2.05.2009

Yet another Obama tax scofflaw!

Husband of Rep. Solis, Labor nominee, settles tax liens

Excerpt:

The husband of President Obama's Labor secretary nominee paid about $6,400 Wednesday to settle tax liens that had been outstanding for as long as 16 years against his business, the Obama administration told USA TODAY this afternoon.

The disclosure came shortly before a scheduled 2 p.m. meeting of the Senate Health, Education, Labor and Pensions Committee, which will vote on Rep. Hilda Solis' nomination as labor secretary. The hearing was postponed; no reason was immediately revealed.

At a press conference, Obama spokesman Robert Gibbs said of Solis: "I read the story in USA TODAY and it quotes somebody who works here. Obviously we know about the story. We reviewed her tax returns and her tax returns are in order.Her husband had an issue."

"She's not a partner in that business," Gibbs said. "We're not going to penalize her for her husband's business mistakes."

Gibbs said he thought Solis' husband, Sam Sayyad, paid the liens back because he owed the taxes, not because of White House pressure. "The White House believes that if you owe taxes you should pay them," Gibbs added.


Comment: I'm starting to lose count!


  1. Hilda Solis, Labor secretary nominee
  2. Tom Daschle, Heath and Human Resources (Withdrawn)
  3. Nancy Killefer, chief performance officer (Withdrawn)
  4. Tim Geithner, Treasury secretary (Confirmed)

On the "New World Order"

Comment: Thank you anonymous commenter for directing me this article.

The chance for a new world order

Excerpt:

The nadir of the existing international financial system coincides with simultaneous political crises around the globe. Never have so many transformations occurred at the same time in so many different parts of the world and been made globally accessible via instantaneous communication. The alternative to a new international order is chaos.

The financial and political crises are, in fact, closely related partly because, during the period of economic exuberance, a gap had opened up between the economic and the political organization of the world.

The economic world has been globalized. Its institutions have a global reach and have operated by maxims that assumed a self-regulating global market.

The financial collapse exposed the mirage. It made evident the absence of global institutions to cushion the shock and to reverse the trend. Inevitably, when the affected publics turned to their national political institutions, these were driven principally by domestic politics, not considerations of world order.

Every major country has attempted to solve its immediate problems essentially on its own and to defer common action to a later, less crisis-driven point. So-called rescue packages have emerged on a piecemeal national basis, generally by substituting seemingly unlimited governmental credit for the domestic credit that produced the debacle in the first place - so far without more than stemming incipient panic.

International order will not come about either in the political or economic field until there emerge general rules toward which countries can orient themselves.

In the end, the political and economic systems can be harmonized in only one of two ways: by creating an international political regulatory system with the same reach as that of the economic world; or by shrinking the economic units to a size manageable by existing political structures, which is likely to lead to a new mercantilism, perhaps of regional units.

A new Bretton Woods-kind of global agreement is by far the preferable outcome. America's role in this enterprise will be decisive. Paradoxically, American influence will be great in proportion to the modesty in our conduct; we need to modify the righteousness that has characterized too many American attitudes, especially since the collapse of the Soviet Union.


Comment: I love this comment: "The alternative to a new international order is chaos". So it is a new world order (with greatest centralization of power and less individual autonomy) or chaos!. I'll take freedom and chaos any day!

Let's get it right ... not do what we "feel"

Obama warns of need for stimulus bill right away

The Action Americans Need

Direct Excerpts:

What Americans expect from Washington is action that matches the urgency they feel in their daily lives -- action that's swift, bold and wise enough for us to climb out of this crisis.

Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

...

I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change. They know that we have tried it those ways for too long. And because we have, our health-care costs still rise faster than inflation. Our dependence on foreign oil still threatens our economy and our security. Our children still study in schools that put them at a disadvantage. We've seen the tragic consequences when our bridges crumble and our levees fail.

...

So we have a choice to make. We can once again let Washington's bad habits stand in the way of progress. Or we can pull together and say that in America, our destiny isn't written for us but by us. We can place good ideas ahead of old ideological battles, and a sense of purpose above the same narrow partisanship. We can act boldly to turn crisis into opportunity and, together, write the next great chapter in our history and meet the test of our time.


