Brain-Jockey

Cap and Tax: Need Truth in Polling

Written by Audrie Zettick on June 25, 2009

Nancy Pelosi is leading the charge to get Democrats in Congress to rush passage of H.R. 2454–The American Clean Energy and Security Act of 2009-before they jet back to their districts. Let not wisdom, deliberate debate and growing public opposition stand in the way of their July vacation (and increase in their carbon footprint).

When asked innocuous questions like “do you support government regulation to reduce greenhouse gases from cars and factories,” three-quarters of Americans purportedly agree.  Heck, I do when worded that way.  Some members of my family have asthma–we’re sensitive to air pollution and stay inside on “ozone action days.”

When polls go on to ask pesky things such as if they’d be willing to pay more for electricity in order to reduce carbon emissions, support for Cap and Trade drops to 52%.

Of course you have to consider that in May, polls showed few people–24% of voters– even knew what cap and trade was.

Imagine if the full truth were asked.  Such as if each poll respondent had to complete this estimate of the personal impact of Cap and Trade.  Or if estimates for outlying years were considered (after 2012).  The bill’s been watered down to minimize impact in the early years, to gain moderate Democrat support.  But when you begin to estimate costs beyond 2012, the financial impact is more pronounced.

American taxpayers better gird their loins for a major change in lifestyle, if Cap and Tax passes.  The Tax Foundation notes that “Lawmakers weighing the costs and benefits of climate policy should be aware that cap and trade would impose a significant and regressive annual burden on U.S. households.” With many households just getting by financially, and with the future tax burden of the bailouts on the horizon, this is ill advised.

My main concern is with the broad impact of vastly higher electricity and gas prices.  President Obama has  himself admitted that “electricity costs will skyrocket” under cap and trade.  See video.

I can envision school taxes rising as districts deal with increased energy costs–for buildings, busing and food.   I know my food bill will rise, impacted by increased energy costs for production.

The Wall Street Journal today refutes the fictional estimates recently released by the CBO.  The Heritage Foundation estimates that cap and trade will cost American families $3,000 per year.

Here’s a better–and more accurate– poll question:

“Would you support an increase in your electricity, gas, school taxes, food items, clothing and general living expenses in order to cap carbon emissions?”

Or perhaps “If your costs go up $3,000 per year, what will you give up first: vacation, braces for your kids, date nights with your spouse, dental work, home renovations, car or electronics purchases.”

Now THAT would make for interesting poll results.

Hedge Manager Dares to Speak Out On Obama

Written by Audrie Zettick on May 6, 2009

A departure from my usual longer posts (and something I’ll be doing more of). 

Here’s something worth reading and viewing, given President Obama’s bashing of Hedge Fund managers who supposedly held up the Chrysler bankruptcy because they wanted more than 30 cents on the dollar for their clients.  No matter what your view on Wall Street, hedge funds and big business, it’s worth the listen.

I Want My SUV: More Unintended Consequences On The Horizon

Written by Audrie Zettick on April 27, 2009

Being involved in government policy making is like watching sausage being made: after you’ve seen it done, you want no part of it. 

Guess that’s why I managed to escape my policy stints in some of the world’s largest government bureaucracies with a modicum of increased wisdom based on experience and a healthy dose of skepticism about government.  Among my lessons: 

Always assume your first try at a new policy won’t go as planned.  Triple the probability of it going wrong if you’re hell-bent on rocketing warp speed toward change. 

For good or ill (and usually for ill), there will be unintended consequences. Among many misfires we have had this year:

·         Banks on the dole.  Call it corporate welfare, bailout or stimulus, I was amused to see the supposedly strange (but predictable) behavior of some financial institutions: buying jets, remodeling offices and the like. (Reminder at old Slate article here:  I See Dead Bankers! Wall Street has become The Sixth Sense-filled with corpses who think they’re still alive.)

