Monday, October 27, 2008

More Redistribution Experiments

Try this the next time you are at a restaurant (well, only if you waiter is voting for Obama).

Thursday, October 23, 2008

How Accurate Will Exit Polls Be?

If there is such a large turnout for early voting, how accurate will the November 4th exit polls be? Of course, they are never very accurate, but they may be even further off this year. As stated in the link above, no matter how early you vote, you only get one vote, and these votes haven't even been counted yet.

Friday, October 17, 2008

These Guys Are Actually Funny

McCain and Obama - why don't they use this stuff in the debates instead of the lame policy talk:

...McCain brought down the house, lighting up faces and shedding a room full of tears with a speech that put a fun touch on countless issues that have been leading the news over the last few weeks.

The Arizona senator touched on his age, wealth, the media, voter registration and, of course, his opponent, Obama.

"This is a very distinguished and influential audience and as good a place as any to make a major announcement," McCain said. "Events are moving fast in my campaign. And, yes, it is true that this morning I dismissed my entire team of senior advisors. All of their positions will now be held by a man named 'Joe The Plumber.'

"Already my friends, my opponents have been subjecting Joe to their vicious attack machine. His voracity has been questioned by Barack Obama's running mate, 'Joe The 6-Term Senator.' He claims that this honest, hard working small business man could not possibly have enough income to face a tax increase under the Obama plan. What they don't know is Joe The Plumber recently signed a very lucrative contract with a wealthy couple to handle all the work on all seven of their houses."

It didn't take long for McCain to bring Obama into the mix, and considering what the two have said about each other over the last 20 months, Thursday night seemed like a good time for some comic relief.

"This campaign needed the common touch of the working man. After all, it began so long ago with the heralded arrival of the man known to Oprah Winfrey as 'The One.' Being a friend and colleague of Barack I just called him 'That One,'" McCain said in reference to his bully-like tactics in the second presidential debate. "He doesn't mind at all. In fact, he even has a pet name for me: 'George Bush...'"

"...It's been that kind of contest and I come here tonight to the Al Smith Dinner knowing I'm the underdog in these final weeks, but if you know where to look there are signs of hope, even in the most unexpected of places, even in the room filled with proud Manhattan Democrats. I can't shake that feeling that some people here are pulling for me.

"I'm delighted to see you here tonight, Hillary."

McCain also took playful shots at former President Bill Clinton and had some fun with MSNBC's Chris Matthews, host of "Hardball."

"I told him, maverick I can do, but messiah is above my pay grade," McCain said. "It's going to be a long, long night at MSNBC if I manage to pull this thing off."

He then launched into a point of contention in the Obama camp – voter registration.

"So, you know I have fun with the media. We all know that the press is really an independent, civic-minded and non-partisan group … like ACORN.

"In case you haven't been following my opponent's 'Get Out The Vote' campaign, ACORN is helping to register groups that were previously excluded, overlooked and under-served – second-graders, the deceased, Disney characters."

While many believe McCain and Obama don't like each other personally, it would be hard to prove as such after listening to McCain's heartfelt comments on his opponent.

"I don't want it getting out of this room, but my opponent is an impressive fellow in many ways," McCain said. "Political opponents can have a little trouble seeing the best in each other. But I've had a few glimpses of this man at his best and I admire his great skill, energy and determination. It's not for nothing, but he's inspired many folks in his own party and beyond. Senator Obama talks about making history and he's made quite a bit of it already. There was a time when the mere invitation of an African-American citizen to dine at the White House was taken as an outrage and an insult. Today is a world away from the cruelty and prideful bigotry of that time – and good riddance.

"I can't wish my opponent luck, but I do wish him well."

Obama later took the podium and said he's not necessarily "the chosen one," but could in fact be a superhero.

"For the last few weeks John has been out on the campaign trail asking this question: Who is Barack Obama? I have to admit I was a little surprised by this question. The answer is right there on my Facebook page," Obama said. "But look, I don't want to be coy about this. We're a couple weeks away from an important election. Americans have a big choice to make, and if anyone feels like they don't know me by now, let me give them some answers ...

"Who is Barack Obama? Contrary to the rumors you may have heard, I was not born in a manger. I was actually born on Krypton and sent here by my father, Jor-El, to save the planet Earth."

He then launched into the genealogy of his birth name.

"Many of you know I got my name, Barack, from my father," Obama said. "It's actually Swahili for 'That One.'

"And I got my middle name, obviously, from someone who never thought I'd be running for president."

