Thursday, November 29, 2007

Only the Rich Believe a Flat Tax is Fair

Last night, Republican candidates for President discussed the “fair tax.” To them, fair taxes are some form of flat tax. Nonsense … There is nothing fair about a flat tax.

These fair-taxers should re-open their economics textbooks and read the section on the marginal-value-of-the-dollar. The theory is simply this: Each dollar you have is worth slightly less than the previous dollar. Stated another way … a check for $5,000 means one heck of a lot to someone making $20,000 per year, but is almost meaningless to someone making $1 million per year.

Years ago, our income taxes were fully graduated and fair. The biggest earners paid over 90 percent on the top dollar they made, while the lower middle class paid a fraction of that on every dollar they earned.

As an example, lets look how a flat tax and a graduated tax would effect three families (2 adults, 2 children, and an elderly parent); the Smiths earn $20,000 per year gross, the Jones $100,000, and the Bushes $1 million per year.

Survival spending, for the basic human rights of shelter, nutrition, health care, education, and care for the elderly, can be equated to the poverty level. Even though the poverty level is grossly under calculated, for argument sake, we’ll still use the rounded figure of $20,000 per year.

Flat Tax

A low, and easy to use, flat tax would be 25 percent.

The Smiths would pay $5,000 on their $20,000, leaving them with $15,000. The Smiths come up short. They’re $5,000 short of $20,000 they need to even survive. Assuming they can find a way to get by, they couldn’t handle any emergency. If the car breaks down, they’re done; there’s no way to get to work so they can pay the rent.

The Joneses would pay $25,000, leaving them with $75,000. Less survival spending, they have $55,000 to spend on a better life. The Joneses can afford a new car, a bigger house, and possibly even send their kids to college someday. They can even afford to put the elderly parent in nursing home, if necessary.

The Bushes have $750,000 left over after paying their flat tax. They have enough money to buy a mansion, send the kids to an elite private school and Yale, and have a live-in nurse for the grandparent, with funds left over.

Graduated Tax

Now, let’s look at a simple graduated tax of zero on income up to $20,000, 25 percent up to $100,000, and 50 percent on income above $100,000.

The Bushes would now pay $470,000 in taxes, leaving them $530,000 for ‘expenses’. Perhaps their house would have to be room or two smaller and the kids would have to go to the local elite prep school instead of Exeter. But, the difference in the Bushes’ lifestyle is unrecognizable.

The Joneses would actually pay a little less in taxes, only $20,000. Their lifestyle wouldn’t change at all.

The Smiths, on the other hand, would see a tremendous improvement in their lives. The difference between $20,000 and $15,000 is huge. They now have enough to live on and, with some wily money management, they could protect themselves against an emergency. Maybe the kids could even go to vocational school. And, just as an aside, their children would be more likely to be become tax payers than entitlement recipients.

A Graduated Tax is the only Fair Tax

No measure of fairness can be based on dollar values. Fairness can only be determined by outcome. Our tax system was originally designed so that each American would pay their fair share. Our current system of taxes has already become too flat and now, the rich want to shift even more of the tax burden to those who can’t handle it.

If we allow a flat tax, Karl Marx could turn out to be right … the workers would rise up and smite the leaders.

Thursday, November 15, 2007

He who asks the questions … answers the questions.

Libdrone and MadameX asked the question: What’s the biggest obstacle to electing the right presidential candidate? In this age of quick mass media, I believe it’s a lazy and sensationalistic press, eager to be led. Whoever frames an issue wins the debate. The following are a few examples of lazy, sensationalistic reporting.

The SCHIP issue was framed by the Whitehouse as medical care for children in families with incomes 200 percent higher than the poverty level. No media organisation has asked the right question; whether the poverty level is correctly calculated.

In a 1999 interview on CNN Al Gore said “during my service in the United States Congress, I took the initiative in creating the Internet,” explaining his sponsoring of a bill that provided funding for research that eventually became the internet. His opponents accused him of claiming to have invented the internet. Which story do you suppose the media ran with, the story requiring some research work, or the simple, sensational, and false story? Of course, the media reported, and continues to report, that Gore said he invented the internet, accusing him of being a serial exaggerator.

