Sunday, December 21, 2014

Saving Congress...and Ourselves

Be careful with the next sentence. It is the longest I have ever written. I’m dividing it up to make it a little easier to read.

Since the original intent of the founders
to restrict federal responsibility to a specific few areas of national consequence
and leave all other responsibilities to the states
has been circumvented by bribing the states with federal grants,
to pay for strictly local needs,
voluntarily, if reluctantly, accepted
and accompanied with restrictions, regulations, additional costs, and ongoing obligations,
to the extent that such grants comprise more than 15% of federal spending,
improperly skew state and local government priorities,
and dominate the time of senators and representatives striving to assure re-election
by currying favor with the voters and financial supporters,
drawing their attention away from the essential duties
that can be performed only by the federal government,
it is essential for the future of the nation and for the integrity of the congress,
that such grants be outlawed,
that federal taxes be reduced correspondingly,
that state and local needs be funded by state and local taxes,
and that congressional term limits be established
to allow members time to focus on the currently ignored federal essentials
rather than on fund raising and campaigning.

It's a long sentence, but I think it is a pretty good summary of the case developed by James L. Buckley in “Saving Congress from Itself: Emancipating the States and Empowering Their People.” It’s a short book, only around a hundred pages or so, but Mr. Buckley, who has a rich history of public service and political experience, does an excellent job of explaining in simple language why his proposals make perfectly good sense and would rescue us from many of the problems we currently face. He explains what the founders intended, what happened and why it happened, and why the current situation is unsustainable. He addresses every objection to his proposal. So, unless you intuitively agree with what I wrote above, please read his book and see if you can come around to his and my way of thinking.

I’m not as well educated, experienced, or eloquent as Mr. Buckley, and my objections to the current system are based mostly on logic and common sense rather than on personal credentials. Several times, often in frustration with people trying to draw analogies between the USA and such Atlanta sized, culturally and ethnically homogeneous countries as Finland, Norway, and Switzerland, I have expressed dismay at the idea that states as diverse and geographically distant as Alaska and Connecticut, Florida and Washington State, Hawaii and Georgia, New York and Utah, Alabama and California, can be controlled and forced into some state of uniformity from politicians up for re-election occupying a couple of square miles of property in the District of Columbia. That would not make sense and was never the plan.

Mr. Buckley hopes a lot of people will read his book, agree that he is right, and do something about it. I’m just trying to help. Since Mr. Buckley is 91 years old, we need to get busy if he is to enjoy seeing any progress.

The Kindle version of the book is only $11.50.

Saturday, December 13, 2014

Church and State, Christianity and Islam, Good News, Bad News, and No News

This week there is a report of the beheading of four teenage Christians in Iraq because of their refusal to convert to Islam. I am willing to concede that Islam may be, or may at least become, a religion of peace if it is stripped of and separated from any political or state power, but that is not the current situation. Alignment of church and state is always tragic, and Christianity also has suffered many shameful failings when established as the official religion and sanctioned by the state.

We are still trying to overcome the residual effects of the Emperor Theodosius's A.D. 380 decision, expressed in the Edict of Thessalonica, to make Nicene Christianity the official religion of the Roman Empire. How much better it would have been had he simply expanded the concept of freedom of religion begun by Constantine sixty seven years earlier in the Edict of Milan. He should have stayed on "the right side of history" and left such theological decision making up to the Church. Had he done so, the infamous Crusades would have rightly been seen as struggles for religious freedom rather than as Christian vs. Muslim.

I suppose Mr. Ron Prosor, who explained the current persecution and extermination of Christians in the Middle East in an April 16, 2014, WSJ Editorial, must have no credibility and shares that problem with Canon Andrew White who reported the beheadings. I know of no other explanation for the failure of ABC, CBS, NBC, and CNN to report daily on this horrible activity. Such stories could displace at least  the regular Kardashian reports.

Last evening Brian Williams chose to dedicate part of his precious twenty two minutes to a bit of fluff about some new study which concluded that men are idiots and do stupid things. He missed a perfect opportunity to point to the current situation in the Middle East, including our role in it, as obvious proof of the hypothesis.

As the suffering and death go on, we can and must give thanks to God daily for the separation of church and state and freedom of religion we enjoy in the United States of America. Such freedom was not a sure thing and was not present in early settlements here. We can thank God for leadership of such as Roger Williams for avoidance of establishment of just another theocracy here in the "Land of the Free." Let us exercise that freedom and defend it from every encroachment, even as we remember that is is "freedom of" and not "freedom from" religion that we are guaranteed.

As a reminder of early American history, here is a picture I took earlier this week of an explanation posted in The Museum of Charleston, Charleston, SC.

Sunday, November 23, 2014

Helping the Poor Republicans - A Dozen Good Ideas

Now that the Republicans are apparently going to have majorities in both houses of Congress for the first time in eight years, I am a bit worried that they may have forgotten how to write and pass legislation and perhaps even how to discern the differences between good ideas and bad ideas. A search of for words such as "recommendation," "idea," and "suggestion" turned up a dozen good ideas proposed and ignored over the past five years. Here they are, all gathered together in one spot for easy reference, all aimed at increasing liberty and freedom, fairness and equality, job creating economic activity, GDP and tax revenue growth, and other good things we need more of. If you look hard, you might even find a little wealth spreading here and there, but it's minor in the overall scope.

