30 May 2003
A Well Informed Public
I was riding the train home from work Thursday, reading The Financial Times of London, when I broke out in laughter. The newspaper is in my car, and I can not find the specific reference online, but the gist of the piece was that Bush did not have to worry about a backlash for selling the war in Iraq to the American public on false pretenses. Bush is home free on the issue, not because Saddam had the capability of a pre-emptive strike against the United States that Bush said he did, but because a majority of Americans believe one of the following three untruths:
1. The US has found weapons of mass destruction in Iraq;
2. The US went to war because of a direct link between Iraq and Al-Qaeda; or
3. The US went to war to remove Hussein from power because of his poor treatment of his people.
No wonder Rumsfeld felt it was okay to throw out for public consumption this week the theory that Saddam had WMD but destroyed them just before the war.
29 May 2003
Do Anything, Say Anything
The Bush administration now believes it can do and say anything with immunity. The White House admitted today that they kept under wraps a study
prepared for former Treasury Secretary Paul O' Neill that projected future US deficits of at least $44.2 trillion. The administration also admitted that it agreed with the conclusions of the study. While making these admissions, Ari Fleischer kept a straight face, telling the news media that Social Security and Medicare are going to present generations with a crushing debt burden unless policymakers work seriously to reform those programs. Fleischer denied the report was hidden because it contradicted the administration's rationale for its tax-cut proposal.
26 May 2003
Warren Buffett for President, Part 2
There are a lot of serious reasons to draft Warren Buffett, the brains behind the Berkshire Hathaway
conglomerate, for president.
- He is unafraid of criticism: Buffett knows where the really harmful political correctness is in America, in the upper echelons of business. Any CEO willing to stand for Democratic ideals has a maverick streak.
- He is right on income taxes: He recently denounced the cupidity and myopia of Republican tax policy.
- He is right on estate taxes: In 2001, he compared elimination of the estate tax to "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics."
- He hates greed: At the most recent Berkshire Hathaway stockholder meeting, he lambasted the greed of his fellow CEOs. (Buffett takes a $200,000 salary, peanuts compared to his nominal peers.)
- He wants campaign reform: He is on record for giving candidates free airtime to dilute the corrupting influence of money in politics.
- He knows the enemy: Almost two years ago, he predicted that the Bush presidency would feature a stagnant economy.
All of these are good reasons, but even the best candidates need intangibles, and Warren Buffett has those in spades.
- He has no money problems: John Kerry can claim to be rich enough to be incorruptible, but Warren Buffett is really rich enough to be incorruptible.
- He is geographically ideal: Buffett could claim residence in Nebraska, one of the most Republican states in recent presidential elections, and wreck the rural Republican majority from the inside.
- He has even better name recognition than you think: Millions of Parrot Heads might confuse Warren for Jimmy Buffett.
- He has his own stalking horse: Even without the confusion, Warren could buy Buffett for President paraphernalia on the cheap.
- He is accessible: At Berkshire Hathway stockholder meetings, Buffett actually takes questions from shareholders. At press conferences (which happen about as often), George Bush needs a script.
25 May 2003
Saving Iraq's Treasures
The June 2003 issue of the Smithsonian has an excellent spread on the remarkable history of civilization that is Iraq. [Ed.: The link to the full article on this page still sends the reader to an article on Cuba. Perhaps the Smithsonian curators figure that something is up.
[Update (5/27/03): the link now works. But we still wonder: did the link to an article on Cuba constitute "chatter"?
Warren Buffett for President
With Warren Buffett
on the ticket the Democrats would win the heartland of America.
Compare, if you would, the Bush administration and the media to the senior management of a public company and its board of directors.
When a large corporation underperforms, the average worker risks loss of employment, and does so with little or no severance. Most workers understand that their jobs are at risk even when their companies perform well. In contrast, senior management works in a win-win environment, with little personal risk. Compensation of executives, with the exception of recent developments at GlaxoSmithKline, has become divorced from performance. Corporate boards do not act independent from management in the interests of shareholders. Instead, the board's close relationship to management clouds both their judgment and actions. Compensation committees grant ever increasing remuneration to management. Dismissal for poor performance can mean millions in golden parachutes.
It appears that the Bush administration lives in the same win-win environment that senior executives enjoy. Despite its poor performance, the media lavishes endless praise. The media favors any alleged bold action as if action was an end in itself. However, actions have consequences, or, in the lexicon of corporate America, a bottom-line. By virtually every measure the bottom-line of the Bush administration is an unmitigated disaster. They have run up massive deficits and have nothing but to show in return except the promise of "voodoo economics." The Republican Party has changed their stated position on deficits 180 degrees. America's goodwill in the world has been squandered. Americans live in fear of terrorism, disease, and economic loss. Despite this failed bottom-line the media has given Bush and his administration a free pass.
In truth, the media and corporate directors are not independent. They are obedient servants to the class to which they see themselves as members. It is a class consciousness that can not be pierced, even by truth or bottom-line.
24 May 2003
The Land Yacht Subsidy Act of 2003
When the Senate voted for the $350 billion set of tax cuts on Friday by the narrowest of margins
, it barely touched the lowest tax rates but slashed the highest tax rate by about 10 percent. It dramatically cut taxes on dividends, the purview of the affluent. And it cut taxes on capital gains, half of which flow to millionaires, by 25 percent, even though capital gains already enjoyed ridiculously favorable treatment. You probably knew about all that.
