The SuperModel Barometer

  Lets just call this the SuperModel barometer.  Actually it is sort of a contrarian thing.  But here is how it goes.  Due to the fact that the media and its’ compadres have berated America throughout the world, even SuperModel’s are flexing their economic muscle and requiring payment in foreign currency not US currency as previously had been the form of currency within the SuperModel industry.

Point in question is Gisele Bundchen, a Brazilian Citizen, who is considered to be the world’s riches SuperModel (I don’t know if that would include the proceeds from Christy Brinkley’s divorce or not) is now demanding to be paid in almost any currency besides the U.S. Dollar.  I love it when people decide to make the switch on commodities “after” the revaluation has basically already occurred.  The actual really smart people (i.e. savvy Europeans) are flocking to the U.S. right now (even as we talk) and looking to buy some really depressed U.S. Real Estate with some really cheap U.S. Dollars (that they can purchase at an impressive discount) thus giving them a strong potential for maybe an historically attractive “double play” in U.S. investments.

This is a more learned and quite a diametrically opposite view than that of Gisele’s, though maybe not as politically correct.  And……..all of this because she and other celebrities have concluded that America, under George Bush (don’t you just love this predicate) is living beyond its means.  And just think, this criticism comes from someone that has gotten rich promoting among other things “flip-flops” at $250 per pair.  I guess this came to light last week at a time when the U.S. Dollar reached $1.4528 per Eurodollar, a record low.

So this may indeed signal market exhaustion (to coin some previous market terminology of my prior days) and could well signal the low or near low of the dollar.  So I wouldn’t bet my last nickel that Gisele and some of the other “forward” looking celebrities are getting on the right horse at the right time.  Time will only tell if she is a genius or an idiot.  You know where my money is.  FOOTNOTE:  I wonder if in the fullness of time it is possible that we will learn that George Soros (that world renown currency speculator) is more behind the collapse of the US dollar than George Bush.  MORE

November 6, 2007 | Filed Under American Pop Culture, Economics | 15 Comments 

Frank Cerabino, Palm Beach Post

 I entered a discussion with Frank Cerabino an award winning columnist here in Florida with the Palm Beach Post.  It has been obvious to me from his writing that he is most definitely of the Liberal slant.  Frank is a former military person and graduated from the Naval Academy (1977) and later obtained a Masters Degree in Journalism from Northwestern University.  (It is too bad he didn’t spend that time studying economics.)

Frank said something in a column HERE that I took as more of the same tired left wing diatribe about “tax cuts for the rich” where he stated that these funds were coming from the have-nots and going to the rich, and he framed the discussion around the Megayachts that regularly sail in and out of the Palm Beach area.  He went on to conclude his article by stating (as an anchor to his overall conclusion) that “more tax cuts for the rich are in the pipeline.”  I know better than that so I wrote him asking him to point to his back up for these statements.  This launched quite a number of exchanges throughout the day where he would simply dip to an ad hominem belittling of me and totally avoid the “merits” of his own thesis.  (If you read the exchange you will clearly see why).  As you read below you should note that the comments in Red are by me and the comments in Black are by Frank.

Read this for a real life illustration of how influential people in the media want to level charges but not deal with metrics of a discussion about them.  I think Frank is a nice guy, but misguided by his own self-assumed brilliance like so many other liberals in the media that they expect you to accept their “pronouncements” and basically resent being questioned about them…….steve

————————————-Frank, In your article Megayachts prove not everyone is in the same boat, you mentioned tax cuts for the rich twice and the second time when you were wrapping up and summarizing your article you mentioned that tax cuts for the rich were in the pipeline.  You article didn’t actually reference these, could you elaborate.  I would be very interested to learn of what you are referring.
 
