The Portland Dept of Transportation is having an entire month of events in May for bike commuters or potential bike commuters. Suck it up and get on that pedal machine. Portland is commonly known as one of, if not the, most bike-friendly cities in the nation. I’ve been riding my bike to work for years (off and on) and can attest to that.
Thursday, April 24, 2008
Wednesday, April 23, 2008
Another perspective on John McCain.
Some say John McCain's character was formed in a North Vietnamese prison. I say those people should take a gander at what John chose to do--voluntarily. Being a carrier pilot requires aptitude, intelligence, skill, knowledge, discernment, and courage of a kind rarely found anywhere but in a poem of Homer's or a half gallon of Dewar's.
John McCain might not square with all of your conservative (or liberal) viewpoints, but he knows something about honor, duty, valor, patriotism, self discipline, responsibility and respect for our national institutions. I don't think the Democrats can attack his service record like they did with Bush in 96. And note that now that neither Dem candidate has a military history it won't seem as important this time around. Will they even try and downplay it?
Tuesday, April 08, 2008
There’s rioting in the streets. In Egypt in a town called Mahalla, but it’s starting to reach out to other parts of the country.
It all started two days ago, when a nationwide strike was called by a number of political parties and worker movements to protest their low income, the skyrocketing cost of living, and the open corruption and blatant nepotism of the Egyptian government. All eyes that day were on Mahalla, which was supposed to kick-start the strike by having its 30,000 textile factory workers go to the factory and stage a sit-in. The security forces in charge immediately rounded up the strike leaders, pressuring some of the weaker ones to accept a compromise. They also arrested and isolated every other strike organizer who wouldn’t budge. The government forced the workers to work at the point of a gun, and announced that the strike was canceled. This rang true until the workers got off work and found their union leaders detained and arrested. They then started confronting the security forces, which lead to clashes that lasted till midnight that day and led to two casualties and some 95 arrests.
The following day, yesterday, around 2,000 demonstrators demonstrated peacefully in front of the police station, demanding the release of their detained co-workers, relatives, and friends. The Egyptian police responded by shooting rubber bullets and tear gas at the demonstrators, and attacking them physically. When word of this reached the demonstrators’ family members and friends, they responded by taking to the streets and attacking the security forces wherever they could find them. The people threw rocks at the security forces, destroyed their cars, and tore down the pictures of Mubarak all over the city. The security forces continued shooting and arresting people, all the while sending plain-clothed police thugs to destroy stores and ransack schools. This was done in order to make it look like as if the people were destroying everything in their path and had to be cracked down on and stopped. The death toll rose to 5 the second night (including a 12 year-old and a 15 year-old), while the arrest total rose to 195. Countless people were injured.
The government is trying to clamp down, and has a 24 hour curfew and no journalists allowed. I’ll paint this one simple for you. Long ruling tyrannical despot vs. people tired of living in squalid conditions. Keep your eyes on this and don’t forget the people of Egypt.
Monday, April 07, 2008
I’ve often thought about this as the source of real problems in our political/social system in this country. There’s a general sense that we need to solve the problem of special interests using money to improperly influence the government, or at least the legislative process. At the same time, there’s a feeling among those of certain economic classes that people who make a lot of money (I mean like hundreds of millions) for some reason don’t deserve that kind of money.
It is misleading to compare legislative budgets with the wealth of Warren Buffett or Bill Gates, because legislators are spending money on all of us. They are not spending money on themselves.
However, America's wealthiest people do not spend their money on themselves, either. They could not possibly do so. As smart as Warren Buffett and Bill Gates are, they cannot figure out how to spend all of their money. They will end up giving most of it away.
What the super-wealthy have that the merely wealthy do not have is more financial power. When it comes to deciding which causes are going to receive money, Bill Gates and Warren Buffett have more power than other people. Which is exactly the power that politicians have.
The problem, as the article points out, is that politicians have far more of this type of “power” than any wealthy person, to orders of magnitude. The sums of money that politicians, especially federal politicians, have control over is too tempting for players on the national and local scene.
The monetary comparisons only scratch the surface of the inequality and excesses of political power in the United States. Bill Gates might be said to control as much money as a member of the County Council where I live. But he does not have the power to, say, tell the people of the County where they can and cannot smoke, or to tell local businesses what wages they must pay their workers, or to decide whether a local concert venue will be devoted to folk music or to rock.