·         A knee jerk reaction as the U.S. House passed a bill requiring a whopping 90% tax on bonuses at AIG and other institutions that took TARP money–but it turns out many of these folks were working under a retention contract which promised them pay after they stayed a set length of time…and many were with the financially-healthy subsidiaries of AIG. So are we surprised when the talent needed at companies like this flee? Or that other financial institutions, hesitant to face micromanagement by the feds are scurrying to pay back TARP funds rather than stick with the Obama plan?  Oh, then there’s that problem with the bill being unconstitutional.

·         U.S. automakers GM and Chrysler had to be thrown multiple lifelines in the form of $17.4 billion to avoid bankruptcy, but it’s only the threat of that very bankruptcy that has resulted in movement toward hauling in labor and healthcare costs (see Chrysler in Canada here). 

Which leads me to the next unintended outcome of any new “economic stimulus” measures:  The success of car companies like KIA. 

With the U.S. government at the helm of GM and Chrysler, market forces go out the window.  President Obama has made it clear that he will “remake” the U.S. auto industry, ”forcing” consumers into smaller cars that are clean, economical and green.  During his campaign, he scolded auto makers for focusing on popular SUVS and not cars with improved fuel efficiency.     

Yet, KIA is currently building their first U.S. auto plant where their value-priced SUV, the Sorento, will be built.  My neighbors, many of whom had trailers hooked to their big SUVs at the recycling center this past Saturday to pick up free mulch, will be glad to know at least one company will still provide an SUV.    

Who Wasn’t In The Room: Small Business Taxpayers

Written by Audrie Zettick on March 19, 2009

Business titans (or at least those with titanic salaries) stood elbow to elbow with President Barack Obama in January, part of the lobbying of the American public aimed at convincing us that indeed, business is behind his efforts to stimulate the economy. More recently, the President spoke to the Business Roundtable, another bastion of high-level, Fortune 500 CEOs. 

But it’s the elbow grease of American small business that’s not only kept this economy humming in the past, but kept us true to our traditions of self-determination and independence.  What qualifies as a small business differs depending upon what industry you are in and who is doing the defining. (Example: the SBA considers a telecommunications reseller with up to 1500 employees a “small” business although generally the top break is at 500 employees). What I am talking about is the meat and potatoes of small business–the more than 60% of businesses with zero to four employees.    

Failure to see things from a small business perspective is a bipartisan issue.  My own family’s experience speaks volumes.  Through Democrat and Republican administrations, we couldn’t fully deduct health care premiums, had to spend time figuring out how to adjust books for new tax tweaks and spent much more than we’d like on CPAs (a worthy profession, but really, I’d rather keep the cost down).  And don’t get me started on the voluminous paperwork and phone calls when (not if) we get a notice from the government indicating a payment error–which to date has always been an error on their part.

The past month, I’ve been phasing out our family promotional products business.  We’ve been in business since 1965–thriving much of that time.  But since my mother’s death 5 years ago, we’d been in a “holding” mode as I helped my 81-year-old dad from a distance (unlike when I was fully committed to the business in the 1980s).  I SHOULD be focused on helping our new owner “work” our client accounts, since payment for the sale is based on a monthly percentage of the sales from our existing clients.  Instead, I’m focused on administration.  I have an MBA.  How hard could that be?    

The list of taxes I’m dealing with is daunting.  Federal Withholding, Medicare, Social Security, Pennsylvania Withholding, Pennsylvania Sales Tax, Federal Unemployment and PA Workers Compensation, and local nuisance taxes (that require quarterly filing, even if we don’t owe a dime).  And we only had one employee at the time of the sale.  Like many small business owners, over the years we’ve found that complying with various local, state, federal tax and regulatory issues takes up more of our time than we’d like, keeping us from expanding our businesses.

I’m ever hopeful that the Obama Administration might do right by small business. This week he DID get the attention of some small business owners by proposing to use $15 million in TARP money to get credit flowing for small business.  It’s a worthy objective.  In layman’s terms, Obama’s recent initiative uses funds to buy SBA-backed loans and get them off the banks’ books, allowing banks to lend again. However, the stimulus package already has increased SBA-backing of the loans themselves to 90% from 75%–making me wary considering the recent track record on other programs (wasn’t the initial bailout sold to us with the intent to get bad mortgages off the books of financial institutions and didn’t we get into this economic mess because of mortage lending to risky borrowers?).  

