Tuesday, March 31, 2009
Monday, March 30, 2009
I just don’t see a scenario where meaningful health reform happens. Chairman Baucus balked at paying for it out of the deductions of high earners. Many more oppose taxing employer-offered benefits. Even if they could agree on what to do, no one seems to know how to pay for it. I keep hearing individual members of Congress talking about working on “the 80 percent where we agree,” but 80 percent seems like an awfully high bar for agreement. If they truly agreed on 80 percent, wouldn’t they have already done a portion of it?
I’ve always thought the problem was this: we want health care to be both a business, with competition and yes, profit, and we want it to be a state-given right for all citizens. We can’t figure out how to have both. The private sector could introduce all sorts of efficiencies and common-sense to the system, but we can’t get out of our own way as a country to let it happen. We have to stop talking about the system we’d create now, if we were starting from zero. That ship has sailed. Too many stakeholders are too married to some portion of the haphazard system we’ve created to let it be dismantled. Like it or not, this hodge-podge, quasi-entitlement, public/private mess is our system. It’s imperfect, it’s bureaucratic, it’s inefficient, it’s outrageously expensive. But until Washington is willing to allow the sacrifices that would have to be made to undo what we’ve got, I think the best we’ll get is an expensive distraction.
Sunday, March 29, 2009
American taxpayers, right now, are a little bit like a young woman who regrets going a bit “too far” with the wrong guy. As we smooth our collective hair and tuck in our collective blouse, backing gently away from the grabby, greedy federal government, we are probably still hoping for a gesture of caring and genuine affection. Perhaps we think it might come in the form of more affordable health care, making up for the mauling we’ve suffered from bailing out the financial industry.
At this moment, I can only tell taxpayers what I’ve told many young female friends: Girls, be sharp and keep your clothes on.
Here are a few tips to at least de-coding the health-care come-ons that are likely to come out of Washington, DC in the coming months:
1. Don’t fall for the phrase “reform the American health-care system.” We don’t have a health-care system in the U.S. We have a health-care marketplace where insurance, medical services, and pharmaceuticals are bought and sold. Government spending, taxation and regulation impact this marketplace profoundly. A politician that boldly promises to reform “the system” needs to explain him or herself a little more fully. Don’t let them get away with this kind of smooth talk. You’re too smart for that. Ask questions, seek specifics on taxation, regulation and spending.
2. Don’t fall for the big spender; he’s going to stick you with the tab, and his plan isn’t necessarily going to work. Much like efforts to improve education, spending more taxpayer dollars has failed to solve our various health-care problems. So listen to four-star-restaurant-level spending proposals as you would listen to a salesman – after all, you’re paying for this date.
3. “I want what’s good for you, baby,” the “consumer.” Addressing you as a consumer is some sweet, caring, empowering talk. But do you really feel like a consumer? Honestly? Have you ever comparative-price-shopped for a doctor, a diagnostic test, or a prescription? Maybe you’d like to become a consumer. Maybe you’d like to buy your own health insurance or your own medical goods and services. And that’s fine. That would be empowering. But don’t believe that they respect your rights as a consumer before they actually let you become one.
One final piece of advice that applies to girlfriends and taxpayers alike: take a second look at the nerds. They can be better for us.
If a geeky politician, for example, starts talking about the “tax treatment of employer-provided health insurance,” your eyes may start to glaze over. But fight it! The tax treatment of health insurance is actually at the root of most of our health-care problems.
Ever wondered why we rely on our employers for insurance? It’s a tax answer. Here’s a short primer so that the nerd talk might more sense:
Employers can buy health insurance with pre-tax dollars, while individuals have to buy it with money that has already had a bite taken out of it by taxes. The difference in price paid is staggering – and flatly unfair.
Okay, so WHY do employers get this break that individuals don’t? Well, it’s an accident of history. During World War II, there were caps on wages and employers had to find different ways to reward and attract employees. They started offering health insurance as part of compensation packages. Congress later thought that practice was quite nice and should be rewarded – and they used their favorite reward-and-punishment tool, the tax code, to show their approval. The rest, as they say, is history.
So if the geek-y politician or pundit on TV talks about the “tax treatment” of employer-sponsored health insurance, listen up. A nerd can be insightful, and that can be very attractive. He is also likely to be a very respectful date. He’ll let you keep your shirt.
Thursday, March 26, 2009
So, I am dumbfounded by all the drama surrounding the early days of his presidency. Seems like Obama went from a serious drama to a sitcom in short order. When he made his announcement in Springfield, IL in 2007, it was All in the Family, with his wife and children. The media portrayed him as the ultimate Family Guy. He campaigned One Day At A Time with his cast of Friends.
He campaigned with a discipline unseen in presidential politics. With his upset victory in the Iowa caucuses, his supporters were feeling Good Times.
But with the unexpected loss in New Hampshire, they felt Bewitched and Lost.
But, he proved to be a Survivor heading into Super Tuesday.
He refused to take his campaign into the Weeds, even when Hillary's campaign went very negative on him. For that, he received Big Love from the voters.
The Obama campaign got hit with The Facts of Life of politics as the Clinton's showed their true Colors in South Carolina.
