Northern Trust under pressure...

[Craig Sweet]

Steve...

Regarding term limits....we have them here in Montana and they INCREASED the power and influence of lobbyist....newbies to the legislature had very few people to turn to for institutional "history"...the lobbyist are there year in and year out.

[Craig Sweet]

Shivas...

I assume you feel the arts have no place in our culture and honoring great performances is a waste of taxpayer money?

The Library of Congress has been doing the Gershwin Prize for years....even when your buddy George was President...and now I can watch it on TV!

"In Performance at the White House – Celebrating the Music of Stevie Wonder: The Library of Congress Gershwin Prize" is a production of WETA Washington, D.C., Mark Krantz Productions and CoMedia, Inc. The "In Performance at the White House" series was created by WETA Washington, D.C. Executive producers and creators of the Library of Congress Gershwin Prize for Popular Song are Bob Kaminsky, Peter Kaminsky, Mark Krantz and Cappy McGarr. Producer Stevie Wonder. Producer Rickey Minor. WETA executive producers are Dalton Delan and David S. Thompson. Major funding is provided by the Corporation for Public Broadcasting, PBS and public television viewers. Additional funding is provided by Mr. and Mrs. William N. Cafritz, The Annenberg Foundation, Pepsi, ASCAP and EMI. Air travel is generously provided by American Airlines.

[Eric_Terhorst]

I was listening to NPR this morning and they talked about Northern Trust wanting to pay back the TARP money....and they said Northern had come under attack recently for a lavish"golf outing"....

Clearly, Northern Trust and the PGA have handled this like bumbling idiots if the media still does not know the difference between a "golf outing" and the sponsorship of a tour stop event.

It didn't occur to you that NPR doesn't care to know the difference between a "golf outing" and sponsorship of a tour stop event, that the reporter is cynically ignoring the difference, or that the editors are simply intellectually lazy and didn't bother to find out?  Would you have preferred that Northern Trust and the PGA spoon-feed them the story?

While reading with amusement in the Op-Ed pages all the hand-wringing over how TARP money is spent, I've wondered how these media bastions of righteousness view their sponsors.  The Chicago Tribune yesterday had a column critical of Northern Trust, in the Business section that featured a full-page ad from the Illinois Lottery.  Meanwhile, the Sports section featured a Cadillac ad and the front section had a full-page ad from Saturn.  The taxpayers are paying for bailouts and the salaries of the blowhard critics!  What a world!!

On that score it's interesting to note that scouring NPR's web site I could not find a list of their corporate sponsors.  But NPR's 990 forms list their investment assets:

Hedge funds  $16.6 million
Real estate    $5 million
Equities          $29 million (9/30/08, down from $47.6 million in '07)
Fixed income  $35.3  million
Money market $4.8 million

Doubtless many NPR listeners would be horrified to learn how many bastions of corporate evil are represented in these investments.

http://www.npr.org/about/statements/fy2008/fy08nprincreport.pdf

[Craig Sweet]

Eric...

Lazy journalism...pure and simple.  Whether it's Faux News or NPR...they are lazy.

Yes, I do think NT and the PGA could have done a much better job of explaining what the obligations, and the benefits of corporate sponsorship, consist of.

[Jason Hines]

I cannot sit here and read this drivel without adding some economical history perspective, the kind that is less driven by party or ideological line, and more strongly rooted in fact and timeline.

If we look back over the last quarter of a decade, as far back as 1980 (early Reagan), the economy was in a recession, led by high unemployment, severe inflation (although abating under Volcker's stern rate medicine), an harmfully strong dollar and the prospect of rising federal deficits. The American consumer did not carry high amount of debt, housing or personal, and saved (even in inflationary times). Money supply, as measured by contemporary metrics was very low (choked by inflation and slow exports).

This was a crisis that provided, in essence, a perfect storm...setting the stage for an unlocking of an enormous monetary and productivity boom that was unleashed with the  Fed easing of the discount rate, M1 & M2 growth, a set of Reagan tax cuts, and market prognosticators (Henry, aka Dr. Doom Kaufman) turning tide to bullishness. The stock market soared, Reagan gave great press and Paul Volcker's war on inflation had worked. Unemployment fell, real & median incomes rose, and productivity began to rise. The cold war was won, globalization of trade flourished. Americans bought homes with 20% or more down financed by local & regional banks.

Throughout the early 80's there was NO large scale securitization instrument markets for debt and little, if any, excess leverage within any financial system, save for a sneaky and ominous trend of specious lending by S&L's, created years back by competition with newly created money-market funds. Free-market de-regulation allowed these S&L's to depart from their original mission, borrow larger sums of $$ and begin OWNING (instead of just lending to) real estate and other tangible assets. Still these were great economic times for our country. The stock market went up and everyone bought new cars and new homes and most, if not all, assets continued to appreciate dramatically. Trees grow, but not to the Ozone layer!