Still, add to this his recent announcement to allow small businesses to get a larger tax break for losses  and it seems headed in the right direction.  But the actions still miss the point.    

Most of us who own small businesses don’t apply for SBA-backed loans and don’t intentionally try to lose money.  The average small business owner isn’t going to apply even for the basic SBA loan, which requires all owners of 20% or more of the business to personally guarantee the loan.  SBA loans are structured to spread the risk around (as they should be), with SBA working through local commercial institutions, and the borrower, lending institution and the SBA–in theory–all assuming risk (although this has altered under TARP).  In this economy, it’s understandable–and responsible–if both the lenders and the borrowers batten down the hatches, so to speak.

Whether we are a stay-at-home mom with an online business or the local plumber, we are more concerned with the financial balancing act: investing our proceeds into the business versus keeping enough self-employment tax funds in our checking account to pay our quarterly taxes.  After all, we get the pleasure of withholding (and then forwarding) the federal taxes deducted (like all employees) but paying the matching portion of these same taxes as the “employer.” 

Perhaps President Obama should have invited some of these folks below into his inner circle on small business. 

“My business doubled last year. I think we would all be better off if the government gave us our taxes back and let us invest the money as we saw fit in our own businesses. I’m creating prosperity for myself and others everyday…the federal government is just getting in the way of progress.”     Augustine 25

 

“Wouldn’t it be better just to cut their tax burden? By burden I mean both the taxes paid and the complexity dealing with tax code. When you need a lawyer and an accountant just to make sure you’re following the law, the law is too complex.”  Dan

 

I hear you, brothers. 

Survive Obama Inauguration Day and Beyond: Let Your Heart Be A Twitter

Written by Audrie Zettick on January 20, 2009

Many heads are in the clouds and hearts all a twitter with this historic inauguration.  To heck with the size of our carbon footprints, let’s make a carbon caldera as we party like it’s 1999.  

Actually, I’m staying home but I don’t behoove Obama supporters (except perhaps those in the media) their fun and adoration of “the One.”  I avoid fawning over pop culture icons, but admit to being speechless the first time I met Reagan.  I wore “Reagan red” in the 1980s—but only because I looked “hot” in the color. 

And you’d have to have a heart of granite not to be moved by the inauguration of our first black President, in a town where the Capitol was build by slaves.  

Yes, I’m for Hope and Change.  Hope that Obama’s inauguration leads to an historic presidency where the first family becomes less a pop culture figure but more an example of a healthy, intact family to emulate.  Hope that President Obama’s speech on accountability and responsibility isn’t about government’s responsibility as a nanny state, but our’s as citizens. And I hope that I still have change in my pocket after Nancy Pelosi’s majority gets through with my purse.

But as I watch the inauguration today, I’m still filled with dread.  Our local paper drove home why I feel that way with an opening line that reads “Today, America changes course.”  With high level officials like Hillary Clinton and Eric Holder at the helm of major policy-making departments, I’m anxious. Lesser known figures such as Cass Sunstein and several at the Justice Department frighten me even more. As regulatory “czar,” Sunstein is in a position to advance his principles, which include designing regulations around how people behave.  He definitely doesn’t behave the way the folks in my family do, where we eat meat, have relatives that hunt, and haven’t included our pet fish in our wills.

Last week, I came across many lists about how to survive the inauguration, such as this one that gives the advice not to wear sequins lest you become stuck to another sequin-attired attendee at an inaugural ball. Not what I had in mind.  Alas, how do conservatives make it through today, tomorrow and next week without our heads exploding?

Fear not, my friends.  I have found the solution.  Attend the Twitter Ball (see Washington Times) hosted by Smart Girl Politics at 9 p.m. tonight (Jan. 20).  Why?

