Thursday, October 23, 2014

Living like a King

I read nearly two dozen books a year. I was an early adopter of the Kindle because my reading isn’t evenly spread throughout the year – I tend to binge read while traveling or on holiday. Schlepping 10 books in a bag became old very quickly…especially since I’m a light packer otherwise. Now I download books to the iPhone and use the Kindle app – much more convenient! In today’s social media technology environment – being able to travel, vacation and have electronic gadgets to read books is a whole series of luxuries known as #firstworldissues. Traveling has its own array of #firstworldproblems.

In a post 9/11 world where all but one major airline company went through bankruptcy, fees have become the solution for balancing the books. CNN/Money reports that $31.5 billion was earned by airlines in 2013 – up from $2.8 5 six years earlier. Annoying as those fees are – they are democratic. If you want more legroom – pay the fee. If you want to bring a lot of stuff, pay a fee. If you don’t want to pay a fee – choose an airline that doesn’t charge fees.

The monetization of every element of airline travel began with the 1978 ‘deregulation’ of the industry. Before then the Government assigned prices and managed schedules. While the industry remains highly regulated, the ‘deregulation’ allowed airlines to introduce the hub-and-spoke system, mange its own pricing and have increased competition. Government still controls routes, security and a slew of other components. Business Class travel was introduced in 1978 – allowing those who were willing to pay for the privilege of having more space.

Companies pay for executives to fly in Business Class for a variety of reasons. Keeping key staff comfortable and happy is certainly part of it, but it's also making sure that their time is productive in the air and on the ground is cost-effective. A well rested sales person/executive is more effective than somebody who needs a day to recover from traveling. Financially the cost of business travel is deductible.

Companies pay federal taxes. For shareholders the goal is to be as profitable as possible – but for tax reporting the goal is to maximize deductions to reduce the tax liability. Travel is a true cost of business and should offset revenue. Does it make sense, though, for first-class and business-class travel to be fully deductible? By allowing a deduction for a luxury item means that the taxpayer is essentially underwriting the premium service. A deduction of the base cost of the fare would be more in the spirit of Government’s desire to incentivize commerce which would then eliminate the taxpayers role in subsidizing luxury travel.

U.S. companies pay one of the highest tax rates in the world – 35%. They pay this rate on revenue earned anywhere. So a U.S. company that earns money in France has to pay whatever tax it owes to the French Government but in addition must pay 35% to the U.S. on those monies as well. A Corporate Inversion is the process where businesses relocate their main offices outside of the United States. These companies still pay 35% tax on all income earned in the U.S. – they just don’t pay a tax on money earned in another country. President Obama has called this “un-American” and shames the businesses for “not paying their fair share.” Taxing money earned outside of the country isn’t fair. No wonder businesses take full advantage of all of the legal options to reduce their tax obligation.

Theoretically taxes are levied against revenue earned in a jurisdiction to offset the costs of services provided by government for that jurisdiction. Local sales tax, then, helps pay for local police to keep the community safe. Federal taxes help pay military costs, etc. Charging a levy against money earned outside that jurisdiction makes it hard to justify the applicability. Why would Boston need to charge a tax on money earned by its residents in New York? It doesn’t. In corporate taxes, though, the U.S. charges 35% to Burger King on money it earns everywhere in the world.

The U.S. tax code is currently 73,954 pages. The code is full of incentives for individuals and business to behave and conform in a manner that Government wants. (Home ownership only became a standard when the Government tax code made it financially beneficial for the majority by having the cost of mortgage interest reduce their tax liability.) One of the consequences is that some companies then don’t pay any tax, and the overall percentage of taxes paid by business have declined. The problem lies in the tax code – not in those who take advantage of what the code allows.

The desire for the State to manage every element of its citizens behavior has resulted in the world’s greatest Democracy to move further towards Imperialism. It applies both to the people who fly in Business and First Class which is subsidized by taxpayers through a tax deduction and to politicians who have created a system that penalize companies for earning money outside the borders. It’s time to do away with the monarchy…again.

