Why We Investors Should WELCOME A Small Transaction Tax March 28, 2013March 28, 2013 THE TRANSACTION TAX Joe Devney: “Here is a story at the intersection of finance and politics: ‘Senator Tom Harkin and Congressman Peter DeFazio reintroduced a bill that would impose a speculation and derivatives tax that could bring in needed government revenues.’ Do you think it’s a good idea?” The big revenue source we should grab is via a carbon tax, as argued Monday. But, yes, if it’s small, I think a financial transaction tax is a an excellent idea. First off, we need the revenue. An extra $5 on a $15,000 trade? I’ll live. Second, it would discourage some of the craziest high-frequency trading. Third, Vanguard founder John Bogle favors it (as do 1,000 economists) and no one’s been a more level-headed advocate for the retail investor than he. AND SPEAKING OF TAXES . . . Thanks to ProPublica and NPR for this eye opener: Imagine filing your income taxes in five minutes — and for free. You’d open up a pre-filled return, see what the government thinks you owe, make any needed changes and be done. The miserable annual IRS shuffle, gone. It’s already a reality in Denmark, Sweden and Spain. The government-prepared return would estimate your taxes using information your employer and bank already send it. Advocates say tens of millions of taxpayers could use such a system each year, saving them a collective $2 billion and 225 million hours in prep costs and time, according to one estimate. The idea, known as “return-free filing,” would be a voluntary alternative to hiring a tax preparer or using commercial tax software. The concept has been around for decades and has been endorsed by both President Ronald Reagan and a campaigning PresidentObama. . . .So why hasn’t it become a reality?Well, for one thing, it doesn’t help that it’s been opposed for years by the company behind the most popular consumer tax software — Intuit, maker of TurboTax. Conservative tax activist Grover Norquist and an influential computer industry group also have fought return-free filing. Intuit has spent about $11.5 million on federal lobbying in the past five years — more than Apple or Amazon. Although the lobbying spans a range of issues, Intuit’s disclosures pointedly note that the company “opposes IRS government tax preparation.” . . . HO-HUM-IZATION Women can vote! Ho-hum. Clarence Thomas’s wife is white! Ho-hum. The President is black! I wouldn’t go so far as to ho-hum that amazing national milestone — but African-American mayors? A dime a dozen. And so on. With time, controversial things become ho-hum. Remember Ellen on the cover of Time? “Yep, I’ m gay.” BIG controversy! Advertiser boycotts! All that — just 16 years ago. Remember Anderson Cooper coming out a few months ago? Good for him, for sure, but . . . yawn. Sam Caldwell: “I think what I’m going to say is old hat for you but it made an impression on me. My son-in-law has a group of close friends who are scattered around the country but who make an effort to get together as often as they can. They’re into back country skiing and some in the group are pretty macho. One of the guys recently came out. It was a non event. He is a great guy who they all like. He’s very busy on Wall St. and sometimes says he can’t make it to their get-togethers. When this happens they really put the heat on him to join and he usually ends up coming. One of their traditions is that when one’s wife is pregnant they all get together for a ‘men’s shower.’ This winter they had their get together in Tahoe and he joined them. He grew up in Florida and doesn’t ski but when they skinned up the mountain he was right with them on snow shoes. When they hit the strip clubs in Reno, he was right with them. To me this is the new normal. This is the way it should be. In future being gay in our culture is going to be about as notable as being left handed.” Maybe this specific subset of hu-hum-ization should be called ho-homo-zation. Whatever we call it, it is, I think — like giving women the right to vote and Justice Thomas the right to marry — a good thing.
Thoughts Inspired By Two Republican Senators March 27, 2013March 27, 2013 HEALTH CARE Alabama Senator Jeff Sessions believes that — until Obama came along and ruined it — we had “the best health care system in the world.” Rachel Maddow’s blog asks why. So worth the read, if you have a minute. 40 YEARS LATER AT YALE I only pretended to go to Yale. Ohio Senator Rob Portman’s son actually does. Read his story here. To think how the world has changed since I didn’t go there. (For one thing: Will’s parents were the first people he told he was gay; mine were the last — and not until the book I had written about it was coming out in paperback.) When my book came out 40 years ago, under a pen name, I referred to my parents as “the Supreme Court.” Today, the real one is hearing oral arguments — supported by the President of the United States among others — in favor of marriage equality. Will Portman’s thoughts thereon — that we shouldn’t assume opponents are “bigots” or proponents “immoral” — are spot on. Makes me proud to have pretended to have gone to Yale. # BOREF The state of play for WheelTug, as reported yesterday in Air Traffic Management. Without going into details as to why I think we may have a better shot at this than the two competitors, it does feel more and more “real” — that one day in that no longer impossibly distant future, jets will maneuver on the ground without having to fire up their main engines. Can’t wait.