Thank You,  Steve————————————–Hi  Steve:
   These tax cuts, as you can see from story, run through 2010.
   Thanks for reading.
   Tax Cuts Offer Most for Very Rich, Study Says —FrankNOTE: For the sake of space Frank pasted a long article by another columnist regarding the Bush tax cuts that are set to expire in 2010 in response to part of my initial question.——————————-Hi Frank, Oh those tax cuts.  I believe that those tax cuts skewed the income tax burden to the upper end of the tax spectrum, not to mention delivering us from the Clinton recession.  But you mentioned additional tax cuts in the pipeline, which are those.  You really don’t do yourself service discussing tax and matters that you aren’t really up to speed on and to do so with such a bias spin as though somebody is doing something wrong, but I suppose it sells newspapers.   I am sorry to sound somewhat hostile here, I really am not, but really encourage you to look deeper into tax policy and consequences since you are in a position of influence. Steve——————————————The consequences of our tax policy, my dear FoxNews hound, is that the people who need relief the least are the people who get the biggest break. Yes, wealthy people pay a lot of taxes. But the percentage drop in the taxes they pay is the highest of any income group during the Bush years.  In other words, the burden was shifted more to the bottom, not the top, as you somehow managed to think.
     In fact, the tax cuts favoring of the rich have been touted by the administration as a wise move, because giving money to the rich is supposed to result in magically making everybody’s life better, through investment in the economy. But what it has done has widened the gap between the haves and the have nots.
   Clinton recession? I seem to remember a budget surplus, a booming economy, and the recent praises of Alan Greenspan, who in his new book, has the highest praise for Clinton’s stewardship of the economy. (By the way, Greenspan regrets being a cheerleader for those Bush tax cuts that haven’t panned out as advertised.)
     You don’t sound hostile, Steve, you just sound like somebody who has been conditioned to believe that we all do well when government takes from the poor to give to the rich.
     – Frank  

————————————————-

Frank,  (I have interlined his  statements above with my response in red)

 

    The consequences of our tax policy, my dear FoxNews hound, is that the people who need relief the least are the people who get the biggest break. Yes, wealthy people pay a lot of taxes. But the percentage drop in the taxes they pay is the highest of any income group during the Bush years.  In other words, the burden was shifted more to the bottom, not the top, as you somehow managed to think.

You seem to confuse rates with burden.  You are errant about this.  The burden of tax receipts shifted more to the upper bracket after the tax cut.  This is unequivocal.  If you are so sure would you like to pick up an easy $1,000? I put that up against yours and then I’ll prove my point.

Fox News Hound?  A little ad hominem don’t you think? …..I am a tax practitioner and specialize in tax and fiscal policy.  And since you are talking about the Bush Tax Cuts let me say that the people you say need relief don’t actually pay income taxes…at all….cummon, you know that.

     In fact, the tax cuts favoring of the rich have been touted by the administration as a wise move, because giving money to the rich is supposed to result in magically making everybody’s life better, through investment in the economy. But what it has done has widened the gap between the haves and the have nots.

Tax cuts always favor the people that actually pay them.  The important question is impact on the economy.  History is rife with examples of this and you might want to get off your Democratic “talking points.”  Do they do much of your writing?  By the way, economic policy is not magic and history points to the soundest course of action.  Nothing will make everybody’s life better.  The goal is to deliver the best for the most at the least (cost).  That is where egalitarianism misses the boat (no pun).  You wouldn’t want to live in the decaying society where all were equal once you realize what the least common denominator would be. Clinton recession? I seem to remember a budget surplus, a booming economy, and the recent praises of Alan Greenspan, who in his new book, has the highest praise for Clinton’s stewardship of the economy. (By the way, Greenspan regrets being a cheerleader for those Bush tax cuts that haven’t panned out as advertised.)

BTW you obviously haven’t either read Greenspan’s book or listened to his rebuttal to the point you and others are trying to make.  He does not claim that the tax cuts didn’t pan out, but that the spending should have been curtailed.  That’s his gripe.  Bush was wrong here, but I am sure his loose spending was applauded by you and the Democrats at that time.  I personally believe it was a misguided strategy to endear himself to the Democrats in Congress in the spirit of compromise……..I could be wrong………but Tax Policy and Spending Policy are separate issues and you won’t get away with trying to blur that distinction with me.

The Budget Surplus followed the people that control the spending in Congress, which came into office in 1994 and you know who that is, and I’ll add that the single biggest contributor to low inflation and economic growth was technological advancements resulting in productivity gains in that evil concept called “private enterprise.”  (of course you know this I’m sure) I suppose you didn’t realize that the 1st quarter of negative growth in the US economy nearly occurred in the 3rd quarter of 2000 the final year of the Clinton administration (still not the classical definition of Recession) and slightly rebounded in the 4th quarter of 2000 (Christmas impetus).  Any armature can look at the graph (see below) and see the economic growth was clearly headed down throughout all of 2000 while bottoming out after the 1st quarter of 2001.  By the time the recession was confirmed in March of 2001 Bush had been in office two months.  Are you telling me that you don’t know that it takes many month for economic activity to be affected by fiscal or monetary policy.   The stock market began its plummet approximately 13 months before Bush and that is typically the most common leading indicator for the economy.  Again, you aren’t suggesting that the fiscal policy of Bush during February and March of 2001 is what Greenspan is hanging his hat on for the recession are you?  In short it actually is a the Clinton/Greenspan era recession and many believe that Greenspan’s slow response to a contraction of the economy was in part responsible.  He’s isn’t going to make that eminently clear do you suppose. Common……tell it to the masses, but you can’t blow that by me.  This canard that you and others in the media try a propagate that it was a Bush recession (I’ve even heard some Democratic elected officials say “made worse” with the tax cuts……how preposterous, but I suppose it only matters in the context as to who they lying to, anything to stir up the base) is nonsense and shame on you and others.You don’t sound hostile, Steve, you just sound like somebody who has been conditioned to believe that we all do well when government takes from the poor to give to the rich.

