Other people’s mistakes

It has been said that fools never learn and wise men learn from their mistakes. But geniuses should learn from other people’s mistakes.

The great state of California seems on the verge of becoming the late great state of California as it struggles to survive the current recession. Because of a few quirks in their state laws, combined with the fact that the legislature is required to produce a balanced state budget, the financial condition of the state is dire.

Some folks living outside of California who find it amusing, even righteous, to look
down upon the state and all its components (especially Hollywood and its Democrats) may be tempted to express a certain amount of glee at how the mighty seems to have fallen, apparently forgetting that it was California and specifically Hollywood that gave us the late, great Ronald Reagan.

But “left-coast” critics around the country, as they decide how to address their own fiscal crises, would do well to try to understand how that state got into this particular fix, for there is much to be learned from it by others.

Back in the day, as we love to say, California was thriving. But in 1978, “thriving” wasn’t enough for some — nor, for that matter, was their system of representative government, apparently, for beginning with the now infamous Proposition 13, they began to opt for anarchy.

California is one of the states that allows for new laws and even constitutional amendments to be accomplished through referendum — that is, a popular vote that effectively bypasses the legislature. Inquiring minds might want to know why anyone should bother with electing a government at all.

So the citizens passed a constitutional amendment, wildly promoted by anti-tax folks, limiting property taxes to 1% of the assessed value of a home and limiting assessment increases to 2% per year until the property changes hands.

By contrast, here in Waxahachie the property tax (including all local taxes) is about 2.35%. Given that just about everything is more expensive in California, the difference is striking.

Of course, here in Texas we have the homestead exemption, which includes a 10% cap on the amount an appraisal can be increased from year to year, a bit more than 2%.

Not satisfied with reducing future property tax revenues, the greedy folks who brought this about made it retroactive, sending out millions of dollars in refund checks the first year; all the homeowner had to do was ask.

Howard Jarvis, half of the Jarvis-Gann team who led the effort to put Prop 13 on the ballot, is quoted as having characterized all taxes as “felony grand theft.” Texas TEA-party folks would be proud.

Added to the existing law requiring a two-thirds vote for any tax increase anywhere in the state, and another prohibiting local agencies from setting any new tax, the collateral damage was huge.

Very soon after the amendment went into effect, the quality of life in California began to change dramatically. Public libraries began closing down to half-days, “non-essential” school personnel (like counselors) were laid off, and according to Wikipedia, citing a report from the Public Policy Institute of California, “Fire departments were gutted because of a drastic loss of funds. … Cities also cut water, gas and electricity expenses.”

According to a 2003 report in the Rand Review, “Widely regarded as one of the best systems of education in the country as recently as 30 years ago, the California public school system has since become, according to most measures, one of the worst.”

Does this sound like something we want in Texas?

One more thought:

The current web site of the Howard Jarvis Taxpayers Association boasts that Proposition 13 has "saved California taxpayers" over $528 billion. As of June 2009, Reuters reported, California’s present struggle is to overcome a $24 billion budget deficit.

You do the math.

One lump, or two?

There’s no accounting for people’s taste in matters of tea, or parties, or especially “tea parties.”

Last week saw the astounding uprising of dozens of people all across our country in a movement that could only be called, truthfully, “astroturf.” That is the term generally applied to activities pretending to be grass-roots movements that are not, really.

In this case, the leadership of passionate folks like Dick Armey, Newt Gingrich and the talking heads on Fox News was hard to ignore. Towards the end, Governor Perry and even ol’ Joe Barton inserted themselves into the act.

In search of a hook upon which to hang their objections to all things Obama, and apparently lacking the imagination to come up with something new, those good folks had decided on tea-and-taxes.

Back in 1773 tea-drinkers in the colonies, specifically in Boston, were really upset to learn that the British Parliament had decided to levy an import tax on tea shipped to the colonies. They were outraged, in fact, and told the captains of the three ships that were waiting in Boston Harbor to take their doggone cargo back to England. Wasn’t fair, they said, to have to pay taxes they had no hand in levying.

It was taxation without representation, they said. And that was wrong.

The ships didn’t budge, and things heated up to the point where angry colonists stormed the docks and dumped all that tea into the harbor.

Reports have it that Samuel Adams was a leader of the movement.

According to the account in Wikipedia,

The Boston Tea Party was a key event in the growth of the American Revolution. Parliament responded in 1774 with the Coercive Acts, which, among other provisions, closed Boston's commerce until the British East India Company had been repaid for the destroyed tea. Colonists in turn responded to the Coercive Acts with additional acts of protest, and by convening the First Continental Congress, which petitioned for repeal of the acts and coordinated colonial resistance to them. The crisis escalated, and the American Revolutionary War began near Boston in 1775.

