Business and industry – Page 87

Free thuggery

We all knew it was coming, the question was how long it would take to become a reality. The misnamed “Employee Free Choice Act of 2009” was introduced earlier this week. And my only surprise at H.R. 1409 is that Frank Kratovil’s name isn’t on it as a co-sponsor (at least not yet. The unions do have to get what they paid for last year.)

In a nutshell, what EFCA2009 provides is the opportunity for unions to twist the arms of workers so they sign a card claiming their support for a union shop. Once the union gets 50% plus 1 of the eligible employees the union is allowed in. For their part, the unions claim that management attempts the same sort of dirty tricks but in neither case should a secret ballot be influenced. Apparently unions want to reduce their chances of losing since they only win these elections about 2/3 of the time.

Because the bill has 222 co-sponsors, there’s little chance of it being stopped in the House – in truth, there’s little chance Frank Kratovil will be strongarmed into going into the record as voting for it unless there’s a procedural need to do so. Certainly he knows that the First District would probably rather see good right-to-work legislation than live by the EFCA2009.

Where this bill may be killed is in the Senate – that is if the GOP sticks together and sells its case to the American people. In all honesty we’re probably not ever going to get a significant portion of the hardcore union vote anyway so there’s little to lose by stopping H.R. 1409 dead in its tracks.

On the other hand, by allowing the plunder of small businesses by union locals thirsty for new sources of revenue from the dues they collect (much of which is immediately funneled into the coffers of the Democrats) the GOP puts itself at a severe monetary disadvantage by not stopping this bill. With President Obama already overturning a number of business-friendly provisions enacted under the Bush Administration there’s little doubt that EFCA2009 is yet another payback to Big Labor – one that could yield an even greater dividend than bailing out the United Auto Workers provided.

The group Americans for Job Security has set up a Facebook site to oppose the EFCA2009 initiative, and I encourage those Facebook members who believe that a worker’s right to a secret ballot should remain in place to join. Otherwise you may arrive at work one day to find Guido and Lefty waiting at the time clock with a paper for you to sign.

Quirky but appropriate

This is an unusual place from which to get a press release, but once you read this it will all make sense.

On April 15th the DontGo Movement (www.dontgomovement.com) in collaboration with Michelle Malkin, Top Conservatives on Twitter, and Smart Girl Politics will be hosting Tax Day Tea Parties in every state in America. For the Tea Parties, the Portsmouth Tea Company (www.portsmouthtea.com) will be donating one pound for every participating state. They will be providing tea similar to what was used at the 1773 Boston Tea Party.

President of the Portsmouth Tea Company, Marshall Malone, says, “It’s an honor to aid in the revival of liberty – fighting socialism rather than imperialism. The number of lives impacted is greater than our founding fathers ever imagined. We will choose our own stimulus package and offer $2 shipping until tax day.”

Communications Director Juliana Johnsons, “This highlights how many people are getting involved. We are so thankful to the Portsmouth Tea Company for supporting our cause. These are small business owners, working, everyday Americans who believe in our cause. We have more than 20 states holding Tax Day Tea Parties. We are growing every day. April 15th will be something this nation hasn’t seen since 1773.

The goal of these protests is to call attention to the unprecedented wasteful spending by the Obama Administration and Democrats in Congress.
Information on the Tax Day Tea Party can be found at www.taxdayteaparty.com.

I don’t know if we’re having a local Tea Party on April 15th but if you believe the likes of Jim Ireton you’d never know the difference in the Wicomico River anyway. And what would the Chesapeake Bay Foundation say?

I can see the point, though. By having a tea party, the original colonists were hitting the British Crown where it lived, since tea was a revenue item for them. Obviously this is utterly symbolic but if it helps the Portsmouth Tea Company sell a little more tea that’s not a bad thing either.

Americans are fed up. We have a balky economy and a government that just doesn’t seem to care about anything except making itself look good and perpetuating itself. It doesn’t seem to matter to them that we are placing our children, grandchildren, and succeeding generations in a debt they didn’t create.