1987 gave us the instantaneous risk adjustment of an over-heated equities market with Black Monday, but the American economy shook it off, led by a sharp uptick led by US consumer spending. Most of our historically close trading partners were not so lucky and fell into sharp recessions. We trudged on, though red ink was beginning to fill the balance sheets of banks and the US Treasury.

Around this time though, US Savings & Loans revealed their toxic pattern of large, highly levered, poorly-collateralized lending practices over the past decade. They had been pushed by regulation over the last decade to consolidate, get larger, ultimately leading to collapse, thus requiring a $170 bailout by the gov't and the establishment of the RTC.

1990 through 1992 serves up a plate of the newly expensive Gulf War, a concurrent oil price shock and marked a period of sharp, but short-lived recession. Unemployment rose, government spending accelerated and Germany & Japan became dominant global trade machines outpacing US growth and competing with the USD for prominence. Budget deficits, mostly due to a bloated defense spending spree grew near exponentially. Our politicians explain it away as the cost of winning the cold war and becoming the world's police force.

1993 sees Clinton/Rubin gets credit for new fiscal discipline, reducing the national budget & trade deficits, adding jobs, and pushing new home construction and ownership. Greenspan lowers rates, re-igniting the capital markets and by 1998 there is a budget surplus (for the first time since 1969), low unemployment, income growth, GDP expansion and savings rates drop nearer to 1% (by 2000). He may have been busy under the Oval Office desk, but the economy flourished.

By 1998, we've stopped savings, begun speculating in equity and housing markets and have the tacit endorsement of the FRB (by Greenspan's easy money). We share a delusional belief that the good times will go on forever. Little worry is ascribed to the now-prescient collapse of LTCM(caused by massive leverage and disconnect of market correlation's). Emerging markets, now a hotbed of capital investment, demonstrate their ability to instantaneously combust and the NY Fed successfully orchestrates a Wall Street-led quasi public-private bailout. Nobody thinks twice about resuming the party. The kool-aid continues to flow freely, and again the $$ spigot is dialed wide open.

  It is right here that the securitization markets for debt begin their exponential growth, further fueling debt expansion (now with other people's money) and we expand the ability of larger financial institutions to take risk by repealing the Glass-Steagall Act, (essentially inviting the larger banks to the party's keg and letting the free-market decide who will make the most coin!). Again, trees don't get to outer space.

The Nasdaq/Internet bubble is but another blip as financial engineers outweigh risk managers and the once provincial and local nature of the US housing market is given the wholesale endorsement by both political parties, the FRB, and the President. Concurrently (as a tonic for the short-shock of 9/11), our government endorse the idea of expanding personal credit and excessive (read: borrowed) consumer spending to lead our economy higher! Most interestingly, median income growth stagnates, becomes the most dichotic between the upper and lower economic strata since the 1920s...hmmmm!!

Market oversight is abandoned and abhorred, accounting standards loosened, and the quest for the holy grail of sequentially higher (albeit specious) earnings becomes the new mantra as we embark on a several trillion-dollar, questionable, war in Iraq. Again, federal deficits soar, the USD tanks but that can't stop the daily fixation on more wealth, little or no savings, and an ever-rising DJIA. Don't forget the then-common(and Presidentially-endorsed) mentality that every red-blooded American should pursue his/her dream of buying a home and has a nearby mortgage-banker with a pal at a GSE to make this a reality. The amount of leverage in the US financial system is nearly 3X it's GDP

Onto this shaky mix add the liquid oxygen combustibility of CDOs, CDSs, and the always false premise that housing (the underlying for most all of these derivatives) will go up forever. Allowing these to go on the books of our most critical financial institutions was the directly akin to lighting a fuse to a fiscal neutron bomb. Guess what...it went off and we are now seeing how well we can contain the poisonous radioactivity.

WHAT THE HELL DID ANYONE EXPECT TO HAPPEN

All the political and ideological bullshit expounded here should take a very long look at their respective parties, their ideologies, and recognize their roles in bringing us to the brink of historic disaster (the edge of the back of one of Cape Kidnapper's cliffside fingers). Both parties have failed us miserably.

All of you spout off about taxes, spending, slanted and false histories and blame and credit, blah..blah...blah...Politicians aren't alone in contributing to this mess. The media has played a large and non-constructive role in this as well and deserve a lambasting. They conveniently go from giddiness and celebrity worship to never-ending gloom and prognostication of fault.

HOWEVER,WE LET IT HAPPEN OURSELVES!!! Pat, Dave, Kalen, Lou, Craig everyone...take some damn responsibility. I know I do. Break this chain of ascribing blame.

We've allowed our collective conscience to take a hiatus in the name of personal gain, greed, avarice and excessive comfort. We went from a nation of strong, often Purtian-like values, to one of weak thought and ignorance of consequence. We have lost our ethical and moral compass.