Inquiring minds want to know: What’s the connection?

Last week’s events had nothing to do with tea, Americans are no longer subject to taxes levied by King George, and Samuel Adams is now associated with a more interesting beverage; Congressional representatives were everywhere to be seen at the “tea parties,” so you could hardly claim lack of representation was the issue.

The organizers managed to turn out clumps of participants all around the country, some wearing teabags, some tossing them into waterways (littering!), many carrying or wearing signs objecting to high taxes, more taxes, and taxes in general.

Given that it was April 15th, the subject had to be pretty fresh on their minds, though it looked like they were having a pretty good time anyway.

Yet the reality is that most of the folks who were demonstrating, from the looks of it, are actually getting a tax cut because of Obama; of course, some of the loudest, like Armey, Perry, Barton, and the stars of Fox News, are probably in that select group of people with income over $250,000 who will see their taxes go up (would that be why they are so passionately involved?).

Lost in the noise, interestingly, is that in the latter case, the projected increase will still keep their rates below what they paid under Clinton. In some cases tax rates will be lower than they were under Reagan. Were they complaining then? Remind me.

A reporter went to one of the rallies and asked around to see how they felt about the fact that their taxes were going to be reduced. Some demonstrators said that didn’t count, because they were sure their taxes were going to go up later.

Well, yes, some people always complain about taxes. They just don’t like them. For that matter, neither do I, but I am very fond of having a government, a military, first responders, national parks and public schools. Just for starters.

Anyway, I don’t think it was really about taxes. I suspect it was more about the economy, and we Americans can be an impatient lot, as is often noted.

Even so, is it reasonable to expect that Obama, after three whole months in office, should have fixed it by now?

Originally published in the Waxahachie Daily Light, April 20, 2009.

Short and sweet: Obama’s tax plan

Some days I just don’t understand how, this late in the game, there can be anyone left who is undecided about the Presidential race. I mean, it’s been going on for close to two years!

Other days, I remember to give the benefit of the doubt to folks who are not political junkies like me and so haven’t been paying attention as closely as I have.

But by now there’s a lot of information out there — the TV ads that have begun to show up in the last month or so, the 24/7 cable news, and of course the candidates’ web sites (and the Obama campaign even has its own TV channel, 5890 on Dish Network) — so
they’d better hop to it, for early voting starts NOW.

This space was dedicated a week ago to comparing the two candidates’ health care plans, followed on Friday by a comparison of their proposals for dealing with the economic crisis.

You could say the best was saved for last. Taxes.

Let’s talk about “Joe the plumber” for a minute.

Samuel Joseph Wurtzelbacher, a registered Republican who rocketed to fame in the third Presidential debate, told Obama, in a rope line, that he was poised to purchase his bosses’ plumbing business but that doing so would bring him income “in the $260,000 to $280,000 range” which he figured would increase his taxes under the Obama plan.

Whether or not he was a “plant,” as some suspect, it made a great talking point for the debate, so I’m glad this conversation took place right there in front of everyone, and I don’t agree with the media frenzy about his license or anything else personal.

It turned into a great hook for the candidates, and gave Obama the chance to point out that (a) based on what he is making at this point Joe would benefit from Obama’s proposed tax cut, and (b) that his tax rate would increase only on the amount of income above $250,000.

In other words, the first $250,000 would be tax-increase free! Still, if I ever get lucky enough to earn that kind of money, I don’t think I’ll mind at all paying another 3% or so on the $10,000, $20,000 or $30,000 extra.

This being politics, of course, part of Obama’s answer on the rope line was morphed by the McCain folks into something vaguely sinister.

Obama said to Joe, “If the economy’s good for folks from the bottom up, it’s gonna be good for everybody. If you’ve got a plumbing business, you’re gonna be better off if you’ve got a whole bunch of customers who can afford to hire you. And right now, everybody’s so pinched that business is bad for everybody. And I think when you spread the wealth around it’s good for everybody.”

This naturally became “Redistribution of wealth! Horrors! Welfare! Yuck!”

Obama went on to explain to Joe that he would also eliminate the capital gains tax for a small business like Joe’s, to encourage growth.

What’s amazing to me is that voters who would never in their wildest dreams reach a net income of $250,000 for a family, or $200,000 for a single taxpayer, are convinced that an Obama administration would raise their taxes.

According to a chart published by the Washington Post, citing the Tax Policy Center, Obama’s plan would actually not raise taxes significantly for anyone earning up to $603,402; the tax increase that would kick in at that point would be 8.7% and that would hold up to $2.87 million. Anyone you know going to be worried about that?

