IRS: A Taxing Problem

The WSJ reports that the yet another cabinet nominee - Kathleen Sebelius (whom I have met by the way) - had to pay additional taxes because she missed them the first time.

I think this means one thing and one thing only: our tax system needs an overhaul.

This is not the first time, or the second time. It seems like every time someone is nominated, they have some tax issue. Keep in mind that these are not foolish people who just don't get it - these are smart, motivated, ambitious and generally wealthy individuals who can afford to get the help they need. But yet they fail. The only explanation is that our tax system is way too freakin complicated and needs to be simplified. How about a flat tax! Or, close all loopholes. Earn a dollar, pay .20 in tax. Don't care where it's from or how you got it. Deductions, rebates, credits... blahblahblah... do away with it! Instead, give people good incentives to do well - pay for education, give incentives to stay healthy.... Get a 3.5 in high school and you're in the 90th percentile of SAT/ACT? Guess what! Go to any college and the Feds pay your tuition as long as you maintain a 3.2 every semester, etc. Go to the doctor every year and maintain your weight, stay off drugs, excessive alcohol, etc... you get $500, etc. This nonsense about how many miles do you drive to work and do drive a hybrid or an electric car... whatever, create a better system by focusing on tomorrow, not on today!

Anyway, this is a call to abolish the IRS in its current form.

Thoughts?

Ad absurdum

CNN reports "General Motors' outgoing chief executive Rick Wagoner is eligible to receive more than $20 million in his retirement package, according to a filing with the Securities and Exchange Commission."

Let me rephrase that: $20 million bucks for running GM to the ground. Let's see if he takes it.

Oh America, you are truly great. Just not fair.

You see the pattern, though, reader? If I worked at a big firm right now, let's say a phone company for example, my goal would be to get to the top, borrow huge amounts of money and buy out every other company, give phones out for free, employ 30 million Americans... voila, too big to fail. Then, it's simple: f*ck the company up. You're guaranteed to receive more money than 10 generations after you will need!! Sweeeeet! Oh, don't forget to sing "America the beautiful" in the process.

Seriously, though, you know what we call this in developing countries? Corruption. Here? "Benefits!" Tis truly absurd.

Do you Tweet/Twitter?

By the way, I'm on Twitter.

Down 98% but still over a million bucks

What's wrong with the following statement?

"CEO's pay drops 98%" - nothing, right?

Wrong. Allow me to finish... "to $1.11 million... down from $70.3 million a year earlier."

Want to know the name of this very poor CEO? It's none other than Lloyd Blankenfein of Goldman Sachs.

GS, by the way, is a public company. Kudos to him for not robbing shareholders more than they have already been destroyed by the collective actions of GS and its cohorts. Want to bet his salary plays catch up in the coming years? We have a deal: 98% of your salary.

Source: here.

How much is $1 trillion?

I would like to illustrate how much a trillion dollar is to you, thanks to this website. I'm copying their info.

Let's start with a $100 dollar bill - you know what that looks like, right?



Now, let's look at what $10,000 looks like when bundled in $100 bills:



Still with me? Good. Now let's put it in perspective. Literally. If you looked at a cool million bucks, it would look like this:



Not too bad eh? So how about $100 million, i.e. the amount CEOs of public companies take home regularly?



Impressed? Good. It gets better. Let's see $1 billion now in the same way.



Pretty sweet eh? According to Forbes, there are around 750 or so people who can do that! But, wait, what about ONE TRILLION dollars? Keep your eyes wide open:



So, there you have it. If you ever wondered how much $1 Trillion really is, now you know. Too bad you and I owe 10 times that much!

USA: A rogue nation?

What does the US have in common with China, Iran, Pakistan, Saudi Arabia, and even Sudan? You'd think we'd like to think of ourselves as far off from some of these countries as one can get. But, in reality, perhaps we should brand ourselves the now-defunct phrase "axis of evil." Geez, we must be bad, you're thinking. Indeed we are. Why? Because we join these aforementioned nations in one of the few to allow execution, i.e. legal murder by government aka capital punishment.