Comments:

  1. I personally buy the need for an economic stimulus. I may be wrong and you may dispute this, but I start my comments with this basis.
  2. No stimulus package is going to be perfect ... hey it's Washington ... need I say more.
  3. I sometimes spend money imprecisely - eg tomorrow I am having work done on a furnace vent. I have an imprecise estimate. Kathee will be there and sign off. It may be $ 253 ... or $ 312. I'm OK with either or between. Government spending, organizational spending, and probably your wife's spending is the same way.
  4. But before we spend A TRILLIION ... let's get it right.
  5. Bush (blame it on intelligence (not his own ... the CIA, etc) did not get WMD right! We may have gone to war anyway, but 5 more months or even a year would have been nice to "get it right"!
  6. Obama's editorial is fear mongering. Example: "if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse". Truth be told, if Washington did nothing ... in due time the economy would correct itself.
  7. On his comment, "voted resoundingly for change". President Obama, we elected a President not a dictator. I didn't vote for you but I support you. I pray for you and I want to see you succeed! On the "change we can believe in" ... let's face it it's more of the partisan same! Lobbyists and tax scofflaws have been nominated by you to cabinet positions. That's not change!
  8. This may not be the best way, but the absolute fastest way to give money back to the people (it is the peoples' money!) is for tax cuts. The stimulus bill as it stands is like Campbell's bean with bacon soup. Not much bean ... even less bacon and a lot of water! The proposed stimulus is like that ... a lot of fluff and not much stimulus.
  9. The Republican minority can be your best friend, President Obama. Listen to them and negotiate with them. Don't expect them to roll over just because because people "voted resoundingly for change".
  10. And my final point: Let's get it right. This is not chump change we are talking about ... this is A TRILLION DOLLARS. Washington has a long history of waste. How much of that Trillion will be wasted? If the generations after us have to pay for this, let's make sure that they are getting what they will be paying for.
  11. I'm working on a small (large to me but small in light of the above) project. We've been working this since late November. It should have been completed. It is still in quality assurance. We haven't gotten it right to pass on to our customers. This stimulus package still isn't right!


Update: Centrists in Senate Push to Cut Billions From Stimulus

The effort is being led by two centrist senators, Ben Nelson, Democrat of Nebraska, and Susan Collins, Republican of Maine, who say they would like to pare from $50 billion to $200 billion from the package. The final Senate vote on the stimulus package is expected late on Thursday.

Among the initiatives that could be cut are $50 million for the National Endowment for the Arts, $14 million for cyber security research by the Homeland Security Department, $1 billion for the National Science Foundation, $400 million for research and prevention of sexually transmitted diseases, $850 million for Amtrak and $400 million for climate change research. But so far, none of the suggestions come close to being enough to shrink the package on the scale proposed.

Can Facebook turn traffic into profits?

Facebook turns five

Excerpt:

One challenge Facebook is yet to overcome is how to make money.

US software giant Microsoft bought a 1.6 percent stake in Facebook in 2007 for 240 million dollars, valuing the social network on paper at 15 billion dollars.

But Facebook, unlike other Web giants such as Amazon, eBay, Google and Yahoo!, is yet to prove how it is going to translate traffic into cash.

"There's no significant visible source of revenue other than investors," said Silicon Valley analyst Rob Enderle of the Enderle Group.

"There's a lot of potential there but they're still kind of living in this dotcom mindset where a business plan doesn't make a difference," he said. "And as we saw with the dotcoms, that has a very unfortunate end to it."

"Google was able to figure out fairly quickly how to monetize what they were doing and they became a giant and that's the potential for Facebook but they've got to cross that chasm," Enderle said.

Going public with an IPO, or initial public offering, would not appear to be an option for Facebook right now.

"Doing a public offering when you have no revenue? Good luck with that -- particularly in this market," said Enderle.

Advertising could be a money-spinner but "the ad model doesn't seem like it works all that well for Facebook -- though it could," said Enderle. "You know an awful lot about people, and so you would think they could do targeted ads."


Comment: I think it is a really cool service. I didn't even know that they weren't making money. Wonder if Facebook will be around 5 years from now?