I believe the facts will bear out your pre-conditioning, not mine. So, how about that $1,000 wager.  I’ll even accept the burden of proof to establish that the burden of income taxes (not rates) has shifted even more progressively under the Bush tax cuts, after all your argument is about fairness not mathematics.  If you are interested further in my explanation that taxes policy should be established to optimize federal revenue and not to fund pet programs (or social goals) you can check the latest post in my blog (and there are others). http://nextstoplauderdale.com/  B-T-W immediately following that particular blog post is another that criticizes of one of those fearful FOX pundits, Bill O’Reilly. One further point…..  Since your original article was about Yachts, you might be interested to know that the last time the official powers that be (Democratic Congress with Clinton) and not newspaper columnists tried to settle the score with the rich and add big taxes to yachts and airplanes they essentially killed both industries (this is not in dispute) in the USA yet these same evil rich people purchased their yachts and planes overseas without said tax.  The Democrats had to relent and reverse this tax after costing tens of thousands of blue collar jobs.  Is your objective to optimize federal revenues and economic stability and growth or merely a evnious and fool hard attempt to balance outcomes in society?   And ……….. you still owe me an explanation of what “additional taxes” where the have-nots give to the rich are “in the pipeline” as you claimed in your article or do I sense a retraction? –Steve   

————————————

Oh, my.  You’re also one of those people who don’t want to face up to global warming.  I’ll say you’re for “free enterprise.”   (Frank)

———————-

Oh I believe in global warming, just not necessarily the nonsense you’re amen chorus is buying into.  To bad you aren’t for free enterprise.  It probably has made you what you are.  What about that retraction………is it coming? Steve——————————-Steve, we could go round and round forever. Just this last message is enough to tie up another chunk of time to set you straight. But I’m calling it quits here. Good luck to you.   ———————Frank, Ok, and good luck to you, your loss not mine.  I was looking for a way to put a cool grand in your pocket, but I understand that this is not without risks.  I’ll go back to the books and look up those forthcoming tax cuts (in the pipeline) for the VERY RICH since you clearly don’t want to let me know the basis of the following statement that anchors the concluding comments of your article: 

Sure, you may be anxious over keeping your finances afloat, but the megayacht business is booming, more tax cuts for the very rich are in the pipeline, and you have a ringside seat to the grand parade.

 This is not only indefensible, but obviously so recognized by you.  :)  I will conclude by stating that you would be well served to re-read my comments here and at NSL with more of an open mind and a less an ad hominem attitude especially in your position as a public commenter.  I think you have a duty to your readers to be better informed.  It is clear that you don’t want your facts challenged and when they are you refuse to discuss the merits (or lack) of those points.  I know it is easier that way, but that is for people outside the public arena…….. Anyway, good luck and try to keep an open mind. Steve

October 27, 2007 | Filed Under Economics, Taxes | 7 Comments 

$1,000 for your vote!!!!

hillary.jpg Do you remember when George McGovern ran for President against Richard Nixon in 1972 he promised to give every American $2,000? Talk about pandering and having the taxpayer pay for what amounts to campaign financing.  (This would have increased federal spending by about 50% for this plan alone……..no wonder he was 100% behind having Senator Eagleton on the ticket as V.P. originally before he fired him……..Wiki Eagleton if you want in on this bit of humor :)

Well now we have it again with Hillary offering to set up everyone a 401-K with the Government kicking in $1,000 per plan.  Gee thanks, just write me the check and forget the bureaucratic costs.  Lets see, you have had the Republicans saying (along with myself on a few NSL posts) that private retirement accounts are the only solution for solving the Baby Boomer retirement equation.

