Saturday, October 30, 2004
In it, I question more of Senator Kerry's statements of "fact," as I have done for the past four weeks(the old ones are also at townhall, or cato.org).
A quick summary of two points:
1. Kerry says, "Over the last four years . . . wages of the average family have fallen by $1,500." That figure (from the reliably partisan Economic Policy Institute) was really about three years not four, incomes not wages, households not families and -- most important -- it was about pre-tax income. Family taxes fell more than $1,500 thanks to you-know-who. Other than that, it is scarcely news that incomes two years after a recssion (2003) were still lower than a year before the recession (2000). Median houshehold income in 1997 was still lower than in 1989, when another you-know-who was President. And that's not counting the tax hikes of 1991 and 1993, which set us back even further.
2. Kerry's only seemingly serious economic plan to date (other than lavish spending and higher tax rates) has been to cut the corporate tax to 33.25% (wow) in exchange for taxing foreigen subsidiaries into oblivion. Yet President Bush just signed a law to cut the tax to 32% for most industrial companies. Although Kerry still talks about his 5% corporate tax cut, it would now require a 4% corporate tax hike. Not to mention destroying any chance of competing in foreign markets (where countries like Germany, France and Canada do not tax offshore earnings at all).
As a long-time absentee Senator, of course, Mr. Kerry probably has no idea the tax law was changed. He's not a quick study. He's not a slow study. He's just a back bench rep of the chattering class. If it sounds good, who cares if it's true?
Friday, October 29, 2004
In the LewRockwell.com piece to which Fumento refers, the flu vaccine is seen as a conspiracy between government and big business to make money for a couple of huge pharma firms. As a result, LewRockwell.com author John Keller asserts, the publicized numbers of flu deaths in the United States are wildly exaggerated. Fumento powerfully refutes this ignorant suggestion. Yes, the flu is not a modern-day mass-killing plague, but it can be highly dangerous, and people do die from complications of flu. Hence, it is wise to take the vaccine if it is available to you.
Keller's piece, unfortunately, has very much the flavor of a Lyndon LaRouche argument.
So, to our libertarian friends:
Yes, it's fun to complain about all the wicked things powerful people do in this world, and we encourage people to spread the truth about them. However, a strong sense of fealty to the facts and a skeptical application of common sense and adult wisdom are essential. Spreading wild claims is all great fun until somebody gets sick and dies from it.
a speech by Edward Johns
This election is about more than attacking the Bush Administration; it’s about a new attack on America. And we have so much work to do. Because the truth is, we still live in two different Americas: one for the privileged few who sue whoever they want, whenever they want to, and another one for everybody impoverished by legal fees. It doesn’t have to be this way.
We have so much work to do. Because the truth is, we still live in two different Americas: one for people who married well, and another for most Americans who work hard and still struggle to make ends meet.
And you know what I’m saying. You don’t need me to explain it to you, you know—you can’t save any money, can you? Takes every dime you make just to pay your taxes. And you know what happens if something goes right. Some politician tries to take even more of your hard-earned money and give it to someone more deserving.
We still have two health care systems in this country: one for families that get their healthcare paid for by taxpayers, and one for people who pay their own bills and buy their own insurance. Millions of Americans want health insurance only if somebody else pays for it. It doesn’t have to be this way.
We shouldn't have two school systems, a private system for the children of affluent Senators and a mandatory public school for everybody else. You and I do not believe that the quality of a child's education should be controlled by parents, but by federal politicians.
We shouldn't have two tax systems in this country: one where the top 20 percent pay 83 percent of all income tax. And one where the bottom 44 percent pay no income tax at all. Right? Folks who work unusually hard, pay nearly all your taxes for you and for Mrs. Kerry. They're carrying the tax burden in this country. You know that. It shouldn't be that way.
This is wrong. It is wrong for our values. It is also wrong for our economy. But it is right for our Party, because those smart enough to earn more than $200,000 are rarely dumb enough to vote for us.
The economic engine of our economy is the millions of Americans who work hard in every corner of this great city and every corner of our great country. But the more they work the more they earn, the more they earn the more likely they are to turn to the Republicans at election time. It doesn’t have to be that way. Together we can keep more people dependent on political generosity.