The only thing worth loudly advocating, IMHO, is a wholesale surge (and then purge) of Congressional reform. Let's use the American spirit and will to demand the very real abolition of lobbying by term limits, federally-financed elections (cheapest government fix I can see), and the end of the seniority system. I didn't vote for either Nancy Pelosi or Mitch McConnell and I resent their ability to dominate the potential legislation for the world they'll leave my daughters. My generation is probably screwed, but theirs doesn't have to be. Let's have legislators who make the office responsible to us, not their financial benefactors (be they corporations, unions, think-tanks, or other political ideologies).

We may not like the medicine we are about to take and it won't taste good, but without some of it (and I don't pretend to sit here and tell anyone what will work and what won't...wtf knows just yet???)  we are doomed to watch this accelerating spiral of deflationary pressure sink us into a morass that might take multiple decades to recover from! Let's stop arguing over what's right and wrong with every bailout and every piece of legislation...they are mostly attempts at short term fixes. Stop worrying over what taxes you will have to pay and start thinking about where this country has to get to. We need real and dramatically different solutions to successfully extract us from this mess.

They won't come from the stale monotony of ideologic bullshit.

Yes We Can!!! I agree very much Steve.  I think the two failed parties in Washington will quit the deficit spending after the dollar has completely devalued and hyperinflation strangles us all.

[RJ_Daley]

Steve Lapper, you are one summarizing sonofagun!

Through all of your summary, I note that aside from elections between two parties that at the bottom of it all are made up of candidates that are beholding to special interests that drive policy in the most convoluted and corrupt way of who spends the most- makes the rules;  there isn't a chance in hell that like minded and balanced people of vision can get into the corridors of power and policy development.   The policy making process is a closed club.  I agree with term limits (but can see Craig's point of a perpetual lobbying class or staff class over-advising unseasoned legislators who would rely on them).  I also think that public funded elections would be a lot less costly to run than these bailouts needed when the bought and special interest controlled ruling class puts us in a jackpot of chaos.  

People with your demonstrated balance and views need to jump into the policy making fray.  But, what would it take to get folks like you to throw all in?  OH yeah, lots and lots of money to get the message out in this mass-media dominated environment.  

Maybe the humorous mantra of "we are all socialists now" should actually be; "we are all economists now".  

You have to give Obama credit on one aspect, he is out there everyday explaining his economic stim ideas, and seemingly as transparent as anything we've seen, ever.  

But, I can't let go or forget my perspective of one reason we are in this mess being the "vision thing" ( which isn't really partisan as much as personal since I have voted most of my life as Rep)  Can you really imagine Bush II getting his mind around these complex economic matters in the same intellectual way as Obama, and then communicating a plan like the big O can?  I have more confidence that the O can sit through a complex economic advisor meeting and follow along and participate than I could possibly imagine Bush not pulling out his rubics cube to kill time while the braniacs talk...  

[Patrick_Mucci]

Patrick..what do you think unemployed people do with their checks? 


They spend the money on the necessities, groceries, their rent/mortgage and their COBRA health premiums.
They have NO discretionary income.

You are absolutely correct Patrick...people need a job.


Agreed.
However, I'd rather see jobs created in the private sector, since those jobs are self supporting, whereas Government jobs are supported by taxes solely from individuals and businesses.


I was just watching an economist talk about spending...and she said there are only three customers when it comes to spending...people, business and government..and right now people and business are not spending...that leave government....and it seems to me the economic stimulus plan has a large dose of spending by government ,and tax cuts to encourage spending by people, and lastly some tax cuts to encourage spending by businesses.

I see the "Stimulus" package as a spending package, not a business creation and business expansion package, both of which are inextricably tied to increased employment.

The problem with big government is that it costs a tremendous amount of money and doesn't shrink when necessary.

[Patrick_Mucci]

"You have to create PROJECTS, be they infrastructure or other endeavors that will cause employers to HIRE people.  
People with JOBS spend money, UNEMPLOYED people don't spend money.
People with JOBS get the lion's share of their healthcare paid for, they get life insurance, long term disability insurance and Pension or 401K money put away for them."

Patrick,

Sounds like you think that Obama's stimulus program might not be big enough, given that there is such a huge amount of excess capacity right now, and no one is going to invest in anything with that kind of oversupply, so the only way to create projects is for the gov't to do so.

Jeff,

It's not the size, it's the focus.
I believe the stimulus package is misguided.
I would have prefered for Obama to have assembled the brightest, most experienced minds from every discipline to craft a prudent "Stimulus" package, instead of Harry Reid and Nancy Pelosi, who injected everything on the wish list they'd been assembling for the last eight years.

[Patrick_Mucci]

Steve Lapper,

You were doing great, right up until the near end.

I agree with you about term limits.
I also agree that the media bears a tremendous amount of responsibility for undermining consumer confidence over the last 2 1/4 years.

