Tuesday, February 17, 2009

A Plague O' Both Your Houses

Consider this an open letter to the California Legislature (it wouldn't hurt the U.S. Congress to read it either).

I am fed to the teeth with the whole
boiling of you. I am seriously considering never voting for an incumbent again - how's that for term limits? You have all spent the last eight months bickering and squabbling over the state budget, and posturing about how holy you are and how you can't walk away from your principles - while the State of California, for whose governance you are (at least theoretically) partly responsible, slides into the economic pit with the rest of the country. The state can't sell a bond to save its life, it is about to run out of frigging cash to pay the bills, and you STILL can't bring yourselves to pass a budget.

The Republicans claim they can't vote for higher taxes because "it would destroy the economy" - how does it improve the state economy to have the state unable to pay its bills? How many poor elderly people will die, you ranting maniacs, because you are too whatever-it-is to vote for the higher taxes necessary to get the state out of this astounding fiscal hole? How do you plan to lure businesses to locate in a state with a credit rating one notch above junk? Businesses need services from the state too, and right now, they'd be better off in Mississippi.

And don't you Democrats start feeling all righteous, just because I started with the Republicans. I'm finally starting to hear, from both sides, the real reason you're all so inept in this crisis: you're afraid that, if you vote the way you have to, to get the state out of the quicksand, you won't be re-elected. Well, get this, children: we did not elect you so you could be re-elected. We elected you so you could govern the goddam state in our name.
Your job is not to be re-elected. It is to use what passes for your brains and judgment to make the hard decisions about how to run the state. If you can't do that, maybe we should recall all of you. And it doesn't help that you're cutting this program and that program, most of which benefit the poor and the helpless - but cutting your salaries, and your per diem, and your office staff? Nooo, we can't do that!

And what really fries my tomatoes about all of you is this: You. Never. Talk. To. Each. Other. You huddle in your little caucuses and never talk to anybody you don't already agree with; and your party leaders stand at the podium and posture at each other. The Internet has been intensifying this trend, with people only reading the blogs they agree with; but when it spills over into the legislative body of the State of California, it's downright dangerous. When was the last time you went out to lunch with a member of the other caucus, and actually listened to him talk about the issues in his district, considered whether your district had any similar issues, and discussed a solution that might help both of you? When was the last time you talked to anybody but your party whip and your favorite lobbyist? You're all supposed to be doing your best to govern the state. I would think this meant talking to the other people doing the same job; but I see no evidence that
Democrats ever talk to Republicans, or vice versa.

Monday, February 09, 2009

What the Senate Thinks is Important

The Senate, especially the Republicans therein, has made a big deal about the fact that they don't like the House version of the stimulus package. They've crafted their own version, which will have to be reconciled with the House version somehow, in conference. The differences between the two bills tell you a whole lot about what the Republicans in the Senate consider really, really important in these disastrous times.

There's a whole lot less aid to the states - $40 billion less. Apparently state governments should be left to cut services and lay people off. That'll help the economy a lot, that will, especially in the long term - $16 billion of the cuts will come out of school construction. (What is it about Republicans and education funding??)

Also helpful to the economy will be the absence of Medicaid coverage for the unemployed uninsured, cuts in Food Stamps, and the limitation of the child tax credit to families with wages of at least $8,100.

Since the bills spend about the same amount, what are the Repubs putting it into?? Tax cuts. $70 billion in alternative minimum tax relief - for one year. Believe me, poor people don't pay the AMT. The Repubs are also fond of the $15K tax credit for home buyers - Paul Krugman, in yesterday's N.Y. Times, calls it a "$15,000 bonus to affluent people who flip their houses."

You people in states with Republican senators: write this stuff down, will you? And remember it, at the next election. Please remember that your senators didn't feel Medicaid and food stamps were important in a downturn. And then vote.