Decline To State March 26, 2013March 25, 2013 EVEN SOME WHITE BREAD REPUBLICANS HAVE HAD ENOUGH Or in this case, a Whitbred Republican. Now former Republican. From Jonathan Capehart’s Washington Post quoting an e-mail from Jeffrey Whitbred of West Covina, California: . . . I am writing mainly to discuss the birther issue. You mentioned the effect that it had on blacks. It is not only blacks, as it had an effect on me too. I was registered Republican since I was in college and voted in my first Presidential election in 1988. However, I changed my party affiliation to Decline to State, as they call independents in California, in 2010. I had been considering making this change since the 2008 primary season, mainly because I did not like the way the Republican Party was becoming more ideologically rigid and inflexible. The birther issue also turned me off greatly, mainly because in addition to it being a total lie, it was also a total distraction that detracted from what I felt were legitimate policy differences between President Obama and the Republicans. Still, changing party affiliation requires one to fill out a new voter registration card and go to the post office, and never quite got motivated enough to do so. What finally got me to do it was the Republican’s reaction when President Obama released the long form of his birth certificate in 2010. I remember Newt Gingrich and Sarah Palin both saying that the President shouldn’t be wasting his time on that matter but should rather be paying attention to the important issues facing the country. I just about wanted to scream when I saw that. Neither one of them had ever said that before the President released that certificate. Rather, they were both totally content to sit back and let everybody talk about that as if it was a legitimate issue. Then, when the President finally did respond to the calls to release the long form, they still found a way to turn this on him. Had it only been Gingrich and Palin alone, I may not have been motivated to switch. However, in my opinion, they both represented the attitude of the entire Republican Party establishment in general. I finally decided that this was not the political party that represented my values or that I wanted to be affiliated with, and I did not want them taking me for granted as a member. I therefore downloaded the voter registration paperwork, filled it out and mailed it in the following day. I do not regret my decision at all, and I will never return to the Republican Party as long as it exists in its current state. LED Larry F.: “I live in a 55+ Florida community of ‘active retirees.’ Most of us have homes with 9 to 10 foot ceilings. Changing the bulbs that are recessed into the ceiling gets trickier every year (is my ladder shrinking?). Going without full light (as some neighbors do because they can’t safely get the bulbs changed) is a dangerous situation as well. I’m going to change my bulbs to LEDs and expect never to change them again. I suggest anyone in my situation or with a parent or friend who struggles with recessed ceiling lights consider the same solution.” DCTH Dr. Rosen: “What does Guru say about DCTH?” He says: “Hold for FDA approval in June, then sell.”
Imagine . . . March 25, 2013 IMAGINE Just a minute (and 20 seconds). Almost like going to church, without having to get dressed up. AND IMAGINE THIS Patrick Johnson: “The progressive budget you endorse has some major problems. Broadly speaking, the biggest problem is it calls for tax revenues of between 21.4% and 22.1% of GDP. For the last 70 years, while tax rates have varied all over the place from preposterously high to quite a bit too low, tax revenue has averaged 18% of GDP with very little deviation. Never, not even during the height of World War 2 nor during the biggest bubble in human history in 2000 producing spectacular, ephemeral capital gains has tax revenue ever been even 21% of GDP. So it seems unrealistic to think the government could actually collect that much revenue.” Looking at this table, I note that federal excise taxes have dropped from close to 3% in the 1945-1955 period to 0.5% today. So what if we imposed a carbon tax? It seems as though that would be a hard one to avoid, as it would appear on your utility bill and at the gas pump. Of course, by conserving and being more efficient, you likely COULD lower your bill by enough to offset the tax — good! So maybe this is a solution? We raise that extra 3% revenue to get receipts up to what the Progressive Budget calls for . . . many people avoid the pain by improving their energy efficiency (weatherizing their homes and the like) . . . phasing the tax in over a few years to give them time . . . we become a more energy-efficient nation . . . a nation with adequate funds to modernize our infrastructure . . . to become more prosperous, healthy, and secure. Imagine that. # HISTORICAL FOOTNOTE Had we phased in a dime-a-year increase in the gasoline excise tax starting in the late 1970’s — as so many people realized we should but considered politically impossible — we would today have $4 a gallon gas (oh, look — we do!), and a dramatically more fuel-efficient fleet of vehicles, most of them produced by GM, Ford, and Chrysler. Instead of sending trillions of dollars abroad to buy gas we then burned into thin air, we could have kept that cash, using it to lower the income tax and to finance smart investments in our future. Too late for that now. But not too late for a carbon tax.