But, who holds them accountable ?
Who chastises them for their deliberate, destructive role ?

They are a force unto themselves, and anyone who criticizes them gets villified because they hold the power of the microphone and camera.

In order to fix a problem you have to understand the problem.

I would have prefered it if Obama had assembled the brightest, most experienced minds to craft a recovery or stimulus package.

Instead he ceded the responsibility to Reid and Pelosi and allowed them to inject their agenda, their wish list that had been eight years in the making.

Strictly throwing money at a problem, rarely solves the problem.

You have to make the problem your sole or primary focus.
You can't let the problem be a tangential beneficiary of a political agenda.

You can't accept politically driven agendas as the solution.

Tax cuts are NOT the solution.

Creating and expanding businesses that hire employees is part of the solution.

Throwing crumbs to businesses isn't my idea of a recovery package.

Basically, two sources hire employees, businesses and governments.
Businesses support themselves and their employees.
Governments are supported by employees and businesses.
Given the choice, I'd rather grow business than grow government.

Hence, I'd prefer a stimulus package that creates and expands businesses, thereby increasing employment in the private sector, rather than growing government, which taxes businesses and employees in order to perpetuate itself.

Lastly, when times are bad, businesses shrink.
Irrespective of times, governments grow, and with them the burden of support, a burden born by businesses and employees vis a vis taxes.

We need government, but the government that governs least, governs best.

[Joe Hancock]

We need government, but the government that governs least, governs best.

I may agree, but indulge me as I ask:

Who says?

Joe

[RJ_Daley]

Pat, we can't be that far apart when we all seem to agree that the long term and sustainable industry jobs are key to recovery, in the private sector.

All I want to know is how you propose to keep the industries and corps from exitting for the lowest tax dollar or cheapest wage, once we get them on their feet with government policies of tax breaks, and less red tape in doing business, etc.   It seems to me, that to the extent tax breaks have been given via loopholes to various industries, and isolated and irratic grants and incentives to the biggest lobbying industries, they still migrated to the cheaper labor and there went the jobs anyway.  Do you think I'm wrong that big industries were given various breaks over the years, and they left anyway?  

We have been duped by a false sense of buying the most stuff as cheap as we can than a better way of buying less, but quality and buying American, quality.  It is still the mentality of buying the most you can (consumerism) and dying with the most stuff, winning.  the more greed there is to have everything, and the easier it is to get credit that shouldn't be given, to buy more stuff, the deeper out hole.  And, when the jobs go away and we couldn't pay the vig of interest on all the loans, we failed.  

But, what is at the heart of it?  Personal ethic of consumption and greed coupled with an indifference in protecting the American engine of prosperity - JOBs!   When we took the bait for cheaper stuff made in foreign countries of cheap labore at the expense of job and industry protection, we went wrong.  I would like to see very smart economists rethink the trade and tarrif ideas in the modern context, not the Smoot Hawley 1928-33 context.  This isn't the same global arena as when Smoot Hawley was devised or enacted.  The needs of our country and mechanisms of global technology and economies are different.  I want to see some creative and intelligent people work harder to figure out how to bring back the jobs lost.  I want to see them piloried as traitors, the enterprises that would sell out the American worker and the job market national engine of prosperity for the lowest most exploitable third world labor scene.  Do that and you will have your America back, and maybe your food and goods will cost slightly more.  But, what would you rather do, spend 10-20% more on food and goods, or pay it in taxes to prop up entitlement and welfare rescue government programs?  

You don't really think that the underclass is going to go away and shut-up do you?  They will want their entitlements paid by your taxes, or they will need a job to buy their own stuff.  You decide which method of how you are going to hand over more wealth from those that still have any.  Prices higher and more jobs, or prices lower due to foreign made goods and no jobs and more entitlements and 'social' programs...  

Redistributionist, I'll plead guilty.  But, didn't we have a redistribution from the middle class and lower lower class to the very upper class from 50s to now?  What is a little redistribution of the previous redistribution for a while when our future is at stake?  

[Joe Hancock]

Redistributionist, I'll plead guilty.  But, didn't we have a redistribution from the middle class and lower lower class to the very upper class from 50s to now?  What is a little redistribution of the previous redistribution for a while when our future is at stake?  

Interesting perspective.

Joe

[Bart Bradley]

Mr. Daley:

I do not wish to get entangled too deeply in this debate...but please explain how the first cent of wealth has been "redistributed" TO me over the last 11 years of my working life.  I have paid huge taxes to the government and received some services...freedom, roads, etc...but I have paid more than my fair share for those services.

Bart

[RJ_Daley]

Bart, I don't know where you stand on the haves or have nots scale.  If you are sitting in one of your multiple homes or vacation homes or on the yahct living large off of enormous exec class compensation, or enjoying your own company profits made on the backs of cheap foreign labor, and finding many accounting tax loopholes to further protect your tax rate and life style and way of doing your business, I'd say you received a good portion of the ongoing redistribution.   

