In the financial world there is a classification often used by the Securities and Exchange Commission called a "sophisticated investor." It's used to differentiate between the guy on the street who may not understand the risks involved in a particular class of securities from an experienced investor who does, or at least should. So, for instance, Warren Buffet or a PhD in Finance can be sold these securities because they presumably understand the risk, while a short order cook making his first foray into market could not be. That term came to mind during the fiasco that is the Obama cabinet appointments.
Three of Obama's high profile picks were suddenly found to be, or have been tax deficient. All three, in my estimation would qualify as sophisticated taxpayers. Tom Daschle, the former Senate majority leader apparently filed amended returns as soon as he was offered the job to head Health and Human Services. The original story was that he had not declared the use of a car (limousine) and driver that had hauled him around Washington DC the past 3 years. (You mean he didn't go back to live in South Dakota?) At first glance this seems plausible even to those who know that it should be considered income. It was just an oversight. But after withdrawing his name from contention, the story started to add a few details. The first tip was that the back taxes amounted to $120,000 plus $11,000 in interest. The problem with that number is that it doesn't match up. If we were to assume he's at a marginal rate of 35%, that would make the value of the car and driver around $350,000. I don't think so, even if they gave him the limo. Then it came out that part of the liability came from consulting fees he received and failed to declare as income, and that he "took more in charitable deductions than he should have." Which sounds like he fabricated them. I think in most peoples view, those are both more aggressive actions that would constitute tax evasion. But wait, there's more.
His pick for the newly created productivity czar was one Nancy Killeher. She had worked for the huge international consulting firm, McKinsey & Co. While they are not CPA's, their expertise is in finance and budgeting. What little is out there on this story is total bullshit. It seems that as soon as she was named, the AP did a little digging and discovered that she had a tax lien filed against her house for non-payment of workers comp insurance for a domestic employee. The tax lien was filed in 2005 and was paid off 5 months later. Taking that information at face value, I cannot believe it is at the heart of her withdrawal. A lien of less than $950 is filed against her house 4 years ago, and she paid it off long before she got the nomination. What's the big deal? Obviously this was not about that particular issue, and Obama's team isn't talking. We can only hope that the real reason comes out, but that's doubtful. I can't see anybody pursuing it on a nominee who withdrew. We'll see. But wait there's more!
Timothy Geither was the head of the Federal Reserve Bank of New York when Obama picked him for Treasury Secretary. But he had previously worked for the International Monetary Fund. But he was apparently paid as a contract employee for those 5 years and not as an employee. That meant he got a 1099 instead of a W2 and would have been required to pay self employment taxes of around 15%. It is absolutely impossible that he did not understand what his tax situation or status was. In fact, the IMF, well aware of this, would "gross up" his pay each year. That is, they gave him an additional bonus that equaled that 15% and it was for the express purpose of providing him with the cash with which to pay those self employment taxes. For all 5 years, he took the supplemental tax bonus and pocketed it, never paying any self employment tax. Furthermore, when he finally got caught by the IRS at the end of the 5 years, he only paid the tax on the last three because the statute of limitations had run out on the other two. He also tried to write off his son's summer camp as a business expense. It was only after getting the nomination for Treasury that he went and paid off those years where the statutes had run out.
But what really makes this whole thing stink is that Geither who by any measure was far and away the worst offender with the least of a defense, particularly ignorance, is the one who got confirmed while the others hastily withdrew their nominations. We may never know what it is, but there is FAR more to this story than we know now.
Wednesday, February 4, 2009
Monday, December 29, 2008
The Kennedy Mystique
I can’t believe that New York Governor David Patterson will actually appoint Caroline Kennedy to Hillary Clinton’s senate seat, but I thought I’d better write about it while it’s still a possibility. I have to believe that after reading her interviews in the New York papers that he wouldn’t dare, but hey, I’m the guy who said Hillary would never be appointed Secretary of State.
The interviews were nothing short of atrocious. Here’s a short example of her style and rhythm:
DH: Why is it that you apparently did not give Senator Clinton any kind of advance warning that you’d be coming out for Senator Obama?
CK: Um, I’m not going to talk about that particular process, but —
DH: Why’s that?