The easiest story for a lazy media is “here he goes again.” Democrats are supposed to effeminate and dishonest and Republicans are supposed the be tough and moral. Consequently, stories about republicans having affairs and stealing candy from babies get ignored because they don’t fit the mold. Stories about Democrats failing to tip a waitress or getting a hundred dollar haircut become the news feed of the day, month, or even year. The story about Rudy Giuliani fighting terrorists on Sept 11, 2001 is played and replayed every day. Never happened. Rudy gave speech after speech, but any hamster could have done that on “9/11.”

Every election cycle, the most thoughtful presidential candidate falls off the radar early in the process because the media ignores issues in favor of stories about personal habits. I almost feel sorry for Paul Tsongis, Joe Biden, Dick Lugar, and George H.W. Bush (Pre-Reagan incarnation, in 1980). Big media coverage went, instead, to Ross Perot who pushed our political debate into the gutter with stupid platitudes like “it doesn’t take a rocket scientist.” Ross …. obviously, it does.

Sunday, October 28, 2007

Neocon "Inconvenient Truth" of Bush and Gore Homes Full of Lies

I received an email, which has been whipping around the internet, showing pictures of George Bush’s modest, energy efficient, home in Crawford, Texas and Al Gore’s expansive, power gobbling, home in Tennessee. The basic premise of the email was true, but its creator just couldn’t keep from lying.

Al Gore’s home and business office uses a great deal of electricity. It recently ran a bill for electricity and natural gas of $2,400 in one month. Meanwhile Bush’s “home” is heated and cooled using a geothermal heat pump system. After this, the analysis and truth simply falls apart.

Fake photo of Al Gore's mansion
Fake photo of George Bush's 'home'

The email had two pictures, the top picture was Gore’s mansion and picture below it was Bush’s “home." Unfortunately, even these photographs were a sham.

Thru a simple search, I found real photos of Al Gore's home and business and George Bush's vaction house. The white house is Al Gore's home and office in Nashville. The ranch struture is George Bush's vacation house in Crawford.

Al Gore's real home and office

George Bush's real vacation house

Bush's entourage takes a stroll around the vacation house

The green house is 4,000 sqft? Not likely. And, notice the large electric air-cooled air conditioner next to it? The green house is actually the original house at the ranch and is only used as a guest house.

The ranch house is only one of several buildings at the Bush "complex." Notice what a lovely day it was when the inner group took a stroll around the ranch house?

Bush has never made this place his home. He had it designed and built, starting in 1998, when he was already living in the governor's mansion in Austin. This "home" is a vacation spot, that's all. This house is NOT the residence of the President of the United States, and it never has been.

Wikipedia says architect David Heymann was hired to design a limestone house for the ranch.
I want to stay in touch with real Americans," said the President to a crowd of Crawford residents shortly after the 2001 inaugural ceremonies. As the locals knew, the President and the First Lady had already put those plans in motion several years earlier by purchasing a spread in the heart of "real America" during his second term as governor of Texas. Flush with a $14.9-million profit from the sale of the Texas Rangers in 1998, the couple had set out in search of a retreat within easy driving distance of the Governor's Mansion in Austin. When the Bushes came across a 1,550-acre tract 20 miles west of Waco just outside the town of Crawford (population 701), they took a second look.

Gore's power use:

Al Gore's home does use a great deal of power, but why?

1. Nashville is fairly cold in the winter and very humid during the summer. A majority of the cost for air-conditioning in the east is dehumidifying, not cooling,

2. Being an international business, Gore's offices have a high computer cooling load, and

3. Gore occupies his home year-round.

Comparing a power bill of $2,400 for a 10,000 sqft office and home to the average single family home is comparing apples and oranges.

Bush's power use:

The email completely fails to address Bush's power use, but (having designed air conditioning systems for 15 years) we can make some simple inferences:

1. While hot, Crawford is not humid during the summer. If Bush's ranch were in the east, a geothermal heat pump would not be sufficient to keep it cool in the summer.

2. Geothermal heat pump systems use inefficient compressors to transfer heat between a building and a heat sink. The compressor is the major energy hog in a heat pump system. All Bush is saving is the cost of running a boiler or cooling tower.

3. Bush is only at the house for a week or two at a time; not even enough time to run up a representative monthly electricity bill. How much electricity does he and his entourage use while at the Crawford ranch?