If you are working middle class, paying taxes without too many loopholes to exclude or protect your income apart from mortgage deductions, and think your taxes are too high now for the freedom and roads and services you demand, and only have an 11 year working life so far, I'd say you haven't that long of a frame of reference as to what higher taxes really are.  You've had 'cheap taxes' by historical US standards.  No, I'd say you didn't get the redistribution as a middle class working guy.  You need a big wealth footprint to get the really big bene's...    I'd say, leave your middle class taxes alone or lower them, and make sure you have a fair wage job to keep paying them, and don't worry too much if the really highly compensated and exec class pay even more.  Trust me, a few more percent on their taxes won't kill their appetite for more stuff and they will not fall into a pit of dispare that they can't still amass fortunes.  They accumulated at way higher tax rates just 20-30 years ago than now, but their accumulation rate has accelerated to breathtaking proportions. 

I think the redistribution needs to come from the idle and indolent big money, via government taking (the only entity that can loosen the money from their greedy pockets) BUT must go to policies that don't prop up a welfare structure, but instead incentivize more industrious American entreprenuers and industries where real jobs and prosperity are created.  Balance must be set between the incentive to create more reasonably wealthy, and taxation not so excessive that it kills incentive to be entreprenurial and want to invest and earn more.  I just don't think that balance is achieved at this time with this low of tax rate and loopholes and social stigma of greed for the most wealthy.  It ain't working in terms of wealth creating national prosperity through reinvestment with the bar set this low on taxes and loopholes... so let's raise the ante and see what happens.  If that don't work, we still have a vote to alter as we go.  But they say 'change has come to America' so let's change it up.

[Patrick_Mucci]

We need government, but the government that governs least, governs best.

I may agree, but indulge me as I ask:

Who says?


Ralph Waldo Emerson and Myself.

Or, as Dan King said/quoted, " I don't trust a man to govern his own affairs, let alone the affairs of others."  

I believe Philip Massinger is credited with those words of wisdom.

[Steve Lapper]

Pat, et.al.


   I do not wish to engage in any "tit-for-tat" policy debate. Neither party nor ideology has served us very well and even those with the most earnest of good intent have fallen prey to the old-school politics, the tiger-traps and cesspools of special interests. You are right when you say there are no political agendas, at present, worthy of becoming the solution.

   Clearly, several things are paramount. We must create jobs, sustain a free-market incentive for small business to succeed and we must begin to accept responsibility to our core values, our community, our country and ourselves. The demise we face has forced back into the hands of big government, like it or not. We are destined to face its effects regardless of any personal distaste for its presence. Without it right now, we would be signing a capitalistic death warrant for our society. Crime and social unrest would be the only headlines to supersede economic ones.

 While I believe I may have some interesting ideas to share, I hardly pretend to have the solutions to the problems we face. What I do know (and others here are persuading me to further vocalize) is that we have the duty and obligation as citizens (and I specifically as the father two very young children) to scream from every soapbox about what we see as corrupt and intolerable.

You make a good point on how to make the media accountable, but I want to point out to you the transformation and answer occurring right in front of you.....the Internet and its viral discovery and instant expansion of ideas. Whether its Youtube, Huffington Post, or even the Drudge Report, these are the types of foundations for the new media. Newspapers are shutting down and cable networks are the eroding the throw-weight of the networks. Words and ideas are moving at lightspeed across boundaries once thought to be the sole purview of a wealthy media baron or two. Let's keep the press on the press.

It will be the "new" media that eclipses the old (as it always has been in any industry that encounters severe business model disruption). This will the path to watch most carefully.

Stop blaming and pontificating and start thinking. We all have interesting points-of-view, ones that with a little perspective, thoughtfulness and balance might just yet produce the right spark.

[Patrick_Mucci]

Pat, we can't be that far apart when we all seem to agree that the long term and sustainable industry jobs are key to recovery, in the private sector.

All I want to know is how you propose to keep the industries and corps from exitting for the lowest tax dollar or cheapest wage, once we get them on their feet with government policies of tax breaks, and less red tape in doing business, etc.  

In simple terms you have to sustain a desirable environment.

How does a husband or a wife keep their spouse after they say, "I do" ?
They don't stop working at the relationship, successful marriages continue because the parties make a mutual committment and continue to work at the marriage.

It's the same thing with business-government policy.

Some, in America became hostile to businesses, so they moved or went out of business.

Why would you expect a corporation to continue to operate in a hostile environment ?

This dilema didn't happen overnight.

Paterson, New Jersey, not long ago, was called "Silk City".
It was a THRIVING textile center.
It had hundreds of factories/plants/mills, it employed tens of thousands of workers, it abounded in businesses collaterally related to the textile industry.  Chemical dye makers, truckers, machine shops, etc., etc..

