October 27, 2005

Two-Plus Years of Sound and Fury, Signifying (Almost) Nothing?

If true, there will be wailing and gnashing of teeth on The Left (HT Drudge and the siren):

Aide to Cheney Appears Likely to Be Indicted; Rove Under Scrutiny

This is a face-saving headline telling us (if true, of course, which given the source, you have to wonder) Rove won’t be indicted, and Libby will be (for perjury in a situation where there has been and apparently will be no charge for an underlying crime).

Again if true, they won’t get the scalp they wanted. The average person will ask “Scooter Who?”
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UPDATE: It’s only Libby. Large Bill’s reax: “The politically active amongst us know who Libby is, but if you polled 100 people and asked if they have heard of Scooter Libby 99 would assume you made the name up.”

Remembering a Previous President’s Dumb Move

Filed under: Taxes & Government — Tom @ 6:21 pm

Which President made this speech?
(excerpted to conceal items that might reveal who it is or what year it was)

My fellow Americans:

….. there’s something I think you should know.

It’s about misrepresentations surrounding the withholding tax on interest and dividends. People are being badly misled, and that misinformation shouldn’t go unanswered.

Americans have been arguing over taxes ever since the Boston Tea Party ….. when an angry band of taxpayers dumped a shipload of tea into Boston Harbor. Well, in the spirit of the Boston Tea Party, I’d like to dump all the misinformation you’ve been getting on withholding taxes. In fact, I’d almost like to dump overboard some of those who’ve been spreading this misinformation and scaring people, especially our older citizens, many of whom have written me very frightened.

As you may recall, this whole business started last summer when the Congress passed, and I signed, the law requiring banks and other financial institutions to withhold 10 percent on interest and dividend income.

(This) withholding law ….. is simply a more effective way of collecting tax money that’s already owed, just as employers have been withholding taxes from our paychecks ….. a procedure most wage earners accept as both fair and necessary.

What it really gets down to is this: Even in a law-abiding country like ours, there’s still a minority of people out there who cheat on their taxes. Last year, (the government) lost billions of dollars in taxes on unreported interest and dividend income. ….. I agree with what one editorial writer said about those who cheat. “When they don’t pay their taxes, someone else does — you and me.”

Withholding 10 percent on interest and dividends will allow the Internal Revenue Service to recover (billions) ….. in otherwise lost revenues over the next 5 years — and that’s without taxing honest taxpayers a penny more than they now pay.

Past experience has proven that withholding is by far the most effective means of combating those who don’t pay their tax bill to the government. The only people who stand to lose under this law are those who haven’t been paying their taxes in the first place, and what’s wrong with that?

….. All of this raises an obvious question. If withholding is nothing more than a more effective collection method, what’s all the controversy about? Well, some of the banking interests seem to think withholding will inconvenience them. But we’ve taken measures to make sure this changeover isn’t burdensome. And as for savers, it will actually be a real convenience for many of them. For example, withholding will free many taxpayers from the chore of preparing quarterly tax payments. It will prevent other citizens from being faced with a substantial accumulated tax bill on April 15th. Most wage earners already prefer to have tax withheld from their paychecks, rather than having to come up with the whole bundle on that annual day of reckoning.

Some of the banks and savings and loans have said withholding will reduce the incentive to save. Well, that just doesn’t make sense. Withholding will have a minimal effect on accrued interest.

….. But I think most Americans would forgo (a little interest) if it meant others who are cheating on billions of dollars of unpaid taxes would have to pay their fair share.

The fact of the matter is that those already paying their taxes can get back all of the amount withheld by reducing their estimated tax payments or by adjusting the number of exemptions on their wage withholding.

Thanks to the pressure from a very busy lobby, however, the Congress is now considering repeal of withholding before it’s even gone into effect. This would help no one who’s doing their fair share, but it would let all those who are not paying their taxes on interest and dividends off the hook. So, I’m not about to let it happen. Rather than asking those who are paying taxes to pay more, I say that those who already owe taxes should pay them. And ….. if the repeal passes the Congress, I’m all set to veto it …..

