August 5, 2010

Survey says

Posted in media coverage, Obama administration tagged , , , at 9:09 am by realitytax

You may have seen stories telling you that over 40% of Republicans or Tea Partiers think the current President wasn’t born in this country, or heard Rush Limbaugh talking about them in dramatic terms.

One small problem, no matter if you’re listening to Limbaugh, watching cable TV, or reading in Salon: Surveys only tell you what people say – what they claim, not what they actually think. Pundits who go beyond that are guessing.

Some may want to infer the Republicans responding to such surveys “think Obama wasn’t born in America,” but it’s equally valid to infer they wish he wasn’t, or to suggest they want you to think they think he wasn’t, or any number of other possible interpretations.

But the data, the only factual material, is how those surveyed responded, nothing more. You can’t know what a person is thinking, which is why the American legal system is predicated on actions, not media coverage, commentator speculation, or inferences drawn by partisan pundits.

August 2, 2010

Pawlenty knows politics.

Posted in 2012 Elections, GOP, John McCain's campaign, media coverage, taxes tagged , , , , , , , , , at 9:17 am by realitytax

Senator McCain suggests his wife enter a topless contest in Sturgis

Is America ready for a first lady who's recently entered a topless contest?

While it’s arguably inappropriate objectification of his wife to bolster his career when lame-duck MN Governor Pawlenty describes her as his “red-hot smoking wife,” I disagree w/ wonkette’s characterization that it’s “two years early.” If Obama hadn’t started early he probably wouldn’t be President, and remember Senator McCain tried to woo votes from Harley riders by suggesting his wife enter the topless Miss Buffalo Chip contest in Sturgis in 2008.

If voters made their choices rationally the political calculus of candidates and campaigns would be very different. Voters often rationalize when interviewed, but research proves the decisions are more often based on emotion than intellectual evaluation.

Campaigns get longer and more costly all the time because mainstream media producers see candidate spending as helping their own bottom lines. In other words, it’s also arguably a conflict of interest to base so much of the determination of a campaign’s viability on successful fund-raising. True, in many cases advertising is a crucial factor, and we all accept that one of the keys to advertising success is repetition across a wide range of media to generate the maximum number of impressions. Yet wouldn’t it be refreshing for a network or newspaper to cap the amount of political ads they’d take at some reasonable level?

Voters report they’re actually annoyed by the saturation of TV as elections approach; in some cases the result seems to be tuning out altogether. Meanwhile where are the balancing stories about what the candidates have actually accomplished, how a candidate runs an efficient and fiscally restrained campaign focused on issues instead of fund-raising, or which ads are to distract from facts or obscure their votes while echoing slogans and talking points in much the same way Budweiser hammers away with their “King of Beer” message.

Lame-duck MN Governor Pawlenty anxious to try a different job

MN Governor Pawlenty spending most of his time raising money and his visibility

Pawlenty knows “earned” media coverage is less costly than buying ads, and he’s got the recent examples of Palin and Bachmann proving the press loves provocative statements more than substantive discussion. Any “news” outlet is reliant on ad revenues, which are in turn driven by ratings. Look how quickly most mainstream media companies jumped on the Shirley Sherrod story – a hint of controversy and the race for viewers/readers was on without what we used to think of as journalistic integrity, all in pursuit of the mighty dollar. Pawlenty certainly doesn’t want the national press talking to disgruntled Minnesotans or economists about how his “no new taxes” mythology has driven down quality of life and scuttled the state budget.

Look for conflicts of interest in coverage, and follow the money if you want to understand Pawlenty — but don’t underestimate either his political savvy or the impact his “red-hot smoking wife” may have on voters and donors.

July 2, 2010

Leadership and the budget conundrum

Posted in 2010 Elections, health care, media coverage, taxes, U.S. Economy tagged , , , , , , , , , , , at 7:55 am by realitytax

Budgeting is always an exercise in prioritization; there’s never enough money to accomplish everything we’d choose to undertake perfectly. The vast majority agree we want government to exist, to manage highways and immigration and mutual defense and make sure our toys don’t have lead paint and our drugs aren’t snake oil and prevent monopolies and so on.