We need to fix our tax code to punish work and wealth, and to give middle class families a chance to see what suffering really means.
I also want to say a word about an issue that's important to me personally. I think it's important for the country. You never hear politicians talk about it anymore: 35 million Americans who live in poverty at some point in their lives.
There are two Americas, one in which husbands and wives get married and stay married and take care of their children, and one in which marriage is rare and fathers are deadbeats. The poverty rate within married-couple families is 5.3 percent, while the poverty rate among female-headed families is 28 percent. It doesn’t have to be this way.
There are 35 million Americans classified as poor yet nearly 8 percent of those poor households have one family member working fulltime. It doesn’t have to be that way. Together, we can teach that 8 percent what the other 92 percent already knows – that it doesn’t pay to work.
Work is not what the Democratic Party believes in. We need to stand on these working families.
Let me tell you what we're going to do. We're going to build an America where we say no to kids with two hard-working parents. You and I can do something about this that. This is the America we believe in.
We still have two governments in America: one for the trial lawyers, the Hollywood elite, the union bosses, and then whatever is leftover is for you.
But in the America you and I build together, we will have one government that works for our insiders, not for theirs.
Let me say this in very simple language that everybody will understand.
This democracy does not belong to their interest groups; it belongs to our interest groups. I have never taken a dime from a Washington lobbyist. But I’ve taken millions from investment bankers at Goldman Sachs and millions more from class action lawyers -- Baron & Budd, Beasley Allen, Girardi & Keese, Weitz & Luxenburg, the Simmons Firm, and many more.
We also live in a country that in far too few ways is still categorized and labeled by race. This is not an African-American issue, not a Hispanic-American issue, not an Asian-American issue; this is an issue of splitting-up Americans according to whether they are African-American, Hispanic-American or Asian-American.
The truth is that we want our children and grandchildren to be the first generation to grow up in an America that's divided and sub-divided by race, and where entitlements and class-action lawsuits are granted on the basis of race, so we have to make as big a deal out of racial division as is humanly possible. Any notion of describing people as simply “American” is simply unacceptable.
It's what our values are. What we believe in. We can do this together, yes, we can.
You know exactly what I'm talking about. So when we hear those same voices telling us we can't get enough trial lawyers, insurance magnates, currency speculators and Hollywood playboys to bankroll our campaign—I say just watch us.
This election is about demeaning the American people. It's about trying to persuade voters that we’re now living through another Great Depression. It's about making the American people believe again that everything depends on government spending and regulations. Our campaign is not just based on the politics of cynicism. It's based on the economics of deception.
And God bless the Trial Lawyers Association of America
Michael Kinsley, writing in last Sunday’s Washington Post, finds it unfair to complain that Teresa Heinz Kerry paid a paltry 12.4 percent federal tax on her reported $5.1 million in taxable income. “Whatever point Teresa Kerry’s critics were making,” he writes, “is wrong as well as utterly obscure.” At a superficial level, Kinsley is right. The Wall Street Journal editorial page made much too much of the fact that half of Mrs. Kerry’s reported income came from tax-exempt municipal bonds. They missed the point. But so did Kinsley.
The most serious question is not how little tax Mrs. Kerry paid on the income reported, but how she managed to report only $5.1 million of taxable income with a net worth of at least $750 million. On October 16, New York Times tax reporter David Cay Johnston noted that “even a modest 5 percent return [on $1 billion in assets] would have generated $50 million of income, 10 times what was on the two pages released by the Ms. Heinz Kerry. A statement released by the Kerry campaign noted that income taxes are paid directly by the Heinz family trust.” The Kerry campaign raised questions rather than answers, since it remains a well-guarded secret how much the family trust paid in taxes, or to Mrs. Kerry.
On October 21, The Journal printed a dozen letters on the relatively minor issue of tax-exempt interest income. One made the simple point that Kinsley now overemphasizes -- that income from tax-exempt bonds involves an “implicit tax,” because the pretax interest rate is lower than might be gotten on similar taxable bonds. It follows that the actual burden of driving investors into tax-exempt securities involves “deadweight loss” – a loss to taxpayers that exceeds by far the revenue gain (if any) to the government.
