January 14, 2008

Objectively Unfit Mitt Romney Roundup (011408)

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 11:00 am

I am pleased to report that the word about Mitt Romney’s myriad weaknesses is spreading, and being enhanced by the contributions of others.

So this week I will have several daily links to others who have news about Objectively Unfit Mitt.

Let’s get started.

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Romney in Seven Words“Make all the promises you have to.”

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I am aware of who wrote these comments at the Des Moines Register. Without revealing more than this person would prefer, I can say that there are circumstantial reasons to believe that the things this person alleges are true.

The allegations dovetail, and are made at least plausible, by what is documented in this vid:

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Romney’s Rap Sheet.

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Steve Forbes, Rudy, Romney, and the economy (link is direct to vid; HT EyeOn08) — the best 1:47 you’ll even spend on Romney’s economic record, as Steve Forbes explain why Rudy’s performance in NY City leaves Romney’s in Massachusetts in the dust:

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Mitt Romney: The Huckster (ironic title, eh?) — I’m not a big fan of Rolling Stone, or even of a lot of the assessment of Romney in this Rolling Stone article. But Matt Taibbi does make a good point, despite himself: “….. if Romney makes it through the nomination process to face the Democrats, they will be sure to turn his career into a referendum on modern business practices. In many ways, Romney is a symbol of modern capitalism, a turbopowered Wall Street dice-roller who made his fortune by coldbloodedly gambling on the successes and failures of the companies he bought and sold from afar. Romney’s “business” wasn’t turning labor into product, it was turning money into money – and more than a few of his investments were of the scorched-earth variety, buying up companies and cashing out within three to five years, often after closing factories or laying off workers to beef up the bottom line.”

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The Kos strategy — He wants Dems to cross over and vote for Romney (Michelle Malkin links to historical evidence that Kos has his history of similar GOP efforts in the early 1970s wrong).

So if Romney squeaks out a win on Tuesday, will he have to say, “I’d like to thank the Kossacks for their support”?

Mid-Fiscal Year Look at Ohio’s State Finances — and Jumbled Reporting

Filed under: Economy,Taxes & Government — Tom @ 7:30 am

Six months into the Ohio’s 2007-2008 fiscal year, it seems like a good time to note that the State of Ohio’s overall budgetary situation is okay.

Unfortunately, at the detail level, it’s indecipherable (click on “January 10, 2008″ for the PDF at the link).

The overall situation: General fund tax receipts before transfers have come in $104 million below expectations (up $393 million over last fiscal year), while general fund expenditures before transfers are $70 million below expectations (up $816 million year over year).

That’s a swing in the wrong direction against what was expected of $34 million ($104 mil – $70 mil), which in the grand scheme of things is not too bad. Of course, breaking even against expectations or beating them would be better.

But what’s really frustrating is that the state is at least six months into a conversion involving payroll that remains uncompleted. It continues to make analyzing what is right and wrong on the spending side impossible. It involves what is known as the Ohio Administrative Knowledge System (OAKS).

Here’s what I mean (from Page 21 of the report for December, dated January 10):

OHstateExps1207

Until the $380 million in “Pending Payroll” is charged out to the correct Reporting Categories, we won’t know who is overspending and underspending. It should also be noted that additions to Pending Payroll are occurring faster than the bean-counters are determining where the expenses should be assigned — i.e., the situation is getting worse, not better. In November, Pending Payroll was “only” $296 million, so the new amount of unfinished bookkeeping entries increased by $84 million ($380 minus $296) in December.

Here’s what Page 15 of the December report has to say about this situation:

As a result of the OAKS Financials implementation, there have been inevitable transaction coding issues to resolve in order to have payroll, vouchers and other state expenses post correctly against FY 2007 encumbrances and FY 2008 appropriations. The General Ledger remains open for November and December while state agencies continue to work to resolve a dwindling number of payroll coding issues. As a result, expenses from November and December – most notably, GRF payroll – will still post to the month once correctly coded. Thus, GRF disbursements for November and December will continue to be updated as additional expenses post and will not be final until all ledgers are closed.

I don’t detect a great deal of urgency to catch up here. The growing, not “dwindling,” volume of uncoded transactions is a testament to that. How does one manage a department when accurate budgetary info isn’t available until two months or more after the fact?

That the incomplete accounting situation still exists six months into the fiscal year is incomprehensible. That it’s still getting worse instead of better should be considered intolerable. That Ohio’s press has not, as far as I know, written a word about all of this is inexcusable.