Thursday, October 16, 2014

Mad as Hell

I am a little bit spoiled. I have expectations that things will work a certain way – and when they don’t, I have less patience than I wish I did. This is especially true with technology. I’m of an age where I know the complexities it takes to make things happen, but am so accustomed to having it that I have little patience when there’s an interruption in the Cable TV, the high-speed wifi Internet, etc. I have to remind myself of the progress in my own lifetime – the computer on Apollo 11 that took the first men to the Moon is less powerful than what I carry around in my shirt pocket every day.  Frustrated as I may get when tech doesn’t work as I think it should, nothing compares to the angst that the American political system can generate.

I don’t think of myself as one of those Angry Tea Baggers fuming against the government. The Government has a role to play in our lives. The Founders pretty clearly laid out in the Constitution how intrusive it should be. Over the history of the U.S. there’s been an ongoing debate about the tension between those who see a more activist role for the State and those who prefer less of one. That’s a good thing, and something to celebrate. Whatever size and role you think the Government should play in all of our lives - the one thing we should all be able to agree on is that it should be done properly. There should be no room for incompetence. That's not the case and I'm Mad as Hell about it!

Let’s look at some of the top issues facing Americans today. Regardless of your political persuasion – whether you think that what the government is doing is good or bad – we can all be mad about how it’s being done.
  •  The U.S. Government spends $1.20 for every $1 it brings in. Total debt is nearly $18 trillion with each person owing about $55,000.  
  •  The military of the United States is deployed in more than 150 countries around the world, with over 160,000 of its active-duty personnel serving outside the U.S. and an additional 110,000 deployed in various contingency operations. 
  •  The President of the United States, a former Constitutional Law Professor, maintains a kill list and decides whom to eliminate without the benefit of a trial, evidence or a defense.
  •  Congress worked 107 days in 2012 and 113 in 2013. 
  •  The largest agencies of the Federal Government – including the IRS itself - can’t be audited because their books and records are in such bad shape. It's been this way for decades now.
  •  Director of National Intelligence James Clapper gave the “least untruthful” answer to Congress about gathering data on millions of Americans. That was after he initially said he didn’t lie. Most recently he claims it was a “mistake.”
  •  The Secret Service not only allowed breaches of security and its own policies, it didn’t disclose them until under oath. 
  • The Veterans Administration and the roll out of the Affordable Care Act show that despite best intentions, government's management of health care has a long way to go. 
  •  The head of the Centers for Disease Control and the Administration have minimized the outbreak of Ebola in the U.S. as a paranoid fantasy. Meanwhile cases are popping up and people are dying in the U.S. The Director of the NIH said this week that the Republicans have caused the problem because of “budget cuts” making a medical catastrophe-in-the-making political.

There’s plenty to be frustrated about. Is the Government – whether Legislative or Executive – lying to the public on purpose? Or are they just incompetent? Probably a little of both.

Paddy Chayefsky’s 1976 movie “Network” is largely famous for its character Howard Beale who persuades viewers to shout out of their windows "I'm as mad as hell, and I'm not going to take this anymore!" It's time to start yelling once again.

The time has long passed for Americans to hold its leaders accountable for the inept handling of its affairs.

Thursday, October 9, 2014

The Multiplying Dead

Zombies are in. Or so I’m told. They’re not just for Halloween anymore either. Hollywood has perpetrated a fascination with the dead and un-dead with TV shows like The Walking Dead, Supernatural and Game of Thrones. There are plenty of movies too. It’s a genre that isn’t a favorite of mine, though I will admit to enjoying TNT’s The Last Ship this summer which was less about zombies and more about a disease killing people mysteriously with one ship of people left to save the world. The Michael Bay series set a dark scenario where an unknown illness killed people indiscriminately. Almost on a parallel timeline news from Africa emerged about the current Ebola outbreak. It seems that fiction is stranger than truth.

Thousands of people in West Africa have died from Ebola. Sierra Leone had 121 deaths in one day. The disease is no longer confined cases and deaths are now reported in several countries, including the United States.

In August (2014) an American missionary was airlifted to a hospital in Texas. Local television news, the Internet, and the community went into full scale panic. The supervisor for the Texas hospital “repeatedly downplayed the risk” as a way to calm the community, according to CNN.  He died this week.

