Tuesday, October 25, 2011

Show Us The Figures, Rick

By now Rick Perry's opinion piece in today's Wall Street Journal is making some waves. In many ways I agree with you, Rick, particularly about simplifying the tax code. But that does not mean a simple graduated tax structure has to be thrown out (in favor of the regressive flat tax) and it does not mean one has to entirely do away with capital gains taxation (usually the realm of the wealthy, so that, too, is another regressive move) or does it mean that a carefully thought out, and fair, inheritance tax shouldn't be retained (concentration of wealth doesn't enhance the American dream, it erodes it). And I'm all for responsibly addressing the twin Swords of Damocles that loom in our future, Medicare and Social Security. I'm even for a balanced budget, but not via Constitutional Amendment (imagine having to raise $$ in a crisis with congressional bickering stalling the process, not to mention transitional issues).

So while I agree with many of the feel-good measures, Rick, how does your op-ed piece constitute a "plan?" Show us the figures, Rick -- how many jobs evolve from massive tax cuts and would those jobs materialize anyhow with the next business cycle? Where is the evidence? Or, is this merely an ideological belief?

And that is my problem in accepting your "plan" as a serious one. Furthermore, Rick, you were not the first Republican candidate with a flat tax agenda. Cain beat you to the Texas punch and Gingrich now says he's for an optional flat tax rate of 15%, which beats yours by five percent. By your own logic, that ought to create even more jobs! And Romney now says he's always been for a flat tax. Sounds like a game of Texas Hold 'em. Are all you Republican candidates in? -- place your bets.

There is a pioneering book of social psychology you should read, Rick: Gustave Le Bon's The Crowd; A Study of the Popular Mind. Hard to believe it was written in 1895 as your true-believer words "tax cut" could have been used by Le Bon as an example. Think of them in the context of a passage I underlined as a student: "The power of words is bound up with the images they evoke, and is quite independent of their real significance. Words whose sense is the most ill-defined are sometimes those that possess the most influence...Yet it is certain that a truly magical power is attached to those short syllables" [e.g. tax cut] "as they contained the solution to all problems. They synthesize the most diverse unconscious aspirations and the hope of their realization. Reason and arguments are incapable of combating certain words and formulas. They are uttered with solemnity...and as soon as they have been pronounced an expression of respect is visible on every countenance, and all heads bowed. By many they are considered as natural forces, as supernatural powers. They evoke grandiose and vague images in men's minds, but this very vagueness that wraps them in obscurity augments their mysterious power."

"Tax cut" is the holy grail for supply-siders -- a "mysterious power" indeed when it comes to resulting in more jobs. As Le Bon further says, those unexamined words "become vain sounds, whose principal utility is to relieve the person who employs them of the obligation of thinking." And, that seems to be the new "democracy" of the so-called "debates." As the late preeminent science fiction writer Isaac Asimov said in Newsweek (21 January 1980): “There is a cult of ignorance in the United States, and there always has been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge.'” (Hat tip, The Big Picture)

Wednesday, October 19, 2011

Chauncey Gardiner Lives!

The Republican debate last night was laughable, sometimes downright embarrassing. Sound bites galore: "Everything is Obama's fault," "I'm a Christian" (choose your deity carefully), "I love family," "prosecute illegal immigrants and their employers" -- in fact electrocute them! (Who will pick Cain's apples and oranges?) "Less or even no taxes will create jobs." "9-9-9," "drill, drill, drill," "blah, blah, blah." If you can't say it, scream it over the other candidates.

Each has his/her shtick in these "debates" proclaiming a "plan" (as they like to call it), in 30 seconds or less. One cannot help of think of Jerzy Kosinski's prophetic novel, Being There, written more than 40 years ago about a simple minded gardener, Chance, who is catapulted to political fame, becoming "Chauncey Gardiner" when the media mistakes his comment, "I like to watch my garden grow" as a metaphor for the economy. That was Chauncey's "plan."

And did the CNN format remind you a little of American Idol or Dancing with the Stars? I honestly thought I'd see three judges emerge with scorecards. Text your winner America!

Sunday, October 16, 2011

Let Them Eat Leftovers

Actually, this is closer to what he meant: "Let the idle poor buy the hand-me-downs of the job creators if they can't afford to pay a 9% national sales tax."

And the non-taxation of used goods is but one feature of Herman Cain's 9-9-9 catchy sounding "plan." Help, I find myself agreeing with Michele Bachmann: "the devil is in the details."

