Perry Glasser

Archive for the ‘TAXES’ Category

THE CRUSH IS ON US – PART 3 of 3

In Business, Economics, Economy, EDUCATION, Finance, Millenials, TAXES on June 13, 2018 at 12:16 pm

THE CRUSH is not a youth problem; it’s a shared disaster.

Titanic_sinking_stu_w1Being on the upper decks of the Titanic did little to protect wealthier passengers from flood below. Passengers in steerage just drowned sooner, but eventually the entire ship lay at the sea bottom and all passengers were in the drink, a few alive but many more dead.

In Part 1 and Part 2 of THE CRUSH, Dollar$ explored the dimensions and culpability for the coming student debt crisis. But THE CRUSH is with us now. We have struck the iceberg and are taking on water. Never mind the moral bankruptcy of blaming victims, rejoinders to “Suck it up, kid,’ and “Pay your dues, punk” are not only insulting, they ignore the economic realities.

This is the rising tide that sinks all boats.

Seeking better loan programs are merely fuzzy thinking that Dollar$ will risk beating a metaphor to death by calling it the equivalent of moving deck chairs. Better loan programs remain loan programs, that is, they continue to tax the poor for being poor.

Instead, Dollar$ puts forward some substantive changes.

  1. All existing and future loans should be 50% the responsibility of the associated colleges and universities – institutions need skin in the game if they are to have incentive to stop soaring tuition and fees.
  2. Free tuition and fees at state schools through 14th grade. Naysayers will scoff at this “giveaway,” doubtlessly the same naysayers who opposed mandatory free education through 12th grade when everyone was certain a 6th grade education was peachy.
  3. Tax private university endowments. Yale and Harvard don’t need tax shelters for accumulated wealth.
  4. Eliminate tax deductions for education donations. Existing tax structures enable the rich to get richer while dumping the burden of social advancement on the rest of us.
  5. Initiate federal tax credits for tuition and fees to all schools — that’s a credit, not a deduction. If education is the key to our society’s future, why can’t all of us lift some of the burden undertaken by a few of us?
  6. In schools with more than 2500 students, cap university administration at 1/300 students by taxing the payrolls of schools with higher ratios. Someone has to step up and squeeze costs: let’s start with non-classroom personnel.

Why?

Well. . .

ECONOMIC RED FLAGS

Autos.

The auto industry is a mainstay pillar of the US economy. Rubber, glass, steel, plastics, aluminum—there is no element of car manufacture that does not support tens of thousands of people. Subsequent to sales, there is an entire service industry, everything from car washes to oil changes to mechanics employing hundreds of thousands more.

Yet the average age of the person buying a new car is up to 51.7 years; that Boomer earns $80,000 per year. “It takes four millennials to replace one boomer” in terms of economic impact,” observed Steven Szakaly, the National Automobile Dealers Association’s chief economist in 2015.

Dollar$ notes for the less financially sophisticated that auto sales on the secondary market, trading your older hunk of junk for a slightly newer pile of junk, has all the national economic impact of opening a lemonade stand in your driveway.

Sure, Whiners will eventually buy new cars. They will have to in order to get from here to there when the supply of jalopies have all turned to rust. But they will delay joining the auto market—the definitions of a demographic market slowdown. They are barred because they carry too much debt. Buying a new car either has to be postponed or requires even higher interest rates.

That, readers, is THE CRUSH that is visited on us all.

Houses.

c20_currHousing starts in the past 20 years have dipped precipitously, most during the Great Recession of 2006-07, but have never recovered. This, Dollar$ hastens to add, is a fact in the teeth of the lowest mortgage rates ever, the reason housing prices and rents are soaring.

It’s our old friend, the fact that cheap borrowed money always inflates prices.  So it is with tuition; so it is with housing.

Cheap borrowed money does little for the Whiner who can’t enter the market because mortgage qualification is out of reach—too much debt already on the books. Qualifying for a mortgage grows more and more difficult, a task like a donkey running on a treadmill for a carrot.

So what, you ask?

“During the first two years after closing on the house, a typical buyer of a newly built single-family detached home tends to spend on average $4,500 more than a similar non-moving home owner. Likewise, a buyer of an existing single-family detached home tends to spend over $4,000 more than a similar non-moving home owner, including close to $3,700 during the first year.” National Association of Home Builders

Every year a Whiner postpones or is barred from entering the housing market is another year that $4,000 of spending on appliances, carpeting, lawn care, furniture, window dressing, pots, pans, wallpaper and paint is withheld from the general economy. With millions of Whiners forced to stay on the sidelines, billions and billions of dollars are withdrawn from economic activity.

That, readers, is THE CRUSH that is visited on us all

Social Life.

We are hard-wired to like babies. We are hard-wired to enjoy creating babies.