Thursday, February 05, 2009


For those of you not familiar with this classic acronym of the mid-twentieth century, it stands for There Ain't No Such Thing As A Free Lunch. According to Wikipedia, it originated in the 1940's, and was popularized in the 1960's (when I heard it) by Robert Heinlein's classic novel, The Moon is a Harsh Mistress. (I'm not going to give you a link to the novel synapsis. It's good enought that you should go get it - the library has it if you've been laid off - and read it.)

TANSTAAFL came to my mind when I read the Washington Post's article listing the victims of Bernie Madoff's Ponzi scheme. All of these people bought into Bernie Madoff's story because they thought they could get something for nothing. They thought they could get a free lunch - endless returns, higher than the market normally gave, with no risk. Madoff's fund never had a down year, even when the market did.

The list, which was made public in a court filing, is 162 pages long, with about 80 names per page! (There's a lot of duplication for people with multiple accounts.) For the many charitable foundations, I just shake my head;
their investment advisors exercised poor judgment. I'm involved with 2 non-profits, and funding is always an issue, and the one that has an invested endowment has lost serious dollars this year. (But not to Madoff!) The same applies to the individuals (I was really sorry to see Sandy Koufax's name); they were very badly advised. But the names that really pissed me off were in this paragraph:
Several investment advisory firms, including Argent Wealth Management, Bank of America Private Bank, Citi Smith Barney, Citigroup Private Banking, Fairfield Greenwich, Fleet Bank and Ivy Asset Management, made the list, ...
It gives me cold chills. I used to work for Bank of America, and at one point I actually investigated whether I should move all my investments to the Private Bank. The answer was no (I think we weren't rich enough). These people are supposed to be investment experts. And they swallowed Madoff's scam hook, line, and sinker.

Did nobody at any of those firms have the brains God gave bastard geese in Ireland? Did nobody have a "too good to be true" alarm that went off in his head? It wasn't impossible; Harry Markopolis spent 9 years trying to convince the SEC that, on the basis of his published returns, Madoff had to be cooking the books. NPR's Planet Money blog has put up several stories about Markopolis' quest; and he was before Congress this week saying that he's got a "mini-Madoff" (only about $1 billion) to give the SEC again. I've seen the document they ignored; Planet Money linked it a couple of months ago. If the SEC ignored that, they were either giving Madoff a pass or they can't add.

We may get out of this economic mess, I don't know. But I know this: until we as a country learn that There Ain't No Such Thing As A Free Lunch, we'll be in constant danger of getting back into another one. Unless we can cure ourselves of the conviction that we can make it big, quick and easy, with no risk - that we can get something for nothing - we'll be wide open to the next Bernie Madoff.

The late great Leslie Charteris wrote a number of his Saint short stories about various forms of bunco games; the Saint made a hobby of beating the bunco artists at their own games. This was in the 1920's, but all the games Charteris wrote about are all still out there; and they all still work, because everybody believes that he can get something for nothing; and none of the bunco schemes ever work on people who understand that there ain't no such thing as a free lunch.

Faith-Based Initiatives

I heard a representative of one of the major religious charitable organizations the other day - I forget which one - complaining about President Obama's campaign promises that government money couldn't be used by faith-based groups that discriminate in hiring. You know - that won't hire gays, or members of other religions. How can we be expected to fulfill our mission, said this man, if we have to do all this? We do a lot of good, he said; we need this money to do more good.

As a matter of fact, although I myself am not especially religious, I have a lot of respect for the religious charities. It's arguable that they are the truest Christians around, out there on the streets, feeding the hungry, succoring the homeless, and so on. I donate to a couple of them regularly.

But in this case, I'm on President Obama's side. There's a very simple answer to your dilemma, sir, whether you're with the Salvation Army or the Catholic Charities (two groups I'm fairly sure I've heard had issues with hiring gays).

Don't take the money. Stick with private fundraising from private donors who agree with you, and stay true to your principles.

Yes, the U.S. Government (at least for now) is a boundless source of money. You could do a lot of good with it. But the U.S. Government, like you and me, doesn't want its money used in ways it disapproves of. You, sir, wouldn't give money to a gay rights group. But gays pay taxes, just as you do; and they don't want their tax money given to groups that won't hire them. The U.S. Government represents all its citizens, even the ones you disapprove of.

