Black Friday – Our New Holy Day of Shopping Obligation

It’s bad enough that Christmas has been largely stripped of its spiritual dimension. Now Americans are in the process of reducing Thanksgiving to a similarly empty materialistic exercise. Thanksgiving, as the word implies, involves pausing to express our gratitude for the people, gifts, and blessings that give meaning and depth to our lives.

Over the past few years this aspect of the Holiday has taken a back seat to a new phenomenon – Black Friday. In fact, television commercials and Internet ads seem to breeze past Thursday entirely, pointing us to the day after and creating a National Shoppers’ Day. This artificial commercial construct and the hyping it receives contain a pernicious message for all: you are defined by what you own. So be thankful that there is no problem in your life that can’t be solved by the purchase of this year’s “must have” items; be thankful that you live in a society where your most materialistic impulses can enjoy immediate gratification.

Of course, biologically and sociologically speaking, instant gratification is the domain of the infant. And this eternal infant in all of us, whether we are 3 years old or 53 years old, is the target of the Black Friday assault.

It’s an interesting holiday recipe: start with a cup of envy, add a half stick of greed, flavor it all with a sense of personal insufficiency. Baste frequently with false promises of easy fulfillment through material acquisition. Sprinkle with easy credit every 15 minutes. Simmer over constant low heat until it all comes to a boil of artificially created shoppers’ hysteria. Then open the doors around midnight and get out of the way.

Look, if people want to fall for this I guess they will. I just think it’s a shame. And a sham.

Here’s what is REALLY going on: In our lousy economy, retailers are concerned that people will be sufficiently hesitant about going even deeper into debt that they will pull back in their holiday spending to more responsible levels. But – if they can be sufficiently seduced at the start of the shopping “season” – they will part with their money early on, and you still have four more weeks to convince them they still haven’t spent enough in their inexorable march toward insolvency.

An overstatement? I hardly think so. Americans are merely employing on the family level the behaviors our government is practicing on the national level.

High Frequency Trading: A Wall Street Scandal Truly Deserving of Protest

While we are fed daily reports of the Occupy Wall Street demonstrations, another Wall Street problem has gone largely unreported.  Unchecked, it could eventually destroy the base of confidence necessary for trading to remain viable. It has already cost American investors money and continues to gnaw away at the foundations of our financial system. Unproductive greed will do that.

Today, I’m turning over the blog to Franklin Khedouri, a concerned investor who has far more familiarity with the market than yours truly.  I urge you to read and consider his argument.  Any comments you make will be forwarded to Mr. Khedouri for his consideration.  Any comments you would like to make to your reps in Washington, D.C. would be very much appreciated.

It is easy to classify the current protests against Wall Street as a lot of noise by a handful of people who do not understand the financial markets.  But this does not mean  excessive greed doesn’t exist.

High frequency trading is perhaps the most egregious example of pure greed with no useful purpose. A handful of hedge funds are tainting all of Wall Street and making huge profits in a way that makes no contribution to anyone but themselves. If you have any money at all invested in stocks, bonds, or mutual funds, high frequency trading has cost you money.

The firms engaging in this practice claim using more sophisticated technology to trade stocks is just the latest means of gaining competitive advantage.  Injecting confusion by placing and removing tens of thousands of false buy and sell orders in seconds is just capitalism at work.

In actuality it is an epic abuse. Monopolists like Rockefeller, Vanderbilt, and J.P, Morgan at least built things with their schemes. The high speed traders create nothing for anyone but themselves. For everyone else there is just uncertainty, fear, the sense that logic and analysis don’t count.

Wall  Street functioning as intended helps all Americans by forming the capital that fuels our economy. The stock market provides a mechanism for companies to raise money for investment in their business. Investors who provide the money get rewarded with dividends and capital appreciation. The effective companies grow, the ineffective ones fail. This process doesn’t happen in a day or a month.

The stock market was never intended to be a vehicle for people whose idea of long term investment is a minute.  High frequency trading makes no contribution whatsoever to the real function of the stock market – raising capital for investment.  Indeed it does the reverse – drives capital out of the market. Individual investors have taken hundreds of billions out of mutual funds and stocks in 2011 even though interest rates are at extreme lows.

No capital means no growth, no jobs, no wealth for anyone but the tiny handful of people who engage in high frequency trading.

High frequency trading should be illegal, just like insider trading, because it serves no useful purpose in supporting investment in America and causes harm to millions.

Congress can eliminate it with the stroke of a pen at no cost to anyone but a few hedge funds. In fact, doing so should be cash positive because individuals will pay more capital gains taxes – which is far better than taking losses.

Let your representatives know you care.

Next week:  A Comparative Look at the Tea Party and Occupy Wall Street movements and a warning to both about the Two-Party System.

George Will – A Voice of Reason is a Treasure Forever

In the current absence of Edmund Burke,

George Will  pinch hits with this wonderful commentary.

