 to states for infrastructure projects; 1/3 to states to prevent the layoff of police officers, teachers, etc. at risk of losing their jobs because of state budget shortfalls • Instituted a new rule allowing the public to meet with federal housing insurers to refinance (in as quickly as one day) a mortgage if they are having trouble paying (2009) • Signed the Serve America Act (April 21, 2009) • Authorized a continuation of the US financial and banking rescue plans initiated at the end of the Bush Administration and authorized TARP funds to buy “toxic assets” from failing financial institutions (2009) • Authorized the “Cash for Clunkers” program that stimulated auto sales and removed old, inefficient, polluting cars from the road (2009); due to large response to program, signed Cash for Clunkers Extension (Aug 6, 2009) • Convened a “jobs summit” to bring experts together to develop ideas for creating jobs (2009) • Placed a 35% tariff on Chinese tires and a few other products such as pipes after China was found to be illegally “dumping” exports below cost (2009) * Note: Clinton, Bush I, and Reagan all refused to “get tough” on China’s predatory trade practices; Bush II refused four times during his presidency • Ordered the FDIC to beef up deposit insurance (2009) • Authorized the federal government to make more loans available to small businesses and ordered lower rates for federal loans to small businesses (2009) and signed a temporary extension of the Small Business Act (March 20, 2009) • Signed Jobs for Main Street Act (Feb 24, 2010) • Efforts to protect US firms’ trademarks, patents, and copyrights; signed Trademark Technical and Conforming Amendment Act (March 17, 2010) • Secured authority to compensate certain furloughed federal employees (March 11, 2010) • Signed Hiring Incentives to Restore Employment Act (March 18, 2010) • Signed Airport and Airway Extension Act (April 30, 2010) • Enhanced antitrust penalties and reforms (June 9, 2010) • Signed Small Business Investment Act (June 17, 2010) • Homebuyer Assistance and Improvement Act (July 2, 2010) • Extension of Unemployment Compensation (July 22, 2010) • FAA Air Transportation Modernization and Safety Improvement Act (Aug 10, 2010) • Signed US Manufacturing Enhancement Act (Aug 11, 2010) • Signed Small Business Jobs Act (Sept 27, 2010) • Signed Worker, Homeowner, and Business Assistance Act (Nov 6, 2010); signed • Extended unemployment benefits for one million workers and expanded coverage for some existing homeowners who are buying again (Nov 2010) • Called on Congress to deliver a comprehensive “Jobs bill” (2010) • Signed a bill to extend unemployment benefits set to expire (2010) • Signed historic Wall Street reform bill (2010) * Note: Designed to reregulate and end abusive practices and promote consumer protections • Signed the HIRE Act to stimulate the economic recovery (2010) * Note: The bill includes: tax cuts for small businesses who hire someone unemployed for at least two months; small businesses can write off their investments in equipment this year; etc. • National Export Initiative established to enhance federal support (technical assistance, training, trade missions, etc.) and coordination efforts to help US businesses export products and services (2010) • Forwarded initiatives to promote a “Wireless Broadband Revolution” (2010) * Note: Among other things, broadband is finally being considered as necessary infrastructure, with efforts to expand use, access, and spectrum… • Expanded agricultural credit to farmers during current economic crisis (2010) • Signed US Manufacturing Enhancement Act (2010) • Signed Single Family Housing Mortgage Insurance (2010) • Signed Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (Dec 17, 2010) • Signed America Competes (Reauthorization) Act (Jan 4, 2011) • Extension of funding for federal support of transportation programs (Sept 16, 2011; March 4, 2011…); extension of funding for airports and airways (several piecemeal increases Aug 5, 2011; June 29, 2011; May 31, 2011 March 21, 2011… because of Republican opposition to full funding of construction, expansion, and improvements) • Announced a comprehensive jobs proposal: cut payroll taxes for working families; incentives to hire the unemployed; reform unemployment insurance; incentives for businesses to hire “returning heroes,” federal supports to states to prevent loss of thousands of teachers and essential public workers; funding for infrastructure repair and construction and school modernization and construction projects; temporary payroll tax holiday… (September 2011) EDUCATION • Authorized construction funds for high-speed, broadband Internet access in K-12 public schools (2009) • Increased funding for school construction (2009) • Increased funding available for student loans (2009) • Expanded the national youth service program (2009) • Streamlined the federal student loan process to save $87 billion over the next 10 years (2009) • Changed the rule to allow students struggling to make college loan payments to refinance their loans (2009) • Discussions with Congress for education reform (2009-2011) * Note: Much of Obama’s education reform has been sidelined by opposition in Congress • Initiated a “Race to the Top” competitive federal grant program for states who develop innovative policies (2009) • Instituted a “judgment review” allowing families with student loans to petition to have their current financial status determine the loan rather than the previous year’s finances (2009) • Launched “Educate to Innovate,” a public/private partnership making $236 million available for science, mathematics, and technology education programs (2009) • Proposed capping the maximum amount students must pay on student loans (as percentage of their income) (2010) • Proposed reducing student loan obligations for individuals going to work in community and public service jobs (2010) • The federal government changed the system to offer direct student loans, cutting out the cost of private banks (“middle man”) who increase the costs in order to make a profit (2010) • Increased investment in technologies for schools/education (2010) ENERGY & ENVIRONMENT • Removed a ruling that now allows individual states (like California) to enact automotive fuel efficiency standards above federal standards (2009) • Offered attractive tax write-offs for those who buy hybrid automobiles (2009) • Overturned Bush-era rule that weakened the Endangered Species Act (2009) • Announced plans to purchase fuel efficient American-made fleet for the federal government (2009) • Ended the Bush-era policy