Today, it's a ghost town for business.

What happened ?

The environment in Paterson and New Jersey turned hostile toward manufacturing.  Unions were a factor, as were energy costs, regulations, taxes, etc., etc..

Suffice it to say that these businesses fled Paterson for the confines of friendlier environments, Pennsylvania, North Carolina, South Carolina, Virginia and Georgia.

That migration would eventually lead from those states to Foreign shores.

The owners of those businesses didn't move, only the factories/plants/mills moved.

At the same time this was happening, government policies permitted foreign goods to be dumped in America at costs well below the costs produced by American businesses, because the foreign companies didn't have the corporate tax burdens, ERISA, OSHA, DEP, the same labor costs, health care costs, etc., etc..  In other words, it wasn't a level playing field.

Just look at the history of the textile, electronics and automotive industries
and you'll get a sense of how we let this get away from us.

For those that would argue that these textile company owners weren't smart businessmen, I can clearly state that some are amongst the smartest people I know, book smart and street smart.  MIT, Harvard and Princeton grads, mentored by their fathers and uncles in the way of business, yet, forces beyond their control cause their companies to move and eventually go under, since they were unable to compete with foreign companies because of the unequal burdens placed upon them.

And, the government did nothing to stop the imbalance, the inequity.

It seems to me, that to the extent tax breaks have been given via loopholes to various industries, and isolated and irratic grants and incentives to the biggest lobbying industries, they still migrated to the cheaper labor and there went the jobs anyway.  

Could you identify these phantom tax breaks and loopholes ?
Let's start with the Textile Industry.

Here are the Federal Corporate Tax rates.

Personal service corporations pay a flat rate of 35%
 
$0                 to     $50,000           15%
$50,000        to     $75,000           25%
$75,000        to     $100,000         34%
$100,000      to     $335,000         39%  
$335,000      to    $10,000,000     34%  
$10,000,000 to    $15,000,000     35%
$15,000,000 to    $18,333,333      38%

$18,333,333 and up flat rate 35%  

State Corporation tax rates -  vary by state but many are under 10%

If a business has revenue of $ 10,000,000 and expenses of $ 8,000,000 they're going to pay Federal Income taxes on $ 2,000,000.
They're also going to pay State taxes.
Payroll taxes, etc., etc..  So where are these wonderful breaks that you and others allude to ?

If you're so adept at reducing and eliminating taxes why don't you take all the corporate business away from local, regional and national accounting firms ?

Do you think I'm wrong that big industries were given various breaks over the years, and they left anyway ?

Yes, I think you're wrong.
Why did they leave ?
The owners/executives stayed here.
Government must have created an environment that wasn't as favorable as others, and government must have allowed foreign companies to unfairly compete with them.

And, government allowed mergers and acquisitions that didn't benefit provide long range benefits, they just put people out of work.

Now I have to be careful since my daughter is a lawyer, but, who's running local, state and the Federal government.  It ain't businessmen.  It's mostly lawyers who don't have a business backround, other than monkey business.  

Who negotiated our trade treaties for the last 50 years ?
Who allowed the predatory dumping of product in America.
HINT:   It wasn't American businessmen.

When it comes to negotiating trade treaties, I'll take Donald Trump over the bureaucrats in Washington every time.    

We have been duped by a false sense of buying the most stuff as cheap as we can than a better way of buying less, but quality and buying American, quality.  

RJ, most of the foreign companies worked, hand in glove with their businesses.  In the U.S. it's been an adversarial relationship between government and business.  Perhaps this debacle will change things.
I certainly hope so.

It is still the mentality of buying the most you can (consumerism) and dying with the most stuff, winning.  the more greed there is to have everything, and the easier it is to get credit that shouldn't be given, to buy more stuff, the deeper out hole.  

RJ, that's human nature.
Everyone wants more for themselves and their families, that's why immigrants flocked to America, the land of opportunity.  They wanted to better their lives, their standard of living and their financial position.
I can't fault anyone for wanting to be successful and I can't fault anyone for working hard and smart toward that goal.

It's every parents wish that their children lead a better, healthier, more prosperous live then they did.

However, I feel that it's the obligation of those that have succeeded to help those that haven't been as fortunate.  Those who are wealthy should be charitable, and most are.   I'd rather give to a charity and see the money put to good use, immediately, than have my money taxed with the promise that government will eventually distribute some of that money to charitable causes after it goes through the government filter.

And, when the jobs go away and we couldn't pay the vig of interest on all the loans, we failed.

That's not quite how it worked.

9-11 was a terrible day in many respects.
Greenspan correctly lowered interest rates,
But, he didn't raise them when he should have.
Money became so cheap that you HAD to borrow it.