Who made this awful speech in support of an absolutely awful idea? (For starters, imagine the administrative costs it would have imposed on the banking and brokerage systems for collecting relatively puny amounts of revenue a little earlier, and the negative compounding effect on wealth accumulation.)

Ronald Reagan, on April 16, 1983, that’s who.

Reagan, by all reasonable accounts, recovered from this incredible blunder pretty nicely. Withholding of federal income taxes on interest and dividends, one of the single dumbest ideas ever conceived in Washington, never happened; it was repealed later in 1983 before it ever took effect, with no presidential veto. And of course Reagan was reelected in 1984 with the most sweeping Electoral College margin in history.

Almost no one remembers Ronald Reagan’s association with the crackpot idea he and so many others who should have known better were so supportive of in 1983.

Similarly, no one will remember the colossal blunder George W. Bush committed by nominating Harriet Miers if his future nominees are solid, and if he otherwise returns to the principles that got him elected, and reelected.

Why Fan and Fred are SOOOO Screwed Up

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 3:59 pm

Congress won’t do the simplest things to keep these quasi-government corporations under control.

The new bill doesn’t please anyone right now:

Plan to Rein in Mortgage Giants Entangled

WASHINGTON (AP) — A plan for tighter supervision of mortgage giants Fannie Mae and Freddie Mac became entangled in a political dispute in the House Wednesday over whether money to house low-income people and hurricane victims can go to community groups that engage in nonpartisan get-out-the-vote drives.

The White House opposes the legislation on a broader issue: that it would not force the mortgage companies to reduce their huge holdings. The two government-sponsored companies together finance more than three-quarters of the home mortgages in the country, and both have recently had accounting scandals.

As the bill headed toward a vote, the fight in the Republican-controlled House was over restrictions on a special low-income housing fund to be financed by Fannie Mae and Freddie Mac.

The restrictions would prohibit nonprofit community groups from receiving any of the housing money if they have used their own funds for nonpartisan voter registration or get-out-the-vote drives, or, in some cases, lobbying in the last year.

An array of civil rights organizations, unions and faith-based groups, including the NAACP, the U.S. Conference of Catholic Bishops and the American Jewish Committee, joined House Democrats in protesting the proposed ban. They are portraying it as an initial effort by conservatives that, if successful, could be widened to bar such community groups from receiving any money from any federal program in the future.

We should be so lucky.

The legislation also calls for the companies to devote a small percentage of their annual profits — which could amount to hundreds of millions of dollars — to financing housing for low-income people, with housing for victims of Hurricane Katrina given priority.

The Bush administration opposes the bill because it does not match a Senate measure that would order the two companies to reduce their mortgage investment holdings, worth a combined $1.5 trillion. Federal Reserve Chairman Alan Greenspan has said their holdings must be diminished because their huge debt — some $2.5 trillion total — poses a potential danger to the U.S. financial system.

The House bill “fails to include key elements that are essential to protect the safety and soundness of the housing finance system and the broader financial system at large,” the White House said in a statement issued Wednesday. “Given the size and importance of (Fannie Mae and Freddie Mac), Congress must ensure that their large mortgage portfolios do not place the U.S. financial system at risk.”

Why should ANY “community groups” get “low-income housing” money, let alone those that also conduct get-out-the-vote campaigns?

And why, if passed in its current form, is it not going to do what is clearly necessary (discussed previously), namely to cut Fan and Fred down to size?

Environmentalists’ (Non)Predictive Powers

EU Rota shows us what fools we would have been to believe the leading lights of environmentalism in the early 1970s.

He covers availability of land for agriculture, agricultural production, mineral resources, and unemployment. He could have gone on and on.