Accordingly, it’s the leaders we elect who have to run government well, although many lately seem to run on the premise that government can’t do anything cost-effectively, let alone well.

We’ve seen what happens when big business calls the shots, from Wall Street’s calamitous collapse (which hurt most of us considerably more than it did them) to the slip-shod operation of an oil rig that threatens to ruin the livelihoods of millions along the gulf coast and savage the oceans and shores for decades to come. The short-sighted profit motive aspect of capitalism is best balanced by governmental regulation on behalf of the greater good.

True leaders don’t sit back and watch as our jobs move overseas and huge corporations prey greedily on those outside their inner circles, they work on behalf of those who elected them despite the constant temptation posed by special influence money. I’m delighted there are, in fact, so many excellent elected officials working on behalf of Minnesotans, and I congratulate David Bly, U.S. Represenative Tim Walz, and their hard-working current and former peers such as Shelley Madore, John Marty, and the late, great U.S. Senator late Senator Paul WellstonePaul Wellstone pursuing solutions to everything from the MN Health Plan to our national budget priorities. Their tireless, selfless efforts are a model of how to step up and get work done despite naysayers who promote a “divided we fall” agenda exemplified by the smoke-and-mirrors approach to discussing the Minnesota budget that Governor Tim Pawlenty has relied on to further his Presidential ambitions at the expense of the citizens of Minnesota.

Hopefully this current election cycle will give us more people pursuing common sense approaches in the state and national legislatures instead of more political posturing and empty “anti-tax, anti-government” sound-bites, although from Fox to MSNBC the media lately seems inclined to let the latter dominate their “journalism” rather than observing that time-tested rule for investigative research and reporting: follow the money.

February 11, 2010

Are disingenuous “republicants” trying to undermine confidence in government?

Posted in economic recovery, GOP, health care, media coverage, mortgage reform, taxes, U.S. Economy tagged , , , , , , , , at 2:29 pm by realitytax

Now more than ever Americans question that Congress is ready, willing, or able to effectively govern. We trusted them with billions of dollars in handouts to Wall Street in late 2008, but still needed a separate stimulus bill to create jobs after a new administration took office, a process which has yet to make much headway as reverberations of the economic crash continue.

Some debate the value of Cash for Clunkers, too – mostly they’re elected to Congress as Republicans, and none of them work in the auto industry. But it’s fashionable to bash the opposition, after all. The media drinks it up, and it keeps their pundits off the foreclosure stories.

The “Credit Card Bill of Rights” was so hamstrung that banks used the interval to increase fees and interest rates on consumers. The American people fear Washington has gone wrong, and the media coverage of Republican leaders steadfastly refusing to compromise on anything has come to epitomize Washington’s gridlock.

Health Care Reform was one of the keys to President Obama’s litany when he was still just Senator Obama, a candidate for our nation’s highest office. It united a broad coalition of voters who believed he understood the unfairness of a system where insurance companies treated health care differently than any other form of insurance, picking and choosing the most profitable customers while denying those who most needed health care access to what is nominally a payment system. In fact, 55 Republican members of Congress who oppose a public option, calling it a “government takeover of health care” nonetheless rely on just such a system themselves. If “government run” health care payment administration is good enough for a member of the U.S. Congress, it’s probably good enough for you and me.

Meanwhile, medical bankruptcies will continue to occur despite the skyrocketing cost of premiums. Over half the personal bankruptcy filings in the U.S. are triggered by medical costs, but Congress spent billions to prop up rich bankers who didn’t even suffer a cut in pay, let alone lose their jobs or benefit packages. Set aside the uninsured a moment, the average medical debt that causes insured families to become bankrupt is $18,000 – compare that to the bonuses paid on Wall Street.

Corporations jiggle their accounting to avoid paying taxes, and the richest Americans pay a smaller fraction that the less well-to-do in personal taxes. It’s no wonder the Tea Party concept holds appeal – we seem to have returned to taxation without representation, and if there’s one things Americans agree on it’s the concept of “fair play.” Well, Americans outside the Republican Caucus in the U.S. Capitol, anyway.

