Category Archives: Commentary

Republicans, Listen – Unless You Are Very Rich Already

This will be yours, we promise

This is a flim flam man alert, brought to you by the letter “C” for “care”. Demand to know which taxes and why, when and how!

The Republican benefit to the American people, based upon the words of Mitt Romney and Paul Ryan, rests primarily in the promise of an economic boon for all. This benefit, they claim, will happen because tax cuts will create more jobs. More jobs will be created because business owners can afford to hire more people with any money not paid to the government, or can afford to buy more things from other companies, who, in turn, can use that money to hire more people instead of giving it to the government.

This notion appeals to our common sense and there is even some truth to it. We like simple, believable things. But as we know, common sense is rarely the whole picture.

The claim that Mitt Romney and company repeatedly make is that the majority of people are employed by “small businesses” and these “small businesses” are taxed as the individual who owns those small businesses; most likely a sole proprietorship or a simple Limited Liability Corporation. The misleading part of this argument is that federal taxes are assessed on your profit, not your expenses. You write off all of the money you have paid to employees, along with other valid expenses, and then you are taxed on that amount.

As such, changing this owner’s tax rate does nothing to help him hire more people – he can hire as many as he has income enough to hire, and not pay any taxes on the amount of money he has passed on to his employees. Even if his tax rate were 80% he could still hire as many people as he had gross income to cover, and only be taxed on the amount he personally had left over after he paid them.

So lowering this guy’s tax rate does nothing to help him hire more people, unless you believe that with his personal business profit he took for himself, he would choose to hire someone else for the company, instead of using the company to hire that person. And he would be very stupid to do this, because he already lost some of his profit to taxes – so why not just do it as a company expense before taxes? Of course, if he had enough profit he might want to hire a full-time maid or cook, and that couldn’t be expensed to the business. And in that case, perhaps there is some very minor economic benefit.

But the benefit is, most certainly, minor. When one has a good deal of extra personal money beyond the business, you only spend so much on personal things, putting that money into the economy. Most people will invest this money into stocks or bonds, taking advantage of even more tax breaks, making that money work for themselves.

This is where Mitt Romney’s smoke and mirrors are doing their best work. When Mitt Romney or Paul Ryan talk about cutting taxes, they are not talking about which types of taxes and why it might matter. When you buy stock, you are basically buying a chunk of a company, hoping that company’s value will rise. Well, some people use Wall Street trickery to hope the value decreases instead, but that’s another subject. If you buy enough of that company’s stock, you effectively own that company.

Now, when you buy a company’s stock and hold onto it, you might decide to sell it later for cash. Depending on what people are willing to pay, you might be able to sell your stock shares for more money than you originally paid for them. This money you made – this income – is called capital gains, and it is taxed at a different rate than people’s normal income tax. It is, in fact, taxed at a much lower rate. Right now, it’s 15%.

So if you decide you are going to buy Boeing, for example, and purchase 10,000 shares at $70/share, it will cost you $700,000. Let’s say a year passes, and Boeing’s value has gone up to $80/share, and you decide to sell all 10,000 shares for $80, meaning you get $800,000. That means that you have just made a capital gain of $100,000. You didn’t have to hire anyone to do it, either. You didn’t have to create a single new job. You just made $100,000 and you get taxed at 15%. If you were to make that same $100,000 by working for wages, you would have paid significantly more money.

This is the main way that people with money make more money. They do nothing whatsoever but ride the waves in the changing values of companies. There are companies out there, like Bain Capital, who purchase controlling shares in companies and subsequently do various things to that company to either increase that company’s value, or strip it down in order to help further other interests they might have elsewhere. You don’t give one whit about job creation. You can only care about increasing money for your own investors. Any impact on people can only be seen in terms of money, and if you make more money for your investors by destroying a thousand jobs, that’s what you do.

And the money you’re making for your investors is capital gains, taxed at that very low rate. This is the rate that Mitt Romney is most worried about. Honestly, the income tax on rich people doesn’t matter at all – it could really be 100% and it wouldn’t make any difference because most rich people aren’t being paid normal wages – they’re being paid capital gains at the 15% rate. Dividends count as income, though, which is a good thing – but very few companies even pay dividends any more.