1. Reform Corporate Taxes to Increase Fairness, Stamp Out Lobbying, and Boost Investment

2. Incentivize Marriage Rather Than Single Motherhood

3. Repeal and Replace the ACA with This

4. Quit Spending Money Trying to Tell Us What to Eat

5. Quit Pumping Money Into Higher Education; It Just Drives Up Prices

6. Put a Cap on Federal Government Size as a Percent of GDP

7. Put a Cap on Federal Social Transfer Payments as a Percent of GDP (10% Maybe?)

8. Equal Pay for Equal Experience, Wisdom, Knowledge, Skills, Effort, Responsibility, and Results

9. Kill the Estate Tax and Tax Inheritances as Income

10. Kill the Capital Gains Tax (Or Adjust it for Inflation)

11. Outlaw Gerrymandering

12. Regulate Congress

I don't have much hope for such significant change as the above ideas would entail. The vested interests in the system as is are far too strong. So, if none of the above are achievable, maybe the new congress can just pass legislation to implement some Silly Suggestions for Job Creation and at least get more of us working. (It is interesting that Hitler used such tactics during construction of the 1936 Olympic site, putting the maximum number of people to work by decreeing that all the labor was to be done by hand. - The Boys in the Boat by Daniel James Brown, Page 213 in the Kindle version)

Mentioning Hitler makes me think of our government's foreign policy. I have never posted on the subject in this blog because I have no foreign policy experience or education. I am uncomfortable, however, with the withdrawal from world affairs that seems to be currently underway and  would like to see our Congress re-establish the United States of America as the most powerful world policeman. If we leave that position vacant, somebody will fill it, and I know of no satisfactory candidates. (Some unsatisfactory candidates are the UN, Russia, China, ISIS and any combinations of same.) I don't know how best to do that, but all twelve of the proposals above will help eliminate distractions and improve our economy such that we can maintain the strength and focus required of a world leader.

Thursday, November 6, 2014

Common Ground and Compromises

With the elections over, I'm thinking about the differences between "seeking common ground" and "compromising." Both terms are being carelessly bantered around by the Left, the Right, and the media, but I believe they have entirely different meanings.

It sounds to me like the president is sticking to his position of the past six years that he is interested in the former but will not do the latter. He often uses the phrase, "...but what I will not do..."  It is just another case of his overuse of the first person singular, and he needs to learn that fewer and fewer care about his personal positions and opinions.

All experienced politicians, on the other hand, Boehner and McConnell included, know that the only way forward is compromise. Of course they also know that what one says in public is often different from what one is willing to do behind closed doors.

There are three major domestic issues facing us at this time:
  1. Current federal receipts only cover about 85% of current federal spending, even with the debt already greater than annual GDP.
  2. Immigration is out of control with millions of undocumented residents.
  3. “Health care” spending is a mess, tens of millions are still uninsured, and the ultimate ACA effect is unknown.
So, how about common ground and compromise possibilities?

I believe Democrats and Republicans both want higher tax revenues so that might be considered "common ground." Democrats typically want that to be accomplished by higher rates on "the rich." Republicans typically want that to be accomplished with lower rates on higher incomes and profits for all with fewer deductions, exemptions, exclusions, credits, etc.

I believe Democrats and Republicans both want everybody living in the United States of America to be legal residents doing productive work, earning reasonable incomes, paying taxes, and voting for their respective candidates and believe that the more such persons the better. Democrats typically want to grant amnesty to all who are here now, leave the doors open, especially for any immigrants likely to vote for their own party, and get the paperwork done as time allows. Republicans typically want to close the doors, get names, photos, and fingerprints of everybody here and everybody who wants to enter, identify any criminals or potential terrorists, and refuse them residency.

I believe Democrats and Republicans want everybody living in the United States of America to have access to needed medical care. Democrats typically want to accomplish that with a government funded, cradle to grave, support system that includes everything from diet, home safety, and firearm advice to free birth control and abortions, all funded with limits on “end of life” care. Republicans typically want to accomplish that with a free medical market that has an ample supply of doctors, hospitals, drug and medical device companies, and insurers, all competing to provide effective medical care faster, at lower cost, and with greater customer (patient) satisfaction. Even Republicans know that there has to be government funded medical care for the poor but just don’t believe that requires a federal takeover of the entire system or even that comfortably retired persons need to be Medicare beneficiaries.

So, let’s see what kind of compromises in these three areas can be achieved in an effort to occupy a little more of that common ground. I have no doubt that Boehner and McConnell will compromise behind closed doors, but success and his own legacy will require President Obama to be willing to do the same.

Tuesday, November 4, 2014

Nomination for American History Required Reading

“Finally he pauses, clears his throat, raises his hand, and points up at the Husky Clipper. Several hundred necks crane. Earnest young eyes gaze upward. A new, deeper level of quiet settles over the room. And then he begins to tell the story.”
That is the last paragraph of The Boys in the Boat: Nine Americans and Their Epic Quest for Gold at the 1936 Berlin Olympics by Daniel James Brown, just five short sentences that, in my case, evoked a strong emotional response, a combination I suppose of admiration and respect for the crew members, the coach, the boat builder, their relationships with each other, joy in their patriotism and victory at Berlin, regret for commercialism of and  diminished emphasis on discipline, character and personal sacrifice in collegiate sports, and dismay at the background story of Hitler’s calculated deception as he led the world into a war that would claim the lives of millions. It is a big and complex story, in the context of The Great Depression which, though certainly tragic in many ways, also played an important role in the character development of these young men.

