Refried Stimulus

You know, it's just getting so ridiculous now that it's hard to see straight anymore. I tried to watch Paulson's news conference today, but man, he is a terrible communicator. And honestly, I don't think he's really any better at economics. Today he confirmed what I already knew - that the TARP is a total ruse and hoax. Sorry, Henry, but the "facts" haven't changed. Only the lies you all have told us have changed.

I understand that everyone who's "important" thinks that the US auto industry is vital and indispensable so that we cannot allow it to crumble. Fine. But isn't there a better way of helping it than to give even more money to a bunch of guys who have proven that they don't know how to manage it? I mean, good Lord, that's like telling a child with a mouth full of rotten teeth to just keep on eating all that candy they want. It just makes a vicious momma feel, well, really super-vicious. ;-)

I really wish that Obama or someone would hire me as an advisor and I could really straighten their asses out about some things. Or at least, I could dispense some long-overdue spankings to all those executives that haven't been properly disciplined. Yeah, appoint me to the Cabinet. Create a new position called Spanking Czar or Tsar or whatever it is. Or Secretary of Discipline. Oh, nevermind, that won't ever happen.

Anyway, we got our letter yesterday about the "Economic Stimulus" - it came this late because we had filed for an extension and just filed our income tax return in October. Well, I figure it's like a small refund of some of the thousands of dollars we've already paid in the last few years. I guess we'll use it for Christmas and do our part to "stimulate" the economy. Maybe everything will be real cheap since all the retailers are in trouble. We'll see.

Perhaps this taking advantage of desperately low prices sounds somewhat predatory or scavenger-like. Well, just look at nature and you'll find that it's a common adaptation to pick out the weakest to consume and to scavenge those that have fallen. I guess I'm a cruel socioeconomic darwinist to look at things this way. Fine. Whatever. But it seems to me that all those guys like Paulson and the other "experts" and "executives" have completely forgotten the laws of nature and the fact that oftentimes it's best to let the weak and non-adaptive things be consumed and/or scavenged by the stronger and healthier.

Okay, what about compassion and humanity? Have I none? Of course I do. And I frankly do think that it is more compassionate and responsible to assure the future well-being of our society by allowing the failures to fail. How will we ever learn to improve if we don't ever let ourselves fail? It's just not natural to prevent failure and death of things that are incapable of living. To quote Mammy from Gone With the Wind, "It ain't fittin'... it ain't fittin'. It jes' ain't fittin'... It ain't fittin'!" Believe it or not, Mammy has always been a kind of vicious momma role model for me:



I couldn't find a video of the "it ain't fittin'" scene, but the one above shows some of the aftermath of the Civil War. The streets of Atlanta were full of predators and scavengers (some called "carpetbaggers") who rightly (and sometimes wrongly) rebuilt the city from its ruins - all without big government bailouts for the formerly rich slave-owners or any kind of "economic parity" programs for the poor whites who didn't even own slaves but still had to suffer through the War and its consequences. Of course, all of that ingenuity and resourcefulness truly is gone with the wind, and now all we are offered is some refried stimulus borrowed from our grandchildren.

You know, the pre-Civil War cotton industry was considered vital and indispensable too, just like the auto industry today. Well, history has a way of repeating itself, especially when the same mistakes are made over again. Who do you think really is holding us as slaves to their ways today? (one hint to one answer: their names are akin to the ones who won the Civil War)

Dear Treasury Secretary Paulson,

I am writing from Main Street, so to speak, to let you know that our small business is in need of your assistance. While you've been so exceptionally generous in helping save the asses profits of the big guys, and I guess we will have to see how well that works out, we little guys are suffering too.

Instead of adding to the modest debt we have been working so hard to eliminate (and avoid), I am requesting that you send us a bailout grant of $50,000 $100,000 to recover the costs of all our outstanding accounts receivable. This amount comes from all the people who have not paid us for our products and services rendered, and frankly, I'm using the accounting tricks of the big guys to inflate that amount. What's fair is fair.

Without this expected income we are not able to pay our own bills from the suppliers and possibly won't be able to cover our payroll. It is very concerning that we might have to lay off our employee due to this problem, and that will hurt all of us.

As a small sole proprietorship, if we cannot pay our bills then those we owe can actually try to sue us for our home or other real assets. You surely realize these are much more serious consequence for us than any of the consequences for the CEOs of the failing financial services companies that you've already agreed to help. As far as I can tell, none of them will have their personal assets seized to cover their inability to keep their companies solvent, even if it is their own fault. Clearly, that is very unjust, don't you agree?

