Author: Matthew G. Saroff

It’s Probably Just a Bait and Switch…

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But as a part of the joint announcement by Sarkosy and Merkel on greater EU integration to fix the current series of debt crises they have proposed to impliment a Tobin tax on financial transactions:

The French president, Nicolas Sarkozy, and German chancellor, Angela Merkel, announced the dramatic proposals after a two-hour mini-summit. They also called for the imposition of tighter restrictions on member country’s deficits and announced a synchronising of the tax policies of their own two countries. Sarkozy has also secured the support of Merkel for a Tobin tax – a financial tax on all international transactions – to raise funds to ease the crisis engulfing the European economy.

The amount of money generated by a Tobin tax would actually be smaller than generally anticipated, because much of the financial activity is pure short speculation, where extremely short term bets with payoffs of a fraction of a percent, create profits for doing nothing.

The banks suggest that such a tax is a bad idea because it would discourage such activity, but I consider it to be an even more valuable feature than any potential revenue raised.

Much of the unproductive rent seeking that occurs in our economy is an artifact of just such a behavior.

So, to paraphrase this xkcd cartoon, Mission F%$#ing Accomplished:

Of course, in reality, it’s just smoke and mirrors:  The Tobin Tax proposal is just a way to sell their idea for a European balanced budget amendment, and at the end of the day, the Tobin Tax will go away, and the Banksters will get what they want, because that’s how the game is played.

Mark Thoma has a good analysis of the tax, and you can also check out the Wiki page.

Philly Phed Phalls

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Click for full size

H/t Calculated Risk for the Chart Pr0n

The Federal Reserve Bank of Philadelphia’s index of economic activity just fell off a cliff:

Optimists on the U.S. economy have conceded that things are weak, but they’ve argued we’re not falling off a cliff.

But on Thursday, Wall Street got a hint that a cliff dive could be imminent.

Philly The Philadelphia Federal Reserve Bank’s index of economic activity in the mid-Atlantic region plummeted to a negative 30.7 this month, down from a positive 3.2 in July and the lowest since a negative 30.8 reading in March 2009 — in the depths of the last recession.

Get ready for President Bachmann and similar disasters.

Some Sanity on Non-Profits in Illinois

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In Illinois, the state Department of Revenue regularly certifies non-profits, with the idea making sure that they behave in a not-for-profit manner, as opposed to accumulating mountains of cash and overpaying their executives.

Well they have now denied tax exemptions to three hospitals, and are reviewing 15 more because they are abrogating their responsibility to serve their communities:

The Illinois Department of Revenue has denied property tax exemptions to three hospitals and is reviewing applications from 15 others, officials said Tuesday, signaling that the state plans to get tough on nonprofit hospitals it believes operate more like businesses than charities.

At stake are millions of dollars in tax revenues that the hospitals could contribute to cities, parks and schools by paying taxes.

Northwestern Memorial’s Prentice Women’s Hospital in Chicago’s Gold Coast neighborhood, Edward Hospital in Naperville and Decatur Memorial Hospital in Decatur were informed of the decisions Tuesday morning, Revenue Department officials told The Associated Press.

They follow last year’s Illinois Supreme Court ruling that found a central Illinois hospital wasn’t doing enough free or discounted treatment of the poor to qualify for an exemption, obligating it to pay $1.2 million in local property tax payments per year.

The hospitals have 60 days to ask an administrative law judge to review the decisions. In Illinois, property taxes are collected by county governments, and the Department of Revenue decides which institutions are eligible for tax exemptions.

This is actually something bears on my personal past, not from the hospital angle, but from the undeserving non-profit angle.

A little over 20 years (!) ago, I incorporated a not-for profit tax exempt corporation as a 501(c)3 that puts on Science Fiction conventions, which in that case meant that I represented it as an educational organization.  While technically legal, I’ve always felt that the organization was more properly a 501(c)7, a social organization.

I filled out the forms, and chased them through the state and federal bureaucracies.  And it was all technically legal, and I did not materially misrepresent anything in the applications

That being said, even at the time, I felt that this was an undeserving use of this status.

I was aware of the differences between a (c)3 and a (c)7 at the time, but we felt that we needed the ability for people to deduct donations, and (more importantly) the postage discount available for the (c)3.

The more scrutiny that is placed on organizations that use these sorts of status as a shield (501(c)4 tend to be used as political front group, for example), the better.