CK: Because those conversations that I have had and had during that time are not something that I think is relevant right now.
NC: How come it isn’t relevant? It kind of goes to your relationship with the person that you’re trying to succeed in the Senate.
CK: I think this is about the future, and, um, you know, that’s what I want to talk about, which is, what’s going on in our state, you know, why I would be the best person to help deliver for New York. We’re facing, you know, an economic crisis, the paper this morning said there’s, you know, five billion dollars of construction projects which just stopped, you know, that’s, you know — conversations a year ago, that’s — beside that, I don’t, as I said, I have conversations with a lot of people, and those are confidential.
Well there you go. For those of you counting, that was six “you knows” in two sentences. The rest of the interview is simply vapid. It’s hard to believe she is a lawyer. In fact, I suspect that she is a lawyer in name only. And by that I mean that she has never practiced law in any real sense, although she does have a law degree. From what I can see she has spent her life on various boards of various charitable organizations and a volunteer job (for $1 per year) for the NYC Dept of Education, where it has been reported, she never showed up. She also didn’t show up to vote according to records, and hasn’t given money to any candidates to speak of. When she has given support, her intentions remain murky. For instance, she gave money to Hillary Clinton for her senate run as well as her presidential campaign. She then turned around and publicly endorsed her opponent, Barrack Obama. (HRC then gave back $2,300 of her contribution) That was generally seen as the death blow to HRC. And when asked about her voting intentions she declared that even though she had worked for the campaign of New York mayor Michael Bloomberg (an Independent) she would be voting for the Democrat candidate. So that clears that up.
I hate to get personal about this, but I suspect that, like her brother (couldn’t pass the bar); she’s not the sharpest knife in the drawer. Whenever they talk about her pedigree, it’s often overlooked that her mother was something of an airhead. And her father’s singular intellectual accomplishment was winning the Pulitzer Prize by submitting Profiles in Courage for publication (Ted Sorenson wrote it.) Don’t get me wrong. JFK was a rock ribbed cold warrior, tax cutting conservative who was gunned down by a radical leftist. That made sense at the time, but then Democrats turned his legacy (myth) into a civil rights visionary who was cut down by the “forces of intolerance.” He wasn’t. He was dragged, kicking and screaming into the civil rights debate. Memoirs and first hand accounts have shown that he was deeply suspicious and distrustful of Martin Luther King. They really had no idea where he (MLK) was going to end up and therefore were concerned about appearing to support him. Civil rights did not get serious presidential support until LBJ. Anyway, Caroline Kennedy has many people pulling for her and they are not deterred by the comparisons to Sarah Palin on qualifications. The wacko Dems are still saying that getting elected mayor of Wasilla and then governor of Alaska just can’t compare to holding down a no show, $1 a year volunteer job with the NY public schools. At least not if your last name is Schlossberg, um I mean, you know, Kennedy.
The interviews were nothing short of atrocious. Here’s a short example of her style and rhythm:
DH: Why is it that you apparently did not give Senator Clinton any kind of advance warning that you’d be coming out for Senator Obama?
CK: Um, I’m not going to talk about that particular process, but —
DH: Why’s that?
CK: Because those conversations that I have had and had during that time are not something that I think is relevant right now.
NC: How come it isn’t relevant? It kind of goes to your relationship with the person that you’re trying to succeed in the Senate.
CK: I think this is about the future, and, um, you know, that’s what I want to talk about, which is, what’s going on in our state, you know, why I would be the best person to help deliver for New York. We’re facing, you know, an economic crisis, the paper this morning said there’s, you know, five billion dollars of construction projects which just stopped, you know, that’s, you know — conversations a year ago, that’s — beside that, I don’t, as I said, I have conversations with a lot of people, and those are confidential.
