The Homa Files

What business would operate this way ???

July 28, 2011

I rarely agree with lib-pop-biz-observer Thomas Friedman, but he struck a chord in his op-ed “Can’t We Do This Right?” by saying:

There is only one thing worse than Republicans and Democrats failing to agree to lift the debt ceiling, and that is lifting the debt ceiling without a well-thought-out plan and with hasty cuts totaling trillions of dollars over a decade.

What business do you know — that is still in business — that would operate this way: making massive long-term cuts, negotiated by exhausted executives, without any strategic plan?

It certainly wouldn’t be a business you’d expect to thrive.

First, the obvious: There are virtually no people with serious business experience sitting in on the negotiations. And, the “CEO” has neither business experience nor apparent business instincts.

So, why would anybody expect the gov’t to run like a world-class business?

Following on to Friedman’s points, what well run business …

Operates with no budget? With no contingency Plan B’s?
(Note: Geithner said Sunday that there was no contingency plan … either there isn’t one or he’s a liar. Either way, we lose.)

Creates 10 year financial plans with all the savings materializing in the out years? (Note: well-run businesses might look out 5 years in op planning – longer for capital planning – but will stack the savings in the “in” years to make sure they happen.)

The reality is that none of these Washington jabrones would cut muster as a corporate CEO – with hard metrics and accountability.

As a CEO buddy once told me : “Given his resume, I couldn’t get Obama approved to sit on my Board”.

Posted in Debt - Deficit, Obama | 1 Comment »

A breakthrough idea for generating more “revenue” …

July 28, 2011

First, a couple of tax facts …

Roughly 140 million individual tax returns are filed each year … some, individual, some joint
Those returns report a bit over $8 trillion in AGI … about $5.3 trillion in taxable income
Those returns generate about $1 trillion in income tax “revenue” … that’s about 12.5% of AGI and about 19.5% of taxable income

The Federal deficit is about $!.6 trillion.

Let’s see how we can close that gap …

Option 1: Increase the average tax rate (on taxable income) by about 2.5 times … from 19.5% to about 45%
Option 2: Make every individual filer pay an additional $1,000 – each joint filer $2,000
Option 3: Make everybody who voted for Obama (about 50 million people) pay an additional $3,000

I really like option 3 … since the vast majority of those folks like the job the President is doing, let them pay for it.

As long as they’re paying, I don’t care how much the President spends …

Posted in Debt - Deficit, Taxes | Leave a Comment »

America’s Got Talent … and the Debt Crisis

July 27, 2011

AGT has passed CSI to become my favorite TV show – at least, for now.

Watching last night, I was struck by two ironic commonalities between AGT and the President’s speech on Monday night.

First, the headline act was a guy named Professor Splash who belly-flopped 36 feet into a kiddie pool filled with 12 inches of water.

Great metaphor for solving the debt crisis, right?

Second, the winners are, of course, decided by folks phoning and emailing to vote for their favorites.

After performances, acts would wave the number of fingers that corresponded to their act’s ID number.

If only, the President had waved and shouted “ … and press the number 1 if you want balance and compromise” when he implored people to call and write to members of Congress.

Agree?

* * * * *

P.S. Since you asked: My current favorite acts are Silhouettes – a choreographed group of kids that dance into amazing formations behind a screen to create artistic silhouettes …. and Prof. Splash – partly because I love the name.

I learned years ago that anybody can just start calling themselves “professor” and write a blog.

If this dude gets up to, say, 50 feet for his belly-dives, he deserves the $1 million. And, if he dies trying, his widow should get the money …

Posted in Debt - Deficit, Laughs | Leave a Comment »

From the “No Choice but to Withhold Granny’s Check” file …

July 27, 2011

Courtesy of http://dirtyspendingsecrets.com/

Sure wouldn’t want to cut any of these fine programs.

Incredibly, Washington is spending $2.6 million training Chinese prostitutes to drink more responsibly on the job.
Congress recently gave Alaska Airlines $500,000 to paint a picture of a Chinook salmon on a Boeing 737
Federal employees cost taxpayers $146 million each year when they upgrade to business class flights. The Government Accountability Office found that more than half of these upgrades were not properly authorized.
The government has spent $3 billion to re-sand our nation’s beaches. Advocates claim this prevents erosion and keeps the beaches attractive to tourists. But the National Oceanic and Atmospheric Administration says the sand does nothing to prevent erosion—and this sand gets swept out to sea just as easily as existing sand!

Pick your favorite …

Posted in Debt - Deficit, Gov't Waste & Inefficiency, Gov't Spending | 2 Comments »

What, you don’t have a master’s degree?

July 27, 2011

Punch line: “Colleges are turning out more graduates than the market can bear, and a master’s is essential for job seekers to stand out”

Excerpted from NYT “The Master’s as the New Bachelor’s“

Browse professional job listings and it’s “bachelor’s required, master’s preferred.”

Call it credentials inflation.

Colleges are turning out more graduates than the market can bear, and a master’s is essential for job seekers to stand out

Once derided as the consolation prize for failing to finish a Ph.D. or just a way to kill time waiting out economic downturns, the master’s is now the fastest-growing degree.

The number awarded, about 657,000 in 2009, has more than doubled since the 1980s, and the rate of increase has quickened substantially in the last couple of years.

Nearly 2 in 25 people age 25 and over have a master’s, about the same proportion that had a bachelor’s or higher in 1960.

* * * * *

The degree of the moment is the professional science master’s, or P.S.M., combining job-specific training with business skills.

Many new master’s are in so-called STEM areas — science, technology, engineering and math … recognizing that not everyone is ivory tower-bound and are drafting credentials for résumé boosting.

* * * * *

So what’s going on here?

Have jobs, “skilled up”?

Or perhaps all this amped-up degree-getting just represents job market “signaling” — the notion that degrees are less valuable for what you learn than for broadcasting your go-get-’em qualities. “Credentialing gone amok.”

“There is definitely some devaluing of the college degree going on. We are going deeper into the pool of high school graduates for college attendance” making a bachelor’s no longer an adequate screening measure of achievement for employers.

Posted in Education - Academics, MBA Degree, MBAs | Leave a Comment »

Nums: U.S. Federal Spending & Deficits under Clinton, Bush & Obama

July 26, 2011

If you missed yesterday’s post “How’d we get into this fix?”, check it out now.

Apparently, Pres. Obama missed it.

How do I know?

Simple: his historical recollections in last night’s speech didn’t seem to match the numbers.

Somebody forwarded him the link, ok?

* * * * *

Following up on yesterday’s post, some HF readers asked for a summary table.

So, here it is … click below for a PDF version

Conclusions stay the same as yesterday …

Bush overspent Cinton by about $1 Trillion annually and Obama makes him look like a tightwad.

Obama is spending $1 Trillion per year more than Bush and $2 Trillion per year more than Clinton.

Still, Obama wants taxpayers to bail him out. Don’t constrain him with spending restraints …

What planet ?

click chart to enlarge or click below to download a PDF version

click to download PDF

Posted in Budget - Deficit, Bush, Obama | Leave a Comment »

“Intransigence” or “Consequences”

July 26, 2011

In Spring 2009, President Obama bluntly, repeatedly, and publically chided Congress and the American people that “elections have consequences”.