There are a lot of slimy things under the rocks that are section 501 of the IRS code.

H/t Washington Monthly.

Have I Mentioned that I Love Matt Taibbi?*

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He just uncovered another bit of regulatory capture, specifically he is reporting on allegations that the SEC routinely destroyed all records of its investigations:

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – “Hey, chief, didja know this guy had two wives die falling down the stairs?” No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation’s worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – “18,000 … including Madoff,” as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.

Under a deal the SEC worked out with the National Archives and Records Administration, all of the agency’s records – “including case files relating to preliminary investigations” – are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term “Orwellian,” devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation. Amazingly, the wholesale destruction of the cases – known as MUIs, or “Matters Under Inquiry” – was not something done on the sly, in secret. The enforcement division of the SEC even spelled out the procedure in writing, on the commission’s internal website. “After you have closed a MUI that has not become an investigation,” the site advised staffers, “you should dispose of any documents obtained in connection with the MUI.”

Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.

The widespread destruction of records was brought to the attention of Congress in July, when an SEC attorney named Darcy Flynn decided to blow the whistle. According to Flynn, who was responsible for helping to manage the commission’s records, the SEC has been destroying records of preliminary investigations since at least 1993. After he alerted NARA to the problem, Flynn reports, senior staff at the SEC scrambled to hide the commission’s improprieties.

And that’s just his first 5 paragraphs.

What’s also in the article is the pattern of what can only be described as a patterned of end loaded bribery, where SEC senior bureaucrats spiked investigations, destroyed all evidence collected, and then found well remunerated positions with firms that they had “exonerated.”

There should be hundreds of people on Wall Street, and regulating Wall Street, who should have been frog marched out of the places of work in hand cuffs.

*In a 110% purely heterosexual kind of way, of course, as the General would say.

Kasich Blinks

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With Democrats almost retaking the Senate in Wisconsin, and his union busting bill down significantly in the polls, Ohio wingnut Governor John Kasich is asking for Democratic Party and labor groups if he could negotiate to forestall the referendum:

Gov. John Kasich and fellow Republicans William Batchelder, Ohio House speaker from Medina, and Senate President Tom Niehaus of New Richmond, offered today to revise the controversial collective bargaining law, known as Senate Bill 5, if public unions will drop their campaign to repeal the bill on the November ballot.

We Are Ohio, the coalition of unions behind the repeal effort, has rejected earlier back-channel efforts by some Republicans to strike a deal, citing the GOP-controlled legislature’s unwillingness to compromise when the bill was written.

Following a press conference by Kasich, We Are Ohio issued the following statement rejecting a call for a compromise.

“We’re glad that Governor Kasich and the other politicians who passed SB 5 are finally admitting this is a flawed bill,” said Melissa Fazekas, spokeswoman for We Are Ohio. “Just like the bill was flawed, this approach to a compromise is flawed as well. Our message is clear. These same politicians who passed this law could repeal it and not thwart the will of the people. They should either repeal the entire bill or support our efforts and encourage a no vote on Issue 2.”

Good for them.

The only reason to call off the referendum that you are certain to win is if he backs down completely, which will not only weaken Kasich among the average voters, but will poison his relationships with Republicans in the state house, because he seriously twisted arms to get SB 5 passed in the first place.

It couldn’t happen to a nicer guy.

This is a Whole New Level of Lame

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After proposing the elimination of Medicare, and getting savaged at town hall meetings, Paul Ryan has found a solution, charging admission to his town hall meetings:

It will cost $15 to ask Rep. Paul Ryan (R-Wis.) a question in person during the August congressional recess.

The House Budget Committee chairman isn’t holding any face-to-face open-to-the-public town hall meetings during the recess, but like several of his colleagues he will speak only for residents willing to open their wallets.

Ryan, who took substantial criticism from his southeast Wisconsin constituents in April after he introduced the Republicans’ budget proposal, isn’t the only member of congress whose August recess town hall-style meetings are strictly pay-per-view.

Words can not express the lamitude of this.

Oh, It’s Worldcon Tomorrow, and I Am Not There

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This fact makes me smile.

It only took me 20 years, but I realized that I don’t like Science Fiction conventions.

This fact probably explains the massive benders that I used to have at said conventions.

I enjoyed running them, but was never into the convention scene.