of not regulating and labeling carbon dioxide emissions (2009) • Signed a measure requiring energy producing plants to begin producing 15% of their energy from renewable sources (2009) • Announced that the federal government would reengage in the long-delayed effort to clean up “Superfund” toxic waste sites (2009) • Announced the long-term development of a national energy grid with renewable sources and cleaner, efficient energy production (2009) * Note: Much of Obama’s energy reform was killed by Senate Republicans • Proposed a new refuge for wild mustangs (2009) • Cancelled several Bush-era mountain-top removal and mining permits (2009) • Reengaged in international treaties and agreements to protect the Antarctic (2009) * Note: Bush had withdrawn from such efforts • Asked Congress for an energy reform and “cap and trade” bill (2009) * Note: The Congress failed to pass such a bill • Developing plan to lease US coastal waters for wind and water-current energy production (2009-2011) • Signed the Omnibus Public Lands Management Act that protects millions of acres of scenic, historic, and recreational lands and trails (March 30, 2009) • Signed Energy and Water Development Act (Oct 28, 2009) • Overturned Bush-era policies that allowed uranium mining near national parks such as the Grand Canyon (2009) • Expanded the Petrified Forest National Park (2009) • Requiring that government buildings and facilities be retrofitted to save energy costs (2009) * Note: These green retrofits are moving very slowly • Authorized studies in several western states to determine how to support large-scale solar installations (2009) • Attended the Copenhagen talks and, after the talks were stalled, negotiated an international (voluntary) agreement on reducing carbon emissions and raising funds to assist developing nations in offsetting carbon emissions (2009) • Banned importation of pythons in response to a growing population of pythons damaging the Florida Everglades (2009) • Committing the federal government to increasing research and use of renewable, clean energy sources such as wind, biomass, etc. (2009) • Executive orders establishing a federal initiative to reduce greenhouse gas emissions in all federal operations (2009-2011) • Called for exploring the possibility of additional off-shore oil drilling in the Gulf, Atlantic, and off Alaska (but not in ANWR) (2010) • Authorized use of funds for Deepwater Horizon oil spill from Oil Spill Liability Trust Fund (June 15, 2010) • Signed North American Wetlands Conservation Act (March 25, 2010) • Agreed to consider increases in nuclear energy production and requested a study on the feasibility of nuclear power plant construction (2010) * Note: Nearly all energy initiatives were defeated by Republican opposition in Congress • Increased investment in clean energy projects (2010) • Executive Order to develop a new strategy for and commitment to ocean and lake resources, and for scientific research on water quality (2010) • Signed Asian Carp Prevention and Control Act (Dec 14, 2010) • Signed Truth in Fur Labeling Act (Dec 18, 2010) • Species protection measures for sharks and other animals (Jan 4, 2011) • Signed Diesel Emissions Reduction Act (Jan 4, 2011) • Measures to reduce levels of lead in drinking water (Jan 4, 2011) • Signed Diesel Emissions Reduction Act (Jan 4, 2011) • Executive Order for an interagency effort on domestic energy sources (July 12, 2011) ETHICS • Ordered the White House and all federal agencies to respect the Freedom of Information Act and overturned Bush-era limits on accessibility of federal documents (Jan 2009) • Instructed all federal agencies to promote openness and transparency as much as possible in the release and availability of government documents (Jan 21, 2009) • Placed limits on lobbyists’ access to the White House (Jan & Feb 2009) • Placed limits on White House aides working for lobbyists after their tenure in the administration (Jan 21, 2009) • Signed a measure strengthening registration and reporting requirements for lobbyists (2009) • Ordered that lobbyists must be removed from and are no longer permitted to serve on federal and White House advisory panels and boards (2009) * Note: After saying he would not hire lobbyists, a few have been hired in the Administration • Companies and individuals who are delinquent on their taxes or owe back taxes are no longer allowed to bid for federal contracts (2009) • Established a special inspector general for the Troubled Asset Relief Program (TARP) (April 24, 2009) • Enhanced the role and powers of the special inspector general for Afghanistan reconstruction (June 30, 2009) • Signed the Fraud Enforcement and Recovery Act (May 20, 2009) • Initiated the “e-Rulemaking Initiative” (in cooperation with Cornell University) to allow for online public “notice and comment” of federal laws and initiatives (2010) • Issued the “Open Gov Directive” ordering all Cabinet departments to promote transparency and citizen participation in their policies (2010) • Signed extensions on banning lobbyists from serving on agency boards (2010) • Developed the “Do Not Pay List” with data on contractors and recipients of federal funds who are deemed to be ineligible because of fraud and abuse (2010) • Signed the Anti-Border Corruption Act (Jan 4, 2011) • Opened additional presidential records to the public (Jan 21, 2011) FOREIGN POLICY • Closed the Bush-era “secret detention” facilities in Eastern Europe (2009) • Ended the Bush-era policy allowing “enhanced interrogation” (torture); the US is again in compliance with Geneva Convention standards (2009) * Note: Obama has permitted some controversial interrogation techniques to continue • Restarted international nuclear non-proliferation talks and reestablished international nuclear inspection protocols (2009) * Note: Bush withdrew from non-proliferation talks and dismantled the inspection infrastructure • Reengaged in the treaties/agreements to protect the Antarctic (2009) * Note: These were suspended under Bush • Reengaged in the agreements/talks on global warming and greenhouse gas emissions (2009) * Note: These were suspended under Bush • Visited more countries and met with more world leaders than any president in his first six months in office (2009) • Banned the export of cluster bombs (2009) • Overturned Bush-era plans to increase the US nuclear arsenal (2009) • Authorized the Navy SEALS operation that freed by force the US shipping captain held by Somali pirates (2009) • Restored the US commitment to the UN population fund for family planning; overturned the ban on providing funds