May 12, 2006

“I Hope He’s Wrong” Quote of the Day

Polipundit (HT Michelle Malkin), characterizing what George Bush will say on immigration Monday, as the President continues down the ruinous path to an amnesty no one will call by its proper name:

El Presidente is proposing to reward 20 million illegal invaders with US citizenship. Yet he’ll claim to oppose “amnesty.” This is not new; McCain and Kennedy claim to oppose “amnesty” too.

Tens of thousands of legal hi-tech guest workers who’ve been working here for several years are not allowed to join the line for citizenship, at the front or back. The 6 billion “decent human beings” around the world, who have never violated US or other laws, are not allowed to join the line, at the front or back.

The privilege of joining the line for US citizenship will be reserved for those who can prove that they’ve been committing immigration fraud, work fraud, forgery, and perjury for at least five years. Yet, this is supposedly not an “amnesty” for them.

WSJ Rips the Gas Price “Gouging” Law Passed by the House

Filed under: Economy,Taxes & Government — Tom @ 1:29 pm

Yesterday a subscriber-only Wall Street Journal editorial got it totally right — If you want to know why prices are high, look no further than Washington:

….. Last week the House of Representatives expressed its collective outrage over high gas prices by voting as a herd, 389-34, to make gasoline “price gouging” a federal felony.

Really. This command and control legislation reads like the kind of law passed by the old Soviet Politburo. If an oil company is found guilty of charging a “grossly excessive” price for gasoline, it could face a $250 million fine and its executives face imprisonment. Even neighborhood service station owners could be sentenced to two years in jail and a $2 million fine for the high crime of charging too much at the pump.

….. If service stations are guilty of extortion because their prices are rising more than their costs, then are we to have pricing police preventing homeowners from selling their houses for two or three times what they bought them for, or movie theaters from charging $6 for popcorn that costs 25 cents to produce, or Barbra Streisand from commanding a $1 million fee for a single performance? Now that Republicans have surrendered to the political expediency of price controls on big oil, they won’t have much standing to stop Democrats from imposing price ceilings on pharmaceutical drugs, school supplies, medical equipment, and the like.

The irony here is that if there is any extortion or swindling going on in the oil marketplace, Congress is the guilty party. It is Congress that ordered service stations across America to switch last month to ethanol additives that have both raised prices at the pump and exacerbated shortages in recent weeks. It is Congress and state governments that take 59 cents a gallon on average of fuel taxes at the pump — almost six times the average of 10 cents per gallon profit that the oil companies make.

When the House had a chance to take a positive step to increase gasoline supplies and lower prices last week by making it easier for oil companies to expand their domestic refinery capacity — Northeastern Republicans teamed with Democrats to bring the measure down. The U.S. now consumes 21 million barrels of oil a day but has a refining capacity of only 17 million. As usual, the loudest Congressional complainers about high gas prices voted as a bloc to keep supplies precariously low.

Mark this “gouging” law down as the first step back toward the oil and gas price controls of the 1970s. We know that chapter of history ended poorly for American consumers — with supply disruptions, gas lines, and increased dependence on foreign oil. Under Congress’s new brainchild, the next time there is a gasoline supply disruption, service station owners may well hold prices artificially low to avoid jail sentences. As night follows day, that will lead to shortages, lines and stranded motorists. So if Congress thinks that voters are in a foul mood now, wait until their price-control scheme offers them no gas at “non-gouging” prices.

If supplies are made artificially tight by a combination of congressional action and inaction, how is that the oil companies’ fault? I’m really not in the mood, and neither is anyone else, for the hours-long waiting lines for gas that we saw in the 1970s.

In France, It May Be Lights Out for Chirac and Villepin

Filed under: Taxes & Government — Tom @ 11:29 am

This is big:

Potential smoking gun in Clearstream affair uncovered

PARIS, May 11, 2006 (AFP) – President Jacques Chirac was further drawn into a dirty tricks scandal rocking the French government Thursday, with the publication of leaked evidence showing he knew of a secret enquiry into his political rival Interior Minister Nicolas Sarkozy.