Imagine March 24, 2013March 24, 2013 IMAGINE Just a minute (and 20 seconds). Almost like going to church, without having to get dressed up. AND IMAGINE THIS Patrick Johnson: “The progressive budget you endorse has some major problems. Broadly speaking, the biggest problem is it calls for tax revenues of between 21.4% and 22.1% of GDP. For the last 70 years, while tax rates have varied all over the place from preposterously high to quite a bit too low, tax revenue has averaged 18% of GDP with very little deviation. Never, not even during the height of World War 2 nor during the biggest bubble in human history in 2000 producing spectacular, ephemeral capital gains has tax revenue ever been even 21% of GDP. So it seems unrealistic to think the government could actually collect that much revenue.” Looking at this table, I note that federal excise taxes have dropped from close to 3% in the 1945-1955 period to 0.5% today. So what if we imposed a carbon tax? It seems as though that would be a hard one to avoid, as it would appear on your utility bill and at the gas pump. Of course, by conserving and being more efficient, you likely COULD lower your bill by enough to offset the tax — good! So maybe this is a solution? We raise that extra 3% revenue to get receipts up to what the Progressive Budget calls for . . . many people avoid the pain by improving their energy efficiency (weatherizing their homes and the like) . . . phasing the tax in over a few years to give them time . . . we become a more energy-efficient nation . . . a nation with adequate funds to modernize our infrastructure . . . to become more prosperous, healthy, and secure. Imagine that. # HISTORICAL FOOTNOTE Had we phased in a dime-a-year increase in the gasoline excise tax starting in the late 1970’s — as so many people realized we should but considered politically impossible — we would today have $4 a gallon gas (oh, look — we do!), and a dramatically more fuel-efficient fleet of vehicles, most of them produced by GM, Ford, and Chrysler. Instead of sending trillions of dollars abroad to buy gas we then burned into thin air, we could have kept that cash, using it to lower the income tax and to finance smart investments in our future. Too late for that now. But not too late for a carbon tax.