The amount we are requesting is such a tiny percentage of your previous "rescue" packages, and as such we believe that this very modest allocation will actually be very immediately effective in relieving our local economy.

However, out of our own benevolence and altruism, we are open to some negotiation. It might be acceptable to us to be absolved from all federal taxes for some period of time, measured in years not months. Please do consider this option. Although it is not really the most helpful for us, it is better than nothing.

I expect to hear from you or your representatives regarding our request as soon as possible.

Thank you.

Sincerely,

Rae Ann
Office Manager/Bookkeeper
[edited for privacy] Heating and Air Conditioning
Knoxville, TN

Dear Foreign Friends and Populist Comrades,

I do understand all of your concern about the current "crisis" in the US economy and that you are also very deeply concerned about how it will affect you and your own economies. Please don't assume that the American people don't care about you. We do. But we also would appreciate your understanding about our own reluctance to throw hundreds of billions of dollars into something that has not been adequately explained and justified. We Americans are generally pretty cautious and careful about demands for huge amounts of money without some assurance that it's not some exaggerated version of a Nigerian email scam.

I hope now that the Senate has passed its "rescue plan" (new name for "bailout" that's actually just their lipstick on the pig) and is sending it down to the House, all of you people around the world who have been throwing blame and hatred towards the "ordinary" Americans will finally begin to appreciate us and maybe even send us a little love for all the sacrifices we are going to make for the *global* economy's benefit.

I was thinking last night that perhaps, since it looks like the US economy is the cash cow that keeps the global economy fed, then perhaps we should just extend this socialism to everyone who depends on us. You know, if we fall, they all fall, so wouldn't it be fair to ask for all to contribute? If every man, woman, and child in America is going to have to be 2-3 thousand dollars more in debt to prop up the global economy, then why wouldn't it be fair to ask every man, woman, and child in the *world* to contribute about $50 which would cover about half of the original $700 billion. Well, what's fair is fair, right?

We "ordinary" Americans have had the weight of the world put on our shoulders and the strain is really too much. What we need right now, instead of blame and derision, is a little love and appreciation for our philosophical and practical sacrifices to join the populist socialist comrades around the world.

I'm willing to say that it isn't really the club that I wanted to join, and all of us "ordinary" and "populist" Americans have been involuntarily drafted into it. Generally, our true populism is not socialist nor communist in nature, and that is why America has been so different from the rest of the world. But now you might have some reason to celebrate our coerced conversion. Actually, it would be pretty nice to see some footage on the news of people around the world sending us praise and blessings, instead of all the previous scenes over the years of people cheering about our tragedies. Well, it's a nice but unrealistic thought.

So please, the next time you are thinking evil thoughts about all the selfish and stupid American masses, stop and try to remember that we are paying the largest price, philosophically and fiscally, to keep your world functioning. And while you're at it, the most helpful and constructive thing you can do is to write and send a $50 check to the US Treasury. That would be the best expression of appreciation possible, but I would personally be happy with a "thank you" or "bless you" or even "I love you." :-)

Sincerely,

Your Comrade (in name only), Rae Ann

PS Here is a video that I always thought had a socialist/communist look to it (but it's a great, fun song):

We can dance if we want to
We can leave your friends behind
'Cause your friends don't dance and if they don't dance
Well they're, no friends of mine

Say, we can go where we want to
A place where they will never find
And we can act like we come from out of this world
Leave the real one far behind

...

We can dance if we want to
We've got all your life and mine
As long as we abuse it, never going to lose it
Everything will work out right

I say, we can dance if we want to
We can leave your friends behind
'Cause your friends don't dance, and if they don't dance
Well they're no friends of mine

I say, we can dance, we can dance
Everything's out of control
We can dance, we can dance
We're doing it from pole to pole

We can dance, we can dance
Everybody look at your hands
We can dance, we can dance
Everybody's taking the chance

...

Transcend the Poison and Boot the Bastards

This whole financial scandal is full of poison, and it's making many of us very sick. On top of that I've been dealing with my own monthly possession by some kind of evil, satirical demon, as well as going through a battery of tests to make sure there isn't any more cancer trying poison my body. I am working on transcending all of this poison. Here is a dose of reality to try to help others transcend it too.

Let's look at the reality of who said what in recent years about the problems surrounding Fannie Mae and Freddie Mac:


The NYTimes reported this Sept. 11, 2003:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending.

However, what many do not recall is that Bush wanted to tighten oversight with a new regulatory board for Fannie Mae, Freddie Mac, and other government recipients for the express purpose of addressing bad loan practices — and Democrats blocked it.

What Rep. Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee, said (page 2 of article linked above):

These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.