• It beats wrapping your head in duct tape.
• You can wear sequins without worrying about getting stuck to folks like Nancy Pelosi.
• You can wear pajamas…or less.
• Some of us from #TCOT (Top Conservatives on Twitter) will be there.
• You can rub “virtual elbows” with people like Saul Anuzis, Chip Saltzman, Amanda Carpenter, and others.
• It’s less calories than chocolate (my personal choice for relieving anxiety)
• You can engage in several tracks of discussion, such as 2012, Taking Back the Congress and more.
• You can turn these discussions into action.
• It’s a hangover-free event and even cheaper than Wild Turkey.
• No worry about how many porta-potties are present. 

See you online.

Can you say that with a straight face?

Written by Audrie Zettick on January 14, 2009

At both the national and state levels, I find democrats making statements so outlandish it’s hard to believe they do it with a straight face. 

At the national level, the nomination of Timothy Geithner as Treasury Secretary continues, despite his late payment of taxes (some uncovered during the vetting process for the nomination, some known earlier).  Now an effort to expedite the nomination process has moved forward resulting in a hearing scheduled for this Friday-with less than the 7 days notice required.  

• Max Baucus, Senate Finance Chair, is still supporting Geithner’s nomination.  Somehow this all fits the Obama mission of “change.”  Obama spokesperson  Robert Gibbs says Geithner is the “right person.” (Sounds like more of the same to me.)

At the state level, Pennsylvania Governor Ed Rendell ignored his own hiring freeze-instituted because of a projected budget deficit of $1.6 billion —creating a new position for an ousted state representative.   Dan Surra will receive $95,000 in annual salary as an advisor for “Pennsylvania Wilds,” a tourism program.      Like many of his brethren, he lost re-election last year, likely due to support in 2005 for a 16-34% legislative pay raise. 

• Rendell’s press secretary said this was not a make work post for an out of work politician and that it’s a wise investment. He went on to say, “it would have been tragic to allow that much talent to disappear from public service.”   (Must do wonders for state government employee morale.)

All presumably said with a straight face. 

Of Filthy Juicy Profits, Pantyhose & Duct Tape: Cuban Policy

Written by Audrie Zettick on January 13, 2009

Fidel Castro has criticized legal and illegal taxis in Cuba for their “juicy profits.”  He was also once quoted as saying:

I find capitalism repugnant. It is filthy, it is gross, it is alienating… because it causes war, hypocrisy and competition.

Some filthy juicy profits may be coming to the rescue of Cuba’s ailing transportation system, as Raul Castro is allowing new taxi licenses to be issued and some taxi drivers to set their own rates.  One mother of a state engineer is quoted as wanting her son to consider giving up his day job to use their car as a taxi. 

Of course, their car is a 1950s Chevy.  (I wonder what all these Cubans would think of the Hershey Car Show each fall, with all those “vintage” cars spiffed up and for sale).

Yes, capitalism at work.  Of course, it’s far from ideal.  Cabs in more populated areas will be more highly regulated and price controlled.    

Even though it’s been ten years since the Cuban government approved new taxi licenses, it hasn’t stopped drivers from offering the service.  So with some of the government brakes off, it will be interesting to see how this plays out.

When my hubby and I were in Ukraine (for an adoption trip) we primarily traveled by taxi.  Each morning we’d guess at what kind of vehicle would show up at the apartment.  Dented?  All windows working?  Any seat belts? Do we have duct tape and pantyhose in case we need to help with on-the-road repairs?  (click here for photos on various auto duct tape repairs and here for a video on replacing your fan belt with hose).

We were taking our lives in our hands–cars in less-than-ideal condition plus bad roads is not a good combo. One member of our independent adoption group was killed in a head-on collision during an evening drive the previous winter because her driver had no headlights.  

Strangely, along with my fear of riding in a cab was delight that these folks were making an independent living.   

President-elect Obama has suggested changes to U.S. policy toward Cuba.  I propose sending duct tape and pantyhose to Cuba to support these budding entrepreneurs. 

Capitalism built on duct tape.  Not a bad idea.  It can be as difficult to remove as an incumbent Congressman.