2.04.2009

Is trillion the new billion?



Numb and numb-er: Is trillion the new billion?

Excerpt:

To provide some perspective on just how big a trillion dollars is, think about it like this: A trillion dollars is the number 1 followed by 12 zeroes. Or you can think of it this way: One trillion $1 bills stacked one on top of the other would reach nearly 68,000 miles (about 109,400 kilometers) into the sky, or about a third of the way from the Earth to the moon.

Some Republicans are hardly over the moon about the growing size of the proposed economic stimulus plan. Senate Republican leader Mitch McConnell said this week that Americans have become desensitized to just how much money that is.

"To put a trillion dollars in context, if you spend a million dollars every day since Jesus was born, you still wouldn't have spent a trillion," McConnell said.

CNN checked McConnell's numbers with noted Temple University math professor and author John Allen Paulos.

"A million dollars a day for 2,000 years is only three-quarters of a trillion dollars. It's a big number no matter how you slice it," Paulos said.


Comment: Another helpful site: What’s a billion?. This one if for the kids (Aren't we all): A billion pennies (trillion pennies image captured from this site.

Now go to Ebay and look up Zimbabwe banknotes.

Buy some for your kids .... explain to them hyperinflation. And say "get ready for it"

Public Service Announcement: Zombies Ahead


Hackers make electronic road signs warn motorists of zombies, raptors; highway officials angry

Excerpt:

Pranksters in at least three states are messing with electronic road signs meant to warn motorists of possible traffic problems by putting drivers on notice about Nazi zombies and raptors. And highway safety officials aren't amused.

The latest breach came Tuesday during the morning rush hour near Collinsville, Ill., where hackers changed a sign along southbound Interstate 255 to read, "DAILY LANE CLOSURES DUE TO ZOMBIES."


Comment: This is the kind of foolish prank I would have done as a teenager (had I the opportunity and ability). Thank God I grew up!

Has the "Tylenol killer" been caught?


FBI Searches Home Of Man Linked To Tylenol Deaths

Excerpt:

The FBI is searching the Cambridge home of a man linked to the deadly 1982 Tylenol tampering scare in Chicago.

FBI officials confirmed to WBZ they are at an apartment complex called the Pavilion on Gore Street in Cambridge, but would not say why. Authorities would not confirm the search in Cambridge was linked to the Tylenol investigation.

Witnesses tell WBZ Radio that FBI agents spent several hours removing boxes from an apartment where James Lewis and his wife Leann lived shortly after James' release from prison in 1995. Lewis served more than 12 years for sending an extortion note to Johnson & Johnson during the Tylenol scare. In the note, Lewis demanded $1 million to "stop the killing."

Lewis is listed as a partner in a Web design and programming company called Cyberlewis. On its Web site, which lists the location searched Wednesday as the company's address, there is a tab labeled "Tylenol" with a written message and audio link in which a voice refers to himself as "Tylenol Man."


Comment: This was hot news back in 1982. More on this here. This crime lead to tamper-evident safety-seals to bottles and other packaging.

Wells Fargo responds

Wells Fargo Responds to Misleading Reports About Employee Recognition Events

Excerpt:

Today’s Associated Press story about Wells Fargo’s recognition events is intentionally misleading. The event is not a “junket” for executives but a four-day business meeting and recognition event for hard-working team members who made homeownership achievable and sustainable for borrowers across the nation. In 2008 alone, the team members who were invited to this event and their colleagues produced $230 billion in mortgage loans for U.S. homeowners.

Through all economic cycles, our recognition events have been an important part of our company’s culture. Late last year, we cancelled recognition events for 2009 except those where the financial commitment was so great that no meaningful savings would occur by cancelling these events. We had scaled back the mortgage event, but in light of the current environment, we have now decided to cancel this event as well. We do not plan to have any other recognition events this year.

The Associated Press story also misleads readers by implying Wells Fargo used the government’s investment to pay for these events. As we’ve said before, we’ve used the government’s investment to lend to creditworthy customers and to help homeowners avoid foreclosure.