Both McCain and Obama will be back out on the campaign trail on Friday, likely with gloves off once again.

But for one night they showed that even the two most recognizable people on the planet, vying for the most important job there is, have a human side."

Don't Question The Messiah

Apparently, if you ask Obama a tough question, this is what happens to you. Maybe that's why the press has given him a pass for the last 20 months.

It doesn't matter that Joe isn't a licensed plumber or that he has tax liens. The point was Obama's answer, which was "spread the wealth." He can make up the 95% number and back into it anyway he wants, but his response to Joe's question plainly describes his approach to taxes: take money from people who have it and give it to those who don't.

UPDATE: Betsy's Page explains this in far more detail than I.

Thursday, October 16, 2008

Real Stories of "Wealthy" Americans

Following the meteoric rise of Joe the Plumber, stories about all those horrible rich people in America that need to be taxed more (From The Corner):

Joe The Lawyer:

I’m Joe the Lawyer.

After dropping out of high school and spending 4 years in the USMC (1963- 1967), I met the woman of my dreams, married, borrowed $500 to buy our first house, did college and law school at night while working full time, had 3 children, educated all of my kids through college (total cost $340,000…none tax deductible), started my own law practice with $25,000 of borrowed funds 32 years ago, have consistently employed between 2 and 11 employees the entire time, never missed a payroll and have earned about 175,000 to $250,000 per year over the last 10 years.

The American Dream, right?

Well, not having worked for a big corporation or a state or federal govt entity, I’ve had only my own savings to accumulate in a 401K for my retirement. I’m now 64, have a mortgage of about $750K (refinanced for college expenses) and can’t retire on my 401K (especially now with the recent market downturn) unless I sell my house (if I can find someone who will buy it) and severely reduce my standard of living.

So, my strategy (assuming my health continues good) is to work until I’m 70, earn as much as I can (this year I’ve worked an average of 60 to 65 hours per week), pay down my mortgage as much as possible and save, save, save. Sure, I’ll make more that $250,000 this year but I’m working the equivalent of 2 jobs.

Not sure where I went wrong here. Started with nothing; married 40 years; 3 kids grown, educated and off my payroll; and can’t retire until earliest age 70. Obama wants to tax me some more, further extending my working life.

$250,000 per year seems like a lot until you look behind the number. Thinking of letting my 6 person staff go, keeping only my secretary and cutting back on all expenses. Then, even if my taxes go up, I ought to be able to save more.

Of course, 6 jobs will be lost.

Mark The Trucker:

I am married to Mark the Trucker. He owns a small transportation business (approx 15 employees). He started with one truck in 1978. I'm pretty proud of him. He was also my high school sweetheart and still a hunk.

Anyway, the point I want to make is that small businesses are usually S-Corps or LLCs, and that means what they cannot deduct as business expenses is taxed as personal income. That puts most small business in a higher tax bracket than the one they would qualify for if only their real earnings were taxed. Also, this predicament disqualifies their children from receiving financial aid for college—we are "wealthy" by FAFSA standards.

In the transport industry an owner has to keep sinking-fund, so to speak. Engines blow up, accidents happen, and the price of replacing an 18 wheel tractor or a specialty trailer is very expensive. My husband is taxed a higher rate on income that is really not income. He puts a large percentage of it back into his business, as I know most entrepreneurs do. We live on a modest percentage of what appears "wealth" to Senator Obama.

My husband's employees understand that. They see how we live and they respect their boss because he pays a fair wage and does provide health care and contribute to their 401ks. He's not a Fat Cat or Robber Baron.

They recognize every time they pass through the toll booth and the EZ Pass registers that their boss is being taxed. They see more taxes when they fuel his rigs. They know that Interstate permits are more taxes. He pays Unemployment and Workman's Comp, as well as half of their Social Security taxes. They recognize this.

And ... they all vote Republican.

TyroBlogger's own story:
My parents both worked for the state of Colorado for almost their entire working lives. They are both retired now and in their 60's. My mom was an elementary school teacher. My dad worked for the Department of Corrections. He was a teacher during most of that time. He taught inmates so that they could pass their GEDs and hopefully get a job when they got out of prison. I can't imagine teaching kids let alone adults who act like kids, but he did it everyday for 30 years. Paid his share of taxes for 30 years. Paid into social security for 30 years.

My parents built the house I was born in. They still live there today. It is a modest 3 bed, 2 bath house that they have updated over the years, but there have never been luxury purchases (besides a hot tub that rarely worked). They put my sister and me through college. We were always provided for, but my parents have never been what one should consider "wealthy."

