Tuesday, December 21, 2010

Taxing the Dead

It is often been asserted that the only two sure things are death and taxes. The current Democratic caucus is making every effort to combine them to avoid any confusion. There have been various arguments put forth regarding the level at which estates should be taxed but whether the act of dying should trigger a tax is rarely discussed.
Newsday informs us that through industry, intelligence and luck – not to mention sacrifice and good choices – some people amass “fortunes” of various sizes. In their opinion, this means that anyone who accomplishes this is justifiably required to contribute a portion of it to everyone else. Their sole reason is because they should. They even attempt to make this less awful “smart estate planners can avoid much of its sting”. So, passing tax on people who can avoid it actually makes sense to the collective economic wisdom of the editors.

Say a guy builds a business manufacturing widgets. After a while he owns a building, the land it’s on, specialized machinery, support equipment, and employs 100 people paying their salary and benefits. Then he dies. The government says his heirs have the absolute right to continue the business - if they give the government $3,000,000. The value any business is mostly in the plant, equipment, trade name and patents so the heirs don’t have $3,000,000 in cash available. The result is the business closes or is sold to a competitor, jobs are lost and Congress has achieved their aim of insuring that no one gets “richer”. Meanwhile, there is still a demand for widgets. The heirs start another business selling the same widgets but these are imported from China. This time the business has no concrete value and nothing to tax except current income. Unfortunately, there are no US employees either. And people wonder why we lost jobs.

So goes the "logic" of the economic loonies.

A Stimulating Idea

There needs to be some level of safety net for the unemployed -- after all the government caused the problem in the first place. But the Democratic House supports never ending and unfunded benefits to the unemployed based on the assumption that this is a great stimulus to the economy - to them almost as good as raising taxes. They assume two things:

One premise is that the wealthy will not spend any money they get to keep in reduced taxes. The theory is that they will not spend on consumption but will only save it. (Which is a stimulating factor too.) Their conclusion is that people who have disposable income will not spend it on electronics, dining out, cars and other symbols of wealth. (?)
A second premise is that people who are getting the small unemployment checks will stimulate the economy by their spending. People in this situation have limited disposable income. They are buying – or should be buying – only what they absolutely need. But the conclusion is that unemployment benefits will stimulate the economy. (?)
So their economic analysis concludes that people with no money can stimulate the economy more than people who have money to spend.
Why are we listening to these idiots?

Yell at them

Sent this to John Boehner:

Thanks to the work of many people we achieved the biggest swing in the House in 60 years. The question to be answered now is: so what? The overall result has been is no appreciable difference in how Congressional business is conducted. This is from an AP article:
Obama has his Departmental Secretaries “reaching out” to the Republican incoming committee chairs and at least one of chairman has already been impressed by this effort.
“It’s very smart,” said Rep. John Mica (R-Fla.), the incoming chairman of the Transportation and Infrastructure Committee, of the White House outreach. … Mica met with Transportation Secretary Ray LaHood, a former House Republican colleague. "I know Ray and I have a lot of confidence in dealing with him.”
The day after meeting with Mica, LaHood announced that the Transportation Department will kick in an additional $342 million for SunRail, a commuter rail project for central Florida strongly backed by Mica... Florida is expected to be a key battleground in Obama’s 2012 reelection run.

This is the same type of earmark (bribe) as the one Landrieu got to vote for Obamacare and is exactly the type of thing we were all motivated to end.

The first positive action that could have been taken was the appointment of chairs that actually understand what happened in November. These appointments could have meant something; certainly more than the symbolic, non- binding, voluntary pledge to end earmarks. But we got the symbolism, a liberal dose of seniority, and no real action. Half of the incoming House committee chairmen do not deserve their positions by any rational evaluation of their past actions vs. the November results. The new Majority Leader in the House is allowing business to be conducted in ways that are indistinguishable from his predecessor. But you keep saying, even in the face of actions like Mica's, that everything is changed.
A repeat of the disastrous display by the 2000-2006 Republican Congress will lead to the collapse of Republican Party as a national option. The motivation to volunteer/donate in the political process is not to elect the lesser of two evils.

Tuesday, December 14, 2010

Democrats can't do arithmetic

The “rich get richer” argument in the Sunday Newsday has been around for as long as there have been demagogues. It is has been repeated enough to become urban legend but it just does not stand up to a little arithmetic.

The comparison between the top and bottom tiers will always be between people who have little or no wealth and people whose wealth continues to grow. You are comparing something that is by definition close to zero with something that continues to grow. By the laws of arithmetic, the gap between the two groups must continue to get larger.