The environmentalists can talk about saving the planet for future generations, but strangely they are silent on saving their financial well-being and the amount of freedom they’ll enjoy. What good is a pristine planet if one is a slave to tyranny?

I figured I may as well post this today because come April 15th I doubt there will be a word about these rallies on the national network news. As far as they’re concerned the only producers in the nation who merit coverage are those who produce more government.

A sign of things to come

This article that appeared last week in Business Week and republished on Yahoo News scares me to a great extent – at least the symbolism of it.

The economic fall of New York City due to the financial crisis is contrasted to the boom of Washington, D.C. in the piece by Peter Coy. But I see it as a microcosm of the larger shift our nation seems to be undertaking from capitalism to socialism. Washington’s boom corresponds with the growth in power and reach of the federal government, which has come to echo the old saw about Washington’s southern efficiency and northern charm.

Our state is a beneficiary of this shift in power, although I feel that as a whole it’s detrimental to the interests of the state. Because a large portion of the population in our state has a direct or indirect stake in a large, powerful federal government (either directly as an employee or indirectly in serving among the many entities who seek to shape federal policy) they tend to view government as something to be desired and not feared. While Governor O’Malley sees the state as “One Maryland” the part he caters to is that part which tends to depend on the government for some aspect of their existence, whether through employment or handout.

On the other hand, New York City’s wealth and power was predominantly built up by the hard work of millions of Americans who wanted to invest in their future and their children’s future. But much of that wealth was blown away in the market crash which, ironically, was brought about in part by events occurring in Washington. It’s quite unfortunate that markets now listen to what the government does more often than what happens with the Dow Jones Industrial member companies.

In a perfect world, Washington D.C. would be a sleepy backwater on the order of our smallest state capital, with just enough facilities to address the functions Constitutionally mandated for a limited federal government. Alas, this doesn’t seem to be the case anytime soon.

An apt cartoon

If a picture is worth a thousand words, then it looks like I can save a whole lot of typing by inserting this recent cartoon by Michael Ramirez:

Now there is an argument that there should be some RINO pellets in that pile and that contention is a correct one to an extent. However, when you consider that had any of the 58 Senate Democrats thoughtfully departed from what became the party line and dissented from the stimulus package, you should realize that those “no” votes would have been enough to sink it as well. Certainly there is plenty of blame to assign to Senators Specter, Snowe, and Collins, but there’s a lot of Senators who have a “D” after their name who are equally guilty. At least there were still seven Democrats in the House who showed some cajones – unlike our so-called “independent” representative who doesn’t trust in the people to drive our economy despite the fact they’ve done it for what, 230 years or so?

Anyway, what Ramirez drew up simply serves as a timesaver for my rant. We’re stuck with this thing now, at least insofar as immediate spending is concerned. Perhaps over the next four years we’ll put the adults back in charge and terminate what we can of this boondoggle. Until then, look for a bleak economic outlook and yet more attempts to jumpstart the economy by attaching the cables to the tailpipe instead of the engine.

Profit-taking by Uncle Sam

I don’t know if you’ve noticed this, but while I was out and about today I saw that gas prices are edging back up again. What were numbers in the $1.50 range a month or so ago are now creeping back up into the mid-$1.80’s at some stations I witnessed along U. S. 50.

In the meantime, the buzz around our nation’s capital has centered on the tax difficulties encountered by several of President Obama’s nominees and the fate of the so-called stimulus package in the Senate.

But a few months ago you’ll likely recall that gas was north of $4 a gallon and Exxon/Mobil was making what many termed obscene profits because of the price spike in crude oil futures. Last May, a bill (S.2971) was introduced which would, in part install a “temporary fee on excess oil profit”:

(a) In General- In addition to any other tax imposed under this title, there is hereby imposed on any applicable taxpayer an excise fee in an amount equal to 50 percent of the excess profit of such taxpayer for any taxable year beginning during 2008.

(b) Applicable Taxpayer- For purposes of this chapter, the term `applicable taxpayer’ means, with respect to operations in the United States–

(1) any integrated oil company (as defined in section 291(b)(4)), and

(2) any other producer or refiner of crude oil with gross receipts from the sale of such crude oil or refined oil products for the taxable year exceeding $1,000,000,000.

The reason I bring this up now is because forecasting the effects of legislation sometimes takes awhile, and this week a study was released showing the possible consequences of such a tax on our domestic energy industry. Continue reading “Profit-taking by Uncle Sam”

Rules for the rest of us

It’s time for me to get all populist on you folks.

There was a little bit of buzz last week in conservative circles about a bill introduced by Congressman John Carter of Texas. Dubbed “The Rangel Rule”, H.R. 735 allows the rest of us to get away with the same trick Congressman Charlie Rangel of New York and Treasury Secretary Timothy Geithner have managed to pull – owing or paying back taxes without penalties or interest.

In the novel Animal Farm, some of the protagonists George Orwell created were “more equal than others.” Apparently this is holding true for elected officials as well, and for every Rod Blagojevich who’s ejected from office for malfeasance it seems there’s ten who get away scot-free with some sort of criminal act. Nor is it exclusive to Democrats, but they tend to have the preponderance of cases where conflicts of interest or graft occur. Methinks this is because they tend to favor a more powerful and centralized system of governance.

While H.R. 735 was introduced as a somewhat tongue-in-cheek measure, there is a principle involved and as I see the proposal it can be a small step to accomplishing two further milestones on the path toward making ours a freer and more prosperous nation.

Carter’s proposal shows that there are some in our society who see their elected or appointed position as a way to enrich themselves. By getting into a place where they can wheel and deal with legislation and favors, many of weak character see themselves as kingmakers rather than the representatives of the people in whose service they were originally expected to perform.

This is a potentially fatal flaw to a democracy if left unchecked, but one way to combat this would be to reduce the amount of money each of these Huey Long wannabes are entrusted to spread around through increasing the amount of money remaining in the pockets of the rest of us by revamping the system of tax collection to one based on consumption. This is a point I’ve made many times before so I won’t belabor it here.

More importantly, even the most expert tax attorneys and quite often the IRS have a difficult time interpreting the labyrinth of tax rules and regulations which are already in place, let alone all the “fixes” applied by Congress in numerous bills they pass each year. Obviously this doesn’t excuse outright cheating but millions of Americans make billions of dollars’ worth of mistakes figuring out their annual tax toll. It’s a consequence of a system which is tinkered with daily in order to give advantages to favored lobbying groups or desired behaviors, such as buying a house or installing solar panels.

The principle of using the tax code to regulate behavior is rather odious to me because it provides rewards and punishments far beyond what the free market and one’s ambition would normally entail. As it stands today our progressive tax code penalizes success and makes those less successful into wards of the state, waiting for handouts they never earned but by virtue of their income status become “entitled” to receive.

We do not elect our representatives to become wealthy through their service, but somehow most of them do. And while in principle there should be nothing that precludes individual campaigns for Federal office to cost many millions or even north of one billion dollars, it’s worth pausing to consider why so much skin is placed in the game and what can be done to make things better for the rest of us.

Welcome to a new advertiser

It took a few months to come to fruition, but today marks the debut of a new local advertiser.

If you scroll down to the bottom of the site, you’ll see an ad for a website called WomenPRWire. While the WomenPRWire site works with a national reach, it’s actually owned and operated by Nana Osei, a young lady who’s a student at Salisbury University.

Unlike other public relations websites which go for the lowest common denominator, the newly-launched Women PR Wire website seeks to connect on a woman-to-woman basis and targets the female audience for authors, performers, and small businesses who are seeking to capture a market segment that truly has the purchasing power in most households.

So I encourage you to check out the site and see what she and her small business can do for yours.

Lesson one: the stimulus

Let me bounce off last night’s post, beginning with the so-called stimulus package.

In this case, though, it’s not just the young voters who want the government to do something, but almost everyone.

There’s no question we’re in a difficult economic period, but it bears repeating that the whole mess started when some of those who borrowed for a larger, more expensive home than they could truly afford found themselves unable to sustain their payments. At that point, the foreclosures began, the overbuilt housing market became even more saturated, and home values plummeted.

As money became tighter, harried consumers cut back on purchases, forcing retailers to close stores or go out of business entirely. In turn, this threw more onto the unemployment lines while at the same time states saw their revenues decrease at a time when they thought spending more on social programs was the way to go.

Enter the stimulus programs of the last 12 months or so. What did you do with your rebate check from last year? Many paid bills, while others put the money away in savings. As economic conditions became worse it was obvious that $150 billion didn’t do the trick – nor has the $350 billion used to bail out a number of banks appreciably loosened the credit market.

Step three seems to be where the Obama Administration and Democrats spend upwards of a trillion dollars on a number of scattershot proposals, including a tax cut for those who don’t pay taxes. In my day, that was called a welfare check – but then there’s no shame for being on the dole anymore. In truth, last year’s check was wealth redistribution too – those who earned above a certain threshold did not get one, either.

Let’s use a little logic here, kids. I know that most of you weren’t taught critical thinking in school, so this may be a foreign concept. Bear with me.

Those of you who are working – it’s likely you make a certain amount per hour and work 40 hours a week if you’re full time. To make math easy, let’s say you make $10 an hour, so your weekly paycheck should be $400. But it’s not, is it? If you’re like me, you have about 1/3 taken out for various reasons, mostly to pay taxes.

For the most part, those taxes go to the federal government. It was a law called the Community Reinvestment Act passed by the federal government which in essence told the banks that they had to lend to those who probably wouldn’t be good credit risks, or they would find it difficult to expand or merge to run more efficiently and profitably.

It was also the federal government who indirectly set the policy of easy credit for homeowners and others in order to make ours an economy based on consumer spending rather than investment.

So, in order to fix the problem they had a hand in creating, the federal government wants to take that money you earned through your hard work and, after they take their cut, give it to a vast array of organizations and inferior (e.g. subordinate to them) governmental bodies (who also take their cut) who will spend some of that money to “stimulate” the economy. Of course, also bear in mind that the money out of your check, even when combined with everyone else’s money, still will fall something on the order of a trillion dollars short of what the federal government would like to spend – for years to come.

Because of that shortfall, one (or both) of two things happen. The debt accrues over time because of interest, making it a larger burden on you later in life; or, the dollars you earn lose purchasing power because there’s more of them out there. You weren’t around for the double-digit inflation of the Carter years, I was. Your $10 an hour would only be worth $9 after a year, yet you work just as hard.

Now imagine that, instead of giving your money to the government who MAY provide you benefits (assuming you happen to be in a group who they target the benefits to at that particular moment, these things are always subject to change) you get to keep more of what you earned and spend it where you want to. Or you could save it and invest for your future dreams, like purchasing a house with a solid 20 percent down payment, as they did in the old days.

Does that sound appealing to you? Well, welcome to conservatism. It’s not practiced by the Democratic Party, so you may wish to rethink that political leaning.

If you’re not convinced yet, don’t worry. I have plenty more where that came from.

Tax reform even Geithner couldn’t screw up

Despite the fact Treasury Secretary designate Timothy Geithner managed to mess up his taxes over several years to the tune of underpaying $34,000 – even though his employer gave him instructions on how to deal with the issue and reimbursed him for the taxes paid – it appears he’ll be confirmed nonetheless; that is if the overwhelming vote to bring him out of committee is any indication.

But this post isn’t intended to bring up that old news; after all, don’t we all mess up on our taxes to the tune of many months’ salary for those of us who don’t work in the elite financial world? On the contrary, I think it’s a perfect time to discuss a subject I’ve waxed eloquent on a number of times before.

Little noticed among the hundreds of bills introduced in the House of Representatives is yet another attempt to implement the FairTax. For the fourth Congress in a row, H.R. 25 is sponsored by Georgia Rep. John Linder and will likely again never see the light of day, buried in committee. (Maybe he needs a new bill number since 25 isn’t cutting it.) The only problem I see with it is H.R. 25 doesn’t repeal the Sixteenth Amendment. (However, there is an aptly-numbered resolution in this Congress which does call for repeal.)