You can see clips from the final Olympic event, filmed by Hitler’s propagandist filmmaker, here.  It is the second race in this clip, interspersed with close ups apparently staged and filmed later. The US team was assigned the slowest lane, most exposed to wind and waves, and had one member deathly ill. They are totally ignored in the filming until the last few seconds when it became obvious to the announcer that America, against all odds, was winning.

Here are the prologue of the book, a discussion with the author, and some photographs. 

This is a very short comment on a pretty long book, but there is no way I could do it justice. If I haven't sparked your interest, maybe this collection of photos will do so. Buy the book and read it. The Kindle price is only $2.99. Why for American History Courses? It explains our "exceptionalism" and is the background story for "The Greatest Generation."

Wednesday, October 22, 2014

Corporate Tax Corruption Deeply Ingrained - Even in Beer Business

In April this year the US Commerce Department reported that before-tax corporate profits in 2013 totaled $2.1T and that corporate tax revenues totaled $419B. That is an effective tax rate of 20%. But wait a minute. I thought the corporate tax rate in the US was 35%!

What made me think of this issue just now was an inspiring business story in The Atlantic (Nov 2014) about Boston Beer Company, producer of Sam Adams Beer. I learned about Sam Adams beer and its unique taste while at MIT in 1989-90. It was still a local beer, total volume around 100,000 barrels a year, but rapidly gaining popularity. The company was founded by Jim Koch (pronounced Cook, not Coke) in 1984, went public in 1995, ticker SAM, languished for about three years at $10 or so a share and is now at about $224 per share. Mr. Koch is a happy billionaire. According to the writer, James Fallows, Koch not only became rich but “opened America to a craft beer renaissance,” preventing growth in imports while creating thousands of well-paying blue collar American jobs.

The only disturbing thing in the article was three consecutive sentences about halfway through. Here they are:
“The IRS applies a lower tax rate to beer from breweries with output below 2 million barrels a year, a level unchanged since 1976. Sam Adams, whose output now exceeds 3.4 million barrels, no longer makes that cut. Koch, along with other brewers, has lobbied Congress to increase the ceiling to 6 million barrels, which would save Sam Adams millions of dollars in federal taxes per year.”
These sentences raised several questions in my mind. They made me wonder how much of Mr. Koch’s success was due to special favors granted by the IRS. They made me wonder how much tax Boston Beer is paying compared to larger competitors. They even made me wonder how in the world the IRS ever got the power to apply different tax rates to companies based on size or any other criterion. I looked up the 2013 financials for Boston Beer and two of its big rivals.

It certainly doesn't look like the feds are showing little Boston Beer any favoritism. I am currently accepting nominations for a more ridiculous set of circumstances than a national corporate tax rate of 35%, corporate tax collections of 20%, and three competing companies the smallest one paying taxes at a rate of 37%, the middle sized one at 13%, and the giant one at 11%.

I’m certain the accountants at all three companies can give very accurate if not informative and understandable reasons for their respective tax rates, but nothing they say is going to improve the image or reputation of corporate America. The fact is, however, that the blame lies not with businesses trying legally to play the tax game, following the rules established by Congress. It lies with Congress which has established an artificially high corporate tax rate and routinely accepts campaign money and votes, not to mention meals, trips, and drinks, in return for concessions that support and motivate a huge lobbying industry seeking favors for companies willing to pay the bills. I know Congress will claim it is acting in the best interests of the USA, but I don’t believe it. It is deep and pervasive corruption, even if legal, and should be stamped out.

It would be so easy. Simply establish the corporate tax rate at 20% of earnings, local or international, reported to shareholders according to GAAP, payable quarterly to the federal treasury, and eliminate ALL exclusions, deductions, credits, exemptions, and allowances. Lobbyists can find real work, Congress can work on real issues, and businesses can turn their attention to business strategy and customer satisfaction and away from the tax game. I believe it would revolutionize our economic system and our political system, and we would see both profits and taxes begin steady growth even as negative political campaign ads disappear.

I have no idea what all the superfluous tax accountants and IRS employees would do, but they are bright folks and would come up with something productive, perhaps turning their skills to business strategy development or charity work.

Monday, September 29, 2014

Change Coming, Plan Needed

Here is a simple survey. Rate the following three in order of importance:
  1. Prompt access to and attention from a qualified physician when medical care is needed
  2. Regular access to health care providers for consultation, advice, and preventive measures
  3. "Health Care" insurance
I'm guessing most of us are going to rank these in the order listed. After all, number 2 is mostly free now on the internet, and number 3 is pretty worthless without number 1.

