CULTURE OF CORRUPTION
By Clarence Page
January 12, 2006
“It’s not healthy to blow your favorite evening beverage through your nostrils. But that’s how surprised I was to hear National Democratic Chairman Howard Dean deny that any Democrats took money from Jack Abramoff.
“Unless you’ve been on the moon for a while, you probably have heard that Abramoff is a formerly well-connected Republican who has pleaded guilty to federal charges tied to his lobbying operations. Right-wing bloggers and others pounced on Dean and flailed away, since a number of Democratic senators and congressmen already have given Abramoff-associated money to charity. How, then, could Dean say otherwise? Right?
“But I checked it out and, guess what? Dean was right.” . . .
On the news last night, the 2006 federal deficit was revised upward to $400 billion. But as usual, this is without the very real $200 billion or so we’re borrowing from the Social Security surplus. So the real deficit this year is now projected at $600 billion or so, nearly a quarter of the federal budget.
Got that? For every four dollars Uncle Sam is spending, three come from taxes and one is borrowed from your children. (Well, from the Chinese and Saudis, too, but it is your children whose future will be weighed down with the debt.)
By the time keys to the White House change hands, in January, 2009, the National Debt will approach $10 trillion – nearly $8 trillion of it racked up under just three Presidents: Reagan, Bush and Bush.
Meanwhile, the interest on all that debt – currently around $350 billion a year – amounted to nearly 40% of the $893 billion we paid in personal income tax in 2005. And that was at today’s low interest rates, and on ‘only’ the $8 trillion in debt. If interest rates rise, and as the debt itself rises, 40% will be remembered as the good old days.
Remember when Republicans were shouting for a Balanced Budget Amendment? (Not a good idea, actually, but they were shouting for it loudly.) Now that they control the government, the only Constitutional Amendment being pushed is one to discriminate against gay families.
LEA, AMP, AXP
The smart friend who suggested LEA around $28 not long ago – it’s dropped to $24 on bad news – says he’s holding on but not buying more. He still thinks it could be a $40 stock in a couple of years, but then again, it might not. He did not expect this news.
We’ve done better with American Express, especially those who bought LEAPS (which raise the risk but lever the reward). The stock is barely a point higher than the $52.50 at which it was suggested last May, but that’s after we got a share of Ameriprise (AMP) for each five shares of (AXP). With AMP at $44, that adds nearly $9, so we’re up just shy of 20% in eight months. Both AXP and AMP are probably worth hanging onto (as are the 2007 and 2008 LEAPS you may own); but if you have them in a nontaxable account, you might take your profit in AMP and either reinvest it in more AXP or . . . if you’re ready to branch out into something new . . . buy a few shares (or LEAPS) of Wal-Mart (WMT), $45.74 last night. It could be $65 or $70 by the end of next year. (If you’re boycotting Wal-Mart, that’s another matter; but boycotting Wal-Mart may have less practical, positive impact than using the profit from its stock, if you make one, to further the causes you believe in.)
LINKING TO THE TIMES
Alan Atwood: ‘In today’s column you posted a link to the story about the IRS seeking to deny ‘fraudulent’ refunds to low income Americans while ignoring fraud from the wealthy. The thing with the New York Times is that after a period of time all their stories go into their archive and are available only to paying subscribers. If two weeks from now someone were to pull up your column and try to follow the link, all they would get is an abstract and an offer to buy access or sign up for Times Select. Thankfully, there is a way to generate permanent links to most New York Times stories with a tool that the Times itself endorses and makes available with bloggers in mind. The tool generates a permanent link which never goes behind the archive firewall. They even have a ‘bookmarklet’ that you can drag to your Internet Explorer or Firefox bookmarks bar to make link generation as simple as a single click while you’re viewing a Times story. For example, this is the non-expiring link to David Cay Johnston’s story on the IRS withholding refunds from the poor.’
☞ Thanks! I’ll try to remember to use this. I do have a Times Select subscription, not least because the New York Times is a company I hope to see thrive.
PETER BROWN’S SUGGESTION FOR NEW ORLEANS
To the Editor
New Orleans Times-Picayune
I am a New Yorker, but the incredible reputation of New Orleans’ creative food innovations has inspired me to propose that the City of New Orleans create a brand new taste treat, which could be marketed nationally, with the proceeds used in the rebuilding effort. It is:
THE NEW ORLEANS BROWNIE
Baked in New Orleans, every package sold will contain a certificate stating that the consumer has contributed to the rebuilding of your great city. It would memorialize the famous observation of President Bush: ‘BROWNIE, YOU’RE DOING A HECK OF A JOB,’ and become known as the brownie that helped save New Orleans.
Peter A. Brown
New York City, New York
Have a great weekend. (Don’t forget to send in your fourth quarterly estimated tax payment by Tuesday, if you need to.)