Fox News may be stoking paranoia on its airwaves, but its website has bypassed the hyperbole to provide the facts:
Ebola doesn't spread easily like the flu, a cold or measles. The virus isn't airborne. Instead, it's in a sick person's bodily fluids, such as blood, vomit, urine, semen or saliva. Another person can catch the disease by getting those germs into his own body, perhaps by wiping his eyes or through a cut in the skin.
Bodily fluids aren't contagious until the infected person begins to feel sick. The initial symptoms are easily confused with other illnesses, however: fever, headaches, flu-like body aches and abdominal pain. Vomiting, diarrhea and sometimes bleeding follow as the disease progresses, increasing the risk to others.
In West Africa, the disease has spread quickly to family members who tended the sick or handled their bodies after death, and infected doctors and nurses working under punishing conditions, without proper equipment. Bed sheets or clothing contaminated by bodily fluids also spread the disease.

Americans are still wound up and worried. Is this because of the disconnect between breathless television coverage and facts? Or are people just stupid? People are reacting emotionally and skeptically. In late July and early August this year the U.S. Government sought to downplay the African outbreak by categorically stating that there was no way a case could get into the U.S. Less than a month later there are multiple cases in the news (the CDC has investigated hundreds of cases that hospitals have reported). The President sent 3,000 troops to the region, committed $750 million to the cause and is making speeches about how the world must step-up and play its part in this outbreak.

Officials can’t have it both ways. They can’t try to pacify the public with statements that there is little to no risk and then launch a war (with ‘boots on the ground’ no less). Then weeks later patients start dying – when medical and political officials said that was unlikely to happen in the U.S. because of its advanced medical facilities. No wonder the public’s ability to trust and believe its elected officials is at epidemic lows.

Jack Nicholson’s character in A Few Good Men famously said “You can’t handle the truth.” With Ebola, that seems quite a fitting description of where American’s are feeling. Without knowing the real impact of this disease, however, the dead are multiplying and the panic is reasonable. Alien as it may be for this Administration, better to say “We don’t know yet” rather than more obfuscation and in short order reveals itself as uninformed or lies.

Thursday, October 2, 2014

Swing and a Miss

I used to play football. For a week in 8th Grade before I quit. They started me on a Varsity team though I never had exercised regularly in a game I had never watched and didn’t understand was way too much for my changing body. I was a new school in a new town and was having new feelings. I played tennis instead. In high school in order to meet the athletic requirement I became the Manager of various teams, ultimately earning “Manager of the Year.” I won that either for my skill in juggling a variety of sports or through dumb luck in not being hit by the pucks hurled at me as I carried a 10 gallon water bucket across the ice while the guys practiced. I once followed baseball for a few years until I realized I was more fanatical about the statistics than the game itself. It’s all to say that I’m not a big sports fan. I’m not ignorant of the games either. While I do skip over the dedicated section of the paper, I try to keep generally up to date on the overall – so that when the Red Sox won the World Series last year it didn’t come as a total surprise. Now if they did this year it would be, mostly because it’s been what’s known as a ‘lost year.’ I have found myself seeing more about sports recently as the various leagues and high profile players have migrated from the Sports Section to the Main and Metro sections.

Los Angles likes to think it’s a big sports city, but in a region that large it’s too diverse to have the community get caught up in the fever of a particular team. The Twin Cities have great teams and fantastic sports fans and when I lived there it was clear that part of the culture of the community includes the great franchises there. But Boston is a sports town. There is a fanaticism here that’s a little hard to fathom as a non-sports fan. The shine seems to be off of the industry as a number of higher profile incidents are tarnishing the whole, including Aaron Hernandez, a star of the New England Patriots football franchise, who is on trial for murder.

The NFL’s records show that since 2000 there have been 665 incidents that have an overall conviction rate of 68.27%. The breakdown of crimes show that 30% were violent.
The NBA has 196 incidents in the same period, everything from bond violation to homicide.

The MLB in comparison has just 35 incidents, mostly alcohol and drug related.

This info-graphic from 2011 shows the professional sports crime statistics.