Le Monde newspaper printed excerpts of hand-written notes kept by spy-master Philippe Rondot, which it said “demolish” denials by Chirac and his ally Prime Minister Dominique de Villepin that they ordered an investigation into Sarkozy’s alleged secret bank accounts.

Chirac on Wednesday denounced the “dictatorship of rumour” surrounding the so-called Clearstream affair, which has plunged his centre-right government into torment over claims of an internecine smear campaign.

But Villepin’s political future remains on a knife-edge after he was accused of lying before parliament over the affair and the Socialist opposition stepped up calls for his resignation.

According to Le Monde’s leaks, Chirac was directly involved in ordering Rondot to look into the allegations against Sarkozy in January 2004, and both he and Villepin were aware of the political dangers if Rondot’s enquiry was made public.

“Protect the president,” and “Risk: that the PR (president) be damaged” were written several times in Rondot’s notes, Le Monde reported. And in July 2004, the spy-chief quoted Villepin as saying: “If we appear, the president and me, we’re done for.”

As noted previously, few tears will be shed here if that is the case.

Yet Another Undisclosed Bob McEwen Business Connection

Filed under: Business Moves,OH-02 US House,Taxes & Government — Tom @ 10:05 am

I’ve gotta say, those Google News Alerts are something else.

One came in yesterday about a current business involvement of former Second District congressional candidate Bob McEwen that was not disclosed during his 2005 or his 2006 campaign. McEwen’s name is mentioned in passing in an announcement about another person:

Nationwide Exchange Services Names Former CIO of US Dept. of Homeland Security, Steven I. Cooper, to Board of Advisors

Nationwide Exchange Services (NES), a leading Qualified Intermediary for 1031 tax-deferred exchanges, today has announced the appointment of Steven Cooper to the Board of Advisors. Mr. Cooper presently is the Senior Vice President for Information Technology and Chief Information Officer (CIO) for the American Red Cross. Cooper joins former Ohio Congressman Bob McEwen and former CEO of BankAmerica Worldwide Trust Operations, Dick Griffith, to further round out NES’ industry leading Board of Advisors.

McEwen is at NES’s web site on the Management Team page in the Advisory Board section. Thank goodness for small favors: He’s identified as a former congressman, something he didn’t call himself during the 2005 campaign, in violation of Ohio election law.

So what does NES do? This is from their overview page:

Nationwide Exchange Services (NES) is a leading provider of 1031 tax deferred property exchange products and services.

For over a decade, NES has successfully conducted tens of thousands of 1031 exchange transactions from the West Coast to the East Coast, in categories that range from corporate jets to beachfront properties.

The idea behind a 1031 exchange (named for the IRS code section involved; also known as a “like-kind exchange”) is to defer the taxation that would take place if an asset were sold for cash by finding someone else with a similar asset who might want what you’re trying to sell. Put most simply, two people who currently own investment properties worth $200,000 that each purchased for less than that amount can avoid paying tax on their gains by swapping properties. Obviously, it can get a lot more complicated than that. NES apparently facilitates these deals in various ways with standardized paperwork and other value-added services.

There appears to be nothing wrong with any of this. 1031 exchanges are perfectly legal, but it’s easy to mess them up if you don’t have good help. 1031 appears to be a growing business, based on this link about the activities of a competitor. Critics consider them a tax loophole, and they have a point, but as long as the so-called loophole exists, those who exploit it can’t or at least shouldn’t be faulted.

As with any professional services, there are fraudsters on the loose in the 1031 exchange consulting business. This item about the consultants running off with invested funds, and this one about consultants losing funds day-trading in the stock market, serve to illustrate that it is more than a minor problem. But NES would appear not to be one of the industry’s problem children; in fact, this post at another blog would seem to indicate that the company is considered one of the major and more reputable players.

Based on a Google search only, the company’s founder, Tom Bottenberg, doesn’t appear to have any blemishes on his record. The most “controversial” thing I could find is that he registered the domain name and made about $6,000 when he sold it to Mrs. Clinton. I would call that a shrewd move.