Since it’s politics, we know we have to follow the money. We’ve recently cut dozens of taxes; Congress has left income tax laws alone which would normally put the GOP in a mood to smile. In this case, with one party childishly digging in their heels much like children who won’t eat their vegetables, we have to ask: “What more does the minority hope to gain?”

January 25, 2010

Will the U.S. Constitution save “We the people…”?

Posted in economic recovery, foreclosure crisis, media coverage, U.S. Constitution, U.S. Economy, U.S. Supreme Court tagged , , , , at 5:16 pm by realitytax

“If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”

Thomas Jefferson

Economic development in the USA is at a critical juncture as we struggle to recover in the wake of the job losses and mortgage foreclosures that are the real, ongoing costs of the crisis that began in 2008 and led to our bailing out Wall Street titans. In doing that, in preserving the institutions on Wall Street from their own unregulated incompetence by borrowing from tax payers on Main Street, we may have eroded more than confidence in banks and our government; we’ve arguably both the weakened the foundation of our democracy and the harmed the engine of our economic growth.

MN State Rep David Bly

MN State Rep David Bly (25-B)


“…we can make saving and rebuilding our middle class society an enduring, unequivocal legislative priority at all levels of government.

We’ve tried the conventional legislative approach long enough without getting where we need to be. It is time to try something new. For me, that ‘something’ is the Middle Class Amendment.”

Minnesota State Representative David Bly

Subsequently to actions that saved bankers from their own risky folly, the U.S. Supreme Court has likened Corporations to citizens, insisting they have the same “right to free speech” that the founding fathers envisioned ensuring for citizens of these United States. Yet Corporations can then use this right to advertise for political agendas as another cost of doing business, further decreasing the likelihood they’ll pay taxes. Unlike citizens, corporations aren’t taxed on income, but only on profits. They hold a special place in our tax structure, they have incentives designed to encourage them to spend money.

In a time when most surveys reveal citizens have reached their saturation point for tolerating political advertising, the U.S. Supreme Court has determined in its split wisdom to provide additional incentives to corporations to spread their profits via media campaigns. The question of how spending by actual media companies would be classified remains to be determined, of course, but let’s talk about corporations.

Are they every altruistic? No, by definition they seek the extinction of their competition. The community doesn’t improve (from a corporate point of view) by adding more who are like me, but rather when all who are like the corporation are either eliminated or assimilated. And now we want to give them the right to express political opinions, as well?

“The jaws of power are always open to devour, and her arm is always stretched out, if possible, to destroy the freedom of thinking, speaking, and writing.”

John Adams

I’m not sure who stands to gain from this recent reversal by the narrowest majority in the Supreme Court, but I know it’s not the average members of our middle class, who work for a living and don’t have the luxury of accountants who work to limit if not obliterate their tax obligations the way wealthy corporations do.

“A free people [claim] their rights as derived from the laws of nature, and not as the gift of their chief magistrate.”

Thomas Jefferson

November 9, 2009

Imperfect Information Undermines “Free-market” Economies

Posted in economic recovery, media coverage, Obama administration, taxes, U.S. Economy tagged , , , , at 8:09 pm by realitytax

It’s no secret that a variety of interested parties exert influence over both economic policies and the general understanding (and reporting) of the effects of changes, just as they do in energy, health care, education, the financial sector, and/or anything else that the Congress or various federal agencies have a role in shaping. Misinformation can lead a seemingly honest, open debate far afield from reality, inhibiting the efficiency of the process while at the same time warping the outcome.

If you don’t understand fiduciary relationships, and you still think most corporate actions reflect the same sort of priorities that pertain when a truly small business is owned by a single person, or a couple, you’re missing a key factor. Shareholders, for instance, seldom have any significant influence on the pay (or bonuses) of officers engaged in potentially risky decisions at major corporations – auto manufacturers, for instance, or the financial institutions that crumbled on Wall Street as the financial crisis became obvious to virtually everybody at home and abroad near the end of the Bush administration, when we ended up dumping billions of dollars into banks without any obvious benefit (it certainly didn’t stimulate consumer lending, as both Bush and early Obama administration initiatives were intended to do.)