Then, bolstered by a filibuster-proof majority in the Senate, he – with sidekicks Reid & Pelosi – rammed through ObamaCare with no GOP votes. No compromise, except to sway Dem votes (think Cornhusker kick-back, Louisiana Purchase, Florida Medicare Advantage, union waivers, etc).

Yep, elections have consequences.

Last November, voters took the President’s words to heart and elected a majority GOP Congress – largely driven by angry tax payers who didn’t want to pay for Obama’s spending binge.

Now, the Congress refuses to jack up taxes … or, in Obama-speak, to increase revenues.

The President and Sen. Reid say the GOP Congress is being “intransigent”.

Hmmm.

I thought elections were supposed to have consequences …

Posted in Debt - Deficit, Obama | 1 Comment »

Internet addiction? … Up there with smoking and drinking.

July 26, 2011

Punch line: Online and digital technology is increasingly pervasive, influencing our friendships, the way we communicate, the fabric of our family life, our work lives, our buying habits and our dealings with organizations.’

People deprived of the internet feel ‘upset and lonely’ and find going offline as hard as quitting smoking or drinking.

* * * * *
Reported in the Daily Mail …

Researchers at the University of Maryland persuaded hundreds of students at 12 colleges around the world to agree not to use any technological devices including television and radios for 24 hours.

The volunteers had to stay away from all emails, text messages, updates on Facebook and Twitter. All they could have access to was a landline phone and books. The students kept diaries of their feelings during their period of ‘information deprivation’.

The researchers reported the volunteers told of physiological and physical symptoms comparable to addicts trying to quit smoking or drugs.

These included feeling fidgety, anxious and isolated, and even reaching out for their mobile phone, which was no longer there.

Some of those taking part in the experiment – called Unplugged – said they felt like they were undergoing ‘cold turkey’ to break a hard drug habit, while others said it felt like going on a diet.

Ken’s Note: Felt guilty … found this article online, edited it online, and posted it for your edification … online, of course.

Posted in Internet - Soc Networking, Psychology | Leave a Comment »

How’d we get in this fix? … Here are the nums re: the Fed’s spending binges.

July 25, 2011

Obama’s stump riff is that we’re in this debt-deficit mess because of 2 unfunded wars, an unfunded prescription drug plan, and the unfunded Bush tax cuts.

Oh, really?

Let’s look at the nums … starting with Bush’s last year – 2008.

Note: All numbers are pulled from usgovernmentspending.com

A couple of takeaways:

No surprise, the big 3 – defense, Medicare and Social Security – are roughly equal in magnitude and account for about 70% of gov’t spending
Bush handed off to Obama a deficit of roughly $500 Billion and a $10 Trillion national debt.
IMPORTANT: ‘Baked in’ to those numbers are Obama’s talking points: the wars, the Rx plan, and the tax cuts … more on that later.

That’s the static view.

For context, let’s look at Bush’s spending (in his last year) versus Clinton’s spending in his last year (2000):

click to enlarge

A couple of more takeways:

Bush increased spending over $1 Trillion (2000 to 2008)
…OUCH!
Almost 1/3 of the increase was in defense spending … 2 wars will do that to you … especially when compared to Clinton’s skinnied down military (remember the “peace dividend” that Reagan handed Clinton?)
Over 1/4 of the increase was attributable to higher healthcare costs … a prescription drug plan and a touch of inflation will do that to you
Note: about $200 Billion of the increase is attributable to Welfare (think refundable tax credits) and Education (think NCLB)
Interesting (to me): The national debt grew by about $4.5 Trillion from 2000 to 2008 … to about $10 Trillion … during the same period, tax receipts (“revenue” in Obama-speak) increased by about $500 Billion (according to the Tax Policy Center)
Conclusion: The increase in the debt / deficit during the Bush years was more than fully explained by the oversized spending … though marginal tax rates went down, tax receipts increased, offsetting some of the higher spending.

Now, keep in mind, that Obama inherited a national debt of about $10 Trillion and an annual deficit of under $500 Billion.

Also, keep in mind that the spending on the 2 wars and the Rx drug plan were baked into Bush’s final year’s numbers.

OK, now let’s look at the Obama years.

click to enlarge

Well, well, well.

Total spending for the current year is projected to be almost $1 Trillion over spending in Bush’s last year … and, about $2 Trillion over Clinton’s last year.

Gawd, how can that be?

Again, keep in mind that the spending on the 2 wars and the Rx drug plan were baked into Bush’s final year’s numbers.
Still, defense spending increased by 28% (over 2008) … I guess doubling down on Afghanistan, initializing “kinetic activities” in Libya, and tripling the number of drone missile attacks will do that to you.
Healthcare is up over 25% … to be fair, there’s inflation in there, but there’s also the massive bureaucracy being built to run Obamacare…
Welfare is up over 25% in 2 years … think food stamps (and more food stamps)

So, there’s a roughly $5.5 Trillion projected increase in the national debt in Obama’s first 3 years …. or, $4.5 Trillion if you still believe that the Stimulus was a necessary and extraordinary budget item.

Double OUCH !

During the period 2008 to 2011, tax policy (i.e. rates, brackets and deductions) stayed essentially constant – remember that the Bush tax cuts were extended last December.

But, tax receipts went down from $2.524 Trillion in 2008 to $2.162 Trillion projected in 2011. I guess a “making work pay” program, a payroll tax holiday, and 9% unemployment will do that to you.

* * * * *

Bottom line: Readers know that I stay pretty close to this stuff.

Still, the numbers are mind-numbing … even to me.

Bush added a Trillion to the deficit over 8 years. Obama did it in 3.

Bush added about $5 Trillion to the debt in 8 years. Obama did it in 3.

Bush disappointed when it came to fiscal management.

But, Obama has literally spent us into a potential default.

He thinks the problem is accelerated depreciation on corporate jets and too little tax paid by the rich.

And, he doesn’t seem to understand – despite the Nov. elections –that tax payers don’t want to pay for his spending binges.

I’m not very optimistic …

Posted in Bush, Debt - Deficit, Obama | 3 Comments »

The “Mother of All No Brainers” … say, what?

July 24, 2011

A real smart friend pointed me to a recent NYT Op-Ed by David Brooks titled The Mother of All No-Brainers … suggesting that it well summarized the destructive idiocy of the GOP for refusing to raise taxes in light of the debt crisis.

Oh, my …

Brooks general premise: “If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.”

A couple of Brook’s arguments supporting the premise – with my take…

* * * * *

“The Democrats have agreed to tie budget cuts to the debt ceiling bill.”

Ken: For months, Obama demanded “a clean increase in the debt level” unencumered by spending cuts to narrow the deficit.

Even now, the Democrats have agreed to nothing.

A few floated leaks do not constitute an agreement … especially when Schumer & Pelosi run to the mics to say “over their dead bodies”

* * * * *

“Democrats have agreed not to raise tax rates.”

Ken: Au contraire.