Earlier this week, I was talking to my dad and he said he had to go to a meeting about Medicare (he'll be 65 next year). He said that his Social Security check will just about cover his Medicare premiums. I asked how much his Social Security check was, he said about $105/month.

After 30 years of paying into Social Security he gets $105/month. You know why? Because he has a pension from the state and Ted Kennedy added something to the Social Security laws that classify my dad as receiving a "windfall" from his pension, so his benefits get reduced.

Yes he can live on his pension and no he doesn't make more than $250,000 per year, but in some government bureaucrat's mind, he is too wealthy to receive what he put into the system. Someone else, someone who probably has contributed less, will get his share. The point is that whenever you give anything to the government, you are unlikely to get it back.

These are real stories about the horrible fat cats in America who should redistribute or "share" their wealth under Obama's tax plan and the Democrats view of "fairness". People like Joe The Plumber, Joe The Lawyer, Mark The Trucker, and my dad.

More Biden

He doesn't know history or how to count

Again, imagine if Sarah Palin had done this?

Friday, October 10, 2008

Simple Explanation of Taxes in the U.S.

I've always appreciated this story for the way that it explains how the U.S. tax system works. It is clear and makes the point perfectly (HT: Sound Politics)

Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

Tuesday, September 30, 2008

Economic Armageddon or Darwinism

After yesterday's market drop and this morning's headlines, I expected to see soup lines on the way to work this morning. Instead it was a nice, normal commute.

Yesterday's 777 point drop, while the biggest single day point drop, represented a 7% decline in market value. While that hurt, it was no where close to the 22.6% drop in 1987. This is another example of how to lie with numbers. Pick the one that suits your argument and leave out the rest of the perspective. In 1987, the Dow lost about 500 points; however, it was only around 2600 when this happened.

This is the same as saying that someone who makes $100,000 gets a $7000 speeding ticket. That, again, hurts. However, this person isn't going to go bankrupt over it. Take someone who makes $26,000 a year gets a $5000 speeding ticket and it's going to be hard to make it through. For the former, the ticket represents less than 1 month of gross income. For the latter, the ticket represents more than 2 months of gross income. Which is worse?

We may see the market go down as far as it did in 1987 or 1929. Who knows? Right now, I am not sure anyone knows. As of 10:09 AM Eastern time today, the market is up 240 points.

What I do know is that we are witnessing Economic Darwinism. The strong are devouring the weak. BOA, Citigroup, and JP Morgan Chase obviously have some cash and are buying up the Countrywides, the Wachovias and the WaMUs. I'm sure there will be more culling of the herd, but this is what should happen and it should happen without government interference.

This article, by a Harvard economist, explains what needs to happen. It will be painful and continue to hurt, but we can get through it, just like we did in 1929, just like we did in 1987, and just like we did in 2001.

The question for each individual American is: Will you be one of the strong or one of the weak?

Monday, September 29, 2008

Who Blew The Bailout

MSM will tell you that it was the Republicans, but last I checked the Democrats held the majority in the House. All they needed was 218 votes to pass this bill. The Democrats currently hold 235 seats in the House. If they vote as a party, it passes.

They didn't

95 Democrats votes against this bill. When that many Democrats vote against it, you know it is a bad bill. When the press tells you that the looming economic earthquake is the fault of the Republicans, you know they are lying.

Joe Biden

In the run-up to the Vice Presidential debate this week, let's look at the Democratic VP Candidate, Joe Biden.

Sarah Palin has gotten most of the press coverage and criticism for either not being able to answer questions or not giving the right answer.

Check out this clip of Joe Biden in his interview with Katie Couric and listen very carefully to his first sentence.

Now that you have watched it, here's a couple of points:

1. In 1929, FDR was not president
2. Television had not been invented yet

FDR did get on the radio and give his fireside chats after 1932. The best part of this whole thing is Biden's lead in sentence: "Part of what a leader does is to install confidence and demonstrate that he or she knows what they are talking about." Then we get into the FDR comment.

What is really interesting is that according to Joe Biden's Wikipedia page, he was a double major at the University of Delaware in political science and history. Maybe it wasn't U.S. history.

Now ask yourself this:
1. Did you see this played over and over on CBS, NBC, or ABC?
2. If Sarah Palin had said this, do you think they would have questioned her qualifications to be VP?
3. Why do you think this is?