4. Why is there no mention of the power consumption of the green house?

Despite the lies and misinformation, a more interesting question remains: By allowing his architect to design an eco-friendly vacation house, at great cost, isn't the President agreeing with the Nobel Prize winner that environmentalism makes for good economics?

Text of the email:

Here's some interesting information.

You can check this out on under "The Story of Two Houses"

House #1 A 20 room mansion ( not including 8 bathrooms ) heated by
natural gas. Add on a pool ( and a pool house) and a separate guest
house, all heated by gas. In one month this residence consumes more
energy than the average American household does in a year. The
average bill for electricity and natural gas runs over $2400. In
natural gas alone, this property consumes more than 20 times the
national average for an American home. This house is not situated
in a Northern or Midwestern "snow belt" area. It's in the South.

House #2 Designed by an architecture professor at a
leading national university. This house incorporates every
"green" feature current home construction can provide. The house is
4,000 square feet ( 4 bedrooms ) and is nestled on a high prairie in the
American southwest. A central closet in the house holds geothermal
heat-pumps drawing ground water through pipes sunk 300 feet into the
ground. The water (usually 67 degrees F. ) heats the house in the winter
and cools it in the summer. The system uses no fossil fuels such as oil or
natural gas and it consumes one-quarter electricity required for a
conventional heating/cooling system. Rainwater from the roof is collected
and funneled into a 25,000 gallon underground cistern. Wastewater from
showers, sinks and toilets goes into underground purifying tanks and then
into the cistern. The collected water then irrigates the land
surrounding the house. Surrounding flowers and shrubs native to the area
enable the property to blend into the surrounding rural landscape.


HOUSE #1 is outside of Nashville, Tennessee; it is the abode of
the "environmentalist" Al Gore.

HOUSE #2 is on a ranch near Crawford,
Texas; it is the residence the of the President of the United States,
George W. Bush.

An "inconvenient truth".

Wednesday, August 29, 2007

Katrina Debacle Entirely Homeland Security’s Fault

The debacle of the Hurricane Katrina was entirely the fault of the Department of Homeland Security. I’m not referring to the flooding of New Orleans, but to the lack of coordination and planning prior to, during, and following the disaster.

DHS was charged with helping states and cities plan for disasters and developing coordination between federal, state, and local agencies. It failed. No coordination existed in 2005 and no coordination is in place now.

Although the State and the City failed in their own planning, it was still DHS’ responsibility to make sure that the State and City had a plan. Tom Ridge and Michael Chertoff did nothing to assure the states and cities of the gulf coast had planned for such disasters.

The true Rovian purpose to creating the behemoth that is DHS, after the President had originally rejected it, was to deprive almost 90,000 federal employees of their right to organize. Only a small oversight body was required to coordinate all of the departments that DHS absorbed, but instead, a monster agency was created where employees have no worker’s protections.

Due to the White House’s misplaced priorities, DHS is a failure. DHS should be turned into an oversight agency and power should be returned to the diverse agencies from which it was taken.

Tuesday, August 28, 2007

Children for Sale on Craigslist

I can see buying arts and crafts, sight unseen, on craiglist, but I think I would need a trial period before buying a baby.

Perhaps craigslist should adjust the wording on its site.

Any comments?

Wednesday, August 22, 2007

Bush Iraq Comparisons to Past Wars Are Nonsense

George Bush compared the conflict in Iraq to past wars today. His comparisons were utter nonsense.

First, he made a comparison to the sneak attack on Pearl Harbor. Following Pearl Harbor, however, we went to war with the nation that actually attacked us, not some random country. And, we had a plan for occupying the country after the war ended. Four years after the end of the war in Iraq, we still don’t have a clue.

Then, he compared a pullout from Iraq with the pullout from Vietnam, citing the re-education camps and the “killing fields” that took place after we left Vietnam. The re-education camps and the killing fields were not even in Vietnam. They were phenomena that took place in Cambodia. Its possible that we even aided the Khmer Rouge takeover with Richard Nixon’s secret bombing of the country. And, do ya know who rescued the Cambodian people from the killing fields? … The Viet Cong; the people we were fighting in Vietnam. Cambodia is now a democracy, thanks to France and the United Nations.