Well, so much for the Democrats' argument that the Bush Administration ignored the building problems with Fannie Mae and Freddie Mac and is responsible for it. Obama, read it and weep, or at least quit falsely blaming Bush and McCain for all of this mess which is rooted much more in the corruption of the Congressional Democrats on the committees involved in finances and banking.

May 25, 2005, John McCain, speaking to the Senate:

Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

The legislation was blocked by Democrats, with the assistance of a few Republicans.

October 27, 2005, NY Times reports:

Responding to the accounting scandals at Fannie Mae and Freddie Mac, the House of Representatives approved legislation on Wednesday overhauling the regulatory oversight of the two huge mortgage financing companies.

...

The White House issued a statement on Wednesday criticizing the legislation adopted by the House, saying it envisioned a regulatory regime that "is considerably weaker than that which governs other large, complex financial institutions."

The legislation "fails to include key elements that are essential to protect the safety and soundness of the housing finance system and the broader financial system at large," the White House statement said.

That legislation died in the Senate. Did you catch that part about the Bush Administration wanting stronger regulation? Yeah, that's right. Whatever tripe Obama is pushing is spoiled rotten and full of toxins. We all know why this legislation failed. It was purely political games by the Democrat-dominated Congress because they hate Bush so much they were willing to sacrifice all of our future financial security just because they didn't want him to "win" anything. That, and they used the excuse that they thought he was seeking too much power. blah, blah, blah

All of that being said, can we please put to rest the wrong ideas that the Republicans are at fault for our "financial crisis"? How can Nancy Pelosi or Barney Frank sleep at night knowing that they were actually big players in preventing the problems from being fixed before it became such a huge "crisis"? Pelosi has said that the Republicans and the Bush Administration failed to properly regulate things so that they got out of control. Well, Nancy, why can't you properly regulate the corruption right under your nose (Charlie Rangel, et al)?

Let's just stop it and do what Obama won't do: transcend the poison of the old political games. Yes, it's difficult and I'm having trouble doing that myself, but Jesus Christ, they (and we) are going to have to put all of that political nonsense aside and actually try to solve some problems. Will the Democrats please just stop demanding all these extra things that only complicate the problems? In Sunday's New York Times:

Ms. Pelosi said Democrats would also insist on “enacting an economic recovery package that creates jobs and returns growth to our economy.”

Jesus F. Johnson, is she a complete idiot or what? Oh, sorry, I'm still dealing with some residual poison. ;-) How about we just try to solve this one huge problem first before we start adding all these conditions and extras that will only complicate and impede progress? Growing jobs is important, but let's get this mortgage situation under control first. And as soon as the government-secured mortgages can get properly straightened out and distributed/sold to financial institutions that can actually handle them, then the broader "economic recovery" can be addressed. Sometimes it's necessary to prioritize and handle one thing at a time, instead of trying to kill fifty birds with one stone.

Truth be told, I tend to agree that there needs to be a serious restructuring of how corporations and financial institutions do business. In my utopian ideas it wouldn't be necessary for the government to regulate so much because all the businesses would naturally want to be ethical, fair, and responsible for their own behavior and the consequences of that behavior. But I know that is only an idealistic fantasy and that a lot of people won't regulate themselves without force or fear of severe penalties.

My own ideas are fairly radical, and maybe even "liberal" depending on how you define it. ;-) I've never believed that the corporate business model is really that good because it inherently encourages too-risky behavior without tough enough consequences. Inevitably when a corporation fails, especially the very large ones, it becomes a private profit-public loss situation because the "owners" aren't held accountable for the losses. The value of their ownership in the company is often not at all related to any real, physical assets. Their wealth is just an illusion based on an assumption of future performance. It's just a bad model to begin with, although I do know and somewhat appreciate some of the "pro" arguments for it. But any other purely private business just can't survive or function by doing things in the same way as corporations, and they can't rely on public money for bailing them out when they screw up.

Let's look at this $700,000,000,000 that the government wants to "liquidate" the whole mess, which apparently accounts for only about 10% of all mortgages in the US (though I haven't found any solid numbers on that so it could be inaccurate). Well, I'd say 10% isn't really that much, but because of the fucked up ways that the banks overinflated the values of them and lent much more money than what the actual collateral was worth, the problem seemed to exponentially grow somehow. Anyway, if I've done my math right, which I probably didn't because every time I try to use real numbers I mess up for whatever reasons ;-), every single man, woman, and child in the US either owes the government over $2000, or you might could say they each will own $2000 worth of other people's houses until the mortgages are paid off.

