Logic takes a holiday in politics

This is a partial list of things I don’t understand that are used for rationale in our current political dialogue:

1. “The President should not nominate a Supreme Court Justice in an election year”, but the 34 Senators and 438 Congresspeople that are up for re-election this year keep doing their work?  Shouldn’t Chuck Grassley wait until the people have a voice in his reelection before he takes a stand this year?  Do we elect Presidents for 3 years, Senators for 5, and Congresspeople for 1 year?
2. Constitutional originalism — does that mean that the “right to bear arms” is limited to single shot, muzzle loading muskets?  Are black people only counted as 3/5ths of a human?
3. “Protesters are violating our First Amendment rights to free speech!”  I am baffled that no one points out that the First Amendment only prevents Congress, not individuals or corporations, from limiting speech.  It is uninvolved in various people trying to yell over each other at a campaign rally.  You can even punch protestors, if you want, but you’ve now violated a different law.
4. Back to the Supreme Court nominating process.   The Constitution doesn’t say the Senate has to vote on nominees, simply that they should “Advise and Consent“.  Does that mean that doing nothing is an implicit consent, similar to a pocket veto being an implicit veto?  Or does it mean that the Senate will devolve into not holding hearings on any vacancies until the President and the Senate are part of the same party?

 

Romney needs 46% of remaining delegates

In another sign that the end is nigh for non-Mitt Republican candidates, Mitt Romney needs 46% of the remaining delegates to claim the GOP crown. One fourth of his remaining need can come from winner take all California in June, where he leads polls by a healthy margin (43% to Sanotum’s 23%)

By definition, all the remaining candidates need 54% of the delegates to prevent Romney’s win. They have collectively won only 45% of the delegates on offer to date.

The specifics by candidate:

• Santorum needs 69% of the remaining delegates to clinch the nomination
• Gingrich needs 80% of the remaining delegates
• Ron Paul needs 87% of the delegates.

Despite Santorum’s win in Louisiana last weekend, Romney’s “% of remaining delegates needed” barely changed.

The power of words, the limits of help, and death

I am sadly reminded today of the power of words and our power to distort them.  We lost someone yesterday.

I recently read “The US is becoming a third world country.” To state this is to state one’s own ignorance. Having spent lots of time in those third world countries, this is patently false.  We insult their poverty to compare the U.S’s problems to theirs.

The primary poverty problem in the US is obesity. The primary poverty problem in Ghana is malnutrition, lack of education, poor health, and infant mortality (to name a few.  I guess that’s more than “primary”). To make this comparison accurate, we have to first burn every US community hospital, churn American roads back to dirt, and rip out our indoor plumbing. And then we are maybe 10% of the way towards a third world country.

Similarly, it’s become de rigeur to compare someone to Hitler. Sure, we have height challenged narcissists in our society. But to compare a current American political figure to Hitler is to insult an entire generation that died in the holocaust. Please, go visit the Holocaust museum, and then try to compare a tax increase to genocide.  I dare you.

I’m reminded of these word abuses when my acquaintance Rep. Gabby Giffords speaks for the first time for the cameras. Was it abused words in the mind of a crazy person that led to Gabby losing half her brain to a bullet? Maybe, or maybe that person was beyond help, regardless.

Beyond help. Beyond help. Today I teach a class on “measuring the results of microfinance”, via simulcast, to 40 business school campuses.  The challenge of measuring results is that the answer invariably says that someone was beyond help. Someone was even harmed, perhaps.  But does that mean we shouldn’t try?  Is only 100% success the ruler we can accept?

I’ll be teaching from the building where, yesterday, a student entered with a gun and, in a confrontation with police, was killed.  That student was beyond help.  As a society, we failed this student.

At moments like this, we are reminded of the rarity of our spectacular circumstances, the blessing of our sanity, and the foundation of our health.  We are reminded of mortality, in the face of a world of activities that seem designed to distract us from that.  For it’s not whether we have fun on life’s path, but whether we make the path better for those that follow.

 

Apple has more cash than Uncle Sam

From 9to5mac website:

A certain Cupertino, California consumer electronics powerhouse has more cash on its hands than the cash-strapped US government which is struggling to raise its debt limit before the August 3 deadline and avoid a default at the same time. Business Insidernails it down, saying “the world’s largest tech company has more cash than the world’s largest sovereign government”. Apple sat on a cash pile of $76.2 billion at the end of the June quarter, the sum which is comprised of cash, cash equivalents and marketable securities. Per this statement from the US Treasury, the government had an operating cash balance of $73.8 billion at the end of Wednesday, July 27. . . . And unlike the US government which owes a lot of money to creditors, Apple owes nothing to banks and has paid its debts in full.