Religious imperatives implore us to be fruitful and multiply, but even if you are of the less religiously minded who believe the problems of our planet stem from the ugly fact that people (gasp!) live here, a problem best cured by having us quietly vanish in favor of a planetary legacy of dolphins, daisies and roaches, Dollar$ notes that for most of us the purpose of life is to create ever more life.

Dollar$ also notes that however unpopular the fact may be, in general, the age of women has a biological shut-off date beyond the shut-off date of men.

Yet the median age for marriage and childbirth are rising.

Women are waiting.

 

Dollar$ endorses the idea that technological and social advances have made much of that delay possible, and Dollar$  celebrates that technology has gifted women with freedoms and choices never seen before.

Nevertheless, among the Whiners, student debt diminishes those choices. Dollar$ suggests no one has children until that want to, and Dollar$ fervently hopes people will be able to afford children when they make that decision, but Dollar$ also notes the delay of expenditures associated with childrearing siphons billions from the economy.

Involuntarily delayed childrearing holds costs for many that cannot be measured because unhappiness is not quantifiable on any balance sheet.

That, readers, is THE CRUSH that is visited on us all.

Dollar$ believes that most things worth doing are worth doing to excess. No so with student debt, however. Enough, in this case is too much.

READ

PART 1 – THE CRUSH: THE COMING STUDENT DEBT CRISIS

PART 2 – THE CRUSH: WHY DOES EDUCATION COST SO DAMN MUCH?

THE GOOD NEWS

In Business, Economics, Economy, Political Economy, ROBERT REICH, SOCIAL MEDIA, TAXES on January 6, 2018 at 1:10 pm

SOCIAL MEDIA STARS -TWOFER

Dollar$ like to imagine the column is the counterpoint to the tsunami of illogic and disinformation that rises in the far off muddled oceans and then inundates us all. Good news rarely makes it into major media. Social media is more iffy, but the War for Clicks devolves into imagery of Fluffy the Cat or Adolph Hitler because as long as there is no middle ground, panic, disgust, and self-pity rules the day.

Good News

  • Though legions of the self-righteous were quick to announce they had to leave the country because of The Orange One’s election, they are still here. Yes, that is good news. This is America, and in America when an election result does not confirm your convictions you are obliged to learn something and, if so inclined, try again. (Go Joe!  Joe Biden that is.)
  • Urban murder rates in the US are the lowest they have been since 1990. That’s hard to notice on the Left where shrill accusations of American racism serve as a touchpoint for activism no matter how distant the cry lies from Truth.
  • The stock market is at an all-time high. Again, the Left wants you to believe that lives are being crushed by corporate America when, in fact, more than half of all American workers have 401-k accounts whose returns have been staggering in the past 2 years. Will there be a correction?  Of course. So what? Stay the course; grow rich sloooooowly.
  • Unemployment rates are so low that wages are rising. If employers want hands, eyes, or brains, they have to bid for them. Cynics question the motives of organizations that have perceived the 2018 tax cut as an occasion to raise minimum wage and to give low-level workers raises.   No one, however, has yet demanded that workers scorn the new money in their wallets. Dollar$ suggests the true cause is a worldwide growing economy.
  • Your take-home pay starting in February will be higher. If you are on salary, You get to keep more or what you earn. Robert Reich* and other progressives who lack a program beyond, “I’m against it!”  are at pains to remind us that this is really a profound plot to transfer wealth from your pocket to the pockets of the rich. Dollar$, however, suggests you buy a better Pinot. Should the tax law need to be adjusted, it will be. After all, if tax law were shaped in brittle concrete, how did it get changed this year?

* Professor Reich continues to redefine chutzpah by not only telling citizens his work is vital to the program-free Resistance, but by asking us to pay to see that vital message on Netflix. This is akin to expecting members of the maquis before they were strangled with piano wire to have passed a hat to continue their vital anti-Nazi work and expecting the SS to look on benignly before beginning any torture.
All right, maybe they’d pass a beret.

TAXE$ AND COMMON CENT$

In Business, Economics, Economy, Finance, Personal Finance, Political Economy, Politics, TAXES on December 21, 2017 at 4:24 pm
bert-lahr-imdb-630x459

SCHOLAR OF THE SUBJUNCTIVE

Dollar$ resents and excoriates finance writers who write in the subjunctive mood. For readers who stopped paying attention to their English teachers in the 8th grade, that means a statement that is conditional. Correctly constructed, the sentiment expresses and a condition that is either not yet true, will never be true, or the speaker wishes were true followed by an outcome that is also not true.

 

If this be treason, make the most of it! – Patrick Henry

In our times, the greatest use of the subjunctive mood is for Romance, handy for lovers unwilling to commit but nevertheless compelled to express what resides in their hearts. Is there a better love song than If I Loved You?