While his 9-9-9 plan is "transparent," it is also transparent that he fails to see it as a regressive tax. It sounds oh-so-fair on the surface, all individuals pay a 9 percent tax on earnings and a 9 percent national sales tax and voila, everything becomes an even playing field. One only has to run an equally simple spreadsheet to see how overwhelmingly regressive such a tax plan would be as at lower income levels, fixed expenses, such as food, shelter, transportation, insurance, health, and, of course, taxes, become 100% of one's earnings. Conversely, even with a national sales tax, very high income tax payers would have even a smaller share of their income taxed unless they spent every discretionary dollar at Tiffany's.

Even if all deductions are removed from the tax code, ones the affluent can more easily access, it is a long way from 9% to the current top 35% marginal rate. And eliminating the 15% capital gains tax is a net gain for those taxpayers. Doing away with the estate tax is another bonanza for the fabulously wealthy (no dispute on my part, though, the estate tax needs reform as outlined here).

Also if Mr. Cain is going to rely on reducing the payroll tax as a bone toss to the middle class, he is ignoring an increasingly large segment of the population -- retired folk who are living on non deferred savings accounts accumulated during their working careers (already subjected to payroll and income tax, and probably at a higher level). They don't get the offset of a reduced payroll tax and in effect this is a means of double taxing and further penalizing savers. And Mr. Cain likes to argue that the removal of the payroll tax is an offset for the average worker that would now have to pay "only" a 9% sales tax, failing to note that half of the 15.3% current payroll tax is presently paid by business.

Overzealous tax reformers advocating a flat tax, or a reduction in income tax, triumphantly use the "growth" card to fill in any revenue shortfall. "Trust me," they are saying, "reduce taxes and the economy will grow to such an extent that everyone will prosper." The "job creators" will work harder.

If, as Cain's supporters contend, the 9-9-9 plan raises as much revenue as the current flawed tax structure, then mostly it is on the backs of working stiffs. And while there are merits in simplifying the tax code, 9-9-9 is not one of them.


Thursday, October 6, 2011

Do You Hear the People Sing?

About a year ago I likened the US income distribution to a "parade," the wealthiest appearing only at the very end, demonstrating the parabolic nature of great wealth at the very extreme of the income curve. I was wondering when, finally, the middle class would wake up to this growing disparity and do something about it. Finally, the "Occupation of Wall Street" movement takes up the cause, hopefully all by non violent means.

At the time I said "to listen to the Tea Partiers, a roll back of taxes of the very wealthiest to pre-Bush rates, is an evil, evil thing. Just think of the trickle-down effect that would be lost to the little folk who stand in line for the crumbs falling from the tables of the fabulously wealthy. It is ironic that these dire warnings of the effects of a tax increase on the wealthy are carried into battle on banners hoisted by 'Joe the Plumbers' -- it shows the power of the conservative media and the most virulent impact of the Internet. It just makes no sense that the people near the middle of the parade should become pawns for the people at the very end."

It is sad that Steve Jobs should pass away at this time. I think of him not only as a visionary technology and marketing genius, but as the greatest entrepreneur the world has ever known. The grass root movements of today, such as Occupation of Wall Street, would not be possible without the mobile devices he had a key part in developing and popularizing. I feel a personal loss of his passing at such an early age, and of the same terrible disease that took my father. And I wonder, if we did have a fairer graduated tax structure, one that would have rolled back the Bush tax cuts, would he have worked any less hard? The "don't-tax-the-job-creator" crowd might so argue.

Steve Jobs worked as he did because it was his passion. Entrepreneurs work with a creative obsession that is not going to be railroaded by a higher incremental tax rate. They are the job creators, not the legions of corporate and banking types, raking it in, paying a lesser portion of their income in taxes than a dozen years ago when the US actually had a balanced budget, CEOs now being paid unspeakable multiples of the average income of workers in the same company. Are higher incremental tax rates and the closing of loopholes the only solutions to the deficit? No, but it's a beginning. And that, as well holding these people accountable for any fiscal malfeasance, is what the growing Occupation movement is all about, the middle class finally awakening to the issue of their being used as puppets by political ideologists.

Do you hear the people sing?
Singing a song of angry men?
It is the music of a people
Who will not be slaves again!
...............Les Misérables, the musical


Wednesday, October 5, 2011

Baltic Cruise

Continuing a prior entry, this is the port description of our September Baltic cruise. Ann wrote a very detailed email on the subject to some friends and family and I borrow heavily from her excellent write up. Figure half of this entry is mine and the other half is hers. In fact, I've depended more and more on her for editing as this blog has evolved over the years. She is both a good writer and an excellent editor. My tendency is to write stream of consciousness, just to get all that is buzzing around in my brain down on virtual paper. In the process I sometimes step all over the English language and she corrects my inevitable gaffes.