It is simply intellectually dishonest to continue to make this argument.

The lowest category of category of wealth is always going to contain most recent high school/college graduates, immigrants, drop outs, newly-weds, unwed mothers, etc. In short, people with little or no wealth. The question is whether they stay there over time. As people work, earn, and save, history has shown they go up the economic ladder to be replaced in the lowest category by new people who have little or no wealth. On the other hand, people who are “rich” will be earning more, saving more and generally increasing their wealth at a faster rate (or at least in larger absolute terms) than people who are just starting out. This category is further distorted by the people (Steve Jobs) who started a business that raised them into the highest category.

Going the wrong way

Drunks keep driving the wrong way on the LIE and the Parkways. There is a campaign to resolve the situation by making it harder for drunks to get on the highway going the wrong way. The spend-more-money solution is for unspecified (but probably costly road modifications and undefined engineering solutions. But in what may be a first a DOT spokesman didn’t go for the tax increase and said, “…roads are perfectly safe if you are alert, sober and follow the rules of the road.” True enough, but we are all at risk from people who are not alert, sober and follow the rules. So what to do?

A common thread of all these incidents is that the drunks are really whacked - at least twice the legal (.08) limit – and some have been on drugs on top of that.. Many of these people also have prior DWIs and suspended licenses. The problem is that when these people do get before a judge, jail time has been an exception. (Killing someone has recently be getting more time but 3-4 years for killing someone has not historically unusual.).

How about:
DWI gets jail time for the first offense and you have to pay to have a breathalyzer installed on your car.
Getting caught subverting the breathalyzer (driving a different car, etc) gets a more jail time.
Multiple offenses gets more jail time, impounded car, more fines,etc.
Killing someone while driving drunk is murder and is punished accordingly.
Raise the limit for DWI. (.08 is two beers with dinner)

Teaching Sacrifice

The current economic has everyone sacrificing. Many companies have cut staff, reduced or eliminated salary increases, are not hiring, dropping benefits and doing what they can to weather the storm.

Yesterday, Deer Park teachers announced their part of the sacrifice. They were contractually due for a 3% raise for the next school year. The Deer Park Superintendent proudly announced that they will not be getting that raise. Due to her superior negotiating skills these teachers will instead be getting a 4.85% raise next school year. Step increases are not mentioned as part of the sacrifice.
This is what passes for “sacrifice” to the Teachers Union and for great negotiating by those responsible. The idiot Superintendent even called this a “savings”. Compared to what?

Fairness requires that it be noted that this type of sacrifice is not confined to Deer Park. Similar sacrifices have been made by teachers all over Long Island

Pension returns

Public pensions are guaranteed a rate of return in excess of the historic return on prudent pension investments. When such unreasonable returns are not achieved, the municipality in question is required to make up the difference. Not being able to just print more dollars (the Federal answer), states, towns and villages get to raise taxes. This benefit is made even more unsound since these guys get to pad their pension pay out in the final working years with unused vacation and sick time and extra overtime. So the unrealistic funding assumption that is supposed to pay for their retirement benefits are made completely impossible since their actual retirement benefits are calculated on an inflated salaries that were never part of the funding process in the first place. This is not a sustainable system.

Bernake raises gas prices

Big noise over the rising gas prices. Nobody wants to talk about it but a big reason for this increase is the policy of the First Dope. He has declared the Gulf waters off limits to drilling and exploration. The next step will be to announce that the potential supply of domestic oil is at an all time low. That will be because if the oil companies are not allowed to look for oil, they are unlikely to find it. If they don’t find potential oil fields our “proven” reserves go down.

But the main reason the price is going up is that the dollar is losing its value. The Dope-in-Chief at the Fed keeps announcing that he is printing more money. Notice that oil is not getting any more expensive to those who buy with most other currencies.

Trade Lesson:

Suppose you are Abdul and have 1,000 barrels of oil to sell every month. You are happy to sell it for $60 a barrel and get $60,000. Abdul uses that money used to buy 3,000 widgets from China which he sells for $40 each. He is making $120,000/month until Bernake prints $600,000,000. The normal price of $60,000 now only buys 2,500 widgets which still sell for $40. But that only grosses $100,000 $20,000 less than before. And the $100,000 buys less stuff than it used to. The test question is, what do you do? The answer is, of course, you raise you prices.

Meanwhile the papers are talking about refineries that are closed for repairs. They bury the weakened dollar at the end of the story if it gets in at all.