 

Clarity of vision, clarity in expression.  Plus he’s a baseball fan.  Thank you, George.

Let’s Go METS – the Millionaires Extra Tax Supply

Much to-do has been made lately of the problems with our tax system.  Depending upon whom you ask, the problems are usually framed in one of the following ways:

1) Taxes are too high already and should not be raised;

2) Taxes on the rich are too low and they must pay their “fair share”;

3) There are too many tax loopholes that need to be closed;

4) Our entire tax code needs to be reformed.

Before I chime in with my own suggestions, let me present a few facts:  (The following numbers reflect most recent data available from the I.R.S. as given to their Congressional Overlords.)

1) The top 1% of American taxpayers pay 30% of all federal personal  income taxes;

2) The top 10% of American taxpayers pay 70% of all federal personal  income taxes;

3) The Bottom 50% of American taxpayers pay no federal income tax at all;

4) Capital gains tax rates in the US are among the highest in the industrial and post-industrial worlds, and are twice as high as those in Canada which has had lower unemployment, lower per capita debt, universal health care, and higher economic growth than the US over the past four years;

5) If the economy tanks into a double-dip recession, federal tax revenues will decline;

6) Once the US economy rebounds, tax revenues will increase;

7) Long term, SOMETHING needs to be done to bring federal revenues and expenses into line.

These are no major revelations for sure, just things to keep in mind as the discussion about taxes goes on over the next year.

My Suggestions: 

Stage I – Attitude Adjustment

1) Don’t put a band aid on a carotid artery that is currently bleeding $1,500,000,000,000 in debt this year. The patient is too sick and is getting sicker by the day.  A sense of urgency is not out of place here.

2) Ditch the use of the word “fairness”, which has been serially abused on the political scene and used to justify any number of partisan initiatives. As Jimmy Carter said, in perhaps his only accurate public statement, “Life isn’t fair.” The government should be more concerned about the fairness of equal opportunity and less about imposing equal results on the people.

3) Let’s all agree that, just like skateboarding, making lots of money and/or being rich is not a crime, nor is it necessarily a sign of personal greed or misplaced moral priorities. And wanting to be wealthy doesn’t mean you have a lesser developed sense of “consciousness”.

4) Personal and corporate philanthropy should be encouraged rather than discouraged by the federal tax code. Abolishing the tax deduction for charitable giving is retrograde.

5) While there may, indeed, be no free lunch, neither is there a painless solution to the financial mess that is the federal government.  Mr. Politician: Don’t play the American people for fools by advocating “feel good” measures that have little to do with the depth of our real financial problems. (Note to President Obama: If you tax the mega-rich – you know, the REAL millionaires and billionaires – at 100% of their income this year, confiscate all their corporate jets for sale at government auction, what do we do with the other 97% of our national debt that would remain, or the $9 trillion in new debt that you project will be added to it over the next ten years?).

6) Taking a class warfare approach will further divide the nation and make solving our financial problems more difficult, not less.  We got into this mess together, we need to get out of it together. A shared-burden solution must be found.

7) ANY politician who demogogues this problem is part of the problem.

Stage II – Tax Code Reform

1. Tax consumption rather than income. A VAT (Value Added Tax or national sales tax) would have the additional benefit of encouraging savings and investment, both of which we need to do. Perhaps we would need a much-lower flat-rate tax as a platform for VAT, I leave that to budget bean counters to decide.

2. Keep capital gains taxes as low as possible to encourage corporate investment and expansion. Job Creation in a capitalist society is the primary responsibility of the private sector.

3. Everyone should pay some nominal tax. You can’t have a cohesive society when half the population pays no tax at all and relies on government more and more. I don’t care if the bottom tax is $50 per year.  All citizens should be tax payers and recognize that they have a stake in efficient government.

4. Re: Loopholes – As a general rule, close them.  Phase out the deductions for mortgage interest, phase in taxation of health care coverage.  Don’t do these now in a fragile economy, but prepare Americans for them ultimately.  Begin phasing in these changes over a five year period beginning in 2012. Oh yeah, no more loopholes for corporate jets. And the next time that the Democrats in Congress try to pass such a perk, I expect the Republicans to stand firm and vote NO.

5. Re-establish the link between revenues and expenses.  Every American household gets this, why can’t politicians? I won’t go as far as to support a mandated balanced budget amendment, but how about mandating that every increase in tax revenue rates must be accompanied by a cut in the budget of equal or greater value?

Now… about those millionaires and billionaires that the President is so eager to take out behind the tax woodshed…

Consider the following, Mr. President:

1) People making $200,000 per year or couples making $250,000 per year are neither millionaires nor billionaires.  Perhaps you are figuring that they are Republicans, I don’t know. But I just wanted to make sure you had your numbers straight – I know you wouldn’t want to mislead the American people with your magnificent oratory.