Many speakers flummox the niceties of this important use of mood, and while it is not Dollar$ purpose today to deliver a grammar lesson, he earnestly hopes readers will be afflicted with the dry heaves should they come across ersatz prophets who preserve deniability and protect their alleged expertise by abusing the subjunctive mood. Yes, the stock market may go up, a bold prediction that allows deniability. It may also go down. Dollar$ also notes in passing that Patrick Henry was not speaking archaic English when he addressed the Virginia House of Burgesses, but was properly employing the subjunctive mood of the verb to be. If you still don’t get it, consider that the Cowardly Lion of Oz fame sings “If I were King of the Forest.” Now you know why Bert Lahr never sang was.

THE 2017 TAX BILL

chicken-little-sky-is-falling-1a

SOCIAL MEDIA EXPERT

Dollar$ has until now said zero about the proposed tax bill because it was proposed. Details were open to negotiation. That, however, did not prevent the doyens of social media to claim the sky was falling and suggest that passage of the tax bill would end civilization as we know it.

FACTS IS FACTS

The corporate tax rate has dropped from 35% to 21%. Lest you read Robert Reich, the former Secretary of Labor so startled he is not advising Hillary Clinton in the White House that he has taken to Facebook to lead “The Resistance,” let’s note that despite Professor Reich this tax cut is does not pick the pockets of the poor to give money to the rich. After all, 35% of nothing remains nothing, not coincidentally the amount of taxes paid by Apple Computer and many other multinational American-based companies that have disincentives to bring their profits back to American shores.  The new tax law is a hope to repatriate funds, an overdue program first called for by John F. Kennedy. Short version: US corporate taxes now align with the rest of the industrialized world.

Apple and other corporations can bring billions back to our shores and suffer no financial penalty for doing so. The Tax Policy Center noted in 2014, “Despite its relatively high corporate tax rate, the United States raises slightly less revenue from corporate income taxes as a share of GDP than the average of other countries.”

TRICKLING.4.19.1-figure2_0
Facebook economists who took time from photographing their cats and their breakfast (or cats having breakfast) have been told repeatedly that Trickle-Down Economics does not trickle.  Dollar$, however, notes that several organizations have as of this morning announced raises for line workers and hikes in their minimum wage. Dollar$ is certain those responses are due to more than a rosy picture of future profits precipitated by a tax cut. Fact is, labor is getting scarce; like other valued assets, if you want to keep trained and skilled workers, you have to pay for them. That’s how markets work.

The Koch brothers may have a social agenda, but Facebook economists smugly predicting that the new tax codes will so reduce revenue that Social Security and Medicare will have to be sharply reduced may want to note that neither of those programs is funded out of general revenues but from separate trusts funds. That’s why your annual pay stub has separate boxes for Medicare and Social Security, Binky. They ain’t general revenues. Dollar$ bids good luck to any weasel who lays a hand on those monies, but since the first rule of weasel life is to remain a weasel, Dollar$ is losing no sleep over that possibility.

Similar dire predictions about how the poor will suffer because so many itemized deductions are now disallowed stagger Dollar$ for the hypocrisy or ignorance of how taxes work.

Itemized deductions are

  • also known as loopholes
  • seldom used by citizen taxpayers who do not own a home

LITTLE OLD LADY WHO LIVED IN A SHOE

woman-livedinashoe

TAX PLAN BENEFICIARY

The Little Old Lady who lived in a Shoe had so many children she did not know what to do will, if she itemizes, will get $2,000 per kid where she used to get $1,000. Unless her shoe is worth more than $750,000, her mortgage interest will remain a deduction. Chances are, however, since more than 60% of all taxpayers already use the Standard Deduction, the Little Old Lady will avail herself of that tax simplification because the SD has near doubled. That is, should she choose to itemize, she’d be a damned fool to do so unless he has more than $24,000 in deductions, something highly unlikely for any who works for wages.Look, that redoubtable working family never paid taxes anyway, and at year’s end looked forward to cashing a tax refund check, the sum of all that withholding tax. Under the new tax plan, her refund will indeed be less because week to week and month to month the Fed will be withholding less of her money. Maybe she can build an addition on the shoe, a playroom in the heel, perhaps.

If any of her kids are planning college, despite the dire warnings of Facebook economists, the deductibility of tuition remains untouched.

So do her medical costs above a certain level—the same as the way things are now.

FLIES IN THE OINTMENT

Okay, Dollar$, a few of you still awake might ask what happens by 2028? Don’t these individual tax breaks phase out? That’s when we’ll be screwed, right?

Dollar$ asks the professional pessimists where it is written that a Congress controlled by Democrats in, say 2024, can’t tweak or change tax law? We change appropriations annually (it’s called a budget).