I thought of the survey after reading this statement from the New York Times:
WASHINGTON — Enrollment in Medicaid is surging as a result of the Affordable Care Act, but the Obama administration and state officials have done little to ensure that new beneficiaries have access to doctors after they get their Medicaid cards, federal investigators say in a new report. The report, to be issued this week by the inspector general at the Department of Health and Human Services, says state standards for access to care vary widely and are rarely enforced. As a result, it says, Medicaid patients often find that they must wait for months or travel long distances to see a doctor.
It may be worth thinking about how in the world the Obama administration or state officials can "ensure... access to doctors" or how a state can have and enforce "a standard for access to care." Mandatory overtime for physicians perhaps? Or a bonus system to entice them to work longer hours?

The above clipping is just one in a string of several that seem to signal the future of actual US medical care (No. 1 in the survey above), an important subject lost in the shuffle of efforts trying to get everybody insured. I'm not making personal complaints here but just trying to understand the lay of the land and make some plans. Good health is primarily a function of genes and strategy, and it is only strategy over which we have any control.

A personal story, not a complaint, has to do with my interest in finally, after eight years of living in town, trying to find a GP or Family Practice physician within walking distance of our once new residence. That was always my plan, but I'm still driving out into the country to see my perfectly fine doctor of fifteen years. Cursory investigation of possibilities quickly revealed that many doctors with established practices don't take new Medicare patients. Of course most multi-physician practices take new Medicare patients but only to be assigned to the newer physicians still paying off their medical school debts. And, a physician friend tells me that it is common for doctors to limit their service to government insured patients to a certain percentage of their practice because of the low reimbursement rates. The bottom line is that low priced medical services demanded by government reimbursement programs already have limited availability, and the situation is unlikely to get better.

Consistent with that, we seem to have been facing a constant stream of news reports about how some health care expert or association has determined that some common preventive or diagnostic test is actually causing more problems that it has solved, resulting in a lot of stress-inducing and expense-incurring false positives and unnecessary treatments while saving only a very few lives. Chest X-Rays, which I got annually as a young person, seem to have become scarce, and now the annual PSA and Mammogram are being questioned, even as the recommended frequency for colonoscopies has decreased from one every seven to one every ten years.

And then there was Dr. Ezekiel Emanuel's Atlantic Magazine article, "Why I Hope to Die at 75." Dr. Emanuel is champion, defender, and a primary architect, of The Affordable Care Act. He has eighteen years to go before reaching 75 while I have only three, so his "hope" probably seems more reasonable to him than to me. Of course his title is somewhat hyperbolic to draw attention. He is not planning euthanasia and promises nothing more than to refuse to seek out life extending medical care, including the annual PSA check, once he reaches 75. I am betting he will break that promise and will have the influence and resources to do so.

Dr. Emanuel is well aware that the increase in demand for medical services by an aging population hoping to live to 100 is on a collision course with downward pressures on both Medicare reimbursements and physician availability, and that increased rationing is the future of medical services for the elderly. I suspect that Soylent Green may be one of his favorite movies.

Third, there was a story in the local news about a heart surgery unit in a local hospital being shut down because of lack of an approved Certificate of Need. Medical care is not a free and competitive market like cell phones and automobiles. Can you imagine Apple having to get a Certificate of Need before rolling out the next iPhone? Still, it is unclear to me why any hospital would want to invest in a service unless there were adequate demand to keep it busy. The combination of fewer facilities and lower reimbursement rates pretty much guarantees fewer surgeons and fewer operations along with higher profits for and longer waits at established facilities. It sounds like a death cycle, no pun intended. Medical care is a market, purchases being made, services being provided, bills being paid, and government planning of a market does not seem to me to be reasonable or likely to work very well. And I have little confidence that the decisions made and policies established are free of political and personal economic considerations and lobbyist influence.

And finally was Brett Baier's autobiographical account of his son's struggles with a heart defect requiring infant surgery, Special Heart: A Journey of Faith, Hope, Courage, and Love. It is good reading about a wonderful family, with a happy ending, and I recommend it, as well as his nightly news program, Special Report. The first big decision the family had to face was whether to endure a risky wait of a few weeks for a renowned pediatric heart surgeon, recommended by everyone but on a trip out of the country, or proceed with an available surgeon. They waited, and one thing we all know, reinforced by the Baier story, is that not all doctors and surgeons are equal. Thankfully, the Baier family, young and vigorous with bright futures and with many influential friends and family and the backing and support of the entire Fox News organization had access to excellent advice and unlimited resources. Most of us, certainly not the low income elderly person with only Medicare, are not going to get that kind of support or priority. Just think of the recent VA scandal. We all, fortunately, do have access to the prayer support on which the Baier family depended and to which they give credit for their son's progress.

What's the point? It is just that there are several indicators that medical care for the elderly, especially expensive and difficult elective surgeries and heroic life extending surgeries are likely to be increasingly scarce over the next few decades. Some of us will have our health improved and lives extended, of course, by government paid health care, and that will be enough for some people to say it is a good thing, same as non-critical assessments of Head Start, but the best hope for most of us is to need less of it. The first fifty years of Medicare have been a great and generous gift from the young to the old. Now we are going to have to "give back." (Unfortunately, some of those who will have to give back are the same ones who gave forward.) We need a plan.

So, as we age, let's get some healthy aerobic and stretching exercise every day, eat healthy foods in moderation, get rid of the gut and flab, say our prayers, get a good night's sleep, and have a glass of wine with dinner and an aspirin with breakfast every day. And focusing our attention on helping somebody every day, will help keep our minds off our own problems. Worry and stress, after all, can lead to illness.

