Sunday, August 31, 2014

Government financing for business

It’s the same old story, always has been….

A recent post on The Junto, a group blog on early American history, tells the little known story of government financing and support for private business enterprise—in the 1820s, when America’s first integrated “factories” were built in Lowell, MA.

The Junto report, also picked up by, spells it out:

Several of the private investors who organized the Lowell enterprise received $1 million from the national government, which agreed to pay off private claims against the Spanish government as part of the 1819 treaty under which Spain transferred Florida to the U.S. and agreed to favorable western boundary adjustments. I guess the Spanish government wasn’t planning to honor those claims. The Lowell owners also benefited directly from American government trade negotiations with Peru, and, specifically, U.S. intervention in support of American textile exports.

It’s been going on ever since then.

Let’s acknowledge government financing of American canals in the 19th century, land giveaways and other government financing for railroads, and, of course, the interstate highway system in the 20th century—you go ahead and add your own examples.

Too many politicians and business leaders today rally to the cry of “get government off the backs of business,” but it seems they forget to complain about the vast web of tax breaks that benefit individual companies and industries, and it seems they forget to refuse the government spending that “serves the public interest” and also materially benefits the corporate world.

It’s the same old story.

Friday, August 29, 2014

Some people have too much money (part 9)

I’m picking my words very carefully as I write about the anonymous person who paid $30,750 for a Parcheesi board.

It was an antique board like this one, painted in the late 19th century.

It was knocked down at $30,750 at an August auction of Americana in Massachusetts. The auctioneer had estimated it would go for $800-$1,200.


Now, whoever bought it is entitled to spend his/her money in any legal way.

But, hey, it’s an old piece of wood. It’s a game board. The only thing you can do with it is look at it, or play Parcheesi on it.

Maybe the person who bought it is the biggest Parcheesi fan in the world.

For $30,750, you could buy a really nice car. Or put someone through college for a year. Or buy 4,000 books for poor kids who don’t have any books.

Some people have too much money.

Just for the record.

Thursday, August 28, 2014

The college textbook racket

You probably know this: college tuition and textbook prices have been climbing faster than inflation for decades.

Students are finding ways to minimize textbook costs: renting textbooks, buying digital versions, buying used books, buying new/used books anywhere but their college bookstores, selling their used books when the course ends.

Here’s a couple factoids maybe you don’t know right off hand, from

“The National Association of College Stores said 78 cents of every dollar spent on new textbooks goes to publishers,” NOT to your alma mater’s book store operation (which nevertheless is almost certainly a profit center for the college).

Publishers claim it costs $750,000 to develop a new textbook, complete with all the bells and whistles: instructor manual, sample tests with answers, and online support for teachers and students. In my experience, a lot of textbook packages could be a lot simpler, and therefore, cheaper.

“Publishers used to spread out the cost of a new edition over five years before publishing the next edition and starting the cycle over. Since the publishing industry began consolidating in the 1980s — five major publishers now control 80 percent of the market — competition has become keener, and the window before a new edition has narrowed from five years to three. That means higher prices so that publishers can recoup the costs and make a profit.” In my experience, the typical “new edition” is only superficially different from the former edition, in other words, it’s largely a rip-off.

And here’s a little kicker: a lot of students don’t read the assignment material in the textbook. Ask any college student or teacher you may know.

Any part of this story make sense to you?

Wednesday, August 27, 2014

Is the long incumbent honeymoon over?

For as long as political polls have been conducted, Americans have said they like their own congressperson more than they like the Congress as a whole.

It was a troubling but all too familiar example of voters—and people in general—holding conspicuously incompatible views about some political reality.

Now, for the first time, we have some evidence that maybe the Teflon appeal of “my local congressman” is starting to peel off, and maybe start swirling around in the toilet…. says a recent Washington Post-ABC News poll finds that 51% of respondents said they disapprove of their own representative’s performance. That’s the first time the disapproval number has reflected majority opinion since that poll started about 25 years ago.

Not too hard to figure out why the disapproval numbers are trending higher.

The current Congress is the most do-nothing Congress in history, and specifically, the Senate and the House haven’t really done anything effective in the last 5 years to boost growth in our national economy and help create jobs for millions of Americans who want to work.