Bill Clinton basically said welcome to The Real World. Obama tried to knock Hillary out in Texas, but they went down to the Wire. But, he did ultimately destroy the Clinton's Dynasty. They never thought he could win The Office. Their explanation was definitely from Spin City.
The Democratic convention was one of the best run conventions ever. The huge crowds gave him loud Cheers, thereby making him an American Idol.
During the general election, Obama ran an Amazing Race, with John McCain being the Biggest Loser. His campaign made McCain's team look like a bunch of Scrubs and subsequently, they all disappeared Without a Trace.
Now that Obama made his Bones, it was time to move to the West Wing. He found that it was a Different World than he thought. He inherited an economy that was in the General Hospital, but is now in the ER.
There is no doubt that Obama has one of America's Toughest Jobs. But, with 20/20 hindsight, it's quite obvious that his budget will turn our country into a Supernanny state. As the World Turns and Obama searches for his Guiding Light, our country seems to see nothing but Dark Shadows.
Seems the Commander in Chief wants us to live on Fantasy Island-a place where the government is the answer to all that ails us.
But What's Happening is no one trusts the government. We know every president has Different Strokes once they get In the House. But Gimme a Break. Before you start expanding the government, you must reform it and make it functional. The government couldn't protect people from Bernard Madoff. The Securities and Exchange Commission couldn't protect us from Wall Street. If we are not careful, we are all going to end up in the House of Payne!
Raynard Jackson is president & CEO of Raynard Jackson & Associates, LLC., a D.C.-based political consulting/government affairs firm. You can listen to his radio show every Saturday evening from 7-9:00 p.m. Go to www.ustalknetwork.com to register and then click on host, and then click on his photo to join his group.
He used a question about the uncertain prospects for a resumption of the Israeli-Palestinian peace process to emphasize his persistence. According to the President, he professes a “whole philosophy of persistence,” and he cited several of his initiatives in which he calmly adhered to that philosophy while impatient critics carped about their lack of immediate success. Among the examples, this:
“When it comes to Iran . . . we did a video, sending a message to the Iranian people and the leadership of the Islamic Republic of Iran. And some people said, well, they did not immediately say that they we’re eliminating nuclear weapons and stop funding terrorism.”
Now, there are certainly critics of the President’s approach to Iran who worry it is based more on wishful thinking than the hard headed realism he promised to restore to America’s foreign policy. And some of those might have seen his videotaped Nowruz greetings to Iran as evidence of his naiveté. But to the best of my knowledge not even his most outspoken and implacable detractors insisted it produce Iran’s immediate disarmament and a cessation of its support for terrorists.
Nor has anyone criticized the President because he has not “immediately eliminated the influence of lobbyists in Washington.” No one of adult judgment would believe such a Utopian achievement were possible in the near or long term without first suspending the First Amendment. The President was criticized for promising repeatedly that his administration would not permit officials who previously were lobbyists to work on issues they once lobbied on, and then immediately proceeded to allow several former lobbyists to do so. Nor has he been criticized because he has “not immediately eliminated wasteful pork projects.” He has been criticized because he accepted without resistance an omnibus spending bill that was loaded with earmarks.
We had an indication of how the President favors this kind of straw man during debate over the stimulus bill, when he denounced Republicans who balked at the price tag or felt it wasn’t sufficiently stimulative as advocates of doing nothing in the midst of a global recession. Yet, Republicans opposed to the bill offered an alternative that was different in size and kind, but was, arguably, more stimulative and responsible than the bill the President supported.
He also likes to dismiss his opposition as biters of the hand of bipartisanship he has generously offered them. Yet, he declined to pursue genuine bipartisan compromise on the stimulus bill because it was needed so urgently he couldn’t spare the time to negotiate seriously. He ignored Republican concerns about earmarks in the omnibus bill because it was last year’s unfinished business. And he threatens to circumvent the traditional supermajority needed to pass major legislation in the Senate, and the bipartisan negotiations it requires, by putting the most sweeping, expensive and controversial policies proposed in his budget submission into budget reconciliation, which requires a simple majority of 51 votes to pass. His excuse: Republicans had similarly abused the process to pass the Bush tax cuts.
Perhaps, the President is a persistent man because, when it comes to this kind of disingenuousness at least, persistence pays off. Few in the press have been stirred to point out the many obvious discrepancies between the President’s declarations of his intentions and the reality of his actions anymore than they were inclined to do so during the campaign. He gets away with it. And it runs counter to the deepest instinct of most politicians to cease prevaricating when there is no penalty for continuing to do so.
When Ed Henry of CNN asked the President why he waited two days to express his outrage over the AIG bonuses, the President dismissively responded, “because I like to know what I'm talking about before I speak.” I doubt there was a single reporter in the East Room that night who believed the President’s explanation for his delayed reaction. They knew the administration had been surprised by the fierceness of the public’s reaction, and belatedly raced to catch up to it.
But there was nary a hint of skepticism offered. They all laughed in appreciation of the surefooted artfulness of the President’s putdown, no doubt offering him further assurance that when it comes to employing straw men and red herrings and other deceptions to promote policies that might very well bankrupt the United States, he would be smart to remain a persistent man.
Wednesday, March 25, 2009
Tuesday, March 24, 2009
The AIG Mess
Submitted by ASO member: Tom Sullivan
Doing business is becoming more complicated by the minute. With a shrinking economy and a growing government , the regulations issued by local, state, and federal agencies, and yearly changes to the tax code are enough to jolt business owners awake at night in a cold sweat.