Oh, and I almost forgot to mention this: Let's go to our local Red Cross and donate a pint of blood every eight weeks. It helps lower the levels of any bad stuff that might be building up in a closed system and might save the life of some young person undergoing expensive and difficult surgery. I recommend this in spite of the recent news item reporting that blood from young folks is better than blood from old folks.

We just have to do the best we can, making appropriate sacrifices, because somebody has determined that the USA spends too much on "health care," and we have to cut somewhere. At least we will all have insurance.

Monday, September 22, 2014

FDR and Granny's Outhouse

My grandparents, Oscar and Ezalee, Hobart and Bessie, were born in 1895, 1895, 1897, and 1898 respectively. Their children, three sisters in the first case and a brother and sister in the second, were born in the 1920’s. So, when The Great Depression arrived, both East Tennessee families were suddenly faced with earning livings and raising young families in a punishing economy with little opportunity.

Granddaddy Oscar had been appointed a rural mail carrier in 1927 by US Representative B. Carroll Reece, Republican from Butler, TN. Postal jobs were political in those days. His salary was $157.50 per month, and he carried the mail on horseback, seven to eight hours per day, until switching to a Chevrolet in 1933. I bet he had callouses on his butt. Granny Ezalee was a talented teacher, seamstress, gardener, and cook, well trained by her mother, Grandma Marshall, whom I barely remember. I bet Granny made a lot of clothes, canned a lot of beans and tomatoes, and scalded and plucked a lot of chickens for those three girls. They were poor, certainly by today’s standards, but I doubt they knew it, worried about it, or suffered very much.

Granddaddy Hobart was a flour mill owner/operator and horse trader who rode around Blount County, TN, trading horses and campaigning against “Old Roosevelt.”  He thought the easy money being spread around and government social programs were going to lead to trouble down the road and that the country would be better off in the long run if Alf Landon or Wendell Willkie were in office. He was a good businessman, and I think his family, also poor by today’s standards, got along OK. One piece of advice he gave me based on his experience: "Sonny Boy, don't ever let anybody tell you the price of land doesn't go down. I've seen it go down." Grandmother Bessie was farm raised, locally, and could hold her own in the garden and the kitchen with anybody.

I’m thinking about these folks and the problems they faced because of the FDR special running on TV this week. The impression I come away with is that Roosevelt was a great and unselfish leader, fully aware that his job was to put away and hide any personal problems, polio included, slap a big smile on his face, and persuade the American people that the USA was a great country and the people were doing a great job and everything was going to be OK. Those intimate “fireside chats” were pure genius made possible only by the recently widespread radio technology. I think President Reagan had the same strengths and succeeded as a popular president for the same reasons, though in very different situations, both leaders always talking about the national good and using collective pronouns rather than the first person singular in their speeches.

In an era that valued and had high demand for manual labor, FDR was able to create meaningful real jobs, planting trees and building everything from dams and tunnels to outhouses including a new “little brown shack out back,” built by the WPA and later painted red, for Oscar and Ezalee. I reported on it earlier here. That kind of jobs program would be much more difficult today because of the dramatic reduction in demands for untrained manual labor and our history of providing government checks for doing nothing.

FDR’s suppressed ego finally got the best of him during his second term and inspired him to seek approval to pack the Supreme Court by adding a new Justice for any who didn't voluntarily retire by a certain age. After that, even his own party failed to support him. Had he been successful, it would have been the end of our democratic republic and the birth of a dictatorship.

FDR was rescued from the Supreme Court fiasco by the Nazi challenge which he recognized early and opposed effectively with little support from either Democrats or Republicans. The American people, remembering WWI and struggling with the economy, were completely uninterested in getting involved in a war in Europe, similar to public interest today in nipping ISIS in the bud. But economic issues took a back seat and patriotism ruled as Hitler advanced and the Japanese attacked, and it was the economic buildup for the war that finally changed attitudes and ended The Great Depression.

Granddaddy Hobart was right about the effects of the easy money. Both the value of money, and our work ethic have deteriorated. Had Granddaddy Oscar stuck a year’s pay from his mail carrier job in a mattress in 1930 and I found it now, it wouldn't pay my cell phone bill. And if President Obama were to ask people to leave home and travel to the national parks to build roads and tunnels and plant trees or to the Midwest to harvest wheat and corn to earn minimum wage, sending most of the money back home, he would be met with stony silence and a request for more food stamps.

But our democratic republic is alive and well and awaiting positive and confident leadership focused on our strengths. It is a shame we need that, but FDR set the example and established the precedent, and we have never recovered from it, still always looking for the next savior. Whatever one thinks of FDR, we can all thank him for the 22nd Amendment to the constitution, passed by congress in 1947 and ratified by the necessary states in 1951, limiting presidents to two terms in office. I’d like to see similar limits on congressmen and senators, but, while they gladly put such a restriction on the office of president, I doubt they will ever subject themselves to the same discipline. They just started a fall vacation, in the third week in September, and won’t have to come back to Washington until after the November elections.

Of those nine members of the two families I mentioned in the first paragraph, only my mother, age 93, and one sister are surviving. I probably should let Mother read this before posting it but will share it with her later and seek forgiveness, if necessary, rather than permission.