I think this proposal is a defacto admission that no form of modification (short of changing the retirement age to death + 1 year) of the Social Security System will keep the program solvent.  But wait………..now we have them also proposing a system that basically turns the money that employers and workers put in retirement savings over to those nasty Wall Street boys, and get this, along with taxpayer money as well.  I wonder if Harry Reid will immediately jump on this and accuse her of having retirement savers put their money in a “risky” stock market scheme like he accused Republicans of when proposing private accounts.  (you don’t think that the 401-K managers will simply purchase Treasury Bills do you?)   

Now here is the sweetest part of all.  She is talking about financing this through a modification on the Estate Tax laws and according to her statement at a campaign stop in small–town central Iowa she is going to tax Estates over $7,000,000 to fund this program and again according to her own statement that from each estate exceeding $7,000,000 5,000 families would get the matching funds of $1,000 (i.e. $5,000,000).  Wow, that sounds generous of her…….and to think she can do all this with only taxing estates at the rate of 71.4%.  Although she didn’t admit it out loud you can see that if a single estate of $7,000,001 would fund $5,000,000 (5/7 = .714 - that is 5,000 families at $1,000 per family) you end up with a confiscatory estate tax rate of 71.4% at the Federal level alone plus what ever the state accesses.

I wonder if this proposal will last any longer than last month’s little bit of pandering where she stated at an address to the Congressional Black Caucus that she wanted to give every child born a $5,000 baby shower gift from Uncle Sam which could be used to pay towards college or a first home.  Her office claims that she has now given up on that proposal, but not until after (I am sure) it obtained its desired impact on impoverished and black communities relative to their support for her candidacy.

I am sure she took pains to calculate at what threshold she could put the Estate Exemption (less than $7,000,000) so as not to disturb or rattle the majority of Iowa farmers that have land values not exceeding that amount with those exceeding being a small percentage.  For additional information on this latest and greatest from the geniuses in the Clinton camp, check HERE.

October 9, 2007 | Filed Under Economics, Retirement, Social Security, Taxes, The Left | 11 Comments 

Don’t Let the Left (and their politicians) Lie to you

irs-logo.jpg 

UPDATE 8/26/2007:  I wanted to add that nobody “took the bait” at least not yet.  That bait was the first sentence of this post “Which readers of NSL have believed that the 2003 “Bush” tax cuts were a tax cut for the rich and have not served the “non-rich”  (I won’t say poor)?  Now I know that M2 has been temporarily pulled away from this blog for the most part along with his particularly acerbic comments on my posts, comments and comments of some of NSL’s readers, but common I would have thought somebody would have jumped in and said “see you are like the rest of the “fat cat” Republicans in that you don’t “see” (such as Hillary often states) the poor in America.  My response is, Oh yeah, I see them, they just aren’t particularly germane to this discussion. 

The reason for this is because the poor in America (and a lot of others) don’t pay income taxes at all.  What I do see and see as pandering nonsense is the lefts proclivity to discuss tax policy in the United States through a prism which they see as some type of un-just treatment of the poor.  Not only do the poor not pay taxes at all, the “working poor” actually get a refund (and not a small one) of taxes that they didn’t even pay to begin with through the Earned Income Tax (EIT).  You would think that basic civil honesty would at least force these politicians to recognize to the population as a whole that this is basically welfare on the federal level and not tax policy. 

As I have stated in other posts that the spending priorities of the country should be debated in Congress and the EIT is one that should stand on the merits of its own debate apart from the tax policy of the United States.  This is just another way that the left continues to “confuse” voters with the question of good tax policy.  I’ll assure you that the next time the tax code takes front and center stage in the debate on the policy of the United States that they (the left) use the Tax Code and it shaping as a campaign tool to insure their continued re-election.   

The Democrats in Congress will not even mention the facts of this recent WSJ article (summarized below) as they continue to debate the question as though the evidence is not in already.  They are the one’s that said in 2003 that the tax cut of Bush would not cause a recovery in the economy which was in recession, but would do further damage to it.  Hmmm……… :-)  

I am considering offering a reward for the first reader that will remind NSL after the next tax debate if the whole process ensues with any tacit acknowledgement by the Democrats (left leaning Democrats) that the statistical results are in and have proven their sloganeering and campaigning rhetoric wrong again.  This is not a matter of conservative opinion, but of recorded fact………..read on……..