We know that regulations cost small business more than their larger-business counterparts. And, we have accepted that a certain amount of bureaucracy is the cost of doing business. What do not know is how close we are to creating a regulatory framework so complex it will scare people away from taking risks, the key ingredient to entrepreneurship.
The anger over AIG using a taxpayer-funded bailout to pay executive bonuses has prompted the U.S. House of Representatives to pass legislation penalizing behavior by changing the rules after the fact. We are wise to consider restrictions on corporate behavior when those companies are depending on federal help. There are always conditions, expectations, and qualifications when two parties enter into a contract. When a company enters into a contract with the government to receive billions of dollars, it should expect some pretty tough contract terms.
However, companies doing business with the government should not expect for the rules to change retroactively. Not only is that wrong from a simple understanding of contractual responsibilities, it is bad policy.
The worse thing to happen right now as our country is struggling to get out of a recession is for companies to start second guessing their decisions because the government "might change its mind." Expansion plans, hiring plans, and product innovations will come to a grinding halt for fear of unknown consequences.
Last year, the University of Kansas won the NCAA men's basketball championship. What would happen if tomorrow we decided to ban the 3-point shot? And, what if we decided to make the change retroactive to the 2008 NCAA championship? Who would have won the championship? That is ridiculous. However, we are doing the same thing to the business community by accepting a retroactive tax to fix a problem we failed to address when the government agreed to provide AIG with $152 billion last fall.
With regulatory costs exceeding $1.1 trillion, we can not add to the mess by changing rules retroactively. I am glad that the Senate is considering how harmful retroactive rule changes can be to our regulatory structure and to our economy.
Monday, March 23, 2009
Treasury Secretary Timothy Geithner was busy writing his press release from the Treasury Department & editorial in the Wall Street Journal, while other members of the Obama administration chattered on the Sunday political talk shows. But, they all had one goal: going to extraordinary lengths to sell the Treasury Department's new program for "taking toxic assets off the books of the troubled banks." They make it sound like some sort of harmless construction project where the bulldozer will just come in as the private partner financed 95% by YOUR government money and moved these assets from the pile of dirt where they are now, and transform them on the journey into gemstones by the time they reach the books of the "private investor partners." The enormous failure of this entire plan is that no one has defined the PURCHASE PRICE to be agreed upon for the purchase of these assets. In addition, what have all these "private conversations" consisted of between potential investors in the forms of private equity firms, money managers, and hedge funds (the only firms left on Wall Street with capital to invest)? Why aren't the terms and promises being defined to the lenders in this situation...the American people who will be financing 95% of each of these transactions? Should we trust the Treasury Department to oversee the paperwork for these transactions just like they did with AIG? Citibank? Goldman Sachs? Morgan Stanley? All the others? NO is clearly the answer.
The investors are asking if they are going to be subjected to executive compensation limits, new taxes on bonuses, and other controls which they currently aren't governed by. After all, they want the financing & assets at a great price with no strings attached. Isn't it predictable that when something goes wrong with this program, it will be yet another bailout that the federal government will hand out even though it's once again a supposed risk transferred to the private sector? Where are the brilliant financial minds in America to find better solutions that this. I can foresee this debt being traded on a secondary market at pennies on the dollar which is all that some of it is worth.
The price setting of this purchase is THE QUINTESSENTIAL COMPONENT of this program and it is irresponsible NOT to focus on that first. How could any investor remotely express interest or not without a price? Everything on Wall Street is driven by price. There obviously are key parts of these private conversations between the Treasury Department and the potential investors that should be disclosed to the American public prior to the implementation of ANY program. Why isn't this purchase program open to all Americans? No one is rushing to put their shekels in the stock market or real estate and they may want to be part of the program. This program and its full terms should be ironed out and disclosed in a red herring for all to view and purchase & most importantly, the PRICE needs to be on the final copy distributed. After all, we will be lending $950,000,000,000 (that's nine-hundred fifty BILLION dollars for those of you who aren't accustomed to counting with so many zeros) out of the one trillion to purchase these diamonds in the rough that will be relocated from one balance sheet to another. I can only hope these purchasers aren't deemed too big to fail.
Sunday, March 22, 2009
Thursday, March 19, 2009
Here’s an idea to get those executives closer to feeling the pain of being “one of us” – the rank and file taxpayers who don’t make millions of dollars a year. This might get the healing going once the last ounce of political and taxpayer blood has been drawn and dried on this terrible incident:
The Treasury department should put the executives of AIG on the federal government’s general schedule pay scale – the “GS Scale..” These folks are, after all, now government employees. They are paid by the taxpayers, just like the rest of the professionals at the Treasury Department.
Each executive can look up what their pay might be right here on the U.S. Office of Personnel Management website:
Don’t be too discouraged, AIG guys and gals: the government also offers merit bonuses, known to sometimes be four figures for exemplary performance! Welcome to your life as a public servant. The joy of knowing that you serve the taxpayers will outweigh the pay-cut in due time, I am sure.