With China, four other nations -- Iran, Pakistan, Saudi Arabia and the United States -- accounted for 93 percent of the 2,390 executions, according to the group's report "Death Sentences and Executions in 2008."

A disproportionate number of death sentences were handed down to the poor and minorities in Iran, Sudan, Saudi Arabia and the United States. Hmmm... maybe we should attack ourselves and start digging for these graves. Urgh Republicans. Some day they'll understand that a life in the womb is the same life they like to torture and kill a couple decades later.

Source found here.

Seismic Shifts in US Economy to last 2+ Decades

30 years from today, I'd like to come back and re-read this particular post.

UMB Scout Funds recently had an excellent market commentary on their perspective on the recent financial blow up and the longer term implications. Here are snippets. It's truly brilliant and I agree with their analysis.

From a longer-term view, we feel that the economy is beginning a debt super-cycle contraction. We stand firmly in the camp that a secular shift is occurring within the U.S. economy which will have significant effects on the sustainability of final demand and a shift away from debt-created consumption towards investment.

...

we expect the growth in consumption to be negatively affected both by baby boomers attempting to increase savings and consumers struggling with debt repayment. This is likely to lead to less growth stability than we have seen for the last 20-25 years.

...

Longer term, we believe a seismic shift has begun where the soil which spawns capital and wealth creation will be more fertile in many overseas economies than in our own. That being said, we maintain our view that, over the long run, the dollar will continue to weaken against many foreign currencies. The dollar’s reserve currency status may not be under attack within the immediate future, but it may be forthcoming, adding pressure for investors to favor foreign holdings.

Source: Click here.

True?

Senator to AIG: "Resign or Go Commit Suicide"

"The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide." - Senator Grassley, R, Iowa

The Bastards of AIG

You think I'm done with AIG, eh? No way. Here's more cool stuff that you and I are working our rears off for (ok, I'm not working right now, but I am accumulating massive amounts of debt to work later).

New York Attorney General Andrew Cuomo confirmed in a letter to Congress that AIG paid 73 employees bonuses of more than $1 million each.

Cuomo also wrote that 11 of the employees no longer work for the company. The largest bonus paid was $6.4 million; seven other people also received more than $4 million each.

$1 million for *ucking up. $6.4 million for *ucking up more?

Welcome to the new America. I mean, the old America. The America that's always been there... on Knockturn Alley. In times good and bad for each other, enriching neighbors and robbing tax payers of their hard work.

So my numbers weren't too bad - they did make off like robbers. Jerks. I really hope Senator Schumer's idea to tax the bonus recipients for the entire amount works. But you know what, I bet you nothing happens. I bet there's some stupid privacy law in which AIG can't release their names. This sort of bull$hi+ where corporations screw the government (and hence tax payers) has been at the crux of deals for decades. I really hope there are wrestling matches in heaven/hell/whatever-it-really-is, and I get to wrestle these people, WWE style.

Bonus nightmare

The Jayhawk is happy to see that the AIG bonuses are a big deal - people are finally paying attention!

Along the same lines - enjoy this cartoon from the Washington Post - sent by the wonderful yellowgondola.blogspot.com

By the way, Wall Street's name should be changed to Knockturn Alley (if this doesn't make sense to you, read Harry Potter).

AIG = American Imbecilic Greed

This just in from the WSJ:

American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG's collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.

Those payments are in addition to $121.5 million in incentive bonuses for 2008 that AIG will start making this month to about 6,400 of its roughly 116,000 employees. AIG, which was rescued in September as it faced potential bankruptcy, is also making over $600 million in retention payments to over 4,000 employees.

Together, the three programs could result in roughly $1.2 billion in retention and bonus payments to AIG employees.

Let's do some math:

Incentive bonuses: $121.5 million + $450 million = $571.5 million
Employees receiving bonuses: 6,400
Bonus per employee: $89,296.88 - each person! a bonus! bonus!!