ORIGINAL POST:  Which readers of NSL have believed that the 2003 “Bush” tax cuts were a tax cut for the rich and have not served the “non-rich”  (I won’t say poor)?  As a result of these tax cuts the burden of tax revenue has intensified on the “rich.”  According to the Wall Street Journal HERE the statistics for 2004 are in and the Richest 1% paid 35.7% of all taxes based on income and without the 2003 tax cuts they would have paid only 30.5%.    Read more

August 24, 2007 | Filed Under Economics, Fiscal Policy, Taxes | 15 Comments 

Loo-king Gooooood ………

ben-bernanke.jpg Well, Federal Reserve Board Chairman Ben Bernanke stepped up to the plate this morning around 8AM and essentially opened the “discount window” at the Federal Reserve Board.  This may be a stroke of genius and Bernanke may prove to be one of Bush’s (43) most important legacies.  This really caught everyone by surprise.  Not so much because he acted, but that he acted in this way.  Everyone was looking for (probably more like hoping for) a reduction in the target rate for the “overnight” loans banks take from each other, but “managed” by the Federal Reserve Board in targeting rates by effecting money supply.  However, this is a subtler but maybe more genius solution for the moment.  He moved it only ½ point, which still keeps it ½ point above the Federal Funds (overnight rate), but two things are important to consider.  He still has another ½ point in his pocket or two ¼ moves and he essentially has made this tool available for a more stable infusion of capital into the skittish markets while it sorts itself out.

Previously the Discount Window was for overnight loans, but he has opened it up to 30 day loans with the possibility of additional time.  This window is primarily for depositary instructions (banks, savings & loans) and on the surface may not seem to be in line to help the likes of Countrywide Mortgage, but with the Federal Reserve Board’s approval virtually anyone can borrow there and will accept practically any collateral versus what they will accept in “open market operations.”  Banks are hesitant to use the Discount Window because it draws attention to them, but this action sort of legitimizes such approaches. 

Wall Street seems to be liking this maneuver and at 9:00 AM before the stock market open the arithmetic mix of the Dow Jones Future Market and the Dow Jones “Fair Value” point to a market “opening” comfortably north of 200-250 points.  This will be an interesting day for those that like to follow the stock market and Federal Reserve and this is on the heels of yesterdays bizarre trading.  I haven’t yet received any comments about my post HERE on the record stock market of 14,000 on July 22nd with the anticipated “see, what do you know, the market is risky” comments, but I am looking forward to them.  Such comments would be doomed to fall in the same trap the Democratic Leadership has waded into every time the market has been down this past 15 years.  If you have lost money in your 401-K’s this month, hang in there.  It may take a few more months to work its way out, but the long-term bias will remain up.

August 17, 2007 | Filed Under Economics | 9 Comments 

Giuliani on Taxes

irs-logo.jpg I am more interested in a recent report that says Giuliani expects the Democrats to raise taxes by 20-30 percent from the perspective that it reveals more about Giuliani than the Democrats.  We all know that the Democrats plan to raise taxes if they take control of the White House as well as Congress, but it is comforting to know that even though Giuliani has some moderate to liberal leanings on some matters, tax policy isn’t one of them.  He further stated that John Edwards had promised to double the current Long-Term Capital Gains tax [talk about a bright move that is directed at populist appeal notwithstanding the damage to the economy].  Rudy correctly noted that the last time Capital Gains was raised by the Democrats that revenue from this source fell by 40%.   

I am really frustrated here, I don’t know why it is so hard for these lame Democratic politicians to get it through their thick skulls that their tax policy is counter productive and reduces federal revenues (and economic growth) while tax cuts (as in the most recent example by Bush) have always increased federal revenues.   

You must be smoking something if you are reading this and don’t conclude that the only conceivable explanation for this is the desire for the Democrats to maintain a perpetual campaign strategy which is a politics of envy.  It seems that they would rather keep a club in their bag to beat the Republicans over the head with than actually do something for the economy.  I realize they have much invested in this line of argument and its continued success depends on their ability to repeatedly lie about it and have that lie believed by the masses.  

August 1, 2007 | Filed Under Economics, Presidential Politics, Taxes | 12 Comments 

Train a Child in the Way He Should Go …. (Prov 22:6)

ian.jpgkathleen.jpg  I was given the high privilege this past weekend of participating in my Grandchildren’s (Ian & Kathleen) first lesson on Finances.  We went to the bank with their mother and set up a savings account in each of their names with the money that they have accumulated in savings lately (about 40 to 50 dollars each).  We are going to be talking with them about savings versus spending and certain incentives such as matching funds for a period of time and some of the fundamentals of money and banking.  I noticed today an article in the local paper that I am going to insert in whole (until they tell me to take it down) from MarketWatch that I think has some very good points about starting kids out with learning about money.    Read more

July 9, 2007 | Filed Under Economics, Personal | 16 Comments 

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