Mitt Romney, Paul Ryan and the Republican party leadership don’t really care at all about income taxes on rich people. I honestly don’t think they care about income taxes on the middle class or poor either, other than they might be able to buy more things. What they do care about is the capital gains tax rate. They want it kept as low as possible because that’s how people with money make most of their money. It’s rich people income. And it’s the lowest tax rate we have.

Remember this when you’re hearing all the obsession on lowering taxes. Lowering taxes is good, especially for people with not a lot of money. But keeping capital gains taxes so low is doing nothing good at all. Now it might, if that vast amount of money was ever spent on things in the economy. But it’s not. It’s only used to buy and sell ownership in companies. It has to be, right? I mean, it’s the lowest tax rate, right? But it doesn’t help the economy. In fact it is the very essence of, if you want to make money, you have to have money first.

What escapes most Republicans, and indeed most people, is that companies – the management and the employees – are the ones doing the hard work, generating value and creating jobs. The people making capital gains are simply harvesting that hard work. Why not siphon out some of that “free money” and put it to work on such things as building our schools into cathedrals, elevating our next generation to levels unimagined? Why not channel that money into even more help in to private sector, who is just starting to reach out into space? Why not channel some of that money into making sure everyone can see a doctor?

It would certainly be a better place to live, here in these United States, using some of that money for our betterment as a whole, rather than giving only the wealthiest amongst us the lowest tax rates of all people, and even with that, allowing them to hide much of it off-shore. How does this demonstrate caring about anything but themselves? How can anyone believe we’re all better off that way?

A Personal Reaction to the First Presidential Debate of 2012

The first of three Presidential debates occurred last night. I set them to record from an over-the-air broadcast by my local Public Broadcasting System channel. Oh, I get NBC, ABC and CBS channels too, as well as CW, Fox, Ion and a small plethora of odd others, several of whom were also carrying the debate. But there’s something more honest, less phony, or dare I say, more trustworthy about listening to news and debates without the backdrop of Coke commercials, wise financial institution sales pitches, and being instructed which car would bring me the most happiness.

It’s early morning for me right now at 1:10pm. I’m awake with just over 6 hours of very restful sleep. This essay is in a small deviation in my morning routine which starts with the brewing of coffee. I then sit down at a computer and examine the day’s effect on my stock portfolios. Currently, I’m very pleased with the National Bank of Greece. I bought it when everyone was saying it would collapse. But it’s one of the oldest financial institutions in the world, and Greek people are more than a little impressive. And I trust the Europeans to do what’s best for their people, in the end. They’re a smart bunch, broadly educated, aware of history – and this brings wisdom.

To be fair, I also bought Bank of America stock, when it tumbled to the floor in value, abandoned by all the other financial institutions. I think they wanted it dead. But it came back, started to rise a great deal, and on the late April crest, I sold my interest, only to buy it back, and more, in a few weeks after the first great swell had past. It’s now back to its late April value again. And you know what? I’ll be an Bank of America owner for the long haul now.

I have to tell you, my favorite ownership is a company called Orbital Sciences. I mean, it’s space! I can’t own Space-X because it’s privately held, and Orbital Sciences has far more experience than Space-X anyway. They’ll both be shuttling cargo to and from the International Space Station, and Orbital Sciences works on a great deal more.

Oh, right, the Presidential debate. Well, first, you should know I’m not a Democrat. Nor am I a Republican. I’m not a Libertarian or a Socialist either. I’ve been accused of being each of them. I’m not exactly impressed by group thinking, like a herd of so much cattle. Nor am I impressed by rebellious thinking, simply for the sake of being different. Intelligence is what matters. Informed intelligence. And even greater than that, wisdom. Wisdom never clings to a set of beliefs. Wisdom is always open, fluid, and bound upon its best course toward Truth.

This morning I have purposefully avoided reading anything about the debates. I do not want anything I write here to be influenced by other people’s interpretations, or any organization’s agenda. I want my reaction to be as purely my own as it can be.

I was surprised by President Obama’s largely passive stance last night. I was not surprised by Mitt Romney’s aggressive one. As the CEO of a large, multinational organization, particularly one dealing in venture capital where you buy and sell businesses, you can expect firmly rooted and well-contrived stances. You can expect to see a position taken, pushed through and sold. That’s what he does. And he does it well.