First, there is the Dem obsession with pushing the upper brackets back “to the Clinton levels”.

An obsession as deep as the GOP’s obsession to just say no.

Second, it’s just semantics if you pare deductions (oops, I mean “loopholes”).

May be a good idea, but the point just isn’t true.

* * * * *

“Democrats have agreed to a roughly 3-to-1 rate of spending cuts to revenue increases.”

Ken: Again, Dems have agreed to nothing. It’s vapor.

Further, the President’s last offer – according to him in his presser – was a 1 to 1 ratio.

* * * * *

“The Senate majority leader, Harry Reid, has talked about supporting a debt reduction measure of $3 trillion or even $4 trillion.”

Ken: Agree: “talked about supporting”.

Let’s see walk not talk.

And, don’t forget: “A federal budget compromise that was hailed as historic for proposing to cut about $38 billion (with a B) would reduce federal spending by only $352 million (with an M) this fiscal year, less than 1 percent of the bill’s advertised amount, according to the Congressional Budget Office.”

Fool me once … then don’t expect me to trust you next time.

* * * * *

“There are some Democrats in the White House and elsewhere who would be willing to accept Medicare cuts if the Republicans would be willing to increase revenues.”

Ken: Yeah, and there are some Republicans who support jacking up taxes.

To be fair, Dems did partially fund ObamaCare with $500 billion in Medicare cuts, demonstrating a willingness to whack away at the program.

But, I haven’t seen any specifics re: what they’re willing to cut this time around.

* * * * *

“The members of this (no new taxes) movement do not accept the legitimacy of scholars and intellectual authorities.”

Ken: English translation – “We’re smarter than you and we know it because, well, we’re smarter than you”.

How do jabrones who have never worked in the private sector, who sit relaxed in protected jobs-for-life, or who – in some cases – haven’t taken a single course in economics or business — qualify as “intellectual authorities”?

Geez.

* * * * *

“The members of this (no new taxes) movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money.”

Ken: Excuse me ?

Remember the auto bailout?

The Administration subordinated secured creditors beneath their unsecured union cronies, making a complete mockery of established bankruptcy laws … and, oh yeah, violating a sacred pledge.

And, the President “can’t guarantee” Social Security Insurance payments to be disbursed from a Social Security Trust Fund.

So much for sacred pledges.

* * * * *

“The members of this movement have no economic theory worthy of the name.”

Ken: How did that Keynesian Stimulus work out for you?

I know “we averted a catastrophe” (or did we “dodge Armegedon” that time, I forget).

The Stimlus was costly for sure — adding a TRILLION dollars to the debt.

The results were equivocal, at best … over $250,000 per job saved or created based on the Administration’s flakey numbers.

Question: If the Administration’s economic theory is so “worthy”, why did Summers, Romer, Goolsbee, Bernstein, and Orzag jump (or get pushed) off the ship?

Hmmm.

* * * * *

“To members of this movement, tax levels are everything. They are willing to cut education and research to preserve tax expenditures.”

Ken: OK, keep education – even though tens of billions of spending doesn’t seem to be getting us anywhere.

Question: Do we really need 82 federal programs to improve teacher quality?

And, keep research, except, maybe for studies like “$2.6 million studying why Chinese prostitutes don’t drink more responsibly on the job”.

But please, at least read the GAO report that uncovered billions of dollars in “wasteful spending by the U.S. government due to duplicate work done by dozens of overlapping agencies on redundant and ineffective federal programs”.

* * * * *

“The GOP has separated itself from normal governance, the normal rules of evidence and the ancient habits of our nation.”

Ken: I especially like the part about “normal governance”.

I guess the new normal is vilification of all dissenters as evil and stupid, “gun-to-head” problem-solving to avert catastrophes — real or imagined, closed door decision-making by a handful of smarter-than-you politicos, and “pass it to see what’s in it”.

Maybe we need a new new normal.

* * * * *

“Independent voters will conclude that Republicans are not fit to govern.”

Ken: As the President used to say “elections have consequences”.

Last November, they voted that the Dems were’t fit to govern and elected a GOP-majority Congress that pledged not to raise taxes.

Now, those Congressmen are being demonized for keeping their pledges and promises.

Go figure …

The Obamacare effect on hiring …

July 22, 2011

Interesting analysis by the Heritage Foundation …

While correlation doesn’t necessarily imply causation, there are reasons to believe:

Companies under 5o people get waivers … so the cost of adding the 51st employee is very high
Bigger companies aren’t sure what plans will qualify and what the costs will be …. few believe the bull that healthcare costs will go down.

Draw your own conclusion.

Posted in Employment - Jobs, Health Care / Medical Insurance | Leave a Comment »

Geez, didn’t they see this coming?

July 22, 2011

Chart from the WSJ highlights the extent of the recent spending binge.

Bush pushed spending from 18% of GDP to 20% … ouch.

Obama has pushed it over 25% … OUCH!

His constituencies think it’s a great idea.

Taxpayers? Not quite so sure.

Rating agencies? Warning of downgrades.

Didn’t those jabrones see this coming? Geez.
1downgrade
Source

About voter IDs …

July 22, 2011

A friend asked me, “What are the pros and cons of voter ID cards … rather than create from whole cloth … and, since I couldn’t think of any cons, I searched.

The pros are obvious: stops voter fraud … citizens only, no substitute voters, no double dipping, no dead people,

The general argument against is that IDs may be discriminatory … keeping minorities, people with disabilities, the elderly, the poor, the homeless and many other legals from voting.

Why?

Folks may not have the money to pay the processing fee for an ID.
Even if free, logistics may be complicated …. have to know where to go and have to have a way to get there.
If, say, mobile ID stations are sent around to neighborhoods, the costs would be too high

Suffice it to say that I don’t find the opposing arguments very compelling.

My view: If you need a photo ID to buy booze (or a gun),to cash a check or to unload stuff at the local dump … it strikes me as reasonable that you should need one to vote.

Posted in Voter IDs | Leave a Comment »

What’s the biggest tax break?

July 21, 2011

From the Tax Policy Center, reported in the WSJ:

Excluding employer-provided health insurance from workers’ incomes is the single biggest benefit in the tax code … one that reduced federal revenue by $160 billion last year.

By letting Americans subtract mortgage interest from their incomes, the government gave up nearly $79.2 billion in tax revenue last year.

Letting taxpayers deduct local property taxes on their federal income-tax return reduced federal revenue by $15.1 billion last year.

Ken’s Take Believe it or not – even though I benefit from all of those tax-savers – I’m a fan of eliminating them – and the deductions for charitable contributions — as long as the tax rates are reduced.

My logic: Why should an employee with company funded health insurance get a break over a self-employed person who has to pay for their health insurance (in after tax dollars)? Why should a home owner get benefits that a renter doesn’t ? Why shouldn’t a person donate to a charity because it’s a good thing to do, not because they get a tax deduction?

Posted in Taxes | 3 Comments »

Wynn Follow-up: Why private sector jobs won’t be coming back any time soon

July 21, 2011

Gotta use Steve Wynn’s “Obama the wet blanket” remarks to flashback.

For the record, Homa Files has been all over this cause & effect for over 2years.