Couldn’t Help But Notice (011408)

Here are important points made in a subscription-only op-ed in the Wall Street Journal over the weekend by Ernest Christian and Gary Robbins about an important, underappreciated type of “tax cut” that took place in 2002 and 2003:

….. the economy did not respond much to a Keynesian tax cut in 2001, consisting mostly of a new 10% bottom bracket for individuals and a child credit. In the first quarter of 2001, real investment began falling at an annual rate of 6%. The decline was stopped by the 30% partial expensing (of investments in capital equipment — Ed.) enacted in the spring of 2002. Investment started rising again at a real annual rate of 9% beginning with the enactment in 2003 of 50% partial expensing, in combination with lower rates of tax on capital gains and dividends.

….. An analysis for the Institute for Policy Innovation in 2001 concluded that, over time, each $1 of tax cut from first-year expensing produces about $9 of additional GDP growth. The high ratio occurs in large part because more capital investment leads to more employment and higher wages.

Keep in mind that this form of “tax cut” is really just a timing difference where more expense is reported in earlier years, and less in future years. Assuming rates don’t change, the amount of tax paid will ordinarily be the same over the life of a given capital investment.

Allowing more or even full expensing of investments in capital equipment beyond what is already allowed should be something that both parties in Congress can actually agree on. Given the documented return in GDP growth, how could anyone reasonably say no?

Of course, if the current congressional majority had a brain and was really willing to take on the economic slowing it is complaining about (or is the correct word “celebrating”?), it really should extend or make permanent the tax system that will have been in place for seven years past its current expiration date of 2010 (this is known more commonly as “extending or making permanent the Bush tax cuts of 2001 and 2003″).

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In case you’re wondering, Joey Vento of Geno’s Steaks, the Philadelphia restaurant owner who insists that his customers order in English (first blogged on here in May 2006), is still under fire in Philadelphia. The city’s new mayor has this to say about the situation, noted by Jim Panyard in the Philadelphia Bulletin:

Asked about the nationally famous Geno’s Steaks squabble over owner Joey Vento’s sign telling customers to order in English, Mr. (Mayor Michael) Nutter said:

“I think the sign sends the absolute wrong message in a city that is trying to encourage a multicultural environment and encourage immigrants to come to Philadelphia.”

Translation: Mr. Vento may think it’s a private business, but such things no longer exist in the city. We have our sights on him.

Vento is still under investigation by the Philadelphia Commission on Human Relations. Investors Business Daily had this to say in December when the last hearing was held:

In 1906, Congress passed and President Theodore Roosevelt signed legislation requiring that people seeking to become naturalized citizens demonstrate oral English proficiency. Was Teddy a racist or a realist?

….. As we have said before, the official-English movement and requirements for speaking English on the job are not anti-immigrant. They are pro-assimilation.

English is the language of corporate America and the economic ladder all must climb. It is the difference between staying one of Joe Vento’s customers and becoming one of his competitors.

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A MarketWatch article on teen employment, (requires free registration), or more correctly stated, teen interest in employment, merits attention in the debate over immigration and “jobs citizens won’t do”:

Even as teens shun work force, job opportunities await

New data indicates that last year’s labor-force participation rate for 16- to 19-year-olds hit 41.3% — down from a peak of 57.9% in 1979, according to the Bureau of Labor Statistics. Experts cite increasing competition for jobs, as well as low wages and high pressure for college admittance as factors keeping kids out of the labor pool.

….. In 2006, the typical earnings of more than half of working older teenagers were less than $200 per week, according to BLS. With wages like these, even parents see that extracurricular activities such as sports and clubs can be better options to help kids prepare for their future, Goodman says.

If currently available wages are seen as unacceptable in comparison to college and other costs that have to be met, consider these contributing factors:

  • A pool of competing illegal immigrants artificially keeps wages in unskilled jobs lower than they otherwise would be.
  • The current college-aid system penalizes “too much” work by teens. Available federal aid is reduced by $1 for every $2 in additional annual earnings by the student above roughly $3,000. So, no surprise, a lot of students stop working at the penalty threshold, or simply decide not to work.
  • The college-aid system also gives the schools too much of an ability to raise tuition and fees without resistance. There is no good explanation, other than the explosion in federal student aid, as to why college tuition costs have consistent gone up at about twice the rate of inflation for at least the past 30 years.

Positivity: Patrick Henry Hughes

Filed under: Positivity — Tom @ 5:56 am

Watch this amazing ESPN report from December 2006 (direct YouTube link).

The vid’s poster says:

Patrick Hughes is a young man at Univ. of Louisville who was born blind and crippled and yet now plays the piano beautifully as well as “marches” in the Louisville marching band. This was a piece done during ESPN College Gameday on 12/2/2006.