As to running them, never again.  It was way too destructive to my life.

There were some good bits, hearing Harry “Hal Clement” Stubbs talk about being a thousand meters away from a nuclear blast was a hoot.

I miss Harry, he knew his sh%$, and he didn’t back down on it, but he was remarkably gentle when he told you that you did not know what you were talking about.

I Love My Wife

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But helping her work with her phone and computer makes me f%$#ing crazy.

I am so not a teacher, but I married one, go figure.

I’m showing her how to sync her android phone directly to her Outlook.

(Hint: it uses a PIM called MyPhone Explorer which is actually pretty slick)

I have to have her press all the buttons, because otherwise, she would not get it, and she would be asking me how to do this over, and over, and over, and over again.

Still, getting her over the hump on this drives me buggy.

Vengeance Is Mine, Sayeth the Dad

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So, we want to a Bar Mitzvah today, and we told Charlie that since he was only 12, he needed to wear a suit jacket and a tie.

He was OK on the tie, but refused to wear a suit jacket.

We are talking yelling, and screaming, and passive aggressive resistance.

Eventually, we got him into the car, and put the jacket in the back, and when when we got there, it was held at the old Washington Post building, we got him to take the jacket in, but not to wear it.

Toward the end of the evening, I asked Charlie if he could put on the jacket for 15 seconds, so that I could snap a picture of it.

He put on the jacket, and I reminded him that he was turning 12 next month, and that  his Bar Mitzvah would be a year from that.

I then informed him that a suit jacket with tie was non-negotiable for his Bar Mitzvah, and as it sunk in, I snapped this picture.

Not a happy young man, huh?

Obama has lost Ed Shultz??

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Not what I expect from Ed

Ed Schultz uses the standard cop out that Obama is “Getting bad advice”, but he’s asking “Where’s Barry?”

He notes, accurately IMNSHO, that if Obama had been involved at any level, then at least three Senators would have been unseated, not just two.

John Nichols comes on toward the end, and notes that not only was Obama AWOL on Wisconsin, but he was a regular visitor until the entire conflict developed, and then he avoided the state.

Ed Schultz is an Obama fanboi, and it’s a huge part of his brand as a broadcaster, and even he feels compelled to say, “If only the Czar knew.”

Eddie, here’s a hint:  the Czar knows, and this is what he wants.

Obama’s self image, and reelection strategy, is all about his PPUS (Post Partisan Unity Schtick), because he (probably wrongly) believes that the voters will perceive his cowardice as strength, and because he is fundamentally unwilling to take any risks, or take any hits, even to the smallest degree, to support his allies.

This, by the way, is why the Democrats will lose the Senate, and not take back the House, inn 2012.  Barack Obama’s intention is to strip mine the base and the party apparatus, and to hell with the party.

Not a Big Fan of Apple Products…

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But I have to give props to some of the people who makes cases for the iPhone.
Here we have:

Among others.

It’s amusing, but the iPhone is still an over-priced, over-restricted product of a control freak who wants to tell its user community just how they are supposed to use their own phones.

Because of the uniformity of the product, Android phones come in all shapes and sizes, it’s something that you will find the variety of accessories of this type in a phone ecosystem that is freer.

I Made a 911 Funny Today

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Things are in flux at work. The US Army has cancelled itsMulti-Function Utility/Logistics and Equipment Vehicle (MULE), and the MULE is supposed to be the lead platform for the Autonomous Navigation System (ANS) that I am working on.

So, the future path for our program is not clear, and rumors are running rampant.

With the end of the fiscal year coming up, we got an update on the current state of the rumor mill from our boss at our department’s weekly meeting, which is a rather humane, and intelligent way of handling things.

He noted that there was still plenty to do in either case, so we shouldn’t slack off:

Boss: We need statuses on progress, so we don’t go into airplane mode.

Me: Airplane mode?

Boss: (Makes throwing motion) Throwing paper airplanes as you get to the end. (instead of working)

Me: Oh, I thought that you meant 911.

You know, I think that this is the first actually funny joke about 911* that I’ve heard, and I was the one who made it.

And BTW, as the meeting was breaking up, the boss’s de facto number 2 threw a paper airplane.

It’s a nice group of people there.

Needless to say, posting is likely to be light for a while, I have work to wrap up, and a resume to update.