Since English is my fifth language, I sometimes wonder if I don't know what words really mean, so I looked up "bonus" at Merriam-Webster. It says:

bo·nus
Pronunciation:
\ˈbō-nəs\
Function:
noun
Etymology:
Latin, literally, good — more at bounty
Date:
1773

something in addition to what is expected or strictly due: as a: money or an equivalent given in addition to an employee's usual compensation b: a premium (as of stock) given by a corporation to a purchaser of its securities, to a promoter, or to an employee

Okay, so my English is not that bad. Let's move on and see more American Imbecilic Greed financed by you and me:

Retention bonus: $600 million
Employees receiving: 4,000
Retention bonus/employee = $150,000

So, you run a company to the ground, take tax payers down with you and you make out rich! I love America - it really is the greatest nation on earth - I bet AIG bonus recipients love America more though. The only adjectives that come to mind: corrupt, vile, evil, disgusting, unethical.

Is there really any argument in favor of these figures? Anyone?

R.I.P. suburbia?

Are we seeing the end of suburbia?

A writer at Fast Company seems to think so. Check it out here.

My reaction:

1. While urban sprawl may not continue at the pace at which it once did, at least in the short-run i.e. the next 10-20 years, the sprawl that exists will continue to be developed.

2. Yes housing prices at many places have come crashing down and many vacant homes may be destroyed, but this will not end suburbia.

3. As long as the population of the country continues to rise, people will need a home.

4. Given our love for 'space' and 'personal bubbles,' suburbs will not die.

5. Good housing in the city is so incredibly expensive that it makes a lot of sense to buy a home outside of the city for a fraction of the cost. The data today show this. At some point, the prices of houses outside the city will come down to a point where people will see value in them and purchase them.

6. Inner city schools are, in general, terrible.

7. Telecommuting and working from home are catching on, and will continue to do so in light of corporate expenses and in an effort to slash them.

8. Companies are more likely to move to the suburbs, again as evidenced over the past decade or two, to take advantage of cheaper real estate and a calmer, friendlier environment.

9. Such articles almost always come at a trough of a cycle - when doom and gloom is the only supposed sensible prediction. I'll take the contrarian approach and say housing prices are about to turn soon, i.e. in the next 6-12 months.

10. The suburbia as we know will change, but everything as we know it will change over the years. It's always done so. Suburbia will become more efficient - homes may be smaller, homes may be more technologically advanced and energy savvy, there will be more hybrid/alternative fuel cars, suburbia may become more compact... but will it die? Yours truly says no way dude.

Anyway, the point is that it's an interesting article on a very applicable topic. I hope to revisit this entry in 2019 and then again in 2079 to see how it turns out.

Do you have thoughts? If so, share away! You, dear reader, have been very quiet - except leftarrow who gets a shout out for commenting!

We've had Enough.

Lee Iacocca, who rescued Chrysler Corporation, 82 years old now has written a new book: "Where Have All The Leaders Gone?" Here are some excerpts:

Lee Iacocca Says:

"Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder! We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, 'Stay the course.' Stay the course? You've got to be kidding. This is America , not the damned, 'Titanic'. I'll give you a sound bite: 'Throw all the bums out!'

"You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore.
The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq , the Middle East is burning and nobody seems to know what to do. And the press is waving 'pom-poms' instead of asking hard questions. That's not the promise of the ' America ' my parents and yours traveled across the ocean for. I've had enough. How about you?

"I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have. The Biggest 'C' is Crisis! (Iacocca elaborates on nine C's of leadership, with crisis being the first.)

"Leaders are made, not born. Leadership is forged in times of crisis. It's easy to sit there with your feet up on the desk and talk theory. Or send someone else's kids off to war when you've never seen a battlefield yourself. It's another thing to lead when your world comes tumbling down.

"On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. We're running the biggest deficit in the history of the country. We're losing the manufacturing edge to Asia , while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way.

"These are times that cry out for leadership.

"But when you look around, you've got to ask: 'Where have all the leaders gone?' Where are the curious, creative communicators? Where are the people of character, courage, conviction, omnipotence, and common sense? I may be a sucker for alliteration, but I think you get the point. Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo?