internationally for family planning (2009) * Note: The family planning efforts were suspended under Bush • Instituted a new policy on Cuba, allowing Cuban families to return “home” to visit families (2009) • Extended an offer of engagement (free from sanctions and penalties) to Iran through December 31, 2009 (Iran did not accept the offer) (2009) • Sent envoys to the Middle East and other parts of the world, reengaging in multilateral and bilateral talks and diplomacy (2009) • Authorized discussions with North Korea and the private mission by former president, Bill Clinton, to secure the release of two Americans held in prisons (2009) • Authorized discussions with Myanmar and the mission by Senator Jim Web to secure the release of an American held captive (2009) • Renewed lucrative loan guarantees for Israel (2009-2011) • Signed the USIFTA trade agreement with/for Israel, which offers Israeli products preferred status (2009-2011) • Authorized a $550m advance for Israel (six months prior to the scheduled date) in order to accommodate Israeli’s economic and financial needs (2009) • Continued agreements with Israel for cultural exchanges, immigration, commercial cooperation, security/military cooperation, counterterrorism supports, joint military exercises (“Juniper Cobra” in Oct 2009), etc. (2009-2011) • Spoke on Arab television, spoke at an Egyptian university, and met with Arab leaders in an effort to change the tone of US-Arab relations (2009) • Ordered the US to finally pay its dues to the United Nations (2009) • Attended the Summit of America’s meeting in Trinidad and Tobago (2010) • Provided missile defense supports to Israel (2010); including $205 million for Israel to develop short-range rocket defenses (“Iron Dome”) (2010-2011) • Dispatched several envoys and initiated talks with numerous nations (2010-2011) • Signed a nuclear limitation treaty with Russia (2010) * Note: The agreement calls for both countries to reduce their nucs by one-third (1,500) and launch systems by half (800) • Hosted nuclear non-proliferation summit for several nations (2010) • Rejected international calls to condemn or use sanctions on Israel after the “Turkey flotilla” incident (2010) • Executive Order to establish support offices in the State Department to assist the governments of Pakistan and Afghanistan (2010) • Issued memoranda to continue drug interdiction support with Columbia (2010) • Secured largest “foreign military funding” allocation to Israel in history (2011) • Proposed a two-state solution in Mideast based on the 1967 borders with clauses for either side to amend the borders (“Mutually agreed upon swaps”) and develop security arrangements, designed to move the process forward before the UN (in Sept 2011) proposes and votes on a Palestinian state (May 2011) • Executive Order for additional sanctions on Iran (May 23, 2011); ditto with North Korea (April 18, 2011) • Initiative to promote US exports (June 15, 2011) • Executive Order imposing certain sanctions/transaction prohibitions on Syria (Aug 18, 2011) GOVERNANCE • The White House website now provides information on all economic stimulus projects and spending, along with an unprecedented amount of information on our government (2009) • Ended the Bush-era practice of circumventing established FDA rules for political reasons (2009) • Ended the Bush-era practice of having White House staff rewrite the findings of scientific and environmental regulations and reports when they disagreed with the results (2009) • Limited the salaries of senior White House aides (salaries cut to $100,000) (2009) • Has been holding open meetings with Republican leaders, although they complain of a lack of access and information (2010) • Signed the Improper Payments Elimination and Recovery Act (2010) * Note: To curb wasteful spending • Tasked federal agencies to develop plans for disposing of unneeded real estate and then to eliminate unnecessary or non-economical lands, properties, etc. (2010) • Signed Fair Sentencing Act (Aug 3, 2010) • Signed Federal Judiciary Administrative Improvements Act (May 27, 2010) • Mandated federal agencies to write in “plain English” and documents be written in “plain writing” (Oct 13, 2010) • Signed Access to Criminal History Records for State Sentencing Commission Act (Jan 4, 2011) • Initiative to increase efficiency, effectiveness, and accountability of federal government (June 13, 2011) HEALTHCARE • Removed Bush-era restrictions on embryonic stem cell research (2009) • Federal support for stem cell and new biomedical research (2009) • Expanded the SCHIP program to cover health care for 4 million more children and signed Children’s Health Insurance Reauthorization Act (Feb 4, 2009) • Established an independent commission to make recommendations on slowing the costs of Medicare (2009) • The First Family initiated several personal projects to promote healthy lifestyles, including planting a garden for the White House’s vegetables and flowers, installing a swing set/playground for the Obama daughters and children of White House employees, and promoting exercise and fitness for children (2009) • Reversed some of the Bush-era restrictions that prevented Medicare from negotiating with pharmaceutical firms for cheaper drugs, allowing government to again competitively bid (2009) * Note: Obama had promised to lift all restrictions but, while he did negotiate with drug companies for them to lower their costs, the deal only lifted some restrictions • Expanding government vaccination programs (2009-2011) • Issued new disease prevention guidelines and priorities for the CDC (2009) • Authorized the FDA to finally begin regulating tobacco (2009) • Tasked federal labs to prioritize research on and deployment of H1N1 vaccines (2009) • Signed Family Smoking Prevention and Tobacco Control Act (June 22, 2009) • Established a new council on National Prevention, Health Promotion, and Public Health to be chaired by Surgeon General and charged with promoting healthy lifestyles and integrative healthcare (2010) • Assisted Social Security recipients with claims; signed Social Security Disability Applicants’ Access to Professional Representation Act (Feb 27, 2010) • Signed Medicare Physician Payment Reform Act (Feb 27, 2010) • When accusations to the contrary arose, an Executive Order was signed to reaffirm that federal funds are not to be used for abortion services (2010) • Signed the Prevent All Cigarette Trafficking Act (March 31, 2010) • Signed the Stem Cell Therapeutic and Research Act (Oct 8, 2010) • Signed the Healthy, Hunger-Free Kids Act (Dec 13, 2010) • Signed the Early