Here’s a reprise of the post: “Why private sector jobs won’t be coming back any time soon”

* * * * *

The dismal jobs picture isn’t really very mysterious: CEOs are dismayed by Team Obama’s economic, regulatory and pro-union policies and won’t do any serious hiring while Obama is in power.

For the record, the Homa Files pitched this case almost 2 years ago in a post titled: “Why private sector jobs won’t be coming back any time soon … Hint: it’s called passive aggressive resistance” … the punch lines:

Given the Administration’s anti-corporate rhetoric, actions, and proposed game-changing rules, I doubt that many CEOs will be taking on added costs and risks to boost the administration.

More likely, they will let unemployment continue to creep along, and will slow roll the process of rehiring.

Corporate chieftains will sit back and watch the President squirm and spin his “4 million jobs – saved or created”. As Rev. Wright would say “the chickens will have come home to roost”. Passively aggressive resistance at its very best.

Unfortunately, that means we’ll be seeing high unemployment for some time – at least through the 2012 Presidential elections.

The full original post is worth another read !

* * * * *

Ken’s current take:

Certainly there won’t be any meaningful hiring until the 2012. elections are in the book.

CEO heels are dug in. I’ve heard cocktail party chatter like “Each job added is a vote for Obama … Fool me once, shame on you … fool me twice, shame on me”

CEOs started to relent a bit when the Congress tilted GOP and Obama extended the Bush tax cuts. (Whatever happened to Immelt’s job creation task force?)

But, recent moves – e.g. stopping Boeing’s move to South Carolina, stumping again for higher taxes, especially on off-shore profits – have more than offset any momentum.

We’ll be stuck with unemployment in the 9s until 2012 … or until there’s a substantial policy roll-back – e.g. repealing ObamaCare.

And, the latter just ain’t gonna happen …

Posted in Employment - Jobs | 1 Comment »

“The greatest wet blanket to business”

July 20, 2011

Casino mogul Steve Wynn lashed out at Pres. Obama’s anti-business rhetoric and actions.

Wynn’s comments are remarkable for 2 reasons.

First, he’s a Democrat whose family contributed to the Obama campaign and who is a staunch supporter of Harry Reid.

Second, based on my very small sample, he’s speaking for many CEOs who share the sentiments are afraid to speak out for fear of reprisals from an Adminstration that is ready and willing to go directly after industries (think oil companies and tanning salons), companies (think Boeing and Blue Cross of California), and individual CEOs (think Ed Whitacre – who was bounced from GM when he went lukewarm on the Volt).

I doubt Wynn will cause a bandwagon effect of CEO speak-outs … the CEOs will continue to lie low and just keep the lid on jobs …

* * * * *
Here’s the video and transcript of Wynn’s remarks

Posted in Debt - Deficit, Economy | Leave a Comment »

The last debt ceiling vote …

July 20, 2011

Bush was President.

All Dem senators voted against raising the debt ceiling … including Sen. Obama (D-IL) and Sen. Biden (D-DE).

I guess where you stand depends on where you’re sitting …

Source: Senate Web Site

Posted in Congress - Senate, Debt - Deficit | Leave a Comment »

Chocolate surges. strawberry slips …

July 20, 2011

I often use the expression: “Vanilla, chocolate & strawberry do the lion’s share of business” … implying that (a) Pareto is alive and well, and (b) variety often builds in complexity without building (much) sales.

Well, I’m going to start saying “vanilla and chocolate” … “vanilla, chocolate & buter pecan” just doesn’t sound right.

* * * * *
Based on a Rasmussen survey of Adults’ flavor preferences in ice cream, the favorite flavors are:

23% vanilla
23% chocolate
9% butter pecan
8% strawberry
8% cookies and cream
6% chocolate chip
4% coffee flavored
17% all other flavors

Other findings:

Vanilla is at the top of the men’s list; chocolate is at the top of the women’s list
White adults prefer chocolate to vanilla 24% to 19%; black adults prefer vanilla by a 43% to 14% margin.
Most ice cream eaters (78%) usually buy it at the store and eat it at home rather than go to an ice cream parlor; 17% would prefer going to an ice cream parlor for their treat.

Posted in Food & Drink | Leave a Comment »

Flash: O’s bud Warren takes offense at corp jet slap ….

July 19, 2011

Here’s the video I’ve been waiting for…Warren Buffett – often quoted by Pres. Obama since he’s a fan of higher taxes – defending his honor as a corporate jet owner.

Guess Buffett doesn’t like being lumped with tanning salons.

Posted in Laughs, Taxes | Leave a Comment »

Grab hold of your wallet … Moody’s says: “Give the President a blank check,

July 19, 2011

CNBC reports that “Moody’s Suggests US Eliminates Debt Ceiling”

Ratings agency Moody’s on Monday suggested the United States should eliminate its statutory limit on government debt to reduce uncertainty among bond holders.

The rationale:

The United States is one of the few countries where Congress sets a ceiling on government debt , which creates “periodic uncertainty” over the government’s ability to meet its obligation.

And, any way …

In the United States, Moody’s said the debt limit had not effectively curbed the rise in government debt because lawmakers regularly raise it and because that limit is not related to the level of expenditures approved by Congress.

Are you kidding me?

First, giving a drunken sailor an open line of credit at the booze store makes no sense at all. I have zero confidence that the Feds will show any fiscal restraint ever. The debt ceiling at least helps to protect them from themselves.

Second, isn’t this the same Moody’s that rated sub-prime mortgage backed securities AAA … right up to the meltdown? Does anybody take these jabrones seriously any more?

Third, isn’t Warren Buffett one of Moody’s owners? Why doesn’t he just turn his personal fortune over to the Treasury if he thinks the spending binge should continue. It would give Obama some walking around money and shut Buffett up re: his strong desire to pay higher taxes.

Geex.

Posted in Budget - Deficit | Leave a Comment »

The rise of the ‘citizen consumer’ … and the rising tide of cause marketing.

July 19, 2011

Punch line: American consumers of all ages are increasingly motivated to buy products that have a connection to a particular charitable or social cause

The key caveat: when price and quality are the same.

* * * * *
Excerpted from USA Today

Consumers are drawn to products with a charitable connection.

American consumers of all ages are increasingly motivated to buy products that have a connection to a particular charitable or social cause.

Nearly half of survey respondents ranked “social purpose” as the No. 1 factor.

In one recent survey, consumers ranked “purpose” as a significantly more important reason to buy a product than design, innovation or brand loyalty, when quality and price are the same.

“Americans seek deeper involvement in social issues and expect brands and companies to provide various means of engagement,”

“We call this the rise of the ‘citizen consumer.'”

* * * * *

“Cause-related marketing .. is not about slapping a ribbon on a product any longer,”

“Almost half of respondents … say they feel brands only support good causes for publicity and promotion, and not because they really care.”

But for companies that get it right, the upside of cause marketing is big. Despite the recession, more than half of consumers say that they are willing to pay more for a product that supports a good cause,

Which companies are getting it right? Respondents placed Pepsi, Newman’s Own and Nike, respectively, on top.