Half of Americans Pay No Taxes

Now that tax day is behind us, can anyone tell who pays what and who gets what among our neighbors?

It’s hard to tell, because in government speak things like a “10% cut” is still an increase overall because it’s a reduction in a future increase.  Right, that cleared it up.  I had to reread that sentence three times.

But here is one thing I now know:  nearly half of Americans paid no tax in 2009 (after their tax credits and deductions)

That’s right, half of Americans got handouts that at least equaled their taxes.  Clearly this is not widely known, because it seems MORE than half of Americans complain about their taxes.

Why isn’t this something that everyone knows?  Why isn’t this a big part of the public debate?

Part of the problem is that we are confused.  The way the government describes income and expense is, if not intentionally obfuscated then at least in language that only a policy wonk could love.

• A “tax credit” is not a tax or a credit.  It is technically a reduction in income to the government, just like an expense is.  Tax credits are an expense for government.
• An “itemized deduction” is also an expense for the government, even though it’s not shown that way.  The mortgage interest deduction costs the federal government $100B per year, about as much as the EPA.
• A “stimulus” is an expense, just like “The Department of Agriculture”, but a stimulus doesn’t take up two full city blocks in Washington, DC.
• A “tax” is revenue.  OK, that one seems pretty easy.

This confusing array of tricks puts expenses in both the income side and expense side of the government balance sheet.  So why not simplify the entire thing?  I’m talking Flat Tax.

People argue against the Flat Tax, which charges everyone the same amount, because the poor are taxed the same as the rich.

I have an alternative.  Combine the Flat Tax with checks issued to those that we care about or are doing things we like.  This moves all the credits, rebates, stimulus, and fluff to what they really are:  expense.

A Flat Tax plus expense checks drastically simplifies our national debate.  If the Flat Tax rate were 20% and you were in the “get back as much as you send in” half of the population, the government would write you a check every year for 20% of your income.

It’s pretty simple, still allows us to achieve social ends (like incentives for home ownership), but drastically improves our ability to understand what’s going on.  We can yell at those people that are getting big checks if we want, or applaud their largesse.

It would simplify the government processing as well, although knowing the government they wouldn’t actually reduce headcount.

And the 1040 form would look like this:

1. What is your income from all sources?_____________
2. Put .20 on Line 2                               _____________
3. Multiply Line 1 by Line 2.                   _____________
4. Send in Line 3
5. We’ll send you a check for an amount, depending on dependents, home ownership, and income.  Half of you will get at least Line 3.  Congratulations!

Charlie Sheen for President

According to a Wall Street Journal Poll, Democrats would vote for Charlie Sheen for President over Sarah Palin 44% to 24%.

Republicans would vote for Charle Sheen over President Barack Obama 37% to 28%.

Clearly, we as a political nation have a problem.

I also have a Charlie Sheen problem.  Well, I’ve Sheen enough.  No more posts on the guy.

Budget deal done. Saves 1%. I feel like Willie Nelson

The Friday budget decision in DC led to a 1% change in the total budget.  Hurrah!  Now, let me bring the bad news.  The overall debt is still huge.  Even Paul Ryan’s interesting $6 trillion in budget cuts over 10 years leaves $400 billion in yearly deficits for as far as the eye can see.

So let me try to help you understand why Friday’s budget compromise and even Paul Ryan’s more serious proposal still leave us in a bad place.  Let’s visualize the size of the US debt.  Try this:

The US debt ($20T by the end of 2020) EQUALS

• all US currency in circulation ($3 trillion) PLUS
• all US Bank Deposits ($7 trillion) PLUS
• the value of the 500 largest companies in the US (the S&P 500 index at $10b, which includes the DJIA)

Yep, not just one of those things.  ALL of them.

Of course, if you don’t want to take all the money out of your pocket and bank plus sell the 500 largest companies in the US just to pay our debts, there is an alternative.  You can just sell every home in the US to our debt holders:

The US debt ($20T by the end of 2020) EQUALS the value of all US Housing ($20 trillion)

With the current debt at $14 trillion, even if we immediately cut every discretionary program while cutting back social security and medicare/medicaid by 1/3rd, we’d still have to sell most of our stuff to pay things off.