Being a professional athlete comes with a lot of perks – and an array of pressures and challenges that those financial incentives are supposed to support. The paychecks are big, the bling is bigger and the outsized proportion of importance is the biggest part of being a star jock. The expectation to deliver at top capacity in exchange can be debilitating (and exhilarating). No matter how talented somebody is – on or off the field – if somebody breaks the law they should be prosecuted just like anybody else. The Hernandez case is good in that it shows that the system does what it’s supposed to do.

Ray Rice allegedly beat up his then fiancé in an elevator. There’s video and pictures, so how can it be “alleged”? No criminal complaint has been filed against him. Let’s not parse here, though – violence is not acceptable in any form, especially domestically. There are laws against it, but he has not been charged. He’s been fired from his team – a violation of a morals clause no doubt. That’s legal. The NFL and its Commissioner Roger Goodell have come under scrutiny and criticism that they lied about seeing the video, didn’t fire him from his team fast enough, etc. All of that may be true – and legitimate complaints. The NFL’s image may be harmed, its value as a franchise impacted, but there’s no evidence that a law has been broken by the NFL. Politicians and media have been screaming for Goodell’s head as if he was the abuser rather than a bad manager and politically inept.

New York Senator Kirsten Gillibrand (D) has not only complained about the process and the situation, she has now proposed that Congress investigate the NFL for how it handled the incident. The NFL is a non-profit 501(c)6 league comprised of 32 teams. The IRS has authority to insure they are in compliance with their tax status – but other than that there’s no other federal agency, let alone Congress itself that should be investigating this organization and how it managed this situation.

"If the NFL doesn't police themselves, then we will be looking more into it. I wouldn't be surprised if we had hearings," said Gillibrand, who blasted the "the way the NFL handled" the situation as "awful" and "outrageous."

Congress doesn’t have time to pass a budget, approve a war that’s underway but it’s going to have time to see if the NFL handled an internal matter of one of its franchises? If ever there was an example of Congress swinging and missing – this would be it. 

Thursday, September 25, 2014

All Roosevelt All the Time

My 87-year swimming buddy at the gym asked if I had seen the Ken Burns docu-series on The Roosevelts. I replied – “What’s the rush? I know how it turns out.” To keep up with him, I binged watched it over the weekend. 14 hours in essentially one sitting. The story telling and subject matter is compelling – and Burns uses an A-list cast of voice talent that adds texture and life to their words. The photographs and archive footage are great, though some images were repeated liberally. I’ve produced a few documentaries myself, and been honored with some awards, so I definitely appreciate the skill and nuance that went into the opus. I know the series was good because days later I’m still completely agitated by the damage to the United States that FDR inflicted during his reign.

The United States Government role from its founding until the New Deal was nominal in the direct lives of Americans. FDR empowered and directed that the Government have a hand in people’s day to day lives in a very active way. Such action was justified by the Great Depression and has continued and expanded.

When President Roosevelt swept into office he pushed through a series of legislation that aggressively put the Federal Government in a position of providing for its citizens. Work programs, food programs, housing programs, etc. were all started. The country was in despair – nearly a third of adults were unemployed, millions hungry, being thrown out of their houses. FDR was able to get the country to work as a collective for the first time in its history, and it worked. All of those programs were then found to be unconstitutional, so FDR tried to restructure the Supreme Court.

When the programs stalled and panic began to set in again, Roosevelt pivoted towards another variation of the same idea. The U.S. had been adamantly isolationist. There was Wilson’s World War I which was highly unpopular and afterwards the feeling from the country was even stronger: no more war. So much so that Congress prevented the President from selling equipment to allies unless they were prepaid. When the British couldn’t pay, FDR “loaned” them the planes and boats anyway.

Roosevelt was the John McCain of his time. He may not have been as much of a warmonger as the Arizona senator, but FDR loved the military industrial complex. It took him several years of warnings and threats and scare tactics, but he got the U.S. into World War II. He ignored intelligence warnings about attacks on the U.S.. For the man who came to office proclaiming “we have nothing to fear but fear itself” he certainly mastered cornering the American population into a war it didn’t seek and didn’t want. Once at war the collective came together and succeeded.