Do the right thing: don’t vote for your incumbent members of Congress every chance you get.

p.s. I don’t want to forget to mention that all public opinion polls are inaccurate, we should be very leery of interpreting the results. No polling company comes even close to reaching a true random sample of respondents in this era of Caller ID, cell phone usage and the increasing reluctance of so many people to actually answer the phone when it rings. All polling companies cook their data by “weighting” the results in multiple dimensions, that is, changing the de facto results of the survey, allegedly to increase the accuracy by manipulating the data so it nominally reflects the arbitrarily assumed attributes of the target population.
I think you can imagine how that turns out.

Monday, August 25, 2014

Moderate voters?....not really….

Like the alleged “independent voters,” a lot of “political moderates” don’t really exist.

A recent report on explains why:

It’s a pollster’s imperative to more or less neatly categorize folks in a political opinion survey so the news media and the cable TV talking heads can do sound-bite-sized reporting and “analysis.”

David Broockman, a political science prof at the University of California/Berkeley, says “surveys mistake people with diverse political opinions for people with moderate political opinions. The way it works is that a pollster will ask people for their position on a wide range of issues: marijuana legalization, the war in Iraq, universal health care, gay marriage, taxes, climate change, and so on. The answers will then be coded as to whether they're left or right. People who have a mix of answers on the left and the right average out to the middle — and so they're labeled as moderate.
“But when you drill down into those individual answers you find a lot of opinions that are well out of the political mainstream."

In other words, there are a sizable number of folks who, manifestly, have both left-wing views and right-wing views—to make up a caricature example, for instance, a person who strongly supports government-sponsored Obamacare but wants to deport all immigrants immediately.

In the rush to “analyze” the survey results, folks with these seemingly conflicting political views don’t score high as either “liberal” or “conservative,” and so they are categorized—wrongly—as “moderates.”

In the same vein, many so-called “independent” or “undecided” voters superficially claim to be independent but their actual opinions, and more importantly, their actual voting behavior is quite obviously “liberal” or “conservative,” and quite obviously Democrat or Republican.

Of course, all this detailed revelation tends to beg the question: how many of these folks actually vote?

Aye, there’s the rub.

And that’s the biggest problem facing our so-called representative democracy. It really isn’t working.

Saturday, August 23, 2014

You’re paying for the Bank of America settlement

It’s not right.

The Justice Department recently announced that Bank of America will pay $16,650,000,000 in penalties to settle charges of mortgage fraud that led up to the 2008 national financial meltdown.

I’m in favor of it, except the part I don’t like is that the settlement doesn’t penalize even one of the people who did the wrongdoing. It just penalizes the bank and its shareholders.

Here’s another part I don’t like: BofA is going to be able to write off some of the huge fines as a tax deduction.

The New York Times reported that the bank might be able to shave as much as $1.6 billion off its tax bill. In other words, that $1.6 billion—in rightful taxes that the bank should pay—won’t be paid by the bank, so guess who has to make up that shortfall in tax revenue. Try looking in a mirror.

A consumer advocacy group said this:
“The American public is expecting the Justice Department to hold the banks accountable for its misdeeds in the mortgage meltdown. But these tax write-offs shift the burden back onto taxpayers and send the wrong message by treating parts of the settlement as an ordinary business expense.”

It’s not right.

Friday, August 22, 2014

Ferguson in perspective….

I wasn’t there in Ferguson, MO, the night the white cop shot the young, unarmed black man.

I’m guessing that both of them said and did things that tragically inflamed the encounter.

I don’t really know what went down, except that I know the black man went down.

This frightening shooting is all over the blogosphere, it’s all over the news, the cable TV talking heads are on it non-stop….

But everywhere except in Ferguson, I think the big thing is absent from all this coverage:

In my mind , the big thing isn’t “White cop shoots unarmed black man.”

The big thing is: “Yet again, another white cop shoots another unarmed black man.”

The big, big thing is: no one thinks this is going to stop.

I haven’t heard any official in Ferguson say: “We’ve got to make sure this never happens again.”

Just for perspective, imagine that the first night news flash had been: “Another blond Presbyterian cop shoots another young, unarmed red-headed Catholic.”

Or, just for perspective, take one whole minute and imagine that you’re a young black man.

Sunday, August 17, 2014

The wisdom of Mahatma Gandhi (part 3)

"In a gentle way, you can shake the world."

Mohandas Karamchand Gandhi (1869 - 1948)

There is much that needs to be shaken.


And don’t worry if you have to push.

Saturday, August 16, 2014

20 profitable companies that paid no taxes

Merck & Co., the second largest pharmaceutical firm in the United States, made over $2 BILLION in profit in the second quarter, but paid no U. S. taxes.