As an example, suppose a business was worth $ 100,000,000.
Suppose it generated $ 10,000,000 a year in profit.  
If interest rates were 3 %, why wouldn't I borrow
$ 100,000,000, pay $ 3,000,000 a year in interest, pay off some of my principal and make a great return for NO outlay on my part ?

You HAD to do it.  It made reasonable business sense, especially since you had no skin in the game, nothing to lose.

With interest rates so low, reasonable leverage ratios climbed out of control.  People forgot about the lessons their parents taught them, those of discipline and that adversity could be right around the corner.

They bought homes they couldn't afford, betting on the come that the price of the house would rise.  They knew what they were doing, but, they were willing to take the risk.  When I was looking to buy my first house, you had to put 20-25 % or more down.  Everyone thought this would go on forever, those who invested conservatively were chided, but, they sure look good today.

But, what is at the heart of it?  
Personal ethic of consumption and greed coupled with an indifference in protecting the American engine of prosperity - JOBs!  

When we took the bait for cheaper stuff made in foreign countries of cheap labor at the expense of job and industry protection, we went wrong.  


RJ, you and I are "protectionists", but, we've been told that that's wrong.
But, our government exacerbated this situation and climate, they fooked us.

I've been against mergers for as long as I can remember.
The net of mergers seems to be lost jobs.

If 20 companies were profitable and each had a 5 % market share +/- a point or two, why the need to merge ?  They could have continued profitable if ONLY our government had protected against predatory product dumping

I would like to see very smart economists rethink the trade and tarrif ideas in the modern context, not the Smoot Hawley 1928-33 context.  


We agree, only I want Donald Trump negotiating for us, not some career bureaucrat who's never been in the business community.

This isn't the same global arena as when Smoot Hawley was devised or enacted.  The needs of our country and mechanisms of global technology and economies are different.  I want to see some creative and intelligent people work harder to figure out how to bring back the jobs lost.  I want to see them piloried as traitors, the enterprises that would sell out the American worker and the job market national engine of prosperity for the lowest most exploitable third world labor scene.  Do that and you will have your America back, and maybe your food and goods will cost slightly more.  But, what would you rather do, spend 10-20% more on food and goods, or pay it in taxes to prop up entitlement and welfare rescue government programs?  

Those aren't the only choices.

I also opposed the repeal of Glass Steagall
Those who went through the great depression knew what they were doing when they seperated banking activities.

Had banks remained as banks, investment houses as investment houses, insurance companies as insurance companies, we wouldn't be in this mess.

I blame those responsible for the repeal of Glass Steagall for contributing to the mess we're in.

You don't really think that the underclass is going to go away and shut-up do you?  They will want their entitlements paid by your taxes, or they will need a job to buy their own stuff.  You decide which method of how you are going to hand over more wealth from those that still have any.  Prices higher and more jobs, or prices lower due to foreign made goods and no jobs and more entitlements and 'social' programs...  

It's more complex than that.
Immigration, illegal and legal are an important component.
Do you want to pay for the health, education and welfare for illegal immigrants ?  We can't afford it.

All the things that we've done wrong over the last 50 years have to be undone, but, it's not as easy as just going in with a chain saw and cutting down all the undesirable trees at Pine Valley.

We're going to have to TRY to get out of this the way we got in it.
Unfortunately, I don't see that happening, not with our political system in its present state.

Redistributionist, I'll plead guilty.  But, didn't we have a redistribution from the middle class and lower lower class to the very upper class from 50s to now?  What is a little redistribution of the previous redistribution for a while when our future is at stake?

The other day, the Comptroller for the City of New York was being interviewed on TV.  The interviewer asked him about piling on taxes for those citizens residing in Manhattan, in light of the cost of living in Manhattan and the layers upon layers of taxes that city dwellers confront.

When the Comptroller stated that taxes were going to get much higher on those earning $ 200,000 per year, the interviewer stated that if you take more and more of their earnings, these people will move to friendlier climates.  The Comptroller's response, "Where are they going to go, New Zealand ?"  I thought, what arrogance.  Anyone who's visited Florida knows that hordes of wealthy people from NY, NJ, CT, PA and MA have changed residence just to get out from under the income and estate tax burdens in those states.

The other day, a fellow I know and respect stated that he thought Florida had a great opportunity to attract business.  With email, cell phones, computers and the global economy, no one needs to restrict themselves to New York City or New Jack City.

Capital goes where the environment is favorable, and when that happens, individuals follow.

If Capital isn't available or if the environment for Capital isn't favorable, Capital won't flow to that location.  If you think government can fill that void and create businesses, create opportunity and not unreasonably tax someone who's successful, then we're farther apart than you think.

Just ask Mike Sweeney, who lives in New York City, what it costs to live in New York City.  I know this sounds outrageous, but, a family of five, making $ 250,000 in New York City, doesn't have a lot of discretionary income.