What you may not have known was the subsidy that the Senate approved for manufacturers of SUVs
, but not just any SUVs. Only vehicles categorized as trucks, with a gross vehicle weight of 6,000 pounds or more qualify. In general, business can depreciate, or deduct over time, the full value of the equipment that they buy. But depreciation is limited on cars and and few other classes of property, like video equipment. For most vehicles, depreciation is limited
to the depreciation on a car costing $15,300. Under the law through Thursday, a business buying a $50,000 luxury sedan could write off no more than $7,660 in the first year (30% up-front depreciation, based on a $15,300 cap, with another 20% on the remainder, based on a new $15,300 cap). But a $50,000 SUV would qualify for a $22,000 write-off ($15,000 up front, plus another $7,000 for first-year depreciation). If the business has not used up its annual allowance of $25,000, it could do even better and get a $36,000 write-off ($25,000 expensing, $7,500 up-front depreciation, plus another $3,500).
Of course, no single-person "business" has ever, ever, allowed its luxury SUV to be used for anything other than business use. That's why those ads for the Hummer and Suburban and Yukon and Expedition SUVs always show their drivers going to and from client meetings.
The Senate could have closed the 6,000-pound loophole, designed to prevent farm and construction trucks from being treated as luxury vehicles. But it never closed it in any version of the tax cut bill that it considered; instead, it opened the loophole wider. The 30% up-front depreciation gets increased to 50%; and the $25,000 expensing limitation becomes $100,000. It's good, I suppose, that at least one iota of this gormless tax cut bill will actually encourage spending. Couldn't the government at least find a more beneficial beneficiary of its largesse?
Ooh, a storm is threatening my very life today
If I don't get some shelter, oh yeah I'm gonna fade away
This week, it was reported that Bill Archer, former House Ways and Means Chairman turned lobbyist, was getting ready to close the deal
on one of the biggest kickbacks in Congressional history. Archer wrote many key provisions to the tax laws that have allowed multinational companies to shelter billions of corporate profits from US corporate taxes. As a representative of the people, Archer created the loopholes that sent billions of untaxed profits offshore. Now, as a lobbyist, he is working with the representatives of the people to create a one-time opportunity for companies to return these profits to their US balance sheets at a tax of 5.25% tax instead of the 35% tax bracket they would normally be subject. Archer and his friends are using Bush's weak economy to justify the windfall. Chairman Archer may have left Congress but he didn't fade away. Any chance Archer will disclose his financial stake in the deal? All this from the man who tried for years to kill the low-income housing tax credit.
23 May 2003
The Leadership of Sen. Robert Byrd
The New York Times reported on Wednesday that "Sen. Robert Byrd accused the Bush administration of using 'false premises' to get Americans to accept what he said was an illegal and unprovoked attack on Saddam Hussein's government." Byrd went on to say, "If the situation in Iraq is the result of liberation, we may have set the cause of freedom back 200 years."
Byrd is living proof that wisdom and courage often come with age. A man who joined the Ku Klux Klan in his youth and put the "pork" in "pork barrel" politics has recently exhibited more leadership than anyone in the Democratic Party. Byrd has paved the way for Democratic candidates to come out their patriotic shell and tell the truth.
Byrd tells a simple truth. The Bush administration used September 11 to switch public focus from Osama bin Laden and al-Qaeda, the masterminds of that day's horrific events, to Saddam Hussein. They did so, in large part, for political purposes, destabilizing Iraq and the world. The reemergence of al-Qaeda will be a constant reminder of that truth.
22 May 2003
Bush Bets the Middle Class Home
Federal Reserve Chairman Alan Greenspan again expressed concern about the effect of the Bush administration's plans for further tax cuts and increases in government spending. Dismissing the canard that the Bush tax policy will stimulate the economy, Greenspan pointed to the American homeowner as the continuing savior of the US economy. According to Greenspan, the willingness of homeowners to tap the equity accrued in their homes should support consumer spending and stimulate economic activity.
The Financial Times of London
reported that "research by the Federal Reserve has found that nearly half the homeowners who refinanced their mortgages in 2001 and 2002 'liquefied' some of their home equity and used the extra money to pay for home improvements, new goods or to pay off debts."
Greenspan downplayed the threat of deflation, which would have a disastrous impact on homeowner equity. Of course, homeowners are taking on ever increasing levels of debt along with state and local governments in order for the Bush administration to give the wealthiest Americans, absent the sunset provisions, a trillion in tax cuts. The Bush administration has not made, and will not make, the American economic pie bigger.
What the Bush administration has done is dramatically shift much of the country's tax and debt burden from the wealthiest Americans to middle class homeowners. Bush is betting the American middle class home that deflation will not come to pass. If it does, equity in homes will disappear, the ability of the middle class to pay the college tuition of their children will be greatly impaired, and a "secure retirement" will be another lost American dream. Bush is a cowboy who is betting with middle class money. At least Bill Bennett bet money that was his.
21 May 2003
What's the NRA Position on Iraqi Guns?
Based on the Bush administration's plan to take away guns from the Iraqi people, I guess the NRA will have to change its slogan to: Guns don't kill people, people (especially non-American people) kill people.
From the New York Times
20 May 2003
Attention K-Marx Shoppers!
Welcome to the newest experiment from Bear Left, this weblog, which will serve two beneficial purposes. First, it will let us keep publishing while our web-compliant editor (Tim) endures the rigors of fatherhood for a second time. Second, it will let us dash off quick pieces on the news or short editorials outside of our normal publishing schedule.
We are not abandoning the weekly format of Bear Left beyond a brief paternity leave; this weblog is an adjunct, not a replacement.