So for a change, I've now edited and amplified on what she wrote, but for much of this entry I am grateful to her -- it saved me a lot of work!

We arrived in Amsterdam and were bused to Rotterdam where appropriately we boarded the ms Rotterdam for the nearly two week cruise to the Baltic region. We had very rough seas on our departure the first evening and the next full day and night under way, which I never mind mainly because I've been impervious to mal de mer unlike others who rush to the medical center for meclizine. But those were the roughest seas of the entire cruise, caused by the low pressure remnants of Hurricane Irene which we battled a couple of weeks earlier in Norwalk Ct.

Entering the harbor of Copenhagen one is struck by the extent of their effort to harness alternative energy, with some 22% coming from wind turbines. So many US east coast cities have blocked such efforts due to the NIMBY (not in my backyard) syndrome. Those turbines abound in the Copenhagen harbor, in peaceful coexistence with boats and presumably most birds (at least we didn't see any dead ones floating nearby).

We were particularly looking forward to our Copenhagen visit as we were scheduled to meet the wife of our friend, Jeremy, one of the three sons of my dear friend Peter who died nearly twenty years ago now. It is hard to believe that it has been that long.

Jeremy is the middle son and I am also close to the older son, Michael. Jeremy is one of the most interesting people I've ever met, someone who multitasks as he is thinking, a writer of prodigious emails (when he gets around to writing) and a brilliant professional as President & COO at Cloud Expo, Inc. But Jeremy and I share another marker in our lives, one that happened almost at the same time, he having to battle cancer which involved radical surgery and I having open heart surgery from which, happily, we have both fully recovered. We had hoped to see Jeremy during this trip but he was on a business trip to Oslo.

First, though, after a leisurely two mile stroll from our ship into the center of town (and back again, which nearly killed Ann), passing the famous Little Mermaid sculpture along the way, we strolled around the main square in front of the concert hall (where we were to meet) and serendipitously encountered the changing of the guard ceremony. Unfortunately, Ann's feet were giving out and she complained bitterly about her walking shoes so we ducked into a shoe store only to find an American brand (but made in China of course) and having to buy them to save her feet. Good planning, currency conversions both ways not to mention duty.

When Jeremy's wife, Kirsten, came into view, she delighted us by bringing along two of her four children, all of whom we hosted some fifteen years ago in our home, then on the Norwalk River. Suffice it to say, we certainly did not recognize Torsten or Sebastien who are now grown into fine young men from the children we remembered playing soccer on our lawn. The oldest, Christian, works in Hong Kong and the baby, Annasophia, a sophisticated sixteen year old was away at boarding school. Their intrepid mother, Kirsten, is currently the Danish Ambassador to Cyprus and in fact was completely packed up and ready to be shipped off to her new posting in Nicosia, having just returned from two years as Ambassador in Sarajevo, which she and the family loved. We ate in the open courtyard of one of their favorite restaurants (it was very chilly), but every chair was draped with a blanket and with heat bulbs blasting overhead, we sat down to a very typical Danish luncheon, varieties of herring and lots of delicious black bread playing a major role. Ann opted for a dark Danish beer with her lunch consisting of a plate with two open faced sandwiches: shrimp and roast beef. I had herring prepared three different ways. We enjoyed catching up with this wonderful family and were only sorry to miss Jeremy.

Warnemünde, Germany was the next stop, where Ann and I parted company. Warnemünde is the port for Berlin which is a very long bus or train ride one way. I dislike six hour round trips on buses, so I chose to spend the day in the seaside resort community and take photographs, and admire the boats and town. Ann was showered, dressed and breakfasted and off the ship by 7 AM waiting with a small group for her bus ride into Berlin where they were meeting a private guide for a full day of sightseeing which included all the major sights, the Brandenburg Gate, the Berlin Wall or what is left of it, the controversial Holocaust Memorial which is an outdoor
exhibit of 2,711 rectangular concrete pillars of varying heights and can be considered to be a starkly moving monument to the horrors of Nazi Germany or an irresistible playground for children who love jumping from one to the other at great risk of serious injury. She walked through this Museum and pondered the gravitas of the architect’s design and the intent behind it and had a lively discussion sharing her thoughts with her companions.
They drove past Checkpoint Charlie, which is now a mock up of the original hut with actors dressed as guards -- sort of a travesty -- the Reichstag, Potsdamer Platz, the New Synagogue and eventually stopped for a wonderful luncheon of sausages as the German’s call them (Wursts to us) along with a very tasty sauerkraut and potatoes. And naturally, she had a typical German dark wheat beer that really hit the spot!