Posted in CSR - Cause Mktg | Leave a Comment »

“80% of Americans agree that taxes should be raised” … say, what?

July 18, 2011

Seriously, now.

To be technically precise, Pres. Obama said that “80% of Americans favor a ‘balanced’ approach” to attacking the deficit-debt problem.

For Obama, “balanced” means tax hikes.

Problem: data doesn’t seem to support the case.

According to the latest Rasmussen survey “55% Oppose Tax Hike In Debt Ceiling Deal”.

Most voters oppose including tax hikes in the deal.
Just 34% think a tax hike should be included in any legislation to raise the debt ceiling; 55% disagree and say it should not.
There is a huge partisan divide on the question. Fifty-eight percent (58%) of Democrats want a tax hike in the deal while 82% of Republicans do not.
Among those not affiliated with either major political party, 35% favor a tax hike and 51% are opposed.
Even those who earn less than $75,000 a year are opposed to including tax hikes.

Where’s the rub?

“By a 59% to19% margin, Political Class voters favor a tax hike in the debt ceiling deal.

By a 68% to 22% margin, Mainstream voters oppose tax hike in the debt ceiling deal.”

* * * * *

Ken’s Take: I still want to see the survey that asks “Do you favor the gov’t raising YOUR taxes to reduce the national debt?”

If 80% is the over/under, I’ll bet the ranch on the under.

Posted in Polls & Surveys, Taxes | 2 Comments »

Time for your quarterly performance review …

July 18, 2011

Punch line: Most companies give employees annual performance reviews, usually laced with pablum. Now, more companies are shifting to quarterly performance reviews – with substance.

* * * * *

Excerpted from Thomas Friedman, NYT:

The rising trend in Silicon Valley is to evaluate employees every quarter, not annually.

Why?

Because the merger of globalization and the I.T. revolution means new products are being phased in and out so fast that companies cannot afford to wait until the end of the year to figure out whether a team leader or team member is doing a good job.

Ken’s Take: Quarterly performance review have been a staple at high-octane consulting firms for years … not surprising that the practice is finally catching on.

Posted in HR - Human Resources | Leave a Comment »

Have you noticed ?

July 15, 2011

Have you noticed the Homa Files fresh, new design?

After 3 years of using the stock WordPress design, I was nudged by family and friends to turn it up a notch.

Thanks to daughter-in-law Jess for the awesome new header … with clean lines, contempo colors and a great image of the Key Bridge leading to Georgetown.

Be sure to notice that there are more information links on the home page … including click thru access to the Homa Notes on the 6 Ps of Marketing.

Onward and upward …

Posted in Mktg - Brandmarks & Logos | Leave a Comment »

“Consider the repatriation issue” …

July 15, 2011

Paul Krugman has won a Nobel prize in Economics … and he teaches at Princeton.

So, he should know what he’s talking about, right?

Not so fast …

Here’s an excerpt from his NYT op-ed rant titled “Corporate Cash Con”

The subject is taxation of repatriated earnings – money that companies make outside the U.S.

Over the last two years profits have soared while unemployment has remained disastrously high.

Why should anyone believe that handing even more money to corporations, no strings attached, would lead to faster job creation?

Consider the repatriation issue.

U.S. corporations are supposed to pay taxes on the profits of their overseas subsidiaries — but only when those profits are transferred back to the parent company.

Now there’s a move afoot to offer an amnesty under which companies could move funds back while paying hardly any taxes.

A similar tax holiday was offered in 2004. And it was a total failure.

Companies did indeed take advantage of the amnesty to move a lot of money back to the United States.

But they used that money to pay dividends, pay down debt, buy up other companies, buy back their own stock.

Indeed, there’s no evidence that the 2004 tax holiday did anything at all to stimulate the economy.

What the tax holiday did do, however, was give big corporations a chance to avoid paying taxes, because they would eventually have repatriated, and paid taxes on, much of the money they brought in under the amnesty.

And it also gave these companies an incentive to move even more jobs overseas, since they now know that there’s a good chance that they’ll be able to bring overseas profits home nearly tax-free under future amnesties.

Corporations already have plenty of cash they’re not using, why would giving them a tax break that adds to this pile of cash do anything to accelerate recovery?

Let’s pick some lint off Prof. Krugman’s argument …

First, he overlooks the fact that companies do, in fact, pay taxes to the locales where the income is booked. It’s not tax-free … but it is usually taxed at rates that are lower than U.S. corporate tax rates … since most countries tax rates are lower.

When earnings are brought back to the U.S., companies are obligated to pay the difference in the tax rates to the U.S. Treasury.

Second, Prof, Krugman argues that low repatriation tax rates are bad because they “give big corporations a chance to avoid paying taxes, because they would eventually have repatriated.”

Au contraire.

In the old days, the U.S. economy was the growth machine. These days, international markets are the growth machines. Think China and India.

The point: in the old days earnings would usually get repatriated for investment in the U.S.

These days, companies have plenty of investment opportunities outside the U.S. They don’t need to repatriate earnings ever.

So, coaxing companies to bring some cash home via a low repatriation rate means that the U.S. Treasury gets some dough. Since tax revenues equals the tax rate times the tax base, if the money stays off-shore, the Treasury gets nothing.

Finally, Krugman rants that companies use repatriated “money to pay dividends, pay down debt, buy up other companies, buy back their own stock.”

Is that a bad thing?

What does Krugman think that people do when they get a dividend check?

My hunch: they spend it … creating demand and stimulating the economy.

I learned that at Princeton, Prof. Krugman.

Posted in Taxes | Leave a Comment »

Pareto is alive and well … and haunting the U.S. healthcare system.

July 15, 2011

According to the National Health Care Management Association analysis of 2008 healthcare spending:

The top 1 percent of the population was responsible for 20.2 percent of spending.
The top 5 percent of the population accounted for almost half (47.5 percent) of all health care spending.
ABout 60% of the top 5 percent (and top 1 percent) are 55 and older; about 40% is 65 and over
The top 10 percent of the population accounted for 63.6 percent of all spending.
15.6 percent of the civilian, non-institutionalized population had no health care spending at all in 2008
The half of the population with the lowest spending accounted for only 3.1 percent of all expenditures.

Posted in Health Care / Medical Insurance | 2 Comments »

“Don’t call my bluff” … say, what?

July 14, 2011

It’s reported that Pres. Obama huffed “Don’t call my bluff, Eric” to Congressman Cantor before walking out of the debt negotiations.

Huh? Freudian slip?

Did he mean; “I’m not bluffing, Eric”?

Or, was he telling Cantor that he was, in fact, bluffing … and didn’t want to be called on it ?

Cue the teleprompter.

I’m confused.

Posted in Obama | Leave a Comment »

Glum alums … Nearly 20% of recent grads are unemployed

July 14, 2011

According to the National Journal … .

Two years after the Great Recession officially ended, job prospects for young Americans remain historically grim.

More than 17 percent of 16-to-24-year-olds who are looking for work can’t find a job.

The percentage of young people who are working—has plunged to 45 percent.

Taken together, the numbers suggest that the U.S. job market is struggling mightily to bring its next generation of workers into the fold.