Anyone who has ever dealt with the personalities who own and run large companies has a good insight into the professional character of Mitt Romney. Once you decide what you want, you gather your resources, you strategize a main plan of attack with a few minor contingencies, then plant your feet firmly and ram your agenda through.

The question I was left with after watching the debate was, what is Mitt Romney’s agenda, other than to become the next President of the United States? The only hard facts he used were numbers used to attack President Obama, while providing no substantial alternative of his own – and some of the numbers he used were used deceptively and manipulatively, such as the amount of money taken out of Medicare by President Obama (which Mitt Romney would never do, he claims).

I understand the tactics. This was pure sales. And aggressive sales at that. I even respect it, to a degree. The thing is, when you’re a business man, and you’re doing aggressive sales, there is always something in it for you. You’re not selling solely for the benefit of the people buying. And it comes down to, with Mitt Romney, will it be a win-win scenario, with all American people included?

I would like to believe so. That man could sell a lot, and get a lot done. But I’m not at all convinced it would be for the best. Beyond the sales tactics, I heard no details. And I don’t buy hardware without first looking over the technical specifications.

The thing is, I might well be better off financially under Mitt Romney – particularly if he keeps capital gains taxes low. But the thing is, I know that this country’s wealth is completely jammed up in just a few pockets. It needs to be shaken loose to get the economy flowing again. This is the only way the economy can start flowing again, unless you go printing more money, which I’m sure neither candidate considers a good idea. Lowering taxes on rich people does nothing except make them happier.

I am not happy with President Obama. Financially, I’m doing great. The corporate sector of America is making record profits since he came to office. I am not happy with President Obama because he is using automated drones to bomb people in other countries. He is prosecuting government whistle-blowers worse than anyone else. He has killed American citizens abroad without any trial or even charges. And he’s pushing for expanded domestic surveillance. Even though all of this was done by, and started by his predecessors, I cannot vote for him and retain a clear conscience. I strongly doubt Mitt Romney would be better and suspect he would be worse, considering his sabre-rattling and obscene increase in our tax dollars feeding the military-industrial complex. Interestingly, even though Mitt Romney wants to increase military spending, he wants to decrease the Veterans Administration. That’s pretty telling – care about the military machine, but not really so much about the troops.

I have little doubt that Mitt Romney really is just planning another hit-and-run like Dick Cheney. With the wars, during the Bush term, you can watch Halliburton stock rise up to new heights starting, pretty much, on the day Dick took office. It continued rising all through Cheney’s term, even while nearly all other stocks tanked during the resulting financial crisis and Great Recession. And then, Halliburton leaves the United States, relocating its headquarters to an Arabic country in the Middle East.

The hard truth is, you small little business owners and cutesy property owners, who think you know business, and who believe people like that – other business people – will look out for your best interest… Well, maybe you don’t know business as well as you think you do. They will look out for themselves, and their own, well before anyone else.

Mitt Romney’s business is taking over an organization and harvesting it for its money and/or assets. That’s what he does. I have no reason to believe he has any different intentions with the United States itself. His presentation was long on tactic, short on substance. It was obviously well-planned and polished, and aggressively rammed through.

You can see this most poignantly in the candidates’ closing remarks, where Mitt Romney looks at the camera like the perfectly-oiled sales machines and methodically ticks off the attack points, with the couple vague promises about something he’ll do. In contrast, President Obama forms his words and thoughts on the spot, which made him appear a little stammering in comparison to such polish.

The interesting thing is, I’m not sure that isn’t a good thing. The American people have been sold so many things. We know the lingo, the sure postures, and true believability of vacuous words. We know when we’re being sold something, as opposed to seeing someone struggle to do something. Unfortunately, one is simply less effective while the other can be dangerous.

I will not vote for Mitt Romney. He looked at the moderator of the debate and told him he would put him out of a job. Jim Lehrer is one of the most respected, and one of the last, of the old school newsmen left. He reeks of integrity, through and through. Because of public funding, Mr. Lehrer is free of commercial concerns, allowing his journalism to remain as unbiased as possible. To my mind, this is where Mitt Romney fails, in a way so profound and substantial, that there is no doubt about his incompetence as a leader of the United States, or any nation on this Earth: Mitt Romney does not realize that Truth is colored by money.