Hearing Detection and Intervention Act (Dec 22, 2010) • Extended healthcare and compensation for 9/11 responders (Jan 2, 2011) • Established National Alzheimer’s Project (Jan 4, 2011) • Signed a reauthorization of the Combatting Autism Act (Sept 20, 2011) • Asked multiple congressional committees to bring forward a healthcare reform bill; held dozens of public hearings and town halls on the issue (2009-2010); signed Patient Protection and Affordable Care Act (March 23, 2010); healthcare reform bill is $940 billion over 10 years (2010) * Note: 32 million additional Americans will receive healthcare coverage and costs will be lowered for most Americans, but many of the goals are phased in over four years Components of the bill: • Prevents insurance companies from denying coverage to individuals/family members with pre-existing health conditions; a temporary plan is being developed to cover high-risk individuals with pre-existing conditions until the full reforms go into effect in 201 • Prevents insurance companies from placing lifetime limits on benefits • Bans “rescission” so insurance companies can’t cancel coverage if individuals keep their policies current or if they become ill • An individual’s out-of-pocket healthcare expenses are capped • Closes the “donut hole” (Part D) for Medicare prescription drug coverage (under Bush, Medicare helped pay for drugs up to $2,600 and above $4,550, but individuals had to pay 100% of the costs in between these amounts); now Medicare helps cover costs irrespective of the amount – seniors will now pay only 25% of drug costs up to $4,550 and only 5% of drug costs above that amount • In 2010, an emergency provision will offer seniors a $250 rebate on the costs incurred within the “donut hole” • Individuals living at or below the poverty line were eligible for healthcare under Medicaid, but by 2014 individuals/families living slightly above (making up to $14,404/$29,327) the poverty line will also be eligible for benefits • Individuals/families making less than $43,320/$88,200 per year will qualify for government subsidies to help purchase health insurance • All individuals must have health insurance or face a government fine; all large (over 50 employees) employers must offer health insurance to employees or pay a fine • Small businesses can get a tax credit if they offer health care • There are hardship exemptions if individuals can’t afford health insurance • Families can keep their children in college on their plans through age 26 • Promotes health insurance “exchanges” so consumers can buy “wholesale” • Creates consumer assistance offices to help consumers file complaints or appeal decisions from insurance companies; beginning in 2011, insurance companies can no longer make excessive rate hikes without justification and approval, and those doing so may be barred from participating in new health insurance exchanges Funding sources: • Large employers (over 50 workers) that don’t offer health benefits will be charged a $2,000/worker fee; if the employer offers coverage but employees instead purchase federally subsidized insurance the fee is $3,000/worker receiving federal subsidies or $750/worker (whichever is lower) • Annual fees on pharmaceutical companies ($27 billion), health insurance companies ($60 billion), and medical device-makers ($20 billion) • Annual penalties on individuals who do not have health insurance (up to a maximum of $695/person) • Increase in the Medicare payroll tax from 1.45% to 2.35% for individuals making $200,000+ and families making $250,000+ • 3.8% tax on unearned income for millionaires • Insurance companies will be subject to a tax on each high-end insurance plan (so-called “Cadillac” plans) they offer Miscellaneous: • Illegal immigrants are not eligible for insurance or subsidies • By Executive Order, such federal funding can’t be used for abortion • The federal government will assist states by covering all of the increased expenses of expanding Medicaid coverage (90% of costs after 2020) IRAQ & AFGHANISTAN • Began the phased withdrawal of US troops from Iraq (2009); fulfilled campaign promise to have combat troops (90,000) out of Iraq by August 31, 2010; over 100,000 combat troops withdrawn by late 2010; continuing the withdrawal (2011) • Authorized the deployment of 17,000 additional troops to Afghanistan, which had been pending for months during the Bush Administration (2009); begin withdrawal of troops from Afghanistan (August 2011) • Changed the US military command in the Afghan conflict (2009) • Tasked the Pentagon to reorganize US policy in Afghanistan; the new policy included 30,000 additional troops deployed, priority training of Afghan forces, developing agriculture and infrastructure, limiting aerial bombing, etc. (2009-2010) • Ordered the Pentagon to send additional helicopters to assist US Marine units and Special Forces in Afghanistan (2009) • Increased unmanned drone strikes on Taliban and al-Qaeda targets in Afghanistan (2009-2011) • Ended the Bush-era “stop-loss” policy that kept soldiers in Iraq/Afghanistan longer than their enlistment date (2009) • Visited US soldiers in Afghanistan (2010) MILITARY & VETERANS • Ordered the Pentagon to cover expenses of families of fallen soldiers if they wish to be on site when the body arrives back in the US (2009) • Ended the Bush-era “blackout” imposed on media coverage of the return of fallen US soldiers (2009) * Note: The media is now permitted to cover the story pending adherence to respectful rules and with the approval of the fallen soldier’s family • Ended the Bush-era “black out” policy on media coverage of war casualties (2009) * Note: Full information is now released for the first time in the War on Terror • Ordered better body armor to be procured for US troops (2009) • Signed Korean War Veterans Recognition Act (July 27, 2009) • Signed Veterans Health Care Budget Reform and Transparency Act (Oct 22, 2009) • Funding new Mine Resistant Ambush Vehicles (2009) * Note: The old Hummers were very vulnerable to roadside explosives and an alarming percentage of our soldiers lost in Iraq were on account of IEDs • Increasing pay and benefits for military personnel (2009-2010) • Improving housing for military personnel (2009-2010) • Signed Veterans Health Care Budget Reform and Transparency Act (Oct 22, 2009) • Signed Military Spouses Residency Relief Act (Nov 11, 2009) • Expanded veterans’ reimbursement for non-VA emergency care (2009 & 2010) • Initiating a new policy to promote federal hiring of military spouses (2009-2010) • Ordered that conditions at Walter Reed Military Hospital and