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An Old Dog Learning New Tricks

December 18, 2013 Leave a comment

This week, Bloomberg Politics reported that investor and businessman, Sheldon Adelson, was taking advantage of a loophole in the current tax law to pass assets on to his heirs. Passing new tax laws in 1990–both the House and Senate were Democratic controlled at that time–is what created the loophole initially. It takes advantage of a special trust called a “GRAT” (grantor retained annuity trust), which allows placing assets into an irrevocable trust, where the person creating the trust pays a tax. The trust pays an annuity every year,  and upon expiration, the beneficiaries receive the remaining assets in the trust, tax-free.

Adelson and other businessmen have successfully used this mechanism to pass their assets to others and to avoid paying penalizing government fees and estate taxes to the tune of $100 billion over the past 13 years. Adelson himself has been able to pass $7.9 billion of his money to his heirs. Mark Zuckerberg (of Facebook fortune) and Lloyd Blankfein (of Goldman Sachs Group) have also taken advantage of the loophole.

Proponents of big government seem suddenly to realize the additional billions that they could spend if the loophole were closed, and they bemoan the fact that it’s still available. Adding to that, the fact that there is simply such large amounts of money mentioned, and other’s greed and envy kick in as well. Ironically, the concerns that people utter, reflect the same thinking as Adelson et al., namely that, “I don’t have enough” and “I need a way  to save what I have now for myself and my children”.

Quickly after that, any parallel thinking ends, and arbitrariness kicks in. All too suddenly, a self-concerned commenter engages in the conditioned response of this administration– “Surely those terribly rich men have enough money already? Why shouldn’t I be able to help spend some of that? Those businessmen must have made that money illegally or exploitatively…”

So, let us review: Congress screws up when they rewrite the tax code, Congress continues to refuse to fix the loophole, people are able to save their own money, and give it to their children. And the unavailable money that the government cannot collect is largely the businessmans fault? I am not sure what mental gymnastic enables one to bend logic that far, but it is quite a stretch.

I expect it will be some time before Congress does anything to close this loophole, since the right’s opposition to taxes is well-known, and the left has far too many big donors taking advantage of the loophole to close it. One thing is certain–whenever a government attempts to increasingly micromanage and legislate things, they will always underestimate the ability and ingenuity of the people to find ways to wriggle out of the most awful laws. The people may be dumb enough to vote for the Congressman, but they are smart enough not to follow his laws.

Monopoly Man

Huzzah! Loopholes!

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Holder’s DOJ Says, “You’re Grounded!”

August 14, 2013 Leave a comment
The merger hits a big bump.

The American Airlines/US Airways merger hits a big bump.

This week, a prospective merger between American Airlines and U.S. Airways stalled, when the United States Department of Justice and six states’ attorneys general filed an antitrust lawsuit. If the merger succeeds, it would create the largest air carrier in the world. The DOJ cited numerous concerns over the effects that a newly merged airline company would mean for consumers.

In a refreshing change, it seems the DOJ is suddenly oriented toward thrift, and consumer protections. It is the government you have always wanted – they are looking out for you. It sounds great, right?

Read the rest on Conservative Daily News.

Friday’s Pick Three

July 12, 2013 Leave a comment

In a new, irregular feature, Pick Three lists will be compiled and shared, with the aim being to make people think or consider a point. Hopefully they will be well received and shared among a growing audience.
The pick three today cover money, the marketplace, and medicine. Obama lies, Walmart threatens to fly, and a medical study doesn’t quite know “why.”.

Democrats1. Sequestration delivers biggest budget surplus on record refuting dems claims via Conservative Daily News‘s R. Mitchell. Do you remember when Obama swore that sequestration would be the most awful, apocalyptic thing to ever occur in the U.S.? Yeah, instead, it has actually already begun to show benefits.

Walmart

2. Wal-Mart to DC: Force Us to Raise Wages? We’ll Leave In a CNBC story that should shock no one who has even the remotest idea of the restrictive and punishing nature of minimum wage laws, Wal-Mart tells Washington DC’s city council if they force wage increases, Wal-Mart will start cutting jobs. Without actually naming and targeting the retailer, the council’s legislation seems to target Wal-Mart with council’s selective criteria.