Wealthy people do not control the curriculum in our children's schools. Politicians do. Wealthy people do not set licensing requirements for everything from doctors to interior designers to hair stylists to manicurists. Politicians do.
Inequality and excess political power is getting worse at a faster rate than inequality and excess in monetary income. As I pointed out in We Need 250 states, political power is far more concentrated and insulated from the voters than was the case 200 years ago.
I feel awkward and defensive when the subject of economic inequality comes up. The fact is that I cannot say that I feel comfortable with the levels of inequality and excess that exist in our society.
However, I am loathe to call inequality a problem that requires a government solution. I do not see how it solves the problem to take power away from wealthy people who have a lot of it in order to increase the power of politicians who have far more of it.
What the American people really should feel awkward and defensive about is the level of inequality and excess of political power. Instead of asking ourselves what we can do about Warren Buffett or Bill Gates, we should be asking ourselves about what we can do about the Clintons and the Spitzers. Those who want more and more power should be our biggest concern.
And a concern it should be. We’ve learned, by way of laws like McCain-Feingold, that you can’t take the money out of politics. It will find a way in. My belief is that the only way to rid our life of politically tainted money thrown around by special interests is to reduce the power that politicians wield. That would, of course, mean that the size and scope of government must decrease, and that means that functions such as health care, education and the like, would have to disappear, and I fear that ain’t happening anytime soon.
Truthfully, though I might favor one candidate for President or Congress over another for his/her economic sanity, neither party has an abundance of members who understand that we all suffer when government grows in it’s scope and power.
When’s the revolt? Anyone?
Thursday, April 03, 2008
Here’s an interesting piece on the stability of Switzerland. I’ll quote the same section that Instapundit did.
They have one of the world’s most stable economies, a skilled workforce, internationally recognized export companies, a sound currency, and renowned banking and financial services. All this is combined with remarkable social harmony, given that Switzerland has four national languages and great religious diversity.
While I appreciate it’s success, something I noted from the article was that while there might be much we can learn from the system they have in place, much of their success is due to foreign actors. Wealth generated in places like the US and Germany feeds the economy there. They haven’t really had to defend themselves (although they do have an army) without help from vaster allies like the US, and indeed during the world wars they declared themselves neutral to avoid large expenditures for military.
The article spends time on their harmonious political environment, but one has to wonder how that type of government would work in a country of 300 million rather than 7.5 million, smaller than New York City (not the metro area, just the city).
Hillary talks about tax incentives designed to create jobs inside the US. Quote from TaxProf:
· Increase the R&D credit by 50% (from 20% to 30%) and increase the Alternative Simplified Credit by 67% (from 12% to 20%).
1 Create a 40% Basic Research Credit.
2 Create a 10% Start Up Research Jobs Credit.
3 Create a new $5 billion Insourcing Markets Tax Credit.
4 Close loopholes that encourage companies to ship jobs overseas:
· Eliminate deferral provision that allows U.S. companies to defer paying U.S. taxes on income earned by their foreign subsidiaries until that income is repatriated to the U.S.
1 Close tax loopholes to ensure that companies cannot continue receiving tax benefits for locating abroad. She will disallow companies from engaging in transfer-pricing arrangements where companies avoid taxes by shifting income or assets to low-tax jurisdictions. She will eliminate incentives in the tax code (like the ability to “cross-credit”) that encourage U.S. companies to shift operations or at least profits to low-tax jurisdictions. And she will eliminate the unfair advantage that foreign insurers located in tax havens have against U.S. insurers competing for U.S. business.
Tax credits aren’t necessarily a bad thing. Government and political types are constantly thinking of ways to modify the behavior of the American public and American business. One way is create law that restricts and imposes that behavior. However, this has the unfortunate side effect of political resistance from large portions of society.
Another way is to modify tax code so that the behavior is not mandatory, but changing that behavior leads to benefits, i.e. your taxes are reduced if you comply. I certainly have less of a problem with this, although it has it’s own drawbacks.