Actually, I think Mitt Romney does know that truth is colored by money, and he relies on it. Just like good science, good journalism cannot have strings attached to the money sources. When you rely on other people for money – other people with their own agendas – it’s in your best interest to make those people happy. This can quickly color truth, in science and journalism (and just about anything else) – and it does. If we are to progress as a species any further, our concerns cannot be just financial. Truth must always come before finance – because without Truth, we’re at the mercy of those who control what we can know to be true. Mitt Romney is either too stupid to know this, or he is too eager to exploit it. Either way, this is the critical flaw for me.

I don’t want to see another hit-and-run raid performed on the United States. This has been Mitt Romney’s business for quite some time. For as much as Republicans say they are financially conservative, they’re the ones I swear are trying to bankrupt the government. What’s happened to them? I really doubt I’ll be voting for President Obama, either. He has not lived up to his promises, and has offered no detailed explanation why. His administration is also behaving unethically. I believe Mitt Romney’s administration would behave even more unethically.

Left with a choice between to the two, I would have to choose President Obama. However, despite what money buys you as truth, there are more than two political parties. And right now, am voting for neither one of them.

If the Rebels Only had Flashlights

Blackhawk Helicopter Interior, vulnerable to flashlights

It seems a federal trial is beginning for a local man accused of shining a small, hand-held spotlight at a helicopter flying low over his house. Apparently the flashlight blinded Homeland Security Agent Dave Simeur, causing him severe pain, and almost made him crash. He also claims the homeowner, Wayne Groen, continued to chase him with the flashlight.

Being a man who spends most nights awake and outside under the stars, I know nighttime helicopters. Even here, far away from international borders, few nights go by without darkened, low-flying helicopters hovering by. I don’t know why. And I don’t even know who to ask. Do I contact the mayor’s office and ask, “what are all these helicopters flying about at night, and who’s flying them, and what gives them the right?”

I thought the airborne ruckuses might be primetime-worthy fugitive chases at first, except that their appearances are almost never accompanied by police cars or sirens. Often, they trace back and forth across a few miles, never going out of hearing range. Sometimes, they are moving very slowly, at a very low altitude, which does indeed rattle everything in the house. In the middle of the night. Which, if I were asleep, would infuriate me.

That’s what happened to Wayne one night while he and his wife were fast asleep. A loud roar, a shaking house, and objects rattling off the shelves. It wasn’t the first time. He ran outside, he claims, to see what the hell it was, and to warn it off the top of their house. It really does make an impressive rattling…

You know he was mad. Furious probably. Of course he was. And it’s perfectly natural. Those assholes don’t care one bit what they keep doing to people down below in their houses, you would think. And they don’t. Not really. Not enough. And so he shined the light: I see you, you son of a bitch! Look at me down here! Pay attention to what the hell you’re doing!

And then Dave the Airborne Agent thinks, how dare that stupid fucker shine a light up on a Homeland Security helicopter! We’ll teach that arrogant SOB a lesson in respect and get him behind bars! Let’s see, I’m blinded, and almost crashed – yeah – putting government agents in danger – yeah – and the neighborhood too maybe. It’s too bad we can’t just take him out, though.

Or was it really, as Dave’s testimony suggests; oh god! My eyes! It hurts! We’re gonna crash in this Blackhawk helicopter that fights in war zones, from a flashlight! Holy moley my friend co-pilot, are you okay?

You know what, asshole helicopter pilots, agents, officers, or whatever you are, who fly low down around people’s homes all dark and secret-like at night… watch out! Wayne’s certainly not the only one you’re pissing off. If thoughts were crimes, the fantasies I’ve had about downing a few of you… and I’m about as far being a violent person as you can get.

And if a flashlight can so easily take you and your $14 million warplane out, just wait until you go up against my slingshot!

Do you think I’m being uncaring, insensitive or disrespectful about agents and police and pilots who are just doing their job when shaking houses apart in the middle of the night? No, the “just doing my job” excuse was long ago used up. For everyone. In everything. It’s your responsibility if you get slapped upside the head eventually, when you’re continually harassing and terrorizing people – for whatever reason.