We should all feel a little bit like country singer Willie Nelson:

In 1990, the IRS sent Willie Nelson a bill for $16.7 million dollars in back taxes. Faced with this rather large debt, Willie decided to try and pay the IRS back by releasing a double album entitled The IRS Tapes: Who’ll Buy My Memories?

The IRS, ever helpful, sped up the process by selling nearly everything he owned. (courtesy CNN)

Charlie Sheen and Lady Gaga versus President Obama

I was doing some research for my upcoming book, using my tried and true “number of Google results as popularity” method, and I found some interesting results.

Who has more tongues wagging (well, fingers wagging) on the internet? Charlie Sheen and Lady Gaga or President Obama?

Obama has about 366 million Google results. Charlie Sheen and Lady Gaga have about 224 million and 242 million, respectively.  Smackdown by the tag team of Sheen and Gaga.

And since I mentioned Charlie Sheen, he’s easily outdistancing fellow crazy people Hugo Chavez (who recently claimed the lack of life on Mars was due to capitalism) and Khadaffi/Gaddafi/Qaddafi combined (at about 40 million).

Justin Bieber is just trailing Charlie Sheen (185 million) but completely buries media darling Sarah Palin (38 million) and the always quotable Vice President, Joe Biden (16 million).

This is important for my friends inside the beltway in Washington, DC.  In the city they almost affectionately call “Hollywood for ugly people”, where the stakes are far higher than at the Academy Awards (73 million Google hits), they miss one important point:  most of the voters aren’t nearly as tuned in as beltway folk are.  The details are lost, the vox populi is elsewhere.

Those populi aren’t really even focused on massive worldwide topics like Egypt (445 million) or Iraq (347 million).  Or even America (1,410 million Google results).

Your very important political product, beltway friends, is losing eyeballs, clicks, and mindshare to one of the largest Google search results I could find:  Facebook (8,810 million results).

Tax Breaks for Angel Investors

This is a great idea to stimulate new business creation (including businesses like microfinance that both make money and solve a social problem).  I don’t say “great idea” in response to legislative efforts very often.

It’s unlikely to pass, so if you have some political contacts, some pull, or just like writing emails and letters to senators and newspapers, now would be a great time.

Sen. Bill 256, known as “The American Opportunity Act,” will provide a 25% federal income tax credit for investing in qualified small businesses, including companies in the advanced manufacturing, aerospace, biotechnology, clean energy and transportation sectors. Qualified small businesses can receive up to $2 million per year in tax credit-eligible cash equity investment, of which no more than $1 million can come from a single investor. The funding is estimated to stimulate $2 billion per year of new capital formation.

More info here.

How to overthrow a government

We now have enough data from various countries that we can develop a short list of the best way to overthrow a government:

1. Get lots of dissatisfied people out in the street.  High unemployment and high food prices are helpful for this.
2. Get the military on your side.

And your done.  In fact, you might be able to skip #1.

The simple truth is, in every country, the arbiter of change is the military.

1. In Tunisia and Egypt, the military went whole-heartedly with the protestors, and the government fell.
2. In Yemen this week, major portions of the military switched to the protestors, and that’s a sign the protestors might win.
3. In Bahrain, the military is firmly with the government leaders, so don’t expect much right now.
4. In Libya, the military split between the government and the protestors, leading many to speculate that a civil war was coming.
5. In Iraq and Afganistan, the US is the only military left, so no wonder it’s taking a decade to set things up again.

Of course, in Libya as the government started winning, many of those military folks switched back to the government (or tactfully disappeared like house guests when the host starts slurring words and spilling drinks).  With the UN now pounding the government, portions of the military might change sides again.  And with all this wishy-washy behavior, don’t expect a cohesive transition if the government falls — the military is divided.

So in the playbook of regime change, it’s the military, stupid.  If the military abandon’s the leader of the “regime”,  the leader is in trouble.  Good thing our military swears an oath to the President.

Just kidding, the military actually swears an oath to the Constitution:

I, (NAME), do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; and that I will obey the orders of the President of the United States and the orders of the officers appointed over me, according to regulations and the Uniform Code of Military Justice. So help me God

This is an important distinction.  If the President or the Officers give unlawful orders (such as firing on peaceful civilians a la Bahrain), the military is obliged to say no.

Having visited the Quantico Officer training school, I can say with comfort that our military thinks very carefully about the definitions and distinctions of a “lawful” order.  If you ever have doubts that the military might one day evilly fire on your peaceful “save the library” mom’s march, you might first take a visit to Quantico.  You will be reassured.