Notice in the last couple of items regarding closing loopholes though. Clinton says that she’ll eliminate deferral provisions that allow companies to defer paying U.S. taxes on income earned by their foreign subsidiaries. Think about that for a second. If your foreign office creates income, even if the income never touches American soil you’d get taxed. Right now that doesn’t happen, and companies usually use the money to invest further in the foreign operation (better salaries for employees, update equipment, R&D).
Note here a common resistance to the notion that companies are not necessarily tied to nations any more. One of the tenants of globalization is that companies are international entities, without national allegiance. One of the reasons that companies outsource in the first place is because the corporate taxes in the US are among the highest in the world. But instead of trying to solve that problem, people like Clinton instead attempt to force companies to pay the taxes regardless. Which in the end will compound the problem, causing some companies to move their corporate offices overseas (which is already happening).
It’s no wonder that businesses, foreign and domestic, freak out about this sort of thing. The American economy drives economic expansion all over the world, and having a candidate for the highest office in the largest economic market in the world act all protectionist isn’t exactly making people around the world all warm and fuzzy. Note this article by Fareed Zakaria in Newsweek that insists that instead of improving our reputation around the world, as they are so often telling is they’ll do, Clinton and Obama might actually cause some further damage because of their tendency to be economically protectionist.
In reference to the original story above, Switzerland has one of the most robust economies in the world, but they do so because of their very open market and reliance on foreign investment. We can’t go down the road in the other direction and think that we’re going to truly improve the lives of ordinary Americans in the long run. Further protectionism is the road of economic stagnation and a people over-burdened by taxes.
So let’s look at McCain on the economic front. What he’s saying at this point makes sense from a Republican stand point. Tax cuts for the middle class. Cut corporate taxes. Ban internet/ cell phone taxes. Reform Health care and Medicare (and SS). Eliminate wasteful spending. Reform the budgeting process. More free trade. This might all seem pat from the red side of the fence, but it’s miles different from what the Democrats propose, so to all my right leaning friends who think that McCain represents some leftward angle here, I implore you to compare what we would get otherwise.
He hits all the high points, and I don’t think you can argue that he’s been solid on the wasteful-spending issue for many years. One thing that bugs me is that, while he would continue the Bush tax cuts, he was initially against them because he thought they benefited the rich primarily, and authored a bill with Tom Daschle to curtail the reduction in the capital gains and dividend taxes (never mind that some economists will tell you that this is double taxation anyway). I’m not sure where he’s at here. He’s mostly about open capitalism, but has a streak of populist anti-wealth type thinking. While he is generally for tax cuts, one wonders how much he’s really willing to cut in the budget enough to make up for it all.
I’m encouraged in other areas, though. He seems a bit antagonistic toward the current mood regarding the mortgage crisis. Many on both sides of the aisle, including the President, seem inclined to bail out those caught in over their heads after signing sub-prime mortgages (including the weird tax rebate we all are supposed to get). McCain says that people need to be responsible for their own mistakes, a sentiment that I concur on. He’s likely to get hammered on this in the general election, but I agree with him there. I read lately from noted columnists decrying the complicated world of mortgage financing and how the consumer is left helpless in the face of uncontrollably tempting 2% loan rates. However I disagree, as I’ve seen all these rates (as a home owner you drown in offers like that), and knowing that anything below 6% is certainly variable interest they all end up in my garbage. Needless to say that I would expect that I would be paying for my own mistake if I went down that road without taking the time to research a rate on probably the largest and most important bit of financing I’ll ever do.
Sorry. Rant over.
McCain is noted, on this issue, of proclaiming a certain amount of ignorance. Is this worrisome or refreshing? You could make an argument either way, and the Democratic candidates of course argue worrisome. That doesn’t bother me, as their positions are worrisome and they think they know how the economy works. It’s not quite refreshing either, though, and it really is going to depend on who McCain ultimately pins down for Secretary of the Treasury and who he appoints as advisors. I’m not sure his recent advice people, like Phil Gramm, are helping ease my conscience on this point.
All and all he’s got some issues, and for the most part I have a difficult time supporting a Senator for an administrative office like this one. However, in the area of finance, especially government finance, McCain is heads above the Democratic candidates at this point. He’ll probably not be able to stop over spending entirely or free up markets as he says he does, but I’d rather have him in there being the Maverick on the economy.
Here’s some more reading on where McCain is at on the issue if the economy. Enjoy.