The next day at sea was a blessing as we needed to recover a little from the two prior ones. Next morning we arrived in Tallinn in Estonia, a charming medieval town built on a very steep incline, which finally won their independence from the Soviet Union, aided by the famous "singing revolution, when from 1987 to independence in 1991 there were a number of mass demonstrations of Estonians singing national songs that were forbidden by the Soviets.
We strolled around admiring all the charm of this cobblestoned city, very reminiscent of Dubrovnik with its old city walls and fortresses. There is a quirkiness about the city too, drainpipes that become sculptures and behind the medieval facade is a vibrant high-tech society with software development and in fact the birthplace of Skype! Our friend Kristen also was once the Danish Ambassador to Tallinn, had lived there for four years, and loved it. We can see why. The Estonians are lovely, friendly people but still with deep roots to the tsarist Russian empire. We were privileged to attend a Russian Orthodox service that was underway in Tallinn, all participants standing up, bowing on cue.

We explored many of the nooks and crannies of Tallinn, the alleys and small passageways, winding our way to the central square, packed with tourists such as ourselves and many restaurants. As it was lunch time we debated over the choices. Internet service is very expensive and slow on the ship and we were both carrying our iTouches so that became my sole criteria for a "good" restaurant: where we could get email and catch up. It turned out that the only dependable Wifi outfitted restaurant was an Irish Pub. Ann was not too happy, but we had great soup and bread there and Ann imbibed Estonian beer, emailing and getting in touch with the world, especially for me: baseball, the economy and politics (pretty much in that order -- hey, the playoffs were upcoming). Although the ship was technically in walking distance, after a day in Tallinn we were ready to rest, hailed a cab and returned to get ready for what we expected to be the trip's highlight: St. Petersburg. That expectation was more than realized.

Before passing through immigration control in the terminal, just stepping onto Russian soil was a thrilling moment, this after nearly a lifetime of dealing with the rhetoric of "the Red Menace." As a child and as an adolescent we were subjected to regular air raid drills of hiding under our desks in school and pulling the shades down, the laughable objective of which was to save our lives in the event of a nuclear war with Russia. In retrospect I think it was a form of indoctrination, to fear the Soviet Union and comply (as adults) with any and all demands of the Defense Department for our own nuclear build up. All this anxiety culminated in the Cuban Missile Crisis while in college, the rumor quickly circulating that we were all being drafted to fight the Russians. I never thought that, in my lifetime, I would be visiting Russia as a tourist and for that I am grateful. The people were wonderful although the immigration officials need to lighten up a little.

We spent the next two exhausting, but thrilling days in St. Petersburg with our private guide, Anna. She and her driver met us at 8 in the morning where we spent the next ten hours the first day and the same on the following attempting to absorb centuries of Russian history, art and culture. She is a graduate of St. Petersburg University with a degree in Art History, so there was no doubt we were in very capable hands. It didn’t hurt that she was stunningly beautiful and drew admiring looks wherever we went.

What a handsome city, filled with extraordinary palaces, cathedrals, gardens and waterways, not to mention the stunning private homes which were built along the University Embankment by the wealthiest friends of the Tsars. No surprise that St. Petersburg is called the Venice of the North with all the rivers, canals, bridges and breathtaking vistas. We had early admission for the Peterhof Palace our first morning, the grand summer palace of Peter I with its magnificent fountains and lush gardens and views of the sea beyond. The fountains were all designed by Peter I, gravity fed with no pumps, more than 150 of them. It is an incredible engineering feat and at 11 each morning there is an opening ceremony for the fountains, choreographed to very nationalistic music by Shostakovich, the great 20th century Russian composer. I was able to capture about a minute of this ceremony before my memory card became dangerously filled but, nonetheless, I posted this truncated version on YouTube.

After three or four hours of exhaustive touring of the grounds and Palace, we boarded a hydrofoil for our return to the city for a very typical Russian luncheon with our guide, tasty pies: meat, mushroom, cabbage, etc., and of course fruit and sweet pies.

And without cataloging every single monument or fortress or cathedral we visited, I’ll simply say the highlight of our trip in St. Petersburg had to be the Hermitage, the Baroque Winter Palace built in the mid 18th Century which we visited after lunch…….…no doubt one of the world’s greatest museums, if not the most wondrous we’ve ever been in. There is no way to adequately describe the gloriousness of this building, let alone begin to do justice to the 2 ½ million pieces of artwork from all over the world housed in the 365 rooms. We tried to see as many of the undisputed ”masterpieces” as we could - given the crowds, our stamina and time constraints, but even that was a herculean task almost beyond us. We were advised in advance that there is no way to see even a small fraction of the art work -- that would take years -- and so we tried to concentrate on and admire the architecture.