FDR was elected four times – less a testament to his political strength and more an example that the media abdicated its responsibility. Much was made in the documentary (as in all coverage of him) about his polio and physical ailments. The most striking (and galling) information was that he was re-elected in the midst of war lying about his health, with his doctor confirming it. He knew he was dying and the country had a right to know. The media knew he disappeared from Washington for months, lost weight and accepted the reports of him being in good health. The result of this omission was that Vice President Truman became President, learned about the nuclear bomb after taking office and then used it. He then started his own war in Korea.

What Truman did militarily has continued on – the U.S. is now an interventionist in global affairs thanks to FDR. His token attempt at preventing war, the U.N., should have a role in those affairs but never had the authority from its member countries to do so.

Economically and socially the collective gains that were made to stabilize the economy worked for a time. The problems happened when those gains became the baseline expectations, otherwise known as an entitlement. Social Security is a perfect example. Instituted to help older employees get off of the work rolls so that younger members of society working in post-Depression America, it was designed to cover minimum living expenses for the final 3 to 4 years of life. It was a cost-effective way to energize employment that never envisioned what to do 20, 30, 100 years later. Today that program now funds people for 25 to 30 years – a level that it was never intended to and never designed to or funded for.  Congress and Presidents have been unable to make changes. Whenever a change has been proposed – to increase the age at which people might be eligible, or increase the contributions that people have to make to fund the program or otherwise decrease benefits, there’s a huge hue and cry. The collective is not willing to contribute as they once were because the greater good is no longer the goal, it is an expectation, a given. Entitlements now consume 2/3rds of the U.S. budget.

It proves that the concept of the collective is good, and in certain instances has worked, but in the long run doesn’t. Today’s political fights of the role of Government aren’t nearly as draconian as the rhetoric would have one believe. The Republicans want to take money from the public and spend it one way, the Democrats want to take money from the public and spend it another way. There’s some differences in how much is to be taken and where it would be spent but the underlying philosophy is the same: it’s All Roosevelt All the Time. Talk about a binge.

Thursday, September 18, 2014

Fingers crossed

I was privileged to experience the consecration of the new Episcopal Bishop for Massachusetts last weekend. For those of faith, it’s a particularly important ritual since the ancient ceremony goes back to the Apostles. Other religions have their own ways of elevating and passing forward leaders. Oaths  are deeply rooted in religion though governments have adapted them. The significance of making a promise to fulfill an obligation beyond one’s word – on behalf of a deity – provides additional gravitas to the action. When somebody breaches their duty it’s not just a broken promise, it’s a violation of trust. There are so many violations in politics today to render the original promise null.
Last month marked the 40th anniversary of President Nixon’s resignation from office. Many things were at play that led to his decision to leave the office he swore to uphold, but the cover-up became his undoing. That moment seems to have shifted how the American public looked at their Presidents. The election of honest Jimmy Carter in 1976 and a slew of reformers was a response to the Watergate era.
Over time, though, something more insidious has happened. President after President has either lied by omission, misstated their intentions or shamelessly told the press what they thought the public needed to hear.
  • Ronald Reagan claimed he could cut taxes – reducing revenues significantly – while maintaining all government spending without consequence. During his tenure the .S. went from the greatest creditor nation to the greatest debtor nation. 
  • George HW Bush (41) promised “no new taxes…read my lips” and then worked with Congress to raise taxes.  
  • Bill Clinton won the Presidency promising LGBT people he’d be their best friend in office, only to promote and support Don’t Ask Don’t Tell and the Defense of Marriage Act. (Then there was the whole Monica Lewinsky thing.) 
  • George W Bush (43) campaigned on a non-interventionist policy only to launch two wars. 
  • Barak Obama promised to restore integrity to the Constitution as president only to breach nearly every article in the document by criminalizing journalists, spying on citizens and maintaining a personal kill list.
With this as a premise, it should not be surprising that oaths and promises are broken. It’s happening with greater regularity and on significant issues.
When the nation erupted in criticism over the NSA surveillance system, President Obama gave an impassioned speech about how he was asking the Attorney General and Congress to find options to better protect privacy. Instead the existing regulations have been automatically renewing.
In addition to the NSA gathering all communications, the FBI has launched a national facial recognition program. It’s not a concept, the live system is live. The Federal Government will now maintain a database of biometric data on everybody that is accessible by 18,000 law enforcement agencies.
The most dramatic turn that President Obama has done, however, is securing office as an anti-war advocate (receiving the Nobel Peace Prize on his commitment to peace) and now launching a new war in The Middle East because 2 Americans were beheaded.