Okay, I suppose the socialists might be cheering about this movement into that direction. But frankly, I don't like it, although logically and rationally and morally speaking no one can place any claims, or liens as they call them, on our mortgage because ours isn't in any kind of trouble. It's just between us and our credit union. I just hope that all those other supposedly 90% of people like us will actually see some "return" on our investments in other people's properties. I'd say it would be fair for the government, as soon as they are able (if ever?), to send us a dividend of that $2000+ per person plus interest (but definitely not at a "sub-prime" rate). ;-) What's good for the goose is good for the gander, so to speak. Or to be a little more "charitable" they could just give us future tax credits for those amounts, including some percentage of interest.

Does anyone really think it's a good idea to trust the current Congress to improve anything? Regardless of your political leanings it should be very clear that these people who are supposed to be "public servants" paid with our money have done a piss-poor job. In fact, I think we should have many of them charged with "high crimes and misdemeanors" and bribery (in the guise of lobbyists' payments). A good explanation of what "high crimes and misdemeanors" means in this context is found in an article by Jon Roland:

... the key to understanding it is the word "high". It does not mean "more serious". It refers to those punishable offenses that only apply to high persons, that is, to public officials, those who, because of their official status, are under special obligations that ordinary persons are not under, and which could not be meaningfully applied or justly punished if committed by ordinary persons.

Our Congress is sworn in and under the obligation to uphold their Oath of Office. This puts the responsibility on them to act on our behalf. I would lead an insurrection if that's what it would take to get all those corrupt bozos out of office. I am a conservative, but I'm a rebel too. Perhaps a revolutionary conservative is a paradox, but here I am anyway. ;-)

As for all those "executives" of these failed and brink-of-failing financial services companies, I think they should be charged with several serious crimes. Stop it with this namby-pamby fiddle-farting around with some big bailout that we can't really afford. Throw the bastards in jail for practically treasonous fraud. Yes, treasonous is a very strong word, but if you believe that the failings of these companies without (and possibly even with) a bailout will actually lead to the complete collapse of the US, and possibly global, economy, then okay, that looks awfully serious to me. They've essentially weakened our country's security in every way.

At least treat them like drug-dealers and seize all their property that they gained from their criminal activities. Make them pay for the mess they created. Of course, that wouldn't be enough to cover it all, but at least it would be something coming from the criminals who caused it. Back in the good old days, people like that would have been dealt with quickly. They certainly wouldn't be rewarded for their betrayals and treachery.

I hope that everyone who reads this will see the truth. And spread the word. I mean really. We're actually the bosses here. So let's act like it.

Amen, go in peace. :-)

Update: Shortly after finishing this and posting it, I heard on the news that the FBI is investigating Fannie Mae, Freddie Mac, Lehman Bros., and AIG. Praise the lord! I hope they are investigating some Congress members too. (of both parties, whoever has been instrumental in allowing the banking fraud to continue)

The Truth About Big Government

Saw these at Xanthippa's and wanted to post them too. They are very much worth the roughly twenty minutes to watch them.

More Tax Reality

There is widespread misunderstanding and lying about the reality of the Bush tax cuts. Some, like CBS, are trying to use 2001 figures to defend their story that the Bush tax cuts favored the wealthy:

The study found that the effective tax rate for the top 1 percent of taxpayers dropped from 33 percent in 2001 to 26.7 percent this year, a decline of 19 percent.

Okay, I make some big mistakes due to some degree of number dyslexia, but I'm pretty sure that 33 - 26.7 does not = 19. And I don't even have the benefits of any editors or proofreaders. [Okay, I've had that explained to me why it isn't incorrect math, but still, the way it's stated is pretty vague and misleading. And it doesn't really change the gist of my arguments.]

People in the top 20 percent of incomes, averaging $182,700 a year, saw their share of federal taxes decline from 65.3 percent of total payments in 2001 to 63.5 percent this year, according to the study by congressional budget analysts.

In contrast, middle-class taxpayers — with incomes ranging from $51,500 to $75,600 — bear a greater tax burden. Those making an average of $75,600 had the biggest jump in their share of taxes, from 18.5 percent of all payments in 2001 to 19.5 percent this year.

Does it not seem pretty outrageous that the top 20% of earners, most of whom are not really so "wealthy" after all with an average income of $182,700, should have to bear such a large percentage of the tax burden in the first place? Instead of hating these "selfish rich people" maybe it would be much better to say a big "Thank You!" for their contributing over 60% of the taxes. And the one percent increase of the "middle class" might actually mean that there is a bigger middle class due to the better economy stimulated by the tax cuts, so it would be natural for there to look like a slight increase in their "burden." Isn't a bigger middle class what all the Bush tax cut critics actually want?