In a similar way, the pre-Bush tax rate of 39.6 percent on dividends had a high cost to me even though I never paid it. To avoid a high tax on dividends I invested too heavily in riskier securities that pay no dividend in the hope of capital gains. Before the capital gains tax was reduced in 1997, I bore yet another cost by parking cash in a tax-exempt bond fund. The lesson Kinsley should have learned from Mrs. Kerry’s example, if not from mine, is that high tax rates on avoidable transactions hurt taxpayers without yielding any revenue. But the lesson he draws, oddly enough, is that steep tax rates that are avoided are somehow superior to lower tax rates that are paid. “Teresa Kerry’s tax returns,” he writes, “certainly seem to illustrate, not contradict, the case for her husband’s tax proposal.” Huh?
Kinsley makes an unduly heroic “rough estimate” that she paid “a fraction under 30 percent.” But this hypothetical implicit tax is not an estimate of dollars received by the U.S. Treasury, but an estimate of the burden of tax distortions to one taxpayer. The 12.4 percent figure, by contrast, would be an entirely fair measure of how little revenue Mrs. Kerry contributed to financing the sorts of grandiose federal spending schemes her husband favors. It would be fair, that is, if her income was not understated.
The truly interesting question, however, is how Mrs. Kerry managed to report so little income. She made it into the Forbes 400 with a net worth of $750 million, most of which is presumably invested in H.J. Heinz Co. Heinz stock rose 10.8 percent last year, from $32.87 to $36.43, yet Mrs. Kerry reported only $14,412 of capital gains. To be as fair as possible, assume she sold no Heinz shares. But what about last year’s dividends of 27 cents a share?
Alan Sloan’s sources estimated that were it not for last year’s cut in the dividend tax to 15 percent, Mrs. Kerry would have paid around $918,000 in taxes rather than $628,000, saving $290,000. Johnston figures she saved $440,000. Take your pick. These figures raise more questions than they answer. How could a Heinz heiress own so few shares of H.J. Heinz? And if her wealth is not mainly from Heinz shares, what is it?
For simplification, assume H.J. Heinz stock accounts for virtually all of her dividend income. Sloan’s figures then imply a 20 percent increase in the dividend tax (from 15 to 35) on her assumed 1,450,000 shares would indeed raise her taxes by $290,000. The trouble is that 1.45 million shares at $35 a share accounts for little more than $50 million – less than 7 percent of her wealth. Johnston’s estimate likewise implies 2.2 million shares, only about 10 percent of her wealth. We are still left with the key question Johnston posed at the start: How could Mrs. Kerry’s report income of only $5.1 million, more than half of which was tax-exempt, if her net worth is $750 million?
Subtract the value of her five houses, $33 million, and that still leaves $717 million earning only $5.1 million – a literally unbelievable return of seven-tenths of one percent. Even Heinz stock and municipal bonds did much better than that.
Despite reporting almost no visible return on her wealth, Forbes nonetheless estimates Mrs. Kerry’s wealth increased by $200 million over the past two years. How is that possible? If she owns enough shares of Heinz to have such large unrealized capital gains, then why does she report so little taxable dividend income? Besides, Heinz stock was no higher at the end of 2003 than it was at the end of 2001, so where’s the gain?
Estimates that Mrs. Kerry would have paid an additional $290,000 -$440,000 if the tax on dividends had been 35 percent rather than 15 percent assumes people would report the same amount of dividend income regardless how dividends are taxed. This is called a static revenue estimate, which is a polite expression for claptrap. Prudent investors would quickly stop holding dividend-paying stocks outside of pension funds. And, like Mrs. Kerry, they would hold more municipal bonds.
Incidentally, the 28 percent Alternative Minimum Tax (AMT) accounted for more than half her tax bill, $326,000, even though tax-exempt bonds are not subject to the AMT, which is usually a sign of aggressive tax planning, to put it charitably.
Contrary to Mr. Kinsley, Mrs. Kerry’s tax returns make no case at all for the centerpiece of her husband’s tax schemes – raising the top tax rates to 36-39.6 percent. On the contrary, as Mr. Sloan noted, raising the top tax to 39.6 percent would not increase Mrs. Kerry’s taxes at all. Any increase in the regular tax on part of her income would be offset by a reduction in the 28 percent alternative minimum tax on the rest. Mrs. Kerry’s tax return illustrates one of many reasons why Mr. Kerry’s wicked tax rates would not raise nearly the booty he imagines -- even aside from the demoralizing impact on work and investment. Raising the top two tax rates would have literally zero impact on at least one of the 400 wealthiest Americans – Senator Kerry’s wife.