Finally, Bush said that because we met our commitments in Korea, South Korea is a democracy. George … You seem to have failed to notice that South Korea has been in a state of war for over fifty years now.

Perhaps, the next time you try to cite lessons from history, you should put down the Bible and learn something about history first.

Sunday, August 12, 2007

A Simple Solution to the Gay Marriage Debate

The real question in the gay marriage debate is not whether the government should allow gay marriage, but whether the government should be in the marriage business at all.

Marriage is a sacred religious sacrament. Only the church should be allowed to determine who can and cannot be married. The principle of ‘separation of church and state’ forbids the state from commanding the church and forbids the church from using the state to enforce its rules.

Currently, state marriage laws are written to enforce the Church’s rules. Muslims and some Mormon sects allow for polygamist marriage, but such marriages are banned by the government. The ban on marriages between same-sex couples is just another example of the state being used by the church.

The government does, however, have a compelling interest in protecting a couple’s children and resolving property distribution issues at the end of the relationship.

The government could simply get out of the marriage business. The state should not issue marriage licenses, but civil-union licenses to all couples. The civil-union license must give couples the same rights and responsibilities, regardless of who they are. Marriage should only be sanctified by a church. The church can refuse to marry anyone they please without denying anyone their civil rights.

Take the Poll.

Monday, August 06, 2007

Sorry Rudy, But America is Tired of Mindless Posturing

[ok, due to 1984-like posturing, I’m getting directly political this time]

Since September 11, 2001, Rudy Giuliani has shown himself to be a master of political posturing. He has shown he can talk tough about real and imagined enemies, but he has nothing useful to add to the conversation.

Rudy is widely considered to be a hero for his handling of “9/11.” What did he do? Nothing more than a hamster could have done. Basically, he got on camera and said … this sucks, we’ll take care of the victims, and we’ll go get the bastards who did this. Any hamster could have done this. By the way, the bastards are still alive and well, thanks to President Hamster.

Now, Rudy is railing against Democrats for not adopting his worthless phrase “Islamic Terrorists.” This term has no real meaning. Rudy’s real purpose, here, is to blindly connect all Muslims to terrorism; to create an easily identifiable enemy. A refusal to use the phrase Islamic Terrorists is not political correctness, but an attempt to focus on the real issues facing America and the world.

Islam is, at its core, a peace loving religion. The principle of Jihad only allows Muslims to defend themselves, just as Americans would defend our homeland. Most Muslims are as aghast at terrorists, acting in the name of Islam, as we are.

If Rudy is really interested in dealing with the issue of terrorism, he needs to stop acting as a shill. He needs to talk about the factors that create terrorism: poverty, hopelessness, and humiliation. Yes, Bin Laden was super wealthy, but he exploited the poverty and hopelessness of many of the world’s Muslims. Without such social and economic conditions, he would have been on his own and couldn’t have led any attacks against American interests.

Rudy … Words matter. Posturing for political gain only leads to failure.

Saturday, August 04, 2007

Globalisation . . . The Way It’s Meant to Be

Fortune Magazine is reporting on a globalisation success story. A small Ohio town has opened a call center for the Tata Group.

Yes, a call center; one of those facilities American companies ship to India, where everyone speaks with a Bangalore accent and seems to be named John. This time, however, Americans are answering phones for while the owner of the call center is headquartered in Mumbai, India.

The Indian Tata Group has discovered some distinct advantages to hiring Americans, even when they more cost more. The Tata Group has found American consumers can have a more enjoyable phone experience when speaking with someone more culturally fluent and without the Indian accent.

This is the idea. Globalisation that works both ways, that uses the advantages offered in each location will increase economic growth worldwide, raising all boats. Lets keep it up.

Wednesday, August 01, 2007

The Ethanol Food Crisis

E-85 ethanol is being promoted as the solution to our energy problems. It could be, if you’re willing to sacrifice the poor.

The industrial revolution occurred partly because, for the first time in human history, we didn’t get energy and nutrition from the same sources. Now, proposals for extensive use of ethanol from corn and sugar cane are returning energy and nutrition to the same market. Adding the high demand for energy to the already high demand for nutrition is driving up food prices at an alarming rate.