This would be perfect for someone like Tim Geithner, who claimed to simply use TurboTax to do his returns. (Listen, I used that program last year and will do so again – there’s no way I was $34,000 off! My refund wasn’t even a tenth of that.)

Some may argue that a recession is a poor time to enact a tax which is based on consumption, but I heartily disagree.

Now is the perfect time for the FairTax because we’d have a worst-case scenario for revenue generation. As economic conditions improve – as they surely would if those of us who are working no longer have to deal with the IRS backup withholding out of our check, meaning more money in our pockets to spend – the government could start gaining the funds to pay for other important items like an enhanced military and backstopping entitlements (at least until they’re sunsetted; hey if I’m going to dream I’m dreaming big!)

The problem with the Obama Administration’s favored solution to our economic woes is that they determine where the money goes and how it’s spent. (Not to mention they’re essentially creating the cash from whole cloth and adding trillions to our budget deficit. Didn’t the Democrats complain about the GOP presidents’ huge deficits? Why yes they did, just read a few of Final Frontier’s comments and somewhere she’ll make mention of that very point!)

Instead of bailing out every bank and automaker who has run into trouble because they couldn’t say no, why not truly stimulate the economy by allowing the public (read: the market) to determine where they spend their own money? I know, they may do something stupid like put it in the bank or invest the money in tax-free municipal bonds instead of buying the latest made-in-China electronic gadgets, but to each his or her own, right?

The more I think about the situation with taxation in our state and our nation, the more I think a consumption tax makes sense. I realize Maryland went to increase their sales tax and didn’t draw the revenue they expected, but that was because of competition from adjoining states. If every state has to collect a particular percentage federal tax, it may level the playing field to some extent. (I’d still go to Delaware for big-ticket items but perhaps that threshold would increase.)

So while I’m probably beating my head against the wall expecting some sort of sane action out of this edition of Congress, hope does spring eternal and perhaps Linder’s idea may finally get some traction.

Is energy a priority?

My friend Jane Van Ryan at API played interviewer in this video shot a few days ago. I’ll share the video first, then my thoughts.

First of all, she looked a little chilly – then again, standing out in the street for whatever time it took to get three minutes of usable footage would tend to be a bit frosty. Since I’ve never done one of these on-street interviews I have no idea.

More importantly, the group Jane represents wanted to make their thoughts known about continuing oil exploration and its associated job creation to the incoming Obama Administration.

Certainly I’m not an expert in the oil business. Before I started communicating to Jane on an occasional basis, I never really thought about all the steps involved in getting something from a mile or more underground in some instances through the entire refining and transport process to the gas pump where I stand and fill my car’s gas tank. If nothing else, I have learned a little bit about the business side of things there thanks to her.

But Jane also serves to put a face on the human side of the equation. There are a whole lot of people who depend on the oil industry for their livelihood, and in truth with oil prices beginning to bottom out her industry may be in for some fairly difficult times. That’s not to say many people will be shedding tears for those in the oil business since all they hear about is the huge profits oil companies made in 2008.

On the other hand, with oil prices so low at the moment, the onetime plan to collect a windfall profits tax on oil when prices were over $80 a barrel isn’t going to happen – unless the Obama Administration does something to drive prices up to that level, such as restoring the offshore drilling ban. Remember, there are some BHO supporters who thought that $4 a gallon gasoline was a good floor price, so I’m sure they shake their head disapprovingly at gas going for $1.75 per gallon. (Either that or they think this is a great time to increase the federal gasoline tax.) Continue reading “Is energy a priority?”

A real recovery?

Last week, Rep. Scott Garrett from New Jersey and 33 co-sponsors (including Maryland’s Roscoe Bartlett) introduced a bill which probably will get nowhere in the Democrats’ scramble to target tax relief to those who don’t pay income taxes and create make-work jobs for their union benefactors building bike paths and “green” buildings.