Y’know, we’re getting into the stratosphere here, what the Tax Policy Center identifies as the top 1% of Americans. But apparently this is who McCain is really, really worried about when he says that Barack Obama is going to raise your taxes.

Warren Buffett, a man who knows a thing or two about making money, hasn’t got a problem with Obama’s tax plan, so I guess I don’t either.

And furthermore …

Even before finishing my last post I realized that there are quite a few more items that need to be said about the current campaign for the presidency. The idea that even one voter might make a choice based on bad information is anathema to everything our Founders intended for America.

Take (please!) this new ad from the McCain campaign:

"Life in the spotlight (the video shows crowds cheering Obama) must be grand, but for the rest of us times are tough."

Us? This from the guy who campaigns wearing $520 leather Ferragamo loafers, enjoys the use of his billion-heiress wife’s private plane to travel to campaign events, and owns at least half a dozen homes in pleasant locations?

The ad goes on: “Obama voted to raise taxes on people making just $42,000,” while the text-over says Obama: RAISE TAXES ON MIDDLE CLASS.

The narrator claims that Obama “promises to raise taxes on small business, seniors, your life savings, your family.” Talk about hot buttons! Then, next to a photo of a smiling Barack Obama, “Painful taxes! Hard choices for your budget!”

What a heartless cad!

The ad concludes, of course, with “I’m John McCain and I approve this message.”

Some in the TV commentariat speculated aloud last week that they don’t believe McCain is really this kind of guy, that he must not really know what his minions are putting out there because he surely would not be comfortable running such ads.

Next to the ad described above, I could almost forgive the simple slander of using a remark out of context, as I described last week. Here we have an out-and-out lie. No other way to characterize it.

Obama has said for months that his tax proposals include REDUCING taxes for every family with less than $250,000 income, and eliminating them altogether for low-income families and seniors under $50,000.

I used to fantasize that whenever an election was won with a proven lie the person who won that way should have to give up the office. Fat chance.

From lies to too-clever-by-half: In an exchange about McCain’s fixation with off-shore drilling, Obama observed that, hey, if every driver got the car tuned up and its tires inflated to specification the fuel savings would be immediate, contrasted with the years before new wells could influence gasoline prices — if indeed they did more than a penny or three a gallon.

McCain promptly began a campaign to mock this as “Obama’s energy plan,” and handed out cute little pressure gauges to reporters. (Ordinary folks could get one for only $25.00 on McCain’s web site.)

But here’s what BusinessWeek.com wrote on August 1, 2008:

According to www.fueleconomy.gov, the gas savings of having a properly tuned car is 16 cents a gallon, compared with a car that’s not properly tuned. The savings from properly inflated tires versus improperly inflated tires is up to 40-cents a gallon.

Statistics vary, but more than half of the vehicles on the road today are believed, from periodic spot checking, to be under-inflated.

AAA and NASCAR agree, by the way.

Further, according to BusinessWeek.com,

The U.S. government’s own Energy Information Administration says that removing restrictions on offshore drilling wouldn’t lead to any additional domestic oil production until 2017, and that even at its peak the extra production would have an ‘insignificant’ impact on oil prices.

So it was reassuring to hear McCain endorse the idea a week or so later.

And none of these sources mentioned the fact that the savings realized by reducing driving speed to 55 mph is said to add about five miles per gallon, not an amount to be sneezed at with current prices where they are.

One thing for sure: McCain’s argument that if we only “Drill here! Drill now!” it will bring down the price of gasoline is, to say the least, misleading.

Ok, but let’s say it’s a reasonable argument that, assuming more oil will eventually be needed, whether or not it drives down prices, we should probably be starting now. Here’s a problem:

People who seem to know what they are talking about point out (a) that we are already operating our refineries at capacity, so to accommodate more oil we will need to build more refineries; and (b) that there are millions of acres of existing oil leases that have not been drilled upon.

According to the U.S. Minerals Management Service,

Currently 79 percent of America’s technically recoverable offshore oil reserves are open for leasing, while just 21 percent are closed to drilling. [Minerals Management Service, 2006]

Currently 82 percent of America’s technically recoverable offshore natural gas reserves are open for leasing, while just 18 percent are closed to drilling. [Minerals Management Service, 2006]”

It does seem to me that it would make sense to start drilling on lands that are already available, start building more refineries, all while continuing the quest for alternative solutions (after all, we’ll have at least a decade on our hands).

I remember how the Bush tax cuts for the very, very wealthy got through a distraught Congress while we were still reeling from the attacks of 9/11 — the President took advantage of the willingness of the nation to follow him just about anywhere, and the tax cuts were passed within days.