That is to say, Binky, if you think it is in your best interest, vote your convictions, but stop screaming like Chicken Little. Dollar$, you pestiferous fool, this tax law will raise the deficit!! We are going to hell in a handcart!” (Be careful though, you may start to sound like a Republican advocating fiscal responsibility.)

We have for a decade endured GDP growth in the 2% range, and we hunger for greater. Three percent is not unreasonable; up around 4% you can get a nosebleed and bet we are losing ground to inflation. But should the economy grow more quickly than it has, the deficit goes down. Bill Clinton demonstrated that by riding out Ronald Reagan’s tax cuts.

A country near 100% employment can afford a few risks, and if for a few years we put money in the hands of citizens, should we sweat it?

 

 

$$$

ZERO-SUM TAX POLICY

In Business, Economics, Economy, Political Economy, Politics, TAXES on December 12, 2017 at 12:52 pm

Five players sit down to play cards, poker for example. Each brings $100 to the table, and because of a peculiar tradition of the Dollar$ Casino, no player is allowed to introduce additional money into the game. If one player has sufficient skill, after some time that player will have $500 and the other four players will have $0.

That’s a zero-sum game.

In the social realm, that’s another way of saying that no player can be allowed to accrue more wealth without a second player becoming poorer.

This is assuredly NOT how the economy works, nor can it be the basis of Tax Policy. Perhaps for the simple-minded who find their checkbook to be an overwhelming problem in higher math, but let’s hope that political and economic policy are not tailored for the least able among us.

THE ZERO-SUM ECONOMY3032348.large

In reality, players in a card game can bring welcome new money to the table by:

  • dipping into a vault where old money has been snoozing,
  • innovating when some whippersnapper creates new
    • logistics (drone delivery, anyone?),
    • desirable products (cats do love their roomba rides),
    • organizational efficiencies that squeeze every nickel out of every process

On the Left, the “I don’t got it and you do so you must give it up” social justice warriors are out there, demanding that your children have to split up shares of an ever-shrinking pie. On the Right, the tax proposal now undergoing reconciliation between the House and Senate limits Research and Development tax (R&D) credits out of some misguided effort to cast a political illusion of “fairness.”  Fairness in tax policy usually means “the other guy should pay more.”

Dollar$ readers with a lick of sense will see this for what it is—an attempt to disallow new money to be brought into the game. Dollar$ is no champion of trickle-down economics, but hopes we can all acknowledge that faith in the future is not blind faith, but a realistic assessment of economic history. If it were not, Malthus would have been right and we’d all have become cannibals by now.

AN OBJECT LESSON

Twenty years ago, the world was supposed to be out of oil by now. Petroleum cartels (OPEC) were supposed to have sucked up all the money in the world. An entire genre of popular films was developed depicting a desert world where fuel was so scarce that warlords took women, water, and weapons based on how much fuel they could steal. Mad Max was a nightmare born of shortages and the lurid fantasies of adolescent boys.

If tax policy had been based on that scenario, and gasoline taxed to conserve an ever-diminishing resource, the cost of gasoline would today be sky-high instead of the roughly adjusted for inflation stable price of the past 25 years – the sole exception being those years when OPEC states manipulated prices by manipulating supply under the false impression that no innovation could ever occur—which it did.

OPEC’s hold on the world economy was busted by hybrid cars and oil from shale extraction coupled with the discovery of 80% of the world’s accessible shale in the United States. It may not be clean and it may not be pretty, but after the picketing is done, you can be sure some whippersnapper will find a way to make it prettier and cleaner.

THE R&D TAX CREDIT

Let’s keep the whippersnappers in business!

 

 

 

 

WEALTH INEQUALITY

In Business, Economics, Economy, EDUCATION, Finance, Political Economy, Politics, TAXES on December 5, 2017 at 10:40 pm

bossy sisterWhenever my big sister played Monopoly, if the game was going against her she would toss the playing board in the air. My hotels and houses would scatter across the living room carpet as she shouted, “Salugi!” (a New York-ism pronounced “suh-LOO-gee”)and lunged across the table to confiscate most of my deeds, especially Boardwalk and Park Place.

When I was able to read the rules of the game, I learned there was no allowance for tossing the game in the air or confiscating my property. My sister was cheating! But since I was 8 and she was 14, she was able to meet my accusation by beating me up.

The History of Wealth Redistribution

My sister was a revolutionary.

To be sure, Dollar$ reminds readers that rebels object to rules, but revolutionaries rewrite them. Rebellions are common; revolutions are rare.

The folks who threw the board in the air in the past have cried, “Justice!” not “Salugi!” They had names like Washington, Lenin, Mao, and Castro.