The announcement of the great day arrived in an email, fitting communication to a soulless drone glued to a screen in an office cube farm that stretched from Corridor G to Destiny. Wow, I thought, here’s the chance of a lifetime for my three sons to get a load of what the old man does every day of his moribund, monotonous life. In fact, included in the announcement was something magic: the faceless human resource bureaucrats even gave us a check list to follow while emphasizing our career failings to our kids. Here’s what happened…
“On this day, children between the ages of 8 and 12 will visit the agency with their parent to learn about our work.”
“Boys,” I said in dramatic fashion as we sat in my workspace after lurching through an endless traffic jam of public servants, “My work is about changing the world. It’s all about thinking outside and inside the box, playing in the sandbox, expanding parameters, breaking templates, modeling models, framing frameworks, having dialogues with folks above my pay grade, singing off the same sheet of music, bringing my A game, taking it to the next level with my elevator speech, cross walking when I’m not partnering, and leveraging the metrics of everything I see. Now, hand me those rubber bands and paperclips – that’s right, next to the tape dispenser -- and I’ll show you how to make a catapult.”
“Explore with them the knowledge, skills, and abilities needed for the future workforce.”
“Hey guys, here’s a skill.” I log onto my computer, whisper to them the secret Caddyshack password I use, and then when presented with a prompt screen, take a short cut to get to my Outlook email box, where there are no new messages for the day as of about 10:00 a.m. “Onwards, gents.” I take a bunch of papers that I haphazardly printed out, staple them together, and place in a wooden Out Box. ”What does that box mean, Dad?” says young Darby. “That means I’m done with that little project.” “What did it do?” he presses me. “Hell if I know,” I say distractedly, checking my empty email account once more.
"Expose the participants to an environment that values the balance of work and family life."
I expose the three to my workspace – they're crowded around my dingy desk in a cube with 6-foot high partitions. “Wow, Dad, you get to have carpet on your walls.” Yep, I tell them, one of the perks of being a key employee. The eldest, Dev, squeezes into a chair, Darby sits on the floor, and Braden crouches on the desk and peers over the low walls at my coworkers. I clear my throat and brush the glazed donut flakes off my tie. “Your dad is quite aware of the balance between work and family life and how the two intersect. For example, we play basketball all the time and I help coach your teams, right? So watch this,” and I wad up a piece of paper and shoot it at the waste can down the aisle outside my work area. It goes in. “See, just like at the gym or in the driveway, I can hit the 3-pointer here at work as well. Get it?”
"Showcase the abilities needed for the future workforce. "
I point to a stapler on my desk. “Dev!” I shout suddenly, “What do you do if that runs out of staples?!” He’s frozen in shock. “C’mon pal, you don’t have an hour to chew on this!” I shriek. “Call the stapler person?” he says hurriedly. ” Exactly, man! Good job.”
“The children will be able to shadow their parent and participate in other hands on and interactive activities."
When I hear the word interactive, I think one thing. So I take them to the copier room. “10 years ago, gents, this room was the nerve center of the modern office. If you had five copies of anything, you were a hero in a meeting. I know, because I often brought seven,” I say matter-of-factly. The boys stare uncertainly at the whirring machinery. “Now listen up, you rascals, because this is important. In the old days, you didn’t have machines that could collate. Can you say that word?” They repeat it with a vapidity that bolds well for following in Dad’s footsteps. I continue: “However, today, you can program the machine to actually staple individual copies together. It remains one of the major technological breakthroughs of our time.”
"The activities will reinforce the importance of education and preparation."
“Education and Preparation are important,” I tell the guys at about 3:30 p.m., reading from the Human Resources prepared statement. By now, all three sons are in daze from the office environment. As we review the day and the numerous coffee breaks, Braden notes, “Dad, you don’t even drink much coffee. You just sit around and chat with people.” “That’s right. It’s called workforce cohesion – everyone you see is in this long, tedious haul together.” “Maybe that’s why no one is smiling around here,” he says as he periodically peers over the partition walls. “Bingo, pal,” I answer.
The theme for this Day without End is “Making Choices for a Better World.” So as the wise father, I break it down for the boys. “My three loyal, optimistic, talented sons. Please look at your old man in his element here and then review all the choices you have before you. Make the right ones and you won’t have to bring my grandsons to this kind of world.”
By Jeff Nelligan
Wednesday, March 18, 2009
Author and National Review commentator Jonah Goldberg writes that he’s bullish on Citibank, despite the company’s recent well-publicized financial problems. Goldberg knows politics and, better yet, understands the notion that markets laid bare to bailout fever are ripe for arbitrage. Over the last week or so, he’s purchased 1,500 shares of Citibank stock for as little a dollar a share, betting that government aid and building momentum will buoy the stock and return a handsome profit. Others have placed the same wager. A good bet? That depends on your perspective.
The key lies in the federal government’s subsidy of large ailing banks like Citibank. And if the government continues to prop up Citibank, as it surely will, it is highly likely that the bank will break out of its historically low trading range. Moreover, since Federal Reserve Chairman Ben Bernanke has on several occasions reaffirmed a pledge that the government simply won’t let big banks fail, the downside risk on this sort of short-term trade seems rather small.