One thing that raising the top two marginal tax rates really would accomplish, however, is to make the Kerry family wealthier. It would greatly increase the demand for municipal bonds, driving up their price and generating a windfall capital gain for Mrs. Kerry.
Mr. Sloan concludes, “Heinz Kerry doesn’t seem to be playing any significant tax games.” Yet serious tax avoidance games among the rich and famous typically involve hiding income in seemingly impersonal legal entities such as trusts.
The massive gap between Mrs. Kerry’s huge and growing wealth and her relatively tiny reported income suggests her lawyers and accountants have done valiant work. In their loyal efforts to ignore Teresa Heinz Kerry’s mysterious missing money, apologists Sloan and Kinsley have been especially heroic.
--Alan Reynolds, Cato Institute
Thursday, October 28, 2004
Michigan was safely in the Kerry column, and still is so, according to all the polls except one that recently appeared in the Detroit News, but suddenly both Kerry and Bush are campaigning furiously there."Very late in the game," Apple writes, "Michigan finds itself back in play."
Apple believes that the Detroit News poll was what caught both candidates' attention:
It strikes me as highly unlikely, however, that one outlier poll could have that much influence over candidates' actions in a very close, high-stakes race. Much of the article, in fact, deals with the presumed unreliability of the polls conducted by the press. In addition, Apple's own article quotes a source as claiming that the candidates' internal polls must have been the real factor in their change in plans:
So what happened? Bill Ballenger, who edits Inside Michigan Politics, a popular newsletter, traces the change to a tracking poll by Steve Mitchell of East Lansing for The Detroit News, which showed Mr. Bush ahead by five percentage points as of last weekend, when other polls showed Mr. Kerry holding a solid lead.
"I think Mitchell changed their minds," Mr. Ballenger said. "He worried the Kerry people and he encouraged the Bush people. If Steve hadn't come out with those numbers, the candidates wouldn't have invested any more time in Michigan."
David Rohde, a professor of political science at Michigan State University, said he had "seen nothing and heard nothing" to explain why Michigan should suddenly "lurch.'' But the candidates' own internal polls, he added, "must show the race tightening in the last days, or they wouldn't be coming here."None of this, of course, is intended to say that Bush will now win Michigan, only that the race in the state is much closer than previously thought, and that the New York Times saw Kerry's and Bush's new interest in campaigning in Michigan as a clue to the real state of the race, despite what the polls said.
Actually, for us laypersons the polls are often unnecessary anyway. I have found that the surest way to infer a candidate's real standing is to watch what he or she does on the campaign trail and in paid advertising. A candidate's polls are as accurate as they can be made to be, because the consequences of getting the numbers wrong are potentially so disastrous. Hence, risky, negative gambits almost always indicate that a candidate knows he or she is behind and falling farther back.
Here in Indiana, for example, Gov. Joe Kernan suddenly went very negative a couple of weeks ago, with a series of extremely harsh advertisements claiming that his challenger, Mitch Daniels, had made a fortune costing average people their jobs during his tenure as a board member of an Indiana corporation. The ads seemed much more angry, intemperate, and irrelevant than one thought could possibly be necessary, especially considering that the two candidates were said to be running neck-and-neck at the time.
Now the polls say that Kernan is about a half-dozen points behind Daniels. One could surmise that the negative ads pushed him down in the polls, but it seems quite possible that what has really happened is that the press's polls are starting to catch up with Kernan's and Daniels's more accurate internally generated numbers. In that case, Kernan's negative ads would be understandable as a desperation move by a candidate falling behind in the polls late in his campaign.
And the same theory would explain the increasing harshness of Sen. John Kerry's attacks on President Bush since the third debate.
Wednesday, October 27, 2004
It was just another reminder how much things have changed. Using a plastic fork at a restaurant that serves food that actually requires real utensils, made me realize that it's the little things that indicate you've lost something. The plastic fork is a bit like the bolt locks we all feel required to have on our doors at home. Barbarism takes back a little space from the civilized world. I don't trust John Kerry to be the guy who's going to turn things around.