After this we were not yet quite done with our day. We boarded a small boat and cruised for an hour on many of the canals leading out to the Neva River, with close views of the Peter and Paul Fortress, the famous burial place of many Russian tsars.

Day two was just as overwhelming, beginning with early admittance to Catherine’s Palace with its ornate furnishings and breathtaking splendor and unimaginably reconstructed Amber Room, all beautifully restored to its original grandeur after being almost totally destroyed by the Germans during their 900 day occupation on the outskirts of St. Petersburg. This day, we also visited the Church of the Savior on the Spilled Blood Cathedral with its richly colored onion domes and magnificent mosaics. Every inch of every wall of this church is covered in beautiful mosaic pictures, depicting Biblical themes. This church was built on the very spot where Tsar Alexander II was murdered in 1881.

From there we went to Trinity Cathedral, the church of one of the imperial guards of Russia, explaining the cannons at its entrance. But the Cathedral left me in awe as I was standing where the wedding of the famous Russian writer Feodor Dostoyevsky took place.

Lunch that day was at a more international restaurant, but Ann had the traditional borscht soup. I think I opted for something along international lines. Our slim guide Anna, as the day before, ate heartily, potatoes and meat, Ann and I wondering where she puts it all.
We drank a toast to such a wonderful tour, Ann with her glass of wine and Anna and I drinking. kvass, an east European drink that has been around since ancient times, made from fermented bread. Anna dared me to drink it instead of my usual diet Coke. It had its own distinctive taste, one that I could probably get used to if I had to, although its visual resemblance to Coca Cola can be off-putting, expecting the latter by just looking at it, but having the tart taste of kvass. Today kvass challenges American soft drinks in the Russian market.

We ended this two day journey on the subway, something I was anxious to see and one Anna said was an unusual request on a private tour. She took us down the steepest escalator we’ve ever been on (beating London’s by a mile!) and enjoyed seeing the average Russian looking just like his New York counterpart, distracted and overworked, but surely enjoying one of the most beautiful underground systems in the world, spotless and full of priceless art.

That evening we were scheduled to leave St. Petersburg and cross over to Helsinki, but high winds prevented us from being able to maneuver the ship through the narrow passageway from our dock and by midnight, we were stuck and in lockdown for the night and next day until we were finally given clearance to leave late in the afternoon. The wind actually blew the water out of the passageway making it dangerously shallow on each side for two ships to pass. Consequently, ships had to go in one way convoys. So goodbye Helsinki and hello a full day of rest for us weary passengers.

Our last port day was in Stockholm which is a beautiful city built on island after island after island. We crossed and crisscrossed so many waterways in our day of sightseeing, we lost track completely. Unfortunately, that day I had come down with a chest infection so we had to opt for the less stressful bus tour and gave up our planned walking tour. I always prefer to be among the people of any city we visit to get a real sense of their culture.

We departed and cruised the archipelagos, thousands of islands, some so close we felt we could touch them. Many had cottages or small homes on them.

And then at the end, two whole blissful days of cruising in the North Sea on our way back to Rotterdam. Time to rest and regroup, think about packing and enjoying the one entertainment we loved every single night, a truly talented jazz trio in the Ocean Bar. They could play anything, and took requests all evening long. We even managed a dance or two!

The flight back was uneventful but long -- we didn't sleep for about 24 hours, returning to our boat in Norwalk, saying our goodbyes to friends every night of the week we returned, and finally headed back to our Florida home.

Tuesday, October 4, 2011

Yuan to Wings

Two interesting and related stories in the Wall Street Journal today.

Item #1 The Senate voted Monday to move ahead with a bill that would punish China for keeping the value of its currency low, drawing a harsh response from Beijing, which said the measure would severely hurt trade ties.

Item #2 The biggest chunk of Yum's [owner of restaurant chains including KFC, Taco Bell and Pizza Hut] operating profit now comes from China.

Are we sure we want a trade war with China, a country holding a sizable portion of US debt? Imagine putting a tariff on the Colonel's finger lickin' good wings? Perhaps there should just be a conversion rate of Yuan to wings and bypass the US dollar? Are the Chinese sure they really want to eat that stuff? Maybe a CIA plot?

Seems our major export now is "US Culture" -- our movies, our fast food and soft drinks, our way of life -- while the rest of the world manufactures everything else we need.

Photo courtesy of Daily Times, Lahore Pakistan