Tilt March 22, 2013 60-WATT EQUIVALENT LED FOR $13 Doug Lindal: “I assume you saw this from David Pogue in today’s NYT, but if not it is huge for the LED bulb market. Ten-dollar (40 W) LED lights from CREE available at Home Depot!” You actually must read this and replace all your incandescent light bulbs — and, when they burn out, all your CFL’s. Best investment you can make. (I think you’ll refer the “warmer” to the “whiter” light. Check them out before you buy to be sure.) . . . The bottom line: Choose the Cree bulbs for their superior design and low price, Philips Hue to startle houseguests, or the GreenWave system for remote control of all the lights in your house. By setting new brightness-per-watt standards that the 135-year-old incandescent technology can’t meet, the federal government has already effectively banned incandescent bulbs. And good riddance to CFL bulbs, with those ridiculous curlicue tubes and dangerous chemicals inside. LED bulbs last decades, save electricity, don’t shatter, don’t burn you, save hundreds of dollars, and now offer plummeting prices and blossoming features. What’s not to like? You’d have to be a pretty dim bulb not to realize that LED light is the future. LEONARD COHEN Bob Miller: “Delighted to see you’re a Leonard lover, too! I saw him here in Chicago a few years ago with my late wife, and again just two weeks ago with my fiancé! I recommend the Leonard videos that were filmed in London in 2009. Here’s The Future (Repent), for example. If you can’t watch the whole thing, start it at about 7:00 and listen to his little talk. I’m sure it will put a smile on your face.” PAPER Fun video in 39 seconds. Trust me: your French is good enough. (Thanks, Dean.) INEQUALITY Joel Grow: “Reich has it right–once again. Here:” . . . For over thirty years Republicans have pitted the middle class against the poor, preying on the frustrations and racial biases of average working people who can’t get ahead no matter how hard they try. In the Republican narrative, government takes from the hard-working middle and gives to the undeserving and dependent needy. In reality, average working people have been stymied because almost all the economic gains of the last three decades have gone to the very top. The middle has lost bargaining power as unions have shriveled. American politics has been flooded with campaign contributions from corporations and the wealthy, which have used their clout to reduce marginal tax rates, widen loopholes, loosen regulations, gain subsidies, and obtain government bailouts when their bets turn sour. Now five years after the worst downturn since the Great Depression and the biggest bailout in history, the stock market has recouped its losses and corporate profits constitute the largest share of the economy since 1929. Yet the real median wage continues to fall — wages now claim the lowest share of the economy on record — and inequality is still widening. All the economic gains since the trough of the recession have gone to the wealthiest 1 percent of Americans; the bottom 90 percent continue to lose ground. . . . All the struggling middle class has to do is elect Democrats, who would tilt the playing field back their way a bit, instead of Republicans, who would tilt it further still.
Repent! March 21, 2013 Went to hear Leonard Cohen last night, quite possibly the coolest 78-year-old on the planet. Seven encores . . . no column today. But check out his music? Bob Dylan meets Tom Waits meets the Doors meets Judy Collins (because he seems to cover so many of her songs, except of course it turns out he wrote those songs and she covered them). My favorites — in order, more or less — The Future (Repent!), Anthem, Hallelujah, Suzanne, Closing Time . . . so many. Cohen’s business manager looted almost his entire $5 million retirement account late in life — cautionary tale! — but the silver lining is that it probably accounts for his touring again. Unlike Frankie Valli — also 78 — Cohen lip-synched not a syllable of his three-hour concert. MACKLEMORE – ENCORE If you liked yesterday’s clips on marriage, here’s a re-link to Macklemore’s Same Love. OSIR Jim Leff: “Are you still holding OSIR? No blog updates in over a year.” I’m selling, actually. It’s up about 50% (or 90% if you bought it at second mention), but not what we had hoped.
Do You Even KNOW The Difference Between Hummus and Baba Ghanoush? March 20, 2013March 20, 2013 Who would have imagined we would come so far so fast on marriage equality? Now to oppose it is to be to the right of Dick Cheney and Rob Portman. And that’s saying something. USA Today did this perspective piece tracing the journey from the 1969 Stonewall riots to the President’s recent marriage equality endorsement as it heads to the Supreme Court — quoting one now-64-year-old Stonewall rioter, “The idea of marriage wasn’t even in sight [back then]. The Supremes, to us, were a singing group.” Here‘s a column on Jeff Chu’s wedding, his parents’ failure to attend, and his book, Does Jesus Really Love Me?: A Gay Christian’s Pilgrimage in Search of God in America. And here are “10 Reasons to OPPOSE Marriage Equality” — except that they’re satirical, as it’s not possible to construct logical ones. (Remember: we’re talking only about civil government-issued marriage licenses, not “holy matrimony.”) And then there’s this: if you don’t allow marriage, meet the guys who’ll steal your girlfriends. Do you even KNOW the difference between hummus and baba ghanoush? They do. # BEST BUS STOP EVER Sorry: Monday’s link was broken. No more.