Never mind their pitiful predictive abilities. In the face of the historical record that contradicts them at every turn, they continue to place no faith in human ingenuity and no belief in the market’s ability to efficiently allocate resources and make people’s lives better. And yet, again in the face of the march of events that ridicules them from the sidelines, they religiously believe that an all-knowing, all-seeing, and all-regulating government leviathan can do better.

Yet their every utterance is treated with total deference by a press that refuses to follow up on the accuracy of previous predictions. So, EU Rota and others must do it for them.

Is Online Commerce Starting to Peak? If So, Thank the Crooks, the Banks, and Bill Gates Equally

This may not constitute proof of a definitive trend, but three items relating to online commerce are troubling and certainly point in that direction:

1. Internet Users Cut Back Because of Fears

WASHINGTON (AP) – As identity theft has grown, so has fear of being victimized through high-tech means.

Nearly a third of Internet users are cutting back on time spent surfing the Internet and a quarter say they have stopped buying online altogether, according to a study from Consumer Reports WebWatch.

Some 80 percent of Internet users say they’re at least somewhat concerned someone could steal their identity from personal information on the Internet. Fifty-three percent of Internet users say they’ve stopped giving out personal information on the Web.

Among those who shop online, 54 percent say they’re now more likely to read a site’s privacy policy or user agreement before buying and 29 percent have cut back on how often they buy online.

A more detailed article is at eWeek.

2. Not Just Reducing Buying, But Also Banking

There are many troubling stats at this PC World link, but the ones most relevant to this post are these:

73% of consumers said personal data theft is a deterrent to online banking.
41% of Net users say they’re buying less online due to security threats.

3. Consumer Worries Are Beginning to Hit Companies’ Bottom Lines

Amazon’s disappointing results and outlook may be directly tied to users’ reluctance to buy online:

The retailer, which began as an online book seller and has become the second-most popular Web commerce site behind eBay Inc., forecast revenue below some Wall Street expectations for the holiday season, when it generates the bulk of its sales.

“It confirms what I’ve been thinking about revenue deceleration,” said Martin Pyykkonen, an analyst at Hoefer & Arnett, who noted that Amazon anticipated fourth-quarter sales to increase between 13 percent and 24 percent, well below its 31 percent sales jump in the fourth quarter of 2004.

Amazon said third-quarter net income fell to $30 million, or 7 cents per share, compared with $54 million, or 13 cents per share a year earlier.

It’s looks to me like Amazon may have geared up for more growth than is taking place. Based on technology developments alone (more Net users, more broadband users, faster speeds, etc.), it should be happening, but it’s not, or not as fast as one would expect.

The growth of online commerce and the cost reductions that should result from it together represent an important factor in future economic growth. The fact that online commerce hasn’t blossomed more, and could be in real jeopardy of leveling off, can primarily be traced to three things:

  1. Enterprising criminals, especially those outside the US, who appear to be able to operate with near impunity, thanks to overextended and/or indifferent law enforcement.
  2. Microsoft’s chronic failure to respond to and plug security holes inherent in both its Windows operating system and its Internet Explorer web browser.
  3. The financial system’s indifference to identity theft and fraud prevention. Banks and lenders have treated losses as a cost of doing business instead of working to prevent their occurrence. The casualties, namely consumers whose identities are stolen and who have to endure the recovery process, have continued to mount. At some point, and we may be there, the horror stories will begin to affect everyone’s willingness to buy and bank online. The industry’s only visible answer thus far has been to cynically attempt to turn identity theft into a profit center by selling insurance against it.

I’d be tempted to add a fourth (consumers themselves), but the fact of the matter is that consumers can follow every sensible step for preventing online identity theft and fraud, and still get taken through absolutely no fault of their own.

It is long past time for the two Holy Grails of protection against fraud and identity theft to get enacted into law: first, credit freezes; and second, mandatory encryption of personal information by those who hold and store it (to prevent negative consequences from the seemingly endless security breaches and data exposures that are occurring).