Well there you go. For those of you counting, that was six “you knows” in two sentences. The rest of the interview is simply vapid. It’s hard to believe she is a lawyer. In fact, I suspect that she is a lawyer in name only. And by that I mean that she has never practiced law in any real sense, although she does have a law degree. From what I can see she has spent her life on various boards of various charitable organizations and a volunteer job (for $1 per year) for the NYC Dept of Education, where it has been reported, she never showed up. She also didn’t show up to vote according to records, and hasn’t given money to any candidates to speak of. When she has given support, her intentions remain murky. For instance, she gave money to Hillary Clinton for her senate run as well as her presidential campaign. She then turned around and publicly endorsed her opponent, Barrack Obama. (HRC then gave back $2,300 of her contribution) That was generally seen as the death blow to HRC. And when asked about her voting intentions she declared that even though she had worked for the campaign of New York mayor Michael Bloomberg (an Independent) she would be voting for the Democrat candidate. So that clears that up.
I hate to get personal about this, but I suspect that, like her brother (couldn’t pass the bar); she’s not the sharpest knife in the drawer. Whenever they talk about her pedigree, it’s often overlooked that her mother was something of an airhead. And her father’s singular intellectual accomplishment was winning the Pulitzer Prize by submitting Profiles in Courage for publication (Ted Sorenson wrote it.) Don’t get me wrong. JFK was a rock ribbed cold warrior, tax cutting conservative who was gunned down by a radical leftist. That made sense at the time, but then Democrats turned his legacy (myth) into a civil rights visionary who was cut down by the “forces of intolerance.” He wasn’t. He was dragged, kicking and screaming into the civil rights debate. Memoirs and first hand accounts have shown that he was deeply suspicious and distrustful of Martin Luther King. They really had no idea where he (MLK) was going to end up and therefore were concerned about appearing to support him. Civil rights did not get serious presidential support until LBJ. Anyway, Caroline Kennedy has many people pulling for her and they are not deterred by the comparisons to Sarah Palin on qualifications. The wacko Dems are still saying that getting elected mayor of Wasilla and then governor of Alaska just can’t compare to holding down a no show, $1 a year volunteer job with the NY public schools. At least not if your last name is Schlossberg, um I mean, you know, Kennedy.
Tuesday, November 18, 2008
The Disappointment Parade
I wrote recently that Obama was elected by a coalition of interests who are now in line to be disappointed. There were many reasons that various groups voted for Obama, and I contend, that few of them had to do with his policy positions. The sheer variety of reasons insures that some voters will be disappointed, I said. So it shouldn’t have come to me as a surprise that an Obama voter woke up today to news that would disappoint him. What surprised me was who the first disappointed voter was: me. That’s right, I voted for Obama. To be sure, it was the primary when I did so, but my reasoning was valid. I was not voting to cynically nominate the Democrat I thought easiest to beat, although I knew others who did just that. No, I voted for the very specific intent to make Obama the nominee because I thought the Democrat pick was likely to win. And I didn’t want it to be Hillary Clinton. So imagine my thoughts when I heard that the anointed one has picked Hillary for his Secretary of State. She is truly like the movie monster that will not die.
I had been saying for days that this was all a rouse. Her name being floated for Sec. of State was nothing more than Obama paying her off by elevating her profile in the international arena. There was no way this would actually happen. Well slap my ass and call me Sally.
Well I may have been the first, but I wasn’t the only one. During the campaign I must have read a dozen columns by pundits who harped on the need for the new president to “sell” shared sacrifice to the American people. He would have to lead by being straight with them. Bush had never made it clear that sacrifices had to be made. The new guy would have to do that. It would be like the myth of FDR “leading us out of the depression” (He did nothing of the sort.) Americans would pull together and tough it out, sharing the burden, whatever that may be. But apparently letting GM go bankrupt is more pain than he is willing to face.
And make no mistake; bailing out GM is very different than saving the financial services industry. The automobile industry is not in trouble. The American automobile industry isn’t even in trouble. Plants in Alabama are humming along spitting out cars that are selling just fine. They just happen to be Hondas and Mercedes Benz. This is a case where the bad moves by GM are well documented and clearly attributable to the company itself. They do not deserve to be saved. And if they are, it will mean that the guys who run it will make even worse decisions in the future because they will know that the government will be there to save them when they do. I guess we’re just going to sacrifice elsewhere.
I had been saying for days that this was all a rouse. Her name being floated for Sec. of State was nothing more than Obama paying her off by elevating her profile in the international arena. There was no way this would actually happen. Well slap my ass and call me Sally.