Note that political persuasion—Left or Right—has nothing to do with revolutionary status. Mao and Washington might have discussed military tactics, but Dollar$ suggests they would have come to no agreement about economic systems or the function of government.

The Function of Governmentpreamble-20532-20120118-55

It’s less complicated than Monopoly.

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

Washington (the dude on the $1) believed that the function of government was primarily to protect the rights of the individual, rights that most often needed protection from government itself. If no military personnel have been billeted in your living room, thank Washington.

Washington may have noted that to promote the general welfare required some redistribution of wealth to insure equal opportunity and to insure domestic tranquility, but that does not guarantee equality of status among citizens.

Washington’s pal was the first Secretary of the Treasury, Hamilton (the dude on the $10). Hamilton understood that wealth concentration in institution like banks were a social good, provided the bank used that concentration of wealth to fund the visions of a greater society, lending money to visionaries and giving stability to the economic infrastructure by protecting wealth from being squandered by a ruling class on personal indulgences. Hamilton, an orphan at 11 and the illegitimate son a British West Indies plantation owner, would likely not endorse a notion that the function of government was to protect the rights of the filthy rich to become obscenely rich.

The Situation Today

Some of Dollar$’s best friends sink into fuzzy thinking when talk comes around to how wealth is created and distributed in the United States. They lose sleep fearful that someone, somehow, somewhere, is leveraging assets to optimize profit.  They simple-mindedly believe that economics is a zero-sum game and cannot imagine economic growth. If an organization makes a dollar, someone must be a dollar poorer.

No. That simply is untrue. If it were so, you and I would enjoy the same standard of living as Washington and Hamilton. But the fact is that economies grow.  At issue is how they grow, not whether they should grow at all, though there are indeed some who think that a good idea, too.

The deluded friends of Dollar$ from time to time propose bold programs to redistribute wealth, programs they understand as pursuing Justice.

There two reasons those cannot and should not work.

1. Nowhere in the US Constitution will one find the word corporation. True, we reserve the right to free assembly, but that does not elevate any assembly of citizens devoted to profit a guaranteed right to speak lies in its advertising or compensate its directors and executive officers so rapaciously that shareholders who hope to partake of the boons of the system see their profit participation reduced by rapacious Buccaneers.

Oliver-Wendell-Jr-Holmes-9342405-1-402
Not Sherlock; not Mycroft, just Oliver

2. Oliver Wendell Holmes, Jr. noted Taxes are the price we pay for a civilized society. The idea is carved in stone on the IRS building in DC., but let’s note that corporations do not pay taxes, they collect them.  If you think they do not, you are submitting to a distraction. Dollar$ hastens to explain that citizens are consumers. Tax us, and we bleed money. Bleeding, we consume or save less, neither of which are good things, though it does not follow consumers should not be taxed. Civilization is messy, but must be purchased. But to a corporation, taxes are a cost of doing business, like labor, supplies, and logistics.

Raise corporate tax rates, and corporations will only raise their prices.

Guess who pays the difference?

Today’s  Lesson

Remember, friends, we cannot pursue social justice by confiscating wealth. We can, however:

  • Limit executive compensation by law to some multiple of the lowest worker in an organization;
  • Create progressive income tax brackets that limit the shift of American wealth to the rich from the poor;
  • Lower repatriation taxes so that companies that keep their money off-shore are encouraged to bring it home where they can invest in more factories and create jobs here–better to collect 15 percent of something than 30 percent of nothing;
  • Demand that higher education is a matter of national security, and so to insure the blessings of liberty are  free to all;
  • To insure the blessings of liberty on ourselves and our posterity, give tax breaks to organizations that train employees instead of demanding that future employees borrow so much money to gain perceived needed skills that students have no choice except a life of indentured servitude;
  • Regulate publicly traded corporations by disallowing aggregation of profits as cash without paying shareholder dividends, a means to share in that profit. Can we stop the nonsense that hoarding cash is good corporate financial strategy when all it does is spike share prices that are subsequently used to calculate executive performance compensation? (Are you listening Apple Computer?)
  • Return to personal income tax rates that  reflect the needs of our society. Under Eisenhower, we built the interstate highway system and taxed marginal income as much as 92 percent.

We don’t have to throw the game board in the air to start over again: all we need to do is play by the rules.

DEMONIZE THE OTHER GUY

In Business, Finance, Political Economy, Politics, TAXES on December 4, 2017 at 5:50 pm
screwed1

Citizen

Dollar$ sadly notes that social media has reduced American political discourse into rabidly demonizing the other guy. I wish we could say Dollar$ is surprised.

If you dislike the proposed tax bill, it cannot be that in 500+ pages there is not a line or page you admire. If you admire the new tax bill, it cannot be the in 500+ pages there is not a page that is wrong-headed.