Could it be that the oil companies (who love the idea of more leases in juicy offshore locations, who gave McCain over $1 million to show that love) are hoping our present panic will help get them those leases?

All I can offer is a cautionary to Americans to pay close attention, check out the facts. Else, once again, it’s “fool me twice” time.

Originally published August 10, 2008

Politics 2008

If it weren’t so infuriating I’d just shrug it off and call it silliness. But believe you me, this is deadly serious stuff and can make or break the success of Barack Obama’s quest for the Presidency. It all depends, frankly, on how much attention American voters are willing to commit to the selection process, and their capacity for critical thinking.

Come to think of it, this kind of stuff probably goes back to, oh, 1789 or so (yes, there were candidates other than George Washington for the signal honor of being Father of our Country), but my own experience is necessarily limited to the last 50-plus years.

You could liken it to the snake oil salesmen of the old West, or the fellow who offers a deed to the Brooklyn Bridge or perhaps some oceanfront property in Arizona, to Professor Harold Hill and his promise to build a boys’ band in River City, or the recent scammers right here in Waxahachie: What all these have in common is the ability to slick-talk folks into believing in something that is a lie.

Every one of their victims chose to buy into something they would never have believed if they had just been a little more skeptical, asked a few more questions, done a little fact-checking for themselves.

I like to think that you can attribute the willingness of some voters to believe the unbelievable to what I think is an American tendency to see the good in people, to give the benefit of the doubt, sort of the way we pride ourselves on the concept of “innocent until proven guilty.” But some outcomes suggest that at least a touch of cynicism is in order, at least when it comes to our money and our country.

Back in 1952, Richard Nixon lobbed non-fact grenades against his opponents, as in accusing Adlai Stevenson of being a “Commie-sympathizer” for suggesting that we talk to Red China. That would be the same Richard Nixon who famously opened the gate to Red China after he got elected some years later.

Leaping forward to our current situation, George W. Bush promised us that he was a “compassionate conservative,” and turned out to be neither.

A very clever fellow named Frank Luntz thought of a way to help the Republicans get rid of nettlesome taxes like the estate tax, which taxes the transfer of great wealth — defined nowadays as exceeding $2 million and excluding family farms — to other than a surviving spouse or a charity. I don’t know if anyone you know will have that much to leave to the kids, but now that it’s called the “death tax,” you’d be dumfounded to learn how many ordinary folks are dead-set opposed to it. Even though experts calculate that doing away with the estate tax would deprive the country of “tens of millions” of dollars every year.

You see, Luntz wanted plain folks to believe that just dying would bring a tax upon you. As Molly used to tell Fibber, “Tain’t so, McGee!” Check it out.

Speaking of taxes, John McCain is quite emphatic when he claims that “Barack Obama wants to raise your taxes!” What he fails to mention is that “your” in this case refers to people with incomes greater than $250,000, twice that for a married couple.
And of course it wouldn’t be helpful to him to add that Obama also wants to lower taxes for everyone earning less than that, and eliminate them altogether for folks earning under $50,000.

Nope. “Barack Obama wants to raise your taxes” is out there, low-hanging fruit dangling from the tree for people too hungry to question it.

And then there’s the not-exactly-a-lie: Speaking to the Congressional Democratic Caucus last week, Obama said, according to people who were there, as reported in The Atlantic:

“It has become increasingly clear in my travel, the campaign, that the crowds, the enthusiasm, 200,000 people in Berlin, is not about me at all. It's about America. I have just become a symbol of the possibility of America returning to our best traditions.”

So what does John McCain’s latest ad tell us about that? That Obama said, in a fit of vanity, that, “I have become a symbol of America returning to our best traditions.” Tain’t so, McCain.

Finally, the straight-out lie of the McCain campaign to bring down Barack Obama is manifested in his recent pop-culture ad costarring celebrity airheads Spears and Hilton, which claims that Obama is all speech and no substance, and in support of that claim McCain’s minions love to say that “we don’t know what he stands for.”

Well. Now, you can go to the library or to Google and find position speeches dating back through the entire campaign and read until your head spins, or you can go to his website and find them there, all neatly categorized.

When you think of it, it’s odd that McCain can attack Obama for what he stands for if we don’t know what that is, isn’t it?

My idealistic, optimistic hope is that THIS time, with what has been called the worst economy since the Great Depression, with America’s reputation in tatters around the world, with our troops committed to an occupation in Iraq while getting blown up in Afghanistan and Iran is making us nervous (but we don’t have any troops to spare right now), our infrastructure showing signs of distress, health care costs and the mortgage crisis driving more seniors into bankruptcy than ever before, that THIS time every single voter will pay attention like never before.

Else, it’s “fool me twice” for America.

Originally published August 3, 2008