But the scenario presents a decidedly more bearish outlook for our economy. The idea that the billions spent on failing enterprises like Citibank won’t end up hurting the economy by saddling future generations with enormous debt, while simultaneously redirecting capital that might otherwise spur the sort of innovation and growth that could help bring us out of this recession and strengthen our economy in the years ahead, might not be readily apparent. But, the federal government cannot get us out of this recession with more government spending. The money has to come from somewhere, and in this case much of it will be at the expense of current and future innovators, start-up companies and entrepreneurs, and proven industry leaders.
Sadly, a profit turned on a well-timed trade of Citibank stock will have hidden costs that dwarf any such short-term gain.
John C. Kalitka
Taxpayers Gather To Protest Spending, Taxes, Growing Debt
So, now AIG declares that it has "contractual obligations" in the amount of $165 million to pay out enormous supposed "performance based" bonuses to the very personnel in the firm in the credit-default swaps department who are responsible for its ruination??? When you don't perform well, you don't get paid. What you haven't read is that this is in addition to $121 million in previously scheduled bonuses for the company's senior executives and another 6,400 employees across the organization. What's wrong with this picture? Run a firm into the ground and lose money and there is no way that you should get anything more than your salary. Before AIG employees go to bed each night, they should thank the GOD in whom we trust on our currency that pays them, along with the American taxpayer and ther future generations who provide that paycheck to them. Yet, we still hear from the bastions of AIG, "Is that All I Get?" They are so used to taking whatever they want at the expense of the firm that they just have continued it, even though the American taxpayers had to re-capitalize the firm.
Whether you are Republican or Democrat, you should be echoing the cries of House Financial Services Committee Chairman Barney Frank to put a moratorium on Wall Street bonuses period until taxpayer money is completely paid back and maybe even thereafter. In fact, Senator Christopher Dodd HAD submitted legislation that would have blocked this occurance but it was ignored at the time. Are you kidding me? Contractual obligations? Legalities? Bonuses? There would be no value whatsoever to these supposed bonus contracts with the collapse of the firm without taxpayer bailout money. No taxpayer money, no firm, no bonuses. The other issue here is that it is de riguer for employees of financial services firms to sign "employment at will" paperwork upon employment. While contracts are common in other industries, they are RARE on Wall Street. We can only hope that our representative will be smart enough to truly investigate the validity of these supposed pre-existing contracts. President Obama ordered the Treasury Department to "pursue every single legal avenue to block these bonuses," when he sensed the rage of the American voters. SOMEONE on Capital Hill or in the Treasury Department ought to be smart enough to foresee these types of shenanigans when drawing up paperwork to dispense these bailouts. The only enforcement that we've seen so far is the New York State Attorney General, Andrew Cuomo, who wants to issue subpoenas for AIG employee names, job descriptions and evaluations of employees receiving bonuses. AIG's Mr. Liddy defended these payments as contractual obligations and further added that this is what's needed to have the talented financial employees to run the business. I highly doubt it. I think some of the 10% of unemployed Americans have a whole lot more common and uncommon sense to run a business than the group that is continuing to rape and pillage AIG now. I hope that investigators continue to look at the fraud that was perpetrated on the AIG shareholders, policyholders and the American people and spare these derivative products "gurus" no mercy.
Gee, makes you wonder who controls AIG, especially in light of the fact that the majority shareholder now, with a whopping 80% of outstanding shares, is the U.S. Federal Government -ie the American people. The answer to this hoopla is found in one simple financial equation that I suggest all executives of investment banks use for 2008 year end Wall Street bonuses: nothing form nothing yields nothing...period.
Tuesday, March 17, 2009
Unfortunately, despite cries from the American public and the New York State Attorney General and some members of the Financial Services Committee, evidently with TARP, there weren't safeguards put in place to prohibit the practice of giving bonuses during bad times. Meaning, ok, the firm hasn't performed, therefore there will be no bonus pool and hence no individual executive bonuses from the bonus pool. Makes sense to anyone with a head on their shoulders, except the good men of Wall Street have still maintained this sickening attitude of entitlement that has allowed them once again to overcompensate themselves by paying themselves bonuses for driving companies into the ground. Directors of these firms came begging to Capital Hill for bailouts, claiming that if they didn't get TARP (bailout #1) they would be bankrupt tomorrow and tens of thousands of employees would be spilling onto the unemployment rolls. Both Bear Stearns and Merrill Lynch poured millions out to employees in bonuses while they bankrupted the companies over their own greed. AIG employees have yet to pay for their trip to California and spa services they received. For bonuses to be paid to any investment or commercial bank employee in this financial environment is clearly WRONG. There is no spectrum of grey within which to debate the merits, it simply is WRONG. SINFUL. GREEDY. NOT RIGHT. Add your own adjectives. It is black and white, no firm who has accepted funds from taxpayer bailout number one or number two should be paying employees any compensation other than salaries. Perquisites should have been terminated entirely in the conditions of the loan documents in order to get these funds. If the best and the brightest were running the Treasury last year, why didn't they protect American taxpayer interests better? Congress and our President need to intervene on behalf of the American Shareholder/taxpayer immediately to stop these payouts however they have too.
Monday, March 16, 2009
Today, President Obama announced some of his plans to help small business. It will be difficult to distract people from pouring over NCAA tournament brackets, but it is worth directing some attention to how the President approaches the sector which we are all counting on to rescue our economy.