other neglected military hospitals be improved (2009) • Beginning the process of reforming and restructuring the military to a post-Cold War, modern fighting force (2009-2011) * Note: Bush announced in 2001 his intention to do this but backed off the reforms after 9/11, which include: new procurement policies; increasing the size of Special Ops units; deploying new technologies; creating new cyber security units; etc. • Ended the Bush-era practice of awarding “no-bid” defense contracts (2009) • Improving VA staffing, information systems, etc. (2009) • Authorized construction of additional health centers to care for veterans (2009-2011) • Suspended the Bush-era decision to purchase a fleet of Marine One helicopters from foreign suppliers in favor of American-made helicopters (2009) • Ordered a review of the existing “Don’t ask, don’t tell” policy on gays in the military (2010) • Supports for blinded veterans (April 7, 2010); improvements in services for blind veterans; established Major Charles R. Soltes Blind Rehabilitation Center within the Department of Veterans Affairs (May 7, 2010) • Increased cost-of-living adjustment and compensation for veterans (Sept 30, 2010) • New GI Bill for returning veterans from Iraq and Afghanistan (2009-2011) • Signed bill providing assistance for caregivers of veterans wounded in Iraq and Afghanistan (2010); signed Caregivers and Veterans Omnibus Health Services Act (April 23, 2010) * Note: The omnibus bill does the following: Training, funding, and counseling for caregivers; promoting pilot childcare programs for women vets under treatment at the VA; independent oversight to prevent abuse; readjustment counseling for National Guard and reservist units; etc. • Eliminated co-payments for veterans who are catastrophically disabled (2010) • Established enforcements for minimum essential care for veterans (May 27, 2010) • Established a new interagency task force to assist veterans owning small businesses (2010) * Note: The efforts include promoting federal contract opportunities, improve access to loans and capital, mentor assistance programs, etc. • Signed The Families of Fallen Heroes Act, which covers the moving costs of immediate family members of those lost in service (military, intelligence, and security personnel) (2010) • Signed the For Vets Act (Dec 22, 2010) • Measure to help prevent military families and vets from losing their homes (Dec 29, 2010) • Proposal to offer tax breaks for businesses that hire unemployed Iraq/Afghanistan veterans; job training support for Iraq/Afghan vets (2011) • Signed Restoring GI Bill Fairness Act (Aug 3, 2011) NATIONAL SECURITY • Phasing out the expensive F-22 war plane (which wasn’t even used in Iraq/Afghanistan) and other outdated weapons systems (2009) • Announced his intention to close the detention facility at Guantanamo Bay (2009) * Note: The closure has been delayed due to opposition but it remains on the agenda. • Stated his interest in housing terrorists at a new federal “super max” facility in the US (2009) * Note: this has been delayed due to opposition but it remains on the agenda • Cut the expensive Reagan-era missile defense program, saving $1.4 billion in 2010 (2009) • Cancelled plans to station anti-ballistic missile systems in Poland and the Czech Republic (2009) • Signed Weapons Systems Acquisition Reform Act (May 22, 2009) • Replacing long-range, expensive missile systems with more efficient smaller systems (2009-2010) • Increased US Navy patrols off the Somali coast in response to pirating (2009-2010) • Established a new cyber security office and appointed a cyber security czar (2009) • Ordered the first nation-wide comprehensive cyber threat assessment (2009) • Signed a one-year extension on some provisions of the controversial PATRIOT Act (2009;and again on Feb 27, 2010 and May 26, 2011) • Authorized the use of more unmanned warplanes/drones (Predator, Reaper, etc.) in the War on Terror (2009); eliminated more terrorist targets in same time period than the Bush Administration • Instituted a new Nuclear Posture Review, revising US nuclear deterrence policy to encourage more nations to join the 1996 Comprehensive Test Ban Treaty (2010) * Note: Components of the policy include: a pledge to stop nuclear testing; a pledge to not build a new generation of nucs; identifying nuclear terrorism, rather than a launch from another nuclear state, as the major threat; a pledge to not use nucs on a non-nuclear state in a conventional conflict; etc. • Signed Executive Orders to block payment, transfers, exports, etc… of individuals and organizations supporting the regimes of North Korea, Iran, Somali pirates, and other foreign threats (2010) • Signed Comprehensive Iran Sanctions, Accountability, and Divestment Act (July 1, 2010); signed related measures for sanctions and divestment Act to deal with other foreign regimes like North Korea (2010) • Additional funds and supports for southwest border security (Aug 13, 2010) • Signed First Responder Anti-Terrorism Training Resources Act (Sept 30, 2010) • Presidential Memoranda to extend certain provisions of The Trading with Enemies Act which was to expire in September 2010 (2010) * Note: This includes freezing assets and banning trade that benefits the Cuban regime; however further efforts at normalizing travel to Cuba are supported • Signed bill for southwest border security and increased funds and agents on the Mexican border (2010) • Ordered another review of efforts to close Guantanamo Detention Facility (Jan 22, 2011); review of unlawful interrogations (Jan 22, 2011); review of Guantanamo detainees (March 7, 2011) • Authorized bombing of military targets in Libya in support of rebels; support NATO mission against Qaddafy regime (winter 2011) • Many terrorists and senior leaders of al-Qaeda and the Taliban have been killed on Obama’s orders and on his watch (Osama bin Laden, Anwar al-Awlaki, Abus Hafs al-Shahri, Atiyah Abd al-Rahman, Ammar al-Wa’ili, Abu Ali al-Harithi, Ali Saleh Farhan, Harun Fazul, Baitullah Mahsud, Noordin Muhammad Top, Saleh Ali Saleh Nabhan, Saleh al-Somali, Muhammad Haqqani, Qari Zafar, Hussein al-Yemeni Dulatin, Abu Ayyub al-Masri, Abu Omar al-Baghdadi, Sheik Saeed al-Masri, Hamza al-Jawfi, etc.; many others were captured including Abdul Ghani Berader, Younis al-Mauritani, etc.) RIGHTS • Instituted enforcements for equal pay for women (Lilly Ledbetter Fair Pay Act) (Jan 20, 2009) • Appointed Sonia Sotomayor, the first Latina, to the Supreme Court (2009) • Held the first Seder in White House (2009) • Appointed a diverse Cabinet and diverse White House staff (2009) (4 