Here’s a challenge: call your representative and ask him or her what he or she likes (or dislikes) about the bill. Make them reverse field. Watch them cry.

Real-world logic allows for conversation and (gulp) compromise. Instead, we see Republicans who simply walked away from their responsibilities for the final year of President Obama’s tenure and refused to act on anything at all; we now have Democrats who think what citizens want is for them to do the same, to get even.

You know, like a kid in a school yard with a grudge.

Wake up, ladies and gentlemen who  represent us—none of us voted for you to do that.

Is it any wonder that Congressional approval ratings linger under 15%? Think of it, 6 of 7 Americans think their representatives are a bunch of horses’ asses.

Guess who is getting screwed?

Congress at work.

Congress at work

WUBBA-WUBBA – IT’S TAXES!!!!

In Business, Economy, EDUCATION, TAXES on December 2, 2017 at 1:57 pm

Monster1My friends (Dollar$ has a few) who are academics are running in small circles and tearing at their hair because both tax plans coming from Congress will require graduate students to declare their free tuition as real dollar income. Sesame Street’s Grover would respond to stress by running in small circles and tearing at his hair while crying “Wubba Wubba.”

Maybe the blue Muppet is a professor.
Academics aren’t as smart as Muppets, so we should charitably give them a bit of latitude. Many seem to believe that graduate education in America is done, another victim of a vengeful carrot-topped president who despises anyone with an IQ above room temperature.

But the same folks who picket and bemoan how their institutions exploit graduate students and adjuncts should be celebrating this tax reform.

Glad you asked. Let’s think before we run in circles and cry, “Wubba-Wubba.”

Suppose (God forbid) you are the president of Big Ass University (BAU), a research institution. Down in the labs they are doing unspeakable things to rats and monkeys; in the Humanities they are lying on tattered divans reading books, rising only to apply for grants to allow them to lie on European divans read European books; every two or three years the faculty reorganize the required curriculum to reflect the newest political orthodoxy. As the head honcho at BAU, you spend most of your time gazing at the blueprints for the next architectural triumph that will mark your legacy, residence halls to rival the Marriott, gymnasia, and perhaps a library, albeit one with as few books as possible insofar as the digital age puts texts and other documents in the hands of students’ smartphones. Books are high maintenance; get rid of them and you can be rid of librarians, as well. The renderings of these oncoming innovations hang on the walls near your office, granting you bragging rights before a single spade of earth is turned. The local construction unions have gifted you with a decorative hardhat.

Your most difficult chore is to staff several thousand classrooms with teachers. It’s a real challenge. The people who write checks to BAU have come to expect something more than a 4-year cruise with aerobics, bull sessions, and yoga classes.

Your noteworthy faculty would prefer to remain unmolested by such niceties. Their important research absorbs their time, so they heartily endorse a system that brings your cheap labor to the front of lecture halls. You hire that cheap labor by paying with scrip, that scrip being free tuition and fee waivers that cannot be ported to any institution other than your own. They can’t pay the butcher with it; they can’t pay a landlord for some close-to-campus vermin infested hovel. The resemblance to the Company Store in a 1930s coal town in West Virginia to BAU should evade no Dollar$ readers.

Note carefully, the dollar value of their pay is calculated by you and has little or nothing to do with their time, labor, or even intelligence—it is a figure calculated by what you are NOT collecting.

Now up steps the Fed with its infernal new tax plan. The Fed will insist your employees declare the scrip that you give them to be income, just like they expect you to declare your limo, clothing allowance, and the two cellphones that come with the job. The Fed now expects to extract taxes from graduate student income in the same way.

How will you ever staff those classes?

PAY THEM WHAT THEY ARE WORTH!

If your professors can earn $100,000 by teaching six or eight classes in a year, they are earning at least $12,500 per class. If a graduate teaching assistant teaches 2 sections in Fall, 2 more in Spring, and 2 more in Summer, at $12, 500 per section, they are good for a salary of $75,000 per year.

What? You say that’s too much? That graduate teaching assistants were meant to be exploited? Wasn’t that you Dollars$ saw on the picket line demanding equal pay for equal work?

What? You fear people will stop going to graduate school and so to cover lower division classes BAU will have to create more tenure-track jobs??? How will adjuncts in dead-end careers stand it? Job openings????

Wubba-wubba, wubba wubba wubba..

MINIMUM WAGE AND JOBS – PITY THE WEASELS!

In Business, Economics, Economy, EDUCATION, Finance, Political Economy, Politics, TAXES on March 29, 2014 at 10:59 am
FINANCIAL RHETORIC

FINANCIAL RHETORIC

Business leaders and their in-pocket legislators are raising their voices to crescendo levels about how a rise in minimum wage laws will destroy jobs. This contempt for logic once again brings Dollar$ to the keyboard to dispel the fog of self-serving rhetoric.