Caduceus3. State of U.S. health ‘mediocre’: report Finally, Reuters offers a story about the so-so nature of wellness in the U.S.. While the healthcare system ranks in the middle of the developed nations’ pack, much of the blame for poor health is placed at the feet of inactivity and diet – despite, they mention, increases in healthcare spending. What important measure does the article omit? Preventative medicine as a part of healthcare in the U.S. vs. other countries.

Moving Left Isn’t Right

April 4, 2013 Leave a comment

Written in a time filled with the gasps and death of the Soviet Union, and its satellites’ declarations of their independence, I found Alvin Rabushka’s “The Failure of Socialism in China” capturing my attention. In it, the author mentions the method that Mao Zedong attempted to use to incite the communist Chinese economy to grow – namely central planning. The author also illustrates why the planning did little to anything at all on its own in the way of economy-building or growth.

As many economists critical of socialist governments point out, central planning heavily relies on a number of measures, so that it can claim to function better than alternative forms of economies.

Find the complete post here: Conservative Daily News

Those who ignore history…

Hold Your Horses, Hutton

February 19, 2013 Leave a comment

They did WHAT!?

In his February 16, 2013 column in the Guardian, columnist Will Hutton lays out the numerous failings of the British Food Standards Agency (FSA), which led to horse meat entering the human food chain. The horse-meat scandal may actually turn out to be two parallel mislabeling scams. Whatever the case, and as strange as mislabeled horse-meat is – it is not my primary issue.

My issue is with Hutton’s disgusting use of the scandal. Mirroring the penchant for American “journalists” who turn their columns and shows into personal soap boxes, Hutton takes swipes at right wingers in the United States, and he espouses the supposed ability of large government to function better than a slim and efficient one. Hutton especially takes to task a British politician who supported cuts in the funding of the FSA.

Hutton would have us believe a fully funded FSA would not have allowed this fiasco to occur. Indeed, an FSA, or any other governmental agency that does not receive adequate funding, is the cause for any accidents and other unfortunate mistakes that then occur. Hutton thinks that because the politicians, often times responding to their voters’ concerns, reduce funding to a bloated agency, they should receive the anger and onus of the press and people too.

Hutton so seems to dislike politician Owen Patterson, he goes so far as to make a personal attack of the man, referring to him as “one of the less sharp knives in the political drawer”. Hutton’s anger seethes against anyone he deems “connected” to the scandal. He attacks the large supermarket chains who seek to price food where the consumer can afford it, he attacks the stock holders of the supermarkets, he attacks right-wing think tanks in the U.S., and he eventually goes so far as attacking capitalism itself, saying it does not deliver the best outcomes.

Within those barbs fed by misunderstanding and assumption, Hutton joins so many of the American left, who hear the word, “capitalism”, and either rage or cringe. The cause of so much damage to people, the cause of so much environmental damage – is the dreaded capitalism. Never mind that it is also the reason there are 90 different types of bread on the supermarket shelves or that it is the reason that clothing is still relatively inexpensive and easily replaced — we must see like Mr. Hutton, that capitalism is inherently evil. Everything it touches, businesses, politicians, and workers are worse off, Hutton would have us believe.

Oddly though – the tax revenue that the capitalism structure generates that allows the left’s dream of bloated and inefficient government programs – well, that is the only good thing that comes from capitalism. Somehow, running the funds through the filter of government who then divvy them out, changes the funds from merely evil capital, based on worker exploitation, to a wonderful means to a social end. Again, in a parallel with the left in the United States, Will Hutton seeks to use a crisis to further the false cause of enlarging the government’s reach and its strength.

I find it interesting that while the right, conservatives especially, often find themselves fitted with the mantle of being a backward-looking anachronism, the left on both sides of the pond, seem constantly to recycle their failed policies of Keynesian spending and bloated government structures. A strength of conservatives is to not only look to history for measures that work, but to look back, and abandon and prevent measures that have failed. Perhaps the left should  finally abandon the continuous failure that is Keynesian economics – but with as rabidly as some support left-wing politics, you have a better chance of having lunch with a Kentucky Derby winner…

Obama’s SOTU: We Must, We Might, I Want

February 13, 2013 Leave a comment

“…and I want a fire truck, and a baseball glove, and a cowboy hat!”

So seemed to go President Obama’s State of the Union wish list. It sounded like Christmas with captive parents in the form of the Congress and a few Supreme Court Justices. Repeatedly, he went so far as to challenge Congress to pass bills, that he would immediately sign.