women, 2 Latinos, 4 African Americans, 3 Asians in Cabinet) *Note: Obama offered 3 Republicans Cabinet posts, but only 2 accepted • Signed Civil Rights History Project Act (May 12, 2009) • Established protections and incentives for adopting children with special needs (May 15, 2009) • Spoke at the annual dinner of the Human Rights Campaign, a gay rights organization (2009) • Signed the first major piece of federal gay rights legislation that includes acts of violence against gays under the list of federal hate crimes (2009) • Reversed the Bush-era practice of politicizing Justice Department investigations and prosecutions against political opponents (2009) • Pushed for some of the 9/11 perpetrators to be tried in federal court (2009-2010) * Note: The process moved at a snail’s pace and, in the face of opposition, Obama has remained quiet • Signed an extension of the Ryan White HIV/AIDS Treatment Extension Act to provide federal research and support for treating the disease (Oct. 30, 2009) • Allowed the State Department of offer same-sex benefits for employees (2009) • After eight years of neglect, the Justice Department and EEOC are again enforcing employment discrimination laws (2009) • Convened the White House Tribal Nations Conference, inviting representatives from 564 federally-recognized Indian tribes (2009) • Provided increased school projects for Indian lands and increased funds for the Indian Health Service (2009) • Signed an Executive Order mandating that his Cabinet develop plans to work with and consult Indian tribes on issues impacting Indian lands (2009) • Signed Human Rights Enforcement Act (Dec 22, 2009) • Proposed that the Pentagon repeal the “Don’t Ask, Don’t Tell” policy; placed a “freeze” on current efforts to remove alleged homosexuals from the military (2009); commissioned a study to develop alternatives to “Don’t Ask, Don’t Tell” (2010); signed Don’t Ask, Don’t Tell Repeal Act (Dec 22, 2010) • Called for federal agencies to look into recognizing gay partnerships in terms of benefits (2010) • Signed an Executive Order for the President’s Initiative on Historically Black Colleges and Universities (2010) • Increased funding for Historically Black Colleges and Universities (2010) • Signed Executive Order to promote the federal government as a “model employer” when it comes to hiring the disabled (2010) * Note: This includes new efforts to increase the recruitment, hiring, and training for the disabled • Programs to assist Spanish speakers with the US Census (2010) • Elena Kagen appointed to Supreme Court (2010) • Tasked all federal agencies to develop new strategies to address HIV/AIDS (2010) • Signed International Adoption Simplification Act (Nov 20, 2010) • Signed Fair Sentencing Act (2010) * Note: The Administration continues to deescalate marijuana interdiction and raids; increased dramatically the amount of cocaine one must possess to be sentenced to jail; eliminated mandatory sentencing for first-time drug abusers and simple possession • Signed Hoh Indian Tribe Safe Homelands Act (Dec 22, 2010) • Additional supports for housing for the elderly (Jan 4, 2011) • Executive Order for notification of employee rights under labor laws (Jan 30, 2011) TAXES • Negotiated a deal with Swiss banks to permit the US government to gain access to records of tax evaders and criminals (2009) • Ended the Bush-era policy of offering tax benefits to corporations who outsource American jobs (2009) * Note: The new policy promotes in-sourcing investments to bring jobs back to the US • Signed the American Recovery and Reinvestment Act which provides small tax cuts for 95% of “working families” (2009) * Note: The tax cuts were not as big as was suggested during the 2008 campaign • Convened an advisory board that is looking into simplifying the tax code (2009) • Ordered the closing of offshore tax safe havens (for individual and business tax evaders) (2009) • Reduced taxes for some small businesses to stimulate the economic recovery (2009) • Extended the Home Buyers Credit for first-time home buyers (2009) • Proposed doubling the child tax credit (2010) • Called for the repeal of the capital gains tax for small businesses (2010) • Proposed rolling back the 2001 and 2003 Bush tax cuts for the wealthiest Americans (2010) * Note: This would be for families earning over $250,000/year and would return their tax rates to the 1990’s level; however, the President backed off proposal in late 201 because of Republican opposition • Proposed “Buffet Rule” which requires millionaires to pay a fair/minimum tax (Sept 2011) * Note: Many take advantage of tax laws to pay less than or lower percentages than middle class Americans OTHER INITIATIVES • New federal funding for science and research labs (2009) • Signed national service legislation; expanded national youth service program (2009) • Increasing opportunities in AmeriCorps program (2009) • Signed Edward M. Kennedy Serve America Act (April 21, 2009) • Ordered the DEA to stop raids on medical marijuana usage (2009) • Ordered a review of existing “mandatory minimum” prison sentencing (2009) • Signed an order to limit airport tarmac delays and the time passengers had to sit in the plane/on the tarmac during delays (2009) • Restored the EPA to “Cabinet level” status (2009) * Note: Bush removed the EPA from this status • Beginning discussions with Congress for comprehensive immigration reform (2010-2011) * Note: Much of Obama’s immigration reform had been stalled by opposition in Congress • Commissioned expert panels and reports from NASA; announced a new direction for human space flight that involves funding a new heavy lift-launcher and jettisoning the Ares 1 program; boosting NASA’s budget by $1 billion in 2011 (2010) • Signed a bill so that members of Congress would NOT receive a cost of living adjustment in FY 2011 (May 14, 2010) • Signed Daniel Pearl Freedom of the Press Act (May 17, 2010) • Ordered a ban on text-messaging for all commercial truck and bus drivers (2010) • Signed Special Agent Samuel Hicks Families of Fallen Heroes Act (June 8, 2010) • Signed FAA Air Transportation Modernization and Safety Improvement Act (2010) • Executive Order to seize transactions/property of criminal organizations (July 25, 2011) • Signed Child and Family Services Improvement and Innovation Act (Sept 20, 2011) FACTOIDS & MISCONCEPTIONS • Online/talk radio claim: The Obamas demanded and spent more money than any first family to move into the White House. Fact: The Obamas paid for the renovations of the private living quarters in the White House with their own money rather than using the