"We've spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened. Everyone's hunkering down, fingers crossed, hoping it doesn't happen again. Now, that's just crazy. Storms happen. Deal with it. Make a plan. Figure out what you're going to do the next time.
Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when 'The Big Three' referred to Japanese car companies? How did this happen, and more important, what are we going to do about it?

"Name me a government leader who can articulate a plan for paying down the debit, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.

"I have news for the gang in Congress. We didn't elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity.

"What is everybody so afraid of? That some bonehead on Fox News will call them a name? Give me a break. Why don't you guys show some spine for a change?

"Had Enough? Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope - I believe in America . In my lifetime, I've had the privilege of living through some of America 's greatest moments. I've also experienced some of our worst crises: The 'Great Depression,' 'World War II,' the 'Korean War,' the 'Kennedy Assassination,' the 'Vietnam War,' the 1970's oil crisis, and the struggles of recent years culminating with 9/11.

"If I've learned one thing, it's this: 'You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a "Call to Action" for people who, like me, believe in America '. It's not too late, but it's getting pretty close. So let's shake off the crap and go to work. Let's tell 'em all we've had 'enough.'"

Taken from a Motley Fool Blog found here.

So, are YOU fed up and ready with an action plan? Thoughts?

Jon Stewart vs. Jim Cramer

This is a must-watch. Stewart brings up excellent points and articulates his thoughts extremely well. Cramer's a little sober here.

http://www.thedailyshow.com/full-episodes/index.jhtml?episodeId=220533

Enjoy!

How the Credit Crisis Happened

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Don't really know how to title this one

Jon Stewart makes fun of CNBC - Ouch!

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Short circuited

Once upon a time, there was a store called Circuit City...

http://finance.yahoo.com/news/After-60-years-Circuit-City-apf-14576739.html

Do you tip?

Ever wondered about the American culture of tipping? Have an opinion yourself? You should share it. Here's an article by a British journalist who looks into our tipping, er, 'tradition.' The comments at the end of the article are especially amusing.

My opinion - tipping has gotten out of control. While I believe that I'm generally very generous because I realize that the people providing the service are not always paid very well, I wonder if it's gotten to the point where employers just exploit the tipping expectation and have deliberately decided to pay minuscule wages. Tipping 15-20% in restaurants is understandable since the wages are absurdly low, but when you have to tip the cab driver (for what?! He simply drove the car like you'd expect!), the delivery guy (generally after paying a heavy sum for delivery!), movers (although their work is really, really hard)... it's getting too much. We should have a 'no tipping' day - I'm guessing no one will show up to work.

What do you think?

Bush, Cheney, Darfur

You should read this: http://www.cnn.com/2009/WORLD/africa/03/04/darfur.rape/index.html

And then consider that it's happened under Bush and Cheney's watch - they who considered themselves messengers and liberators from God himself and took it in their own hands to go plundering and murdering people in Iraq (which by the way was a fully functioning country), while genocide of the worst kind known to the world was taking place not too far away from the Middle-East. Some day when history is written (and not the revisionist kind of history that Cheney tried so hard to write in his final days as VP), I believe we'll look at the issue of Darfur and we'll look back with great remorse.

It doesn't help that nothing much has been said of Darfur or is being done even today, but at least we don't have a president who believes he is *the* 'axis-of-good.'

A New American Paradigm?

WSJ outlines the new realities in corporate America - the massive cutbacks of professionals. Some interesting points:

1. The consumer-led economy of the past few decades created niche markets of people who learned to write, to advertise, etc. These jobs are getting axed - what are these super specialized people to do? They certainly can't build roads and wind turbines.

2. Getting a professional degree has been a way up - is it now going to be a way down, especially after you add up the debt required to get one?

3. Will the cost of professional services as a whole decrease as good talent is laid off and will eventually compete with each other?

4. Have we - as a society - become increasingly dependent on others? Of course, we have. Must there be a revolutionary change in these fundamentals, i.e. should a nuclear engineer also learn how to grow potatoes and tomatoes?

5. Will we finally have fewer ambulance chasers?

6. Did somebody say back to basics...?

7. Should we rename our country NUSA (New United States of America)?

Anyway, the list continues - here's the article.