Merck wasn’t the only one. USA Today reported on 20 big American companies that made money in the second quarter, but didn’t pay any taxes.

In fact, this group—Merck, Seagate Technology, Thermo Fisher Scientific, General Motors and 16 others—made almost $4.5 BILLION in profits, overall, but they used tax credits, write-offs and other business tax deductions to completely eliminate their nominal 35% tax liability.

The news media doesn’t mention often enough that nearly all U. S. companies don’t pay anything near that nominal 35% “corporate income tax” rate that gets routinely blasted as “the highest corporate tax in the world.”

It’s legal, but it shouldn’t be.

Here’s another point that your favorite big business isn’t likely to mention in its next annual report: In the 1950s, U.S. corporations paid in about a third of all U.S. tax revenues……now that figure is down around 10%.

Has your personal tax bill been rising or falling lately?

Friday, August 15, 2014

“Respect Are Country!”

Yup, you’re right, the first part of that admonition isn’t grammatically correct, even if it seems that ideally it should be politically correct….

Turns out that not everyone who hates immigrants can claim to have what he claims immigrants should have, e.g. a command of our English language.

Nativist prejudice is never pretty….and sometimes the spectator has to work hard to get the smug grin off his or her face.

And by the way, let’s just call it what it is: millions of immigrants do work that native-born Americans won’t do—if you like to eat lettuce, you know what I’m talking about.

So let’s create a sensible path to citizenship for immigrants who aren’t criminals, and let’s make them full members of our society, and let them pay all their taxes, and decently treat them like human beings….

Let’s honor the spirit of America as the great melting pot.

Wednesday, August 13, 2014

Grade inflation!?! oh my gosh!?!

Grade inflation at the college level is real, it’s undeniable –it should be quite dismaying for the truly superior segment of college students who are getting “all As” along with so many of their less capable fellow students.

If almost everybody is getting top grades, what exactly do top grades mean?

At my alma mater, 50 years ago, a handful of graduates walked across the commencement stage "with honors." Now, about 40% of the graduating class earns a degree cum laude or better.

A recent piece on tells the familiar story:

Grade inflation continues across the nation. More than 40% of all undergraduate across the country are “A” or “A-minus.” Grade inflation is the norm at top ranked schools: at Yale, 62% of undergraduate grades are “A” or “A-minus.” In 1963 only 10% of the grades posted for Yale undergrads were in that once-exclusive category.

Princeton experimented for 10 years with high profile, voluntary guidelines to limit the pervasiveness of such high grades, but Princeton is abandoning this effort—faculty didn’t like it, students didn’t like and Princeton officials believe that other Ivy schools were taking competitive advantage of Princeton’s nominal stingy grade policies.

There is some thought that today’s students (and their parents) think that the absurdly inflated COST of going to college entitles them to high grades. Wow.

And here’s another point: some defenders of grade inflation argue that today’s college students are “smarter” than students were in the old days. That’s baloney, too.

Consider: 50 years ago only 45% of high school graduates went to college (2-year or 4-year), and now it’s much higher, about 65%. De facto, with such a large majority of high school grads heading to college, it’s really not mathematically possible that the additional 20% who are heading to college are much, much smarter than the average college-bound kid was many years ago.

The expanded crop of college freshmen each year, mathematically, must have a lower average capability to do college work than the relatively smaller, more select 1960s crowd took to their college campuses.

Monday, August 11, 2014

"It’s OK, you’re not too short to die…."

As we remember the guns of August, 100 years ago, we should also remember the stunning carnage that wiped out the professional armies of Europe in the first few months of World War I.

The first three months of the war killed just about every British soldier who was already in uniform before the shooting started on July 28, 1914.

In August of that year, the British army was rejecting recruits who were less than 5 feet 8 inches tall.

By October, British recruiters were taking every man at least 5 feet 5 inches tall.

In October, about 30,000 Tommies died on gruesome European battlefields.

In November, khaki uniforms were being handed out to enlistees who were at least 5 feet 3 inches.

I guess you know the rest of the story….

Source: Howard Zinn, A People’s History of the United States:1492 – Present. (New York, HarperPerennial Modern Classics, 2005), 360.

Sunday, August 10, 2014

Cold is the new hot

A refrigerator is the big thing in China, and it amounts to a big threat for global warming.

That sounds weird, but it’s true.

The New York Times Magazine for July 27 tells the tale.