College graduates who enter the labor force during a recession make significantly less money — in their first year and over the course of their careers — than grads who walk into an economic boom.

Not surprisingly, polls suggest that America’s young people have grown more pessimistic about the economy and their own future fortunes.

Posted in Employment - Jobs | Leave a Comment »

Friends with benefits …

July 14, 2011

Punch line: The number of unmarried cohabitators has doubled in the past 10 years …

[DIVORCE jump]
Source

Posted in Trends & Milestones | Leave a Comment »

The shrinking (black) middle class

July 13, 2011

Some sobering statistics reported in the Chicago Sun Times …

“History is going to say the black middle class was decimated” over the past few years.

For many in the black community, job loss during this recession has knocked them out of the middle class and back into poverty.

In 2004, the median net worth of white households was $134,280, compared with $13,450 for black households.

By 2009, the median net worth for white households had fallen 24 percent to $97,860; the median net worth for black households had fallen 83 percent to $2,170.

Blacks are overrepresented in state and local government jobs that are being eliminated because of massive budget shortfalls.

Since 2009, the overall unemployment rate has fallen slightly, while the black unemployment rate has risen from 14.7 to 16.2 percent — The highest rate since the government began keeping track in 1972.

Only 56.9 percent of black men over 20 were working, compared with 68.1 percent of white men.

The college-educated unemployment rate is 3.9 percent for whites and 7 percent for blacks.

Nearly 8 percent of African Americans who bought homes from 2005 to 2008 have lost them to foreclosure, compared with 4.5 percent of whites.

Some see a bitter irony in soaring black unemployment and the decline of the black middle class on the watch of the first black president.

* * * * *

Ken’s Take: No question, the recession has hit the lower rungs of the economy most severely. The numbers are striking.

Note: According to Gallup, Over 80% of blacks still approve of job President Obama is doing …

Posted in Demograhics, Economics, Employment - Jobs | Leave a Comment »

Shining sunlight on “vampire brands” …

July 13, 2011

Punch line: Vampire brands live off the blood of their customers … they can be (and should be) defanged by vigilant and vocal consumers.

Extracted from a published letter in the Financial Times by MSB Prof Charles Skuba.

Examples of minor customer exploitation have become too common business practices today and deserve more customer challenge.

It is lamentable that “business practices whose rationale derives from consumer ignorance and producer knowledge” are accepted today by too many executives, particularly in service industries, as convenient opportunities for fattening margins after the primary customer decision has been made.

The best brands and marketing practitioners have greater respect for their customers and work to win their loyalty at what Procter & Gamble calls the first and second “moments of truth”.

The first moment of truth is when the customer chooses one brand over another at the point of purchase.

The second moment of truth is when the customer chooses whether to repurchase after consideration of the value equation.

We will all benefit when consumers share their frustrating experiences with brands that fail this test.

Vampire brands that live off the blood of their customers are best controlled by exposure to the sunlight of customer criticism.

Ken’s Take: Social media provides a powerful way for dis-satisfied customers to spread their messages broadly and quickly. Vampire brands beware.

Posted in Mktg - Brands | Leave a Comment »

Obama to Boeing: Don’t waste time in court …”

July 12, 2011

Obama’s NLRB filed suit against Boeing to stop it from opening a plant in South Carolina – a right-to-work state.

Boeing has already invested close to $1 billion on the plant, and has already hired over 1,000 workers.

The NLRB action has broad reaching implications, since it tries to restrict where and how a company can operate.

Biz execs say privately that the NLRB is the proverbial straw that broke the camel’s back … demonstrating the lengths that the administration will go to meddle in private businesses to support its union constituency.

If companies are restricted from opening plants in right-to-work states, their only options are operating in high cost union-dominated states … or beyond the U.S. borders.

Now, after throwing the stink bomb, Obama is trying to play the role of the conciliatory mediator.

Ken’s Take: To avoid wasting court time, why doesn’t the President just tell his NLRB lackeys to back off?

* * * * *

From KING-TV:

The NLRB alleges that Boeing retaliated against its unionized work force in Washington state by opening a new production line for its 787 airplane in South Carolina, which is a right-to-work state. The case could drag on for years.

President Barack Obama is calling for Boeing and its workers to resolve their differences without “wasting a lot of time in court.”

Obama was asked about the National Labor Relations Board’s lawsuit against the aerospace giant in a KING-TV interview.

The president restated an earlier comment that “businesses should be able to locate wherever they want to operate” and have to follow the law.

“We can’t afford to have businesses and their workers arguing instead of coming together to try to produce the best possible products and sell them as aggressively as possible.”

http://online.wsj.com/article/SB121728762442091427.html?mod=opinion_main_commentaries

Posted in Unions - UAW | Leave a Comment »

Reprise: Dogbert for President – His Tax Plan

July 12, 2011

This was originally posted July 30, 2008 as the Presidential campaigns were heating up … and has recently been one of the Homa Files most popular posts.

Since it’s particularly relevant during the current deficit debates… here it is again…

* * * * *

A few years ago I stumbled on a Dogbert cartoon. At the time it made me smile.

Today, the cartoon makes me nervous — very nervous.

Of course, the source of my angst is the Obama tax plan. But, my specific concerns aren’t the ones that most pundits dwell on.

* * * * *

Buying Votes

True, Obama did hijack Dogbert’s campaign strategy and plans to raise tax rates on the top 3% of income earners (individuals and couples earning over $250,000 annually) and to redistribute the “savings” via a new tax credit of $500 per person, or $1,000 per working family.

Cynics point out that in the good old days, Mayor Daley’s Chicago political machine could deliver a vote for a the price of a pack of cigarettes. Apparently the price of a vote has gone up more than the price of gasoline. At least votes are now “marked to market”. The Obama plan clearly sets the price at $500 (cash) per vote, with a perpetuity value of about $10,000 @ 5%.

* * * * *

Buying Old Folk’s Votes

And, Obama promises zero Federal taxes for seniors over 65 on income up to $50,000 .

Mark Penn, Hillary Clinton’s former chief strategist says: “The Obama camp hit a bull’s-eye with this proposal, which has little economic justification but is great politics.”
http://www.politico.com/news/stories/0708/12117.html

* * * * *

Upping High Bracket Marginal Rates

In a WSJ op-ed, Stanford economics professor Michael Boskin opines that despite the rhetoric to the contrary, Obama’s increases don’t just hit “rich” individuals. They also impact lot of small businesses and two-earner households in high cost-of-living areas.

Specifically, Obama would raise the top marginal rates from 35% to 39.6%, increase the tax rate on capital gains and dividends, and uncap Social Security taxes (which currently are levied on the first $102,000 of earnings).

When payroll and state income taxes are thrown in, Boskin estimates that the high bracket marginal rate goes to over 60% – with almost $2 of every $3 earned at the margin, going to the government for services and redistribution.

click to make table bigger

* * * * *

Redistributing $131 Billion Annually

An analysis done by the Tax Foundation — a self-proclaimed non-partisan think tank – indicates that Obama’s plan — as proposed — would redistribute about $131 billion each year. Taking money from the undeserving rich, and giving it directly to the financially besieged middle (and lower) class).