The very fact that Mr. Bush mentioned the missing explosives, after two days of silence since their disappearance was first reported, signaled that his campaign strategists recognized the issue's political potency in the final week of a presidential race that both sides agree could be exceedingly close.
People in the Kerry campaign clearly think too that the missing explosives may be a powerful issue, as the senator himself illustrated today by again emphasizing it at a rally in Sioux City, Iowa, whose seven electoral votes are up for grabs.
Rather reminiscent of certain false stories about American atrocities in Vietnam that certain people spread during the early 1970s, isn't it?
These events smack of coordination between Kerry, the DNC, and the establishment media in a way that is going to be studied and commented upon for a long time. The days of big, supposedly objective media are way over. We're moving back to openly ideologically driven news, just like in the days when every town had a couple of papers, one for each party. It's just more honest that way.
Tuesday, October 26, 2004
The 1971 documents "provide a glimpse of the favorable way the Viet Cong viewed the activities in which Mr. Kerry was involved," Lipscomb writes. He notes that the documents closely tie Kerry's activities and those of the VVAW with the expressed desires of the Viet Cong:
The CDEC Viet Cong document titled "Circular on Antiwar Movements in the US" notes, "The spontaneous antiwar movements in the US have received assistance and guidance from the friendly (VC/NVN) delegations at the Paris Peace Talks." It also notes that "The seven-point peace proposal (of the SVN Provisional Revolutionary Government) [the Viet Cong proposal advanced by one of its envoys, Madame Binh, operating out of Paris] not only solved problems concerning the release of US prisoners but also motivated the people of all walks of life and even relatives of US pilots detained in NVN to participate in the antiwar movement."One could argue that this is all ancient history and of no real importance today, had Sen. Kerry not based so much of his presidential campaign so thoroughly on his war record. As a consequence, the entire record of Sen. Kerry's response to the war is indeed relevant, and Tom Lipscomb has done an excellent job of unearthing this side of Kerry's record, in several articles in the Chicago Sun-Times and other publications. Highly recommended.
The significance of the documents lies in the way they dovetail with activities of the young Mr. Kerry as he led the VVAW anti-war movement in the spring of 1971.
Monday, October 25, 2004
What may prove more important than the video itself is the promotion of it. While watching ESPN at various intervals, I caught the ads offering "Fahrenhype" for sale. They function as defenses of Bush against Moore without qualifying as anyone's campaign money.
Ideologically-based for profit business is going to be absolutely huge in the near future. Get ready for regular visits to your cineplex of "documentaries" of the Moore style in both left and right varieties.
The episode concerned the murder of an elderly atheist activist. Suspicion falls upon her son, a Christian minister, and his ministry, who might stand to benefit both ideologically and financially from her death. In recent decades, that is precisely where the story would probably have gone.
In this LAOCI episode, by contrast, the minister and his church associates are depicted not as greedy, narrow-minded, fanatics, as was all too common throughout the past couple of decades in both TV fiction and, alas, the news. Instead, they are presented as quite reasonable, intelligent, and caring, though of course not overly fond of their former adversary who has been murdered. Some snide, cynical comments directed toward the minister and his associates by the investigating police officers are clearly intended not as their own thoughts but as attempts to goad him into incriminating himself.
The atheist activist, by contrast, who is quite clearly based on the late Madalyn Murray O'Hair, is shown to have been a fanatic herself, and by no means a good and loving mother. The atheists among the suspects are shown to be rather unattractive, secretive, selfish, and somewhat weird. The characterizations, however, are nuanced and avoid caricature; the characters' motives are presented with understanding, so that the atheists are never depicted as buffoons or monsters. They freely choose to act as they do, and their problems clearly arise from their way of seeing the world and their sense that ultimately they have no one and nothing to which they must answer except the force of earthly law.
The episode was altogether a quite fair and insightful analysis of characters who have chosen very different ways of life.
I commend executive producer Dick Wolf and his staff for avoiding a particularly dreary twentieth century cliche in the treatment of religion. The fairer treatment of religion, specifically Christianity, in this episode is part of what I see as a strong trend which has shown up in numerous television fiction programs in the past couple of years, and is a matter on which I shall write further as opportunities arise.