Looking Forward March 19, 2013March 18, 2013 HUBRIS: LOOKING BACK If you missed it last month, set your TiVo for the re-air of Hubris: Selling the Iraq War Friday at 9pm Eastern on MSNBC . . . the story of how we were misled and mis-led into a war that wound up wounding or killing more than 100,000 Americans and vastly more Iraqis, at a cost to us of more than $2 trillion. And a cost to others, like the Brits, as well. “The way Britain was led into war was ‘wholly irresponsible,’ senior military figures have told the Guardian. Though they direct their fire principally at the Bush administration, they make clear the Blair government must share a lot of the blame.” “. . . It was absolutely irresponsible to go in without thinking of the consequences”, said Lord Guthrie, former chief of defence staff and head of the army. He added: “War is dangerous, difficult, and dirty, but usually cheaper and shorter and easier than what can happen after the fighting stops.” Donald Rumsfeld, US defence secretary at the time, had a “lot to answer for”, Guthrie added, referring to the way Rumsfeld, notorious for his “stuff happens” description of widespread looting in Baghdad, allowed Paul Bremer, the US chief administrator – in effect the US governor of Iraq after the invasion – to ban the Ba’ath party and dismantle the Iraqi army. They should have got rid of the top people but “clasped the army to their bosom”, and say to them: ‘Help us rebuild Iraq'”, Guthrie told the Guardian. “Why did Bremer squash any sense of the Iraqi people taking any role in their own destiny?” asked Air Chief Marshal Sir Brian Burridge, commander of British forces in Iraq at the time of the invasion. “That defies logic.” General Sir Mike Jackson, head of the army at the time, described Rumsfeld and Bremer as “intellectually bankrupt”. With other British defence chiefs, he expected and wanted Iraqi military units, including Saddam Hussein’s Republican Guard, to remain in place and help maintain law and order in Iraq after the invasion. . . . LOOKING FORWARD: THE PROGRESSIVE BUDGET Thanks to UP/with Chris Hayes, the Nation, and a few others for publicizing this budget, otherwise getting drowned out by attention to the Paul Ryan budget that dismantles the New Deal (on the one hand) and the Patty Murray budget which is way better but not bold enough (on the other). The Congressional Progressive Caucus “Back to Work” budget aims to create 7 million jobs its first year as it sets about rebuilding America’s infrastructure . . . paid for with deficit-cutting revenue measures like a carbon tax; a quarter-of-one-percent tax on stock trades; higher tax brackets for that portion of your income above $1 million, with a top 49% bracket for that portion of your annual income above $1 billion. And more. Read it. It’s interesting! And logical! If I were God, I might so some editing it . . . maybe a tenth-of-one-percent instead of a quarter percent on stock trades . . . maybe a little gentler treatment of estates, especially those under $10 million . . . but in the main, it seems this is exactly the document we should be working from. MYLGF MethylGene reported a failed drug trial yesterday having something to do with a fungal enzyme. But we were always in this for the cancer drugs, on which the company indicates there might be a progress report later in the year. It remains highly speculative. # Marriage, as promised: but tomorrow. (Wasn’t divorce fun?)
Marisa Tomei! Marisa Tomei! March 18, 2013March 19, 2013 FLORIDA Start with this: Florida leans Democratic. It has more registered Democrats than registered Republicans and — despite concerted efforts to suppress the Democratic vote — more Floridians voted for Obama than for McCain or Romney. Okay? Florida leans Democratic. Yet, mainly because of the way voting districts have been drawn (“gerrymandered”), by a wide margin Republicans control the state legislature. What could possibly better reflect the will of the people? One practical effect: blocking aid to the sick and needy. . . . a Republican-led House committee blocked the expansion earlier this month and last week a Senate panel also moved to stop the plan to offer health care to an additional 1 million Floridians. By rejecting the Medicaid expansion, Florida is estimated to be giving up $51 billion over 10 years to cover low-income residents. Under the law, the federal government would pay for 100 percent of the costs for the first three years of the program and then 90 percent thereafter. . . . BEST BUS STOP EVER I’m guessing you’ve seen this clip. If not, you may smile. DIVORCE Tomorrow (or soon): marriage. But, just to get the downside out of the way first (and to keep you smiling): divorce. Warning: Not x-rated but . . . sophisticated. (Co-starring, George Costanza would be excited to learn, Marisa Tomei.) GEARS I grasp at all straws — it’s part of the fun — so here’s the latest: a company bragging about its role in successfully engineering the gears for WheelTug. Just one more data point to suggest people are actually working on this thing with the expectation it may come to fruition. Wouldn’t that be nice?