Okay, so the CBS story is from 4 years ago, but still we hear all these same lies about the tax cuts hurting the middle class. And that "The study is based on figures in 2001 and assumes no changes in wealth distribution from increases in income, dividends or capital gains". I think it should be obvious that their assumptions are questionable.

Now let's look at the other side of the equation as reported by the National Center for Policy Analysis.

The top 1 percent of income earners pay more than one in every three dollars the IRS collects in taxes. From 1986 to 2004, the total share of the income tax burden paid by the top 1 percent of earners grew from 25.8 percent to 36.9 percent, while the total share of the tax burden paid by the bottom half of earners fell from 6.5 percent to only 3.3 percent.

During the same period, the percentage of income the top 1 percent of tax filers paid in federal income taxes rose from 18.3 percent to 19.6 percent. By contrast, the percentage of income the bottom fifth of tax filers paid in federal income taxes dropped from 0.4 percent to zero.

The income share of the top 1 percent rose 7.7 percentage points, from 11.3 percent to 19 percent, while their income tax burden rose even more, by 11 percentage points, from 26 percent to 37 percent.

Okay, can you see what all of that means? It means that the actuality is that the wealthiest Americans have all had big tax increases, even despite the Bush Tax Cuts that have supposedly benefited them. Well, I really don't begrudge wealthy people their hard-earned money because I have enough real life experience to know how difficult it is to make money. But I also don't really have too much guilt about expecting the wealthy to "give back" or contribute more to their communities and society. But let's be fair. Let's not believe all these lies that the wealthy are getting all kinds of nonexistent tax breaks and decreases. And let's not be too greedy ourselves and expect them to give back such huge percentages of their wealth. After all, even God only asks for a tithe. ;-) Anything above and beyond that should be seen as generosity and charity and not some kind of forced social responsibility.

Now back to the other side, let's look at how some groups are misrepresenting the "Bush tax cuts" by picking just one tiny aspect of it and showing that this one tiny part of it has only benefited a tiny percentage of those who claim small business income. The CBPP focuses only on the reduction of the "top income tax rate" (top tax bracket), which is only a tiny part of the whole of the Tax Cuts.

Few small businesses will see any benefit at all from the reduction in the top income-tax rates.

While standing alone that statement is basically true, but their "lies of omission" and other false conclusions attached to it reveal that they are not looking at the whole picture at all. By looking only at those statistics they try to present the Tax Cuts as only benefiting a tiny group, but that is very misleading and dishonest because there are other aspects of the Tax Cuts that have benefited most 'average' small businesses. The biggest example is the increase in the expense allowances/deductions for investment in new equipment such as trucks and other vital big purchases, "capital expenses," as allowed by Section 179.

Perhaps it would be helpful for people to actually read about what are business expenses according to the IRS. When a small business owner needs a new truck in order to stay in business he is allowed to deduct the cost of that truck, which must meet certain technical requirements and can't be just any old vehicle, from his gross profit, thus reducing his "taxable income." Do you think that is unfair to those who don't have their own small business? Or can you see that it actually stimulates the economy for someone to buy something made by employees of other businesses? Or do you think it is better for the small business guy to send that money to the black hole of the government? Seems to me that it's more efficient and more logical to allow people to spend their money on what they know they need instead of making them give it over to an insatiable beast.

I recommend anyone who wishes to be fully informed of the true facts of how small business taxation and tax relief work do some research beyond the lies and convolutions of such places as the CBPP and CBS news. Here is a good place to start which clearly explains the importance of the Section 179 deductions:

The section 179 deduction can provide a substantial measure of financial relief for small businesses struggling to keep up with America’s rapidly changing economic environment. With the funds that become available more readily through this deduction, businesses can extend their budgets and other resources to become more competitive in their marketplace.

Another good explanation of Section 179 is here. I would like to challenge the CBPP and other propagandists to study how this Section 179 has actually stimulated the economy and helped many more small businesses than they would ever like to admit. But make no mistake, I won't bet money on the chance that they will ever even look at it.

So if you ever read some nonsense that says something like only 4% or 2% or whatever % of small businesses have ever benefited from the Bush Tax Cuts, please use your brain to consider that their X% is completely made up and has no basis in the whole true reality.


PS My best unsolicited advice to any small business owner, or anyone wanting to start a small business, is to find a really good accountant whose job is to help you understand your expenses and taxes. Don't try to do it all yourself because you will spend too much time trying to figure it all out instead of actually doing the real work that creates income for your small business.