It will be very difficult to lure consumers who conclude that online commerce is hopelessly unsafe back into the fold, so the time frame for a comprehensive and credible fix is short indeed.

Positivity: American Charitable Donations Increased Dramatically in 2004

Filed under: Positivity — Tom @ 6:09 am

The 2004 increase over 2003 was double-digit dramatic (HT Good News Blog), and 2005 appears on its way to another surge in contributions:

(more…)

The “No WMD” Lie

Filed under: MSM Biz/Other Bias,MSM Biz/Other Ignorance — Tom @ 6:04 am

NOTE: Go here for LINKED proof of the claims.
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Did you know this? From Atlas Shrugs (scroll to end of post), based on member-only information at Human Events Online:

Did you know WMDs have been found in Iraq?
* 1.77 metric tons of enriched uranium
* 1,500 gallons of chemical weapons agents
* 17 chemical warheads containing cyclosarin (a nerve agent five times more deadly than sarin gas)
* Over 1,000 radioactive materials in powdered form meant for dispersal over populated areas
* Roadside bombs loaded with mustard and “conventional” sarin gas, assembled in binary chemical projectiles for maximum potency

This is only a PARTIAL LIST of the horrific weapons verified to have been recovered in Iraq to date. Yet, Americans overwhelmingly believe U.S. and coalition forces found NO weapons of mass destruction.

The question is… WHY do they believe this (“No WMD”) lie?

Hmm. Maybe The New York Times should be nominating Judith Miller for a Pullitzer instead of considering firing her.
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Dec. 3 Update: Newsmax reports on Connecticut Senator Joe Lieberman’s assertion that Saddam had WMD programs when we invaded Iraq:

Following up on his Wall Street Journal article Tuesday defending the Iraq war, Sen. Joseph Lieberman is reminding Bush administration critics that it’s wrong to claim that Saddam Hussein had no weapons of mass destruction when the U.S. attacked in 2003.

“The so-called Duelfer Report, which a lot of people read to say there were no weapons of mass destruction – concluded that Saddam continued to have very low level of chemical and biological programs,” Lieberman told ABC Radio host Sean Hannity on Wednesday.

“[Saddam] was trying to break out of the U.N. sanctions by going back into rapid redevelopment of chemical and biological and probably nuclear [weapons],” Lieberman said, calling the Iraqi dictator “a ticking time bomb.”

“I have no regrets” that the U.S. toppled Saddam, the former vice presidential candidate explained. “I think we can finish our job there, and as part of it – really transform the Arab-Islamic world.”

Lieberman said that his fellow Democrats haven’t taken kindly to his decision to buck his party on Iraq.

“There’s been some grumbling,” he told Hannity. “In Connecticut there’s a ‘Dump Joe’ web site that has cropped up.”

But Lieberman added, “I’ve been here long enough where, at this stage in my career, I’m going to do what I think is right.”

Quote of the Day: On Photoshopping Condi and “Sambo-izing” Steele

From Deroy Murdock via Amy “Hat TrickRidenour, who informed me that she received the following in an e-mail from Mr. Murdock, on the Condi and Steele hatchet jobs:

Largely having retired such stereotypes and images from polite company, it is nauseating that they now only survive among the American Left. Out of answers and devoid of ideas, all they can do is excavate the iconography of the Ku Klux Klan to attack honorable, black American public servants who do not drink the liberal Kool-Aid. If the American Left’s reservoir of decency were not running on fumes, they would denounce such racist rhetoric and instead, debate the issues. I am not holding my breath.

I’m also looking to see if the liberals who objected to the “mug shot” photo of OJ Simpson in Time Magazine (go to Pages 2-3 at link) after his arrest over a decade ago are going to speak out against USAT’s “treatment” of Condi or NewsBlog’s trashing of Steele. Fat chance; no one has lifted a finger, or typed a sentence, to object to the Democrat Senatorial Campaign Committee’s illegally obtaining Steele’s credit report. It’s obvious that no rhetoric, or tactic, is off-limits.