: Source: Tax Foundation – Tax Policy Center Estimate

“Hard Numbers on Obama’s Tax Redistribution Plan
http://www.taxfoundation.org/publications/show/23319.html

* * * * *

My POV

1. On a philosophical level, I agree that the grossly uneven distribution of earning power in the US is a serious problem that needs to be fixed.

2. But, I don’t think that the problem of income inequality should be fixed via a tax system — which was originally intended to “tax & spend” efficiently on necessary common services — not to “grab and redistribute”. Direct transfers from one citizen’s pockets to another’s (e.g. refundable tax credits) are certainly the latter.

3. Except for the impact on small businesses, I can’t get too riled over marginal rate increases that start at $350,000; but I do think a “doughnut hole” payroll tax schedule is wacky and I think raising capital gains taxes during an economic slowdown is dangerous.

4 . My real issue: The numbers say that in Obama World, a minority of voting age Americans will be paying income taxes. That scares me. What’s to stop an income tax-free majority from continually voting to raise taxes on the tax-paying minority to fund an ever increasing potpourri of benefits or add to the redistribution pot.

Posted in Debt - Deficit, Taxes | 1 Comment »

Raising taxes on low- and middle-income families … what?

July 11, 2011

AP is reporting …

Debt reduction proposals under consideration include raising taxes on small business owners and potentially low- and middle-income families.

You won’t hear about that from Obama.

Instead the president focuses on the very rich, and oil companies.

Full article

Ken’s Take Perhaps the President will reveal these considerations in his press conference today … along with his specific plan for cutting the costs of Medicare, Medicaid, and Social Security … he said they’re “on the table” … let’s hear the specifics.

Posted in Taxes | Leave a Comment »

WSJ: A Home Is a Lousy Investment

July 11, 2011

An analysis of home-price and ownership data for the last 30 years in California — the Golden State with notoriously golden property prices — indicates that the average single family house has never been a particularly stellar investment.

If a disciplined investor who might have considered purchasing that median-price California house in 1980 had opted instead to invest the 20% down payment of $19,910 and the normal homeownership expenses (above the cost of renting) over the years in the Dow Jones Industrial Index, the value of his portfolio in 2010 would have been $1,800,016.

The stocks would have been worth more than the house by $1,503,196.

If the analysis is based on 2007, the stock portfolio would have been worth $2,186,120, exceeding the house value by $1,625,850.

Full article < Worth reading

* * * * *

Great Quote: The sanctity of mortgage obligations has become the rough moral equivalent of the 55-mile-per-hour speed limit.

* * * * *

Ken’s Take: But, who put 20% down? Lots of upside potential with little downside risk if you don’t care about your credit rating … living in a house for free a couple years – while the bank tries to foreclose – offsets much of the difference .

Posted in Mortgage Crisis | Leave a Comment »

How safe is your money market fund?

July 11, 2011

Punch line: Amid the Greek mini-panic this month, did you notice the really shocking news? To wit, U.S. regulators are worried about the “systemic risk” posed by the exposure of American money-market funds to European bank debt.

* * * * *
According to the WSJ:

A 1983 Securities and Exchange Commission rule allows money funds to report a stable net-asset value of $1 per share, even if that’s not precisely true based on changes in the fund’s underlying assets.

The result is that investors have come to expect that money funds never “break the buck,” never decline in value.

But since 2008 U.S. money funds have been allowed to pile into European bank debt.

Half the assets in U.S. prime money market funds were invested in European banks as of the end of May.

Bottom line: If Greece tanks and takes down some Euro banks with it, the impact will be felt by US money market funds … which could possibly break a buck …

Posted in Financial Crisis, Financial Services & Crises | 1 Comment »

A mockery of longstanding bankruptcy law …

July 11, 2011

When the history is written on Pres. Obama’s strained relationship with American business leaders, I think that the GM non-bankruptcy bankruptcy will be tagged as the the first critical shot fired (by the President).

Just in case you forgot, here’s a recap excerpted from Reason:

Many experts suspect that GM could have obtained private bankruptcy financing if it had presented a credible restructuring plan addressing the cause of its malaise: the uncompetitive costs of its unionized work force.

If it couldn’t, then the government could have offered guarantees to private lenders for the amounts they loaned, which likely would have been smaller than the bailout.

But the administration took matters in its own hands, using taxpayer dollars to commandeer the bankruptcy process to protect key constituencies, while giving short shrift to others.

It gave Chrysler’s secured creditors, who would have had priority in a normal bankruptcy, 29 cents on the dollar.

Chrysler’s unions, on the other hand, got more than 40 cents, even though they are equivalent to low-priority lenders.

This made a mockery of longstanding bankruptcy law, something that will make credit markets wary of lending to political sacred cows in the future.

I think CEOs could have lived with Obama firing Richard Waggoner as CEO … and then firing his replacement, Fritz Henderson … and then firing his replacement, Ed Whitacre.

But, ignoring the rule of law and subordinating secured creditors to one of Obama’s core constituencies — overpaid union hacks – was over the top.

If there were any hopes of turning around the relationship, the Administration’s moves to keep Boeing from operating a plant in right-to-work South Carolina dashed them

Obama Warns Debt Ceiling Should Not Be ‘Used As A Gun’ To Extract Tax Breaks

Posted in Anti-business, Autos - Travel, Obama | 1 Comment »

On civility: Do as I say, not as I do.

July 8, 2011

Back in January – seizing the moment after the Gabrielle Gifford’s shooting, “President Obama called for a New Era of Civility in U.S. Politics”.

“At a time when our discourse has become so sharply polarized, at a time when we are far too eager to lay the blame for all that ails the world at the feet of those who think differently than we do,” he said, “it’s important for us to pause for a moment and make sure that we are talking with each other in a way that heals, not a way that wounds.”

Fast forward to this week’s Twitter news conference:

In some of his harshest language to date in the fight over the deficit, President Obama warned today that the debt ceiling should not be “used as a gun” against Americans’ heads to extract tax breaks for the wealthy.

Guess the President isn’t a big fan of the Golden Rule …

Posted in Obama - Promises Made & Kept | Leave a Comment »

Stores creating “a sense of privacy, even sanctum” … for men!

July 8, 2011

According to research coming out of Australia, and reported in RetailWire:

Male-only supermarket shopping aisles that focus on gender-specific products rather than merchandise by category could encourage men to browse longer, trial new items and spend more.

“Research has shown that there is a group of male shoppers who have a ‘fear of the feminine’ or fear shopping among women’s health products such as tampons, waxing strips, pink razors and body scrubs,”

“Further, research found that men made more purchases … of health products that were not placed in high traffic areas or next to feminine-inspired products.

Apparently, some men are apprehensive of women’s products and are therefore less likely to spend time perusing their own personal needs.”

The answer: Creating retail ‘man caves’… “Gender specific aisles providie a relief to men, inspiring them to explore and discover new products … and create a sense of privacy, even sanctum.”

I can’t wait to go shopping tomorrow … I need some “privacy, even sanctum.”