This is not Granddaddy Oscar, nor is it his 1933 Chevrolet.  I just thought the images might help younger folks think about what the USA was like in 1933. I wish I had such pictures of him, but photography was an expensive luxury in those days.


Sunday, September 21, 2014

Housing First for Columbia - Retreat Style

A few years ago there was a lot of interest in development of student housing south of Williams Brice Stadium, shuttle service back and forth to campus included.  One of those developments was The Retreat at 1929 Bluff Road, about three miles or a one hour walk from the center of campus.  The development offers "Columbia's only CRAFTSMAN-STYLE COTTAGE LIVING community with COLUMBIA'S BEST AMENITIES, and expansive greenspace.  And with a SAVINGS OF UP TO $855 A SEMESTER over the dorms, The Retreat is truly THE VERY BEST IN STUDENT LIVING!" And, six or seven times a year, students could easily walk to Williams Brice Stadium for football games!

Now there is a boom in student housing within easy walking distance of campus. The old SCANA office building on Main Street has been converted. Residents get a space in the adjacent parking garage but there are reports that some are still planning to also rent space on campus to reduce the 0.9 mile walk that would otherwise be required. Major new student housing projects have also been announced on Assembly and on Blossom streets, both within blocks of the campus, and there are others much closer to campus than The Retreat. With the unfortunate proliferation of student loans, cost of the more convenient and newer housing, usually with excellent amenities, should not be a major issue. And this increase in residential living in downtown Columbia is a very good thing for the city.

I haven't visited The Retreat since it is gated, but I am guessing that it is suffering some from several years of student occupation (Some reviews) and will soon be abandoned for the status and convenience of the new high rises much closer to campus. If that happens, The Retreat will provide an excellent opportunity for the City of Columbia to take a giant leap forward with the Housing First approach to homelessness. Units at The Retreat offer up to five bedrooms so transient homeless and first time occupants can be assigned a room at income adjusted cost and given the opportunity to work their way up to better and more private facilities based on the care and housekeeping they practice and on their participation in personal development opportunities offered.

Use of The Retreat for Housing First will greatly facilitate the work of providers of counseling, medical, feeding, and job training services. Day Labor companies can provide pickup there. Transportation can be provided to Transitions, hospitals, etc., using the system of vans already in place. Struggles and spending to provide "winter shelter" can be ceased.  Space not needed for the homeless can become ordinary Section 8 housing.  Conversion of student housing to Section 8 housing in Columbia is not unprecedented. A large development of Section 8 housing on Withers Drive at 320 South Beltline was once, I was told, apartments for married USC graduate students.

An interesting intersection of ideas here is that the only active Housing First initiative currently underway in Columbia is sponsored by the University of South Carolina School of Medicine. You can visit their website here.

Of course there has to be some requirement that homeless persons in Columbia take advantage of such a generous and potentially helpful offering and make some effort to improve their situations rather than camp in the parks and along the riverbanks and railroads. Income information will be required and affordable daily rents will have to be paid, even if only a dollar or two a day. Maintenance and cleaning jobs can be offered at the facility to help residents pay their bills and earn additional money. It is important to avoid attacks on dignity and self respect by having reasonable expectations of those who take advantage of the living space.

As I have pointed out in previous posts, sleeping outside in Columbia SC in public places is both dangerous and unhealthy and should not be allowed. Homeless on the streets should be offered the options of either going to jail, leaving town, or occupying a nice facility complete with baths, laundry facilities, swimming pool, and exercise room and participating in the programs and homeless services provided along with it. Of course there would have to be full time police coverage. Background checks would be required for occupants but, unless the applicant is subject to arrest, would not prevent assignment of a room.

Lest my readers think this is tongue-in-cheek or sarcasm, let me assure you that I believe the Housing First initiative is a good idea offering the potential to save money and provide more effective assistance to homeless individuals than current approaches, and that such an approach would be a good thing for Columbia, SC.

And, if it turns out that The Retreat is unavailable for such use, there are other similar developments in the area. I'm just using The Retreat as an example of what might be possible.

Saturday, September 20, 2014

The Market, the Economy, and the Future

Pay close attention. There is going to be a test at the end of this post.

It’s been six long years since the September 2008 bankruptcy of assumed venerable Lehman Brothers triggered the real estate collapse and panicked us into supporting massive bailouts of other venerable financial dominoes lined up behind it. The upset got my attention because I was holding a $10,000 Lehman Bond, assumed to be an ultra-safe and conservative income-generating investment, suddenly worth almost nothing. Now many of us are wondering what the future holds for our economy, our pocketbooks, our lifestyles, and even our nation.

The two key variables are GDP and the stock market, Main Street and Wall Street so to speak. The former largely determines how Joe the Plumber is doing, and the latter has more to do with how the upper middle and above classes are doing. Click on the chart for a better views.

The stock market is fickle, volatile, easily manipulated, subject to emotion and difficult to understand but very easy to measure. We get instantaneous readings throughout every day the market is open. And the broadest popular measure, the S&P500, is up 150% since the bottom following the Lehman Brothers fall and up about 40% since just before the Dot Com bust of early 2000. That is impressive and is, of course, the single biggest reason that, throughout the last decade and a half, the rich, those who invest, have gotten so much richer even as the poor have remained poor. Of course that comfort and anxiety creating wealth is just on paper and could be decimated in a few months as it was in 2000 to 2002 and again in 2008 and early 2009. Click on the chart for a better view.