Then there's the whole issue of the separation of church and state. If the government gives you money which you use to forward your religious mission, isn't that "creating an establishment of religion"? The only way to get around that would be for the state to give money to all religious groups, and allow them all to use it for their sectarian goals - and I mean all religions, including the Wiccans and the pagans.

Actually, as I was writing this, I saw an article on Obama's new Office of Faith-Based and Neighborhood Initiatives. The complaining gentleman will be able to get funds from the office; but his bookkeeping had better be good, because he can hire and fire based on religious tenets, only for projects which don't get government funding. On the other hand, this office will also work with secular non-profits.

I didn't see any mention of Wiccans and pagans.

Tuesday, February 03, 2009

Taxpayers - Enemy Action

Well, now we are up to three - I heard on NPR this morning that Nancy Killefer, the candidate for "performance czar" (czarina, surely?) is withdrawing her candidacy "because of a tax issue." Specifically, she didn't pay unemployment compensation taxes on her household help, and the District of Columbia put a $925 lien on her property.

I'm sorry - that's the worst tax flub yet. Geithner "didn't realize" he had to pay the full Social Security tax when working at the IMF; OK, that's just stupid, even if he was using TurboTax (TurboTax?) to do his returns. Daschle "didn't realize" that the car and driver his dear old friend the plutocrat "loaned" him actually represented a gift of income; he was "used to" having a car and driver as Senate majority leader. That's just arrogant. But this woman didn't pay the unemployment tax on her housekeeper or nanny - that's really inexcusable. That means that if and when she fires them, they can't pull unemployment.

The good news is that Daschle has shown more class than the senators who were all set to confirm him - he's withdrawn his name from nomination. He still shouldn't have done it; but at least he realizes that it's a problem, which is more than Geithner did.

Remember Leona Helmsley, who said that only the little people pay taxes??

Debra Saunders of the San Francisco Chronicle devoted her column today (Feb. 3) to this mess. She's even more bitter than I am about it. She makes the valid point, though, that if we're going to require absolute perfection for anybody who wants a job inside the Beltway, the pool of applicants will be very very small. But on this one I agree with her - these mistakes are not only stupid but venal. Dashle and Killefer did the right thing by withdrawing (finally); and frankly, I think Geithner should resign as well. But we may be stuck with him.

Monday, February 02, 2009


This has happened twice, now, so we've gone from happenstance to coincidence; one more instance and we'll be looking at enemy action.

Out of the dozen or so candidates for cabinet office in the Obama administration, two have problems with their back taxes. Those of you with really long memories may recall that unpaid taxes finally sent Scarface Al Capone to the slammer for good. To make it even better, the first candidate with a "tax malfunction" is up for Secretary of the Treasury (and supervisor of the IRS)! And the other is Tom Daschle, of whom I just thought better.

In fact, I thought better of the whole Obama team. I expected, of course, to discover that they're only human, but I didn't realize it'd come quite so fast. Something is wrong when you pick the dozen or so best people you can think of, to help pull the country out of the worst mess since the Depression; and two of them have fluffed their taxes. And this comes out after the nomination has been submitted. Did the vetting team miss this? Did the candidates not think it was worth mentioning?

OK, they've paid all the back taxes. And the fines. But it bothers me. It bothers me more that the Democrats essentially just waved them through. Boys, I suppose, will be boys. I remember some candidates with tax issues
in a previous administration, and domestic-servant-without-papers issues, who had to withdraw from nomination; and frankly, I thought it was reasonable that they should. It's just not clear to me why Timothy Geithner is such a hot pick for the Treasury spot that we should ignore the fact that he blew off his Social Security taxes. Twice. Even if he has paid everything now.

I pay all my taxes, every year. I don't think it's unreasonable to expect this of the people I hire to represent me. For shame, Mr. Obama.