Thermo King refrigerated truck
Whereas most American households got a refrigerator by the 1950s, in 1995 only 7 percent of urban Chinese households had a frig—now, the figure is close to 100 percent in China.

Here’s the problem: refrigerators of course use electricity, which is created by largely by burning fossil fuels in China.

Worldwide, electricity to power domestic and commercial refrigeration and cooling accounts for about one-sixth of total demand. Wow.

Here’s the bigger problem: leakage of the refrigerant gas (mostly dangerous hydrofluorocarbons in China) is projected to account for almost half of global greenhouse gas emissions by mid-century.

Here’s another thing: in the United States, at least, easy availability of bigger and multiple home refrigerators has created what one researcher calls the “full cupboard effect”: people like you and me tend to fill the frig with food, much of which is spoiled or thrown away uneaten. For fat, comfortable Americans, our refrigerators seem to “serve as cleaner, colder trash bins.”

And by the way, if you were wondering, the first mechanically cooled commercial refrigeration was invented in Boston in 1881.

Keeping things cold is now making the world hotter.

Friday, August 8, 2014

Gaza gets water, electricity from Israel

Here’s another point for the debate:

Throughout the current fighting and killing in Gaza and Israel, the Israelis have continued to supply drinking water and electricity to the Palestinians in the Gaza Strip.

Israel essentially controls sea and land access to Gaza. Historically, Israel has supplied more than half of the electrical power for Gaza, and also delivers fresh water every day.

....and by the way, the Palestinian Authority is behind in its payments for the electricity, currently owing Israel about $1.5 billion.

Just another strange reality in this area of the world, where people wake up in the morning, thinking about the strangers they might kill….

Thursday, August 7, 2014

Wednesday, August 6, 2014

“. . . the loudest yelps for liberty . . .”

“How is it that we hear the loudest yelps for liberty
                                            from the drivers of negroes?"
18th century Britain’s pre-eminent man of letters

In 1775 Dr, Johnson  reached for his pen to write a political pamphlet, “Taxation No Tyranny,” in response to the protestations of the First Continental Congress  about the Coercive Acts and other administrative and legislative actions of King George’s government. Johnson was no fan of either the colonial protests or American independence.

He pushed a tempting button. His acid comment about the slaveholders who would adopt the Declaration of Independence in 1776 rang more than a few bells in Britain, which developed an active anti-slavery movement soon after the Revolutionary War ended, and outlawed slavery throughout most of the Empire in 1833.

An early draft of the Declaration decried slavery in the colonies, but that mention was purged from the final official version.

Too bad that Americans waited about 90 years to do something official about eliminating slavery, and too bad we’re still dealing with the legacies of colonial acceptance of that most harsh of violations of human rights and spirit.

Tuesday, August 5, 2014

Stupid political blather about the Export-Import Bank

However you feel about the U. S. Export-Import Bank’s mission to support American companies engaged in foreign trade, here’s one thing you must admit:

It’s not a drain on taxpayer’s money.

You can call Ex-Im a stinging example of “crony capitalism” if you want to, but one thing you can’t say is that it uses money from the “cashier at the corner grocery store, the cop on the beat, your children’s teachers,” as U.S. Rep. Jeb Hensarling (R-TX) has claimed.

Ex-Im provides loans to foreign buyers of U.S. products, guarantees loans to banks that lend to foreign buyers, provides insurance against trade losses by U.S. exporters and banks, and guarantees “working capital” loans to U. S. exporters.

Robert Samuelson at explains:
“The central fact about the Ex-Im Bank is that, in the $3.5 trillion federal budget, it is a pygmy. It has about 400 employees. In 2013, its operating budget — its overhead — totaled $90 million, according to a report from the Congressional Research Service (CRS). But these expenses were fully paid by fees and interest from Ex-Im’s private customers. There was no direct drain on taxpayers. Indeed, the bank turned a profit in 2013 and paid $1.1 billion to the Treasury.”

Congressional Republicans and Tea Party foes of the Ex-Im Bank are blowing smoke when they fight against funding it and claim they’re fighting government waste and freebies to business.

The Ex-Im bank supports more than 200,000 American jobs, and every other major country provides export credit subsidies.

I’m not a fan of Ex-Im, but everybody else is doing it. It’s not a great reason to fund the bank, but it’s a reason.

In any event, the Export-Import Bank isn’t costing taxpayers a dime—in fact it sends money to America’s bottom line.