Blowing Away the Cloud

Clouds and WeatherLast night I was listening to an Earth Day interviewee claim that nuclear power, despite its shortcomings, was still strongly advocated by corporations and government agencies mostly because nuclear energy is centrally controlled. Why else go to such elaborate lengths to boil water? Central control means fewer people own the pie and so gain a larger proportion of money. Conversely, solar, wind and hydrogen is largely decentralized, effectively obsoleting the business of large, centrally-controlled power organizations.

We know that distributing work out in a decentralized manner, amongst many things, is a good idea. The Internet was born from this thinking, by design — highly tolerant of any small or even large segments failing. The military knows that relying on central control makes you both vulnerable and dependent. So the Internet requires no central authority to operate in any fundamental sense. If a failure occurs, it routes around that failure. This is the aspect, ironically created through military funding, that now physically embodies democracy – disparate entities functioning together loosely as a greater whole, both individually free and collectively resilient.

It was not always so. Just a couple decades ago, Apple created the famous commercial where the beautiful and free “new order” smashed the tyranny of Big Brother and his centrally-kowtowed minions.  IBM mainframes, the huge repositories of centrally controlled information, were the mainstay of corporate and government life. When they failed, everything stopped. Your only choice was to call IBM, whose agents arrived en masse, unsettlingly dressed all alike in creepy dark suits to set things right; so business carries on. As long as you purchased the right plan…

When Apple came along with computers for humans, or “end users” in corporate IBM-speak, IBM realized their business model must change. They already had branched into “distributed computing” by installing smaller mainframes at customer’s satellite companies that fed into larger, central mainframes. Now it was just a matter of embracing these “personal” computers as well. Although centralized power resisted distributing processing to end users, mostly by the technorati themselves, and doomsaying abounded, the newly freed employees could finally have their way with their own information, and productivity soared. People could get what they needed, when they needed it, change it into any form they could imagine, and were no longer wholly dependent upon centralized resources and control.

Yet strangely, a trend seems to be moving us back toward the centralized control of information processing, glitteringly re-branded as some amorphous “cloud”. The reality is, this cloud is really just a collection of CPU’s and storage devices, very much the same as any latter-day mainframe. In essence, the big Old Iron has returned, and we’re eagerly handing our data processing capabilities right over to it. And it’s not even our mainframe any more. It’s someone else’s. Some might say it’s not a mainframe, but a cluster. A collection of CPU’s and memory that had access to large and fast data storage and retrieval. Those people need to take another look at what latter-day mainframes are.

Even if we do get past the cloud of marketing and look at using another company’s data processing services, certain realities remain: maintaining 100% uptime is only a holy grail. Despite all the effort and cleverness a systems engineer will devote to maintaining uptime, the fact is, we are returning to a single point of failure every time we put something on the cloud, unless we are using the cloud as merely a supplementary or backup mechanism, or have those mechanisms ourselves as backup. And there is little, if any, transparency. Even several days after a major failure of the largest cloud, no detailed information has been provided about what actually went wrong, nor what is being done to mitigate such an incident in the future. Even IBM in the days of the old iron would provide immediate and ongoing detailed status reports. But “the cloud”… who knows? Right?

One last thing to consider other than central points of failure, and their accompanying points of performance limitations and benefits, is that using another company’s mainframes creates a single point of access for increased government access and control. When everything is on the cloud, the government needs only to deal with one company – one ring to rule them all, so to speak. During the infamous illegal government wiretapping case that broke during the Bush era, the government compelled AT&T to allow access to our communications by forcibly bringing all data into one hub in San Francisco, so they could snoop. Using the centralized old iron model makes this government behavior simple, whereas the distributed model once again points us toward democratization.

As the dust settles from this failure, the spin, which will be dutifully echoed by all the tech heads currently ensorcelled with the “cloud computing” moniker, will be that there is nothing wrong with cloud computing. In fact, it is user error – the customers who were too cheap to purchase a second or third redundant site at another data center (or region) deserved what they got. And strangely, they won’t even notice this implies multiple “clouds”, nor will it raise any questions as to how this cloud differs, in essence, from any well-managed colo rental space.