Raising the minimum wage reduces profit; it has nothing to do with the number of jobs. Dollar$ knows of no successful business operated as a public service to create employment opportunities.

Weasels are chasing their tails in fits of anxiety. On the one hand, all those underpaid Citizens vote, on the other hand, Buccaneers fund re-election campaigns.

What to do, O what to do?

Pity the poor Weasels!

This Weasel is so terrified of exposure, it is disguises as a  mongoose.

This Weasel is so terrified of exposure, it is disguises as a mongoose.

Minimum Wage

Minimum wage laws are safeguards against worker exploitation, allegedly set at a level that guarantees a living wage. What constitutes a living wage is open to debate, but whatever that may be, it stands to reason that over time, as inflation makes the cost of living rise, minimum wages must rise to keep pace. They are regional, as they should be, matters of state law. Federal guidelines for federal workers set a benchmark. The current federal minimum wage for non-military projects is $7.25 per hour and goes back to July, 2009.

Everyone knows this. Even Weasels and Buccaneers.

Everyone also knows that the purpose and function of business is to make profit. Dollar$ loses no sleep over this, and Dollar$ implores you to sleep soundly as well. Making money threatens nothing you hold dear. Profit is the engine of every aspect of our society. Irving Berlin wrote music to make money; Shakespeare wrote plays to sell tickets. Michelangelo sold his skills to Renaissance patrons who bid for his services.

Organizations pursue profit like water flows downhill or electrons through wire, following the path of least resistance. Effective management will deploy labor in the most efficient way possible to maximize profit. That’s simply good business practice.

Everyone knows all this, too.

The Buccaneer-Weasel Chorus

So Dollar$ reads with wide-eyed wonder when the Buccaneer-Weasel Chorus lifts their voices to sing about the perils of a raise in the minimum wage laws and how that will cost jobs.

Even Weasels and Buccaneers know this cannot be true.

If it were so, then lowering the minimum wage would create more jobs, and none of us believe for a minute that Ronald McDonald, Mickey Mouse, or your kid on the corner selling lemonade would be hiring if they could pay the help less: they would, instead, be pocketing the difference in wages as increased profit.

No real Buccaneer runs an organization to create jobs. True, the pursuit of profit will make a successful organization expand, and this expansion will incidentally create opportunities and jobs for employees, but Mickey Mouse does not open theme parks in China, France, and Tokyo as a public service to out-of-work Chinese, French, or Japanese workers—Mickey sails under the Jolly Roger and owes allegiance to no nation.

Flag of Business Loyalty

Flag of Business Loyalty

  • Like Mickey, your kid is selling lemonade on the corner because your kid wants profit. Like Mickey. your kid sets prices by calculating the cost of sugar, water, lemon juice, and ice, and then calculating a sales price that makes her labor worth her time—that’s the pursuit of profit.

Neither Mickey nor your kid hires additional labor as an act of charity or public policy because the pursuit of profit requires efficient deployment of labor.

Why hire three lemon-crushers when one will do? What’s the minimum number of ticket-sellers at the gates to the Magic Kingdom on a Fall day in Tokyo?

Raising the Minimum Wage

  • Raising the minimum wage will not put high school kids dishing ice cream out of summer work—someone has to do it because summers do not last.
  • Raising the minimum wage will not put sales people out of work at WalMart—WalMart hires no floor help as an act of public spirited charity; they already hire the fewest number of people they can.
  • Raising the minimum wage will not mean be fewer people in food services—someone still has to flip the burgers and Ronald already they already hire the fewest number of people they can.

Raising the minimum wage reduces profit, and this is why Weasels are chasing their tails. On the one hand, all those underpaid Citizens vote, on the other hand, Buccaneers fund re-election campaigns.

What to do, O what to do?

Pity the poor Weasels!

Send your personal Weasel a note indicating you are willing to pay a nickel more for your next cheeseburger so that the person serving it to you can buy her kid eyeglasses or can make the rent.

Who among us would not?

SEQUESTER THIS, MUTHA!

In Business, Economics, Economy, Political Economy, Politics, TAXES on February 26, 2013 at 9:20 am

Dollar$ notes with awe the creativity of Weasels.

New readers of this column may want to check on the Prime Directives of Weasel Life, but the short course for those unwilling to click a link is that Weasels live to remain Weasels.

Yellow MongooseWeasel survival rests on avoiding controversy or culpability on any and all issues while sustaining the illusion that Weasels are nevertheless doing their jobs.

  • Controversy: any issue on which two Citizens might disagree.
  • Culpability: being perceived by Citizens as having been the architect of any policy that is controversial.