Since credit began contracting 18 months ago, Wells Fargo has made almost half a trillion dollars in new loan commitments and mortgage originations. Last quarter alone, we made $22 billion in loan commitments and $50 billion in mortgage originations. That's more than $70 billion or almost three times the amount of the U.S. Treasury's investment in Wells Fargo -- which has begun to benefit from our performance through the dividend we will pay to the Treasury this quarter.


Comment: Tobin, a CF reader (thank you Tobin!) referred me to this site as well: Tiger Hawk: Do not pick on Wells Fargo for the Vegas trip

2.03.2009

WFC: Reality Check

Wells Fargo cancels Las Vegas events

Excerpt:

Wells Fargo & Co (WFC.N), which received $25 billion from the government's bank bailout program four months ago, said it had canceled employee events in Las Vegas after a report saying it had booked expensive hotels.

The move came after the Associated Press said the bank had booked 12 nights at the Wynn Las Vegas (WYNN.O) and the Encore Las Vegas, two of that city's more upscale hotels, as part of a conference for top mortgage officials.

Wells Fargo had also been planning a 3-day meeting starting on Feb. 25 for 40 insurance employees at another high-end hotel, the Mandalay Bay Resort & Casino, according to the Las Vegas Convention and Visitors Authority's website.

The bank issued a statement saying it had canceled events, although it was not immediately clear when these were planned for. Wells Fargo was immediately available for comment.

"We had scaled back the mortgage event, but in light of the current environment, we have now decided to cancel this event as well. We do not plan to have any other recognition events this year," it said in a statement.

The bank, however, defended such events as part of its culture, and said the Associated Press report was misleading.

"The event is not a 'junket' for executives but a four-day business meeting and recognition event for hard-working team members who made homeownership achievable and sustainable for borrowers across the nation," it said.


Comment: Since I've been asked about this by several relatives I will briefly comment.

  • The so-called "bailout" money was the Government buying dividend paying preferred stock in WFC.
  • Preferred stock pays interest to the government (like a bond) &
  • Preferred stock dividends pay out before common stock dividends. I have XXX shares of WFC stock that pay dividends. I will never see those dividends until after WFC pays the government preferred dividends.
  • Rewards for sales people is a part of every sales culture in America.
  • I'm in IT not sales but I used to sell computers for IBM and later DEC. When I had a great year (I had some stinkers too!) I would get a trip. So what. The salesmen earn it.
  • If it were in Toledo, or Green Bay no one would be complaining. Do you know it is less expensive to fly people to Las Vegas than to Toledo or Green Bay.


CNN and the other main stream media outlets did a great disservice by giving "half-truths" (a form of a lie!). But it doesn't surprise me. Also reports like this take the focus off Dems that don't pay taxes or pork-laiden wasteful government spending. My 2 cents.

2.02.2009

Pelosi: channeling the ghost of Margaret Sanger


Commentary: Ridiculous items in stimulus plan

Excerpt:

I'd settle for removing more of the ridiculous items that House Democrats slipped into the legislation to advance their sociopolitical agenda. Like $350 million for child care on military bases. Or $335 million to prevent sexually transmitted diseases.

In normal economic times, there might not be anything wrong with this. But these aren't normal times. And these politically motivated giveaways do nothing to fight the recession.

Another such item, which was removed from the bill, was a plan to spend more than $200 million on birth control funding as a way of stimulating the economy.

Who could possibly defend such a thing? House Speaker Nancy Pelosi concocted an argument that was ridiculous and offensive. In fact, the argument was so bad that it might have single-handedly led to the demise of the funding, which some conservatives considered a giveaway to Planned Parenthood.

When ABC's George Stephanopolous asked Pelosi to explain how birth control helps the economy, here's what the speaker said: "The family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now, and part of what we do for children's health, education and some of those elements are to help the states meet their financial needs. One of those -- one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government."

You know the nation's cupboard is bare when politicians propose limiting the number of births as a way of improving the economy. That's a conversation we shouldn't be having.

There is nothing more private -- that is, none of the government's business -- than the personal decision that a family makes about how many children to have. Besides, Pelosi's comments had an ugly ring to them.

For a minute, it sounded as if the House speaker was channeling the ghost of Margaret Sanger. The 20th-century birth control advocate is a hero to those who worship at the altar of reproductive freedom. She even founded the American Birth Control League, which became Planned Parenthood.