H.R. 470 instead takes the proven formula of stimulating the economy by cutting taxes for everyone and assisting small business. It makes the 2003 Bush tax cuts permanent, lowers rates for all taxpyers (the current 10% to 35% rates would slip to the 9.5% to 33.25% range, which is a proportionate 5% drop in rates from low to high), repeals the alternative minimum tax entirely, and cuts corporate income tax rates from 35 percent to 25 percent. And that’s just for starters.

The proposal also increases the child tax credit from $1,000 to $5,000 and makes it permanent, allows those over 70 to maintain their retirement accounts without withdrawing the money, increases the allowable deduction for educational expenses and student loans, and allows tax-free IRA withdrawals to those who otherwise would be penalized – but only for this year.

Finally, the proposal mandates an across-the-board 1% cut in discretionary spending.

While I’ve never been crazy about the way our federal government has somewhat arbitrarily selected the several different tax rates or targets certain actions for deductions as opposed to other actions, lowering each of the tax rates proportionally would be a good thing. If we’re to be saddled with the tax code we have for the foreseeable future, certainly these provisions make a lot more sense than growing government through deficit spending to put money back into the economy.

And while this plan makes more financial sense than anything the Democrats have come up with, we already have enough instances where the money one is forced to give to the federal government as an interest-free loan comes back in the form of a “tax refund.”

Personally I’d prefer a more permanent version of H.R. 143 (which Bartlett also co-sponsors), a bill which would suspend part 2 of the TARP funding and instead give taxpayers a break by temporarily halting backup withholding. But in either case, I don’t anticipate the bills ever getting anywhere close to a floor vote.

Instead, taxpayers will be bending over and grabbing the ankles sometime in the future as the bills we incur today come due tomorrow. Writing in the Washington Times on Thursday, Richard Rahn postulated on the shape of things to come (h/t NetRightNation.) Maybe it won’t be as gloomy as Rahn sees it, but there will be a lot of forthcoming pain if we abandon the ideals of capitalism and supply-side economics which served us well until federal interference became too great.

A lesson in dominoes falling

This morning we learned that struggling retailer Circuit City has thrown in the towel, the latest in a series of chain stores to do so. In a few weeks, Americans will have another reminder of how economic times are as they drive by yet another shuttered storefront.

At the same time, President Bush leaves office with the catcalls of the liberals and the media (but I repeat myself) following him out the door and back to Texas. Frequent liberal critic “Final Frontier” delivered one scathing criticism of GWB on a previous post of mine, part of which I’ll reprise here:

I never said Bush acted like a”true conservative,” I said he simply went out and did whatever he wanted to do (or probably more correctly Dick Cheney), which turned out to be a disaster…

(snip)

…GWB and his republican pals DID spend their political capital by spending like drunken sailors, abandoning any sort of value system … and focusing on Iraq when they should have been focusing on Afghanistan and New Orleans. GWB and his circle of pals paid no attention to the growing fiscal crisis (and the Dems are equally guilty on that one), did not seriously go after bin Laden, did nothing in Darfur, did nothing in New Orleans, did nothing as international opinion of the U.S sank…

The diatribe goes on from there, and I left out the parts of her response concerning gay marriage for the purpose of this post. I do want to rebut Final Frontier in part by noting that Bush’s legacy will be one of fighting the Long War, and success isn’t measured there in what we did but what we did not have to do – that is to say, we haven’t had a 9/11 part 2 thus far.

Fairly or unfairly, anything negative which happens during a President’s term generally serves as another reason to blame him – given the media prism in our society today, it’s especially true when a Republican is president, not so much when a Democrat holds office. However, the comment FF makes does distribute blame equally between the Bush Administration and the Democrats for the economic woes we are facing – a surprising concession on her part.

But I’m choosing to look at this on a larger level, and to bring Circuit City into the picture. First off, I’m sorry to see them close because I liked them much better than Best Buy. Continue reading “A lesson in dominoes falling”