Well I may have been the first, but I wasn’t the only one. During the campaign I must have read a dozen columns by pundits who harped on the need for the new president to “sell” shared sacrifice to the American people. He would have to lead by being straight with them. Bush had never made it clear that sacrifices had to be made. The new guy would have to do that. It would be like the myth of FDR “leading us out of the depression” (He did nothing of the sort.) Americans would pull together and tough it out, sharing the burden, whatever that may be. But apparently letting GM go bankrupt is more pain than he is willing to face.
And make no mistake; bailing out GM is very different than saving the financial services industry. The automobile industry is not in trouble. The American automobile industry isn’t even in trouble. Plants in Alabama are humming along spitting out cars that are selling just fine. They just happen to be Hondas and Mercedes Benz. This is a case where the bad moves by GM are well documented and clearly attributable to the company itself. They do not deserve to be saved. And if they are, it will mean that the guys who run it will make even worse decisions in the future because they will know that the government will be there to save them when they do. I guess we’re just going to sacrifice elsewhere.
Monday, November 10, 2008
Original Sin, Reconciliation and Absolution
It finally came to me. I last wrote about how I didn’t think all the Obama voters were on the same page. They voted Obama for a variety of reasons, but I hadn’t been able to pinpoint the reason so many folks who considered themselves “conservative,” had voted for him. But thinking about the “feel good” atmosphere that seemed so obvious to me, helped form my hypothesis. Voting for Obama was reconciliation that removed the Original sin of slavery, and will lead to absolution for historic discrimination against blacks. A vote for Obama said “I am not a racist and America is not a racist country. Now you have proof.”
Towards the end of the campaign, the one thing that liberal pundits kept pushing, were the quotes from conservative pundits who had switched over to Obama or were at least critical of McCain. David Brook’s line that Palin was a “cancer on the GOP” got more circulation than anything else he has written since he joined the New York Times. You’d be hard pressed to find a liberal who didn’t quote it in his column. Most people didn’t even know who Christopher Buckley was before he endorsed Obama. But within days everybody knew he was the son of recently deceased conservative icon, William F. Buckley. They heard all about his voting for Obama, but I doubt they heard his response when asked if he feared Obama’s liberal agenda. I don’t have the exact quote, but he basically said he didn’t think that Obama would actually be able to implement everything he wanted because cooler heads would prevail when he started getting advice from folks who knew better. That, he felt, made it safe to vote for him. Considering the people most likely to end up in his cabinet, I take no comfort from that notion. Nationalized health care, no new drilling, a hasty exit from Iraq and redistribution of wealth are what his true believers expect for him to deliver. And something tells me he does not wish to disappoint them right off the bat.
I heard this morning that Obama plans to start his administration by immediately reversing many of the executive orders that Bush had signed. Not surprisingly, one of them was to expand the stem cell lines that are eligible for federal research dollars. That won’t strike any chords. Nobody will come crashing to Earth on that one. But the next one listed was to kill any expanded off shore drilling. You may recall that during the campaign, even Obama had to say he supported that. More than two thirds of Americans did and he wasn’t about to hand an issue like that to McCain. Even the Democrat congress lifted their ban because of voter support. So would this reversal be called “lying,” or will some softer sounding term be put forth? At the very least sentences will be parsed. (“I only said I was for SOME expanded drilling.”)
It’s going to be a while before reality steps in for the “conservatives” who opted for absolution on slavery. They are currently enjoying that renewed feeling one gets from going to confession.
Towards the end of the campaign, the one thing that liberal pundits kept pushing, were the quotes from conservative pundits who had switched over to Obama or were at least critical of McCain. David Brook’s line that Palin was a “cancer on the GOP” got more circulation than anything else he has written since he joined the New York Times. You’d be hard pressed to find a liberal who didn’t quote it in his column. Most people didn’t even know who Christopher Buckley was before he endorsed Obama. But within days everybody knew he was the son of recently deceased conservative icon, William F. Buckley. They heard all about his voting for Obama, but I doubt they heard his response when asked if he feared Obama’s liberal agenda. I don’t have the exact quote, but he basically said he didn’t think that Obama would actually be able to implement everything he wanted because cooler heads would prevail when he started getting advice from folks who knew better. That, he felt, made it safe to vote for him. Considering the people most likely to end up in his cabinet, I take no comfort from that notion. Nationalized health care, no new drilling, a hasty exit from Iraq and redistribution of wealth are what his true believers expect for him to deliver. And something tells me he does not wish to disappoint them right off the bat.