But there is more. Sanger also embraced birth control as a means of social engineering. She was a leader in the eugenics movement, which had a number of influential supporters.

Many in that school of thought considered immigrant groups like Jews, Italians and Irish to be inferior genetically, and they felt that these groups were having too many children, a trend they believed needed to be stopped -- by forced sterilization if necessary.

In an article she wrote in 1932 for Birth Control Review, a publication she founded, she spelled out her "Plan for Peace," which included having "Congress set up a special department for the study of population problems and appoint a Parliament of Population" whose main objectives would include keeping "the doors of immigration closed to the entrance of certain aliens whose condition is known to be detrimental to the stamina of the race such as ... [those] barred by the immigration laws of 1924." Those laws were mainly intended to stop the immigration of Italians, Greeks and Jews.

Nice. There are still people who believe that stuff. The only difference is that, in this century, the folks under attack are more likely to be Hispanic or African-American.

When you make the argument that contraception is a cost-saving measure for state and federal government, some might think what you're implying is that the babies who would otherwise have been born were destined to become dependent on welfare and other public services.


Comment: For decades, abortion has disproportionately targeted minority babies (Whatever the intent of the abortion industry may be, by functional standards, abortion is a racist institution. In the United States, black children are aborted at 5 times the rate as white children and Hispanic children don't fare much better)

Unappetizing Federal budget numbers

Congress Will Have the Buffet

Excerpt:

[Rep. Jim Cooper (Democratic, Tennessee)] has an unshakable appetite for unappetizing numbers, wishes that more Americans were similarly eccentric and would read the 188-page 2008 Financial Report of the United States Government — the only government document that calculates what deficit and debt numbers would be if the government practiced, as businesses must, accrual accounting.


Under such accounting, future outlays to which beneficiaries are entitled by existing law are acknowledged as expenditures before they are paid. Were the Social Security surplus sequestered for accounting purposes, reflecting the truth that it is already obligated, and were there similar treatment of the other entitlement programs' liabilities, the deficit for the fiscal year that ended Sept. 30 would have been $3 trillion rather than $454.8 billion. The report's numbers show that the true national debt is $56 trillion, not the widely reported $10 trillion.


The report says that in 25 years the portion of the population 65 and older will increase from 12 percent to 20 percent, while the share of the population that is working and paying taxes will decrease from 60 percent to 55 percent. If Medicare spending continues to grow, as it has for four decades, more than 1 1/2 times as fast as the economy, the big three entitlements, which currently are 44 percent of all federal expenditures (excluding interest costs of the national debt), will be 65 percent by 2030. Under current law, 30 years from now government revenue will cover only half of anticipated expenditures.


For years, many conservatives advocated a "starve the beast" approach to limiting government. They supported any tax cut, of any size, at any time, for any purpose, assuming that, deprived of revenue, government spending would stop growing. But spending continued, and government borrowing encouraged government's growth by making big government cheap: People were given $1 worth of government but were charged less than that, the balance being shifted, through debt, to future generations. In 2003, Republicans fattened the beast with the Medicare prescription drug benefit (Cooper opposed it), which added almost $8 trillion in the present value of benefits scheduled, but unfunded, over the next 75 years.




Comment: Our government will not do anything about this because governing today is about being reelected. Rep Cooper is a member of the Blue Dog Coalition.

More from George Will

On Barack Obama's inaugural address

"The time has come," he said pointedly, "to set aside childish things." Things, presumably, such as the pandemic indiscipline that has produced a nation of households as overleveraged as is the government from which the householders insistently demand more goods and services than they are willing to pay for.


Key phrase about the Federal government: "overleveraged"

Stimulus legislation - "an exercise in wretched excess"

Stimulus math for the GOP

Excerpts:

... congressional Democrats have turned the 647-page stimulus legislation into an excuse for something that never needs an excuse — an exercise in wretched excess.

...

The [GOP's] duty is to assert inconvenient truths, one of which is that the truth shall make you modest. There never is a moment when an open society that wants to remain such does not need the wisdom of Friedrich Hayek, the Nobel Prize-winning economist who said: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." So the deference accorded this president should be proportional to his willingness to acknowledge that neither he nor anyone else can know whether the stimulus will work.