funds provided to all new first families. • Online/talk radio claim: The Obamas are Muslims (some emails claim atheists) who did not allow Christmas to be celebrated in the White House. Fact: The Obamas are Christian and celebrated Christmas in a very traditional way during each holiday season at the White House. They also recognized celebrations and customs from other religions. What was different about the Christmas celebration was that the Obamas reused many Christmas ornaments from previous White House trees rather than buy new ones and used LED energy-saving lights. • Online/talk radio claim: Obama received extra money as part of his Nobel Peace award and he pocketed it all. Fact: Obama received the same award as other Nobel laureates, but donated the award money for the prize to several charities. • Online/talk radio claim: Obama has been secretive and unwilling to allow public or media access. Fact: In only his first year in office, Obama held 23 town hall meetings, gave 158 interviews, and held 42 press/news conferences, as well as 411 speeches, comments, and remarks * Note: Official numbers are not available on such things, but this seems to be a new record high in the White House • Online/talk radio claim: Obama vacations more than any president. Fact: In his first year in office, Obama took only 26 days of vacation (2009) * Note: Official numbers are not readily available on such things, but this seems to be a new record low and far lower than Bush • Online/talk radio claim: Obama was not born in America and is some sort of international “Manchurian” plant who supports other countries over America. Fact: Obama was born in Hawaii in 1961. He has been an internationalist president insofar as he took 10 foreign trips to 21 nations and met with 74 foreign leaders in only his first year in office (he also took 46 out-of-town trips to 58 cities and 30 states in 2009). • Online/talk radio claim: Obama has not kept any of his campaign promises. Fact: Official numbers are not kept on such things historically, but it appears Obama made more promises and discussed more policy issues during his campaign than any other presidential candidate. But, it also appears he has kept more promises than perhaps any other president. (As of 10/4/11) Obama has kept 147 of his campaign promises and another 197 of them are currently in progress; but he has broken 49 of them and compromised with Republicans on 44 of them; another 69 of his campaign promises have been stalled by Republicans. (Source: PolitiFact) • … and in case you were wondering Obama promoted the celebration of the Reagan Centennial and established the Ronald Reagan Centennial Commission (June 2, 2009) EMIS The stock retreated. What now? Guru: “The negative result was from the osteoarthritis trial (the second one) which I never expected to work. We are waiting for the results from the osteoporosis (brittle bones) trial. Expected in the fourth quarter, probably next month. There I do expect it to work, though with biotech there is always significant risk.”
Herman Cain, Warren Buffett October 18, 2011March 25, 2017 9-9-9 Leaving aside the difficulty President Herman Cain might encounter getting Congress to slash the top tax bracket from 35% to 9% (and from 15% to zero on their capital gains) . . . and leaving aside the unfairness of funding those cuts with tax hikes on the poor and middle class . . . and leaving aside the irony of allowing “charitable giving” as the one remaining deduction (taxing the poor to fund breaks for the rich seems anything but charitable*) . . . and leaving aside the uncertainty such a drastic proposal would cause as decision-makers wondered whether it could actually pass and, if it did, how long it could survive and what its impact would be (uncertainty, the Republicans tell us, is what’s paralyzing the economy**) . . . leaving aside all that, there is this: Herman Cain told “Meet the Press” host David Gregory Sunday that his 9% federal sales tax – on things like bread – would not cost the poor anything. He explained that taxes on the corporation that made the bread would be lower, and on the company that delivered the bread would be lower, and on the bodega owner that sold the bread would be lower . . . so, he said, competition would force them to pass on the savings and the price of bread would go down. Don’t you understand competition? he more or less asked David Gregory. But here’s the thing: Those taxes are not a cost of producing the bread. Yes, if the cost of wheat went down, it’s possible some of the savings would be passed on. Wheat is a cost of producing bread. If bakery or stockroom wages were reduced (say, by allowing child labor and abolishing the minimum wage), competition might drive down the cost of bread. But tax on the profit from making (or delivering or selling) the bread is not a cost of making (or delivering or selling) the bread. Owners will still have the same incentive to maximize profits they always did; and will be no more eager to share their profits with consumers than they ever were. Did your landlord lower your rent, or your parents’ rent, when his tax bracket fell from 70% under Carter to 28% under Reagan? As a shareholder, did you expect management in the bakery you own to lower prices when the tax rate on your dividends fell from 39.6% under Clinton to 15% under Bush? It’s a fine notion to simplify the tax code.*** I’m all for it. But one piece of the code that could hardly be simpler is having higher rates for rich people than for poor people. It would not in fact strain the nation’s computing capacity to have several rates, with the very highest reserved for income over, say, $10 million a year. That may seem a bum deal for such people; but one day this week I hope to tell you the story of Warren Buffett’s genie. *And, by the way, a 9% rate would diminish charitable giving, the after-tax cost of which for rich people would spike up to 91 cents for each dollar given, from an after-tax cost of 65 cents today. **In fact, of course, it’s not uncertainty over taxes and regulation that are paralyzing decision-makers, as the Republicans claim, but uncertainty over whether our political system is up to the challenge of setting the economy on a sustainable path. Things like modernizing our crumbling infrastructure, making 100 million homes and offices energy efficient, and teaching our kids the skills they’ll need to compete in a global economy – things that can’t be done by lowering taxes or laying off teachers. ***In that interview he also said poor people would save on the cost of tax preparation. A cost