First Women: It’s Not The Party You Think

Written by Audrie Zettick on January 12, 2009

The mainstream media are full of headlines touting another “first” with the Obama Administration.  As proclaimed by the Presidential Inaugural Committee, Rev. Sharon Watkins will give the sermon at the National Prayer Service on January 21. 

I’m glad for her, really.  I just hope her theme–“To Believe In Something Bigger Than Ourselves“–isn’t an omen for the bigger and badder Federal Government we’re certain to have under the Obama Administration.  Call me an optimist.  NOT.

Speaking of firsts, which party had the first woman elected to the U.S. Congress?  And who was she? I’ll give you some clues. 

• She worked for women’s rights. 
• She was a strong advocate for veterans rights.
• Upon her death, she left funds intended to assist “mature, unemployed women workers.”     

The first female elected U.S. Congress was Jeannette Rankin.  First elected in 1916 in Montana, she was elected after women in that state were given the right to vote, but at a time when few women nationally held that right.  In fact, she was the first woman elected to a national legislature in any western democracy.  An effective advocate for women’s rights, Jeannette introduced the Susan B. Anthony Amendment in the House (which would later become the 19th Amendment). 

Elected in 1916, she was the first woman elected to a national legislature in any western democracy. 

Democrat?  No, Jeannette was elected as a Republican.  She served one term in the 65th Congress, then was  gerrymandered out of her congressional district.  She then ran unsuccessfully as an independent for U.S. Senate, but was later elected again to Congress, serving in the 77th Congress.  (As a side note, she served only one term each time, mostly likely due to the fact that she voted against U.S. entry into both WWI and WWII, proof that ardent pacifists can exist in either party–and that going against the will of the people is never healthy for one’s elected career).  

So all the women who had the right to vote for Obama can, in part, thank a Republican woman for that right. 

Obama and the Law of Unintended Consequences: What Might Be Next?

Written by Audrie Zettick on December 6, 2008

Anticipating federal policy changes certain to be on the horizon with a Democrat president and U.S. Congress, I was reminded of the Law of Unintended Consquences.  You know, when policies start out well-meaning but end up having all sorts of deleterious effects.

Examples abound. 

• Welfare payments  Back before welfare reform, a mom on cash assistance was smart for not working.  While there was no mandate to work, if she chose to work–even very part-time–her welfare payment was reduced, sometimes drastically.  If the net income to her family was less, then why work?  The result: not many welfare recipients had work histories, making it even less likely they’d ever be off the  public dole. Similar “we-meant-well” bad side affects of the old welfare policy resulted in more single-parent families, less child support to single moms, and generational reliance on welfare. (Now, in PA, a family on public assistance with a working adult actually has more income and benefits than if no one is working.   Cash assistance recipients can keep their welfare checks for a while while they gain work experience, but the 60-month life-time limit on cash assistance spurs them along). 

•  Cigarette Taxes  (Commonwealth Foundation just blogged about this) People “smuggling” cigs across the border to avoid high cigarette taxes.  (I’m waiting for the “speak easy” smoking rooms, since we just outlawed smoking in restaurants in PA).

• Immigration Reform  Ronald Reagan signed an immigration reform law in 1986 which included an amnesty policy.  It was to be tied to strict sanctions for employers who hired illegal aliens–the deterrent to an influx of more illegals. The result: Ted Kennedy managed to eventually do away with the sanctions…and we have today’s immigration challenges.

• Hawaii Child Healthcare Hawaii had a great idea.  Get healthcare coverage for the remaining children without it, kids whose parents worked but made too much money for medicaid.  They had to discontinue the program after 7 months as too costly—families who were paying for healthcare dropped their coverage for the government-funded program.  

• Nebraska Safe Haven Law–This law was originally intended to keep unwanted infants from being abandoned and, like all other states’ safe haven laws, parents were allowed to drop of their children at hospitals, no questions asked.  But Nebraska had to amend their law to specify an upper age limit, as parents were abandoning their teens.