*Yes, I know all the jokes about “Hijackers surprised to find themselves in hell” stuff, but that is not a 911 joke, it’s a hijacker joke.

Wisconsin Recall Update

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As it stands right now, 2 Republicans were recalled, and 3 survived the vote, and one race, the race between Alberta Darling (R) and Sandy Pasch (D), is too close to call.

I’m not going to be up late enough to call this, but considering the fact that part of the district is in Waukesha County, where Waukesha County Clerk Kathy Nickolaus mysteriously found a few thousand votes for Supreme Court Justice David Prosser in April, I’m going to say that a surprisingly robust turnout from Waukesha County county will likely have ‘Phant winning.

Nicklaus is either incompetent or corrupt, but each time something comes up, the irregularities cut in favor or Republicans, so I’ll go with corrupt.

This means that the Republicans will maintain control of the Senate, which is a bummer.

Yes, recalls are hard, and the performance was historically good, these were Republican leaning districts, and the elections were close, but this is going to be spun as a Republican victory by the media and the conventional wisdom.

I will bet heavy odds that in the next few weeks, a senior administration official will be anonymously quoted excoriating the grass roots over wasting all that money and effort, just like they did over the Blanche Lincoln primary challenge.

In any case, I am turning off the teevee and going to bed.

(Morning update via mobile)
Confirmed. Only two pickups. Damn.

Baucus?!?!?!?! Max F%$#ing Baucus?!?!?!?

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So Harry Reid has appointed his 3 Democrats to the “Super Committee”, and they are John Kerry, Patty Murray, and Max Baucus.

Here is my rundown:

  • Max Baucus is the least Democratic Democrat in the US Senate.  He is more responsible for killing the public option than anyone in the senate.
  • John Kerry is angling for the Secretary of State appointment after Hillary Clinton resigns, probably after the election, and so is in Obama’s, and Secretary of Defense Panetta’s pocket.
  • Patty Murray is the Senator from Boeing.

So Reid has appointed 3 people who will blink at the possibility of the automatic cuts to defense, and Republicans desperate to get Democrats to join in their “Kill Medicare” suicide pact.

The rule is that a majority vote passes along a non-debatable, non-filibusterable, and non amendable motion to both houses, so if just one Dem flips *cough* Baucus *cough*, we see something that cuts Medicare, Medicaid, and Social Security, both gutting the safety the safety net, and saving the Republicans from the Paul Ryan budget.

I honestly believe that this is intentional.

It will condemn the Democrats to minority party status for a generation, because it means that we stand for nothing.

Economics Update

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It’s been a busy economic news day, with the Federal Reserve declaring that  it will keep its benchmark interest rates low for the next two year:

The stock market staged a dramatic rebound Tuesday, recording the biggest gains after the Federal Reserve announced it would keep its ultra-low interest rate policies in place for two more years.

The surge ended a wild day of trading in which the Dow Jones industrial average dipped in and out of negative territory four times, giving back hundreds of points in early gains before finishing the session up 429 points. That represented a nearly 4 percent rise, the largest increase in two years.

Investors seemed uncertain about what to make of the announcement by the Fed’s main policymaking board, which for the first time set a firm date for maintaining its near-zero target for short-term interest rates. This move could provide businesses and consumers with greater certainty about the availability of low-cost borrowing as they consider making investments or major purchases, such as homes or autos.

At the same time, the Fed declined to make any significant new efforts to bolster the nation’s flagging recovery. A rare dissent by three of the policy committee members to the interest rate decision signaled that it could prove hard for the central bank to take more dramatic steps in the coming months to lift the economy and prop up the financial system.

When one considers the fact that the interest is effectively 0%, this is not a ringing endorsement of where the economy is going, and the markets were hoping for more.  (Full Fed Statement below the fold)

Why are the markets expecting more, perhaps because productivity fell for the 2nd straight quarter, and small business optimism for the 5th straight month.

Between Democrats who believe in the austerity fairy, and Republicans who are deliberately tanking the economy for political advantage, the Fed is all we have to fix things.

Release Date: August 9, 2011
For immediate release
Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected. Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up. Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity. Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions. More recently, inflation has moderated as prices of energy and some commodities have declined from their earlier peaks. Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, downside risks to the economic outlook have increased. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.
To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.
The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.
Voting against the action were: Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who would have preferred to continue to describe economic conditions as likely to warrant exceptionally low levels for the federal funds rate for an extended period.