they do not, of course, have. I think what he meant was that the overall cost of everyone’s tax compliance, including corporate tax compliance, is $430 billion – that was the number he used. To the extent that number is fair – and it seems to me that at about 3% of our overall GDP it must be stretched to the limit of a variety of aggressive assumptions – I don’t think it’s realistic to think business will ever run without accounting of any kind. So just how much of that $430 billion would be saved, and how much of that saving would lower the cost of a poor person’s bread, I hesitate to weigh too heavily. But, yes: let’s simplify the tax code. WARREN BUFFETT’S CHAIN LETTER This is not that story. This is the story of an email I got yesterday from a widely-known national journalist, passed on to me and a long list of others at the purported urging of Warren Buffett, urging each of us to pass it on to a minimum of 20 others. The email begins this way: Warren Buffett, in a recent interview with CNBC, offers one of the best quotes about the debt ceiling: “I could end the deficit in 5 minutes,” he told CNBC. “You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.” The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971…before computers, e-mail, cell phones, etc. Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land…all because of public pressure. Warren Buffet is asking each addressee to forward this email to a minimum of twenty people on their address list; in turn ask each of those to do likewise. ☞ Well, no. I checked with Mr. Buffett and he has not in fact encouraged anyone to forward this email. I replied to my well-intentioned journalist friend . . . If you read the full CNBC transcript you’ll see that, yes, Warren is frustrated that Washington has allowed our national finances to grow so precarious. But he is not literally working to amend the Constitution this way. At a two-hour Obama fundraising dinner that he headlined for us recently, he never mentioned it. (Rather, he said now is NOT the time to put a sharp brake on government spending.) [BTW, this nightmare began when Reagan/Bush quadrupled the National debt in 12 years by overdoing tax cuts for the best off . . . righted itself when Clinton raised their taxes somewhat and moderated military spending, handing Bush 43 and a Republican Congress “surpluses as far as the eye could see” . . . then became a disaster as Bush 43 further slashed taxes for the best off, squandered the surplus, and handed Obama three remarkable gifts: $4 trillion more in debt; a baked-in $1.5 trillion 2009 budget deficit; and an economy on the brink of depression.] We +all+ share Warren Buffett’s frustration . . . I venture to say none of us more than the President himself. And we all want simple solutions. (Here’s one I like: how about putting millions of people to work – for private companies – doing work that desperately needs doing? Like repairing 158,000 substandard bridges and 35,000 substandard schools.) But forcing Congress to limit the deficit to 3% of GDP even during emergencies (like now) is a terrible idea that could, among other things, make the deficit WORSE as it plunged us into depression. MOST years, for sure, the debt needs to grow slower than the economy, so over time we shrink the debt relative to the economy as a whole. In 1930 it was 30% of the GDP. In 1940, after all the WPA projects and such, it was 40% — but then WW II came along, which we simply had to win (and which many believe provided the stimulus to end the Depression), and we ran the Debt up to 121% of GDP by 1946 . . . when we began a 35-year period of gradually growing the debt slower than the economy . . . handing Reagan a 30% ratio of Debt to GDP when he took office in 1980. Right now we need LOADS of government spending — ideally, on productive infrastructure that will last 50 or 100 years — to win +this+ “war” to make the country efficient and competitive again. (Which sure beats borrowing to build tanks and bombs to blow things up.) But leaving aside how insane it would be to throw the brakes on the economy right now — even as we all agree we need to chart a sustainable +long-term+ post-recovery path — what of the +mechanics+ of this Constitutional Amendment? Kick out all 435 representatives and the entire institutional memory of the place all at once, swearing in 435 freshmen/women and complete political chaos? And when? In the election right after the budget is passed but before it has played out? The election five weeks after the offending fiscal year has ended? (The fiscal year ends September 30.) And with what accounting tricks allowed or not allowed to +calculate+ the budget deficit and GDP? And with what Supreme Court challenges +to+ those calculations? And what if the GDP were revised upward or downward months later, as usually happens? Undo the whole thing if it turns out to have been a 2.92% deficit instead of 3.06%? We need “fair districting” so centrists once again have a chance at being elected and working together. (The Florida fair-districting initiative many of us worked hard to pass may eventually undo much of the gerrymandering in that state — if we can beat back the Republican attempts to subvert it.) We need to get rid of anyone who signs an anti-tax pledge. That can be done next November. (We need to start NOW registering millions of voters and helping millions more overcome the obstacles-to-voting that Republicans have been erecting.) And we need, I humbly submit, to channel our frustration constructively. Warren Buffett is headlining fundraising dinners to help elect Democrats. And he recently sent in his own max-out check. If you think he’s a smart guy and a rational capitalist — and I happen to think he’s the +smartest+ guy (and most rational capitalist) — then I’d encourage you to follow his lead and support the President. (We take smaller contributions, too.) Please push back on those who sent you this email. Their intentions are surely good; and they will want to correct the impression that Warren Buffett has asked them to forward it. ☞ The purported “Warren Buffett email” went on to list 7 other measures – not just the 3% deficit cap – to include in a Constitutional Amendment aimed at members of Congress. E.g., no Congressional pensions. Even for those already receiving them. Just cut them off. There is anger in the land, and frustration, and suffering. But can we be clear about one thing? It is not suffering on the part of the handful of billionaires funding much of the Republican push to shift ever more wealth and power to the already rich and powerful.