GDP, on the other hand, is sluggish, slow to change, impossible to manipulate, easy to understand, and difficult to measure. Still, we anxiously await the noisy and soon to be adjusted quarterly estimates as if they really mattered. The six year interval since the Lehman failure inspired me to think of looking at a six year running average of quarterly percent change in GDP. I doubt that anybody else is considering six year averages, but, statistically thinking, I believe that, in spite of the noise and errors in individual quarterly measurements, the average of 24 consecutive numbers is a satisfactorily accurate picture of what has happened to the real economy over that period of time. An examination of the chart shows that nothing good has happened to GDP in the last six years even as the stock markets have more than doubled.

The GDP chart also shows that GDP growth was an incredibly favorable 4% in 1994 to 1999, even allowing our federal government to run a surplus because of strong tax revenues, and that the trend has been unfavorable ever since the Dot Com bust, only worsening with the real estate bust.

So, here is the multiple choice test. Please consider the data presented above and choose the answer which most accurately describes the current situation. 
  1. The strong stock market, at a high but sustainable level, is signaling a turn in the economy, and boom times with 3% to 4% GDP growth are just around the corner. We can expect strong tax revenues, strong job growth, increasing pay rates, historic infrastructure investments, and diminishing federal debt as a percent of GDP. (The Patriotic Theme)
  2. The strong stock market is a soon-to-burst bubble driven by artificially low interest rates, quantitative easing, greed, and the greater fool theory. The result will be a market crash followed by continued low GDP growth, more panicky stimulus spending, more unemployment, lower wages, crumbling infrastructure, and higher federal debt as a percent of GDP. (The Depression Theme)
  3. Both the stock market and the economy are becoming irrelevant because of low participation as we abandon news programs, newspapers, and cable TV, ignore current events, and return to an agrarian economy with everybody receiving a government check and just sticking around the house to care for their gardens and chickens, posting ignored pictures of them on social media sites, even as the necessary infrastructure crumbles. (The Abandonment Theme)
Whichever choice you make, don’t bet everything on it. Just do your best and don't worry. "Everything's gonna be alright."

(Earlier post mistakenly said September 2009 in the first sentence.)

Tuesday, August 19, 2014

A Nerdy President Everybody Could Trust

Two or three weeks ago I saw on Facebook one of those irritating little “Quotes in a Box” attributed to USA President Calvin Coolidge. I realized I know very little about him but figured that, if he rates a Facebook Box Quote, whether accurate and correctly attributed or not, I should probably learn a bit more. A quick search revealed that his autobiography, personally written and highly personal, is available on Kindle for $1.99, and that is my main source. The Calvin Coolidge Wikipedia article seems to be a pretty good source of less personal information, none of it inconsistent with the autobiography.

Coolidge was our thirtieth president, stepping up from Vice President upon the 1923 death of Warren Harding and then being re-elected in 1924. He chose not to run for re-election in 1928 because, “I felt it was not best for the country that I should succeed myself.”  A more extensive explanation of his decision is included in the book, but rest assured it was not because of failures on his part, of poor prospects of winning, or of a desire to enter private life and make some real money.  

Coolidge was a quiet, unassuming, humble, intelligent, well educated, solidly middle-class Republican lawyer of modest means, both before and after his presidency, with ambition only for service. His demeanor earned him the nickname, “Silent Cal.”   Not everybody agreed, of course, with his conservative small government and personal responsibility themes, but since there were no obvious disturbing and trust destroying inconsistencies between his philosophies and his personal or political behaviors and actions, he was generally assumed to be both trustworthy and admirable.  He entered office, enjoying popularity and without wealth, and left the same way, moving to a modest rented Northampton, MA, home to write his autobiography. He died suddenly in 1933, after what would have been the end of his second full term. We can only wonder what his response to the 1929 stock market crash would have been.

Here are some of my favorite quotes from the autobiography:

When we come into the world the gate of gifts is closed behind us…So far as each individual is concerned all he can do is to take the abilities he has and make the most of them.”

The study of it (U.S Constitution) which I then (in high school) began has never ceased, and the more I study it the more I have come to admire it, realizing that no other document devised by the hand of man ever brought so much progress and happiness to humanity.”

It is much better not to press a candidacy (for governor of Massachusetts) too much, but to let it develop on its own merits without artificial stimulation. If the people want a man, they will nominate him. If they do not want him, he had best let the nomination go to another.”  - In the 21st century, I believe it is personal ambition and expensive “artificial stimulation” that rule.

There is no dignity quite so impressive, and no independence quite so important, as living within your means. In our country a small income is usually less embarrassing than the possession of a large one.” (Well, we have seen some deterioration of that principle.)

(On his duty as Vice President of presiding over the Senate) - “If the Senate is anything it is a great deliberative body and if it is to remain a safeguard of liberty it must remain a deliberative body.”  Oops!

 (On becoming President) “While I felt qualified to serve, I was also well aware that there were many others who were better qualified. It would be my province to get the benefit of their opinions and advice.”