Living Long and Prospering

The National Center for Health Services announced that US life expectancy has declined by about a month. With rates in other countries rising, this is being cited as an indication of the worsening state of health care in the US. It is not. The real US life expectancy is actually higher than almost every nation. Three things bring the announced rate down.
The US counts infant mortality from day 1 - most other nations do not count for up to a week; no other nation has our ridiculous number of deaths via automobile accident; and the #1 cause of black male (16-30) deaths is from shooting each other.
These things have nothing to do with the quality of health care but have a major effect on reducing the average life expectancy here.


The First Dope is trying to convince the more wacky Democrats that he didn’t betray them in their effort at class warfare. The Dope agrees that avoiding the scheduled tax increases will contribute to job growth and by extension tax revenue increases as well as cost savings in unemployment benefits. (He did what?) The really liberal Democrats don’t care about that part. Their main goal is to continue harping on the “gives too much to the wealthy” mantra. Class warfare over policy . The conclusion is that it is more important to the Democrats to extract money from the people they consider rich than it is to create jobs.

Tuesday, December 7, 2010

Democratic Economics

Steve Israel is today’s dope. He is campaigning to get the federal government to return 100% of the taxes New Yorkers pay to the Feds. His statement is that “No one should be paying more than they get.” He has even collected the support of the LIA and some local economist.
Third grade arithmetic: when the amount of taxes paid to the government equals the amount of money the government returns to the states, the difference is zero. But some portion of government revenue goes to pay Representative Israel’s salary, to pay for the SBA grant the “economist” got, to pay TSA workers to grab people’s genitals airports, and to pay for wars and other Gov’t overhead. The Fed could simply print more dollars to make up the difference but that is neither permanent solution nor a good idea.

It is no surprise that Steve Israel is another in a long line of Democrats that have no idea what they are talking about

Village Idiots

The Village Idiots of Glen Cove – lead by Mayor Suozzi - have determined that it is the stores’ fault that people steal shopping carts and leave them around where the Town has to clean them up. Their solution is to fine the stores because people steal from them. This actually makes sense to them. The fine is $250 per cart and they figure to get $20,000/year.

Good plan - ignore the people who steal stuff and pass a law that punishes the stores that are targets of the theft. Who would have guessed that the idiots who thought this one up are “lifelong Democrats”?

Media Accuracy

The Headline was “Republicans block meals for needy kids”. The media was in a snit. Michelle was “lobbying furiously”. The reason was “House Democrats said the GOP amendment, which would have required a background checks for child care workers, was an effort to kill the bill. Running background checks on people employed in these jobs should be considered a good thing. What would be the downside of preventing felons, child abusers, and Islamoterrorists from working in the child care industry? The Democrats and the media seem to think that such a check would be a problem. Why?

Friday, December 3, 2010

The Nanny State - Parenting Division

The Transportation Safety Department has thought of a new way to spend your money. They propose that all cars and SUVs be equipped with rear facing cameras starting in 2014. The idea is to prevent the “busy parents juggling careers and children” from not running over their “toddlers who get behind a parked car, not realizing the inherent dangers”.
Now it is very sad that people are dying because their parents are not paying any attention when they back up. Unfortunately, these things are caused because someone didn’t pay attention. Exactly how will another camera change that? According to these do-gooders, the same people who don’t pay attention to where their kid is before backing up will now pay attention to where their kid because they will now magically look where they should have been looking before. Why, because it is now easier not to run over your kid? Please!!! It was easy not to do that before. Just pay attention to where your toddler is when you back up. And that is free. But your nanny state thinks that juggling a career is just too difficult to handle without federal intervention.
This new advantage will increase the cost of a new car a $1,000 or so for something that most people don’t need.
The “do it for the kids” crowd will be bleeding their hearts out to save the kids from parents who don’t pay any attention to their role as parents. In the meantime, this is a tax. Not a just tax on people who are “rich”; it is a tax on everyone who buys a car. It will hurt car sales, decrease jobs and put your spending decisions in the Government’s hands.
If you want to buy the camera option, go ahead. Don’t make everyone else do so

Your Government Inaction

The Off Track Betting Corp in NYC is asking for a Bailout from the State. The Nassau and Suffolk editions are right behind them in line. In another demonstration of complete incompetence, the government can’t even avoid losses while running a gambling business!! Any profit from the business would be completely out of the question. How much on an incompetent idiot do you have to be to lose money doing this? Of course, it does not top the Government's performance in not being able to run a whore house in Nevada
There are people who have been successfully profiting in these businesses for years. Maybe they would help if asked nicely.