I guess that promise in the Constitution – the right to be protected against unreasonable searches is another unfulfilled promise. Or maybe his fingers were crossed.

Thursday, September 11, 2014


I like clowns. Generally speaking they don’t bother me though I know others who have a genuine fear of them. Maybe it’s because I tried (and failed) to be a class clown or perhaps it’s because the theatricality fascinated me. I even enjoy the Canadian versions that appear in the various Cirque shows that are now a staple in Las Vegas. Political clowns, however, are something to be avoided – so much so that I generally ignore them and rarely call them out. This week is an exception…so much so that Barnum & Bailey would closely identify with what’s happening.

Senator Ted Cruz (R) came to Washington in 2012 determined to shake up the political establishment. His fiery speeches, libertarian-leaning philosophy and ambition for higher office has made him cat-nip for those in the political elite and the chattering class to mock him and dismiss his ideas. He’s raised millions of dollars and has been quite effective at shifting the status-quo to a more polarized “my way or the highway” environment. In order to control the agenda and policy discussion his ‘trademark’ has been inflamed rhetoric and hyperbolic statements that rev up moderate and liberal commentators while serving as red meat for the folks back home in Texas.

Substantively there’s much that Senator Cruz stands for that I agree with. In many speeches he has demanded that President Obama obtain authorization from Congress before he takes military action against ISIS. He cogently argued that the Constitution provides that Congress alone has the authority to declare war. (The Commander in Chief can use military action when there’s an imminent threat to U.S. interests.) Cruz is absolutely right. The problem, of course, is that this is true for all actions that the President (and his predecessors) have taken since World War II.  U.S. interests have become so widespread and all-encompassing that notifying Congress of military action has become a require act of reporting rather than a request for permission. Demanding a war authorization is the right thing to do; but the reality is Congress ceded that authority a long time ago.

Cruz is scheduled to introduce legislation soon (9/2014) that would revoke the U.S. citizenship of anyone fighting or providing support to terrorist groups working to attack the United States. “Americans who choose to go to Syria or Iraq to fight with vicious ISIS terrorists are party to a terrorist organization committing horrific acts of violence, including beheading innocent American journalists who they have captured,” Cruz said in a statement.
    Of course Congress has no authority in the Constitution to revoke citizenship. Cruz, a lawyer, should know this. The legislation (or even the promise of it) is political theatre. So why give heed to this play versus the more flamboyant grandstanding he did on Obamacare and other issues like Immigration? The idea of this proposed law is McCarthyism, pure and simple. Wikipedia’s definition: “McCarthyism is the practice of making accusations of disloyalty, subversion, or treason without proper regard for evidence.” Named after U.S. Senator Joseph McCarthy for his dogged pursuit of communists, the term is now used to describe reckless, unsubstantiated accusations, as well as demagogic attacks on the character or patriotism of political adversaries.

The era of Communist baiting in the United States is still a blemish on this country’s record of democracy.

The Islamic States of Iraq and Syria (ISIS/ISIL) is a Sunni extremist group that follows al-Qaeda's hard-line ideology and adheres to global jihadist principles. It is not a friend to the U.S. or to western style democracy. I do not support them, their ideas, ideals, practices, actions or anything about them. As vehemently and completely as I oppose all that they stand for I equally believe in individual’s rights to support something I don’t. Just because an American citizen supports ISIS (or Vladamir Putin or anybody else) is no reason to take away the citizenship that guarantees them the right of free expression and free association.

Individuals must be held responsible for their actions. In the event somebody took an action contrary to U.S. law, then there are consequences and the Constitution already considers all of that.

Introducing a piece of legislation that is not constitutional, inflames public opinion and further polarizes the political discourse is sadly not new, nor unique to Senator Cruz. As a de facto protégée of Senator McCarthy it will take years to undo the damage if this progresses. With a paralyzed legislative process its unlikely that it will ever become law. It’s this sort of behavior that gives clowns a bad name and make people afraid of them.