In some countries the poor are already suffering from ethanol. In southern Mexico, some villages rely on corn tortillas. The price of corn has already skyrocketed, putting their nutritional source out of reach for some. And, we’re just at the beginning of ethanol production. To meet the proposed E-85 goals, many will go hungry.

The solution to our energy problems is not ethanol, it’s a little bit of every solution proposed: solar, wind, geothermal, wave, etc.

Monday, July 30, 2007

That’s Just Not a Human Right

You have basic human rights, but they may not be what you think. We Americans think our basic human rights are rights to free speech, to and from religion, to assemble, and freedom of the press. Although critically important, these are not human rights. They are political rights.

Our basic human rights are to nutrition, shelter, education, and healthcare.

Over the years, we’ve accused China of failing to provide basic human rights, to which they responded that United States failed to provide basic human rights. China cites the number of people in the U.S. without medical insurance and the number of homeless. We cite China’s lack of freedoms of speech and religion.

Both countries are right. They’re just arguing at cross points. In the end, it may be that China is better at providing basic human rights and the U.S. is better at providing basic political rights.

Before anyone gets the wrong point . . . political rights are critical. Without political rights it is nearly impossible to obtain basic human rights. We order to have a rational discussion we just need to differentiate.

Sunday, July 29, 2007

Illegal Immigration . . . What’s the real issue?

In the wake of a federal court throwing out Hazleton, Pennsylvania’s anti-immigration laws, I think we need to step back and reexamine the issue of illegal immigration.

Fences and guns won’t stop people from immigrating to find work, whether they do it legally or illegally. Doesn’t a father who has children that are malnourished, under educated, poorly sheltered, or lacking in medical care have a moral duty to do something to help his family? And, following logically, doesn’t that father’s children have a moral obligation to follow him, if he demands it?

The real issue isn’t crossing borders illegally. It’s rational choice. Most people are tied to where they grow up. Most of us would prefer to stay in the community where we were raised. But, if staying is not a rational choice, we have to leave.

The only way we can solve illegal immigration is by making the villages and cities in other countries a rational choice. NAFTA was supposed to do the trick, but it didn’t provide for minimum wages or environmental controls. If children can be fed, sheltered, educated, and provided with health care, to a reasonable degree, most parents would choose to remain where they are.

How do we use this global economy we’re developing to make villages a generationally rational choice?

Saturday, July 28, 2007

Capitalism Needs Help

The United States economy is alive and well, but capitalism isn’t. According to the theories of capitalism, an economy grows through competition. We are currently in a prolonged period of low competition. So, worldwide economic growth is slow.

Competition requires a huge number of firms competing in each market and ease of entry for new firms. Of course, ease of entry must also mean ease of leaving the market. Right now, however, almost every market is dominated by a few gargantuan firms.

A solid capitalist system protects us all. A central control economy, like the former Soviet Union, fails due to a lack of decision makers. It only takes one man to make a bad decision and the market can fail. The beauty of a capitalist system is the great number of decision makers. Even if some bad decisions are made, enough entrepreneurs will make good decisions to protect the market.

Three steps could promote the wide open markets envisioned be Adam Smith. The key is to make small firms competitive with huge firms. Right now, a large company has an advantage in research and development and providing health care and pensions to their employees.

The first step is national health care and national pensions. National healthcare and pensions will allow smaller companies to compete with large firms in providing basic benefits to employees. If the Government were to contract out healthcare and pensions to a multitude of firms, with mandatory goals, capitalistic innovation could be maintained. Plus, foreign firms could no longer hide behind national healthcare and pension systems in their home countries to undercut American companies.

The second step would be graduating the corporate tax code. A proper graduation of the corporate tax code would promote small business, and thus, greater competition. A nationally backed foreign firm could be taxed based on the size of the government funding it. Foreign firms, selling in the United States, would have to be smaller companies too.

Third, to account for expensive research and development, small businesses should be allowed to create R&D consortiums. Such R&D consortiums need to be protected from antitrust laws. Generally, beyond promoting small business, antitrust laws must be strictly enforced, however.

We believe small business is the engine of our economy, so why don’t we act like it? Properly configured and aided, a system of small business competition and innovation will propel our economy into the next age.

Wednesday, July 25, 2007

The War In Iraq is Over !

Yep, the War is over, has been for four years. When President Bush stood on the deck of the aircraft carrier, in 2003, and told us the War was over, he was right.