Well before newspapers were carrying news of the economic collapse, large companies were shedding jobs and out of the wreckage grew newly self-employed entrepreneurs. This is not a description of some job-layoff silver lining. Rather, it is a statement of what employment data show over the past several years. Now that small and large businesses alike are deep in the trench of an economic recession, the national focus is appropriately how to climb out.
Small businesses have rescued the economy from past recessions. Entrepreneurs grow businesses through innovation, ingenuity, creativity and unbridled energy. Businesses grow as entrepreneurs succeed. As small business goes, so goes the economy. My advice to the President is to carefully examine what policies stimulate entrepreneurial activity and what policies stifle that activity. And, I advise, go full steam ahead with the policies in the “stimulate” category.
Health care and taxes should be the top two issues of focus for President Obama as he details his plans for the entrepreneurial sector. Small businesses will applaud a concentrated effort to address costs when re-shaping the health insurance system. The top question that needs to be answered is, “how do we make it easier for small employers to provide health insurance?” On taxes, the President should acknowledge that the more cash small business has, the more likely those profits will result in new hires. Postpone the rhetoric of “tax the rich” until those wealthy employers hire more people.
Next, I advise the President to focus on how government agencies treat entrepreneurs. Small businesses shoulder a disproportionately high percentage of regulatory burden compared to their larger business competitors. The cost of keeping up with the massive amount of federal rules, regulations, standards, guidance, filings, reports, and permits is 45 percent more for very small businesses compared to businesses with 500 or more employees. Federal regulatory costs for small businesses total $7,647 per employee per year. On a per-household basis, this cost exceeds the cost of healthcare. The President’s small business plan should start with a pronouncement that his White House will hold regulatory agencies directly accountable to small businesses. He can do that by adding a small business empowerment section to President Clinton’s executive order on regulatory planning and review. The small business section should stop federal mandates that unnecessarily stifle entrepreneurial growth and should encourage regulatory actions that unleash the economic potential of small enterprise.
Sunday, March 15, 2009
This would all be the height of hilarity if it wasn’t actually happening. When the screaming in my head stops, I have quiet time to imagine all these budget-, policy-, and financial services-types in Washington running around like a hundred Charlie Chaplains: leaderless, directionless, and ridiculous. What are they doing?!?! I don’t at all claim to have the answers to these economic problems, but it certainly can’t be the death-by-a-thousand-cuts profligate spending of which we’re suddenly so fond.
Many seem to be saying (you know who you are: thank you) that we can’t simply resolve this situation by throwing money at it, but no one is closing the spending floodgates. I’m as scared as the next person of a prolonged recession, or (God forbid) a full-blown depression, but I’m more afraid of weathering this storm only to face 50 percent income taxes and so much government intervention and regulation that capitalists and entrepreneurs flee for the hills. We can’t afford for the engines of American ingenuity to decide to shut down to avoid conflict with our government.
I wrote last time about the importance of us learning our collective lessons from this crisis. The government is doing us no favors in that regard. We’re being scolded for having spent beyond our means and buying homes our incomes couldn’t support. We’re also being told that only our spending as consumers keeps the economy growing, and until we start doing that again, they’re going to do it for us. That causes me to wonder: when we start spending again, will they stop? And if they stop (or especially if they don’t), how much of our paychecks will be devoured by taxes to pay for it all (including the interest on our national debt)? It already feels like a vicious cycle, and it’s barely begun. Hilarious, huh?
Thursday, March 12, 2009
Here’s a bit of inspiring news for anyone who is feeling a little bit smothered by the big-government creepiness that is Washington, DC these days: many state governments are re-asserting their rights under the 10th amendment! Check out this story, complete with the language of the amendment.
This is a state government’s way of saying, to their counterparts (not bosses) in Washington: “Hey, I know the constitution was written a long time ago, so you may need a little reminder… that you are supposed to have limited powers! The states are sovereign. Got it? Get off of our cloud, man.”
I’m inspired. I hope the feds get off of my cloud soon, too.
Wednesday, March 11, 2009
I recently became more aware of three shocking tax scenarios. The first starts as Union Bank of Switzerland, A.G., more commonly know as UBS, is being lightly raked over the coals by the U.S. Justice Department. As part of a deal last month UBS was supposed to be forthcoming with the names and numbers of accounts of Americans who have evaded Uncle Sam's tax tables by keeping their wealth in Swiss Bank Accounts in exchange for not having UBS officers subjected to criminal prosecution. This has resulted in UBS executives "confessing" last July 2008 to the Senate Homeland Security and Governmental Affairs Committee that there were 19,000 American accounts at its bank that were evading American income taxes. This past week, Mark Branson, a UBS executive, now confirms that there are "around" 47,000 accounts in their Swiss bank of Americans not paying taxes on income. Last month UBS formally accepted responsibility for helping Americans hide assets from the U.S. government and agreed to pay $780 million in restitution & fines based on the prior disclosure. The bank also turned over the names of ONLY 300 or so American clients of the 19,000 it declared then. The rest of the 46,700 names have yet to be turned over to the IRS or the the Senate Homeland Security & Government Affairs Committee. So, the question is, will these tax evaders eventually have to pay their income taxes like every other American? Should the company face penalties and fines in this country for fronting this operation on an even greater scale than they originally said? Only problem with this is that UBS isn't even the tip of the iceberg in terms of tax evasion and the Swiss may not even be the best at it. American banks and brokerages hold billions of dollars of foreign money for citizens of Latin America, Arab countries, Israel and other nations, not only assisting in tax evasion on the income, but avoiding the asset tax that many countries have on the principal, among other financial scams. Yes, US banks earn hefty fees on these transactions every year. In addition, Luxembourg, the Canary Islands and the Caribbean Islands are well known tax havens. Is anyone going to evenly prosecute all these offenders?