Comment: Before they vote it they should have a high degree of confidence it will work! More from Newsweek:

Obama Ducks Hard Choices

Excerpts:

Among the many claims made for the "economic stimulus" package now before Congress is that it will "jump-start" a "bigger, better, smarter" electric grid, enabling Americans to use energy more efficiently. The package commits $4.5 billion to this, which (says the White House) will help finance 3,000 miles of transmission lines and 40 million "smart meters." Sounds great.

But it may be mostly hype. For starters, $4.5 billion is a pittance. An industry study in 2004— surely outdated—put the price tag of modernizing the grid at $165 billion. More important, says a report from J.P. Morgan, the "smart grid" isn't mainly a matter of building new transmission lines or installing new meters. It's more "communications and information processing technology" that allows for more efficient transportation and use of power.

....

As it turns out, President Obama didn't make the tough choices on the stimulus package. He could have either used the program mainly (a) to bolster the economy or (b) to advance a larger political agenda, from energy efficiency to school renovation. But Obama wanted both, and, superficially, the two can be portrayed as an enlightened partnership.

"This is not just a short-term program to boost employment," Obama said recently. "It's one that will invest in our most important priorities like energy and education, health care, and a new infrastructure that are necessary to keep us strong and competitive in the 21st century."

....

The $819 billion program passed by the House would only slowly provide stimulus. The Congressional Budget Office estimates that in fiscal 2009 (through this September) about 21 percent of the new spending and tax cuts would flow to the economy. For 2010, the estimate is an additional 44 percent. The total of 65 percent means that, by the CBO's estimate, about a third of the $819 billion package would be spent after fiscal 2010. That falls far short of Obama's stated goal of 75 percent in the first 18 months.

"What could they have here that you could possibly want to buy?"


In Bolivia, Untapped Bounty Meets Nationalism

Excerpt:

“We know that Bolivia can become the Saudi Arabia of lithium,” said Francisco Quisbert, 64, the leader of Frutcas, a group of salt gatherers and quinoa farmers on the edge of Salar de Uyuni, the world’s largest salt flat. “We are poor, but we are not stupid peasants,” he said. “The lithium may be Bolivia’s, but it is also our property.”

...

The United States Geological Survey says 5.4 million tons of lithium could eventually be extracted in Bolivia, compared with 3 million in Chile, 1.1 million in China and just 410,000 in the United States. Independent geologists estimate that Bolivia might have even more lithium at Uyuni and its other salt deserts, though high altitudes could make accessing the mineral difficult.


Comment: Wiki: Lithium

Butch Cassidy and the Sundance Kid

[arriving in Bolivia]
Butch Cassidy: You know, it could be worse. You get a lot more for your money in Bolivia, I checked on it.
Sundance Kid: What could they have here that you could possibly want to buy?

-------
Image from worldnomads.com

How Washington works: "by dint of his name & connections"

In Daschle’s Tax Woes, a Peek Into Washington

Excerpt:

Beyond the ramifications for Mr. Daschle’s ascent to the cabinet, the disclosures about Mr. Hindery and the many clients Mr. Daschle advised on public policy offers a new window into how Washington works. It shows how in just four years an influential former senator was able to make $5 million and live a lavish lifestyle by dint of his name, connections and knowledge of the town’s inner workings.

Uptick in savings could be drag on recovery

Consumers in U.S. Increase Savings While Spending Less

Excerpt:

The latest economic data released Monday painted a picture of American consumers and businesses embarking on an era of thrift as the recession deepens, spending less on consumer goods, housing and big-ticket developments like office buildings and hotels.

Americans cut their spending for a sixth month in December and, perhaps more significant, put more into their savings accounts, the government reported Monday, as they worried about losing their jobs and earning less in a deteriorating economy.

...

“If households are shying away from spending, what’s going to cause businesses to start spending again?” a senior economist at Moody’s Economy.com, Aaron Smith, said.


Comment: Haven't seen the numbers yet, but a low savings rate has hurt the US Economy.