In fact, if you look closely, the problem of banks that are “too big to fail” is getting worse, not better, due to consolidation. But that’s not what they tell Congress or the media; the bankers speak instead of “economies of scale” to justify even further growth. Banks are tied to the model that’s ruled economic policy for decades: debt-fueled consumer spending.

Those who talk about concerns over finite resources, such as clean water, are scoffed at, and the countering rhetoric lumps them in with “climate alarmists” and “tree huggers” in such a way that genuine free market forces are not even close to determining the value of any natural resource that cannot be mined – with the curious exception that there are some cities who have privatized their formerly municipally controlled water systems, which does begin to result in a certain market value being placed on that particular resource. Of course, once a profit motive starts driving the price up, citizens in the U.S. and abroad often agitate to re-socialize their water supplies, in an era when “socializing” is used by some to imply everything that went wrong with every non-U.S. form of government.

Similarly there’s an obvious bias in the talk about income tax cuts – it generally originates from those who are well to do, and stirs the emotions of those who have much less, but more importantly if one looks closely at the data, there’s been a strong correlation in the past between those with wealth and those whose tax rates truly go down under most of the recent approaches. Would tax cuts stimulate the economy? Assuredly so – but in what way? A tax cut on income doesn’t have the same effect as, say, a tax cut (or tax credit/investment credit) for spending consistent with our national priorities, such as alternative energy sources, or research and education, etc. Such selective, targeted changes spur spending in specific areas — a very straightforward function of supply and demand, and the result is tangible — money flows to those areas, stimulating job growth and additional investment without any necessary growth of the government (growth which makes most of us justifiably cautious in the wake of the Bush administration’s under-reported increases.)

The reason that governments trying socialism, such as the USSR, to manage resources and markets for the good of the people have consistently floundered and failed is that they don’t — and can’t — have good enough centralized information to succeed making the rapid decisions necessary to control what is arguably the most intricate challenge of any “man-made” system, the decentralized activity of a vibrant, balanced economy. Markets are efficient at managing that information; but we’ve seen a dramatic example of why they cannot be expected to function for the good of the consumers when government fails to regulate those with the profit motives.

Consumers, too, need access to better information than they typically get under the current system, no matter if you’re considering tax-cuts, politics, the price of peanut butter, new home-buyer credits, or anything else. When misinformation is tolerated (or encouraged) it undermines the effectiveness of capitalism. Free markets rely on timely, accurate information – we need to consider new incentives for the reporting of “news” and information systems we base our choices on, or capitalism is absolutely doomed to implode.

Digg!

October 29, 2009

CNN & Money.com aren’t qualified to assess “Cash for Clunkers”

Posted in economic recovery, media coverage, Obama administration, U.S. Economy tagged , , , at 3:38 pm by realitytax

You’d expect an author at this CNNMoney.com to understand the role of money in business.  You’d expect an editor to send this back to re-write.  Here was the basis of Peter Valdes-Dapena‘s misguided assessment:

“…majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com”

So? This isn’t news, and it misses the point of the Cash for Clunkers initiative.

Valdes-Dapena and/or his editor may think selling cars sooner rather than later is a valid reason to criticize the program, but as any businessman can tell you: success in business is about cash flow. Any retail operation needs to keep their stock turning over. At a time when the inventory was sitting idle on the lots this program provided a much needed infusion, enabling dealers to pay staff, utilities, creditors, and suppliers.

Did the Cash for Clunkers program solve the economic crisis? Of course not.  The goal was to turn over inventory in one segment of the industry – to keep dealerships from failing in huge numbers just before the manufacturers started to recover, thereby saving some jobs and hopefully averting a situation that would spread and further exacerbate the economic downturn.

The article may fool a person with no entrepreneurial experience, but it reflects either a shallow grasp of money and business or a thinly-veiled attack on the government’s attempt to avert a breakdown in the delivery mechanism of an industry it was actively seeking to save – without proposing any alternative that might have been even marginally effective.

The public may think “Cash for Clunkers” was as simple as just selling cars, the author evidently wants to; the reality is much subtler. Edmunds didn’t surprise anybody (except maybe CNNMoney.com staff) with the news that one of the primary effects was to accelerate the decisions and purchases – that was the point.

In business, my friends, timing is everything.

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