So why didn’t voters of The Second District know about McEwen’s involvement with NES? With all the interest that was shown in Jean Schmidt’s resume, why wasn’t McEwen’s position on NES’s Advisory Board on his? And, of course, what else don’t we know about? Once again, we’re back to the same old question that bothered many of who opposed him in both of his congressional campaigns — Why was it so important (and it obviously was) that voters know as little as possible about Bob McEwen’s business involvements?

Because of his defeat, deserved for six big reasons (never mind relatively less-big reasons like the one discussed here), the preceding questions are, for now, academic. If Second District voters are fortunate, they’ll stay that way.

UPDATE: I thought I heard echoes of the objections raised during McEwen’s 2005 and 2006 Second District Primary runs coming from a race on the West Coast. Indeed I did. There must be a language deficiency you acquire (call it “lobbyaria”) when you spend too much time as a lobbyist. Based on the article’s content, far-leftist and former McEwen Advantage Associate Ron Dellums would appear to have as a bad a case of lobbyaria as putative conservative Bob McEwen does.

Second District 2006 Primary Collection

Dow Is Near Record. So?

Filed under: Economy,Taxes & Government — Tom @ 9:19 am

This entry was posted just before the market opened on Friday.

Even after yesterday’s big hit, there is a lot of excitement about the Dow Jones Industrial Average being within striking distance of its all-time high.

Please. The Dow, consisting of only 30 companies, and very large ones at that, has always been overemphasized.

Recovery from the stock market bubble will not be complete until the S&P 500 gets back to its high of roughly 1527 that was achieved in March 2000.

Given that it closed on Thursday at 1306, that’s a long haul of a bit over 17%. I think that might have happened by the end of the year had Congress “made the tax cuts permanent” (more accurately described as “make the current tax structure that has been in place for the past three years permanent”). Now I think it’s very doubtful.

As to the NASDAQ, there was so much froth in that index at its height that it’s really not appropriate to have a benchmark for recovery. So many companies that made up the index when it soared to over 5000 aren’t even around any more, or are shadows of their former ridiculously overvalued selves.

Bizzy’s AM Coffee Biz-Econ-Life Links (051206)

Free Links:

  • The Hill is reporting that there is less than meets the eye in the earmark (i.e., pork) identification effort built-in to the disaster known as the “lobbying reform” bill. Besides restricting free speech in a major way, it appears to create greater opportunity for disclosure-avoiding agency-specific earmarks. Once the lawmakers get the hang of it, earmarks may end up as tough to decipher as they have previously been, if not more so.
  • In a very cleverly written post, “” Newshound notes a big switcheroo on how different people with differing political outlooks get treated by the WORMs (Worn-Out Reactionary Media, known to most as The Mainstream Media) when they talk about their religious convictions.
  • Female tennis star Maria Sharapova wants women’s prize money in tennis to be the same as the men’s — Fine. Just play best-of-five sets like the men do. Deal?
  • You can’t make this stuff upIn an article about how a programmer in the Columbus school system is leaving suddenly because of her association with falsified attendance reporting at her prior job with Cleveland’s schools, there’s this gem: “The Cleveland district reported 620 excused absences for the 2004-05 school year; the real number was more than 500,000.”
  • Leaving the geese that are generating the golden eggs alone for nowCooler heads are prevailing on the idea of assessing an admissions tax at the various tourist attractions in the northeastern Cincinnati suburb of Mason. The idea is on hold. I suggest a permanent one.
  • Here’s a shocker (as in NOT) — “France’s archaic state-owned university system is overcrowded, underfinanced and resistant to the changes demanded by the outside world.” Read the article to understand just how millions of supposedly educated people become totally out of touch.
  • The Bolivian government’s expropriation of its national gas fields will not be compensated. The theft is not limited to US companies; in fact, the Brazilian company Petrobas is actually the biggest loser. The BBC dutifully relays the government’s claim that it will use the assets to “Finance National Growth.” Sure, just like Cuba.

Positivity: Photographer of Shriners’ Signature Photo Honored

Filed under: Positivity — Tom @ 5:59 am

It’s amazing how one photo has meant so much: