Great Recession Recovery Not Getting Usual Gov't Help

Below is an interesting article on how the government is not doing what it normally does in a recession recovery.  I am not educated enough to know exactly what it means, but it sure doesn't look positive.  The crushing federal debt has to be a major factor in why the government isn't adding jobs to help the recovery along.  Being always interested in numbers, and being unemployed going on 11 months, the longest by far in my career, the thought of another two years of recovery is disturbing.  Being north of 55 years of age doesn't help either.

 Usually a job engine, localities slow US economy

By PAUL WISEMAN, AP Economics Writer  3:26 a.m., June 6, 2011

WASHINGTON — In a healthy economic recovery, states and localities start hiring, expand services and help fuel the nation's growth. Then there's the 2011 recovery.
The U.S. economy is moving ahead, however fitfully. Yet state and local governments are still stuck in recession. Short of cash, they cut 30,000 jobs in May, the seventh straight month they've shed workers. Rather than add to U.S. economic growth, they're subtracting from it.
And ordinary Americans are feeling it - from reduced services to fewer teachers, police officers and firefighters.

The Great Recession officially ended two years ago this month. By the same point during previous recoveries, state and local governments were engines of growth: In the two years after the 1990-91 recession ended, for example, they'd added 430,000 jobs. At the same point after the 2001 recession ended, they had added 249,000.

This time is different. More than 467,000 state and local government jobs have vanished since the recession officially ended in June 2009, including 188,000 in schools.

Few see the pain subsiding soon. Mark Vitner, senior economist at Wells Fargo Securities, expects state and local governments to slash 20,000 to 30,000 jobs a month through the middle of 2012.
Joel Naroff of Naroff Economic Advisors notes that when states cut spending to balance their budgets, as required annually, a ripple effect multiplies the damage: Companies that do business with states and localities suffer. These companies, in turn, scale back their own hiring.
"There's a whole slew of private companies that have to cut back when they don't get the (government) contracts they had been getting," Naroff said. "You can't balance a budget and say everything's going to be beautiful."
Moody's Analytics estimates that each job in state and local government supports an additional 1.3 jobs elsewhere in the economy.......

The Great Recession of 2007-2009, the longest and deepest downturn since the 1930s, dried up state and local tax revenue. It also escalated demands for social programs like Medicaid and unemployment benefits and "ate through their rainy-day funds," notes Michael Gapen, senior U.S. economist at Barclays Capital.
For a while, federal stimulus spending cushioned the blow to state and local finances. But that money is running out. And it probably won't be replenished. The federal government is preparing to cut its own spending to shrink huge budget deficits.......

But 29 states say they'll still spend less in the 2012 fiscal year than in 2008. And local governments are still waiting for a recovery in tax revenue. They rely heavily on property tax revenue, which continues to sink with the collapse in home prices in many areas.
"The state revenues are coming back, but the local revenues probably haven't seen the worst of it," says Christopher Hoene, director of research at the National League of Cities. "We still have another year to go for sure."

Honesty and Ethics Ratings of Professions, 2008-2010

Here is an interesting chart from the Gallup Poll showing the public's perception of honesty and ethics by profession, and changes over three recent years.  It's worth nothing that Members of Congress are near the bottom, with car salespeople, both with very low ratings, even less than advertising practitioners, and in fact about half off what the people think of lawyers!  How can we have so very little trust in the people we elect?

Top economist Ken Rogoff warns of dangers in US debt fight

In this Q and A session, top economist Ken Rogoff tells it like it is.  My primary reason for posting this article is what he says about taxes, that they will have to rise, no way around it, but that the present income tax system must be overhauled, a flat tax instituted, with a high deductible for low income earners, and the scrapping of the "smoke and mirrors" that high wage earners use presently to avoid paying taxes. 

 

Top economist warns of dangers in US debt fight

(AP) – May 16, 2011

NEW YORK CITY (AP) — Kenneth Rogoff never intended to be a political actor. But since the financial crisis hit, politicians and pundits have evoked the Harvard economist's research when warning about the perils of borrowing too much.
Expect to hear his name even more between now and August 2. That's the deadline the Treasury Dept. has given Congress for raising the federal government's debt ceiling without risking a default.
Rogoff's research with fellow economist Carmen Reinhart found that recovering from a financial crisis often takes longer than anyone expects. Deep debts weigh on economic growth, making countries vulnerable to another blow. "It's like being a little more run down," he says. "It's easier to get sick."
Rogoff and Reinhart also revealed that when a country's debt surpasses 90 percent of its economy, the economy often turns sluggish. The U.S. is now at 96 percent.
These findings, written in the pair's 2009 best-seller, "This Time is Different: Eight Centuries of Financial Folly," have taken on a life of their own in political circles. When you hear Republican leaders like Rep. Paul Ryan say the U.S. needs to slash spending, they often quote Rogoff's work.
For his part, Rogoff doesn't believe the country's debt trouble can be solved quickly or through deep spending cuts. "You just can't do this overnight," he says. "If we tighten too fast, we would slam growth."
Rogoff, 58, served as the International Monetary Fund's chief economist for two years and as an adviser to John McCain's 2008 presidential campaign. In graduate school at the Massachusetts Institute of Technology, Rogoff befriended Ben Bernanke, the current chairman of the Federal Reserve.
In an interview with The Associated Press, Rogoff talked about the debt ceiling, mistakes made in the Fed's $600 billion stimulus effort and his obsession with chess. Here are edited excerpts:
Q: The U.S. hit the $14.3 trillion debt ceiling today, and now the Treasury is moving cash around to stave off default till August. What's that mean for markets?
A: I don't think it means anything immediately, but it doesn't seem like any way to run the government. I think they should raise the debt ceiling unconditionally, despite the fact that some reforms are desperately needed. When you're the world's biggest debtor there are repercussions when you take it to the brink and scare people (with the idea) that you just might consider a default.
Q: You're not in favor of the artificial cap, or debt ceiling, because it threatens creditors. But debt is still your biggest worry about the economy, yes?
A: The greatest concern at the moment is the huge debt overhang. All U.S. government debt, including state and local, is higher than at the end of World War II. But equally significantly, private debt (like mortgages and credit cards) is almost at its all-time high. If you combine the two, there's never been anything like it.
Q: What's the risk in the U.S. having so much debt? Other countries, like Japan, have larger debt burdens.
A: It doesn't automatically cause a crisis, but it certainly weighs on the recovery. Very roughly speaking, when a country has public debt over 90 percent of income, growth is about 1 percent lower for a very long time.
Q: A government can't increase spending as easily if it has too much debt, which you say makes a country vulnerable. How so?
A: That's the fundamental problem. You see it when a country loses tax revenues and needs to borrow money. They have wars and natural catastrophes and need to spend to pay for things, reconstruction, bridges. You don't want to be forced in the middle of a recession to raise tax rates (to pay for those things). That's a disaster.
Q: Politicians use your work to argue for deep spending cuts now to trim our debt. Do you agree?
A: If we tighten too fast, the economy will implode on itself. We didn't get here in two years, and we shouldn't try to get out of it in two years. But at the same time the idea that we can worry about the future later, that's false.

It's not just about cutting spending. The tax take probably needs to go up. We need to clean up the tax system.

Q: Where would you start?

A: I'm one of many economists who favor scrapping the current system entirely in favor of some form of a flat tax, with a very high deductible for low-income earners.

And you know what? The very wealthy would pay more. They pay less under the current system because there are these smoke and mirrors they can hide behind, all these deductions and all these ways of avoiding taxes.

Q: Your friend and former classmate Ben Bernanke has taken flak for the most recent quantitative easing program, known as QE 2. What do you make of the effort to keep prices from falling through pushing $600 billion into the economy?
A: I thought QE 2 was absolutely right when they did it. But the way quantitative easing works best is you announce a goal and then say you will do whatever it takes (to get there). If you don't have a blank check, it doesn't do much. Because of all the pushback from the Chinese, the Germans and Sarah Palin, they couldn't keep going. The Fed needed a free hand, and it doesn't have one.
A second problem was the Fed was not careful enough to tell the market clearly, "This is not going to solve all your problems." The biggest mistake they made was the suggestion that part of the way quantitative easing operates is through the stock market.
There are all these traders on Wall Street who said, "This means the Fed's got our back. The Fed is just determined to drive up the market."
Q: What's wrong with traders thinking that?
A: Well, the Fed doesn't have their back. The Fed cares about stable inflation. So the worry now is when these traders see that QE 2 is coming to an end, will they get really depressed and all their trades will unwind? That's the concern.
Q. At Bernanke's first press conference in April, he joked that playing chess with you was a "big mistake." Most people don't know you're an International Grandmaster. Did Bernanke ever ask for a rematch?
A:  No. I went cold turkey after leaving graduate school. I teach my children how to play (chess) but that's it. I'm completely addicted and need to guard myself from playing. I still think about chess all the time.
Q: Has your expertise in chess helped inform your work?
A: Chess teaches you to think about what the other person is thinking. Obviously, there are other ways besides chess to come to that. Chess is just a disciplined approach. At the IMF, we had crises in Argentina, Brazil, Turkey and Lebanon. And it helped to put myself in their position: "What are they thinking."

Copyright © 2011 The Associated Press. All rights reserved.

A "Crisis" Over Civics Knowledge

Three-quarters of high school seniors tested weren't able to show skills in the subject of civics.  So says a recent study by the US Department of Education, who administers the National Assessment of Education Progress test.

It occurred to me recently that our poor public education system is not rudimentary and inadequate just to raise new, uninformed consumers, but also to supply the military.  I'm going out on a limb hear noting that, the more educated one is, the less likely is going to fall for the military recruitment posters and shpiel.  I'm taking about grunts, the boots on the ground/deck people.  First, the more educated one is, the more options available to you for advancement, so the less attractive a tour is to you.  Second, you are just more likely to fall for their BS.  Public high school is the very beginning of the military-industrial complex at work. 

2,400 Wealthy Californians Pay No State Income Tax

Here is a story that will boil your blood.  Apparently it is too much to ask everyone to pull their share of the weight.

2,400 wealthy Californians pay no state income tax

That number has quadrupled over the past decade, report says

By Dean Calbreath

Originally published April 14, 2011 at 1:42 a.m., updated April 14, 2011 at 8:39 a.m.

As last-minute tax filers rush to the post office this weekend to mail their income taxes, they may take heart in the fact that the state's corporations are paying a little less in state and local taxes even though individuals are paying a little more.
This year, personal income taxes will represent 51.5 percent of all general fund revenues, compared to 42 percent as recently as 2003, according to estimates by the state Department of Finance.
Last year, California ranked 15th in the nation in terms of the size of its state taxes versus personal income. That's up six notches from the year before, when it ranked 21st.
One reason for that jump is that during the 2008-2009 budget crisis, Sacramento introduced temporary increases in the personal income tax, which expired in December, and sales tax and vehicle license fees, which are slated to expire in June.
But another reason is that individual income taxes are shouldering the burden for a decrease in corporate taxes, partly thanks to tax deals arranged in the budget crisis. Those deals will cost $1.5 billion in the upcoming fiscal year, $1.6 billion next year and $1.8 billion per year from 2013 to 2015.
So who's shouldering the burden for all this?
The study estimates that the lowest-paid 20 percent of Californians now pay 11 percent of their income on state income, property and sales taxes compared to 7.8 percent tax bill among the highest-paid 20 percent.
But in terms of income taxes alone, the biggest bills are going to people making $200,000 or more. Although they represent only 4 percent of the population, they make nearly 40 percent of the state's taxable income and as a result pay 61 percent of its income taxes.
But even though the official top tax rate in California is around 9.5 percent, or 10.5 percent if you make more than $1 million per year, few pay that rate. Statistics from the Franchise Tax Board show:

• 2,430 upper-income households paid no taxes and another 5,366 paid less than 1 percent in 2008, the most recent year for comprehensive data. Although that amounts to just 1 percent of the total, those numbers have risen sharply over the past decade. In 1997, only 579 people in the upper-income bracket paid zero taxes.
• Roughly half of the upper-income households paid state income taxes ranging from 3 to 7 percent.
• Only 4 percent paid above 9 percent.

During the 2008-2009 budget negotiations, tax changes were implemented requiring the poor to pay more in taxes by lowering the threshold for paying taxes and sharply reducing the tax credit for dependent children. In 2008, a family of four did not have to pay income taxes until their income was above $51,335. But in 2010, such a family has to pay taxes once their income hits $36,591.

The Bipartisan March to Madness, by David Stockman

 This is an excellent examination of the fix we are in and how we got there, by David Stockman, a former
Republican representative from Michigan, was the director of the Office of Management and Budget from 1981 to 1985.  Truth be told, we are on borrowed time, and should have addressed this march toward the cliff a long time ago.

"Washington’s feckless drift into class war is based on the illusion that we have endless time to put our fiscal house in order. This has instilled a terrible budgetary habit whereby politicians continuously duck concrete but politically painful near-term savings in favor of gimmicks like freezes, caps and block grants that push purely paper cuts into the distant, foggy future. Mr. Ryan’s plan gets to a balanced budget in the fiscal afterlife (i.e., the 2030s); the White House’s tactic of accumulating small-fry deficit cuts over the enormous span of 12 years amounts to the same dodge."

The Bipartisan March to Madness

System Failure: California’s Loophole- Ridden Commercial Property Tax

The link to "System Failure.." should be required reading for all elected officials in California, especially at the State level.  It's an excellent examination of the effects of Prop 13, more specifically it's failure due to loopholes.

From the summary:  
"As California faces a severe fiscal crisis at the state and local level, all aspects of our tax system, including the property tax, must be examined. This report provides an examination of the property tax system as it applies to commercial property, and provides significant new data which comes to two clear and related conclusions:

1. In virtually every county, commercial property is paying a far smaller share of the
property tax since Proposition 13 passed in 1978.

2. Commercial property is able to exploit huge loopholes in the law to avoid
reassessment upon a change in ownership as required by current state law.

The first part of the report, “Who Pays the Property Tax?” provides county-by-county data on the shifting property tax burden between residential and non-residential property since the passage of Prop. 13.....

The data is consistent throughout the state: in virtually every county in the state, the share of the property tax borne by residential property has increased since the passage of Proposition 13 in 1978, while the share of the property tax borne by non-residential property has decreased. Some examples: in Contra Costa County, the residential share of the property tax went from 48% to 73%. In Santa Clara County, the residential share went from 50% to 64%, despite massive industrial/commercial growth. In Los Angeles County, it went

from 53% to 69%. In Orange County, it went from 59% to 72%."

It's very interesting that, for some unexplained reason, there has been virtually no change in San Diego County.  Nevertheless, statewide there has been a significant shift in the burden of property taxes from corporations to individuals.  The basic premise of Prop 13 should definitely be preserved, at the same time the loopholes for commercial property desperately need to be closed.  See the link for the full report:
System Failure.....

Super Rich See Federal Taxes Drop Dramatically - What's Wrong With This Picture?!

It wouldn't take a rocket scientist or herculean effort to make our tax policy much more fair, just a real dose of logic and common sense. Unfortunately, neither are in great supply in Congress.  See my emphasis in large red type below.

 

Super rich see federal taxes drop dramatically

By STEPHEN OHLEMACHER, Associated Press

Sunday, April 17, 2011 at 2:24 a.m.

/ AP

WASHINGTON — .......And nearly half of U.S. households pay no income taxes at all.
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.

Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.

The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation's tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.
There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.


.....The sheer volume of credits, deductions and exemptions has both Democrats and Republicans calling for tax laws to be overhauled. House Republicans want to eliminate breaks to pay for lower overall rates, reducing the top tax rate from 35 percent to 25 percent. Republicans oppose raising taxes, but they argue that a more efficient tax code would increase economic activity, generating additional tax revenue.
President Barack Obama said last week he wants to do away with tax breaks to lower the rates and to reduce government borrowing. Obama's proposal would result in $1 trillion in tax increases over the next 12 years. Neither proposal included many details, putting off hard choices about which tax breaks to eliminate.
In all, the tax code is filled with a total of $1.1 trillion in credits, deductions and exemptions, an average of about $8,000 per taxpayer, according to an analysis by the National Taxpayer Advocate, an independent watchdog within the IRS.
Rep. John Tierney, D-Mass., has introduced a bill to eliminate about $60 billion in tax breaks, mostly for businesses. The bill would require a regular review of all tax breaks to see if they still serve their original purpose.
"Right how they don't even come into the conversation," Tierney said. "We need to get them into the conversation and have the information on which to make a good solid decision."
More than half of the nation's tax revenue came from the top 10 percent of earners in 2007. More than 44 percent came from the top 5 percent. Still, the wealthy have access to much more lucrative tax breaks than people with lower incomes.

Obama wants the wealthy to pay so "the amount of taxes you pay isn't determined by what kind of accountant you can afford."

Eric Schoenberg says to sign him up for paying higher taxes. Schoenberg, who inherited money and has a healthy portfolio from his days as an investment banker, has joined a group of other wealthy Americans called Responsible Wealth, which is project of the group, United for a Fair Economy. Their goal: Raise taxes on rich people like themselves.
Schoenberg, who now teaches a business class at Columbia University, said his income is usually "north of half a million a year." But 2009 was a bad year for investments, so his income dropped to a little over $200,000. His federal income tax bill was a little more than $2,000.

"I simply point out to people, `Do you think this is reasonable, that somebody in my circumstances should only be paying 1 percent of their income in tax?'" Schoenberg said.

Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said he has a solution for rich people who want to pay more in taxes: Write a check to the IRS. There's nothing stopping you.
"There's still time before the filing deadline for them to give Uncle Sam some more money," Hatch said.
Schoenberg said Hatch's suggestion misses the point.
"This voluntary idea clearly represents a mindset that basically pretends there's no such things as collective goods that we produce," Schoenberg said. "Are you going to let people volunteer to build the road system? Are you going to let them volunteer to pay for education?"
The law is packed with tax breaks that help narrow special interests. But many of the biggest tax breaks benefit millions of American families at just about every income level, making them difficult for politicians to touch.
The vast majority of those who escape federal income taxes have low and medium incomes, and most of them pay other taxes, including Social Security and Medicare taxes, property taxes and retail sales taxes.
The share of people paying no federal income tax has dropped slightly the past two years. It was 47 percent for 2009. The main difference for 2010 was the expiration of a tax break that exempted the first $2,400 of unemployment benefits from taxation, Williams said.
In 2009, nearly 35 million taxpayers got a tax break for paying interest on their home mortgages, and nearly 36 million taxpayers took the $1,000-per-child tax credit. About 41 million households reduced their federal income taxes by deducting state and local income and sales taxes from their taxable income.
About 36 million families cut their taxes by nearly $35 billion by deducting charitable donations, and 28 million taxpayers saved a total of $24 billion because their income from Social Security and railroad pensions was untaxed.
"As a matter of policy, there would be a lot of ways to save money and actually make these things work better," said Leonard Burman, a public affairs professor at Syracuse University. "As a matter of politics, it's really, really difficult."

2,400 Wealthy Californians Pay No State Income Tax

 Here is a story that will boil your blood.  Apparently it is too much to ask everyone to pull their share of the weight.

2,400 wealthy Californians pay no state income tax

That number has quadrupled over the past decade, report says

By Dean Calbreath

Originally published April 14, 2011 at 1:42 a.m., updated April 14, 2011 at 8:39 a.m.

As last-minute tax filers rush to the post office this weekend to mail their income taxes, they may take heart in the fact that the state's corporations are paying a little less in state and local taxes even though individuals are paying a little more.
This year, personal income taxes will represent 51.5 percent of all general fund revenues, compared to 42 percent as recently as 2003, according to estimates by the state Department of Finance.
Last year, California ranked 15th in the nation in terms of the size of its state taxes versus personal income. That's up six notches from the year before, when it ranked 21st.
One reason for that jump is that during the 2008-2009 budget crisis, Sacramento introduced temporary increases in the personal income tax, which expired in December, and sales tax and vehicle license fees, which are slated to expire in June.
But another reason is that individual income taxes are shouldering the burden for a decrease in corporate taxes, partly thanks to tax deals arranged in the budget crisis. Those deals will cost $1.5 billion in the upcoming fiscal year, $1.6 billion next year and $1.8 billion per year from 2013 to 2015.
So who's shouldering the burden for all this?
The study estimates that the lowest-paid 20 percent of Californians now pay 11 percent of their income on state income, property and sales taxes compared to 7.8 percent tax bill among the highest-paid 20 percent.
But in terms of income taxes alone, the biggest bills are going to people making $200,000 or more. Although they represent only 4 percent of the population, they make nearly 40 percent of the state's taxable income and as a result pay 61 percent of its income taxes.
But even though the official top tax rate in California is around 9.5 percent, or 10.5 percent if you make more than $1 million per year, few pay that rate. Statistics from the Franchise Tax Board show:

• 2,430 upper-income households paid no taxes and another 5,366 paid less than 1 percent in 2008, the most recent year for comprehensive data. Although that amounts to just 1 percent of the total, those numbers have risen sharply over the past decade. In 1997, only 579 people in the upper-income bracket paid zero taxes.
• Roughly half of the upper-income households paid state income taxes ranging from 3 to 7 percent.
• Only 4 percent paid above 9 percent.

During the 2008-2009 budget negotiations, tax changes were implemented requiring the poor to pay more in taxes by lowering the threshold for paying taxes and sharply reducing the tax credit for dependent children. In 2008, a family of four did not have to pay income taxes until their income was above $51,335. But in 2010, such a family has to pay taxes once their income hits $36,591.

Fed Earns Record $82 Billion Due to Stimulus Spending

Here's a headline that didn't make the front page of the Union-Tribune, or even the front section, amazingly.  After averaging a transfer amount of $25 billion during the previous decade, the Fed transferred $47.4 billion in 2009 and now $79 billion for 2010, a new record an a 66% increase over the previous year.  This is money that goes directly to the US Treasury.  This should have gotten much more media coverage. 

Remember this next time someone criticizes President Obama's economy recovery plan.
Article in Huffington Post

Half Dome Hike in June

I overslept, and only Brady got through of the other people planning this hike on June 19.  I've done it once, about 16 years ago, with Brady, and he's done it once since then, with Faith.  It was really tough, as I was not in shape, but it was well worth it and I'll never forget it.  Last year they instituted permits, and limit those to 400 per day.  This is another cost we pay for refusing to somehow limit our population.  See the story below from the San Francisco Chronicle.  

In the fastest five minutes of the year, Yosemite sold all the permits to climb Half Dome for weekends in May and June. For weekdays, the new required permits sold out in 23 minutes.
"We knew they wouldn't last a day," said Kari Cobb at Yosemite National Park. "It's the most popular hike in the park."
The rush could make the April 1 event, when Half Dome permits for July go on sale at 7 a.m., the most intense two or three minutes of the vacation season. If you're lucky, for a service fee of $1.50, you can get four permits.
On the first day of sales last year, when Yosemite first required climbing permits for weekends at Half Dome, they sold out in 32 minutes.
The hike up Half Dome in Yosemite Valley rivals Mount Fuji in Japan and Mount St. Helens in Washington as the world's most popular trek. In past years, so many people in Yosemite Valley attempted the climb on impulse that traffic jams of humanity often formed on the climbing cables.
On one trip with brother Rambob, we were stuck in place on a ledge at mid-wall for 30 minutes, with nothing to do except to wait it out and gaze across Tenaya Canyon. There were just too many people in one place, going both up and down on the cable.
Many have been unprepared for the physical challenge. From Yosemite Valley, it's an 8.5-mile ascent one-way with a 4,800-foot elevation gain. You climb past Vernal Fall, Nevada Fall and Little Yosemite en route to Half Dome's backside. The ultimate is the 440-foot cable ascent, where hiking becomes an act of faith, and you emerge atop the 13-acre (mostly flat) summit.
From the perch of a rock cornice atop Half Dome, Yosemite Valley looks like a miracle. Below you is nearly a mile of empty air. The canyon walls are framed by El Capitan on one side, three-spired Cathedral Rocks on the other. Long silver-tasseled waterfalls slide down the massive granite exposures of the towering canyon walls.
The best strategy to get a permit is to go to recreation.gov, the park's website for reservations, and create a user profile in advance. When the race starts at 7 a.m. April 1 (and again on May 1 for August), all you have to do is punch in a date and hope you don't get locked out. You can be out of luck if your server is slow or you can't break through the logjam of users. To get a reservation by phone, (877) 444-6777, seems virtually impossible. Many Chronicle readers e-mailed their frustrations over their failed attempts to get permits Tuesday.
By requiring permits, Cobb said, park rangers achieved two goals: reducing the number of people on the cables and increasing the level of planning and expertise for climbers.
"The numbers of people on Half Dome are down a quarter to one-third per day of what it used to be," Cobb said, with 300 permits now available from the reservation service, recreation.gov, and an additional 100 through wilderness permits from the Yosemite Wilderness Center.
The new process requires climbers to read safety information about the trek. That includes bringing enough water and food, and not wearing the wrong footwear. One time, at the foot of the cables, we ran into a group of kids on their way up the big rock who were carrying empty plastic jugs, and they asked brother Rambob, "Where's the water?" Another time, we saw someone wearing flip-flops who stubbed a toe. There are many such tales.
"Our search and rescue calls have been dramatically reduced," Cobb said. "With fewer people, you get the wilderness experience and they love it, not a parking lot of people." Providing, that is, you get one of those permits.
The Half Dome cables are usually in place the weekend before Memorial Day. Updates and info are available at nps.gov/yose; reservations at recreation.gov.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/05/SP1E1I2T7A.DTL#ixzz1G7E6WpCM

Senior Health Issues

This is a public service announcement from the school of hard knocks, to protect those who may have made the same assumptions I did.


We were more than thrilled when my parents were accepted into a senior citizen village that looked more like a campus than an old folks home, and offered all three levels of care, Independent Living, Assisted Living, and Skilled Nursing.  Naively, I thought our prayers had been answered:  not only was there such a wonderful place for Mom and Dad, but they would never have to move again, at least not outside the village.

Well, my eyes are open now.  Assisted Living and Skilled Nursing facilities are for seniors with physical challenges, while doing virtually nothing for mentally-challenged patients.  Although the cost difference between Independent Living apartments and Assisted Living rooms is about double, there is virtually no help for mentally-challenged patients.

My Mom has had several minor strokes and TMI's, and is not the person she was before the strokes.  She can barely carry on a conversation, and has virtually no drive or initiative.  Although she is now moving into an Assisted Living room, we have been told directly that they do not force anyone to do anything, but can only 'strongly suggest.'  This includes eating, drinking, changing clothes, you get the picture.  Now you are thinking, "What, you expected they would force her to eat and drink, might even give her an IV or put a tube down her throat?!" 

So now what do we do?  To be truthful, I hadn't thought this far ahead, until now.  I'm all for prescribing anti-depressants, but so far they haven't really made a difference.  It's really horrible to see the quality of life drain away from someone, especially one's parents.

My point is, naive or wishful thinking or whatever, everyone should know this ahead of time, and be prepared to deal with this issue, rather than assume, as I did.

Earmarks Are Out! Hallelujah!

Wow, great news, Congressional earmarks are off the list!  Republicans and Democrats coming together to deal with very real budget problems, fantastic.

Berkshire Hathaway Beats Forecast, Has $20B in the Bank

Warren Buffett continues to light the way for investors, improving financial results in a tough year.  In his annual letter to stockholders, he has an optimistic tone for the coming year. 

OMAHA, Neb. (AP) -- Warren Buffett's Berkshire Hathaway reported a 43 percent jump in fourth-quarter earnings Saturday largely because of strong performance at its railroad business and a paper gain of $1.4 billion on the company's derivative contracts and investments.
Buffett said in his annual letter to shareholders that the purchase of the Burlington Northern Santa Fe railroad was Berkshire's highlight of 2010.
Berkshire reported net income of $4.38 billion, or $2,656 per share of its primary, Class A stock. That's up from the $3.1 billion net income, or $1,969 per Class A share, a year ago. It's also higher than the $1,695 per Class A share expected by analysts surveyed by FactSet.
Revenue grew nearly 20 percent to $36.2 billion from $30.2 billion a year earlier.

Buffett said Berkshire's $26.7 billion acquisition of BNSF last February is working out better than he expected. The railroad added $2.2 billion to Berkshire's net income in 2010.
In his annual letter to investors, Buffett wrote:  "Earlier I explained just how important railroads are to our country’s future. Rail moves 42% of America’s inter-city freight, measured by ton-miles, and BNSF moves more than any other railroad – about 28% of the industry total. A little math will tell you that more than 11% of all inter-city ton-miles of freight in the U.S. is transported by BNSF."


Revenue for the full year was $136.2 billion, up 21 percent from $112.5 billion a year earlier.
Buffett said he's looking for more big acquisitions to boost Berkshire's earnings power.  Berkshire Hathaway continues to bank $20 billion dollars in cash.

Paul Krugman Praises the President

Paul Krugman's recent column blows the smoke of complexity and distraction away from the huge federal budget crisis, and praises President Obama for his actions.  It's about time the President gets some credit, and it's good to see.  As usual, this is a good read.
Paul Krugman's column

David Brooks and the Great Stagnation

David Brooks of the New York Times writes about the book The Great Stagnation by Tyler Cowen.  In the book, the author maintains that the world became a different place in 1974.  He points out the auto industry employes millions of workers, but today, the new economy is eBay, Facebook, etc., where we spend our time but not our money, and these companies employe just a few thousand workers.  Where will the jobs come from in the future?  It's a very interesting read, and I'm going to get a copy of Cowen's book.

David Brooks column

American Public Shows How it Would Cut the Budget Deficit

I  found a new organization and website, one which I agree with wholeheartedly on their view of how citizens have been disenfranchised from their government.  See their website at:
Program for Public Consultation

They completed a study recently on how the public would deal with the federal budget deficit.  Through a combination of spending cuts and tax increases, on average, respondents cut the discretionary budget deficit projected for 2015 by seventy percent.  I'll bet you will be surprised at some of the actions those in this study opted to take.  You can also take your shot at how you would reduce the deficit, at their website.

An equally interesting result came from a recent poll of Americans, in which only two in ten said their country is "is run for the benefit of all the people" while eight in ten said the country is "pretty much run by a few big interests looking out for themselves." Other democracies have similar views.


This problem seems to be getting worse. When this question was first asked to Americans in 1964 two thirds said that the country was run for the benefit of all the people, but this number has been descending ever since.

People are also frustrated with the level of partisanship in government decisionmaking. 64% chose the position "The parties fight for their narrow interests, the will of the people is ignored, and the results do not serve the people."

Low trust in government is highly correlated with the perception that government is not responding to the will of the people. Presented the argument that "Government tends to get bogged down in partisan conflict and distorted by the influence of moneyed interests. Thus, it is necessary for the public to have a stronger voice in shaping government decisions," 78% found it convincing.

This does not mean that people think that government should follow public opinion in a lock-step fashion. Asked how much influence the will of the people should have on government decisionmaking on a scale of 0 to 10, the mean response was 7.9--a high level, though well below 10. But asked how much influence the people are having, the mean response just 4.0. More than 8 in 10 said the public should have greater influence.

Paul Krugman's "THE GOP'S OWN PRIVATE EUROPE

The Republican's make it so easy, sometimes, to smash their logic.  Case in point, Rep. Paul Ryan's official Republican response to President Obama's State of the Union address.  Ryan:  "Just take a look at what's happening to Greece, Ireland, the United Kingdom and other nations in Europe.  They didn't act soon enough, and now their governments have been forced to impose painful austerity measures:  large benefits cuts to seniors and huge tax increases on everybody." 

The trouble is, in the case of Ireland and the UK, what happened actually refutes the current Republican narrative.

Krugman:  "Again, American conservatives have long used the myth of a failing Europe to argue against progressive policies in America.  More recently, they have tried to appropriate Europe's debt problems on behalf of their own agenda, never mind the fact that the events in Europe actually point the other way.  But Ryan is widely portrayed as the intellectual leader within the GOP, with special experties on matters of debt and deficits.  So the revelation that he literally doesn't know the first thing about the debt crises currently in progess is, as I said, interesting - and not in a good way." 

Read the full editorial here.

President Obama Calls on Corporate Tax Overhaul, Long Overdue

The article below is from SignOnSanDiego.com, and is the best exposure I’ve seen on the corrupted corporate tax structure in the United States. Instead of editing it, I’ve copied the entire article, and highlighted and bolded the best points. My point is, here are experts in their fields, quoted in a San Diego Union-Tribune website, agreeing with President Obama’s goal of restructuring the corporate tax policy so it is fair, finally. As you will read, we are losing from $60 billion to $100 billion a year in corporate income taxes, and guess who has to make that up?

See this link, too, on the Ugland House in Cayman Islands, ‘official’ headquarters to over 9,000 US corporations, including Intel, Atria, Exxon, and Coca Cola, allowing them to reduce their US income tax liability to a fraction of what it should be.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aWoQkk2WY1oc

EconoMeter: Should loopholes favoring lower corporate taxes be eliminated?

BY ROGER SHOWLEY    ORIGINALLY PUBLISHED JANUARY 29, 2011 AT 6:44 P.M., UPDATED JANUARY 29, 2011 AT 5:23 P.M.

In his State of the Union address, President Obama covered much, including many ideas about federal spending priorities and the nation’s economic future. One idea was recommended by his deficit reduction commission last year and dealt with corporate tax rates and loopholes.

Q: Do you support President Obama’s idea to eliminate corporate income tax loopholes and reduce the overall income tax rate assessed against companies? What is your favorite loophole – and one that could generate a lot of revenue -- that should be eliminated?

Marney Cox, San Diego Association of Governments

NO

But don’t get me wrong, I’m against all loopholes; the principles of sound tax policy dictate that tax laws should not favor one economic activity over another. The goal should be to lower tax rates, removing the distortions in the present system, allowing businesses to compete on the basis of performance and return rather than on their ability to receive or keep special provisions in the tax code. Some of the biggest loopholes today are offered to companies in the energy field, no not oil companies, those that produce energy from renewable “green” sources. President Obama is not going to level the playing field and let the market rather than the tax system drive investment.

Kelly Cunningham, National University System

YES

The current top corporate tax rate in the U.S. is among the highest in the industrialized world, yet federal tax laws are filled with so many credits, deductions and exemptions, few companies ever pay the top rate. Most businesses should pay lower taxes, and thus stimulate more businesses to employ more workers and pay taxes. Simplifying tax codes also encourages sounder business decisions, while eliminating loopholes effectively raises net revenue to the Treasury. The litany of corporate loopholes is extensive, but the principle of the market determining costs and success is vastly preferable to government picking winners and losers.

Alan Gin, University of San Diego

YES

The U.S. statutory corporate tax rate of 35 percent is among the highest in the world. But when tax loopholes are factored in, the effective tax rate drops significantly. The problem is that the tax burden is uneven, with some companies benefitting from the loopholes and paying little to no taxes, while others have to pay the full rate. One area to look at is transfer-pricing arrangements that allow companies to shift income to subsidiaries in overseas tax havens and avoid taxes in the U.S. One estimate is that closing loopholes involving overseas tax havens could bring in an extra $100 billion dollars a year in tax revenue.

James Hamilton, University of California San Diego

YES

But I’ll believe it when I see it. Today’s “loophole” is yesterday’s “tax incentive.” Congress has never been able to resist the urge to decide that certain goals are useful and need to be encouraged, even if we all understand as a general principle that it makes more sense to let private firms decide which projects have the highest potential returns. If we’re serious about doing something about this, the place I’d like to see us start is the enormous tax breaks and subsidies for ethanol. These have made very little if any positive contribution to our net energy supplies, and have significantly increased the cost of food not just to Americans but also to consumers around the world.

Gary London, The London Group

YES

Particularly in those cases of corporations that are highly profitable. There is no inherent benefit to U.S. taxpayers to subsidize them with tax breaks. In fact, what they don’t pay, presumably the rest of us have to make up. The President cited Exxon, which earned a record $45.2 billion profit, none of it domestically taxed. Google, General Electric, and Facebook (their reported intention this year) send earnings from Ireland to the Cayman Islands, through a perfectly legal loophole called “transfer pricing,” paper transactions among corporate subsidiaries that allow for allocating income to tax havens while attributing expenses to higher-tax countries. Such income shifting costs the U.S. government as much as $60 billion in annual revenue. That is hard to ignore.

Norm Miller, CoStar Group

YES

The tactics of firms like Google and Facebook and many others depend on shifting income to lower tax rate countries like Ireland or the Cayman Islands by paying rent on things like the use of logos and other intellectual property. They deduct the expense in the high tax-rate country like the U.S. and claim the income in the low tax-rate country. The key to eliminating this behavior starts with lowering corporate taxes overall from 35% to say 25% and then eliminating the games. Doing so would provide $50 to $60 billion in revenue which would pay off .4% of the outstanding U.S. debt balance each year. It’s a start.

Lynn Reaser, Point Loma Nazarene University

Yes

The U.S. corporate tax rate is one of the highest in the world but generates one of the lowest revenue totals relative to GDP because of the myriad of tax incentives. To improve U.S. competitiveness: (1) The corporate tax structure should be collapsed from multiple brackets, with the top taxed at 35%, to one bracket taxed at 28%; and (2) All of the more than 30 tax credits and over 75 tax exclusions, deductions, and deferrals known as “tax expenditures” should be eliminated. This approach could mitigate the backlash if tax preferences were retained for one industry but not another. A level playing field without the distortion of various tax subsidies, combined with a lower overall tax rate, would enhance both the efficiency and equity of the U.S. economy.

Dan Seiver, San Diego State University

YES

The U.S. corporate tax rate is too high compared to many other developed countries, and there are too many loopholes that allow corporations to avoid paying taxes. If we simplify the corporate tax code, and eliminate loopholes, we can certainly reduce the statutory rate, and probably will not lose any tax revenue! The worst loophole is the one that allows U.S. firms to list their main or subsidiary “headquarters” as the Cayman Islands, which has no corporate tax rate. Many large American firms have used this loophole, including Altria, Coke and Intel. Don’t believe me? Google “Ugland House Bloomberg” and read the May 2009 story for yourself. Over 18,000 corporations list this 5-story building in the Cayman Islands as their official address. Close this loophole!

Historic Idea Has Democrats and Republicans Sitting Together for State of the Union Address

Congratulations to Sen. Mark Udall, D-Colo., Sen. Lisa Murkowski, R-Alaska, U.S. Reps, Heath Shuler, D-N.C., and Paul Gosar, R-Ariz. for gathering 60 members of Congress to sit with members of the opposite party during President Obama's State of the Union speech tonight.  I've always hated to see our elected Senators and Representatives divided by party.  An article from the Houston Chronicle states this have never happened in the nearly 100 year history of the State of the Union address.  It's about time.


'Date night' pairs lawmakers in nod to call for civility


Gesture breaks tradition that can be traced to 1913

By JOE HOLLEY

HOUSTON CHRONICLE

Jan. 25, 2011, 10:47PM

GOP Sen. John McCain, right, talking before the address with Democratic Sen. John Kerry, suggested he was looking forward to less "jumping up and down" in his seat.

There was U.S. Rep. Sheila Jackson Lee, D-Houston, in her coveted State of the Union perch along the aisle....This time, though, instead of sitting in a bloc with her fellow Democrats, Lee sat beside a real live Republican, U.S. Rep. Pete Olson of Sugar Land.

The two Houston lawmakers were enthusiastic participants in the State of the Union "date night," a bipartisan gesture prompted by the shooting of U.S. Rep. Gabrielle Giffords, D-Ariz., earlier this month. The pre-speech curiosity was almost Oscar-night giddy — or maybe prom-night giddy - as lawmakers over the past several days paired off.

More than 60 members signed up to sit beside one of their colleagues from a different party, including U.S. Sen. Charles Schumer, the liberal Democrat from New York, who paired up with U.S. Sen. Tom Coburn, a conservative Republican from Oklahoma. Schumer noted that sitting together was symbolic, but added, "Maybe it just sets a tone and everything gets a little bit more civil."

U.S. Rep. Michael McCaul, R-Austin, sat with U.S. Rep. Henry Cuellar, D-Laredo, while U.S. Sen. Kay Bailey Hutchison, R-Texas, sat next to U.S. Sen. Kent Conrad, a North Dakota Democrat who had asked her for a "date" on ABC's This Week on Sunday.

House Minority Leader Nancy Pelosi turned down an invitation from House Majority Leader Eric Cantor, R-Va., explaining via Twitter that she already had accepted an invitation from Rep. Roscoe Bartlett, R-Md.

U.S. Sen. Dick Durbin, a Democrat, sat with fellow Illinois Sen. Mark Kirk, a Republican, who was attending his first State of the Union address.

"I'm bringing the popcorn; he's bringing a Coke with two straws," Durbin joked last week.

'Want to change the tone'

The move to break with tradition came earlier this month from a moderate Democratic policy group called Third Way and was quickly endorsed by Sen. Mark Udall, D-Colo.

"I think we all believe that the State of the Union's become more like a high school pep rally, and we want to change the tone and show the public that we can work together," Udall said at a news conference a few hours before the president's speech. Joining him were U.S. Sen. Lisa Murkowski, R-Alaska, and U.S. Reps. Heath Shuler, D-N.C., and Paul Gosar, R-Ariz. All three were co-signers of a "Dear Colleague" letter to every member of Congress, asking them to end the partisan-seating tradition.

"The choreographed standing and clapping of one side of the room - while the other side sits - is unbecoming of a serious institution," Udall had written. "And the message that it sends is that even on a night when the president is addressing the entire nation, we in Congress cannot sit as one, but must be divided as two."

Sen. John McCain, R-Ariz., announced that he'd be sitting with Mark Udall's cousin, U.S. Sen. Tom Udall, D-N.M.

"It might be nice to cut back a little bit on all the jumping up and down," McCain told CBS' Face the Nation on Sunday. McCain was a close friend of the late U.S. Rep. Morris Udall, a liberal Democrat from Arizona who sought his party's presidential nomination in 1976.

'Pep rally' dates to 1983

The partisan seating tradition dates back to 1913, when President Woodrow Wilson personally delivered a State of the Union address to a joint session of Congress for the first time since Thomas Jefferson.

Lawmakers observed the partisan seating tradition of the House - and continued to do so for nearly a century.

The "political pep rally," as Chief Justice John Roberts of the Supreme Court put it last year - members on one side leaping to their feet in a syncopated ovation while the other side sits glumly - dates back to 1983, when Democrats mockingly applauded President Ronald Reagan during a State of the Union speech.

"Date night" 2011 turned out to be a rather sober public lecture from the president. They heard Obama call for "our generation's Sputnik moment" - investment in biomedical research, information technology, clean-energy technology. They also heard him call for education reform, investment in infrastructure and tax reform.

Empty seat for Giffords

There were 79 applause interruptions, and lawmakers still rose for standing ovations, but less often and less raucously than in years past. An empty seat among the Arizona delegation, a tribute to Giffords, also contributed to a more somber tone.

Whether bipartisan civility lasts past midnight Tuesday is an open question, as the president acknowledged.

Just recognizing "common hopes and a common creed," Obama said, "won't usher in a new era of cooperation. ... What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow."

Sen. Mitch McConnell dismisses it as strictly symbolic with no meaning to the public, but I beg to differ.  I've always hated to see the traditional splitting by party. 


Others are not so enthusiastic. Senate Minority Leader Mitch McConnell, R-Kentucky, said on FOX that he would sit in his usual Senate seat.

"If people want to mix it up, we don't have seating assignments," McConnell said. "The American people are more interested in actual accomplishments ... than seating arrangements for the State of the Union."

What is Possible?

The next time someone tells you something isn't possible, tell them first to finish their sentence, after you quote the following to them, from Wikipedia.org:

"Modern U.S. Navy aircraft carriers have the Mark 7 Mod 3 arresting gear installed, which have the capability of recovering a 50,000-pound (23,000 kg) aircraft at an engaging speed of 130 knots in a distance of 340 feet (104 m). The system is designed to absorb theoretical maximum energy of 47,500,000 foot-pounds (64.4 MJ) at maximum cable run-out.

.....Aircraft coming in to land on a carrier are at approximately 85% of full throttle. At touchdown, the pilot advances the throttles to full power. Once the arresting gear stops the aircraft, he brings the throttles back to idle..."

We have all seen pictures of aircraft landing on aircraft carriers, the above showing the incredible numbers behind the pictures.  The point is, with the will to make something happen, it can be made to happen, and the above is an excellent example.  The current class of aircraft carriers in the US cost only $4.5 billion dollars, not pocket change, but less than one might have imagined.

Ridiculous Legislations Passes Every Month

What, you ask, isn't this a gross exageration?  No, when you consider that virtually all legislation which contains a dollare amount is not indexed!  For example, the Occupational Health and Safety Act of 1970 established penalties, in section 17.  Here is subsection a:

(a) Any employer who willfully or repeatedly violates the requirements of section 5 of this Act, any standard, rule, or order promulgated pursuant to section 6 of this Act, or regulations prescribed pursuant to this Act, may be assessed a civil penalty of not more than $70,000 for each violation, but not less than $5,000 for each willful violation.

The penalty amounts were updated in 1990, from $10,000 to the current $70,000.  Accounting for inflation, the amount would have grown to $33,685 if indexed, so the new 1990 amount was more than double, creating a great dis-incentive.  Today, however, to keep the same weight, the penalty should be adjusted to $116,785.  However, Congress fails, month after month, to simply index such legislation so that it automatically continues to have the same weight and impact on violations. 

The US Bureau of Labor Statistics maintains an Inflation Calculator, so it would be simple to attach all fines to this Calculator, by law.  Instead, they continue to pass legislation that loses bite, year after year.  Ridiculous.

US Inflation Calculator

Supervisor Roberts Opens New Juvenile Hall Parking Lot, Benefits Clients and Birdland Residence

On December 23, 2010, Deputy Probation Officer Yvette Klepin, Serra Mesa Planning Group Chair yours truly, and Supervisor Ron Roberts, cut the ribbon officially opening the new Juvenile Hall Parking Lot.  This new parking lot provides 265 new spaces for Juvenile Hall and Court employees, and frees up the same number of spaces in the much more convenient existing lot behind the Juvenile Court, for people with business at the Court and Hall.  This, in turn, takes away the need for those people to search for onstreet parking in the Birdland neighborhood, up to four blocks away from the Court complex.  Thank you, Supervisor Roberts, for providing such a good solution to the problem, but also doing it so quickly, less than a year from start to finish.

Governor Arnold Schwarzenegger Serves Last Week

Nest Monday, Governor Schwarzenegger's two terms and seven years come to an end.  He is far from the worst governor California has ever had.  I think we can thank the woman  behind the man for much of his success, that being Maria Shriver.  He led California through some very tough times.  I didn't always agree with his politics or actions, but I do have a lot of respect for him.  "My struggle for reform will continue, my belief in environmental issues and in protecting the environment will continue," he said recently.  Overall, I have to say, Thank You Governor, for your two terms as governor of the eighth largest economy in the world.  Happy Trails to you and your family. 

Brazil's 1st Female President Takes Office

From Marxist rebel to economist to the new leader of the world's fifth largest country, what a story for the new president of Brazil.  Dilma Rousseff, 63, in a 45 minute speech at her inauguration, wept when she remembered her past as a member of a leftist Marxist guerrilla group and her dead comrades in the fight against the 1964-85 dictatorship in Brazil, during which she was imprisoned and suffered torture.  What an incredible story!    "I do not come here to enrich my biography but to glorify the life of every Brazilian woman.  It is my supreme commitment to honor women, to protect those who are weakest and to govern for all," she said.  She succeeds her mentor, Luiz Inacio Lula da Silva, who termed out, and leaves office with record popularity.  Best of luck to her and the people of Brazil.

Sam Harris Writes About the Dangerous Growing Wealth Gap

Sam Harris writes in Huffingpost.com about the current wealth gap, how dangerous it is, and a 'simple' solution to it.  Here is a quote from it:

Most Americans believe that a person should enjoy the full fruits of his or her labors, however abundant. In this light, taxation tends to be seen as an intrinsic evil. It is worth noting, however, that throughout the 1950's--a decade for which American conservatives pretend to feel a harrowing sense of nostalgia--the marginal tax rate for the wealthy was over 90 percent. In fact, prior to the 1980's it never dipped below 70 percent. Since 1982, however, it has come down by half. In the meantime, the average net worth of the richest 1 percent of Americans has doubled (to $18.5 million), while that of the poorest 40 percent has fallen by 63 percent (to $2,200).

Follow the link to read this well-thought out article.

Sam Harris on the Growing Wealth Gap