Weasel-life is therefore stressful. Elected to do a job by unsuspecting Citizens who pay for junkets to Caribbean islands, medical care for life, generous pensions, six-figure salaries, subsidized travel to and from Washington DC, jobs to dispense, and Pac-supplied dinners at Morton’s, Weasels are in a bind.

If they do the job, they are culpable. Someone is going to unhappy. If enough Citizens grow unhappy, they will lose the job and be forced to earn a living.

The usual Weasel tactic are:

  1. Lying – Why say what you believe when you have staff whose only function is to discover what constituencies want to hear?
  2. Absenteeism-why show up for a roll-call vote?TAX-CODE
  3. Absolutism-take an extreme position, never budge, and the lack of governance is always the other guy’s fault.
  4. Denial – Cornered Weasels who have committed an indiscretion often claim to have been misquoted, a tactic persistently less effective in an age when webcams and YouTube are on every cellphone.
  5. Vagueness and Obscurity – Any Citizen who has ever wondered why the Bill of Rights can fit on a few pages of typescript but contemporary legislation for such matters as the tax code require a pack of pages thick as a brick ought to understand this.

Dollar$ is happy to reveal why Weasels are calling next week’s scheduled economic event the sequester. An honest Weasel would call it “Diminished Services.”

There are no honest Weasels.

The Immaculate Delay.

The newest Weasel tactic, the Immaculate Delay, aka Kick the Can down the Road rests on Weasel contempt for the intelligence of Citizens whose memories often fail at recalling what they ate for breakfast. With the Immaculate Delay, a Weasel can claim to be doing the job with neither culpability nor controversy. Laws and policies go into effect on a time schedule, perhaps long after a Weasel is dead or retired. Death is a situation that has its drawbacks to be sure, but nevertheless serves the Prime Directive of Weaseldom.

Some are predicting that next week when the sequester goes into effect airplanes will fall from the sky and there will be an epidemic of cooties and Bubonic plague, pubic hair will unroot itself, and panicked Citizens will find the CDC has closed.

Doubt the apocalypse.

Also note that no contemporary Weasel need do a damn thing to avoid any repercussions at all. They can tsk-tsk the sequester as if it were a force of nature, like Katrina or Sandy, just something that happened, an act of God.

It isn’t.

It is an act of Weasel.

PITY THE WALL STREET JOURNAL!

In Business, Economics, Economy, Finance, Politics, Rupert Murdoch, TAXES, Wall Street, Wall Street Journal on February 11, 2013 at 7:56 pm

As Official Apologist for Buccaneers, The Wall Street Journal is suffering a bad case of the heebie-jeebies.  Owned by the wire-tapping Rupert Murdoch, the doyen of rumor and FOX News, the Journal of late has to endure nothing but the good news that contradicts what Buccaneers wish were true.

After all, how can the super-rich endure yet ever more humiliation, scraping by on mere millions.

Consider how Peggy Noonan and Karl Rove writhe in their columns. Rove, a Republican attack dog, on election night was so amazed that FOX had declared Obama had won the presidency, that he stormed into the news center’s datacenter.  He spins fantasies about how the GOP needs to persuade voters to cast ballots for candidates that have less than the best interests of their constituency in mind. Noonan, who writes brilliantly, seems unable to get her mind around the idea that the Reagan Revolution is over: the coalition of the Religious Right and the Rich has fallen apart because the rest of America favors Reproductive Rights, Gay Marriage, and all the other issues that would keep Big Government in America’s bedrooms while simultaneously demanding smaller government.

The Journal’s layout editors keep burying good news on interior pages. What else can they do? Admit that Murdoch’s agenda sucked, still sucks, and will suck in the future?

Let’s see, after 4 years in office, Obama was elected by a majority of Americans, not just a fluke of the Electoral College.  Nothing is more dear to the heart of Buccaneers than money, but at the Journal no one seems ready to admit that:

  • The Dow Jones is flirting with its all-time high,
  • America continues to create jobs, albeit slowly,
  • The Housing sector is coming to life,
  • The alleged rise in taxes is, in fact, the restoration of rates from long ago that were  lowered for an economic emergency by Bush—it’s time to restore normalcy,
  • Did we mention that the Bailout money Obama allocated at the beginning of his term has not only come back with a profit, but likely saved the jobs of hundreds of thousands of Americans?
  • ObamaCare is about to go into effect and will not bankrupt America,
  • We are out of one war and exiting another.
  • Oh…there has been no significant terrorist activity for years and Obama gave the order that killed Bin Laden.

Guess what, Rupert?  America is happy about such things.

buccaneer

DOYEN OF INDUSTRY

The Buccaneers are headed into the headwinds of Peace and Prosperity.  To get anywhere, they may have to turn around.