With today’s issues, I wonder what unintended consequences we’ll see in future months or years.  One or two spring to mind immediately: the FDIC proposal to allow mortgage holders who haven’t made a payment in 2 months to qualify for lower interest rates and Barack Obama’s promises (as shown in the video below) to “not weaponize space,”  not develop new nuclear weapons and “slow development of future weapons systems.” 

A mistake made in welfare policy we can live with for a short while.  Defense mistakes?  Sometimes it takes us generations to correct them…if we can correct them at all.

What else do you think is on the horizon?

Obama’s Friend-Raising Trumps Fundraising

Written by Audrie Zettick on December 1, 2008

Apparently, Barack Obama’s fundraising from small donors wasn’t up to the hype.  But still, what can we learn? 

While Obama did indeed set new records for funds raised, a recent study  revealed that small donors (defined as those who donated under $200) comprised 26% of Obama’s total donations–only 1% higher than Bush’s small donor percentage (25%) in 2004.  This study by the non-partisan Campaign Finance Institute confirmed a suspicion we’ve had–that the Obama campaign’s small donor base was inflated by counting donors multiple times–each time they gave an amount under $200–even if the total was much more than that.

Many pundits might stop there, glorying in the proof of Obamamania hype.  

But the lesson here lies in the communication strategy used by Obama—not just the media but how the tools were used. I’ll call it his “Friend-Raising” strategy. 

As Soren Dayton wrote, there are ways in which the Republican campaign organization exceeded Obama’s campaign.  But the bottom line was that the GOP applied technology to the old way of doing things; the Obama campaign used its “technology tool box” to really move things forward–especially with their advanced use of social networking.

A great insight into social networking is found in a quote by Travis Kalanick on MSNBC.  Travis, the Founder and former CEO of Red Swoosh said:

“Social networks are like grease — in some cases, gasoline — for our personal business networking machines. If you aren’t plugged in, you will be out-done by better-connected, hyper-networked colleagues and competitors.”

Obama’s social networking efforts clearly threw gasoline on the fire of Obamamania, empowering onlookers to become invested in the outcome of the election.  As Rachel Motte wrote today on EvangelicalOutpost.Com,  Republicans have got to “stop treating the internet like just another communications medium and to start using it to spark real-world action.”   She goes on to summarize some great conservative activity online this week (kudos to Michael P. Leahy for starting the Top Conservatives on Twitter list). 

What we are talking about is Web 2.0–(see my favorite web 2.0 definition)—using the tools of the internet to transform the way we do business.  

Deployed well, web 2.0 in the “business” of political advocacy can :

• Creat momentum to recruit volunteers and their natural online activity to make them virtual organizers.  This article discusses how the Obama campaign didn’t just USE social networking by encouraging piecemeal social media usage but rather by finding new applications to integrate usage.  The Obama campaign implemented an application (turned down by the McCain camp) that integrated the My.Barack.Obama website with Facebook, allowing a feed from the one to the other.  So, for example, if someone registered with the Obama site signed up to host an event, it got posted to Facebook.  The result was a community that was cultivated, one where lurkers turned into activists.  By allowing individuals’ Facebook pages to become a shout out of activity, it essentially turned these Facebook pages into “community organizers” where new constituencies were reached.  Cool.

• Turn small donors into repeat donors and leaders-by-example.  You might not be able to give $100 to a cause or candidate, but giving $25 several times is doable.  And it can be done quickly.  And –what if the Facebook feed showed a small giver just donated.  Would his or her Facebook friends feel pressure to donate?  I have a nonprofit consultant acquaintance I watched raise thousands of dollars quickly by simply asking her Twitter network to go to a website and donate $10 each.

• Keep the blogosphere buzzing.  Whether it’s reality checking facts or getting everyone to show for an event, the turn around time is short and breadth of coverage is wide in social media.  People can become engaged, not simply talked to (as you might with email). 

Lesson here:  go beyond just employing the tools; make them work together to nourish (not just create) a community–and use that community to transform the way we “do” politics.