* * * * *

Random Finding: Men also shop differently, valuing efficiency and independence over customer service and tend not ask for help.

Or, as Grandma Homa used to say: “Women shop, men buy.”

Posted in Mktg - Consumer Behavior, Mktg - Shopping Behavior, Retailing | 1 Comment »

Corporate jets … “since John the Baptist”

July 8, 2011

Charles Krauthammer puts the President’s railing against corporate jets into perspective in today’s Washington Post:

What have been Obama’s own debt-reduction ideas?

In last week’s news conference, he railed against the tax break for corporate jet owners — six times.

I did the math.

If you collect that tax for the next 5,000 years — that is not a typo — it would equal the new debt Obama racked up last year alone.

To put it another way, if we had levied this tax at the time of John the Baptist and collected it every year since — first in shekels, then in dollars — we would have 500 years to go before we could offset half of the debt added by Obama last year alone.

* * * * *

Flashback: Will the Republicans get hosed again?

July 7, 2011

Today is Pres. Obama’s bipartisan summit to go long ball on debt and deficit reduction.

My bet: history will repeat itself and Republicans will get snookered again.

Remember the budget deal that averted the government shutdown last December?

Headlines said it would cut spending by $38 billion (with an “b”).

Turns out that the real impact was only $352 million (with an “m”).

According to the Washington Post:

Budget deal: CBO analysis shows initial spending cuts less than expected

A federal budget compromise that was hailed as historic for proposing to cut about $38 billion would reduce federal spending by only $352 million this fiscal year, less than 1 percent of the bill’s advertised amount, according to the Congressional Budget Office.

And, a mere 6 months after the agreement – that was supposed to hold until the end of 2012, Obama is walking back the full extension of the Bush tax plan and the tax-based stimulus provisions.

As the original Grandma Homa would say: fool me once, shame on you, fool me twice, shame on me.

* * * * *

Clever planning: The President shrewdly invited the GOP political hacks, but left Ryan, Coburn and Portman — the only guys who understand the numbers – off the guest list.

I guess that a fact-free summit will go smoother

Also, the President scheduled the summit the day before another likely-to-be-dismal jobs report … hoping that the jobs report will get ignored.

Trust, HomaFiles won’t ignore it.

* * * * *

What to watch: I’m betting that most of the Dems “cuts” will be capping growth in spending (which isn’t a cut !) and the usual phantom attack on waste & fraud (how are we doing on the $500 billion of w&f that was supposed to come out of Medicare?).

Posted in Budget - Deficit | 1 Comment »

Still more about corp jets … a bit hypocritical?

July 7, 2011

I vowed to myself that there wouldn’t be another corp-jet post …

But, during Pres Obama’s Twitter Town Hall, he keep harping on those evil, greedy corporate jet owners.

His harping reminded me of 2 stories that highlight the silliness and hypocrisy of the issue.

1) Remember Barack & Michelle’s date night in New York CIty? Air Force One (kinda like a corp jet) to JFK, Marine One (kinda like a corp helicopter, but nicer), Limo to the theater and dinner … then back to DC.

2) Or, did you hear that the Federal limo fleet increased 73% under Obama administration

Jets, helicopters, limos … does that make Obama an evil, greedy person, too?

I guess those trans-modes are only required for business when you’re the POTUS.

Just looking for a bit of consistency …

* * * * *

Posted in Taxes | Leave a Comment »

American people want higher taxes … oh, really?

July 7, 2011

The drivel just won’t stop.

A pundit named Froma Harrop says:

Poll after poll shows that the American people want higher taxes. That’s not the same as liking higher taxes. The people have simply concluded that higher taxes are preferable to the alternative

A Quinnipiac poll found that 69 percent, including nearly half of Republicans, want taxes raised on households making more than $250,000.

Let’s think about that for a moment.

About 2% of Americans are in households making over $250,000.

About 70% of Americans – who presumably earn less than $250,00 – say that taxes should be hiked on the top 2% so that they don’t lose any government handouts.

That doesn’t surprise me.

What does surprise me is that 28% of Americans say – don’t raise taxes on other people just so I can keep my handouts.

Wonder why they don’t poll people on the question: “Do you want YOUR taxes to be jacked up to support out-of-control government spending?”

I bet that fewer than 70% say “sign me up”.

It’s a lot easier to support taxing the other guy …

* * * * *

Posted in Taxes | Leave a Comment »

More re: corp jets … Are they really slipping through a“loophole” ?

July 6, 2011

In an earlier post, we pointed out the irony regarding Pres. Obama’s poli-rants against “corporate jet owners”:

HR 4853– the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 – was initiated in the lame duck Pelosi-controlled Democratic House, passed by the Reid-controlled Democratic lame duck Senate, and signed by President Obama – ostensibly to create J-O-B-S.

A HomaFiles reader replied to the post with a relevant clarification:

“A tax break is not a loophole.

HR4853 purposely included this incentive to produce an outcome.

Only unintended tax outcomes that reduce taxes are loopholes.

It is amazing to see the amount of misinformation provided by the press and believed by democrats …”

Good point.

* * * * *

Posted in Taxes | 1 Comment »

Football, band, honors classes and hot lunches … here we go again.

July 6, 2011

When I was a kid, the local school board would biennially warn that football, the band, the honors program and hot lunches would be cut unless a levy was passed to boost real estate taxes.

I remember that – even as a kid – it sounded like a bunch of bull.

Sometimes the levies passed. Sometimes they didn’t.

Regardless of the vote, the stadium lights still glowed bright on Friday nights, the smart kids still got their honors courses, and the cafeteria kept serving up hot slop.

Today’s equivalent of football, band, honors and lunches was articulated at Pres. Obama’s press conference last week: college scholarships, food safety, medical research, etc.

Nothing else can possibly be cut.

Nope, it’s gotta be football, band, honors and hot lunches.

But, wait a minute.

What about the $100 to $200 billion in wasteful spending that the GAO reported last last March:

WSJ, Billions in Bloat Uncovered in Beltway, March 1, 2011

A GAO report uncovered billions of dollars in wasteful spending by the U.S. government due to duplicate work done by dozens of overlapping agencies on redundant and ineffective federal programs

For example, the U.S. government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development.

The agency found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances.

The report took particular aim at government funding for surface transportation, including the building of roads and other projects, which the administration has made a major part of its push to update the country’s infrastructure. The report said five divisions within the Department of Transportation account for 100 different programs that fund things like highways, rail projects and safety programs.

The report chided the government over encouraging federal agencies to purchase plug-in hybrid vehicles while having policies that agencies reduce electricity consumption. It said government agencies have purchased numerous vehicles that run on alternative fuels only to find many gas stations don’t sell alternative fuels. This has led government agencies to turn around and request waivers so they didn’t have to use alternative fuels.

The GAO identified between $100 billion and $200 billion in duplicative spending.

GAO’s prior recommendations have generally been ignored or postponed by federal agencies and lawmakers, particularly when they could require difficult political votes.

Hmmm.

Just not hearing a lot about that report these days …

Nope, it’s gotta be football, band, honors and hot lunches.

* * * * *

Click to see the full report …