The Iraqi military had been defeated. Saddam Hussein had been overthrown. The War was at an end. That day, the Occupation of Iraq began. We’ve been occupying the country for over four years now, and it hasn’t gone well.

The American military and its troops are equipped and trained for blitzkrieg, not occupation. The war in Granada was a blitzkrieg. So was the war in Panama. During the Kuwait War, the United States swept in and forced out the vaunted Iraqi military in a matter of days. Having met its United Nations mandate, the U.S. pulled out.

Unfortunately, we still have not equipped or trained our military for an occupation. We cannot effectively hold territory and win hearts and minds. Our troops are still great at quick and forceful action, but cannot win hearts and minds. We need to redevelop some of our forces for occupation missions.

To implement a plan in Iraq, it is critical that we call a spade a spade. Words are important. If our Government, military, and the public start to call the operation in Iraq an Occupation, rather than a War, we could finally have an operation in Iraq that makes sense and could finally come to an end.

Tuesday, July 24, 2007

Minimum Wage Increases Today, but . . .

Good news … The Federal minimum wage is increasing today, for the first time in 10 years. Bad news … The Federal minimum wage still does not even come close to enough money to raise a family.

The Federal minimum wage increases today, from $5.15 per hour to $5.85 per hour. Based on the standard minimum wage work week of 35 hours, someone working 52 weeks a year would gross $10,647. Rarely will a minimum wage worker receive benefits. A two earner family, both working minimum wage jobs would earn $21,294 in gross earnings. Of course, FICA must be paid from all wages, reducing the couple’s net earnings to about $19,700, assuming no payment of income tax.

Unfortunately, the poverty line for a family of four in 2007 is $20,650 for the lower 48 states. Federal Register, Vol. 72, No. 15, January 24, 2007, pp. 3147–3148. So, two parents earning minimum wage, with two children, must still need to rely on additional government support programs.

Why, you may ask, is the Federal poverty line apparently wrong? The calculation is no longer accurate. In 1963, Mollie Orshansky, of the Social Security Administration, developed a simple formula to calculate the minimum income needed for a family: The cost of the U.S. Dept. of Agriculture economy food plan for a family multiplied by three. At the time, food was about one third of a family’s spending.

Orshansky’s formula may have been fairly accurate in 1963, but it doesn’t work in 2007. Due to increases in the cost of housing, health care, fuel, etc., food is now much less than one third of family’s expenses. If food accounts for as much as 20 percent of a family’s spending, the poverty line for a family of four would be $34,416. (Based on the Government’s poverty line for 2007). The poverty line is 40 percent too low.

By 2009, the minimum wage will be $7.25 per hour. The two minimum wage earner family would be grossing $26,390 or netting about $24,400, still well below a realistic poverty threshold.

The question remains . . . Who benefits from government poverty programs? Aren’t the government support assistance programs really support to employers who underpay their employees?

Sunday, July 15, 2007

High Middle Class Standard of Living Causes Wage Stagnation

The American middle class enjoyed a significant improvement in its standard of living during the 1980s and 90s. But, it was too much.

There has always been an acceptable standard of living for the middle class. A middle class family should be barely able to feed, clothe, and educate itself, as well as providing for shelter and medical care. Whenever the middle class standard of living gets higher than this acceptable standard, wages stagnate until the middle class is brought back to its proper standard of living.

There were two primary reasons for a rising standard of living; the computer age and the rise of the two earner family. Now two earner families are necesary. Due to two incomes, middle class parents were able to add luxuries, such as travel and technology, to the acceptable standard of living. Wage payers have never been willing to provide their workers with luxuries.

So, wage payers now keep wage increases below inflation. When wages and inflation balance in the acceptable middle class standard of living again, wages will finally start increasing. Hopefully, the middle class will not slip too far below the acceptable standard of living.

Sunday, July 08, 2007

Scooter Libby Question

I have a simple question about Scooter Libby's commutation: Tony Snow said Libby will have a hard time making a living as a lawyer due to his felony conviction. This is a man who was Chief of Staff to the Vice President of the United States. He's a lobbyist's dream.

Does Snow really believe Libby ever had any intention to return to arguing cases in court after leaving the Whitehouse?