2) Instead of trotting out some billionaire stooge who complains that he isn’t being taxed enough, finesse the entire issue, Mr. President.  You’ll look good, the billionaires will look good, everybody wins, OK?  Here’s what you do:

a) Set up a new government agency. Let’s call it the Millionaire’s Extra Tax Supply (METS). You can even name another czar to run the agency without getting congressional approval if it will make you feel better.

b) Invite (yes, I know that’s not as fulfilling as “coerce” but bear with me here) all American millionaires and billionaires who deem themselves undertaxed to contribute to the METS.  You could set up a tiered giving structure, like so many philanthropies and the Jesuits do, i.e. the “President’s Council” for those who voluntarily donate $10 million annually, the “Andrew Carnegie Council” for annual giving of a billion or more, etc. And at the end of each year, the sum total of all their gifts could be used to pay down the national debt!  Imagine what Chris Matthews could do with something like that. Or, you could use the money to pay doctors who agree to treat Medicare patients once Obamacare begins to kick in.  Perhaps you could skim 10% off the top of their total donations as administrative costs and apply this money to your reelection campaign. (Most of these guys were big givers to you in 2008, so I’m doing you a favor by streamlining this, like that intercontinental high speed train you’ve always wanted.) Ultimately the entire process could be open to American taxpayers of all income levels!  Citizens voluntarily giving until it hurts to help clean up the mess in Washington!

I can see it now.  As the program takes hold, millions of my fellow Americans, chanting as one “Let’s go METS!, let’s go METS!”

Finally, in addition to a grab bag of buttons, posters, presidentially autographed 8″ by 10″s, membership cards, all program donors could receive ten free tickets to see my favorite baseball team try to play the game at CitiField.  There will be plenty of good seats available next year, after all.  Just like in Washington, D.C.

Paul Krugman, You Are a Coward

This column is in response to a post by Mr. Paul Krugman  of the New York Times on his blog page “Conscience of a Liberal” of 9/11/2011.  A link to his column is provided here: 

http://krugman.blogs.nytimes.com/2011/09/11/the-years-of-shame/?smid=tw-NytimesKrugman&seid=auto

Actually, Mr. Krugman, it IS just you. In your latest column you describe America’s response to 9/11 as “deeply shameful”. I think you are projecting.

You say that the atrocity of 9/11 should have been a unifying event.  In fact, it was – and that’s what bugs you, isn’t it? Because it led to a renewal of patriotism, love of country, and an appreciation for our military and for the sacrifices they make each day to protect this great nation. Thank God America doesn’t have to rely on people like you to protect our freedoms and personal liberty.

It really bugged you when so many Americans stood behind President Bush and Mayor Giuliani, didn’t it? They were, of course, your political enemies then as they are now, and it was their leadership that you found so unbearable, wasn’t it? (Full disclosure: I did not vote for Bush in either 2000 or 2004.) You say George W. Bush “raced to cash in on the horror?” Consider that maybe, just maybe, he was acting forcefully as the President of a nation under attack. Question for you: Did Barack Obama “race to cash in” on the killing of Osama Bin Laden in his address to the nation less than 24 hours later with more than a dozen references to his own role in ordering the killing? Is his administration “cashing in” on that hit by giving unprecedented access to America’s intelligence services to the Hollywood group that is creating a film of this event, to be released on October 12, 2012, just in time for the presidential election? (Full disclosure: I worked in the motion picture industry for several years and it is unheard of for a release date to be determined more than a year in advance of any film.)

Mr. Krugman, you state that the memory of 9/11 has been irrevocably poisoned. You speak entirely for yourself.  For me, 9/11 is and always will be a harsh reminder that the freedoms we enjoy in our great country are not free of cost, neither are they permanently assured. It is a reminder that Thomas Jefferson was correct in stating “The tree of  liberty must be watered periodically by the blood of tyrants and patriots alike.”

9/11 may be an occasion of shame for you, as you said. For me it is a time to remember Dwight Darcy, Brendan Buchanon, Mike Armstrong, and the twelve people from the high school I attended who were murdered on that day.  The only shame I feel is the shame that they all had to die so young.

In your columns over the years, you often consider the world in terms of victims and oppressors. I have 2,966 victims for you to consider – the innocent victims of a Muslim ideology that has been corrupted into a maniacal and nihilistic agent of violence and antediluvian self-delusion.

I wouldn’t have bothered to devote an entire blog entry to your misguided and hateful opinions, but by not allowing any comments to them on your website, you left me no choice.

Former President Bush said yesterday that 9/11 taught us that “evil is real and so is courage.” In your column today (and especially by locking out comments on what you said) you showed us all that you certainly lack the latter.