I heard this morning that Obama plans to start his administration by immediately reversing many of the executive orders that Bush had signed. Not surprisingly, one of them was to expand the stem cell lines that are eligible for federal research dollars. That won’t strike any chords. Nobody will come crashing to Earth on that one. But the next one listed was to kill any expanded off shore drilling. You may recall that during the campaign, even Obama had to say he supported that. More than two thirds of Americans did and he wasn’t about to hand an issue like that to McCain. Even the Democrat congress lifted their ban because of voter support. So would this reversal be called “lying,” or will some softer sounding term be put forth? At the very least sentences will be parsed. (“I only said I was for SOME expanded drilling.”)
It’s going to be a while before reality steps in for the “conservatives” who opted for absolution on slavery. They are currently enjoying that renewed feeling one gets from going to confession.
Friday, November 7, 2008
Feelin' All Right
OK, I went zero for 3 on my political predictions. I think I'll refrain from that in the future. I'm not very good at prognosticating, I think I do better at seeing what has happened. Which brings me to this writing.
It dawned on me today what it was that I had witnessed in the elections just ended. But I believe that what it really came down to was that voting for Obama was the feel-good vote of the season. By that, I mean that the act of voting itself, made many people feel really good about themselves. The reasons for feeling good were many and varied. There were the true believers of liberalism, of course. But there are just too many stories out there about certain demographic groups level of support to think that they were all in agreement about motives. For instance, while both black and gay voters went overwhelmingly for Obama, it seems that the huge black turnout, in California, also helped push the gay marriage ban over the top, much to the consternation of gays, their presumed ally. My guess is that when they cast their Obama votes, each group left the polls feeling pretty good about what they had just done, but for different reasons. There also was a 1968 feeling coming from the young people. Among students, I think one would have to have been a brave, true believer to have shown support for McCain to their peers. There was a sense that Iraq was their Viet Nam and they were going to make the revolution succeed, this time. Hispanics backed Obama 2 to 1, although McCain had been been on their side during the immigration bill debates.
I don't want this to sound like sour grapes. And I'm certainly not going to say what liberals did in 2000 and 2004 (That the American people are basically stupid), but I refuse to believe that this was about liberal policy. A very embarrassing audio tape was circulated around the Internet a few weeks before the election. Some smart ass radio DJs sent a guy in to Harlem where he interviewed random people about why they were voting for Obama. To be honest, it was a set-up on several levels, but I still think it was telling. They'd ask the person to choose between several choices of policy positions that they felt mattered most as the reason they were voting for Obama. But the choices were all McCain's positions. So they'd ask something like, "Which do think is more important, Obama's desire to stay the course in Iraq or his pledge to appoint pro-life judges?" Often, the answer was "both," or they'd make comments like "I think it's more important that he stay the course in Iraq."
I just don't think they were all on the same page, which will make for an interesting clash of expectations down the road.
It dawned on me today what it was that I had witnessed in the elections just ended. But I believe that what it really came down to was that voting for Obama was the feel-good vote of the season. By that, I mean that the act of voting itself, made many people feel really good about themselves. The reasons for feeling good were many and varied. There were the true believers of liberalism, of course. But there are just too many stories out there about certain demographic groups level of support to think that they were all in agreement about motives. For instance, while both black and gay voters went overwhelmingly for Obama, it seems that the huge black turnout, in California, also helped push the gay marriage ban over the top, much to the consternation of gays, their presumed ally. My guess is that when they cast their Obama votes, each group left the polls feeling pretty good about what they had just done, but for different reasons. There also was a 1968 feeling coming from the young people. Among students, I think one would have to have been a brave, true believer to have shown support for McCain to their peers. There was a sense that Iraq was their Viet Nam and they were going to make the revolution succeed, this time. Hispanics backed Obama 2 to 1, although McCain had been been on their side during the immigration bill debates.