If anything comes of this, perhaps people might start saying the plural clouds instead of the singular, amorphous cloud. I doubt it. It’s one of those sensationally brilliant marketing accidents that is perpetually reinforced by throngs of parrots. What we must learn is to start asking the question once again: who are we renting our servers from, and who are we giving our, and our customer’s data to? And why?

Perhaps cloud fans would find Eucalyptus interesting.

Image credit: Salvatore Vuono

PS. You are the sun.

This article was published in The Sunbreak and was quoted in The New York Times.

The Deparment of Defense is Defying Presidential Orders

We Americans like the notions of freedom, liberty and democracy. We grew up knowing they were ours; fundamental rights that all humans deserve – and if any humans don’t have them, they ought to aspire toward winning those rights. And we’re willing to help. Even eager.

It’s always a dangerous thing when you have not only all the answers, but also all the guns.

It’s also dangerous when you discover you’re not actually fighting for freedom, liberty and democracy – unless freedom, liberty and democracy are equivalent to money, that is. And there are, actually, reasonable arguments that support the notion of money as a tangible quantity that represents freedom, liberty and democracy.

But money is not for everyone, equally. Was some notion of equality intended to exist within these notions of freedom, liberty an democracy? Perhaps different “types” of equality, based upon… merit? What we consider realistic is wholly dependent upon the predominant agreements between us all – or by who controls the water, food supplies, housing – or who directs the big guns.

Yesterday, the last US citizen left alive, who served in the first World War, died of old age at 110. Frank Buckles saw the birth of America’s fledgling war industries. Indeed, those industries allowed us to eventually successfully complete the second World War as well.

The Supreme Allied Commander of World War II was Dwight Eisenhower, who eventually became President. He was intimately familiar with the industrial businessmen and their growing coziness with politicians and military leaders. He also knew very well that when you combine money and profit-making with the instruments of killing, a recipe for disaster is close at hand.

And this is exactly what we are left with: baked from that European oven is our “military/industrial complex”, as he coined the phrase. The Supreme Allied Commander of the free Western World’s military arsenals, and our President, warned us with the utmost gravity against the military and industry’s growing influence. And even today we are left with war, in the name of profit.

So it is not surprising the industrial machines react so menacingly against “whistle blowers” or any others who bring to light any truth behind their publicly-oriented propaganda. Nor is it surprising that the majority of military leaders go into high-paid positions after their retirement from military service, into the same companies they previously channeled billions of our taxpayer dollars. And it is not surprising that we must continuously demonstrate a need for the most outrageously enormous military, no matter how that need is demonstrated.

But it may be surprising that the Department of Defense is perfectly comfortable defying Presidential orders – in this case, orders to revise their classification system – a system that classifies far more than it should, and that often does not release historical documents when it is required to by law. Let me be clear (that latest in fashion propaganda emphasis): right now the heads of the Department of Defense are defying orders – Executive order #13526 to be exact.

As Steven Aftergood notes, “The promulgation of implementing regulations for [President Obama’s] E.O. 13526… is not an optional activity,” said William J. Bosanko, director of the Information Security Oversight Office, which oversees the classification system.

The industrial war machine is a perpetual and enormous drain upon our country’s wealth. We can’t even discuss taking some of that money and giving it to people who might need help with winter heating, let alone an operation or medicine to save their lives. We are the richest country on the planet, yet we cannot afford schools. All this, and our military can defy Presidential orders, and work its propaganda on Congressional lawmakers? Cheney’s Halliburton can take billions servicing the war machine, then move the company to the United Arab Emirates to avoid US law and taxes?

Propaganda is a powerful tool. Beliefs we hold dear that can be manipulated to serve an end is a weakness to which even the most headstrong among us are susceptible. The War Machine mentality is like a drug addiction – it kills while making the dealers and players rich. Right now, it is withering us, even spiritually.

And the alternative? Life! Or as a first step, perhaps, just not-death. For anyone. Or maybe, if you must, err on the side of not killing this time. Have a sit-down. Think it through. Imagine what else we might accomplish, with such a committed focus of money and attention. I imagine such a thing would cause the history books to tremble, just a bit.