Interestingly, but hardly surprising to me, was the president’s line that the government should work for the many, not the few.

Why else was this State of the Union such a collassal waste of time for anyone who bothered watching it? Read more here for my thoughts and a few jabs…

http://www.conservativedailynews.com/2013/02/obamas-sotu-we-must-we-might-i-want/

Who’s got a bad case of the “gimmes”?

Mitt-ila The Hun

January 13, 2012 1 comment

The man came from the east, and rode aboard a midnight black steed, with angry fire in its eyes. The steed seemed reluctant to allow anyone but its rider to even get close to it. The mount whinnied uneasily, and lived for moments it could swoop in and, with its rider cause confusion and destruction. Once its rider saddled up, they were unstoppable. Always riding all-out, and never looking back, they rode without care nor conscience.
One of the most infamous raids, that so many remember, came one day in the 90s, in the middle of the country. Mitt-ila with his steed, Bain, came to the steel mill, licking his lips, and casing everything that he would soon own and be able to plunder and turn asunder. Sparks flew from the horse’s hooves  as they rode onto the grounds. The horse and its master began the blood-letting – the guild members, their pay, the equipment – they began laying waste to everything in sight…Soon, their nefarious plans were complete, and the tiny factory was no more.

What is this? This is the Newt-would-approve-if-he-read-it-version of Mitt Romney’s time at Bain Capital. This is the, politically-expedient version of what happened in Kansas City. Mitt of course, the ardent anti-capitalist and destroyer of all that he touched, only wanted the companies Bain invested in for their liquidity values, right? I mean, why would anyone invest in a company that they may be able to resurrect, and restore to profitability (and make far more money, than just relying on the liquidity value)? Once a company is seen to have its best days behind it, the person who attributes this “un-profitable operating” designation could never have any ways of turning it around – its only value is in plundering anything and everything that still has any value. Right? So it is raid and plunder away.

Except – that is not always the way that business happens. I would venture to guess it is seldom that a capital company step in and buys a company solely for its liquid assets, before it has declared bankruptcy, when the investing company can buy it for a song. That seems like paying extra for the “privilege” of going through bankruptcy proceedings and haggling with creditors. With the intention of retrofitting and upgrading the facilities at Kansas City located “GST Steel”, Bain made investments and attempted to turn the troubled steelmaker around. After investments of $100 million were sunk into the plant, due to myriad mismanagement issues, tons of cheap Chinese-made steel (made and sold at a loss, to gain market share), and the debt-load created to save the plant, it still had to be closed. 750 people lost their jobs as a result.

It should be mentioned, but seldom seems to be, that the Chinese steel is probably more to blame for GST’s failure than any other factors, including: Bain Capital’s “raiding”, more competitive American steel foundries, and obsolescing equipment. Add to that, some of the most misguided management that I have ever read about (like hiring managers for this steel plant, that had previously worked in retail for Wal-Mart), and it appears that the factory was always doomed. Some 40+ other American steel companies went under in the same time GST was slowly rusting away.

My main issues with the attack of Romney (and attacks of him, under the guise of attacks of Bain) are the fact that supposed conservative and right-wing candidates are making the majority of them. The fact that some are using Romney’s time at Bain as a way to compare him to Bernie Madoff, and his criminal Ponzi scheme (that was James Clyburn), is also disheartening. As a matter of fact, Mitt wasn’t even with Bain at the time GST finally gasped and was shuttered. Now it’s like all hands on deck for a thrashing of the mechanism that built this country, and gave so many people the lives we enjoy.

The way that I see it, if a person is going to attack a function of capitalism, and stand behind their point, whether it is legitimate or not, it would also mean that the same arbitrary condemnation could apply to any function of capitalism. You don’t like paying some of your bills – then don’t, because you think it’s “unfair.” You don’t like having to pay a manufacturers’ makeup? Well, don’t pay it then – you’ve deemed it “unfair” too. When we slip into a mindset of the left, where, this is fair, that is unfair, this group over here has more than you (and you really deserve it more than they do), and that some big, bad, government boogie-man is piling on with those filthy rich fat cats, it is easy to find yourself getting angry. The trick is to channel that anger and frustration – almost like using that destructive feeling for something…Creative.