I don't want this to sound like sour grapes. And I'm certainly not going to say what liberals did in 2000 and 2004 (That the American people are basically stupid), but I refuse to believe that this was about liberal policy. A very embarrassing audio tape was circulated around the Internet a few weeks before the election. Some smart ass radio DJs sent a guy in to Harlem where he interviewed random people about why they were voting for Obama. To be honest, it was a set-up on several levels, but I still think it was telling. They'd ask the person to choose between several choices of policy positions that they felt mattered most as the reason they were voting for Obama. But the choices were all McCain's positions. So they'd ask something like, "Which do think is more important, Obama's desire to stay the course in Iraq or his pledge to appoint pro-life judges?" Often, the answer was "both," or they'd make comments like "I think it's more important that he stay the course in Iraq."
I just don't think they were all on the same page, which will make for an interesting clash of expectations down the road.
Wednesday, November 5, 2008
Friday, October 31, 2008
All Hung Up
Hanging American presidents in effigy has been a time honored tradition for decades, if not centuries. George W. Bush probably holds the record for most executions in effigy, but maybe LBJ could give him a run for his money considering the volume of Viet Nam protests. Certainly nobody ever got too worked up about it. Usually, if it was domestic and particularly threatening, the Secret Service would make a perfunctory house call to make sure people understood that this could be seen as a threat and they needed to tread carefully.
But the candidacy of Barrack Obama has put this practice in an uncomfortable spotlight. A fellow from West Hollywood put up a Halloween display that featured Sarah Palin hanging from a noose. It made the wire services and a few people complained. Notably, the guy who was quoted in the story as saying he thought is was in bad taste, refused to give his last name, while the guy who put the display up gave first, middle and last. The display stayed up for a few days, with the owner defiantly claiming free speech rights. But on the third day, a not-so-funny thing happened. Some college students in Kentucky hung an effigy of Barrack Obama from a tree. Suddenly, this was serious. The president of the University declared that the perpetrators would be caught and prosecuted, and then made good on it. Two twenty year olds were arrested for disorderly conduct and burglary (they apparently lifted the mannequin from a frat house) and bond was set at $7,600 for each of them. I’ve heard of lower bail for manslaughter charges. This was essentially a prank. Of course there were no arrests in West Hollywood.
What will be interesting to see is what will happen after the election. After the euphoria of having elected Obama wears off, the rest of the world will go back to despising the United States. Barrack Obama, much to the consternation of his supporters, will become the face of American hegemony. And the third world doesn’t relate to the racist lynchings that took place in the American south. So they will very likely hang Obama when they rally in Tehran or Islamabad. I just wonder how the American left will react and how far they’ll go to try and straighten out these folks. I can’t see them ignoring it.
But the candidacy of Barrack Obama has put this practice in an uncomfortable spotlight. A fellow from West Hollywood put up a Halloween display that featured Sarah Palin hanging from a noose. It made the wire services and a few people complained. Notably, the guy who was quoted in the story as saying he thought is was in bad taste, refused to give his last name, while the guy who put the display up gave first, middle and last. The display stayed up for a few days, with the owner defiantly claiming free speech rights. But on the third day, a not-so-funny thing happened. Some college students in Kentucky hung an effigy of Barrack Obama from a tree. Suddenly, this was serious. The president of the University declared that the perpetrators would be caught and prosecuted, and then made good on it. Two twenty year olds were arrested for disorderly conduct and burglary (they apparently lifted the mannequin from a frat house) and bond was set at $7,600 for each of them. I’ve heard of lower bail for manslaughter charges. This was essentially a prank. Of course there were no arrests in West Hollywood.
What will be interesting to see is what will happen after the election. After the euphoria of having elected Obama wears off, the rest of the world will go back to despising the United States. Barrack Obama, much to the consternation of his supporters, will become the face of American hegemony. And the third world doesn’t relate to the racist lynchings that took place in the American south. So they will very likely hang Obama when they rally in Tehran or Islamabad. I just wonder how the American left will react and how far they’ll go to try and straighten out these folks. I can’t see them ignoring it.
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