The words of the President have an enormous weight and ought not to be used indiscriminately. It would be exceedingly easy to…foment hatreds and jealousies which…would help nobody and harm everybody.”

On his campaign for President: “…I did not attend any partisan meetings or make any purely political speeches during the campaign.” What?

The description of his education which “began with a set of blocks which had on them the Roman numerals and the letters of the alphabet” and “…is not yet finished” could well be used to establish a “Common Core” for the 21st century public schools.

What a shame that a man with such attributes and principles, such ability and confidence combined with self-effacing humility, could never be elected president today. Now we are all looking for a savior who will fight for US. Read the book. Whatever your political philosophy, you will enjoy it. 

Friday, July 25, 2014

Acting Patriotically

My first real discomfort with President Obama was five years ago, the summer of 2009, when he commented on what should have been a strictly local issue by saying that the Cambridge, MA, police had “acted stupidly” in their handling of an issue involving a Black Harvard professor mistakenly arrested. Whether they acted stupidly or not was far less important, in my opinion, than the fact that President Obama felt compelled to comment on such a local race-related issue. Just a few weeks after that, the “Cash for Clunkers” effort, an example in my view of government acting stupidly, launched my blogging hobby, and I borrowed the president's phrase for the title, “Government Acting Stupidly.” My opinion has not changed, but I did soon abandon that early blog title for the more positive, “Permanent Fixes.”

Now we have a case of the president accusing corporate managements and boards of acting, not stupidly, but unpatriotically by merging their corporations with overseas companies in a way that allows them to declare a non-US location as their tax headquarters, thereby reducing their total tax liability. He suggests that such companies should opt out of that completely legal opportunity and continue to pay higher taxes and asks Congress to immediately close the “loophole” retroactively. “Loophole,” by the way, is just another word for a law passed by Congress and signed by a president.

The issue made me wonder if President Obama is taking advantage of any “loopholes” to reduce his personal tax liability or is simply declaring all his income and reading the tax payable out of the simple table provided by the IRS. The president’s 2013 income tax return is posted online, so I took a look at it. The “Adjusted Gross Income” from Line 37 is $481,098. Using the IRS tax table for “Married Filing Jointly” indicates a tax due on that income of $138,161, an “effective” tax rate of 28.7%.

Of course none of us take that approach if we have options for reducing our tax bill, and neither did the president. He reported $147,769 in itemized deductions, including state and local taxes, contributions, and mortgage interest, and was able to reduce his tax bill to $100,462, a saving of almost $38,000 and an “effective” tax rate of 20.9%. It is exactly what I would have done and is both legal and patriotic, totally compliant with the unbelievably convoluted and intrusive tax code that has been imposed on us by our government for its own benefit. Because of that tax code, the tax return the president had to file to justify that lower bill totaled 42 pages plus certainly a much larger pile of paper his accountant must keep on hand to justify the 42 pages in case the president is targeted by the IRS under some future administration. A side benefit, or issue, is that it kept him from having to pay his “fair share” relative to single people who cannot file jointly and people who choose not to give their money to organizations granting tax deductions or those who avoid big home mortgages by supporting their local landlord. 

The whole thing makes me wonder if it wouldn’t be fairer, simpler, more transparent, less time consuming, less threatening, and less tempting, to eliminate the current tax code and simply tax incomes at a flat 20%. That is about what the president ended up paying anyway after all the calisthenics on what would certainly rank in the top 1% of US incomes. Of course such a simplified system would be far better in every way.  

But back to the current issue, corporate leaders acting unpatriotically. Companies likely to try that tax saving move, referred to as “inversions,” are those that are in global businesses with operations and sales around the world. They are in competitive environments and have a fiduciary responsibility to their employees, shareholders, and lenders to do the best they can against their competition. Success is not guaranteed, and when failure occurs, there is much suffering, mostly by employees. As a few glaring examples of recent corporate failures, take a look at Eastman Kodak, Lehman Brothers, and the president’s favorite solar company, Solyndra, which couldn't be kept alive even with federal favoritism.

Here is the big problem we face.  The United States has lagged economically beginning with the first big oil crunch in 1974 and the almost simultaneous onset of globalization, automation, and major post-war advances of economies of Japan and Germany and, later, China, India, and Latin America. We are in competition with all those economies, and our losses have, in a large part, been their gains. I suppose that was only fair, but now it is time for us to notch up our efforts a bit by making the United States of America once again the number one business and manufacturing site in the world. A really good way to do that is to eliminate our shamefully complex and mysterious corporate tax code and replace it with a simple flat tax of 15% on all corporate earnings as reported to the public with ZERO exclusions, exemptions, deductions, credits, or other adjustments. Just read the annual report and find the “Net Income before Taxes" line, multiply that by 0.15, and mail a check to the government. We would find companies flocking to the United States as a low cost tax haven with tremendous resources, joyful freedom, and a large workforce continuously boosted and replenished from south of the border.  

Congress could begin acting patriotically, focusing on something besides picking and choosing winners and losers and granting favors for votes and contributions, infrastructure perhaps. Patriotism would expand, rapidly replacing our current shame of the stuff going on in Washington DC. Both business activity and tax revenues would soar.  And we could get back to work and quit complaining.