The second scenario is the upper 1% of Americans who don't seem to have to conform to the tax code until they get nominated to serve in high public office, such as Secretary of the Treasury, Timothy Geithner, who recently ponied up $34,000, Former Senator Tom Daschle, who ultimately declined the nomination to the office of Health & Human Services Secretary because of back taxes owed in the amount of $128,203 and finally Ron Kirk, the former mayor of Dallas who, if confirmed will be the White House chief trade representative, owes over $10,000 in back taxes. Should the well-heeled only have to pay taxes when they're caught not paying them after being nominated for offices of the Federal Government by President Obama? Hardly seems fair to the average tax payer.
Which brings me to the third scenario. Many Americans have family, neighbors, and friends currently without jobs due to the financial shams in our country. Many were unaware that their unemployment checks that they received in 2008 are indeed subject to Federal and in some cases State tax. And, there is no automatic withholding or notification with your check that you might want to institute withholding so that you don't have a big tax bill in 2009 to pay on that money that you already spent.
So, we have the REALLY well-heeled protected by the Swiss and other foreign tax havens' secrecy, the SORT OF well-heeled with their assets in America only getting caught, and the Average Joe who got laid off last year completely exposed with regard to his income and tax obligations. Where's the IRS in this picture? Why isn't the audit process hitting the big timers who with one audit will make up for 1,000's of little guys? Well, right now, the IRS has asked the Justice Department to have UBS respond to its John Doe summons for the names of the rest of their clients. We'll see how this saga plays out.
Tuesday, March 10, 2009
I may be drummed out of the current version of the GOP for saying this, but Republicans need a Nelson Rockefeller to lead the party, now more than ever. The former governor of New York and Vice President to Gerald Ford was many things – billionaire, art lover, philanthropist, industrialist and ardent anti communist. In this age of political correctness, he would have been classified as a throwback – he could show genuine emotion in public -- he didn’t mind flipping the bird to hecklers. He was a progressive in economics and public works programs, and a staunch believer in the theory that good jobs could be created from private/public partnerships. He was not perfect, nobody is – yet, today’s rudderless GOP had better start looking for a Rockefeller if they hope to beat President Obama, a.k.a. Mr. Man in the Middle (or so he seems to be).
Message to the GOP intelligentsia: It’s the candidate, stupid.
A Dartmouth graduate, Rockefeller was born into one of the 20th Century’s greatest fortunes. However, curious as it appeared, Rocky didn’t seem all that enthralled with his wealth. Liberals will opine he didn’t need to concern himself with the mundane toil of everyday life when those kinds of bucks where at his fingertips, but Rockefeller genuinely didn’t let his riches get to him. He invested quite a bit of himself, personally, and professionally, to helping Middle America gain a larger foothold in the economy. Name one billionaire today willing to get tangled up with politics – there isn’t one willing to do it, save for Ebay’s Whitman.
It is true that Rockefeller tried to buy his way into the Presidency more than once and was shot down – but, it was his money to spend and lose, and not the PAC and union zillions we have to contend with today. In this day and age, Rockefeller would be viewed with suspicion and skepticism just as he was 40 years ago – although a reflective and introspective GOP could look beyond the intellectual decay of the sound bite and the hardliners who inhabit the fringe boundaries of the “party” to recognize that Rockefeller had it right – that government does have a role to play in economic development, that government does have a role to play in the improvement of life in this country – roles that do not bludgeon Americans to their knees with higher taxes but helps them get off their knees with effective government programs – measurable in their results and accountable in their actions.
“Rockefeller Republican” could be the label that wins votes during the upcoming election cycles. It is not important to educate voters who exactly Rockefeller was – it’s probably not important at this point – but his politics seem more interesting than ever.
Submitted by ASO member: Tom Sullivan
Monday, March 9, 2009
I am an Arizonan. It used to be easy to be a Republican here. We had Barry Goldwater as our leader and we stood for something. We didn’t need focus groups or campaign consultants. We knew who we were and what we believed in and we had the confidence to stand behind those beliefs.
We believed in freedom. It wasn’t freedom as a slogan or an excuse for military intervention, it was freedom as a way of life. For us, being a Republican meant that you thought people should be free to rise and fall based upon their own individual talents and ambition. The government was there to keep things fair and legal and to provide basic services and defense from those who would harm us. But the government wasn’t there to take care of us from cradle to grave or to decide for us the best ways for us to spend our time or money. We wanted government to be limited in its scope, but efficient in its execution of those limited duties.
It’s not so easy being a Republican here or anywhere else anymore. Republicans really don’t stand for anything anymore. They don’t have big ideas and they don’t seem to have a clue how to run the government. They stood and watched as Democrats sold the idea that everyone should own their own home, regardless of ability to pay for it, and under the folly of deregulation allowed their greedy contributors to put the nation’s economy at risk for the sake of padding their own bank accounts. It was an obviously fatally flawed scenario and very few Republicans said a word to try to stop it.