Michelle wins one

The lame duck House passed a federal bill that covers what local schools do to feed students. Michelle Obama is thrilled.
The bill apparently will create jobs too. There is a provision in the bill that the Department of Agriculture will determine how often schools can run fund raising bake sales. Agriculture is also charged with determining whether the foods that parents cook and bring to them for sale meet federal standards for being healthy enough. Looks like each school district will be getting a Bake Sale Czar. There is no word on how to get approval for a sale, or how the food that is prepared in each home will be monitored before it gets to the sale. More inspectors will be needed to taste brownies – if they are allowed. This will be a big help.


The LIE was expanded to add a special lane only for cars with multiple passengers. It has been finished for several years. Someone thought this was a great idea and everyone’s taxes paid for it. It is now time to evaluate what has happened. Doing major project like this ought to have an evaluation when they are completed. Were the expected benefits actually achieved? Were there any unexpected benefits? How about the downside? Are there more accidents because of it? Did it help at all?
There are good ideas and bad one. When something like this is done, we ought to find out whether it works as planned. We should be learning who has good ideas and who doesn’t; who gets things done and doesn’t. And act accordingly.

Wednesday, December 1, 2010

Senior Discounts

A member of Newsday’s editorial board questioned senior discounts. His arguments about might be valid with for public companies like the MTA. For them, subsidizing anyone - even students – is a debatable policy. The rest of his contention seems to be that private companies should not be allowed to maximize their opportunities. He does not seem to be aware of the profit motive involved. These discounts are not being done to promote social policy.
Take the movie house. An empty seat for a show is a lost opportunity to generate revenue. It is clearly better for them to fill that otherwise empty seat for a dollar less than to have it be empty. If they were selling all their seats they would have no incentive to cut prices to attract more people. As he says, some Yankee games have discounts. That deal is not available for a Yank/Red Sox game. Wonder why?
These companies are trying to get more people to use their services when they are not at peak. The stereotype of seniors going to dinner and movies early (and riding the LIRR off peak) is demonstrably true.
The astounding information that NYS provides a break to seniors who “meet certain income requirements” is no more out of line than that there are NYS residents of all ages who are not taxed because of “certain income requirements”. Real money is involved in both cases.
No wonder the Newsday editorials are so dopey.

Electric Cars

These things may well be the wave of the future but the question is whether the future is now. Doesn’t look like it. This GM beauty will go about 40 miles per charge. The charge time is about 10 hours on a 120 volt line and 4 hours on a 240 line. Installing a 240 v line into your garage is extra. Another thing that seems to have popped up is the impact on the power lines of having a cluster of these things in the same area. But that stuff will eventually be resolved and as supporters say: “We’ve got to start somewhere.”
Right, but how about starting with stuff that actually works? Not with an over-priced, small (four seat) car that is inconvenient to operate. If someone wants to overpay for a product they want that is their choice but supporting uneconomic choices with everyone else's tax money doesn't seem quite right.
It is just difficult to name another product that has to be sold based upon deceptive advertising that our current nanny state would allow on the market. How about a ladder where only the first two rungs would support you; almost sterile band-aids; soda made with water that was pretty clean; or flat screen TVs that had to be recharged after each hour of viewing? But maybe that last one would improve literacy rates.

Conservative Slant?

Fox News - object of derision because of its perceived conservative slant had a beauty Sunday. They were promoting the web site of a recent Northeastern graduate who had $200,000 in student loans. The website was asking for donations so she would be able to pay off the debt. She apparently had a job (not the one she wanted) but still found it difficult to pay her loan. The idiot Fox anchor was promoting this as a good thing to do. The woman chose to go to Northeastern; she chose to take out the loans to pay for it; she was bright enough to get into the school but not bright enough to determine that she couldn’t afford it. She blames this mess on the fact the she bought into the myth that you should go to the best school that you can. The part about the best school you can afford was missed in her thought process. And now she has determined that it should be everyone else’s problem. She is looking for people who are dopey enough to reward behavior that should not be encouraged. Don’t blame her for trying – maybe she was taught in her Northeastern Marketing class that taking advantage of the gullible was a valid fund raising technique.
The main issue is the moronic anchor guy who supports this drivel. He seems to have missed the issue of personal responsibility completely. Suppose she bought a BMW and now she can’t afford the payments. Her original options were to buy a BMW, NOT to buy a car, or to buy a different car for less than half the price. The last two would leave her with more manageable debt. But a BMW is better, faster, and cooler. Not anyone’s problem but hers. And clearly she would have trouble finding people who would donate for that.
This guy proposed that everyone in this audience send the woman a dime and the debt would be paid. Maybe he should try and solve everyone’s financial problems and suggest that everyone should send everyone else one dollar. The end result of such a dopey plan is that everyone would wind up with exactly what they started with. Bet that would make sense to him though.