Treadmill to Oblivion

The title of Fred Allen’s 1955 autobiography could just as easily describe the state of our nation today.  Over the past fifty years, Americans have lost connection with the historical and cultural narrative that had previously united us e pluribus unum.

There are any number of reasons for this, from a gospel of consumption preached daily to a media-created, self-perpetuating “Me Generation”, to a destabilizing propensity for “celebrating diversity” with its accompanying moral relativism, to a general historical ignorance born of an educational movement that emphasized globally-focused social studies at the expense of traditional American history and values.

The by-product of all this is a nation of homeless wanderers looking for a place or cause to which they can belong.  Absent that, we face the world as individuals, alone.  Our previous national narrative, that of an American Dream offered to a nation of immigrants, of hard work and deferred gratification to benefit one’s progency, a belief in American exceptionalism, a social fabric centered on family, church, and community, of individual responsibility, is no longer operative.  In its place we have what author Joseph Roth (in his work Radetsky’s March)  described as “the bewildering meaninglessness that follows the disillusion of an ideal.” Like the Hapsburg Empire which Roth eulogized, the United States has been an amalgam of different peoples held together by an ideal. Unless we can reestablish a sense of common purpose and shared values our future is no more assured than was that of the Hapsburgs  one hundred years ago.

Currently, our national discourse is dominated largely by “Progressive” voices that declaim our former unifying narrative as a politically incorrect product of dead white male oppressors, and the Tea Party, which seems to want to drive America into the future while limiting our vision to what can be seen in the rear-view mirror.  Both roads lead nowhere fast.

We had better figure it all out soon. History is littered with examples of great nations and empires that rotted away from within. If we stay our current course, don’t be surprised to see the kind of social disruptions recently visited on the Middle East and the U.K. coming soon to a city near you. The egocentric nihilism of contemporary Amercan culture virtually guarantees it.

Anyone care to propose ways in which we can turn this situation around?

Walking the Walk

I once worked with an esteemed colleague, a veteran educator who used to tell his students and the world, if they would listen:

What you do shouts so loud, I can’t hear what you are saying.

In recognition of the inherent wisdom of his remark, I am hereby instituting two new awards:

The Walking the Walk Honesty Award given to those in public life who follow through and actually live what they preach to the rest of us.

The Talking the Talk Hypocrisy Award given to those who, alas, tell us what is good for us to do and then do something else for themselves.

So here we go:

A Walking the Walk Award is presented to Senator Chuck Schumer of New York. Now I know what some of you are saying: “Bob, have you gone over to the Dark Side?” Relax, it’s nothing like that. And I still disagree with Senator Schumer on many issues. (Chuck, did you really say on July 30,2011 that illegal immigration creates jobs?) I’ve heard all of the jokes about him too.

Q: Where is the most dangerous place to be in the United States?

A: Between Chuck Schumer and a TV  camera.

But let us give this man his due.  Schumer has been a vocal lifelong supporter of our public school system. Unlike other pols who give lip service in support of public education and then  a) send their own children to exclusive private schools while  b) voting to deny poor families any form of real choice of schools for their beleaguered kids – yes I’m talking to you, Bill Clinton, George W. Bush, Jimmy Carter, Barack Obama, and hundreds of senators & congressmen – Chuck Schumer’s kids attended New York City public schools (as did my wife, BTW).  As far as I know his children are still alive and thriving. Hats off to you, Senator Schumer, for walking the walk and showing the depth of your commitment to public education!

On the other hand…

A Talking the Talk Award for hypocrisy is given to Al Gore for the dissonance between what he preaches the rest of us must do to “Save the Planet” and what he himself actually does on a daily basis. (Want to compare your carbon footprint with mine, Al? Bring it on.)  The Grand Master of Environmental Disaster flies around the world giving speeches on the urgent need for responsible environmental behavior.  Four years ago, ABCNews, using the information from Al Gore’s actually utility bills, reported that Al paid more than $30,000 for his energy use on his Tennessee home alone! He used 221,000 kilowatt hours of electricity the previous year, more than twenty times the national average. Once this story leaked out, Gore did make some energy improvements to his home, but it still features natural gas lanterns in the yard, a year-round heated outdoor pool, and electric gates.  The utility bills for the pool house still average more than $500 per month.  For the pool house. I’d warn him to watch that rising water level in the pool, but just found out that this past year Gore purchased an ocean-front property in California, so I guess rising sea levels are last year’s concern. On the other hand, Al’s new California estate features nine (count ’em) bathrooms. Nine bathrooms for “only” five bedrooms? Of course, there is an obvious explanation why Al Gore needs nine bathrooms, but I won’t elaborate other than to say he is hereby awarded a much-deserved Talking the Talk Award for hypocrisy on a truly global scale.

Of course, Al won’t really care.  He’s already left town in his private jet, spewing carbon monoxide into the atmosphere while on his way to give another speech excoriating Americans on their indifference toward the environment.