Lastly, why do you think Bandon and Kohler succeeded ?
Without a friendly business environment, neither entepreneur would have invested their capital.

Jobs my friend, not the dole.

Stay well.

[Patrick_Mucci]

Steve Lapper,

The system is broken.

Until you get equal campaign funding and term limits, the entrenched parties and the wealthy will prevent viable candidates from attaining office.

I've been fiscally conservative in my personal life, business life and in my political beliefs.
My one extravagance might be golf.

When you allow people to recklessly spend other people's money, as the misguided politicians and executives have, and continue to do, finding the solutions is the easy part. 

It's implementing them that's impossible.

[Steve Lapper]

Steve Lapper,

The system is broken.

Until you get equal campaign funding and term limits, the entrenched parties and the wealthy will prevent viable candidates from attaining office.

I've been fiscally conservative in my personal life, business life and in my political beliefs.
My one extravagance might be golf.

When you allow people to recklessly spend other people's money, as the misguided politicians and executives have, and continue to do, finding the solutions is the easy part. 

It's implementing them that's impossible.

Patrick Mucci,

    You are indeed correct. We are on the same page. It remains no less a shame that we cannot find the means to be more optimistic.


BTW...for all a very, very good read on AIG and its implications by Joe Nocera. I strongly recommend it to anyone who want to understand the leverage in our system and its residual danger(s).


http://www.nytimes.com/2009/02/28/business/28nocera.html?ref=business

[Mike Sweeney]

BTW...for all a very, very good read on AIG and its implications by Joe Nocera. I strongly recommend it to anyone who want to understand the leverage in our system and its residual danger(s).


http://www.nytimes.com/2009/02/28/business/28nocera.html?ref=business

Slapper is on a roll!

Steve,

I have been calling for this since the fall :

http://online.wsj.com/article/SB123578492279598531.html

I would put AIG in this category and probably one car company. My opinion is let's do it and move on. I believe you were a "Too Big to Fail" guy. Updated thoughts?

PS: Needless to say I don't really know the answer at this point, but we are on GCA so I will act like I do know!

[W.H. Cosgrove]

I must add one thing to this suddenly sensitive and insightful commentary. 

Many people who had a limited understanding of debt and how it works, were given the opportunity, through the housing bubble, to refinance.  Unfortunately they did not understand that it is disasterous to mix ones short term obligations, with their long term debts. 

They purchased a tank of gas on their credit card, then refinanced that debt into a mortgage.  Why not, housing prices were never going to fall.  The tank of gas was now going to be paid off over a thirty year period.  Three days later, they bought another tank of gas.  Now you had the beginnings of the tsunami of debt that overtook us last fall.

The response of government is not disimilar, Congress has now passed several bills creating huge long term debt to cure what would have been a relatively, although painful, short term problem.  Given gentle yet firm support, I trust that the credit markets, real estate markets and stock markets would have and will recover. Instead to make everyone feel better, they have swatted a fly with a nuclear weapon.  3, 4, maybe 5 years down the road what is all of this liquidity going to do to our monetary system?  Severe inflation is a real possibility. 

We need to concentrate on reducing our need for foreign oil, reinvigorate manufacturing, and retool our infrastructure and education system.  Those can been done with tax incentives.  It doesn't require trillions of dollars of debt.  Nor does it require sapping the upper classes of the wealth they have earned and nurtured.  It is their investment that created much of the success of this nation.

I understand there is going to be some suffering.  It has already begun.

[Ian Larson]

I just had lunch with my friend who works for AIG today in Venice. He says there are talks of bankruptcy maybe as soon as this week. But take that for what its worth....

[Sam Maryland]

FootJoy shut the Brockton plant. 

Street Shoe and Classic lines are no more, get 'em while you can.

[Lynn_Shackelford]

We need government, but the government that governs least, governs best.
I may agree, but indulge me as I ask:
Who says?
Ralph Waldo Emerson and Myself.


Pat, I thought it was Thomas Jefferson.

[TEPaul]

MAN, is this place a trip!!

I was just reading a post by Pat Mucci where he makes an analogy between successful national industry and the relationship between a relatively content husband and wife!! I'm willing to admit he may be right and there might be a lot there particularly the sex!

Not to mention that that particular post of Pat's just might be the longest in the history of GOLFCLUBATLAS.com.

Perhaps now is the time to ask if the participants on this thread actually realize that the vast freedom of opinion, doubt, complaint etc, etc, might just bespeak or evidence true freedom in perhaps its most remarkable form, historically and today. Lincoln once said something to the effect that the barometer of the strength of a democracy is the degree of dissent the government could stand or withstand at any particular time!

Or else it might be time to throw in here Bradley Klein's regular, oft-used and now semi-famous remark when they introduce him to club memberships and golf architectural audiences and such and ask him what he first noticed when he became aware of golf clubs and memberships and golf architecture.

"I realized that very rich people can be real idiots too!"