President Bush violated his campaign promises against nation building and Republicans moved in lockstep behind him. Civil liberties that Republicans once held sacred were unilaterally trampled under the name of national security. Spending for the war and spending for things that the government didn’t need or have any business being involved in escalated at a record pace. Surpluses turned to deficits and finally it all exploded. Now the Democrats see this as an “opportunity” to enact all of the policies that Republicans have traditionally opposed over the years and the Republicans bemoan the fact that they are “leaderless.”
Actually, they are without principles. This crew sold out when they had a chance to stand tall for real conservatism. They pounded social issues that the government should stay away from and allowed their big business contributors to do whatever they wanted.
Frankly, they don’t deserve to be in power. But the Democratic ideas of bigger and bigger government, of class warfare and redistribution of wealth will ultimately change this country so as to make it unrecognizable. We broke away from Europe to form this Union. We should not crawl back now.
So how do the Republicans come back? They need new leaders. The old sell-out crowd should step aside or be pushed there. They need to stand for something and stick to it. But what should that bedrock principle be that guides their stands on policies and the proper role of government? Well, from out here in Arizona one word echoes from the Grand Canyon that Barry Goldwater so loved. Freedom.
We don’t need more government, we need better government. We don’t need government to dictate our morality, we need to be the sort of people who make moral choices on our own. We need a country that allows us the freedom rise up or fall down on our own. If the Republican Party could show that it would create such a climate, through competent governing and a philosophy that respected individual freedom, its future would take care of itself.
Click here to learn more to learn more about Grant Woods, former Arizona Attorney General.
Sunday, March 8, 2009
The greatness of America rests not in our government, it rests in our people. We should not be growing government in trying times; we should be unleashing the creativity and entrepreneurial spirit of our businessmen and women, our scientists, our students, and our inventors.
Growing government, to some how make up for the lost productivity of the private sector makes no sense. At this time, government should be cutting costs and reducing spending. Our lawmakers should be cutting taxes and providing incentives to the marketplace for investment and ingenuity.
Businesses that have been mismanaged should fail. Businesses that need to reorganize under bankruptcy laws, should do so. Government bailouts are not the answer. Our laws are for everyone, the corporation and the individual, the big, the tall and the small.
Our government should not be in the business of picking winners and losers by providing taxpayer funds to finance greedy, corrupt or incompetent businesses and practices.
People and corporations must be held accountable for their behavior, including but not limited to their business decisions. There must be more than a sense of responsibility it must be real and it must be accounted for.
There must be consequences. For those who have violated the public trust, they should be brought to justice and for those who have acted incompetently, they should be removed.
The marketplace is resilient. We will come back stronger economically, if Wall Street and Main Street operate on the same rules and principles.
Now is the time for sacrifice, but out of sacrifice we will be a stronger nation. We have all lost something of value in this past year, but there is nothing more valuable than our collective spirit and that is still in tact and unwavering.
The American People can solve any problem and over come any diversity. My message to my government is simple, "Let my People go"! Get out of our way and lighten our load and we will come back stronger than ever.
Friday, March 6, 2009
Thursday, March 5, 2009
He can’t have it both ways.
If we look back on the last 19 months, you’ll find that the U.S.
government has pledged more than $11.6 trillion on behalf of American taxpayers to dig our nation out of our economic woes – and that’s not counting the $410-billion omnibus the Senate is sorting out right now.
And now, the President has released his budget for fiscal year 2010 that not only raises taxes, but grows government to new and unheard of heights. President Obama's budget includes nearly $1 trillion just in new health care spending and proposes to pay for it with an economy-crippling energy tax that will cost the average family about $4000 more a year. Our government is like a runaway train that’s speeding down the tracks, barreling through any supposed notion of fiscal responsibility.
Washington is asking Americans to bear down and make sacrifices as our country finds its way out of our economic rut, and Washington would be wise to heed that advice and do the same. If you've cut back your spending, it's only fair that we cut back ours. Taxpayers are struggling enough in this weakened economy and it is time Congress started to show respect for the American people and stop increasing the weight of their financial burdens. The spending spree has to stop.
Submitted by ASO member: Congresswoman Bachmann
Wednesday, March 4, 2009
President Obama has spent the last two years talking about his commitment to clean energy but he has not signaled any desire to expand nuclear power generation. Why? Because the environmental community has spent the past 30 years hyping concerns over the safety of nuclear power – to the extent that no nuclear power plant ordered after 1977 has been completed and brought on line in the
Nuclear power constitutes 20 percent of the electricity used in the
Nuclear-waste management remains an issue at the forefront of the nuclear expansion debate. There is significant debate as to the responsibility of the Government in the management and storing of nuclear waste. The Federal government has proposed a single deep geological storage reserve for spent fuel in
But bottom line, the involvement of Nevada equals Harry Reid equals no Yucca Mountain storage equals no new plants for the next two decades equals dozens of plants will be decommissioned equals an eight percent reduction in clean and safe energy equals another loss for the country. And why? Because of the environmental special interest. The same type of special interests that the President pledged to transcend.
ASO member Ken Nahigian